In the middle part of the 1760s, the British government was reeling from the effects of the Seven Years War, which had ended in 1762. Although the war had resulted in the English domination of the eastern half of North America, it had cost a lot of money, much of it spent on military campaigns in North America. In addition, it had been determined that conflicts between the colonists and the Indians (abetted by the remaining French settlers in the region), required the continuous garrisoning of British troops in North America. By the end of 1763, the total yearly expense of the colonies was expected to reach (350,000 and Britain's total funded debt was estimated to exceed (129 million, with annual interest charges exceeding (4.6 million. It was clear that new methods of raising revenue would have to be explored.
Plans for a widely expected tax on stamps for all documents in the colonies began in 1763; the Grenville ministry, however, did not include such a proposal in the Revenue Act of 1764 (popularly known as the Sugar Act), proposed and passed in March of 1764. Instead, introduction of the stamp tax resolutions in Parliament was delayed for a year, possibly to provide the colonists with an opportunity to either propose a less burdensome tax or levy a stamp tax themselves. In actuality, a stamp tax had long been imposed upon residents of the British Isles on such items as marriage licenses, stock transfers, and newspapers; unsuccessful attempts had previously been made to extend these duties to the colonies.
After listening to the arguments of colonial agents as to why Parliament should not impose such a tax on the colonies, Grenville introduced a resolution into Parliament in January of 1765 which would impose a stamp duty on almost every form of paper used in everyday life, including licenses, legal papers, commissions, private contracts, pamphlets, newspapers, and advertisements. Such duties were to be paid in gold or silver,...