Throughout the majority of the colonial period, Britain and the other major colonial powers utilized an economic system known as mercantilism, which basically saw the best bet to economic prosperity being keeping everyone else out of your shit via the strict control of trade. In the latter half of the seventeenth century, in an attempt to get out from under the thumb of the Dutch who controlled global trade at the time, Britain passed a series of laws collectively known as the Navigation Acts. These laws required that all exports of European goods to the British colonies and exports of cash crops from the colonies must all be shipped through Britain aboard British owned vessels. As you can probably imagine this was a pretty fucking sweet deal for British merchants in that it restricted competition, allowing them to buy colonial goods at cheaper prices while selling manufactured goods to the colonies at elevated prices. It was also pretty sweet for the British government given they could more easily collect taxes on imports and exports. However, it completely sucked donkey balls for the colonists, who found themselves on the short end of the stick no matter which way you looked at it. Furthermore, to add insult to injury, further British laws also restricted the manufacture and export of certain goods from the colonies in order to protect similar industries in Britain itself.
Now while for the southern colonies and the British Caribbean this all was a bit of a pain in the ass, overall it wasn’t the end of the world. After all, the cash crops they grew were in high demand in Europe. However, the same could not be said of the middle colonies and New England, whose main exports at the time were lumber, fish, grain, and cheese, for which Britain and the rest of Europe had a rather finite demand. Luckily, the Navigation Acts also fucked over the Dutch, which created a need to build more merchant vessels, which New England, with its shipyards and ready supply of lumber, was in an excellent position to provide. Shifting to building merchant vessels, they at first sold them to British merchants, but soon after began to realize they could make even more money if they set up their own merchant companies. Using capital from well-to-do British investors, these new merchant companies began hauling lumber and food south to the Caribbean where such things were in high demand, trading with not only the British islands, but also the French and Dutch and anybody else willing to pay because why the hell not. Given the shortage of hard currency in the colonies, most of these islands paid with sugar, which the New England merchants were more than happy to take since they could sell it for a good price in Britain. However, first they had to take it back to New York City and Boston in order to take advantage of a loophole in the laws requiring sugar only be imported from British colonies.
As you can probably imagine, this royally pissed off the British Caribbean islands and the British merchants who traded with them, both of whom found themselves losing money. As established businesses usually do when such things happen, they went bitching to the government which at the close of the seventeenth century passed several new laws meant to close the loopholes and tamp down on the shenanigans of the New England merchants. However, instead they found new loopholes and shenanigans. At the time, the French Caribbean islands were awash in molasses, a byproduct of sugar production which was used to make rum. France had recently banned the import of rum in order to protect the domestic brandy industry, which put the islands in a bit of a pickle. Still needing food and lumber, they were more than happy to sell molasses to the New England merchants at rock bottom prices.
First developed in the Caribbean in the mid-seventeenth century, rum had become popular throughout the colonies, Europe, and West Africa both for the obvious reasons and as an additive to water to help make it safer to drink, a common use of many liquors at the time given most people didn’t want to die of literally shitty diseases. Being rather clever fucks, and again using investment from well-to-do British asshats, the New England merchants quickly set up a large rum distilling industry in New England, which thanks to the ample availability of cheap French molasses and lumber for barrels, quickly came to dominate the global rum trade. As a result, New England merchant ships began popping up throughout western Europe, the Mediterranean, and even south along the coast of Africa where they became a major player in the Atlantic slave trade.
As you can probably guess, this also pissed off the British Caribbean islands and the British merchants given previously they had been the top exporter and seller of rum. Not liking such competition, they again bitched to the government, who again stepped in to get them to shut up, passing a new law in 1733 which put a tax on all foreign produced molasses imported into Britain or its colonies. Given this would have pretty much crashed the New England economy, the merchants there just kind of said fuck off, refusing to pay the tax, smuggling in molasses, and bribing customs officials to look the other way. Britain made various attempts to stop the smuggling, but failing again and again over a ten year period, finally just kind of gave up, which in the long term probably wasn’t all that great of an idea given it gave the sense, especially in New England, that British laws were a bit of a joke. Over the next several decades, despite technically being illegal, the New England rum trade continued to grow.
