During the American revolution did Great Britain suffer a financial crisis?

by Perseus_The_Great

As an example was it like the U.S during WW2 where there was rations and shortages of things?

Gorrest-Fump

Do you mean a financial crisis or an economic crisis? If you mean a financial crisis, the British debt rose considerably during the Revolution – although it was part of broader increase in indebtedness from the early 18th century to 1815. This graph gives you some idea of how indebted the British government became during this period.

That being said, this debt did not necessarily mean the government was in crisis. As John Brewer has argued in The Sinews of Power, Britain was in the process of building a “fiscal-military” state in the 18th century: a highly effective machine of using taxes and bonds to financial global wars of empire building. As this graph shows, government spending at this time was oriented almost entirely toward financing the military and servicing the debt. This was possible through an expansion of the tax base, especially through excise taxes (i.e., consumption taxes levied on products such as salt, beer, and soap), and eventually by the 1790s an income tax.

So while wartime expenditures increased (from annual expenditures of £5.5 during the Nine Years War of 1688-97 to £20 million during the Revolution), so did government revenues (from £3.6 million during the Nine Years War to over £12 million during the Revolution). So the British government bent, but did not break, during the war.

When it comes to an economic crisis, ordinary people certainly did suffer from shortages that resulted from interruptions of trade. Over a third of all British exports in 1770 were directed to the American colonies; the loss of trade certainly caused an economic downturn in port towns and the manufacturing sector. On the other hand, it was offset to some degree by an increase in demand from the military sector.

There was no rations regime during the war – it was a very different kind of economy (wartime rations didn’t get introduced until the 20th century). Whereas in World War II, the US had an industrial economy that was managed to a large degree by the government, Britain in the 1780s was still a largely agricultural society, with little government involvement beyond taxes and bonds. Also, the military was also outsourced to a large degree – for example, privateers were still an important element of naval campaigns, and armies still depended to some degree on forage and plunder. (See David Hackett Fischer’s Washington’s Crossing for details on the latter.)