The Sugar Act, passed by Parliament on April 5, 1764, arrives in the colonies at a time of economic depression.

It is an indirect tax, although the colonists are well informed of its presence.

A good part of the reason is that a significant portion of the colonial economy during the Seven Years' War is involved with supplying food and supplies to the British Army.

Colonials, however, especially those affected directly as merchants and shippers, assume that the highly visible new tax program is the major culprit.

As protests against the Sugar Act develop, it is the economic impact rather than the constitutional issue of taxation without representation that is the main focus for the colonists.

New England ports especially suffer economic losses from the Sugar Act as the stricter enforcement makes smuggling molasses more dangerous and risky.

Also they argue that the profit margin on rum is too small to support any tax on molasses.

Forced to increase their prices, many colonists fear being priced out of the market.

The British West Indies, on the other hand, now have undivided access to colonial exports.

With supply of molasses well exceeding demand, the islands prosper with their reduced expenses while New England ports see revenue from their rum exports decrease.

Also, the West Indies have been the primary colonial source for hard currency, or specie, and as the reserves of specie are depleted the soundness of colonial currency is threatened.

Two prime movers behind the protests against the Sugar Act are Samuel Adams and James Otis, both of Massachusetts.

In May, Samuel Adams draftss a report on the Sugar Act for the Massachusetts assembly, in which he denounces the act as an infringement of the rights of the colonists as British subjects:

    For if our Trade may be taxed why not our Lands? Why not the Produce of our Lands & every thing we possess or make use of? This we apprehend annihilates our Charter Right to govern & tax ourselves – It strikes our British Privileges, which as we have never forfeited them, we hold in common with our Fellow Subjects who are Natives of Britain: If Taxes are laid upon us in any shape without our having a legal Representation where they are laid, are we not reduced from the Character of free Subjects to the miserable State of tributary Slaves?

In August, fifty Boston merchants agree to stop purchasing British luxury imports, and in both Boston and New York City there are movements to increase colonial manufacturing.

There are sporadic outbreaks of violence, most notably in Rhode Island.

Overall, however, there is not an immediate high level of protest over the Sugar Act in either New England or the rest of the colonies.

That will begin in the later part of the next year when the Stamp Act is passed.