Commons directed its corrupt and blighting attention to the English
colonial system. The Stamp Act was passed in 1764, and repealed in
1766. In 1768 came Charles Townshend's mischievous duty on tea; and
the American Congress met at Lexington in 1774. At this time the
resident population of Newfoundland amounted to over 12,000[31] and it
was soon realized that the colony would be gravely affected by the
outbreak of war. Congress at once prohibited all trade with the
English colonies. The seriousness of this blow was extreme, for
Newfoundland was largely dependent upon the American trade for the
necessaries of life. Want and tempest worked together for ill, and the
year 1775 is one of the blackest in the history of the colony. The
treaty with France in 1778 brought to the American colonists a success
which their resources and, it must be added, their resolution could
hardly have won alone, and once more exposed Newfoundland to European
attacks. It was protected by the energy and resource of Governor
Montague.

In 1775 came the very important Act known as Palliser's Act. This
statute was based on the old selfish and restrictive view that
Newfoundland should be a training ground for the Navy, and a place of
trade, not a permanent settlement. Bounties were given to the fishing
industry, and stringent measures were provided to ensure that masters
trading to the island should return with undiminished crews. The
privilege of drying fish was to be enjoyed only by such of the King's
subjects as sailed to Newfoundland from Great Britain, or from one of
the British dominions in Europe.

An interesting light upon the economic condition of the colony is
thrown by the following figures: