Formal Establishment of the Colony, 1862-71

Largely as a result of the costly military expeditions against the Maya, the expenses of administering the new colony of British Honduras increased, at a time when the economy was severely depressed. Great landowners and merchants dominated the Legislative Assembly, which controlled the colony's revenues and expenditures. Some of the landowners were also involved in commerce but their interest differed from the other merchants of Belize Town. The former group resisted the taxation of land and favored an increase in import duties; the latter preferred the opposite. Moreover, the merchants in the town felt relatively secure from Mayan attacks and were unwilling to contribute toward the protection of mahogany camps, whereas the landowners felt that they should not be required to pay taxes on lands given inadequate protection. These conflicting interests produced a stalemate in the Legislative Assembly, which failed to authorize the raising of sufficient revenue. Unable to agree among themselves, the members of the Legislative Assembly surrendered their political privileges and asked for establishment of direct British rule in return for the greater security of crown colony status. The new constitution was inaugurated in April 1871 and the new legislature became the Legislative Council.

Under the new constitution of 1871, the lieutenant governor and the Legislative Council, consisting of five ex officio or "official" and four appointed or "unofficial" members, governed British Honduras. This constitutional change confirmed and completed a change in the locus and form of power in the colony's political economy that had been evolving during the preceding half century. The change moved power from the old settler oligarchy to the boardrooms of British companies and to the Colonial Office in London.