Britain's need for revenue continued even after France was ejected from North America, primarily because of continuing struggles with the Native Americans. The conflict between the French and British had kept each side trying to gain the Indians' loyalty through gifts and concessions. However, once France left North America the British stopped giving these gifts to the tribes, and squatters from the colonies began to settle on Indian lands. The Native Americans, in turn, feared the British would support these movements. Tensions rose and both sides prepared for a long battle.
An Indian prophet from the Delaware tribe, named Neolin, attracted a large following among the natives, calling for a complete rejection of all things European, including culture and alliances. Pontiac, an Ottawa Indian, was another proponent of anti-British action. During the summer of 1763, he led the Ottawas in attacks against British forts around the great lakes, eight of which they successfully sacked. His efforts continued, but over the coming years conditions declined. The Ottawas experienced shortages of food and ammunition, and a smallpox epidemic broke out after the British deliberately distributed infected blankets as a peace offering. Finally, the hobbled Indians made peace with the British in 1766.
In efforts to conciliate the Indians, the British government issued the Proclamation of 1763 on October 7, 1763. The proclamation declared that all land transactions made to the west of the Appalachian crest would be governed by the British government rather than by the colonies. The British vowed to respect Native American land rights and stringently control colonial expansion.
As a result of the increased tension in North America, especially between the Native Americans and the British, the British government decided that rather than recall its entire army, 10,000 troops would remain behind to protect the empire's interests in the newly acquired territory. The British troops intimidated Indians, the remaining French, and the Spanish, all of which challenged Britain in certain areas of the continent. As it turned out, the troops also intimidated the colonists, some of whom reacted negatively to the decision to leave troops in North America. The expense for maintaining North American operations, including payment and supplies for troops, and the establishment of civil governments in Canada and Florida, totaled about six percent of Britain's peacetime budget. The British thought it was reasonable for the colonists to share in this expense, and began to deliberate on how best to tax the colonies. Most colonists, on the other hand, considered the payment of soldiers in North America and the establishment of colonial governments to be none of their responsibility.
The history of the colonization of North America is also the history of forced western migration for the continent's Native Americans. Constantly at odds with the settlers on the continent, the tribes had relied on their ability to play the major powers of France and Britain against each other to maintain their land claims west of the Appalachians. However, once France no longer occupied a large geographical area, this option disappeared. They feared that with all land east of the Mississippi in British hands, the British colonists along the east coast would rapidly move westward, and drive them further from their land. When colonial squatters did start to move into the western lands, the Indians saw no option but to react strongly. However, the lack of communication between tribes and the resulting lack in coordinated action made them easy prey for the British soldiers.
The Proclamation of 1763 was an attempt by the British government to restore order to colonial expansion, which until then had been left to the colonies themselves to regulate. The Proclamation was intended to assuage the fears of the Indian tribes by recognizing all existing Indian land titles everywhere west of the "proclamation line" until tribal governments agreed to cede the lands through treaties. The wording of the proclamation made it clear that the British expected the tribes to cede their lands at some point in the future, and that the British government intended to regulate, not stop, westward expansion. Though the proclamation calmed the Indians' fears to an extent, the colonists saw it as an unjust invasion of their rights, and decried its slowing effect on expansion. After the British became the controlling power in North America, many colonists had grown excited about the prospects of settling in the west, and expansion was universally considered to be the path to prosperity. The Proclamation of 1763 was added to the growing litany of British impositions, which the colonists complained restricted their freedoms.