Our modern degrees can be traced back to two bands of operative masons, the hewers and setters, who in the mid 1300's found a need to set up codes and regulations to govern their work. These documents were hand written and often referred to as 'The Charges. About 1390, one of these codes, the Regius manuscript describes a ceremony of admission to operative masonry as a Fellow Craft. The ceremony was composed of three parts, a Prayer, History and Charges. There were no penalties. Operative masonry continued thus until the late 1500's.
In 1598 there are records of two Scottish lodges practicing 2 degrees, the entered apprentice and Fellow Craft. Until this time, an apprentice was considered chattel and could be bought and sold. The EA was now admitted to the lodge but was not considered equal to the FC. A document from this time, the Edinburgh Register House Document describes the two degrees and makes mention of the two pillars, J & B and the Five Points of Friendship. When a candidate was raised from EA he became a Master or Fellow Craft. The two were considered equal in the lodge but outside the Master was the employer and the Fellow Craft the employee.
In 1700, 300 years after Regius, the Sloane manuscript makes the first mention of the master mason's word, very similar to the one we know today but given in two parts, as in halving. The Dumfries manuscript of 1710 describes the candidate being brought into the lodge “Shamfully w' a rope about his neck”.
In 1717, the first Grand Lodge was formed in London and more speculative members were admitted to the craft. It was at about this time that the 3rd degree appears in documents. Unfortunately we do not know when, why or by who it was initiated. One of the earliest references arises in the Graham manuscript of 1726 which includes a 'Legend of Raising' very similar to that in our 3rd degree except that the body being raised was Noah, not Hiram Abif. Graham also mentions being “Entered, Passed & Raised by three severall Lodges” another indication of an early if not the first 3rd degree.
Since the ritual could not be written in the lodge records, much of the evidence of what was happening comes from non-masons publishing 'Exposures”. In 1730, Samuel Prichard published 'Masonry Dissected' describing all three degrees in detail. From it it was discovered that the 1st degree was split in two creating three degrees. Thus by the mid 1700's the basic form of the three degrees had been established.
In the late 18th century, the English ritual took shape primarily due to the efforts of one man, William Preston. Many feel that he refined the degrees to their highest point about 1800. There existed at that time, two rival Grand Lodges in England. When they reunited between 1809 and 1813, a Lodge of Promulgation was formed to standardize the English Ritual. In the process much of Preston's work was changed or discarded perhaps not for the better.
During this time, the popularity of Freemasonry was growing on this side of the Atlantic as well. In 1796, Thomas Smith Webb of Albany NY and John Hanmer, a student of William Preston's ritual of 1800, used it to create and publish 'Webb's Monitor'. Following the end of the American revolution, Grand lodges formed rapidly in the new nation and were quick to adopt and preserve Webb's ritual, essentially that we practice today.