The British East India Company had a problem. The British Parliament had required it to sell all of its tea to merchants in London. Much of that Tea was then shipped to the American Colonies. Therein lied the problem. A significant portion of the tea that was sent to the Colonies remained unsold. An increasing number of colonists were up-in-arms about the taxes and regulations which had been placed upon them by the Townshend Acts. The company’s other problem was that it was obligated to pay 400,000 British pounds each year to the British government. The British East India Company was going broke.
The British Parliament also had a problem. Smugglers! Smugglers brought in as much as 900,000 pounds (in weight) of tea each year into the Colonies. Although the tea was not of the same quality as that offered by the British East India Company, it was untaxed, and therefore it could be sold for less money. The smuggled tea provided added income for colonial merchants, and the smugglers as well, so it gained increasing popularity among consumers as time went by.
A further problem for the Parliament was its relationship to the East India Company. The East India Company established trading posts in Bombay, Calcutta, and several other cities before Britain established colonial control of the area. The company was poorly managed and filled with corruption. By 1773, Lord North had come to the conclusion that the company was more likely to remain solvent if it was controlled by the government rather than its then current corrupt management. The East India Company Regulating Act and the East India Company Loan Act, both formalized in 1773, seized control of the company in exchange for 40,000 pounds (in currency) that the government was obligated to pay to the company in alternate years. The Regulating Act also established governmental control over the area that had previously been considered the property of the company. After it initiated those two Acts, the Parliament found it had further problems. When Colonists consumed tea purchased from anywhere other than the East India Company, the British government did not receive income which was created by taxes and duties. It also placed increased financial strain on the East India Company. A company in which the British government now had a proprietary interest.
On May 10, 1773 the Parliament approved of and initiated provisions set forth by the Tea Act. The Tea Act’s official title actually read: “An act to allow a drawback of the duties of customs on the exportation of tea to any of his Majesty’s colonies or plantations in America; to increase the deposit on bohea tea to be sold at the East India Company’s sales; and to empower the commissioners of the treasury to grant licenses to the East India Company to export tea duty-free”. It seemed to be a fairly simple proposition. From that point forward the East India Company would be allowed to import tea, duty-free, into the Colonies. However, many Colonists viewed the matter quite differently. They felt that drinking tea which had been taxed according to provisions in the Townshend Act constituted an implied acceptance of the Parliament’s tyranny upon them. They also recognized this Act placed the East India Company in control of all tea that was sold in the Colonies. The Tea Act allowed the East India Company to directly ship tea to the Colonies from India. If ships carried tea that was not the property of the East India Company, they were deemed to be smugglers by British officials. Other teas began to disappear from the shelves of colonial businesses. Only establishments with official permission were allowed to sell the tea. The local economy was dampened because of both the regulations and the loss of free market products as a result of the Tea Act. Many colonists anticipated that when local merchants closed their shops because of lost profits, the British would then raise the price of the tea to that which existed before the enactment of the Tea Act. From their perception British coffers would be further filled at the expense of the Colonies.
How did the Colonies react to the Tea Act? Coalitions mobilized to prevent the sale of the tea, and efforts were made to actually prevent the ships which transported the tea from landing in the harbors of Boston, Philadelphia, Annapolis, New York, and Charleston. Merchants in Charleston would not accept the tea, and it spoiled on the dock. Opponents in New York and Philadelphia successfully prevented many ships from docking, and eventually followed the example of those in Boston who threw the tea into the harbor. In Annapolis, a crowd forced one captain to not only burn the tea aboard his ship, but his ship as well. In Boston, the British Governor used force to ensure ships were allowed to dock. His actions further angered Colonists and resulted in the planning of the Boston Tea Party. After tea that was valued at more than 18,000 pounds (in currency) was thrown into the harbor, Parliament began to enact measures they referred to as the Coercive Acts. We know them, of course, as the Intolerable Acts.
The attached image is a 1614 painting of British, Spanish, and Dutch ships sailing in what is believed to be a bay in the East Indies.
Read the full text of the Tea Act here:http://www.bingoforpatriots.com/american-history/13-colonies/taxation-without-representation/tea-act-1773/
Please take a moment to be thankful that we have the right to question the motives behind the decisions of our elected officials. It is truly one of the things on my list of What IS Right With America!
Susan C. Rempel, Ph.D.