The East India Company, famed for spreading English influence throughout India, had fallen on hard times in the early 1770s. Its market for Indian teas in the American colonies was a casualty of the taxation tiff that was growing increasingly ugly. In 1767, British policymakers had imposed a duty on tea and other commodities destined for the colonies. A boycott of British goods convinced the government that it should repeal the unpopular Townshend Duties in 1770, but insisted on retaining the tax on tea as a matter of principle. Not surprisingly, the Americans continued to boycott tea. As a result, the East India Company had warehouses full of tea, but was teetering on the brink of bankruptcy.
The British government responded in 1773 with a program designed to answer two needs: (1) extend assistance to the East India Company, and (2) challenge the American colonists on the nettlesome taxation issue.
The Tea Act of 1773 provided for the following:
Many in England thought this law would be warmly greeted in America, because it allowed the colonists to resume their tea-drinking habit at a cost lower than ever before. Ships laden with more than 500,000 pounds of tea set off for the colonies in September 1773.
- Tea was allowed to be shipped in East India Company ships directly from India to the American colonies, thus avoiding a tax if the commodity were first sent to England as required by previous legislation
- A duty of three pence per pound was to be collected on tea delivered to America; this tax was considerably less than the previous one
- The tea was to be marketed in America by special consignees selected by the East India Company. Four centers, Boston, New York, Philadelphia, and Charleston were selected.
The optimists in Britain were disappointed by the American reaction. Ordinarily conservative shippers and shopkeepers were directly impacted by the new law and were vocal in their opposition. Previously, American ships brought much of the tea from England, but that trade was now reserved for the East India Company. The shop owners objected to the new practice of using only selected merchants to sell the tea; many would be excluded from this trade in favor of a new monopoly.
Opposition developed to the arriving tea shipments in Boston and other colonial ports. The Tea Act actually revived the flagging careers of agitators like Samuel Adams, who had been frustrated in recent years by the relative calm in the relationship with the mother country. The radicals found allies in the formerly conservative business community.
Public anger was sufficient to induce many of the appointed tea agents to resign their positions before the tea arrived. In New York City and Philadelphia the ships masters quickly assessed the situation on arrival and headed back to England. In Annapolis the ship owner was forced by angry demonstrators to set fire to his ship and its cargo of tea.
The focal point of opposition, however, was Boston. There Governor Thomas Hutchinson, whose relatives were the local tea agents, decided to force the issue. The outcome was the Boston Tea Party.
See timeline of the American Revolution.