Tea Act of 1773: Lord North's Cheap Tea Bailout and Hutchinson's Sons

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The Boston Tea Party was set off by a law that made tea cheaper. In 1773 the British East India Company, which owed the government 400,000 pounds a year for its monopoly, was close to collapse after the 1770 Bengal famine gutted its revenue. By law it had to sell all its tea at the London auction after paying a duty of two shillings and sixpence per pound, which roughly doubled the price, so unsold tea piled up in London warehouses. In America, about 86 percent of the tea consumed was smuggled Dutch tea, around 900,000 pounds a year against 562,000 pounds of legal British tea, and the Sons of Liberty promoted the inferior Dutch product as a patriotic protest against the Townshend duties of 1767.

Prime Minister Lord North's Tea Act, which received royal assent on May 10, 1773, let the company ship directly to the colonies with British duties waived, an idea Benjamin Franklin had helped suggest. North kept the three-pence Townshend tax because it paid the salaries of royal governors, freeing them from colonial assemblies. The act united legitimate merchants and smugglers against the company's handpicked consignees. New York and Philadelphia sent the ships home, and Charleston let the tea rot in storage. In Boston, Governor Thomas Hutchinson refused to let the ships leave, and on December 16, 1773, as the 20-day landing deadline expired for the Dartmouth, men from the Old South Meeting House destroyed 342 chests, over 90,000 pounds of tea. Parliament answered with the Coercive Acts, which drew the colonies together toward the First Continental Congress and war.

• Hutchinson was a part owner of the merchant business receiving the Boston tea, and two of his sons and a nephew were consignees.
• In Charleston, customs officials seized the unloaded tea for unpaid duties and locked it in the Exchange building.
• The Boston Port Act closed the harbor until the company was repaid, and General Thomas Gage was installed as royal governor of Massachusetts.
• Parliament repealed the tea tax in the Taxation of Colonies Act of 1778, three years into the war.
• The Tea Act stayed on the British books until the Statute Law Revision Act took effect on August 6, 1861.