Tax measure by the British government that led to the Boston Tea Party.
By 1773, the British East India Company was experiencing serious financial trouble and required an emergency loan from the British government to continue operating. The British Parliament not only sought to regulate the company through the Regulating Act for India, it also wanted to remedy the company’s financial situation through economic aid in the form of a tax cut on tea the company had stockpiled in its warehouses. The Tea Act of 1773 actually reduced the duty on tea shipped to America from 9 to 3 English pennies per pound, a rate that made English tea cheaper than smuggled Dutch tea—especially because the British East India Company paid the duty in London rather than at the colonial ports. Under the Tea Act, Parliament consigned the tea to a few major importers in the colonies and shipped the tea, hoping it would sell quickly, pay the British East India Company’s debts, and discourage smuggling.
However, the colonists, for whom tea had become a household staple, still resented that tea had remained taxed after the repeal of the Townshend duties (in effect from 1767 to 1773) on lead, glass, paper, and tea to raise money for the British Treasury. Merchants complained that only a few well-connected importers could sell tea. Protests occurred in Philadelphia and New York when the tea arrived, and in Boston the Sons of Liberty led the Boston Tea Party, in which Bostonians destroyed tea aboard the Dartmouth, Eleanor, and Beaver. Instead of solving a problem by making a commodity more accessible to the colonies, the Tea Act of 1773 sparked only resentment of the British East India Company’s privileged position and of continued taxation of the colonies by the British Parliament.
