Parliament made tea cheaper and received a riot in return
Seeking to rescue the East India Company and reassert the right to tax, Parliament cut the price of tea — and ignited a revolution.
By 1772 the British East India Company was in the kind of financial distress that makes auditors weep. It had accumulated some seventeen million pounds of surplus tea in its London warehouses1 — the consequence of American boycotts, rampant smuggling of cheaper Dutch tea, and a credit crisis. The Company owed the government £400,000 a year for its charter and could not pay. Parliament extended a loan and then turned its attention to the tea mountain.
The solution was the Tea Act, given royal assent on 10 May 1773.2 It did not create the Company's monopoly — that was a century old. What it did was streamline it to a previously illegal degree: the Company could now skip the London auction, obtain a Treasury licence, and ship directly to appointed consignees in Boston, New York, Philadelphia, and Charleston. The London merchants and the colonial wholesalers were cut out entirely. In Boston the chosen agents included the sons of Royal Governor Thomas Hutchinson.
The retained Townshend duty of three pence per pound was the constitutional linchpin.2 Lord North had in 1770 repealed every other Townshend impost but kept the tea duty precisely so that repeal could not be read as conceding Parliament's right to tax. Benjamin Franklin, writing to Speaker Thomas Cushing in June 1773, described the logic exactly: the plan was "to take off so much duty here, as will make tea cheaper in America than foreigners can supply us, and to confine the duty there to keep up the exercise of the right."5 Even after the three-pence duty, Company tea now undercut smuggled Dutch tea for the first time in memory.3 Parliament had made legal tea the bargain option.
Colonial patriots grasped the trap at once. Accepting cheap taxed tea meant accepting the right to tax; the affordability was the danger. Consignees in Philadelphia and New York were persuaded to resign before the ships arrived. In Boston, where Hutchinson's sons declined to surrender their appointments, the situation escalated.4
On the night of 16 December 1773, after Hutchinson refused a final appeal to send the ships home, men in Mohawk dress emptied 342 chests from the Dartmouth, Eleanor, and Beaver into the harbour.4 John Adams, the next morning, called it "the grandest Event, which has ever yet happened Since, the Controversy, with Britain, opened!"6
Parliament's response — the Coercive Acts of 1774 — proved more radicalising than the Tea Act itself. The attempt to rescue a struggling trading company by rationalising its supply chain had produced an object lesson in the difference between a price and a principle. The colonists were not, in the end, rioting about the cost of tea.
To take off so much duty here, as will make tea cheaper in America than foreigners can supply us, and to confine the duty there to keep up the exercise of the right.— Benjamin Franklin to Thomas Cushing, 4 June 1773
References & Citations
- Boston Tea Party Ships & Museum — "The Tea Act", bostonteapartyship.com, accessed 2026.
- The Statutes Project — "Tea Act 1773, 13 Geo. 3, c. 44", statutes.org.uk, accessed 2026.
- Stamp Act History — "1773 Tea Act", stamp-act-history.com, accessed 2026.
- Massachusetts Historical Society — "The Coming of the American Revolution: Tea Party", masshist.org, accessed 2026.
- Founders Online / National Archives — "Benjamin Franklin to Thomas Cushing, 4 June 1773", founders.archives.gov.
- Massachusetts Historical Society (Beehive) — "John Adams and the Boston Tea Party", masshist.org, December 2015.