Published December 16, 2010
There are taxes, regulation, a massive corporate bailout, and a popular uprising called "the Tea Party"—but it’s not 2010. It’s 1773, and today marks the 236th anniversary of the Boston Tea Party. The similarities are illuminating.
By the 1760s, American colonists consumed more than a million pounds of tea each year. Britain, which produced the stuff in India, should have been swimming in revenues from the trade. But taxes and regulation, as they often do, fouled the situation.
Parliament’s taxes doubled the cost of British tea compared to rival (and illegal) imports. So rather than pay the taxes, the colonists smuggled their tea. Conservative estimates suggest that more than three-quarters of the tea consumed in America was bootlegged. One Massachusetts governor wrote that “carts and other carriages are heard to be continually going about in the dead of night, which can be for no other purpose than smuggling.” The practice was so widespread that the famed evangelist George Whitefield preached against it when he visited the colonies: “What will become of you who cheat the King of his taxes?” As new taxes were levied, the colonists imposed widespread boycotts on British goods, including tea.
Taxes and tax evasion weren’t the only problems, however. British trade regulations prevented the British East India Company, a private corporation of merchants, from selling their tea directly to the colonies.
Instead, the company was forced to sell the tea to auction houses in England, an intermediary step that further drove up prices. To make matters worse, inefficiency, incompetence, and corruption marked the organization in the late 1760s. Ruin was inevitable. By the fall of 1772, the British East India Company owed the government more than £1 million.
The British government had no desire to see its debtor go out of business. It was, in the parlance of our time, too big to fail. So early in 1773, Parliament pushed a bailout package for the British East India Company called the Tea Act. The bill extended a massive loan—well over what was already owed—and more government control over the company’s governance. It also allowed the East India Company the freedom to sell tea directly to the Americas.
By summer four American cities were set to receive the tea: Charleston, Philadelphia, New York, and Boston. Merchants in each town were supposed to take the tea on consignment. Massachusetts Governor Thomas Hutchinson used his position to get his two sons jobs as consignees. Corruption is the cream to the heady brew of power.
But power often overlooks the obvious. While Parliament had removed some of the regulatory roadblocks for tea sales, it decided to keep the tea tax in place.
Being unrepresented in Parliament, the patriots opposed importing the tea and vowed resistance. The Boston patriot club, the North End Caucus, voted to “oppose the vending [of] any Tea, sent by the East India Company to any part of the Continent, with our lives and fortunes.”
The first of three ships arrived in Boston Harbor on November 28. The taxes on the tea were payable when the boat was offloaded, and it could only sit in the harbor unloaded for twenty days before customs men would seize the goods. Patriots like Samuel Adams, Joseph Warren, and John Hancock lobbied to have the ships turned around and sent back, but the law prohibited that, which set the two sides on a collision course ending at midnight, December 16, the last moment to legally unload the tea.
Both sides politicked it late into the evening of the sixteenth but to no avail. Finally, at a crowded town assembly, Sam Adams stood and announced, “This meeting can do nothing more to save the country.” In response people outside yelled and screeched. Up went the call: “Boston Harbor a teapot tonight!” And down the street strode dozens upon dozens of men dressed as Indians, making their way to Griffin’s Wharf and the three tea ships.
It was a well-orchestrated piece of protest and political theater. The “Indians” boarded the ships and dumped hundreds of crates of tea into the bay, destroying the entire cargo.
History never really repeats itself, but an observer would have to be thick to miss the parallels here. Governments that distort markets with taxes and regulation, perpetuate incompetence with bailouts, utilize cronyism and ignore constituents should not be surprised when those same constituents rock the boat and upset the crates.
Joel J. Miller is the author of "The Revolutionary Paul Revere" and co-editor of "The Portable Patriot: Documents, Speeches, and Sermons that Compose the American Soul." He is a vice president at Thomas Nelson Publishers. To contact Joel, visit his website: JoelJMiller.com.