December 16, 2023 will mark the 250th anniversary of the Boston Tea Party. That event saw three bands of fifty men, loosely disguised as Mohawk warriors, proceed to board three tea ships of the East India Company and dump some 90,000 pounds of tea into the bay.

The Tea Party sparked the long series of imperial measures and colonial countermeasure that would eventually lead to the shooting war of the American Revolution. These measures included the much hated Boston Port Act, which collectively punished one of the most important trading centers in colonial America. The significance of the Tea Party as the ignition spark that exploded the powder keg of the American Revolution cannot be overemphasized. Yet there remains considerable doubt as to its moral, political, and economic causes.

A great deal of this orientation arises from a number of fairly recent critical accounts that are in sympathy with the constitutional and political position of the king and Parliament. We hear again ideas once pronounced by American Loyalists and their British counterparts that colonial Patriots were actually confused about the nature of the British constitution, that they were in large measure led about by local smugglers of Dutch tea in service of their private interests, and that the Tea Act of 1773 was actually designed to lower the price of tea to the benefit of American consumers. Each of these points can be defended as having a basis in historical fact. But there was a whole lot more going on than just this.

Politics does make curious bedfellows. Smuggling had been in active practice since the very beginning of the colonial enterprise over a century before. But in this instance, it was also a primary countermeasure to the attempt to compel compliance with the efforts of Parliament to tax various articles of trade issued just a few years prior to the Tea Party. Under what was then collectively called the Townshend Duties, taxes had been placed on various articles of trade imported into the colonies including tea, but the resulting opposition was so severe, and the form of regulation so out of the ordinary even for mercantilists, that most of the acts were repealed in 1770. All but one, that is: the duty placed on tea.

This tax was to remain at the insistence of Lord North, First Lord of the Treasury. Here, he argued, was the last redoubt to defend Parliament’s right to rule in any capacity over the colonies. Lose this tax, he asserted, and you would soon lose all claim to any power over the settlements whatsoever. Interestingly, even though this single tax was retained, tensions nonetheless subsided and for nearly three years, nothing much happened. Why? The calm was largely due to the fact that there were alternatives to the East India company’s product before 1773.

Smuggling, mostly from Dutch sources, ensured that other supplies of tea could be had, and while these brands were not as popular as the teas from China and India brought in by the English company, no colonial was forced into the purchase and so the duty could be easily avoided. This was possible because the original chartered privilege of the East India Company, as the sole supplier of various articles of trade to the Empire from the Far East, including tea, was initially restricted to bringing its cargoes to England. From here, merchants were allowed to purchase the company’s goods and reexport them to other parts of the empire, and so it was with tea.

That practice of re-exportation, however, raised the company’s costs of doing business in the colonies. It also made detection of smuggling more difficult. Independent agents could easily elude officials in the various colonial seaports and just as easily disguise the sources of their products carried in bulk. In 1773, as the stockpiles of East India company tea accumulated in London warehouses, the imperial ministry arrived at what it thought to be a very clever solution. And here is where the loyalist pro-ministry argument finds some historical footing.

Citing a few of these pro-imperial interpretations, Andrew Roberts has recently summarized the Imperial viewpoint in his Last King in America (2021). Americans, he notes, perceived the company to be a monopoly, but The Tea Act passed in May of that year would actually have opened up American commerce to “market forces” by allowing the company to sell directly to the American colonies. No longer would the company’s tea suffer under the heavy markups of middlemen. The act would finally permit the East India company’s agents to ship to their own consignees in the colonies.

The opening of direct trade thus promised to halve the costs to the company of its exports and was to be the key to “undercutting the Dutch alternative.” Americans, Roberts observes “would still have to pay the three penny per pound import duty, but since the tea itself would be so much cheaper than its illegal alternative, no difficulties were anticipated.”  Citing another similarly disposed interpretation, Roberts reports that some “historians have described the Sons of Liberty as the ‘henchmen’ of the rich smuggler-merchants: ‘It was essentially a private operation for the benefit of racketeers.’”

These points are the same ones originally raised by contemporary loyalist supporters of then Governor Thomas Hutchinson. Daniel Leonard, writing as Massachusettensis in his fourth letter of January 2, 1775, observed that had the act been allowed to go into operation, American consumers would have reaped “the benefit, as tea would have been sold at near one half” its former price and thus “the country in general would have been great gainers.” The losers, he pointed out, would have been the smugglers, who had up until this time, amassed great fortunes: “A smuggler and a Whig,” Leonard chided, “are cousin germans, the offspring of two sisters, avarice and ambition.”  

Among the main points in the Patriot case, a point that none deny, was the irritation caused by Governor Hutchinson when he quietly chose to take his salary and the salaries of judicial officers, directly from this last remaining duty on tea. That decision threatened to place royal officials beyond the power of the assembly’s ability to control the government’s budget. But there was another aspect to the issue that linked the colonist’s constitutional arguments to the fear of monopoly, and this helped to prepare the way for Boston’s radical response.

Writing at the height of the controversy over the Townshend Duties, John Dickinson of Pennsylvania authored a series of widely influential pamphlets styled, Letters from a Farmer between 1767 and 1768 in which he took up the question raised earlier by Franklin in his deposition before Parliament: The distinction between internal and external taxation. This was not really the issue, Dickinson argued, but rather, internal versus external impositions.

Duties to prohibit a trade were one thing, he noted, but duties imposed on articles of trade that could only be acquired from a single source, namely Great Britain, were quite another. The former were meant to restrict trade in articles thought to be detrimental to the needs of the whole empire. The latter, however, were clearly and unquestionably meant to raise money and establish Parliament’s authority to do so.

Here, monopoly played the central part of the constitutional argument of the Patriot cause: “If you ONCE admit, that Great-Britain may lay duties upon her exportations to us, for the purpose of levying money on us only, she then will have nothing to do, but to lay those duties on the articles which she prohibits us to manufacture—and the tragedy of American liberty is complete.” Dickinson had specifically referenced such articles as “paper, etc.” but the application of the principle was the same with respect to tea. By levying a tax on a product supplied only by an official monopoly, no matter how small the rate or quantum charged, the precedent would be finally established of Parliament’s right to raise any degree of revenue thereafter.

The Tea Act did far more than simply lower the company’s operating costs in the distribution of its products. By opening trade directly with the colonies, it also made enforcement of its monopoly position more secure through exposing clearly who was operating as a consignee of the company and who was not. With the powerful presence of the British fleet, such enforcement was not to be doubted. But there was still more reason for the particularly radical turn taken by Bostonians.

Governor Hutchinson had himself directly influenced the appointment of the agents for the company, and these included his own sons. More troubling still, he specifically ordered that the ships not be permitted to leave until they had unloaded their cargoes. Most other colonial governments, royal and otherwise, had left the captains of the ships and the consignees of the company to fend for themselves. Such inaction usually resulted in the departure of the vessels with no corresponding crisis.

In Massachusetts, however, Hutchinson not only ordered the tea to be landed, but he also used fort Castle William, to house and protect the consignees of the company. But there’s more.

Hutchison was also to insist that should the cargoes not be unloaded before December 17, they would be seized for non-payment of the prescribed duty! At that point, few doubted that the Governor planned to engage in a little black-market dealing himself, selling off the contrabanded tea to supply his and other’s salaries. The forces of the colony’s executive and imperial officials thus seemed arrayed to compel the creation of the very precedent warned of by Dickinson! And so, the tea was dumped on December 16, 250 years ago. The rest is history.

Any opinions expressed are the author’s and do not necessarily reflect those of Liberty Fund.