Seeking to rescue the financially struggling East India Company, Parliament passed the Tea Act, allowing the company to ship tea directly to the American colonies and undercut local merchants while retaining the existing three-pence tax that colonists found so galling. Rather than pacifying colonial anger, the act was seen as a Trojan horse for taxation without representation, and it provoked the defiant dumping of tea into Boston Harbor seven months later.
The East India Company was, by 1773, sitting on roughly 17 million pounds of unsold tea and teetering toward bankruptcy, a crisis serious enough that its collapse threatened British financial markets. Parliament's fix was elegant on paper: let the company bypass middlemen and sell tea directly in the colonies at a lower price than even smuggled Dutch tea, while quietly preserving the Townshend duty that colonists had been boycotting for years.
Colonial leaders saw through the arrangement immediately. Cheaper tea was not the point; the point was that accepting it meant tacitly accepting Parliament's right to tax colonists without their consent, a principle radicals like Samuel Adams and the Sons of Liberty refused to concede regardless of price.
When three East India Company ships arrived in Boston Harbor that December, colonists boarded them disguised as Mohawk warriors and dumped 342 chests of tea into the water, an act of vandalism-as-protest that Britain answered with the punitive Coercive Acts, which in turn helped push the colonies toward the First Continental Congress and, within two years, open war.
Key people: Lord North, Samuel Adams