As most students know, the “Boston Tea Party,” which occurred this week (Dec. 16) in 1773, was a direct response to the Tea Act that the British Parliament had passed earlier that year. But it was also in response to the series of revenue acts — Sugar Act, Stamp Act, Townshend Acts — that Britain had imposed on its American colonies since the end of the French and Indian War in 1763, a war that had cost Britain dearly. Indeed, Britain had imposed the revenue acts to help pay for that war.
That said, the Tea Act was different because its chief purpose was not to gain revenue, but to rescue the British East India Company from bankruptcy. Parliament worried that if the East India Company failed, it might drag down the entire British economy, but many members of Parliament wanted to prevent the company’s bankruptcy also because they had personal fortunes invested in it.
Thus did the Tea Act expand the East India Company’s monopoly on selling tea to the British colonies — and at a very cheap price because the company had tons of tea sitting in its warehouses that it needed to sell. In fact, the price was so cheap that even though Parliament imposed a small tax on the tea, it still undercut the price the American colonies currently were paying for tea, including smuggled tea, which made up the bulk of the tea they consumed. What’s more, the East India tea was of higher quality than the smuggled tea.