Too Big To Fail - The East India Company’s Contribution to the Boston Tea Party
Once the largest corporation in the world, the English East India Company’s tight financial conditions contributed to the British Parliament passing the Tax Act in 1773.
We are all aware of the political protest that took place on Griffin’s Wharf in December 1773. The Sons of Liberty took aim at a shipment of tea that belonged to the East India Company. In protest to the Tea Act, the Boston Tea Party came to pass.
The Boston Tea Party lives on in American lore. While many understand why the Sons of Liberty carried out their protest, few are aware of the reason the British enacted the Tea Act in May of 1773. To shed light on that, we must delve into the British East India Company.
Back to the Beginning
Founded under Queen Elizabeth I, the British East India Company, then called the English East India Company (EIC), was incorporated on December 31, 1600. The company was formed to promote trade in the Indian Ocean region with an initial focus on the East Indies.
To say the EIC was successful would be an understatement. The fruits of their business flooded England. Teas, cotton textiles, and spices were soon abundant in the streets of London. And locals coulnd’t get enough. As for investors, they were experiencing returns as high as thirty percent.
What started as a trading company grew into a wildly successful trading company. And then into a behemoth. At its peak, the company was the largest corporation in the world.
A Company or Global Power?
The line between company and something more soon became blurred. The EIC had grown larger than several nations. It formed its own armed forces, amassing a count of 260,000 soldiers - twice the size of the standing British army.
Competitors soon were too frightened to go into places where the EIC had established business. Indian rulers feared for their territories being conquered. They found themselves signing one-sided contracts that granted the EIC taxing powers.
The success of the EIC soon became strained by its financials. The EIC found itself struggling to make its contractual payments to the British government. They found themselves embroiled in a war.
Moreover, in Bengal, back to back years of crop failure had created a famine. The EIC shared governance of the region and had been granted the right to collect revenue in Bengal. The famine ravaged the region and severely impacted revenues from the India region.
How to Save a Struggling Giant
London believed the company was too big to fail. Lord North and his administration saw an opportunity. If they allowed the EIC to ship directly to the colonies, and removed existing merchant agreements, the middlemen markups on tea would go away.
The act was drafted and set forth a few key provisions, one of which was to validate the previously passed Townshend Tax on tea. Created to help fund the British government, colonists had paid an external tax on imports.
Colonists opposed the act. Not only did it offer a way to rescue the EIC, it validated the taxes on tea. Moreover, the merchants who had made their living as middlemen traders were out of business.
Protests Crescendo in Boston
Under the thumb of a monarchy and having to import its business from a monopoly, the colonists made their opposition more known. In New York and Philadelphia, arriving tea shipments were sent back to Britain. In Charleston, the tea was left on the docks.
And in Boston, they decided to leave the ships in port and refused to unload them. On December 16, 1773, under the cover of darkness, the Sons of Liberty snuck aboard and dumped the cargo into the harbor.
Stunned British politicians took action. They enacted the Boston Port Act which closed the harbor until the destroyed tea was paid for. Other harsh measures including the Coercive Acts were passed. The steps taken by Great Britain would unify the colonists and accelerated the road to war.
The British had tried to puppeteer the American colonies. But in reponse to the dire condition of the East India Company, they went too far. The policies they enacted set the stage for one of America’s legendary events. And fueled colonial desire for independence.
History for the Hurried:
March 4, 1681: King Charles II of England granted a huge tract of land in the New World to William Penn to settle an outstanding debt. The area later became Pennsylvania.
March 9, 1864: Ulysses S. Grant was commissioned as a Lieutenant General and became commander of the Union armies. He would go on to lead the Union to victory.