How A “Corporate Bailout” Cost Britain A Nation: The Real Boston Tea Party

Author’s note: Last week’s entry on American History was so well-received, I thought another might be of interest:

During the cold  night of December 16, 1773, several dozen radicals,  face-painted to resemble Mohawk Indians, stole aboard three American vessels moored in Boston Harbor christened the Dartmouth, Beaver, and Eleanor. There, the band broke open 340 chests of Chinese tea belonging to the East India Company and tossed the contents overboard. Popular myth has it that the act was widely celebrated in the colonies as an act of defiance and that it was all about higher taxes on tea. Both myths are decidedly … well, mythical.

Likely coming as a shock to  our modern-day “Tea Party” devotees, the Boston version was not a protest over higher taxes on tea, but over  a tax break engineered by the British Crown to save the East India Company.  Also, the act of piracy was not particularly well-received by the majority of colonists, and became an object of scorn. In fact, most of the tea party conspirators fled Boston after the event to avoid arrest.

According to an article by Ray Raphael entitled “Debunking Boston Tea Party Myths,” the true  motivator for this first meeting of the real Tea Party Movement was to protest  a government bailout of the East India Company by the British Crown. It seems the world’s first mega-corporation was, like the mega-corps of our day, facing near collapse because of the bubble caused by speculative banking schemes that burst in Europe in 1772. Under Royal Charter since 1600, the East India Company effectively ruled over much of India and also controlled a large share of the world’s tea production. When the banking crisis froze credit all over Europe, tea began to pile up in the Company’s warehouses. British politicians publicly aghast at corporate greed, set about privately to bail out the Company with legislation designed to make tea more affordable.

What came out of the sausage grinder was the Tea Act of 1773 which repealed the tax on tea that landed on British shores headed for America. Behind the idea was the economic reality that Europe was awash in 18 million pounds of surplus tea. The colonies actually craved more tea (it was the recreational drug of its day), so a marriage made in London was arranged. Oh, America still had to pay  the puny import duty, but Parliament made sure to “cut out the middle man” by allowing the Company to sell tea directly to American consumers thus reducing the ultimate cost. What could be wrong with that, reasoned the distinguished men of Westminster.  Plus, as an added bonus, it would save the Company and the Empire.

What the London cartel didn’t consider was the personality of the New Englander who resented any tax break he or she didn’t come up with themselves.  They were also tone-deaf to the  feelings of  colonists about the Currency Act of 1764.  Sponsored by the Bank of England, the law forbade the colonies from printing their own  paper money thus forcing them to pay in precious metals which they borrowed from banks (guess which one) at exorbitant interest rates.

As  Raphael puts it, ” For the Americans, the fundamental issue was one of self-governance. Whoever levied taxes got to call the shots, including how to spend the money. Parliament insisted on taxing colonists to support—and command—colonial administration. Colonists countered that they were more than willing to tax—and rule—themselves. “No more taxation without representation” became their rallying cry, not “down with high taxes.”  Even Benjamin Franklin downplayed the role of the tea import duty on causing the American Revolution saying,  “… the colonies would gladly have borne the little tax on tea and other matters had it not been that England took away from the colonies their money, which created unemployment and dissatisfaction.”

The revolt was not well-received outside of the radical fringe that perpetrated it.  George Washington chided “their conduct in destroying tea,” and Benjamin Franklin argued for compensating the corporate giant for the losses.  The deed itself was not recognized as the “Boston Tea Party” for over 50 years. In fact, tea drinking was frowned upon in the colonies and considered either a faint evil or “slow poison.” One Virginia newspaper considering the habit, even went so far as to lament, “our race is dwindled and become puny, weak, and disordered to such a degree, that were it to prevail a century more we should be reduced to mere pigmies.”

What riled the rest of America were not the works of the faux Native Americans, but the British reaction to the Tea Party. Passed in its wake, the “Intolerable Acts” closed Boston Harbor and denied Americans the rights they took for granted as British subjects. This was the match that lit the fuse for revolution, not the costume party on the water.


–Mark Esposito, Guest Blogger

15 thoughts on “How A “Corporate Bailout” Cost Britain A Nation: The Real Boston Tea Party”

  1. Spiritual Adviser to the president, Jim Wallis

    WALLIS: Well, it’s the kind of language, to be blunt, Rupert Murdock likes. Fox News has been the ah ah the assassin of Obama’s religion. I was on Fox News last week and they said, “How do you explain that 18% of the American people now believe that he’s a Muslim. I said, ” Are you serious?” and they said yes.

    I said because you’ve been planting the seed of doubt 24/7 in people’s minds. It’s been a religious assassination of Barack Obama by the far right. I’ve known him for ten years, he’s been a Christian -he had a conversion. Nothing wrong with being Muslim at all, but he’s not. And so, what they’re trying to do is disconnect him and his values from the American people.

    and to be blunt there wouldn’t be a Tea Party if there wasn’t a black man in the White House. There wouldn’t be a Tea Party. That’s a fact.

    He had a conversion ? from what ?


    HOST: I suppose what they would say is the problem, actually, is the economy hasn’t improved for most Americans, the problem is that Barack Obama’s solution seemed to many Americans to be un-American, seemed to be rather more European in terms of government spending and emphasis on things like that. And that really, it has nothing to do with assassinating and his religion – that the issue is Obama, himself.

    WALLIS: Well there’s two issues here. One is, ah, a journalist asked me how I reacted to the election results and I quote the Proverb, “Without a vision, the people perish, ” and when people feel like they’re perishing, they’re angry and afraid. So the economy, lack of jobs, lack of success, is indeed the real issue here. But along side that, there’s been, there’s been a very calculated right wing media machine response trying to discredit Obama. He wasn’t born here, he was born someplace else, he’s not really a christian, so basically you have an ideological food fight

    HOST: Does he believe what you are telling us this morning, that actually Rupert Murdock is too a large extent responsible as you are saying?

    WALLIS: I’m saying, I’ll take responsibility.

    HOST: But do you think he believes that?

    WALLIS: Well, I think he certainly feels he hasn’t had a chance to sorta communicate effectively what he’s been for.

    But yet Barack Obama is a great communicator.

  2. “…most of the tea party conspirators fled…”

    What a fine idea. Here’s to hoping that history repeats.

  3. “As a venerable retired judge told me, the crime stays the same, only the names of the perpetrator and victim change.”

    I thought someone was channeling Jack Webb there for a second. Must have. More coffee.

  4. ” the true motivator for this first meeting of the real Tea Party Movement was to protest a government bailout of the East India Company by the British Crown.”

    The true motivator of the current day Tea Party
    “Racism Strait Up” Janeane Garofalo

  5. mespo,

    Right … now it’s coming back to me … somewhere in that time was a “special court” the Brits set up to deal with smuggling and I thought that court was part of the 1764 Act.

    Great topic … and a short moment to remember, most fondly, one of my favorite teachers and his love of history which inspired me. I’m going to spend some time goggling and reading.

  6. Blouise:

    I think the Sugar Act passed the same year as the Currency Act gave rise to smuggling to avoid the duty. The Currency Act extended previous legislation to prohibit colonial “bills of credit” (basically IOU’s issued against anticipated tax revenues)from being issued and thus limiting them to ones already in circulation. The first Currency Act in 1751 applied only to New England colonies tha used the boc’s to pay for war debts.

  7. James:

    “Well see its nice to know this as it seems to me now that everything old is new again…”


    As a venerable retired judge told me, the crime stays the same, only the names of the perpetrator and victim change.

  8. Well see its nice to know this as it seems to me now that everything old is new again……………had never heard this version of the ” Boston Tea Party ” before as this sheds a different light on what i thought I knew,………….thanks

  9. Thanks for another interesting history lesson, mespo. (Well told…) And thanks for the introduction to Ray Raphael, as well. A perfect way to start a cold and gloomy day…

    About Ray Raphael:

    “He spent the summer of 1962 in North Carolina registering black voters and integrating public facilities and the summer of 1964 with the Student Nonviolent Coordinating Committee’s “Freedom Summer” in Mississippi. His work in the “Movement” of the sixties influenced his grassroots journalistic style and his bottom-up telling of history.”


  10. mespo,

    Yeah! You have taken me back to my eighth grade civics class and the teacher who insisted that we study the Currency Act of 1764 as it was the real spark that lit the Revolutionary War. If I remember correctly, and I have to admit it’s a little vague after all these years, weren’t there issues involving smuggling contained within that Act also?

    At any rate, thanks for the relevancy (corporate bail-out) of yesterday to today.

  11. Give me Orange Pekoe with a little honey….I’ll start my own tea party…..

Comments are closed.