Clashing Over Commerce: A History of US Trade Policy (Markets and Governments in Economic History)

by Douglas A. Irwin

The revenue implications of bringing the smuggled tea into legal channels of trade and taxing it were enormous.24 Even though Britain was actually reducing the price of legal tea imports, colonial merchants—many of whom were probably complicit in the illegal smuggling—protested the granting of a monopoly privilege to the East India Company and the payment of duty. They succeeded in riling up other colonists against the British action and, in the fall of 1773, American ports began turning away East India ships loaded with tea. In Boston, several ships landed but were not permitted to unload. At the instigation of local merchants who profited from smuggled tea, crowds gathered near the docks on December 16, 1773. About one hundred fifty people stormed an East India Company ship and dumped 342 chests of tea (about 90,000 pounds) into the harbor. Thus, the famous Boston Tea Party was not a protest about an unfair tax increase, since the duty was actually being reduced, but about a British attempt to make the smuggling of tea unprofitable so that the East India Company could gain control of the trade.