On May 10, 1773, the British Parliament passes the Tea Act, a bill designed to save the faltering East India Company from bankruptcy by greatly lowering the tea tax it paid to the British government and, thus, granting it a de facto monopoly on the American tea trade. Because all legal tea entered the colonies through England, allowing the East India Company to pay lower taxes in Britain also allowed it to sell tea more cheaply in the colonies. Even untaxed Dutch tea, which entered the colonies illegally through smuggling, was more expensive the East India tea after the act took effect.
British Prime Minister, Frederick, Lord North, who initiated the legislation, thought it impossible that the colonists would protest cheap tea; he was wrong. Many colonists viewed the act as yet another example of taxation tyranny, precisely because it left an earlier duty on tea entering the colonies in place while removing the duty on tea entering England.
When three tea ships carrying East India Company tea, the Dartmouth, the Eleanor and the Beaver, arrived in Boston Harbor, the colonists demanded that the tea be returned to England. After Massachusetts Governor Thomas Hutchinson refused to send back the cargo, Patriot leader Samuel Adams organized the so-called Boston Tea Party with about 60 members of the radically anti-British Sons of Liberty. On December 16, 1773, the Patriots boarded the British ships disguised as Mohawk Indians and dumped the tea chests, valued then at £18,000 (nearly $1 million in today’s money), into the water.
Parliament, outraged by the Boston Tea Party and other blatant acts of destruction of British property, enacted the Coercive Acts, known to colonists as the Intolerable Acts, the following year. The Coercive Acts closed Boston to merchant shipping, established formal British military rule in Massachusetts, made British officials immune to criminal prosecution in America and required colonists to quarter British troops. The colonists subsequently called the first Continental Congress to consider a united American resistance to what they saw as British oppression.
