The British "Bailout":
In 1773, a new law passed by the British Parliament prompted more protests. The Tea Act was an attempt by the British government to rescue the business of one of England’s largest trading companies, the British East India Company. The British East Indian Company was in financial distress, partly as a result of the colonial boycott of English tea, and was in danger of going broke unless it could sell the nearly 17 million pounds of tea that were sitting in its London warehouses. To save the company from ruin, Parliament passed the Tea Act, which allowed the company to ship tea to America without paying the existing heavy duty in England. This lowered the cost of their tea that was sold in the colonies and allowed the company to sell the tea more cheaply than the colonial importers of English tea as well as the smugglers of foreign tea. This would ruin many American tea merchants. The Tea Act also gave the British East India Company a monopoly, or complete control, over tea sales in the colonies. From now on, the only merchants who could sell the bargain-priced tea were those chosen by the company.
Although the British government thought that it could pursuade the colonists to buy the tea being sold by the East India Company after it had lowered in price, the colonists were not fooled. The colonists still had to pay a slight tax on the tea (a remainder from the recently repealed Townshend Acts), and were upset that the British Parliament had passed yet another law that affected them without their consent. If they agreed to buy the East India Company's tea, they would be agreeing to their lack of representation in the British Parliament.
In addition, many merchants were alarmed by the East India Company's monopoly over the tea trade. They wondered what the British government might try to control next. Would there be a monopoly on cloth? Nervous merchants wondered what would happen to their businesses if other goods were also restricted.
In 1773, a new law passed by the British Parliament prompted more protests. The Tea Act was an attempt by the British government to rescue the business of one of England’s largest trading companies, the British East India Company. The British East Indian Company was in financial distress, partly as a result of the colonial boycott of English tea, and was in danger of going broke unless it could sell the nearly 17 million pounds of tea that were sitting in its London warehouses. To save the company from ruin, Parliament passed the Tea Act, which allowed the company to ship tea to America without paying the existing heavy duty in England. This lowered the cost of their tea that was sold in the colonies and allowed the company to sell the tea more cheaply than the colonial importers of English tea as well as the smugglers of foreign tea. This would ruin many American tea merchants. The Tea Act also gave the British East India Company a monopoly, or complete control, over tea sales in the colonies. From now on, the only merchants who could sell the bargain-priced tea were those chosen by the company.
Although the British government thought that it could pursuade the colonists to buy the tea being sold by the East India Company after it had lowered in price, the colonists were not fooled. The colonists still had to pay a slight tax on the tea (a remainder from the recently repealed Townshend Acts), and were upset that the British Parliament had passed yet another law that affected them without their consent. If they agreed to buy the East India Company's tea, they would be agreeing to their lack of representation in the British Parliament.
In addition, many merchants were alarmed by the East India Company's monopoly over the tea trade. They wondered what the British government might try to control next. Would there be a monopoly on cloth? Nervous merchants wondered what would happen to their businesses if other goods were also restricted.