" Vide also Ramsay, History of the American
Revolution
(Phila-
delphia, 1789), vol.
delphia, 1789), vol.
Arthur Schlesinger - Colonial Merchants and the American Revolution
net/2027/mdp.
39015011480665 Public Domain, Google-digitized / http://www.
hathitrust.
org/access_use#pd-google
? 26o THE COLONIAL MERCHANTS: 1763-1776
localities engineered town meetings, which approved the
Boston resolutions or adopted others more radical, and ap-
pointed standing committees of correspondence composed of
radicals. In all, seventy-eight such meetings, mostly of
inland towns but including the ports of Plymouth, Marble-
head and Newburyport, were noted in the journals of the
Boston Committee of Correspondence or in the newspapers.
[Thus, all on a sudden, from a state of peace, order, and general
contentment, as some expressed themselves, the province, more
or less from one end to the other, was brought into a state of
contention, disorder and general dissatisfaction; or, as others
would have it, were aroused from stupor and inaction, to sen-
sibility and activity. 1""]
The merchants as a class continued to hold aloof from the
organized popular clamor. 2 When the Assembly met in
January, 1773, Governor Hutchinson, now keenly alive to
the danger, denounced the committee of correspondence sys-
tem as unwarrantable and of dangerous tendency, and asked
the body to join him in discountenancing such innovations. *
This unwise action produced a storm of messages and re-
plies that, for the time, fanned higher the flame which was
already beginning to die for lack of fuel.
Indeed the weakness of Adams' plan was that the mani-
festo of the Boston town meeting was largely a recitation
of old grievances, and the leading new issue could scarcely
1 Hutchinson, op. cit. , vol. iii, p. 370 n. Not* some of the extravagant
protests against "these mighty grievances and intolerable wrongs," so
freshly discovered! Ibid. , pp. 369-370 n.
1 It is significant that Salem failed to take action, and that twenty-
nine of substance and character at Marblehead expressed their "entire
disapprobation. " Mass. Gas. & Post-Boy, Dec. 28, 1772; Adams, S. ,
Writings (Cushing), vol. ii, p. 350. The little town of Weston refused
to appoint a committee by a large vote.
1Hutchinson, op. cit. , vol. iii, pp. 370-390; Hosmer, op. cit. , pp. 396
ct seq.
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? COLONIAL PROSPERITY 26l
be an enduring one to a people who had been complaining
for generations against the burden of paying high salaries
to governors and judges. Moreover, the radical propaganda
had not yet advanced to a stage where it could be sustained
without the support of the merchant class. Adams, how-
ever, had an abiding faith in the efficacy of a campaign of
education and agitation, and in the establishment of a popu-
lar organization which would be ready for action when the
time should arrive.
The matter of salaries was in form a local issue, and
was not likely to stir the people of other provinces to the
point of organization. However, the radicals of the Vir-
ginia House of Burgesses, in March, 1773, seized the op-
portunity to establish a single committee of correspondence
for the whole province, when news reached them that a
royal commission of inquiry of large powers had been ap-
pointed to investigate the Gaspce affair. This committee
composed almost entirely of radical planters, was empowered
"to obtain the most early and authentic intelligence of all
such acts and resolutions of the British parliament, or pro-
ceedings of administration, as may relate to or affect the
British colonies in America," and to carry on a correspond-
ence with the sister provinces respecting these matters. 1
On April 10, 1773, Adams wrote to a member of the Vir-
ginia committee, urging the establishment of municipal com-
mittees of correspondence in every province;2 but he did
not understand, as they did, that political leadership in Vir-
ginia was held by the planting class and that the few urban
centres were dominated by the narrow views of merchants
and factors. The Virginia type of committee became at
1 Frothingham, Rise of Republic, pp. 279-281. Collins, E. D. , "Com-
mittees of Correspondence of the American Revolution," Am. Hist.
Assn. Rep. (1901), vol. i, pp. 243-271, is important in this connection.
1 To R. H. Lee; Writings (Cushing), vol. iii, p. 26.
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? 262 THE COLONIAL MERCHANTS: 1763-1776
once the popular plan of organization among the radicals;
and by July, 1773, five assemblies had followed the lead of
that province. 1 It was not until Great Britain adopted meas-
ures which affected all provinces alike and which aroused the
powerful merchant class once more to protest that the or-
ganization of committees in local subdivisions throughout
the continent was made possible. After July, 1773, the
flurry of discontent stirred up by the radicals of Massachu-
setts and Virginia quickly subsided. 2 The mercantile and
conservative classes had made their influence felt once more.
General apathy again reigned.
As destiny would have itf Lord North, not S^m Adams.
was responsible for thp ahrnpf. determinat1on of the mer-
chantcla&s_^o_&il UP cudgels ^1113. 111 in n str11inilc or com-
i" r*"> *>>" nf Tf"f\. It was the enactment
in Mayr 1773. that caused the
JJS winflg 3Tlfl tr>. g^plf again
jjke the^garlier
tea legislation, this act was designed to accomplish a double
purpose : to help the East India Company to sell their surplus
tfia^stock, amounting to seventeen million pounds; anoto
enforcgjho. <rJlg^ion_2fJjhf p*1"1*^ . . . . . '1'"J l'"t,1n America. 1
1 R. I. , Conn. , N. H. , Mass. , S. C. A second group of assemblies
acted from September, 1773, to February, 1774: Ga. , Md. , Del. , N. Y. ,
N. J. Vide Collins's article, loc. cit. There seemed to be little or no
connection between the later movement and the agitation against the
East India Company which was developing concurrently.
1 For one thing, the commission to investigate the Gaspee affair had
failed to exercise any of their extraordinary powers.
1 With reference to the second purpose, the revenue arising from all
d1e various duties in America during 1772 had yielded a balance of less
than ? 85 above d1e expenses of collection, not counting the cost of main-
taining ships-of-war for the suppression of smuggling. Franklin, Writ-
ings (Smyth), vol. v, p. 460; vol. vi, pp. 2-3. Under the circumstances,
it was cheaper for the home government to adopt some expedient for
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? COLONIAL PROSPERITY 263
The act of 1773 involved no new infringement of the con-
stitutional or natural rights of the Americans, so far as the
taxation principle was concerned. Continuing the three-
penny import duty in America, the act provided that, in place
of a partial refund, a full drawback of English import duties
should be given on all teas re-shipped to America, thus re-
storing the arrangement which had existed under the Towns-
hend Act save that the company were not to be liable for
deficiencies in the revenue. The radical innovation was in-
troduced in the provision which empowered the East India
Company, if they so chose, to export tea to America or
to " foreign parts " from their warehouses and on their own
account, upon obtaining a license from the commissioners of
the treasury. 1
In other words. lthe East India Company, which hitherto
had been required by law to sell their teas at public auction
to merchants for exportation, were now authorized to be-
come their own exporters and to establish branch houses in
America. This arrangement swept away, by one stroke,
the English merchant who purchased the tea at the com-
pany's auction and the American merchant who bought it
of the English merchant; for the East India Company, by
dealing directly with the American retailer, eliminated all
the profits which ordinarily accumulated in the passage of
the tea through the hands of the middlemen! From another
point of view, as Joseph Galloway has pointed out,
the consumer of tea in America was obliged to pay only one
carrying out Hutchinson's oft-repeated suggestion of sinking the selling
price of tea. The particular method adopted had already been suggested
by Samuel Wharton in London and Gilbert Barkly, the Philadelphia
merchant, and by others. Pa. Mag. , vol. xxv, pp. 139-141; Drake, op. cit. ,
pp. 199-202.
1 13 George III, c. 44. Such exportation was to be permitted only
when the supp'y of tea in the company's warehouses amounted to at
least 10,000,000 pounds.
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? 264 THE COLONIAL MERCHANTS: 1763-1776
profit to the Company, another to the shopkeeper. But before
the act, they usually paid a profit to the Company, to the London
merchant, who bought it of the Company and sold it to the
American merchant, and also to the American merchant, be-
sides the profit of the retailer. So that, by this act, the con-
sumer of this necessary and common article of subsistence
was enabled to purchase it at one-half of its usual price . . . *
The colonial merchant class saw at once that the new act,
if permitted to go into effect, would enable the American
consumer to buy dutied teas, imported directly by the East
India Company, at a cheaper rate than dutied teas imported
in the customary manner by private merchants or than
Dutch teas introduced by the illicit traders. Therefore,
when the colonial press announced in September, 1773, that
the East India Company had been licensed to export more
than half a million pounds of tea to the four leading ports
of America, an alliance of powerful interests at once ap-
peared in opposition to the company's shipments.
As Governor Hutchinson at Boston put it in a letter of
January 2, 1774:
Our liberty men had lost their reputation with Philadelphia
and New York, having been importers of Teas from England
for three or four Years past notwithstanding the engagement
they had entrd into to the contrary. As soon as the news
came of the intended exportation of Teas [by the] E. I. Com-
pany which must of course put an end to all Trade in Teas by
private Merchants, proposals were made both to Philadelphia
and York for a new Union, and they were readily accepted, for
although no Teas had been imported from England at either of
those places, yet an immense profit had been made by the Im-
portation from Holland, which wou'd entirely cease if the Teas
1 Galloway, Historical and Political Reflections on the Rise and Pro-
gress of the American Rebellion (London, 1780), pp. 17-18. For similar
statements, vide also "Z" in Boston Eve. Post, Oct . 25, 1773, and
"Massachusettensis" in Mass. Gasette and Post-Boy, Jan. 2, 1775.
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? COLONIAL PROSPERITY 265
from the E. I. Company should be admitted. This was the
consideration which engaged all the merchants. 1
An extended controversy began in newspaper and broad-
side, which not only revealed the fundamental antagonism
between the undertaking of the British trading corporation
and the interest of the colonial tea merchants, but also
pointed out the far-reaching menace which the new act held
for American merchants in general. To broaden the basis
of the popular protest, the old theoretical arguments against
the taxing author1ty ot Parl1ament were exhumed; and new
ana bizarre arguments were 1nvented. ""
"An examination of the propagandist literature and of a
few private letters will bear out this preliminary analysis.
Most of the writings against the tea shipments issued from
the presses of Boston, New York and Philadelphia and, with
varying emphasis, covered substantially the same ground.
The Charleston newspapers reprinted many of the northern
arguments, and the events there may therefore be said to
have been determined in large part by the same sentiments.
At Boston, the newspaper writers laid great stress on the
fact that the legitimate traffic in English teas was assailed
with destructive competition. "A Consistent Patriot" de-
clared that the new statute would displace the men in the
American tea trade and force them to seek their living else-
where "in order to make room for an East India factor,
probably from North-Britain, to thrive upon what are now
the honest gains of our own Merchants. " 2 "Surely all the
1 Mass. Archives, vol. xxvii, p. 610. Such also was the view of the An-
nual Register (1774), p. 48: "All the dealers, both legal and clandestine,
. . . saw their trade taken at once out of their hands. They supposed
it would fall into the hands of the company's consignees, to whom they
must become in a great measure dependent, if they could hope to trade
at all.
" Vide also Ramsay, History of the American Revolution (Phila-
delphia, 1789), vol. i, p. 96.
1 Mass. Spy, Oct. 14, 1773.
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? 266 THE COLONIAL MERCHANTS: 1763. 1776
London Merchants trading to America and all the American
Merchants trading with Britain," said " Reclusus," "must
highly resent such a Monopoly, considered only as it effects
their private Interest" and without regard to the fact that
everyone who buys the tea will be paying tribute to the
"harpy Commissioners" and to Parliament; the newly-
appointed tea consignees " can't seriously imagine that the
Merchants will quietly see themselves excluded from a con-
siderable branch of Trade . . . that they and the odious
Commissioners may riot in luxury. " * "A Merchant" ex-
pressed surprise that the merchants and traders had not met
to take action in the crisis, noting, among other commercial
ills, that "those gentlemen that have dealt in that article
will altogether be deprived of the benefit arising from such
business. " * The loyalist town of Hinsdale, N. H. , resolved
unanimously that the tumult against the tea was not due
to objections against a revenue tax, "but because the in-
tended Method of Sale in this Country by the East India
Company probably would hurt the private Interest of many
Persons who deal largely in Tea. " *
At New York and Philadelphia, the chief smuggling ports,
greater emphasis was placed on the threatened ruin awaiting
the illicit tea traffic. The Philadelphia merchant, Thomas
Wharton, pointed out that " it is impossible always to form
a true judgment from what real motives an opposition
springs, as the smugglers and London importers may both
declare that this duty is stamping the Americans with the
badge of slavery. " 4 A tea commissioner at Boston believed
1 Boston Eve. Post, Oct. 18,1773.
* Mass. Spy, Oct. 28, 1773.
1 N. H. Gazette, June 17, 1774. Other acts of Parliament, added the
town meeting, infringe our rights more than that law--thus, the
molasses duty and the late act establishing custom-house fees--and
yet no complaint is made against them.
4 Drake, op. cit. , p. 273.
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? COLONIAL PROSPERITY 267
that the agitation against the act was " fomented, if not ori-
ginated, principally by those persons concerned in the Hol-
land trade," a trade " much more practised in the Southern
Governments than this way. " * "A Citizen" conceded cau-
tiously in the New York Journal of November n, 1773,
that " we have not been hitherto altogether at the mercy of
those monopolists [the East India Company], because it
has been worth the while for others to supply us with
tea at a more reasonable price," but that hereafter " if tea
should be brought us from any foreign market, the East
India Company might occasionally undersell those concerned
in it, so as to ruin or deter them from making many experi-
ments of the kind. " A loyalist writer expressed the same
thought from a different point of view when he affirmed to
the people of New York that every measure of the radical
cabal
is an undoubted proof that not your liberties but their private
interest is the object. To create an odium against the British
company is the main point at which they have laboured. They
have too richly experienced the fruits which may be reaped
from a contraband trade . . . to relinquish them to others with-
out a struggle. 4
One of the tea commissioners at New York declared that
"the introduction of the East India Company's tea is vio-
lently opposed here by a set of men who shamefully live by
monopolizing tea in the smuggling way. " * Governor Tryon
and others entertained a similar opinion. 4
1 Drake, op. cit. , pp. 261-262.
1AT. 7. Gasetteer, Nov. 18, 1773.
1 Abram Lott to W. Kelly, Nov. 5, 1773; Drake, op. cit. , p. 269.
*N. Y. Col. Docs. , vol. viii, pp. 400, 408. A similar opinion was
shared by Haldimand, at New York, Brit. Papers ("Sparks Mss"),
vol. iii, p. 175; and by the anonymous authors of letters in 4 Am. Arch. ,
vol. i, p. 302 n. , and of an address in ibid. , p. 642.
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? 268 THE COLONIAL MERCHANTS: 1763-1776
To rob the new law of the appeal it held for the pocket-
books of the tea purchasers, the writers impeached the good
faith of the company in undercutting prices. "Reclusus"
predicted confidently thatj^tho' the first Teas may be sold
at a low Rate to make a popular Entry, yet when this mode
of receiving Tea is well established, they, as all other Mono-
polists do, will meditate a greater profit on their Goods, and
set them up at what Price they please. "*3 "Hampden"
wrote:
Nor let it be said, to cajole the poor, that this importation of
tea will lower the price of it. Is any temporary abatement of
that to be weighed in the balance with the permanent loss that
will attend the sole monopoly of it in future, which will enable
them abundantly to reimburse themselves by raising the price
as high as their known avarice may dictate ? -a
In the words of " Mucius,"
Every puchaser must be at their mercy . . . The India Com-
pany would not undertake to pay the duty in England or Amer-
ica--pay enormous fees to Commissioners &c &c unless they
were well assured that the Americans would in the end reim-
burse them for every expence their unreasonable project should
bring along with it*
The writers sought to show that the present project of the
East India Company was the entering wedge for larger
and more ambitious undertakings calculated to undermine
the colonial mercantile world. Their opinion was based on
the fact that, in addition to the article of tea, the East India
Company imported into England vast quantities of silks,
1 Boston Eve. Post, Oct. 18, 1773. Vide also Bos. Com. Cor. Mss. , vol.
vi, p. 452.
1 N. Y. Journal, Oct. 28, 1773.
1 Pa. Packet, Nov. 1, 1773.
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? COLONIAL PROSPERITY 269
calicoes and other fabrics, spices, drugs and chinaware, all
commodities of staple demand; and on their fear that the
success of the present venture would result in an extension
of the same principle to the sale of the other articles. Per-
haps no argument had greater weight than this; nor, indeed,
was such a development beyond the range of possibility. 1
If they succeed in their present experiment with tea,
argued "A Mechanic,"
they will send their own Factors and Creatures, establish
Houses among US, Ship US all other East-India Goods; and,
in order to full freight their Ships, take in other Kind of Goods
at under Freight, or (more probably) ship them on their own
Accounts to their own Factors, and undersell our Merchants,
till they monopolize the whole Trade. Thus our Merchants are
ruined, Ship Building ceases. They will then sell Goods at
any exorbitant Price. Our Artificers will be unemployed, and
every Tradesman will groan under dire Oppression. 2
"Hampden" warned the New Yorkers:
If you receive the portion [of tea] designed for this city, you
will in future have an India warehouse here; and the trade of
all the commodities of that country will be lost to your mer-
1 In a letter of Oct. g, 1773 to Thomas Walpole, Thomas Wharton pro-
posed the extension of the East India Company's trade, under the new
regulations, to include pepper, spices and silks. Drake, op. cit. , pp. 274-
275. Dickinson, in an essay in July 1774, quoted a contemporary writer
in England as proposing " that the Government, through the means of a
few merchants acquainted with the American trade . . . , should estab-
lish factors at Boston, New-York, and a few other ports, for the sale
of such cargoes of British manufactures as should be consigned to them;
and to consist of such particularly as were most manufactured in the
Province, with directions immediately and continually to undersell all
such Colony manufactures. " 4 Am. Archives, vol. i, p. 575 n. The
probability of some such scheme was also contemplated by "An Ameri-
can Watchman" in Pinkney's Va. Gasette, Jan. 26, 1775.
1 Pa. Gasette, Dec. 8, 1773. Vide also a letter in Pa. Chron. , Nov. 15,
1773, and "A Countryman" in Pa. Packet, Oct. 18, 1773.
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? 270 THE COLONIAL MERCHANTS: 1763. 1776
chants and be carried on by the company, which will be an im-
mense loss to the colony. 1
A customs commissioner writing to the home govern-
ment from Boston noted that it was pretended that " when
once the East India Company has established Warehouses
for the Sale of Tea, all other articles commonly imported
from the East Indies and Saleable in America, will be sent
there by the Company. " *
That the fear of monopoly was the mainspring of Ameri-
can opposition is further evidenced by the trend of discus-
sion in the early weeks before it was known definitely that
the new law provided for the retention of the threepenny
import duty. The report gained currency that the tea
shipped by the East India Company was to be introduced
free of the American import duty. This understanding
was based upon a misreading of that portion of the statute
which empowered the company " to export such tea to any
of the British colonies or plantations in America, or to for-
eign parts, discharged from the payment of any customs or
duties whatsoever, anything in the said recited act, or any
other act, to the contrary notwithstanding. " * Had this
been a correct interpretation of the law, there is every reason
to believe that the course of American opposition would have
developed unchanged and the tea would then have been
dumped into the Atlantic as an undisguised and unmixed
protest against a grasping trading monopoly.
1 N. Y. Journal, Oct . 28, 1773.
1 Stevens, Facsimiles, vol. xxiv, no. 2029, p. 4. Vide also Hancock's
view, expressed in the annual oration of Mar. 5, 1774. I M. H. S.
Procs. , vol. xiii, p. 187.
'Unsigned article in Ar. Y. Gasetteer, Oct . 28, 1773. Vide also
"Poplicola," ibid. , Nov. 18, 1773.
? 26o THE COLONIAL MERCHANTS: 1763-1776
localities engineered town meetings, which approved the
Boston resolutions or adopted others more radical, and ap-
pointed standing committees of correspondence composed of
radicals. In all, seventy-eight such meetings, mostly of
inland towns but including the ports of Plymouth, Marble-
head and Newburyport, were noted in the journals of the
Boston Committee of Correspondence or in the newspapers.
[Thus, all on a sudden, from a state of peace, order, and general
contentment, as some expressed themselves, the province, more
or less from one end to the other, was brought into a state of
contention, disorder and general dissatisfaction; or, as others
would have it, were aroused from stupor and inaction, to sen-
sibility and activity. 1""]
The merchants as a class continued to hold aloof from the
organized popular clamor. 2 When the Assembly met in
January, 1773, Governor Hutchinson, now keenly alive to
the danger, denounced the committee of correspondence sys-
tem as unwarrantable and of dangerous tendency, and asked
the body to join him in discountenancing such innovations. *
This unwise action produced a storm of messages and re-
plies that, for the time, fanned higher the flame which was
already beginning to die for lack of fuel.
Indeed the weakness of Adams' plan was that the mani-
festo of the Boston town meeting was largely a recitation
of old grievances, and the leading new issue could scarcely
1 Hutchinson, op. cit. , vol. iii, p. 370 n. Not* some of the extravagant
protests against "these mighty grievances and intolerable wrongs," so
freshly discovered! Ibid. , pp. 369-370 n.
1 It is significant that Salem failed to take action, and that twenty-
nine of substance and character at Marblehead expressed their "entire
disapprobation. " Mass. Gas. & Post-Boy, Dec. 28, 1772; Adams, S. ,
Writings (Cushing), vol. ii, p. 350. The little town of Weston refused
to appoint a committee by a large vote.
1Hutchinson, op. cit. , vol. iii, pp. 370-390; Hosmer, op. cit. , pp. 396
ct seq.
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? COLONIAL PROSPERITY 26l
be an enduring one to a people who had been complaining
for generations against the burden of paying high salaries
to governors and judges. Moreover, the radical propaganda
had not yet advanced to a stage where it could be sustained
without the support of the merchant class. Adams, how-
ever, had an abiding faith in the efficacy of a campaign of
education and agitation, and in the establishment of a popu-
lar organization which would be ready for action when the
time should arrive.
The matter of salaries was in form a local issue, and
was not likely to stir the people of other provinces to the
point of organization. However, the radicals of the Vir-
ginia House of Burgesses, in March, 1773, seized the op-
portunity to establish a single committee of correspondence
for the whole province, when news reached them that a
royal commission of inquiry of large powers had been ap-
pointed to investigate the Gaspce affair. This committee
composed almost entirely of radical planters, was empowered
"to obtain the most early and authentic intelligence of all
such acts and resolutions of the British parliament, or pro-
ceedings of administration, as may relate to or affect the
British colonies in America," and to carry on a correspond-
ence with the sister provinces respecting these matters. 1
On April 10, 1773, Adams wrote to a member of the Vir-
ginia committee, urging the establishment of municipal com-
mittees of correspondence in every province;2 but he did
not understand, as they did, that political leadership in Vir-
ginia was held by the planting class and that the few urban
centres were dominated by the narrow views of merchants
and factors. The Virginia type of committee became at
1 Frothingham, Rise of Republic, pp. 279-281. Collins, E. D. , "Com-
mittees of Correspondence of the American Revolution," Am. Hist.
Assn. Rep. (1901), vol. i, pp. 243-271, is important in this connection.
1 To R. H. Lee; Writings (Cushing), vol. iii, p. 26.
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? 262 THE COLONIAL MERCHANTS: 1763-1776
once the popular plan of organization among the radicals;
and by July, 1773, five assemblies had followed the lead of
that province. 1 It was not until Great Britain adopted meas-
ures which affected all provinces alike and which aroused the
powerful merchant class once more to protest that the or-
ganization of committees in local subdivisions throughout
the continent was made possible. After July, 1773, the
flurry of discontent stirred up by the radicals of Massachu-
setts and Virginia quickly subsided. 2 The mercantile and
conservative classes had made their influence felt once more.
General apathy again reigned.
As destiny would have itf Lord North, not S^m Adams.
was responsible for thp ahrnpf. determinat1on of the mer-
chantcla&s_^o_&il UP cudgels ^1113. 111 in n str11inilc or com-
i" r*"> *>>" nf Tf"f\. It was the enactment
in Mayr 1773. that caused the
JJS winflg 3Tlfl tr>. g^plf again
jjke the^garlier
tea legislation, this act was designed to accomplish a double
purpose : to help the East India Company to sell their surplus
tfia^stock, amounting to seventeen million pounds; anoto
enforcgjho. <rJlg^ion_2fJjhf p*1"1*^ . . . . . '1'"J l'"t,1n America. 1
1 R. I. , Conn. , N. H. , Mass. , S. C. A second group of assemblies
acted from September, 1773, to February, 1774: Ga. , Md. , Del. , N. Y. ,
N. J. Vide Collins's article, loc. cit. There seemed to be little or no
connection between the later movement and the agitation against the
East India Company which was developing concurrently.
1 For one thing, the commission to investigate the Gaspee affair had
failed to exercise any of their extraordinary powers.
1 With reference to the second purpose, the revenue arising from all
d1e various duties in America during 1772 had yielded a balance of less
than ? 85 above d1e expenses of collection, not counting the cost of main-
taining ships-of-war for the suppression of smuggling. Franklin, Writ-
ings (Smyth), vol. v, p. 460; vol. vi, pp. 2-3. Under the circumstances,
it was cheaper for the home government to adopt some expedient for
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? COLONIAL PROSPERITY 263
The act of 1773 involved no new infringement of the con-
stitutional or natural rights of the Americans, so far as the
taxation principle was concerned. Continuing the three-
penny import duty in America, the act provided that, in place
of a partial refund, a full drawback of English import duties
should be given on all teas re-shipped to America, thus re-
storing the arrangement which had existed under the Towns-
hend Act save that the company were not to be liable for
deficiencies in the revenue. The radical innovation was in-
troduced in the provision which empowered the East India
Company, if they so chose, to export tea to America or
to " foreign parts " from their warehouses and on their own
account, upon obtaining a license from the commissioners of
the treasury. 1
In other words. lthe East India Company, which hitherto
had been required by law to sell their teas at public auction
to merchants for exportation, were now authorized to be-
come their own exporters and to establish branch houses in
America. This arrangement swept away, by one stroke,
the English merchant who purchased the tea at the com-
pany's auction and the American merchant who bought it
of the English merchant; for the East India Company, by
dealing directly with the American retailer, eliminated all
the profits which ordinarily accumulated in the passage of
the tea through the hands of the middlemen! From another
point of view, as Joseph Galloway has pointed out,
the consumer of tea in America was obliged to pay only one
carrying out Hutchinson's oft-repeated suggestion of sinking the selling
price of tea. The particular method adopted had already been suggested
by Samuel Wharton in London and Gilbert Barkly, the Philadelphia
merchant, and by others. Pa. Mag. , vol. xxv, pp. 139-141; Drake, op. cit. ,
pp. 199-202.
1 13 George III, c. 44. Such exportation was to be permitted only
when the supp'y of tea in the company's warehouses amounted to at
least 10,000,000 pounds.
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? 264 THE COLONIAL MERCHANTS: 1763-1776
profit to the Company, another to the shopkeeper. But before
the act, they usually paid a profit to the Company, to the London
merchant, who bought it of the Company and sold it to the
American merchant, and also to the American merchant, be-
sides the profit of the retailer. So that, by this act, the con-
sumer of this necessary and common article of subsistence
was enabled to purchase it at one-half of its usual price . . . *
The colonial merchant class saw at once that the new act,
if permitted to go into effect, would enable the American
consumer to buy dutied teas, imported directly by the East
India Company, at a cheaper rate than dutied teas imported
in the customary manner by private merchants or than
Dutch teas introduced by the illicit traders. Therefore,
when the colonial press announced in September, 1773, that
the East India Company had been licensed to export more
than half a million pounds of tea to the four leading ports
of America, an alliance of powerful interests at once ap-
peared in opposition to the company's shipments.
As Governor Hutchinson at Boston put it in a letter of
January 2, 1774:
Our liberty men had lost their reputation with Philadelphia
and New York, having been importers of Teas from England
for three or four Years past notwithstanding the engagement
they had entrd into to the contrary. As soon as the news
came of the intended exportation of Teas [by the] E. I. Com-
pany which must of course put an end to all Trade in Teas by
private Merchants, proposals were made both to Philadelphia
and York for a new Union, and they were readily accepted, for
although no Teas had been imported from England at either of
those places, yet an immense profit had been made by the Im-
portation from Holland, which wou'd entirely cease if the Teas
1 Galloway, Historical and Political Reflections on the Rise and Pro-
gress of the American Rebellion (London, 1780), pp. 17-18. For similar
statements, vide also "Z" in Boston Eve. Post, Oct . 25, 1773, and
"Massachusettensis" in Mass. Gasette and Post-Boy, Jan. 2, 1775.
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? COLONIAL PROSPERITY 265
from the E. I. Company should be admitted. This was the
consideration which engaged all the merchants. 1
An extended controversy began in newspaper and broad-
side, which not only revealed the fundamental antagonism
between the undertaking of the British trading corporation
and the interest of the colonial tea merchants, but also
pointed out the far-reaching menace which the new act held
for American merchants in general. To broaden the basis
of the popular protest, the old theoretical arguments against
the taxing author1ty ot Parl1ament were exhumed; and new
ana bizarre arguments were 1nvented. ""
"An examination of the propagandist literature and of a
few private letters will bear out this preliminary analysis.
Most of the writings against the tea shipments issued from
the presses of Boston, New York and Philadelphia and, with
varying emphasis, covered substantially the same ground.
The Charleston newspapers reprinted many of the northern
arguments, and the events there may therefore be said to
have been determined in large part by the same sentiments.
At Boston, the newspaper writers laid great stress on the
fact that the legitimate traffic in English teas was assailed
with destructive competition. "A Consistent Patriot" de-
clared that the new statute would displace the men in the
American tea trade and force them to seek their living else-
where "in order to make room for an East India factor,
probably from North-Britain, to thrive upon what are now
the honest gains of our own Merchants. " 2 "Surely all the
1 Mass. Archives, vol. xxvii, p. 610. Such also was the view of the An-
nual Register (1774), p. 48: "All the dealers, both legal and clandestine,
. . . saw their trade taken at once out of their hands. They supposed
it would fall into the hands of the company's consignees, to whom they
must become in a great measure dependent, if they could hope to trade
at all.
" Vide also Ramsay, History of the American Revolution (Phila-
delphia, 1789), vol. i, p. 96.
1 Mass. Spy, Oct. 14, 1773.
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? 266 THE COLONIAL MERCHANTS: 1763. 1776
London Merchants trading to America and all the American
Merchants trading with Britain," said " Reclusus," "must
highly resent such a Monopoly, considered only as it effects
their private Interest" and without regard to the fact that
everyone who buys the tea will be paying tribute to the
"harpy Commissioners" and to Parliament; the newly-
appointed tea consignees " can't seriously imagine that the
Merchants will quietly see themselves excluded from a con-
siderable branch of Trade . . . that they and the odious
Commissioners may riot in luxury. " * "A Merchant" ex-
pressed surprise that the merchants and traders had not met
to take action in the crisis, noting, among other commercial
ills, that "those gentlemen that have dealt in that article
will altogether be deprived of the benefit arising from such
business. " * The loyalist town of Hinsdale, N. H. , resolved
unanimously that the tumult against the tea was not due
to objections against a revenue tax, "but because the in-
tended Method of Sale in this Country by the East India
Company probably would hurt the private Interest of many
Persons who deal largely in Tea. " *
At New York and Philadelphia, the chief smuggling ports,
greater emphasis was placed on the threatened ruin awaiting
the illicit tea traffic. The Philadelphia merchant, Thomas
Wharton, pointed out that " it is impossible always to form
a true judgment from what real motives an opposition
springs, as the smugglers and London importers may both
declare that this duty is stamping the Americans with the
badge of slavery. " 4 A tea commissioner at Boston believed
1 Boston Eve. Post, Oct. 18,1773.
* Mass. Spy, Oct. 28, 1773.
1 N. H. Gazette, June 17, 1774. Other acts of Parliament, added the
town meeting, infringe our rights more than that law--thus, the
molasses duty and the late act establishing custom-house fees--and
yet no complaint is made against them.
4 Drake, op. cit. , p. 273.
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? COLONIAL PROSPERITY 267
that the agitation against the act was " fomented, if not ori-
ginated, principally by those persons concerned in the Hol-
land trade," a trade " much more practised in the Southern
Governments than this way. " * "A Citizen" conceded cau-
tiously in the New York Journal of November n, 1773,
that " we have not been hitherto altogether at the mercy of
those monopolists [the East India Company], because it
has been worth the while for others to supply us with
tea at a more reasonable price," but that hereafter " if tea
should be brought us from any foreign market, the East
India Company might occasionally undersell those concerned
in it, so as to ruin or deter them from making many experi-
ments of the kind. " A loyalist writer expressed the same
thought from a different point of view when he affirmed to
the people of New York that every measure of the radical
cabal
is an undoubted proof that not your liberties but their private
interest is the object. To create an odium against the British
company is the main point at which they have laboured. They
have too richly experienced the fruits which may be reaped
from a contraband trade . . . to relinquish them to others with-
out a struggle. 4
One of the tea commissioners at New York declared that
"the introduction of the East India Company's tea is vio-
lently opposed here by a set of men who shamefully live by
monopolizing tea in the smuggling way. " * Governor Tryon
and others entertained a similar opinion. 4
1 Drake, op. cit. , pp. 261-262.
1AT. 7. Gasetteer, Nov. 18, 1773.
1 Abram Lott to W. Kelly, Nov. 5, 1773; Drake, op. cit. , p. 269.
*N. Y. Col. Docs. , vol. viii, pp. 400, 408. A similar opinion was
shared by Haldimand, at New York, Brit. Papers ("Sparks Mss"),
vol. iii, p. 175; and by the anonymous authors of letters in 4 Am. Arch. ,
vol. i, p. 302 n. , and of an address in ibid. , p. 642.
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? 268 THE COLONIAL MERCHANTS: 1763-1776
To rob the new law of the appeal it held for the pocket-
books of the tea purchasers, the writers impeached the good
faith of the company in undercutting prices. "Reclusus"
predicted confidently thatj^tho' the first Teas may be sold
at a low Rate to make a popular Entry, yet when this mode
of receiving Tea is well established, they, as all other Mono-
polists do, will meditate a greater profit on their Goods, and
set them up at what Price they please. "*3 "Hampden"
wrote:
Nor let it be said, to cajole the poor, that this importation of
tea will lower the price of it. Is any temporary abatement of
that to be weighed in the balance with the permanent loss that
will attend the sole monopoly of it in future, which will enable
them abundantly to reimburse themselves by raising the price
as high as their known avarice may dictate ? -a
In the words of " Mucius,"
Every puchaser must be at their mercy . . . The India Com-
pany would not undertake to pay the duty in England or Amer-
ica--pay enormous fees to Commissioners &c &c unless they
were well assured that the Americans would in the end reim-
burse them for every expence their unreasonable project should
bring along with it*
The writers sought to show that the present project of the
East India Company was the entering wedge for larger
and more ambitious undertakings calculated to undermine
the colonial mercantile world. Their opinion was based on
the fact that, in addition to the article of tea, the East India
Company imported into England vast quantities of silks,
1 Boston Eve. Post, Oct. 18, 1773. Vide also Bos. Com. Cor. Mss. , vol.
vi, p. 452.
1 N. Y. Journal, Oct. 28, 1773.
1 Pa. Packet, Nov. 1, 1773.
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? COLONIAL PROSPERITY 269
calicoes and other fabrics, spices, drugs and chinaware, all
commodities of staple demand; and on their fear that the
success of the present venture would result in an extension
of the same principle to the sale of the other articles. Per-
haps no argument had greater weight than this; nor, indeed,
was such a development beyond the range of possibility. 1
If they succeed in their present experiment with tea,
argued "A Mechanic,"
they will send their own Factors and Creatures, establish
Houses among US, Ship US all other East-India Goods; and,
in order to full freight their Ships, take in other Kind of Goods
at under Freight, or (more probably) ship them on their own
Accounts to their own Factors, and undersell our Merchants,
till they monopolize the whole Trade. Thus our Merchants are
ruined, Ship Building ceases. They will then sell Goods at
any exorbitant Price. Our Artificers will be unemployed, and
every Tradesman will groan under dire Oppression. 2
"Hampden" warned the New Yorkers:
If you receive the portion [of tea] designed for this city, you
will in future have an India warehouse here; and the trade of
all the commodities of that country will be lost to your mer-
1 In a letter of Oct. g, 1773 to Thomas Walpole, Thomas Wharton pro-
posed the extension of the East India Company's trade, under the new
regulations, to include pepper, spices and silks. Drake, op. cit. , pp. 274-
275. Dickinson, in an essay in July 1774, quoted a contemporary writer
in England as proposing " that the Government, through the means of a
few merchants acquainted with the American trade . . . , should estab-
lish factors at Boston, New-York, and a few other ports, for the sale
of such cargoes of British manufactures as should be consigned to them;
and to consist of such particularly as were most manufactured in the
Province, with directions immediately and continually to undersell all
such Colony manufactures. " 4 Am. Archives, vol. i, p. 575 n. The
probability of some such scheme was also contemplated by "An Ameri-
can Watchman" in Pinkney's Va. Gasette, Jan. 26, 1775.
1 Pa. Gasette, Dec. 8, 1773. Vide also a letter in Pa. Chron. , Nov. 15,
1773, and "A Countryman" in Pa. Packet, Oct. 18, 1773.
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? 270 THE COLONIAL MERCHANTS: 1763. 1776
chants and be carried on by the company, which will be an im-
mense loss to the colony. 1
A customs commissioner writing to the home govern-
ment from Boston noted that it was pretended that " when
once the East India Company has established Warehouses
for the Sale of Tea, all other articles commonly imported
from the East Indies and Saleable in America, will be sent
there by the Company. " *
That the fear of monopoly was the mainspring of Ameri-
can opposition is further evidenced by the trend of discus-
sion in the early weeks before it was known definitely that
the new law provided for the retention of the threepenny
import duty. The report gained currency that the tea
shipped by the East India Company was to be introduced
free of the American import duty. This understanding
was based upon a misreading of that portion of the statute
which empowered the company " to export such tea to any
of the British colonies or plantations in America, or to for-
eign parts, discharged from the payment of any customs or
duties whatsoever, anything in the said recited act, or any
other act, to the contrary notwithstanding. " * Had this
been a correct interpretation of the law, there is every reason
to believe that the course of American opposition would have
developed unchanged and the tea would then have been
dumped into the Atlantic as an undisguised and unmixed
protest against a grasping trading monopoly.
1 N. Y. Journal, Oct . 28, 1773.
1 Stevens, Facsimiles, vol. xxiv, no. 2029, p. 4. Vide also Hancock's
view, expressed in the annual oration of Mar. 5, 1774. I M. H. S.
Procs. , vol. xiii, p. 187.
'Unsigned article in Ar. Y. Gasetteer, Oct . 28, 1773. Vide also
"Poplicola," ibid. , Nov. 18, 1773.
