|Posted by Gilbert Stack on May 10, 2018 at 5:05 AM|
On this day (May 10) in 1773 Great Britain passed the Tea Act. The primary motivation for the act was to save the East India Company (EIC) from bankruptcy. They did this by lowering the tax on tea and granting the EIC a monopoly on selling tea to the American colonies. The EIC had a substantial stockpile of tea built up in London warehouses that it had not been able to sell because of the American boycott of English Tea over taxes. The reduced tax level, however, would permit the EIC tea to undercut the price of smuggled tea making the British government believe they could kill two birds with one stone—save the EIC from bankruptcy and end the boycott by making legal tea cheaper than smuggled tea. The unintended consequence of this Act was the Boston Tea Party, which took the American colonies one step closer to rebellion.