FROM INDIA TO THE BOSTON TEA PARTY

D. Morgan Pierce

ESTABLISHMENT OF INDIAN TRADE ...... 317 THE EAST INDIA COMPANY IN BRITISH POLITICS ...... 325 INDIAN LAND REVENUE ...... 328 TOWNSHEND ACTS ...... 348 PARTIAL REPEAL OF THE TOWNSHEND ACTS 1771...... 356 THE REGULATING ACT OF 1773 ...... 359 THE TEA ACT OF 1773 ...... 373 THE THIRD BOYCOTT ...... 402 BOSTON TEA PARTY ...... 413 THE COERCIVE ACTS ...... 420 BIBLIOGRAPHY ...... 433

ESTABLISHMENT OF INDIAN TRADE

Initially the British had no further interest in India beyond trade; there was no intention to establish sovereignty. In the mid 17th century the Dutch East India Company enjoyed predominance over its English counterpart. Indian trade required fi nancial organization that could not be privately sustained, and England did not nationally finance such adventures. The six-month, six thousand mile voyage around the Cape of South Africa immobilized the investment capital in the voyage from diversion to alternate enterprise, and thereby discouraged investment. Indian trade required ships of the largest scale, and permanent

－ 317 － D. Morgan Pierce trading settlements for marketing the ship’s cargo and arranging for return cargo to Europe. Finally, both Portugal and Holland had advanced their hold in India far ahead of England, and both would capture English ships that were found in those waters. Merely the size of capital investment gave the East India Company an informal monopoly in the English Indian trade from the 17th century. Capital was organized by distribution of stock to a multiplicity of investors for each voyage. Investment and profi t were distributed separately for each voyage, thereby attempting to defray the hesitation over long term investment. However, within a small amount of time it had become impractical to terminate stock capital at the closure of each voyage. Some overhead could not be calculated for single voyages; war, diplomatic efforts, and permanent trading posts constituted expense that had to be spread across single voyages. These insecurities dissuaded the English Crown from direct action in the Indian trade, although England was worried at missing opportunity and eager to have some other entity undertake the risk; Queen Elizabeth chartered the English East India Company in 1600.1 The charter entitled the Company to enact all functions that normally belong only to a national government; the Company continued to exercise its own policies, judiciary, military and administrative preferences, without interference from the Crown, for the following 250 years. Interestingly, the Crown awarded exactly the same independent panoply of powers to private companies that established the Atlantic colonies. Although the delegation of national power was exactly the same, in the Atlantic colonies the constitution of the colonies as independent, chartered corporations did not function well for as long as a generation. The identical approach did function for India. Precipitous capital investment for Indian trade, however, necessitated intimate collaboration with the national government; in return for large loans to the State, the monarchy formalized the East India Company monopoly over the Asian trade. This should have forestalled the liability that compounded cost would overwhelm the Company before it could draw profi ts.2 Though the Company survived such liabilities, the cost of the remedy nevertheless spawned chronic corporate debilities and forced the Company to project its break-even point far into the future.

1 Cf. Draper, Theodore; A Struggle for Power, Vintage Books, 1997, p. 29.

－ 318 － FROM INDIA TO THE BOSTON TEA PARTY

Between 1660 and the Glorious Revolution the English Asian trade caught up with that of Holland. The much increased expenditure in military operations, diplomacy, fortifi cation and fi xed capital retarded the Dutch from further expansion. Political breakdown throughout the Indian continent induced the same obstruction for England that Holland had gone through in the previous generation. Whereas the English had gained on the Dutch until 1688, the War of the League of Augsburg (1689-97) with France pursuant to the Glorious Revolution, plus the abortive Mogul War, suppressed investment in the East India Company; between 1692 and 1700 the Company paid no dividends, its shipping volume fell, and the Dutch retained the ascendant position. Although the East India Company paid its ordinary agents risible salaries, location in India enabled the employee to scheme; the Company did not forbid collateral profit-seeking by pursuit of private trade. This was not anomalous. British government traditionally allowed government agents to exploit official positions by charging piecemeal fees or by other pecuniary stratagems; this shifted the cost of government employment from government to the supplicant. Furthermore, by paying minimal wages to its agents in India, the Company could present a public image of frugality and incorruptibility. During the 17th century the Company had been active in the “country trade," i.e. trade between Indian and neighboring Asian ports, but from the 1670’s the Company conceded local trade to the private enterprise of its employees. This consisted mostly in coastal trade. The employees could either transport British and Indian goods for profi t, or Indians would pay them to transport their own goods.3 Though the East India Company reduced corporate costs by permitting trade on private account, it was perhaps short-sighted; incubation of this illicit and nefarious mentality might have been what eventually brought the East India Company to bankruptcy. This distortion

2 Cf. Marshall, P.J.; The British in Asia: Trade to Dominion, 1700-1765; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 488. 3 Cf. Marshall, P.J.; The British in Asia: Trade to Dominion, 1700-1765; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 493.

－ 319 － D. Morgan Pierce of English activity in India was cognate with primogeniture. Second sons & c. were sent out through patronage as agents of the East India Company because of the restriction of inheritance to the oldest son; such agents could remain in the higher social class in which they were brought up only if they could make a killing in India.4 The British insistence on trade without war was not a false profession, although the creeping British proclivity for war was never successfully arrested. In 1682 the Dutch expelled the English from Bantam; in 1685 the Nawab invested the English factories in Bengal with troops. Over the eighty years since the English East India Company had started, its offi cial Indian trade policy had been confi nement to commercial exchange; the Company had envisioned that trade would be more profitable if it presented itself in India as non- belligerent. However, repeatedly various Nawabs had sold to the Company, then captured the purchasers, and resold the cargo plus Company employees held in ransom. The Company ports were vulnerable to collateral damage in war between competing Nawabs, etc. Under the guidance of Sir Josiah Child (company president five times 1681-1689) and Sir John Child (president of Surat, governor of Bombay 1682-1690), it was resolved that Indian commerce needed to be conducted “with a drawn sword.” After expulsion of the English from Bantam, the 1684 fortifi cation of Benkulen, a factory in Sumatra, formed the initial manifestation of the new attitude.5 The later Stuarts awarded the English East India Company a right to fortify Indian settlements, holding substantial English populations, a right to press coinage, a right to command English and Indian armies, and authority to declare war and make peace treaties with non-European powers. The Company could not go to war with French, Dutch, or other interests in India out of fear that a small action in India might instigate a national war in Europe. Rather than to aggravate belligerence with native Indians, however, the British eagerly submitted themselves to the Mogul governments. Eventually they came into participation with the Indian tax farms and fi nancial organizations, but they conducted such activities according to the native Indian procedures.6

4 Cf. Basil Williams, F.B.A., The Whig Supremacy 1714-1760, Oxford, 1962, p. 331. 5 Cf. Carsten, F.L., editor: The Ascendancy of France 1648-1688, The New Modern Cambridge History, Volume 5, p. 425.

－ 320 － FROM INDIA TO THE BOSTON TEA PARTY

It remains indisputable that where the Company established trading colonies, with independent jurisdiction, Indians migrated into those colonies in overwhelming numbers, because both life and commerce were much safer than they were under native Indian jurisdiction. This trend was seminal; if British colonization had not shown this positive aspect, or if the alleged safety had not been fundamentally true, Britain could never have established such an empire as it acquired. Bombay accepted fl oods of Indian refugees from Surat; Indians living on the Coromandel Coast increasingly moved into the British enclave, Madras.7 Calcutta was the strongest instance of the same phenomenon. There was, however, a very dark irony to this apparent Indian preference for British rule. The Indian Emperor awarded a tax exemption for goods bought by the British, and which were not to be sold domestically in India. The arrangement had always been that this exemption would apply only to export. The employees of the Company however took advantage of this concession for their private trade, using the Company export exemption by disguising their own purchases as official Company purchase for export. They quickly dominated inland and domestic trade by applying the Company exemption to their own transactions. Indian merchants were driven out of business by the tax disparity, except for those Indians who paid bribes to the English merchants to transport their goods under the same tax fraud. By going into association with the British the Indian merchants could prevail over the non-colluding Indian merchants; Indians who stayed out of the British association would inevitably go bankrupt due to the tax disadvantage. Whereas the British trade was propagating wealth to the Indians in partnership with the English, ultimately due to the trade vent to England, the wealth did not dissipate through the Indian population, nor to the Indian government, because the wealth derived from exemption from the commercial tax revenue which the Moguls otherwise

6 Cf. Marshall, P.J.; The British in Asia: Trade to Dominion, 1700-1765; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 497. 7 Cf. Marshall, P.J.; The British in Asia: Trade to Dominion, 1700-1765; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 495

－ 321 － D. Morgan Pierce received from their subjects. As in Europe, bureaucracy was not sufficiently developed to measure assets except at the moment of commercial transaction or of land holding. This phenomenon was strongest in Calcutta, whose growth was continually weakening the Moguls of the state of Bengal. The native Indian government had initially granted the East India Company exemption from internal trade duties in exchange for an annual lump sum payment of 3,000 rupees. This was economically naïve. Prior to the English, India did not have large international trade routes, and accordingly little circulating capital; its trade was inland, local, and miniscule. The commercial exchange with England and Europe, not aggressively sought, but pressed upon them, gave opportunity to great commercial volume, for which India was unprepared, except by means of enabling infrastructure introduced from England. As trade increased, dependence on the English increased, as it was English devices that accommodated greater commerce. The 3,000 rupee annual gift was not ad valorem, and therein was the naivety. If the exemption had been a percentage of trade rather than a fi xed sum, Britain would not have achieved control of India. Both inland and external trade multiply expanded due to the huge and unanticipated vent in England and Europe. The fi xed 3,000 payment became insignifi cant in proportion to the new transaction volume. It is plausible that the Moguls did not understand that the value of money diminishes with monetary expansion, instead supposing that a rupee’s purchasing power is the same in good or bad times; the fi xed 3,000 rupee payment continually diminished the real power of the Moguls. The dustuck, although it did incite war between the Company and the Indian potentates, is probably the essential factor in the pacific transfer of India from native to British rule. Exemption from internal duties provided two advantages. First, it allowed the Company employees to trade on private account; this arrangement was not directly profitable to the Company, but indirectly it was highly beneficial in that it quickly led to the economic dependence of the Nawabs on the Company. If the employees had not had this advantage over native Indian traders, England could never have captured the full Indian commercial range from major export to the tiniest village transaction. Second, the native evasion of commercial tax deeply degraded the power of the Mogul Nawabs.8

－ 322 － FROM INDIA TO THE BOSTON TEA PARTY

The employees conducted private trading especially in the inland, as the Company had abandoned inland trading by the 18th century, although private trade developed from networks originally established by the Company. The private merchants, most of them Company employees, had not brought capital from England, but used loans from Indian bankers to develop a trade. The Indians were glad to lend money to the British, because British traders, by virtue of the dustuck, were the most likely to prevail in enterprise. The capability of the private traders to make profi ts for themselves and their Indian lenders resulted in a symbiotic relation between the two groups.9 Commercial bribery in effect meant that Indian merchants paid commercial taxes to the British instead of their Indian government. The revenue of the Nawab, the regional king, derived almost wholly from the commercial tax. Any native Indian who did not pay a bribe to elude this tax failed in business, not because the tax was onerous, but because competitors exempt from the tax could undersell. Consequently the Nawab’s income collapsed.10 Two phenomena resulted. The Indian subalterns (Nawabs, i.e. regional kings) of the Emperor then charged their tariffs in defi ance of imperial decree, and the employees of the Company abused the exemption for private profi t. The collapse of the Nawab’s tax base did not result in concerted enmity against the British, first, because the English never posed themselves as the obdurate enemy; there was no obvious enemy with whom to make war. Second, the East India Company, and its privately active employees, were always eagerly willing to let the Nawabs borrow, in the form of tax anticipation; the Nawabs would prefer to passively accept debtor status, as long as their monarchy was not thereby imperiled. Debt bondage to the English made the Nawabs disinclined to make war against the English; they did not lose their thrones by debt, but did lose them by defiance. The Nawab could either watch himself grow bankrupt, but slowly,

8 Cf. Basil Williams, F.B.A., The Whig Supremacy 1714-1760, Oxford, 1962, p. 332. 9 Cf. Marshall, P.J.; The British in Asia: Trade to Dominion, 1700-1765; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 494. 10 Cf. Marshall, P.J.; The British in Asia: Trade to Dominion, 1700-1765; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 494.

－ 323 － D. Morgan Pierce and without losing his monarchy, or disregard the English exemption from the dustuck; in 1672 the Nawab Shaista Khan stopped all trade until the right of taxation was reinstated. The exemption was re-acquired in 1677 during a period when Shaista Khan was temporarily in retirement, for a payment of 21,000 rupees, and in 1679 the Emperor (not the Nawab) issued a fi rman (decree) formalizing the exemption. Shaista Khan, back in power, disregarded the fi rman and encouraged his customs offi cials to extort whatever they could from the English. The English resolved such a case by replacing the naughty Nawab with the “rightful ruler,” or by letting a neighboring Nawab more complaisant to the English conquer the kingdom of the naughty Nawab. Given innumerable skirmishes of this sort, the British always engaged in the form of support to one Indian group at war with another, and never presented herself at war pro Britannia. The Indians warring against each other perceived the Company as an adjunct to one Indian army or another, but never received the impression that India was being conquered by a wholly foreign enemy. The second pillar of British supremacy, every bit as essential to their success as the dustuck, was the Nominal Sovereignty. The Nawabs, i.e. the local kings, thus became dependants of Britain, although they were always kept nominally sovereign. First, the Nawabs were more compliant with the Company if they felt secure that the Company would not ultimately deprive them of their sovereignty; this evolved into the absurd situation that the Nawab was grateful to the Company for protecting his sovereignty. Second, popular hostility did not develop towards the English because the people did not perceive that their native self-rule had been eviscerated; since the Moguls were a hostile foreign power of a different religion and race anyway, concern about self-rule was an exotic fantasy. Taxation was conducted in the traditional Mogul manner, with Indian tax collectors. Formerly tax revenue had been assigned by the emperor to the landed aristocracy (Nawabs); the tax assignment had been a return payment for the Nawab’s supply of soldiers to the Emperor. As the British loans on the tax anticipation became mountainous, however, the English were able to achieve the next concession; taxes were to be paid directly to the Company’s agents, and the Company would dispense what part of it as the Company pleased to the Nawab. In effect, the Nawab was put on a salary by the Company. Bank loans anticipated tax revenue. The Indian soldiers were now paid in cash and given

－ 324 － FROM INDIA TO THE BOSTON TEA PARTY

European, not Indian, military training. Military authority was centralized in the Company, and the solders were emotionally separated from their previous feudal ties to the Nawabs of their homeland. The westernization of the Indian military was essential to the eventual British hegemony fi rst, because the European military technology was better, and second, because it made the Indian soldiers incapable of feeling divided loyalty between their commander, the East India Company, and their native Nawabs. The greatest part of the English armies in India was made of sepoys, i.e. Indian soldiers trained in the British fashion. The Nawabs depended on Britain for British-trained Indian troops and for British commanders; the anticipation of tax revenues made the Indian bankers dependent on Britain; both forms of dependency gave Britain an early political role. Development followed a parasitic pattern; first came political infl uence, then political dominance by virtue of the Nawab’s debt, until fi nally the entire governmental structure was taken over by the British, with the Nawab performing only a fi ctitious role, but always with the patina of Mogul government kept perfectly intact; concurrently tax revenue came to be paid directly into the East India Company, and the sepoys were inducted directly into the Company’s English military. England saved enormous expense by having preserved the traditional Mogul forms in this transformation, instead of transparently using war to eradicate the former Mogul rule.11

THE EAST INDIA COMPANY IN BRITISH POLITICS

In the face of the War of the League of Augsburg and the War of the Spanish Succession, English government fi nanced itself from additional public loan administered by the Exchequer, through charted companies, in 1694, 1698, 1709, and 1711. The Bank of England was inaugurated in 1694 in return for the bank’s loan to government of £1.2 million at 8% interest. The East India Company had been perforce intimately associated with the Stuart monarchy, and, in addition being the benefi ciary of the Indian monopoly, was highly resented by the lower members of the English trading class who were thereby excluded. These were the

11 Cf. Marshall, P.J.; The British in Asia: Trade to Dominion, 1700-1765; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 497.

－ 325 － D. Morgan Pierce commercial supporters of the Whigs, who ascended in the Glorious Revolution. The East India Company was a remainder of the hated Stuart monarchy, in fact a major factor fomenting opposition to the Stuarts; Parliament, hostile to the deposed king and the Stuart commercial aristocracy, supported the interlopers (traders illegally infringing the Company monopoly) and favored the pamphlet campaign denouncing the injustice of the East India Company’s monopoly. Parliament challenged the corporate monopoly in 1694. The excluded part of the trading sector attempted to subvert the monopoly by establishing a Scottish Company in 1695; the greater part of the capital for this had been provided by English investors, who wanted to operate through a Scottish Company, which would stand outside of the jurisdiction of English law protecting the monopoly. The royal permission by which the Scottish Company was established placed William in a scandal, from which he extricated himself by a ruffl ed repudiation of his permission in a speech before Parliament. English investors were forced to withdraw; Scotland strained to support the company, without English fi nancing, on insuffi cient resources. The bankruptcy of the Scottish company, due to the insupportable expense of the colony of Darien, on the Isthmus of Panama, ensued; the mishap was clearly foreseen and the decision to establish Darien had not been economically rational, but the Scots had overcome their rationality to satisfy an abortive need for national pride. Following the collapse of the Scottish venture, William III chartered a rival New East India Company in 1698, in exchange for the new company’s loan of £2 million at 8%. The new company should have satisfied the English who had defected from the Scottish venture; this new company embodied all the conditions for which the minor traders had petitioned. The competition between the old and new companies in fi nal effect brought about a decline of consumer prices in England and a rise of purchasing prices in India; competitive trade became unprofi table to both companies and to England. The absurdity was resolved by amalgamation of the two companies in 1709, i.e. two years after the Act of Union, in exchange for payment of a further ₤1 million into the Exchequer: the “United Company of Merchants of England Trading to the East Indies”.12 The

12 Cf. Carsten, F.L., editor: The Ascendancy of France 1648-1688, The New Modern Cambridge History, Volume 5, p. 427.

－ 326 － FROM INDIA TO THE BOSTON TEA PARTY rules of the amalgamated company reverted to those of the monopoly organization of the older company; the amalgamation succeeded because those who had previously been excluded had thus become bona fi de members in the amalgamated company. Britain had used tontines and lotteries to assemble the loans supporting the Anglo-French wars from 1693 to 1713. Government attempted to attenuate its annuity debt by extracting loans or “gifts” from companies that could not have survived without the monopolies awarded them from government. In this context the East India Company, Bank of England, and South Sea Company found themselves afterwards obliged to pay large low interest loans to government in return for extension of their monopolies; persistence of the popular hostility against monopoly rights only strengthened government’s ability to extort from the hated monopolies. Government allowed the institution of the Bank of England in exchange for a ₤1.2 million loan to government from the Bank in 1694; the exchange comprised a monopoly right for the Bank of England to issue bank notes in London, and a franchise for the circulation of exchequer bills based on tax anticipation.13 Conversion was implemented to alleviate the subsequent public debt; private loans made to government in naval, exchequer, and other government bills were converted from government obligation to make capital reimbursement into a payment of negotiable and assignable interest payment from tax revenue, without obligation to reimburse the capital. These devices in effect transferred the capital from its owners to the possession of the government in return for guaranteed interest on the capital, although the arrangements would function only for as long as the interest payment remained reliable. Reliability was not certain; enormous interest obligations built up that government might become as unable to pay as the capital. Government undertook to alleviate the tontine debt burden by converting the annuities to rising stock. Godolphin had been Chancellor of the Exchequer during these transactions; in 1711 his successor, Harley, maneuvered the £9 million debt which government owed to annuity holders into a conversion of stock in the newly incorporated “Governor & Co.

13 Cf. Patrick K. O’Brien; Inseparable Connections: Trade, Economy, Fiscal State, and the Expansion of Empire, 1688-1815; in Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 65.

－ 327 － D. Morgan Pierce of Merchants of Great Britain Trading to the South Seas”. Annuity holders received the equivalent of their annuities in the stock of the South Sea Company; they unanimously cooperated in the conversion because the value of the stock was going far above the par value at which they exchanged for it. The conversion to stock freed government from debt, i.e. its promise to pay interest in return for non-reimbursement of the capital, and made the creditors hostage to the buoyancy of a stock-holding. Thus government no longer had the £9 million debt; the South Sea Company did, but went bankrupt shortly afterwards, and in so doing liberated government from its annuity debt.14 Upon the bursting of the South Sea Bubble, government had disburdened its debt, and the previous creditors to government lost their capital in consequence of its disappointed anticipation of a fraudulent stock conjuncture.

INDIAN LAND REVENUE

The French won the war with the Dutch in the War of the Austrian Succession, but were badly beaten at sea by Britain, and Boscawen successfully blockaded Pondicherry with ten ships.15 As the British in India were under the aegis of the Company, not of the British government, they were excused from fighting the French in India. In 1746 Bourdonnais expelled the British ships that defended the Indian coast; Dupleix moved in and took Madras for France. Dupleix fortified his capture of Madras by promising it to Anwar-ud-Dun, but when Dupleix reneged, Anwar attacked with a massive army, which Dupleix defeated with a small number of French troops. In 1747 the East India Company had petitioned government to send ships of the line to save the English trade in India; there was a danger that the French would expel British interests. The Treaty of Aix-la-Chapelle (1748) awarded Madras to the French, but Dupleix, under the pretext of the claims of Chanda Sahib, was intent on taking

14 Cf. Dickson, P.G.M., and Sperling, John; War Finance, 1689-1714, in The Rise of Great Britain and Russia 1688-1715/25, edited by J. S. Bromley, Cambridge University press, 1970, The New Cambridge Modern History, Volume 6, p. 288. 15 In May 1747 Anderson captured six French ships of the Line and four East Indiamen off Cape Finisterre; Hawke won the sea battle at Belleisle. Cf. Marshall, Dorothy; 18th-Century England, publisher Longmeadow, 1974, London, p. 222.

－ 328 － FROM INDIA TO THE BOSTON TEA PARTY all of the Carnatic for France.16 Dupleix was restrained in his Indian strategy pursuant to the Treaty of Aix-la-Chapelle in 1748. The East India Company had a slight advantage at the end of the war, but they remained seriously in danger of being expelled from India by the French. The East India Company became a quasi Indian sovereign in its status as a commercial trading monopoly licensed by the British government. The Elizabethan charter from 1600 entitled the company to do what was necessary to maintain its commercial operation: to wage war, govern its Indian settlements, and make treaties with Indian powers. Conferral of these powers came in consequence of the inability of England to finance the said powers. The Crown should have taken sovereignty over the territorial possessions of the Company, but the British government, entirely ignorant of things Indian, refrained from any participation of the Company in India, and accorded formulation of commercial administration to the directors of the East India Company. Government did not oblige the Company to conform government to the laws of England, as it had done in the case of the American colonies; it was diffi dent of making judgments over a wholly alien society. It was good enough if commerce proceeded regularly and the Indian subjects were quiet; the Indian properties of the company were treated as non-contingent possessions of the Company, immune to English intervention.17 At the inception of the Seven Years’ War, India was still entirely in the hands of the East India Company, not of British government, and once again the British in India were under no offi cial obligation to fi ght the French. Again the French had the superior military commander of the name De Bussy, who controlled Chandernagore, the Deccan, and was in a position to drive the British out of Bengal. In March 1757 Clive conquered Chandernagore in a move of offensive defense. The Nawab Suraj-ud-Daulah stood between de Bussy and Clive, sometimes pretending to ally with the British, sometimes with the French. The British eventually decided to liquidate Suraj-ud-Daulah in favor of a more pliant Nawab. Mir Jafi r, a general of Suraj- ud-Daulah’s army, colluded for a palace overthrow of the Nawab, and, although he failed to

16 Cf. Marshall, Dorothy; 18th-Century England, publisher Longmeadow, 1974, London, p. 249. 17 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 532.

－ 329 － D. Morgan Pierce perform his part of the conspiracy, was chosen to be Nawab over Bengal, Bihar, and Orissa after Clive’s victory at Plassey on the 23rd of June, 1757.18 While the Directors of the East India Company were free of government control, they, being stationed in London, were in turn unable to direct the Company operations in India. The acquisition by the Company of the diwani of Bengal (land-tax) gave the British people an amplifi ed impression of the profi ts to come from India; by 1767 the British investors drove the East India Company stock to great heights, and this engendered exactly the same illusion as had been played out in the South Sea Bubble in 1720; the fact that the stock quotation had become very high was taken to be synonymous with the real wealth and prospects of the Company. Because the stock was over-priced, people developed overconfi dence in its returns. In a different context and to serve different purposes Robert Clive, then the great war-celebrity, exaggerated the wealth of the Company to amount to £4 million a year. The objective fact of the diwani had been the bedrock on which the British public based its false expectations.19 Financial coteries connected with the Company stock recognized that they would not draw a profi t by speculation unless the dividend rose; there was therefore a secondary motivation for raising the dividend beyond its reasonable limits. The Company Directors, who knew the real fi nancial status of the Company, knew that the rumors of the Company’s wealth were false, but the investment made into the Company, though on the basis of false expectations, was necessary; they could not risk losing this much-needed investment by declaring that the object to which this investment was oriented was false. The Directors were however against raising dividends; a subordinate anxiety had been that high dividends would imply to government that the Company was more prosperous than it was, and thereby motivate government to make much harsher fi scal demands in return for continuance of the charter. In September 1766 the Court of Proprietors, overruling the advice of the Directors, by general vote raised the dividend from 6% to 10%. Subsequently they raised the dividend to 12%; the House of Commons raised a motion to limit the dividend to a maximum of 10%,

18 Cf. Marshall, Dorothy; 18th-Century England, publisher Longmeadow, 1974, London, p. 294. 19 Cf. Marshall, Dorothy; 18th-Century England, publisher Longmeadow, 1974, London, p. 374.

－ 330 － FROM INDIA TO THE BOSTON TEA PARTY but it was not legislated. In 1769 Government allowed the Company to distribute a 12.5% dividend on its shareholders. This was one of those events, rational in the context of the stock market, but entirely irrational apart from it. In order to pay a 12.5% dividend the Company would have to borrow money. Rationally considered, the Company should not have allowed more dividends than could be paid from their profits. Shareholders observed employees returning to Britain very wealthy, while the stock itself did not rise; as the wages of employees were minimal, the wealth derived either from embezzlement, or from business activities apart from the Company, of which the Company should have been the primary benefi ciary. In either case the Proprietors of the Company, its investors, had to infer that Management was illicitly deriving private wealth that should have belonged to the Company, i.e. the proprietors, i.e. themselves. They determined to extract their benefi t from the stock-holding. Paradoxically, the stockholders voted for something that the Directors warned would bankrupt the Company: the 12.5% dividend. The stock of the East India Company did not rise because the profit was purloined by the employees. Consequently, either the dividend would need to be paid by reclaiming the money purloined by the employees (i.e. authentic reform would be imperative) or the Company would go bankrupt. The objection from the Directors signifi ed to them merely that if they did not take a high dividend, profi ts would be embezzled. Company presidents returning from India had enough wealth to buy directorships in London and maintain the Indian scams from which they had derived their wealth. Employees located in India formed factions in the intramural politics of the company to protect whatever abuses were most profitable to themselves, sheltering themselves from the reforms that the London Directors thought necessary for the survival of the Company. In a fat-fingered attempt to achieve something like democracy, a shareholder received one vote in the Court of Proprietors if he owned a minimal £500 of stock, but possession of stock in tens of thousands of pounds did not raise the holder’s voting power. Supposedly this should have prevented oligarchic control; the preponderant vote would derive from the majority of shareholders rather than from the majority of shareholdings. Chatham’s call for parliamentary investigation sent panic throughout the East India Company; it would reveal fraud and corruption. The shareholders strove to shelter their own

－ 331 － D. Morgan Pierce scams by organizing into factions and achieving the faction’s invincibility through stock splitting; the majority of votes from shareholding would in turn determine election of the Company directors. The stockholders adopted the obvious illicit tactic; they covertly divided their stocks into £500 units and distributed the shares, temporarily, to their underlings as dummy shareholders, so that they would control more votes. Absurdly, the rules underlying this arrangement were never modifi ed in our period. The opponent of such a clique was also forced into illicitly splitting his stock in the same way.20 Since the greatest part of the wealth was embezzled at source, those who returned from India were likely to outvote the London- based directors and stockholders who had no personal interest in the Indian embezzlement. The London-based personnel and stockholders, being disinterested in the profit from corruption, inclined to authentic reform, and would have insisted on noninvolvement in the military and political events of India.21 Throughout the 18th century London Headquarters was convinced that the most effective way to transfer surplus wealth from India to England was: “Trade not conquest.”22 This held two implications: 1) trade was the best way to acquire wealth and 2) the English East Company was the only way to achieve the fi rst. If the Indian trade had been free, then territorial conquest would have been imperative, first because divided small traders could not have enforced the regulations of trade; second, because the French rivals were organized and unifi ed nationally, and would easily overpower any efforts of dispersed British merchants. The existence of the East India Company is what saved Britain from the alternative necessity of military intervention. The key was therefore to make the East India Company so dominant that national intervention would be unnecessary, and at the same time to tax the company so effi ciently that its tax returns would benefi t the government as much as if India were a British province. Under these premises the London Headquarters

20 Cf. Marshall, Dorothy; 18th-Century England, publisher Longmeadow, 1974, London, p. 407. 21 Cf. Marshall, P.J.; The British in Asia: Trade to Dominion, 1700-1765; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 498. 22 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 534.

－ 332 － FROM INDIA TO THE BOSTON TEA PARTY did not want its Indian agents to make war, which would ultimately necessitate national intervention, and thereby destroy the primary purpose for which the East India Company was valuable to the British government. The London Directors consistently forbade war, and forbade territorial expansion, on the ground that the costs of military operations would ruin the profi ts of trade.23 War on any scale, even without British national aid, would probably not pay for itself, and thus diminish the revenue derived from trade; the Company needed to use just so much military force to destroy commercial competition, but not so much that the cost of war would ruin the profi t of commerce. However, the military arm of the Company, unlike the traders, achieved profi t only from war; the Indian Nawabs etc. had a Mogul custom of giving “gifts” to the conquerors, and receiving gifts was potentially more profitable than what the traders extracted. Given this conflict of interests, wars were reported to the home authorities in London ex post facto, while London never ordained territorial annexation; since the army was composed mostly of sepoys, it was quite easy to wage war before notifi cation to headquarters. The slow creep of empire was driven by the self-interest of the British stationed in India, made possible by the time interval dividing London and Bengal.24 The London Directors could not reform this proclivity by forbidding its army to make war, because military spontaneity was necessary to arrest French or French-allied activity in India from making gains. But there was a confl ict of interests. The Directors of the Company, or the Company at large, did not want military involvements and land annexation to cancel the total profi t from the trade; the merchants and company soldiers acting for the Company in India, did want war, because the possibilities of spectacular personal profi t were engendered from war. Plassey constituted the full ripening of this internal corruption. Company employees

23 Cf. Ray, Rajat Kanta; Indian Society and the Establishment of British Supremacy, 1765-1818; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 518. 24 Cf. Marshall, P.J.; The British in Asia: Trade to Dominion, 1700-1765; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 499.

－ 333 － D. Morgan Pierce associated with Indian merchants to exploit the internal trade of the Indian continent; the Company exemption from the dustuck ensured that the English and their Indian underlings would profit from trade. Several of the wars comprised the efforts of Moguls to retrieve English trade into tax regulation, and the war that developed over the application of the dustuck destroyed Mogul rule defi nitively. The Company appropriated direct collection of the land revenue; though an innovation, it became newly exigent because of the military costs involved in territorial acquisition. But the exigency of the revenue did not guarantee its availability. Indian land revenue traditionally passed through an Indian class of rentiers, who had no connection to agriculture beyond their rights to receive land tax; in the Indian system, unlike the British or European, individuals did not transfer property in land, but rather the rights to receive a certain tax on a piece of land. The confusion this caused the British produced great diffi culty in assessing how much they could collect from the peasants. If the land tax were exorbitant, in the long term it would lead to soil deterioration, impoverishment of the peasants, and diminishing returns.25 Taxation required disinterested judgment because those holding the land would earn more money, in the present, by making the wrong decision, and because the right-holders over the tax farms consisted of Indians and British. The British colonization of India was rule over an autochthonous population that supplied the civil infrastructure on which the British trade depended, and which paid into the Company tax farm without the slightest representative institution. The Atlantic colonies were indigenously British, cultivated representative institutions which they had brought from the mother country, and fought tooth and nail against England’s attempts to tax them. The Indians were paying taxes to a British Company, not even an authentic government, while at the same time England could not get taxes out of colonists of its own lineage. One might surmise that this asymmetry encouraged the English to think they were entitled to colonial taxation. The Indian administration was conducted according to Hindu or Muslim law, mostly by Indian

25 Cf. Marshall, P.J.; The British in Asia: Trade to Dominion, 1700-1765; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 504.

－ 334 － FROM INDIA TO THE BOSTON TEA PARTY natives, but no objection arose against the British rule. There was intense rivalry between intermediary right holders and the ultimate collector of the land tax. The British presided over Courts conducted according to Mogul law, which they did not understand; consequently the law courts became a confusion of Mogul and British law, the result of which was to enrich some contenders with highly lucrative land taxes, to alter the traditional concepts of land ownership and weaken the Indian land-owning class. Whereas the traditional rights to receive land tax from the peasants was a form of property that substituted for land ownership, one must take note that the Indian method failed to achieve a suffi cient distinction between rent and tax, and thereby the status of landlord was in great jeopardy when the English took over their tax system. The English laws of land tenure introduced into the interpretation of these rights had strongly destabilized the elite Indian classes. Amounts of payment were also adjudicated in these courts, in which judges had no knowledge of Indian culture.26 As the Company did not aggressively take action against the English merchants’ rape of India subsequently to Plassey, sooner or later the British government would have no alternative but to take over government of India if only in order to restore proper trade.27 The acquisition of tax-collection (diwani) accomplished what might have been achieved by the Townshend Act in the American colonies. The army support made it impossible for the Company to revert to a purely commercial operation; the army was indispensable for the possibility of trade, but it was a debilitating expense. The land tax was needed to pay the extra cost of the army, which in turn supported the possibility of trade and collection of land tax. The military agents in India were motivated by immediate gains; they reasonably disregarded the wishes of headquarters, since their company salary was nothing compared to the money illicitly obtainable from war and trade. The land revenue enabled this duplicity.

26 Cf. Marshall, P.J.; The British in Asia: Trade to Dominion, 1700-1765; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 504. 27 Cf. Marshall, P.J.; The British in Asia: Trade to Dominion, 1700-1765; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 503.

－ 335 － D. Morgan Pierce

The Indian agents recruited soldiers mainly from native Indians, and since the British got hold of the Indian land revenue, they did not need to petition headquarters for money. By 1815 the Company had a private army of 140,000 sepoys and 30,000 British soldiers.28 The war efforts conducted by the Company in India could be kept secret from the same Company, in London; London headquarters had no idea of the size of the land revenue, and could therefore be kept ignorant of the military expense. Thus the Indian land revenue fi nanced the sporadic Indian wars. The Company continually increased its private army. Thereafter the Company, perhaps unwisely, petitioned the Crown for military aid in India; this behavior strongly reminded government that it could not indefi nitely continue the arrangement of making the Company periodically pay government in exchange for monopoly.29 The Company had acquired territorial possessions in India; it was highly improper for a company to act as the government in the same place as it conducted its business. British tax rates had risen to their maximum capacity during the French and Indian War, and the national debt following the war guaranteed that the tax rates could not subside. Debt could not be extinguished with higher taxes because higher taxation would have throttled the volume of transaction on which the taxes were applied; too much business would have become too unprofi table to continue. Native English taxation being out of the question, the only alternatives were the American colonies or India. Pitt had quashed the Stamp Act; India remained. Corruption in India grew much worse after Robert Clive achieved the conclusive British victories in India and then made his first return to England. The private trading of the employees was directly reducing Company profi ts and the rapacious behavior of the British traders intensifi ed Indian hatred of the Company. Despite the outrage over Clive’s jagir, in

28 Cf. Marshall, P.J.; Introduction; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 16. 29 Cf. Marshall, P.J.; The British in Asia: Trade to Dominion, 1700-1765; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 498.

－ 336 － FROM INDIA TO THE BOSTON TEA PARTY

1764 members of the Company successfully advocated the return of Clive to presidency in India, under the belief that only Clive could bring things into order. This was paradoxical; the person who had extorted by far the most from India was being sent back to India to stop extortion. The jagir was a gift made by the puppet Nawab whom Clive had made king of Bengal; he was utterly dependent on Clive for his monarchy, and dependent on Clive for the resources from which he could give the jagir to Clive. Except for Clive’s victory at Plassey, he would not have been a Nawab. The gift, which Clive had not passively received but actively demanded, was a gift in the traditional Mogul style. As landlords in India did not own the land, but owned the rights of taxation on land, Clive’s jagir had been in this fashion: a right to all the tax revenues of a territory, not only life-long but interminably heritable past his death to his progeny. The gift of the jagir was assigned personally to Robert Clive, not to Robert Clive as the representative of the East India Company. The East India Company was to receive nothing from this gift. Although this gift was in accordance with Mogul law and tradition, English law could not make head or tail out of it; a personal gift to a man who acted as the agent of a Company, who took the reward instead of the Company, in the form of a reward from a foreign potentate whom the Company did not dare to denounce as nothing more than a diaphanous façade for the usurpation of a foreign nation. Yet the decision to send Clive was perhaps correct. In accomplishing this task Clive transferred the financial administration of India (i.e. Bengal) directly to the East India Company. Similarly as had been provided for the colonies, the army enforced land taxation, from which the army was financed. Land taxation of Bengal stimulated much larger trade volumes; the three functions, amplifi ed trade, army, and land taxation became interdependent in a way that failure in India would have enacted bankruptcy of Britain.30 By 1767 England could not disregard the East India Company in the spirit of laissez-faire, as the fi nances of England had grown into such consonance with those of the Company; it was vitally important to British national survival to determine how India would be governed, and how Britain would

30 Cf. Marshall, P.J.; The British in Asia: Trade to Dominion, 1700-1765; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 506.

－ 337 － D. Morgan Pierce extract tax revenue from the Company. The Company could not have stayed in the government’s favor if it had overtly announced its annexation of Bengal, but could not have achieved commercial stability if it did not, in reality, possess Bengal. But Britain could not have maintained status quo with its European competitors if it pronounced Bengal to be British territory. The traditional Indian distinction between ownership of land and ownership of taxation over the land was highly useful in maintaining the pretense that the Company had not annexed Bengal, and to sustain that pretense, it was necessary overtly to respect puppet Nawabs and a puppet Emperor. This deception was, however, extremely expensive to the British interest. The thinly disguised annexation was consolidated and perpetuated by those who amassed such illicit fortunes that they could purchase membership in the House of Commons;31 their enthusiastic advocacy of the East India Company preserved the conditions for the younger generation to thrive from the continued spoliation of India. The expectation of tremendous wealth pulled the Company into the deepest center of parliamentary politics. Any political party that acquired control of the Company’s patronage would control Parliament, indeed control government, and conversely, any faction within Company politics that could get the support of British Government would gain control of the Company.32 The extortionate Company government in India could not be reformed without exposing the fraudulence of the puppet Mogul rule; this exposure was unaffordable, and the entailments consequently made authentic reform unaffordable. The Charter had not assigned the East India Company the duties of national government; it had been assigned to govern itself, but merely as a company, managing its posts in Bombay, Calcutta, Fort St. David, and Madras. Parliament had never assigned the East India Company explicit, offi cial governmental offi ces. When the East India Company suddenly had administration over territories larger than England, and with populations ten times the size of that of England, unmonitored by pertinent parliamentary legislation, those who became de facto government administrators were

31 Cf. Marshall, Dorothy; 18th-Century England, publisher Longmeadow, 1974, London, p. 372. 32 Cf. Marshall, Dorothy; 18th-Century England, publisher Longmeadow, 1974, London, p. 372.

－ 338 － FROM INDIA TO THE BOSTON TEA PARTY those agents who had long been inured to manipulating corporate roles for embezzlement.33 Although commerce in tea & c. was the East India Company’s assigned and legitimate business, the Company, or better put, its employees, were earning multiply greater revenue from extortionate land administration. In what was an 18th century analogue of money laundering, the employees were able to smuggle their illegally acquired and unaccountable fortunes into England by means of a fraud concerned with making loans to their employer, the East India Company. Clive’s pacifi cation of Bengal and his formal transfer of the Bengal tax farm to the East India Company inspired a skyrocketing boom in the stock price. Expectation of tremendous wealth intensifi ed the pressure in Parliament to reduce the national tax burden. The British land tax was at its maximum, 4s/£, and Britain was under intolerable debt. The mainstream members of Parliament were therefore eager to appropriate profi ts of the East India Company as an opportunity to reduce their own land taxes. The British aristocracy, i.e. the landowners, pushed for reduction of the land tax, whereas the wealthy Indian agents, i.e. those not dependent on English land rents, would invest in Parliament seats and act against reduction of the land tax.34 India was forming according to the classic French paradigm (Canada, Ohio Valley, Louisiana), of costing the predatory country more than she could extract; as an MP of the 1780s (George Johnstone) put it: “the Territories we acquired through him (sc. Clive) had done a greater injury than a benefi t to us”.35 In this Robert Clive played a peculiar role. Nobody profited more than Clive from Indian extortion, but, oddly, he did not seek to justify his extortions by defending those of the others; he aggressively acted to stop the corrupt practices of his colleagues and recommended British nationalization of the Company territories as a fi nal solution. Pitt, (later made Lord Chatham) encouraged by Robert Clive, therefore aimed at national appropriation of the territory conferred by the Indian powers on the

33 Cf. Basil Williams, F.B.A., The Whig Supremacy 1714-1760, Oxford, 1962, p. 333. 34 Cf. Marshall, Dorothy; 18th-Century England, publisher Longmeadow, 1974, London, p. 372. 35 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 542.

－ 339 － D. Morgan Pierce

Company. Clive assessed that, due to the collapse of the Mogul government throughout India, and due to the inadequacy of the East India Company, India would disintegrate if Britain did not annex the territory to British national government. Pitt was however too heavily perplexed with the American part of the Seven Years War to take resolute action in India. Management of the Indian problem was left to the East India Company because Pitt’s immediate resources for the challenge were insuffi cient. Chatham did send four ships of the line to protect Company interests in India; this was primarily intended to protect shipping of Company (not national government) soldiers from the French ships under Commodore d’Ache.36 Chatham afterwards reasoned that since Britain had provided the Company with military and naval forces during its war with the French in India, it was appropriate that acquired territory should be in the ownership of the British government, not of a commercial organization licensed by the British government.37 The opinion that the Indian territory should be an annexation, if at all, of the British nation, not a company, was perfectly correct. Pitt’s stated justification for national annexation of Bengal was nevertheless peculiar; because the nation had provided military and naval forces to the Company’s wars, the British nation deserved ownership of the Company territory. Private property is always in the ultimate ownership of the nation; a private owner has such rights of ownership as they are sanctioned by the government that vouchsafes recognition. Thus the ancient principle of terra regis was not irrational; if an individual claims ownership, he must presuppose the prior national sovereignty of some government that is willing to recognize his private ownership right and enforces such laws as regulate the meaning of property. Bengal posed perhaps two ambiguities in this principle. First, the Company most of the time acquired the territory by its own military force, not the national British Army, and second, the Company ceaselessly insisted that it was not owner of Bengal, but that the Bengal sovereign was owner, while the Company merely had the right of taxation. The ground for Parliament’s presumption to the territory was the principle of terra regis;

36 Cf. Marshall, Dorothy; 18th-Century England, publisher Longmeadow, 1974, London, p. 294. 37 Cf. Marshall, Dorothy; 18th-Century England, publisher Longmeadow, 1974, London, p. 373.

－ 340 － FROM INDIA TO THE BOSTON TEA PARTY any newly acquired land belonged primarily to the King, who was then authorized to charter the acquisition to someone, normally the person who enacted acquisition; this had been fundamental in the American colonies. This made little sense for India because the Company was owner of Bengal etc. by virtue of its supposed vassalage to the Emperor of India. The agents in India had retained this diaphanous “vassalage” as a fi g-leaf to defend their actions against London headquarters, which had been emphatically opposed to territorial conquest. But this stratagem inadvertently served a much more important, unforeseen, purpose, once London headquarters grew more comfortable with assets multiply more valuable than it could otherwise have obtained. A company might be a vassal, but the British King could not reasonably claim ownership of territory by virtue of his vassalage to the Indian Emperor; this was indeed helpful in deterring national appropriation. But, since the territorial Nawab and the Emperor were themselves puppets of the East India Company, Britain might have taken the territory from the Company simply by repudiating the Indian pretense of an emperor. The notion of terra regis prevailed in the American colonies because of the English descent of the colonists, who had no heritage of any other sovereign, and because colonial law was a continuance of English law. Britain had taken credit for her liberality in allowing Mogul law in India, but this was sanctimonious; the people constituted a population much larger than that of Britain, and the British ignorance of Indian society made governance by English law a sheer impossibility. It was a serious factor that if the King of England had repudiated the authority of the Indian Emperor, England could not have legitimized her Indian occupation to the contending European powers. The charade of Mogul sovereignty was very important for the security of British rule. From 1766-68 Pitt, intending to use the Company as a source of fi scal revenue, argued that British government had a prior right to any territory acquired by the Company, and forthwith a right to its land revenues. Pitt had never inferred from the impropriety of the Company’s government over the territory in which it conducted business to a duty of reversion of the government of the territory to native Indians; one of the main deceptions of Clive’s “dual system” had been to deny that there existed any usurped territory to be reverted. Although at the outset Chatham was unambiguous in his objection to the Company’s receipt of land-

－ 341 － D. Morgan Pierce rent revenue, he intended to make the Indian territories into an acknowledged possession of the British Crown.38 While Clive had made the original recommendation to Pitt that British government annex the Company territories, Chatham had desired to transfer sovereignty over India to King George III. On the basis of explicit British national ownership of Bengal he wanted the East India Company to pay Government, as well as shareholders, in return for permission to conduct its business activity there. George III fully supported Chatham’s approach. The East India Company was by now deriving far more money by ground rental than it was from its chartered activity, commercial exchange; not a private company, but government, should have sovereignty over India. British government believed that the East India Company was deriving ₤2,000,000 per year from territorial revenue (as Robert Clive had boasted), apart from the tea or other commodity trade: an amount equal to ¼ of Britain’s GNP. If Parliament had imposed reform on the Company, Government would not have needed to tax the American colonies. Pitt, though having taken the position that Parliament was not entitled to colonial taxation, remained aware that British national debt had to be assuaged. By posing the annexation of territory by a commercial interest as illegal, Pitt supposed that a Parliamentary purge of the criminality of the East India Company would resolve British debt by a transfer of the Indian land revenue to the British government.39 After obtaining repeal of the Stamp Act in October, 1766, Chatham planned to compensate for the revenue forfeited from the Stamp Act Crisis by deriving £1 million from appropriating the Indian territory, together with its land taxes, from the Company.40 On December 9th, 1766, in the House of Commons Pitt himself demanded that Parliament investigate the revenue, expenditures, charters, and treaties of the East India Company. Pitt had William Beckford initiate a parliamentary investigation, the ultimate object of which was to be declaration of state ownership of the Indian territory. The territorial revenue would then

38 Cf. Marshall, Dorothy; 18th-Century England, publisher Longmeadow, 1974, London, p. 407. 39 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 79. 40 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 79.

－ 342 － FROM INDIA TO THE BOSTON TEA PARTY belong wholly to government, and the East India Company revenue would be confined to trade.41 Parliamentary factions sympathetic to the East India Company imputed to Chatham (i.e. Pitt) intention to steal the wealth acquired at risk and built up for over a hundred years by the Company, at the same time as Chatham was referring to the almost nonexistent intervention of the British army and navy in 1747 as justifi cation for nationalizing the Company’s Indian land acquisition. That Chatham had shown himself so insouciant when enlarging the Seven Years’ War did not endear his nonchalance to Parliament about the possible European backlash to an outright annexation. Grafton informed the East India Company of Chatham’s intention, while Townshend and Conway, members of Chatham’s cabinet and supposedly obligated to him, strongly opposed parliamentary inquiry; a “ministerial negotiation” would be much less public and therefore easily manipulated. Chatham overrode Townshend’s counterproposal without compromise.42 It would have been unconstitutional for the Crown to bypass Parliament to seize the revenue of a private company, but it was outrageously unconstitutional for an English company, licensed by the Crown, to pose itself as sovereign of a territory independently of Crown or Parliament. Opponents of Chatham immediately advocated the rights of the Company’s vested interests; the Company had acquired its territory and trade according to the conditions promised in its charter.43 Charles Townshend, the Chancellor of the Exchequer in Pitt’s ministry, sabotaged Pitt’s grand plan to expurgate the corruption infesting the East India Company. He had been inducted into Pitt’s cabinet, against Pitt’s will, by virtue of extraneous political pressures. Townshend wanted to be Prime Minister, and there were political forces in advocacy for the East India Company; it was advisable for Townshend to placate these groups. Behind these

41 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 7. 42 Cf. Ritcheson, Charles; British Politics and the American Revolution, University of Oklahoma press, 1954. 320 pages, p. 80. 43 Cf. Cook, Don; The Long Fuse How England Lost the American Colonies, 1760-1785, Atlantic Monthly Press, 1995, p. 115.

－ 343 － D. Morgan Pierce counterarguments against British annexation of the Indian territories were constituencies that might vote for or against a political candidate. More than half of the members of Parliament were invested in the East India Company. Similarly to the American colonies, the East India Company did not have any payable obligation to British government. The Company had maintained its monopoly only by paying enormous bribes. The Courteen Association, the New East India Company, and the non-enforcement of laws against interlopers had been committed by the government in breach of its contract with the Company. England had not constructed the commercial colonies nor financed the incessant Indian wars that were ingredient to business activity in India. If British government now expropriated the territorial holdings from the Company, it would break the charter with the Company, plunder the wealth that government had had no role in acquiring, all on the pretence that the Company was British, and therefore anything belonging to the Company belonged to Britain. Townshend could not afford to alienate Whig or Tory sentiments about the sanctity of private property. Chatham’s sudden mental and physical collapse saved the Company from reform. In 1767, the same year as the Townshend Duties were legislated for the American colonies, British government expressed a claim on all Indian territory that the East India Company had acquired as collector of the Indian land tax. The passionate defense of the Company on the slogan of property rights (Britain’s prior ratifi cation of any English Company → British prior ownership in the Company’s ownership→ outright British annexation of Bengal → war with competing European powers illegal government expropriation of the property of a properly chartered private company → Company’s vassalage to an Indian Emperor → King George III’s vassalage to an Indian Emperor) fomented dissent within Chatham’s own Cabinet and a near defeat in the House of Commons.44 Given the intermission of Chatham’s breakdown, Townshend was able to demolish Chatham’s attempt at reform. This in itself is paradoxical; both Charles Townshend and his brother were usually rabidly aggressive for the aggrandizement of Government; it was

44 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 537.

－ 344 － FROM INDIA TO THE BOSTON TEA PARTY out of character for Townshend to protect the Company against Government. Ad nauseam, Townshend intended to be prime minister; Pitt and Clive had spoken for nationalization, and in the next generation Fox, but otherwise no politician dared to speak for infringement of the Company’s charter, and Fox’s advocacy prevented his appointment to Prime Minister. Townshend could not afford to offend the Company. The Parliament powers who had protested in favor of vested interests aligned themselves with Townshend: Henry Seymour Conway, Speaker for the Commons, Rockingham, Temple, and Grenville defended the Company against Chatham’s initiative. Due to breakdown Pitt was not in charge of his own ministry when the petition against the Company materialized; Townshend, Chancellor of the Exchequer in the Pitt ministry, took over the government side of negotiation. Townshend used his succession to destroy Chatham’s project; instead of prosecuting the injustice of corporate governance of an Indian province, Townshend accepted an offer from the Company in return for smothering investigation of a commercial company collecting the land-tax of a foreign country.45 Grafton, who was senior to Townshend and nominally the second on command of Chatham’s ministry, at once notifi ed Chatham of Townshend’s intent to overturn the prosecution of the Company. Chatham had Grafton ask Lord North to become Chancellor of the Exchequer in the place of Townshend. Aware of Chatham’s declining health, however, North bluntly refused. Chatham, on learning of North’s refusal, went into a nervous breakdown and became utterly unable to manage affairs.46 Although Chatham was head of the Ministry, he did not take action against his own appointees, Townshend and Conway, when they blatantly subverted his project. Shelburne, rigidly loyal to Chatham, ought to have interfered. However, Chatham’s demand of an “investigation” or a “reform” of the Company was too vague to support the final intent of nationalizing Bengal, which would have drawn ferocious opposition due to betrayal of a

45 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume III, Oxford University Press, 1998, p. 537. 46 Cf. Cook, Don; The Long Fuse How England Lost the American Colonies, 1760-1785, Atlantic Monthly Press, 1995, p. 117.

－ 345 － D. Morgan Pierce charter. Shelburne supposed that the object of expropriating the Indian territory in the name of Britain was far fetched; the very powerful opposition would have defl ected the investigation long before having achieved such an effect. The Company Directors had initiated the offer of a £400,000 annual payment in return for cancellation of the investigation. Shelburne calculated that such a payment, without altercation, would be better than the risk of crusading for a reform Pitt had envisioned, but which would probably prove abortive. Conway and Townshend, members of the Cabinet, pledged to obstruct Pitt’s motion for a parliamentary investigation; in collusion with Rockingham, who led the opposition, they tried to raise the parliamentary permission of dividends to 12½%.47 No one apart from Shelburne was in a position to oppose Townshend. The effort was perhaps hopeless from the start; already by December 1766 the Company had virtually gotten clear of Chatham’s demand for parliamentary investigation.48 Townshend altered the claim of the British government from ownership of all the Indian territory from which the Company received taxes to a settlement by which the Company would retain ownership of the territory, but in lieu of which the Company would pay government £400,000 annually. Two fi fths of the import duty would be rebated on tea sent to the American colonies, in return for which the Company promised to pay compensation for any shortfall in the revenue expected from this calculation. The Company would remain the unique representative of India; no branch of British government would be planted. The compromise was delectable because Britain had no knowledge of India on the basis of which to collect land tax in India, did not want the King to be the vassal of an Indian emperor, and did not want renewed rivalry with European nations by having torn down the façade of autochthonous Indian government.49 To conceal its disinterest in Indian oppression, Parliament

47 Cf. Marshall, Dorothy; 18th-Century England, publisher Longmeadow, 1974, London, p. 375. 48 Cf. Cook, Don; The Long Fuse How England Lost the American Colonies, 1760-1785, Atlantic Monthly Press, 1995, p. 116. 49 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 536.

－ 346 － FROM INDIA TO THE BOSTON TEA PARTY in May 1766 limited the East India Company to a maximum 10% dividend, a meretricious act whose intended effect was to present an appearance of reform.50 The Company received an initial two year extension on its monopoly rights in return for the aforesaid nominal payment of £400,000, which was not so much as to reduce the maximum dividends of the stockholders.51 Precisely why should the Company have paid £400,000, outside of legislated customs taxation? There was no legal foundation: to assert simply, as government did, that “England should have her share” – was vacuous; the assertion could not be translated into legal terms. The Indian territory it occupied was not British territory; inquiry into this presupposition had been smothered, and since it remained merely an unlegislated presupposition, it could not have constituted a right to charge rent on the Company for occupation of the territory. It was simply blackmail, and the Company did not contest the blackmail (rather, it was the Company’s proposition), out of fear that continuance would lead to nationalization of the acquired territories. The Pitt ministry, through Pitt, had already attempted to claim British possession of the Indian territories taken by the East India Company in the same year as the Townshend duties were imposed on the American colonies (1767). It was this specific claim that Townshend had expunged by announcing the annual £400,000 gift of the Company; in return the Company would retain ownership of the Indian territory. The compromise, such as it was, aroused objections. The government had as little right to revenue from the Company’s profi t as it did to charge rent; the business had been built up without expense to the government, and the revenue was from territory not belonging to England. It could be construed that the Company had agreed to pay the annual sum, though unjustifi ably, to forestall expropriation. The annual payment had been negotiated to obfuscate the illegality of the Company’s tax farm; persistent logic could have forced such an inquiry only in one direction. It was worth £400,000 for the Company to maintain the tax farm, and on the other hand Britain would

50 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 81. 51 Cf. Cook, Don; The Long Fuse How England Lost the American Colonies, 1760-1785, Atlantic Monthly Press, 1995, p. 115.

－ 347 － D. Morgan Pierce have been apprehensive of the otherwise unnecessary diplomatic and legal confl icts ensuing from nationalization. Obfuscation of the status of Indian land revenues was the optimal way to safeguard its benefits. Although M.P.s continued to assert the simple right of the State (not the Company) to the Indian land revenue, no one again publicly dared to confront the countercharge that the State would thereby steal the private property of the Company, acquired within the provisions of its charter.52

TOWNSHEND ACTS

In May, 1766, Townshend had interrupted a speech by Grenville to seize credit for an incidental idea in Grenville’s speech; he announced his authorship of a scheme by which to extract money from the colonies. In a parliamentary debate of April 26th, 1767, Grenville had argued that the American colonies should be made to pay the expenses of the British armies stationed there. This was a vindictive reaction to his humiliation at the repeal of the Stamp Act; vindictive in that any new attempt at taxing the colonies would betray the understanding on which the colonists accepted the demise of the Stamp Act. Townshend declared that he had devised a way to extract revenue out of the colonists without provoking another fi asco such as the Stamp Act Crisis. On the basis of the Declaratory Act he affi rmed that Parliament was unconditionally entitled to impose internal or external taxes on the colonies. Townshend had supported the Stamp Act when he was in the Grenville government, but supported repeal of the Stamp Act when he was in the Rockingham government. At the present time, his derision of the distinction of internal and external taxes was a repudiation of Chatham, who had made this distinction the basis of his opposition to the Stamp Tax. Townshend was nominally a member in Chatham’s ministry; he made the derogatory remark during the period that sickness rendered Chatham defenseless.53

52 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 537. 53 Cf. Cook, Don; The Long Fuse How England Lost the American Colonies, 1760-1785, Atlantic Monthly Press, 1995, p. 116.

－ 348 － FROM INDIA TO THE BOSTON TEA PARTY

The annual ₤400,000 payment presupposed the halt of the parliamentary inquiry and the Company’s unchallenged ownership of the Indian territories.54 Accordingly Britain would not receive revenue from the Indian land tax. In the spring of 1767 Townshend had claimed in Parliament that he could reduce the English Land Tax by making the American colonists finance the British armies stationed in America.55 However, Townshend’s tax plan for the colonies would have provided only 1/10th of the revenue lacking, even if it had worked. Accordingly, Townshend afterwards appealed for a continued maximum English land tax. Instead, in 1767, opposition in the House of Commons, encouraged by Townshend’s capricious claim, unexpectedly reduced the English Land Tax from 4s/₤ to 3s/₤, thereby reducing the national revenue by ₤500,000. Sir George Savile, M.P., interrupted the enthusiasm prior to vote with a warning that if the land tax revenue were reduced by as much as £450,000, and revenue from India had already been prevented, the only remaining source would be the American colonies. The assertion didn’t alarm Parliament, considering that more than half its members were heavily invested in the East India Company, while no one at all had investment in the American colonies. Maintenance of the high English Land Tax would jeopardize the Members of Parliament in the upcoming election, the results of which were controlled by the aristocratic land owners.56 The ministry needed another revenue either from the colonies or India to compensate for the loss in English land tax. The previous impetus to distrain the East India Company’s territorial sovereignty, while preserving its commercial property according to charter, came from recognition that the East India Company was profi ting more from real estate, rent, and Indian land tax, outside its chartered rights, than from its commerce as legally sanctioned; hence Pitt’s conviction that the legal entity, the nation of England, was the proper recipient of the Indian tax revenues. The American colonial territory was, on the contrary, legitimately owned

54 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 154. 55 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 239. 56 Cf. Ritcheson, Charles; British Politics and the American Revolution, University of Oklahoma press, 1954. 320 pages, p. 97.

－ 349 － D. Morgan Pierce under British law; Townshend therefore claimed English entitlement to colonial tax revenue. The reduction of the Land Tax was quickly ratified by a parliamentary vote of 206 to 188; the revenue acquired by Townshend’s deal with the East India Company was thereby neutralized, leaving Government still £500,000 in defi cit. Townshend, by diverting the motion to investigate the East India Company, made it exigent to impose colonial taxation expressly as a means to compensate against British revenue shortage.57 Three days after the successful parliamentary vote to reduce land taxes the Earl of Chatham, though an invalid, struggled to London, where he discovered the betrayal of his Indian and American policies by Townshend; his fi rst action was to write Grafton to expel Townshend from his ministry.58 But his wish was not carried out. Previous to the negotiation for the £400,000 annual payment, Townshend had already premeditated a plan to use a tea duty to shift the revenue requirement from English to colonial taxation.59 The Stamp Act Crisis had extracted from government a muddled intimation that Parliament would not again attempt to tax the colonies. What made the Townshend Act magnifi cently threatening was not the renewed attempt to tax, but its political perspective; it was a colonial tax intended to pay an English defi cit. If taxes could be imposed on colonies for meeting extraneous debts of the mother country, a precedent for unlimited exploitation would materialize. The aim of the Townshend Act had been to alleviate the taxation of British taxpayers; with no colonial representation in Parliament, and the insight that for every tax on the colonies there would be less tax in England, British taxpayers would fi nd colonial taxation an eminently happy solution. Continuance of the maximum Land Tax made war unaffordable; peace was to be unconditionally preserved.60 As Townshend’s negotiation forfeited greater revenue that might have come from the East India Company, the only way to compensate

57 Cf. John C. Miller, Origins of the American Revolution, Little, Brown and Company, 1943, p. 245. 58 Cf. Cook, Don; The Long Fuse How England Lost the American Colonies, 1760-1785, Atlantic Monthly Press, 1995, p. 117. 59 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 19.

－ 350 － FROM INDIA TO THE BOSTON TEA PARTY for the reduced Land Tax revenue was to carry out whatever it was that Townshend claimed would raise in colonial revenue.61 Due to his aspiration to be prime minister, Townshend could not afford to lose face by reneging on his boast. Under pressure from Grenville, Townshend had to establish colonial tax revenue for the express purpose of reducing British taxation of the home country.62 On the 24th of April, 1767, in cabinet meeting Townshend proposed the Restraining Act, which was to suspend the New York Assembly until it submitted to the supply of General Gage’s army: “an army in America, and consequently American revenue, is essentially necessary.” The colonists had protested not only colonial revenue payment for a British army, but also the stationing of the army in colonial territory; protests that the native colonials could perform their self-defense better were ignored. When the colonists protested the Stamp Act, they had affi rmed their cooperation with British taxation in the Navigation Acts on the ground that they were concerned with trade regulation. Therefore Townshend’s derisive rendition on the occasion of the American Revenue Act, that he had complied to the letter with the colonists’ affi rmation of what taxation they would accept, is not quite true. The Townshend Duties did, mockingly, observe the distinction between internal and external taxes, but in their abandonment of the purpose of trade regulation, and their avowed purpose in creating an English government revenue, they were blatantly in contradiction with what the colonists had claimed would be acceptable.63 Worse than imposing unacceptable taxation, this was a violation of good faith. On May 13th, 1767 Townshend proposed to receive ₤40,000 annually

60 Cf. Ward, W.R.; The Beginnings of Reform in Great Britain: Imperial Problems: Politics, Administration, Economic Growth, in Goodwin, A., editor; The American and French Revolutions 1763-93, The New Cambridge Modern History, Volume Eight, Cambridge University Press, 1965, London, p. 549. 61 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 97. 62 Cf. John C. Miller, Origins of the American Revolution, Little, Brown and Company, 1943, p. 243. 63 Cf. Cook, Don; The Long Fuse How England Lost the American Colonies, 1760-1785, Atlantic Monthly Press, 1995, p. 121.

－ 351 － D. Morgan Pierce from a customs duty on tea, glass, paper, red and white lead, and paints. The tea tax was to be reduced from 1s/pound to 3d/pound: a tactic to subvert smuggling. The Townshend Act was to allow general writs of assistance in all of the colonies.64 The New York Assembly was scheduled by the Townshend Act to be suspended as of October 1st, 1767. It was a combination of statutes to convince colonists that all colonial autonomy was intended for destruction.65 The Townshend Act not only violated the colonists’ conviction that Parliament was not entitled to tax colonies, but overbore the colonial objection to Crown payment of royal officials in the colonies. The Townshend Act deprived the colonies of the payment of all royal officers, appointed by the Crown but stationed in the colonies. The payment would be controlled by London, not the colonies, although the money used would derive from the colonies, i.e. from the Townshend Duties.66 Thus Britain abandoned her apologetic defense that customs duties functioned only for the regulation of trade. The Townshend Acts inaugurated a separate Board of Customs Commissioners in America to guarantee the effi cacy of the trade laws; it would supervise the Navigation Acts and tax collection.67 Until presently colonial courts could issue unlimited writs of assistance only in the New England colonies; the Townshend Act expanded their enforcement for the customs duties in all colonies.68 Royal colonial judges were to be empowered to issue writs of assistance, by which customs offi cers were to search private premises for illegal imports without warning, and without time limits.69 Two days later, on May 15th, 1767, the Townshend Act (Revenue

64 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 99. 65 Cf. Middlekauff, Robert; The Glorious Cause The American Revolution 1763-1789, Oxford University Press, 1982, p. 151. 66 Cf. Cook, Don; The Long Fuse How England Lost the American Colonies, 1760-1785, Atlantic Monthly Press, 1995, p. 122. 67 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 33. 68 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 34.

－ 352 － FROM INDIA TO THE BOSTON TEA PARTY

Act) was ratified.70 In the following parliamentary session, from the 23rd of February to March 8th 1768, prosecution of all trade and revenue laws by the colonial Vice-Admiralty Courts was ratified. “Royal colonial judges” and “vice-admiralty” meant that the office holders would be English, not colonial, and the same was true of customs commissioners. A Board of Commissioners of Customs was to be installed in Boston to rationalize revenue collection.71 Four district Admiralty Courts (Halifax, Boston, Philadelphia, and Charleston) were instituted on August 4th, 1768 for full colonial jurisdiction, and began operation in 1769; these courts would not have juries.72 The judge who determined guilt and pronounced punishment was a royal appointee, not a colonist, and, unlike a jury trial, the defendant was presumed guilty, not presumed innocent. The governor, the Crown, and the ship captain making the capture were awarded the total value of the confi scated ship with its cargo. “An Act for the further Improvement of his Majesty’s Revenue of Customs,” 1762, had previously enacted that a Customs offi cial would receive half the value of a ship and its cargo for seizing a ship in violation of the navigation laws.73 The Customs Service thereupon developed into a racketeering operation, largely victimizing coastal ships that were not comprehended in the intention of these laws. If the defendant should succeed in proving innocence, he nevertheless was obligated to pay the court costs and retrieve his ship at his own expense, nor was he allowed to sue for expenses having arisen therefrom. Choice of a colonial or admiralty court was given to the prosecutor, not the defendant.74 Expansion of the Admiralty Courts signifi ed

69 Cf. Cook, Don; The Long Fuse How England Lost the American Colonies, 1760-1785, Atlantic Monthly Press, 1995, p. 121. 70 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 100. 71 Cf. Cook, Don; The Long Fuse How England Lost the American Colonies, 1760-1785, Atlantic Monthly Press, 1995, p. 121. 72 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 35. 73 Cf. Ketchum, Richard M.; Divided Loyalties, How the American Revolution Came to New York, Owl Books, Henry Holt and Company, New York, 2002, p. 81. 74 Cf. Middlekauff, Robert; The Glorious Cause The American Revolution 1763-1789, Oxford University Press, 1982, p. 61.

－ 353 － D. Morgan Pierce

Britain’s intention to expand prosecution. The Townshend Acts were passed under the Pitt Ministry, a Ministry sympathetic to the colonies; it had been subverted from within. Both Chatham and Shelburne, who was offi cially the leader of Pitt’s cabinet during his later illness, opposed the parliamentary attempt to tax the colonies, but Townshend, though a member in the same cabinet, introduced a colonial tax bill more offensive than that of Grenville; the new taxes were for revenue and, since they comprised a civil list, once implemented, they would be inexpugnable. He resolved to withdraw the British troops from the colonial frontiers, where their support was more expensive, and to concentrate them in the urban concentrations of colonial unrest. Two years previously Barrington (Secretary of War) had recommended to the Rockingham ministry total withdrawal of the army from the colonies into stations in Canada, Nova Scotia, and Florida; the proposal was killed by Townshend’s objection that the colonial territories should never be left vulnerable to a new French invasion. Whereas Grenville’s tax was dignifi ed with an imperial plan to develop the newly acquired territories, Townshend’s objective was purely fi scal. He demanded withdrawal of British armies from the western frontier into the coastal cities, to economize. Under the Mutiny Act the host colony was obligated to finance the living expenses of the army, and the armies would suppress colonial unrest; this reignited the colonial opposition to the Mutiny Act, and reinvigorated colonial dread that the British army had been stationed not as a precaution against Indians, but against colonists. The original pretext, that the army had been stationed for defense and development of the frontier, had been belied.75 The Massachusetts Assembly twice delivered petitions and remonstrances to Parliament against the resolve to institute a civil list. On July 14th, 1771, Massachusetts protested the royal payment of Governor Hutchinson’s salary; shortly thereafter North had the Massachusetts judges paid through a civil list, paid by the Massachusetts Assembly but permanently out of the control of the assembly. The assembly protested it as a breach of the

75 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 98.

－ 354 － FROM INDIA TO THE BOSTON TEA PARTY colony’s charter, which gave the assembly full power to raise taxes for support of government; the colony had paid the governor’s salary at its own discretion for more than eighty years.76 The complaint was unanswered. The later remonstrances were a reprise of objections to the authoritarian methods by which Parliament was forcing its will. Customs officials had been installed to collect the Townshend duties, but these positions were not provided in the colony’s charter; appointment of the customs offi cials was unconstitutional, and the customs service carried a long history of corruption and abuse: “fl eets and armies have been introduced to support these unconstitutional officers in collecting and managing this unconstitutional revenue. Introducing and quartering standing armies in a free country in times of peace without the consent of the people.”77 The colonies had previously held the conciliatory position that Parliament could validly legislate for conditions common to all parts of the empire, while denying that Parliament could legitimately impose revenue taxes on the colonies. The new provocation in the Townshend Acts advanced the colonial position to denial that Parliament had any legislative power over the colonies whatever. The Townshend Acts signifi ed to the colonies that England had never taken their opposition to imperial taxation seriously; if the commotion of the Stamp Act Crisis was too subtle for the English to understand, perhaps they might understand only a much blunter rejection.78 From 1770-74 ₤40,000 was collected annually from the Townshend duties, in addition to income from seizures, penalties, etc. The revenue paid for attorneys general, chief justices, all Admiralty judges, lieutenant governors, and the governors of Massachusetts and New York; this detoxifi ed them of any longing for the affection of the assemblies, which had previously been their paymasters.79 The New York Assembly had been suspended, Admiralty Court

76 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 235. 77 Cf. Christie, Ian R., and Labaree, Benjamin W.; Empire or Independence 1760-1776, W.W. Norton & Company, Inc., New York, 1976, p. 158. 78 Cf. Middlekauff, Robert; The Glorious Cause The American Revolution 1763-1789, Oxford University Press, 1982, p. 235.

－ 355 － D. Morgan Pierce jurisdiction expanded, and an Anglican episcopate was foreseen. The remonstrances were ignored; Massachusetts subsequently submitted to the collapse of the second boycott.80

PARTIAL REPEAL OF THE TOWNSHEND ACTS 1771

The second boycott had been instituted in reaction to the Townshend Acts. Whereas England’s colonial export amounted to £ 2,153,000 of goods in 1768, the sum cascaded to a value £1,332,000 in 1769. The Townshend Duties had greatly reduced colonial demand, while the revenue from the duties was never nearly so much as 1/10th of what England needed. The motivation for repeal consisted in the amount of money being forfeited from reduced trade, but Lord North and George III objected to repeal inasmuch as repeal would imply the injustice of parliamentary taxation.81 The distinction between tea and the other tax items: paint, lead, paper, and glass, refl ected three opportunities for economy. The latter group constituted things for which the colonies depended on English import, but which might easily be produced in the colonies. Grenville conjectured that the Townshend duties on paper, glass, paint and lead would prompt colonial production of the taxed goods; persisting in the economic rationale for repeal, taxes on products which were part of the British monopoly (glass, paint, etc.) were repealed. Taxation on these items raised their price and thereby contracted British sale, simultaneously creating a shelter for native colonial products to substitute for them. The Townshend Duty would promote such colonial production as infant industries, by making English and colonial prices competitive. Correlatively, fi xing a customs duty on these things would inhibit native English production by raising the export market prices. Tea was not an English manufacture, nor could it be a colonial one, so no inhibition of English trade would result from an export duty on tea. Taxation was therefore retained on the one

79 Cf. Christie, Ian R., and Labaree, Benjamin W.; Empire or Independence 1760-1776, W.W. Norton & Company, Inc., New York, 1976, p. 154. 80 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 151. 81 Cf. Ketchum, Richard M.; Divided Loyalties, How the American Revolution Came to New York, Owl Books, Henry Holt and Company, New York, 2002, p. 201.

－ 356 － FROM INDIA TO THE BOSTON TEA PARTY product that was not of British manufacture: tea. The increased price of tea resulting from the duty could not penalize demand on British production. It was necessary to repeal the Townshend duties so that British export could kill nascent colonial industries, and the repeal had to be introduced within the time frame in which British could still undersell, and thus utterly prevent, colonial production. It made sense to retain the tea tax because it could not be cultivated in the colonies, and since tea was produced not in England but India, taxation would not foment native English unemployment. Finally, only the tea duty achieved appreciable revenue, circa ¾ of the total Townshend revenue, so that if all the other duties were repealed, the revenue function would not be sacrifi ced. North contrived to repeal all other duties except the remunerative tea duty, and thus to maintain the tea duty as standing evidence for the right of parliament to tax the colonies.82 Repeal of the Township Act was insincere. The repeal of the Townshend Act did not impair efforts to bring colonial government into English control. North’s repeal preserved the preamble to the Townshend Acts, which asserted the British right to impose a revenue tax and the intention to establish a colonial civil list. It was publicly announced that the Townshend duty on tea was retained for Crown revenue, an explicit contradiction to the colonial objection.83 The revenue from the tea duty was to expand payment of the colonial civil list. An American Board of Customs Commissioners, run by royal English appointees, was maintained from the original Townshend Act. The law calling for writs of assistance, the civil list, and the three Vice Admiralty Courts had not been repealed. The intention of the Townshend Act was fully executed in Massachusetts; the Exchequer took over payment of all civil government and judiciary in Massachusetts.84 The British stubbornly thought that treating the most recalcitrant the most punitively would best settle the colonial disruption. By 1772 the Townshend

82 Cf. Ketchum, Richard M.; Divided Loyalties, How the American Revolution Came to New York, Owl Books, Henry Holt and Company, New York, 2002, p. 201. 83 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 137. 84 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 245.

－ 357 － D. Morgan Pierce

Duty financed almost all civil offices in Massachusetts, and it was being implemented in the same way for New York and New Jersey.85 The only item that constituted the “repeal” of the Townshend Act was the nullifi cation of import duties on the several items of British production such as glass and paint. Lord North managed to break the boycott by repealing only the unremunerative, peripheral duties while the main tea duty successfully continued to pay the civil list.86 The tea tax had become a cardinal subversion of colonial autonomy; its revenue was depriving the colonial assemblies of their infl uence over the royally appointed governors. To keep up with British debt, colonists had borrowed to purchase more slaves and land required for greater productive volume; when the Indian famine and British recession of 1772 brought a call on the colonies to repay immediately, land, slaves, and livestock were confiscated, and the colonists accordingly had become acutely sensitive to any parliamentary legislation that might further deplete their capital.87 British government had consistently supported the British merchants by disallowing colonial statutes that would have classifi ed land and slaves as freehold. It was a century before common sense incorporated the idea that a debt-truant should be left with the minimal property with which to recoup the money to pay his debt. Without freehold classifi cation British merchants could continue to confi scate land and slaves in payment for debt.88 Following the Tea Party General Gage was commissioned to be governor of Massachusetts, and Thomas Hutchinson went to England; appointment of the supreme commander of the British armies in the colonies to be simultaneously Governor of Massachusetts implied several things. Boston merchants took the opportunity to reimburse the East India Company for the

85 Cf. Chaffin, Robert J.; The Townshend Act Crisis, 1767-1770, in A Companion to The American Revolution, eds. Greene, Jack P., and Pole, J. R.; Blackwell Publishing, 2004, p. 146. 86 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 212. 87 Cf. Nash, Gary; The Unknown American Revolution; The Unruly Birth of Democracy and the Struggle to Create America; Viking, 2005, New York, p. 92. 88 Cf. John C. Miller, Origins of the American Revolution, Little, Brown and Company, 1943, p. 18.

－ 358 － FROM INDIA TO THE BOSTON TEA PARTY damages of the Tea Party; they appointed Thomas Hutchinson to present their offer in London. In reaction the artisans sponsored a “Solemn League and Covenant according to which all trade with Great Britain would be halted as of August 31st; on June 17th the colony voted for the covenant, and voted to refuse payment for the tea, over the opposition of the Boston merchants.89 The partial repeal of the Townshend duties split colonial solidarity, although for the time being the colonies accepted the partial repeal.

THE REGULATING ACT OF 1773

The colonial embargo on tea was at the same time jeopardizing the East India Company.90 Frederick North legislated the Tea Act of 1773 and the Regulating Act in 1773 in order to pacify the political troubles arising from the East India Company.91 In 1765, shortly after the acquisition of Florida and Canada, Britain also came into possession of the revenue and government of Bengal.92 One would suppose great financial expansion to materialize for both British government and Company, despite the Company’s constant official resistance to territorial expansion or usurpation of Indian government. The acquisition and usurpation were nevertheless compelling as they came to figure as minimal conditions for security of commerce in the neighborhood of the Marathas and Mysore. During the Seven Years’ War the Indian Powers had gone into coalition against the Company; later, in 1782, the French tried to regain their Indian position through military coalition with Haidar Ali of Mysore. Although in 1765 Robert Clive had acquired the revenue administration of Bengal for the Company

89 Cf. Middlekauff, Robert; The Glorious Cause The American Revolution 1763-1789, Oxford University Press, 1982, p. 232. 90 Cf. Resistance, politics, and the American struggle for independence, 1765-1775, Editors Conser, Walter .F. Jr., McCarthy, Ronald M., Toscano, David J., Sharp, Gene, Lynne Rienner Publishers, Boulder, Colorado, 1986, 592 p. 125. 91 Cf. Ian K. Steele; The Anointed, the Appointed, and the Elected: Governance of the British Empire, 1689-1784; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume III, Oxford University Press, 1998, p. 122. 92 Cf. Marshall, P.J.; Introduction; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 8.

－ 359 － D. Morgan Pierce

(in reality, territorial possession of Bengal), the joyous expectation of greater revenue defl ated from the expense of territorial war. The British Army and Navy were again brought in to buttress the Company’s private army. Warren Hastings, Governor of Bengal, prevailed over the French and (East) Indian coalition in 1782, but again, military cost frustrated the expectation of profi t. Already by 1772 the East India Company was virtually in bankruptcy, although it remained propped up by government in the following decades.93 Townshend’s manipulation of Pitt’s initiative left the corporate corruption unaffected; the proximate cause of the corporate bankruptcy of 1772 had been its dividend obligations. The East India Company had gone through wild gyrations in the stock market throughout the 1760s; the British population, without a valid basis, had been speculating extravagantly in its share price. Parliament readjusted the Company’s dividends at a maximum of 12½%, and the Company enacted the maximum rate. By 1772 the price of East India Company stock had fallen to 60, the Company was in debt of more than ₤1 million, and it had a surplus of 17 million pounds of tea in London storage, which, being a perishable commodity, in time would lose its present value of £4 million. 94 9/10th of the tea consumed in the colonies was Dutch tea for which duties had not been paid. The British import duty (British port) plus the Townshend duty (colonial port) had trained the colonists not to buy East India Company tea, which gradually caused the 17 million pound tea surplus contributing to the fi nancial breakdown of the East India Company. The Townshend Act boycott of 1767, which had collapsed, was after all not a failure. The British government and the British commercial sector felt unscathed, but the resulting tea surplus went into the bankruptcy of the East India Company, which had not even had so much contact as trade with the colonies.95 The American colonies, 1/3 of the population of Britain,

93 Cf. Lenman, Bruce P.; Colonial Wars and Imperial Instability, 1688-1793; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 165. 94 Cf. Curtis P. Nettles, The Roots of American Civilization, George Allen & Unwin LTD, 1963, p. 641. 95 Cf. Curtis P. Nettles, The Roots of American Civilization, George Allen & Unwin LTD, 1963, p. 641.

－ 360 － FROM INDIA TO THE BOSTON TEA PARTY was consuming more tea than Britain, but the tea consumed was not British. It was clear that the Townshend import duty of 3d per pound was the cause of the market boycott, and that tea would not sell until its price was competitive with that of Dutch tea; Westminster had every reason to repeal the Townshend tea duty, and groups within Parliament had for years waited for an excuse by which it could be repealed without losing face. Frederick North insisted on maintaining the Townshend duty, on the ground that repeal of the tea tax would remove the legal precedent for taxation, trusting that eventual acceptance of the tea at the lower price would secure justifi cation for later taxation initiatives. The East India Company had petitioned the Bank of England for a loan to pay the dividends; the Bank declined the loan. Parliament was outraged (1772) that the Company should petition a loan at the same time as it was paying such a high dividend, but ultimately British government felt forced to provide the loan. The great contraction in general production resulting from the Indian famine of 1769 threatened English economic stability. The landlords and merchants mulcting India were not extracting payments on the official Company account, and, calculating only the profits on private account, did not alleviate the taxes and debts in sympathy for the famine. In consequence of the bankruptcies of Indian agriculture, the famine and its recession persisted perpetually, as the effort to meet debt led the peasants to overstrain the soil. Ministry and opposition joined in terminating the internal corporate strife over Clive’s jagir, in order that the dissension within the Company would not trigger bankruptcy. By June, 1772, in the wake of the Indian famine, banks and fi nancial houses were going bankrupt by the dozen, in both England and Holland. The Company customarily borrowed heavily from the Bank of England, regularly twice a year, and recovered afterwards by the revenue of its biennial sales. However, the Bank of England could not delay its terms of repayment, due to the general fi nancial collapse of tributary country banks which called on the Bank for extra bullion to elude insolvency, while the Company, for the same reason, was belatedly receiving less revenue from its Indian commercial circuit. The Company could not meet its dividend payments or its £400,000 obligation to the State. Accurately formulated, this was bankruptcy itself, not an omen thereof. The Company thereupon applied to the Government for a loan and for suspension of the annual payment.

－ 361 － D. Morgan Pierce

The high dividend encouraged public optimism, and therefore helped to keep corporate stock prices from collapse; if the Company had not received the government loan, inability to sustain the 12.5% dividend would have destroyed confi dence, and the stock value would have plummeted far below 60. A collapse of East India Company stock prices would have brought about British economic collapse. Corruption had produced an overpowering debt against daily operation. North offered the loan only in return for reform of the Company’s internal corruption, to which the Company replied that its books could be balanced if it were allowed to unload its tea in the American colonies, without duties, and without wholesalers.96 North acceded to the loan and the payment suspension in the Regulating Act of 1772; the concession stipulated very lenient counter-demands in the expectation that substantial reform would materialize more easily at the renewal of the Company’s monopoly in 1780.97 To halt the unrestrained speculation in the Company stock Parliament limited Company dividends to 12.5% and required regular fi nancial reports to the Exchequer. The nuance in the Regulating Act of 1773, obligation to make regular financial reports to the British Exchequer, ought to have enforced a balance between earnings and dividend payment. Nevertheless, the persistent dishonesty from the employees to the Company, and the dishonesty of the Company in India to the Company headquarters in London, and the deceptive dealings between the London-based Company parties vying for the Directorship caused so much turmoil that the Company became nonfunctional. The Sulivan and Clive factions were fi ghting over control of the Company, either to preserve or abolish Clive’s jagir; both sides surreptitiously and illicitly subdivided their stock holdings to dummy possessors, so that they could maximize their voting power. Dutch stock in the Company was drawn into the competition, and subdivided; all the major holders divided their shares amongst dummy- holders to amplify voting power. This rivalry however had broken up in May 1769 at news of the Indian famine.

96 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 299. 97 Cf. Marshall, Dorothy; 18th-Century England, publisher Longmeadow, 1974, London, p. 408.

－ 362 － FROM INDIA TO THE BOSTON TEA PARTY

The previous government agreement in 1769 to make a loan at that time had forced government to lend money to the Company just at the time that failure to raise revenue from the Stamp Act in the colonies produced a need in government to expropriate money from the Company. The parliamentary legislation of 1769 limiting the maximum dividend to 12.5% had not prevented the dividend scam from doing its damage. According to the original legislation, unless the dividend fell to 6%, government would receive annually the £400,000 payment.98 By 1772 the real bankruptcy made this impossible; if government did not supply the needed funds, an illicit act for a government to perform, the Company’s real status would become manifest. If the British Government allowed the Company to go quite publicly bankrupt it would be courting the probability of national bankruptcy. The volume of Indian business had been overestimated; the purchase of Indian goods had been based upon bills fi nanced by the English employees in India. Part of the accomplished corporate reform had been a formal restriction of the employees in some of their private business, although they disregarded the strictures; supervision of the employees’ assets had been used to monitor whether the employee was engaged in illicit business practice. It had therefore become difficult to transfer one’s secret, ill-gotten wealth back to England. One of the tricks to circumvent this had been for the employee to lend the Company badly needed money, at a high interest, which the Company would then use to make its purchases. More absurdly; the employee who made the loans to the Company was at the same time the Company’s agent for receiving the loan, so that the employee negotiated (with himself) absurdly high rates of interest for his loan; meanwhile the London headquarters accepted these loans with their disadvantageous terms because they were made to suppose that they did not understand the exotic conditions of business and fi nance in far-away India. The debt of the Company to the lender was then converted into a bill of exchange, which was then payable to the lender when he returned to England. This “laundered” the employee’s fortune, and made

98 Ward, W.R.; The Beginnings of Reform in Great Britain: Imperial Problems: Politics Administration, Economic Growth, in Goodwin, A., editor; The American and French Revolutions 1763-93, The New Cambridge Modern History, Volume Eight, Cambridge University Press, 1965, London, p. 545.

－ 363 － D. Morgan Pierce the Company in effect transfer the fortune to the lender’s home, unencumbered by government surveillance. The Company headquarters in London, however, found it impossible to pay off the bills of exchange. Frederick North was appointed Prime Minister in 1770; his initial challenge was not the American colonies but the East India Company. The 1772 bankruptcy of the East India Company was the direct result of the frustration of Chatham’s effort to impose rigorous reform in 1767.99 The directors, employees, and investors had since done nothing to curb their various forms of corruption in loco; the ensuing demand for a government bailout amounted to nothing more than a desire to keep all the participants in malversation solvent. Corporate bankruptcy was imminent because most Indian money was passing privately, and illicitly, through the Company employees, rather than offi cially through the supervised books of the Company. North had pressured both formally and privately for the Company to introduce its own reforms, in return for fi nancial aid from the State. If the Company had quietly made its own reforms, there would be no popular outcry against State tyranny, the stock market would not spin into panic defl ation, factionalism would not develop in Parliament over the issue, if scandal did arise it would stick to the Company rather than to government, and politicians would not ruin their careers by risking ill-advised positions. In fact the Company did not initiate real reform; the functioning of the Company depended on the cooperative good will of the embezzlers. Division of the Company between two centers, one in London and one in Bengal, together with discrepancy between the private interest of the employees and the collective corporate interest, gave corporate policy-making a broken back. The idea of either appropriating or regulating the Company had first ensued from the Company’s failure, since 1770, to improve its own stability; subsequently factions within the Company organization and within Parliament had organized to refuse such reform. Opponents of reform stood up within both the Company and Parliament; not enough integrity remained

99 Cf. Cook, Don; The Long Fuse How England Lost the American Colonies, 1760-1785, Atlantic Monthly Press, 1995, p. 166.

－ 364 － FROM INDIA TO THE BOSTON TEA PARTY for the possibility of an internal reform. That the Company petitioned Government to extend a loan of £1,500,000 only after the Bank of England declined the Company’s petition for an extraordinary loan exhibits that the Company had fi rst tried everything possible to elude government involvement. Petition for a loan signified several things: the company was bankrupt; the company was bankrupt because of internal corruption; if the Company went into final bankruptcy Britain would entirely lose any means of extracting the revenue she drew from India. Publicity about the abuses of the East India Company suggested that if government did not intervene, government would be pulled into the same notoriety by association.100 On the other hand, direct government intervention would infl ame protests concerning the inviolability of charters, the rapacity of government, etc. The space between the two positions was precarious. In a subsequent debate over the Regulation Bill opponents charged that Crown appointment of judges in a proposed “Supreme Court of Bengal” would give the Crown control of all company possessions, and the patronage of the Company would come into the possession of the Crown. North retorted: “I have a direct, declared, open purpose of conveying power and management of the East India Company directly or indirectly to the Crown…any territory would be better administered by the Crown than is so ill administered by directors incapable of governing it”.101 The opposition in Parliament between two presumable majorities, members of Parliament, one majority, who depended on the King’s patronage for their positions, and another majority, those who were invested or indirectly employed by the East India Company, made incisive parliamentary intervention into Company corruption unthinkable. Despite North’s power in Parliament to achieve deep change in the legislation affecting the East India Company, prevalent indecision concerning what the respective rights of

100 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 537. 101 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume III, Oxford University Press, 1998, p. 538.

－ 365 － D. Morgan Pierce

Company and government should be persuaded, or intimidated, him to temper his reaction to the Company’s petition. North’s ministry had majority power in Parliament and his judgment of the East India Company was unequivocal. However, the commotions over the East India Company over the past ten years had not resolved the contention over government’s right to the Indian land tax revenues or to whether the Crown, not the Company, was the territorial owner of Bengal. This, the most important issue of all, had been aggressively smothered. At the time of the parliamentary assertion: “all acquisitions made under the infl uence of a military force or by treaty with foreign princes do and of right belong to the state,” this “military force” was not specifi ed to be private or national. The main military force had not been the British army, but the Company’s private, sepoy, army, which was larger by multiples than the national British army. In contradiction with the Commons’ resolution, the royally decreed charter of the company explicitly specifi ed the Company’s right to form a military force and wage war at its own discretion. Clive himself had advocated that Britain should possess the Indian territories of the Company, except insofar as it affected his personal fortune; the other benefi ciaries of Indian exploitation argued that they should not be deprived of their gains, if Clive’s fortune, acquired in the same way, should be condoned. The Company relied on its charter to defend its territorial possessions. For as long as the Crown could not univocally assert possession of any foreign territory acquired by an English company, the State could not take over the land revenue or the government of Bengal. As the legal dispute was in the near future irresolvable, and corporate finances did not allow the possibility of extracting State revenue, at the present time there was no value to be gained from going through the tremendous battle to determine the ultimate rightful owner of Bengal. This left Parliament unprepared to discuss a transfer of government from the Company to Parliament; resolution of fi nal ownership was a presupposition for such a topic. The wrangle over Lord Clive’s right to his jagir merely compounded confusion; how could Parliament or Company have the right to stop payment of a gift made in a foreign country, from an Indian to an Englishman, when neither government nor Company explicitly claimed ownership of Bengal, and when the Company’s right to the tax farm of Bengal was based on exactly the same ground as the gift of Clive’s jagir? The House of Commons vacuously pronounced:

－ 366 － FROM INDIA TO THE BOSTON TEA PARTY

“all acquisitions made under the influence of a military force or by treaty with foreign princes do and of right belonged to the state,” but did not dare to legislate on the basis of this pronouncement. After Clive’s death, the jagir was not transferred to Clive’s heir, as had been stipulated, nor was the jagir cancelled; the gift, i.e. a part of the Bengal land rent, was transferred to the East India Company. The East India Company had grown so large that the British economy depended on it. Adversaries of the Company had perennially argued that the corporate monopoly was detrimental to British wealth, but by now the Company was the only means by which the wealth of India could be seized and transferred to England; free trade would have ruined the ubiquitous effects of the dustuck, which made it impossible for an Indian to survive even in small business without surrendering a large cut of the profi ts to his English partner. In order to assail, to speak nothing of overcome, the East India Company lobby, a member of Parliament would need to demonstrate persuasively that an alternative commercial structure would siphon wealth out of India as effi ciently as the East India Company. The Ministry had never managed to envision such an alternative; no one dared confront the Company until the 1790s. Horace Walpole inferred from the House pronouncement: “the sovereignty of three imperial vast provinces was transferred from the East India Company,” but without an attempt at formal legislation the inference was mere assertion.102 In any case, the bankruptcy of the Company in 1772 was so great that taking action of this sort would have caused the Company to collapse. It was essential not to invade the Company’s right to any of its revenue, as such a retraction would bring a stock market crash in short order. The Ministry would not have intervened at all in the East India Company if doing so could have been avoided. Britain had committed herself to the consequences of the ancient decision that a monopoly would be more effective than unregulated trade in India. The one-sided transfer of wealth from India to England now depended on the East India Company; if the Company were to collapse, Britain would have no means to continue the transfer. There was

102 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume III, Oxford University Press, 1998, p. 539.

－ 367 － D. Morgan Pierce no alternative but to sustain the East India Company, and to interfere in the Company only so deeply as was necessary to preserve its solvency.103 The Regulating Bill withered before the Company opposition; the items of governmental possession of the territory and management of the Company had to be dropped. Fox was the only politician in the period from 1760 to 1800 who continued to advocate appropriation of both Indian administration as well as of Indian commerce from the East India Company. Otherwise, in the manner of North and Townshend, every politician thought that the mere imputation to the speaker, that government would usurp the Company’s monopoly charter, would produce political ruin for such an advocate. Fox failed to become Prime Minister. The central objection had been that acquisition of the Company’s patronage by government would have given the Crown nearly total control over the election of parliamentary members.104 If government appropriated the Company, who but government would control appointment, and, that being inevitably the case, how could anyone advocate appropriation without being suspected of royal conspiracy against Parliament? The East India Company had not intended to appropriate Indian territory, nor had Britain intended to appropriate the East India Company; both initiatives would have instigated far too much legal faction. Lord North devised legislation that he knew the House would not accept, in order to derive a more favorable compromise. Instead of control, government accepted a rather light supervisory position; corporate corruption was cosmetically amended, and it was provided that serious reform would be deferred until expiration and renewal of the charter in 1780.105 That in March 1773 the Company petitioned government for the £1,500,000 loan and remission of the annual payment meant that Britain would not even receive the previously settled £400,000.

103 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume III, Oxford University Press, 1998, p. 537. 104 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 536.

－ 368 － FROM INDIA TO THE BOSTON TEA PARTY

Enthusiasm for annexation of Bengal to the British Empire disappeared because annexation would not have been accompanied by immediate revenue. North was convinced that government intervention was necessary to reform the East India Company, but he anticipated that factional rage would emerge from a sincere parliamentary reformation of the East India Company. The Company’s desperate dependence on government loan, against bankruptcy, would have fully justifi ed interference by means of a quid pro quo. The Company had lost so much credibility by its petition for a bailout that it could not entirely deflect parliamentary reform legislation, although arguments about sanctity of a charter and the liability of a parliament overpopulated with the King’s friends suffi ced to avert the primary intention to appropriate the Company into the Government.106 North preferred to defer substantial reform until the expiry of the Company’s current charter, when the Company would need to apply for renewal. North’s diaphanous pretense that the moment of Charter renewal would be more justifi catory for corporate reorganization than at the moment when the Company pleaded for government bailout from bankruptcy suggests that North’s real requirement was a pretext to elude involving himself in the inevitable altercation.107 The reform North deferred for 1780 never did materialize because the American Revolution absorbed British attention through 1781.108 The distraction of the American War seems rather to have promoted the corrupt practices in India. Exactly at the same time as the American colonists, now at war, were charging Britain with tyranny, the rumors of Britain’s

105 Cf. Ward, W.R.; The Beginnings of Reform in Great Britain: Imperial Problems: Politics Administration, Economic Growth, in Goodwin, A., editor; The American and French Revolutions 1763-93, The New Cambridge Modern History, Volume Eight, Cambridge University Press, 1965, London, p. 545. 106 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 538. 107 Cf. Marshall, Dorothy; 18th-Century England, publisher Longmeadow, 1974, London, p. 408. 108 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 540.

－ 369 － D. Morgan Pierce depredation and oppression of India reached its loudest pitch in the London newspapers. The House of Commons committee reported in 1783: “up to and during the whole period that elapsed from 1773 to the commencement of 1782, disorders and abuses of every kind multiplied.”109 Throughout the 1770s and 1780s the English had developed a popular image that the Company was despoiling India by extortion.110 The East India Company was publicly presented as doing nothing other than raping Bengal; smaller and smaller monopolies constantly nested within the East India Company monopoly. Analogously to most other such moments of history the Company averred its deep concern for the freedom and peace-loving people of India etc. etc., but the spoliation was not at the hands of the Company, but of its privately acting underlings, and nothing in the offi cial records of the Company ever hinted at condonation of extortion. Nor was any remedy devised against the practices which were offi cially invisible.111 Presumably what underlay fashionable public criticism of the East India Company’s oppression of natives and nepotistic corruption was disappointment that the fabled Indian wealth did not seem to be precipitating down to the ordinary public. The preponderant effect of envy is not desire to emulate, but desire to destroy, the object envied, but since mere complaint that one does not have as much as the object of envy does not effectively propagate the desire to destroy the object, the original reason for hatred is fabricated into the more humane pretext that one’s outrage is motivated by compassion, a far more powerful persuasion for recruitment in one’s envy and hatred. Supervenient anxiety that the power of Indian wealth would abet parliamentary corruption through the East India Lobby, and thus abet legislation against one’s

109 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume III, Oxford University Press, 1998, p. 540. 110 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 541. 111 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume III, Oxford University Press, 1998, p. 541.

－ 370 － FROM INDIA TO THE BOSTON TEA PARTY own interests, amplified the revulsion. Nevertheless, Britain could not give up her Indian Empire, because it was the chief asset that kept Britain ascendant over France.112 The East India Company could not be reduced because it was the only structure of stability for English hegemony over Indian wealth. Bankruptcy of the Company would have entailed complete loss of the British hold over India. It is nevertheless gratifying to notice that a government could openly exercise such criticism of itself or its minions; it is unimaginable that a government less structured on the principle of representation could have been capable of such a level of hypocrisy so convoluted that it looked like genuine self-criticism. The threat of annexation did nevertheless function in 1773 to force the Company’s acquiescence to the articles of the Regulating Act of 1773.113 In addition to the formal debates in the House of Commons, six months of informal or collusive deal-making since the application for the loan eventuated in a government loan of £1.4 million, only £100,000 less than requested. The agreement supposedly entailed major participation of British government in Company policy, although this element never became visible in the subsequent transactions. The agreement also entailed a transfer of the sovereignty in India from the Company to British government, and this idea also failed to show the least reality.114 The Company retained the tax-farm. The anemic Regulating Act presumed to reform the East India Company by separation of commercial from administrative authority; the measures had no substantial effect. In 1772 a governor of Bengal was appointed jointly by British Crown and Company: Warren Hastings. The governor was to have overriding authority, so that communication with London would not delay formation of policy; however, the governor could be overruled by a council of four, in India, so that his overriding power could not become abusive.115 His councilors were

112 Cf. Marshall, P.J.; Introduction; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 8. 113 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 539. 114 Cf. Cook, Don; The Long Fuse How England Lost the American Colonies, 1760-1785, Atlantic Monthly Press, 1995, p. 166.

－ 371 － D. Morgan Pierce usually hostile to him and usually did overrule his decisions. Hastings was very sincere, but the general corruption proceeded as rambunctiously as before. It was at this time that London headquarters paraded a supposed attempt to repress power struggles by raising the minimum voting qualifi cation to 1,000 votes.116 The reform was ridiculous, since it merely excluded the lower orders of the proprietors, whereas the wealthy shareholders could split their holdings into £1,000 fi ctitious units twice as easily as they could split holdings into £500 units. British Government also established a Supreme Court in Calcutta, that, as an entity independent of Company control, was to suppress corruption; these appointees of the Crown were paid very generously in the fanciful belief that high salary would discourage connivance. The usual homilies were issued against private trade, and Government instituted that the ministers were to read Company communication coming from India. Opposition objected that this provision gave the Crown too much interference in the Company; it was a legitimate fear that the Crown might gain total control over Parliament by acquiring all the patronage attaching to the Company. In the immediate situation, although opposition supposed that North had dangerously violated the rights of the Company, in fact the Regulating Act accomplished nothing to stem corruption, and Hastings had largely been compelled to accede to the corruption, without himself profi ting from it, as the only way to keep minimal harmony in the Company’s operation. George III cooperated with North’s restraint due to his belief that new occasions for disciplining the Company would never be lacking: “new abuses will naturally now be daily coming to light, which in the end Parliament alone can in any degree check”.117 Whereas the Company now came under minimal government control, maximal government expenditure was necessary to hold the Company back from manifest collapse. The British public thought that the monopoly of the Company was the reason why the public was not

115 Cf. Marshall, Dorothy; 18th-Century England, publisher Longmeadow, 1974, London, p. 409. 116 Cf. Marshall, Dorothy; 18th-Century England, publisher Longmeadow, 1974, London, p. 409. 117 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 540.

－ 372 － FROM INDIA TO THE BOSTON TEA PARTY enjoying the fabled enormous wealth from India, and correlatively it believed that common people would benefi t if only the East India Company lost its monopolistic control of business in India. This was an ignorant illusion. One of the minor factors inducing the slump and bankruptcy of the Company had been the imminent threat that the French in 1768 might invade and dispute the English hegemony, although this threat receded with the death of the French Prime Minister Choiseul. The Company had been left to manage the government, wars, and politics in India. This was pathological, but in the immediate instance, Britain was present in India solely in the name of the East India Company, without any legal pretext for interference, or even presence, otherwise. It was as if, just as the East India Company had used the Moguls as a façade for their usurpation of India, the British government had no recourse but to use the Company as a façade for its annexation of India. No British governmental or military agencies were installed. The only way in the short term to keep India was to preserve the East India Company, which in turn maintained major private armies in India. The company was so important to Britain that by 1773 it could virtually blackmail government with the threat of going bankrupt.

THE TEA ACT OF 1773

Lord North, attempting to avert the Company’s bankruptcy, introduced the Tea Act and Regulating Act in 1773.118 As the option to reform the Company’s territorial possession had been smashed, commerce in tea had become the only reform of the East India Company through which Government might rebalance the Company’s accounts. The Regulating Act and Tea Act were not concerned with the Atlantic colonies. The stoppage of (English) tea consumption, due to the colonial tea boycott, the expense of the Company’s war machine in India, and the ubiquitous corruption had led the Company directly back into bankruptcy by 1772. Something that is usually lightly overlooked, but which was of momentously critical

118 Cf. Ian K. Steele; The Anointed, the Appointed, and the Elected: Governance of the British Empire, 1689-1784; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 122.

－ 373 － D. Morgan Pierce importance took place; the East India Company petitioned for monopoly of the British and American tea markets. It was perhaps the first time that a British company had explicitly petitioned government to extirpate a colonial business to make room for its own commercial expansion. A company, since inception of the colonies, active only on the opposite end of the earth, already under indictment for having illicitly arrogated the government of India, dreaded for the liability that it might subvert Parliamentary representation, since inception blamed for abuse of its monopoly power, was asking to extend its monopoly directly over an independent social formation with which it had never had the least direct connection, a social formation in which it had usque nunc not performed the least service. The last clause is enormously important; throughout the middle ages and the early modern period England had regularly deputized private concerns with monopoly to perform public services, but justification had always been based upon a public service to the community which government could not afford to perform, and which the company in question had already been long established in performing. The Bubble Act of 1720 had made it explicitly illegal for a monopoly to extend its power over any service for which its monopoly had not been originally chartered. The East India Company monopoly was the fi rst instance in English history that Parliament was about to assign monopoly over a public service, in which that company was not already performing an exigent service; the monopolization of the colonial tea market ought to have been illegal by the precedent of English custom. Prior to this petition the monopoly of tea sales both in the colonies and England were legally hers already, inasmuch as any tea sale in the colonies or Britain that did not derive from the East India Company was illegal. But if the East India Company already had the legal tea monopoly in Britain and the colonies, what was the apparently redundant meaning of her petition for the tea monopoly? The British import duty (25-50%) had made the minimally profi table selling price of English tea far higher than Dutch tea; both English and colonial markets were dominated, though illegally, by Holland, because the Dutch price was the universal market price whereas the British price was the hothouse flower price. The original rationale for the closed British trade commonwealth, which was protecting the English price, had been to make commodity prices cheaper for all belonging to the

－ 374 － FROM INDIA TO THE BOSTON TEA PARTY union; this trade advantage however involved disadvantage not only to colonies but to the native English consumers. The Navigation Acts in one respect had advantaged the colonies by giving them a non-competitive market; Holland, Spain and France together with their colonies were prevented from competing against British colonial products on the English market. The trade union was also supposed to guarantee the best English products, at the best prices, to the colonies.119 This trade union monopoly had however worked the opposite of its intention. Since the colonial import and export was a captive market, competing prices from the European countries could not check the English prices; in reality the trade union enabled England to sell more expensively to, and buy more cheaply from, the colonies. But no legal measure could successfully constrain illegal sale of a commodity, tea, whose legal price was more than twice that of the delinquent product, especially when the institution of the delinquency seemed itself to be unfair. Lord North announced in 1772 that the government’s budget deficit would amount to ₤400,000, almost the same revenue that had been forfeited by the reduction of the Land Tax to 3s; it was also the exact obligation that the East India Tea Company now declared that it was unable to pay into the Exchequer. The East India Tea Company had obligated itself from the 1767 Townshend negotiation to pay annually ₤400,000 plus lost customs revenue, but the Townshend duty on tea had, ambiguously, reduced the Company’s colonial tea vent, and hence raised the Company’s obligation to pay the shortfall on expected revenue duty. Probably the real cause was the 50% British customs duty that made British tea far more expensive than the world market price; on the other hand it was the persistent Townshend colonial duty on East India Company Tea that had moved the colonials to call a formal boycott on tea. Since Britain gained such high revenue from the dutied tea, she was already as motivated as she could ever be to suppress smuggling; if smuggling predominated, it was already in spite of the best countermeasures that Britain could institute. Perhaps the optimal success of applying every means against illegality was a tolerance of 60% illegal tea. The only device to eliminate illegal tea beyond the maximum capacity of policing would have been to repeal the import

119 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 241.

－ 375 － D. Morgan Pierce duty. Reduction of the 60% illicit tea consumption could have been calculated by correlation to the amount of reduction of import tax. Presumably the English economists of the time knew how to calculate the calibration between reduction of import duty, decline of smuggling, and total duty revenue. It is informative that government repealed the import duty for the colonies but not for Britain. Apparently the 50-60% incidence of tea smuggling was tolerated in Britain, in exchange for the revenue gained from the 40-50% that was properly dutied; it must have been calculated that revenue deriving from the maximum tea duty would be greater than the duty arising from a smaller import duty on a greater volume of declared importation. But in the case of the colonies it seems to have been reasoned that it would be more profi table to eliminate smuggling by eliminating the import duty entirely. The 50% duty either from Britain or the colonies would indifferently go into the Exchequer (i.e. not into a separate colonial fund), so, what was the logic of eliminating the import duty in the colonies, but not in Britain, or, alternatively, of reducing smuggling without expunging it, by reducing, but not eliminating, the import duty in both sectors? Perhaps one must infer that if the majority of Englishmen consumed smuggled tea, the savings would still eventually find their way into tax revenue by alternative expenditure of the money saved, whereas the savings from smuggled tea in the colonial sector, where there were no English excise taxes, would be unlikely to be soaked up by other British taxes, to the effect that colonial savings on tea would be a pure loss to Britain. The (Townshend) 1767 legislation had allowed the East India Tea Company exemption from the previous 25% import duty on tea re-exported to the colonies, but under the condition that the Company pay compensation on any defi cit of the prognosticated duty revenue. The Exchequer and Company ended up in bitter quarrels over the size of the prognosis.120 Because over these years the colonies had very substantially embargoed British Tea, the penalty for the shortfall from the tea duty was very large, and the Company could pay neither it nor the ₤400,000 annual tribute. This was the status in 1772, when the 1767 legislation was to

120 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 248.

－ 376 － FROM INDIA TO THE BOSTON TEA PARTY expire. The East India Company ought to have gone bankrupt in 1767, except for the British government subvention; the Company remained for the following fi ve years overextended. The loan to the East India Company was made on the condition of the Regulating Act of June 1773. Tea was the main legal commerce of the Company but the tea market had collapsed. Three quarters of the tea of the colonial market was smuggled; more than half of the tea in Britain was smuggled. British taxation had priced East India Tea out of the market, even the British market. Even under these conditions, however, tea was still the fourth largest British export to the colonies.121 At a time when the East India Company was harvesting more of its legal commodity, tea, than ever before in its history, it had gone bankrupt purely from failures in those of its ventures that were illicit; how should a government go about saving a company from bankruptcy, if doing so consisted in restoring solvency in practices it had declared illegal? Smuggled, not legal, tea determined the British market price because tea smuggling was just as pervasive in England as in the colonies. The government taxation of tea was ruining the East India Company markets; British government since 1745 took a tax that was at least 25% (or 50%) of the auction price, and auction was the only way that the East India Company was permitted vend its tea. There was an additional tax of 3s per pound on tea sold domestically, although not on exported tea. In 1766 the London auction price was 3s per pound when tea sold at 1s 11d per pound in Amsterdam.122 Regardless of whether provision of tea was legal or illegal, nothing but world market price dictated what tea would be sold. The East India Company continued to disintegrate following Townshend’s conciliatory arrangement. The East India Tea Company could not survive the availability of Dutch tea unless its price became competitive: “Unless the East India Company brings the price of their teas so near to the price in Holland as to make the profi t of importing teas from thence not equal to the rest, in a short time there will be scarce any teas imported from England.” Townshend’s manipulations

121 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 18. 122 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 18.

－ 377 － D. Morgan Pierce in 1767 had provided the East India Company with an opportunity to reduce the price, but the Company, hoping to recoup its fi nancial loss, took advantage of its British monopoly by setting an excessive reserve price at the London tea auctions.123 Due to the Company’s prostration Parliament spent the whole of the parliamentary session starting in November, 1772, investigating the conditions for salvation of the Company. At the time that the Company declared its inability to make its annual payment, government had been planning to pay off ₤1.5 million of national debt. In order to keep the Company afl oat North instead withheld ₤600,000 from the Navy, which was to have deep consequences in the subsequent years.124 Rather than to make a punitive response to the Company’s mismanagement and corruption, government generously revised the regulations for the colonial tea vent. The introduction and ratification of the Tea Act took place after introduction of the Regulating Bill, and long before ratifi cation of the Regulating Act. Until this point all East India tea had to be sold exclusively by auction in London; this secured the 50% import tax, but the specifi c intention of sale by auction had been to prevent manipulation by speculation in futures. Instead of sale by auction to a middleman in London, the Company was now to be allowed to ship the tea and sell it directly in the colonies, without the 25-50% import tax.125 On the 10th of May 1773 Parliament ratifi ed the Tea Act; it was thought that by forcing open the tea market in the colonies the task of returning the Company to solvency would be less onerous. Not necessarily in conflict with Townshend’s intention had been the thought of both government and Company, that bankruptcy could be eluded if the colonial market were exclusively opened to East India Company tea.126 The entirely illegal Dutch tea was driving

123 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 248. 124 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 174. 125 Cf. Smith, Howard R.; Economic History of the United States, The Ronald Press Company, 1955, p. 61.

－ 378 － FROM INDIA TO THE BOSTON TEA PARTY an English company into bankruptcy; it was reasonable that Parliament should resolve to close down the Dutch tea trade. The English tea merchants who distributed tea in Britain and the colonies were not company employees; they bought tea at auction in London from the East India Company. Whereas the tea was taxed at 50% (25-50% passim: the English import tax had been reduced to combat smuggling, but was once again raised to its highest rate as soon as the harm of smuggling diminished. The rate thus had a see-saw pattern), such merchants were able to commercially survive only because of enumeration; the Company could not sell its tea other than in England, and since tea prices could not be competitive (foreign teas being illegal), the base price of tea could be kept high enough to sustain tea commerce despite the 50% tax. Foreign tea could not be marketed. This only barely functioned in England; in the colonies it failed. The idea had been to create a fresh vent for the tea by eliminating the 50% tax and the London auction for the colonial market, thus enabling the English to undersell the predominant illegal Dutch tea on market rather than on legal principles. For the fi rst time a purely political approach had been devised for opening a market; neither legally auctioned nor smuggled tea could be sold more cheaply.127 This was the substance of the Tea Act of 1773. The East India Company tea surplus had accumulated largely because of the tacit colonial boycott against English tea and the colonial importation of illegal Dutch tea. The East India Company could not sell at prices comparable to those of the Dutch because the East India Company was required to unload its tea at an English port, and pay an enormous import duty, and on re-exporting the tea from England to the colonies the tea was again taxed by the Townshend duty. If the Townshend duty had been repealed, the colonists would have withdrawn their principled boycott; if the English import duty had been withdrawn, the price would be competitive with that of Dutch tea. In order to capitalize from its perishable surplus of tea, the East India Company needed to recover the American market quickly; to that purpose the Company petitioned “that leave be given to export tea duty free to America.”128

126 Cf. Gunderson, Gerald; A New Economic History of America, McGraw-Hill Book Company, 1976, p. 85. 127 Cf. Ratner, Sidney; Soltow, James H.; Sylla, Richard; The Evolution of the American Economy, 1979, p. 83.

－ 379 － D. Morgan Pierce

The Company had not made distinctions between the English import duty and the Townshend duty. On the 13th of May, 1772, Lord North proposed to reinstate the rebate on re-exported tea, but to keep 3/5 of the original import duty; the Company was to be relieved of its liability for shortfalls in the tea duty revenue. Lord North imagined that this reprieve would suffi ce to make the East India Tea competitive against smuggled Dutch tea.129 The tea duty, in effect reduced from 25% to 10%, added on to the Townshend duty of 3d charged at the American ports continued to ruin the British colonial Tea trade.130 Despite the 3/5 rebate Dutch tea had overpowering competitive advantage; repeal of liability for the duty defi cit did no good. The English may have underestimated the train of thought entertained by the colonial assemblies; if the tea duty had been allowed to pay a civil list, the colonists would have lost autonomous government in their colonial assemblies.131 Benjamin Franklin, and also Thomas Wharton, an English associate in the Ohio Valley enterprise, speaking for Benjamin Franklin, recommended a solution to the East India Company’s recession: permission to vent tea directly to the colonies without auction or middleman. Franklin through communication with Dartmouth urged the North ministry to take the crisis of the East India Company as a face-saving opportunity to abolish the Townshend Duty, thereby assuaging the hostility between the colonies and Britain. Franklin’s timing was astute. The real ground that retained the Townshend Duty had not been the overt economic one, but the semantic one. George III had insisted that the Townshend duty on tea be retained on principle. The colonists had established a boycott against British goods, and had rioted; the Townshend duty was therefore to persist as a “as a mark of the supremacy of Parliament”.132

128 Cf. Cook, Don; The Long Fuse How England Lost the American Colonies, 1760-1785, Atlantic Monthly Press, 1995, p. 166. 129 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 248. 130 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 248. 131 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 174.

－ 380 － FROM INDIA TO THE BOSTON TEA PARTY

At this moment the Townshend duty could have been repealed credibly on the overt economic ground without implication that the Crown had retreated. The Tea Act was ancillary to the Regulating Act. If England had repealed the Townshend duty colonials might have bought tea, though more expensive, out of gratitude; on the other hand, if the Townshend duties had been repealed but the British import tax had been maintained, the colonists might not have bought tea purely out of economic rationality. Instead of a strong tea sale, as expected from the 1767 accord, sale of tea collapsed, so that nothing compensated against the failure of the Company’s ₤400,000 pledge: “The East India Company, it is probable, will petition for a repeal of the duty upon Tea, the only article which ministry themselves wished to retain.”133 The idea of the Townshend duty on tea as a symbol of Parliamentary supremacy had been anchored by George III. While government maintained the Townshend duty on tea in order to symbolize British sovereignty, it had proposed that if in the future the colonies remained obedient, the Townshend duty might at some time be repealed. This hypothetical offer of what colonists might receive after they fulfi lled some condition, without making it a contractual promise, was manipulative; instead of treating the negotiator with equality it was a way to reduce him to the submission of an inferior. In 1765 at the imposition of the Quartering Act the English had played the same trick: a comment that some time in the future the Quartering Act might be repealed if the colonists showed good behavior. During the period of the Stamp Tax and other tax initiatives Parliament forbade the colonies to object to any Act that involved fi nances, and promised to treat any colony that submitted criticism of a fi scal act punitively. At the crisis of the Boston circular letter Lord Hillsborough promoted a bill that any colony that so much as voiced a complaint to Parliament should have its charter automatically annulled. The Stamp Act was repealed on the ground that it was an economic hardship, but excluded any legalistic criticism of the Stamp Act’s constitutionality.

132 Cf. Samuel Eliot Morison, The Oxford History of the American People, Volume One, Meridian Books, 1994, p. 269. 133 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 170.

－ 381 － D. Morgan Pierce

The Townshend duty of 3d/pound was to be retained, while exempting the East India Company of the obligation to unload and auction tea to middlemen in London; if the Company were relieved of the English navigation duties and could directly market tea in the colonies, the tea would still undersell smuggled tea, despite the Townshend duty, and colonial purchase would implicitly endorse the power of Parliament to raise colonial revenues. This was how the colonies imagined North’s strategy, and the interpretation was correct. On April 27th, 1773, Lord North expounded in the Commons that tea, without the import duty but with the Townshend duty, would undersell Dutch tea and that colonial purchase of the tea would commit the colonists to acknowledge the right of Parliament to impose a revenue tax on the colonies. North’s pronouncement directly contradicted his earlier pledge: that Parliament would never again try to tax the colonies. As the colonists thought, the Tea Act was a deliberate attempt to deceive the colonies into implicitly committing themselves to the legitimacy of imperial taxation, after they had explicitly refused. Parliament ratifi ed the Tea Bill pursuant to North’s explanation to take effect on May 10th, 1773.134 Benjamin Franklin was the fi rst person to have perceived the connection between the East India Company fi nances and the need for a repeal of the Townshend duty on tea, presumably so that the Company could then recover financial health by filling the colonial tea market. The fall of East India stock was causing a rash of private bankruptcies, and England was by now aware of the chain-reaction nature of bank failure. Fifteen banks in Amsterdam had gone bankrupt due to the fall of East India Company stock prices. Repeal of the Townshend Duties would not have brought the English tea into the lower price range of the smuggled Dutch tea; nevertheless Franklin thought that with victory in principle, the re-opened market for English tea would relieve the pressure in British fi nance. At the repeal of the Stamp Duty the colonists had made massive import orders from England, and had presented the orders as an expression of gratitude. Likewise, the King had previously demonstrated leniency by having supported repeal of the Stamp Act, and by having supported repeal of the Townshend duties for the

134 Cf. Ritcheson, Charles; British Politics and the American Revolution, University of Oklahoma press, 1954. p. 155.

－ 382 － FROM INDIA TO THE BOSTON TEA PARTY exception of tea. Whereas Franklin had seen this as a face saving occasion for the repeal of the Townshend tea duty, in this Franklin utterly misunderstood Lord North. Although some of the Townshend duties had been repealed, North was quite delighted in the effi cacy of the tea duty for paying the civil list, thus depriving the colonial assemblies of power over the governors. Every year the tea duty was deployed to pay all the royal offi cials and judges in the colonies. When in 1773 the tea duty reached the limits of its capacity in this, North, far from inclination to repeal the tea duty, was devising ways to expand it.135 North implemented Franklin’s idea to dump tea in the colonies, but refused repeal of the Townshend duty. Possibly he rationalized that because the Townshend Duties were tiny by comparison with the repealed English import duty, colonists in their gratitude would overlook the tax. Franklin however judged that the fi scally trivial point on which the colonists had taken a principled opposition was more important than the economically onerous import duty. It is chillingly amusing that the land bank, the stamp tax, and the Tea Act had all most originally been Franklin’s ideas, not those of an Englishman, and that in all three cases Franklin had to repudiate his own ideas - the only creative ideas that could have constructively redressed the problems – because the distortions the government handlers worked into the ideas changed them into the worst scenario for each situation.136 Franklin was a sort of Cassandra, who always devised the most amicable solution, only to see his own idea metamorphose into a nightmarish caricature; in their distortions they remained the only ideas which did determine the direction of history. When the chairman of the East India Company understood Lord North’s intentions to keep the Townshend Tea Duty, he perspicaciously reneged on his previous petition for access to the colonial market; he understood that under the conditions North set, any colonial sale would be impossible. The East India Company publicly renounced its interest in the colonial market, persisting only for redemption from liability

135 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 215. 136 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 154.

－ 383 － D. Morgan Pierce for the customs duty shortfall. Given the Townshend Tea Duty, the East India Company had decided that under any conditions it would be safer to unload the surplus tea in Europe.137 Thomas Wharton, an associate in Franklin’s Ohio Valley Company, had served Benjamin Franklin by advocating Franklin’s idea in Parliament: to permit the East India Company to ship and market its surplus tea in the colonies by relieving the Company of all import duties and intermediaries. Franklin’s idea became the core of the Tea Act, so that one might reasonably infer that the Boston Tea Party remotely originated from Benjamin Franklin. Franklin’s recommendation oddly permitted what the colonists were to object to most strenuously: exclusion of the colonial middlemen from the chain of sale.138 Of course Franklin espoused repeal of the Townshend Tea Duty in his proposal, and the Townshend duty was the only imposition that was religiously preserved; but otherwise the Tea Act would nevertheless have provoked enraged opposition, due to an aspect that Franklin perhaps overlooked; permission for the East India Company to dispense with independent colonial wholesalers would reduce the colonists’ opportunity in colonial business.139 Up to this point the colonial aspect of the East India Company problem was nothing but an externality. Because the tea, relieved of the British import duty, would undersell smuggled Dutch tea, North had assumed that the enactment would fi nd no opposition in the colonies. The Townshend tax on tea had been effective for several years already; it was exactly because the tea tax had not over the previous years inflamed the colonies that it was thought quite innocuous to ratify the Tea Act of 1773 without anxiety about colonial truculence. But there was an internal fold to this situation; the boycott against the Townshend Act collapsed without its complete repeal because colonial merchants had wanted to resume trade while other middle class colonial groups had wanted to persist in the boycott until the duty on tea was also

137 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 171. 138 Cf. Dorfman, Joseph; The Economic Mind in American Civilization: 1606-1865, Volume One, George G. Harrap & Co. Ltd., 1947, p. 205. 139 Cf. Dorfman, Joseph; The Economic Mind in American Civilization: 1606-1865, Volume One, George G. Harrap & Co. Ltd., 1947, p. 205.

－ 384 － FROM INDIA TO THE BOSTON TEA PARTY repealed. Internal dissension within the colonial population had weakened the united front against British offences; instead of univocally canceling the boycott, it was allowed to become meaningless. We are speaking here of the colonial, not the English, merchants; in the summer of 1770 the colonial population divided into confrontation along class lines over the admissibility of British trade, under the condition that the Townshend duties were repealed on everything, except tea. News of the partial repeal of the Townshend Act reached the colonies on April 25th, 1770; merchants precipitately placed orders. The mercantile classes of Philadelphia and New York jubilantly accepted the partial repeal as suffi cient, but the common population adopted the principled stance: boycott must not be lifted until the tea duty was also repealed.140 The colonial opposition had divided into wholesalers, who conceded, and artisans, who persisted. In the wake of the Tea Act of 1773 and the Boston Tea Party, the solidarity split into the wholesaler-merchants, who wanted amicable relations with Britain, and the artisans, who continued the non-importation policy. New York merchants were haunted by the apprehension that if they did not drop the embargo, merchants in Boston and Philadelphia would gain a major advantage over New York. New York prepared to defect from the pan-colonial non-importation pact, justifying its intention with denunciations that the other colonies were cheating.141 Since the other colonies would not support New York’s plea for resumption, New York attempted to confuse the pact with a consumer plebiscite.142 The DeLanceys, one of the two great barons of New York, pro-British, undermined the boycott with an impromptu public poll.143 The result supported rescission of the boycott, and the merchants pretended their plebiscite as a stronger authority than the previous inter-colonial non-importation agreement.

140 Cf. Schlesinger, Arthur Meier; The Colonial Merchants and the American Revolution 1663-1776, Frederick Ungar Publishng Company, New York, 1957, p. 217. 141 Cf. Ketchum, Richard M.; Divided Loyalties, How the American Revolution Came to New York, Owl Books, Henry Holt and Company, New York, 2002, p. 231. 142 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 276. 143 Cf. Ketchum, Richard M.; Divided Loyalties, How the American Revolution Came to New York, Owl Books, Henry Holt and Company, New York, 2002, p. 233.

－ 385 － D. Morgan Pierce

New York dropped the embargo unilaterally; if Boston and Philadelphia had not quickly followed suit, they would have suffered severe loss of market share. There was no escape from the indictment that New York broke the embargo without consent from other colonies in the agreement, and that they used their plebiscite because they knew that the other colonies would not have agreed. A “Son of Liberty, i.e. a political radical, straightforwardly accused the New York merchants of having stolen the cessation of the embargo by having fabricated a majority of their own choosing: “there were not quite 1200 persons who signed for importing (notwithstanding the diligence and indefatigable industry of those who went about for the purpose), and I am well assured that they do not amount to above one third of the inhabitants of this city (not to mention the counties, who have an undoubted right to give their voices upon this very interesting and important subject).”144 Merchants resumed trade in everything, and the potential confrontation over the tea duty was muffl ed by purchasing smuggled, Dutch tea, without stridently preventing the sale of overpriced English tea. The British recession had more immediate effect in the colonies than in Britain; in 1771-1772 Massachusetts suffered deep depression from the British recession together with the effects of the second boycott. The near bankruptcy of the East India Tea Company had caused a major London banking house to collapse, which in turn instigated a pervasive credit crisis. In the years previous English and Scottish merchants had provided very extensive credit to the American colonists in order to stimulate British exports. American wholesalers, stymied by the lack of legal tender, allowed this credit to expand further in the form of retailer’s book credit. The colonies lacked hard currency, in accordance with British law, but the English merchants, also according to British law, demanded payment in hard currency. Normally the contradiction was overcome by conversion of colonial produce into bills of exchange. However, this conversion took place in England, not the colonies; the exchange rate was calculated to British advantage. On the colonial side, trade transpired through barter, since there was no hard currency for the purpose.145 In consequence it was fl atly impossible to call

144 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 278. 145 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 117.

－ 386 － FROM INDIA TO THE BOSTON TEA PARTY in debts at short notice; American wholesalers could not rapidly retrieve their credit when the English financial Houses recalled loans to restore their solvency. Thereupon both colonial wholesalers and retailers who could not retrieve the book debt to pay the British creditors went into bankruptcy.146 One might wonder how the colonists paid British debts in sterling in the fi rst place, when there was no bullion in the colonial territory. Sterling bills of exchange were sold for colonial export credits in London, and the colonists then paid their British debts-in-sterling with these bills of exchange. Thus payment in pound sterling did not involve monetary exchange; the value of colonial imports was directly converted into bills of exchange in London. When British merchants did not extend credit, or the market price of tobacco fell in England, purchase of the bills of credit became more expensive relative to total colonial export production. The British merchants mistakenly attributed the rising exchange rates, and hence colonial inability to buy sufficient bills of exchange, to the colonial issue of paper money during the Seven Years’ War. 147 Britain of course blamed the debt failure on the profl igacy of the colonists, but the real cause was the British prohibition of colonial legal tender. As of 1707 the Scots had unimpeded commercial access to the colonies. The wealthy colonists bought through London merchants by consignment, so the Scots undertook to create a second market out of the lower economic classes. The Scottish firms employed agents in Britain, predominantly Scots, to run small stores based on book debt and exchange in kind; thereby the least affl uent colonists got absorbed into the consumer import market which had previously been inaccessible. In consequence a whole class of colonists contracted debt which could not be liquidated in hard cash.148 In Philadelphia, 90%, and in the Chesapeake, 80% of imported goods were sold on credit. The book-debt system allowed the population to buy out of season,

146 Cf. Nash, Gary; The Unknown American Revolution; The Unruly Birth of Democracy and the Struggle to Create America; Viking, 2005, New York, p. 92. 147 Cf. Ernst, Joseph;“ Ideology” and an Economic Interpretation of the Revolution; Cf. Young, Alfred F.; The American Revolution Explorations in the History of American Radicalism, Northern Illinois University press, DeKalb 1976, p. 174. 148 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 123.

－ 387 － D. Morgan Pierce rather than at the time they sold their crops; this asynchronicity expanded the sales volume because it allowed purchase to exceed purchasing power.149 This brought the customers into the debt that they could not extinguish at short notice; the Scottish shopkeepers nevertheless encouraged this trend. Customers in debt felt obliged to bring their tobacco or other produce to the shop where they had debt, which enabled the Scots to accumulate produce more cheaply than in the open market.150 British merchants had been fully aware of the penury of the colonists when they aggressively advanced loan repayment schedules years and years into the future. Lord North, under pressure from the King, regarded the economic objection, not the objection on principle, as the greater obstacle to the Tea Act. He supposed that by sacrifi cing major government revenue deriving from the import duty, English tea would undersell Dutch tea, and the colonial market would turn immediately to 100% purchase of English tea. To the contrary, if the English import duty had been retained, the colonial market might have corrected the British fi scal defi cit and the Company surplus, whereas the persistence of the Townshend Duty would not have been substantially helpful to the fi scal or corporate problem. Parliament thought that the enduring Townshend Duty would form no obstacle to the colonial preference for English tea, so that England would gain a small victory in principle.151 The House of Commons retained the Townshend Duty, but abolished the English import duty without division on May 10th, 1773. The smuggling of Dutch Tea had implemented the colonial boycott on tea; the East India Company might have retained its colonial market if purchase of Dutch tea had not been an option.152 The elimination of the English auction made legal English tea cheaper than illegal Dutch tea. The Tea Act was a wonderfully accurate revenge; the Tea Act eliminated

149 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 136. 150 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 123. 151 Cf. Cook, Don; The Long Fuse How England Lost the American Colonies, 1760-1785, Atlantic Monthly Press, 1995, p. 167. 152 Cf. Smith, Howard R.; Economic History of the United States, The Ronald Press Company, 1955, p. 61.

－ 388 － FROM INDIA TO THE BOSTON TEA PARTY the import duty and the profi ts of the auctioneer and wholesaler. It enabled the Company to exclude colonial tea merchants from the marketing circuit, and thus drive into bankruptcy exactly the colonial groups who had caused the Company to build up its 17 million pound tea surplus within danger of bankruptcy. Previously the Company had to sell its tea in England to merchants, who then transported the tea to the colonies. The Townshend import duty on the East India Tea was retained, but reshipment of tea from English ports to the colonies was exempted from taxation. Government remitted duty payments on tea stored in England and reshipped to the colonies. The exclusion of colonial tea merchants was a large part of the savings the Company gained from the Tea Act. As John Adams and other agitators had clearly realized, the broad public would be utterly indifferent to the political issue; it would buy the East India Company Tea if it was cheaper, and in complete ignorance blissfully destroy any of the colonial countermeasures against tyranny. There is a moral ambiguity in whether the colonial patriots should have felt entitled to prevent their countrymen from abetting tyranny. The Tea Act exploited this inconsistency perfectly; it would gratify the colonial public by selling tea more cheaply, and bankrupt the former tea merchants and associates who had been partially responsible for the 17 million pound surplus. The House of Commons ratifi ed this plan as presented by North on April 27th, 1773.153 Parliament had not considered that the Tea Act would be perceived as a new tactic to extort money from the colonies. Only the question of the scope of colonial autonomy had remained in dispute, but the opposition between colonies and Britain over economic rights seemed to have been resolved, muddily, until the appearance of the Tea Act.154 The colonists had made a self-centered interpretation of the Tea Act of 1773 to be an assault on tea smuggling, without considering the possibility that its aetiology might perhaps have been completely alien. In a tangential sense the Act was did aim at smuggling, but English government was not preoccupied with petty colonial quarrels, while it was intensely concerned with the rescue

153 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 155. 154 Cf. Edwin J. Perkins, The Economy of Colonial America, Columbia University Press, 1980, p. 137.

－ 389 － D. Morgan Pierce of the East India Company from bankruptcy. Probably more stupidly than malevolently, Parliament repealed the law requiring the Company to sell tea assigned to the colonial market at London auction. The company was now empowered to sell tea by direct shipment to the colonies, without auction and without the mediation of colonial merchants. The English tea monopoly suggested that English legislation might engender other monopoly schemes in the colonies.155 Certainly the English at the time of the Tea Act had no such thoughts, but successful execution of the tea monopoly would have soon suggested the idea. The colonists did not object so strenuously against the Townshend duty as against the provision that an English company was allowed to exclude colonial middlemen from the commercial circuit. If the East India Company obtained a monopoly of the colonial tea trade, similar parliamentary legislation could enable other English companies to achieve monopoly in the colonial market, therein foreclosing market opportunity for colonists in their native region. This approach was already embryonic in Britain’s established economic plan to reserve all manufacturing industry for Britain, and to restrict colonial enterprise to extraction of raw material; such had been the motivations of the Hat Act, the Iron Act, and the laws against exporting machinery or technical knowledge from Britain. The Tea Act raised the ghastly dread that Parliament might exterminate germinating branches of colonial business at will by re-assigning through parliamentary act other sectors of free trade to an English monopoly;156 “Whenever the tea is swallowed, and pretty well digested, we shall have new duties imposed on other articles of commerce.”157 England could save the East India Company from bankruptcy by channeling its business into the colonies; it set a precedent that England might save other failing English companies by legislating a colonial monopoly, to the loss of native colonial businesses.158

155 Cf. Resistance, Politics, and the American Struggle for Independence, 1765-1775, Editors Conser, Walter .F. Jr., McCarthy, Ronald M., Toscano, David J., Sharp, Gene, Lynne Rienner Publishers, Boulder, Colorado, 1986, 592 p. 219. 156 Cf. Resistance, Politics, and the American Struggle for Independence, 1765-1775, Editors Conser, Walter .F. Jr., McCarthy, Ronald M., Toscano, David J., Sharp, Gene, Lynne Rienner Publishers, Boulder, Colorado, 1986, p. 219. 157 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 300.

－ 390 － FROM INDIA TO THE BOSTON TEA PARTY

John Dickinson managed to formulate a very cutting parallel with contemporary events in British India: Their conduct in Asia, for some years past, has given ample proof, how little they regard the laws of nations, the rights, liberties, or lives of men. They have levied war, excited rebellions, dethroned princes, and sacrifi ced millions for the sake of gain. The revenues of mighty kingdoms have centered in their coffers. And these not being suffi cient to glut their avarice, they have, by the most unparalleled barbarities, extortions and monopolies, stripped the miserable inhabitants of their property, and reduced whole provinces to indigence and ruin. 1500 thousand, it is said, perished by famine in one year, not because the Earth denied its fruits, but this Company and its servants engrossed all on the necessaries of life, and set them at so high rate, that the poor could not purchase them. Thus having drained the sources of that immense wealth, they now, it seems, cast their eyes on America, as a new theater, whereon to exercise their talents of rapine, oppression and cruelty. The monopoly of tea, is, I dare say, but a small part of the plan they have formed to strip us of our property. But thank God, we are not Sepoys, nor Marrattas, but British Subjects, who are born to liberty, who know its worth, and who prize it high.159 It is perhaps uncanny how tightly Dickinson’s description fits with the minute interactions ingredient to the Townshend Act. The gravity of the charge might be dissipated by repeating that England harbored no such intentions, and by arguing that the colonists who would suffer were only those who traded illegally in the fi rst place.160 The illegality of Dutch tea was a consequence of the Navigation Acts, when Dutch Tea was less than half the price of English Tea. But the colonists had not been permitted any resort to challenge the law making Dutch tea illegal; smuggling might

158 Cf. Smith, Howard R.; Economic History of the United States, The Ronald Press Company, 1955, p. 62. 159 Cf. Schlesinger, Arthur Meier; The Colonial Merchants and the American Revolution 1663-1776, Frederick Ungar Publishng Company, New York, 1957, p. 275. 160 Cf. Gary B. Nash, The Urban Crucible: Social Change, Political Consciousness, and the Origins of the American Revolution, Harvard University Press, 1979, p. 317.

－ 391 － D. Morgan Pierce have been argued to be just, though not legal, on the ground of the injustice of unimpeachable laws. Smuggling was the only alternative when a legal dispute against the cost of tea import was - illegal. The cost of making English cheaper than Dutch tea was the surrender of colonial commercial autonomy. Colonial wholesalers, shippers, and importers would be deprived of their enterprise, and the same procedure could just as easily be implemented for other English imports, under conditions that made any other than British imports illegal, and which prevented colonial redress of such laws. The Iron Act and the Hat Act had already announced that other colonial enterprises might be put on the same chopping-block, and, since business is based upon foresight, the mere liability that such stratagems might be introduced, even without actual introduction, would have been enough to crush the initiative of colonial enterprise. “America would be prostrate before a monster that may be able to destroy every branch of our commerce, drain us of all our property, and wantonly leave us to perish by thousands.” 161 Why should such a worry have been irrational? Parliamentary legislation had already secured priority for Englishmen over natives in the inland trade of India; because the travel pass exempted Englishmen from the internal customs duties that native Indians had to pay, the English could undersell the natives in their internal markets. Likewise the fur trade in the newly acquired Ohio valley had recently been reserved to British, as opposed to colonial traders, by parliamentary legislation. Prior to the Tea Act British merchants had been selling directly to retailers or vending through auction (vendue sale), thus excluding both the colonial wholesaler and retailer. The vendue had originally been justifi ed as a vent for damaged goods, but had become regular auctions directly from the ship for all imported goods, and was eroding the colonial commercial class in the northern colonies.162 The English merchants had perceived that by circumventing the colonial wholesalers they could achieve higher profi ts: “For some years past the London merchants for the sake of advancing their profi ts have got into dealing immediately with the retailers, and have thereby abolished the distinction of

161 Cf. Kirkland, Edward C.; A History of American Economic Life, F. S. Crofts & Co., 1939, p. 129. 162 Cf. Gary B. Nash, The Urban Crucible: Social Change, Political Consciousness, and the Origins of the American Revolution, Harvard University Press, 1979, p. 316.

－ 392 － FROM INDIA TO THE BOSTON TEA PARTY merchants at Boston: so that at present every merchant is a shopkeeper and every shopkeeper is a merchant. Instead of dealing with respectable and creditable houses, the London merchants are engaged in a great number of little shops.”163 Formerly colonials bought in wholesale from the exporter and distributed to retailers, but for several years previous to the Tea Act Crisis the English exporters had encroached on the colonial side of the import business: “Vendues are the means of lowering the price of goods in the shops; this is also a temptation for people to buy articles which they otherwise might have made at home, or done without.”164 Because the tea was cheap the Company would inevitably acquire real monopoly. The Iron Act and Hat Act had similarly repressed colonial enterprise, but the Tea Act quite formally signifi ed the power of Parliament to establish English monopolies in America; since all but English importation was illegal to the colonies, market devices would not protect colonial merchants from schemes to usurp colonial markets for exclusive British sale.165 If for instance Holland or France had been able to trade directly with the colonies the Tea Act would not have been very alarming, for colonial merchants might have used foreign purchase to control East India Company prices; but since any purchase but English was illegal, nothing guaranteed against the rise of monopoly prices once smuggling had been eliminated. Given that the colonial wholesaler could compete against the East India Company only illegally, in that Dutch purchase was illegal, the Company controlled the price and distribution. The colonial was still free to buy tea from the Company at auction in London, but since the Company would sell tea without the percentiles of cost added from the import duty, only the Company would be able to sell tea at effective demand. The colonials were thereby deprived of any control over their native market.166 When there are many competitors it does not make sense to attack the rival by underselling; one company, without enough resources to

163 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 116. 164 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 142. 165 Cf. Faulkner Harold Underwood; American Economic History, Harper & Brothers Publishers, 1949, p. 124. 166 Cf. Gary B. Nash, The Urban Crucible: Social Change, Political Consciousness, and the Origins of the American Revolution, Harvard University Press, 1979, p. 317.

－ 393 － D. Morgan Pierce drive several companies into bankruptcy by selling beneath the break even point, might fi rst drive itself into bankruptcy. But if there is only one rival, it may be effective to sell at a price beneath cost until the rival goes bankrupt, and then recuperate by raising the price afterwards. Because of the Navigation Laws, this scheme of potlatch competition accurately suited virtually any colonial enterprise vis-à-vis England. Britain had managed to undersell India, in India, in cotton goods, even though India was the primary producer of cotton; this could not have happened if France had retained half of the Indian colonization. The Tea Act would serve as a model of further English commercial incursions into the native colonial market.167 In its modern context monopoly emerges from competition, in which competitors succeed or fail according to the same rules and in which government is neutral. But the proposed monopoly of the 1773 Tea Act arose originally from government interest, an invincible monopoly; government would simply change whatever laws obstructed the preferred monopoly formation, so that this type of monopoly was inherently irreversible by purely economic market patterns. The government interest consisted in termination of colonial smuggling, and since the monopoly was a legislated monopoly, it was a combination of business and government that would destroy any counter-organization. The 1773 Tea Act intimated willingness to legislate monopoly by superfetating English enterprise on an original colonial enterprise and then letting the infant colonial counterpart die. The colonists felt great anxiety that England would graft English business on any original colonial enterprise. Hypothetically, if English tea had been traded by several companies, competition would have adjusted to a uniform market price, and it would have been futile to attempt the destruction of competitors by underselling; but since English Tea was monolithic, it would be economically rational for the East India Company to initially drive independent colonial tea out of business.168 It intimated a new pattern: England might be willing to save a failing English company by providing it with a colonial market legislatively confi scated from colonial

167 Cf. Dorfman, Joseph; The Economic Mind in American Civilization: 1606-1865, Volume One, George G. Harrap & Co. Ltd., 1947, p. 206. 168 Cf. Louis M. Hacker; The Triumph of American Capitalism, Columbia University Press, 1947, p. 163.

－ 394 － FROM INDIA TO THE BOSTON TEA PARTY businessmen.169 Possibly the decision to use colonial wholesalers was meant to appease the colonials, but since, following common sense, the Company conspicuously employed pro-British colonists, colonial insecurity was all the more infl amed. Even wholesalers with large stocks of Dutch tea already stored in the colonies would be ruined.170 Colonial tea merchants did not receive commissions from the East India Company in compensation for their bankrupt trade. The Tea Act authorized the East India to use its own agents, located in the colonies. Disturbance might not have arisen if the East India Company had appointed the previous colonial wholesalers, but the Company chose colonial agents from political interests that were offensive to the colonists. The Company’s marketing tactic would have enriched the repressive element that was indigenous to the colonies; the East India Company would thus have been an anti-colonial monopoly. Substitution of the vendors did not immediately raise the Company’s profi t, but the Company was able to achieve its targeted profi t margin at a much cheaper retail price, thus expanding the effective market. The practice of replacing original merchants with pro-British colonists would have had the general effect of transferring colonial wealth to those colonists who supported British policy; it was the seed of a new patronage system. Britain rescued the East India Company by taking the tea market from the colonists and giving it to the Company; such an easy ploy could be implemented for other English companies.171 The legislative device revealed that certain layers of middleman were entirely unnecessary, and this could be applied extensively to other duplicate products of English and colonial manufacture. The fear behind the Iron Act and the Hat Act had been that colonial production might displace British international markets; if British production could have been legislated to extirpate identical colonial productions, the anxiety from the English side would have been

169 Cf. Louis M. Hacker; The Triumph of American Capitalism, Columbia University Press, 1947, p. 163. 170 Cf. Curtis P. Nettles, The Roots of American Civilization, George Allen & Unwin LTD, 1963, p. 641. 171 Cf. Smith, Howard R.; Economic History of the United States, The Ronald Press Company, 1955, p. 62.

－ 395 － D. Morgan Pierce resolved. The colonies on their side would not have objected to legislation that eliminated a layer of expense discovered to be unnecessary, if the merchants adversely affected had been English. The colonists did not object to the development of a new cost effi ciency per se, but only to the harm of its collateral effect. The essence of the Tea Act was inevitable, in that a capitalistic system progresses only if it eliminates ineffi ciencies wherever they are discovered; to tolerate an ineffi ciency amounts to inviting the competitor to gain advantage by being fi rst to implement the economy. Although the colonists denounced Britain for deploying the cheap price of tea in order to validate the Townshend duty,172 the colonists would have rationalized business in the same way in a context in which the extraneous political symbols did not inhere. The vendue had been a low-key threat to colonial businessmen, both wholesalers and retailers, dependent more on import than export, of which the Tea Act was merely the most blatant manifestation. Colonists inferred that England might enable more English companies to destroy native colonial businesses by legislated duty and marketing privileges. But for the English there could have been no compromise; if England had enjoined the East India Company to vent the tea through colonial wholesalers, the price of Dutch tea would remain lower, and none of the other parliamentary provisions for the Company would have enabled her to unload her tea. The Townshend tea duty was never repealed, and the tea boycott had never been resigned.173 The duty symbolized parliamentary right to tax the colonies, but Britain had since then neither imposed any new tax, nor ever formally pledged not to tax. The colonists on their part did not aggressively push Parliament to clarify the intentional ambiguity of the Declaratory Act: in all cases whatsoever. The boycott was also ambiguous; the colonists turned to Dutch tea instead of aggressively fi ghting for repeal of the tea duty. The East India Company sent its tea surplus to the colonies only because British government prevented the Company from selling it in England or Europe. The English tea would undersell Dutch tea despite the Townshend duty.174

172 Cf. Curtis P. Nettles, The Roots of American Civilization, George Allen & Unwin LTD, 1963, p. 641. 173 Cf. Edwin J. Perkins, The Economy of Colonial America, Columbia University Press, 1980, p. 137.

－ 396 － FROM INDIA TO THE BOSTON TEA PARTY

It remains quizzical how dutied tea could undersell the untaxed smuggled tea, under any conditions. The East India Company was permitted to sell the tea without auction, middlemen, or tax, whereas the transaction of illegal tea had to be intrinsically more expensive than legal transaction, simply because transgression of any law entails extra expense. Prior to the Tea Act of 1773, four stages of profi t were cascaded on tea: The East India Company, the English auctioneer, the colonial importer, and the retailer.175 Freight and duty costs were cathected on the four stages of profi t. Direct sale from the East India Company to the retailer removed two levels of profi t and some of the attendant shipping/insurance costs. The contention between smuggled and English tea had a zero-sum structure. Either the East India Company would acquire a monopoly, driving every smuggler and colonial tea merchant out of business, or the Tea Act would fail utterly, without even a partial market gain. Thus the elimination of middlemen, far from insignifi cant, was a vital necessity, without which the parliamentary plan for colonial vent of the tea would have failed. The reduction of retail prices due to tax exemption and elimination of middlemen did not gratify, but infuriate, the colonists.176 The method of distributing the tea revealed a univocal purpose concerning the colonists, which could not be construed to derive from any other motive; Frederick North’s decision to retain the Townshend Duty amply justified colonial suspicion of the Tea Act. Even disregarding the colonial protest, inasmuch as the smuggled tea had to be cheaper than Dutch tea in order to achieve its sole purpose, it was irrational to maintain the Townshend duty; every thinkable means of reducing the price of the English under that of the Dutch tea was exigent. In fi nal analysis, North preferred to put the East India Company at extended risk in order to implement his favorite idea for asseverating the right to tax the colonies.

174 Cf. Smith, Howard R.; Economic History of the United States, The Ronald Press Company, 1955, p. 61. 175 Cf. Faulkner Harold Underwood; American Economic History, Harper & Brothers Publishers, 1949, p. 124. 176 Cf. Nash, Gary; The Unknown American Revolution; The Unruly Birth of Democracy and the Struggle to Create America; Viking, 2005, New York, p. 89.

－ 397 － D. Morgan Pierce

The colonies had been conceived instrumentally; just as England solved part of its criminal problem by deporting convicts to the colonies, over colonial objections, they resolved to use the colonies as an escape hatch for salvaging the East India Company from bankruptcy. The connection of the Company and colonies was one-sided; despite the assertion that the British trade commonwealth was to benefi t all territories of the British Empire, the East India Company was allowed to sell duty-free to the colonies, but the colonies were not allowed any trade outlet in India, and had been prohibited at all times previously. A 1689 parliamentary act forbade all English subjects, for the exception of the East India Company, to conduct any commercial exchange with India, the whole continent of Asia (China), the east coast of Africa, or South America; the law continued in effect beyond 1775.177 While the Tea Act of May 10th, 1773, allowed the East India Company to export tea from its English warehouses without import duty and without auction for direct sale in the colonies, tea for sale to Britain or Europe remained subject to import duty and auction. The East India Company could not, as it had expressly preferred, dump its tea surplus in the European market. Exemption from the import tax would have made the price of East India Tea competitive with that of Dutch tea in the European mainland, and would have reduced the 17 million pound surplus just as effi ciently. Although this tactic would not have cost government greater loss of revenue, government forbade this. Upon learning that the Townshend duty on tea would not be repealed, George Colebrooke, Chairman of the East India Company, announced that he had no interest whatever in selling tea in the colonial market (paraphrased by Johnson): “for all the company cared the ministry could increase the American tea duty tenfold.” Colebrook withdrew his petition for repeal of the Townshend duty, while maintaining the petition for relief from paying compensation for straitened customs duties.178 Colebrooke surmised that since the colonists saw the connection of the Townshend Duty with the civil list and the survival of their assemblies, it did not matter how small the tea duty was, the colonists would fi ght very

177 Cf. Knollenberg, Bernhard; Origin of the American Revolution 1759-1766, The Free Press, 1965, p. 158. 178 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 171.

－ 398 － FROM INDIA TO THE BOSTON TEA PARTY violently against the Tea Act. He didn’t want to involve the Company. Although the East India Company had explicitly spoken out against the colonial sale, the fi nal arrangement forced the Company either to vent its surplus in the colonies, and the colonies only, or go bankrupt. The East India Company was being used, quite deliberately, to manipulate the colonies. The Company had expressed its preference for relief to sell in Europe, but government, by maintaining the import duty for Britain and Europe, forced the tea surplus on to the colonies as the only option by which the Company would be free to elude fi nancial breakdown. Tea would be much cheaper in the colonies than in England, although Dutch tea smuggling dominated the English as much as the colonial market. The remedy for the colonial market was not applied to the same problem in the English market, which continued under the import duty. Only the Townshend duty, applied to the colonial but not the domestic market, constituted a distinction; apparently, the opportunity to force colonial acceptance of the Townshend duty was the fi nal factor that determined the issuance of the Tea Act. All the other reasons for the Tea Act would have urged exactly the same import duty relief for the English and European market as for the colonial; the only motive for reservation of this tactic for the colonies was to achieve some unique objective in the colonies. If England had eliminated the Townshend Duty on tea, but had maintained the import duty at London auction, the percentage of legal, dutied tea might perhaps have shifted enough over smuggled tea to reduce the tea surplus, and less colonial tax revenue would have been lost. The colonies would have bought a larger proportion of Company tea, at London auction, if the Townshend Duty had been removed, even if the import duties had persisted. It appears that the English imputed short-term motives in their interpretation of colonial behavior, and therefore found the colonists irrational, whereas the colonists were thinking in terms of the long-term consequences of allowing monopoly and internal excise taxation, ignoring the short term benefi ts of the 1773 Tea Act. The colonists did not boycott tea for the remission of the import duty, which had been charged indifferently on British or colonial tea, but did boycott against the Townshend duty, an insignifi cant tax by comparison, which was charged on the colonies but not Britain; apparently

－ 399 － D. Morgan Pierce the colonists were laboring with a conception of equity rather than effi ciency. The colonists were unimpressed by the English argument that the Tea Act enabled colonists to buy tea more cheaply than in England. Monopolies normally emerge by a contest of loss, and then, when the rival is driven from the fi eld, offset their losses by raising prices; but if the advantage to the East India Company was backed by parliamentary legislation, no colonial enterprise could have had even a chance in competition.179 Parliament adverted to the colonial boycott on the Townshend duty as one reason for the fi nancial failure of the East India Company, but never in the same breath did government draw attention to the import duty in the failure of native Englishmen to consume enough Company tea. Government had tried to increase its revenue by enabling greater sale of tea. The British West Indies planters had developed a monoculture in coffee. England had prohibited the sale of foreign coffee, so that the West India planters would enjoy a British monopoly; the coffee price had gone 50% higher than the European market price. Upon the recession of the East India Company, Parliament prophylactically imposed additional import duties on West Indian coffee in order to induce the English public to become tea drinkers.180 The Indian famine had caused shortfalls in the annual revenue of the East India Company, and the Townshend boycott had stemmed the sale of tea; by making coffee more expensive, government hoped that the public would consume the East India Company tea surplus. The measure did not restore Company fi nances, although the public took up tea consumption; the English import duty on tea led the English public to buy the illegal Dutch tea. Preserving the lacuna between the English and the world market price of tea, Parliament determined on the 10th of May 1773 to repair the Company’s fi nancial collapse by allowing the Company re-exportation of tea to the colonies, free of the import duty; the colonial tea was to be subject only to the 3d Townshend Duty, as had been charged since the introduction of

179 Cf. Dorfman, Joseph; The Economic Mind in American Civilization: 1606-1865, Volume One, George G. Harrap & Co. Ltd., 1947, p. 206. 180 Cf. Ward, J. R.; The British West Indies in the Age of Abolition, 1748-1815; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 422.

－ 400 － FROM INDIA TO THE BOSTON TEA PARTY the Townshend Act in 1767. Government exempted the Company from duty to auction tea in London, for all tea intended for sale in the colonies.181 The Tea Act of 1773 had been intended to save the East India Company by market expansion. It was unconcerned with the dispute over the power of Parliament to tax the colonies; in 1770 Parliament and Crown had given up the overriding idea to extract imperial revenue from the colonies.182 England could remain safe from France only if England was ascendant; England would remain so only if she retained India; England would retain India only if the East India Company remained solvent; the East India Company would not go bankrupt only if she could unload her tea; the East India Company could unload her tea only if the colonies could be motivated to buy it. The Tea Act of 1773 focused on restoration of the East India Company to solvency. All that was owned and invested in India was through the Company, which had so far successfully asserted the independence of its corporate territorial holdings in India from British government; if the Company collapsed, the holdings of the Company would not be the property of British government by default. The idea that the Company should sell tea without intermediary in the colonies ought to have saved the Britishness of British India by reinvigorating a neglected market of the Company.183 The direct export to America eliminated the 50% customs duty; the London auction remained the only legal way for colonial wholesalers to purchase tea, but since their auction purchase entailed the 50% customs duty, no established tea wholesale could persist. The colonial wholesalers received drawbacks, but the savings did not compete against the Company’s duty-free exportation. Since the East India Company itself, together with the wholesalers, was still obligated to pay the 50% duty for tea sale in Britain and Europe, the East India Company was under compulsion to sell the tea in the one place where the import

181 Cf. Smith, Howard R.; Economic History of the United States, The Ronald Press Company, 1955, p. 61. 182 Cf. Ian K. Steele; The Anointed, the Appointed, and the Elected: Governance of the British Empire, 1689-1784; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 124. 183 Cf. Gunderson, Gerald; A New Economic History of America, McGraw-Hill Book Company, 1976, p. 85.

－ 401 － D. Morgan Pierce duty did not apply. One would have to strain oneself to believe that Parliament had instituted these anti-colonial constraints on the East India Company inadvertently.

THE THIRD BOYCOTT

The Townshend boycott counts as the second boycott, and the Stamp Act boycott as the fi rst; the third boycott followed the Coercive Acts (below), but never became a real boycott in that the American War cut into the boycott at its outset; it is advantageous to explain the sociological suggestions of the third boycott from features of the second boycott. The Solemn League and Covenant instituted a new boycott for the repeal of the Coercive Acts of 1774. Artisans and farmers embodied the Solemn League; when merchants amassed in June 1774 to abolish the Solemn League, they were instead forced into submission.184 What was new in this event was that the colonists had divided against each other; the associations were not formed to act against the British, but against the group of colonists who were likely to cooperate with the British. Although the tea tax persisted, the colonies had informally terminated the Townshend Act boycott when the other, negligible import duties were stricken.185 The boycott on tea was nominally maintained, but resistance was muted by the colonists’ decision to buy smuggled tea instead of stridently opposing the tea tax with a boycott: colonists drank tea, colonists did not boycott other British imports, and Britain did not take action against the illicit Dutch tea trade. A new polite fi ction. Tea stored in English warehouses rose from 13,627,000 lbs. in 1771 to 17,756,000 lbs. in 1772 and to 21,233,000 lbs. in 1773. Preservation of the tea tax suggested that the metropolitan government was likely to invent new ways to tax the colonies.186 The importation of Dutch tea had displaced the normal vent of British East India Tea, and thus caused the East India Company tea surplus. Tea stored in warehouses would eventually lose market value from deterioration, so that it was imperative to unload the surplus tea within a reasonable time

184 Cf. Nash, Gary; The Unknown American Revolution; The Unruly Birth of Democracy and the Struggle to Create America; Viking, 2005, New York, p. 98. 185 Cf. Shannon, Fred A.; America’s Economic Growth, Macmillan, 1951, p. 101. 186 Varg, Paul A.; The Advent of Nationalism, 1758-1776, American Quarterly, 16, 1964, p. 178.

－ 402 － FROM INDIA TO THE BOSTON TEA PARTY frame.187 North’s refusal to repeal the tea tax prevented citation of the repeal of the Townshend Act as evidence of Parliament’s recognition of the illegality of subsequent tax acts; refusal to repeal however prevented the timely sale of the tea. The colonists had not wanted a war, and did not want independence; resistance against Britain took the form of trade embargoes because that approach seemed the least bellicose. Since most of the issues concerned trade and focused on the welfare of merchants, it seemed reasonable to resist the British with trade measures. There was a deep flaw in this strategy, however; it meant that the colonial merchant class would take the brunt of Britain’s aggressions. Merchants might have wanted to fight for their commercial rights, but they were also inclined to abandon dispute altogether if they could profi t in the status quo. Since the colonial merchants would take the brunt of all damages ensuing from resistance, they vacillated between endorsing strategies that were in their favor and opposing the same policies from fear of British repercussions. Maryland, Virginia, and South Carolina also had self- interested motives to resist cooperation in the non-importation strategy until the summer of 1769; being agricultural colonies, they did not want to jeopardize their export trade, whereas the New England area had never been permitted agricultural export business, and could therefore concentrate on trade advantages. For as long as the colonists clung to pacifistic resistance, there was no strategy by which they could distribute the harm of British retaliation more evenly over all colonial classes in place of its concentration on the mercantile class.188 Actual war would, and did, achieve such distribution, but as soon as war became the form of resistance, the merchant class became utterly insignifi cant in the struggle. There is a clear explanation why the merchant and labor classes cooperated in the initial resistance but divided against each other before their resistance achieved its goal. In 1769 colonial merchants pared back British importation by two thirds.189 The import surplus had

187 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 249. 188 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 246. 189 Cf. Schlesinger, Arthur Meier; The Colonial Merchants and the American Revolution 1663-1776, Frederick Ungar Publishng Company, New York, 1957, p. 210.

－ 403 － D. Morgan Pierce formed into dead stock; an interruption of importation would be profi table to the merchants insofar as they could market and exhaust the dead stock; if new importation did not supersede the marketing of the surplus, it would be unnecessary to reduce prices in order to achieve clearance, and at the same time the merchants would not need to pay for new imports. The boycott was temporarily benefi cial. The gradual depletion of surplus stock eventually made it advantageous to import from Britain, and this marks the moment at which merchants and workers became alienated. The conventional explanation for the split is partially true: colonial merchants were frightened at the vehemence of labor resistance, particularly if it had the appearance of the sorcerer’s apprentice. But merchants did not complain about their centrality in the struggle until they noticed they were forfeiting opportunities for profi t. The natural position of merchants should have been alliance with England, and correlatively England erred in not having accommodated them more complaisantly. Temporarily the merchants adopted opposition to Britain and allied with their colonial labor class, a most illogical move. The merchants had preferred to enjoy the profits of short term advantage rather than to risk their business life by persisting in a longer-term defi ance that might result in great retaliation. It was gradually becoming clear to the colonial merchants that they might lose their social position, as a class in total, if the radicals should succeed with a revolution; such a revolution would probably not support the former merchant class. On the other hand it would not be unthinkable for the British to substitute the entire upper echelon of colonial businessmen with a class of English appointees. The whole merchant class could continue to exist only if the colonists remained British subjects.190 This possibility remained at its strongest if the merchants put an end to colonial defi ance as quickly as possible. There was a measure of unfairness in the colonial boycott; the political radicals depended on the conformity of the merchants, who might have had cogent reasons to avoid provocation of Britain; notwithstanding, the radicals forced the merchants into conformity. A major factor

190 Schlesinger formulates a dichotomy between the political aims of the people and the commercial precision of the merchants; I think attribution of this confrontation to political aspiration is misconceived. Cf. Schlesinger, Arthur Meier; The Colonial Merchants and the American Revolution 1663-1776, Frederick Ungar Publishng Company, New York, 1957, p. 308.

－ 404 － FROM INDIA TO THE BOSTON TEA PARTY was the free-rider problem; while merchants of all colonies wanted long-term reform of commercial regulations, a group of merchants in one colony could seize market share if the commercial group of another colony subscribed to embargo. The group which cheated would nevertheless be strongly in favor of the boycott because success in the boycott they were undermining would achieve for them long-term advantages; it was simply more economical if other merchants carried on the boycott while they continued to profi t from the straitened supply. It was a faint echo from St. Augustine: Preserve me from my lust, oh Lord, but not too soon. Although the different colonial mercantile groups did subscribe to boycott in unison, the various groups covertly cheated. Some merchants would sacrifi ce private interest for the benefi t of common resistance, but others would use professions of conformity to resistance as a cover for private profi t. Needless to say, cheating gave the advantage to the English exporters, who effectively broke the boycott. The Boston merchants already in March 1768 had subscribed only to a conditional boycott, according to which they would withhold English orders only for as long as the merchants of New York and Philadelphia did. New York consented to this proviso, but Philadelphia did not.191 When surplus ran out and merchants could not replenish with new orders, scarcity drove up prices because subsistence revenue had to be earned from smaller sales volume; the merchants were then even more deeply resented by the people as extortionists.192 The growing hostility of the general public to their native merchant class prodded New York, Philadelphia, and Boston into accepting the boycott.193 Distrust of the native business elite led to the consumption boycott. The artisanal sector of the population established groups to enforce non-importation, by supervising or spying on merchants who could not be trusted; colonial importers were required to sign a declaration that they would not handle imported British goods. Prohibited imports were stored in public warehouses, but from time to time these inventories were discovered to have disappeared; the

191 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 245. 192 Cf. Schlesinger, Arthur Meier; The Colonial Merchants and the American Revolution 1663-1776, Frederick Ungar Publishng Company, New York, 1957, p. 211. 193 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 245.

－ 405 － D. Morgan Pierce covert transference from the public warehouse to illicit retail sale presaged the later anxiety over letting tea be stored in public security. The merchant and artisanal classes, though apparently in uniformity, had divided into two groups, the artisans, controlling and supervising the conformity of the mercantile group, with an absurd division: the artisans as watchdogs to prevent merchants from breaking an embargo protective of the merchants. The artisanal group did not resort to physical violence, but merchants who cheated were blackballed from future commerce in the colony. A Boston town meeting, May, 1769: “unanimously expressed their high satisfaction on being informed that the merchants had so strictly adhered to their late agreement relative to a non-importation of European merchandise.”194 The generalized supervision of the merchant class by the artisan class turned the merchants more against reform, even though the reform envisioned was to their advantage. It was highly unhistorical, quite absurd, for the merchants to fi nd their role reversed with that of the artisans; in normal historical circumstances the merchant controlled how the labor class behaved, and the merchants were discovering that this usual hierarchy would stay in place only if the British continued to control the colonies.195 We accept unrefl ectively that the merchant class could excite at will the lower classes into united opposition against England; we accept that the merchant class presided over a free choice, whether or not to enfold the labor class into antagonism against Britain. We accept that the lower class became more powerful than the merchant class once hostilities grew, that the labor class then overpowered the merchant class into pressing for reforms favorable to the merchant class. We accept that the merchant class either became loyalists or conformed only reluctantly, to pro-merchant priorities assigned by the labor class. However, why was the labor class able to be aroused by the merchants? How was it possible for the lower class to have gotten more passionate than the merchant class about injustices weighing not on the labor, but the merchant class? On what imaginings was the labor class able to pursue confrontation with the British, concerning principles oriented on the benefi t of the merchant class, after the

194 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 254. 195 Cf. Schlesinger, Arthur Meier; The Colonial Merchants and the American Revolution 1663-1776, Frederick Ungar Publishing Company, New York, 1957, p. 189.

－ 406 － FROM INDIA TO THE BOSTON TEA PARTY merchant class itself abandoned its self-centered ideals? A further ambivalence now enters the situation; the radicals had to suppress the merchants because the radicals knew that once imports reached the retail level, the people would buy British products in disregard of the economic liabilities; suppression of the merchants was a consequence of even greater distrust of the general public. Whereas merchants would be sharply conscious of issues involved, but reluctant to cooperate by virtue of private interest, the general public would be unaware of the issues, and unmotivated to believe that their behavior would make any difference. Since the merchants would cheat, a move was made from non-importation to non-consumption. This might appear to have shifted pressure from the merchants to the general public, but in reality it was a way to intensify pressure on the merchants. Delegates to the fi rst Continental Congress would later formulate non-consumption as “an effectual security for the observation of non-importation.”196 If the general public would by and large abide by a non-consumption pact, then no merchant could afford to make British orders, because the retail purchase of the non-compliant public would relieve merchants of too small a fraction of their stock to achieve a break-even point; the greatest part of contraband British imports would become dead stock. This strategy might be interpreted to be highly undemocratic, because the act was predicated on the presumption that the majority of people, left to themselves, would not comply with the purpose of the embargo. On the other hand, the act appears to be pacifi stic, inasmuch as the radicals did their utmost to use only non-violent ways to meet the British challenge, refraining from brutality by every imaginable means short of submission. An individual from Connecticut had pronounced that the previous embargo had failed because “it stood on a rotten and unsolid basis. It was erected wholly on the virtue of the merchants, and rested solely on this prop.”197 On the 10th of June 1768 John Hancock’s ship, the Liberty, had been confiscated on the ground of smuggling.198 It was a falsifi ed charge based solely on the false testimony of

196 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 325. 197 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 298. 198 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 83.

－ 407 － D. Morgan Pierce someone who was already dead. The confiscation seemed to be revenge from the customs offi cers who had previously been humiliated in a frustrated attempt to arrest Hancock on a previous occasion; although there was no viable proof, the charges were probably in large part true. The confi scation of the Liberty aroused riots; the customs commissioners, having been assaulted by an enraged mob, retreated to Castle William, and made formal appeal to General Gage and Admiral Hood for troops and naval presence.199 In consequence in October 1768 2,000 British soldiers were stationed in Boston to suppress further unrest. This infl amed the artisanal Bostonians, who were the object of this maneuver, inasmuch as the army had come to secure enforcement of the trade laws against which the Bostonians were protesting.200 Until then the British maintained the pretense that the standing army was for protection against the French and Indians; the Boston station of the troops advertized that the army existed for suppression of the civilian population. The stationing of the British army greatly promoted the popularity of the political radicals. The army remained stationed in Boston for the following two years.201 The military encampment worked an unexpected effect in the primary victim; while the labor class continued its boycott on tea, protecting the merchant class, the merchants developed friendship with the British military in order to curry lucrative supply contracts.202 Nevertheless, throughout 1773 the same upper class merchants covertly continued to instigate lower class hostilities against the British.203

199 Cf. Ritcheson, Charles; British Politics and the American Revolution, University of Oklahoma press, 1954. 320 pages, p. 116. 200 Cf. Hoerder, Dirk; Boston Leaders and Boston crowds, 1765-1776; Cf. Young, Alfred F.; The American Revolution Explorations in the History of American Radicalism, Northern Illinois University press, DeKalb 1976, p. 253. 201 Cf. Schlesinger, Arthur Meier; The Colonial Merchants and the American Revolution 1663-1776, Frederick Ungar Publishng Company, New York, 1957, p. 104. 202 Cf. Hoerder, Dirk; Boston Leaders and Boston crowds, 1765-1776; in Young, Alfred F.; The American Revolution Explorations in the History of American Radicalism, Northern Illinois University press, DeKalb 1976, p. 253. 203 Cf. Hoerder, Dirk; Boston Leaders and Boston crowds, 1765-1776; in Young, Alfred F.; The American Revolution Explorations in the History of American Radicalism, Northern Illinois University press, DeKalb 1976, p. 261.

－ 408 － FROM INDIA TO THE BOSTON TEA PARTY

Britain enabled itself to pay its soldiers impossibly low salaries by one of its characteristic methods of economy.204 Just as previously government delegated public services that it could not afford to private monopolies; just as the East India Company allowed employees to conduct private business; just as British government allowed its agents to charge private fees for public services; similarly government allowed its soldiers to take private employment when they were off duty. In consequence the British soldiers, who were already deeply hated as an occupying army, absorbed all the available employment in Boston. The Boston labor class could not help but demand wages adequate for subsistence, but since the British soldiers received regular payment from the army, they could underbid native colonials in any employment; the army intensified the economic depression by depriving workers of employment. Investigated in minute detail, it is clear that the colonists provoked the Boston Massacre on King Street, and that the harm was exaggerated for purposes of propaganda. However, the background of this disturbance was indubitably a veracious colonial dread at how easily England could impoverish the colonial population by methods of displacement, of which the Tea Act was to be merely the most brazen example. The Boston élite restored the dignity of the Bostonians by skillfully protecting and absolving the British soldiers involved in the Boston massacre, despite the public rage. This event very powerfully belied the British rationale for establishing Admiralty Courts in the colonies and for depriving the colonists of their right to trial by jury. Needless to say, England disregarded the graciousness of the colonial treatment of the British soldiers. The persistence of the Townshend Duty in the Tea Act of 1773 was therefore an affront to the political radicals, who could now use the Townshend Duty much more embarrassingly than the import duty to reproach the merchants for their complaisance and the resultant English intransigence. To wit: because the merchants had not maintained resistance in 1767, they now confronted a much more lethal monopolistic device. If the East India Company could eliminate colonial middlemen in the colonial market, the essential idea in the precedent

204 Cf. Hoerder, Dirk; Boston Leaders and Boston crowds, 1765-1776; Cf. Young, Alfred F.; The American Revolution Explorations in the History of American Radicalism, Northern Illinois University press, DeKalb 1976, p. 265.

－ 409 － D. Morgan Pierce might lead to the serial replacement of all colonial merchants, sector by sector. The Tea Act, in modern parlance, allowed the East India Company to dump tea in the colonies, and destroy the possibility for every other tea business, legal or illegal. Two conditions certifi ed the lethality of the monopolistic device: (1) the legislated privileges would enable the British company to undersell any rival enterprise, because colonial enterprise did not have enough capital reserve to weather dumping prices, and (2) the general consumer would never prefer observance of a principle to the cheapest price for a commodity. Because the Tea Act removed a much more onerous import duty while at the same time insisting on the Townshend duty, the only consistent interpretation for emphasis on the Townshend Duty had to dwell in the legal difference of the two duties. The Townshend duty was the only duty that amounted to an internal excise on the colonies, since unlike the import duty it was not charged on English imports. Colonists accordingly interpreted the low price to be a ruse to make them implicitly approve the principle of an English excise tax in the colonies.205 The colonists did not react in anticipation of the Tea Act because they had preconceived it to be a colonial victory; as of 1770 the colonial newspapers had predicted the repeal of the Tea Duty, Parliament had said that the Townshend duty might be repealed for good behavior, Benjamin Franklin had coupled its repeal in his recommendation of a Tea Act, and the colonists thought that the 1773 Tea Act was synonymous with the repeal of the Townshend Duty. The unpleasant revelation that the 1773 Act maintained the Townshend Duty embodied itself in an objection to the unmediated sale between the Company and the colonists.206 Perhaps this is paradoxical; the issue of English sale without colonial handlers was by far the greatest threat, but it appears that the colonists might not have objected if tea were to be

205 Cf. Shy, John; The American Colonies in War and Revolution, 1748-1783; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 313. 206 Cf. Resistance, Politics, and the American Struggle for Independence, 1765-1775, Editors Conser, Walter .F. Jr., McCarthy, Ronald M., Toscano, David J., Sharp, Gene, Lynne Rienner Publishers, Boulder, Colorado, 1986, p. 219.

－ 410 － FROM INDIA TO THE BOSTON TEA PARTY sold directly, merely without the Townshend Duty. It appears that the outrage was over the Townshend Duty, with the objection to imperial monopoly seemingly a mere afterthought, a rationalization for the umbrage over the Townshend Duty. The colonists had identifi ed the major threat accurately; why could the Townshend Duty have had such a disproportionate catalytic infl uence? The colonial radicals from the time of 1767 had wanted to maintain total non-importation until the Townshend Duty on tea was repealed. The merchants themselves however possibly understood that such an effect would not be achieved; to save their own livelihood they broke with the political radicals and resumed importation, but compromised with the radicals in an agreement to persist in the non-importation of East India Company tea. Nothing was achieved by this extremely limited embargo, and the colonists were also not discomfi ted, since they enjoyed more than enough from the smuggled tea. 207 Given this dilemma, the 1767 and the 1773 boycotts were pacifistic. Boycott was the most peaceful recourse one could take against a government which refused to receive colonial agents and refused to countenance petitions. Lord Hillsborough refused to receive Benjamin Franklin, who had been chosen by Philadelphia to be its representative agent and who was paid by Philadelphia for this office. Hillsborough refused him because the governor of Pennsylvania had not appointed him. Hillsborough thereafter demanded from Philadelphia that Franklin not be paid, because he had not been appointed by the governor of Pennsylvania. The governor’s choice was synonymous with the king’s choice; it meant that the colony would have no authentic representation. Burke: “this I consider in effect, as destructive of one of the most necessary mediums of communication between the Colonies and the parent Country. The provinces ought in my opinion to have a direct intercourse with Ministry and Parliament here, by some person who might be truly confidential with them who appointed him.”208 Burke expatiated that royal appointment of the colonial agent would displace colonial representation with an offi cer of the Crown.

207 Cf. Samuel Eliot Morison, The Oxford History of the American People, Volume One, Meridian Books, 1994, p. 269. 208 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 151.

－ 411 － D. Morgan Pierce

A boycott however destabilized colonial resistance by accentuating the difference of interests operating within a united opposition. The merchants supported a boycott because the boycott was fi rst and foremost in their interest; the trade regulations being protested by the boycott were those which primarily disadvantaged merchants. If the people were in this regard the supporters of the merchants, they were in another regard the natural victims of the merchants. Whereas merchant and people were one in being the victim of British trade regulation, nevertheless merchants were in the business of extracting profi t from the colonists, not from the British government, and would naturally take sides with British government against their fellow colonists whenever profi t taking was to the disadvantage of the colonials but to the advantage of the colonial merchants. A boycott, which could close trade activity totally, might achieve its objective to the degree that stoppage was total, but to that same degree would bankrupt colonial merchants. Therefore it was always possible that colonial merchants would take the side of British government against boycott measures that had been undertaken primarily for the sake of the selfsame merchants. In 1768 the colonial leadership opposed vigorous opposition to the Townshend Act, because they feared being overwhelmed by the vandalistic lower-class support that they would excite. When on Pope’s Day the “United Northenders” and the “United Southenders” paraded with the slogan: “liberty and property and no commissioners, it is signifi cant that these lower-class gangs, who traditionally brawled with each other, had united in this protest independently of the upper class rebellious group.209 The Quartering Act (1774) seems to have aimed at the Boston labor class; whereas the previous Quartering Act of 1765 required the Bostonians to provide living quarters for the soldiers, the new Quartering Act enabled the British army to provide its soldiers not in quarters outside the city, but inside. Conditional license to take quarters in private homes inhabited by families meant that the British soldiers, the natural enemies of the Boston working class, would not only fi ll the streets, but occupy the very homes in which the working class people were living. Chatham objected to the Bill, but it passed through Commons and Lords

209 Cf. Hoerder, Dirk; Boston Leaders and Boston crowds, 1765-1776; Cf. Young, Alfred F.; The American Revolution Explorations in the History of American Radicalism, Northern Illinois University press, DeKalb 1976, p. 240.

－ 412 － FROM INDIA TO THE BOSTON TEA PARTY without division in early May.210

BOSTON TEA PARTY

To prevent the Tea Act from submerging autonomy of the colonial market it was indispensable to keep the consumer from ever having the choice; the consumer would, stupidly, without understanding of the issues, choose the cheaper tea to the favor of British government. All involved understood that the general public could be trusted not to buy the English tea only by securing ahead of time that there would be no tea there to be bought.211 The merchants started the opposition to the Tea Act, so that they wouldn’t get closed out by English monopolies, but to motivate the boycott they had to talk about representation and rights etc. which was not interesting to them, but necessary to involve the sympathy of the common people, who would need to be persuaded that it was a bad thing to buy tea at half price. A minority of more intelligent activists, working for the sake of the people, but against their superficial inclinations, had to prevent the people from having free choice (possibly in contradiction with their slogans of rights and freedom); the English shipment had to be prevented from reaching the colonial retailer.212 In the autumn of 1773 the colonists tried to preempt the Tea Act by pressuring the consignees to resign prior to arrival of the tea. Samuel Adams tried to intimidate the tea agents through mob action; on November 2nd the North End Caucus (alias: Sons of Liberty) handbills gave public notifi cation of a meeting at Liberty Tree on the 3rd of November, where the tea agents were to publicly renounce their consignments. The consignees did not appear; thereupon a mob moved to Clark’s warehouse, where the consignees were, and the mob damaged the warehouse while taking care not to infl ict physical harm. On the 5th of November, 1773, John Hancock headed a committee to require the consignees to resign. The consigned tea agents were colonial merchants who sided

210 Cf. Middlekauff, Robert; The Glorious Cause The American Revolution 1763-1789, Oxford University Press, 1982, p. 231. 211 Cf. Schlesinger, Arthur Meier; The Colonial Merchants and the American Revolution 1663-1776, Frederick Ungar Publishng Company, New York, 1957, p. 279. 212 Cf. Shannon, Fred A.; America’s Economic Growth, Macmillan, 1951, p. 101.

－ 413 － D. Morgan Pierce with England, and they would greatly profi t from their positions as tea agents; they refused to resign. The deliveries were to arrive in November, 1773; the political radicals tried to force the customs agents to prohibit the unloading of the tea; they also refused.213 On November 5th Boston formally united with New York and Philadelphia by accepting resolutions that bound them to obtain resignations from the tea agents. This failed; a second committee lead by Samuel Adams and John Hancock then demanded resignations from the Hutchinsons at Milton; this also failed. On the 18th of November in response to news of the tea’s imminent arrival, the town again demanded resignation, and the Hutchinsons again resolutely refused. The consignees held to their commissions from the East India Tea Company, and stalemate held through the end of November.214 On December 7th, 1770, Hillsborough had announced that Thomas Hutchinson and Andrew Oliver were to be appointed Governor and Lieutenant Governor of Massachusetts at an annual salary from the tea duty of ₤1,500 and ₤300, respectively.215 In 1771 they enacted their royal appointment; their salaries were to be paid from the revenue of the Townshend tea duty.216 The fi ve holders of the Boston tea commissions were the two sons of Thomas Hutchinson, one nephew of Thomas Hutchinson, and two Clarks, who were friends intermarried with the Hutchinson family. The appointment to commissioner of the Townshend duties was to be highly lucrative; any such post could collect private and arbitrary fees.217 From 1768 the salaries of the Attorney-General of New York and the Chief Justice of Massachusetts were paid through the tea duty; on the 21st of June 1770 the new Governor of New York, Lord Dunmore,

213 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 300. 214 Cf. Middlekauff, Robert; The Glorious Cause The American Revolution 1763-1789, Oxford University Press, 1982, p. 224. 215 Cf. Thomas, Peter D. G; The Townshend Duties Crisis, The Second Phase of the American Revolution 1767-1773, Clarendon Press, Oxford, 1987, p. 212. 216 Cf. Christie, Ian R., and Labaree, Benjamin W.; Empire or Independence 1760-1776, W.W. Norton & Company, Inc., New York, 1976, p. 150. 217 Cf. Hoerder, Dirk; Boston Leaders and Boston crowds, 1765-1776; Cf. Young, Alfred F.; The American Revolution Explorations in the History of American Radicalism, Northern Illinois University press, DeKalb 1976, p. 243.

－ 414 － FROM INDIA TO THE BOSTON TEA PARTY was salaried ₤2,000 through the tea duty; Dunmore was forbidden to accept a salary from the New York Assembly. The most pernicious element of the Townshend Acts, the civil list, was progressing. Aside from Thomas and Elisha Hutchinson, every other East India Company tea agent in Massachusetts was either a Hutchinson, or a close political, inter-married ally of Hutchinson, occupying Hutchinson-appointed government posts. One might reflect on the legality or, more broadly, the propriety of appointing the Governor of Massachusetts, Thomas Hutchinson, to be at the same time the offi cial agent of the East India Company, making him the chief benefi ciary of the Boston tea trade, a commercial position, simultaneously as he was governor of Massachusetts, for which he depended on the Townshend duty for his salary as governor. Hutchinson became intransigent only after his salary was made independent of the Massachusetts Assembly; deriving as it did from the Townshend revenue, the British had conveyed that Hutchinson would remain unpaid if the Townshend Duty failed. It is plausible that if Hutchinson’s salary had not been made dependent on the Townshend duty, the provocation that built up into the Boston Tea Party would never have materialized. Hutchinson twelve years earlier had enforced the writs of assistance and afterwards the Stamp Act; he had used his British favor to build an oligarchy that excluded all colonials interested in the common good of the colony from positions of government.218 The Bostonians hated Hutchinson so much that twelve years earlier they had demolished his house; it was perhaps a sign of Parliament’s arrogant obstinacy that it kept a man, so violently hated, in power over those same people for the subsequent twelve years. It was so evidently foolish to keep such a man in charge of English interests that it would be irresponsible to ascribe the decision to stupidity; one perhaps has to analyze the behavior of Parliament more dispassionately. Without Hutchinson’s vindictive insistence on the unloading of the tea that started the tea party, and if Parliament had not installed a person with a passionate hatred of the people he governed, the Tea Party could not have occurred.

218 Cf. Nash, Gary; The Unknown American Revolution; The Unruly Birth of Democracy and the Struggle to Create America; Viking, 2005, New York, p. 21.

－ 415 － D. Morgan Pierce

Anticipating, another highly peculiar instance of this behavior pattern was the Coercive Acts. Normally the Coercive Acts are narrated as if they were a common-sense reaction to the Boston Tea Party, needing no explanation, but in fact, qua reaction, the Coercive Acts should strike one as having been irrational. The independence of Hutchinson’s salary from the will of the Assembly enabled Hutchinson and his associates to be intransigent on the occasion of the Tea Party. No; not “enabled; forced; Parliament, by arranging to pay Hutchinson out of the tea duty, confi gured the situation so that Hutchinson would not be paid at all if the direct sale of English East India tea were not effected. This was in conformity with the intent of the Townshend and Tea Acts; as Hutchinson and every other member of his nepotistic government oligarchy were to be paid from the tea revenues, and from nowhere else, British government was encouraging him to err on the side of temerity. Hutchinson did not fall blindly into his situation; he had had the guns of Castle William set up to be able to destroy any ship passing out of the harbor without permission; this order was issued before the arrival of the tea ships and before Samuel Adams’ petitions. Anticipating that the tea ships might try to escape through another channel, he had two warships, previously laid up for the winter, stationed to prevent passage out of other harbor exits.219 Samuel Adams held another mass meeting on November 29th and November 30th, the days on which the East India Company ships came into Boston harbor; each meeting comprised about 5,000 people. The meetings formulated a very simple, slogan-like demand: the tea must be returned to England. One should remember that although Hutchinson was immune to the Boston Assembly regarding his salary, the Crown made it quite evident that Hutchinson would be paid by the Crown, and keep his position as Governor, only if the tea duties were paid. Thomas and Elisha Hutchinson insisted on unloading the tea.220 Resolutions from Samuel Adams’ meetings were sent in written form to the consignees, who had fl ed for safety to the British army in Castle William. Being with the British army in a fort, the consignees had no

219 Cf. Schlesinger, Arthur Meier; The Colonial Merchants and the American Revolution 1663-1776, Frederick Ungar Publishng Company, New York, 1957, p. 288. 220 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 301.

－ 416 － FROM INDIA TO THE BOSTON TEA PARTY diffi culty in rejecting the demand; thereupon Samuel Adams had the Dartmouth, the ship with the fi rst tea delivery, tied up and guarded at Griffi n’s Wharf.221 The colonial sequestration of the Dartmouth was merely a gesture; with British men-of-war in the harbor, the British could have retrieved the ship at will. The fi nal alternative for the town was to prevent the unloading of the tea.222 British law stipulated that the Customs Offi ce would seize all goods from a ship if the customs duty were not paid within 20 days of arrival. From past experience the radicals reasonably feared that seizure and storage would eventuate in dispersal of the tea through the consignees, and defeat of the boycott. The owner of the Dartmouth, Francis Rotch, wanted to unload the tea, and the consignees were in a coercive dilemma. If the tea were not unloaded, the consignees would be liable to the East India Company for the fi nancial loss of the cargo, because British law prohibited the tea, once exported from England, from being reimported into England. The date of the twenty-day deadline was December 16th.223 England had made re-importation of tea exported from England illegal; thus Parliament had forced the Company to sell its tea in the colonies, in that the ships would not be allowed into any English port unless they had unloaded their tea in the colonies. It was presumably illegal for the ships to unload this tea in Europe without British permission, but it was better than to face the violence of a colonial port. However, uniquely in Boston Gage’s British army had been encamped previously to the delivery of the tea; there were canon on the coast that could sink any ship that attempted to leave the port illegally, and the British men-of-war in Boston Harbor, had, in preparation, trained its canon on Boston and could reduce every building in Boston to cinders in ten minutes. Whereas ships bound to other colonial harbors did turn away, the British military and navy stationed in Boston gave Hutchinson and the other royal offi cials

221 Cf. Middlekauff, Robert; The Glorious Cause The American Revolution 1763-1789, Oxford University Press, 1982, p. 225. 222 Cf. Resistance, Politics, and the American Struggle for Independence, 1765-1775, Editors Conser, Walter .F. Jr., McCarthy, Ronald M., Toscano, David J., Sharp, Gene, Lynne Rienner Publishers, Boulder, Colorado, 1986, p. 220. 223 Cf. Middlekauff, Robert; The Glorious Cause The American Revolution 1763-1789, Oxford University Press, 1982, p. 225.

－ 417 － D. Morgan Pierce the audacity to insist on unloading the tea.224 Hutchinson had left Boston in order to be out of danger, and he harbored profound hatred for the people of Boston; it appeared to him quite safe to face down the Boston population.225 The ship was not allowed to leave Boston Harbor without fi rst unloading, also according to British law; if the tea were to be confiscated instead of transacted, it would be a defeat for Boston. The tea could be confiscated on the 17th of December. Hutchinson abetted the British interest by refusal to authorize the departure. The tea on the Dartmouth and two other ships were on the verge of being taken by the British to Castle William; thereupon the tea agents would surreptitiously pay the duty and market the confiscated tea. Committees of correspondence coordinated three days before the deadline, although it is unknown when the decision had been made to destroy the tea as a fi nal resort. A mass meeting on the 14th of December told Rotch to request permission to leave Boston harbor; ten of the group accompanied Rotch to the customs officers; on the 15th of December, Richard Harrison, a victim of the Liberty riot in 1768, now the customs collector, refused permission. On December 16th Rotch was sent to Milton to petition Governor Hutchinson for clearance to leave Boston. Hutchinson once again refused a fi nal, desperate plea by the Bostonians and the merchant. Hutchinson refused, but he offered Rotch to obtain naval protection from Admiral Montagu. This was odd: Rotch declined. If the men-of-war had been authorized to protect the Dartmouth, the Boston Tea Party would have been impossible. If by December 17th the merchant did not unload and pay duties on the tea, Hutchinson said that the customs offi cials would confi scate the tea from the merchant and sell it by auction. The tea was destroyed in consequence of this last minute refusal, penultimately to confi scation of the tea by the English government.226 Rotch returned from Milton at six in the evening, and reported Hutchinson’s refusal. The Boston colonials who perpetrated the Tea Party had used every imaginable restraint, repeatedly, to avert the Tea Party. Mass meetings

224 Cf. Gunderson, Gerald; A New Economic History of America, McGraw-Hill Book Company, 1976, p. 85. 225 Cf. Gunderson, Gerald; A New Economic History of America, McGraw-Hill Book Company, 1976, p. 85.

－ 418 － FROM INDIA TO THE BOSTON TEA PARTY of between 2,000 to 5,000 participants had been repeatedly organized to alert Hutchinson to the seriousness of their opposition, but he refused to issue a pass by which the two ships could depart. In this meeting Samuel Adams announced “there was nothing more they could do to save their country, and shortly afterwards the Tea Party commenced.227 Hutchinson could not have failed to appreciate that refusal to sign the pass would release greater violence than in the 1765 Stamp Act crisis.228 He had absconded from Boston to Milton because he was in fear of his life. On December 16th, hours before customs confiscation, men disguised as Indians boarded the three ships and dumped the entire tea shipment (342 chests) into the harbor.229 The colonists had delayed action until the last possible minute; they had for months previously repeatedly petitioned against the tea shipment. In the months previous the demands on the tea agents to resign had been carried out peacefully; none of the agents had been threatened with physical harm. The Tea Party itself involved no violence beyond the destruction of tea; the other cargo and the ships were unharmed, and not a single individual was physically hurt. At the end of 1773 the colonists had overcome the Tea Act; the East India Company “found that at Boston it still had agents but no tea, at Charleston, tea (held by the Customs offi cers) but no agents, and at Philadelphia and New York neither agents nor tea.”230 The tea ships that arrived in New York City, Charleston, and Philadelphia either returned to London unloaded, and illegal, or the customs officers put the tea in storage, from which it could

226 op. cit. On December 16, Hutchinson’s final declination was communicated to a crowded assembly at the Old South Meetinghouse. Instantly, the word was given, a band of Indians boarded the vessels, opened the hatches, hoisted out the tea, and threw it over the side, while two thousand spectators stood approvingly by. 133 227 Cf. Middlekauff, Robert; The Glorious Cause The American Revolution 1763-1789, Oxford University Press, 1982, p. 226. 228 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 156. 229 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University press, 2004, p. 301. 230 Cf. Resistance, Politics, and the American Struggle for Independence, 1765-1775, Editors Conser, Walter .F. Jr., McCarthy, Ronald M., Toscano, David J., Sharp, Gene, Lynne Rienner Publishers, Boulder, Colorado, 1986, p. 222.

－ 419 － D. Morgan Pierce not be marketed.231 It was all accomplished without physical violence. Plausibly to belie the pusillanimous interpretation the English had imputed to the Tea Party (tax evasion), the Massachusetts colonists covering more than forty towns imposed a consumption ban of both English and smuggled tea on themselves. Although the Tea Party had been in principle a defense of the colonial merchants in the tea market, the very same merchants resolved to stop any sale of legal or smuggled tea as of the 20th of January, 1774. The Boston Tea Party was not a narrow revolt against taxation, since the tea tax pre-existed the tea party by several years, and the party revolted against what promised to be an immediate economic gain for the colonies. The urgency was in the ominous power of parliamentary taxation to debilitate the capacity of the Boston economy to sustain legislative autonomy. The article in the Tea Act by which the East India Company could eliminate colonial handlers as far down, and including, the retailers, was a principle that the colonials had to refuse, whereas the British again trivialized the Tea Party by interpreting it as mere refusal to pay an insignifi cant tax.232 In fact, the colonists burnt much more tea that they had already paid for than what they had tossed into Boston harbor, because the call for non-consumption of tea included destruction of that already possessed.233 The voluntary scheme of the previous embargo had failed; the first Continental Congress instituted a coercive organization, the Continental Association, to monitor compliance throughout the colonies.234

THE COERCIVE ACTS

The English were indignant at the Boston Tea Party because they had imagined that the Tea Act was a win-win situation; why should the colonists riot against a tea price that was cheaper than any price they previously had, even including the price of smuggled imports? The

231 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 301. 232 Cf. Sakolski, A. M., and Hoch, Myron L.; American Economic Development, Thomas Nelson and Sons, 1936, p. 53. 233 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 309. 234 Nonimportation December 1st, 1774; nonconsumption March 1st, 1775, and nonexportation September 1st, 1775. Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 325.

－ 420 － FROM INDIA TO THE BOSTON TEA PARTY

English supposed that the Boston Tea Party was motivated by nothing more than tax chiseling. Colonial indignation developed from their assessment that the matter of principle would not inhibit the colonial retailers and consumers from purchasing the tea. Although tea would be cheaper than ever before, it would still carry the Townshend tea tax; the boycott on English tea had silently persisted because of this tax. Until this moment the protest was smothered because retailers bought smuggled instead of dutied tea. If the colonial public would buy the East India Tea, it would thereby establish that colonies endorsed Parliamentary taxation, thus encouraging new parliamentary schemes to capitalize on the precedent. Just as the Tea Act would wipe out the business livelihood of colonial tea merchants, further English export companies would emaciate colonial economy by replacing colonial wholesalers with their own agents. English rage at the Boston Tea Party was nevertheless contrived. The English people did not know that the colonials had petitioned Parliament months before the tea delivery; that Parliament refused to allow the petitions to be heard; that colonial agents were refused communication; that all of the colonial assemblies had been suspended by the Crown; that Hutchinson would lose his salary if the delivery did not succeed; that the colonists had rallied many times during the twenty days to have the tea withheld; that the party was delayed until the last possible minute; that the colonists caused no collateral harm when they dumped the tea. If Members of Parliament were aware, it suited their pride not to acknowledge such features, and it was moreover much better for their side in the propaganda not to publicize these aspects. In any case, in order to feel good about oneself when murdering someone, just prior to shoving the knife in one must fabricate a thoroughly degrading image of the victim that negates any positive quality the victim may pretend to have. Two days after the news of the Boston Tea Party, on July 29, 1774, the Privy Council, under Gower, called Benjamin Franklin, as agent for the Massachusetts legislature, into the “cockpit” to testify over a colonial petition that Hutchinson and Oliver be removed from offi ce. The hearing was a pretext; the occasion had been staged for the public vilification of Franklin. The ostensible ground for the hearing was not aired; instead Alexander Wedderburn, the Solicitor General, for over an hour vituperated Franklin before 35 privy counselors and a large parliamentary audience.235

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Benjamin Franklin, by far the most world-famous of the colonials, had his reputation destroyed by Wedderburn’s invective. Franklin had sent letters of Thomas Hutchinson to Boston, in the intention to divert Bostonians’ anger from London to Hutchinson. Hutchinson had written a letter calling for an “abridgement of what are called English liberties” in the colonies, as the best way to keep them in British subjection.236 Parliament however interpreted Franklin’s divulgence of the letter to be a provocation of the colonists against the English. Franklin had confessed his agency in divulging the letters in order to prevent a duel arranged between two innocent associates. On the day following the cockpit Franklin resigned his offi ces, and British government stripped Franklin of his offi ce of deputy postmaster general of the colonies.237 He returned to the colonies shortly afterwards. He received the vituperation in silence; he could preserve dignity best in such a situation by saying nothing in his own defense. The petition for removal of Hutchinson and Oliver was refused. The vicious public humiliation of Benjamin Franklin, as vicarious punishment for an event in which he had no role, was childish. The Boston labor class did not come in unison when the Boston merchant class came forth to assuage British anger immediately after the party by pledging reimburse the East India Company. The precipitate entreaty to pay damages fed into the British predilection to view the Tea Party as a thoughtless, criminal act performed by stupid people. Boston did not regret the Tea Party, and evidently it was not unpremeditated; within a month another British ship loaded with tea came into Boston Harbor; the Bostonians once again boarded the ship and dumped its thirty chests of tea into the harbor.238 Philadelphia had voted for full endorsement of the Boston Tea Party. Interestingly, the Quaker and Anglican merchant class of Philadelphia rallied, regained political ascendancy, and reversed the initiative of the labor class.239 Again

235 Cf. Middlekauff, Robert; The Glorious Cause The American Revolution 1763-1789, Oxford University Press, 1982, p. 227. 236 Cf. John C. Miller, Origins of the American Revolution, Little, Brown and Company, 1943, p. 58. 237 Cf. Ritcheson, Charles; British Politics and the American Revolution, University of Oklahoma press, 1954. 320 pages, p. 159. 238 Cf. Ketchum, Richard M.; Divided Loyalties, How the American Revolution Came to New York, Owl Books, Henry Holt and Company, New York, 2002, p. 262.

－ 422 － FROM INDIA TO THE BOSTON TEA PARTY the colonial classes were divided within themselves. Reacting to the Boston Tea Party, Parliament issued the Coercive Acts to assert belligerently its sovereignty over Boston. If there was ambivalence about the Tea Party in the colonies, there was none in the monarchy; the Coercive Acts were signed by the King without modifi cation. The first two were signed on May 20th, 1775; two weeks later he approved the Quartering Act, which had gone through Commons without division, and also Lords, although Chatham opposed it.240 Possibly the English indignation deriving from a false reception of the Tea Party accounts for how deeply irrational the Coercive Acts were. The underlying assumption seems to have been that if a person who is refractory should be utterly humiliated, the trauma of the humiliation will inhibit the individual from repeating the infraction. Possibly the tactic would have worked with a port of trade, but not with a society that had matured over a period of 150 years, was three thousand miles distant, was commercially very attractive to rivals of the mother country, and had a population at least one third of that of the mother country. The English rhetoric of the pre-revolutionary era constantly refers to the colonies as “our children, with peripheral remarks on their naughty behavior and need for chastisement, etc. The Boston Port Act ruled that Boston would be deprived of oceanic commerce at least until the destroyed tea had been paid for. The Boston Port Act blockaded Boston harbor entirely until Boston paid for the tea. Put bluntly, Boston was to be starved into submission. Prior to the second coercive act, i.e. the Regulatory Act, on March 9th, 1774, Boston for the second time attacked a ship and destroyed 30 chests of tea; outlawing town meetings, an article of the new Act, was to break the committees of correspondence, which orchestrated such attacks and were dependent on the town meetings. Town meetings were to be held only by permission of the Crown. The Massachusetts Government and Administration of Justice Act prohibited the traditional Town Meetings and suspended the Massachusetts Assembly. Hitherto the Massachusetts Assembly had elected the members of Council; however the

239 R. A. Ryerson, ‘Political Mobilization and the American Revolution: The Resistance Movement in Philadelphia, 1765 to 1776” The William and Mary Quarterly, third series, 31, 1974, p. 568. 240 Cf. Middlekauff, Robert; The Glorious Cause The American Revolution 1763-1789, Oxford University Press, 1982, p. 231.

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Massachusetts Council had been seen to sympathize with the colonists. The Administration of Justice Act therefore instituted royal appointment of council members in place of election.241 The governor would be empowered to appoint and remove all offi ce-holders. Sheriffs, i.e. royal appointees, would select members of jury. North described the Regulatory Act as an effort “to take the executive power from the hands of the democratic part of government.”242 The Massachusetts Regulatory Act violated the colonial charter; it converted Boston into a royal colony. The Impartial Administration of Justice Act stipulated that any royal official accused of crime could have his trial held in England or another colony.243 Barré objected during deliberation of this Act, warning Parliament that passage of this Act would move the colonists into open warfare.244 All British soldiers and royal offi cials were sequestered from liability to colonial courts.245 The Quartering Act enabled the governor to commandeer private houses in any colony or town for quartering soldiers.246 The New England Restraining Act of March 30th 1775 limited Boston trade to Great Britain and Ireland and denied fi shing rights off Newfoundland and Nova Scotia. Fishing was essential to the commerce and sustenance of New England; the Caribbean trade was indispensable for the New England economy; by extension, the New England – Caribbean trade was essential

241 Cf. Schlesinger, Arthur Meier; The Colonial Merchants and the American Revolution 1663-1776, Frederick Ungar Publishng Company, New York, 1957, p. 305. 242 Cf. Ritcheson, Charles; British politics and the American Revolution, University of Oklahoma press, 1954. p. 160. 243 Cf. Middlekauff, Robert; The Glorious Cause The American Revolution 1763-1789, Oxford University Press, 1982, p. 230. 244 Cf. Ritcheson, Charles; British Politics and the American Revolution, University of Oklahoma Press, 1954, p. 163. 245 Cf. Nash, Gary; The Unknown American Revolution; The Unruly Birth of Democracy and the Struggle to Create America; Viking, 2005, New York, p. 90. 246 Op. cit. The Boston tea party needled Parliament into passing, and George III into signing, a series of laws that Americans referred to as the Coercive, or Intolerable, Acts. Therese were, in order, the Boston Port Act; which virtually blockaded Boston until it chose to pay for the tumbled tea; the Massachusetts Government and Administration of Justice Acts, chastising the government of that naughty province; and the Quartering Act, which empowered royal governors to commandeer private houses in any colonial town for quartering soldiers.

－ 424 － FROM INDIA TO THE BOSTON TEA PARTY for trade with England. The Restraining Act was intended to intimidate the other colonies by demonstrating the quick destruction of Boston. In the wake of these punitive Acts Parliament ratified the Quebec Act of June, 1775, which, though not intended to be punitive, was received with more injury than the acts that were meant to be punitive.247 The Quebec Act conclusively granted the Northwest Territory to the French in Quebec, although the several colonies had been vying to claim that territory for decades.248 The Quebec Act nullified three colonial land enterprises, one of which, the Ohio Company, had already been preliminarily ratifi ed. The Quebec Act arrogated all of the territories pertaining to the land companies into Quebec and outlawed any migration into these territories by colonials; the new territory was reserved for the French and Indians, the peoples whom the colonials fought in the previous war. The Lexington and Concord skirmishes occurred before Boston was informed of the Restraining Act. Perhaps on the basis of the depreciative interpretation government had made of the Boston Tea Party, the cabinet predicted that the Coercive Acts would alienate Boston from the sympathy of the other colonies because the criminality of the vandalism was so unambiguous; they had not even entertained the possibility that the Coercive Acts would unite the colonies in sympathy with Boston.249 Parliament was prorogued on June 22nd. It was assumed that belligerence would intimidate the colonies. Perhaps Hutchinson had behaved as truculently as he had in order to make a good impression on England; having arrived in England and never again to see his native Massachusetts, he infl ated his reputation by promoting the fl attering view that the colonies would immediately collapse before British resolve.250 The Quebec Act had been deliberated independently but was promulgated at the same

247 Cf. Middlekauff, Robert; The Glorious Cause The American Revolution 1763-1789, Oxford University Press, 1982, p. 231. 248 Cf. Shannon, Fred A.; America’s Economic Growth, Macmillan, 1951, p. 101. 249 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 158. 250 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 168.

－ 425 － D. Morgan Pierce time as the Coercive Acts; it is usually admired as a historically fi rst time for having shown tolerance to a religious opponent.251 It formally preserved the French legal system and the Catholic Church in the territories acquired from France at the close of the Seven Years War. In the light of recent British policies the maneuver was not as surprising as it is always made out to be. The British had assigned self-government to the American colonies; Britain governed India with native Mogul, not British law. Britain allowed government at second remove whenever cultural divides would make British law and government too cumbersome. England could not instantly force British government, or religion, on a population that had never functioned according to anything but French Catholicism, and the population was too large to be expelled or exterminated. The Quebec Act of 1774 did not evidence a newly felt tolerance for Catholicism.252 The Society for the Propagation of the Gospel, an organization of the Anglican Church, had established a mission at the front gates of Harvard College, a major symbol of the Congregational Church; this mission was to convert not Indians, but Congregationalists, to the Anglican Church. At the same time English government prohibited the Congregational Church from sending missionaries to the Indians.253 Britain did not palliate the native laws against Catholics and low-church Anglicans on English soil. The British had not deliberately planned on the annexation of the French territory; Britain bad been predisposed to take the French Caribbean islands and leave Louisiana, Ohio, and Canada to the French. When the Ohio Valley and Canada were instead acquired, the British had no prevision of how they would manage a long established French colonial population. Since Elizabeth the English regarded Catholicism as their most formidable enemy; it is unreasonable to contrast the English as tolerant and the colonists as ignorantly prejudiced against Catholicism, or that the English were less hostile

251 Cf. Samuel Eliot Morison, The Oxford History of the American People, Volume One, Meridian Books, 1994, p. 283. 252 Cf. Rhys, Isaac; Preachers and Patriots: Popular Culture and the Revolution in Virginia; Cf. Young, Alfred F.; The American Revolution Explorations in the History of American Radicalism, Northern Illinois University press, DeKalb 1976, p. 145. 253 Cf. Alden, John R.; A History of the American Revolution, Da Capo Press, 1989, 541p. 41.

－ 426 － FROM INDIA TO THE BOSTON TEA PARTY to Catholicism than the colonists. Difference in attitude between the colonials and England towards the Catholic community was due solely to the colonists’ proximity to the Catholics. The Great Awakening, which infl amed the colonies just prior to the French and Indian Wars, was at root a revolt against the Anglican and other Protestant sects for apparently having lost too much of their Protestantism. One of the main factors of more evangelistic sects, such as Puritanism, Baptism, and Quakerism, in both the colonies and England, had been perception that the Anglican Church had never been sufficiently different to preclude reconciliation with the Catholic Church. The Protestant colonial culture had originated as escape from the corruption and evil of the British government embracing the Anglican Church. If now Britain presumed to allow only Anglican missionary activity in the colonial territory, and planned the institution of Anglican bishoprics in the colonies, the Protestant colonists would revive their image of themselves as refugees from evil. The colonials had substantiated the spiritual difference between themselves and England in their possession of a working proto-democratic representative government. English government was viewed as evil and corrupt in its social hierarchy, its having stationed a standing army, in its formal acceptance of Catholicism in regard to the French Catholics, and in the protection of the extortions of the Customs Service through the Administration of Justice Act.254 The colonists were alarmed that political and economic freedom was being given to the very population which had threatened within the same decade to encircle and destroy the British Protestant colonial settlements. In 1754 the French had pursued a vague, but deliberate, plan of encircling the British colonies and finally extinguishing them, together with their Protestantism; the British colonies since inception had been aware that Catholicism aimed at their own extinction. The population that was given the rights of Catholicism was this same people, and the British Ministry had explicitly theorized that having a French Catholic population at their backs would make the British colonists more compliant with London. The hypocrisy did not dwell in the colonial horror at Catholicism, but in the illusion that England,

254 Cf. Middlekauff, Robert; The Glorious Cause The American Revolution 1763-1789, Oxford University Press, 1982, p. 239.

－ 427 － D. Morgan Pierce having permitted Catholicism, was not as strongly disposed against French Catholicism. The colonies had invited Quebec to Philadelphia, and Quebec refused. Some of he English elite publicly expressed regret at their decision to take the new territory, asserting that fear of the French would have kept the colonists from complaining about British legislation; Lord Lyttleton, in formal debate in the House of Commons, expounded the value of the operating Quebec Act expressly as a method to revive a powerful French-Indian threat to the colonies, and thereby to keep them tractable and intimidated.255 Thomas Jefferson responded to this inconsideration in 1774 with the declaration that the new territories were not in the King’s domain; in effect this was a denial of the terra Regis doctrine, with the implication that the King was not authorized to issue the Quebec Act.256 The King’s prerogative had largely lost respect in the colonies; the ministerial behavior exhibited an effort to preserve the power of royal prerogative in the new territories from its degeneracy in the old settlements.257 When the first of the Coercive Acts became known, Samuel Adams, supported by the town meeting, called for a total trade embargo on Great Britain and its dominions. The non- importation pact of 1770 had collapsed due to mutual suspicion of cheating, and many groups had taken advantage of other groups’ observance of the boycott.258 The merchant groups would not refrain from trade unless it was certain that other groups would not take advantage. A uniform policy failed to materialize. The merchants attempted to dissolve the Committee of Correspondence and the Solemn League by a petition of over 100 merchants. Paralysis, not victory, ensued; the non-importation policy was carried, but was disavowed by the class most centrally concerned.259 The embargo virtually located the native colonial merchants on the

255 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 167. 256 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 166. 257 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 167 (1774). 258 Cf. Middlekauff, Robert; The Glorious Cause The American Revolution 1763-1789, Oxford University Press, 1982, p. 234.

－ 428 － FROM INDIA TO THE BOSTON TEA PARTY enemy side of the confrontation; inasmuch as it imposed the greatest sacrifi ce on the merchant class that was unwilling to accept it, the colonials could not claim a united front. The non- consumption policy enabled the revolutionary groups to set their supervisory groups against the retailers as well as the wholesale merchants.260 The first convention of the Continental Congress was on September 5th, 1774. Instead of violent defiance of the Coercive Acts the Congress emitted a “Declaration of Rights and Results,” appealing to the “immutable laws of nature, the principles of the English constitutions, and the several colonial charters and compacts,” but perhaps more persuasively it organized a pan-colonial boycott on English import and export, not effective immediately, but only in the case that Parliament did not rescind the Coercive Acts by December 1st, 1774.261 This response was not belligerent, nor did it give evidence that the colonies wanted independence. Quite similar to Benjamin Franklin’s Albany Plan of 1754, Joseph Galloway had presented a “Plan of Union;” it was stronger than Franklin’s plan because it contained a clause that entitled the federated colonial council to veto Acts of Parliament relating to the colonies. The Galloway proposal was scuttled because of apprehension of an impending British naval attack on Boston; the rumor gave the radical wing of the convention ascendancy. Instead of the prior Plan of Union the delegates issued on September 17th, 1774 a declaration to defy the Coercive Acts, and a resolution to withhold tax payment until colonial government achieved a constitutional foundation. In mid-October 1774 the Congress released its “Declaration of Rights and Resolves,” which argued for a colonial union on the ground that because the colonies could not have adequate representation in Parliament, they should retain a power of self-legislation in their own territory. Within a few days Congress organized the association for the boycott of British trade.262 The contraposition of the Galloway Plan of

259 Cf. Middlekauff, Robert; The Glorious Cause The American Revolution 1763-1789, Oxford University Press, 1982, p. 233. 260 Cf. Breen, T.H.; The Marketplace of Revolution, Oxford University Press, 2004, p. 20. 261 Cf. Nash, Gary; The Unknown American Revolution; The Unruly Birth of Democracy and the Struggle to Create America; Viking, 2005, New York, p. 90. 262 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 177.

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Union and the Declaration of Rights and Resolves epitomizes the fi nal rift between commerce and labor; afterwards Galloway became a loyalist and took the side of the English in the war. The ministry did not send troops following colonial reaction to the Coercive Acts because they would then have lacked military defense against possible French attack in England; the English presumption that they had enough force to coerce the colonies had been unrealistic.263 Both Lord Sandwich, fi rst Lord of the Admiralty, and Barrington, Secretary at War, opposed military reinforcement of the colonies because of the threat of France. Barrington had argued to Dartmouth that the military conquest of the colonies would place Britain in unacceptable jeopardy, and therefore recommended that all British troops be withdrawn from the colonies; he recommended that the colonies instead be broken by naval blockade. But the idea of naval blockade was abandoned; if Britain had supplied enough ships to accomplish a blockade she would lack naval defense in the European area against France. Until 1774 Lord North had declined Sandwich’s requests for a larger navy because it would antagonize France. Although in 1774 France began to build a larger naval force, both North and the King opposed building a greater navy, again, because building a larger navy in response to France’s naval construction – would antagonize France!264 This had developed prior to Lexington, prior to the Coercive Acts; war with France was dreaded long before Britain belligerently provoked the colonies. Charles Jenkinson, who was the main author of the Tea Act, in 1777 proposed that apart from coastal trade the colonies be prohibited from overseas trade with England; a ship from the colony of origin should be allowed, but otherwise all ships conducting colonial trade should be resident in the British Isles. The interest was in putting a fi nal end to the emergent capability of Boston to compete with the naval commerce of London, and, of course, if the colonies did not have a navy they would be utterly incapable of belligerence towards Britain.265 To the contrary, on April 10th, Fox advocated American independence as the only way to

263 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 171. 264 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 175.

－ 430 － FROM INDIA TO THE BOSTON TEA PARTY avoid war with France. Almost simultaneously with the same fear about British circumstances in India, Fox warned that retention of the colonies would in short order expand the royal patronage so much that the monarchy would achieve permanent control of Parliament.266 In 1783 Fox introduced his East India Bill. Between 1778 and 1783 the North Ministry had collapsed, the peace treaty with the United States of America was signed (1781), the Rockingham-Shelburne Ministry appeared and disappeared, and fresh political outrages emerged from the corruption of the East India Company. The chief inhibitor of nationalizing the Company had always been dread of the power which Company patronage would give to the King; even without the Company patronage, about two thirds of the Members of Parliament were dependent on the King’s patronage to keep their positions. Fox tried to skirt this issue in a proposal to vest most of the powers of the governor-general (i.e. the Company) to a body of government Commissioners, without thereby transferring the Company patronage to the King. But this idea merely managed to alienate both the King and the Company. If the King did not control the patronage, it did not follow that it disappeared; if not the king, then it would go to whatever political party controlled the selection of the Commissioners. Fox’s fl imfl am that the Commissioners would be divided, or politically neutral, persuaded no one. The younger Pitt, Dundas, Jenkinson, Thurlow, Robinson, etc. seized the opportunity to fl y to the King’s rescue, throwing up the trusty slogan of the Sanctity of the Charter. The East India Bill was defeated. Fox never became Prime Minister; on December 18th, 1783, just after the defeat of the East India Bill, the King requested Pitt to form a government.267 The end of the American War [1781] signified the end of the “first empire;” Britain became more dependent on India once she had lost the Atlantic colonies. Pitt, 1784: “India

265 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 216. 266 Cf. Ritcheson, Charles R.; British Politics and the American Revolution, Greenwood Press, Westport, Connecticut, 1954, p. 249. 267 Cf. Ward, W.R.; The Beginnings of Reform in Great Britain: Imperial Problems: Politics, Administration, Economic Growth, in Goodwin, A., editor; The American and French Revolutions 1763-93, The New Cambridge Modern History, Volume Eight, Cambridge University Press, 1965, London, p. 553.

－ 431 － D. Morgan Pierce had increased in proportion to the losses sustained by the dismemberment of other great possessions.”268 Between 1765 and 1818 the tax farm of the East India Company over India amounted to an annual revenue of £18 million, 1/3 of the total annual GNP of Britain, and this apart from the Company’s commercial revenue.269 Reform of India had been delayed by the American war, but in its wake Britain felt more stringently that she could not risk loss of India through the mismanagement of the Company; the ensuing India Act [1783] had proposed a Board of Commissioners that was to establish British control of the military and civil issues. The lobby protecting the Company’s charter rights was still very strong, so that the commercial and patronage monopolies of the Company remained inviolate. Pitt pronounced that the Company activities “were not in a state that called for the revocation of the charter;” in consequence the India Act tried to reform minimally, by strengthening controls already in place rather than by innovation.270

268 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 542. 269 Cf. Marshal, J.P.; Britain Without America- A Second Empire?; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 582. 270 Cf. Bowen, H. V.; British India, 1765-1813: The Metropolitan Context; Cf. Marshall, P.J., D. Phil., FBA, editor; The Eighteenth Century, The Oxford History of the British Empire, Volume II, Oxford University Press, 1998, p. 544.

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