Too big to fail

A giant corporation is in financial trouble. It’s overextended itself and cannot manage its debt load. A recession brought on by long and costly wars has shrunk its market. The company is so integral to the functioning of the nation — and so many members of its government are heavily invested in it — that it simply cannot be allowed to fail.

So, the government steps in, with a policy that will have unforeseen consequences that shake the world.

That thoroughly modern and familiar scenario was the catalyst behind an event that led directly to the American War of Independence: The Boston Tea Party of December 16, 1773.

The East India Company was, at its founding in 1600, a modern innovation — one of the world’s early joint stock companies. It was a “chartered company,” granted a charter from the government of England for monopoly on trade from the Indian subcontinent and eventually China. A similar chartered company left its footprints here in Oregon: The Hudson’s Bay Company.

The Company wasn’t just a trading concern. It had its own military forces (imagine Amazon with an army, navy and air force) and over the course of a century would establish its rule by force, bribery, and diplomacy across most of what is now India.

In 1773, the Company was in trouble. It owed a massive debt to the government of Great Britain. Markets had shrunk in a contraction after the Seven Years War (known in America as the French & Indian War) which was, in effect, a world war. It was awash in a massive overstock of Chinese tea, some 17 million pounds of unsold surplus.

Meanwhile, Great Britain was locked in a years-long roil with its American colonies over taxes Parliament had imposed to recoup the cost of defending its possessions from the French. The British government considered such taxes merely asking the Colonies to foot their fair share of the bill for victory in the French & Indian War; many colonists saw the taxes — imposed without colonial representation — as acts of tyranny.

By 1773, Parliament had rescinded almost all of the objectionable taxes — except for the 1767 Tea Act. The Tea Act granted the British East India Company license to export their tea to the American colonies at a subsidized rate that undercut colonial merchants, with a minimal tax remitted to Great Britain. Win-win-win. The East India Company could offload their massive tea surplus and pay down some debt, the British government could gently assert its right to tax the colonies, while the colonists could enjoy Chinese tea on the cheap.

The colonists weren’t having it. Several cities turned away East Indiamen ships and made them return to Britain. Others refused to offload the tea, which was simply left to spoil. In Boston, Massachusetts Lt. Governor and Chief Justice Thomas Hutchinson refused to allow three tea ships to return to Britain, while the anti-tax Sons of Liberty refused allow the tea to be offloaded.

On December 16, a party of Sons of Liberty dressed up as Mohawk Indians boarded the ships at Griffin’s Wharf and dumped 340 chests of tea —worth about $1 million in today’s dollars — into Boston Harbor. It was an orderly act of property destruction — no tea was stolen, the ships were left undamaged and Sons of Liberty protesters even reportedly swept the decks clean after their action.

The proverbial then hit the fan.

The British government was furious at the destruction of Company property and imposed harsh measures known as the Coercive Acts to bring Boston to heel and enforce repayment for the tea. For all intents and purposes, they imposed martial law on the city, and brought in troops to maintain order and enforce the Acts.

A powder train was laid that would explode less than two years later in the villages west of Boston known as Lexington and Concord. The echoes of that explosion resound to this day.

Author Bio

Jim Cornelius, Editor in Chief

Jim Cornelius is editor in chief of The Nugget and author of “Warriors of the Wildlands: True Tales of the Frontier Partisans.” A history buff, he explores frontier history across three centuries and several continents on his podcast, The Frontier Partisans. For more information visit www.frontierpartisans.com.

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