The East India Company was incorporated by royal charter on December 31, 1600, to exploit trade with East and Southeast Asia; as well as India. Although it was originally organized as a monopolistic trading company, over a period of time it became more political in nature. The company was very influential, and its shareholders included some of the most prominent individuals in Great Britain. Originally, the company controlled a large area of India for trade purposes and even had its’ own army to protect the Company’s interests.

In the mid-18th century, tea from China became a very valuable and important import displacing cotton goods.

In 1757, the Company began its’ evolution into a ruling enterprise in India after the Company’s army defeated Siraj-ud-daulah, who was the last independent Nawab (governor) of Bengal at the Battle of Plassey. Within a few years, the Company was collecting revenues for the Mughal Emperor of India; which should have made the East India Company very wealthy. However, the famine of 1769-70 reduced India’s population by as much as one-third along with the costs associated with maintaining a large army placed the Company on the verge of Bankruptcy. In addition, the East India Company had been operating at a significant loss due to a tremendous decrease in sales of tea to the America. This decline had begun in the mid-1760s; by 1773 nearly ninety percent of the tea sold in America was from the Dutch and imported illegally.

In response, the British Parliament passed the Tea Act on April 27, 1773, and on May 10, 1773, King George III placed his royal assent on this act.

The major purpose behind the passage of the Tea Act was to keep the East India Company from going bankrupt. Essentially, the Tea Act lowered the duty the Company paid on tea to the British government and in doing so gave the Company a monopoly on the American tea trade allowing them to sell directly to the colonists. Thus, East India Tea became the cheapest tea to be imported to the American colonies.

When the British Parliament proposed the Tea Act, there was a belief that the colonists would not object in any form to being able to purchase cheaper tea. However, Prime Minister Frederick, Lord North, failed to take into consideration not only the power of the colonial merchants who had been cut out as middlemen from the sales of tea, but also the way the colonists would view this act as “taxation without representation.” The colonists viewed it this way because the Tea Act intentionally left in place a duty on tea that entered the colonies yet it removed the same duty on tea that entered England.

After the enactment of the Tea Act, the East India Company shipped its’ tea to several different colonial ports, including New York, Charleston, and Philadelphia all of which refused to allow the shipments to be brought ashore. The ships were forced to return to England.

In December 1773, three ships named the Dartmouth, the Eleanor, and the Beaver arrived in Boston Harbor carrying East India Company tea. The colonists demanded that the tea be turned away and sent back to England. However, the Massachusetts Governor, Thomas Hutchinson, refused to heed to the colonists’ demands.

On December 16, 1773, a group of colonists, many of whom were dressed in disguise as Mohawk Indians boarded the British ships and dumped 342 chests of tea into the chilly waters of Boston Harbor. Mmany believe their actions were signaled by the words of Samuel Adams during a meeting at the Old South Meeting House. This incident became known as the Boston Tea Party. It was one of the leading acts of defiance by colonists that would come to full fruition a few years later in the Revolutionary War.

Interestingly enough, General Charles Cornwallis (who surrendered the British army to General George Washington at Yorktown on October 18, 1871) was the governor-general and commander in chief in India from 1786 until 1794.