The East India Company had previously been…
June 1773 CE
The East India Company had previously been required to sell its tea exclusively in London on which it paid a duty which averaged two shillings and six pence per pound.
The East India Company will now be allowed to export its tea directly to the colonies without paying the taxes it was paying in London "to export such tea to any of the British colonies or plantations in America, or to foreign parts, discharged from the payment of any customs or duties whatsoever", and instead only be required to pay the Townshend import duty of three pence a pound.
The Company is important to the British Empire because it is a monopoly trading company in India and in the east and many influential people are shareholders.
The Tea Act is intended to aid the company's finances, which are close to collapse because it is paying the British government four hundred thousand pounds per year, war and famine in India, and economic weakness in European markets.
The Company has been unable to meet its commitments since 1768 because of the loss of tea sales to America.
About eighty-five percent of all the tea in America is smuggled Dutch tea.
The Company owes money to both the Bank of England and the government: it has fifteen million pounds (6.8 million kilogram) of tea rotting in British warehouses and more en route from India.
Benjamin Franklin had proposed to the British government the idea of eliminating the tax on tea as a way to help the East India company.
Britain expects the colonists to be happy to be paying less for their tea.
Lord North decides to overhaul the management of the East India Company with the Regulating Act.
This is the first step to the eventual government control of India.
The Act sets up a system whereby it supervises (regulates) the work of the East India Company.
The Company has taken over large areas of India for trading purposes and has an army to protect its interests.
Company men are not trained to govern, so North's government begins moves towards government control since India was of national importance.
Shareholders in the Company oppose the Act, which commences on June 10, 1773.
The East India Company is still a powerful lobbying group in Parliament in spite of its financial problems.