On this day 240 years ago, New England’s most famous independent wholesaler, John Hancock, and Congress’s stenographer, Charles Thomson, signed a parchment. We celebrate that signing annually, often by setting off low-tariff fireworks imported from China.
Most Americans know little about the background of this event. The details they recall from a high school textbook are incorrect. There is great confusion. The amount of misinformation is shocking. I am here to clear up some widely held misconceptions. (Note: I have a Ph.D in colonial American history. I have also been involved since 1974 in direct-response marketing. As far as I know, no one else has combined these two careers.)
In 1776, Hancock was well known to consumers in New England as a highly price-competitive wholesaler. His main competitor, the British East India Company, called him a smuggler. That’s what high-cost competitors who are losing market share often do. They smear the competition. This accusation went to court, but it was was not proven. His defense attorney had been John Adams.
Hancock’s competitor in 1773 had adopted a new marketing strategy. It cut prices to just below what Hancock could afford to meet. How? By persuading Parliament to cut import taxes on the company’s main item of commerce, tea. Only a small tax remained, which went to pay the salary of the governor of Massachusetts and a few officials.
Next, a group of Hancock’s associates who operated out of the Green Dragon Tavern responded by throwing the competition’s tea into Boston harbor. So, Parliament closed Boston’s harbor in 1774.
The debate grew more heated throughout 1774. British tea was now cheaper than the duty-free but illegal Dutch tea, which Hancock imported. But there was a solution: a highly successful direct-response marketing campaign run by Hancock’s long-term associate, Sam Adams. Adams had a serious marketing problem. He had to persuade people that reduced taxes and lower tea prices were a threat to liberty. This was a hard sell. But Adams was up to it. He ignored the obvious: low taxes and low prices are a good thing. Instead, he warned readers that Parliament could close every port. He also skipped over the reason why the Parliament closed the port: protesters had thrown private property into the water. In today’s money, this was over a million dollars’ worth of tea.
Beginning in 1772, Adams had begun putting together an in-house mailing list known as the Committees on Correspondence. The letters began going out. Incredibly, outraged readers began a national boycott against low-cost British tea. It another context, this would be called cutting off your nose to spite your face.
I realize that this is not the way all this is described in textbooks. This is a tribute to the effectiveness of Adams’ direct-mail campaign. There is even a movement called the Tea Party that has adopted the name given to the event in the 1830’s. The Tea Party is for lower taxes.
So was Parliament in 1773.
The entry for “Boston Tea Party” on Wikipedia describes things accurately.
The North ministry’s solution was the Tea Act, which received the assent of King George on May 10, 1773. This act restored the East India Company’s full refund on the duty for importing tea into Britain, and also permitted the company, for the first time, to export tea to the colonies on its own account. This would allow the company to reduce costs by eliminating the middlemen who bought the tea at wholesale auctions in London. Instead of selling to middlemen, the company now appointed colonial merchants to receive the tea on consignment; the consignees would in turn sell the tea for a commission. In July 1773, tea consignees were selected in New York, Philadelphia, Boston, and Charleston.
Hancock was New England’s #1 middleman for tea. He was cut out of the deal.
(For the rest of my article — even more amazing — click the link.)