Chapter 6: The First Corporate War
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Chapter 6: The First Corporate War
Every American schoolchild learns about the Boston Tea Party, and most also learn it was about “taxation without representation.”
That’s true, but hugely incomplete.
The Boston Tea Party was, in reality, fundamentally a rebellion against raw corporate power. The tea being dumped belonged to the British East India Company, then the world’s largest corporate monopoly. The tyranny being resisted was a new form of corporate tyranny corruptly backed by Company stockholder King George III’s government force.
The Founders of this nation, then, fought a revolution every bit as much against a corporation as against the British military. Understanding this history explains why they would’ve been horrified by the idea of corporate constitutional rights.
The Company That Ruled the World
The British East India Company was not like modern corporations: it was also, essentially, a private army with a corporate charter—a state unto itself.
It had its own military, its own courts, its own laws. It conquered nations, ruled hundreds of millions of people via its own appointed governors, and extracted wealth on a scale that dwarfed the British government itself.
By the 1770s, the Company controlled most of India, ran the opium trade into China, and dominated global commerce, including North America. It was more powerful than most governments. It could—and did—wage wars, negotiate treaties, and legally execute prisoners. It answered to stockholders, the King, and his Parliament, not average citizens or voters.
The Company’s stockholders included members of Parliament, British aristocrats, and the King himself. These conflicts of interest meant Company interests heavily shaped eighteenth-century British policy. When the Company wanted something, Parliament often gave it.
The Company was the original too-big-to-fail corporation. When it faced bankruptcy in 1773, Parliament bailed it out by granting it a monopoly on tea sales in the American colonies, thus outlawing the now-illegal importation of tea by independent merchants and traders.
That was the Tea Act of 1773, which American colonists correctly understood as corporate tyranny enforced by government power.
A Voice from the Revolution
I searched for years to find a firsthand account of what actually happened in Boston Harbor that cold December night in 1773. The participants in the Tea Party were sworn to secrecy for fifty years, by which time most were dead, so most of what they thought and felt was lost to history.
Then, in an antique bookstore in London, I found a treasure. It was sitting on a shelf with a bunch of old books from the early nineteenth century, a part of the store that smelled of dust, wax, and aging paper. When I saw it, I was astonished: I’d been looking for something like it for decades.
I immediately purchased an original copy of Retrospect of the Boston Tea Party with a Memoir of George R.T. Hewes, a Survivor of the Little Band of Patriots Who Drowned the Tea in Boston Harbour in 1773, published in New York by S.S. Bliss in 1834.
The book’s author, James Hawkes, interviewed George Robert Twelve-trees Hewes, who was a shoemaker and a patriot. He knew Samuel Adams and John Hancock personally. He was present at the Boston Massacre. And on the night of December 16, 1773, he was one of the men who boarded the Company’s ships.
Hawkes’s interview of Hewes, published sixty-one years after the event, is the only actual first-person account in existence of the Boston Tea Party by a participant.
Most significantly, what Hewes described to Hawkes in this little book wasn’t just a tax revolt: it was an explicit rebellion against corporate power.
The Corporate Monopoly
Many people today think the Tea Act of 1773 simply raised taxes on tea. It did not: it was actually a massive tax cut.
The purpose of the Tea Act was to give the East India Company full and unlimited access to the American tea trade so it could sell the surplus tea it had built up in its warehouses over the previous three years during a pretty severe recession.
It exempted the Company from having to pay taxes to Britain on that tea exported to the colonies, and even gave the Company a tax refund on the millions of pounds of tea it was holding in inventory.
Because the Company no longer had to pay high taxes to England and held a monopoly on colonial tea sales, it could lower its prices to undercut local importers and the mom-and-pop tea merchants in every town in America. Additionally, it allowed the British navy to intercept tea “smugglers” to the colonies, seize their ships and cargo, and imprison their crews.
It wasn’t “taxation without representation”: it was “tax breaks for giant corporations without representation” and a government-granted monopoly.
This was what specifically infuriated the colonists. They resented their colonies being used as a profit center for a multinational corporation and their small businesses no longer being able to buy tea from “pirates” (private ships bringing tea to the colonies) because the Company had an exclusive, monopolistic right of sale in North America.
“Taxation without representation” meant something specific to that generation: hitting the average person and small business with taxes while giving the most powerful corporation in the world one of the most massive tax breaks in history. It was government sponsorship of one corporation over all competitors, plain and simple.
According to Hewes, colonists were either boycotting Company tea or buying smuggled tea to avoid supporting the Company’s profits. This resistance, he said, had “greatly diminished the importation into the colonies of this commodity.”
Meanwhile, he noted, “an immense quantity of it was accumulated in the warehouses of the East India Company in England. This company petitioned the King to suppress the duty of three pence per pound upon its introduction into America.”
The King granted the petition with the Tea Act, and the Company’s ships set sail for America with their monopoly tea.
The Alarm Goes Out
A newsletter called The Alarm circulated through the colonies. One issue, signed by the enigmatic “Rusticus,” made clear the feelings of colonial Americans about England’s largest corporation:
Are we in like Manner to be given up to the Disposal of the East India Company, who have now the Assurance, to step forth in Aid of the Minister, to execute his Plan, of enslaving America? Their Conduct in Asia, for some Years past, has given simple Proof, how little they regard the Laws of Nations, the Rights, Liberties, or Lives of Men. They have levied War, excited Rebellions, dethroned lawful Princes, and sacrificed Millions for the Sake of Gain.
The Revenues of Mighty Kingdoms have centered in their Coffers. And these not being sufficient 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. Fifteen hundred Thousands, it is said, perished by Famine in one Year, not because the Earth denied its Fruits; but because this Company and their Servants engulfed all the Necessaries of Life, and set them at so high a Rate that the poor could not purchase them.
One and a half million people died, Rusticus wrote, in a single year, not from natural disasters but from corporate greed.
The colonists knew exactly what kind of monster they were facing. They’d seen what the East India Company did to India and were determined it wouldn’t happen to their America.
Another pamphlet, signed “Hampden,” declared: “It hath now been proved to you that the East India Company obtained the monopoly of that trade by bribery and corruption. That the power thus obtained they have prostituted to extortion, and other the most cruel and horrible purposes, the sun ever beheld.”
Philadelphia and New York Resist
The battle began in Philadelphia.
According to Hewes, “those to whom the teas of the Company were intended to be consigned, were induced by persuasion, or constrained by menaces, to promise, on no terms, to accept the proffered consignment.”
In New York, Captains Sears and McDougal, “daring and enterprising men, effected a concert of will between the smugglers, the merchants, and the sons of liberty.” The small businessmen, the entrepreneurs, and the patriots had joined forces. In many cases, like Paul Revere and Sam Adams, they were the same people.
“Pamphlets suited to the conjecture, were daily distributed,” Hewes affirmed, “and nothing was left unattempted by popular leaders, to obtain their purpose.”
The Company’s ships were turned back from Philadelphia and New York. The colonists had drawn a line.
Then the ships arrived in Boston.
The Decisive Moment
“On the twenty-eighth of November, 1773,” Hewes told Hawkes, “the ship Dartmouth with 112 chests arrived; and the next morning after, the following notice was widely circulated: ‘Friends, Brethren, Countrymen! That worst of plagues, the detested TEA, has arrived in this harbor. The hour of destruction, a manly opposition to the machinations of tyranny, stares you in the face. Every friend to his country, to himself, and to posterity, is now called upon to meet in Faneuil Hall, at nine o’clock, this day, at which time the bells will ring, to make a united and successful resistance to this last, worst, and most destructive measure of administration.’”
The colonists gathered. The Company’s local agents were urged to renounce their positions, but they refused and instead took refuge in a nearby British fortress.
A guard was placed on Griffin’s Wharf, near where the tea ships were moored. Messengers stood ready to ride to neighboring towns if the Company made any moves.
Hewes recalls the voices of the Bostonians during a hastily convened meeting in a local pub:
“Why do we wait? Soon or late we must engage in conflict with England. The opposition is formed; it is general; it remains for us to seize the occasion. The more we delay the more strength is acquired by the [British] ministers. Now is the time to prove our courage.”
A local tea seller named Rotch was asked to demand that the Governor permit the ships to return to England. The Governor refused, citing the honor of the laws and duty toward the King.
The meeting erupted. A man disguised as an Indian shouted from the gallery. The crowd dissolved in an instant and rushed to Griffin’s Wharf.
The Tea Party had begun.
That Night in the Harbor
Hewes was there. His account is vivid:
“It was now evening, and I immediately dressed myself in the costume of an Indian, equipped with a small hatchet, which I and my associates denominated the tomahawk, with which, and a club, after having painted my face and hands with coal dust in the shop of a blacksmith, I repaired to Griffin’s wharf, where the ships lay that contained the tea.
“When I first appeared in the street after being thus disguised, I fell in with many who were dressed, equipped and painted as I was, and who fell in with me and marched in order to the place of our destination.”
Between one hundred and one hundred and fifty men gathered at the wharf. They were divided into three parties, one for each ship, and Hewes was appointed boatswain of his group and sent to demand the keys to the hatches from the ship’s captain.
“I made the demand accordingly,” he said, “and the captain promptly replied, and delivered the articles; but requested me at the same time to do no damage to the ship or rigging.”
The captain of a Company ship stood by and watched as the colonists destroyed the Company’s property. He asked only that they not damage the ship itself. He knew which way the wind was blowing. Hewes continued:
“We then were ordered by our commander to open the hatches and take out all the chests of tea and throw them overboard, and we immediately proceeded to execute his orders, first cutting and splitting the chests with our tomahawks, so as thoroughly to expose them to the effects of the water. In about three hours from the time we went on board, we had thus broken and thrown overboard every tea chest to be found in the ship, while those in the other ships were disposing of the tea in the same way, at the same time. We were surrounded by British armed ships, but no attempt was made to resist us.”
Three hundred forty-two chests. Over ninety thousand pounds of tea. Enough to make twenty-four million cups. Worth over two million dollars in today’s money.
All of it destroyed to make a point about corporate power.
No Tea Shall Survive
The participants were absolutely committed that none of the East India Company’s tea would ever be consumed on American shores. Hewes describes what happened to those who tried to pocket some for themselves:
“During the time we were throwing the tea overboard, there were several attempts made by some of the citizens of Boston and its vicinity to carry off small quantities of it for their family use. To effect that object, they would watch their opportunity to snatch up a handful from the deck, where it became plentifully scattered, and put it into their pockets.
“One Captain O’Conner, whom I well knew, came on board for that purpose, and when he supposed he was not noticed, filled his pockets, and also the lining of his coat. But I had detected him and gave information to the captain of what he was doing. We were ordered to take him into custody, and just as he was stepping from the vessel, I seized him by the skirt of his coat, and in attempting to pull him back, I tore it off; but, springing forward, by a rapid effort he made his escape. He had, however, to run a gauntlet through the crowd upon the wharf; each one, as he passed, giving him a kick or a stroke.”
An old man with a large cocked hat and white wig slipped some tea into his pocket. They caught him, threw his hat and wig into the harbor along with the tea, and let him escape with “now and then a slight kick.”
The next morning, considerable quantities of tea were found floating on the water. Small boats rowed out and beat it with oars and paddles until it was thoroughly destroyed.
“We then quietly retired to our several places of residence,” Hewes concludes, “without having any conversation with each other, or taking any measures to discover who were our associates. . . . There appeared to be an understanding that each individual should volunteer his services, keep his own secret, and risk the consequence for himself. No disorder took place during that transaction, and it was observed at that time that the stillest night ensued that Boston had enjoyed for many months.”
The War Begins
The British Parliament responded immediately.
The Boston Port Act closed the port of Boston until the citizens reimbursed the East India Company for the tea they’d destroyed.
The colonists refused.
A year and a half later, on April 19, 1775, the colonists would again defy the Company and Great Britain, this time taking on British troops in armed conflict at Lexington and Concord, the “shots heard ’round the world.”
That war, triggered by a transnational corporation and its government’s patrons trying to deny American colonists a fair and competitive marketplace, would last until 1783.
The Declaration of Independence, written in 1776, lists the colonies’ grievances against King George III and specifically mentions taxes, troops, judges, and governors.
It never mentions the East India Company by name, but it didn’t have to. Everyone understood. The King’s tyranny and the Company’s tyranny were the same tyranny. The Company had bought the government, so fighting the King meant fighting corporate power.
The Lesson the Founders Learned
The men who wrote the Constitution had fought a corporation. They’d seen what unchecked corporate power could do. They’d watched the East India Company starve millions in India, corrupt Parliament, and try to monopolize American commerce.
And they were determined it would never happen here again.
The US Constitution contains about 4,400 words. It establishes the structure of government, enumerates powers, and limits authority.
But it never mentions corporations. Not once.
This was not an oversight. The Founders knew about corporations. They had fought one. They deliberately chose not to give corporations constitutional status or protection.
Corporations were creatures of state law, to be kept on a short leash by state legislatures close to the people. They could be chartered, regulated, and dissolved by the states and, at our country’s founding, had no rights whatsoever under the federal Constitution.
The American antipathy toward the East India Company continued even after the Revolution. When the Company tried to resume postwar trading with America, offering clothing, silks, coffee, and spices, the Americans refused. The trade war continued to and through the War of 1812.
The Founders had not forgotten. And they made sure corporate power would never gain the same foothold in America that it had held in the colonies.
Or so they thought.
A century later, a court reporter and a corrupt justice would undo much of their work with a few strokes of a pen.
George Washington spoke of the need for eternal vigilance to defend freedom. Maybe he was talking about preventing military attack, but he may as well have been speaking of the need to ever be on the lookout for incursion from within by corporate interests. Corporate influence grows within the body politic like a parasite until it consumes its host.
I’m reading your book..Who Killed the American Dream. It arrived two days ago and I want to shout to everyone I come across… “Read this book! It will make your hair stand on end and gives a perspective we all should have.”
Please keep up the good work you do.