In 1698, The East Indian Company had sole monopoly to import tea to all British colonies. A bill was passed by The English Parliament as they still had authority over the colonies stating that the British American colonies could not import their tea from anywhere else like China.
This eliminated foreign competition and also gave Britain the chance to heavily tax all tea that was imported from Britain. The tea was auctioned off wholesale and the British companies that bought the tea were able to export it out the colonies and merchants in Boston, New York, Philadelphia and Charleston. There then arose a big problem. The tea was taxed at 25% to be paid by the East India Company to bring it into Britain and an additional tax was on the tea only consumed in England. However when the tea was bought by the Dutch government, no such taxes existed.
So it was inevitable that the British Americans smuggled the Dutch tea in at cheaper prices and no tax. Eventually over a period of 5 years, the Tea Act brought in lower taxes and the tea was then readmitted into the American colonies at a cheaper rate than the smuggled tea. The East Indian Company that was once facing bankruptcy was back in business and seven ships were sent to the colonies. Two thousand chests spread between the seven ships were on route when a protest erupted, the smugglers and the Dutch tea company were out of business. Legitimate tea importers were outraged that the Tea Act of 1773 gave the monopoly back to the East Indian Company.
The tea ship, the Dartmouth, arrived into Boston Harbour late in November of 1773. A mass meeting had been called and thousands of people turned up. By British law the Dartmouth had 20 days to unload its tea cargo before it was confiscated by customs officials. The meeting passed a resolution that the Dartmouth captain was to turn back without unloading and paying the import duty. Governor Hutchinson refused permission for the Dartmouth to leave without paying the duty! On the last day of the Dartmouth’s deadline 7000 people gathered at the Old South Meeting House. Govern Hutchinson still refused the ship to leave without paying, and the tea party began.
While control of the meeting was trying to be regained by Samuel Adams, with some people dressed in Mohawk costumes and as warriors, this was an attempt to put a national American symbolism over European tradition. That evening the three ships were boarded and over the next few hours 342 chests of tea were dumped overboard and into the water of Boston Harbour.