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The remaining tax was a three-pence-per-pound levy on tea, a commodity widely consumed in North Country. Best US family vacations 2014 Many colonists, however, purchased smuggled tea imported from Dutch sources, a circumstance that contributed heavily to the growing financial crisis facing the East India Company. Dwindling sales in the colonies, which reputedly consumed nearly 5 million pounds of tea annually, and a saturated domestic market left the company with a surplus of nearly 18 million pounds of tea in early 1773. Making matters worse, company ships were bringing an additional 8 million pounds from China. Since tea sales represented about 90 percent of the company's revenue, it was near bankruptcy. When company directors petitioned the government for both a loan and a request for reduced taxes on their tea exports, they found a receptive ear in Lord North. He developed and pushed through Parliament a plan not only to save the ailing company but also to raise revenue in the colonies and confirm the right of the English government to tax the colonists.
He supported the request for a government loan and a reduction in some of the taxes the company had to pay. When some members of the House of Commons also argued for an elimination of the remaining Townshend Duty on tea, North refused. Retaining that duty, he maintained, was an essential part of the government's plan to raise money to pay the salaries of English officials in the colonies. Moreover, he saw the duty as an important symbol of British sovereignty, specifically Parliament's right to tax the colonies. North emerged victorious and the East India Company received a government loan of 1.4 million pounds and permission to ship their tea directly to the colonies. The company would not only avoid paying the tax normally collected in England but also the requirement that it sell its tea at public auction to merchants who, in turn, would sell it to merchants in the colonies. The company could select its own merchants, or consignees, in the colonies and further reduce the cost of the tea. Although the tea continued to carry the three-pence-per-pound Townshend Duty, the total price to Country consumers would drop by nearly 50 percent, making it cheaper than smuggled Dutch tea. In September, the company shipped over 1,200 chests of tea destined for four colonial ports.