No. 1 - Letter from Mr. William Palmer

Index: Tea Leaves - A Collection of East India Co. Letters, 1773 

To the Directors of the East India Company.[24]


As the Act allowing a Drawback of the whole of the customs paid on tea, if exported to America, is now passed, in which there is a clause empowering the Lords of the Treasury to grant licences to the India Company, to export tea, duty free, to foreign States, or America, having at the time of granting such licences upwards of ten millions of pounds in their warehouses, and as the present stock of tea is not only near seventeen million, but the quantity expected to arrive this season does also considerably exceed the ordinary demand of twelve months, and the expediency of exporting tea to foreign States having been considered, I presume to lay before this Court the following extracts, &c., from letters relative to the consumption in America, and calculation of advantages attending the exportation of tea by licence, and as an assurance the same are formed upon some experience of this trade (having not only been concerned in a great part of the tea which has been shipped to America since the allowance of the drawback, in 1767; but being now about to repurchase at your ensuing sale no small quantity of Bohea tea for the same account,) I am desirous, at my own hazard, to include in such purchase, an assortment of all other kinds, viz.: Congou, Souchong and Hyson, but more particularly the several species of Singlo, namely, Hyson, Skin, Twankay and First Sort, from a conviction that, by degrees, the consumption of these species, also and particularly Singlo tea, might be introduced into America, at least so far for the benefit of the Company, as in part to relieve them from the disagreeable necessity, they will, without some such vend, be subject to, of forcing that species of tea to market, before it is greatly damaged by age, provided you are of opinion the same may possibly tend to the advantage of the Company; or, should it be the opinion of this Court, an immediate consignment should take place, I am ready to give such assistance towards carrying the same into execution as may be thought most conducive to the interest of the Company, together with such security as the nature of the trust may require. In the prosecution of these consignments, I would propose to obtain a more exact computation of the actual consumption; what quantity might probably find a sale there, and the most probable means of success in such sales, whether by waiting for a demand in the ordinary way, or by public sales there; conducted upon the outlines of those made in England, by fixing a future day of payment, and by a restriction in selling any future quantity for a limited time, but particularly (under my mode) in what manner, and within what time assurances can be given by remittances being made on account of such sales.

I am, gentlemen, your humble servant,

Wm. Palmer.

London, 19th May, 1773.



Extracts from Letters, &c., to Prove the State of the Tea Trade in America.


Extract from a Letter from Boston, dated 29th April, 1771, in Answer to a Consignment made in February, 1771, at 3s. 1d., with the whole drawback of £23 18s. 7½d. pr cent.:

"Were it not for the Holland tea, the vent of English would have answered your expectation here, but the profit is immense upon the Holland tea, which some say cost but 18d., and the 3d. duty here is saved. Many hundred chests have been imported. What is shipped may go off in time, without loss, for there must be buyers of English tea; the transportation of the Dutch by water being attended with much trouble and risk."

Extract from a Letter from Boston, dated 11th July, 1771:

"So much tea has been imported from Holland, that the importers from England have been obliged to sell for little or no profit. The Dutch traders, it is said, had their first teas at 18d. pr lb., the last at 2s.; either is much cheaper than from England, and they save the 3d. duty here. The Company must keep theirs nearer the prices in Holland. The consumption is prodigious."

Extract from a Letter from Boston, 2d Sepr., 1771:

"The consumption of Bohea tea thro' the Continent increases every year. It is difficult for us to say how great it is at present. We imagine there may be consumed in this Province, which is perhaps a seventh part of the Continent, 3000 chests in a year. We are sure nothing can discourage the running of it but the reducing the price as low, or lower, than it was two or three years past in England"

Extract from a Letter from Boston, (Messrs. Hutchinson,) dated 10th Sepr., 1771:

"From a more particular estimate of the consumption we are of opinion, the two towns of Boston and Charlestown consume a chest, or about 340 pounds of tea, one day with another. These two towns are not more than one-eighth, perhaps not more than one-tenth, part of the Province. Suppose they consume but 300 chests in a year, and allow they are but one-eighth, it will make 2400 chests a year for the whole Province. This Province is not one-eighth part of the Colonies, and in the other governments, especially New York, they consume tea in much greater proportion than in this Province. In this proportion, the consumption may be estimated at 19,200 chests per annum, or upwards of six millions of pounds. Yet at New York or Pensylvania they import no teas from England, and at Rhode Island very little. Here we find the Dutch traders continually gaining ground upon us. If teas do not sail with you before the spring shippings, we fear the Dutch will carry away all the trade of the Colonies in this article."

Extract of a Letter from Boston, dated 11th Sepr., 1772:

"We have delayed answering your last enquiries relative to the tea concern, in hopes of being able to form a better judgment, but to no great purpose; the great importation from Holland, principally through New York and Philadelphia, keeps down the price here, and consequently the sale of teas from England. We have set ours so low we shall have no profit from this years adventure, yet there are 50 chests still on hand. You ask our opinion whether the difference between the English and Dutch teas, if it did not exceed the 3d. duty and 9 pr cent., would be sufficient encouragement to the illicit trader? If the difference was not greater we think some of the smugglers would be discouraged, but the greater part would not. Nothing will be effectual short of reducing the price in England equal to the price in Holland. If no other burthen than the 3d. duty in the Colonies, to save that alone would not be sufficient profit, and the New Yorkers, &c., would soon break thro' their solemn engagements not to import from England."

Extract from a Letter from Boston, dated 25th Feb., 1773, in Answer to a calculation sent of the supposed price at which the illicit trader can now import tea into America from Holland:

"In your calculation of the profits on Dutch teas, 12 pr cent. is too much to deduct for the risque of illicit trade. We are confident not one chest in five hundred has been seized in this Province for two or three years past, and the custom house officers seem unwilling to run any risk to make a seisure. At New York, we are told it is carted about at noon day. There is some expence in landing, which we believe the importers would give five pr cent. to be freed from."

Copy of a Letter from Rotterdam, dated 12th June, 1772:

"I have to acknowledge the receipt of your favor of the 5th instant, desiring information of the present state and prices of tea at this market, and also what the freight and charges are thereon to North America, to all which I cheerfully give you every elucidation in my power, and with the greatest pleasure, as neither you nor your friends have any thought of engaging in said trade, which, with every other branch of smuggling, must be held in abhorrence by all good men. The present prices of tea are—

  d. d.
Dutch Bohea's, in whole chests, 20 @ 22
" " half " 22 24
" " quarter " 24 25
Swedish,   whole " 21 22
Danish,   " " 21 22½
Congo, 28 45
Souchon, 36 65
Peco, 32 55
Imperial, 49 50
Green, 48 50
Tonkay, 52 53
Heysan Skin, 60 62
Heysan, 90 95

The tare on whole chests is 84 lbs., if they weigh less than 400 lbs., and if they weigh 400 lbs. or upwards, then 90 lbs.; for the half chests, under 200 lbs., tare 54 lbs.; if 200 lbs., or upwards, then 60 lbs.; for the quarter chests, under 100 lbs., tare, 23 lbs.; if 100 lbs., or upwards, then 30 lbs. The advantages on the tares are calculated at 7 or 8 pr cent. on the whole chests, at 12 @ 13 pr cent. on the half chests, and at 15 @ 16 per cent. on the quarter chests. The quantity of teas on hand is not considerable, so that we do not apprehend a decline; on the contrary, if any orders of the least importance were to appear, the prices would go higher. There are now about 400 chests shipping for America, from Amsterdam, from which port the teas that go to North America from this country are always shipped, and not from this city; they are sent to Rhode Island, and not to Boston. Of Green teas there are hardly any left, neither fine Souchong nor Congos, but ordinary, in abundance. The freight of a whole chest of Bohea to St. Eustatius, one of the Dutch West India Islands, comes to about 7-1/4s. pr chest. It is reckoned by the foot square, at 6s. the foot to North America. It is generally £4 pr chest, New York currency, but the captain is not answerable in any case of seizure.

Agreeable to your desire, I send you a pro forma invoice of 6 chests Dutch Boheas, so as they come to stand on board if they were shipped here; but as the shipping is at Amsterdam, the charges may be somewhat higher. In regard to what they estimate, the risk that in America for running in the teas I cannot inform you, this you may be better able to learn from some of your New England houses, as our underwriters will not sign against the risk of seizures; but I fancy the risk is not very great, as the trade is carried on for so large parcels.

Pro forma invoice of 6 chests of Dutch Bohea tea:


320 Tare of 4 chests, under
at 84 lb. each, 336


360 2270
390 do. of 2 chests above
400 @ 90 lb. each 180


410   1754 @ 24s. £2104 16
420 off 1 pr cent., 21 2
  £2083 14
Custom and Passport, £20 4s
Sleding, 1 7
½ weigh money, 13 0
Brokerage, 10 8
Shipping, 3 0
Commission, 2 per cent. on £2131 13s. 42 12
  90 11
  £2174 5[25]

Estimate of the advantages attending the Tea trade to North America, if carried on from England:

Observe 1st. In the following calculation, no more than half the consumption of the Continent, as estimated by Messrs. Hutchinson, in their letter of the 10th Sepr., 1771, is assumed as the whole, as from the mode in which they were under the necessity of making their estimate, it was liable to error, and 19,200 chests is more than has been hitherto annually imported from China by all foreign companies.

2ndly. That this calculation is formed upon Bohea tea only, the species of tea already consumed there; yet it is probable by degrees other species might be introduced, the vend of which may be more profitable to the Company. 9600 chests of Bohea tea, each containing 340 lbs., makes 3,264,000 lbs., if sold at 2s. 6d. Boston currency, (which is 4d. lower than it appears to have been even at the time it was purchased in Holland, at 15 stivers, or under 18d. pr lb.,

amounts to   £408,000
Deduct 25 pr cent. for exchange,   102,000
Sterling,   £306,000
Deduct 6 pr cent. for commission and charges,   18,360
Annual net proceeds before the American
duty is deducted,
} ————

Application of those Net proceeds to the following purposes:

To the revenue for the duty on 3,264,000, @ 3d.   £40,800
To the ship owners, for freight from England to America, if according to the present rate of 15 pr chest,   7,200
To the ship owners for freight from China to England, according to Sir Richard Hotham's plan, of £21 pr ton, of 10 hundred weight, or for every 3 chests of tea,   67,200
To the purchase at Canton, if at 15 tale pr pecul would amount thus: say 3,264,000 lb., divided by 133-1/3 for each pecul, makes peculs 24,480 @ 15 each, is tales 367,200, which, at 6s. 8d. pr tale, is sterling,   122,400
Commission on the purchase in China,   6,120
Charges of all sorts, rated at 10s. pr chest,   4,600
To the Company for Net profit after all deductions whatsoever upon the most reduced estimate, upwards of 30 pr cent. on the purchase, or } 39,320