Richard Twining, the Commutation Act, & Smuggling

Early in 1706, Thomas Twining bought a coffee shop in the Strand from which he also began selling tea. That shop is still in operation, & Twining’s is now the world’s largest producer of ‘specialty’ teas, as distinct from the stout British cuppa. Stephen Twining, one of the Directors, is the 10th generation to work in the company.

Richard Twining, Thomas’ grandson, inspired William Pitt the Younger to pass the Commutation Act in 1784. The Act drastically reduced duties on a large number of imports, particularly tea. The tax on tea was lowered from a huge 119% to a more realistic 12 ½ %. In 1784, retained imports of tea came to 4,962,000 lbs. In 1785 retained imports rose nearly 3.3 times, to 16,307,000 lbs. No, this is _not_ a dramatic illustration of elasticity of demand. What had happened, of course, was that smuggled tea was now imported openly.

Incidentally, Richard Twining was Chairman of the Tea Dealers Association. The sharp reduction in duties on tea dealt a direct blow to their commercial rivals, the smugglers. The latter held a public meeting in London to oppose the Act, & also issued pamphlets setting out the dire effects to be expected from reducing duties so rapidly & to such an extent. But to no avail.

As is well-known, the heavy import duties of 18th century Britain, made smuggling into a major industry. It was a significant income-earner in the coastal areas of Kent, Sussex, Hampshire, Cornwall, & of course Scotland. Smugglers called themselves ‘free traders’. The casks of smuggled brandy & other smuggled goods were often stored in the crypt of the local church. Local JPs not only turned a blind eye, they were regular customers & often also provided storage space for the smugglers.

Upto 1745, it is estimated that three times as much tea was smuggled into Britain as was imported ‘legally’. Duties were reduced in that year, but raised again in later years. Imports of ‘legal’ tea rose, but it continued to be much the smaller part of the total supply. Smuggled tea of course cost far less than tea which paid duty; it is estimated the difference was around one-half the price of ‘legal’ tea.

Tea was smuggled into England from Amsterdam. Practically all the tea drunk in Scotland came via fast smuggling ships from Denmark. Tea dealers gave regular orders to the smugglers, who delivered labelled packages to each dealer. In the 18th century, the bulk of the incomes of the Danish & then the Swedish, East India Companies, came from smuggling tea into Britain. The Swedish company dwindled away after the Commutation Act.

Twentieth century governments, like the Bourbons, have learnt nothing. But while the Bourbons remembered what they had far better forgotten, twentieth century governments forget -- where they _must_ remember.