On this day 240 years ago, New England’s most famous independent wholesaler, John Hancock, and Congress’s stenographer, Charles Thomson, signed a parchment. We celebrate that signing annually, often by setting off low-tariff fireworks imported from China.
Most Americans know little about the background of this event. The details they recall from a high school textbook are incorrect. There is great confusion. The amount of misinformation is shocking. I am here to clear up some widely held misconceptions. (Note: I have a Ph.D. in colonial American history. I have also been involved since 1974 in direct-response marketing. As far as I know, no one else has combined these two careers.)
HISTORICAL BACKGROUND
In 1776, Hancock was well known to consumers in New England as a highly price-competitive wholesaler. His main competitor, the British East India Company, called him a smuggler. That’s what high-cost competitors who are losing market share often do. They smear the competition. This accusation went to court, but it was was not proven. His defense attorney had been John Adams.
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Hancock’s competitor in 1773 had adopted a new marketing strategy. It cut prices to just below what Hancock could afford to meet. How? By persuading Parliament to cut import taxes on the company’s main item of commerce, tea. Only a small tax remained, which went to pay the salary of the governor of Massachusetts and a few officials.
Next, a group of Hancock’s associates who operated out of the Green Dragon Tavern responded by throwing the competition’s tea into Boston harbor. So, Parliament closed Boston’s harbor in 1774.
The debate grew more heated throughout 1774. British tea was now cheaper than the duty-free but illegal Dutch tea, which Hancock imported. But there was a solution: a highly successful direct-response marketing campaign run by Hancock’s long-term associate, Sam Adams. Adams had a serious marketing problem. He had to persuade people that reduced taxes and lower tea prices were a threat to liberty. This was a hard sell. But Adams was up to it. He ignored the obvious: low taxes and low prices are a good thing. Instead, he warned readers that Parliament could close every port. He also skipped over the reason why the Parliament closed the port: protesters had thrown private property into the water. In today’s money, this was over a million dollars’ worth of tea.
Beginning in 1772, Adams had begun putting together an in-house mailing list known as the Committees of Correspondence. The letters began going out. Incredibly, outraged readers began a national boycott against low-cost British tea. It another context, this would be called cutting off your nose to spite your face.
I realize that this is not the way all this is described in textbooks. This is a tribute to the effectiveness of Adams’ direct-mail campaign. There is even a movement called the Tea Party that has adopted the name given to the event in the 1830’s. The Tea Party is for lower taxes.
So was Parliament in 1773.
The entry for “Boston Tea Party” on Wikipedia describes things accurately.
The North ministry’s solution was the Tea Act, which received the assent of King George on May 10, 1773. This act restored the East India Company’s full refund on the duty for importing tea into Britain, and also permitted the company, for the first time, to export tea to the colonies on its own account. This would allow the company to reduce costs by eliminating the middlemen who bought the tea at wholesale auctions in London. Instead of selling to middlemen, the company now appointed colonial merchants to receive the tea on consignment; the consignees would in turn sell the tea for a commission. In July 1773, tea consignees were selected in New York, Philadelphia, Boston, and Charleston.
Hancock was New England’s #1 middleman for tea. He was cut out of the deal.
The British East India Company now had a new marketing slogan. “Lower taxes. Lower prices.” (Walmart’s recently adopted slogan is similar: “Save Money. Live Better.”) Hancock had to do something, and he had to do it fast. Fortunately for Hancock, Sam Adams was up to the task.
Back in 1765, Adams had helped organize a regional sales force, the Sons of Liberty. This group had made tax collectors offers that they simply could not refuse. He had recruited Hancock into the organization. They had worked together ever since. Adams had revived the organization in 1774. It called for a boycott of tea sold by retailers for British tea. This campaign led to the first Continental Congress in September.
Adams was highly successful in politics but in nothing else. So, honoring market responses, he specialized in politics. He had been a beer brewer, but he had gone bankrupt. (The successful beer company named Sam Adams took the name of a man who had been a complete failure as a brewer. This would be like calling a company two centuries from now “Enron Securities.” But good marketing can accomplish miracles, as I am trying to demonstrate here.)
Adams had also been a tax collector but had failed to collect all of the required taxes. He got out of the field. This is something that he had in common with a recent immigrant from England, Thomas Paine. Earlier in the year, Paine had proven himself to be a highly skilled practitioner of direct-response marketing. His January 1776 marketing campaign was based on a classic long-copy ad with this headline: Common Sense. The campaign pulled spectacularly. It still does — a phenomenon known in the direct-response trade as “drag.” From Wikipedia:
It was sold and distributed widely and read aloud at taverns and meeting places. In proportion to the population of the colonies at that time (2.5 million), it had the largest sale and circulation of any book published in American history. As of 2006, it remains the all-time best selling American title, and is still in print today. . . .The pamphlet was also highly successful because of a brilliant marketing tactic planned by Paine. He and Bell timed the first edition to be published at around the same time as a proclamation on the colonies by King George III, hoping to contrast the strong, monarchical message with the heavily anti-monarchical Common Sense. Luckily, the speech and the first advertisement of the pamphlet appeared on the same day within the pages of the Pennsylvania Evening Post.
Paine’s marketing was revolutionary. Literally.
Summary: In July 1776, Hancock was in charge of a national marketing campaign against the British East India Company. Yet the company was never mentioned. Officially, he was fighting Parliament. This was why he signed the parchment.
What was odd about the document was that it never mentioned Parliament. It only mentioned the king, who had almost no power, and who had not been involved in Parliament’s decision to cut the tax on tea. He had dutifully signed the bill when it was handed to him — a strictly formal procedure. He had remained on the sidelines until the Green Dragon boys tossed tea overboard. This attack on private property angered him. He thought it was mob violence, just as it had been a decade earlier with Adams’ Sons of Liberty. So, he closed the port of Boston when Parliament demanded this action. He sent ships to enforce this joint decision.
Hancock had great name identification, so he wrote his signature large enough to be eye-catching, but not so large as to generate envy among his associates — he hoped. He wanted to head off murmuring: “Pretty fancy signature for a smuggler.”
He need not have worried. His peers did not want to put their John Hancocks on the document — not yet, anyway.
