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Indemnity Act of 1767

The Indemnity Act of 1767 was one of the five hated Townshend Acts, which raised taxes on glass, lead, tea, painters colors and paper in the British American colonies and called for their strict enforcement.

The Indemnity Act of 1767 was the fourth of the Townshend Acts to be passed on June 29, 1767. It reduced taxes on the British East India Company when they imported tea into England. This allowed them to then export the tea to the colonies more cheeaply and resell it to the colonists. A the time, all items had to be shipped to England first from wherever they were made and then re-exported to their destination, including to the colonies.

The British East India Company was one of England's largest companies, but was on the verge of collapse due to much cheaper smuggled Dutch tea. Part of the purpose of the entire series of Townshend Acts was to save the company from imploding.

East India Company Coat of Arms

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East India Company Coat of Arms

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The colonies were one of the largest consumers of East India Company tea, consuming more than a million pounds a year at the time. By reducing the price by removing the import tax, Parliament hoped to undercut the price of smuggled tea. A small tax for importing the tea into the colonies would help recover some of the cost of removing the import tax into England, though it did not cover all the difference.

The colonists were outraged by the Townshend Acts because they created new taxes without their consent since they had no representatives in Parliament. The Townshend Acts also created a new regime of commissioners to enforce customs regulations and taxes; new courts to prosecute violators without the benefit of trial by jury; and shut down the government of New York for not complying with the Quartering Act of 1765.

The colonists began a series of protests, riots and boycotts of English goods in order to express their outrage, leading to the occupation of Boston by British troops and eventually, the Boston Massacre.

Eventually the Townshend Acts' taxes were repealed, except for the tea tax, which outraged the colonists even further. Their response was to dump a shipfull of tea into Boston Harbor. Parliament responded by passing the Coercive Acts, which closed Boston Harbor until the tea was paid for and took over the government of Massachusetts. The outbreak of the Revolution was not far behind.

You can read the text of the Indemnity Act of 1767 below or read more about the Townshend Acts here.

Indemnity Act of 1767 -
June 29, 1767

An Act for Taking Off the Inland Duty of One Shilling per Pound Weight upon All Black and Singlo Teas Consumed in Great Britain; and for Granting a Drawback upon the Exportation of Teas to Ireland and the British Dominions in America, for a Limited Time, upon Such Indemnification to Be Made in Respect Thereof by the East India Company, as Is Therein Mentioned; for Permitting the Exportation of Teas in Smaller Quantities Than One Lot to Ireland, or the Said Dominions in America; and for Preventing Teas Seized and Condemned from Being Consumed in Great Britain

WHEREAS by an act of Parliament made in the eighteenth year of the reign of his late Majesty King George the Second, entitled, An act for repealing the present inland duty of four shillings per poundweight upon all tea sold in Great Britain, and for granting to his Majesty certain other inland duties in lieu thereof; and for better securing the duty upon tea and other duties of excise; and for pursuing offenders out of one county into another; an inland duty of one shilling per poundweight avoirdupois, and in that proportion for a greater or lesser quantity, was imposed and charged upon all tea to be sold in Great Britain; and also a further duty of twenty-five pounds for every one hundred pounds of the gross price at which such teas should be sold at the public sales of the united company of merchants of England trading to the East Indies, and proportionably for a greater or lesser sum; which duties were to commence from the twenty-fourth day of June, one thousand seven hundred and forty-five, over and above all customs, subsidies, and duties, payable to his Majesty for the same, upon importation thereof, to be paid in manner as in the said act is directed; and whereas by an act of Parliament made in the twenty-first year of his said late Majesty's reign, tea was allowed to be exported from this kingdom to Ireland and his Majesty's plantations in America without payment of the said inland duties; and whereas the taking off the said inland duty of one shilling per poundweight upon black and singlo teas, granted by the said act, and the allowing, upon the exportation of all teas which shall be exported to Ireland and his Majesty's plantations in America, the whole of the duty paid upon the importation thereof into this kingdom, appear to be the most probable and expedient means of extending the consumption of teas legally imported within this kingdom, and of increasing the exportation of teas to Ireland and to his Majesty's plantations in America, which are now chiefly furnished by foreigners in a course of illicit trade; and whereas the united company of merchants of England trading to the East Indies are willing and desirous to indemnify the public, in such manner as is hereinafter provided, with respect to any diminution of the revenue which shall or may happen from this experiment. We, your Majesty's most dutiful and loyal subjects, the Commons of Great Britain in Parliament assembled, do therefore most humbly beseech your Majesty, that it may be enacted; and be it enacted by the King's most excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal and Commons in this present Parliament assembled and by the authority of the same, that for and during the space of five years, to be computed from the fifth day of July, one thousand seven hundred and sixty-seven, the said inland duty of one shilling per poundweight upon teas shall not be paid for or in respect of any bohea, congo, souchong, or pekoe teas, commonly called black teas, or any teas known by the denomination of singlo teas, which shall be cleared for consumption within Great Britain, out of the warehouses of the united company of merchants of England trading to the East Indies, or their successors; but that all such teas so to be cleared, whether the same have been already, or shall be hereafter, sold by the said company, or their successors, shall be and are hereby freed and discharged during the said term from the said inland duty.

II. And it is hereby further enacted by the authority aforesaid, that for and during the like space of five years, to be computed from the fifth day of July, one thousand seven hundred and sixty-seven, there shall be drawn back and allowed for all teas exported from this kingdom as merchandise to Ireland, or any of the British colonies or plantations in America, the whole duties of customs payable upon the importation of such teas; which drawback or allowance, with respect to such teas as shall be exported to Ireland, shall be made to the exporter in such manner, and under such rules, regulations, securities, penalties, and forfeitures, as any drawback or allowance is now payable out of the duty of customs upon the exportation of foreign goods to Ireland; and with respect to such teas as shall be exported to the British colonies and plantations in America, the said drawback or allowance shall be made in such manner, and under such rules, regulations, penalties, and forfeitures, as any drawback or allowance payable out of the duty of customs upon foreign goods exported to foreign parts was, could, or might be made before the passing of this act (except in such cases as are otherwise provided for by this act).

III. Provided always, and it is hereby enacted by the authority aforesaid, that the drawback allowed by this act shall not be paid or allowed for any teas which shall not be exported directly from the warehouse or warehouses wherein the same shall be lodged, pursuant to the directions of an act made in the tenth year of the reign of his late Majesty King George the First.

IV. And, for making good any diminution which may happen in the revenues of customs and excise by the discontinuance of the said duty and the allowance of the said drawback during the term aforesaid, be it enacted by the authority aforesaid, that on or before the first day of September, one thousand seven hundred and sixty-eight, and on or before the first day of September in each of the four succeeding years, a true and exact account shall be taken, slated, and made up by the proper officers of the customs and excise, respectively, of the net produce of all the duties of customs for and in respect of teas sold by the said company, or their successors, and also of the net produce of the duties of excise upon teas cleared out of the warehouses belonging to the said company, or their successors, within the year, ending the fifth day of July immediately preceding the taking, stating, and making up, such account; and that a sum, which shall be equal to the annual net produce of the duties of customs paid upon the importation of teas which were exported to Ireland and the British colonies and plantations in America, upon an average for five years preceding the fifth day of July, one thousand seven hundred and sixty-seven, shall be deducted from the total of the net produce, so stated, of the said duties of customs and excise in the said account, for the year ending the said fifth day of July, one thousand seven hundred and sixty-eight, and for each of the said four succeeding years, respectively; and if, after such deduction shall have been made, the remaining sum shall not amount to such a sum as shall be equal to the annual net produce of all the duties of customs for and in respect of teas sold by the said company; and also to the annual net produce of the duties of excise upon teas cleared out of the warehouses of the said company on an average for five years preceding the said fifth day of July, one thousand seven hundred and sixty-seven; then, and in every such case, from time to time, as often as such case shall so happen, the said company, or their successors, within forty days after a copy of such yearly account respectively shall have been delivered to their chairman, deputy chairman, secretary, cashier, or accomptant [accountant] general shall advance and pay, for every such year, respectively, into the receipt of his Majesty's exchequer, for his Majesty's use, such sum of money as shall, with the monies remaining in such respective annual account after the deduction aforesaid shall have been made, amount to such a sum as shall be equal to the annual net produce of all the said duties of customs and excise upon teas, on the said average of five years preceding the said fifth day of July, one thousand seven hundred and sixty-seven; so as the money to be paid by the said company, or their successors, in pursuance of this act, shall not, in any one of the said five years, exceed such a sum as shall be equal to the annual net amount of the said inland duty of one shilling per pound weight upon teas cleared from the warehouses of the said company for consumption within Great Britain; and also to the annual net amount of the duties of customs paid on the importation of teas which were exported to Ireland and the British colonies and plantations in America upon an average for five years preceding the said fifth day of July, one thousand seven hundred and sixty-seven.

V. And be it further enacted by the authority aforesaid, that in case the said united company of merchants of England trading to the East Indies, or their successors, shall make failure in any of the payments hereby directed, required, or appointed to be made into the receipt of his Majesty's exchequer, in the manner, or on or before the respective times herein before limited or appointed for that purpose; that then, from time to time, as often as such case shall so happen, the money, whereof such failure in payment shall be made, shall and may be recovered to his Majesty's use, by action of debt, or upon the case, bill, suit, or information, in any of his Majesty's courts of record at Westminster; wherein no essoin, protection, privilege, or wager of law shall be allowed, or any more than one imparlance; in which action, bill, suit, or information, it shall be lawful to declare that the said united company of merchants of England trading to the East Indies, or their successors, are indebted to his Majesty the monies of which they shall have made default in payment, according to the form of this statute, and have not paid the same, which shall be sufficient; and in or upon such action, bill, suit, or information, there shall be further recovered to his Majesty's use, against the said united company of merchants of England trading to the East Indies, or their successors, damages, after the rate of twelve pounds per centum per annum, for the respective monies so unpaid, contrary to this act, together with full costs of suit; and the said united company, and their successors, and all their stock, funds, and all other their estate and property whatsoever and wheresoever shall be and are hereby made subject and liable to the payment of such monies, damages, and costs.

VI. And be it further enacted by the authority aforesaid, that all the monies which shall be paid into the receipt of his Majesty's exchequer in pursuance of this act shall be applied to such uses and purposes, and in such proportions, as the present duties on teas are now made applicable.

VII. And whereas by an act made in the twenty-first year of the reign of his late Majesty, entitled, An act for permitting tea to be exported to Ireland, and his Majesty's plantations in America, without paying the inland duties charged thereupon by an act of the eighteenth year of his present Majesty's reign; and for enlarging the time for some of the payments to be made on the subscription of six millions three hundred thousand pounds, by virtue of an act of this session of Parliament, it is enacted, that from and after the first day of June, one thousand seven hundred and forty-eight, no tea should be exported to the kingdom of Ireland, or to any of his Majesty's plantations in America, in any chest, cask, tub, or package whatsoever, other than that in which it was originally imported into Great Britain, nor in any less quantities than in the entire lot or lots in which the same was sold at the sale of the said united company, under the penalty of the forfeiture of such tea and the package containing the same; and whereas the prohibiting the exportation of tea in any less quantity than one entire lot has been very inconvenient to merchants and traders and tends to discourage the exportation of tea to Ireland, and the said colonies; be it therefore enacted by the authority aforesaid, that from and after the fifth day of July, one thousand seven hundred and sixty-seven, the said recited clause shall be, and is hereby, repealed.

VIII. And be it further enacted by the authority aforesaid, that from and after the said fifth day of July, one thousand seven hundred and sixty-seven, no tea shall be exported to the kingdom of Ireland, or to any of his Majesty's plantations in America, in any chest, cask, tub, or package whatsoever other than that in which it was originally imported into Great Britain; nor in any less quantity than the whole and entire quantity contained in any chest, cask, tub, or package in which the same was sold at the public sale of the united company of merchants of England trading to the East Indies; under the penalty of the forfeiture of such tea, and the package containing the same, which shall and may be seized by any officer of the customs; and such forfeiture shall be recovered and applied in such and the same manner, as any of the penalties or forfeitures mentioned in the said act, made in the twenty-first year of the reign of his late Majesty, are thereby directed to be recovered and applied; and all tea exported under the authority of this act is hereby freed and discharged from the payment of the inland duties of excise, in such and the same manner, and shall be subject to the same rules and regulations, as are mentioned, appointed, and prescribed by the said act, in relation to tea exported by virtue thereof.

IX. And be it enacted by the authority aforesaid, that from and after the twenty-fourth day of July, one thousand seven hundred and sixty-seven, all teas which shall be seized and condemned for being illegally imported, or for any other cause, shall not be sold for consumption within this kingdom, but shall be exported to Ireland, or to the British colonies in America; and that no such teas, after the sale thereof, shall be delivered out of any warehouse belonging to his Majesty, otherwise than for exportation as aforesaid, or be exported in any package containing a less quantity than fifty pounds weight; which exportation shall be made in like manner, and under the same rules, regulations, penalties, and forfeitures, except in respect to the allowance of any drawback, as are by this act prescribed, appointed, and inflicted in relation to the exportation of teas sold by the said company; and upon the like bond and security as is required by the said act made in the twenty-first year of the reign of his late Majesty King George the Second, to be approved of by the commissioners of the customs or excise in England for the time being, or any three of them, respectively, or by such person or persons as they shall respectively appoint for that purpose.

X. And be it further enacted by the authority aforesaid, that if any action or suit shall be commenced against any person or persons for anything by him or them done or executed in pursuance of this act, the defendant or defendants in such action or suit shall and may plead the general issue, and give this act, and the special matter, in evidence, at any trial to be had thereupon; and that the same was done in pursuance and by the authority of this act; and if afterwards a verdict shall pass for the defendant or defendants, or the plaintiff or plaintiffs shall become nonsuited, or discontinue his, her, or their action or prosecution, or judgment shall be given against him, her or them, upon demurrer, or otherwise, then such defendant or defendants shall have treble costs awarded to him or them against such plaintiff or plaintiffs.

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You can also read the text of each of the other Townshend Acts here:


Published 10/11/12

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