The founders pondered this question from the very beginnings of the republic. Although the Articles of Confederation directed each state to contribute money voluntarily in proportion to the land values within the state, there was no provision compelling the states to pay. Many states initially contributed little or nothing toward the federal government’s operations. Raising revenue became much easier after Americans ratified the U.S. Constitution, but taxation continued to present challenges.

One potential revenue source involved the sale of western lands. In his plan to organize the Northwest Territory—that area north of the Ohio River and east of the Mississippi—Thomas Jefferson proposed that Congress give the land away rather than selling it, because future taxes would provide a return on the new nation’s investment. However, when legislators laid out the process by which the territories became states in the Northwest Ordinances of 1784, 1785, and 1787, they directed that the land be sold. Although land sales helped to raise some revenue, it was not enough to make the new nation solvent.

Fortunately, the United States Constitution gave Congress the teeth to compel states and individuals to pay taxes. There was no income tax, so most federal revenue came from customs duties, land sales, and taxes levied on goods such as distilled spirits, slaves, and tobacco. In 1789, Congress created the Department of Treasury to manage the nation’s money, and the Secretary of the Treasury, Alexander Hamilton, proposed innovative ways to collect revenue. Some of his ideas, such as granting subsidies to domestic manufacturers and imposing tariffs on imported goods to encourage “buying American,” were too controversial for Congress to implement. However, Congress enacted some of his other proposals, such as a Bank of the United States, which held all federal money. The federal government owned 20% of the bank’s stock, and private investors purchased the rest of the stock.

Congress also approved Hamilton’s suggestion to levy a 25% tax on whiskey, placing the payment burden on farmers, who paid the tax when they delivered grain to the distillery. Starting in 1791, farmers on the western edge of several states petitioned Congress for relief. After winning only small concessions, they mounted increasingly aggressive demonstrations against the tax. Unrest escalated in July of 1794, when 7,000 farmers marched toward Pittsburgh to protest the whiskey tax. President Washington and Secretary Hamilton led 13,000 soldiers to Western Pennsylvania to quell the rebellion. When forces arrived in September of 1794, the demonstrators were gone. Two men were convicted of high treason but Washington later pardoned them. Even after the government put down the rebellion, the whiskey tax proved difficult to collect, and Congress repealed it after Jeffersonian Republicans came to power in 1800.

Taxes, custom duties, and many other means of generating revenue bred resentment among citizens long before the Revolution, yet Congress had to find ways to collect the revenue required for the government’s operation. Despite the best efforts of Congress and others, however, Americans have never embraced taxes. In fact, most still look upon them as, at best, a necessary evil.

The tea was on three privately owned merchant ships. One hundred and fourteen chests were on board the Dartmouth, the first ship to arrive in port. The other two ships, the Eleanor and the brig Beaver carried 228 chests between them, along with other cargo. As the ships sailed into Boston Harbor, they each passed by Castle William to the south, which was under the command of a British officer and had upwards of a hundred cannon. When the ships came into the harbor, but before they docked, port officials boarded them. That meant that they had officially reached port and that their movements were now under the command of port officials instead of their captains.

Behind the tea-laden ships, British Admiral John Montagu brought a squadron of warships to prevent the colonists from forcing the ships back out to sea before they were unloaded. This put the captains (and the ships' owners) in a bind. If the tea wasn't unloaded, customs weren't paid. And if the ships tried to sail back out of port, Montagu would stop them and charge them with failing to pay customs on their cargo that was due, according to him, because they had already entered port.

After a few days, the colonists had the ships come in close to Griffin's Wharf. The Sons of Liberty organized a continuous watch of the vessels. Twenty-five men on each shift ensured that the ships were not unloaded under the cover of darkness, or at least to sound an alarm if there was an attempt. The ships' captains came ashore and left the mates on board. The situation remained the same for more than two weeks.

Thomas Hutchinson, the royal governor of colonial Massachusetts, clearly understood that the colonists were angry, but he did not anticipate that they would damage the cargo. He was counting on the fact that after 20 days without having paid customs, the customs authorities—with the assistance of British sailors and soldiers—could legally impound the tea from the ships, and then, from Castle William, disburse it in small amounts to a few merchants who could resell it. This would circumvent the colonists' effort to make sure that the tea did not enter Massachusetts. Hutchinson and the apprehensive merchants who were willing to receive the tea had holed up with the troops in Castle William.

Boston was not under martial law, so soldiers were not policing the city, although Hutchinson could have brought a detachment of soldiers in, had he known beforehand the particulars of a threat. He did not post a military guard at the wharf, however, perhaps to avoid provoking a confrontation with the crowds keeping watch there.

On December 14th, when the 20 days of waiting were almost up, Hutchinson wrote his brother Elisha about the excited Bostonians, "I hardly think they will attempt sending the tea back, but am more sure it will not go many leagues: it seems probable they will wait to hear from the southward, and much may depend on what is done there." (Hutchinson, 96) Yet Hutchinson also believed the colonists might take some form of direct action if an attempt was made to land the tea onto the wharf.

Just after six o'clock on the night of December 16, 1773, a group of about 60 men daubed their faces with burnt cork, coal dust, or donned other makeshift disguises, armed themselves with hatchets, and formed a raiding party. Some of them styled themselves "Indians."

They made their way to the wharf. The Sons of Liberty's watch was already there, and still others joined them, either to assist or simply to see what was happening. The raiding party formed three groups of 50 each, and boarded all of the nearly deserted ships at about the same time. They met no resistance.

Lendall Pitts, the commander of the group that boarded the brig Beaver, "sent a man to the mate, who was on board, in his cabin, with a message, politely requesting the use of a few lights, and the brig's keys—so that as little damage as possible might be done to the vessel;—and such was the case. The mate acted the part of a gentleman altogether. He handed over the keys without hesitation, and without saying a single word, and sent his cabin-boy for a bunch of candles, to be immediately put in use." (Thatcher, 181–2).

The moon shone brightly too, so their work was well lit. The night was very quiet and neither the crowd on the wharf nor the raiding party spoke much. Onlookers at the wharf, as well as the men on some of the closer British ships, however, quite distinctly heard the sounds of the chests being staved in.

The party quickly brought the 342 chests of tea (a total of 90,000 lbs.) onto the deck. They split them open and threw the tea and the chests overboard into the harbor. The party took care that no other property on board the ships was harmed, and that none of the raiders took away any of the tea. They even swept the decks clean of loose tea when they were done. They worked quickly, apprehensive of a possible attack from Admiral Montagu's squadron, part of which was only a quarter of a mile away.

Montagu watched the affair from the fleet, but he took no action because of the cargo ships' position next to the wharf. "I could easily have prevented the Execution of this Plan," he wrote the following day in a report, "but must have endangered the Lives of many innocent People by firing upon the Town." (Labardee, 145) Instead, he rowed ashore and watched from a building nearby, even briefly exchanging taunts with the Indians.

The tea party lasted three hours, finishing around nine o'clock. The raiding party then formed in rank and file by the wharf, and, shouldering their hatchets, marched, accompanied by a fifer, back into town, dispersed, and went home.

The next morning a large, winding mound of loose tea still floated in the harbor, and a party of colonists rowed out in boats and sank it down into the waters with their oars. The British fleet witnessed this, too, but did not interfere.

The disguised men's identities were kept secret by their fellow Bostonians, and Governor Hutchinson was unable to charge the members of the raiding party, but Parliament responded five months later (news traveled back and forth across the ocean very slowly then) with a series of measures meant to force Boston to heel.