On April 2, 1774, Gage was made Royal Governor of Massachusetts. On May 13, 1774, he returned to Boston and disembarked on May 17. He almost immediately declared martial law in response to the simmering tensions following the Intolerable Acts. Late in 1774, Gage began seizing powder stores, because he knew that emotions were rapidly building toward violence. On April 14, 1775, Gage received orders from London to take decisive action to halt the building rebellion. He could not arrest members of the Massachusets Provincial Congress, because it adjourned on April 15. He instead decided to seize powder and supplies at Concord, whose location he knew about through his informants.
On April 19, 1775, General Gage ordered Lt. Colonel Frances Smith and Major James Pitcairn to carry out the seizure of the munitions at Concord, Massachusetts. He wanted it done in secret, so as to not alert the rebels and allow them time to hide the muntions. The British troops were roused in the middle of the night and not told of their mission until they were ready to march. In spite of these precautions, word quickly spread, because Boston was full of informants and rebel spies. While the British were marching out of the city, Paul Revere and William Dawes were riding ahead to warn the rebels. Though Revere was captured and Dawes was turned back, Samuel Prescott got through to Concord and the munitions were safely hidden away. The resulting skirmishes at Lexington and Concord started the American Revolutionary War.
As the British troops returned from Concord, farmers were moving in to surround Boston. On April 23, 1775, the Massachusetts Provincial Congress voted to call up militia to form an army. On May 25, Major Generals William Howe, Henry Clinton and John Burgoyne arrived from England and any one of them was a likely candidate to replace Gage as Commander-in-Chief of the British Army in America. By June 15,000 men surrounded Boston, while Gage was in command of 6,500 troops. On June 12, 1775, Gage had offered to pardon all but Samuel Adams and John Hancock. He then decided to occupy Dorchester Heights which oversaw Boston Harbor, but on June 13, the Americans learned of his plan.
By the night of June 16, 1775, the Americans were building ramparts on Breed's Hill and when General Gage awoke on the morning of June 17, he was surprised to find significant American fortifications had been built overnight. He immediately ordered Maj. General William Howe to sail to Charleston peninsula and dislodge the rebels. In the Battle of Bunker Hill, Howe was able to dislodge the Americans only after three charges up the hill, absorbing tremendous losses, and the waning supply of ammunition for the Americans.
On September 26, 1775, General Gage received orders to return to England under the pretext of helping plan operations for the following year. On October 10, he surrendered command of the British Army in America to General Howe. On November 14, 1775, he reached London. On April 18, 1776, he was finally informed of his removal from command by British Secretary of State for America, Gage's old classmate from the Westminster School, George Sackville Germain. While he retained his rank, he was in virtual retirement while Germain remained in power for the remainder of the war.
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