no. xxvi
(From the Minerva.)
1795.
The British trade to their possessions in the East Indies, as well as to China, is a monopoly vested by the Legislature in a company of merchants. No other persons in Great Britain, nor in any of her dominions or colonies, can send a vessel to, or prosecute trade independent of the company, with any part of Asia. The right to trade with their possessions in India is not only refused to all British subjects, the India Company excepted, but is one that Great Britain has never before yielded by treaty to any foreign nation. By the terms of the charter to the India Company, among a variety of limitations, they are restrained and confined to a direct trade between Asia and the port of London; they are prohibited from bringing any of the productions of India or China directly to any part of America, as well to the British colonies as to our territories; and moreover, they are restrained from carrying any of the productions of Asia directly to any part of Europe, or to any port in Great Britain, Scotland, or Ireland, except the single port of London.
The 13th article stipulates, that our vessels shall be admitted in all the seaports and harbors of the British territories in the East Indies, and that our citizens may freely carry on a trade between said territories and the United States in all such articles, of which the importation or exportation shall not be entirely prohibited; provided only that when Great Britain is at war we may not export from their territories in India, without the permission of their local government there, military stores, naval stores, or rice. Our vessels shall pay in this trade the same tonnage duty as is paid by British vessels in our ports; and our cargoes on their importation and exportation shall pay no other or higher charges or duties than shall be payable on the same articles when imported or exported in British bottoms; but it is agreed that this trade shall be direct between the United States and the said territories; that the article shall not be deemed to allow the vessels of the United States to carry on any part of the coasting trade of the British territories in India, nor to allow our citizens to settle or reside within the said territories, or to go into the interior parts thereof, without the permission of the British local government there.
The British trade to their territories in the East Indies is carried on by a corporation, who have a monopoly against the great body of British merchants. Our trade to the same territories will be open to the skill and enterprise of every American citizen. The British trade to these territories is direct, but confined to the port of London; our trade to the same must likewise be direct, but may be carried on from and to all our principal ports.
The article gives us a right in common with the India Company to carry to these territories, and to purchase and bring from thence, all articles which may be carried to or purchased and brought from the same, in British vessels: our cargoes paying native duties, and our ships the same alien tonnage as British ships pay in our ports. This trade is equally open to both nations; except when Great Britain is engaged in war, when the consent of the British local government is required in order to enable us to export naval stores, military stores, and rice; a limitation of small consequence, none of the articles except nitre being likely to form any part of our return cargoes. Though this article is one against which the objection of a want of reciprocity (so often and so uncandidly urged against other parts of the treaty) has not been preferred, it has not, however, escaped censure.
It is said that we are already in the enjoyment of a less restrained commerce with the British territories in India, and that the treaty will alter it for the worse; inasmuch as we thereby incapacitate ourselves to carry on any part of the coasting trade of the British territories in India, and as we relinquish the profitable freights to be made between Bombay and Canton, and likewise those sometimes obtained from the English territories in Bengal to Ostend.
It would seem a sufficient answer to say, that this trade has heretofore existed by the mere indulgence of those who permitted it; that it was liable to variations; that a total exclusion, especially had it been of us in common with other foreign nations, could have afforded no just ground of complaint; that the relaxation which has hitherto given us admission to the British Indian territories, was not a permanent, but a mere temporary and occasional regulation, liable to alteration, and by no means to be demanded as the basis of an intercourse to be adjusted by compact with a foreign nation, which would no longer leave the power of alteration in either of the parties.
But in respect to the first objection the article amounts to this, that the rights which it does grant shall not by implication be construed to give a right to carry on any part of the British coasting trade in India.
If we have before shared in this trade by permission, nothing in the article will preclude us from enjoying the same in future. If we did not participate in it, nothing in the article impairs either the authority of the British local government to permit our participation or our capacity to profit by such permission. This objection, therefore, falls to the ground, since the coasting trade remains as it was before the treaty was formed.
[Further, according to my information.]—It is not the trade between the East Indies and China, as has been erroneously supposed by some persons, but the exportation of rice and other articles, which are exchanged between the British territories in the hither and further Indies, that is denominated the coasting trade of the British territories in India. The importance of this trade is not well understood; nor am I able to say whether we have heretofore been allowed to carry it on. If we have, the little that we have heard of it leads to an opinion that it is not an object of much consequence. Let is, however, be granted that hereafter we shall not be allowed to engage in it. Shall we have more reason to complain of this exclusion, than we have that we are refused a share in the coasting trade of the European dominions of Great Britain? or that we are excluded from the coasting trade between their islands in the West Indies? or than the British themselves have, that by our prohibiting tonnage duty (being fifty cents per ton on entry of a foreign vessel, when our own coasting vessels pay only six cents per ton, for a year’s license) they are excluded from sharing in our coasting trade—a branch of business that already employs a large proportion of our whole navigation, and is daily increasing?
In respect to the second and third objections, it may be remarked, that so far as the trade has been heretofore enjoyed, it has been in consequence of an exception from, and relaxation in, the system by which the European commerce has been regulated; that having depended on the mere occasional permission of the local government, we may safely infer (though it may have been supposed incompatible with the discretionary powers vested in that government, to confer by treaty a positive right to carry on the trade in question) that so long and as often as the interest that has heretofore induced the grant of this permission shall continue or exist, the permission will be continued or renewed. The stipulation, restraining the trade, may, if the parties see fit, be dispensed with, and the trade, may, if the parties see fit, be dispensed with, and the trade may be enlarged, or made free. It being a contract only between them and us, the parties are free to remodify it; and without a formal alteration, if those in whose favor the restraint is made consent to remove it, the other party is released from the obligation to observe it.
Again—Surat, which is in the neighborhood of Bombay, is the emporium of Guzerat, and of the northern portion of the Malabar coast; the cottons shipped from Bombay to Canton are frequently first sent from Surat to Bombay. Surat belongs to the native powers to which we have free access. If the transportation of cotton and some few other commodities from the coast of Malabar to Canton is an important branch of our commerce, what will prevent our prosecuting it from Surat or any other free port in the hither Indies?
That it may be undertaken from the ports of the native powers is rendered probable by the circumstance, that these freights are supplied principally or alone by the native or black merchants, whose residence would naturally be in the ports under native jurisdiction more frequently than in those under the jurisdiction of any of the foreign powers.
But is it not true (and will not candor admit it?) that the trade to the Asiatic dominions of the European powers has usually been confined to the nation to whom such territories belong? In our treaty with Holland, have we not even stipulated to respect their monopoly of this trade? And by our treaty with France, a nation whose liberal policy is said to have laid us under eternal obligations of gratitude, have we acquired the slightest pretensions, much less a right, to resort to, or trade with, any part of their Asiatic territories?
A late decree of the convention which opened to us the ports in their West Indies, likewise laid open their remaining territories in Asia. But this measure, proceeding from the necessities of the war and their inability to carry on their foreign commerce, will change hereafter, as heretofore it has done, with the establishment of peace. Did this opinion require to be strengthened, it is abundantly confirmed by the navigation act, decreed by the convention; the operation whereof is suspended for the same reason that induced the opening to foreigners that trade to their colonies and territories in the West and East Indies.
The British for more than a hundred years excluded foreigners from a share in their East India trade; for a few years past they relaxed in the rigor of this system. We have availed ourselves of this circumstance, and shared with them in their India commerce. But this permission can be viewed only as an occasional departure from a general law, which may be affected by a change of circumstances; the duration of which, therefore, is uncertain. The loss and inconvenience to which our merchants may be exposed from the prosecution of a trade depending on regulations arising from inconstant circumstances, and which frequently vary, may, in some measure, be guarded against, where the scene is not remote, and the alterations in the laws can be known soon after they are made. But in the Asiatic and in our other distant commerce, it is of importance that the laws under which an adventure is begun should be permanent. Losses to a considerable amount have been experienced by some of our merchants, who have undertaken distant voyages in the expectation of the continuation of these temporary regulations. The trade, for example, with the Cape of Good Hope (which the Dutch Government ordinarily monopolize to their own people) was some time since opened to foreigners, and some of our citizens profited by it; but others, who had engaged in large adventures to that market, suffered no small disappointment and loss in finding themselves excluded, upon their arrival, by a repeal of the permission to foreigners to trade there. It must then be considered as an important object secured, in respect to the principal proportion of our India trade, that alone which is capable of being pursued as a branch of our commerce, that the treaty turns a favor into a right, and that our direct intercourse with the British territories in the East Indies, in all respects as broad as that of Great Britain herself (except in the articles of rice, naval and military stores, when Great Britain is engaged in war), instead of being an uncertain and hazardous trade, as heretofore, from its precarious nature, it has been, will, hereafter, be as certain as any in which our merchants shall engage.
It is further alleged, by way of objection to this article, that it does not secure to our citizens a right to reside and settle in the British territories in India, without the consent of the British local government. The observation that has been made on a similar objection, in respect to the coasting trade in India, is equally applicable to this. The article leaves subjects precisely in the situation in which it found them. But let it be remembered that the disproportion between the numbers of the native Indians and the foreigners inhabiting their country, is more than one thousand of the former to one of the latter; that the most exact discipline and subordination among the foreigners are therefore essential to the preservation of the British authority over that country; that no foreigner, or even a British subject, is allowed to reside there, except in the character of a servant of the company, or of a licensed inhabitant; that it has long been held as a sound opinion, that unrestrained liberty to the Europeans to emigrate to and settle among the Indians, would, in a short time, overturn and destroy the British empire in India. This danger would by no means be diminished by conferring a right upon the Americans, freely to reside and settle in India; that we shall be allowed to reside and settle there by permission of the local British government, is fairly to be inferred from the article. But an [absolute right] to an entire liberty on these points might evidently be dangerous to the British government over India—[and in prudence could not have been stipulated].
The advantageous footing on which the trade is placed is so evident, that those who had no reliance on the objections urged against it, but who, nevertheless, have been unwilling to allow the treaty any merit on the score of this article, have endeavored to show that our India trade is of little importance, and of small value.
Whatever article can be supplied by the India Company may likewise be supplied by us, and some of them on better terms by us than by them. The reports of the committee of the directors of the East India Company, published in 1793, when their charter was renewed, afford useful information on this subject, and disclose facts which show the advantages that we shall possess in this trade over the company. They admit, that in the articles of iron, wines, canvas, cordage, arms, and naval and military stores, foreigners can enter into a beneficial competition with them; and that canvas and cordage and, we may add, all naval stores and several other articles can always be furnished in India by foreigners cheaper than by the Company.
If we appreciate the advantage we have over them, in such articles of supply as are of our own growth or production, as well as in the wines not unusually procured by touching at Madeira on the outward voyage to India, and compare it with the advantage that they have over us in the few articles of choice which they purchase at the first hands, and which we must import in order to re-export to India, it is probable that our cargoes to India will, on the whole, be laid in as advantageously, if not more so than those of the India Company. If we consider the vast extent of territory, the numerous population, and the established manufactures of India, so far from supposing that a free trade to that country will be of little value to a young and enterprising nation, whose manufactures are still in their infancy, we ought rather to conclude that it is a country with which we should be solicitous to establish a free trade and intercourse.
Every one who has bestowed the slightest attention upon the foreign manufactures consumed in our country, must have observed the general and increasing use of those of India, owing to the better terms on which they can be procured from Asia than from Europe. Though no document is at hand that will show the value of the annual importations from India, it is stated by Mr. Coxe, in his View of the United States, that the amount in value of our importations from Asia is more than one fifth of the value of our whole annual consumption of foreign commodities. It is true that the porcelain, silks, nankeens, and teas of China form a large portion of this annual importation. But, after a full deduction on this account, a great and profitable branch of our commerce will be found in our trade to the East Indies. It should be remembered, [also,] that it is not the consumption of our own country that regulates the quantity of India goods that we import; other countries have been supplied through us with the fabrics and productions of both India and China. The treaty will enlarge this demand.
Several circumstances calculated to give our trade with Asia an advantage against foreign competition, and a preference to our trade with Europe, are deserving of attention.
First.—The direct trade between us and Asia, including the East Indies, as well as China, cannot be prosecuted by the British East India Company, their ships being obliged to return to the port of London, and there to discharge.
Second.—The difference between the duties on Asiatic goods imported in American bottoms direct from Asia, and the duties imposed on the same goods in foreign bottoms from Asia or from Europe; being on all articles a favorable discrimination, and in the articles of teas, the duties on those imported in foreign bottoms being fifty per cent. higher than on those imported in American bottoms.
The particular difference of duties on Asiatic goods imported in American and in foreign bottoms, so favorable to our own navigation, will not be affected by the right reserved by Great Britain to impose countervailing duties in certain cases, that right being relative to the intercourse between the United States and the British territories in Europe.
Third.—The European intercourse with Asia is, in most cases, conducted by corporations or exclusive companies, and all experience has proved that in every species of business (that of banking and a few analogous employments excepted), in conducting of which a competition shall exist between individuals and corporations, the superior economy, enterprise, zeal, and perseverance of the former will make them an overmatch for the latter; and that while individuals acquire riches, corporations engaged in the same business often sink their capital and become bankrupt. The British East India Company are, moreover, burdened with various terms and conditions, which they are required to observe in their Asiatic trade, and which operate as so many advantages in favor of their rivals in the supply of foreign markets. The company, for example, are obliged annually to invest a large capital in the purchase of British manufactures, to be exported and sold by them in India; the loss on these investments is considerable every year, as few of the manufactures which they are obliged to purchase will sell in India for their cost and charges; besides, from the policy of protecting the home manufactures, the Company are, in a great measure, shut out from supplying India goods for the home consumption of Great Britain. Most of the goods which they import from India are re-exported with additional charges, incurred by the regulations of the Company, to foreign markets, in supplying of which we shall be their rivals, as, from the information of intelligent merchants, it is a fact that Asiatic goods, including the teas of China, are [on an average] cheaper within the United States than in Great Britain.
Fourth.—The manufactures of Asia are not only cheaper here than in Europe, but in general they are cheaper than goods of equal quality of European manufacture. So long as from the cheapness of subsistence and the immense population of India (the inhabitants of the British territories alone being estimated at forty millions) the labor of a manufacturer can be procured from two to three pence sterling per day, the similar manufactures of Europe, aided with all their ingenious machinery, are likely, on a fair competition, in almost every instance, to be excluded by those of India. So apprehensive have the British Government been of endangering their home manufactures by the permission of Asiatic goods to be consumed in Great Britain, that they have imposed eighteen per cent. duties on the gross sales of all India muslins, which is equal to twenty-two per cent. on their prime cost. The duties on coarser India goods are still higher, and a long catalogue of Asiatic articles, including all stained and printed goods, is prohibited from being consumed in Great Britain.
The British manufacturers were not satisfied even with this prohibitory system; and on the late renewal of the Company’s charter, they urged the total exclusion from British consumption of all India goods, and, moreover, proposed that the Company should be held to import annually from India a large amount of raw materials, and particularly cotton, for the supply of the British manufacturers.
Those facts are noticed to show the advantages to be derived from a free access to the India market, from whence we may obtain those goods which would be extensively consumed even in the first manufacturing nations of Europe, did not the security of their manufactories require their exclusion.
Camillus.
Titles (by Subject) 
