Front Page Titles (by Subject) CHAP. III.: A more Open East-India- Trade, is more profitable to the Kingdom. - A Select Collection of Early English Tracts on Commerce from the Originals of Mun, Roberts, North, and Others
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CHAP. III.: A more Open East-India- Trade, is more profitable to the Kingdom. - John Ramsay McCulloch, A Select Collection of Early English Tracts on Commerce from the Originals of Mun, Roberts, North, and Others 
A Select Collection of Early English Tracts on Commerce from the Originals of Mun, Roberts, North, and Others, with a Preface and Index (London: Printed for the Political Economy Club, 1856).
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A more Open East-India-Trade, is more profitable to the Kingdom.
’TIS objected, and deny’d, That the East-India-Trade, as at present manag’d, is an Exchange of less for greater Value; for that the Emulation of two Companies contending one against another, has utterly destroy’d the Profit of the Trade, has driven the Trade so very close, has run the Prices of things so high in India, so very low in England, that no more can be imported from India for any sum of Money, than will be made in England for the same Money. Bullion, and so much Manufacture as can be purchas’d for it, are equivalent. Wherefore for any quantity of Bullion, if no more can be imported from India, than wou’d be made in England, the Exchange is not of less for greater value; the Kingdom is not the richer for this Exchange.
First ’tis answer’d,The Bullion is exchang’d for more Manufactures, than will be made in England for it. That the Merchant still carries on his Trade to the East-Indies; wherefore upon the return of his Manufactures, he finds sufficient value to pay the Freight and Cargo outwards, sufficient to pay the Customs of the King, and some Profit to himself besides; and still he is able to sell the Indian, cheaper than he can buy an equal English Manufacture. Therefore notwithstanding the Emulation of two Companies, notwithstanding the Prices rais’d in India, and abated in England, still the Bullion is exchang’d with India for more Manufactures than will be made in England for it; still the Exchange is of less for greater value.
But for a farther Answer to this Objection of two Companies trading one against another, it must be said, That the East-India-Trade, the more open, and the closer driven, must needs import more Profit to the Kingdom, and less disturb the English Manufactures.
’Tis very probable the profit of an open Trade is a great deal less in proportion to the Stock imploy’d in it, and therefore the Merchant that feels the difference, will be very ready with his Complaints; ’tis without doubt, more profitable for a Merchant to imploy his Stock in Trade, so as at the end of the Year to receive his Principal again, with Gain besides of twenty for every Hundred, than to imploy as much Stock for half as much Profit. But ’tis better and more profitable for the Kingdom, that 300l. should be imployed in Trade for the profit of 10 per Cent. than but 100l. for the profit of 20 per Cent. wherefore, less in proportion and more in quantity, must be esteem’d as greater profit.
This then will be the consequence of the East-India Trade,Companies trade at more charge than private Persons. laid more open and closer driven; the profit will be less in proportion but more in quantity. ’Tis reasonable to believe, that a Company cannot trade so much to the publick Benefit; a Company of Merchants trading with a Joint-stock, is but one only Buyer, one only Seller; they manage their Trade with the pride and charge that become the State of Kings; they expect to be follow’d by the Market, and therefore never stir beyond the Warehouse, whither if Customers come, they are forc’d to wait till the Auction is ready to begin; in an open Trade, every Merchant is upon his good Behaviour, always afraid of being undersold at home, always seeking out for new Markets in Foreign Countries; in the mean time, Trade is carried on with less Expence: This is the effect of Necessity and Emulation, things unknown to a single Company. A Trade so far extended, so much better husbanded, however less profitable in proportion to the Merchant’s Stock, must needs import more absolute Profit to the Kingdom.
Also,Other Examples. the Examples of parallel Cases make it very credible, that a more open East-India Trade and closer driven, tho’ it may be less profitable in proportion to the Bulk of it, will yet be more profitable to the Kingdom. In the time of Sir Thomas Gresham, perhaps he was the only Merchant in England: Wonderful things are storyed of Trade and profit of Trade in that Age; for every Hundred Pounds at the end of the Year, besides the Principal return’d again, Two or Three Hundred Pounds are said to have been divided between the Customs of the King and the Merchant’s Gain. ’Tis scarce credible, that at this time more than the profit of 20 or 30 per Cent. can be divided between the Merchant and the King; but then from the difference of Customs, and for other Reasons, we may very well believe, that for every Hundred Pounds in the Age of Sir Thomas Gresham, Ten Thousand Pounds are now imploy’d in Trade; and consequently, for every Hundred Pounds gain’d in that Age, at least a Thousand Pounds are gain’d in this; indeed a great deal less in proportion to the Stock, but more in quantity. The African Trade was very lately like that of the East-Indies, carried on by the Joint-stock of one single Company: it is not laid quite open now, only private Traders are admitted upon payment of a Mulct to the Company; the consequence of this is, that Ten ships are imploy’d in that Trade for one before, Ten hundred Pounds for one before. It will hardly be pretended by the Company, that when the Trade was all their own, they divided more to the King and Company than 100 per Cent. And it will hardly be deny’d by the present Traders, that 20 or 30 per Cent. is divided to the Customs and their own Profit: and this is likewise less in proportion to the present Bulk of the Trade, yet more in quantity. Now, if this has been the consequence of other Trades enlarg’d and closer driven, why should it not be the same of the East-India Trade enlarg’d and closer driven.
But indeed,Also of the East-India Trade, prove an open Trade most profitable. this is the consequence: The East-India Trade enlarg’d by the Emulation of two Companies, may be less profitable to the Merchant; certainly it must import more profit to the Kingdom. While one only Company enjoy’d that Trade, I will believe, that every Hundred Pounds exported into India, return’d in value besides the Principal, 50l. to the Customs, and double that Sum to the Merchant’s Gain; in all 150l. this was great Profit. But at this time, the Stock in that Trade is four times as great as ’twas before, that is, Four hundred Pounds for one; Four hundred Pounds must now return in value, besides the Principal, as much in proportion to the Customs, in all Two hundred Pounds, and something over to the Merchant’s Gains, perhaps One hundred Pounds for all the four. And thus the Trade is four times as great as ’twas before; the Profit is only doubled; the Profit is less in proportion to the Bulk of the Trade, but more in quantity.
Less Profit in proportion but greater in quantity, is greater Profit; from Reason, from the Experience of other Trades, and even of this very Trade, it appears, the more open the same shall be, and closer driven, it may indeed import less Profit in proportion to the Bulk of the Trade, yet must import more in quantity, and consequently must needs be more profitable to the Kingdom: And thus again, notwithstanding the prices of things rais’d in India, abated here, the Bullion is still exchang’d for greater value.
’Tis true,Tho’ driven so close as to be left off. if this Trade shall be carried on with the greatest freedom, if every one shall be permitted to imploy his Stock in it, by degrees it will be driven so very close, that nothing of Profit will be glean’d from it; the Merchant will be disabled to import the Indian Manufactures cheaper than as good things may be made in England. Then there will be truth in his Complaint, the Exchange will be unprofitable, and must be given over. But then ’tis fit the Merchant should be told, that the East-India Trade is not carried on for his sake, but for the Kingdom’s: when Manufactures are not to be imported cheaper from India than they can be made in England, our End is gain’d; we have reap’d the utmost Profit that is to be obtain’d by that or any other Trade; our Manufactures will then be quiet; they will not be disturb’d by the cheaper Indian Manufactures; these will not rule the price of ours, neither in our own nor foreign Markets: And thus one of the great Objections against this Trade wou’d be answer’d; the East-India Trade the more open and closer driven, will less disturb the English Manufactures, and import the greatest Profit into England.
Yet against a more open East-India Trade will be objected,Objections that a more open East-India Trade not good. That the Trade is not to be carried on at all without Forts and Factories; that these are not to be maintain’d without the Joint-stock of a Company; and ’tis but reasonable the Company that bears the charge, shou’d reap the Profit of the Trade. Wherefore ’tis every day insinuated, That the late Act for erecting a new Company, was gain’d by Violence and Injustice; that it is continu’d only for the sake of the Loan to the Government, at excessive Interest; that to be restor’d to their former Right of the whole Trade, the Old Company is ready to pay the Loan, and will be content with half the Interest; and ’twill be unreasonable, if an English Parliament shall refuse to do a piece of Justice so very profitable to the Kingdom, where as it ought to be done tho’ to our greatest Disadvantage. And besides, Political Reasons concur with this, that the Kingdom may be once more at quiet. What Heats and Animosities have been caus’d by this Division? What Distractions in the Publick Counsels? Our Elections are not free, neither our Debates of Parliament. The Publick Business is very often at a stand; every one is engag’d on the side of the one or the other Company. If either can be gain’d to the Publick Interest, this is sure, tho’ for no other reason, to meet with Opposition. Indeed of late, the Resolutions have been brave; the King has been Address’d to enter into great Alliances, for the preservation of our Selves, our Neighbours, our Religion, and the Peace of Europe. Nevertheless it cannot presently be forgotten, that it was some struggle to resolve upon the Peace of Europe, that Speeches were made in favour of the Duke of Anjou’s Title to the Crown of Spain, and that it has been thought almost crime enough for an Impeachment, to advise the King to disown it. All which is imputed to the Quarrel of the two Companies; Men are afraid, that this in time may clog the Wheels of the Government; so that we may be forc’d to stand still, and see a coalition of France and Spain, the Empire broken, Holland devour’d in one or two Campagnes, and England left alone to deal with all this Power. Our Mediterranean Trade is already at the mercy of this Conjunction; when Holland’s gone, the French are Masters of all the Coast upon the Continent; our Baltic Trade and all our Naval Stores are gone. Our East and West-India Trades might languish yet a little longer, but must decay for want of Places to take off our Returns, and may yet be sooner broken by this united Power. But why shou’d we be in any Disquiets for our Trade, as if that alone were in danger? If this Conjunction holds, we must submit our selves, and be contented with Laws and Vice-Roys, such as France will please to send us. ’Tis said, that this Division of the Companies must certainly disable us to use our Naval Strength, to harass the Coasts of France and Spain, to cut off their Communication with their Indian Kingdoms, to intercept and confiscate their Treasures there to the use of a War so necessary; leave must be had of both the Companies to spirit the Discontents of Spain, to encourage the Friends of the House of Austria to shew themselves, and call aloud for change of Government: These and an hundred other invidious things, are charg’d upon this Division; if they are true, we pay too dear for this Enlargement of our Trade; ’twere far better that both the Companies were broken, and all the Profit of the Trade were lost for ever.
But certainly,Answer’d. to break both Companies is not the way to lose the Profit of the Trade; the Trade is then laid open, the Profit thereof must needs encrease; the necessary Forts and Castles may be as well maintain’d at the Publick Charge; and this may be better paid by the greater Gain of an open Trade. The want of Factories can be no Complaint: A greater Trade must needs increase these; it has done so in every Country; the Reason is alike in all; our Factories must be as well secur’d by Forts and Castles, under the immediate care of the Government, as if the same were maintain’d by the Joint-stock of a Company.
If it has really enter’d into the Thoughts of any Gentleman of the Old Company, to offer to advance this Loan to the Parliament at half the interest for all the Trade; if this is intended to be propos’d to the Wisdom of a Nation as a beneficial Bargain, this of all things is most extravagant and amazing. The Kingdom, that is, the Body of the People, is neither richer nor poorer, whether an Hundred thousand Pounds per Annum be paid to a Company of English Merchants, or remain at the disposal of the Government. But the Nation possibly, is by half a Million yearly richer, as long as this Trade is so much enlarg’d by the Emulation of two Companies, than if ’twere reduc’d to the Joint-stock of one. If so great a yearly Profit is not to be given up to Peace and Justice, ’twill never be given away for nothing; the Wisdom of Parliament will never be so far over-reach’d by the cunning of Merchants.
I rather hope to hear of Ways and Means to pay this Loan of both the Companies, to buy their Forts and Castles, and whatsoever is their Right of Trade: These might be valu’d by a Jury of Twelve indifferent and understanding Men; whatever by these shou’d be Awarded, wou’d soon be paid by the Customs of this Trade: And thus the Trade wou’d be laid quite open to all the good People of England; by this means no Injustice wou’d be done, and these Advantages wou’d be obtain’d.
First of all,The dissolution of the Companies, the way to destory Stock-jobbing, an end wou’d be put to the Trade of Stock-jobbers; unskilful and unwary Men are entic’d away, from certain Profit to pursue uncertain Hopes; after great Revolutions of the Game, their Hopes at last are disappointed, their Stocks are left among the Artists, their Industry is lost to the Kingdom, their Families are undone. ’Tis in vain to forbid the thing by Laws; Laws are eluded by the subtlety and cunning of Men; the thing is practis’d more than ever: To break both Companies, is not only to forbid the Corruption, but to tear it up by the very Roots.
Stocks in the Warehouses of private Merchants rise and fall, and no Man knows it but themselves;To restore Freedom to the publick Debates, however, they rise in value in spight of Wars. Companies are frighted by Wars and rumours of Wars; the Joint-stocks fall, and every one must hear it: And this engages the private Interest of some, the Fear of others, to disturb the publick Resolutions; to be rid of this inconvenience were worth a great deal to the Nation; to break both Companies were half the way to do it.
Of Companies,To put an end to many Corruptions, Committees have always separate interests of their own; Commands of Ships, Places, and Governments to sell; however it fares with the Joint-stock, the Trade to these Men is always profitable. These do not care to part with their places; and this perhaps has chiefly held off the Union of both the Companies. The Corruptions which they have practis’d themselves, they have learn’d to practise upon greater Men than themselves. Vast sums are gone, which are not yet, nor ever will be brought to account. To break both Companies, is the surest way to break these Practices; to make Men honest, is to take from them all Temptations to be otherwise.
By this,To restore Peace among the People. our Heats and Animosities will be remov’d, our Breaches heal’d, the Kingdom once again in peace. If such Mischiefs have been created by the distracted Counsels of both Companies, what may be fear’d from the united Strength of both?
To purchase these Advantages, nothing is given away that’s valuable; the Trade already enlarg’d by the Emulation of two Companies, by the dissolution of both, will yet be more enlarg’d. A Trade more open and closer driven, will be more profitable to the Kingdom. Prices of things may be rais’d in India, abated here; nevertheless, as long as this Trade shall be carried on, the same will be an exchange of less for greater value; and when it ceases to be such, ’twill then be time to give it over.