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CHAP. V. - James Mill, The History of British India, vol. 1 
The History of British India in 6 vols. (3rd edition) (London: Baldwin, Cradock, and Joy, 1826). Vol. 1.
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From the Project of forming a new and rival Company, till the Union of the two Companies by the Award of Godolphin, in the year 1711.
book i.Chap. 5. 1683.The Company were now again threatened by that competition with their fellow-citizens which they have always regarded as their greatest misfortune. From the renewal of their charter, shortly after the accession of Charles II., their monopoly had not been disturbed, except by a few feeble interlopers, whom they had not found it difficult to crush. In the year 1682–83, the design was disclosed of opening a subscription for a new joint-stock, and establishing a rival East India Company. The scheme was so much in unison with the sentiments of the nation, and assumed an aspect of so much importance, that it was taken into consideration by the King and Council. 1
It had so much effect upon the views of the Company, though for the present the Council withheld their sanction, that, in Mr. Bruce's opinion, it introduced into their policy of 1682–83 a refinement, calculated, and intended, to impose upon the King and the public. It induced them to speak of the amount of their equipments, not, as usual, in terms of exact detail, but in those of vague and hyperbolical estimate. What we know of their adventure of that year is only the information they forwarded to their Indian stations, that the stock to be sent out would exceed one million sterling. In the course of book i.Chap. 5. 1683–85. the next season they equipped four ships to Surat. Of that year we only further know that 100,000l. in bullion was intended for Bengal. In 1684–85, information was forwarded to Surat, in general terms, that the tonnage and stock would be considerable: Five ships sailed for Fort St. George and Bengal, with 140,000l. in bullion: Of other circumstances nothing is adduced: and for several succeeding years no statement of the tonnage and stock of the annual voyages appears.1
Under the skill which the Court of Directors have all along displayed in suppressing such information as they wished not to appear, it is often impossible to collect more than gleanings of intelligence respecting the Company's debts. At the present period, however, they appear to have been heavy and distressing. In 1676, it was asserted by their opponents in England that their debts amounted to 600,000l.;2 and we have already seen that, in 1674, the debt of Surat alone amounted to 135,000l.3 In 1682–83, the Directors authorised the Agency in Bengal to borrow 200,000l. and, in 1683–84, it is stated that the debt upon the dead stock at Bombay alone amounted to 300,000l.4 It seems highly probable that at this time their debts exceeded their capital.
In a war between the King of Bantam and his son, in which the English sided with the one, and the Dutch with the other, the son prevailed; and expelled the English from the place. The agents and servants of the factory took shelter at Batavia, and the Dutch Governor made offer of his assistance to book i.Chap. 5. 1683–85. bring the property of the Company from Bantam. As the English, however, accused the Dutch of being the real authors of the calamity, they declined the proposal, as precluding those claims of redress which the Company might prosecute in Europe. Various efforts were made to regain possession of Bantam, but the Dutch from this time remained sole masters of Java.1
Upon the loss of Bantam, the Presidency for the government of the Eastern Coast, which had hitherto, with a fond desire for the traffic of the islands, been stationed at that place, was removed to Fort St. George.2
The nation becoming gradually more impatient under the monopoly, the numbers multiplied of those who ventured to break through the restraint which it imposed upon the commercial ardour of the times. The Company, not satisfied with the power which they had already obtained of common and martial law, and of seizing, with their property, and sending to England, as many of their countrymen, as their interests or caprice might direct, still called for a wider range of authority: and, under the favour of government which they now enjoyed, obtained the powers of Admiralty jurisdiction, for the purpose of seizing and condemning, safe from the review of the courts of municipal law in England, the ships of the interlopers.3 The servants of the Company were now invested with unlimited power over the British people in India.
Insurrection again appeared at Bombay, and assumed a very formidable aspect. The causes were such as have commonly, in the Company's affairs, been attended with similar effects. Efforts had been made to retrench expenses; unpleasant to the Company's book i.Chap. 5. 1683–85. servants. The earliest experiment of the Company in territorial sovereignty agreed with the enlarged experience of succeeding times: the expense of the government exceeded the revenue which the population and territory could be made to yield. The Directors, new to the business of government, were disappointed; and having first laboured to correct the deficit by screwing up the revenue, they next attempted the same arduous task by lessening the expense. By the two operations together, all classes of their subjects were alienated: First, the people, by the weight of taxation; next, the instruments of government, by the diminution of their profits. Accordingly Captain Keigwin, commander of the garrison at Bombay, was joined by the troops and the great body of the people, in renouncing the authority of the Company, and declaring by proclamation, dated December 27, 1683, that the island belonged to the King. Keigwin was by general consent appointed Governor; and immediately addressed letters to the King and to the Duke of York, stating such reasons as were most likely to avert from his conduct the condemnation to which it was exposed.1
The President and Council at Surat, conscious of their inability to reduce the island by force, had recourse to negociation. A general pardon, and redress of grievances, were promised. First three commissioners were sent; afterwards the President repaired to Bombay in person. But neither entreaties nor threats were of any avail.2
book i.Chap. 5. 1685–87. As soon as intelligence arrived in England, the King's command was procured, directing Captain Keigwin to deliver up the island: and instructions were forwarded to proceed against the insurgents by force. When Sir Thomas Grantham, the commander of the Company's fleet, presented himself at Bombay, invested with the King's commission, Keigwin offered, if assured of a free pardon to himself and adherents, to surrender the place. On these terms the island was restored to obedience. For the more effectual coercion of any turbulent propensities, the expedient was adopted of removing the seat of government from Surat to Bombay. Nor could the humble title and pretensions of a President and Council any longer satisfy the rising ambition of the Company. The Dutch had established a regency at Batavia and Columbo. It was not consistent wiih the grandeur of the English Company to remain contented with inferior distinction. In 1687, Bombay was elevated to the dignity of a Regency, with unlimited power over the rest of the Company's settlements. Madras was formed into a corporation, governed by a mayor and aldermen.1
The English had met with less favour, and more oppression, from the native powers in Bengal, than in any other part of India.2 In 1685–86, the resolution was adopted of seeking redress and protection by book i.Chap. 5. 1685–87. force of arms. The greatest military equipment the Company had ever provided was sent to India. Ten armed vessels, from twelve to seventy guns, under the command of Captain Nicholson, and six companies of infantry, without captains, whose places were to be supplied by the Members of Council in Bengal, were dispatched, with instructions to seize and fortify Chittagong as a place of future security, and to retaliate in such a manner upon the Nabob and Mogul as to obtain reparation for the injuries and losses which had been already sustained. In addition to this force, the Directors, in the following year, made application to the King for an entire company of regular infantry with their officers; and power was granted to the Governor in India to select from the privates such men as should appear qualified to be commissioned officers in the Company's service. By some of those innumerable casualties, inseparable from distant expeditions, the whole of the force arrived not at one time in the Ganges; and an insignificant quarrel, between some of the English soldiers and the natives, was imprudently allowed to bring on hostilities, before the English were in a condition to maintain them with success. They were obliged to retire from Hoogley, after they had cannonaded it with the fleet, and took shelter at Chutanuttee, afterwards Calcutta, till an agreement with the Nabob, or additional forces, should enable them to resume their stations. The disappointment of their ambitious schemes was bitterly felt by the Court of Directors. They blamed their servants in Bengal in book i.Chap. 5. 1685–87. the severest terms, not only for timidity, but breach of trust, as having turned the resources of the Company, which ought to have been effectually employed in obtaining profitable and honourable terms from the Nabob and Mogul, to their own schemes of private avarice and emolument. A hollow truce was agreed to by the Nabob, which he only employed for preparing the means of an effectual attack. The English, under the direction of Charnock, the Company's agent, made a gallant defence. They not only repulsed the Nabob's forces in repeated assaults, but stormed the fort of Tanna, seized the island of Injellee, in which they fortified themselves, and burnt the town of Balasore, with forty sail of the Mogul fleet; the factories, however, at Patna and Cossimbuzar were taken and plundered. In September, 1687, an accommodation was effected, and the English were allowed to return to Hoogley, with their ancient privileges. But this was a termination of the contest ill-relished by the Court of Directors. Repeating their accusations of Charnock and their other functionaries, they sent Sir John Child, the governor of Bombay, to Madras and Bengal, for the purpose of reforming abuses, and of re-establishing, if possible, the factories at Cossimbuzar and other places, from which they had been driven by the war. A large ship, the Defence, accompanied by a frigate, arrived from England under the command of a captain of the name of Heath, with instructions for war. The Company's servants had made considerable progress by negociation in regaining their ancient ground; when Heath precipitately commenced hostilities, plundered the town of Balasore, and proceeded to Chittagong, which he found himself unable to subdue. Having taken the Company's servants and effects on board, agreeably to his orders, he sailed to Madras; book i.Chap. 5. 1687. and Bengal was abandoned.1
These proceedings, with the rash and presumptuous behaviour of Sir John Child on the western side of India, exasperated Aurengzebe, the most powerful of all the Mogul sovereigns, and exposed the Company's establishments to ruin in every part of India. The factory at Surat was seized; the island of Bombay was attacked by the fleet of the Siddees; the greater part of it was taken, and the governor besieged in the town and castle. Aurengzebe issued orders to expel the English from his dominions. The factory at Masulipatam was seized; as was also that at Visigapatam, where the Company's agent and several of their servants were slain. The English stooped to the most abject submissions. With much difficulty they obtained an order for the restoration of the factory at Surat, and the removal of the enemy from Bombay. Negotiation was continued, with earnest endeavours, to effect a reconciliation. The trade of the strangers was felt in the Mogul treasuries; and rendered the Emperor, as well as his deputies, not averse to an accommodation. But the interruption and delay sustained by the Company made them pay dearly for their premature ambition, and for the unseasonable insolence, or the imprudence of their servants.2
book i.Chap. 5. 1689–98. During these contests the French found an interval, in which they improved their footing in India. They had formed an establishment at Pondicherry, where they were at this time employed in erecting fortifications.1
The equipments for 1689–90 were on a reduced scale; consisting of three ships only, two for Bombay, and one for Fort St. George. They were equally small the succeeding year. We are not informed to what the number of ships or value of cargo amounted in 1691–2. In the following year, however, the number of ships was eleven; and was increased in 1693–4, to thirteen. In the following year there was a diminution, but to what extent does not appear. In each of the years 1695–6 and 1696–7, the number of ships was eight. And in 1697–8 it was only four.2
It was now laid down as a determinate object of policy, that independence was to be established in India; and dominion acquired. In the instructions forwarded in 1689, the Directors expounded themselves in the following words: “The increase of our revenue is the subject of our care, as much as our trade:—'tis that must maintain our force, when twenty accidents may interrupt our trade; 'tis that must make us a nation in India;—without that we are but as a great number of interlopers, united by his Majesty's royal charter, fit only to trade where nobody of power thinks it their interest to prevent us;—and upon this account it is that the wise Dutch, in all their general advices which we have seen, write ten paragraphs concerning their government, their civil and military policy, warfare, and the increase of their revenue, for one paragraph they write concerning book i.Chap. 5. 1689–98. trade.”1 It thus appears at how early a period, when trade and sovereignty were blended, the trade, as was abundantly natural, became an object of contempt, and by necessary consequence, a subject of neglect. A trade, the subject of neglect, is of course a trade without profit.
This policy was so far gratified, about the same period, that Tegnapatam, a town and harbour on the Coromandel coast, a little to the south of Pondicherry, was obtained by purchase, and secured by grant from the country powers. It was strengthened by a wall and bulwarks, and named Fort St. David.2
A fact of much intrinsic importance occurs at this part of the history. Among the Christians of the East, the Armenians, during the power of the successors of Constantine, had formed a particular sect. When the countries which they inhabited were overrun by the Mahomedan arms, they were transplanted by force, in great numbers, into Persia, and dispersed in the surrounding countries. Under oppression, the Armenians adhered to their faith; and, addicting themselves to commerce, became, like the Jews in Europe, the merchants and brokers in the different countries to which they resorted.3 A proportion of them made their way into India, and, by their usual industry and acuteness, acquired that share in the business of the country which was the customary reward of the qualities they displayed. The pecuniary pressure under which the Company at this book i.Chap. 5. 1689–98. time laboured, and under which, without ruinous consequences, the increase of patronage could not be pursued, constrained the Directors to look out for economical modes of conducting their trade. They accordingly gave instructions, that, instead of multiplying European agents in India, natives, and especially Armenians, should be employed: “because,” to use the words of Mr. Bruce, copying or abridging the letters of the Court, “that people could vend English woollens, by carrying small quantities into the interior provinces, and could collect fine muslins, and other new and valuable articles, suited to the European demands, betterthan any agents of the Company could effect, under any phirmaund or grant which might be eventually purchased.”1
The prosperity which the nation had enjoyed, since the death of Charles I., having rendered capital more abundant, the eagerness of the mercantile population to enter into the channel of Indian enterprise and gain had proportionably increased; and the principles of liberty being now better understood, and actuating more strongly the breasts of Englishmen, not only had private adventure, in more numerous instances, surmounted the barriers of the Company's monopoly, but the public in general at last disputed the power of a royal charter, unsupported by Parliamentary sanction, to limit the rights of one part of the people in favour of another, and to debar all but the East India Company from the commerce of India. Applications were made to Parliament for a new system of management in this branch of national affairs; and certain instances of severity, which were made to carry the appearance of atrocity, in the exercise of the powers of martial law assumed by the Company, in St. Helena and other places, served to book i.Chap. 5. 1689–98. augment the unfavourable opinion which was now rising against them.1
The views of the House of Commons were hostile to the Company. A committee, appointed to investigate the subject, delivered it as their opinion on the 16th January, 1690, that a new Company should be established, and established by Act of Parliament; but that the present Company should carry on the trade exclusively, till the new Company were established.2 The House itself in 1691, addressed the King to dissolve the Company, and incorporate a new one; when the King referred the question to a committee of the Privy Council.3
In the mean time the Company proceeded, in a spirit of virulence, to extinguish the hated competition of the general traders. “The Court,” says Mr. Bruce, transcribing the instructions of 1691, “continued to act towards their opponents, interlopers, in the same manner as they had done in the latter years of the two preceding reigns; and granted commissions to all their captains, proceeding this season to India, to seize the interlopers of every description, and to bring them to trial before the Admiralty Court at Bombay;—explaining, that, as they attributed all the differences between the Company and the Indian powers to the interlopers, if they continued their depredations on the subjects of the Mogul or King of Persia, they were to be tried for their lives as pirates, and sentence of death passed; but execution stayed till the King's pleasure should be known.”4
book i.Chap. 5. 1689–98. The cruelty which marks these proceedings is obvious; and would hardly be credible if it were less strongly attested. The Company seized their opponents, and carried them before their own Admiralty Courts, that is, before themselves, to judge and pass sentence in their own cause, and inflict almost any measure of injury which it suited minds, inflamed with all the passions of disappointed avarice and ambition, to perpetrate. They accused their competitors of piracy, or of any other crime they chose; tried them, as they pleased, and sentenced them even to death: accounting it an act of mercy that they did not consign them to the executioner before the royal pleasure was known;—as if that pleasure could be as quickly known, in India, as it could in England;—as if the unfortunate victim might not remain for months and years in the dungeons of the Company, in a climate, where a sentence of imprisonment, for any length of time, to a European constitution, is a sentence of almost certain death; and where he could hardly fail to suffer the pains of many executions, beside the ruin of his affairs, in a land of strangers and enemies, even if his wretched life were protracted till his doom, pronounced at the opposite side of the globe, could be known. Mr. Bruce, with his usual alacrity of advocation, says, “This proceeding of the Court rested upon the opinion of the twelve Judges, which was, that the Company had a right to the trade to the East Indies, according to their charter.”1 Because the Judges said they had a right to the trade to the East Indies, book i.Chap. 5. 1693. they assumed a right to be judges and executioners of their fellow subjects, in their own cause. This was a bold conclusion. It was impossible that, under any colour of justice, the powers of judicature entrusted to the Company, by kingly without parliamentary authority, even if allowed, could be extended beyond their own servants, who voluntarily submitted to their jurisdiction. Over the rest of their fellow-subjects, it was surely sufficient power, if they were permitted to send them to England, to answer for their conduct, if challenged, before a tribunal, which had not an overbearing interest in destroying them.
The King of 1693, like the King of any other period, preferred power in his own hands to power in the hands of the parliament, and would have been pleased to retain without participation the right of making or annulling exclusive privileges of trade. Notwithstanding the resolution of the committee of the House of Commons, that parliament should determine whatever regulations might be deemed expedient for the Indian trade, a new charter was granted by letters patent from the crown, as the proper mode of terminating the present controversies. The principal conditions were, that the capital of the Company, which was 756,000l. should be augmented by book i.Chap. 5. 1693. 744,000l., so as to raise it to 1,500,000l.; that their exclusive privileges should be confirmed for twenty-one years; that they should export 100,000l. of British produce annually; that the title to a vote in the court of Proprietors should be 1000l.; and that no more than then votes should be allowed to any individual.1
The pretensions, however, of the House of Commons brought this important question to a different issue. Towards the close of the very same season, that assembly came to a vote, “that it was the right of all Englishmen to trade to the East Indies, or any part of the world, unless prohibited by act of parliament:2 and William knew his situation too well to dispute their authority.
The Company laboured under the most pressing embarrassments. Though their pecuniary difficulties, through the whole course of their history, have been allowed as little as possible to meet the public eye, what we happen to be told of the situation at this time of the Presidency at Surat affords a lively idea of the financial distresses in which they were in volved. Instead of eight lacks of rupees, which it was expected would be sent from Bombay to Surat, to purchase goods for the homeward voyage, only three lacks and a half were received. The debt at Surat already amounted to twenty lacks; yet it was absolutely necessary to borrow money to purchase a cargo for even three ships. A loan of one lack and 80,000 rupees was necessary to complete this small investment. To raise this sum, it was necessary to allow to individuals the privileges of the contract which subsisted with the Armenian merchants.3 And after all these exertions the money could only be obtained book i.Chap. 5. 1693–98. by taking it up on loans from the Company's servants.1
The Company meanwhile did not neglect the usual corrupt methods of obtaining favours at home. It appeared that they had distributed large sums of money to men in power, before obtaining their charter. The House of Commons were, at the present period, disposed to inquire into such transactions. They ordered the books of the Company to be examined; where it appeared that it had been the practice, and even habit of the Company, to give bribes to great men; that, previous to the revolution, their annual expense under that head had scarcely ever exceeded 1,200l; that since the revolution it had gradually increased; and that in the year 1693, it had amounted to nearly 90,000l. The Duke of Leeds, who was charged with having received a bribe of 5,000l. was impeached by the Commons. But the principal witness against him was sent out of the way, and it was not till nine days after it was demanded by the Lords that a proclamation was issued to stop his flight. Great men were concerned in smothering the inquiry; parliament was prorogued; and the scene was here permitted to close.2
As the science and art of government were still so imperfect as to be very unequal to the suppression of crimes; and robberies and murders were prevalent even in the best regulated countries in Europe; so depredation was committed on the ocean under still less restraint, and pirates abounded wherever the amount of property at sea afforded an adequate temptation. The fame of Indian riches attracted to the book i.Chap. 5. 1693–98. Eastern seas adventurers of all nations; some of whom were professed pirates; others, men preferring honest trade; though, when they found themselves debarred from this source of profit, by the pretensions and power of monopoly, they had no such aversion to piracy as to reject the only other source in which they were allowed to partake. The moderation which, during some few years, the Company had found it prudent to observe in their operations for restraining the resort of private traders to India, had permitted an increase of the predatory adventurers. As vessels belonging to Mogul subjects fell occasionally into the hands of plunderers of the English nation, the Mogul government, too ignorant and headlong to be guided by any but the rudest appearances, held the Company responsible for the misdeeds of their countrymen; and sometimes proceeded to such extremities as to confiscate their goods and confine their servants. The Company, who would have been justified in requiring aid at the hands of government for the remedy of so real a grievance, made use of the occasion as a favourable one for accumulating odium upon the independent traders. They endeavoured to confound them with the pirates. They imputed the piracies in general to the interlopers as they called them. In their complaints to government they represented the interlopers and the depredations of which they said they were the authors, as the cause of all the calamities to which, under the Mogul government, the Company had been exposed. The charge, in truth, of piracy became a general calumny, with which all the different parties in India endeavoured to blacken their competitors; and the Company itself, when the new association of merchants trading to India began to rival them, were as strongly accused of acting the pirates in India, as the individual traders had been by themselves.1
Such was the situation of the Company in England, and in India, when the influence of the rival association threatened them with destruction. In the year 1698 both parties were urging their pretensions with the greatest possible zeal, when the necessities of the government pointed out to both the project of bribing it by the accommodation of money. The Company offered to lend to government 700,000l. at 4 per cent. interest, provided their charter should be confirmed, and the monopoly of India secured to them by act of parliament. Their rivals, knowing on how effectual an expedient they had fallen, resolved to augment the temptation. They offered to advance 2,000,000l. at 8 per cent. provided they should be invested with the monopoly, free from obligation of trading on a jointstock, except as they themselves should afterwards desire.2
A bill was introduced into parliament for carrying the project of the new association into execution. And the arguments of the two parties were brought forward in full strength and detail.3
On the part of the existing Company, it was represented; That they possessed charters; that the infringement of charters was contrary to good faith, contrary to justice, and in fact no less imprudent than it was immoral, by destroying that security of engagements book i.Chap. 5. 1698. on which the industry of individuals and the prosperity of nations essentially depend: That the East India Company, moreover, had property, of which to deprive them would be to violate the very foundation on which the structure of society rests; that they were the Lords-Proprietors, by royal grant, of Bombay and St. Helena; that they had in India at their own expense, and by their own exertions, acquired immoveable property, in lands, in houses, in taxes and duties, the annual produce of which might be estimated at 44,000l.: That at great expense they had erected fortifications in various parts of India, by which they had preserved to their country the Indian trade; and had built factories and purchased privileges of great importance to the nation; enterprises to which they could have been induced by nothing but the hope and prospect of national support: That the resources and abilities of the Company were proved, by the estimate of their quick and dead stock; and that a capital of two millions would be raised immediately by subscription: That the project, on the contrary, of the new association made no provision for a determinate stock; and the trade, which experience proved to require an advance of 600,000l. annually, might thus be lost to the nation, for want of sufficient capital to carry it on: That justice to individuals, as well as to the public, required the continuance of the charter, as the property and even subsistence of many families, widows, and orphans, was involved in the fate of the Company: In short, that humanity, law, and policy, would all be equally violated by infringing the chartered rights of this admirable institution.1
The new association replied; That it was no infringement of good faith or justice, to annul, by a book i.Chap. 5. 1698. legislative act, a charter which was hostile to the interests of the nation; because that would be to say, if a government has once committed an error, that it is not lawful to correct itself; it would be to say that, if a nation has once been rendered miserable, by erroneous institutions of government, it must never try to rescue itself from its misery: That the practical rule of the British government, as many precedents abundantly testified, had been, to set at nought the pretended inviolability of charters, as often as they were proved to be unprofitable or injurious: That not only had charters been destroyed by act of parliament, but even the judges at law (so little in reality was the respect which had been paid to charters) had often set them aside, by their sole authority, on the vague and general ground that the King had been deceived in his grant: That, if any chartered body was entitled to complain of being dissolved, in obedience to the dictates of utility, if was certainly not the East India Company, whose charter had been originally granted, and subsequently renewed, on the invariable condition of being terminated, after three years’ notice, if not productive of national advantage: To display the property which the Company had acquired in India, and to pretend that it gave them a right to perpetuity of charter, was nothing less than to insult the supreme authority of the state; by telling it, that, be the limitations what they might, under which the legislature should grant a charter, it was at all times in the power of the chartered body to annul those limitations, and mock the legislative wisdom of the nation, simply by acquiring property: That, if the Company had erected forts and factories, the question still remained, whether they carried on the trade more profitably by their charter than the nation could book i.Chap. 5. 1698. carry it on if the charter were destroyed: That the nation and its constituted authorities were the sole judge in this controversy; of which the question whether the nation or the Company were most likely to fail in point of capital, no doubt formed a part: That if inconvenience, and in some instances distress, should be felt by individuals, this deserved consideration, and, in the balance of goods and evils, ought to be counted to its full amount; but to bring forward the inconvenience of individuals, as constituting in itself a conclusive argument against a political arrangement, is as much as to say that no abuse should be ever remedied; because no abuse is without its profit to somebody, and no considerable number of persons can be deprived of customary profits without inconvenience to most, hardship to many, and distress to some.1
The new associators, though thus strong against the particular pleas of their opponents, were debarred the use of those important arguments which bore upon the principle of exclusion; and which, even in that age, were urged with great force against the Company. They who were themselves endeavouring to obtain a monopoly could not proclaim the evils which it was the nature of monopoly to produce. The pretended rights of the Company to a perpetuity of their exclusive privileges, for to that extent did their arguments reach, were disregarded by every body, and an act was passed, empowering the King to convert the new association into a corporate body, and to bestow upon them the monopoly of the Indian trade. The charters, the property, the privileges, the forts and factories of the Company in India, and their claims of merit with the nation, if not treated with contempt, were at least book i.Chap. 5. 1798. held inadequate to debar the legislative wisdom of the community from establishing for the Indian trade whatever rules and regulations the interest of the public appeared to require.1
The following were the principal provisions of the act: That the sum of two millions should be raised by subscription, for the service of government: that this subscription should be open to natives or foreigners, bodies politic or corporate: that the money so advanced should bear an interest of 8 per cent. per annum: that it should be lawful for his Majesty, by his letters patent, to make the subscribers a body politic and corporate, by the name of the “General Society:” that the subscribers severally might trade to the East Indies, each to the amount of his subscription: that if any or all of the subscribers should be willing and desirous, they might be incorporated into a joint-stock Company: that the subscribers to this fund should have the sole and exclusive right of trading to the East Indies: that on three years’ notice, after the 29th of September, 1711, and the repayment of the capital of 2,000,000l. this act should cease and determine: that the old or London Company, to whom three years’ notice were due, should have leave to trade to India till 1701: that their estates should be chargeable with their debts: and that if any further dividends were made before the payment of their debts, the members who received them should be responsible for the debts with their private estates to the amount of the sums thus unduly received.
This measure, of prohibiting dividends while debt is unpaid, or of rendering the Proprietors responsible book i.Chap. 5. 1698. with their fortunes to the amount of the dividends received, befitted the legislative justice of a nation.
A clause, on the same principle, was enacted with regard to the New Company, that they should not allow their debts at any time to exceed the amount of their capital stock; or, if they did, that every proprietor should be responsible for the debts with his private fortune, to the whole amount of whatever he should have received in the way of dividend or share after the debts exceeded the capital.1
This good policy was little regarded in the sequel.
In conformity with this act a charter passed the great seal, bearing date the 3d of September, constituting the subscribers to the stock of 2,000,000l. a body corporate under the name of the “General Society.” This charter empowered the subscribers to trade, on the terms of a regulated Company, each subscriber for his own account. The greater part, however, of the subscribers desired to trade upon a joint-stock: and another charter, dated the 5th of the same month, formed this portion of the subscribers, exclusive of the small remainder, into a joint-stock Company, by the name of “the English Company trading to the East Indies.”2
“In all this very material affair,” says Anderson, “there certainly was a strange jumble of inconsistencies, contradictions, and difficulties, not easily to be accounted for in the conduct of men of judgment.”3 The London Company, who had a right by their charter to the exclusive trade to India till three years after notice, had reason to complain of this injustice, that the English Company were empowered to trade to book i.Chap. 5. 1698. India immediately, while they had the poor compensation of trading for three years along with them. There was palpable absurdity in abolishing one exclusive company, only to erect another; when the former had acted no otherwise than the latter would act. Even the departure from joint-stock management, if trade on the principle of Individual inspection and personal interest had been looked to as the source of improvement, might have been accomplished, without the erection of two exclusive companies, by only abolishing the joint-stock regulation of the old one. But the chief mark of the ignorance of parliament, at that time, in the art and science of government, was, their abstracting from a trading body, under the name of loan to government, the whole of their trading capital: and expecting them to traffic largely and profitably when destitute of funds. The vast advance to government, which they feebly repaired by credit, beggared the English Company, and ensured their ruin, from the beginning.
The old, or London Company, lost not their hopes. They were allowed to trade for three years on their own charter; and availing themselves of the clause in the act, which permitted corporations to hold stock of the New Company, they resolved to subscribe into this fund as largely as possible; and, under the privilege of private adventure, allowed by the charter of the English Company, to trade, separately, and in their own name, after the three years of their charter should be expired. The sum which they were enabled to appropriate to this purpose was 315,000l.1
In the instructions to their servants abroad they book i.Chap. 5. 1698–99. represented the late measures of parliament as rather the result of the power of a particular party than the fruit of legislative wisdom: “The Interlopers,” so they called the New Company, “had prevailed by their offer of having the trade free, and not on a joint-stock;” but they were resolved by large equipments (if their servants would only second their endeavours) to frustrate the speculations of those opponents: “Two East India Companies in England,” these are their own words, “could no more subsist without destroying one the other, than two Kings, at the same time regnant in the same kingdom: that now a civil battle was to be fought between the Old and the New Company; and that two or three years must end this war, as the Old or the New must give way: that, being veterans, if their servants abroad would do their duty they did not doubt of the victory: that if the world laughed at the pains the two Companies took to ruin each other they could not help it, as they were on good ground and had a charter.”1
When the time arrived for paying the instalments of the subscriptions to the stock of the New Company, many of the subscribers, not finding it easy to fulfil their engagements, were under the necessity of selling their shares. Shares fell to a discount; and the despondency, hence arising, operated to produce still greater depression.2
The first voyage which the New Company fitted out, consisted of three ships with a stock of 178,000l.3 To this state of imbecility did the absorption of their capital reduce their operations. The sum to which they were thus limited for commencing their trade but little exceeded the interest which they were annually to receive from government.
With such means the New Company proved a book i.Chap. 5. 1698–99. very unequal competitor with the Old. The Equipments of the Old Company, for the same season, 1698–99, amounted to thirteen sail of shipping, 5,000 tons burthen, and stock estimated at 525,000l. Under the difficulties with which they had to contend at home, they resolved by the most submissive and respectful behaviour, as well as by offer of services, to cultivate the favour of the Moguls. Their endeavours were not unsuccessful. They obtained a grant of the towns of Chuttanuttee, Govindpore, and Calcutta, and began, but cautiously, so as not to alarm the native government, to construct a fort. It was denominated Fort William; and the station was constituted a Presidency.1
To secure advantages to which they looked from their subscription of 315,000l. into the stock of the English Company, they had sufficient influence to obtain an act of parliament, by which they were continued a corporation, entitled after the period of their own charter, to trade, on their own account, under the charter of the New Company, to the amount of the stock they had subscribed.2
The rivalship of the two Companies produced, in India, all those acts of mutual opposition and hostility, which naturally flowed from the circumstances in which they were placed. They laboured to supplant one another in the good opinion of the native inhabitants and the native governments. They defamed one another. They obstructed the operations of one another. And at last their animosities and contentions broke out into undissembled violence and oppression. Sir William Norris, whom the New Company, with the King's permission, had sent as book i.Chap. 5. 1700. their Ambassador to the Mogul court, arrived at Surat in the month of December, 1700. After several acts, insulting and injurious to the London Company, whom he accused of obstructing him in all his measures and designs, he seized three of the Council, and delivered them to the Mogul Governor, who detained them till they found security for their appearance. The President and the Council were afterwards, by an order of the Mogul government, put in confinement; and Sir Nicholas Waite, the English Company's Consul at Surat, declared, in his correspondence with the Directors of that Company, that he had solicited this act of severity, because the London Company's servants had used treasonable expressions towards the King; and had made use of their interest with the Governor of Surat to oppose the privileges which the Ambassador of the English Company was soliciting at the court of the Mogul.1
As the injury which these destructive contentions produced to the nation soon affected the public mind, and was deplored in proportion to the imaginary benefits of the trade, an union of the two Companies was generally desired, and strongly recommended. Upon the first depression, in the market, of the stock of the New Company, an inclination on the part of that Company had been manifested towards a coalition. But what disposed the one party to such a measure, suggested the hope of greater advantage, and more complete revenge, to the other, by holding back from it. The King himself, when he received in March, 1700, the Directors of the London Company, on the subject of the act which continued them a corporate body, recommended to their serious consideration an union of the two Companies, as the measure which would most promote, what they both book i.Chap. 5. 1700. held out as a great national object, the Indian trade. So far the Company paid respect to the royal authority, as to call a General Court of Proprietors for taking the subject into consideration; but after this step they appeared disposed to let the subject rest. Toward the close, however, of the year, the King, by a special message, required to know what proceedings they had adopted in consequence of his advice. Upon this the Directors summoned a General Court, and the following evasive resolution was voted: “That this Company, as they have always been, so are they still ready to embrace every opportunity by which they may manifest their duty to his Majesty, and zeal for the public good, and that they are desirous to contribute their utmost endeavours for the preservation of the East India trade to this kingdom, and are willing to agree with the New Company upon reasonable terms.” The English Company were more explicit; they readily specified the conditions on which they were willing to form a coalition; upon which the London Company proposed that seven individuals on each side should be appointed, to whom the negotiation should be entrusted, and by whom the terms should be discussed.1
As the expiration approached of the three years which were granted to the London Company to continue trade on their whole stock, they became more inclined to an accommodation. In their first proposal they aimed at the extinction of the rival Company. As a committee of the House of Commons had been formed, “to receive proposals for paying off the national debts, and advancing the credit of the book i.Chap. 5. 1701. nation,” they made a proposition to pay off the 2,000,000l. which government had borrowed at usurious interest from the English Company, and to hold the debt at five per cent. The proposal, though entertained by the committee, was not relished by the House; and this project was defeated.1 The distress, however, in which the Company were now involved, their stock having within the last ten years fluctuated from 300 to 37 per cent.,2 rendered some speedy remedy indispensable. The committee of seven, which had been proposed in the Answer to the King, was now resorted to in earnest, and was empowered by a General Court, on the 17th of April, 1701, to make and receive proposals for the union of the two companies.
It was the beginning of January, in the succeeding year, before the following general terms were adjusted and approved: That the Court of twenty-four Managers or Directors should be composed of twelve individuals chosen by each Company; that of the annual exports, the amount of which should be fixed by the Court of Managers, a half should be furnished by each Company; that the Court of Managers should have the entire direction of all matters relating to trade and settlements subsequently to this union; but that the factors of each Company should manage separately the stocks which each had sent out previously to the date of that transaction; that seven years should be allowed to wind up the separate concerns of each Company; and that, after that period, one great joint-stock should be formed by the final union of the funds of both. This agreement was confirmed by the General Courts of both Companies book i.Chap. 5. 1702. on the 27th April, 1702.1
An indenture tripartite, including the Queen and the two East India Companies, was the instrument adopted for giving legal efficacy to the transaction. For equalizing the shares of the two Companies, the following scheme was devised. The London Company, it was agreed, should purchase at par as much of the capital of the English Company, lent to government, as, added to the 315,000l. which they had already subscribed, should render equal the portion of each. The dead stock of the London Company was estimated at 330,000l.; that of the English Company at 70,000l.; whereupon, the latter paid 130,000l. for equalizing the shares of this part of the common estate. On the 22d July, 1702, the indenture passed under the great seal; and the two parties took the common name of The United Company of Merchants trading to the East Indies.2
On the foundation on which the affairs of the two Companies were in this manner placed, they continued with considerable jarrings and contention, especially between the functionaries in India, till the book i.Chap. 5. 1708. season 1707–8, when an event occurred, which necessitated the accommodation of differences, and accelerated the completion of the union. A loan of 1,200,000l., without interest, was exacted of the two Companies for the use of government. The recollection of what had happened, when the body of private adventurers were formed into the English East India Company, made them dread the offers of a new body of adventurers, should any difficulty be found on their part. It was necessary, therefore, that the two Companies should lay aside all separate views, and cordially join their endeavours to avert the common danger.
It was at last agreed, that all differences subsisting between them should be submitted to the arbitration of the Earl of Godolphin, then Lord High Treasurer of England; and that the union should be rendered complete and final upon the award which he should pronounce. On this foundation, the act, 6th Anne, ch. 17, was passed; enacting that a sum of 1,200,000l. without interest should be advanced by the United Company to government, which, being added to the former advance of 2,000,000l. at 8 per cent. interest, constituted a loan of 3,200,000l. yielding interest at the rate of 5 per cent. upon the whole; that to raise this sum of 1,200,000l. the Company should be empowered to borrow to the extent of 1,500,000l. on their common seal, or to call in moneys to that extent from the Proprietors; that this sum of 1,200,000l. should be added to their capital stock; that instead of terminating on three years’ notice after the 29th of September, 1711, their privileges should be continued till three years’ notice after the 25th of March, 1726, and till repayment of their capital; that the stock of the separate adventures of the General Society, amounting to 7,200l., which had never been incorporated into the joint-stock of the book i.Chap. 5. 1708. English Company, might be paid off, on three years’ notice after the 29th of September, 1711, and merged in the joint-stock of the United Company; and that the award of the Earl of Godolphin, settling the terms of the Union, should be binding and conclusive on both parties.1
The award of Godolphin was dated and published on the 29th of September, 1708. It referred solely to the winding up of the concerns of the two Companies; and the blending of their separate properties into one stock, on terms equitable to both. As the assets or effects of the London Company in India fell short of the debts of that concern, they were required to pay by instalments to the United Company the sum of 96,615l. 4s. 9d.: and as the effects of the English Company in India exceeded their debts, they were directed to receive from the United Company the sum of 66,005l. 4s. 2d.; a debt due by Sir Edward Littleton in Bengal, of 80,437 rupees and 8 anas, remaining to be discharged by the English Company on their own account. On these terms the whole of the property and debts of both Companies abroad became the property and debts of the United Company. With regard to the debts of both Companies in Britain, it was in general ordained that they should all be discharged before the 1st of March, 1709; and as those of the London Company amounted to the sum of 399,795l. 9s. 1d. they were empowered to call upon their Proprietors, by three several instalments, for the means of liquidation.2
As the intercourse of the English nation with the people of India was now destined to become, by a rapid progress, both very intimate, and very extensive, book i.Chap. 5. 1708. a full account of the character and circumstances of that people is required for the understanding of the subsequent proceedings and events.
The population of those great countries consisted chiefly of two Races: one, who may here be called the Hindu; another, the Mahomedan Race. The first were the aboriginal inhabitants of the country. The latter were subsequent invaders; and insignificant, in point of number, compared with the first.
The next two Books will be devoted to the purpose of laying before the reader all that appears to be useful in what is known concerning both these classes of the Indian people. To those who delight in tracing the phenomena of human nature; and to those who desire to know completely the foundation upon which the actions of the British people in India have been laid, this will not appear the least interesting department of the work.
OF THE HINDUS.
[1.]Bruce ii. 275.
[1.]Bruce, ii. 476, 481—496, 506—528, 531.
[2.]Anderson's Hist. of Commerce Macpherson's Annals, ii. 579
[3.]Supra, p. 95.
[4.]Bruce, ii. 482, 499.
[1.]Bruce, ii. 492
[1.]Bruce, ii. 512. Governor Child is accused by Hamilton of wanton and intolerable oppressions; and that author states some facts which indicate excessive tyranny. New Account of the East Indies, i. 187—199.
[2.]Bruce, ii. 515.
[1.]Bruce, ii. 526, 540, 584, 591. It was debated in the Privy Council, whether the charter of incorporation should be under the King's or the Company's seal. The King asked the Chairman his opinion, who replied, “that no person in India should be employed by immediate commission from his Majesty, because, if they were, they would be prejudicial to our service by their arrogancy, and prejudicial to themselves, because the wind of extraordinary honour in their heads would probably make them so haughty and overbearing, that we should be forced to remove them.” Letter from the Court to the President of Fort St. George, (Ib. 591). Hamilton, ut supra (189—192). Orme's Historical Fragments, 185, 188, 192, 198.
[2.]Mr. Orme is not unwilling to ascribe part of the hardships they experienced to the interlopers, who, seeking protection against the oppressions of the Company, were more sedulous and skilful in their endeavours to please the native governors. Hist. Frag. 185.
[1.]These events occurred under the government of the celebrated imperial deputy Shaista Khan; “to the character of whom (says Mr. Stewart, Hist. of Bengal, 300.) it is exceedingly difficult to do justice. By the Mohammedan historians he is described as the pattern of excellence; but by the English he is vilified as the oppressor of the human race. Facts are strongly on the side of the Mohammedans.”
[2.]Bruce, ii. 558, 569, 578, 594, 608, 620, 630, 639, 641, 646, 650. The lively and intelligent Captain Hamilton represents the conduct of Sir John Child at Surat as exceptionable in the highest degree. But the Captain was an interloper, and though his book is strongly stamped with the marks of veracity, his testimony is to be received with the same caution on the one side as that of the Company on the other. New Account of India, i. 199—228.
[1.]Bruce, ii. 655.
[2.]Ib. iii. 75, 87, 122, 139, 181, 203, 231.
[1.]Bruce, iii. 78.
[3.]See, in Gibbon, viii. 357 to 360, a train of allusions, as usual, to the history of the Armenians; and in his notes a list of its authors.—The principal facts regarding them, as a religious people, are collected with his usual industry and fidelity by Mosheim, Ecclesiast. Hist. iii. 493, 494, 495, and 412, 413.
[1.]Bruce, iii. 88.
[1.]Bruce, iii. 81; Macpherson's Annals, ii. 618; and Adam Smith, Wealth of Nations, iii. 132, who with his usual sagacity brings to view the causes of the principal events in the history of the Company.
[2.]Bruce, iii. 82.
[3.]Macpherson's Annals, ii. 648.
[4.]Bruce, iii. 102.
[1.]Ib. iii. 103. Sir Josiah Child, as chairman of the Court of Directors, wrote to the Governor of Bombay, to spare no severity to crush their countrymen who invaded the ground of the Company's pretensions in India. The Governor replied, by professing his readiness to omit nothing which lay within the sphere of his power to satisfy the wishes of the Company; but the laws of England unhappily would not let him proceed so far as might otherwise be desirable. Sir Josiah wrote back with anger:—“That he expected his orders were to be his rules, and not the laws of England, which were an heap of nonsense, compiled by a few ignorant country gentlemen, who hardly knew how to make laws for the good of their own private families, much less for the regulating of Companies, and foreign commerce.” (Hamilton's New Account of India, i. 232.) “I am the more particular,” adds Captain Hamilton, “on this account, because I saw and copied both those letters in Anno 1696, while Mr. Vaux [the Governor to whom the letters were addressed] and I were prisoners at Surat, on account of Captain Evory's robbing the Mogul's great ship, called the Gunsway.” Bruce, iii. 233.
[1.]Bruce, iii. 133—135. Macpherson's Annals, ii. 649.
[3.]We know not the terms of that contract, nor how a participation in its privileges could be granted to individuals without a breach of faith toward the Armenian merchants.
[1.]Bruce, iii. 167.
[2.]Macpherson's Annals, ii. 652, 662; 10,000l. is said to have been traced to the King.
[1.]Bruce, iii. 146, 186. “Sir Nicholas Waite [Consul of the Association] addressed a letter,” says Mr. Bruce, “to the Mogul, accusing the London Company of being sharers and abettors of the piracies, from which his subjects and the trade of his dominions had suffered, or, in the Consul's coarse language, of being thieves and confederates with the pirates.” Ib. 337.
[2.]Anderson's Hist. Macpherson's Annals, ii. 694 Bruce, iii. 252, 253.
[3.]Bruce, iii. 253, Macpherson, ii. 694.
[1.]Bruce, iii. 253. Anderson's History of Commerce; Macpherson, ii. 694, 695.
[1.]Bruce, iii. 253, 254. Anderson's History of Commerce; Macpherson, ii. 695.
[1.]Bruce, iii. 253. Macpherson, ii. 696.
[1.]Statute 9 & 10 W. III. c. 44.
[2.]Macpherson's Annals, ii. 699. Bruce, iii. 257, 258. Preamble to the Stat. 6. A. c. 17.
[3.]Anderson's Hist. of Commerce, Macpherson, ii. 700.
[1.]Bruce, iii. 256, 257. Macpherson, ii. 700. Smith's Wealth of Nations, iii. 133.
[1.]Bruce, iii. 257.
[2.]Ib. 259, 260.
[1.]Bruce, 264, 268, 300
[2.]Ib. iii. 293, 326, 350.
[1.]Bruce, 260 to 370, 374 to 379, 410.
[1.]Bruce, iii. 290, 293, 355.
[2.]Anderson's Hist. of Commerce, Macpherson, ii. 705.
[1.]Bruce, iii. 424 to 426. Of the subtleties which at this time entered into the policy of the Company, the following is a specimen. Sir Basil Firebrace, or Firebrass, a notorious jobber who had been an interloper, and afterwards joined with the London Company, was now an intriguer for both Companies. At a General Court of the London Company, on the 23d April, 1701, this man stated, that he had a scheme to propose, which he doubted not would accomplish the union desired; but required to know what recompense should be allowed him, if he effected this important end. By an act of the Court, the committee of seven were authorized to negotiate, with Sir Basil, the recompense which he ought to receive: and after repeated conferences with the gentleman, they proposed to the Court of Committees, that if he effected the union, 150,000l. of the stock of the Company should be transferred to him on his paying 80l. per cent. In other words, he was to receive 20 per cent. on 150,000l. or a reward of 30,000l. for the success of his intrigues. Ibid. See also Macpherson, ii. 663.
[2.]Bruce, iii. 486 to 491.
[1.]Bruce, iii. 635 to 639; Stat. 6. A. c. 17.
[2.]Ib. 667 to 679. Macpherson, iii. 1, 2.