1730.

it ought never to be improved; in things of no moment society may be allowed CHAP. I. to make progress; in things of magnitude that progress ought ever to be stre nuously and unbendingly opposed. This argument is, unhappily, not confined to the use of the East India Company: Whoever has attentively traced the progress of government, will find that it has been employed by the enemies of improvement, at every stage of its progress; and only in so far as it has been disregarded and contemned, has the condition of man ascended above the miseries of savage life. Instead of the maxim, A thing is important, therefore it ought not to be improved; reason would doubtless suggest, that the more any thing is important, the more its improvement should be studied and pursued. When a thing is of small importance, a small inconvenience may suffice to dissuade the pursuit of its improvement. When it is of great importance, a great inconvenience alone can be allowed to produce that unhappy effect. If it be said, that where much is enjoyed, care should be taken to avoid its loss; this is merely to say that men ought to be prudent; which is very true, but surely authorizes no such inference, as that improvement, in matters of importance, should be always opposed.

The Company quitted the argument to criminate the arguers: The objections to the monopoly were the impure and odious offspring of avaricious envy. But, if the monopoly, as the opponents said, was a bad thing, and free trade a good thing; from whatever motive they spoke, the good thing was to be adopted, the evil to be shunned. The question of their motives was one thing: the truth or falsehood of their positions, another. When truth is spoken from a bad motive, it is no less truth; nor is it less entitled to its command over human action, than when it is spoken from the finest motive which can enter the human breast; if otherwise, an ill-designing man would enjoy the wonderful power, by recommending a good course of action, to render a bad one obligatory upon the

human race.

Because the East India Company had a large stock in trade, that was no reason why the monopoly should remain. If a large capital was necessary, the capital of the mercantile interest of Great Britain was much greater than the capital of the East India Company; and of that capital, whatever proportion could find a more profitable employment in the India trade, than in any other branch of the national industry, that the Indian trade would be sure to receive.

With regard to the annual expense of the forts and factories, it was asserted by the opponents of the Company; and, as far as appears, without contradiction, that they defrayed their own expense, and supported themselves.

Book IV.

1730.

In parliament

the advocates

of the mono

As to the customs paid by the East India Company; all trade paid customs, and if the Indian trade increased under the system of freedom, it would pay a greater amount of customs than it paid before; if it decreased, the capital now employed in it would seek another destination, and pay customs and taxes in the second channel as well as the first. To lay any stress upon the customs paid by the Company, unless to take advantage of the gross ignorance of a minister or a parliament, was singularly absurd.

But of all the arguments of the Company, none more strongly displayed the power of self-delusion, than their endeavour to create a belief, that the competition of free trade would make the merchants buy so dear in India, and sell so cheap in England, as to ruin themselves. What was it that hindered this effect from taking place, in trading with France, in trading with Holland, or any other country, with which the commerce was free? Or what hindered it in every branch of business within the kingdom itself? If the two East India Companies ruined themselves by competition, what folly was it to reason from a case, which bore no analogy whatsoever to the case which was under contemplation; at the same time that all the cases which exactly corresponded, those of free trade, and boundless competition, led to a conclusion directly the reverse? If two East India Companies ruined one another, it was only an additional proof that they were ineligible instruments of commerce. The ruin proceeded not from the nature of competition, but the circumstances of the competitors. Where two corporate bodies contended against one another, and the ruin of the one left the field to the other, their contention might very well be ruinous; because each might hope, that, by exhausting its antagonist in a competition of loss, it would deliver itself from its only rival. Where every merchant had not one, but a multitude of competitors, the hope was clearly vain of wearing all of them out by a contest of loss. Every merchant would deal therefore on such terms alone, as allowed him the usual, or more than the usual rate of profit; and he would find it his interest to observe an obliging, rather than a hostile deportment toward others, that they might use an obliging, rather than a hostile deportment toward him. As it is this principle which produces the harmony and prosperity of all other cases of trade, in which freedom prevails, it remained to be shown why it would not produce them in the Indian trade.

The subject was introduced into parliament, and discussed. But the advocates for the freedom of the trade were there overruled, and those of monopoly

poly prevailed. triumphed.

which the

renewed.

In order to aid the parliament in coming to such a decision as the Company CHAP. I. desired, and to counteract in some degree the impression likely to be made by 1732. the proposal of their antagonists to accept of two per cent. for the whole of Terms upon the loan to government, they offered to reduce the interest from five to four per charter was cent., and, as a premium for the renewal of their charter, to contribute a sum of 200,000l. to the public service. On these conditions it was enacted that the exclusive privileges should be prolonged to Lady Day in the year 1766, which, with the usual addition of three years' notice, carried the term of the monopoly to 1769; with a proviso that nothing in this arrangement should be construed to limit their power of continuing a body corporate, and of trading to India on their joint stock with other of their fellow subjects, even after their exclusive privileges should expire.*

On the ground on which the affairs of the East India Company were now State of the Company's established, they remained till the year 1744. From 1730 to that year, the trade. trade of the Company underwent but little variation. Of goods exported, the amount indeed was considerably increased; but as in this stores were included, and as the demand for stores, by the extension of their forts, and the increase of military apparatus, was augmented, the greater part of the increase of exports may be justly set down to this account. The official value of the goods imported had kept rather below a million annually; sometimes indeed exceeding that sum, but commonly falling below it, and some years to a considerable amount; with little or no progressive improvement from the beginning of the period to the end. The exports had increased from 135,4847. the exportation of the first year, to 476,2747. that of the last; and they had been still greater in the preceding year. But the greater part of the increase had taken place after the prospect of wars and the necessity of military preparations; when a great addition was demanded in the article of stores.†

In the year 1732, the Company first began to make up annual accounts; and In 1732, the 'Company first from that period we have regular statements of the actual purchase of their ex- made up anports, and the actual sale of their imports. In the year 1732, the sales of the Company amounted to 1,940,996/. In 1744, they amounted to 1,997,506.;

* As a corporate body is seldom hurt by its modesty, the Company alleged that they had a right, by a preceding act of parliament, to the monopoly in perpetuity: but, to avoid disputes, they consented to wave this claim, for a certainty of thirty-six years. 3 Geo. II. c. 14. Collection of Statutes, p. 73. Anderson, ad an. 1730. Political State, xxxix. 258.

+ Sir Charles Whitworth's Tables, part ii. p. 9.

nual accounts.

1732.

Book IV. and in all the intermediate years were less. The quantity of goods and stores paid for in the year 1732 amounted to 105,2301.; the quantity paid for in 1744, to 231,3181. The quantity of bullion exported in 1732 was 393,3771.; the quantity exported in 1744 was 458,544/. The quantity then of goods exported was increased, and in some degree, also, that of bullion, while the quantity of goods imported remained nearly the same. It follows, that the additional exportation, not having been employed in the additional purchase of goods, must have been not merchandize, but stores. It is to be observed, also, that in the amount of sales, as exhibited in the Company's accounts, were included at this time the duties paid to government, stated at thirty per cent.; a deduction which brings the amount of the sales to nearly the official valuation of the imports at the custom-house.*

State of the dividends.

Company attempt and accomplish a

of the exclu

In 1732, the Company were obliged to reduce their dividends from eight to seven per cent. per annum; and at this rate they continued till 1744, in which year they returned to eight per cent. † The Dutch East India Company, from 1730 to 1736, divided twenty-five per cent. per annum upon the capital stock; in 1736, twenty per cent.; for the next three years, fifteen per cent. per annum; for the next four, twelve and a half per annum; and in 1744, as much as fifteen per cent. The grand advantage of the English East India Company, in the peculiar privilege of having their trade exempted from duties in Bengal and the other concessions obtained by their embassy to the court of the Mogul, had thus produced no improvement in the final result, the ultimate profits of

the trade.

The Company seem to have been extremely anxious to avoid a renewal of the discussion on the utility or fitness of the monopoly, and for that purpose to foreprolongation stal the excitement of the public attention by the approach to the conclusion of sive privilege. the privileged term. At a moment accordingly when no one was prepared to oppose them; and in the middle of an expensive war, when the offer of any pecuniary facilities was a powerful bribe to the government, they made a proposal to lend it the sum of one million, at an interest of three per cent., provided the period of their exclusive privileges should be prolonged to three years' notice

* Third Report of the Committee of Secrecy, on the State of the East India Company, (House of Commons, 1773) p. 75.

+ Ibid. p. 73.

+ Histoire Philosoph. et Polit. des Etablissemens, &c. dans les Deux Indes, par Guillaume Thomas Raynal, liv. ii. sect. 21. Table at the end of the vol.

after Lady-day 1780. On these conditions, a new act was passed in 1744; and CHAP. I. to enable the Company to make good their loan to government, they were authorized to borrow to the extent of a million on their bonds.*

1740.

On the death of the Emperor Charles VI. in the year 1740, a violent war, kindled by competition for the imperial throne, and for a share in the spoils of the house of Austria, had begun in Germany. In this contest, France and England, the latter involved by her Hanoverian interests, had both engaged as auxiliaries; and in the end had become nearly, or rather altogether, principals. From 1739, England had been at war with Spain, a war intended to annul the right claimed and exercised by the Spaniards of searching her ships on the coast of America for contraband goods. England and France, though contending against one another, with no ordinary efforts, in a cause ostensibly not their own, abstained from hostilities directly on their own account, till 1744; War between when the two governments came to mutual declarations of war. And it was England in not long before the most distant settlements of the two nations felt the effects 1744. of their destructive contentions.

France and

On the 14th of September, 1746, a French fleet anchored four leagues to Madras attacked by a the south of Madras; and landed five or six hundred men. On the 15th the French fleet. fleet moved along the coast, while the troops marched by land; and about noon it arrived within cannon-shot of the town. Labourdonnais, who commanded the expedition, then landed, with the rest of the troops. The whole force destined for the siege, consisted of 1000 or 1100 Europeans, 400 Sepoys, and 400 Caffres, or blacks of Madagascar, brought from the island of Mauritius; and 1700 or 1800 men, all sorts included, remained in the ships.‡

dras.

Madras had, during the space of 100 years, been the principal settlement of State of Mathe English on the Coromandel coast. The territory belonging to the Company extended five miles along the shore, and was about one mile in breadth. The town consisted of three divisions. The first, denominated the white town, in which resided none but the English or other Europeans, under their pretection, consisted of about fifty houses, together with the warehouses and other buildings of the Company, and two churches, one an English, the other a Roman Catholic church. This division was surrounded with a slender wall, defended with four bastions, and four batteries, but weak and badly constructed: And

* Anderson's Hist. of Commerce, ad an. 1744; Collection of Statutes, p. 84, 17 Geo. II. c. 17. + Memoire pour Labourdonnais, i. 124. Mr. Orme, i. 67, says the third, the difference being that of the stiles: The old stile, it appears, was used by the English historian.

Memoire, ut supra, p. 125. Orme, p. 67.