AS THE contests carried on between the Company and the Portuguese had long been productive only of mischief to both, a mutual desire for arrangement was felt. While they were wasting their strength the Dutch were continuing their successful career, and threatening to involve them in a common ruin. In these circumstances little difficulty was found in opening a friendly communication with the Viceroy of Goa, and forming a truce which, if approved by their sovereigns, might afterwards be converted into a permanent treaty. Under this truce, which gave each of the contracting parties free access, for all commercial purposes, to the ports and factories of the other, the Company naturally anticipated a large extension of traffic, and had begun to make the necessary preparations with that view, when they were startled by the information that King Charles had granted license to a new body of mercantile adventurers, for the special purpose of appropriating the advantages which the truce was expected to confer.

This extraordinary proceeding, which took place in 1635, was probably the result of a variety of causes. It may be that Charles, while he concealed his displeasure at the memorial which the Company presented to parliament in 1628, had never forgotten it, and was therefore not unwilling to avail himself of the first opportunity which offered to take his revenge. The very bitter terms in which the past conduct of the Company is stigmatized, certainly savours of vindictiveness. On different occasions his majesty had borne strong and willing testimony to the honour and benefit which the Company had conferred on the nation at large, whereas the establishment of a rival association is now justified expressly on the ground that “in all this time, since the erection of the said East India Company, notwithstanding the manifold privileges granted to them, they had neither so settled and planted trade in those parts, nor made any such fortification or place of surety, as might give assurance or encouragement to any, in future times, to adventure to trade there; neither had we received any annual benefit from thence (as other princes did), by reason of the said Company’s neglect in fortifying.” They “had merely intended and pursued their own present profit and advantage, without providing any safety or settledness for establishing of trafficking in the said Indies for the good of posterity, or for longer time than it should please the natives or inhabitants there to permit the continuance thereof.” The conduct of the Company in this respect is contrasted with that of the Portuguese and Dutch, who “had planted and fortified themselves there, and established a lasting and hopeful trade there, for the good of posterity; and by advantage thereof had not only rendered our subjects abiding in those parts subject to their insolencies and apparent injuries, but, in a manner, wrought them out of trade there, which we found, not only by the complaint of divers of the adventurers in that society, but principally by the daily decrease of our customs for goods imported from thence, which we could impute to nothing more than the said Company’s supine neglect of discovery and settling of trade in divers places in those parts where they had a plentiful stock, and fair opportunities to have compassed and effected it.”

The charges thus lavishly brought against the Company were not wholly unfounded. They had commenced with experimental voyages, and shifted about from place to place, wandering over the whole extent of the Indian Ocean, from the Red Sea to the isle of Japan, without having secured a single station which they could call their own, and to which they could resort as a secure asylum in all emergencies. They thus existed merely by sufferance; and when attacked, succeeded only in a few rare instances in maintaining their ground. Their conduct in this respect was not dictated by motives of policy. Sir Thomas Roe, it is true, had cautioned them against the erection of forts, as incompatible with their prosperity as a mercantile company, and declared that “if the emperor would offer me ten I would not accept one.” But the Company had never adopted this view, and would gladly have fortified if they had possessed the means. The great difficulty was in the want of funds, which at no time sufficed for more than to furnish the necessary investments. They were thus very much at the mercy both of native princes and European rivals: and when subjected to injustice, were obliged either to overlook it, or to confine themselves to clamorous and unavailing supplications for redress. Claiming an exclusive right to the commerce of more than half the globe, they were bound to have achieved for themselves a much more dignified position.

Admitting that the Company were thus far in fault, it does not follow that Charles was justified in the method which he took to supplant them. They were entitled, at all events, to a three years’ notice, and therefore ought not to have been threatened with violent extinction before even a single note of warning had been given. The truth is, that Charles had now been brought into that unhappy position from which he thought himself entitled to seek relief by any means which promised to be successful, however much they might be at variance with honour and equity. He was engaged in the fatal experiment of attempting to rule without a parliament; and having thus excluded himself from the only means of obtaining money by legal taxation, was ready to snatch at any expedient for replenishing his treasury. There can be little doubt that the license granted to the rival adventurers, afterwards known by the name of “Courten’s Association,” was one of those expedients. The truce recently concluded with Portugal was represented as about to open up new sources of wealth, and the king, consulting only his necessities, was deluded into the belief that, by means of a new body of adventurers, a large and permanent addition might be made to his own revenue. Sir William Courten, a wealthy London merchant, had the principal share in the new company, and has hence given it its name. He had lent large sums both to the king and his father, and may possibly have cancelled part of the debt, or granted a new loan, in return for the royal license. It is plain, however, from the language employed, that Charles had more than an indirect interest in the success of Courten’s association. He speaks of the first voyage as having been partly undertaken “at and by the charge and adventure of us, and of our trusty and faithful servant, Endymion Porter, Esq., one of the grooms of our bedchamber,” and authorizes the ships, “as an ensign that they were specially employed by us,” to carry the “union flag which our own ships, and none but the ships employed in our particular service, ought to bear.”

The old Company, naturally alarmed at the special favour thus shown to the new adventurers, and the open infringement of the exclusive privileges guaranteed to them by the charters of Queen Elizabeth and King James, presented an earnest remonstrance; but though they succeeded so far as to cause a new proclamation to be issued, in which the right of traffic conferred on the association was restricted to “such of those parts and places before named, where the said East India Company had not settled factories and trade before the 12th December, 1635,” they were so far from gaining their main object, that the license, originally granted only for a single voyage, was extended to five years, and declared to stand good against all who might be disposed to challenge it, “any charters, letters-patents, grants of incorporations, or of any liberties, powers, jurisdictions, privileges of trade or traffick, or any act of parliament, statute, ordinance, proclamation, provision or restriction, or other matter or thing whatsoever, to the contrary hereof, in any wise notwithstanding.” The passage now quoted is curious, not only as evincing the king’s determination strenuously to support the new association, but as displaying the extent to which he was prepared to stretch his prerogative, and to set at nought all the other powers of the state when they were supposed to interfere with any of his favourite projects.

At the date of the second proclamation, the ships fitted out for the first voyage of the association were already at sea. When they arrived at Surat, the president and council, who had not previously been informed of the license which had been granted, were surprised above measure, and utterly at a loss how to proceed. They had been preparing to take advantage of the arrangement which had been made with the Portuguese, and had partly completed their investment with a view to it. Now, however, they found themselves forestalled, and virtually excluded from their most hopeful market. This disappointment was the more severely felt in consequence of the general stagnation of trade, which had been produced by the recent famine and pestilence; and also of a very violent proceeding on the part of the Mughul emperor, Shah Jahan, who, on learning that a vessel bearing his flag had been plundered by a pirate under English colours, had imprisoned the leading members of the Surat factory, and refused to release them till they engaged to pay a very heavy fine. Under these circumstances, trade was for a time almost entirely suspended. While thus overwhelmed by adversity, the Company had the additional dissatisfaction to learn that Courten’s vessels had made a prosperous voyage, and arrived in England with cargoes which would yield the adventurers a very profitable return. In a letter addressed to their servants at Surat, the governor and Company thus express themselves:—“Wee could wish that wee could vindicate the reputacion of our nation in these partes, and do ourselves right for the losse and damage our estate in those partes have susteyned; but of all these wee must beare the burthen, and with patience sitt still, untill we may find these frowning tymes more auspicious to us and to our affayres.”

For several subsequent years the Company remained in a very depressed state. At one time the rivalship of Courten’s association, at another time the encroachments of the Dutch—who, no longer satisfied with their ascendency in the Eastern islands, were ambitious enough to aim at the establishment of it in all the leading ports of India—absorbed all their thoughts, and formed the subject of various petitions, in which they implored the government to interfere and save them from impending destruction. Their importunity at last obtained a favourable hearing; and the privy council recommended, as the most effectual remedy, that the license to Courten’s association should be withdrawn, on the understanding that a new joint stock should be formed, on a scheme sufficiently large and liberal to promise a great extension of the trade. In accordance with this recommendation, the Company proceeded to take the necessary steps, and issued a prospectus embodying the following proposals:—1. That the subscription should be payable, by instalments, in four years; and that it should be left to the majority of the subscribers to determine in what manner, and by whom the business should be managed. 2. That the subscription should be open to all persons, as well foreigners as English, till the 1st of May, 1640. 3. That on all past due instalments 1½ per cent per month should be levied, as a fine, till payment. 4. That the minimum subscription should be, by an Englishman £500, and by a foreigner £1,000. 5. That, in buying any share after the books were closed, an Englishman should pay £20 and a foreigner £40 for his freedom. 6. That the old Company, or adventurers in what was called the third joint stock, should be allowed sufficient time for bringing home their property, but be prohibited from sending any more stock to India on their former account.

The above terms are fair and reasonable, and, under ordinary circumstances, could hardly fail to have been eagerly and generally accepted; but troublous times were at hand, and few who possessed capital were inclined to expose it to the risks which it would necessarily run during the struggles of a civil war. When the date fixed for closing the books arrived, the whole amount subscribed was the paltry sum of £22,500. The proposed scheme having thus proved a complete failure, matters returned to their former state; and the Company were again left to fight their battle single-handed. While thus engaged, their course was checkered by prosperity as well as adversity. Under the former head, a first place must be assigned to the acquisition of a new locality on the Coromandel coast. This locality was the nucleus of what was destined to swell out into the presidency of Madras. The acquisition was made in 1640, on the most favourable terms, the naik or governor of the district volunteering to build a fort at his own expense, at which the English might settle and carry on their trade exempt from all customs. So satisfied was Mr. Day, a member of the factory of Masulipatam, who conducted the transaction with the naik, of the value of the offer which had been made, that he immediately undertook the erection of the fort, which, in honour of the naik’s father, received the name of Chenappa-patan, or Chenna-patan, still applied to it by the natives, though Europeans from the first knew it only by the name of Fort St. George. The importance of this station soon became apparent; and the decisive step which Mr. Day took in at once commencing operations was most fortunate, as it afterwards appeared that the Company, if they had been previously consulted, would have withheld their sanction under a belief that the state of their funds did not justify the outlay. Another circumstance, which at this time had a favourable influence on the Company’s prospects, was the overthrow of the Spanish rule in Portugal, which in consequence resumed its position as an independent kingdom. By this event, the friendly relations already existing between England and Portugal were drawn closer; and the Dutch, having no longer any pretext for continuing hostilities against the latter, were obliged to withdraw the blockades, which, though nominally directed only against Portuguese ports, had inflicted serious injuries on the English East India trade.

Such were the leading events which at this time were favourable to the Company. They were, however, more than counterbalanced by the unfavourable state of affairs both at home and abroad, and more especially by a heavy pecuniary loss inflicted on them by the king, who, in order to relieve his necessities in 1641, fell upon the singular device of buying all the pepper in the Company’s stores on credit, and selling it for ready money. The quantity of pepper was 607,252 bags, and the price agreed to be paid, at the rate of 2s. 1d. per lb., amounted to £63,283, 11s. 1d.; but the sales, made at the rate of 1s. 8d. per lb., realized only £50,626. The king thus sustained an apparent loss of above £12,000 by the speculation, but ultimately the Company were the sole sufferers. The bonds which they had received from the farmers of the customs remained unpaid; and the only sum which they appear to have received was £13,000, which they retained out of the customs due by them. Even this sum they were not allowed to retain without question, as parliament, now at open hostilities with the king, did not admit that the bonds which had been granted in payment of the pepper constituted an effectual burden on the public revenue.

During the civil war the transactions of the Company remain almost a perfect blank. The collection of money for investments could not be openly announced without endangering their confiscation by one or other of the contending parties; and the vessels were fitted out and despatched with as much secrecy as if they had been engaged in an illicit traffic. Among the few facts of importance which may be gleaned from the history of this period, are the erection of a factory at Balasore, situated within the Mughul territories a little to the west of Pipli, which had not realized the hopes at one time entertained of it; and a considerable extension of the trade of Madras, which, though still subordinate to Bantam, was rapidly outstripping it, and had already superseded Masulipatam as the principal factory of the Company on the Coromandel coast. For this prosperity Madras was mainly indebted to its fortifications, which not only gave security to the servants of the factory, but induced many of the native merchants and artisans to settle in the town and the adjoining district, where they could always be sure of finding protection in times of commotion. All these advantages had been obtained at a very trifling cost, for in 1645 the whole sum expended on Fort St. George was £2,294, and the estimate was, that not more than an additional £2,000 would be necessary to render it impregnable to any attack by native forces.

Courten’s association, of which the Company had long complained as the worst thorn in their sides, after a short course of prosperity had rapidly declined. The same causes which depressed the Company must have effected them in a similar manner, but their misfortunes seem to have been far more owing to their own misconduct. After wandering about without any fixed plan, and committing depredations which subjected them to severe reprisals, they resolved in 1646 to establish a colony at St. Augustine’s Bay, on the island of Madagascar. The project, injudicious in itself, was altogether beyond their means, and proved a failure. In order to relieve the embarrassments into which they were thus thrown they had recourse to fraud, and set up a mint, at which they coined counterfeit pagodas and rials. The cheat was soon discovered, and so seriously damaged their character that they afterwards found great difficulty in carrying on even a legitimate trade. Not long after this transaction, a proposal was made that the Company and the association should forget their quarrels and amalgamate. Had the Company been their own masters, they would never have entertained this proposal; but a complete change had taken place in the political state of the kingdom, and, in the general uncertainty which prevailed, it was dangerous to demur to any proposal which had the sanction of the dominant party. The king was now a prisoner in the Isle of Wight, and the cause of the parliament was everywhere triumphant. The Company, trembling for their charter, endeavoured to meet the threatened storm by proposing a new subscription, in which they made a curious effort at conciliation. In the prospectus issued, while the public generally were restricted to a certain day for filling up the lists, an exception was made in favour of members of parliament, for whom the period of closing was prolonged that they might have an opportunity to consider the subject, and to become subscribers. The device is said to have succeeded; and the plan obtained so much of the approbation of the commons, as to amount to a virtual recognition of the rights and privileges of the Company. Accordingly, the council of state—to which the questions at issue between the Company and Courten’s association, which was now designated by the name of “The Assada Merchants,” from their settlement on an island of that name near Madagascar, had been submitted—while declining to give any formal decision, strongly recommended an amalgamation.

In accordance with this recommendation, various conferences were held between the managers of the two companies, and a union was finally arranged. The leading conditions were—That a stock of £300,000 should be subscribed within two months, to be paid by instalments in four years; that a valuation should be taken of all the houses, shipping, and goods belonging to the Company in India; that the settlers on the island of Assada should be allowed to trade direct to any ports of Asia, Africa, and America, but not to trade from port to port in India; that, on this continent, a fortified station should be fixed on for both companies; that all Indian goods, spices, &c., should be joint property; that salaries, both in England and India, should be reduced; and that, in the future management of the joint trade, a share of at least £500 should be necessary to give a vote. It was of importance to obtain legislative sanction to this arrangement, and a petition to that effect was immediately presented to the House of Commons. It was taken into consideration on the 31st January, 1650; but though the Company appear to have hoped for a distinct confirmation of their exclusive privileges, the utmost they could obtain was the cautiously worded resolution, “That the trade to the East Indies should be carried on by one company, and with one joint stock, the management thereof to be under such regulations as the parliament should think fit; and that the East India Company should proceed upon the articles of agreement made between them and the Assada merchants on the 21st November, 1649, till further orders from the parliament.”

Whatever may have been the political predilections of individual members of the Company, they appear, as a body, to have been easily reconciled to the constitutional changes which followed the execution of the king; and, on the 14th of November, 1650, presented a petition, addressed, in the language and spirit of the times, to “the supreme authority of the nation, the high court of the Parliament of England.” The great burden of the petition was the old complaint of ill usage from the Dutch, from whom redress, though hitherto asked in vain “from the late king and his council, was now confidently anticipated.” At this time the new government was evidently preparing for a rupture with the Dutch; and hence, as the petition was opportune, it met with such a favourable reception, that on the very day on which it was presented parliament adopted a resolution referring it to the consideration of the council of state. That the impression already made might not be permitted to die away, the Company endeavoured to keep their case before the view of the council by a series of memorials. In the first of these, dated 9th May, 1651, after referring to their petition, they renewed their grounds of complaint against the Dutch, and drew up a list of their losses, which they estimated at £1,681,996, 15s. This was exclusive of interest, which it was alleged would amount to a larger sum than the principal. In a second memorial, presented in June, when the probability of a Dutch war was stronger than ever, they expressed their apprehensions for the safety of their homeward bound fleet, consisting of five ships laden with valuable cargoes, and particularly with saltpetre for the use of government; and prayed that ships of war might be stationed off the Land’s End for the purpose of conducting their fleet in safety into the Downs. In a third memorial, following close upon the other, they took the bolder step of praying that powers might be given, under the great seal of England, to their presidents and councils in India, to enforce obedience on all Englishmen within their jurisdiction, and to punish offenders conformably to the laws of England. On the 29th of January, 1652, they again importuned the council on the subject of their claims, because, knowing that ambassadors from the States-general were then in England endeavouring to negotiate a treaty, they felt that if they lost the present opportunity of obtaining compensation they might wait in vain for another. Ultimately, however, the negotiation having failed, and open hostilities between the two countries having been declared, their claims were again indefinitely postponed.

At the very time when the Dutch war broke out, it was apprehended that the proceedings of Admiral Blake at Lisbon, where part of the English fleet which had adhered to the Royalists had been attacked, might lead to a rupture with Portugal. The Company were thus in the perilous predicament of being attacked in India by two nations at once, while almost totally unprovided with the means of resistance. To add to their difficulties, a fierce war was raging between the Kings of Bijapur and Golkunda, to the great obstruction of their trade on the Coromandel coast. It is not to be wondered at, that in these circumstances the Company, yielding to a feeling of despondency, refused to sanction an additional outlay on the fortifications of St. George, though it was truly urged by the agents there that these formed the only security to the inland trade, and the principal protection to the shipping; and that, under certain firmans which had been obtained from the Nabob of the Carnatic, authorizing them to purchase cloths and other goods without restriction in all parts of his government, the trade might be very largely extended.

The vigour and success with which the war was prosecuted by Cromwell, soon threatened the Dutch commerce in Europe with total destruction; but in India, where their maritime and commercial ascendency had been long established, they completely swept the seas. Shortly after the declaration of war, they appeared off Swally with a fleet of eight large ships, and might easily have annihilated the English establishment at Surat, had they not been afraid of provoking the hostility of the Great Mughul by carrying war into any portion of his dominions. Contenting themselves, therefore, with offering large bribes to the governor and other officials, to induce them to harass the English by obstructing them in every way, they set sail for the Persian Gulf, where they not only put a stop to the lucrative trade which the Company had long carried on between Surat and Gomberoon, but captured three of their ships, and drove a fourth on shore, where she was totally lost. These disasters, which might have been expected to dispirit the Company, seemed rather to have roused their courage, for they are found petitioning the government to lend them five or six frigates, which they would man and equip at their own expense, and despatch to the East Indies for the purpose of making reprisals. This warlike movement appears not to have been encouraged, and in fact soon ceased to be necessary, as the Dutch, now completely humbled, were eagerly suing for a termination of hostilities. After a negotiation, during which the Dutch became sensible that they would be obliged to submit to any terms which Cromwell chose to dictate, the peace concluded was ratified at Westminster, 5th April, 1654.

In the treaty drawn up on this occasion the claims of the Company were not forgotten. By the twenty-seventh article, it was agreed:—“That the Lords the States-general of the United Provinces shall take care that justice be done upon those who were partakers or accomplices in the massacre of the English at Amboyna, as the republic of England is pleased to term that fact; provided any of them be living.” By the thirtieth article, four commissioners were to be named on both sides to meet at London, and “to examine and distinguish all those losses and injurys, in the year 1611 and after to the 18th of May, 1652, according to the English style, as well in the East Indies as in Greenland, Muscovy, Brazil, or wherever else either party complains of having received them from the other; and the particulars of all those injurys and damages shall be exhibited to the said commissioners so nominated before the aforesaid 18th of May, with this restriction, that no new ones shall be admitted after that day.” Should the commissioners not come to an agreement within three months, the whole case was to be submitted “to the judgment and arbitration of the Swiss Cantons,” who were authorized for that purpose to delegate commissioners, whose decision, given within six months, should “bind both parties, and be well and truly performed.” At the first meeting of the commissioners, held on the 30th of August, 1654, the English Company stated their damages at £2,695,999, 15s. Strange to say, the Dutch contrived to exceed this amount, and stated theirs at £2,919,861, 3s. 6d. Both statements were supported by a series of accounts; but the commissioners soon became satisfied that little dependence was to be placed upon them, and within the three months pronounced an award, of which the principal findings were that the island of Polaroon should be restored to the English, and that the Dutch Company should pay to the London Company the sum of £85,000, and to the heirs or executors of the sufferers at Amboyna the sum of £3,615.

It seems to be admitted that the award was fairly made; and therefore, when the comparatively paltry amount of the compensation is considered, it is difficult to account for the loud outcry which the Company had continued without interruption from the first years of their existence to make against the Dutch, as the main authors of all the calamities which befell them. Surely less clamour might have sufficed, when the object merely was to obtain redress for losses which, spread over the course of nearly half a century, had only reached the aggregate amount of £85,000. When the sum was paid, many questions arose as to the mode in which it was to be apportioned among the proprietors of the different stocks by which the voyages of the Company had been fitted out. A protracted and ruinous litigation might have ensued, had not Cromwell alarmed all the claimants, and united them as in a common danger, by proposing that in the meantime the money should remain with him as a loan. The Company pleaded the general state of their affairs, and the depressed circumstances of many of the individual claimants, as reasons for not lending the whole sum; and proposed to receive £35,000 in hand, and to express their gratitude to the Protector by lending him the remaining £50,000, on the understanding that it was to be repaid in eighteen months by instalments. The final apportionment of the sum among the claimants was left to the decision of five arbiters specially appointed for that purpose.

After the arrangement made with Courten’s association, the Company began to trade on what was called a united joint stock; and while contending with many difficulties, made some arrangements which contributed greatly to their ultimate prosperity. Among others may be mentioned, the obtaining of a firman which, in return for a payment of 3,000 rupees (£300), gave them the privilege of free trade in Bengal without payment of customs. These very favourable terms, which were obtained in 1651, they owed to the influence of Mr. Gabriel Boughton, who, when English surgeon to the factory at Surat, had gained the favour of Shah Jahan by the cure of one of his daughters, and at a later period resided in Bengal as the medical attendant of the governor, Prince Shuja, Shah Jahan’s son. While new facilities for trade were thus opened up in Bengal, the Coromandel coast was not overlooked, and in 1654 the important step was taken of raising Fort St. George to the rank of a presidency. In the use of these and similar advantages, the Company might soon have repaired all their disasters, and attained a higher prosperity than they had enjoyed at any former period. Unhappily new obstacles arose from within. The union with Courten’s association had never been cordial; and the members of the latter, accustomed to much more freedom of action than the more regular management of the Company permitted, became loud in their complaints. When the union was formed, the mode of carrying on the joint trade was left open for future arrangement. On this subject, the views of the Company and of the Assada merchants were almost diametrically opposed. The Company, jealous of their privileges, and convinced that they could not maintain them without a joint stock, refused to carry on the trade on any other footing. The Assada merchants, on the contrary, while admitting that a company was necessary, insisted that it should be, not a joint stock, but a regulated company, in which the members should have liberty individually “to employ their own stocks, servants, and shipping, in such way as they might conceive most to their own advantage.” To procure an authoritative settlement of the important question thus raised, both parties, in the end of 1654, appeared as petitioners before the council of state.

The Company, in their petition, repeated all the arguments which they had been accustomed to urge in favour of a joint stock: their own experience acquired during a course of forty years—the formidable competition of the Portuguese and Dutch—the failure of isolated voyages, the expenses of equipment far exceeding the means of individual adventurers—the extent of territory over which the trade extended, the factories of the Company being actually situated “in the dominions of not less than fourteen sovereigns”—and, above all, “the engagements which the Company were under to the native powers to make good any losses which their subjects might sustain by the depredations of Englishmen,” even though these should not belong to their service. On these grounds, they thought themselves entitled to pray that the Protector would be pleased to renew their charter, with such additional privileges as had been found necessary to enable them to carry on their trade; to prohibit private persons from sending out shipping to India; and to assist them in recovering their position in the Spice Islands. Were this prayer granted, they had no doubt of being able not only to procure a large subscription at present, but to establish the East India trade on a secure and durable basis.

On the other hand, the Assada merchants alleged that management by joint stocks had not been so profitable either to subscribers or to the public as that of separate voyages would have been; and appealed in proof to the successful manner in which the Turkey, Muscovy, and Eastland trades were carried on under free companies. Besides this appeal to experience, they argued the point at great length, insisting, in substance, that a free trade regulated would encourage industry and ingenuity, giving them full latitude and scope for exercise; while each person, instead of standing idle and leaving others to act for him, had the ordering of his own affairs, and consequently opportunity to make use of his own talents; that by increasing the number of traders, it would destroy the spirit of monopoly, and, by means of active competition, lower the price of foreign commodities, to the great advantage of the public; that instead of restricting adventurers to a set time when the subscription list of a joint stock required to be peremptorily closed, and to the payment of ready money as the only mode of investment, it left them at full liberty to choose their own time, and to invest in the mode which might be most convenient, not merely in ready money, but in goods or shipping; and, finally, that besides being less expensive in its management than a joint stock, it would be far more efficient, because the adventurers, “being whetted on by their own interest and the competition of others, will in reason turn every stone for discovering of new trades;” and thus have some advantage over the Dutch Company, who, having little control over their servants abroad, make Holland the principal seat of their management.

While the subject of a joint stock or a regulated trade was thus keenly agitated, Cromwell at first maintained a strict neutrality between the contending parties, granting authority to both to undertake voyages to India, and conduct them on their own principles. An authoritative decision, however, was necessary; and to obtain it, the whole question was submitted to the council of state in a writing signed by the Protector’s own hand, and bearing date 20th October, 1656. The council referred the matter to a select committee, who were directed to report “in what manner the East India trade might be best managed for the public good and its own encouragement.” On 18th December following, the committee reported that, after taking means to obtain the fullest information, by directing notices to be affixed to the Exchange, appointing a day for all persons concerned in the East India trade to attend, and fully considering all the arguments urged orally or in writing by both parties, they had not ventured to come to any positive determination, though their own private opinion was that the trade ought to be conducted on an united joint stock. The council having the question thus returned upon them, summoned the governor and committees of the Company and the principal merchant adventurers to the East Indies to attend them; and after a full hearing on January 28, 1657, gave it as their advice to the Protector, “That the trade of East India be manned by a united joint stock, exclusive of all others.” Within a fortnight thereafter, Cromwell announced his determination to act on this advice; and a committee of the council was appointed to consider the terms of the charter to be granted to the East India Company.

It is to be presumed that the charter thus virtually promised was actually granted; but, strange to say, no copy of it has ever been discovered, and the only evidence of its existence is derived from a reference made to it in a petition which the Company presented to Cromwell in 1658, and from a letter from Fort St. George to the factory of Surat, in which it is stated that a vessel called the Blackmoore, which arrived from England on the 12th of June in that year, had “posted away with all haste after his highness the Lord Protector had signed the Company’s charter.” The Company were, of course, greatly elated with their success; and having again formed a coalition with the principal members of the merchant adventurers, succeeded in obtaining a subscription of £786,000 to form a new joint stock. It was necessary, however, before acting upon it, to make an arrangement for the settlement of previously existing claims. Under the original agreement with Courten’s association, the trade had for some years been carried on by the funds of what was called the “United Joint Stock.” The state of its affairs, made up to the date of 1st September, 1655, throws light on the position which the Company then occupied.

From this account, it appears that at its date the balance of the credit of the united joint stock amounted to the large sum of £156,317, 7s. 8d. In 1658, when the new joint stock was formed, this balance must have been considerably reduced; but as much remained as to make it necessary to settle the terms on which, if not the whole, at least that portion of it which belonged to what is called dead stock was to be transferred. The terms, apparently very favourable, were:—That “on the new stock paying £20,000, by two instalments, to the united stock, the forts, privileges, and immunities in India and Persia should be made over in full right, and the three ships and £14,000 in bullion, prepared for the voyage of this season, transferred at prime cost of the new stock; that on the arrival of these ships at the Company’s factories, the goods, furniture, and stores were to be transferred to the new account, at the valuation of 6s. 6d. sterling per rial of eight; that the servants of the new stock should assist those of the united stock in recovering their debts; and that the united stock should be charged with the expenses of the settlements and trade till the arrival of the shipping of the new stock, when the agents of this stock should take charge, and be entitled to receive the customs of Gomberoon after the 1st October, 1658.” Another arrangement of some importance was, that such persons as had served an apprenticeship to the members of the joint stock, should be admitted freemen and members of the Company on paying a fine of £5; and that the persons who had been possessed of shares in the former trade, and, on that account, had property in the Indies, were not to

Progress of the East India Company - III

The accession of James II in 1685 was followed by a complete change in the policy of the Company. The new king, who had been created Duke of York before his accession, had always taken a warm interest in the Company’s affairs, and had been one of the principal shareholders. He was now in a position to give effect to his views; and accordingly, the first step which he took was to appoint Sir Josiah Child, who had been the leading spirit in the Company’s management for some years, as governor. Sir Josiah Child was a man of considerable ability, but of a character which combined the worst features of the merchant and the courtier. He was unscrupulous in his dealings, and had already shown himself to be a master of the arts of corruption. His appointment was followed by a series of measures which, while they greatly increased the power and influence of the Company, were attended with consequences which, in the long run, proved injurious to the interests of the nation.

The first of these measures was the establishment of a new settlement in Bengal. The Company had long desired to obtain a fortified station in that province, but had hitherto been unable to do so. The opportunity now presented itself. The Mughul governor of Bengal, Shaista Khan, had been removed from his post, and his successor, Ibrahim Khan, was known to be less hostile to the English. Accordingly, in 1686, the Company despatched an expedition under the command of Job Charnock, with instructions to establish a factory at Calcutta, which had been selected as the most suitable site. The expedition was successful, and Calcutta was founded as a fortified settlement. This was a most important acquisition, as it gave the Company a secure base of operations in Bengal, and enabled them to extend their trade in that province on a much larger scale than had hitherto been possible.

The establishment of Calcutta was followed by a series of aggressive measures against the Mughul government. The Company, emboldened by their new strength, began to seize Mughul vessels and to levy duties on trade without the sanction of the Mughul authorities. These acts of aggression soon brought them into conflict with the Mughul government, and in 1688 the Company’s factories in Bengal were attacked and plundered by the Mughul forces. The Company’s servants were imprisoned, and their property was confiscated. This was a serious blow to the Company’s interests, and it became clear that they could not hope to maintain their position in Bengal without the support of a strong military force.

In consequence of these reverses, the Company resolved to adopt a more aggressive policy. They despatched a fleet under the command of Sir Thomas Grantham, with instructions to attack the Mughul forces and to recover the Company’s factories. The fleet was successful in its operations, and the Mughul forces were defeated. A peace was concluded, and the Company’s factories were restored to them. However, the peace was of short duration, and hostilities were soon renewed.

The struggle between the Company and the Mughul government continued for several years, and was attended with varying fortunes. At times the Company was successful, and at other times it was forced to retreat. Eventually, however, the Company’s superior military organization and discipline enabled them to gain the upper hand, and they were able to establish themselves firmly in Bengal. This was a turning point in the history of the Company, as it marked the beginning of their transformation from a purely commercial organization into a territorial power.

The establishment of the Company’s power in Bengal was followed by a series of measures designed to consolidate their position and to extend their influence. They established a mint at Calcutta, and began to coin money in their own name. They also established a system of administration, with a governor and council, similar to that which they had established at Bombay and Madras. These measures were designed to give the Company the appearance of a sovereign power, and to enable them to exercise authority over the territories under their control.

The success of the Company in Bengal was not achieved without considerable cost. The Company was forced to maintain a large military establishment, and the expenses of administration were considerable. However, the profits derived from the trade in Bengal were so great that the Company was able to bear these expenses without difficulty. Indeed, the trade in Bengal became the most profitable branch of the Company’s business, and it was largely through the profits derived from this trade that the Company was able to finance its other operations.

The establishment of the Company’s power in Bengal was also attended with important political consequences. The success of the Company in Bengal demonstrated that a European power could, with the aid of superior military organization and discipline, establish itself in India and exercise authority over the native populations. This demonstration had a profound effect on the subsequent history of India, and it was largely as a result of the Company’s success in Bengal that other European powers, particularly France, were encouraged to attempt similar enterprises.

The period following the accession of James II was also marked by important changes in the Company’s organization and management. The Company’s charter was renewed and extended, and new powers were conferred upon it. The Company was now authorized to establish courts of justice, to coin money, to maintain a military force, and to exercise authority over the territories under its control. These powers were exercised in a manner which was often arbitrary and oppressive, and they gave rise to considerable discontent among the native populations.

The Company’s aggressive policy in India was not without its critics in England. There were many who believed that the Company’s actions were contrary to the interests of the nation, and that the Company was pursuing a policy of territorial conquest which was inconsistent with its character as a commercial organization. These critics argued that the Company’s actions would inevitably lead to conflicts with the native powers, and that these conflicts would ultimately prove injurious to the interests of the nation.

However, the Company’s supporters argued that the establishment of the Company’s power in India was necessary for the protection of the Company’s trade, and that the Company’s actions were justified by the necessity of defending itself against the aggression of the native powers. They also argued that the Company’s success in India was a source of great profit to the nation, and that the Company’s actions were therefore in the interests of the nation as a whole.

The debate between the Company’s critics and supporters continued for many years, and it was not until the end of the eighteenth century that the Company’s monopoly was finally broken and its powers were curtailed. However, by that time the Company had already established itself as a territorial power in India, and it was able to exercise a profound influence on the subsequent history of the subcontinent.

The period following the accession of James II was also marked by important changes in the Company’s commercial operations. The Company began to expand its trade in new directions, and to establish factories in new locations. In particular, the Company began to expand its trade in China, and to establish a factory at Canton. This expansion of the Company’s trade in China was to have important consequences for the subsequent history of the Company, as it was largely through the trade in China that the Company was able to derive the greatest profits.

The establishment of the Company’s factory at Canton was attended with considerable difficulties. The Chinese government was suspicious of foreign traders, and it was only with great difficulty that the Company was able to obtain permission to establish a factory. However, once the factory had been established, the trade in China proved to be extremely profitable, and it soon became the most important branch of the Company’s business.

The success of the Company in China was largely due to the efforts of the Company’s agents in that country, who were able to establish good relations with the Chinese authorities and to negotiate favorable terms of trade. The Company’s agents were also able to establish a system of trade which was mutually beneficial to both the Company and the Chinese merchants, and which enabled the Company to derive considerable profits from the trade in Chinese goods.

The period following the accession of James II was thus a period of great expansion and consolidation for the Company. The Company was able to establish itself as a territorial power in India, to expand its trade in new directions, and to establish factories in new locations. These achievements were attended with considerable cost, but they enabled the Company to derive great profits from its operations, and to exercise a profound influence on the subsequent history of India and the Far East.

However, the Company’s success was not without its costs. The Company’s aggressive policy in India led to conflicts with the native powers, and these conflicts were attended with considerable loss of life and property. The Company’s actions also gave rise to considerable discontent among the native populations, and this discontent was to have important consequences for the subsequent history of India.

Moreover, the Company’s success in India was not achieved without considerable opposition from other European powers, particularly France. The French East India Company, which had been established in 1664, was also attempting to establish itself in India, and the competition between the English and French companies was to lead to a series of conflicts which were to have important consequences for the subsequent history of India and the world.

The period following the accession of James II was thus a period of great change and upheaval for the Company. The Company was able to establish itself as a territorial power in India, but this achievement was attended with considerable cost and conflict. The Company’s success in India was to have profound consequences for the subsequent history of the subcontinent, and it was largely as a result of the Company’s success that India was eventually brought under British rule.

New Charters

The Duke of York, now James II, had been a considerable shareholder in the Company, and was understood to be willing to employ all the power and influence of the crown in their favour. A new course of prosperity was hence anticipated, and it soon became apparent that the moderation and caution hitherto manifested were no longer deemed necessary. The interlopers were henceforth to be proceeded against with a rigour which, while admitted to be most desirable, had previously been deemed impolitic. In England prosecutions were immediately to be commenced in the Court of King’s Bench against no fewer than forty-eight individuals, who were charged with violating the Company’s exclusive privileges, and several of whom, it was supposed, would be unable to make any effectual defence, because the statements contained in their petitions to the king were to be laid hold of as admissions of guilt. In India the judge-advocate established at Bombay was furnished with the code of martial law established in the British army, that it might become the rule of his conduct in trying the commanders and officers of the interloping ships; and the president and council were specially enjoined not to perplex themselves with questions as to the legality of the proceedings, but to be careful in providing that the sentences pronounced by the judge should be carried into execution. The Company must have been aware that the outcry which had been raised against them would thus become more clamorous than ever; but they acted as if they had imbibed the spirit of the last of the Stuarts, and were resolved, if they could not conciliate public opinion, to set it at defiance.

In a similar spirit, the native powers were no longer to be addressed in submissive petitions, but given to understand that the Company would henceforth treat with them as an independent power, and when aggrieved would, if necessary, compel redress by force of arms. To show that this haughty tone meant as much as it expressed, the Company obtained the king’s patent, authorizing them to appoint their president, Sir John Child, “captain-general and admiral of all their forces by sea and land, in the northern parts of India, from Cape Comorin to the Gulf of Persia.” To give effect to this appointment, he was to fix the seat of government at Bombay, while Surat was to be reduced to a simple factory; and he was to maintain a kind of state, by the attendance of a guard of English grenadiers under the command of an ensign with the rank of captain. It was presumed that the removal to Bombay would give umbrage to the Mughul government, but under the new policy this was a very secondary consideration, as not only the Mughul, but Sambhuji and the native princes generally, were to be given to understand that the Company had now in Bombay an impregnable retreat, from which they would be able to retaliate at sea for any exactions and depredations to which they might be subjected on shore. This was no empty menace, for the same vessel which carried out the above public instructions, carried others of a still more important nature, transmitted from a secret committee, with the approbation of the king, and intended not to be made known till the moment for acting upon them had arrived.

An armament on a far larger scale than the Company had ever before fitted out had sailed from England. It consisted of ten ships, mounting from twelve to seventy guns each, and carrying as many troops as, with those which were ordered to join them on their arrival, would make 1,000 regular infantry. Its destination was Bengal. On arriving there, and forming, with the Company’s ships, a fleet of nineteen sail, it was to effect a landing at Chittagong, on the north-east side of the Bay of Bengal, and take permanent possession of it, fortifying it in the best manner, mounting 200 cannons upon it, establishing a mint, and levying five per cent customs on the inhabitants. The possibility of a failure seems never to have been contemplated. The instructions, accordingly, presuming a complete success, enter into a number of minute details for the purpose of regulating future proceedings. After Chittagong was captured and made secure, and all Mughul ships of every description had been seized and declared lawful prizes, the expedition was to proceed up the eastern branch of the Ganges against Dacca. Supposing, as a matter of course, that the nabob and his troops would immediately save themselves by flight, peace was to be offered to him on the following conditions: that he should cede the city and territory of Chittagong to the Company, and pay the debts he owed them; that he should allow the rupees coined at Chittagong to pass current in his district, and restore all privileges according to ancient firmans. Should he claim restitution of the ships and property seized, he was to be told that the parties were to bear their respective losses and expenses during the war; and that, while these were the most favourable terms which the Company were disposed to concede, even these would not be binding upon them, unless they were ratified and embodied in a regular treaty by the Great Mughul.

As if a single war were not enough at one time, the armament was also to commence hostilities with the King of Siam, and seize his vessels by way of compensation for the losses which the Company had sustained in his dominions. Nor was this all. The Portuguese were to be dealt with after a similar fashion; and if they continued to exact customs at Tanna and Caranja, the president at Bombay was not only to refuse them, but to employ the fleet and military forces at his disposal in seizing Salsette and other dependencies, which it was asserted that the grant of the port and island of Bombay ought to have carried along with it.

The extravagance of these schemes, sufficiently apparent in itself, was signally proved by the result. On the 28th October, 1686, in consequence of a quarrel between three English and some native soldiers in the bazaar at Hughli, hostilities were prematurely commenced. The nabob’s troops were defeated, and Hughli suffered severely by a cannonade of the Company’s fleet. Before this event, Shaistah Khan, the nabob, was disposed to compromise matters with the Company, or submit their differences to arbitration. An amicable settlement was now impossible, and indeed was not desired by the Company, who had made up a list of claims exceeding in the aggregate £500,000 sterling, and were indulging the hope that by their warlike successes a considerable portion of it might be secured for their treasury, though they must have been aware that many of the items charged were fictitious, or at least conjectural. As a specimen the following may be mentioned:—“For detaining ye agent with ye silk at Cassumbuzar, 400,000 rupees” (£40,000). “For what extorted from us in presents, &c., 200,000 rupees” (£20,000). “To demorage of shipping, the three last years, 2,000,000 rupees” (£200,000). “For charge of 1,000 men and twenty ships for ye war, also 2,000,000 rupees” (£200,000).

Immediately after the attack on Hughli, the Mughuls, pretending to be intimidated, but merely with the view of gaining time, obtained a cessation of hostilities, during which the servants of the Company removed with their property from that town, and on 20th December, 1686, fixed on Sutanati, or Calcutta, as a safer station while negotiations were pending. How these would issue soon became apparent; for the nabob, making no secret of his intentions, seized upon the English factory at Patna, and imprisoned all the inmates. The prospects of the Company now became sufficiently alarming. The premature attack had made the Mughuls aware of what was intended; the subsequent delay had enabled them to complete their preparations; and it had become impossible to disguise the fact, that the armament which had been provided was inadequate to its object. Chittagong could not be attacked with any probability of success. In proportion to the extravagance of the hopes which had been entertained was the despondency produced by failure. Mr. Gyfford, the president of Madras, first took alarm. Aurangzeb’s army was approaching. It had already conquered the kingdom of Bijapur; that of Golkunda was on the point of sharing the same fate. What then was to prevent it from continuing its victorious career, and advancing upon Madras? Fort St. George, to reinforce the expedition to Bengal, had been left almost entirely without a garrison and without military stores. Thus unprovided with the means of defence, the president saw no safety for it except in negotiation. With this view he opened a communication with the Mughul, and by means of various flimsy excuses for the hostilities in Bengal, humbly deprecated his displeasure, and prayed for a confirmation of the privileges which Madras had so long enjoyed.

The court at home, never dreaming of the gloomy aspect which affairs had assumed, continued to busy themselves with their schemes of aggrandizement, and the various changes which might become necessary by the accomplishment of them. In imitation of the Dutch at Batavia and Colombo, they raised Bombay to the rank of a regency, and declared their wish that it should be fortified “as strong as art and money could make it.” As the seat of government, Sir John Child, who presided at it, was to have unlimited power over all the Company’s settlements in India. Madras, too, though subordinate to Bombay, was also raised to the rank of a regency, and at the same time (1687) received a charter of incorporation. Before this charter was granted the governor and deputy-governor of the Company were commanded to attend his majesty at the cabinet council. The subject of the intended charter was then largely debated, though the only question which appears to have excited much interest was—whether the charter should pass immediately by the king, under the great seal, or whether it should pass under the common seal of the Company. One member of council argued in favour of the former method, but the governor, when the king asked his opinion, replied as follows:—“What his majesty thought best the Company would always think so; but if his majesty expected the governor’s private opinion, he had ever been of opinion, 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”. This view of the matter so far prevailed, that the charter was made to pass under the common seal of the Company. Under this charter the corporation was to consist of a mayor and ten aldermen (three Company’s servants and seven natives), who were to be justices of the peace, and wear thin silk scarlet gowns, and of 120 burgesses with black silk gowns.

At the period when this charter was granted, the population of the city of Madras, the town of Fort St. George, and the villages within the Company’s bounds was estimated at 300,000. The whole was held of the King of Golkunda at a quit-rent of 1,200 pagodas, or about £430. The obligation to pay this sum could not be disputed; and yet, as if the Company under their new policy had considered themselves entitled to dispense with justice wherever force could effect their object, they caused intimation to be made to the king that their future payment to him would depend on his keeping St. Thome in such a manner as not to become an annoyance to Fort St. George. If he would not let it on lease or farm to the Company, the president, “as representing an independent power, was not only to refuse payment of the quit-rent, but to declare the place the property of the Company.” For the gross fraud and violence thus proposed to be perpetrated, the only justification attempted was that the King of Golkunda’s power had been “much decreased by the victories of the Mughul, and his expulsion from Masulipatam by the Dutch,” and that “it was impracticable to carry on trade, or maintain a seat of government without revenue.” Such were the Machiavellian principles shamelessly advocated by the court in their letters to Madras in the season 1687-88.

When the failure of the expedition to Bengal was announced in England, the court, instead of attributing it to the tortuous policy which they had begun to pursue, were ungenerous enough to throw the whole blame on their servants in India. The agency of Bengal were censured for their timid conduct, charged with having selfishly pursued their own ends, regardless of the honour and interests of the king and Company who had confided in them, and threatened with expulsion from the service if, by their sinister schemes, the objects of the war should not be accomplished. These objects the Company were not yet willing to abandon; and therefore, when despatching a large ship, called the Defence, under the command of Captain Heath, and a small frigate, fully armed, and carrying a reinforcement of 160 soldiers, to assist in the war, they intimated their determination that “unless a fortification and a district around it should be ceded, to be held as an independent sovereignty, the charges of the armament be defrayed, and permission to coin money in Bengal, to pass current in the Mughul’s and nabob’s dominions, be granted, they would not consent to a peace, or send any more stock or goods to the Ganges.” These boastings and menaces become ludicrous when viewed in connection with the actual position of affairs, and only proclaim the ignorance, presumption, and folly of those to whom the home management of the Company was at this time intrusted.

Captain Heath arrived in Bengal in October, 1688, and, proceeding to act on instructions which had become altogether inapplicable to the circumstances, embarked the Company’s property at Calcutta, and then proceeded to Balasore Roads. The members of the factory there had been seized and imprisoned; but Captain Heath, though he opened a negotiation with the governor, was too impatient to wait for the result of it. Having effected a landing, he captured a battery of thirty guns, and then plundered the town. By this proceeding he gained little, and threw away the only chance of obtaining the English prisoners, who were carried off into the interior to endure a hopeless captivity. From Balasore he proceeded to Chittagong; but instead of attacking it with his well-equipped fleet, now amounting to fifteen sail, he spent some days in fruitless negotiation, and then set sail for Arakan. It was supposed that as the king was at enmity with the Mughul, a locality for a fortified settlement might be easily obtained. The application, however, was refused; and Captain Heath, after an ineffectual attempt to secure his object by courting the alliance of a rebel chief, finally quitted the Bengal coast, and arrived at Madras on the 4th of March, 1689. On board the fleet was all that now remained to the Company of the wreck of their once flourishing factories in Bengal.

On the west coast of India the results were not more satisfactory. The first intimation of the warlike policy of the Company was communicated by the secret committee in a letter to President Child, intended for his eye alone, but marked to be opened in his absence by Sir John Wyborne, deputy-governor of Bombay. The president was absent, and Sir John not only opened the letter, but imprudently communicated the contents to the council. The secret was of a kind not likely to be kept, and great alarm was felt lest it should reach the ears of the governor of Surat. This was altogether contrary to the intentions of the Company, who were bent on carrying out a great scheme of fraud by making sudden war on the Mughul in one quarter of his dominions, when they were deluding him with professions of friendship in another. In Bengal his territory was to be invaded, and his ships and those of his subjects seized as lawful prizes, not only there, but in the eastern seas and in the Persian Gulf; while on the west coast of India, and particularly at Surat, a mask of friendship was to be worn, and not thrown off so long as concealment might seem desirable. This nefarious mode of warfare excited no scruples in the mind of Sir John Child, who at once entered into the spirit of it, and discovered, as Bruce expresses it, “a high sense of duty, and a provident concern for the interests of the Company,” by resolving not only to keep up the deception and avoid hostilities with the Mughul till the result of the Bengal expedition should be known, but even “should circumstances oblige him to commence hostilities, to take the responsibility on himself.” The meaning is, that he was to act as a screen to the Company, and enable them, should the war prove unsuccessful, to allege, in utter disregard of truth and honour, that he had acted without their authority. In the case supposed, therefore, Sir John Child was to be treated apparently as if he had incurred the displeasure of the Company, and they were to follow out the wretched system of duplicity by negotiating with the Mughul “for the restoration of their privileges and trade, upon the same basis as they were anterior to his apparently unwise proceedings.”

At this game of deceit it was not easy to overmatch the Mughul, and the Company’s experience ere long furnished a new illustration of the old adage, that “honesty is the best policy.” Sir John Child displayed considerable dexterity. At first he despatched two of the Company’s ships to Mocha and Bussorah, and two others to China, with secret orders to seize all the Mughul or Siamese vessels they might fall in with. At the same time he despatched a ship to Surat to lie off the mouth of the estuary, and endeavour if possible to bring off all the members and property of the factory. The governor of Surat was too well informed, and too much on the alert to be thus imposed upon. Without proceeding to acts of violence, he kept such a strict watch that the escape of the agent and factors was impracticable. Craft being thus unavailing, Sir John Child tried the effect of force, and suddenly seized all the Surat ships in the port of Bombay. The governor, affecting an intimidation which he did not feel, sent one of the English factors to him with a complimentary letter, in which he expressed an anxious wish to come to an accommodation, and to know what terms would satisfy the Company, and induce them to resume trade. The factor returned to Surat with a statement of grievances, comprising thirty-five articles, including, inter alia, satisfaction for stoppage of goods at the custom-house, for the obstruction of investments, for the demurrage of vessels detained, for the refusal to deliver up interlopers and their ships, for the raising of customs from 2 to 3½ per cent, for the refusal of permission to coin money, for the imposition of arbitrary taxes, and the seizure of horses and goods for the Mughul’s use without paying for them.

Before any answer was returned to these propositions, Captain Andrews, commanding one of the ships which had been sent to the Persian Gulf, returned to Bombay, bringing with him an interloping ship and six Mughul vessels, which were sailing under Dutch colours. These captures speedily becoming known, put an end to the trick of concealing actual hostilities, and therefore, without any further attempt at disguise, Sir John Child despatched two large ships to Surat, with orders to seize all Mughul vessels that should be met with, and also to attack the Siddi’s fleet, if it should attempt to cross the bar with the view of putting out to sea. During these proceedings a new governor arrived at Surat, and professed such friendly feelings, that Sir John Child, at the urgent request of the agent, made his appearance off Surat, and succeeded, as he thought, in negotiating a provisional convention on the basis of his thirty-five articles. Though these fell far short of what had at one time been anticipated, the Company, now alive to the difficulties in which their fraud and folly had involved them, were so delighted at the prospect of a treaty with the Mughul, that they voted the president a present of 1,000 guineas, as a mark of approbation for the wisdom of his proceedings during the war, and for his general services. The vote was afterwards discovered to have been premature. The governor of Surat had merely begun to play his part in the game of deceit, and in order to gain time had professed a willingness to accept of terms which he was determined to repudiate. No sooner, therefore, was his object secured, than he threw off the mask of friendship, again imprisoned the members of the factory, confiscated all the Company’s property, and offered a large reward for the person of Sir John Child, alive or dead. The president, thus completely outwitted, returned to Bombay, and found no other means of avenging himself than by capturing forty vessels of a large fleet of Mughul merchantmen.

Though the prospect of an amicable termination had now become hopeless, one effort more was made by sending a deputation to Aurangzeb himself, who was then encamped with his army at Bijapur. Meanwhile, Sir John Child found himself so completely powerless, that he was unable to prevent the Siddi from making several descents upon the island, and even threatening an attack upon the castle of Bombay. He had no spirit to face the gathering storm, and died on the 4th of February, 1690. Had he lived a few weeks longer, he would have seen the Company in a more humiliating position than he had ever contemplated as possible; for shortly after, Aurangzeb’s answer to the deputation which had been sent to him arrived in the form of a firman, couched in the following terms:—

“All the English having made a most humble, submissive petition, that the crime they have done may be pardoned, and requested another phirmaund, to make their being forgiven manifest, and sent their bakkeels to the heavenly palace, the most illustrious in the world, to get the royal favour; and Ettimaund Caun, the governor of Suratt’s petition to the famous court, equal to the skie, being arrived, that they would present the great king with a fine of 150,000 rupees, to his most noble treasury, representing the sun, and would restore the merchants’ goods they had taken away to the owners of them, and would walk by the ancient customs of the port, and behave themselves for the future no more in such a shameful manner; therefore his majesty, according to his duty and favour to all the people of the world, hath pardoned their faults, mercifully forgiven them, and out of his princely condescension agrees, that the present be put into the treasury of the port, the merchants’ goods be returned, the town flourish, and they follow their trade, as in former times; and Mr. Child, who did the disgrace, be turned out and expelled. This order is irreversible.”

While the Company were thus, by a kind of just retribution, reaping the bitter fruits of their war policy, another calamity had befallen them. Their great patron James II had been driven from the throne which he unworthily occupied. The Revolution, which saved the liberties of the nation from civil and ecclesiastical despotism, was no doubt eminently favourable to trade; but the Company unfortunately stood in a false position. They held a monopoly which a powerful party were bent on wrestling from them, and they had themselves incurred much odium by the rigorous and despotic measures which they had adopted in maintaining their exclusive privileges. It would not have been wonderful if, in these circumstances, while they were regarded as almost identified with the dynasty which had just been expelled, they had shared its fate. The Company, though fully alive to the danger, did not lose heart, but resolved to leave no means untried that promised to avert it.

The spirit of freedom evoked during the struggle with the last of the Stuarts, was naturally taken advantage of by the opponents of the Company; and no sooner had William and Mary been seated on the throne, than it was boldly maintained that the crown had exceeded its powers in granting exclusive privileges of trade, without the consent of the other branches of the legislature. This question, on the solution of which the very existence of the Company evidently depended, could not be much longer delayed. It was not to be expected that, while thus existing only by a kind of reprieve, they would venture on any large expenditure in new and hazardous enterprises, or even continue their equipments on their previous scale. In the season 1689-90, they sent out only three ships, two of them destined for Bombay, and one for Fort St. George. At the same time, when they were thus curtailing their trade, they made strenuous exertions to increase their revenue; and, still clinging to the idea of becoming an independent Indian power, addressed the presidency of Bombay in the following terms:—“The object 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 nation 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 trade.” This language, which certainly sounds strange in a Company which professed to be established “on a purely mercantile bottom,” may be partly explained by the change which had taken place in European politics.

The “wise Dutch”, whose conduct, after having been so often the subject of bitter vituperation, is eulogized as a model, were now in close alliance with England; while France, which had been rapidly acquiring power and influence in the East, had become their common enemy. Whatever might be the ultimate issue of the hostilities, it was scarcely possible, while they continued, to carry on a profitable trade. Both in the East and in Europe, French privateers were on the watch to make prizes of the Company’s ships. It was therefore easy to represent the curtailed equipments as the result of prudential arrangements, and to justify the resolution to make revenue a primary object. The accomplishment of this object, however, was attended with considerable difficulty. At Bombay taxation had already been carried to an extent which had produced insurrection. In Fort St. George a similar result was threatened; but the court, listening only to their necessities, held that the additional revenue actually obtained was “by no means equal to what might have been expected, or drawn from a fortified town which could afford protection to shipping and trade, and that the amount might be increased to £100,000 per annum, if a similar system of taxation should be introduced with that which the Dutch had established at Batavia.”

The opposition to the Company had now assumed a definite shape, by the presentation of a petition to the House of Commons, praying for legislative sanction to the establishment of a new company, formed on more liberal principles. From the causes already mentioned, the petitioners found much favour, and a committee was appointed who, after fully hearing both parties, reported on the 16th of January, 1690, that, in their opinion, “the best way to manage the East India trade, is to have it in a new company and a new joint stock, and this to be established by act of parliament; but that till this was done, the exclusive trade should remain with the present Company”. Parliament was prorogued before this report could be taken into consideration, but in 1691 the resolution of the committee was virtually sanctioned by an address which the House of Commons presented to the crown. After this decided step, the Company became convinced that their privileges would never be secure until they were confirmed by statute. To this object, accordingly, their domestic policy was henceforth more especially devoted. In a petition to parliament they set forth their claims at full length, and ultimately gained what they justly considered a victory, because the adverse decision previously given against them was not repeated; and the House of Commons, as if satisfied that they had hitherto acted in the matter with some degree of precipitation, simply referred the whole business to the king. This was just what the Company desired, for they felt assured that even if argument should fail, they had it in their power to conciliate the favour of government by the employment of other means of a more efficacious nature. What these were will shortly appear; but in the meantime it is necessary only to mention the result—that, on the 7th of October, 1693, the Company obtained a new charter from the crown. Before considering its terms, it will be proper to glance at the state of affairs in India.

As already mentioned, the Company sent out only three ships from England in the season 1689-90. In the following season the same number only was sent, and not so much for the purpose of carrying on trade at the great marts, which they enjoyed before their unhappy hostilities with the Mughul, as of picking up any remains of traffic which might be found in localities not affected by these hostilities. Thus one of the vessels was sent to Bencoolen in Sumatra, where, as a substitute for Bantam, which was no longer accessible, a factory had been established and fortified; the second vessel, destined for Fort St. George, was to load with coast goods, including those which it might be possible to collect from Bengal; and the third, proceeding direct to Bombay, was to endeavour to obtain a cargo by touching at the different stations on the Malabar coast. In 1692-93 trade took a new start, and the number of ships despatched amounted to eleven. The main cause of the increase was the re-establishment of trade within the Mughul territories, on terms which, though humiliating, the Company were too glad to accept; but something also may have been due to the better prospect which they now had of obtaining a confirmation of their privileges from the king. The latter cause must have operated still more powerfully in the ensuing season, and accordingly the number of ships sent out amounted to thirteen, which sailed as two successive fleets in January and March.

During the hostilities with the Mughul, the Dutch and French had turned the blunders of the Company to good account, and, in a manner, monopolized the Indian market. The advantages thus acquired by the Dutch were not eventually of serious consequence, because the strict alliance into which they were brought with England prevented them from using these advantages, at least openly, for the purpose of injuring the Company. The case was different with the French. While the Company were sacrificing all the substantial advantages which it had cost them the better part of a century to secure, the French had not only established factories at Surat on the Malabar coast, and in the mouth of the Ganges, but had acquired a commanding settlement on the Coromandel coast at Pondicherry, eighty-five miles south-south-west of Madras. Even when France and England were allies, the Company could not refrain from expressing the jealousy and fear which they felt at the rising prosperity of the French; and now that the alliance had been broken up, and the two nations were once more open enemies, one of the first instructions sent out to the presidency of Surat was to endeavour to secure the safety of their settlements and trade by wrestling Pondicherry from the French. This was far more than the presidency could venture to attempt with the feeble means at their disposal, and the struggle which was finally to decide the ascendency between the rival establishments was necessarily reserved to a future period. Indeed, at this time, so far were the Company from being in a condition to undertake the siege of Pondicherry, that they were unable to maintain their own ground against a French fleet of four ships, mounting respectively sixty-six, sixty, forty, and twenty guns, which had made its appearance on the west coast of India, and captured one of the Company’s ships within fifty miles of Bombay. This loss was somewhat counterbalanced by a gain on the east coast, where Tegnapatam, situated only about twelve miles south of Pondicherry, was acquired by purchase from a native prince, and immediately converted into the strong and important settlement of Fort St. David. It is rather curious, that while the French, with whom we were then at war, allowed the Company quietly to fortify themselves in their immediate vicinity, the Dutch, our allies, manifested the utmost jealousy, and refused to recognize the right which the Company claimed, in virtue of their purchase, to levy harbour dues and customs.

BOTH the disgraceful termination of the war in which the Company had engaged with the Mughul, and the state of the public mind produced by the Revolution, gave great advantages to their enemies, who endeavoured, by a petition which they presented to the House of Commons, to prove that nothing but the establishment of a new Company was able to save the East India trade from being entirely lost to the nation. The question raised by the petition was too important not to attract considerable attention; and a committee, appointed by the House, to take cognizance of it, began by requiring an exact state of the Company’s accounts, an estimate of their stock, goods, cash, and debts, and a view of the correspondence both at home and abroad. The Company meanwhile met the petition of their opponents with a counter-petition, and both sides having been fully heard, resolutions were adopted, laying down a series of general propositions as to the terms on which the trade to the East Indies should in future be carried on. The most important of the resolutions were—“That a sum not less than £1,500,000, and not exceeding £2,000,000, was a fund necessary to carry on the East India trade in a joint stock—that no one person should possess any larger share than £5,000, nor have more than one vote—that no private contracts should be made, but all goods be sold at public sales by inch of candle, except saltpetre for the use of the crown, and in lots each not exceeding at one time the value of £500—that all dividends be made in money, and no dividend be made without leaving a sufficient fund to pay all debts and carry on the trade—that no ships, either with permission or without, for the future be allowed to go to the East Indies, except only such as should be of a company, or be established by act of parliament—and that the joint stock of a company to trade to the East Indies be for twenty-one years, and no longer.”

Though in these resolutions no express mention was made of the existing Company, it became evident, from other resolutions adopted immediately after, that the intention of parliament was to continue them in possession of their monopoly; for after stipulating “that persons having above the sum of £5,000 in the stock of the present East India Company, in their own or other persons’ names, be obliged to sell so much thereof as should exceed the sum of £5,000, at the rate of one hundred pounds for every hundred,” and “that the members of the committee of the East India Company be obliged to give security, to be approved of by the House, that the stock and estate they now had should be made good £749,000, all debts paid,” it was added, “that security being first given, an humble address be presented to his majesty, to incorporate the present East India Company by charter, according to the regulations agreed upon by the House, that the same might pass into an act.”

To some of these regulations as unnecessary or impolitic, valid objections might easily have been made; but the Company apparently resolved to waive them; for within a week, Sir Thomas Cooke the governor, and two other committees of the Company, produced their proposals of security. They were not deemed satisfactory, and the House, after a short delay, adopted the following resolution, dated 11th February, 1692—“That an humble address be presented to his majesty to dissolve the present East India Company, according to the powers reserved in their charter, and to constitute another East India Company for the better preserving of the East India trade to this kingdom, in such manner as his majesty in his royal wisdom should think fit.” To this address, which was ordered to be presented by the whole House, his majesty replied, “That it was a matter of very great importance to the trade of this kingdom, and that it could not be expected he should give a present answer to it, but that he would take time to consider of it, and in a short time give them his positive answer.” The Company having reason to believe that they had more to expect from the king than from the legislature, bound themselves by writing to submit to such regulations as should be made. Accordingly, the committee of the privy council, to whom the whole matter had been referred, drew up an elaborate paper, entitled, “Propositions for regulating the East India Company.” The propositions, thirty-two in number, while retaining the spirit of the resolutions sanctioned by the House of Commons, entered much more into detail, and also made some very important alterations and additions. Instead of accepting them as they had formerly promised, the Company returned what they called the “Humble Answer of the Governor, Deputy-governor, and Court of Committees of the East India Company, to a Paper of Propositions for Regulation of the East India Company.” In this answer the propositions were minutely criticized, and for the most part strenuously objected to. Some of the answers are very quaint and curious. To the second proposition, which was—“The stock of the present Company to be part of the fund” (the proposed fund amounting to at least £1,500,000, and not exceeding £2,000,000), “and to be rated at £744,000, if they can give security that it shall effectually produce that sum; or else at so much less, as they will engage to make good after all debts paid, and satisfaction made to the Mughul and his subjects, against whose pretensions the new stock to be indemnified by the like security:"—it was answered—“The Company, recommending their righteous cause to God and his majesty’s known and famous justice in the whole course of his happy life, say that the value of everything is what it will sell for; and their stock, under all the calumnies and persecutions of their adversaries, now currently sells for £150 per hundred; and they know and can prove it to be intrinsically more worth than that current price; but they know no law or reason why they should be dispossessed of their estates at any less value than they are really worth in ready money, by all the measures anything is valued in any part of the world. They humbly say as to security, they know no reason why they should give security for their own estates. They affirm that they owe not a penny to the Great Mughul or any of his subjects, other than their running accounts with their own banyas and brokers, which are changing daily, like merchants running cash in a goldsmith’s hand. Although the Company owe nothing to the Mughul, as aforesaid, yet the bare mentioning any such thing by a public act of his majesty, would be enough to persuade him to invent demands upon the Company for transactions and pretences done in ages past, before any of the present adventurers were born; and therefore that part of the proposition seems manifestly impossible, as well as unjust, neither the Mughul nor any of his subjects having made any complaint to his majesty of the Company’s being in debt to him or them; that being only a suggestion of the interlopers and their adherents, not only now, but for many years past. As to that hypothesis—if they can give security—it will not become the Company to say what they might of their own ability, or the ability or disability of their adversaries; they are, on both sides, well known on the Exchange.

The other answers exhibiting a similar spirit, were regarded by the king as a formal rejection by the Company of the charter which had been offered to them; and accordingly, on the 14th November, 1692, he returned the following answer to the address which had been presented to him on the subject during the previous session of parliament:—

“The House of Commons having presented an address to the king to dissolve the present East India Company, according to the power reserved in their charter, and to constitute a new one, his majesty took into consideration the proper methods of complying with their desires, and of securing effectually this advantageous trade to the nation.

“But his majesty, upon examination of the charter, and consulting his judges and learned council, found that he could not legally dissolve the Company but upon three years’ warning; and that during the three years after warning the Company must subsist, and might continue to trade; and that although the king might constitute a new company, yet he could not empower such new company to trade till after three years, the crown having expressly covenanted not to grant any such liberties.

“Hereupon his majesty was very apprehensive of the ill consequences of giving warning to the Company, because they would then be less solicitous of promoting the true interest and advantage of the trade, whereof they could not long reap the fruits, and that no new company could be immediately admitted to it; so that this very beneficial trade, which is already so much impaired, might be in danger of being entirely lost to the nation.

“His majesty, very desirous to prevent so great a mischief, and to gratify the House of Commons in the end, since he could not do it without great hazard in the manner they proposed, required the East India Company to answer directly whether they would submit to such regulations as his majesty should judge proper, and most likely to advance the trade; and the Company having fully agreed to it, and declared their resolution in writing, his majesty commanded a committee of his privy council to prepare regulations; which they did, and offered them to the Company; but the Company, notwithstanding their declaration of submission, rejected almost all the material particulars.

“So that his majesty, finding that what possibly the House of Commons might have expected, and indeed was necessary to preserve this trade, could not be perfected by his own authority alone, and that the Company could not be induced to consent to any such regulations as might have answered the intentions of the House of Commons, and that the concurrence of parliament is requisite to make a complete and useful settlement of this trade, has directed all the proceedings in this matter to be laid before them; and recommends to them the preparing of such a bill, in order to pass into an act of parliament, as may establish this trade on such foundations as are most likely to preserve and advance it.”

The House of Commons endeavoured to act on this suggestion, but finding that the opposition of the Company still continued, resolved, on the 25th February, 1693, “That an humble address be presented to his majesty, that he will dissolve the East India Company, upon three years’ warning to the said Company, according to the power reserved in their charter.” The king answered, “I will do always all the good in my power for this kingdom, and I will consider your address.”

A crisis was thus evidently approaching; but the Company, though they had been bold enough to provoke it, became alive to the full extent of the danger, and determined to leave no means untried that promised to prevent it. Unfortunately, however, at this very time, from mere inadvertency or some other cause which has never been properly explained, they incurred a direct forfeiture of their charter by failing to make payment of the first quarterly instalment of a tax of five per cent imposed upon their stock, by Act 4 Wm. and Mary, c. 15. In this act the stock was valued at £744,000, and consequently the whole sum exigible under the first quarterly payment was only £9,300. It was obvious that the nonpayment of a sum so comparatively paltry must have been owing to oversight and not to inability; but the enemies of the Company were numerous, influential, and inveterate; and as the act, after ordering the first quarterly payment to be made on the 25th of March, 1693, expressly declared, that “in case the governors and treasurers of the said respective companies” (the East India Company, the Royal African Company, and the Hudson’s Bay Company) “shall make default in payment of the said several sums, or any of them respectively, charged on the stock of the said companies, at the days and times aforesaid, according to the true intent of this act, the charter of such company respectively shall be, and is hereby adjudged to be void,” it was seriously proposed to exact the full penalty. The Company being thus entirely at the mercy of government, abandoned all idea of resistance to any terms that might be offered them, and counted themselves fortunate when they escaped annihilation by obtaining new crown charters, which provided that the forfeiture, if really incurred, should not take effect.

The first of these charters, dated 7th October, 1693, after premising that “the governor and Company of Merchants of London trading into the East Indies have been of long time, to the honour and profit of the nation, a corporation,” and that “some doubt or question hath of late been made touching the validity of the charters of the said Company, and whether the same be not, in strictness of law, void, by the not actual payment into the receipt of our exchequer of the first quarterly payment of the tax of £5 per cent charged on the general joint stock of the said Company,” proceeds as follows: “Now know ye, that we, taking the premises into our royal consideration, and well weighing what disorders and inconveniences would befall the said Company, and other persons concerned and employed in their trade, especially in the remote parts of the world, if we would take advantage of the forfeiture aforesaid (if any be), and we being willing that the said governor and Company, or late governor and Company of Merchants of London trading into the East Indies, and their successors, shall have and enjoy all such and the like lawful powers, privileges and advantages, and immunities; and in as ample manner, to all intents and purposes, as if the said first quarterly payment of the said tax had been duly and regularly made according to the said act; of our especial grace, certain knowledge, and mere motion,” constitute and appoint Sir Thomas Cooke, knight, and various other individuals named, “and all and every other persons who were members of the said Company, or late Company of Merchants of London trading into the East Indies, on the 25th day of March, now last past, who have not since parted with their stocks in the said Company; and all and every other person and persons who, since the 24th of March last past, by buying stock or otherwise, have come into, and remain in a capacity of being members of the said Company, be and shall be one body corporate and politic in deed and in name,” &c.

While thus generally confirming all the rights and privileges previously enjoyed by the Company, the new charter contains the following important proviso:—“If the said governor and Company of Merchants of London trading into the East Indies, and their successors, do not accept of, and from time to time, and at all times hereafter, act according to, and put in due and effectual execution, and submit and conform in all things unto such orders, directions, additions, alterations, restrictions, and qualifications, relating to the constitution, continuance, determination, rights, powers, or privileges of the said Company, or the government thereof, or of the said governor and Company; or the encouragement, management, regulation, or advancement of trade; or of the present or future joint stock of the said Company; or concerning any future subscriptions, to be made by way of increase or addition to the joint stock; or for ascertaining the true values of the said joint stock, at and during the times of any such future subscriptions; which, and as we, our heirs or successors, by the advice of our or their privy council, shall from time to time, at any time before the 29th day of September which shall be in the year 1694, think fit to make, insert, limit, direct, appoint, or express in or by any further or other charter, letters-patents, or other writing or instrument, under our or their great seal of England, then and in each and every of the cases aforesaid, it shall and may be lawful to and for us, our heirs and successors, by letters-patents, under our or their great seal of England, to determine, revoke, and make void these presents, and the grant hereby made.

The object of this proviso evidently was to bind the Company to the acceptance of those conditions which the House of Commons had embodied in a series of resolutions already referred to; and accordingly, in little more than a month after the date of the above charter, effect was given to the proviso by another charter, in which, with several not unimportant modifications, the parliamentary resolutions were enforced. In this new charter, dated 11th November, 1693, after a repetition of the proviso, and a preamble stating, inter alia, the importance of the traffic to the East Indies, and the desirableness of rendering it “more national, general, and extensive than hitherto it hath been,” the Company are taken bound to accept and agree to a series of propositions, of which the most important are—that all subjects of the British crown, whether natural born, or “naturalized and endenzed,” shall be entitled to become members of the Company; that £744,000 shall be added to the present general joint stock “by the new subscriptions of such persons who shall be minded to adventure any share; that no person shall subscribe or hold more than £10,000 of stock in his own or any other name; that the new subscriptions, if exceeding in the aggregate £744,000, shall be individually reduced pro rata; that every £1,000 up to £10,000 shall give a vote, thus allowing to the individual possessed of the maximum of stock ten votes in all; that the qualification for a committee shall be £1,000, and for governor and deputy-governor £4,000; that all dividends shall be paid in money; that no private trade shall be permitted; that with the exception of saltpetre sold to the crown, all sales shall be public, by inch of candle; that no single lot of goods, except jewels, shall exceed £500 in value; and that British produce and manufactures should be annually exported to the amount of £100,000.

These clauses, though binding the Company to conditions which must have prevented many of the abuses of which their previous management was accused, not only fell far short of what their avowed opponents had anticipated, but failed to satisfy the public mind; and the question having again been keenly agitated, and brought specially before parliament by a petition praying for the erection of a new East India Company, the House of Commons, “examined the charters of the old Company, the book of new subscriptions, the state of their present stock, and the petition above mentioned; and after mature deliberation” resolved, on the 19th of January, 1694, “that all the subjects of England have equal right to trade to the East Indies, unless prohibited by act of parliament.” The point thus summarily decided by one branch of the legislature was properly a question of law; and several years before, under very different circumstances, had undergone a lengthened discussion in the Court of King’s Bench. In the year 1683, when the crown was stretching its prerogative to the utmost, the East India Company, deeming the time favourable for obtaining an authoritative decision in favour of the validity of their charter, determined to try the question, and with that view brought an action against Thomas Sandys for attempting to trade within the limits to which they had, by their charter, an exclusive right. Sandys argued that the Company was a monopoly, and being consequently struck at by the statute against monopolies, had usurped powers which, however sanctioned by the crown, could not be legally maintained. The case, of which a full report is given in the state trials, under the title of the “Great Case of Monopolies,” attracted much attention; and having been fully argued by the ablest counsel at the bar, was not finally decided till 1685, when James II had mounted the throne, and Jeffreys was lord chief-justice. The decision, as might have been expected in the circumstances, was in favour of the royal prerogative, and found that “the grant to the plaintiffs of the sole trade to the Indies, exclusive of others, is a good grant.” The victory which the Company thus gained was more apparent than real. The decision was in their favour, but the argument was clearly against them; and the maintenance of their monopoly became in consequence identified, in the public mind, with that of despotism. Hence, when the Revolution had made way for the establishment of constitutional freedom, their position became insecure, and every new discussion of their privileges seemed only to bring them nearer to the brink of destruction. The resolution of the House of Commons was indeed a virtual repeal of their monopoly, because it declared that nothing but an act of parliament could make it valid.

There was still, however, good ground to hope that such an act of parliament might yet be obtained. The king, by the charters which he had granted, had gone as far as he could safely do in their favour; and it was well understood, that while many of the members of the legislature were sincerely attached to their interests, because convinced that the trade to the East Indies could be best carried on by the present Company, there were others on whom, after argument had failed, another kind of influence might be brought to bear. What this influence was, and how unscrupulously the managers of the Company had employed it, soon became apparent.

Several instances of bribery and corruption in the administration of public offices having been detected, rumours began to prevail that the whole body politic was corrupt. Suspicion fell especially upon the city of London and the East India Company; and on the 7th of March, 1695, the House of Commons appointed a committee to inspect the books of these two bodies. The guilt of the former was easily established, as the chamberlain’s books contained an entry bearing that 1,000 guineas had been paid to Sir John Trevor, speaker of the House of Commons, on the 22nd of June, 1694, as a douceur for his pains about a bill brought into parliament under the name of the “Orphans’ Bill.” The guilt of the Company was not so easily established, though enough was at once discovered to show that bribery to an enormous extent must have been carried on. From an abstract obtained from the Company’s books, it appeared that from 1688 to 1694, inclusive, £107,013, 12s. 7d. had been paid in cash for what was called the “Company’s special service.” In 1693, when Sir Thomas Cooke was governor and Francis Tyssen deputy-governor, the sum issued under this head was £87,402, 12s. 3d. On searching for the orders for this issue, the committee discovered a minute of a court of committees, dated the 13th of April, 1693, and stating, inter alia, “The governor this day acquainting the court with what proceedings had been made in their affairs towards granting a new charter, and with what had been disburst by him in prosecution thereof, the court approved of the said charges, and ordered a warrant to be made out for the same; and returned him thanks for his great care, pains, and trouble in their service, desiring him to proceed in the perfecting thereof.” Two other minutes to a similar effect were found, together with one dated the 23rd of November, 1693, in which “it is ordered that the cashier-general do from time to time make payment of such sums of money for carrying on of the Company’s service as the governor shall direct, pursuant to the sense of the present debate.”

In regard to the disposal of the money, the committee reported that they had been unable to obtain any further account than that it was for special service, and that a large part of it had been put into the hands of Sir Basil Firebrace. On examining the Company’s cash-book, they found a balance at their credit of £124,249, 15s. 10d; but on asking Mr. Portmans, the cashier, if he had the same in cash, he answered that he had not, and in its stead produced the following voucher by Sir Thomas Cooke:—“Received, the 10th of January, 1693 (1694), of Mr. Edmond Portmans, for account of the East India Company, £90,000; which I have disburst and paid for £99,197 stock, in the East India Company, for their account; which I promise to be accountable for on account of the East India Company; and was by order of the Company the 24th of November, 1693.” No such amount of stock had been transferred to the Company’s account; but the committee, on examining Sir Benjamin Bathurst, one of the Company’s court of committees, were told by him, that “finding so great a sum as £30,000 charged for secret services, he had some warm discourse with Sir Thomas Cooke about it, to know how it was disburst; but he refused to give him any particulars, and told him he should remember he was bound by his oath to the Company to keep their secrets”. Sir Benjamin added, that “about April, 1694, understanding they were in want of money, he looked into the cash-book; which casting up, he found a considerable sum in cash; and taking some persons with him, discoursed Sir Thomas Cooke thereof, who said the £90,000 he had received was to gratify some persons in case the bill should pass.”

Beside the above suspicious payments, the committee discovered a contract of a very singular description. It bore the date of the 26th of February, 1694; and bound the Company to pay for 200 tons of saltpetre, to be brought home in the ship Seymour from India, the sum of £12,000, together with £25 freight per ton to the owners of the ship, besides all charges in England. It seems that this saltpetre, for which £12,000 was to be paid, could be purchased in India for £2,000; and this sum was actually advanced by the Company for that purpose, and not only so, but they also granted bond under the Company’s seal for £10,000, as the remaining balance payable by a certain day, whether the ship should arrive in safety or not. The result of the contract is thus accurately explained by the committee:—“The Company runs the adventure of £12,000 for that which cost only £2,000, and must consequently lose £12,000 if the ship miscarry; and on the contrary, the seller on the other hand gets £10,000 clear without disbursing or running the hazard of one penny; and what is yet more, a certain loss of £9,000 or £10,000 will attend it if the ship arrives in safety.”

The report of the committee was made on the 12th of March, 1695; and on the 18th the House of Commons resolved, “that whosoever shall discover any money or other gratuity given to any member of this House for matters transacted in this House relating to the orphans’ bill or the East India Company, shall have the indemnity of this House for such gift.” On the 26th it was ordered, “that Sir Thomas Cooke, a member of this House, do give an account to the House how the £87,402,12s. 3d. mentioned in the report was distributed.” When examined he refused to answer, and was committed to the Tower. At the same time a bill was ordered to be brought in for the purpose of obliging him to give an account. So much were the House in earnest that, in little more than a week, the bill, though counsel was heard against it, was passed and carried to the House of Lords. When it was read there for the first time it was vehemently opposed by the Duke of Leeds, lord-president of the council, who commenced with a most solemn protestation of his cleanness and innocence, and laying his hand upon his breast, declared upon his faith and honour “that he was perfectly disinterested, and had no part or concern in this matter, and therefore might the better appear against it.” Sir Thomas Cooke, being brought from the Tower to the bar of the lords, declared himself ready and very willing to make a full discovery on obtaining an indemnifying vote; and as the reports of the period express it, “bemoaned himself (weeping) that he was not indemnified at that instant, so that he might just then make the discovery which was expected, and which he was so desirous to make.” On being asked what he wanted to be indemnified from, he answered, “All actions and suits, except from the East India Company, whom, if he had injured, he would be bound to undergo the utmost rigour.” He also desired, he said, to be indemnified from scandalums, which he explained to mean the action of scandalum magnatum.

The lords sisted procedure with the bill sent up from the commons, and introduced a bill of indemnity, which was ultimately passed. The preamble and leading enacting clause of the act are as follows:—“Whereas it appears, by the books of the East India Company, that Sir Thomas Cooke, knight, in the year 1693, being the governor of the said Company, did receive, out of the stock and treasure belonging to the same, the sum of £77,258, and hath also received out of the stock and treasure of the said Company the further sum of £90,000: And whereas a true discovery of the distribution and application of the said several sums of money will be of public use and service, and is necessary to the vindicating the justice and honour of the government; and the said Sir Thomas Cooke hath voluntarily offered to make such discovery, so as he may be indemnified in such manner as is hereafter mentioned and provided: Be it therefore enacted, by the king’s most excellent majesty, by and with the advice and consent of the lords spiritual and temporal, and commons, in this present parliament assembled, and by the authority of the same, that, if the said Sir Thomas Cooke shall, on or before the 23rd day of April, 1695, make a true and full discovery on oath, before a committee of the lords and commons, to be appointed by each House for that purpose, how and in what manner, and to what person or persons, and to what particular uses, intents, and purposes, and on what account, the said sum of £90,000, and the sum of £67,000, part of the said sum of £77,258, have been distributed, paid, applied, disposed, and made use of, then the said Sir Thomas Cooke shall not, by reason or means of such discovery, be liable to any action or suit of any person or persons whatsoever, other than the said East India Company, nor shall such discovery or confession be allowed or given in evidence against him in or upon any action or suit, other than as aforesaid; and also shall be declared pardoned and indemnified for any crime he may be guilty of in the distribution, payment, application, or disposal of the said money, to any person other than to himself.”

When examined before the committee of both Houses appointed in terms of this act, Sir Thomas Cooke produced a written statement, entitled, “A true and full discovery, upon oath, made by Sir Thomas Cooke, to the best of his knowledge, &c., . . . which discovery is in pursuance of an act of this present session of parliament.” This statement contained the names of the various parties to whom cash had been paid to the amount of £67,031, 18s. 2d., and of others from whom East India stock, to the amount of £90,000, had been bought for account of the East India Company. Among the cash items were £10,000 “delivered to Francis Tyssen, Esq., for the special service of the Company”; £10,000 to Mr. Richard Acton, “to defray the expenses of himself, and for his friends’ soliciting to prevent a new settlement of an East India Company, and to endeavour the establishment of the old;” £10,000 to Sir Basil Firebrace, “in recompense of his trouble in prosecuting the Company’s affairs, and in consideration of other losses he had sustained by neglecting his own business, and by not engaging himself with the interloping ships.” An additional sum of £30,000 was set down as having been paid “to the said Sir Basil for £50 per cent loss on stock I was obliged to accept of him at £150 per cent on the Company’s account.” On being interrogated with reference to the above statement, Sir Thomas Cooke declared “that the first sum of £10,000 above mentioned was given in expectation to have the charter of the East India Company confirmed, and new regulations thereto made,” and that “it was intended for the king, but he could not say the king had it,” though “he believes Mr. Tyssen told him that he delivered it to Sir Josiah Child, who delivered it to the king.” He added that “it was a customary present, and that in King Charles’s and other former reigns, the like had been done for several years.” With regard to the £10,000 paid to Mr. Acton, he declared that he had given it with the privity of Sir Josiah Child, “who recommended Acton as a person capable of doing the Company service, having great acquaintance with parliament men, and others who had interest with them;” that “he could not particularize who they were, but the end aimed at was to get an act of parliament.” The sums paid to Sir Basil Firebrace were stated to be in implement of an agreement, by which the Company became bound, in case the charter passed, to take £60,000 stock of Sir Basil at £150 per cent. As the stock was then only £100 per cent, the Company lost £30,000 by the transaction. By another agreement of a similar nature, they would have been bound to accept a transfer of £40,000 stock on the same terms, if an act of parliament in favour of the Company had been obtained.

In following up the inquiry, various other persons were examined. Sir Josiah Child affected general ignorance of the matter, and said that “he never disposed of £10 of the Company’s money to his remembrance.” He admitted, however, that “he did recommend Mr. Acton as being an honest man, and thought he might do service to the Company in parliament, because of his acquaintances.” He also recommended “that a present of £50,000 should be made to the king, if his majesty would so far waive his prerogative that an act of parliament might be passed for settling the Company; but Mr. Tyssen told him the king would not meddle in that matter.” He “knew nothing of the £40,000 paid to Sir Basil Firebrace, but there was a kind of a company of twenty-five persons, that sat de die in diem, to destroy the Company, and he told Sir Thomas Cooke that he thought Sir Basil the fittest person to divide them.”

Sir Basil Firebrace, when first examined, admitted the payments as stated by Sir Thomas Cooke, viz—£10,000 as a gratuity for losses, and £30,000 in terms of contract. Both sums “were directly for himself, and for the use of no other person whatsoever; he paid no part of the same towards procuring a charter or act of parliament, nor made any promises to do so, but he had several discourses with Sir Thomas Cooke about using his endeavours to procure a new charter.” Being asked “what particular services he did or was to do for procuring a new charter,” he said “that he wished he might answer that at some other time, being not well, not having slept two or three nights, and being much indisposed as to his health; that he was unwilling to take too much upon himself, but thought he did great service to the Company in solicitation and other services.” On the following day, having desired to be called in, he deposed, “that having had a treaty with Mr. Bates, whom he thought able to do service in passing the charter, and to have acquaintance with several persons of honour,” he gave him two notes, the one for 3,000 and the other for 2,500 guineas, payable to Mr. Bates or bearer. The latter note was paid after the charter for restoring the East India Company passed; the other after the charter for regulation passed. These notes were from Sir Thomas Cooke, who, he believed, “did know how they were to be disposed of.” In fact, Mr. Bates had introduced Sir Basil several times to the Duke of Leeds, the lord-president, “who made some scruples in point of law.”

Mr. Bates deponed “that Sir Basil Firebrace did apply himself to him to use his interest for obtaining a charter to the East India Company:” that “he did use his interest with the lord-president, who said he would do what service he could: that he received 5,000 guineas, told the lord-president of the fact, and urged the same upon his lordship’s acceptance, but he refused it.” He admitted, however, that “in regard he could not tell money very well himself,” he “did ask leave of my lord that his servant might tell the money.” His lordship gave leave, and accordingly his lordship’s servant, M. Robert, “did receive the money.” At first Bates alleged that M. Robert paid over the money to him, but on a subsequent examination he admitted that he had it not, and that it had remained with Robert till within the last few days, when Robert had brought it to him for the purpose of being given back to Sir Basil Firebrace. His reason for thus paying back the guineas was “the noise that it made, and that people might think he did not deserve them.”

More light was thrown on this disclosure by Sir Basil, who, when again examined, stated “that the East India Company’s charter being forfeited, Sir Thomas Cooke was apprehensive “that it stuck with the Duke of Leeds,” and told him that “some way must be found out to the duke.” Sir Basil thereupon applied to Mr. Bates, who, after a good deal of higgling, agreed to accept of 5,000 guineas for his friend, and 500 guineas to himself. Sir Thomas Cooke sanctioned the agreement, remarking that if “it was insisted on it must be done.” The agreement was that “if the duke did act in favour of the Company, he should have 2,000 and 3,000 guineas, and Bates 500 guineas for himself.” Sir Basil added, “that from the time the notes were given, they had free access to the lord-president, and found him easy and willing to give them his assistance.”

Mr. Tyssen deposed that “Sir Thomas Cooke and Sir Josiah Child gave him a note under their hands for £50,000, which was intended to be presented to his majesty if his majesty would pass an act of parliament as they should desire, and that he acquainted my Lord Portland with the Company’s intention to make such a present; who told the deponent that the king would not meddle with it.” On being asked “if he had offered the same to Lord Portland, he denied that he had so done, saying, if he had, he must never have seen his face more.”

That bribery to an enormous extent had been carried on, there could now be no doubt, but the only case in which, as yet, it seemed capable of being proved, was that of the Duke of Leeds, against whom, accordingly, the commons resolved to proceed by impeachment. On the reading of the report of the committee in the House of Lords, the duke rose in his place and said that “as he had formerly protested himself to be free in this matter, so he still denied, upon his faith and honour, that he was guilty of any such corruptions as were suggested against him, and that if the whole truth were laid open it would tend to his honour and advantage.” His explanation was, “that Mr. Bates introduced Sir Basil Firebrace to him, and that he had conferences with Sir Basil upon the subject of the East India Company, which Sir Basil was concerned for; that some time after Mr. Bates came and informed him that he was to have a sum of money of Sir Basil, and desired his lordship to lend him one of his servants, Mr. Bates keeping but a footman, to receive the money, and so he lent him M. Robert; that his lordship knew nothing of the sum, but afterwards Mr. Bates came to him and told him he had received 5,000 guineas, which he offered to him, telling his lordship that he had been very obliging and kind to him, and that in acknowledgment of the many favours he had received from his lordship’s hands, he humbly desired him to accept of them, which he refusing, Mr. Bates pressed him earnestly to take one-half or a quarter, which he still refused, declaring he would not touch a penny of them; and told him since he had taken them, he thought there was no need of returning them—they were his own, and he wished him good luck with them. While the duke was making this apology, or rather confession, he got private notice that the commons were preparing to impeach him. Startled at the news he hastened off, and intimated, through one of the members, his desire to be heard. Permission was given, and he made a long and apparently rambling speech, without making any favourable impression, for the impeachment was immediately carried up to the lords. The first article, containing the substance of the whole, was as follows:—“That certain merchants trading to the East Indies, having either forfeited their charter, or being under an apprehension that they had forfeited the same, and having made their humble application to their majesties in council for obtaining a charter of confirmation: the said Duke of Leeds, being then president of their majesties’ most honourable privy council, and sworn to give their majesties true and faithful advice, did, contrary to his oath, office, and duty to their majesties, and in breach of the great trust reposed in him, by himself, his agents, or servants, corruptly and illegally treat, contract, and agree with the said merchants or their agents, for 5,500 guineas, to procure the said charter of confirmation, and also a charter of regulations, or to use his endeavours to obtain the same.”

By some strange oversight the duke’s servant, M. Robert, whom the previous deposition had shown to be a most important witness, had not been examined, and when the necessary steps for the purpose were about to be taken, it was found that he had disappeared. A tardy proclamation for securing him was issued, but it proved unavailing; and thus an essential link in the chain of evidence could not be supplied. The Duke of Leeds, now feeling confident that the impeachment could not be made good, began to use the language of injured innocence, and to complain of the hardship and injustice of having a charge hanging over his head, while no attempt was made to prove, and no opportunity was given him to disprove it. The state of matters was, however, well understood, and his shuffling only served to confirm the conviction generally entertained of his guilt. Meanwhile parliament seemed resolved to do its duty; and as the leading witnesses were justly suspected of prevarication or concealment, an act was passed for imprisoning them, and for restraining them from alienating their estates. Unfortunately, the zeal manifested by parliament was not seconded at court. At a very early period of the inquiry, the king, after giving the royal assent to several bills, addressed both Houses as follows:—“My lords and gentlemen, I take this occasion to tell you that the season of the year is so far advanced, and the circumstances of affairs are so pressing, that I very earnestly recommend to you the speedy despatching such business as you think of most importance for the public good, because I must put an end to this session in a few days”. From this significant hint, it was well understood that there was a strong feeling in high quarters against the exposure to which the parliamentary inquiry into bribery and corruption threatened to lead; and in fact, on the 3rd of May, within a fortnight after the hint was given, and while the issue of the inquiry was still in suspense, parliament was prorogued. According to Burnet, “It was intended to hang up the matter to another session; but an act of grace came in at the end of this, with an exception, indeed, as to corruption; yet this whole discovery was let fall, and it was believed too many of all sides were concerned in it; for, by a common consent, it was never revived.”

There cannot be a doubt that the Company suffered severely in public estimation by the disclosure, so far as it had gone. A distinction, however, ought to be made between the Company and the management. This had been gradually monopolized by Sir Josiah Child and a few wealthy individuals, who, taking undue advantage of the unlimited power of purchasing stock, and of voting upon it, had succeeded in ousting most of the independent members of committee, and supplanting them by their own creatures. On them, therefore, the chief blame ought to rest; more especially as the general court of proprietors, even before the parliamentary inquiry commenced, had been induced, in consequence of the rumours which had begun to prevail, to appoint a committee “to inspect into the affairs of the general joint stock under the management of the court of committees, and of the several transactions that had been had therein, for the satisfaction of the adventurers.” The report of the committee thus appointed, had furnished most of the leading facts, which were afterwards more fully brought out by the parliamentary investigation.

While the Company were suffering severely in public estimation from these shameful disclosures, an alarm arose from a different quarter. Scotland and England, though their crowns were now worn by a single monarch, were still separate and independent kingdoms, and there was therefore nothing to prevent the former from having its East India Company as well as the latter. Indeed, as early as 1617, King James had given his sanction to such a company, by granting letters-patent under the great seal of Scotland, to Sir James Cunningham, of Glengarnock, appointing him, his heirs and assignees, to be its governors and directors, with authority “to trade to and from the East Indies, and the countries or parts of Asia, Africa, and America, beyond the Cape of Bona Sperantia to the Straits of Magellan, and to the Levant Sea, and territories under the government of the Great Turk, and to and from the countries of Greenland, and all the countries and islands in the north, northwest, and north-east seas, and all other parts of America and Muscovy.” Whatever may have been the original intention of this grant, it ultimately degenerated into a mere job for the benefit of the grantee, who sold it, and all his rights under it, for a valuable consideration. The purchasers were the London East India Company, who thus escaped the danger of a competition, which in honest and skilful hands might have proved formidable. This abortive attempt to give Scotland a trade to the East appears to have attracted little notice; and other interests, of a still more vital nature, so completely occupied the public mind during the persecuting reigns of the Stuarts, that the better part of a century elapsed before the subject was again mooted. The better era which commenced with the Revolution brought new desires and aspirations along with it, and a general desire was felt by patriotic Scotsmen to give their country as high a place in commerce as it had already attained in liberty, religion, and arms. The influence exerted with this view on the public mind, was soon manifested in parliament, which, on the 14th June, 1693, passed an “Act for encouraging of Forraigne Trade,” in which “our sovereign lord and ladye, the king and queen’s majesties, considering how much the improvement of trade concerns the wealth and welfare of the kingdom, and that nothing hath been found more effectuall for the improving and enlarging thereof than the erecting and encouraging of companies, whereby the same may be carried on by undertakeings to the remotest parts, which it is not possible for single persons to undergo, doe therefore, with advice and consent of the estates of parliament, statute and declare, that merchants more or fewer may contract and enter into societies and companies for carrying on of trade, as to any subject and sort of goodes and merchandise to whatsoever kingdoms, countreyes, or parts of the world, not being in warr with their majesties, where trade is in use to be, or may be followed, and particularly beside the kingdoms and countreyes of Europe, to the East and West Indies, to the straits and trade of the Mediterranean, or upon the coast of Africa, or northern parts, or elsewhere, as above.” By a subsequent act, dated 26th June, 1695, John, Lord Belhaven, and various individuals specially named, including beside Scottish, several English and foreign merchants, “together with such others as shall joyn with them within the space of twelve moneths after the first day of August next,” were constituted “a free incorporation, with perpetual succession, by the name of the Company of Scotland trading to Africa and the Indies.” Half the capital was to be “allotted for Scottish men within the kingdom;” but it was allowed to “Scotsmen residing abroad or forraigners to come in and subscribe,” the least sum being £100 and the greatest £3,000. In carrying on their trade the company were “impowered to equip, fitt, set out, fraught, and navigate their own or hired ships in such manner as they shall think fit, and that for the space of ten years from the date hereof,” and “from any of the ports or places of this kingdom, or from any other ports or places in amity, or not in hostility with his majesty, in warlike or other manner, to any lands, islands, countreyes, or places in Asia, Africa, or America, and there to plant collonies, build cities, towns, or forts, on or upon the places not inhabited, or on or upon any other place by consent of the natives or inhabitants thereof, and not possest by an European sovereign potentate, prince, or state;” they were also fully authorized not only to defend themselves by “force of arms,” but “to seek and take reparation of damage done by sea or land, and to make and conclude treaties of peace with the sovereigns, princes, estates, rulers, governors, or proprietors of the foresaid lands, islands, countreyes, or places in Asia, Africa, or America.”

Beside these extensive powers, which were declared to be exclusive, no subject of Scotland being permitted without the company’s written permission to trade within these limits, various extraordinary privileges were conferred. Among others it was declared that “all persons concerned or to be concerned in this company” were “to be free denizens of this kingdom,” and that “they with all that shall settle to inhabit, or be born in any of the foresaid plantations, collonies, cityes, touns, factories, and other places, that shall be purchast and possesst by the said company, shall be repute as natives of this kingdom, and have the privileged thereof;” and that for the space of twenty-one years, the company’s ships, goods, and other effects whatsoever, were to be “free of all manner of restraints or prohibitions, and of all customs, taxes, cesses, supplies, or other duties imposed or to be imposed by act of parliament or otherwise”, with the exception only of the duties on tobacco and sugar, not the growth of their own plantations. This privilege is made still broader by a subsequent clause, which provides that “the said company, whole members, officers, servants, or others belonging thereto, shall be free, both in their persons, estates, and goods, employed in the said stock and trade, from all manner of taxes, cesses, supplies, excises, quartering of soudiers, transient or local, or leaving of soudiers, or other impositions whatsoever;” and lest the power given to the company to redress themselves should prove inadequate, his majesty expressly promises, that if “contrar to the said rights, liberties, privileges, exemptions, grants, or agreements, any of the ships, goods, merchandise, persons, or other effects whatsoever, belonging to the said company, shall be stopped, detained, embazled, or away taken, or in any sort prejudged or damnified,” he will “interpose his authority to have restitution, reparation, and satisfaction made for the damage done, and that upon the public charge, which his majesty shall cause depurse and lay out for that effect.”

The liberality which parliament had displayed in conferring such ample privileges was fully seconded by the country at large. In a short time a subscription list, such as Scotland had never before seen, was filled up. The amount was £400,000; and the list contained the names of 1,219 shareholders, among whom were most of the leading nobility, the public bodies, clergy, lawyers, merchants, and a large selection of individuals of all classes, thus proving beyond a doubt that the formation of the company was the effect of a great national movement. Liberal as the home subscription had thus been, a large addition was anticipated from other countries; and the managers, among whom the celebrated William Paterson, the founder of the Bank of England, took the lead, despatched commissioners to London, Amsterdam, and Hamburg, with authority to open new subscription lists, and confer the privileges of the company on all who might be induced by these representations to apply for them.

The English parliament, on being acquainted with these proceedings, immediately took alarm; and having their attention specially called to the subject by a petition of their own Company, proceeded, on the 13th December, 1695, to present a common address from both Houses to the crown. This address proceeds as follows:—“The lords spiritual and temporal and commons, in parliament assembled, having taken into our consideration the state of the trade of this kingdom, do find that, besides many other disadvantages and difficulties it now lies under, an act of parliament that hath lately received your majesty’s royal assent in your kingdom of Scotland, for erecting a company trading to Africa and the Indies, is likely to bring many prejudices and mischiefs to all your majesty’s subjects that are concerned in the wealth and trade of this nation.” After quoting largely from the act in support of this allegation, it thus continues:—“By reason of which great advantages granted to the Scots East India Company, and the duties and difficulties that lie upon that trade in England, a great part of the stock and shipping of this nation will be carried thither, and by this means Scotland will be made a free port for all East India commodities; and consequently those several places which were supplied from England will be furnished from thence much cheaper than can be done by the English; and therefore this nation will lose the benefit of supplying foreign parts with those commodities, which hath always been a great article in the balance of our foreign trade. Moreover, the said commodities will unavoidably be brought by the Scots into England by stealth, both by sea and land, to the vast prejudice of the English trade and navigation, and to the great detriment of your majesty in your customs.”

The king was thus placed in a very awkward predicament. He could not question the competency of parliament to grant the act complained of without attacking the national independence, and disappointing what had become one of the national hopes of Scotland; nor could he continue to sanction the act without placing himself in decided opposition to the legislature of England, and some of the most strongly cherished prejudices of the English people. He therefore answered somewhat vaguely, “I have been ill served in Scotland, but I hope some remedies may be found to prevent the inconveniencies which may arise from this act;” and shortly after showed that he was really dissatisfied with the management of his ministers in Scotland by dismissing most of them from office. The English parliament took still more decided steps; and on receiving the report of a committee which had been appointed to examine the methods by which the act had been obtained, and the proceedings under it, the commons resolved, “that the directors of the company of Scotland trading to Africa and the Indies, administering and taking here an oath de fideti, and under colour of a Scots act styling themselves a company, were guilty of a high crime and misdemeanour, and that the Lord Belhaven, William Paterson (and other individuals named), be impeached of the same.” This resolution, violent as it undoubtedly was in its nature, and offensive in its terms, was not beyond the competency of the English parliament; and therefore, however much it must have roused the indignation of the Scots, did not properly furnish matter for formal complaint. Another step, however, was of a more objectionable nature.

The Scots company had, as already mentioned, sent a deputation to Hamburg, and had every prospect of obtaining a liberal subscription, when all their hopes were frustrated by hostility from an unexpected quarter. The nature of the hostility will be best explained by a memorial presented on the 7th of April, 1697, and subscribed by his Britannic majesty’s envoy extraordinary at the courts of Luneburg, and his resident in the city of Hamburg. In this document, addressed to the senate of this city, the memorialists express themselves as follows:—“We, the subscribers, ministers of his majesty the King of Great Britain, have, upon the arrival of commissioners from an Indian company in Scotland, represented at two several times to your magnificences and lordships from the king our master, that his majesty, understanding that the said commissioners endeavoured to open to themselves a commerce and trade in these parts, by making some convention or treaty with this city, had commanded us most expressly to notify to your magnificences and lordships, that if you enter into such conventions with private men his subjects, who have neither credential letters, nor are any other ways authorized by his majesty, that his majesty would regard such proceedings as an affront to his royal authority, and that he would not fail to resent it. Your magnificences and lordships had the goodness to answer us thereto by your deputy that you would no way enter into commerce with the aforesaid commissioners, nor encourage them in any sort. Notwithstanding whereof, we, the subscribers, do see with displeasure that, without any regard to the remonstrances made by us in the name of his majesty, the inhabitants of this city forbear not to make conventions and treaties with the said commissioners, who dare even erect a public office to receive subscriptions, as appears by the annexed print. And it is not very credible that strangers could so openly enterprise matters of such importance without being supported by this government: wherefore we make our just complaints thereof to your magnificences and lordships, beseeching you, in the name of the king our master, to remedy in time that which is begun, and to do it so effectually as to prevent any consequences it may have, capable to disturb the friendship and good correspondence which we would cultivate between England and the city of Hamburg. We wait your magnificences’ and lordships’ answer in writing, to be transmitted to his majesty our master.”

This memorial, which contains a gross misrepresentation of the character of the Scotch commissioners, and amounted in fact to a most unwarrantable interference with the independent rights both of Scotland and Hamburg, having been transmitted by the senate to the Commercir, or general body of merchants, called forth the following answer:—“We look upon it as a very strange thing, that the King of Britain should hinder us, who are a free people, to trade with whom we please; but are amazed to think that he would hinder us from joining with his own subjects in Scotland, to whom he had lately given such large privileges by so solemn an act of parliament.” This answer unquestionably placed the matter in its true light; but the Hamburg merchants, though they signed for considerable sums in the company’s books, were too cautious to commit themselves finally, and appended a condition making their subscriptions void, “if the company did not procure some declaration from the king that might secure them against the threatensings and other insinuations contained in the memorial.”

It was now the first business of the Scottish company to endeavour to obtain the declaration for which their subscribers in Hamburg had stipulated; and accordingly, on the 28th June, 1697, their council-general presented an address to the king, in which, after enumerating their legal rights, and the prejudice which they had sustained by the interference of individuals acting in his majesty’s name, they applied for the protection to which they were entitled by “natural right and the privilege of all merchants whatsoever, even though they had wanted the sanction of so solemn laws, and more especially for such declaration as in your royal wisdom you shall think fit to render the senate and inhabitants of the said city of Hamburg, and all others that are or may be concerned, from the threatenings or other suggestions” which the memorial contained. As the king had evidently been brought into a false position, and could not have justified the proceedings of the memorialists without throwing all Scotland into a flame, the Scotch secretaries, after the lapse of more than a month, answered as follows:—“We are empowered by the king to signify unto you that as soon as his majesty shall return to England he will take into consideration what you have represented unto him, and that in the meantime his majesty will give order to his envoy at the courts of Luneburg and his resident at Hamburg not to make use of his majesty’s name or authority for obstructing your company in the prosecution of your trade with the inhabitants of that city.”

This answer, though little better than an evasion, promised more than was actually performed; and new remonstrances by the company proved unavailing, till the general dissatisfaction which had begun to prevail, obliged the king to reply that the promise of his secretaries had been fulfilled, and his residents abroad distinctly prohibited from further interference. Matters, however, appeared to be drawing to a crisis, when the proceedings of the Scotch company freed the king from his embarrassments, and paved the way for their own ultimate extinction. They were expressly prohibited from attempting to settle on any territory belonging to a power in amity with Britain. The site of the Isthmus of Darien, situated between the Atlantic and the Pacific, seemed so advantageous that all other considerations were lost sight of, and the first expedition fitted out by the company attempted to settle upon it. Spain, which claimed the territory, immediately remonstrated, and King William appears to have been only too glad to second their remonstrance. The consequence was, that the Scots, instead of being permitted to establish a trade, found themselves suddenly engaged single-handed in a war with the Spanish monarchy. For a time they fought the battle manfully, but disaster followed disaster. Of the 3,000 men whom Scotland had sent out to the Isthmus, only a small remnant returned; and the company trading to Africa and the Indies, after exciting so many hopes in the northern, and so many fears in the southern part of Great Britain, ceased to exist.

The discussions to which the establishment of the Scotch East India Company had given rise, and the obloquy which the London India Company had incurred by the nefarious proceedings of those who had usurped its management, had made the English legislature fully alive to the importance of placing the trade to the East on a new and permanent basis. The shape which the measure might have taken, had parliament been left at liberty to choose the wisest plan, would perhaps have differed much from that which was adopted; but circumstances had occurred which rendered a new arrangement expedient, not only on its account, but with a view to other purposes to which it might be made subservient. The powerful coalition which King William had formed to frustrate the ambitious designs of the King of France required an enormous expenditure, and the necessity of obtaining the necessary funds to meet it seemed for a time to outweigh all other considerations. It had thus become obvious that the question which had long been keenly debated between the existing India Company and the numerous party now leagued in opposition to them, would be determined not so much on its own merits as on mere pecuniary considerations. The government was in urgent want of money. What amount of contribution were the candidates for its favour prepared to furnish? On this low and unworthy ground the question of continuing the old, or of erecting a new company was now to be settled by act of parliament. The offer of the old Company was a loan of £700,000 at four per cent interest: their opponents offered £2,000,000, at eight per cent, and obtained the preference. Considering the different rates of interest, the smaller loan was certainly the more advantageous to the public, but the greater amount of present relief which the larger loan afforded, was eagerly grasped at and carried the day. Ostensibly, however, the preference given to it was justified, not merely by the amount of the loan, but by the terms on which it was offered. The old Company stipulated that the legislature should confirm their charter, and continue them in possession of all their privileges as a joint stock. Their rivals repudiated the idea of a joint stock, and asked only to be incorporated, at least in the first instance, as a regulated company, which would allow every member to trade in his own name and on his own responsibility to the amount of his subscribed capital. This arrangement being in accordance with the more liberal ideas which the Restoration had introduced, was supposed to possess intrinsic merits, which, even if other considerations had been equal, would have entitled it to be preferred.

The resolution in favour of a new East India Company was adopted by the House of Commons on 4th May, 1698, and on the 26th a bill was brought in for the purpose of giving effect to it. It was strenuously opposed in all its stages, the old Company being allowed to appear by counsel against it, but ultimately passed both Houses by considerable majorities, and obtained the royal assent. The old Company, though powerfully supported, had lost favour with the public by the acts of bribery which had been proved against them; and even during the discussion of the bill which doomed them to extinction, had sustained new damage from the report of a parliamentary committee which had been appointed to examine their books; for in this report it was more than insinuated that by a kind of juggle the value of their stock had been greatly exaggerated, and large dividends had been paid, not out of profit, but out of capital. Some of the statements in this report throw so much light on the history of the Company that they deserve to be quoted. The original stock of the Company, in 1657, was £369,891, 5s. The aggregate dividends on this stock from October, 1661, to April 1, 1681, amounted to 390 per cent, or about 19 per cent per annum. On 2nd November, 1681, their funds were so low that a call was made on the adventurers for the residue of their subscriptions; and yet, on the 18th of January thereafter, circumstances had so suddenly altered that the call was revoked, and instead of it, a dividend of 150 per cent was declared. Of this dividend, however, only 50 per cent was paid in money, while the remaining 100 per cent was retained, and held to be equivalent to a duplication of the original stock, which was accordingly henceforth stated at double its original amount. On this doubled stock dividends had been regularly paid at the rate of 25 per cent. These dividends were always made on the arrival of ships on general computations without the help of the books, or a minute statement of the whole account; and hence, even at the time of making them, the Company were hampered by a large debt, which in 1680 exceeded £500,000, and in 1698 amounted on bond alone to £631,554, 10s., exclusive of debts in India to an amount which could not be specified. In 1693, in fulfilment of the conditions of the charter granted them in that year, they opened a new subscription, and received under it £744,000. The only legitimate purpose to which this sum could have been applied was that expressly specified in the charter, viz, to raise the stock of the Company to £1,500,000. The parliamentary committee, after failing to obtain a distinct answer as to the manner in which this sum had been disposed of, consulted the Company’s cash-book, and ascertained that a large portion of it had been squandered in the system of bribery which has already been exposed, and that of the remainder no less than £325,565, 0s. 4d. had been repaid (on what ground is not explained) to the old adventurers. This report, given in at the very time when the Company were maintaining a desperate struggle for existence, must have told fearfully against them.

The act which founded the new East India Company ranks as 9 Wm. III. c. 44, and is entitled, “An act for raising a sum not exceeding £2,000,000, upon a fund for payment of annuities, after the rate of £8 per centum per annum, and for settling the trade to the East Indies.” It is of great length, and is entirely occupied in its first part with regulating the salt and stamp duties, from which his majesty was to derive the annual sum of £160,000, necessary to pay the interest or annuities exigible at the rate of eight per cent on the £2,000,000 loan. In regard to the loan itself, the leading provisions are, that “it shall and may be lawful to and for his majesty, by commission under the great seal of England, to take and receive all such voluntary subscriptions as shall be made on or before the 29th day of September, 1698, by or for any person or persons, natives or foreigners, bodies politick or corporate (the governor and company of the Bank of England only excepted), of any sum of money whatsoever, not less than £100, for and towards the raising and paying into the said receipt of the exchequer the said sum of £2,000,000.” The whole sum was subject to redemption; but during the non-redemption his majesty might, by letters-patent, incorporate the subscribers under the name of the General Society entitled to the advantages given by this act of parliament. Of the General Society thus incorporated, the sum total of subscriptions was to form the principal stock, and every subscriber to the amount of £500 and upwards was entitled to have one vote, and not more than one, in the election of twenty-four trustees, each of them qualified by the possession of not less than £2,000 of the society’s stock in his own right. The subscribers, their executors, successors, or assigns, and the persons licensed by them, were to have the privilege of trading to the East Indies, each to the extent of his stock; or if, instead of thus acting individually, the whole or any number of them, or even corporations, should prefer to manage their share of the trade as a company or joint stock, they might be incorporated for this special purpose. In order “to maintain such ambassadors or other ministers” as the crown, at the nomination of the trustees, directors, or managers of the General Society, or of a joint-stock company established as aforesaid, should “be pleased to send to any emperor, prince, or state” within the specified limits, and to “defray any other extraordinary or necessary expense in carrying on the said trade,” a duty of five per cent was to be levied on all India goods imported, but should any surplus remain after these purposes were served, it was not to belong to the state, but to be distributed among the shareholders. The right of trading to the East Indies was in future to belong exclusively to the General Society, subject, however, to two most important provisoes:—first, that on three years’ notice after 1711, and the repayment of the £2,000,000, all the rights granted by the act were to cease; and, second, that the old Company might still continue to trade as before, till the 29th of September, 1701. This was meant to be an equivalent for the three years’ notice to which they were entitled under their charter, and yet fell far short of it, as the true meaning of the charter undoubtedly was, that while the three years were running, they were to enjoy the whole trade, instead of being subjected, as they now were, to a formidable competition. The equivalent, however, imperfect as it was, was not given without a grudge, and had something like a stigma attached to it by a clause in the act, which expressly stipulated that the present East India Company should be bound to pay all their just debts; and should they make dividends after the 24th of June, 1698, and before their debts were discharged, not only would the estate of the Company continue liable, but the individual members receiving such dividends would still be held bound in proportion of their shares, and, moreover, be subjected to the penalty of double costs. The stipulation thus inserted strikingly indicates the general suspicion which now attached to the proceedings of the London Company. Indeed, the language of the legislature evidently implies a doubt, not merely of their ability, but of their willingness to pay. There could not be any good ground for such a doubt; and yet it is impossible to deny that during the last years of their exclusive monopoly they had done too much to justify it.

The members of the General Society, though they had originally offered their subscriptions on condition of being established as a regulated, were soon found to be almost unanimous in favour of a joint-stock company; and accordingly, on the 5th of September, 1698, the crown, in accordance with the authority given in the act of parliament, granted a charter, incorporating the vast majority of their number as a company or joint stock, under the name of the English Company trading to the East Indies. The leading provisions of the deed are almost identical with those embodied in the charters of the old Company, and it is therefore unnecessary here to do more than refer to a few of the special clauses. Though the amount of their subscriptions to the £2,000,000 loan formed their proper capital, they were to have an indefinite power of augmenting their stock – one-tenth of their exports was to consist of British produce and manufactures; every shareholder to the amount of £500 was to have a vote, and none, however large his share, was to have more than one; all sales were to be by public auction by inch of candle; and no lot, except consisting of jewels, was to be of the value of more than £1,000; the management was to be intrusted, as formerly, to twenty-four individuals, who were to form what was called, not as before, the court of committees, but the “court of directors;” four general courts were to be held annually. Abroad, the same powers of judicature as had been conferred by previous charters were to be exercised, and some provision was made both for general and religious instruction, by the maintenance of a chaplain in every ship of 500 tons, and of schoolmasters and ministers in all the principal factories. With regard to ministers, in particular, it was provided that they should be obliged to learn the Portuguese, and “apply themselves to learn the native language of the country where they shall reside, the better to enable them to instruct the Gentoos that shall be servants or slaves of the same Company, or of their agents, in the Protestant religion.”

The arrangements for the establishment of a new East India Company display little wisdom and foresight. The loan to government constituted the only capital; but this was already absorbed, and the only fund on which the Company could rely for carrying on their trade, was the annual sum of £160,000, payable to them as interest. This was wholly inadequate; and hence, at the very outset, their pecuniary resources began to fail. Their subscription list had been rapidly filled up, but as the instalments fell due, the defaulters became numerous, and the stock, which had at first brought a premium, with difficulty found purchasers at a considerable discount. While the new Company was thus hampered, the old Company still kept the field with its resources unimpaired, and all the advantages arising from pre-occupation. The result of a competition carried on under such circumstances could scarcely be doubtful; and it is therefore easy to understand how the old Company, in addressing their agents abroad on the recent changes, instead of using desponding terms, speak almost with exultation of the approaching contest, expressing themselves as follows:—

“Two East India Companies in England could no more subsist, without destroying one ye other, than two kings at the same time regnant in the same kingdom. Now, a civil battle was to be fought between the old and new company; two or three years must end this war, as the old or the new must give way. Being veterans, if their servants abroad would do their duty, they did not doubt of the victory; 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.”

The confidence thus expressed was founded, not merely on the superior advantages which they possessed in a trade which had long been established, and for the protection of which various fortified stations had been provided, but on the important interest which they had secured in the stock of the General Society. The act of parliament left it open for them, as for any other corporation, to become subscribers to the £2,000,000 loan, and no less than £315,000 stood in the subscription list, in the name of Mr. Dubois, for their behoof. The consequence was, that instead of being extinguished when the three years of grace allowed them should expire, they would still be entitled to trade annually to India to the amount of the above subscription. There was, however, one great difficulty. As the law stood, their existence as a corporation and joint-stock company would terminate in 1701, and they would thereafter be obliged to trade, not as an united body, but as individuals, each in proportion to the amount which he had subscribed to the loan. The first object, therefore, now, was to provide against this emergency by endeavouring to secure a prolongation of their corporate character. In this they were completely successful, for in the beginning of 1700 a private act of parliament was passed, “for continuing the governor and Company of the merchants of London trading into the East Indies a corporation.” This act, after referring to the privileges conferred on the subscribers to the £2,000,000 loan, and stating that “John Dubois, of London, merchant, hath, by the direction, and in trust for the governor and Company of merchants trading into the East Indies, subscribed and paid the sum of £315,000, as part of the said sum of £2,000,000, in order to entitle the said governor and Company to the several benefits of the said act,” proceeds to declare that they shall “continue and be one body, corporate and politick, by the name aforesaid, subject, nevertheless, to be determined upon redemption of the fund.” The reasons given for the enactment are, that the London Company, though entitled to the benefits conferred on the subscribers to the loan, would, notwithstanding, be deprived of them” should they cease to be a corporation;” and “for that several hundred persons are interested in the said subscription of £315,000, they cannot manage the same, and the benefit of trade accruing thereby, but in a corporation.”

Thus, by solemn acts of the legislature, two independent East India Companies were established, without any provision whatever to prevent the evils which would necessarily arise from their rivalship and collision. The geographical limits of the trade were sufficiently ample for both, and each might have been assigned a distinct field, within which it would have found ample scope of all its capital and enterprise. Instead of this they were placed at once in hostile array, and commenced a system of warfare which, while it exposed them to the derision and extortion of the native rulers, could only terminate in their common ruin. So early was this perceived, that the new or English Company, afraid to face the difficulties which, from the very first, began to gather around them, made overtures for a union. The London Company were not disposed to listen. They had been forced into a struggle which they were most anxious to prevent; but, now that it had commenced, felt so confident of victory, that when their agents abroad expressed their alarm, they spoke slightly of the danger, and described it “as a blustering storm, which was so far from tearing them up, that it only a little shook the roots, and made them thereby take the better hold, and grow the firmer, and flourish the faster.” The language thus employed was more vainglorious than sincere; and when the violent feelings which at the commencement of the struggle kept the companies aloof had been gradually moderated, a general desire for union began to be entertained. The king himself, probably convinced that the legislature itself was to blame for much of the confusion which had arisen, openly declared in favour of a union, and in particular when, agreeably to a practice then usual in passing a private act, a deputation of the London Company, consisting of the governor and committees, and about 100 proprietors, accompanied by the lord-mayor, sheriffs, and ten of the aldermen of London, obtained an audience of his majesty at Kensington on the 8th of March, 1700, to request that he would give the royal assent to the bill for continuing them a corporation, he took the opportunity, while assuring them of his favour and protection, to recommend the union of the two companies to their serious consideration, on the ground “that it would be most for the interest of the India trade.”

Though the union of the companies was not effected during the reign of King William, his recommendation had a powerful influence in paving the way for it. At first, indeed, the London Company, instead of meeting its rival on a footing of equality, endeavoured to get rid of it altogether by making an offer to parliament to advance, at a reduced interest, as much money as would suffice to pay the whole of the £2,000,000 loan. This offer could not have been accepted without a gross breach of faith with the subscribers to that loan, and was therefore justly rejected. It was now felt that the union could only be effected on equitable terms; and as the necessity for it became daily more and more apparent, the deputies of the two companies, abandoning all attempts to overreach each other, began in good earnest to arrange an amalgamation. The result was embodied in a deed dated the 2nd of July, 1702, and entitled “Indenture Tripartite between her majesty Queen Anne and the two East India Companies, for uniting the said Companies.” The leading object of this deed was to place the companies in the very same position, by dividing the whole sum advanced to government into two equal portions, and assigning one portion to each. At the time of its execution, the subscription to the £2,000,000 loan stood as follows:—

English Company’s subscription, £1,662,000 London Company’s subscription, £315,000 Separate traders’ subscription, £23,000

£2,000,000

Leaving out of view the separate traders, who were so called because they preferred to trade, to the amount of their subscription, on their own individual responsibility, and not on a joint stock, the whole sum subscribed by the two companies was £1,977,000. The share allotted to each company, under the new arrangement, was the half of this sum, or £988,500; but as the London Company had subscribed only £315,000, it was necessary for them to make up the difference by purchasing stock at par from the English Company, to the amount of £673,500. This arranged, the next object was to fix the value of what was called the dead stock of the companies, or that portion of stock which, consisting of forts, factories, buildings, &c., could not be turned into money, but behaved to be reserved in common for the purpose of carrying on the trade. The whole of this dead stock was valued at £400,000, of which £330,000 belonged to the London, and only £70,000 to the English Company. It was therefore necessary, in order to maintain equality, that the latter Company should make up the difference by paying to the former £130,000. During seven years, the companies were to maintain their separate existence, but the trade was to be carried on as an united trade, for the common benefit of both, and under the direction of twenty-four managers, twelve of them chosen by each company. At the end of the seven years the London was to be entirely merged in the English Company, which should, “from thenceforth, for ever, continue the same corporation and body politic, with change of its name, and be from thenceforth called by the name of ‘The United Company of Merchants of England trading to the East Indies’.”

Of the same date as the indenture tripartite, another was executed under the name of “Quinque-partite Indenture of Conveyance of the Dead Stock of the two East India Companies.” The inventory which it gives of this stock is of some interest, in so far at least as relates to the original Company, as it not only furnishes the names, but also indicates the extent of the acquisitions which it had made in the East during the 100 years of its existence. The various places and subjects conveyed, in terms of the above agreement, at the valuation of £330,000, are enumerated as follows:—“The ports and islands of Bombay and St. Helena, with all their rights, profits, territories, and appurtenances whatsoever. Under the presidency of the aforesaid island Bombay, the factories of Surat, Swalli, and Broach, and the factories of Ahmedabad, Agra, and Lucknow (in which three last places the Company have only houses and buildings and some other conveniences remaining, but they have at present no factors that reside there). On the coast of Malabar, the forts of Karwar, Tellicherri, and Anjengo, and the factory of Calicut. In Persia, the factories of Gombroon, Shiraz, and Ispahan, and the yearly rent, pension, or sum of 1,000 tomands, amounting to the yearly sum of £3,333, 6s. 8d. English money, granted by the Sufi of Persia to the said governor and Company. On the coast of Choromandel, Chinghee and Orixa, Fort St. George, with the castle and fortifications, and territory thereto belonging, upon which a large city is built, consisting of—houses, which are held of and pay rent to the said governor and Company, together with the said city and its dependencies; and also all that fort called Fort St. David (being a strong fort and factory), and about three miles compass of the circumjacent country, upon which several small towns or villages are erected; the factories of Cuddalore, Porto-Novo, Pettipolee, Melchlepatam (Masulipatam), and Madapollam, and the fort and factory of Vizagapatam. On the island of Sumatra, the settlement of York Fort at Benculen, and the factory there, with a territory of about five miles thereto belonging, and the factory at Indrapore; also the factories of Tryaming and Sillebar, and some other out-pagars or factories depending on the factory of Benculen. In Cochin-China, the factory of Tonquin, in the kingdom of Bengal; the Fort William and the factory of Sutanati with a large territory thereto belonging; the factories of Balasore, Cossimbuzar, Dacca, Hughli, Malda, Rajahmal, and Patna. Also the right and title of the said governor and Company to Bantam, or any other settlements in the South Seas; and all rents, customs, and other profits, and all privileges, graunts, and phirmaunds in India.

It must be admitted that the subjects above enumerated were very moderately valued, and had not only cost more, but would have been rated far higher for an absolute sale. The object, however, being to effect an amicable amalgamation, the London Company lost little by consenting to liberal terms, though the effect certainly was to give an unfavourable view of the state of their affairs, and countenance the allegation that at the period when the arrangement was made, notwithstanding the large dividends regularly declared, they were barely solvent. This would almost seem to have been their own impression, for though they had at first professed aversion to the union, they at last became so urgent for it as once more to ask in the aid of the now notorious Sir Basil Firebrace, and purchase it by the promise of an enormous reward. As a compensation for his services, if they proved successful, £150,000 of the Company stock was to be transferred to him at £80. Assuming the stock to be at par, he was to make a gain of twenty per cent, or in other words receive a douceur of £30,000. The arrangement was not more extravagant than impolitic, because it led many of the English Company to imagine that they had been outwitted in the bargain, and thus disposed them instead of entering into it cordially, to throw obstacles in the way of its completion. This want of cordiality was especially manifested abroad, where the servants of both companies, disregarding the instructions which they received from home, seemed determined to carry on a kind of internecine warfare. Year after year thus passed away, and the process of winding up the separate concerns of the companies, preparatory to the final amalgamation, made little progress. The necessity of taking some more decisive step for this purpose having become apparent, it was at last resolved to have recourse to a referee. This important office was undertaken by no less a personage than Sidney, Earl of Godolphin, the lord high-treasurer of Great Britain; and in order that full effect might be given to his award, it was previously made binding on both companies by a special clause in an act of parliament.

This act of parliament (6th Anne, chap. 17), exacted a new loan of £1,200,000 from the United Company, thus making the whole amount of the advance to government £3,200,000. No interest was allowed on the latter loan; but as the former had borne interest at eight per cent, the effect was to accumulate both loans into one, bearing a common interest of five per cent. In return for the loan thus exacted, certain new advantages were conferred. The portion of the original loan, which still belonged to the separate traders of the General Society, had been reduced to £7,200, and it was now made optional to the United Company, on giving three years’ notice of their intention after 29th September, 1711, to pay off this sum and incorporate it with their own stock, so as to put them in exclusive possession of the whole East India trade, and leave them without even the shadow of a competitor. It was also enacted that the existence of the Company, instead of being terminable by three years’ notice after 1711, on repayment of the loan, should be prolonged under the same conditions till 1726; and power was given them to borrow £1,500,000, which they might either allow to remain as a bonded debt, or repay by means of calls on their shareholders. In this way the amount of capital, which would otherwise have been absorbed by the additional loan, was more than replaced. Lord Godolphin’s award was pronounced on the 29th September, 1708; and the arrangements consequent upon it being immediately completed, the amalgamation was finally effected. One Company only, bearing the name of “The United Company of Merchants of England trading to the East Indies,” now existed; and preparations were forthwith made for carrying on the East India trade on a larger scale than it had previously attained. The circumstances were propitious: the charter of the English Company on which the trade was in future to be conducted could no longer be called in question, as it had obtained the direct sanction of the legislature—the internal dissensions and animosities which at one time threatened to bring ruin on both companies had been suppressed—and the native governments, in consequence of the political changes which followed the death of Aurangzeb, had become less able to practise extortion and oppression.