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February 1830.

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A SELECT COMMITTEE has been appointed by
each of the Houses of Parliament, " to enquire into the
" present State of the Affairs of the East-India Corn-
's pany, and into the Trade between Great- Britain,
; ' the East-Indies, and China, and to report their
" Observations thereon to the House."

It is matter more for regret than of surprise, that so little should
be generally known regarding the East-India Company, and the
character in which they stand with relation to the vast interests
committed (under certain restrictions) to their management and

The means of acquiring information are more ample, and more
readily to be obtained than upon almost any other public question,
whether such information be sought for in the records of Par-
liament, in those of the Company which have been from time
to time printed for and laid before the Proprietors of East-India
Stock, or in the standard histories of the day.

B When


When the mercantile interests of the country are suffering
through the alleged want of wider fields for commercial en-
terprize, the abolition of the Company's remaining exclusive
privileges of trade is declared to be the panacea.

When the case of an individual seeking redress at the hands of
the Court of Directors for some alleged grievance inflicted by the
Governments abroad has been rejected, and an appeal made,
either to Parliament or to the Public, the occasion is seized
upon to condemn the system under which the government of
India is carried on, and to denounce it as pregnant with the most
serious evils.

In the absence of either of these causes for public discussion,
little is comparatively heard of the East-India Company. The
Proprietors receive their dividend, the State its revenue, and the
best proof of the adaptation of the parts to the whole is, that the
vast machine works quietly, but effectually, the purpose for
which it has been framed and established.

It must not, however, be supposed, that the existing India
system is the production of a day, or (as has been stated by an
authority entitled to much respect) that " our Indian legisla-
" tion has advanced by springs and jerks," and that in each
renewal of the charter " consideration and enquiry were out of
the question.' ■ The system has grown out of the trade com-
menced by the Company at the close of the sixteenth century,
and prosecuted amidst the most extraordinary difficulties and
political vicissitudes, to the present day, comprizing an unbroken
period of two hundred and thirty years, during which the British
empire in India has been established.


The laws under which the system is administered have been
passed from time to time, as circumstances have called for their
enactment. Whenever evils have been found to exist, remedies
have been applied ; and it cannot fail to be remembered, that the
most important parliamentary measure, a measure which may be
considered as the foundation of the present system, was brought
forward, and ultimately passed into a law, not more for the pur-
pose of securing the rights and interests of the Company, than
for the preservation of the constitution of this country.*

It is proposed, in the present paper, to notice the leading facts
connected with the Home Administration of the East-India Com-
pany, and the financial results of the system. This paper is di-
vided into two parts.

Part I. Treats of the Home Administration, embracing the
commercial and political privileges, with the territorial possessions
which have been conferred upon the Company, from time to time,
since its union in 1708.

Part II. Contains Facts and Observations, explanatory of the
accounts laid before Parliament respecting the East-India and
China Trade, and of the Financial Affairs of the East -India

It may probably be said, with reference to the first part, that
a more limited retrospect would have sufficed. Had that been the
case, much time and labour would have been saved ; but then it
would have been impossible to have arrived at the ground-work
of the present system, or to have given that connected view which
is essential to a correct understanding of it.

B 2 The

* The Act of 24 Geo. III. cap. 25.

The government of the British territories in India is confided
to the East-India Company and to the Board of Commissioners
for the Affairs of India, subject to the control of Parliament.

The affairs abroad are administered by the Supreme Govern-
ment of Fort William in Bengal, and by the two subordinate
governments of Fort St. George and Bombay, under orders and
instructions received from the authorities in England.

The East-India Company,

The Supreme Government in Bengal,

The Board of Commissioners for the Affairs of India,

The Supreme Courts of Judicature, and

The Governments of Fort St. George and Bombay,
were established by distinct legislative enactments, which will be
noticed as the events which gave rise to them occurred.

The East-India Company, under the title of the " London
Company/ ' was incorporated by charter granted by Queen Eliza-
beth on the 30th December 1600. In 1693, that Company having
failed in the payment of a duty of five per cent, on their capital
stock, imposed by the 4th and 5th of William and Mary, doubts
arose whether, in strictness of law, the charters which had been
granted them were not rendered void. A new one, however, was
granted, on condition that it should be determinable on three
years' notice.

In 1698 the necessities of the state led to a loan from the
Public of .§£2,000,000 at eight per cent., and the subscribers
were incorporated by charter into a society, called the " English
Company/ ' with the exclusive right of trade to all countries and
places beyond the Cape of Good Hope to the Straits of Magellan.


The Act reserved a power to determine the exclusive trade
September 1711, on three years' notice and repayment of the

In 1708 the London and English Companies were united, since
which their title has been " The United Company of Merchants
of England trading to the East-Indies."

The East -India Company consists of the Proprietors of the »
capital stock, who, when assembled under the charter of King
William, which is the basis of their present privileges, are desig-
nated " A General Court/ '

All Proprietors of ^500 stock, whether possessing such stock
in their own right or otherwise, or having held it only for an
hour, were entitled to vote, and to take part in the discussions
and proceedings in the General Court. They likewise elected
twenty-four proprietors annually, each possessing ,§£2,000 stock,
to be Directors of the Company. These provisions were subse-
quently altered by the Acts passed in 1767, and the Regulating
Act of 1773.

A Court of Directors, the designation prescribed by the charter,
must consist of not less than thirteen members. They form
the executive body, and carry on the concerns of the Company,
their duties being partly of a political, and partly of a commercial

The personal interests of the Proprietors consist in the se-
curity of their capital stock, of the quick and dead stock at
home and abroad, and of those immunities which they have from
time to time acquired, as a corporate body, in England and in



India. These several interests are confided to the care and pro-
tection of the Court of Directors, who, as the executive body,
must be considered responsible to the Proprietors for their pre-



This review is divided into five separate periods, each of
which comprizes events that designate it as a distinct epoch in
the affairs of the Company.


From the Union of the two Companies in 1708 to the Year 1744 ; — During
which the Acts were passed conferring upon the Company the exclusive trade
until I78O, and declaring also their right to a perpetuity in the trade, not-
withstanding the exclusive privileges might be done away ; — the Acts to
suppress clandestine trade ; — and the rejection by Parliament of a petition
from sundry merchants to advance £3,200,000, to redeem the debt due to the
Company, on condition of being incorporated and vested, in lieu of the Com-
pany, with the whole trade to India,

The first extension of the period for which the United Company
were to enjoy the exclusive privileges of trade took place in
1703. It was for fifteen years, viz. until 1723, in consideration
of which the Company advanced to the public ^1, 200,000, by
way of loan, without interest, the same being added to the two
millions lent at eight per cent., under the 9th and 10th William III,
making a total of s£3,200,000 due to the Company.

In May 1712 the Company presented a petition to Parliament,
representing that they had acquired several forts and settlements,
and privileges in India, which were absolutely necessary for the
carrying on their trade, and were a great security to the British
interests in that quarter, and cost the Company very great sums



of money: that in order to compete with the Dutch and to secure
the interests of the Company, the period then remaining, viz.
eleven years, was too short to incur a further outlay, and they
therefore prayed for an additional term.

The Act of the 10th Anne, cap. 28, was accordingly passed ; and
in order " that the United Company might be the better en-
" couraged to proceed in their trade, and to make such lasting
" settlements for the support and maintenance thereof for the
" benefit of the British nation," the exclusive trade was continued
to them until three years' notice after the 25thJVlarch 1733.

The Company, at this early period of their union, had to
contend with a clandestine trade which had been carried on by
British merchants under foreign colours. In order to check its
continuance, the Court of Directors presented two petitions to
His Majesty, King George the First, at Kensington, in December
1718, when His Majesty was pleased to give the following answer :
" You may depend upon the continuance of my protection wher-
" ever it may be necessary."

An Act was accordingly passed, prohibiting, under severe penal-
ties, the prosecution of such clandestine trade.

In the year 1729 various attacks were made upon the Company.
On the 26th February a petition was presented to the House
of Commons by several merchants and traders of Great Britain,
offering to advance ,§£3,200,000, to redeem the fund and trade
of the East-India Company, at five several payments, on or before
the 25th March 1733, at an interest of four per cent, from the
times of payment until the 25th March 1735, and two per cent,
afterwards ; provided the lenders might be incorporated and vested



with the whole trade to the East-Indies and elsewhere, in the
same extensive degree as was granted to the East-India Company,
yet so as not to trade with their joint stock in a corporate capa-
city, but the trade to be open to all His Majesty's subjects, upon
license from such proposed new company to be granted to all
His Majesty's subjects desiring the same, on proper terms and
conditions ; and provided the trade be exercised to and from the
port of London only, and be subject to redemption at any time,
upon three years' notice, after thirty-one years and the repay-
ment of the principal.

The petition was rejected by 223 to 138^

The Ministers at that time were convinced that the trade
could be most beneficially carried on through the Company, the
opposition to the Company was therefore ineffectual : but the
business was again brought forward, the time intervening between
the rejection of the first petition and the presentation of a second,
being employed in the publication of anonymous letters, essays,
periodical papers, and pamphlets against exclusive companies
in general ; and all the arguments which had been ever ad-
vanced against monopolies were retailed on the occasion, and
then, as now, all the benefits which were supposed to result from
a free trade magnified with great art and ability. On the 9th
April 1730, a petition from the merchants, traders, and others,
against confining the East- India trade to the East-India Company
only, and for obliging the Company to grant licenses on proper
terms and conditions, was offered to be presented to the House ;
and on the question for its being brought, the same was nega-
tived by 177 to 77' The same course was followed, but without

C a divi-


a division, on petitions to the same purport from Bristol and

In the month of March the following propositions, which had
been made in the Committee of Ways and Means, relating to
the funds and trade of the Company, were received by the Di-

" The United East-India Company to abate out of their present fund of
" £150,000 per annum, £32,000 per annum : the abatement to commence
" from Michaelmas, 1730.

" The further sum of £200,000 to be paid by the Company for the use of
" the Public without any interest or addition to their capital, to be paid on
M or before Christmas next 1730.

" The Company to enjoy the remaining part of their funds of £128,000
" per annum till Lady Day 1736, subject then to redemption upon one
" year's notice, in any sum not less than £500,000 at any time.

" The Company to accept a term of thirty years after 1736, with three
" years' notice, for the whole and sole right of the trade to the East-Indies,
M subject afterwards to the power of redemption.

" The Corporation to continue for ever, notwithstanding the redemption
" of their fund and exclusive trade."

It may here be important to observe, with reference to the last
proposition, that although the Directors were unanimously of
opinion, that by the Act of the 10th Anne the Company had a
right of perpetuity to the trade, notwithstanding the fund should
be redeemed, opinions were divided, both in and out of Parlia-
ment, concerning this material point ; and as it was conceived
that the putting it to a trial might be attended with great hazard
and inconvenience, the Directors submitted that it would be more



for the Company's interest and benefit to accept of the proposals
before the Court.

The Act of the 3d Geo. II., cap. 14, was accordingly passed, by
which the Company gave to the Public the sum of ^200,000,
and reduced the interest on the ,§£3,200,000 due from the Public
from five to four per cent. viz. ^£128,000, per annum, instead of
^£1 60,000 per annum. The Company, notwithstanding the re-
demption by the Public of the said debt of ^3,200,000 9 was
declared to be a body Politic and Corporate in deed and in
name, by the title of " the United Company of Merchants of
England trading to the East-Indies," and by that name should
have perpetual succession and a common seal.

In January 1744 it was intimated to the Court of Directors,
that if the Company would advance and lend to His Majesty, for
the service of the Government, the sum of one million at three
per cent., it might be the means of procuring the prolongation
of the Company's term in the exclusive trade to the year 1780,
their present term expiring at Lady Day 1766; the Company
to be empowered to borrow the said million on their bonds. The
proposition was agreed to : the three years' notice to be given
from 1780.

The 17th George II. cap. 17, was accordingly passed.

It was at the same time declared, that the Company were to
have the benefit of all Charters and Acts which had been made
in their favour.

This measure secured to the Company the exclusive trade for
the prospective term of thirty- six years from 1744. The several
periods for which, and the terms upon which such exclusive trade
has been extended, will be seen by the following summary.

C 2





for Years.



9 and 10

The Charter granted from \

10 years,

On lending £2,000,000, at

William III.

the 29th of September f
1701, to 29th Septem- f
ber 1711. )


3 years'


eight per cent.


6 Anne

Ditto extended from 29th "^

14£ years,

On lending £1,200,000, at

September 1711 to they


five per cent.and agreeing

25th March 1726. C

3 years'

to receive only five per
cent, on the two millions.


10 Anne

Ditto extended from the")
25th March 1726 toV
the 25th March 1733. (

7 years,


3 years'


No further terms.


3 Geo. II.

Ditto extended from the~\

33 years,

And a right granted to con-

25th March 1733 to the (


tinue a Corporate Body

25th March 1766. (

3 years'

for ever, giving £200,000,
by the 24th December

1730, and agreeing to
receive from the 29th
September 1730, only
£128,000, or four per
cent, on the £3,200,000.


17 Geo. II.

Ditto extended from the^

14 years,

On lending £1,000,000,

25th March 1766 toV


by the 29th September

25th March 1780. }

3 years'

1744, at three per cent.,
the £3,200,000 to con-

From 29th September")

tinue at four per cent.

Total Loan to Government,

1701 to the 25th March V



1780. (

* In 1749 the Company consented to a reduction in the interest on the ,£4,200,000 from four to three per cent.,
on condition that they were empowered to raise money towards the discharge of their bond debt by the sale of three
per cent, annuities to the amount of the debt due from the public to the Company. The sum of ,£2,992,440. 5s.
was raised, the dividends on which were paid at the East-India House, Government allowing the Company £l,687
per annum for charges of management : these, together with £1,207,559. 15s., being the residue of the debt of
£4,200,000 from the Public form the East- India Annuities, which, by the Act of the 33d Geo. III. cap. 47,
were placed under the management of the Bank, and engrafted on the Three per Cent. Reduced Annuities.



From 1745 to 1765 : comprises the commencement of hostilities with an Euro-
pean power in India; — the loss and subsequent restoration by treaty of
Fort St. George ; — the events in Bengal which led to the loss of Calcutta ;
its recapture ; — the Act for punishing mutiny and desertion of officers and
soldiers of the Company's service ; — the issue of letters-patent by His
Majesty George the Second, granting booty and plunder to the Company ;
— and of further letters-patent, authorising the Company to hold and enjoy
such lands and fortresses, subject to the sovereignty of His Majesty in and
over the same, and subject, nevertheless, to His Majesty's disposition and
pleasure, as to such lands as might be acquired from the subjects of any
European power*

It will be perceived that the events within the abovementioned
period related principally to the affairs of the Company abroad.

France having joined Spain in the war against Great Britain, the
effects were soon felt in India. The French succeeded in reducing
Madras, by which a loss of a£ 180,000 was entailed upon the
Company. This settlement was restored to the Company in 1 749
by the treaty of Aix-la-Chapelle. These events were followed by
the inhuman incarceration of one hundred and forty- six Euro-
peans in the Black Hole at Calcutta ; the loss of Fort William ;
its recapture by the King's and Company's forces under Admiral
Watson and Colonel Clive, together with the restoration of the
Company's factories in Bengal ; the deposition of Sujeh Dowlah,
and the elevation of Meer Jaffier to the musnud, succeeded by the
victories of Colonel Clive, which led to the extension of the Com-
pany's possessions ; the deposition of Meer Jaffier and succession
of Cossim Ali Khan, and the re- elevation of Meer Jaffier.



The hostile proceedings of M. Dupleix on the Coast of Coro-
mandel, whose views went to the annihilation of the Company's
authority in that quarter of India, and the acquisition of the
Dewannee obtained by Lord Clive in Bengal, were the promi-
nent occurrences.

The limits of this paper will not admit of any lengthened
review of the principles by which the Court of Directors (then
the only Home authority) were governed, in the instructions
which at that early period they sent to India. The materials for
such purpose are abundant, the matter most interesting, and the
whole tenour of the Court's despatches calculated to remove the
generally received, but nevertheless erroneous opinion, that the
Directors were comparatively indifferent to the events in progress,
and that they withheld the exercise of that control which was
essential to good government, and to the proper conduct of their
servants abroad.

The following extracts will be sufficient to shew the general
character of the Court's proceedings.

In 1744, the Committee of Shipping, who at that time superin-
tended the measures connected with the repair of fortifications,
were instructed to frame regulations for that purpose, and the
Court informed the government in Bengal that " they grudged
l{ no expense necessary for the just defence of the Company's
" settlements." An engineer officer who had been employed in
the fortifications in Flanders, was sent by the Directors with the
rank of Major.

The Court of Directors, in their petitions to the Lords Justices
of the 18th July 1750, 19th August 1752, and in their letters to



the Earl of Holdernesse of the 10th January and 14th Septem-
ber 1753, had represented the Company's situation with regard
to the French on the Coromandel coast, at those several periods.

In 1754, the Court stated, that notwithstanding all their endea-
vours at home, and those of their servants abroad, they found by
the several advices which they had from time to time laid before
Administration, that the French were daily growing in power : that
at a meeting at Sadras, the French commissaries insisted that M.
Dupleix should be Governor of the whole country from Cape
Comorin to the River Kishna, to which adding the Rajahmundry
and Chicacole countries, lately granted to him, the whole coast
would be his to very near Point Palmiras, an extent of near
fourteen degrees; and that should M. Dupleix succeed in that
object, the Company's settlements and trade upon the Coast of
Coromandel must be in the power of the French, and the British
authorities entirely subject to their pleasure.

The Court pointed out, that since the commencement of those
troubles, they had from time to time sent very large supplies of
men and military stores, and intended to send a further force,
and to exert themselves to the utmost of their power as far as a
trading company could do ; but they thought it a duty they owed
to the Public and to the Company, to lay before Administration
the circumstances and situation they were placed in abroad, not
doubting but that Ministers would represent the same to His
Majesty in such a manner, that proper and effectual measures
might be taken to secure to this nation " so great and valuable a
" branch of their trade as that to the East-Indies."

On the 3d August 1757, the Court of Directors, in addressing



the authorities at Calcutta in anticipation of its restoration,
wrote :

" Pacific measures must, if possible, be the foundation you are to build on
" as the best means of promoting the commercial interest of the Company,
" and avoiding the heavy expenses which a state of war must necessarily
" produce, and which the Company at this juncture are so little able to
" bear."

In March 1758, after a general review of the investment, ship-
ping, &c, the Court laid down instructions as to the conduct of
servants, the collection of revenues and customs, and the extent
of the military establishment.

The junior servants were ordered to be sent from Calcutta,
where they acquired habits of idleness and extravagance, to the
aurungs, where they might learn the languages and gain a know-
ledge of the various qualities of goods, &c. To encourage the
cultivation of raw-silk, the Court sent out a Mr.Wilder, who was

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