years' notice being given. Such was the origin of the British East India Company,the most celebrated commercial association of ancient or modern times, and which has now extended its sway over the whole of the Mogul empire.

It might have been expected that, after the charter was obtained, considerable eagerness would have been manifested to engage in the trade. But such was not the case. Notwithstanding the earnest calls and threats of the directors, many of the adventurers could not be induced to come forward to pay their proportion of the charges incident to the fitting out of the first expedition. And as the directors seem either to have wanted power to enforce their resolutions, or thought it better not to exercise it, they formed a subordinate association, consisting of such members of the Company as were really willing to defray the cost of the voyage, and to bear all the risks and losses attending it, on condition of their having the exclusive right to whatever profits might arise from it. And it was by such subordinate associations that the trade was conducted during the first 13 years of the Company's existence.

The first expedition to India, the cost of which amounted, ships and cargoes included, to 69,0914, consisted of 5 ships, the largest being 600 and the smaller 130 tons burden. The goods put on board were principally bullion, iron, tin, broad cloths, cutlery, glass, &c. The chief command was intrusted to Captain James Lancaster, who had already been in India. They set sail from Torbay on the 13th of February, 1601. Being very imperfectly acquainted with the seas and countries they were to visit, they did not arrive at their destination, Acheen in Sumatra, till the 5th of June, 1602. But though tedious, the voyage was, on the whole, uncommonly prosperous. Lancaster entered into commercial treaties with the kings of Acheen and Bantam; and having taken on board a valuable cargo of pepper and other produce, he was fortunate enough, in his way home, to fall in with and capture, in concert with a Dutch vessel, a Portuguese carrack of 900 tons burden, richly laden. Lancaster returned to the Downs on the 11th of September, 1603.-(Modern Universal History, vol. x. p. 16.; Macpherson's Commerce of the European Powers with India, p, 81.)

But notwithstanding the favourable result of this voyage, the expeditions fitted out in the years immediately following, though sometimes consisting of larger ships, were not, at an average, materially increased. In 1612, Captain Best obtained from the court at Delhi several considerable privileges; and, amongst others, that of establishing a factory at Surat; which city was, henceforth, looked upon as the principal British station in the west of India, till the acquisition of Bombay.

In establishing factories in India, the English only followed the example of the Portuguese and Dutch. It was contended, that they were necessary to serve as depôts for the goods collected in the country for exportation to Europe, as well as for those imported into India, in the event of their not meeting with a ready market on the arrival of the ships. Such establishments, it was admitted, are not required in civilised countries; but the peculiar and unsettled state of India was said to render them indispensable there. Whatever weight may be attached to this statement, it is obvious that factories formed for such purposes could hardly fail of speedily degenerating into a species of forts. The security of the valuable property deposited in them furnished a specious pretext for putting them in a condition to withstand an attack; while the agents, clerks, warehousemen, &c. formed a sort of garrison. Possessing such strong holds, the Europeans were early emboldened to act in a manner quite inconsistent with their character as merchants, and but a very short time elapsed before they began to form schemes for monopolising the commerce of particular districts, and acquiring territorial dominion.

Though the Company met with several heavy losses during the earlier part of their traffic with India, from shipwrecks and other unforeseen accidents, and still more from the hostility of the Dutch, yet, on the whole, the trade was decidedly profitable. There can, however, be little doubt, that their gains, at this early period, have been very much exaggerated. During the first 13 years, they are said to have amounted to 132 per cent. But then it should be borne in mind, as Mr. Grant has justly stated, that the voyages were seldom accomplished in less than 30 months, and sometimes extended to 3 or 4 years and it should further be remarked, that, on the arrival of the ships at home, the cargoes were disposed of at long credits of 18 months or 2 years; and that it was frequently even 6 or 7 years before the concerns of a single voyage were finally adjusted. (Sketch of the History of the Company, p. 13.) When these circumstances are taken into view, it will immediately be seen that the Company's profits were not, really, by any means so great as has been represented. It may not, however, be uninstructive to remark, that the principal complaint that was then made against the Company did not proceed so much on the circumstance of its charter excluding the public from any share in an advantageous traffic, as in its authorising the Company to export gold and silver of the value of 30,000l. a year. It is true that the charter stipulated that the Company should import an equal quantity of gold and silver within 6 months of the termination of every voyage: but the enemies of the Company contended that this condition was not complied

with; and that it was, besides, highly injurious to the public interest, and contrary to all principle, to allow gold and silver to be sent out of the kingdom. The merchants and others interested in the support of the Company could not controvert the reasoning of their opponents, without openly impugning the ancient policy of absolutely preventing the exportation of the precious metals. They did not, however, venture to contend, if the idea really occurred to them, that the exportation of bullion to the East was advantageous, on the broad ground of the commodities purchased by it being of greater value in England. But they contended that the exportation of bullion to India was advantageous, because the commodities thence imported were chiefly re-exported to other countries from which a much greater quantity of bullion was obtained than had been required to pay for them in India. Mr. Thomas Mun, a director of the East India Company, and the ablest of its early advocates, ingeniously.compares the operations of the merchant in conducting a trade carried on by the exportation of gold and silver to the seed time and harvest of agriculture. If we only behold," says he, "the actions of the husbandman in the seed time, when he casteth away much good corn into the ground, we shall account him rather a madman than a husbandman. But when we consider his labours in the narvest, which is the end of his endeavours, we find the worth and plentiful increase of his actions."-(Treasure by Foreign Trade, p. 50. ed. 1664.)

We may here remark, that what has been called the mercantile system of political economy, or that system which measures the progress of a country in the career of wealth by the supposed balance of payments in its favour, or by the estimated excess of the value of its exports over that of its imports, appears to have originated in the excuses now set up for the exportation of bullion. Previously to this epoch, the policy of prohibiting the exportation of bullion had been universally admitted; but it now began to be pretty generally allowed, that its exportation might be productive of advantage, provided it occasioned the subsequent exportation of a greater amount of raw or manufactured products to countries whence bullion was obtained for them. This, when compared with the previously existing prejudice—for it hardly deserves the name of system which wholly interdicted the exportation of gold and silver, must be allowed to be a considerable step in the progress to sounder opinions. The maxim, ce n'est que le premier pas qui coute, was strikingly verified on this occasion. The advocates of the East India Company began gradually to assume a higher tone, and, at length, boldly contended that bullion was nothing but a commodity, and that its exportation should be rendered as free as that of any thing else. Nor were these opinions confined to the partners of the East India Company. They were gradually communicated to others; and many eminent merchants were taught to look with suspicion on several of the previously received dogmas with respect to commerce, and were, in consequence, led to acquire more correct and comprehensive views. The new ideas ultimately made their way into the House of Commons; and, in 1663, the statutes prohibiting the exportation of foreign coin and bullion were repealed, and full liberty given to the East India Company and to private traders to export them in unlimited quantities.

But the objection to the East India Company, or rather the East India trade, on the ground of its causing the exportation of gold and silver, admitted of a more direct and conclusive, if not a more ingenious reply. How compendious soever the ancient intercourse with India by the Red Sea and the Mediterranean, it was unavoidably attended with a good deal of expense. The productions of the remote parts of Asia, brought to Ceylon, or the ports on the Malabar coast, by the natives, were there put on board the ships which arrived from the Arabic gulph. At Berenice they were landed, and carried by camels 250 miles to the banks of the Nile. They were there again embarked, and conveyed down the river to Alexandria, whence they were despatched to different markets. The addition to the price of goods by such a multiplicity of operations must have been considerable; more especially as the price charged on each operation was fixed by monopolists, subject to no competition or control. Pliny says, that the cost of the Arabian and Indian products brought to Rome when he flourished (A. D. 70), was increased a hundred fold by the expenses of transit — (Hist. Nat. lib. vi. c. 23.); but there can be little or no doubt that this is to be regarded as a rhetorical exaggeration. (See antè, p. 18.) There are good grounds for thinking that the less bulky sorts of Eastern products, such as silk, spices, balsams, precious stones, &c., which were those principally made use of at Rome, might, supposing there were no political obstacles in the way, be conveyed from most parts of India to the ports on the Mediterranean by way of Egypt, at a decidedly cheaper rate than they could be conveyed to them by the Cape of Good Hope.

But at the period when the latter route to India began to be frequented, Syria, Egypt, &c. were occupied by Turks and Mamelukes; barbarians who despised commerce and navigation, and were, at the same time, extremely jealous of strangers, especially of Christians or infidels. The price of the commodities obtained through the intervention of such persons was necessarily very much enhanced; and the discovery of

the route by the Cape of Good Hope was, consequently, of the utmost importance; for, by putting an end to the monopoly enjoyed by the Turks and Mamelukes, it introduced, for the first time, something like competition into the Indian trade, and enabled the western parts of Europe to obtain supplies of Indian products for about a third par of what they had previously cost. Mr. Mun, in a tract published in 1621, estimates

the quantity of Indian commodities imported into Europe, and their cost when bought in Aleppo and in India, as follows:

Cost of Indian commodities consumed in Europe when bought in Aleppo (or Alexandria).

6,000,000 lbs. pepper cost, with charges, &c. at Aleppo 28. per lb.

450,000 lbs. cloves, at 4s. 9d.

150,000 lbs. mace, at 4s. 9d.

400,000 lbs. nutmegs, at 2s. 4d. 350,000 lbs. indigo, at 4s. 4d.

1,000,000 lbs. Persian raw silk, at 12s.

£ s. d.

- 600,000 00 - 106,875 10 0

35,626 0 0

But the same quantities of the same commodities cost, when bought in the East Indies, according to Mr. Mun, as follows:

6,000,000 lbs. pepper, at 21d. per lb.

450,000 lbs. cloves, at 9d.

150,000 lbs. mace, at 8d. 400,000 lbs. nutmegs, at 4d. 350,000 lbs. indigo, at is. 2d. 1,00,000 lbs. raw silk, at 8s.

£ 8. d.

62,500 0 0 16,875 0 0 5,000 0 0 6,666 13 4

20,416 12 4 - 400,000 00

£511,458 5 8

And

Which being deducted from the former, leaves a balance of 953,5421. 138. 4d. supposing that the statements made by Mr. Mun are correct, and that allowance is made for the difference between the freight from Aleppo and India, the result would indicate the saving which the discovery of the route by the Cape of Good Hope occasioned in the purchase of the above-mentioned articles. - (A Discourse of Trade from England to the East Indies, by T. M., original ed. p. 10. This tract, which is very scarce, is reprinted in Purchas's Pilgrims.)

-

In the same publication (p. 37.), Mr. Mun informs us that, from the beginning of the Company's trade to July, 1620, they had sent 79 ships to India; of which 34 had come home safely and richly laden, 4 had been worn out by long service in India, 2 had been lost in careening, 6 had been lost by the perils of the sea, and 12 had been captured by the Dutch. Mr. Mun further states, that the exports to India, since the formation of the Company, had amounted to 840,3761.; that the produce brought from India had cost 356,2881., and had produced here the enormous sum of 1,914,600l. ; that the quarrels with the Dutch had occasioned a loss of 84,088.; and that the stock of the Company, in ships, goods in India, &c., amounted to 400,0001.

The hostility of the Dutch, to which Mr. Mun has here alluded, was long a very formidable obstacle to the Company's success. The Dutch early endeavoured to obtain the exclusive possession of the spice trade, and were not at all scrupulous about the means by which they attempted to bring about this their favourite object. The English, on their part, naturally exerted themselves to obtain a share of so valuable a commerce; and as neither party was disposed to abandon its views and pretensions, the most violent animosities grew up between them. In this state of things, it would be ridiculous to suppose that unjustifiable acts were not committed by the one party as well as the other; though the worst act of the English appears venial, when compared with the conduct of the Dutch in the massacre at Amboyna, in 1622. While, however, the Dutch Company was vigorously supported by the government at home, the English Company met with no efficient assistance from the feeble and vacillating policy of James and Charles. The Dutch either despised their remonstrances, or defeated them by an apparent compliance; so that no real reparation was obtained for the outrages they had committed. During the civil war, Indian affairs were necessarily lost sight of: and the Dutch continued, until the ascendancy of the republican party had been established, to reign triumphant in the East, where the English commerce was nearly annihilated.

But notwithstanding their depressed condition, the Company's servants in India laid the foundation, during the period in question, of the settlements at Madras and in Bengal. Permission to build Fort St. George was obtained from the native authorities in 1640. In 1658, Madras was raised to the station of a presidency. In 1645, the Company began to establish factories in Bengal; the principal of which was at Hooghly. These were, for a lengthened period, subordinate to the presidency at Madras.

No sooner, however, had the civil wars terminated, than the arms and councils of Cromwell retrieved the situation of our affairs in India. The war which broke out between the long parliament and the Dutch, in 1652, was eminently injurious to the latter In the treaty of peace, concluded in 1654, it was stipulated that indemnification

should be made by the Dutch for the losses and injuries sustained by the English merchants and factors in India. The 27th article bears, "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." A commission was at the same time appointed, conformably to another article of the treaty, to inquire into the reciprocal claims which the subjects of the contracting parties had upon each other for losses sustained in India, Brazil, &c.; and, upon their decision, the Dutch paid the sum of 85,000l. to the East India Company, and 3,6154. to the heirs or executors of the sufferers at Amboyna. (Bruce's Annals, vol. i. p. 489.)

The charter under which the East India Company prosecuted their exclusive trade to India, being merely a grant from the Crown, and not ratified by any act of parliament, was understood by the merchants to be at an end when Charles I. was deposed. They were confirmed in this view of the matter, from the circumstance of Charles having himself granted, in 1635, a charter to Sir William Courten and others, authorising them to trade with those parts of India with which the Company had not established any regular intercourse. The reasons alleged in justification of this measure, by the Crown, were, that "the East India Company had neglected to establish fortified factories, or seats of trade, to which the king's subjects could resort with safety; that they had consulted their own interests only, without any regard to the king's revenue; and in general, that they had broken the condition on which their charter and exclusive privileges had been granted to them."-(Rym. Fœdera, vol. xx. p. 146.)

Courten's association, for the foundation of which such satisfactory reasons had been assigned, continued to trade with India during the remainder of Charles's reign; and no sooner had the arms of the Commonwealth forced the Dutch to desist from their de predations, and to make reparation for the injuries they had inflicted on the English in India, than private adventurers engaged in great numbers in the Indian trade, and carried it on with a zeal, economy, and success, that monopoly can never expect to rival. It is stated in a little work, entitled Britannia Languens, published in 1680, the author of which has evidently been a well-informed and intelligent person, that during the years 1653, 1654, 1655, and 1656, when the trade to India was open, the private traders imported East India commodities in such large quantities, and sold them at such reduced prices, that they not only fully supplied the British markets, but had even come into successful competition with the Dutch in the market of Amsterdam, "and very much sunk the actions (shares) of the Dutch East India Company.” (p. 132.) This circumstance naturally excited the greatest apprehensions on the part of the Dutch Company; for, besides the danger that they now ran of being deprived, by the active competition of the English merchants, of a considerable part of the trade which they had previously enjoyed, they could hardly expect that, if the trade were thrown open in England, the monopoly would be allowed to continue in Holland. A striking proof of what is now stated is to be found in a letter in the third volume of Thurlow's State Papers, dated at the Hague, the 15th of January, 1654, where it is said, that "the merchants of Amsterdam have advice that the Lord Protector intends to dissolve the East India Company at London, and to declare the navigation and commerce of the East Indies free and open: which doth cause great jealously at Amsterdam, as a thing that will very much prejudice the East India Company in Holland.”

Feeling that it was impossible to contend with the private adventurers under a system of fair competition, the moment the treaty with the Dutch had been concluded, the Company began to solicit a renewal of their charter; but in this they were not only opposed by the free traders, but by a part of themselves. To understand how this happened, it may be proper to mention that Courten's association, the origin of which has been already noticed, had begun, in 1648, to found a colony in Assuda, an island near Madagascar. The Company, alarmed at this project, applied to the council of state to prevent its being carried into effect; and the council, without entering on the question of either party's rights, recommended them to form a union; which was accordingly effected in 1649. But the union was, for a considerable time, rather nominal than real; and when the Dutch war had been put an end to, most of those holders of the Company's stock who had belonged to Courten's association joined in petitioning the council of state that the trade might in future be carried on, not by a joint stock, but by a regulated company; so that each individual engaging in it might be allowed to employ his own stock, servants, and shipping, in whatever way he might conceive most for his own advantage. (Petition of Adventurers, 17th of Nov. 1656; Bruce's Annals, vol. i. p. 518.) This proposal was obviously most reasonable. The Company had always founded their claim to a monopoly of the trade on the alleged ground of its being necessary to maintain forts, factories, and ships of war in India; and that as this was not done by government, it could only be done by a Company. But, by forming the traders with India into a regulated company, they might have been subjected to whatever rules were

considered most advisable; and such special duties might have been laid on the commodities they exported and imported, as would have sufficed to defray the public expenses required for carrying on the trade, at the same time that the inestimable advantages of free competition would have been secured; each individual trader being left at liberty to conduct his enterprises, subject only to a few general regulations, in his own way and for his own advantage. (See COMPANIES.)

But notwithstanding the efforts of the petitioners, and the success that was clearly proved to have attended the operations of the private traders, the Company succeeded in obtaining a renewal of their charter from Cromwell in 1657. Charles II. confirmed this charter in 1661; and at the same time conferred on them the power of making peace or war with any power or people not of the Christian religion; of establishing fortifications, garrisons, and colonies; of exporting ammunition and stores to their settlements duty free; of seizing and sending to England such British subjects as should be found trading to India without their leave; and of exercising civil and criminal jurisdiction in their settlements, according to the laws of England. Still, however, as this charter was not fully confirmed by any act of parliament, it did not prevent traders, or interlopers as they were termed, from appearing within the limits of the Company's territories. The energy of private commerce, which, to use the words of Mr. Orme, "sees its drift with eagles' eyes," formed associations at the risk of trying the consequence at law, being safe at the outset, and during the voyage, since the Company were not authorised to stop or seize the ships of those who thus attempted to come into competition with them. Hence their monopoly was by no means complete; and it was not till after the Revolution, and when a free system of government had been established at home, that, by a singular contradiction, the authority of parliament was interposed to enable the Company wholly to engross the trade with the East.

In addition to the losses arising from this source, the Company's trade suffered severely, during the reign of Charles II., from the hostilities that were then waged with the Dutch, and from the confusion and disorders caused by contests among the native princes; but in 1668 the Company obtained a very valuable acquisition in the island of Bombay. Charles II. acquired this island as a part of the marriage portion of his wife, Catharine of Portugal; and it was now made over to the Company, on condition of their not selling or alienating it to any persons whatever, except such as were subjects of the British crown. They were allowed to legislate for their new possession; but it was enjoined that their laws should be consonant to reason, and "as near as might be " agreeable to the practice of England. They were authorised to maintain their dominion by force of arms; and the natives of Bombay were declared to have the same liberties as natural-born subjects. The Company's western presidency was soon after transferred from Surat to Bombay.

In 1664, the French East India Company was formed; and 10 years afterwards they laid the foundation of their settlement at Pondicherry.

But the reign of Charles II. is chiefly memorable in the Company's annals, from its being the æra of the commencement of the tea trade. The first notice of tea in the Company's records is found in a despatch, addressed to their agent at Bantam, dated 24th of January, 1667-8, in which he is desired to send home 100 lbs. of tea," the best he can get."— (Bruce's Annals, vol. ii. p. 210.) Such was the late and feeble beginning of the tea trade; a branch of commerce that has long been of vast importance to the British nation; and without which, it is more than probable that the East India Company would long since have ceased to exist, at least as a mercantile body.

In 1677, the Company obtained a fresh renewal of their charter; receiving at the same time an indemnity for all past misuse of their privileges, and authority to establish a mint at Bombay.

During the greater part of the reigns of Charles II. and James II. the Company's affairs at home were principally managed by the celebrated Sir Josiah Child, the ablest commercial writer of the time; and in India, by his brother, Sir John Child. In 1681, Sir Josiah published an apology for the Company, under the signature of Þλowaтpis—“A Treatise wherein is demonstrated that the East India Trade is the most National of all Foreign Trades:" in which, besides endeavouring to vindicate the Company from the objections that had been made against it, he gives an account of its state at the time. From this account it appears that the Company consisted of 556 partners; that they had from 35 to 36 ships, of from 775 to 100 tons, employed in the trade between England and India, and from port to port in India —(p. 23.); that the customs duties upon the trade amounted to about 60,000l. a year; and that the value of the exports, "in lead, tin, cloth, and stuffs, and other commodities of the production and manufacture of England," amounted to about 60,000/, or 70,000l. a year. Sir Josiah seems to have been struck, as he well might, by the inconsiderable amount of the trade; and he therefore dwells on the advantages of which it was indirectly productive, in enabling us to obtain supplies of raw silk, pepper, &c. at a much lower price than they would otherwise have fetched.