CYCLOPÆDIA

OF

POLITICAL SCIENCE, POLITICAL ECONOMY,

AND OF THE

POLITICAL HISTORY OF THE UNITED STATES.

EAST

EAST INDIA COMPANY.

AST INDIA COMPANY, a famous associ- | sort would now appear, did any one then doubt ation, originally established for prosecuting the trade between England and India, which they acquired a right to carry on exclusively. Since the middle of the last century, however, the company's political became of more importance than their commercial concerns. The persevering efforts of the Portuguese to discover a route to India, by sailing round Africa, were crowned with success in 1497. And it may appear singular, that, notwithstanding the exaggerated accounts that had been prevalent in Europe, from the remotest antiquity, with respect to the wealth of India, and the importance to which the commerce with it had raised the Phoenicians and Egyptians in antiquity, the Venetians in the middle ages, and which it was then seen to confer on the Portuguese, the latter should have been allowed to monopolize it for nearly a century after it had been turned into a channel accessible to every nation. But the prejudices by which the people of most European states were actuated in the sixteenth century, and the peculiar circumstances under which they were placed, hindered them from embarking with the alacrity and ardor which might have been expected in this new commercial career. Soon after the Portuguese began to prosecute their discoveries along the coast of Africa, they applied to the pope for a bull, securing to them the exclusive right to and possession of all countries occupied by infidels which the Portuguese either had discovered, or might discover, to the south of Cape Non, on the west coast of Africa, in 27° 54' north latitude; and the pontiff, desirous to display, and at the same time to extend, his power, immediately issued a bull to this effect. Nor, preposterous as a proceeding of this

that the pope had a right to issue such a bull, and that all states and empires were bound to obey it. In consequence, the Portuguese were, for a lengthened period, allowed to prosecute their conquests in India without the interference of any other European power; and it was not till a considerable period after the beginning of the war which the blind and brutal bigotry of Philip II. kindled in the Low Countries, that the Dutch navigators began to display their flag on the eastern ocean, and laid the foundations of their Indian empire.-The desire to comply with the injunctions in the pope's bull, and to avoid coming into collision, first with the Portuguese, and subsequently with the Spaniards, who had conquered Portugal in 1580, seems to have been the principal cause that led the English to make repeated attempts, in the reigns of Henry VIII. and Edward VI., and the early part of the reign of Elizabeth, to discover a route to India by a northwest or northeast passage-channels from which the Portuguese would have had no pretense for excluding them. But these attempts having proved unsuccessful, and the pope's bull having ceased to be of any effect in England, the English merchants and navigators resolved to be no longer deterred by the imaginary rights of the Portuguese from directly entering upon what was then reckoned by far the most lucrative and advantageous branch of commerce. Captain Stephens, who performed the voyage in 1582, was the first Englishman who sailed to India by the cape of Good Hope. The voyage of the famous Sir Francis Drake contributed greatly to diffuse a spirit of naval enterprise, and to render the English better acquainted with the newly opened route to India. But the voyage of the

celebrated Thomas Cavendish was, in the latter | except the first, the same quantity of silver, gold respect, the most important. Cavendish sailed from England in a little squadron, fitted out at his own expense, in July, 1586; and having explored the greater part of the Indian ocean, as far as the Philippine islands, and carefully observed the most important and characteristic features of the people and countries which he visited, returned to England, after a prosperous navigation, in September, 1588. But perhaps nothing contributed so much to inspire the English with a desire to embark in the Indian trade as the captures that were made about this period from the Spaniards. A Portuguese East India ship, or carrack, captured by Sir Francis Drake during his expedition to the coast of Spain, inflamed the cupidity of the merchants by the richness of her cargo, at the same time that the papers found on board gave specific information respecting the traffic in which she had been engaged. A still more important capture of the same sort was made in 1593. An armament, fitted out for the East Indies by Sir Walter Raleigh, and commanded by Sir John Bor roughs, fell in, near the Azores, with the largest of all the Portuguese carracks, a ship of 1,600 tons burden, carrying 700 men and 36 brass cannon; and, after an obstinate conflict, carried her into Dartmouth. She was the largest vessel that had been seen in England; and her cargo, consisting of gold, spices, calicoes, silks, pearls, drugs, porcelain, ivory, etc., excited the ardor of the English to engage in so opulent a commerce. -In consequence of these and other concurring causes, an association was formed in London in 1599 for prosecuting the trade to India. The adventurers applied to the queen for a charter of incorporation, and also for power to exclude all other English subjects, who had not obtained a license from them, from carrying on any species of traffic beyond the cape of Good Hope or the straits of Magellan. As exclusive companies were then very generally looked upon as the best instruments for prosecuting most branches of commerce and industry, the adventurers seem to have had little difficulty in obtaining their charter, which was dated Dec. 31, 1600. The corporation was entitled: The Governor and Company of Merchants of London trading into the East Indies." The first governor (Thomas Smythe, Esq.) and twenty-four directors were nominated in the charter; but power was given to the company to elect a deputy governor, and in future to elect their governor and directors, and such other office bearers as they might think fit to appoint. They were empowered to make by-laws; to inflict punishments, either corporal or pecuniary, provided such punishments were in accordance with the laws of England; to export all sorts of goods free of duty for four years; and to export foreign com or bullion to the amount of £30,000 a year, £6,000 of the same being previously coined at the mint; but they were obliged to import, within six months after the completion of every voyage

and foreign coin that they had exported. The duration of the charter was limited to a period of fifteen years; but with and under the condition that, if it were not found for the public advantage, it might be canceled at any time upon two 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 in course of time 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. It was by such subordinate associations that the trade was conducted during the first thirteen years of the company's existence.-The first expedition to India, the cost of which amounted, ships and cargoes included, to £69,091, consisted of five ships, the largest being 600, and the smaller 130 tons burden. The goods put on board were principally bullion, iron, tin, broadcloths, cutlery, glass, etc. The chief command was intrusted to Capt. James Lancaster, who had already been in India. They set sail from Torbay on Feb. 13, 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 June 5, 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, on 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 Sept. 11, 1603. (Modern Universal History, vol. x., p. 16; Macpherson's Commerce of the European Powers with India, p. 81.)-But notwithstanding the favorable 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 Capt. Best obtained from the court at Delhi several considerable privileges; and among 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 dépôts 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 civilized 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, etc., formed a sort of garrison. Possessing such strongholds, the Europeans were early embold-portation of gold and silver, to the seed-time and ened to act in a manner quite inconsistent with their character as merchants, and but a very short time clapsed before they began to form schemes for monopolizing 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 thirteen 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 thirty months, and sometimes extended to three or four 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 eighteen months or two years; and that it was frequently even six or seven years before the concerns of a single voyage were finally adjusted. (Sketch of the History of the Company, p. 13.) When these circum stances 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. Still it may not 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 authorizing the company to export gold and silver of the value of £30,000 a year. It is true that the charter stipulated that the company should import an equal quantity of gold and silver within six 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 ex

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 labors in the harvest, which is the end of his endeavors, 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 favor, 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. Before this epoch the policy of prohibiting the exportation of bullion had been universally admitted; but it now be gan 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 anything 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 com

celebrated Thomas Cavendish was, in the latter | except the first, the same quantity of silver, gold respect, the most important. Cavendish sailed from England in a little squadron, fitted out at his own expense, in July, 1586; and having explored the greater part of the Indian ocean, as far as the Philippine islands, and carefully observed the most important and characteristic features of the people and countries which he visited, returned to England, after a prosperous navigation, in September, 1588. But perhaps nothing contributed so much to inspire the English with a desire to embark in the Indian arade as the captures that were made about this period from the Spaniards. A Portuguese East India ship, or carrack, captured by Sir Francis Drake during his expedition to the coast of Spain, inflamed the cupidity of the merchants by the richness of her cargo, at the same time that the papers found on board gave specific information respecting the traffic in which she had been engaged. A still more important capture of the same sort was made in 1593. An armament, fitted out for the East Indies by Sir Walter Raleigh, and commanded by Sir John Borroughs, fell in, near the Azores, with the largest of all the Portuguese carracks, a ship of 1,600 tons burden, carrying 700 men and 35 brass cannon; and, after an obstinate conflict, carried her into Dartmouth. She was the largest vessel that had been seen in England; and her cargo, consisting of gold, spices, calicoes, silks, pearls, drugs, porcelain, ivory, etc., excited the ardor of the English to engage in so opulent a commerce. -In consequence of these and other concurring causes, an association was formed in London in 1599 for prosecuting the trade to India. The adventurers applied to the queen for a charter of incorporation, and also for power to exclude all other English subjects, who had not obtained a license from them, from carrying on any species of traffic beyond the cape of Good Hope or the straits of Magellan. As exclusive companies were then very generally looked upon as the best instruments for prosecuting most branches of commerce and industry, the adventurers seem to have had little difficulty in obtaining their charter, which was dated Dec. 31, 1600. The corporation was entitled: "The Governor and Company of Merchants of London trading into the East Indies." The first governor (Thomas Smythe, Esq.) and twenty-four directors were nominated in the charter; but power was given to the company to elect a deputy governor, and in future to elect their governor and directors, and such other office bearers as they might think fit to appoint. They were empowered to make by-laws; to inflict punishments, either corporal or pecuniary, provided such punishments were in accordance with the laws of England; to export all sorts of goods free of duty for four years; and to export foreign com or bullion to the amount of £30,000 a year, £6,000 of the same being previously coined at the mint; but they were obliged to import, within six months after the completion of every voyage

and foreign coin that they had exported. The duration of the charter was limited to a period of fifteen years; but with and under the condition that, if it were not found for the public advantage, it might be canceled at any time upon two 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 in course of time 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. It was by such subordinate associations that the trade was conducted during the first thirteen years of the company's existence.-The first expedition to India, the cost of which amounted, ships and cargoes included, to £69,091, consisted of five ships, the largest being 600, and the smaller 130 tons burden. The goods put on board were principally bullion, iron, tin, broadcloths, cutlery, glass, etc. The chief command was intrusted to Capt. James Lancaster, who had already been in India. They set sail from Torbay on Feb. 13, 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 June 5, 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, on 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 Sept. 11, 1603. (Modern Universal History, vol. x., p. 16; Macpherson's Commerce of the European Powers with India, p. 81.)—But notwithstanding the favorable 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 Capt. Best obtained from the court at Delhi several considerable privileges; and among 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