besides, on this occasion, what was saved from the hasty spoil of the military, was seized by the more methodical extortion of persons acting under the authority, though in contradiction to the express wishes of the directors; the enormous wealth thus amassed, by individuals in India, and ostentatiously displayed at home, whilst it excited general disgust, gave rise to a most exaggerated estimate of the company's finances; the proprietors of India stock became clamorous for an extravagant increase of dividend; the legislature thought it necessary to interfere, and, after fixing the limits of the dividend, decided that the public should participate in the territorial revenues of the company to the amount of £400,000, to be annually paid into the exchequer.

From the termination of the Indian war in 1765, to the peace of Paris in 1783, almost every session of parliament was productive of new laws intended to secure the due appropriation of the company's annual receipts; to simplify their government abroad by establishing a proper subordination between their different presidencies; to guard their commerce against the illicit practices of their own servants; and to check every abuse of authority on the part of those servants by subjecting them to a stricter responsibility, and by rendering them amenable to the courts at home as well as to the tribunals specifically appointed for the administration of justice in India. These numerous laws and provisions, after successive emendations, were digested by Mr. Fox, in 1783, into one code, which was substantially adopted (except as to the mode of vesting the ultimate power of controul) by Mr. Pitt in 1784, and still farther improved in 1793, &c. so that it may be presumed that the strange and anomalous government of Hindostan, as now administered, is no longer hostile to the happiness of the governed. That the condition of the people has been greatly meliorated is, indeed, proved by the increase of the Indian revenue to a degree which cannot be solely referred to the excessive growth of our dominion. It is true that the two wars with Tippoo Saib, which ended in 1792 and in 1799, and the reduction of the Mahratta power in 1805, have conveyed to the company a vast extent of country, and, consequently, of wealth; but it is no less true that the progressive population and the growing industry of those provinces, which have constantly derived protection from the British government, have contributed much more than our conquests to that great fund which has, of late years, furnished material assistance to the general treasury of the empire. To the improved state of these provinces the company has also been chiefly indebted for the support of a trade the profits of which have been taxed to furnish an annual interest on a capital increased, between 1785 and 1793, to nearly double its original amount, and to afford this in

terest

terest during a war of unexampled malignity and particularly directed to the subversion of commerce.

We must now, in pity to our readers, bring to a close our very imperfect historical sketch, and, passing over the annals of the French, Spanish, Danish, Swedish, and Ostend companies, proceed to Mr. Macpherson's Review of the Arguments for and against a Company,' &c. But here, again, we shall omit our author's refutation of the objections adduced against the utility of the India trade in general, and also his controversy with De Witt, with the Abbé Morellet, and with several minor advocates of commercial liberty, and confine ourselves to the reasoning with which he controverts the opinions entertained on this subject by the celebrated author of the Wealth of Nations.'

Our readers will probably recollect that Dr. Smith, after endeavouring to expose the general impolicy of monopolies, whether claimed by one nation against other nations, or exercised against a part of its own subjects, has particularly pointed out the exclusive privilege of the English East India Company as a glaring instance of such impolicy, and has pressed for its early abolition: and farther, that he has described the same company as bad sovereigns and bad merchants, whose territorial possessions ought, therefore, to be transferred from them to the state. It is on these two points that Mr. Macpherson presumes to enter the lists with the great master of political economy.

The first opinion is conveyed by Dr. Smith in the following words.

"Except in Portugal, and within these few years in France, the trade to the East Indies has in every European country been subjected to an exclusive company. Monopolies of this kind are properly established against the very nation which erects them. The greater part of that nation are thereby not only excluded from a trade to which it might be convenient for them to turn some part of their stock, but are obliged to buy the goods, which that trade deals in, somewhat dearer than if it was open and free to all their countrymen. Since the establishment of the English East India Company, for example, the other inhabitants of England, over and above being excluded from the trade, must have paid in the price of the East India goods, which they have consumed, not only for all the extraordinary profits which the company may have made upon those goods in consequence of their monopoly, but for all the extraordinary waste, which the fraud and abuse, inseparable from the management of the affairs of so great a company must necessarily have occasioned.”—Vol. II. p. 467, ed. 1793. See also Vol. III. p. 144, where the same assertions are repeated.'

The objections of Mr. Macpherson to these propositions may be thus exhibited.

There is here, in the very outset, a mistake which it is necessary

to

to notice, because Dr. Smith has, in many other places, insisted on the example of the Portuguese as a proof that the general practice of carrying on the India trade through the medium of a joint stock company is unnecessary. The truth is, that the Portuguese trade with India was a monopoly in the hands of the king and never was open to all his subjects.

The next proposition is little more than a truism, since it is obvious that every exclusive privilege must exclude, from a participation in it, all persons but those on whom it is conferred; and that such a privilege, if conferred as a source of mercantile profit, must be intended to operate at the expense of the buyers. But this is not, in Dr. Smith's opinion, a conclusive objection against monopolies, since he admits that they afford, in some instances, as in the case of authors of the discoveries of useful arts, and of banking insurance companies, the best mode of remuneration. He admits, also, that in the case of any new trade undertaken by a company, the easiest and most natural way in which the state can recompense such an association for a dangerous and expensive experiment is by a temporary monopoly; and he only contends that, at the expiration of the prescribed period, such monopoly ought to determine. Now the charter of the East India Company has never been granted by parliament but for a limited time, and, at each renewal, has been purchased from the public at a price which the legislature has considered as adequate. It is therefore incumbent upon those who censure these renewals either to prove, generally, that a source of profit given as the most natural equivalent for the possible risks of a new trade cannot afterwards be continued to the possessors on any terms of barter; or, specially, that in this parti cular instance successive ministers and parliaments have, during nearly a century, always made a most improvident bargain for the community.

With respect to the extraordinary profits' of the company, if this term be meant to express only those gains which must have been contemplated by the legislature in making the periodical bargains above alluded to, no justification is necessary :-if it be meant to insinuate that these gains are also inordinate, (an accusation which is elsewhere directly stated by Dr. Smith,)

It may be answered,' (says Mr. Macpherson,) that the company are obliged by law to expose all their goods to public sale, and in lots within the reach of every dealer in moderate circumstances, and that none of them are ever bought in on their own account; so that the buyers have them at prices of their own making. It is also a fact well worthy of serious consideration, that Oriental goods, imported by this monopolizing company, have, for thirty or forty years past, been sold for less nominal money than they were a hundred years ago; whereas

all

all other goods, not excepting the produce of the West India islands, the trade of which is entirely open to all British subjects, have advanced to double, triple, or quadruple prices.'

Lastly, as to the extraordinary waste' which is here imputed to the company's servants, it must be conceded that several instances of flagrant mismanagement in India have been formerly brought to light.

'During the unsettled period which preceded the acquisition of the Dewannee, (says Mr. Macpherson,) many of the company's servants, and also many British subjects not in their service, were guilty of acts of oppression, violence, and extortion, which must have brought an odium on the national character, if subsequent regulations, strictly enforced, had not convinced the natives that such outrages were prohibited, and would, in future, be effectually prevented by the company." -p. 190.

But from many such instances occurring during the temporary anarchy which followed a sanguinary war, it is not fair to infer the general depravity of a whole community, or to conclude that 'fraud and abuse are inseparable from the management of the affairs of so great a company. If the trade to India were unrestricted, the number of agents employed there would not, most probably, be diminished, neither would the chances of their integrity be much improved. The liberal education of all the candidates for the company's civil service, the competent provision assigned to them on their arrival, and the high prospects offered to their ambition, afford, it should seem, the best possible security for the honourable discharge of their duty; and the great expense thus incurred in cultivating talent or rewarding merit is, perhaps, not less efficacious in checking extraordinary waste than the most economical expedient which the ingenuity of private traders could devise.

So much for the comprehensive answer to the general charge; but in replying to such an antagonist as Dr. Smith it is necessary to enter upon a fuller and more particular discussion.

It being assumed, on one hand, that monopolies are, in general, mischievous and useless infringements on the freedom of commerce, and, on the other hand, that they are, notwithstanding, admissible in particular cases, the point at issue is, whether the exclusive right of trading to India, exercised, as it now is, ought to be condemned under the rule or justified under the exceptions. And the latter proposition is affirmed by Mr. Macpherson partly ou the ground of experience and partly by arguments deduced from the peculiar nature of the trade.

The experiment of a free and open trade with India, has been twice tried in this country; first, after the triumph of the republicans over Charles I. and secondly, soon after the revolution effected

by King William. Both trials, therefore, were begun under the most favourable circumstances, and prosecuted with all the advantage of popular opinion. Both were relinquished with the greatest reluctance; and the latter, after much litigation in parliament, and a long and obstinate controversy through the medium of the press. The period of 1698, indeed, had much resemblance to the present day;-a frightful war; a depreciated currency; a spirit of gambling speculation in India, as wild as that of our modern adventurers in South America; numerous bankruptcies, and a failing credit. It may perhaps be objected that the distressing glut of Indian produce, was a transitory evil which, if the free trade had been continued, must have cured itself, and that to revive the joint stock company was an act of gross impolicy, and at variance with the true principles of commerce. To this, however, it is a fair answer that, though our ancestors may have been less wise than ourselves, and therefore less confident in this remedy, they could not be quite ignorant of its being within their reach. They could not but know that a great redundance of any article is usually followed by a proportionate scarcity, which ultimately re-establishes the demand and replaces commerce on its proper footing; but they dreaded a series of these alternations, which they considered, after much inquiry, as inseparable from an open trade, and only to be avoided by the united councils of a company. They had personally endured the misery of a monopoly and the inconveniences of a free trade, and it was after a fair comparison of both that they made their decision. Thus far these two examples, which occur at different periods of our history, are of some value; and as they are the only examples to which we can refer, the appeal to experience must end with them. It therefore now becomes necessary to examine, the nature of our traffic with India, and the probable means of extending it by a different and improved management.

The Hindoo, (says Mr. Macpherson,) born and desiring to pass his life in the same country where his ancestors, through a long succession of ages, were born and passed their lives; whose food is rice, whose drink is water or milk, to whom wine or strong drink is an object of abomination; and who, if he strictly acts up to his religious principles, would sooner lay down his own life than put any living creature to death, or permit a morsel of animal food to enter his mouth; whose warm climate renders any clothing, beyond what decency requires, intolerable, and whose light clothing is made by himself and his family from the cotton produced in his own fertile fields; whose customs and religion, to which he adheres with the most inflexible constancy, render utterly inadmissible many articles of enjoyment and comfort, which our habits have rendered almost necessary to our existence, can never have any desire to acquire the produce or manufactures of Europe. Hence it is evident that the exportation of European goods of any kind

must