IT is a prominent feature in our national character, that the most heart-stirring interests of the day soon slide away into cold commercial problems. When military difficulties arise, few other nations, probably, deal with them with equal energy. When political questions present themselves in turn, few nations address themselves to their solution with wider intellectual grasp. But before the enthusiasm has subsided—and while there is still need of vigorous military administration, and of acute political reasoning—the subject invariably begins to develop an new phasis. The British people are still, undoubtedly, resolved to avenge the wrongs of their countrymen. but there is no denying that they soon indicate a tendency to consult their pockets as well as their sentiments. They will put down insurrection; they will avenge murder; they will reorganize Government; but they will also get something tangible for their pains.

Unless we are widely mistaken, before the questions of the double Government and of the local administration of India shall be finally set at rest, a commercial agitation will arise. We are already conscious that we have widely misgoverned that country; but we are pre-eminently conscious that we have not developed its marketable resources. Of all the empires which have possessed India in different ages of the world, none have possessed it as ourselves. We alone have organized it, and we alone have integrated it into the conquering empire. We have done with India very much what Rome did with Gaul in the age of the Cæsars. We have made it, not a propugnaculum imperii, but a pars imperii. Portugal, France, and Holland, effected no such result. As the conquering race of India in this age of the world, [510/511] we stand, therefore, on a different footing from any of our predecessors in that position.

It is on this account that our rule in India must still be regarded as an experimental rule, and our Indian future as peculiarly an indeterminate figure. We come into the possession of India, applying it to principles of government that are without precedent among other conquering States; and which, in their present degree of application, are without precedent even among ourselves. There is no doubt, at the same time, that much has happened which is calculated to clear away our illusions and to expand our knowledge. Since the age of Clive and Hastings the preposterous notions of Indian wealth, which were then common, have been discareded as fabulous and chimerical. We have long learnt that India, after all, is a poor country: or, at least, that it is a country much less wealthy than our own. A population of 160,000,000 afford the State a revenue of less than thirty millions. The immense fortunes which were formerly amassed there, during a few years, were fortunes amassed by every species of extortion, and often by open violence. The fortunes which are amassed there at this day—less rapid and less considerable—still chiefly arise from the factitious superiority of the few. English officials are not paid higher salaries, nor are English barristers entitled to higher fees than they would receive at home, because India is a richer country than their own, but because they would not go to Calcutta and Bombay without greater incentives than lie before them in London. The wealth of the dominant race in India is therefore no index of the wealth of the subject race. Yet, although, these illusions are now dispelled, there is no doubt that the wealth of our Indian possessions remains in a great degree undeveloped.

With these views, we propose to forestall the probable diversion of the public mind to the questions of Indian commerce. In order to deal with this subject in its fullest comprehension, it is necessary to glance at the relation borne by India to Europe in all ages of which we have any record. It is important to observe what that relation has been, under successive changes of empire in Europe, under changes of civilization, of manners, of means of intercourse, of navigation, and of military rule.

The existence of India, then, has been to Europe, in all such ages, a great commercial fact. While the political relations between Europe and India have widely varied during almost every century, and have often been quite extinguished, commercial relations have been permanent. The products which once supplied Babylon and Rome now supply London and Paris. All this, of course, is the mere result of the difference between the [511/512] permanent laws of Nature and the temporary character of political systems. But while civilized Europe has always looked upon India as a source of trade, both in the luxuries and in the necessaries of life, her commercial relations in different periods with that country are marked by two cardinal distinctions. In the first place, under the Roman Empire, the trade maintained between Europe and India was chiefly indirect; whereas, in the modern age, it has been chiefly direct. In other words, Rome did not maintain the carrying trade, even by land, between Europe and India, which Venice, Holland, and Great Britain have successively usurped by sea. In the second place, it was the genius of Roman policy to subordinate wealth to arms—to exalt dominion above commerce. On the other hand, it has been the genius of modern States to look to commerce as the end of their territorial acquisitions.

The poets will aptly illustrate our meaning. If we contrast the language of Virgil, in the age of Augustus, with the language of Dryden, in the age of Louis XIV. and Charles II., we shall trace just this difference between the Indian policy of ancient and of modern Europe. The eulogistic address of Virgil to the CŠsar of his day—

'Imbellem avertis Romanis arcibus Indum,'

implies that India was rather an empire to be subjugated for territorial security, than an empire to be traded with — as by the Venetians and the Dutch—and still less to be organized and civilized, as is now the experimental policy of our own country-men. It exactly illustrates the difference which had crept into the Indian policy of Europe during seventeen centuries, to compare this view with Dryden's description of the Indian commerce of the Dutch in 1666: —

'The sun but seemed the labourer of their year;
Each waxing moon supplied her watery store,
To swell those tides which from the Line did bear
Their brim-full vessels to the Belgian shore.'

A view of the commerce of ancient India has its practical importance, inasmuch as it bears directly upon the natural properties and products of that country in our own day. It will be inferred from what we have just said, that the most permanent feature of Indian history rests in the progressive development of its commerce. This development, more or less continuous as between India and the West, has proceeded for some three thousand years. We need hardly therefore apprehend that we have conducted that development to its utmost limit. To consult the interests of Anglo-Indian commerce at this day, [512/513] we ought to possess some notion of what the trade of India, both external and domestic, has been from the earliest periods of which we have any certain record. We here therefore propose to glance at the whole subject.

The Indians themselves never were an active or energetic nation. The introduction of Mahometanism made no appreciable difference in their commercial character; for the enterprise and mental activity commonly displayed by the advocates of that faith were cancelled by their religious antipathy to trade. Hindooism, which was venerable before Mahometanism arose, seems not unlikely to outlive Mahometinism in turn. At any rate our notions of Indian trade are connected with the Hindoos, as well after as before the introduction of the Crescent. This want of national enterprise is the more remarkable, since Hindoo fables abound with the most romantic exploits. Yet even in such ancient works as the Periplus, the Ramayana, and the Sacontala, it is clear that the Hindoos were the same dull, passive race that we know them to have been in later ages. They were cut off by a chain of nearly impassable mountains from communion with the North. They were very indifferent mariners, and their only notion of the sea was the Bay of Bengal, which we find perpetually used by them as an interchangeable term for the whole ocean. So strongly was this passive character innate among them, that it was maintained in spite of the encouragement to commerce which their religion afforded. In this respect they held a footing of advantage, not only over the Mahometans, but over the Egyptians of an earlier age, who regarded the sea as impure; for the Institutes of Menu indirectly sanction commercial interchange.

The backwardness of the Hindoos as a trading nation, in all ages, arose also from another equally permanent cause. Indo-European commerce has always been maintained by far more inconsequence of the advantage derived from it by Europe than of the advantage derived from it by India. The western nations, therefore, have been actuated by much stronger incentives to seek Indian commerce than the Hindoos to seek European commerce. The nation which was least in want, or was least avaricious, was naturally least active. The negative attitude of the Hindoos towards Europe is therefore the result of two principal causes. They are an inert and unambitious race, and they have had less, as they conceive, to gain from Europe than Europe has had to gain from India.

But we must not suppose that the Hindoos have been equally unenterprising towards the Asiatic nations with whom they had more direct and obvious commercial interests. In their most [513/514] ancient literature we find recognitions even of a certain maritime traffic. Sir William Jones has brought to light from the Hitopadesa, the very acute and original remark, that 'a ship is a necessary requisite for enabling a man to traverse the ocean.' This inculcation reads as though it were the postulate of an argument in favour of commerce, to be built up with mathematical severity. In the Ramayana, scholars in Oriental literature read also of 'merchants who traffic beyond sea, and bring presents to the king.' From these circumstances it is clear that even maritime international commerce was not unknown among the Hindoos, before Western civilization had extended to their shores.

Nevertheless the Hindoos, viewed collectively as a nation, strangely appeared to repudiate commerce. Trade, where it was conducted by them, fell into the hands of the few. This few almost became a caste. The Hindoo merchants were called 'Banians.' They settled themselves at different marts of trade, indifferently within and without the confines of their own nation. The profession descended from father to son, and from son to grandson, until the Banians acquired a hereditary character, thought always liable to be interfused by fresh mercantile speculators. Heeren quotes the statement of Cloupet, the French traveller in Arabia, that the commerce of Arabia Felix is at this day wholly in the hands of the Banians of Guzerat, who had been settled there during some generations. It is also estimated that there are now 300 Banians at Bokhara. It would seem therefore, that the machinery of purely Oriental trade, as maintained by the Hindoos, has undergone little change during many ages.

China was the principal country with which ancient India appears to have maintained commercial relations. Commerce was maintained by the overland route through Bactria, and by sea from the mouth of the Ganges to Limyrica. The former, by which the bulk of early Indian trade probably passed, is presumed to be the same route with that which is traversed at this day by a portion of the Hindoo trading community of India.

Hereen asserts that the cotton garments described in ancient Indian records are identical with the cotton garments worn by Hindoos now. It appears that the Cashmere shawls, always in much favour among English ladies, are identical with the Cashmere shawls worn no doubt by the fine ladies of Babylon nearly three thousand years ago! 'What,' asks Heeren, 'can be the “woolen stuffs” described by Ezekiel the prophet—and what 'the coloured cloths and rich apparel' brought to Tyre and Babylon from distant countries (by which he understands India) — but modern Cashmere shawls?'

The truth is, Eastern manufactures are in nearly the same [514/515] condition now as in the Babylonian age, and the great products are in all respects the same now as then.

In the remote times of which we speak, the carrying-trade between India and the West was maintained jointly by the Tyrians and the Arabs, in the instances at least in which it was conveyed by the ports of the Read Sea. At those ports the trade of the Arabs ceased; and the conveyance of Indian goods to the few civilized States of the Mediterranean was continued by the Tyrians. But the Asiatic carrying-trade gradually expired. The Greeks — after the extinction of their idependence the agents of the world — became settlers in Egypt. Established midway, or nearly so, between Europe and India, they became the principal carriers, both in the Red Sea and in the Mediterranean. Another change occurred; and the Greek traffic, impaired in the Asiatic waters, became nearly extinct in the European. When the monopoly of the Egyptian Greeks declined, commerce found its way to the Mediterranean coasts by the double channel of the Red Sea and the Persian Gulf. The trade by the latter route afterwards went up the Euphrates and the Tigris, passing by Aleppo and Antioch through the dominion of ruined Tyre. Hence arose the frequency of European adventure on these rivers in the middle ages, and hence Aleppo has always maintained its commercial importance. So widely had this adventure penetrated those times, that in the sixteenth, if not in the fifteenth, century, a company of British merchants had established themselves on the Euphrates. The goods, however, thus brought during the middle ages to the Mediterranean shores by a medley of traders formed of all nations, were shipped and transmitted through Europe by the Venetians and the Genoese. The devolution of the Indo-European carrying trade into their hands forms the most fixed feature of this commerce in the middle age. In Northern Europe the Hanse Towns aided in the dissemination of Eastern products. Much of this valuable trade sprang from the Indian Archipelago, as well as from the Indian Peninsula. So little acquainted were the European nations generally with the countries that produced the luxuries of life, that the islands of the Archipelago appear, up to the sixteenth century, to have been scarcely known by name.

But with the end of the fifteenth century another and a greater change occurred. The discovery of Vasco di Gama in 1486 changed the fate of the commercial world. The Cape of Good Hope, once discovered and possessed by Portuguese sailors, and the Cape once doubled by their ships, Eastern trade passed by another route. In 1512 the first Portuguese ship was laded with spices such as had never before passed through the plains [515/516] and estuaries of Western Asia. Venetian commerce was threatened with annihilation. The Hanse Towns apprehended nearly an equal calamity. Portugal threatened to monopolize the carrying-trade between the Eastern and the Western world.

But it must not be supposed that this great discovery immediately effected the consequences that it threatened. Few governments appear to have been less aware how to seize a great opportunity than the Portuguese at the beginning of the sixteenth century. It must be remembered, at the same time, that they entered on this great enterprise when the arts of government and navigation were a century behind their condition in the era in which the Dutch possessed themselves of the same empire. But it was a fatal error in Portuguese policy, that the Government, instead of opening the Indian trade to the nation, held it in their own hands. At the period of its origin it is true that there existed no mercantile navy in Europe capable of navigating the Indian seas. For the moment, therefore, it was necessary that the King's ships should carry Indian goods. But the Crown, instead of stimulating popular enterprise, repressed it. When the ship-building had reached such a development that the royal dockyards launched vessels of war of twelve hundred tons, there could be no vital obstacle to the creation of an adequate mercantile navy by the Portuguese public.

The Portuguese principles of intercourse with India were marked by another leading error. They gave more prominence to dominion by force of arms and to religious conversion than to commerce. Of their efforts towards the establishment of Christianity we should speak with every reverence, had they not marred them by a fanaticism, and, indeed, a persecuting spirit, which degraded their religious profession. No permanent hold was likely to be secured to the Christian faith by a process so antagonistic to its precepts. Yet in spite of this impolicy, Mr. Crawfurd (long British resident at Java) assures us, that 'more monuments of the arts of the Portuguese, of their religion, and of their language, exist in the Archipelago than of those who succeeded them, whose authority has been twice as long established, and who are at this moment in the actual exercise of it.' It was but the natural result of this sort of dominion, in which the civilizing influence even of a distorted form of true religions cancelled the barbarizing tendency of a military dominion in that age, that more should be effected for civilization than for commerce.

The Portuguese governed their Eastern colonies under singularly conflicting notions of that commercial policy which it would be an anachronism to term political economy. While [516/517] they were so impolite as to discourage the mercantile marine of their own country, they never attempted, like their successors, to limit or regulate the growth of the favourite articles of commerce: —

'It happened, therefore,' writes Mr. Crawfurd, 'from the degree of freedom which prevailed, that their commercial establishments prospered exceedingly, notwithstanding the vices and violence of their administration. Malacca, famed as a commercial emporium under its native sovereigns, lost none of its reputation under the Portuguese. An active and unlimited intercourse existed between the Indian islands and China, and between them and Japan, of a beneficial nature unknown to their successors.'

But while this prosperity prevailed in the East Indies, Europe gained little benefit. Eastern luxuries, indeed, were more scarce than they had been before the discovery of the Cape. The Portuguese wars in the Moluccas diminished the growth of spices; the ancient carriers of the trade by the Arabian and Persian Gulfs were seized and blockaded by a European marine, virtually a fleet of pirates. The military navy of the Portuguese did not carry one-third of the Indian goods which had been brought into Europe in the previous age by the Venetians and the Genoese. The discovery of the passage by the Cape, during nearly the whole of the sixteenth century, was therefore not simply a calamity to Genoa and Venice, but an evil to the rest of Europe.

But the seventeenth century followed; and with it the Eastern enterprise of Holland replaced that of Portugal. The arts of commerce and navigation had meanwhile expanded. Dutch trade with the Indies thus widely differed from Portuguese, that it was the trade, not of the State, but (theoretically at least) of individuals. But the trade of individuals soon passed into the trade of commercial monopolies. Thus, indeed, was then inevitable. There was little individual wealth. There was even less organized trade. Barings and Hopes were only to be made up by aggregating individual speculators into companies. No extensive trade, therefore, could have been carried on between Holland and the East Indies except by means of monopolies. Indeed, the adaptation of monopolies to those times, and their impolicy in our own, is but one of the many illustrations of the reason, which has been often asked, why political economy was not known before the latter part of the eighteenth century. The truth is that, although the wealth of the Archipelago even under the Portuguese rule was fully adapted to the liberality of its commercial principles, the corresponding wealth of Europe was wholly unequal to reciprocate the benefit of such principles. [517/518] Monopolies became, in the sixteenth century, the machinery of individuals for the development of national interests.

But these monopolies of Indian trade were chiefly mere speculations. This was common both to British and Dutch monopolies. Of one of them we are told, that it was formed of 'dukes, earls, judges, knights, the king's counsel, privy councillors, countesses, ladies, doctors of divinity, doctors of physic, widows, and virgins!' It was simple gambling. The peers and the doctors, the old ladies and the young ladies, put their money into East India trade, as they would have put it into a lottery. A clear indication that the speculation was of this character is to be found in the sums for which each speculated. For the first English voyage to India, Crawfurd tells us that the whole number of subscribers was 237, of whom 212 were for sums under 300l. In the second joint-stock company of the English, it appears that the whole subscribers were 954, of whom only 338 were merchants.

The development of the Companies into quasi-sovereign societies arose from the exact contrast between the policy of the Dutch and English Governments on the one hand, and the Portuguese Government on the other. The Court of Lisbon, as we have seen, were both the rulers and the speculators in the East. The British and Dutch Governments, on the other hand, in abnegating all commercial enterprise, abnegated also all territorial and political pretensions. Now trade could only be maintained by means of local factories: the factories could not be made secure without forts: the forts presupposed other means of military defence, the commercial monopolies, thus established and secured, provoked native jealousy: this conflict, both among the Dutch and the English settlements, was usually favourable to the intruders: the territory surrounding the forts was consequently evacuated: the settlement grew into a district: the district grew into a province: and finally with ourselves, on the Indian mainland, the province expanded into an empire.

The Dutch and British East India Companies were both developed by these means. A vast difference is to be traced in the extent to which the two Companies carried their respective power. And there is a corresponding difference between the vigour of Dutch rule a century after its establishment, and the vigour of our own rule at this day, a century after the battle of Plassy. But the introduction of Dutch rule in the East Indies, during the seventeenth century, marks two novel principles of European supremacy in the East. The first rests in the subordination of territorial empire to commercial wealth: the second [518/519] represents the application to India of the great principle of commercial monopolies which is now fading away from the face of the globe.

The Dutch and English, in this manner, soon lost the simple character of the Eastern traders, in which they first navigated the Indian seas. Originally, indeed, they stood in honourable contrast to the Spaniards and Portuguese. The acts of piracy which frequently stained the annals of the latter nations in these seas, rarely attached to the history of the former. But when the Portuguese rule declined, the Dutch usurped their place, and, to a certain extent, imitated their violence.

The cessation of the Portuguese rule thus developed what we may term 'coercive monopolies' Once established in factories, and defended by forts, the Companies sought to carry out, as against the Indians, the monopoly which they enjoyed, as against their own countrymen. Occasionally, therefore, they built forts as much to overawe the native governments as to protect their commercial establishments. Whenever a company obtained a preponderance of power, it was their first care to establish a commercial treaty with the native Government. The means employed by the agents of the Companies for this purpose were sometimes surreptitious, sometimes violent. Anyhow, it is to be apprehended that law and justice were not greatly regarded. The object of these treaties has been aptly described, 'to exclude all rivalry and competition, to obtain the staple products of industry at their own prices, and to possess the exclusive monopoly of the native market for their own imagined advantage. Every attempt on the part of the natives to evade the flagrant injustice, as well as absurdity, which an adherence to them implied, was construed by the traders of Europe, exercising sovereign authority, as a perfidious (?) violation of their rights (?), and accordingly punished to the utmost of their power.' Hence, as well as from the innate jealousies of the native Governments, arose the continual wars between the settlers and the original inhabitants. This sketch describes the growth of the European colonies — and especially the Dutch — in the Archipelago, more directly than on the mainland.

The most extraordinary result of such relations between the European and Asiatic population was to introduce serfdom into the East Indies. The bloodshed incident to these wars had so depopulated the districts in proximity to European settlements, that the land could no longer be maintained in cultivation under the existing laws.

'The resource,' writes Crawfurd, 'was to convert the population of each particular country into prŠdial slaves, and to compel them, by [519/520] 'arbitrary edicts, to cultivate the most favoured products of their soil, and to deliver them exclusively to the monopolists at such prices as the latter might be pleased to grant. It was on this principle, equally iniquitous and unprofitable, that the English have obtained their supplies of pepper, and the Dutch their pepper, their coffee, their cloves, and their nutmegs.'

It is difficult to conceive any rule more alien from that which we now maintain in continental India than what existed some two centuries ago in the Archipelago. During the mutinies — which we are now happily surmounting — we have had an opportunity, such as no other nation has perhaps ever obtained, of testing the appreciation of our rule by the populations which we had subjected. To the mass of the Indian people, unacquainted with our home resources, India must then have seemed lost to the British Empire; yet even in the worst districts of the Bengal Presidency, scarcely a single peasant avowed himself on the side of the mutineers, even when those mutineers marched in triumph from province to province. The population knew that the British dominion, whatever the imperfections it possessed, was the guardian of their rights, and the guarantee of their domestic peace.

But two centuries ago the European name was execrated thoughout the Indies. The odious rapacity of those who bore it had engendered a universal rancour and malignity on the part of the governed races.

Nor was this all. The Dutch were hated by the English, and the English were hated by the Dutch, as cordially as Dutch and English were detested in common by the Asiatics. They taduced each other, arresting their hatred for the moment when it became their united interest to traduce the Spaniards and Portuguese. The Asiatic Governments, which were still powerful enough to resist the European settlers, renounced intercourse with them. Two of the most trusted contemporary authorities on this head are Captain Hamilton, who wrote a New Account of the East Indies, and Captain Beeckman, who wrote his Voyage to Borneo. Both these works date from the reign of Anne; and they afford a striking instance at once of the immoral cupidity of bodies of armed merchants, conquering for lucre, and of the intense detestation in which the European name was then held in the Eastern seas.

Such is a picture of European rule in the East Indies two centuries after its foundation — the saturnalia of conquering merchants! It will have been seen how broadly the Anglo-Dutch rule differed from the ancient, and even from the Portuguese, in respect of the predominance assigned to commerce. In point of [520/521] violence, little distinction appears to be found between the different races of usurping settlers, notwithstanding Mr Crawfurd's somewhat paradoxical assertion relating to the peculiar traces of Portuguese civilization in the Archipelago. The lust of trade, in the one instance, was as cruel and as brutalizing as the lust of territory in the other.

But it is time that we should refer to dates with more precision. Let us glance at the manner in which India became distinctively associated with the name of England.

We have fixed the discovery of the Cape in 1486, by Vasco di Gama, as the dawn of modern Italian trade, distinguished from the mediŠval trade maintained by Venice, Genoa, and the Hanseatic League. Twelve years afterwards, in 1498, Vasco di Gama reached Calicut. The Portuguese Empire dates from the occupation of Goa by Albuquerque, in 1500. This empire gained recognition in Europe chiefly in virtue of a Papal Bull — then of equal validity throughout Western Europe — allotting to the Court of Lisbon the whole empire of the East. It is not surprising that a dominion attained under such a license was marked by a spirit of fanatical proselytism. The career of Albuquerque, in cannot be denied, bore some relation to the career of Clive, two centuries and a half later. It is said that with five hundred Europeans he defeated the King of Ormuz at the head of thirty thousand. At any rate, the disparity in number was probably immense. He next conquered Malacca, raised Portuguese fortresses along the whole coast line of his possessions, and established a firm dominion in the East. His political talents were even more remarkable in that age than his military exploits. He was among the first to perceive that wealth, and even the state revenue, were to be gained by the freedom of trade; and it may be said that he anticipated in Asia early in the sixteenth century what the most enlightened states of Europe have not perceived until the nineteenth. The policy of Albuquerque was subverted by the hideous reign of grinding monopolies, and was first faintly restored by the abolition of the exclusive trading licenses of our own East India Company in 1815.

Albuquerque, then, was the founder not only of the Portuguese, but of the EUROPEAN Empire in India, and the originator of the commercial principles which we now maintain in those territories. The conquests which followed his reign were rapid. The coast of Ceylon had been occupied by the Portuguese in 1505. Malacca was taken in 1512. In 1516, Portuguese intercourse commenced in China. In 1534, a Portuguese settlement was formed at Macao. The Dutch trade commenced about 1590. Holland occupied the Mauritius in 1598. She wrenched Malacca [521/522] from Portugal in 1605. She attempted to open a trade with China in 1622. She took Trincomalee in 1632. Meanwhile, the Portuguese dominion had declined. The Embassy sent from Lisbon to Japan failed in 1640, and Portugal was expelled from Ceylon in 1656, during the reign of Cromwell. Thus, in the middle of the seventeenth century the Dutch were the only important competitors of the English in point of trade.

The English trade with the East Indies originated in the Levant; before Venice had been robbed by Portugal. The great Republic on the Adriatic had been in the habit of sending annually a single ship to these coasts laden with Indian stores, for which the Venetian merchants charged exorbitant prices. Such a monopoly roused the jealous energy of our own people under Henry VIII. This spirit was directed to the formation of a trade in the Levant with India, without the intervention of the Venetians. Hence arose, under the Tudors, our famous LEVANT TRADE. But the established passage of the Portuguese by the Cape, and their tardiness in availing themselves of the carrying trade, which the formation of a mercantile navy would have secured them, diverted British enterprise to that quarter before the end of the reign of Elizabeth. Singularly enough, instead of at first following the beaten track of the Portuguese, it was attempted to discover a new route, either by the north-east or north-west. Captain Forbisher, in command of two vessels, made three unsuccessful voyages with this view. His first was made in 1576. The aim of these expeditions, to save the circuits of Cape Horn or the Cape of Good Hope, was similar to that in which Franklin so lately perished. Sir Francis Drake, on his return from the circumnavigation of the globe, pronounced a passage by the arctic circle impracticable. This advice determined the English to follow in the Portuguese track. Hence, with the dawn of the seventeenth age arose the British trade with India by the Cape, which was destined to surpass the trade of the rest of the world.

The first English 'East India Company' was founded in 1600. Cavendish, a young gentleman who had wasted his property in England, had shortly before sailed to the Indies. The account which he gave the merchants of London on his return determined our Indian future. A great body of them applied to the Queen fro a charter or incorporation, defining the principles on which they should trade to the East. In December, 1600, the petitioners were accordingly incorporated by Elizabeth under the designation of 'The Governor and Company of Merchants of London trading to the East Indies.'

It may be interesting to glance, while Indian Government is a [522/523] moot point of legislation, at the original constitution of this Company. The shares were fixed at 50l each; the whole capital amounted to 369,891l, 5s. This, indeed, was no small sum for a first adventure in such an age. In 1676, the profits were added to the stock, and the capital was thereby doubled. The precedent with regard to the direction weighs evenly on either side of the present dispute between the Company and the Crown. Elizabeth, on the formation of the Company, herself nominated the twenty-four directors, and also the Governor, who appears to have made a twenty-fifth in the directory. But leave was given in the charter to the Company, or proprietors, to elect most of their directors in future.

The concessions of this charter were: —

'Freely to traffic and use the trade of merchandise by sea, in and by such ways and passages already discovered, or hereafter to be discovered, as they should esteem and take to be fittest, unto and from the East Indies, unto the countries and ports of Asia and Africa, and unto and from all the islands, ports, havens, cities, creeks, rivers, and places of Asia, Africa, and America, or any of them beyond the Cape of Good Hope, to the Strait of Magellan, where any trade or traffic may be used, to or from every of them, in such order, manner, form, liberty, and condition, as they themselves should, from time to time, agree upon and determine.'

Besides this quaint designation of their commercial privileges, certain political rights were vested in the Company. They were allowed to make bye-laws, and to inflict both fine and imprisonment, and even corporal punishment; providing that they did not transgress the existing laws of their own country.

The English East India Company was quickly brought into collision with both Dutch and Portuguese rivals. Actions were not infrequent between their armed mercantile vessels. But the English Company, if duly supported, would have triumphed over every obstacle. Sir Henry Middleton defeated a very superior Portuguese fleet; and Sir Thomas Roe, soon afterwards sent as ambassador to the Court of Delhi, aided in the extensions in which the rival Companies were involved, lay in either case to the home Government. But James I. accepted the bribes of the merchants of Amsterdam, and abandoned the interests of the English Company.

A treaty was at length concluded between the British and Dutch East India Companies towards the end of this reign. But it was no sooner signed than it was violated by the Dutch in every particular. All the English Company's agents in Amboyna were seized, tortured, and eventually murdered by them, on a [523/524] groundless pretext that they had stimulated an insurrection of the natives against Holland. Neither the First James nor the First Charles avenged these iniquities. The Dutch Company, supported by the Dutch State, soon grew too powerful for the English Company, unsupported by the English State. Half a century after the formation of the English Company in 1600, our rule in the East Indies seemed about to expire.

But at this critical moment, a change happily took place in the government of England. Cromwell had acceded to the supreme power. He was resolved to pursue war in the interest of British commerce. He allied himself with Mazarin, and declared war against the Dutch. The victorious terms which he enforced upon them in the treaty of the 5th or April, 1654, are well known. It is to be recorded to his credit that in that treaty he avenged, so far as the lapse of time permitted, the atrocities inflicted on the English agents, in which James and Charles, thirty years previously, had failed to redress the honour of the nation. It was stipulated among the articles of this treaty, that 'the Lords the States General of the United Provinces shall take care that justice be done upon those who are partakers and accomplices in the massacre at Ambonya, as the Republic of England is pleased to term that fact, provided any of them be living.' A compensation of 82,000l was also demanded for the English Company from the Dutch.

The English 'East India Company,' thus avenged and re-established by Cromwell, never lost their hold on the Eastern world. But from Charles II. they experienced the most inconsistent and capricious conduct. On his accession, he confirmed and extended their charter. In 1669, he granted them the island of Bombay, which had been part of the dowry of his queen, the Princess of Portugal. Yet at the moment when the Company were equipping a fleet for the reacquisition of the kingdom of Bantam, Charles accepted, like his grandfather, a Dutch bribe, and interdicted the expedition. He had repented his liberality in having ceded Bombay to the Company for nothing in return; his mistresses clamoured for more pin-money; his gambling demanded a good supply of cash; and he, too, crushed the English interest for a handful of English interest for a handful of gold from Amsterdam.

The Triennium of James II. introduced at once consistent principles and a false policy. James laboured to increase the severity of the existing monopoly. But in order to explain his peculiar object, it is necessary to state in what condition this chartered monopoly had stood in actual practice. Charters were in those days granted almost invariably by the Crown alone. The Court was too fickle, and the people were too free, to entitle [524/525] the holders of these theoretic rights to general respect. The popular presumption was commonly against the equity of royal charters. Their very legality was questioned. The best lawyers openly scoffed at the pretensions of Companies claiming privileges in virtue of them. It was very clear, therefore, that an adventurous people would not be bound by restrictions of certain moral injustice, and of doubtful legal validity. Accordingly, the monopoly of the East India Company was extensively invaded during the reign of Charles II. The traders to the East in violation of the Company's charter were termed 'interlopers.' In 1685, this body had seized a no small portion of Indian commerce.

The policy of James II. was directed against the interlopers. In 1686, he despatched a ship of war to India, bearing a royal proclamation, 'directing the free-traders to place themselves under the control of the Company and abandon their pursuits.' This decree struck at the root of the Indian wealth which was surreptitiously diffusing itself in the country. Had that Stuarts remained much longer on the throne, it is doubtful whether the British, exposed at once to the hostility of the Dutch and to the growing power of the French, would have been able to maintain their ground in the East Indies. In 1688, James happily fled the country; and the accession of William of Orange heralded a new era to Anglo-Indian interests.

The Convention Parliament, assembled on the abdication of James, opened the whole question of trade with India. But it appears that the patriots were as open to bribery as the Court. Soon after the accession of William III., an address was presented by Parliament for the revocation of the charter. The Directors were terrified. William took up the question: he referred it to the Privy Council. The Directors bribed the Privy Councillors. The Privy Councillors accordingly advised the King to set the Parliament at defiance, to renew and even to extend the charter. The Dutch Company had bribed the Stuart King: the English Company now bribed the advisers of the Dutch King. But the Company were not yet clear of the rocks. It happened that an Act of Parliament — not specially directed, it would appear, against them — had just been passed, providing that every Company which did not pay certain taxes which this Act levied on all joint-stocks, within three months after they became due, should forfeit its charter. The East India Directors, by a strange carelessness, permitted themselves to take rank among the defaulters. Parliament seized the opportunity, and declared the charter abrogated.

But gold once more came to the Company's aid. The question [525/526] went again to the Privy Council. The councillors were bribed more largely than before; for, in truth, they had a great deal more to swallow on this occasion than on the previous one. They now set law and reason plainly at defiance. It is, perhaps, one of the strangest instances of the imperfect working of our constitution in this period, that the question should have gone to the King's advisers at all. It related to the construction and operation of an Act of Parliament. The Court of King's Bench was of course its legitimate arbiter. But the Privy Council, at once usurping functions and discarding justice, set the Company on their legs once more. This was too glaring. A storm of indignation arose. It took shape in a demand for the books of the Company. From these books it appeared that not less than 100,000l. had been expended during this single year for secret service or, in other words, for bribes, under the euphonism of 'gratifications!' Such, however, was the flunkeyism of the House of Commons, that from the moment at which it appeared that exposure would involve in common the greatest personages and the greatest 'patriots' in the land, the prosecution of the inquiry was arrested.

But the necessities of Government, more urgent than the eupidity of individual ministers, threw a check on this career of monopoly. William found himself unable to prolong the war with France without a loan of two millions. Certain merchants came forward, offering to advance the money on the condition of being incorporated as a rival Company. Thus arose the New East India Company.

The hostile monopolists, however, each acted in a manner as pre-judicial to the interests of the other as the elder English Company and the Dutch. The result was almost inevitable: they proposed and effected an amalgamation. This amalgamation took place on the accession of Anne in 1702. The organization of the united Company is very curious. The three Presidencies of Calcutta, Bombay, and Madras were then instituted. The relations of the two Courts of Proprietors and Directors were clearly defined as the Indian executive and the Indian legislative. In Robert Walpole, empowering them to create a Mayor's Court at each Presidency, which should consist of a Mayor and nine Aldermen for cognizance of all civil questions — a Court of Quarter Sessions for all criminal offences, excepting high treason; while the President and Council who governed in the name of the Company formed in either case a Court of Appeal. In the extinct title of President, since changed into Governor, we find the origin of the present devision of our empire into Pre-[526/527]sidencies. The development of the European Courts into a form analogous to that which they now bear, dates from an extension of this Charter in 1753.

But the real evil of the amalgamation of the two Companies remains to be told. It crushed the principle of free trade. On this point Mr. Crawfurd, whom we have not followed for several pages, writes — 'From the union of this new Company with the old one, in 1702, under Queen Anne, is to be dated the ruin of free trade, the triumph of monopoly principles, and of course the cessation, as far as Great Britain was concerned, of all useful intercourse with India — a blank of 112 years.'

We shall conclude these observations by describing the commerce of British India during the last century and a half. But before we do so it is necessary to glance at our collision with the French, in order to explain the manner in which we attained the commercial pre-eminence that we now possess.

The French appeared later on the Indian theatre; and they hoped to dispossess the Dutch and British, as the Dutch and British had dispossessed the Portuguese. They did not come formally into competition until 1721. The French 'East India Company' had but lately been established. The island of Mauritius, which the Dutch had abandoned in 1712, was then formally occupied in the name of Louis XV. The French 'Company,' content with this acquisition as a refitting port between France and the Indies, made no effort to colonize it. Mauritius under their rule appears to have been as much a rendezvous for the outcasts of all civilized nations as are the quays of Constantinople and Smyrna at this day. Among the settlers it is affirmed there were a clique of European pirates, just as such a clique, (many of whom claim the protection of the British flag in the character of Ionian Islanders,) still infest the Turkish ports of the Mediterranean. The island, however, served the political more fully than the commercial pretensions of the French Government; and while its cultivation was nearly neglected, it formed the pivot by which the French navy maintained its ascendancy in the Indian waters during the American war.

But the French rule in the East occupies too unimportant a place in European history to be dealt with at any length. Pondicherry was probably their most important colony; and it temporarily excited the jealousy of their rivals. Perhaps the proposal of the French East India Company to the British Company, to recognise a neutrality in the Indian seas, may be taken as a fair presumption of their inferiority; for nothing in their history leads us to deem them less rapacious than their rivals; and the proposal, indignantly rejected by the British Company, [527/528] was just what an expiring rapacity was likely to dictate. In 1746, a detachment of the French Company's forces, under Labourdonnais, captured Madras. Ten years afterwards, the European Seven Years' War broke out; and hostilities between the British and French forces in India formed a part of the general combination. The French lost Madras nearly in the same juncture with that in which the English lost Calcutta. But while Clive regained Calcutta from Raja Dowla and avenged the iniquity of the Black Hole, the French failed in the recapture of Madras. In 1778, Warren Hastings and Admiral Vernon seized the opportunity of the resumption of war between France and England for the conquest of all the French possessions in the East Indies. The execution of this design established the British people, for the first time, the undisputed masters of the East.

Having thus sketched Indian commerce down to the establishment of our supremacy in the East, we have next to trace the introduction of free trade with India in the abolition of the monopoly system of the seventeenth and eighteenth centuries. Mr. Crawfurd's narrative, which is superior, both in historic fidelity and in breadth of commercial view, to any which has since appeared, thus glances at the influence of American in bringing about this result: —

'The first appearance of an Anglo-American trader in the ports of India in the year 1784, is the true era of the commencement of fair and legitimate commerce between India and the civilized nations of the West. The period of nearly three centuries which preceded that event, may truly be described as a period of delusion in which the nations of Europe, to their own loss and dishonour, were pursuing a mischievous phantom. During all the time of the American trade, it has never connected itself with any political concern of the natives, never embroiled itself in their quarrels; nor has any American ship ever been cut off by the rudest tribe they have dealt with. In the very vicinage of our powerful establishments, they are now (1820) pushing their enterprises in situations that we have neglected for more than a century, and by their conciliatory conduct retrieving that character which their progenitors had lost.' — Vol. III., p. 253.

Mr. Crawfurd, however, does not notice the provision introduced by Mr. Pitt in the interest of free trade into the Company's charter in 1793. This provision, it is true, proved nearly abortive in practice. It was there stipulated that 3000 tons of the shipping of the Company were to be allotted annually to private merchants. 'But the rate of freight,' says another writer on this subject, 'was not specified, and of course the Company's agents, with the usual impolicy and injustice of monopolists, fixed so [528/529] high a rate, that the British merchants and manufacturers were deterred from engaging extensively in the trade. Thus the exports to India were very limited in amount; while there was an increasing amount of exports from India, which was liable to serious checks and hindrances from the uncertainty and cost of the means of conveyance.' It should be added, that the only improvements of importance introduced into our trade in this juncture of importance introduced into our trade in this juncture were introduced on the unsupported authority of the Marquis Wellesley.

It may be interesting to glance at the extent of English trade under this system. During the first twenty-one years, the average number of ships annually employed was but four. It is calculated that about twelve per cent., or one eighth of these were captured by the Dutch, and that about ten per cent. were lost. But from 1680, we have more accurate data. During the next twenty years, 1700-1720, the average annual tonnage declined to 4232. But from that period trade began to increase. During the twenty years 1740-1760, it was 8891; during the twenty years 1760-1780, it rose to 13,350; and during the twenty years, 1780-1800, it rose to 26,300.

But this rapid increase was no result of of any beneficial policy on the part of the Company. 'It arose altogether, ' says Mr. Crawfurd, 'from circumstances forced or fortuitous.' The chief cause has been the accidental or unlooked-for circumstance of tea having become, in rapid progression, an article of great consumption in this country; and it would, I imagine, be as unfair to ascribe the prosperity of the East India Company's commerce to this circumstance, as to take the extent of the monopoly of salt in Old France, or the King's monopoly of salt in Bengal, as just criteria of the prosperity of those countries. In the first period there was not a ton of tea consumed in all England. In the second the tonnage occupied by it would not exceed 160. In the third period, it would rise to nearly 1000. In the fourth, it would rise to above 2000. In the fifth, 5600; and in the sixth period to 15,149. The deduction is a startling one. The increase of the trade of the Company in the East during a whole century was almost entirely confined to a single product, reared in a territory in which they had no settlements. If we take the 15,149. The deduction is a startling one. The increase of the trade of the Company in the East during a whole century was almost entirely confined to a single product, reared in a territory in which they had no settlements. If we take the 15,149 tons of tea annually imported on an average during the years 1780-1800, from the 26,300 tons forming the aggregate [529/530] trade on an average of the same twenty years, there remain but 11,151 tons to represent the trade in all other articles and throughout the Company's dominions. If, again, we take the 4590 tons forming the annual average from 1680-1700, when there was no tea-trade, from the 11,151 tons forming the annual average for 1780-1800 exclusive of the tea-trade, we find that the increase of the Company's legitimate trade, or the trade arising from their own territories during a whole century, did not exceed 6561 tons. Yet in that century, the Company, having commenced it with hardly an acre of land, had acquired territorial possessions which gave them the dominion of sixty millions of human beings!

With figures so conclusive on the question of East Indian monopoly, it is surprising that this monopoly could have endured so long. The iniquity was apparently maintained by bribery, and by that organization and activity which a wealthy corporation well knows how to put in practice against the assailants of its pretensions. The profits gained under this system were naturally enormous. Spices, at the commencement of the trade, appear to have sold in England for 700 per cent. on their original cost. But these immense profits steadily diminished.

The final abolition of the exclusive license of trade, so long maintained by the East India Company, took place in 1815. The results of this measure were greater and more rapid than could have been anticipated. In that year, the united trade with India and China had reached 40,000 tons; its increase, therefore, was less than 1000 tons a year, since the beginning of the century, with which our former calculations ceased. Yet in 1820, this trade had reached 61,000 tons, the increase being immediately almost five times as rapid after the dissolution of the commercial privileges of the Company, as it had been before it. This is a fair estimate of the relative merit of the two systems, even though the five years, 1815-1820, were the first years of peace; for war had rather developed than crippled our commercial energy.

The Company's monopoly being thus destroyed, and experience confirming the wisdom of its destruction, we confess that we should, so long ago as in 1820, have been disposed to regard the Company itself as a doomed corporation. We have already shown that this Company was incorporated and and invested with its great privileges for the sake of commerce, not for the government of territory; for when the original Company arose in 1600, it had great commercial prospects without any territorial possessions. Government, therefore, [530/531] was the accident of its commercial existence, not the object of its existence. But its trading privileges were a greater incubus on the nation than its political authority. Those trading privileges, as we have shown, originated in a period unfitted for any other trade. The period and the adaptation passed away; and the commercial privileges, for which alone the Company was originally called into existence, were, of necessity, abrogated.

When this abrogation had taken place, the territorial and political rights of the Company, which were mere accessories to its commercial rights, out of which they had arisen, became anomalous. So far as we can perceive, the only motives which dictated the retention of these rights under the charter of 1815, and under subsequent charters, were a vague conservative instinct, a sense of the general inexpediency of great changes, and a more definite apprehension of ministerial corruption, by a transfer of immense patronage to the Crown, before the principle had been recognised by the State. The government of India by the Company could hardly fail, sooner or later, to give way to the devouring spirit of centralization.

We shall now glance at the condition of Indian commerce at this day. We will advert, in the first place, to the disproportion of native to European trade with India. In this statement we, of course, exclude the native Indian costing-trade from consideration. We may appeal to a recent Blue Book in verification of this statement. That first a tabular view of the number and tonnage of EUROPEAN vessels entered and cleared at ports of British India during the years 1854, 1855: —


The test of relative commerce is, we need not observe, to be found in the tonnage, and not in the number of vessels. Indeed, [531/532] the native or Asiatic trading vessels (exclusive of coasting craft) appear to be by more than three times as numerous as the European. The proportion of native vessels entered in 1855 is 9696, against only 3191 European. The other comparisons run in the same proportion. But the native tonnage entered is but 429,000 against 1,207,000 European tonnage. The ratio of tonnage is inverse to the ratio of shipping; and the native vessels, three times as numerous as the European, yet only one-third of the European in aggregate tonnage, present an average of one-ninth of the European in the average tonnage of each vessel. European commerce, then, is triple in extent to native maritime commerce.

Another such view will show the relation of British shipping at Indian ports to that of all other European states. We will take the returns for 1855 simply.

British Vessels2307906,0002421916,000
Other European Vessels567152,000537142,000

According to these figures, British vessels entered and cleared at Indian ports present about four-fifths of the aggregate of European vessels, and their tonnage presents about five-sixths of the aggregate European tonnage. The figures, however, contradict each other, to the extent of of some twelve per cent., as will be perceived on collating the last table distinguishing British and other European trade from the aggregate of European trade cited in a previous table. After making due allowance for this error, British trade appears to be larger than all the native trade and all other European trade in combination.

We should glance next at the degree in which each of the three Presidencies contributes to this aggregate. The following tabular view refers to the year 1855.


It appears, therefore that the actual shipping is three times more numerous at Madras than at Calcutta, and is even greater at Bombay than at Madras. On the other hand, the tonnage is considerably less. We can account for this inverse proportion [532/533] only on the supposition that the bulk of the Native trade is maintained with the Presidencies of Bombay and Madras, since we have seen above that the average tonnage of European vessels is larger by nine times than the average tonnage of Native vessels. The Bengal Presidency, with only 1640 ships, appears to maintain a trader larger by one half than the Bombay Presidency with 5821 ships.

This view of the disparity in the usual tonnage of the ships trading with the three Presidencies is confirmed, so far as the relation of the Bengal to the Madras trade is concerned, by the following table, of the total value of IMPORTS (including Treasure) at each Presidency, by sea, in each of the years ending 30th April 1853-55. The computation is in pounds sterling.


The proportion of the Bengal trade to the Madras trade nearly represents the proportion of Bengal to Madras tonnage. On the other hand, the value of the Bombay trade is nearly equal to that of the Bengal trade, notwithstanding the difference of tonnage. We may perhaps account for this apparent contradiction on the supposition that the trade of Bombay concerns articles more valuable in proportion to their compass and specific gravity.

It must not be supposed from the above tabular view that the trade of India actually declined during the three most famous years of Lord Dalhousie's rule. The diminution was caused by the variation in Treasure, which declined from 5,000,000l. to 2,000,000l. in these three years. The increase of Trade (exclusive of treasure) in the three years was, therefore, nearly 1,000,000l.

It is impossible to conclude these observations without reference to the immense change which the altered Eastern policy of their own generation is working both in our Indian trade and in the fortunes of the East. We refer the origin of this change to the abolition of the Company's exclusive trading privileges in 1815. That abolition extinguished the principle of chartered monopoly. With that principle there was also associated, both in tradition and in fact, a spirit of the worst injustice towards the Asiatics. It was that spirit, and the principle which kept it alive, that first induced the Chinese to shackle the freedom of their trade. We had to conquer back by arms the limited freedom [533/534] of Chinese trade that we have enjoyed since 1842, and which there can be doubt, but for the monopolies of the seventeenth and eighteenth centuries, we might have generally enjoyed from good will, and even in a greater extent. We exclude, of course, in these observations, any reference to recent events in China: for among such a people, and with such a Government, it is impossible but that temporary violations of faith and order will arise.

Foremost among the promoters of our new commercial system in the Archipelago ranks Sir James Brooke. He has illustrated the exact reverse of the Dutch policy of the seventeenth and eighteenth centuries. He has endeavoured not to profit by the Asiatics at their expense, but to profit by them through improving and civilizing them. The Dutch practised piracy: it is our aim to put down piracy. The Dutch established their authority to oppress all but themselves: we now establish ours to deal out justice among all. Let us quote Rajah Brooke's own words, from which it appears that we are by these means instituting a moral authority in the Archipelago far more secure than any power of the sword hitherto established there: —

'Since the advent of Europe in the Archipelago, it has been the tendency of the Polynesian Governments to go to decay. Here the experiment may be fairly tried on the smallest scale of expense, whether a beneficial European influence may not reanimate a falling State, and at the same time extend our own commerce. We are here devoid of the stimulus which has urged us on to conquest in India. We incur no risks of the collision of the two races; we occupy a small station in the vicinity of a friendly and unwarlike people, and we aim at the development of native countries through native agency.


'I own the native development, through their own exertions, is but a favourite theory; but, whatever may be the fate of the Government of Borneo, the people will still remain; and if they be protected and enabled to live in quiet security, I cannot entertain a doubt of the country becoming a highly productive one, eminently calculated as a field of British enterprise and capital.' — Expedition to Borneo. (Mem. of Sir J. Brooke.) Vol. ii. pp. 159, 160.

These expectations of Sir James Brooke, written more than ten years ago, are being gradually realized; though perhaps more slowly than the astute Reformer of the Archipelago had expected. The three definite means on which he relies for laying the basis of the future civilization of these islanders are — first, the crushing of piracy; secondly, the settlement of native governments on such a basis as to afford protection to the poorer and producing classes; and thirdly, a better knowledge of their interests, and more frequent intercourse with them. [534/535] The Indian Archipelago is, then, distinctively the theatre of a great commercial future. There is no doubt that within our recognised continental empire itself, the formation of railways will greatly increase production by facilitating transport; and that it will thereby widen our maritime commerce in those regions also. We have seen how numerous and abundant were the exported products of India in the most ancient times. But in the Archipelago we have yet a political organization to create, yet a policy to determine and to accomplish. When we perceive the tendency of the native insular governments to decline under the justice, the foresight, and the energy of our own rule, we can hardly doubt that those who follow in the footsteps of Brooke will eventually become the naturalized island chiefs, and be to the declining dynasty what the Carlovings were to the Merovigns. It is by such rule as this that the East Indies now begin to yield the produce with which Nature appears always to have designed them to supply the Western World.

Last modified 6 April 2010