Asia Economy 1804 – 1843 – part 2

Sat 17th March 1804

The Directors have written to the Governor-General on 17th August 1803 concerning the new allowances for private traders to ship British manufactures and produce to India. This is complementary to the 3,000 tons of Indian exports allowed to England which concerns solely the return cargoes on British ships.

The freight rate in peacetime is £5 per ton on the Extra Ships, London to India and £11 per ton India to London.

Freight must be paid to the Company within two weeks of ordering space on the ship.

The carriage of wine from Madeira (consumed in astonishing quantities in British India) will cost £4 per pipe Madeira to India and £8 per pipe from India to London. (A pipe is a wooden barrel of 120 – 125 English gallons) In war time it will be £12 per ton for the return leg.

The Extra Ships will be allowed to stay at Madeira for two days for every 20 tons of cargo contracted for loading (cargo handling at Madeira is slow). If the stevedores fail to load at the rate considered reasonable by the Directors, the ship will leave with a part cargo but the prepaid freight on the unshipped goods will not be refunded.

When shippers sell their goods in India, if the proceeds of sale are paid into the Company (at Bombay, Madras, Calcutta or Penang), Bills on London will be given at the current rate. Shippers must deliver their goods for loading at least three days before sailing.

Sat 5th May 1804

Outstanding Bombay Promissory Notes have slightly increased again at end April to 1.6 million Rupees. These are mostly 6% Notes. Repayments are apparently fixed. Every month 10,000 Rupees is discharged.

Sat 19th May 1804

The Bombay government is selling some of the presents it has received from visiting dignitaries recently.

One horse and carriage from the late Persian embassy and the many gifts of the Vackeel of Sind, Mushlak Ram, comprising bolts of cloth and some shawls are all displayed and available for purchase from the Civil Pay Office on 21st May.

Sat 22nd Sept 1804

Bombay Government is soliciting loans of 1,000+ Rupees for 8% Promissory Notes again. A 2% discount is offered. Repayment will be in cash or Bills on London at 2/6d per Rupee.

Sat 22nd Sept 1804

The Salsette arrack monopoly is up for renewal for 3 years w.e.f. 1st October. Same terms as last time. Apply to the Collector at Tannah or to Bombay.

Sat 12th Jan 1805

Statement of the annual estimated costs and charges (C & C) of produce and the nett profits on sales at the Company’s auctions in England in £ millions from March 1799 – March 1804:[49]

India goods China goods







C & C*







Nett profits







C & C







Nett profits







* Cost and Carriage.

Sat 26th Jan 1805

The Company has laid a claim on the home government for £4 millions. It was tabled in House of Commons on 2nd July 1804.

Amongst the charges is over £3 millions for the capture of Ceylon. Another million is for the capture of the French and Dutch ports of India. A fifth million is for the aborted invasions of Mauritius in 1794 and Manila in 1797 and there is an additional amount for the maintenance of H M regiments in India beyond the numbers previously agreed.

All the claims include interest running from the date the disbursement was paid. The claim is reduced by a credit of £1.5 millions paid prior to 1st March 1804 leaving the nett claim of £4 millions.

The estimated costs of the Egyptian campaign to the Company are said to be £2 millions but it has been agreed not to make this claim yet.

Sat 9th March 1805

This year’s indigo harvest in Bengal will exceed 60,000 Maunds. It is as much as we grew in the last two years together.

The Arabs have taken over 6,000 Maunds and appear to represent a new customer.

The Persians used to buy indigo from the native traders in north India but the progress of war disrupted the overland trade route and they are now coming to Calcutta for supply.

By sending our indigo by sea it should be landed in the Gulf at cheaper prices than either the Arabs or Persians have been able to obtain formerly. They should become our regular customers.

Sat 27th April 1805

Notice – The monopoly for operating the ferry to Caranja is for sale on 30th April. The farm will run for three years from 1st May 1805. Service is from Morah Bunder to Bombay and back. Contact the Caranja Collector for details.

Sat 5th Oct 1805

All private merchants wishing to export goods to London in 1805 / 06 season should make application to the Company before Sunday 6th October (tomorrow) showing the type and quantity of goods for shipment. Freight must be prepaid in Bombay or security given here for payment in London on delivery. Agents making requests for tonnage on behalf of Principals must include the Principal’s confirmation of same. The peace rate for shipments to London is £5 per ton (war rate – add £1.10.0d). The peace rate from London to Bombay is £11 per ton (war rate – add £3 per ton). Madeira wine is freighted at £4 per pipe (about 10% of retail value).[50] All goods exported to India must be marked and registered with the Company and may be inspected. Unregistered cargo will be confiscated. Cargo space is available on ‘first come, first served’ basis.

Sat 5th Oct 1805

The progressive development of the government road across Salsette has finally convinced native businessmen to invest in property on that island. The Company is selling the whole island leasehold. Indian businessmen have hitherto held back their capital but of late have been buying along the route of the road.

Sat 2nd Nov 1805

The recently adopted plan of building ships in India for sale in London originated with Philip Dundas while serving as Royal Naval representative in Bombay. When he returned to England in 1803 he told his father Henry of the advantages of teak ships. Here is an edited version of his report:

“Teakwood is more durable than oak and protects the iron fasteners longer. If we ship teak timber to England, the high cost of freight payable to the Company will consume too much of the price advantage. We would do better to build the largest ships that Indian ports can produce and sail them to London for sale. Teak is widely available all along the coast of Malabar from Surat to Cape Comorin. Bombay is near to the teak supply and has the deepest port although the three available docks at Bombay are not very suitable for ship-building.”

He commends ship-building be undertaken on Butcher’s Island or Colaba or Old Woman’s Island where docks can be built easily and the depth of water is adequate.

Philip was Naval Superintendent when the Cornwallis was built at Bombay. She is 1,360 tons. Only the upper dock was suitable for the job and it had to be lengthened. We also had a problem buying large timbers for her. I had to send men up-country to buy trees one by one. There is also a good supply of teak from Pegu (in Burma) but I don’t know must about that trade. Bengal has no teak. Most of our straight timber comes from Travancore. All the ironwork and copper would have to be imported from London. Indian masts and yards are not as good as the European ones. Indian coir and hemp is satisfactory. It comes mostly from the Maratha states but we could grow it at Surat or on Salsette. We have an adequate supply of skilled carpenters at Bombay.[51]

Sat 16th Nov 1805 Extraordinary

Notice, 15th November – The Bombay Governor-in-Council is raising a new 2-year loan to be called the 1805 / 06 10% Loan. Minimum subscription 1,000 Rupees; 10% interest.

Payment may be by cash, Bills of Exchange, Treasury Bills, Certificates of Arrears (of salary or allowances) or any other Demand on Government.

These Promissory Notes will be exchangeable with Bengal Promissory Notes of the same tenor. Payment of principal and interest may be by 12 month Sight Bills on London or cash here in Bombay.

Sat 1st March 1806

Country ships permitted to take cargo to London under the recent concession of the Company have been neglecting their lascar seamen. These people need board and lodging whilst in London, suitable winter clothing and medical treatment when sick. These items are falling to the Company to pay when payment should be the responsibility of the captains and owners of the country ships on which the lascars crew.

In future Captains will sign the charter-party with owners and the Company and will be jointly responsible with owners for the care of seamen and their return to India. Enforcement of the new terms will impact the captain’s ability to return to India which will be ended if he fails to care for his men.

Sat 26th April 1806

The Company’s import of specie to Calcutta has helped to restore the value of its loan paper which was drooping. The Company needs a link between the silver and paper currencies to maintain confidence. We hope the paper value will soon equal the silver value it supposedly represents.

With this aim in mind the Company is to open a bank at Bombay, under its guarantee, and the 500 subscriber shares (of 10,000 Rupees each) have been taken-up by the big merchants with alacrity.

There are no shares left to buy and they were not even advertised (in this newspaper) for sale. The capital of the Bank will accordingly be 5 million Sicca Rupees. This should bring an end to shroffage, the premium that silver bears to paper.[52]

Sat 31st May 1806

The Bombay Government requires 100,000 Rupees and offers Bills of Exchange at 9-months Sight on London. The loan is valid for a year at 5% interest.

Sat 12th July 1806

Wanted to buy, 8th July – The Company will buy 2,200 bales of Broach cotton and 640 Candies of Sandalwood (Bombay Candy = 588 lbs) for the China market. Payment in cash or our own Bills (into our Treasury at Canton but for sellers’ account) within two months of arrival at Whampoa or within twelve months of our acceptance of your offer here (in the event the goods are lost en voyage). Partial offers acceptable.

Mon 4th Aug 1806 Extraordinary

This edition is published solely to remind country traders of the 3,000 tons allowance for London which has not yet been fully taken-up.

Sat 23rd Aug 1806

The indigo harvest in Bengal this year is expected to be smaller than usual. The likely harvest in Benares has not been estimated.

During the last 2-3 years the sircars have been growing indigo in their fields and have established co-operative factories for its processing in Jessore, Kishenaghur and Burdwan and in many other places all over Bengal.

This practice does not yet seem to have started in Bihar or the newly ceded district. It will increase the harvest and farmers must try to produce a better quality article to ensure good sales.

Sat 6th Sept 1806

The Company’s Chairman has stoutly defended the Company’s administration of India:

In other colonies, the British merchant is free to visit or live or work or trade but the Company has a monopoly over India and all Asia. This contradictory situation has encouraged many private British merchants to seek for access to eastern trade. They say that all Europe can trade to India but not English merchants. It is true and it cannot be helped.

The maritime countries of Europe explored the east and set-up trading posts, some before us. We only conquer those trading posts in wartime on which occasions our control of India is perfect. When we make peace we usually restore them. In wartime all the neutral states carry on Eastern trade with better prospects than either the Company or private British merchants. They do not have to pay war-risks insurance premiums like us. The costs of their crews and officers are cheaper. The Americans are particularly diligent in Eastern trade often acting in ways far beyond the intentions of our 1791 Treaty of Commerce and Amity with them. That allowed them a direct trade between Eastern ports and American ports. It was not intended that they should assume the carrying trade of Europe as they have in fact done, but this is not a problem for the Company to redress, it is a matter for the home government.

In the Company’s Presidencies little specie circulates and paper money is the chief means of exchange. In the interior of the country only specie is valued – factories, farmers and traders deal in nothing else. Most of the bullion we import to India is coined into Company’s Rupees and circulates in the interior. Some part of this is used for trade outside India and is lost to us. The cargoes of Indian goods bought by foreigners are exported to Europe and America, so their money comes in but does not go out.

Since a limited private trade was permitted in 1801 our own trade has diminished by 30% so this is not simply a matter of neutral countries creaming-off the business of India. Reducing the trade of neutrals may not increase the Company’s trade or indeed the private trade, if India became an unrestricted market to them.

This question is basically whether India should be treated as a British Colony or as a monopoly of the Company as hitherto.

Sat 20th Sept 1806

The late Company auctions of Indian cloth, dyes and piece-goods in London were poorly attended and prices have fallen 15 – 20% from the previous sale. 1st quality indigo is now 13/- a lb and the cheapest quality is 5/-.

Sat 4th Oct 1806

The Collector of Surat is selling the monopoly for collection of transit dues on the River Tapti for one year (the river that serves the southern part of Maratha lands). Send in your proposals before 15th October.

Sat 3rd Jan 1807

The Bombay Presidency is raising a new 8% loan. The Notice is only in English. We will receive all outstanding Bombay Treasury Bills or Bills of Exchange drawn on the Bombay Governor (adjusted for outstanding interest) in subscription to the new loan. Army paymasters are to transfer their debts to this loan by issuing and submitting drafts on the military Paymaster-General. Subscriptions in cash or Bills will be received at par. Principal is repayable by 12 month Sight Bills drawn on London at 2/6d per rupee.

Sat 28th Feb 1807

The Calcutta merchants are having a problem with the cotton growers in the Upper Provinces. Those people keep themselves informed of the prices available in China (the principal market where Bengal cotton is preferred) and increase their own prices when they hear Chinese prices are up.

The native capitalists (the Shroffs) are enabled by this means to obtain a high return on their investment whilst we European Agencies are left with only the balance. Our recourse has been to send Agents with cash into the growing areas to buy the cotton before it is harvested.

As our Bengal trade increases in consequence, it is likely the Bombay and the new Malabar cotton sales will decrease.

Sat 4th April 1807

The Bombay Government has so far raised 3.25 million Rupees on the 8% loan this year. It’s the first major borrowing since 1804. This takes the outstanding indebtedness of the Bombay Presidency under its Promissory Notes to 18 million Rupees.

Sat 2nd May 1807

The Bombay Presidency has added another million Rupees of debt within the last month. Value of outstanding promissory notes is now 19 million Rupees.

Sat 9th May 1807

Notice – All the 6% promissory notes issued 1795 – 96 will be discharged on 4th May. All the 9% promissory notes issued August / September 1799 will be discharged at the same time.

Sat 6th June 1807

Another 100,000 Rupees of the 8% Promissory Notes has been issued this month.

Sat 6th June 1807

The belief in London amongst the Company’s ex-servants that wines are improved by the heat of a voyage across the equator has drawn the attention of the Company’s directors to this minor aspect of trade.

In order to participate in these extra profits the Company has declared it will charge freight of £15 per pipe for the return carriage of Madeira from Bombay to London.

Sat 13th June 1807

Notice, 2nd June – The Company has chartered two extra ships to replace those that have been lost. These new ships are stronger and more defensible than the old ones. We are accepting approved cargoes India to London at £30.10.0d freight per ton.

Sat 4th July 1807

A considerable sale of 8% promissory notes was made in June and another 2 million Rupees was collected. The total outstanding debt of the Bombay Presidency for promissory notes is now 21.3 million Rupees (over £2 million) of which nearly 7 million Rupees has been subscribed in this 1806 / 07 year

Sat 5th Sept 1807

The Company has abolished the taxes on production from the stone quarries of Salsette. The salt gabelle, the taxes on production of hay and ownership of date palms are also repealed w.e.f. 1st October 1807.

Sat 19th Sept 1807

Notice 4th September – The Mahim ferry monopoly is for sale from 1st October 1807 – 30th April 1810. For conditions of the lease visit the Office of the Company’s Boat Master.

Sat 26th Sept 1807

The 10% ten year loan that commenced in July 1798 is due for repayment soon. You may have cash or Bills on London at 2/6d per Rupee.

Sat 5th March 1808

Bombay Government debt under its Promissory Notes has again increased in the last two months. Its now 26 million Rupees (>£3 millions).

Sat 5th March 1808

Between 1801 – 1807 we built 72 ships and brigs at Calcutta. They total 32,244 tons. At 31st December 1807 63 merchant ships are registered to the port of Calcutta. They total 23,745 tons and employ 245 European and 2,982 Asiatic mariners.

Sat 7th May 1808

The indebtedness of the Bombay Presidency under its Promissory Notes at end April was just over 29 million Rupees.

Sat 25th June 1808

Our Bombay Promissory Notes are bearer notes and many natives are being defrauded. The Company has opened a Transfer Office to register genuine transfers of title. The fee is reasonable (56 Reas per 100 Rupees)

Sat 23rd July 1808

Government invites tenders for the provision of 1,000 bales of Mocha coffee CIF Bombay. The quality of the shipment will be subject to government approval.

Sat 6th Aug 1808

Bombay Government borrowing on Promissory Notes has continued at a balance of 29 million Rupees but the take-up of the new 8% notes has been used to pay-down some old Notes and thus maintain the same level of indebtedness.

Sales of the 1806 / 07 Note have now reached 9.5 million Rupees.

Sat 3rd Sept 1808

Bombay debt on Promissory Notes decreased to 27.5 million Rupees last month.

Sat 17th Sept 1808

Part of the Company’s stock of Travancore pepper will be sold on 10th October at auction in lots of 5 Candies each. Contact the Company’s warehouse keeper.

Sat 8th Oct 1808

The House of Commons Select Committee on India has reported the debt of the Company to Britain is assessed at £8.4 millions and the claims of the Company on England are £6.9 millions[53] leaving a balance due to the British people of £1.5 millions.

Sat 24th Dec 1808

Starting 1st January 1809 the Company will be taxing road users to collect a fund for maintenance of the roads in Bombay. Carts will pay 5 rupees; every other vehicle will pay 10 – 20 rupees. Owners of riding horses will pay 6 rupees a year.

Sat 7th Jan 1809

The new rates for pilotage in Bombay harbour are Fair Weather – 50 to 100 Rupees; Monsoon Season – 75 to 125 Rupees.

The rates apply to all square-rigged ships, depending on size.

Sat 7th Jan 1809

The ship-owners and merchants of Bombay have eulogised Sir Edward Pellow’s administration of the Royal Navy’s India squadron. He is about to return to Europe. Sir Charles Forbes is their Chairman.

Between 1798 and 1805 insurance premiums Bombay to China and China to Bombay were consecutively 12, 10, 9 and 8% per voyage ad valorem whilst during Pellow’s command from 1805-1808 the premiums were 8% with a return for no claims of 3% (if convoyed) and 5% for a voyage warranted convoyed. During those three years 110 Bombay ships have traded to China under convoy and only 28 ships have sailed out of season (when no convoy was available).

The amount insured for the three seasons 1805 / 06, 1806 / 07 and 1807 / 08 was 53.7 million Rupees (c. £6.7 million) and the premiums paid on those exports were 3.6 million Rupees (6.7% or £445,000). Losses due to capture were 493,000 Rupees (£61,000) whilst losses due to sea risks were 552,000 Rupees (£69,000). The gross profit of the local insurance societies was 2.5 million Rupees (£314,000).

These good results flow exclusively from Pellow’s insistence that merchant ships accept convoy.

(NB – pursuant on this meeting, the insurers combined to create a new policy requirement – any master who in future left convoy will be denied all cover for 18 months after the offence and would thereafter pay an enhanced premium with some part of it refundable for no claims)

Sat 21st Jan 1809

Notice – The Company invites loans from the public in even hundreds of Rupees (minimum 1,000) and will pay 8% interest per annum. You can buy the scrip at the treasuries of Bombay, Surat or Anjengo.

We accept Bills of Exchange (less 8% for interest over the period the Bill has to run to collection), Bills due from our Army, Bills for Arrears of Salary and any of our other Promissory Notes that pay more than 8% as well as silver. A discount of 2% applies – you only pay 196 Rupees to receive a Promissory Note of 200 Rupees.

Sat 25th Feb 1809

A letter from London, dated 7th September 1808:

The American embargo on trade with England has increased the price of cotton generally, to the benefit of Surat and Bengal producers whose fibres are now selling in London at 18d and 17d per lb respectively.

Sat 11th March 1809

The Bombay government has paid off some Promissory Notes and overall debt for these instruments at end February is down to 27 million Rupees.

Sat 6th May 1809

A list of licence fees for commercial activities in Bombay is provided. They apply to money changers, warehousemen, butchers, bakers, shopkeepers, etc. A total of 51 types of licence are listed. Merchants selling the necessaries of life are exempt from fees. Five different licences for weighers and measurers are also shown.

A different fee structure is applied at Mahim.

Sat 20th May 1809

The Company wishes to buy silver bullion or specie. Deliver your treasure to the Assay Office before January 1810. Value will be fixed by the Company’s assay master.

Sat 3rd June 1809

The Bombay Presidency’s indebtedness under Promissory Notes has reduced to 24 million Rupees at end May.

Sat 8th July 1809

The Bombay Presidency’s debt for Promissory Notes at end June is further reduced to 23.5 million Rupees.

Sat 22nd July 1809

Coffee remains expensive owing to a dispute between the Imam of Mocha, who has the buyers, and the Sultan of Aden, who controls the supplies.[54]

Sat 5th Aug 1809

Bombay Presidency’s indebtedness under Promissory Notes has fallen to 22.4 million Rupees at end July.

Sat 2nd Sept 1809

Bombay Presidency’s debt under Promissory Notes has again fallen slightly and now totals 22 million Rupees.

Sat 16th Sept 1809

The British parliament has passed an Act on 30th March 1809 permitting the importation of tobacco from anywhere. Britain is no longer receiving the Virginian supply (owing to the commercial dispute that caused the US embargo). The Act is valid for two years.

Bombay Presidency can supply tobacco and merchants are invited to ship it to London on the Company’s ships. Note that the only pre-import processing permitted by UK Customs is stripping the leaves from the stalks.

Council suggests you make up your shipments in bales of 450 lbs.

Sat 23rd Sept 1809

The Company is selling the grass on Salsette for turf. There will be an auction on 20th October at the Collector’s Office.

Sat 7th Oct 1809

Bombay debt on Promissory Notes at end September was 25 million Rupees.

Sat 4th Nov 1809

The debt on Bombay Promissory Notes rose to 26.5 million Rupees in October.

Sat 4th Nov 1809

31st October – The Collector of Salsette is selling the Company’s share of this year’s rice harvest on the island. The rice has not been harvested and interested buyers will be responsible for protecting, harvesting and removing it.

Sat 18th Nov 1809

Government Notice – The sale of foreign liquor is increasing and the import duty will be doubled to 50% effective 10th November ‘to preserve the market for local products’.

Sat 2nd Dec 1809

The indebtedness of the Bombay Presidency under Promissory Notes has increased to 29½ million Rupees during the last month.

Sat 16th Dec 1809

Calcutta Notice, 22nd November – The Company’s extra ships Tottenham, Ocean and Devaynes (these are the only ships on which private merchants are permitted to send goods to London this season), which were to sail immediately to England, are detained and will now sail with the Company’s own ships in mid-January.[55]

Sat 16th Dec 1809

House of Commons, 6th June – Prendergast MP said the East India private merchants had memorialised him to complain that the rate of freight agreed by the Company with them, under the concession to ship private goods to London, had been unilaterally altered by the Company. He had complained to the Board of Control and the Company without effect. The original £14 per ton published in the Gazette of 25th August 1805 had become generally £30 – 32 per ton and recently £44 per ton.

The Board of Control says it is not empowered to interfere in the trade of the Company – it only regulates its political administration of territory. The Chairman of the Directors told Prendergast that he (the Chairman) was a private trader too and had been required to pay £47 per ton on his indigo!

These extra freight charges were apparently sanctioned in the Gazette by a notice of July 1807 which claimed retrospective effect back to the inception of the scheme. This notice set freight at £30.10.0d in 1804 and 1806 and £32.5.0d in 1805. Since then rates have been trending up to the present £44 per ton at which level the private merchants are unable to market their goods competitively.

Prendergast thought, now that we have contracted to settle the American merchants’ claims, they would soon crowd every Indian port and our great India Agencies would discover a second more permanent ground for their inability to compete.

He noted that the Act requiring the Company to carry private merchant’s cargo did not mention ‘extra ships’ but the Company had unilaterally chartered such ships at horrendous rates in the off-season when heavy weather was a feature of every voyage. They were also leaky ships. As a result water-damage claims and insurance premiums were higher than usual.

Prendergast supposed, from the attitude adopted towards private merchants in the Presidencies, that the Company resented their trade, never consulted their interests, and by endless regulation made everything difficult for them. Whenever the Company launched one of its frequent military expeditions, the extra ships were commandeered to transport stores and troops and private cargo was thrown out to await the next ship.

Charles Grant for the Company said the Charter was coming up for renewal in 3-odd years and that would be the time to resolve the matter. He said £14 per ton was fixed in 1803 during the peace of Amiens but since then we were again at war and the operation of ships had become more expensive. He counter-complained that some of the extra ships were in the ownership of the Indian Agencies themselves and were chartered from them by the Company at £21 per ton but those same Agents demanded the Company accept their own freight at £14 per ton. The application of the £44 rate occurred in 1805 when the private merchants wanted space on the Company’s regular ships and in 1806 when the rate was £47. Those merchants wished their cargoes to be carried in the Company’s splendid ships and they naturally had to pay the same rate as the Company. He thought the Company had been very accommodating to the merchants and had even permitted their trade in forbidden articles that infringed the Company’s monopoly.

Sat 23rd Dec 1809

Government advertisement, 16th December – a new solicitation for an 8% loan. Payment in cash, Company Bills, Bills for Arrears of Salary, etc., will all qualify in subscription. Cash or bullion gets a discount of 2%; Mercantile Bills will be received at a premium of 3%.

Sat 6th Jan 1810

The Bombay Presidency’s accumulated debt due to Promissory Notes approached 30 million Rupees at end 1809.

Sat 6th Jan 1810

Government Notice – People proceeding to England must pay a security deposit at the Company’s nearest Treasury in respect of the maintenance of any servants they are taking with them.

Sat 10th March 1810

Notice – The Bombay Governor has received a letter from the Directors dated 2nd October 1809 indicating the approved freight rates for private merchants to / from London on the Company’s ‘extra’ ships in the last season are:

London to Bombay £9 per ton

Bombay to London £27 per ton

No-one shipped Bombay to London on a ‘regular’ ship but, had they done so, it would have cost £32 per ton.

Sat 28th April 1810

Retail prices of Company’s Madeira wine throughout 1810 are published by the Company’s Bombay Import Warehouseman. They indicate an intended increase of 10% between May and Dec. London market wines are already 5% more expensive than the direct country-trade supply.

Sat 28th April 1810

Ships built in the Company’s domains and belonging to British subjects are to be allowed to carry Bengal cargo to London. The cream of the trade – indigo, piece-goods, raw silk and some other items – is reserved to the Company’s own ships. Suitable ships have to complete their lading before 31st May. (at 21st May only the Fairlie and Baring had been offered)

This concession is also extended to Bombay ships but a considerable number of restrictions and fees is promulgated. For example, carriage of a passenger merits a fine of £500 – the Company must maintain its control of who can come to the East.

Sat 26th May 1810

Notice –A new 8% loan is solicited by the Company’s Government.

Sat 2nd June 1810

Bombay Presidency debt under its Promissory Notes jumped to 31½ million Rupees (c. £4 million) in May.

Sat 30th June 1810

A recital of the advertisement for the 8% loan. Send subscriptions.

Sat 7th July 1810

Bombay Presidency debt under Promissory Notes was 33 million Rupees at end June.

Sat 7th July 1810

The Company’s quarterly sale of English manufactures will be held on 16th July. Broad cloth, long ells and metals are for sale by auction to the highest bidder. 10% deposit on buying and the balance before clearing the goods. We promise not to make any more sales for three months. These goods may not be exported to avoid upsetting the Company’s other markets but you can sell into any of the dependencies of Bombay Presidency except Bushire and Basra.

Sat 8th Sept 1810

Notice – The Bombay government experiences inconvenience from receiving old claims on it. It makes financial estimating uncertain. In future, any claims not presented within two months of the date of performance of the subject-matter will be at risk of rejection and claims over four months old will be summarily dismissed.

Wed 12th Sept 1810 Extraordinary

Some people complain they were unable to subscribe to the recent 8% loan. The Governor of Bombay is pleased to re-open the Treasury for more subscriptions.

Sat 22nd Sept 1810

On 8th May the Company published the following advertisement in the London daily papers:

In response to parliamentary pressure, the Company has paid off the debts it incurred under decennial loans. A good many people who relied on the income from these bonds cannot find an equally profitable investment at home and have asked for our reconsideration. We have to say it was never the intention, or in the interest, of the Company’s shareholders to remit such a large amount of silver from India to London as dividends.

To provide a new opportunity for lucrative risk-free investments in India the Company invites all those, who have received our Bills in settlement of their previous investments, to return the Bills endorsed for the payment of principal on other debt at the same Presidency they had previously invested in.

Sat 20th Oct 1810

House of Commons, 3rd June – Dundas (son of Lord Melville) has reported on the financial difficulties of the Company. He says 1809 was a terrible trading year and the Company lost money. It was also an active year for wars in India which were expensive.

He recommends the Commons approve a 12-month loan of £1.5 millions to the Company to help it through this cash shortage. After a year the Company will repay the loan or explain why it cannot.

There are no expensive wars being fought this year and the Company’s investment in commerce has increased. The prospects for the future are bright.

The House was (as usual for India affairs) poorly attended and young Dundas got his vote 77 / 10.

Sat 27th Oct 1810

Notice – the Company’s monopoly on the sale of tobacco, cannabis and snuff in Bombay will be abolished on 31st October 1810. Thereafter importation is free to all, subject only to the Company’s duties of 3½% ad valorem tax, payable on all imports, plus 10½ Rupees per Maund on tobacco, 87 Rupees per Maund on ganga and 1 Rupee per pound on snuff.

A drawback of the tax (except the ad valorem charge) is available on proof of export. Regulations for this trade will be published shortly.

Sat 3rd Nov 1810

The Company’s Directors have discussed Robert Dundas’ recent motion in the House of Commons for a loan for the Company.

They say the debate did not do the Company justice. India had drawn an extra £4 millions from the Company’s London funds to fight recent wars. It had sustained several shipping losses to French privateers and heavy weather with the lost tea and silk cargo valued at £1 million plus. These losses put expenditure about £2 millions over income in 1809 / 10 and necessitated the loan. Dundas failed to mention all this.

The Directors aver that the Company is never likely to be profitable when it has to fight wars – the costs of the war are borne by the Company whilst the soldiery get the benefits in extra pay and prize money in return for their risk.

The accounts of the Company to March 1809 showed funds in London were in surplus by about £4.8 millions which should be ample security to obtain House of Commons approval. The Directors agreed that Dundas’ statement of the Company’s case be reinforced to the House of Commons by petition.

The House of Commons further debated the loan requested on 31st May and Dundas got it though. The Company has offered its stock-in-trade as security but Creevey said he had no confidence in its valuation. He said even Dundas’ gung-ho picture of the Company noted only a decrease in its deficit, not a profit. Dundas said he had the Directors’ agreement to meet some naval expenses that England would shortly incur in Eastern Seas and this assistance was valuable.

Sat 17th Nov 1810

The shareholders of the Bank of Bengal have met in Calcutta to consider whether their enormous holdings of Company Promissory Notes should be converted into the Company’s new 6% loan. They agreed they should.

Sat 26th Jan 1811

All the 8% Promissory Notes issued by Bombay Government in former years will be paid-off on Friday 15th February or before.

Sat 2nd Feb 1811

The Governor-General is consolidating the Company’s Indian loans. He is calling in all the old 8% Promissory Notes of the various Presidencies and issuing a new loan at Bengal in Sicca Rupees (c. 8 Sicca Rupees per £), also paying 8%. All three Presidencies will concert their actions.

Credit Notes issued on surrender of the old notes may be used to apply for the new. Minimum investment is 1,000 Sicca Rupees.

Conversion rates for Bombay Rupees and Madras Pagodas are given. The new notes will be exchangeable for any paper issued by the Directors in London.

Sat 2nd March 1811

The Bullion Report that Cobbett is reviewing in his newspaper contains a section dealing with exchange between England and Asia. The Bullion Committee has reviewed the Company’s accounts for ten years up to 1808 / 09. They have also interviewed Charles Grant.

Two of the principal Agency houses in London that discount India Bills say from 1800 – 1804 they exchanged the Bills at 2/6d per silver Rupee 6-month’s Sight; from 1805 – 1809 they paid 2/7d per Rupee, 12-month’s Sight and most recently they pay 2/6d or 2/5d per Sicca Rupee. All the London Agency houses paid about the same.

These Bills represent British payments for goods from India and as those exports have decreased in the last two years, the London Agents are paying less for the Bills in order to maintain the overall profitability of the business.

Grant says the relationship of value between silver and gold in China was 10:1 in 1730 but with the steady accumulation of silver in that country from the trade purchases of Europe, the rate deteriorated to 16:1 today. In China silver metal is used as currency for exchange.

Gold is nowhere used for exchange in Asia except on the Coromandel coast where they use Star Pagodas and in the British Presidential towns where there is a small circulation of Gold Mohurs.[56] The currency of the rest of India is silver and silver coins are changing in value in comparison with gold coins.

For several years the Company has ceased exporting silver to China. We now send sufficient goods from India to make up the trade balance. Silver for China trade now comes from the Americans and somewhat from the Spanish at Manila.

Sat 30th March 1811

Calcutta, 8th March – there is a sudden shortage of rice and dhal[57] in Bengal, both of which have doubled in price in the last few weeks.

An extensive tract of land formerly under rice has this year been given-over to indigo and hemp production.

The Company asserts it should have no discernible influence on total rice supply but it appears some speculators have sensed an opportunity to create a shortage.

Sat 25th May 1811

The price of land in Calcutta is greater than London. A lot at the Loll Deeland near Larkins Lane belonging to Mr Leicester and measuring 3¼ cottahs (c. 2,340 sq ft) was sold on 3rd May by M/s Williams & Hohler for 4,500 Rupees. It equates with £10,000 an acre. That well illustrates the value attached to land in Calcutta.

Sat 22nd June 1811

Notice – the authorised Customs Houses for the receipt of duty on tobacco, ganga and snuff are at the Fort and the Musjed Bunder. If these items are introduced anywhere else, they will be confiscated along with the carrying conveyance.

Sat 20th July 1811

Sir James MacIntosh, the Recorder of Bombay, is preparing to return to England. He has reported to government on his opinion of the adequacy of laws:

There is no bankruptcy law to ensure a fair distribution of a bankrupt’s assets to creditors. As a result every mercantile failure produces a scramble for assets and a few recover all whilst the majority lose all. The local Agency houses, with their networks of suppliers and buyers know the capacity of local companies long before the Trustees of some W&O fund in London. When a British Indian bank is seen to have over-speculated in indigo or opium or whatever, the local capitalists are the first to withdraw their investments, never for a moment hinting at the real reason for their withdrawal. The withdrawal of itself helps to fulfil the creditor’s expectations.

Some merchants are agreeable to better clarity on this subject of bankruptcy. We have seen some recent failures in which the debtor’s estate is passed to Trustees to run-off and an equal distribution achieved. A similar development occurred in London after the recent spate of business failures there. The potential defect in this voluntary system is the absence of penalties for the concealment of assets. Everything depends on the integrity and vigilance of Trustees.

Sat 14th Sept 1811

Bills drawn on the Company’s account in India for payment in London are the means whereby the Company amasses funds in London to settle its expenses and pay its debts there (the Home Charges). An advertisement was published in London on 12th March 1811 on the subject, which says:

The Company is informed that several London holders of Bills on India payable in London wish to re-invest their funds in India after their Bills are discounted. From now until 1st March 1812 (one year), holders of Bills falling due within the period may surrender the Bills in London for re-investment in Bengal on the same terms as the 6% loan published in Calcutta Gazette of 19th September 1810 with interest payable twice a year in cash in India or by further Bills on London at an exchange of 2/6d per Sicca Rupee payable 6 months after Sight. Interest will be paid without deduction provided holders signify they will surrender their Bills for transfer before 10th April 1811. This 6% loan will run for seven years from 10th April 1811.

Sat 19th Oct 1811

Notice – Rice during the last ten years on Salsette has never been cheaper than 27 Rupees per Morah for white and 24 Rupees per Morah for black rice. It has occasionally reached 40 Rupees for both types, however the Company does not intend to make a large increase in the tax it charges. Starting next year, the Company’s toka will be set at 22½ Rupees for white and 18 Rupees for black rice.

Sat 9th Nov 1811

Notice, 5th November – To encourage exporters to trade with Basra, the Company has abolished both its 4% export duty and the consular fees of 2% levied by its Basra Resident. Bombay merchants trading to Basra will in future only be required to pay the 3% Turkish import duty.

Sat 9th Nov 1811

In early June there was a shareholders meeting of the East India Company. Bosanquet, the Company’s Chairman, called the meeting to obtain approval for an application to House of Commons to issue a further £2 million of Company shares.

The Act of 1797 allowed the Company to add £2 millions to its then capital of £6 millions. As the Company’s stock is presently trading at £200 per share this addition would raise £4 millions for the Company if the share price is unaffected. The additional capital is required to increase and extend the trade of the Company.

Bosanquet blames the war for the Company’s commercial difficulties. In 1798 the French sent 40,000 men to Egypt to unite with disaffected Egyptians and overthrow English influence. The provision of an Indian army to Egypt in response was the beginning of a series of unexpected expenses that have depleted the Company’s wealth, he said.

We have raised considerable new capital in India from our employees and the natives to fund the administration of several new territorial acquisitions both within and without India. These Indian Promissory Notes pay high interest over several years and give the option of repayment in London so the holders can use them to accumulate funds in this country. We have succeeded in converting all the old Promissory Notes to one enormous new one that pays 6% interest – abnormally low for India. It reflects the present peaceful state of the sub-continent now it is entirely under our control.

The Company calculates that it will need part of the new money to discharge these Promissory Notes in London as they fall due. The Directors are thinking to use £1 million to pay off Promissory Notes and another million to sell as new shares which could produce up to £2 millions at the present market rate of the Company’s stock.

We have also arranged to send at least £500,000 from India via China to London. This amount could increase to as much as £1 million but Bosanquet wishes to be prudent.

Sir Hugh Inglis corroborated the Chairman. The Resolutions were then approved unanimously.

Sat 30th Nov 1811

Notice – The Company has learned that extensive smuggling in country ships and native craft occurs at Bombay harbour during the night. The Regulation of 1768 is revived. This prohibits all communications between the shipping and the shore between dusk and dawn. Only the Customs Master, Superintendent of Police or the Town Major may issue licences of exemption from this Regulation.

Bum boats have hitherto been unregulated. In future the Customs Master will register all such boats and apply a unique number to their hulls. Unregistered boats will be excluded from the harbour.

Mon 3rd Feb 1812 Extraordinary

Notice – the 8% Promissory Notes will be paid off on 18th February. You can exchange them for the 6% Bengal loan at 106 Bombay Rupees to 100 Sicca Rupees. The new Notes will be dated 30th June 1811 and the first interest is payable a year later.

Sat 7th March 1812

The discount on the new 6% Promissory Notes is 1.1% and Bills on London are cheaper too.

Sat 4th April 1812

Notice – The private traders in India who buy the Company’s imports are permitted to export them to any other port in India or to the Company’s stations in the Persian Gulf (Basra, Bushire, Muscat). Hitherto the trade in European staples to Persian Gulf was a monopoly of the Company.

In future the Company does not intend to consign goods to any of its stations in the Gulf and will allow a qualified free trade (no woollens or metals) to those destinations. This concession is unavailable to merchants based in England.

Sat 18th April 1812

Notice, 9th April – The Bombay town duty on imports of spirits is a half Rupee per gallon, except those distilled on Salsette which pay a quarter Rupee a gallon. The usual drawback for re-exports is permitted.

The duty of 55 Rupees per 155 gallons of Batavia arrack and the town duty on that commodity of the same amount are both cancelled. In future Batavia arrack will pay the same import duty as Ceylon arrack i.e. 15% of invoice value.

Thurs 7th May 1812 Extraordinary

The Company’s Directors have unanimously resolved not to drink French wine until its import is rearranged to provide a commercial advantage to Britain.[58]

Sat 9th May 1812

The Company’s government is persuaded to raise revenue by lotteries. There are a few on offer weekly in one or other of the Presidencies. There is much spare cash in the hands of the employees and this is a popular way of investing it. The lottery currently advertised is the 7th Lottery for the Improvement of Calcutta. It offers prizes of 475,200 Rupees and the balance of 64,800 Rupees is earmarked for communal purposes.

5,400 tickets are sold. In Bombay they cost 110 Rupees each. The extra 10% is to reward the administrative cost of the Agents as the tickets are sold throughout India, not just in Calcutta (for Madras Lotteries the Agent ’s commission is 15%). If you have an account with the Agent (always a leading merchant) its easy to buy; if not, you must remit the funds via your own agents at the nearest Presidency.

Today Bombay has advertised the first of several lotteries that will ultimately fund the construction of a Town Hall for the assembly of up to 300 persons. It is to be built on Bombay Green and is estimated to cost 200,000 Rupees.

Sat 25th July 1812

Notice, 20th July – The Directors have made rules for the trade of Mauritius and Reunion since they became part of the British Empire:

Any British subject may trade to the islands under a licence granted by the Company. The licence will always require the ship to proceed direct from / to London. Imports to Britain must be off-loaded into the Company’s warehouse in London and sold at the Company’s sales. They will be treated like the privileged goods of the Company’s ship officers.

The trade of Mauritius and Reunion with India will in future be under the Company’s exclusive control. It will operate in the same way as the trade of India to the Cape. Temporarily we allow the Governor-General to licence ships for Mauritian trade but these ships may never extend their voyages to America or Europe. The quantities of goods will be monitored as this concession is to satisfy the domestic demand in the islands only and is not intended to create a re-export trade.

The Directors confirm they permit direct Indian trade with Africa, South America and the west coast of North America.

Sat 25th July 1812

House of Commons – Wallace of the East India Committee has sought to introduce the report of the Committee on India – its intimidatingly bulky:

Creevey said we should consider the approaching Charter renewal. He said there was not a man in the House who knew what the Committee had been doing for the last five years and now we are expected to digest this forest of words in one session. It’s the usual Company thing – either no information or a surfeit of useless information, he said. The Committee’s papers include two voluminous financial reports containing papers that do not tally with each other and which together maintain the esoteric obscurity that always characterises the Company’s accounts.

Creevey said the Company is obliged to pay the government £500,000 a year in compensation to British merchants who are excluded from Asian trade by the Company’s charter. In the last 19 years it has been paid once whilst the government has had to advance £1,500,000 to the Company during the same period. The Company’s debt had now increased to £30 millions and their Bond Debt to £7 millions. The accumulation of £12 millions as security for the Company’s capital that was agreed before the last Charter renewal has never even started to accumulate.

When the Company started business it made good its commitments. William of Orange got a £2 million loan for giving them exclusive privileges. Queen Anne got £12 millions for continuing them. Since 1765 the Company has been sovereign in part of India and the House agreed the British people should participate more in the Company’s profit but nothing has been paid.

Burke’s Report of 1781 showed the Company was no longer a trading firm but a landowner. They still operated a fleet but it was all chartered London tonnage to carry out the stores of the Company and return the tribute of production and manufactured goods being rent paid.

Since then the Company has no more tribute to repatriate and exists on loans from its employees. The amount of property tax it collected in 1811 was £1.1 million less than that collected in the prior year. The Company could not make good this shortfall from its land holdings or stock of goods – it was defrayed by commercial profits.

The people of Liverpool who are dependent on American trade (which has been stopped by the US government’s embargo) are suffering and the number seeking for relief from the Poor Houses has increased from 8,000 to 15,000 in just the last month. Whenever the people of England have been permitted some slight access to Asian trade, the effect has been beneficial. Creevey suggests the Company is incompetent and its trade should be opened to everyone. At least British merchants should get as much access as neutrals.

It’s a funny thing that the Company has financial difficulties whilst American merchants, who get limited access, are hugely profitable.

Creevey does not recommend transferring the Company’s revenues to the Crown. Its neither in the interest of the shareholders or the country generally. We should just note that the original capital of the Company has been entirely lost and the shareholders are actually exposed to ruin. This is a matter for the whole House to debate, not a secret committee.

General Gascoigne noted that all the ports of England were preparing petitions requesting access to Asian trade and they also petition for an end of the Company’s monopoly.

Charles Grant, one of the Company’s MPs, said the Committee’s report was really very useful. The Company’s account with government was contained in the two reports – on Ordinary Revenue and on Extraordinary Revenue – and gave complete information. A careful reading of these reports would allow a fair person to conclude that the Charter should be renewed. Creevey’s references were from the 9th Report which detailed the state of affairs in 1790 and had since been superseded. The annual payment of £500,000 that Creevey mentioned was not compensation for the monopoly. The Company does not exclude British merchants from Asian trade because it fears competition. He was sure that a well-informed man would conclude that opening India to free trade would not be beneficial. Our continental competitors can neither sell European goods in Asia nor Asian goods in Europe. America is a special case because of that country’s neutrality – they carry Indian goods to France and no-one else can.

Whitbread noted that 4 MPs received full board from the Company.

The Chancellor of the Exchequer thought a good part of Asian trade could be opened to relieve distress at English ports without prejudicing the Company. The reduction in the Company’s rental receipts in 1811 was actually not serious. Many of the 1809 collections had been paid late and appeared in the 1810 accounts. If you took all three years, the trend was up and 1810 was the best year the Company ever had. It was the same with the Indian outports. 1810 was a bumper year and 1811 has been comparatively poorer but still more profitable than any previous year.

Brougham said everyone knew the ministry was negotiating a renewal with the Directors and the terms were said to have been largely agreed. The ministry does this privately and only comes to this House for approval. Actually the Company’s acts are so complex that documents alone are inadequate to reveal its full extent and witnesses were required. All data leaking from the Company was specific and partial and no-one outside the Directors really knew its significance in the big picture.

Concerning free trade, if anyone thinks India is a pot of gold they just have to look at our new South American trade. There the Board of Trade stimulated exports and everyone lost his shirt. It is the latecomers who see the mistakes of the ‘early birds’ and make profits, Brougham noted. There is a very large number of people in England who have been devalued or bankrupted by the ministry’s policies. The desolated people of Liverpool are one small example of a problem that is countrywide.

Brougham was particularly concerned to have a timely report. Too often the committee is appointed late and reports late and there is no time to read the report, which is often vague or incorrect, before voting on renewal.

Lord Folkestone said the ministry’s negotiations with the Company had produced a Report and he hoped the House Committee would not be tempted to act as messenger in bringing that Report before the membership. The real problem in the country was the costs of government – tax after tax, surcharge after surcharge, appeal after appeal – all unredressed.

The House then voted and the Committee was revived.

Wed 12th Aug 1812 Extraordinary

The British ministry has offered the Company a deal. If they will agree the incorporation of the Company’s army in the national army they will retain their monopoly on trade.

Sat 15th Aug 1812

Bosanquet chaired a meeting of the Company’s shareholders:

Robert Dundas wrote the Company at end 1808 that the liquidation of its debt is a pre-condition for Charter renewal. He also required the union of the Company’s army with the national army as proposed by Cornwallis some years earlier. He wanted an Indian government that nurtures the native Indians and not just British Indians. The last item on the ministry’s wish-list is the opening of trade.

The Company’s Secret Committee concluded in January 1809 that both military union and free trade were totally subversive of the Company’s administration. The Company maintains its view that trade to India is unprofitable. It already exports as much British manufactures as the market can bear. The Dutch and French had also tried to create an Eastern market for their home manufactures and failed. Those were national ventures but the Americans likewise had attempted to build a market in those goods and they failed too. Obviously there is no market.

The thing is that the preponderance of Indian people are poor and had few wants, whereas the handful of rich Indians stubbornly resist British invention and cling to their traditional goods. When the Company was obliged by the 1793 Charter to allow British merchants to export some goods to India (in Company ships) the tonnage provided was not used for British woollens or other manufactures but almost entirely for booze for the Company’s employees.

As regards the export of Indian products it would be foolish to try to increase production as there was no market and surplus production would simply drive down prices. If the Indian people are encouraged to grow produce for export and those products cannot be sold, they will sustain severe hardship.

Free trade would be even worse. A gang of speculators will be released onto India who will disrupt the market for every commodity as they do in Britain. They will threaten the Company’s China-trade monopoly, the profits on which are imperatively needed by both Company and ministry, and their trade will destabilise the conduct of the Company’s auctions in London (where all Asian produce is presently sold). The Company can regulate its employees by registration and law but if speculators get in to India it will be impossible to control them, they having no domicile in India. They would expose all the Company’s commerce to danger. The Company’s Secret Committee concluded that a renewed Charter that embraced free trade could not be recommended to the shareholders.

The Company’s army was the subject of admiration throughout Europe. The Company’s European officers are familiar with the prejudices of the native soldiers and adapt their authority accordingly. A measure of Indian language instruction is given to ensure the officers are competent in this respect. Education is best absorbed at a young age. The Company’s army is composed of officers who join as cadets and get promoted by strict seniority. Promotion by seniority and special local knowledge make the officer corps of the Indian army unique. Any attempt to unite the two armies would be hazardous and confusing. The Indian army has a peacetime establishment of 140,000 which is many times the size of the British army. The administrative burden of the combined armies would be almost unbearable.

Subsequent letters between Bosanquet and Dundas revealed the ministry was prepared to forego amalgamation if it could have free trade. That was the development that had caused Bosanquet to call this meeting.

He noted that the Company was about to surpass the Mughals in the extent of Indian territory under its control. The Dutch, Danes and French had been driven out of Asia. We have achieved this by our own efforts and expense without much help from Britain and we have agreed to pay heavy contributions to Britain for the privilege, he said. He thought the ministry’s attitude should be one of gratitude. At the last renewal in 1793 the Company was allowed to pay a 10% dividend (later increased to 10½%) and we got a grant of £100,000 (later increased to £500,000) which, at the time, did not appear necessary to repay.

Since then the country has been at continuous war which usually destroys commerce but the Company has continued to prosper although it had been adversely affected by prize-taking. During that period the Company has annihilated the power of Tippoo Sultan, removed the French army from Hyderabad, occupied Ceylon, Mauritius, Malacca, the Moluccas and Java. All these actions were immensely expensive and were the cause of the debts.

A second drain on profits has been the high rate of interest expected on loans in India – generally 6-7% but sometimes as much as 12%, depending on the availability of funds and the urgency of need. To get these loans in India, the Company usually had to offer the option of repayment in England. Since 1797 £14 millions had been drawn in England in respect of loans received by the Company in India. Now the Company’s debt in England was reduced to £6 millions. Last year (1810) we received less than £1 million in London from India but we have funds available and can send more if needed. In spite of the costs of these obligations to extend territory, we have remitted surplus profits from Indian trade of £100,000 in 1810 and it will be £200,000 in 1811.

As regards government views, Bosanquet hoped the ministry would recognise the need to keep India in the Empire. If they insist on taking our Indian trade monopoly, they should at least restrict it to British capital and British merchants in British ships.

At the conclusion of his address, Bosanquet pointed to Charles Grant, sitting in the corner of the hall, and identified him as the author of the Company’s response to the ministry.[59]

Sat 22nd Aug 1812

The annual advertisement for free trade to England in Company ships is recited. It is only in English. It seems the Indian and Parsee traders are not expected to participate.

Sat 22nd Aug 1812

Randle Jackson has told the Company’s directors that their capital is insufficient to engross the entire prospective trade of Asia. He thinks a limited access to British merchants is the way ahead.

The Americans and all other friendly neutrals (of whom presently none) already have access since Dundas brought in a Bill based on Lord Kenyon’s decision in one of the prize cases. It is anomalous that Americans should have better access to Asia than Britons. Dundas slipped that Ordinance passed parliament on his assertion that the Navigation Acts do not extend to India!

Fortunately, the Americans bring bullion which increases Asian prosperity. On the other hand they are participating in a trade that was formerly the Company’s and they provide cover for numerous British traders posing as Americans. All the Asian goods sold in West Indies are on American account and we have lost the profits on all that.

Our treaty with America has expired but the Act giving Americans access to Asia remains unrepealed. Jackson says the Directors should petition the ministry to repeal Dundas’ Act and, if there is real doubt, to expressly extend the jurisdiction of the Navigation Acts to Asia. This will provide a framework in which to transfer American Asian trade to Britons.

We have captured all the European colonies in Asia (except Goa which we garrison and is in any event a colony of Portugal which country is under British administration) and in the West Indies and we must prevent their colonisation by other nations whilst we can. The day we open Asian ports to everyone will be the day we lose Asian trade.

The ministry should be brought to recognise that we provide it support. In 1730 we paid £300,000 in duty; in 1793 £1,000,000; in 1803 £2,500,000 and for the last five years £4 millions (a reference to the Customs import duty on Asian goods, mostly China tea). We achieved this by expelling all the other Europeans in India with our own armies – it costs Britain nothing. It is the Company’s territorial success in India that has boosted British prestige in Europe. If we allow foreigners back in, we risk that achievement.

When we agreed to a limited access in 1793 we got 2% added to our dividends. What are we offered for free trade to Asia? At present the private merchants pay us 3% on their trade in our ships. If they are to get free trade, we want at least 5% for the use of our port facilities and it should be paid without deduction to the shareholders in increased dividends.

Jackson also opposes the academies that are being established in India. We want people schooled in England with a proper concern for English interests. If they are tutored in England, their attachment will be to England, he says.

George Johnstone said we got the extra 2% on the dividend when the country expected we would be paying £500,000 a year to government. We haven’t paid that and our chance of getting approval for an even greater dividend are accordingly poor.

It was also the case that the Company’s debt has increased by £26 millions since last renewal in 1793 and we are about to launch an important loan for £6 millions which can be done only if conditions are right.

Johnstone thought the civil power of the Indian government should be increased so the military clearly recognised its inferior status. That would permit the administrators the usual means of operating on the hopes and fears of the soldiery. He repudiated the policy of promotion by strict seniority as it gave officers nothing to hope for or to fear from government.

Rigby said Castlereagh had erred in making the Company liable to pay income tax. The Company was a great supporter of government but this act had been hostile and inconsistent with former policy. We should have been exempted.

Lowndes said the Company had paid £9 millions extra in freight to the shipping interest due to war rates. This diminished shareholders’ profits. In recognition of this support to British shipping, we should be relieved of income tax on the dividend.

Bosanquet summed-up. The discussion has been critical of Directors. People should remember the Charter is about to expire whereafter we will have nothing. We have preserved the China monopoly; our direction of the Indian army; our use of London as sole port for off-loading. We have obtained a ministerial pledge to prevent European emigration to India – these are all great successes and far more important than exemption from income tax.

We have a shortage of cash and will soon have to ask government for permission to raise a big loan – we have to see the big picture. Our relationship with government has to be satisfactory to both parties. Have faith in your Directors to get the best deal.

Inglis said in 1799 all the ports of Europe were open to British trade; now they are all closed against us. It is unsurprising that British merchants are searching for new markets. This reinforcement of our opponents has more or less united the entire country against our monopoly. We would do well to forego the little points and focus on the essential ones.

Sat 24th Oct 1812

The Chairman of the Company Sir Hugh Inglis has addressed the shareholders at India House on 2nd May. Lord Melville (now young Dundas) says he recognises that we cannot permit free trade in Asia. There is some talk of a limited free trade to ports that the Company does not itself trade to, but its preliminary.[60]

The important thing is the China trade. Britain sells £1 million of woollens and manufactures to China in exchange for tea, on which the government gets £4 millions of revenue (and the Company about the same in sale profits). If the trade is thrown open, our pricing arrangements at Canton will be deranged and tea will get more expensive (i.e. the value of tea in Britain will become known to the Nanking wholesalers and their Hong merchant intermediaries and more woollens will be required to buy the same quantity).

It is also imperative we receive all the exports of India in London, and nowhere else, so we can restrict supply to our auctions and maintain stability in the market. We know exactly what we are doing and no-one else does. The revenue officers who attend our auctions are experts. If we depart from this settled system we will incite an increase in smuggling of tea and silk which is already becoming extensive.

The majority of ships on the British Register average 300-400 tons whereas our Indiamen are 1,200 tons. If small ships trade East, they will load in all the myriad little ports of Asia and discharge in all the ports of England and we will completely lose control. It would require hundreds of thousands of Customs Officers to maintain the revenue. Our big ships are distinctive. Their unique size limits them to the port facilities at London.

If we conduct Asian trade in small ships they will be indistinguishable from the Americans with whom our free traders are already often confused. The huge investment that our Indiamen represent, hull and cargo, keeps business in the hands of the best qualified people, the people who have demonstrated success by their wealth.

The new trade in spices which we have just monopolised will be totally destroyed by free trade. One or two Indiamen can carry the entire annual spice consumption of Europe. Just one small interloper could destroy that market.

If Asian trade is permitted at British outports, the free-traders will ship earlier than us and, by anticipating our auctions in London, they will destabilise prices. It is by restricting trade to London that we make trade so productive. Free trade will not make Bristol, Liverpool, Glasgow and Dublin richer, it will make London poorer. This argument about ‘rights and freedoms’ has no merit.

What of the business of those City gentlemen who are already investing in Asian trade in shipping, in financing the privileged tonnage and in providing commercial services? Their capital involved in Eastern trade has been estimated at £5 millions but is very likely twice that. What about our investment in the East India Docks? What about the Company’s great warehouses? Is all this investment and employment to be jeopardised? What about that fine body of men who officer and man our ships? Their privileged tonnage is worth £600,000 a year. Tens of thousands of Londoners rely on the Company for their employment. The extent of change that free trade would cause would disrupt the entire City.

If you are against new taxes you must be a supporter of the Company. The fortune of the Company is the fortune of the revenue. The two rise and fall together and cannot be separated.

The quality of the Company’s goods is unquestioned everywhere. We only trade in the very finest goods. Foreign buyers accept our goods on the strength of our shipping marks on the bales. The quality is assured. If we have free trade, that will be lost and Britain’s commercial reputation will be damaged.

Sir Hugh said the clamour against monopoly was solely due to commercial distress which was in turn due to the French Decrees.[61] The supposition that Asia represented a huge potential market for British manufactures was absurd. Who in Asia will buy our knives and forks, our shoes and socks, our hats and coats. Most British manufactures are completely unsuitable for Asian trade. We know what we are doing. Leave it to us.

Sat 7th Nov 1812

India House, 5th May – negotiations for Charter renewal are continuing and the barrister Randle Jackson has given another long opinion on the subject to the shareholders:

He notes Lord Melville has agreed that the property of the Company, particularly its share price, must be protected. Other officials lack Melville’s understanding of our business. Lord Buckingham’s proposals would destroy our Company.[62] The only point we are in dispute with Melville is his belief our trade need not be confined to London.

The problem for the ministry is the constant stream of deputations from the manufacturing towns and outports seeking for new business to replace what has been lost in Europe and America. The ministry wants to throw them a bone. These people are saying the Company makes no profit from its Indian trade and therefore cannot be harmed by opening it to competition. We opened private Indian trade to England in the last Charter. British merchants do not understand that we use our commercial profits to conquer new countries for England as well as pay the dividend. The advantages are prospective. We have to invest in conquest before we can reap the advantages in revenue and trade, he said.

These intending interlopers say the Americans have access and therefore they should also. They do not know that American ships brought only £1.2 millions of British goods to India last year. The England / India trade is not the big market they suspect it to be.

Lord Buckingham has collapsed before these speculators from the industrial Midlands. His proposals would permit every town access, whether they have any previous India-trade or not. Ministers have been overwhelmed by the ‘numbers game’. A delegation arrives and claims to represent ‘n’ number of people and the ministry instantly and mindlessly seeks to accommodate them. Tell the ministry you are a hundred or a thousand and they will abandon their former principles. The Company, on the other hand, has no political objectives, no voters to purchase or intimidate; we just try to do our business.

The Chancellor of the Exchequer has told the House of Commons that there is insufficient time to satisfactorily debate Charter renewal in the present session. The Company should ensure its arguments are well prepared and rehearsed before next session. We must remind the ministry of the fundamental importance of the services we render to England.

Jackson then proposed a detailed resolution that was instantly seconded and carried by an overwhelming majority.

The Chairman (Inglis) suggested the resolution be published, which was agreed. He noted that many of the Company’s earliest factories in Asia had been purchased rather than obtained by conquest. If government claims a right to take these away, it must pay compensation, he thought.

Thornton said if the ministry insisted for renewal on the presently indicated terms, it might as well say ‘farewell Company and welcome United Company of Smugglers from all parts of the Empire’ (applause).

Sat 7th Nov 1812

House of Commons, 5th May – A petition has been received from the merchants and ship owners in the Company’s service praying for renewal of the Charter. The signatures were on a separate piece of paper and it was accordingly rejected.

The packers of the Company (warehousemen) have also petitioned for renewal. It was tabled.

A third petition from the merchants of Cork against the Company’s monopoly was also tabled.

Thurs 12th Nov 1812 Extraordinary

The leases on a large selection of farming lands are for auction by the Bengal Revenue Board. They are being sold to provide a fund for the recovery of unpaid land tax from the former leaseholder.

The estates are in Cuttack, Dacca, Jessore, Goruckpore, Mymensing, Shahabad and Sylhet. Further details from the Collectors for the above districts.[63]

Sat 26th Dec 1812

The commanders of Indiamen have held a meeting at the Jerusalem Coffee House in London with Hugh Lindsay in the Chair. They have drafted a Petition to both Houses of Parliament requesting the Company’s monopoly be maintained:

They say there will be no advantage to Britain in opening the Indian and China-trade to competition. On the contrary the only effect will be the ruin of the Company. The naval service of the Company has been established over a century and many respectable people used it as a route to material success. Time served in the Company’s navy was for long accepted as qualifying towards the six year’s sea-time necessary to become a Lieutenant in the Royal Navy. Consequently many Company officers became Royal Navy officers and many paid-off Royal Navy officers worked for the Company.

The company’s navy has made important conquests and has often assisted the Royal Navy. On those occasions the Company’s officers had sacrificed their personal advantage for the national interest.

The Company’s officers have made important contributions to the sciences of astronomy, mathematics, engineering, etc. They have surveyed much of the East and improved our understanding of its geography.

Until one becomes a commander at 25 years (the youngest possible) one pays and pays. It is only at commander level that the job starts to pay back.

The country tried opening Asian trade in 1793 and it failed. The best course is to maintain the Company’s navy and not ruin its many officers. By keeping the qualification high, the Company has prevented the rise of English piracy in Asia – everyone remembers what happened to HMS Bounty.

There are 2,500+ officers in the Company’s marine. They are entitled to 3,000 tons of privileged tonnage and this quantity has always been adequate to satisfy the demand for British goods in Asia.

The only Chinese export that is conceivably of interest to British merchants is silk but the export of silk is rigorously controlled by the Canton government. There is no coasting trade in silk available to us – the Chinese themselves carry it throughout the eastern islands from Malacca in the west to the Spice Islands in the east and their prices are extraordinarily reasonable.

Many other Chinese manufactures were formerly imported to Britain (e.g. chinaware) but parliament has restricted their import to protect domestic manufacturers. These goods are now either illegal to import or attract a swingeing duty to make their import uncompetitive with the domestic supply. As a result only tea, raw silk and nankeens find a sure market in London (the three items the Company expressly reserved to itself under the 1793 ‘free trade’ Charter provisions). The trade in drugs (rhubarb root, senna, cassia, and many other purges.) has never been large and is mostly re-exported to Europe. The frequent absence of a return cargo on China-trade means it is very common for the holder of privileged tonnage to make his returns in Bills bought from the Select committee of the Company at Canton.

We are experienced traders. We have speculated in all sorts of goods. We can assure the mercantile classes that there is no magically profitable trade to be had. The China-trade is almost totally a tea trade. Formerly we bought it for silver; now we exchange tin, lead and woollens for part of the tea cargoes but these earn no profit. We also exchange Indian cotton and opium.[64]

The Company’s monopoly of tea is a boon to the home government. It limits the sources of supply, which diminishes smuggling and ensures revenue collection is simple and sure. The tea revenue is imperatively needed by government and would be lessened if the trade passed to merchants generally.

We are both merchants and seamen. We can manage Eastern trade ourselves. We know the customs of the Asians and the navigation of their seas. If any group of British people can assume the conduct of Eastern trade, it is us, but we do not demand it. We believe the present system is the best possible available.

Sat 23rd Jan 1813

The Company has assessed a 5% rate on all houses in Bombay that are worth 20 Rupees per month or more in rental income. It will be collected w.e.f. 31st January 1813. If any houses are owner-occupied the rate will be set to fit the circumstances. Empty houses are exempt.

Sat 6th Feb 1813

The Company’s Directors have acted to mitigate the shortage of bullion in London. They have waived their right to a 3% duty on all silver imported to England from Asia. The waiver is only for the year 1812.

Sat 13th March 1813

Undated Notice – The Presidency’s revenue officers are preparing to institute a Coconut Tax. They require a statement of the number of coconut trees under cultivation. All land owners in Bombay and Mahim are to report on 1st of each month. Under-declarations will be fined 6 Rupees per tree and half the fine will be remitted to the informer.

Sat 3rd April 1813

Notice – The Company will commence its quarterly sale of stores on 15th April – cloth, tools, window glass up to 14” x 10,” etc.

Wed 19th May 1813 Extraordinary

Bombay Castle 17th May – Governor Nepean has received the following advices from London, dated 18th December, which are published for those interested in grain trade:

The Company’s Directors have been asked by government to facilitate the import of rice from India to Britain, given the uncertainty of grain supply from Europe and America. To encourage supply, the government is enacting new law to permit rice imports on a special low duty of 10/- per cwt for three years.

The Company has in the first instance agreed to licence ships from England to sail to India and bring back rice cargoes between April 1813 – Aug 1814. The ships may bring to India any British manufactures except arms & ammunition. They may load three quarters with rice and the remainder with any Indian commodities except saltpetre, piece goods, indigo, raw silk and all kinds of China goods.

We also allow India ships to take rice to London on the same conditions.

The freight rate from India to London is £33 per ton on our regular ships and £24 per ton on extra ships; the return leg is £11 and £8 per ton respectively .

The Company will only charge ship owners the actual costs of wharfage, stevedoring and warehousing in its facilities in London. All imports to London will be sold at the Company’s auctions.

No passengers may be carried in either direction.

The Directors note these arrangements are dangerous to the exclusive system the Company operates in Asia and are sanctioned only in light of the importance and urgency of the national need.

Sat 29th May 1813

Sir Hugh Inglis called a quarterly meeting of the Company to declare a half-yearly dividend of 5¼%. Negotiations with the ministry over Charter renewal are at a delicate stage, he said.

Randle Jackson reminded the shareholders that neither Fox nor Pitt had ever considered opening Asian trade. Melville, after 20 years at the head of the Board of Control, thought likewise. Every informed person agreed on the fundamental importance of monopoly until the last few months. Even MPs were abandoning their usual state of thraldom to the ministry and recognising the necessity.

Jackson said this was just as well – we may have to appeal to parliament to redress the intentions of ministers. Petitions to open Asian trade are being received at Westminster from towns that have never exported to India or received a bale of India goods. Fortunately the City merchants have published their opinion of the ruin that would follow free trade. There can be no doubt that London is the emporium of India and East India House is its depot. The Company’s problem is the timidity of the ministry.

Inglis said the ministry is thinking only of trade. They have forgotten the shareholders, the widows & orphans of our employees, and all that vast concourse of industries that derive support from India.

Michael Brock asked, if the ministry’s plan to increase income tax by 2½% actually happened, would the Company pick up the tab. Inglis said “Yes – the dividend will be preserved.”

Sat 26th June 1813

The Company forced the holders of 8% loans to receive back their investment or transfer their funds into the new 6% loan. Many overseas investors have discovered that their investments had been transferred unauthorisedly by their Indian agents. They threatened to make Indian Promissory Notes a matter for parliamentary debate.

This is not the time. The Company has now agreed to pay the overseas investors 8% for the period of the original Promissory Note’s validity.

Sat 3rd July 1813

The ministry has told the Secret Committee of the Company (three Directors, commonly the Chairman, vice Chairman and another) that it intends to declare free trade to India in the renewed Charter and has identified ports at which the trade may be handled – Bristol, Cork, Dublin, Glasgow, Hull and London are mentioned.

The China-trade, to London only, will continue as the Company’s monopoly.

Sat 10th July 1813

East India trade:

  • The Common Council of the City of London has debated the opening of trade to Asia. They seem to fear that the consequent loss of business to London from ending the Company’s monopoly would be generally felt in that city. The India Company has been an assiduous supporter of the City of London, selling its imports and raising its domestic loans here. That would be dispersed all over the country if Asian trade is freed.
  • The Chamber of Commerce of Edinburgh has petitioned Lord Buckingham as President of the Board of Control that if Asian trade is opened, Leith may be added to the list of outports through which the free trade may pass.

Mon 19th July 1813 Extraordinary

The Company has chartered 20 Extra ships for the 1813 season. They are all smaller than the Company’s Indiamen – generally 500 to 600 tons – but with three 700+ tonners amongst them.

On 20th January the Company held an extraordinary Court to brief shareholders on developments in the renewal of the Charter. Inglis told the meeting that unless the ministry’s plans were changed, the loss of business to London would have national significance.

Shareholder Weybridge said ministers had been overly influenced by the torrent of petitions from the country. All those petitioners were from greedy people without any understanding of Asian trade. Weybridge said Pitt and Melville completely understood the Company’s situation – how can these present officials hold a different view? He became distraught and was unable to continue speaking.

Davis said he knew Indian trade. He had made four voyages there and had been both a merchant in Indian goods and a broker of them in the City. He knew what he was talking about. Transferring the China trade from London to the outports would injure London without advantaging the outports. It was notorious that for many years the exports from England to India had been excessive and unprofitable. People used to say the freight was too high; now they said it was too low. A ship that is suitable to bring back sugar and pepper from the West Indies was entirely unsuitable to perform the same function in East Indies. The merchants in the outports have no idea what they are asking for.

Several of the Company’s ship captains, in consideration of the losses they were making on privileged tonnage, applied to Minto at Bengal for draw-backs and Minto said ‘you are all speculators and must pay the price of imprudence.’

When the Earl of Buckinghamshire,[65] was Governor of Madras in 1795, as Lord Hobart, a ship named Rodney (Carruthers) arrived with cargo for Madras and Calcutta. Orders awaiting the captain at Madras required him to complete his outbound voyage there, dispose of the Bengal cargo in Madras and return to London. The Captain put an extra £8,000 of British manufactures into the Madras market and collapsed the prices of all English imports. Lord Hobart suggested a Lottery would be the best way of converting the goods into money – he should remember that (Buckingham is using his office to press for a free trade in Indian goods).

This is the danger we face. If several markets in Asian goods are opened, one at each outport, we will have some goods expensive and others cheap depending on local conditions. This will encourage speculators who always disrupt markets at the merest whiff of opportunity.

Another problem is smuggling. The Company has professed its monopoly restrains smuggling but the ministry received advice from the Commissioners of Customs and Excise who told them that there is already more smuggling of India goods in the Thames than there could ever conceivably be if the trade was opened to the outports.

Last year Dundas told the Directors that £181,000 of private goods were imported from India in 1793; after the loosening of the monopoly (in 1798) £881,660 was imported privately to London. Since then war has diminished trade and no useful statistics are available but Dundas relies on this earlier growth to establish the case for free trade.

The great Indian Agency Houses complain against the burgeoning trade of American ships using London capital to buy and sell in India. Those Agencies say their own capital has now increased to the point that they can themselves finance all the private trade to England. The Agents all deplore this advantage we allow the Americans over our own maritime traders. They say the choice for monopolising this trade is with either the Indian Agencies or the Americans. They feel the country should have no doubt whom to support.

At present goods are sent from Calcutta to America on Bills from Calcutta drawn on London. We are financing the trade of a competitor to the detriment of our own ships and merchants. The underlying concept of the Navigation Acts was to give British merchants the carrying trade of British colonies. In fact the Americans are not importing Indian goods to any great degree – they are re-exporting them to central and south America and to our own colonies in West Indies.

The parliamentary Select Committee of 1809 proposed to levy a double duty on American ships exporting from India. That would have entirely solved the problem. Gallatin[66] has told the American Congress that their government gets $1 million a year from duties levied on their merchants’ trade with India and we are at war with America.

In 1809-10 season the Americans exported 6.8 million Rupees worth of Indian goods while British private merchants exported 7.4 million Rupees. American trade will soon exceed ours if it does not do so already.

British exports to Asia have increased fivefold since last Charter renewal. In 1798 we imported goods into India to a value of 1.8 million Rupees. By 1802 – 3 that had doubled to 4 million Rupees. It was 7.7 million Rupees in 1805 and 8.9 million Rupees in 1807.

Our exports to China in 1794 were £600,000 but in 1803 they were £1.3 million and we were told all along that China-trade was hopeless.

In 1793 Dundas offered us a deal – take his terms or surrender the Charter. We had no answer for him. But now we have investigated the subject clearly and have identified the complaints we should have made then and will certainly make now.

The crews of Indiamen are almost exclusively provided by crimps. They supply the worst sort of sailors. If the trade passed to the private merchants the quality of sailors would improve – they would be Lascars with families in India who would not desert the ship. At present the crews of Indiamen, when they desert, are immediately identifiable because there are no other poor Europeans in India. If we see a poor European, we know who he is and repatriate him.

Sat 24th July 1813

On 6th January 1813 the Company’s shareholders reconvened their meeting to discuss the state of play with the ministry over Charter renewal. Buckingham wrote to the Secret Committee on 24th December 1812 that the ministry wanted to open India to the exports of Britain from all the outports but was agreeable to restricting imports from India to London. British manufacturers responded that access to the export trade without access to the return cargoes for import was insufficiently profitable to them.

British merchants reject the Company’s argument that restricting trade to London mitigates smuggling. They say the China-trade can also be opened and answer the Company’s defence of that part of its monopoly (protection of the British revenue and solicitude for the Chinese) by asserting that proper regulation at outports is all that is necessary to establish the opened trade on a firm and secure foundation.[67]

The ministry was satisfied that the private merchants had established their case for opening the trade to ports other than London, with the exception of the tea trade. The Customs officials had confirmed they anticipate no undue effect on smuggling and, if there was, it could be dealt with by harsher penalties. The Channel has always been a location of smuggling because of easy communications with the French coast. If there is an increase, we can deal with it.

The ministry is willing to legislatively limit the number of King’s troops sent to India at the cost of the Company.

The Company replied that the tea-trade was fundamental to the Company’s continuance. The profits from tea fund the Home Charges. If there was smuggling of tea at the outports, it would not just be a loss of revenue to the government but it would reduce the ability of the Company to inter alia pay its dividend in England with the obvious ramifications on the share price.

Once the private traders get to India they will be able to organise a tea supply without going to China. They can buy at very reasonable prices from the Chinese coasting trade that operates throughout Asia and no doubt those skilled Chinese traders would soon adapt their teas to precisely suit English requirements.

The Company believes the ministry has collapsed before the private merchants and a major effect of the proposed change will be to increase speculation in Indian trade.

Sat 24th July 1813

Charter debate, 23rd January. The Americans derive an immense advantage from our welcome of their trade in Asia. It was partly due to their indefatigable efforts as traders and partly to the immunity that neutrality in war gives them. The fact was that the Americans could hardly obtain trade advantages if there were not Company’s factories throughout the East that had drawn the production of valuable crops and minerals to them from their hinterlands.[68]

The only valid reason the Directors have adduced for continuing the monopoly has been the hazard to the China-trade that would arise if it ended. Adam Smith, who is a proponent of free trade, agrees on the difficulty of preventing smuggling. Napoleon has shown us that even burning the contraband and executing the smugglers does not prevent it. Trade always finds a way.

The ministry has hardly considered this subject – it has only adduced that some regulation may be needed in the Thames – unless it tacitly intends to extend the application of the Manifest Act to Asia. In that case, the idea of validating a ship’s lading in Asia before departure is extraordinary. At present, one sails the seas and buys what one likes, where one likes – we are only concerned for the quality and price and the export duties at the port of loading. Is England willing to place Customs Officers throughout Asia to ensure Manifests are properly completed? Simply opening the trade of Asia without some such measure is absurd.

It has taken the Company decades to build its power in India to the point it can assert its commercial will in the ports and enforce a system of trade on the merchants. The great Agency Houses of India employ the finest and most reputable merchants but the small traders were up to all sorts of tricks (i.e. the recent cases of arms to China[69] and slaving at Ceylon). The fact is that everyone in Britain knows the Company is wealthy and some large part of that wealth emanates from trade. This encourages all sorts of speculators to trade East and, once arrived, they will endeavour by hook or by crook to obtain a part of the most lucrative trades no matter what regulations are enacted to restrain them.

R Grant said we should not experiment on India. We have been fighting a war in Europe for twenty years to prevent precisely the same sort of speculative development in England – the settling of a new liberal French-style Constitution on the British people. If we are willing as a nation to fight against such innovations and maintain the status quo why do we adopt different tactics towards Asia?

In 1784 Pitt said that it was impossible to transfer the government of India from the Company to the ministry because it raised so many Constitutional difficulties. Pitt subsequently renewed the Charter in 1793 for a further 20 years and ignored the Constitutional derogations.

In 1802 Melville observed that the foundation of the Company’s power in India was a grant from the Grand Mughal. Although the Mughal’s political power has ended, he remains titular sovereign of India and the Company has acted as his representative in exercising the government of India. It has made war and peace. If it is replaced by the ministry it will be the replacement of an authorised government by an unauthorised one.[70]

Melville has conceded that the prosperity of India is unknown in the surrounding territories which are still oppressed by venal government and continuous quarrels.[71] The ministry is motivated by the loss of European trade to British outports and is solely concerned to provide some other market to British manufacturers and importers – it has not thought about the matter at all. When we enquire into the details of the ministry’s plan we are given no answer but told that we should be satisfied with their decision.

As regards smuggling, it is notorious that Customs Officers have been incapable of preventing it in the Thames, the river of the capital city of the country – how can they contemplate preventing it in Asia? Our difficulty is a great number of merchants who have formerly made their profits in trade with Europe are now shut out of that market by Napoleon and want the alternative of India.

Shareholder Horace Twiss said the inability of the Customs to protect the British revenue was well evidenced by the huge exportations of gold that had occurred from England when the British gold price fell below the European price. Trade in bullion and specie is legislatively regulated but it went on unrestrainedly.

He noted Melville had introduced a limited free trade in 1793 and it had grown under the Company’s control into a valuable trade. In the first year it was £81,000, in the fifth year £800,000 and in the tenth year £3 millions. This was free trade under the Company’s supervision whereby the Company obtained some advantage for its trouble.

Ministers have referred to the licensed trade that was introduced by Wellesley when Governor-General. That was at a time when the funds of the Company had been applied to war in Hindustan and the Deccan (the Maratha Wars) instead of commercial purposes and it required financing, inter alia through the sale of trading licences.

A good number of the petitions for free trade to Asia also beg for the reform of parliament and the emancipation of the Catholics. One might suspect that the ministry, being unwilling to grant those requests, feels it least threatening to itself to grant free Asian trade.

We issued Orders-in-Council, France responded with Decrees, we indiscriminately seized American property, now we are at war. America first sent Jay to negotiate and we compensated the Americans. The 13th article of Jay’s treaty permitted American trade to India. We conceded that because we needed American intermediaries to carry our manufactures to Europe. Dundas required the Directors to construe the 13th article liberally. Other states claiming the same privileges could not then be denied on the grounds of political conformity. We are hoisted with an MFN argument which we invented for use only for our own advantage.

Formerly, when the Company had cashflow problems, the ministry turned to the Royal Exchange – now it turns to America. The power of trade is so great that, despite the Non-Importation Act, we sent more goods to America than we had before its enactment.[72] 18 months ago we knew that the privateering interest in America was pushing that country into war with us – the letters of marque were issued concurrently with the Declaration of War.[73]

The Americans bring silver to India which is very welcome but we might bring it ourselves if we chose to do so.

The Indian production of cottons and indigo for export was solely an initiative of the private traders. These trades were encouraged as the means of maintaining remittances from India to London.[74] They support the Company’s monopoly.

If the ministry is really intent on opening Asian trade it must first agree a satisfactory compensation scheme for us before the King’s government assumes the government of India. We must have security for the stock value and the dividend. It is farcical to suppose that Asia might be opened to free trade but not China. There is a vibrant Chinese coasting trade between China and the eastern islands from India to Japan that is completely beyond our control. Really the Company and the ministry both have the best interests of England in mind in continuing the monopoly.

Shareholder Trower said the cry of ‘no monopoly’ that the ministry had stirred-up amongst the people was as ludicrous as the cry of ‘no Popery’ every time the Catholic question was discussed. This is simply the case of one group of capitalists seeking to evict another group from the Indian market.

Director Bosanquet said India is an inexhaustible mine of wealth and it is the foundation of the wealth of England. We provide cotton, indigo, silk, spices, coffee and sugar quite apart from the mineral wealth we extract – gold, silver, salt, saltpetre, etc.

Grant noted the popular Petitions to parliament all suppose a great increase in British exports to India is in prospect once the monopoly is removed. There were two existing types of trade – the officers’ privileged trade and the Company’s own trade. The officers’ trade had been greatly increased by the Warehousing Act of 1798 but they had not profited from it. Indeed the real basis to the growth of ships officers’ trade was the growth in the expatriate population in India (privileged tonnage is used to ship European wines, salted meats, fashions and leatherware for the expatriate community). It was not something that could grow disproportionately to the expatriate population. In any event, this trade was an imaginary increase so far as British manufacturers were concerned for had the foreign population of India stayed in England they would likely have still consumed about the same quantities of British goods. We are talking of a trade worth on average about £3.5 millions annually. The only new article added to the usual British exports to India over the last 22 years was cochineal and that came from the West Indies not England. There is no pressure from the native traders to have a greater supply (they buy English imports from the Agencies and the Company). Those native traders should know the Indian market better than the manufacturers of Sheffield and Birmingham.

Some people say it is the high price of freight that the Company charges for use of cargo space on its chartered fleet that is the cause of diminished trade. That must be wrong as the Company’s officers pay no freight on their imports but they are still unable to extend sales.

The exports of India to England and America have increased from £181,000 in 1793 to £1,791,000 in 1810 but in 1811 they had fallen to £100,000. Right now there is £500,000 (42,000 bales) of Indian cotton and £1.1 million of indigo in the Company’s London warehouses that cannot be sold. How is the free trade going to develop these markets? American exports from India run at about £3.5 millions annually and that only started with the French Revolution.

Grant then produced a letter of Lord Wellesley’s dated 1810 stating that opening Indian trade would be disastrous. He said the commerce of the Company could not be severed from its political interests. They were interwoven.

Joseph Hume MP (who is the sole shareholder in favour of free trade) said the quantity of unsold Indian cotton in the Company’s warehouses was only half a year’s supply. It would soon be sold. He said the Company’s profit on trade had to be adjusted for duties. The Company charged itself 6¼% ad valorem on woollen imports and 10% on everything else and this revenue of about £2.6 millions was transferred to the territorial account. This should actually be a reduction from the Company’s commercial profits but co-mingling of accounts caused it to be recorded separately. Deduct the duty from the Company’s trading profits and it becomes a loss-making commercial venture. Hume said this illustrates a mischief in the Company’s way of accounting.

R Jackson noted that the Company’s capital had been exhausted by its diversion to territorial purposes. This was another reason for separating the two interests.

A private Indian merchant told the meeting on a previous day that he could always have taken 5,000 more tons on extra ships had he needed to do so but the volume of trade did not warrant it. Contrarily the Chairman told a Commons Select Committee that he admitted a want of tonnage for private trade but said the shortfall was not due to anything the Company had done.

Davis said he was a private exporter of Indian goods and had never had difficulty in obtaining all the tonnage he needed.

Hume said the comparison of today’s situation with 1783 was wrong. Fox had sought to assume the control of all the Indian patronage whereas the present ministry merely wished to take away the Company’s commerce which it had all along claimed to be the source of its repeated losses. He thought it wonderful that the Company so resolutely declined to part with the loss-making aspect of its business.

Inglis wondered if Hume was attacking the patronage of the Directors and assured him that, even without the commerce, they would still have the patronage. Inglis said it had been the capital and loans of the Company that had permitted the acquisition of control of India and the commercial endeavour was an inseparable part of the territorial endeavour.

Weybridge’s resolution was then passed with Hume the sole dissenter.[75] Jackson objected to a passage in the resolution that admitted a loss on Indian trade but Inglis thought it was worded in a sufficiently guarded way to be acceptable.

Sat 14th Aug 1813

The Edinburgh Review No 40 has considered a copy of the papers printed by the Company respecting Charter renewal:

This subject is sunk in obfuscation. A Select Committee of the Commons once wrote it had been ‘fatigued into such a despair of ever obtaining a competent knowledge of the transactions in India, that they were easily persuaded to remand them back to that obscurity, mystery and intrigue out of which they should never have been forced upon public notice, but by the calamities arising from their extreme mismanagement.”[76]

Well, the Review has penetrated the ‘obscurity, mystery and intrigue’ by first assuming that there are three parties involved in the matter – Britain, the Company and the Indian people.

The Company’s advocates assert a right to Indian territory and its exclusive commerce. They say the right derives from the sovereignty they have obtained over the native states. As a sovereign power they question the right of the British or any other Legislature to interfere in their internal affairs. This audacious opinion neglects the fact that the Company is itself a creature of the British Legislature.

The essential first step in this Sisyphean task of Charter renewal is to bring the Company’s advocates to a sense of reality.

The Directors secondly note that they have been deemed competent to administer India in the past and there has been no change that might influence their ability in the future.

In this way abuse is perpetuated on the basis of old custom.

Their third general argument is that experience (in the slightest degree) is better than speculation, they being experienced and legislators (and the merchants they represent) being speculators.

Once this much of the onion has been peeled away, they come to the merits of their case.

They hold that opening the trade of India would produce no national advantage because they have themselves already tried every commercial prospect and neither the import nor export trade can be increased beyond its present extent. This opinion excites surprise amongst the mercantile community of Britain that our country with its wealth can do so little business with a nation of 60 million farmers.

Trade occurs when one country with a surfeit of production finds another with a surfeit of production, and those surfeits are different and complimentary – we speak of real trade, not the predatory version.

It is said the machine-made piece-goods of England now rival the piece-goods of India. If it is so, why are there high import duties on Indian cloth? Indian production is not limited to cotton, we have just stimulated the production of that fibre by providing a demand for it. We might also grow an almost endless variety of other products had we the interest to do so. One example is indigo which we have made into a staple of the Indian economy. This product was ignored by the Company and was developed, almost against the Company’s wishes, by a group of private merchants seeking for a product that would provide a means of remittance from India to England.[77]

In a letter to the Board of Control of 13th January 1809 the Company’s Directors attributed the cause of the insignificant level of trade to inter alia 16 years of war. Contrarily, in their Third Report of 25th March 1802, the Directors stated their conviction that it was impossible for the British Legislature to increase the trade with India in time of peace!

We also note the late Lord Melville’s famous letter of 30th June 1801, concerning the liquidation of the Company’s debts, which allows a 30% reduction in the Company’s gross trade due to peace (i.e. the Company’s recognition that war secures international trade to England and increases the Company’s share of it by removing the competitors). Nevertheless, it is now said to be war that diminishes Indian trade. The British experience throughout this great war, except for one year, has been a steady increase in exports as we alone engross the supply of colonial and manufactured goods to Europe.

On the subject of Indian imports, the Company has repeatedly told us that Asian people will not buy British goods; that the great variety of things that Europeans enjoy cannot be adapted to Asian tastes. We will refer to our first Orientalist, Henry Thomas Colebrooke, who privately printed and circulated a book at Calcutta in 1794 on the agriculture and commerce of India. The section on agriculture was later printed in England and was well received. The section on commerce was so dismissive of the Company’s monopoly as to be deemed unprintable and it remains out of print. In it, Colebrooke notes the Company says it sells as much as possible. It says refined metals are unwanted whilst metal ore and woollens are already over-supplied and sold at a loss. It says India is too hot most of the year for woollens to have a market and neither Hindus nor Muslims can use metalware made by infidels. The Indian belief is actually captured in the works of Manu where it is written ‘the hand of an artist, employed in his art, is always pure; so is every vendible commodity when exposed to sale’ and in several other similar sayings. Colebrooke was even advised by some priests that woollen cloth can be purified by exposure to air whereas all other forms of cloth require washing. Colebrooke noticed many Indians walked the streets of Calcutta in the rainy season in woollen broadcloth as it gave better protection than the local cloth. He thought if the import market was exposed to competition the price of British cloth would fall and the Indian market in the rains and winter would increase. He also noted that Indians liked china pots and plates and used a vast quantity of metal vessels and implements, and he was unable to comprehend why the Company found such difficulty in developing its captive market.[78]

Mr Bazett, who was engaged in the principal Agency House at Calcutta since 1788 (Colvin Bazett and Co), gave evidence to the Select Committee on India in 1806 that he was ‘convinced that, if the British merchants of India were allowed to export their produce in India-built ships, and to load those ships without Company interference, exports to England would be greatly extended’. Henry Fawcett (of Bruce Fawcett & Co) of Bombay said something similar. Had the Company held the monopoly of trade with North America its policies could never have permitted that market to reach £12 millions annually as it has done for the last several years under the private trade.

The Company points to the limited extent of interest by private merchants to take-up the 3,000 tons of space they offer on the Company’s Extra ships annually, and says this establishes that there really is no extra business to be had. The private merchants say the endless regulation, potential penalties and extraordinary expense of shipping goods by the Company’s ships was the reason few private merchants were willing to take the chance.

The freight rate on Extra ships was exorbitant but space was often unavailable and private merchants had to ship on regular ships at an even higher freight rate. They also pay a 50% insurance surcharge for war risks. There is compelling evidence, by comparison of what government pays on Botany Bay ships and troop transports, to suggest the freight rate out and back should never exceed £5 per ton either way. In a few (rare) instances, private merchants had paid over 10 times that rate to the Company. Compare these rates with the cost of commodities – sugar for example costs £30 – £40 per ton – and the importance of the freight rate is revealed.

The Company also points to the speculative nature of the early trade to South America and the serious losses that many merchants encountered. It says it wishes to protect traders from their own greed. Really? Merchants are not like politicians – they do not repeat the same mistakes over and over again – they do not need the Company’s fatherly guidance.

The Company’s next defence is that frequent contact between private British traders and Indians would make the country ungovernable. The natives would be influenced by our attitudes and opinions – they would learn to protect themselves at law and become litigious. Increasing numbers of British speculators would destroy all orderly commerce. All that the Company has done to bring about the submission of the natives and their toleration of our rule would be jeopardised, the Directors say.

This is an absurd proposition. The Indian people have been subjected for centuries to the oppressive rule of the Mughals and there is not one instance of the Hindu population rising against the Muslims. The numbers of Mughal supporters in India is vastly greater than the number of Britons. It looks more probable that the Hindus did not oppose the Mughals because there were so many of them. Now the Company asserts they do not oppose the British because there are so few of them.

Numbers are in fact irrelevant. The battle of Plassey that gave us our territorial foothold in India was won by 900 Europeans and 2,000 sepoys against an Indian army of 60,000 men. The Muslims were initially most numerous in the Indus and Ganges river valleys and they were rarely found in the Deccan until the Muslim kingdoms of Beejapore and Golconda were founded by a handful of people. It was not until the reign of Aurengzeb that Muslims became numerous throughout India.

The fact is that the Indians who are most closely connected with us are the residents of the black towns of Cuddalore (south of Pondicherry), Madras and Calcutta. These people serve in our residences and offices and maintain our towns and have extensive daily contact with us. Has this made them more disposed to revolt than others? On the contrary, they are under the immediate eye of government and have proved to be unlikely to protest against us. We merely have to treat these people fairly, to repress the bad elements and protect the innocent, and we assure ourselves of their co-operation. If the Company believes the people have to be protected from the injustice of private traders it merely has to enforce existing law to achieve the desired result. In fact the Select Committee of 1783 heard evidence from Philip Francis detailing the Company’s oppressive acts in the Pergunnahs and Aurangs towards farmers, weavers and salt workers and none of these groups rebelled against those institutionalised injustices.

The Company develops this argument into an intent to prevent British colonisation of India. They say their monopoly depends on their authority. The people must fear the Company for it to successfully obtain a revenue from them. Warren Hastings wrote in his Review of the State of Bengal that the correspondence files of the Company’s Board of Trade are filled with complaints against private merchants – they pay advances to weavers (to capture their production) that are greater than the Company’s own advances to those people. The Company’s view has always been that obtaining the goods cheap was more important than developing trade. It routinely pays advances to producers to secure their production at fixed rates irrespective of the market. Hastings’ Review ends with ‘commerce can only flourish when it is equal and free’.

One of the most instructive of the Company’s acts involves the opium monopoly at Patna that is operated by a few of its servants. This was unable to compete with the quality and quantity of production by the Nabob of Oudh and the Rajah of Benares. In those states there were no advances to farmers or disturbances between the factors. The production of opium in native states was open to competition and it thrived. How did the Company deal with this robust competition? It sent an army and put a stop to it militarily, permanently in the case of Oudh and temporarily in the case of Benares, which production was later permitted to drive the expansion of the Company’s own monopoly at Patna.

The Company’s rule in India is oppressive. The Hindu is required to submit to a degree that does not occur to the nationals of European countries. The Company’s Collectors are spread throughout the country and enjoy a degree of power that is unknown in Europe. The private merchant’s business is rendered unprofitable by endless regulation. The Company is sovereign and despotic. The caste system is utilised to keep the low caste people down and anyone rising above that level is taxed to the limit. By collecting the wealth of India to the Company and its employees, the people remain poor and Company control is thought to be better assured.

In 1768 Calcutta wrote a declaration of policy to Madras:

‘…. we depend upon you to discourage foreigners. You must convert as much of the revenues into manufactures as possible for shipment home and you should invariably outbid the private traders in this. This should attract sellers to you in preference to them and will cause only a slight increase in prices. You shall prevent the Cuddalore weavers from producing any of our assortments for others; extend this restriction generally and make it permanent’.

The great commodities under Company control are raw silk and piece-goods of silk and cotton. The Company claims no formal monopoly on these products but the market in them is not free. The Company has numerous means of interfering with the manufacturers until they understand that they must obey verbal instructions – this is the Company’s means of informal monopoly.

The only sure remedy for this abuse is to remove the Company from trade entirely and leave it solely with the government of India. We should have recognised the impolicy of combining government and commerce from the fate of the Dutch possessions in India.

There remain many questions:

  • should the Company only lose the trade or should it also lose the government;
  • should the British people pay the debts of the Company when its Charter is ended;
  • should the cost of wars fought in India in respect of quarrels in Europe be for the Company’s or the country’s account;
  • should the Company’s army be assimilated to the national army;
  • should Asian trade continue to be confined to London;
  • should the Company pay its shareholders 10½% annual dividend[79] when it has made a loss and can only pay by borrowing (it’s a nice question whether there is or has ever been a surplus revenue in India) and
  • are the Indian people benefited by our rule.

There were two great investigations into the Company in 1772 and 1782 at which time the reputation of the Company in England was appalling. Then Pitt gave the Company a form that screened its activities from parliament by the institution of the Board of Control.

Burke noted that when British employees of the Company squabble, their complaints inter alia reveal the misery of the natives, but when the staff are all in agreement, the natives are said to be likewise content. All the anecdotal evidence suggests the Indians are poor and oppressed. Colebrooke’s book says Bengal is exhausted. It had historically been one of the richest countries in the world, engrossing all the trade coming down the Ganges and receiving all the trade going in the other direction.

Since our assumption of sovereignty it has become beggarly.

Sat 21st Aug 1813

House of Commons 23rd March – Castlereagh moved a series of Resolutions concerning the Company that are to be debated on 30th March. They are:

  • The China-trade is continued restricted.
  • Any Briton may import or export to / from India to / from any port in Britain provided the port has a Customs warehouse and the ship is minimum 250 tons.
  • Asian goods made from silk and / or human hair to be regulated
  • The revenue of the Company to be applied to paying its army, maintaining its forts, liquidating its debt on Bills of Exchange, liquidating its other debts, paying the dividend of 10% plus a contingent ½%, reducing the bond debt to £300,000, apportioning the profits 5/6th to government and 1/6th to the Company, making provision to repay the issued capital, etc.

Sat 28th Aug 1813

R Thornton has presented the Company’s Petition for renewal of its Charter to the House of Commons on 26th February. Castlereagh allowed a debate to be set down for a fortnight hence. Buckingham, the President of the Board of Control, is thought too confrontational and the debate will be moderated by Castlereagh. It will be based on a series of Resolutions.

The debate came on on 22nd March. Castlereagh introduced the topics he thought required consideration by the House:

He said our Eastern empire has a population and area that is several times greater than Britain. The House should take care to ensure the happiness of so many people. He said the Eastern empire was unique in the World’s history for being such an extensive empire governed by so few people. At least 50 million Indians are ruled by 1,600 British officials. The Company is the most efficient administrator of territory on the planet. He respects and admires the Company and hopes no-one will take a contrary view.

The Company has recently permitted some private trade to impinge upon its monopoly. 3,000 tons of cargo space are reserved each year for private traders’ use. The Company loses £500,000 by the arrangement and the private traders say they lose as well (they are greatly restricted and the ships might be diverted to other duties at any time).

The Company has issued as many loans in London as it can service; it has been unable to buy gold or silver from England for many years and the combined effect has been to throw the Company on the capital market of India for its commercial funding. Loans in India require high interest to attract investment. This is the resource that the Company can command to engross the trade of Asia wherein live the preponderance of the world’s population. An increase in the Company’s capital would indubitably presage an increase in its trade, particularly with China. The legislative alterations effected in 1793 and 1802 indicated the ease with which the Company’s trade could be increased but even more can be expected.

One difficulty is patronage. It would be possible although inconvenient for the British government to assume the government of India but that would add an immense amount of patronage for the minister to distribute at a time when we have been slowly reducing domestic patronage. An increase in patronage is conceived by the liberal MPs to be a threat to the Constitution.

Castlereagh believed the sense of the House would oppose a continuation of all the liberties that the Company presently enjoyed. The Company is willing to consider revision of its Charter but some disagreements remain.

He thought the China tea trade should continue as a monopoly of the Company as the Chinese had since 1760 created their own monopoly to trade with ours. All the other trade of the Company should be opened to competition. He proposed the trade be opened to all British subjects using British ships of 350+ tons. All the ports of Asia and Britain should be opened to this trade.

He wished to reserve all the trade in Asian piece-goods to the Company because those products compete with our own national production and must be heavily taxed. That made them the target of smugglers and to minimise their smuggling he feels the Company should continue to monopolise their import to Britain.

Castlereagh noted that the British government’s revenue from the Company’s trade was worth £4.4 millions annually of which £4 million is raised from the duty on tea and $400,000 for all the other goods. The huge revenue on tea united the Company and the country against smuggling. The tea duty is high because people are willing to pay it. If smuggling increased we may have to vary the rates of duty.

In fact there is an existing supply of smuggled tea from America. During peace, when the trade of Europe is restored, there is a supply of tea available from Sweden, Denmark and Ostend. We already have tea smuggling but it is limited in extent. When smugglers are caught, their ships are routinely confiscated, and that confines the trade to small boats – it is manageable.

The Company fears that opening the Asian trade will cause a torrent of emigration to India.

American trade to Asia had to be welcomed as they brought silver to exchange for their purchases which is something no British merchant can do.

Sat 18th Sept 1813

The French are publishing opinions about British trade.

  • A book On India by M Rubichon says as soon as Italy was occupied by the French, and England was unable to import Italian silk, she started importing Indian silk.
  • He says when Spain was occupied by France, and England could no longer receive Spanish indigo, she likewise commenced the importation of Indian indigo.
  • He says when the Continental System prevented England importing European grain, she started to bring rice from India.
  • He says when Russia became England’s enemy and no longer supplied Russian hemp, the British started importing the Indian variety.
  • He says when America declared war and threatened the supply of cotton to England, she again imported the Indian equivalent.
  • If the British wish to destroy the commerce of their own West Indian colonies, they can import sugar and coffee from India too, he notes.

The commercial benefactor of British woe in war is invariably India and she is required to produce only sufficient for the British demand and no more. To go further would be to hazard the capital of the speculators to over-production and falling prices.

Sat 18th Sept 1813

The Company has sent in a long petition to the House of Commons concerning the renewal of its Charter:

Bombay and St Helena were granted to the Company by Charles II. William III sold us the right to exploit Asia for £2 millions. In 1702 the two Companies permitted to trade east were united. On 29th Sept 1711 the King limited his power of recovering the monopoly to a parliamentary refund of the money. The business went well until Charter renewal in 1773 (the first renewal since acquisition of territory) when parliament interfered to regulate the Company.

When we came to India we found the Mughal owned everything and had given rights to a variety of people called chiefs or zemindars who inserted themselves between the Mughal and the farming population. As a result no man had clear title to his land or his production. Then we came and fixed the rent of land and gave the farmers certainty of title. Added to this innovation is our establishment of honest Courts of Law that guarantee the natives always get a fair deal.

We deny that the tranquillity of India is maintained militarily. It is due to our superior moral influence. If any Tom, Dick or Harry can come to India, our moral influence will be lost. No British immigration to India is appropriate except in a way regulated by us. If immigration is not restrained we will have not only speculative capitalists disrupting our commerce but adventurers joining and assisting the armies of native Princes.

Our army has repeatedly provided service to the British government. We pay for it and for the British regiments seconded to serve in India. Whenever, Britain is at war with another European country we use our army to occupy that country’s possessions in Asia and deny them their colonial trade except such part of it that ships through London, pays our taxes and conforms to our re-export rules. We sent a large force to Egypt in 1801 to assist the British army in its war with France. After the failure of the peace of Amiens, we occupied all the French, Dutch and Danish settlements and have only been partially compensated for our costs.[80]

Our China trade has operated for little more than a century. The Chinese are peculiar – it takes years to get to know them. Now we sent 46,000 tons of shipping every year and maintain a large establishment there to manage the business. We have to adapt our trade to comply with the Chinese mercantile system.

At last Charter renewal we had an issued capital of £5 millions. Since then we have added £1 million more capital. At the time of last renewal, we had sundry debts of £7 millions incurred in defending British interests in Asia. These debts were funded by loans raised in India (Promissory Notes) with repayment either in India or by Bills on the Directors in London. Since 1807 we have paid-off £10,902,924 on loans raised in India and have a balance of £26 millions outstanding. We have also invested £1.4 millions in 3% consols and £3 millions in the 3% reduced, which together comprise the security on a London loan of £2.5 millions raised last year. This loan was necessary to discharge Promissory Notes sold in India that were repaid in London. The value of Bills issued for settlement in London that have not yet been presented to us for payment, is $2,202,000.

The land revenue we received in India in 1793 was £8 millions. The land revenue we receive now is £16 millions a year. Unfortunately the civil and military expenses of our government have also increased.

The profit of our trade in 1793 was …. illegible … We have to pay interest on all these loans and pay the creditors of the Nabob of the Carnatic £910,000 a year (see the Nozeed Act in the main Asia chapter). These payments come from our funds in London. … illegible ….

We have conducted wars in Asia on behalf of the King in London and expect to be repaid for those costs. These total £2,294,420.

And we petition to be continued in all our rights and privileges etc.

Mon 20th Sept 1813 Extraordinary

The Committee on Indian Affairs has been examining witnesses at the bar of the House.

Cooper lived in India for 15 years. He says the Indians will not buy British goods. He thinks they will not buy them even if India is converted to Christianity (its not a Hindu or Muslim religious requirement). He said the Christian missionaries are generally harmless and make few converts but if our religion is forced upon India it will have a pernicious tendency. He was concerned by a recent meeting at the London Tavern which resolved to ‘eliminate superstition’ in India and introduce the population to Christ. He understood about 400 copies of British newspapers went out to India with each fleet and reports of these missionary proceedings would likely stir discontent. Grant (one of the Company’s leading men in House of Commons and a devout Christian) was irritated by Cooper and berated him until he withdrew.

Lord Teignmouth[81] was then called and he thought there would be no difficulty in converting the heathens. He said Christian missionaries had been active in India for 19 years and had translated the Holy Books into local languages and distributed them. There was no suggestion of any disapproval from the Muslims or Hindus.

Warren Hastings gave evidence on 30th March. He said free trade would ruin the Company, disturb the peace of India and provide no benefit to England. The Indians are easily led and conform themselves to our stronger character. If they are exposed to the influence of British speculators they will become ungovernable. Any discontent in India would encourage the neighbouring states to intervene militarily and we might lose everything. The Indians have everything they need and do not buy luxuries. They are simple people with few wants. They have remained unchanged since we first went there.

Hastings had warned against permitting British people free access to India at the time of the last renewal. The situation is still the same. When Hastings was resident in India, the missionaries Schwartz and Fernando had been proselytising the natives. Fernando claimed to have converted a Hindu. Another missionary, a Catholic, co-habited with several natives who all seemed ignorant of Christianity.

Colonel Monroe worked in India for 32 years, mainly in Malabar and along the Coromandel coast. He said the Indians are diligent in their own religion. English immigrants to India would be ignorant of local customs and cause trouble. He said all the British private traders who travel into the interior of the country cause disputes with natives. It was always preferable to sell British goods in the British ports and let the natives carry them into the interior themselves. Whenever private merchants attempted to sell in the interior there were arguments.

Sir John Malcolm said he joined the Company in 1783 and lived at Mysore for 9 years. He had conducted 13 political missions and met most of the native princes. British culture was different and Indians did not subscribe to our views. The more British immigration to India the more trouble there will be.

Sat 2nd Oct 1813

The Marquis Wellesley has considered the resolutions before parliament for the renewal of the Company’s charter. He needs to back-pedal from his pro-free trade views when Governor-General:

He told the House of Lords that our government of India arose initially from our commercial enterprise and was subsequently reinforced by our military conquest. It is the nature of power in India that one dominates both commerce and the people. Any new principles introduced by Charter renewal must recognise this basic history.

The new science of political economy asserts doctrines that are discordant with the Company’s government of India. Economics was now sufficiently understood to have become scientific and persuasive. To apply economic principles to India required the creation of substantial commercial and financial records of our experience in that country. We should be careful not to willy nilly apply our understanding of European economics to India until we are confident that the same rules apply. He thought this disabled every British commentator from opining whether commerce and sovereignty should be separated.

In practice he thought the Company’s system works tolerably well. It is not right to say the Company loses money trading this or that commodity and therefore these items may be opened to general competition. Every trader knows that one has to continually deal, even if occasionally unprofitable, and this is sometimes the case with the Company. If it lacks total control it will collapse. The trade of India is essential to the Company to carry-on the trade with China. Everyone recognises that the China-trade is fundamental to the Company’s organisation, but few understand that it depends on the Indian trade. Until recently the Company had to export bullion for tea. Now it exports Indian cotton and opium for tea. Formerly the balance of trade was against us and we topped-up the balance in silver, now it is in our favour and we export that balance from China in silver.

Wellesley thought every other Governor-General took the view that the Company’s present policies were correct and it would be foolish to meddle with them.

He thought India was not an unchanging country. More than a million Sepoys had passed through the Company’s service over the years and been influenced by our organisational methods. These concepts were percolating through Indian society which is becoming aware of the importance of discipline and the power of concerted action.

He thought the Indians would inevitably come to value British manufactures sooner or later, independent of the Company’s system of government.

He had personally recommended the relaxation of the monopoly in 1800 but had recognised the danger of unrestricted access to Europeans. He had upheld the law that required Europeans to have a Company licence to visit India, to leave when their licence or employment ended, and to be punished for the misdemeanour of staying-on. Can the Company enforce that on rich influential merchants from London and Birmingham, he wondered?

Few Englishmen know that English Law does not extend to much of the interior of India. It is true that it applies to all Englishmen in India but when they are up-country our enforcement is uncertain. When an English resident trader goes into the interior, the Company invariably requires a bond of him as a condition of his licence to travel and this bond requires the trader to acknowledge and submit to the Company’s courts. Such bonds may not be legal in England but they are commonly used in India and are respected by the British residents.

The proposed free trade of India will cause Europeans with little or no previous experience of India to travel all over the country and there must be endless disputes. It would be impossible for the Company to bond them as it has hitherto done. The orderly conduct of trade would be threatened by speculators. Self-interest, quick profits and greed would characterise trade which would become onerously one-sided and sordid. The English name will be humiliated and we will start to lose what we have gained. The Asian trade will be assumed by greedy men in armed ships and anarchy will result. A trade in arms and ammunition will arise.

It will be impossible to prevent free ships venturing to China (“we were blown off course,” “our ship was damaged”, etc.) The carefully maintained prices of British goods at Canton would be destroyed, making tea more expensive.

All the operations of the Company hang together and one cannot change one without causing knock-on effects elsewhere. Its highly unpredictable and our best course is not to meddle in it.

Buckingham complained that Wellesley had been appointed a member of the Commons Select Committee two years before but had seldom attended the meetings and now offered his doubts publicly. He should support the resolutions. Its unfair. Does he not know that all the merchants want the China-trade opened? Once that is conceded, it is only necessary to identify a way of doing it.

Buckingham thought Wellesley’s fantasy about the evils of speculators was misplaced. The parliamentary Select Committee intends to preserve the Company’s monopoly as it is presently, and had so written to the Directors, but had not given its opinion on the means of doing so.

The sole valid concern of Wellesley, Buckingham thought, is the extension of the exports of India to British outports which he presumes to involve a danger that is not extant in London. When Wellesley was himself Governor-General in 1800 he had written that it was the trade of foreigners that was more difficult to control rather than the trade of Britons – why does he now allege a difficulty?

Buckingham predicted that the British population of India would remain the same whether the trade was freed or not. The big Agencies already engross its entire extent.

Grenville said Wellesley’s concern to control foreigners was easily met, if parliament shared it, by making India a colony of England and bringing it within the existing exclusive trading arrangements adopted for our overseas possessions .

He thought it was impossible for a sovereign to trade profitably. Wellesley said the Company had lost £6 millions from trade and the only part of its commerce that was profitable was that part it derived beyond the limits of its sovereignty (in China). This was the best argument for separating the sovereignty from the commerce.

In 1784 the political power of the Company was put under the supervision of the Board of Control but the commercial power remained with the Directors. The Company is the only merchant in England that does not present clear accounts. The Directors say this is due to its mixed character. The first step is to sever the accounts of territory and commerce. No free trader can compete with a Company that can draw on its revenue from a huge country to finance its trade.

The Company’s way in commerce was well illustrated by the Indian weavers. It prepaid the weavers and thereby engrossed their production for export. By giving them the money before they had earned it, they were effectively enslaved to its contracts. It has extended that form of predatory financing to other productions (e.g. opium). In India such free trade as exists is a barter trade, the exchange of this for that, whereas the Company introduced trade finance and skimmed a profit off the worker. People wonder how the Company can continue to lose money on both imports and exports but the fact is it makes a huge profit out of its domestic production by this financing mechanism, using the territorial revenue.

Liverpool said the starting point for any discussion of the Company’s charter must be the happiness of the Indian people. He thought that the Company since 1784 had greatly increased the happiness of India by establishing the principle of individual property rights. This principle had not existed in India previously.

Sat 16th Oct 1813

The London Morning Chronicle of 19th April has discussed Charter renewal:

There are three contending plans.

  • The ministry would prefer to continue all the Company’s privileges with a few inconsequential changes.
  • Lord Grenville wants to transfer Indian sovereignty to parliament to take control of the Indian patronage and ensure neither King nor Company can use it contrary to the wishes of the Commons.
  • Marquis Wellesley proposes to give British merchants as much of the cake as can be efficiently severed from the Company without damaging it. He wants the mandate of the Board of Control extended to cover commercial affairs. He suggests regulating the export trade of England to India in accordance with Sir John Anstruther’s recommendations in his (unpublished) Select Committee report. He notes the freeing of Indian trade that was intended in the 1793 renewal has not occurred and it would be wise to enforce it now but he recognises some restraints are necessary to protect the Company’s other functions and overall integrity.

The introduction of more Indian woven cloth to England under the private traders is thought to be timely as the French have recently invented a flying shuttle that will make their weaving machinery more efficient.

Sat 16th Oct 1813

Sir John Malcolm has continued his evidence to the Select Committee of the House of Commons on India:

We have treaties with the most important states – The Nizam of the Deccan, the Sultan of Mysore, the Peshwa, Sindhia, etc – but no connection with many small states. The big states eventually might be induced to buy our manufactures but it will take time.

India produces fine tanned leather which is worked-up into excellent gaiters, gloves, artillery harnesses and the like. India also has a sophisticated brass industry.

India has no wool and our woollen goods should find a welcome market there amongst those who can afford to buy. It gets cold in the winter. Many Company servants give gifts of woollen cloth to their Indian friends and these are always well received.

Malcolm noted that there are many Christians in India but they are mostly found in the old French and Danish possessions.

Sat 16th Oct 1813

HMS President arrived at Portsmouth 22nd April with $500,000 in gold dust and silver bullion from Calcutta. It required 9 wagons to carry the bullion to the Bank of England.

Sat 23rd Oct 1813

Sir Charles Forbes MP spoke in the debate on Charter renewal. He told the Commons in May 1813 that he had lived in India for 24 years and the Indian people wanted British manufactures and only lacked the capital to buy them.

Unfortunately the preponderance of Indians were poor but he thought we should expect an increase of both import and export trade.

Sat 30th Oct 1813

House of Commons – Castlereagh has prepared a new list of Resolutions for Charter renewal and circulated it to MPs, at the same time calling for the House to go into Committee to consider it. The ministry needs to overcome or subvert the Company’s MPs who form a large party. Several Company MPs complained they had no time to read the Resolutions. Grant said the Directors had only learned of the new resolutions that morning.

Castlereagh would brook no delay. He said it is only the 3rd Resolution that had been substantially changed – by the time we get to that, you will all be familiar with the changes. Canning supported Castlereagh.

Robinson said the new 3rd Resolution introduced a licensing system for people going to India. The licences are to be issued by the Board of Control. He thought it was novel and required deep consideration.

Castlereagh said if the Directors need more time he would reluctantly concede it to them. General Gascoigne said the Company’s strategy for months had been to delay parliamentary discussion, principally by introducing an endless debate on everything, most particularly the introduction of Christianity to India, and MPs should not permit it to continue any longer. Lushington (the ex-Company Chairman) was then appointed Chairman of Committee.

Lushington was predictable. The cause of the widespread cry for free trade in Asia was the loss of British markets in continental Europe and America due to war. The Company was being punished by ministers for the consequences of their own initiatives. Free trade in Asia will not provide profits to British factories. The Indian people are too poor. They are bound by their traditions.

There was much talk about the honour of the British trader but all over the world except Asia it could be seen that British dominion had introduced misery and ruin to the indigenous peoples. In north America we had fought the indigenous natives and driven them into the last of their forests whilst we exploited the natural resources – now we plan the same for India.

The Company is already exploiting the resources of India at great speed:

  • In one province 5/8ths of the logging was taken as land tax and the remaining 3/8ths was bought by the company (at its own price) for its own requirements.
  • Indian cotton is prepared by hand because wages are so low (2d per day). The quality of this careful picking and selection was evident in the end products and, if Indian cotton was made available to British manufacturers, it would make our industrially-produced cotton cloth that was unbeatable on price. We grow and harvest the cotton in India, send it to England for manufacture and return the piece-goods for sale. Cotton is sold in India at 5d per pound and in London at 2/- per pound (five times the Indian price).

The ministry characterised the attitude of the Company’s Directors as the attitude of monopolists not sovereigns. They deprecate the possibility of rising costs although that is the sure evidence of increasing wealth of the Indians.

Philips MP argued that the Company was sovereign in India. Britain expects her allies to trade with her. Is India an ally? If so, the Company should permit our trade.

He expostulated – “What would we say to that sovereign who asserts he will not trade with us because ‘you are a set of piratical ragamuffins who, if once admitted, will proceed to lay our villages in blood, and carry off our children. You come here stained with a vile traffic that you carried on for centuries without shame and did not give it up without a struggle.’ We might find this objectionable from the Tsar of Russia or the Emperor of China but this is what we hear from the gang in Leadenhall Street. They exclude the British trader from India whilst including the American trader and those gentlemen called ‘second chop English’ in India. Their argument lacks merit.”

Philips thought the argument against unregulated British emigration to India was also flawed. The Company’s real concern is that it is taxing the Indian of his last dollar and, if other predators are admitted, it will get less revenue – that is why it foresees insurrection resulting from our traders emigrating there. It may also be concerned to have people beyond its control observing what it does. Perhaps they will report the realities of Indian life to London newspapers.

The only genuine difficulty is the revenue raised from commercial monopolies – on salt, various spices, timber, opium and (effectively) on all the staple crops. That is an instance of commerce and territory becoming co-mingled.

Ponsonby thought the government of India should be assumed by parliament. He subscribed to the opinion that all people everywhere sought the same conditions for existence and there was no special case to be made to exempt India. If England had only discovered India today we would have no doubt about the form its government should take – we are merely accommodating ancient and obsolete practices to suit the Company. Is there an MP present who would propose the Company’s form of government for the West Indies?

The Company’s argument about the immutability of the Hindu character jarred with its intended promotion of Christianity in that country.[82] At most he would allow 6-7 years as a sufficient period for the Company to wind-up its commercial activities and open the trade.

Robinson said the case against open British emigration to India had been based on comparison with the experience of Spanish emigration in South America. The rapacity and avarice of the Spanish settlers towards the indigenous peoples had shocked the world. India is not solely British. Once peace breaks out, the colonies of France, the Netherlands and Denmark will be restored and foreigners from those countries might act as the Spanish have done in South America.

Sat 6th Nov 1813

Rickards, a long-term India resident who recently obtained a seat in parliament (one of the Wootton Bassett seats), has spoken in the Commons debate on Charter renewal.

He said the Indian natives are so poor they are tied to the land to maintain their existence. In the immediate vicinity of the great towns it was different, but over most of India the natives are all subsistence farmers. No profit from agriculture can accrue to the native farmer because of the high proportion of his production that is taken as tax. In all the Muslim lands the tax was 50% of production. It was less in Hindu states. It was occasionally the case that the farmer, the nominal proprietor of the land, had less income that his labourers who generally received the equivalent of 3d (1½ anna) per day for their work. The only chance for the ryot to amass some capital was by mortgaging his share of his production but failure to repay the mortgage risked the loss of title to his land and extinction.

This revealed a problem. The Company’s revenue was dependent on the farmer’s production. Tax could only be reduced if other revenue streams could be identified and tapped. This was the specific task of Cornwallis when he was sent out as Governor-General. The source of new revenue that he identified was commerce. To improve the Land Tax receipts, Cornwallis inserted the Zemindar between the farmer and the Company and introduced the ‘free Zemindar state’ in Bengal but the Company, as the replacement of the Mughal, required its half and the Zemindar wanted his share too. In many cases Rickards said Bengal farmers received less than 10% of their production.

This onerous system was nevertheless extended to Madras Presidency where it was called the Mootadary system. To the Madras tax was added a collection fee because the Presidency farmed its tax collection. This caused the natives of Madras to prefer their former lot under Hyder Ali and Tippoo Sultan to that under the Company. They voted with their feet. Subsequently a great number of farms came onto the market for sale by creditors and the ownership of land, both in Bengal and Madras, was increasingly transferred to foreign capitalists in the towns. The old farmers become labourers on their own land or left for better prospects in other states. This bare subsistence made a large and peaceful class prone to allurement by any adventurer who came along promising relief.

The Company had promoted the use of new land for farming but the productive ability of the new land was less than the fertile land already in use. The value of new land consequently fell and seizing the ownership of it through the Courts (by Writs of Fi Fa after action) ceased to be a profitable way of securing agricultural loans. Capitalists were being exposed to risk of default on their mortgages! Their response was to imprison landlords for non-payment of debts. This encouraged them to importune their relatives and friends for the funds we required. It may be deduced from this that the system we operate in India is unjust and inhumane, Rickards said.

Opening Indian trade would draw forth capital and the value of agricultural production would increase with demand. Rickards thought there was no other way to relieve the farmer and preserve the country. Continuing the Charter on its present monopolistic terms would be a disaster, he thought. The Company’s allegation that Indian trade could not be increased was refuted by the activities of the Americans and our own private traders.

Rickards was loudly cheered by the other MPs.[83]

Sat 13th Nov 1813

House of Commons, 15th June 1813, Charter renewal:

Horner said parliamentary regulations to establish the moral tone of the government of India were useless. In 1794 we passed a resolution that the Company should never again fight a war of aggression but in fact it had been more or less continually at war with one or other of the native states. These conflicts were commenced by the Company on trite and frivolous grounds – commonly an alleged insult of some sort.[84]

Horner thought the sovereignty of India should be explicitly given to the Crown. Bruce said the Company had never claimed the sovereignty of India but merely the property in its territorial acquisitions. Horner said all the Company’s land conquests should be Crown property. Tierney said the Charter permitted the Company to raise fleets and armies and to make conquests – all the Company’s lands in and around India must be the Company’s property, he thought. If it is the British Crown that is sovereign in India, there should be a delegation of sovereign powers by Britain to the Company. It is unmentioned in the Charter – where is it?

Creevey said government by merchants was anomalous and continually put the Indian civil service into embarrassing positions. They only act to make money. The fundamental problem with India was this union of government and commerce. He thought the Company’s Directors never considered a duty to the Indian people, they only thought about cadetships and writerships for India and supercargoes and warehouse jobs in their ports – the common sources of patronage, which jobs they gave mainly to shareholders and powerful families. A large minority of the shareholders were elderly ladies, who inherit their shares or act as nominees for their husbands. Their two over-riding concerns were to get the dividend on which their lives were financed and to find employment for sons and nephews. These people are unlikely to take a mature view of the Company’s role as sovereign – they see their investment as a financial thing.

On the other hand, the Directors are only concerned with the opinions of those shareholders who are current or former employees because they all act in combination at meetings and must be satisfied.

Castlereagh said the Company’s large debts gave them some protection from invasive parliamentary acts. We need them to service their loans and pay their dividends to avoid social and financial disorder.[85] It is true the Company has not paid the £500,000 every year as was agreed in the 1794 Charter but they have an excuse – they sent an army to Egypt and more recently occupied many French and Dutch Asian colonies. These were costs which the Company expected Britain to contribute to and appeared to represent a set-off.

The main thing to bear in mind, Castlereagh thought, was that the monopoly applied to half the world and the trade potential of Asia was, by several orders of magnitude, greater than the Company’s existing capital or staffing could ever contemplate developing.

Castlereagh asked MPs to recollect that renewing the Charter did not put India beyond parliamentary oversight for 20 years – we have the Board of Control to inspect and modify Company initiatives as appropriate. If the British government, in its relations with other powers, finds it necessary to modify the powers of the Company it will certainly do so regardless of any apparent conflict with Charter terms.

In respect of trade, the Company is able to borrow almost without limit and can make immense investments whenever it chooses to do so. It could easily crush the private trade if it were not for the Regulations that protect private traders. One of these Regulations requires the Company to keep its funds from territory, commerce and political initiatives all distinct. It cannot legally co-mingle its capital – money from territory is used by territory, from commerce by commerce. It was thus that the loss-making nature of the commerce had been brought to light. The Commissioners for India, sitting in the Board of Control, are the people who check for abuse of the Company’s territorial capital.

As regards the exclusive trade with China, the British people are already in receipt of a handsome indemnity for that lost opportunity in the Customs revenue on tea. The commerce with China was subject to the rules of Chinese culture and was not well-understood by foreigners. The Chinese had created a monopoly of their own fifty years ago to confront the monopolies of the western nations. This revealed the advantage of uniting all our trade with China under one Company. In that way, we obtained advantages by negotiation that might not be available to a body of merchants each with different interests.[86]

Rickards, the long-term India resident, said he did not wish to question the Company’s accounts but he found it peculiar that they never progressed their commerce year by year. They have increased their territory every year and the number of people under their government was now 50-60 millions. Their territorial revenue must have increased proportionately but their commerce stood still, and the people remained poor.

At the same time, a river of retirees return to this country each year with immense personal resources. He thought this revealed a radical defect in the Company’s administration and he identified that defect as the onerous land tax.

A second defect was apparent from the Company’s own accounts. He had perused the Bombay Presidency accounts and found commercial charges in the political account. He noted the estimates of profits made by Directors to the House covering the last 17 years had varied from £21 millions to £2 millions. It suggested that nobody really knew the Company’s financial position. The only consistent fact was that they were drawing a handsome income from India every year. Their remittances and advances, which imperatively must be solidly profitable, had produced a loss of £3 millions according to the accounts.

He noted the charges for maintaining St Helena, which is a provisioning base for the Company’s shipping, were in the nature of a commercial expense but appeared in the political and territorial accounts. He concluded that the Company’s commercial losses are strewn throughout the three accounts and are effectively concealed. In fact the Company’s trade was continued by borrowing in London and using revenue in India. The Company acts in a determinedly inscrutable way and the only means of throwing some light on the prospects for Asian trade is to open the trade and see what happens. Following political arrangements in London (the Company itself would never have allowed it) we permit the Americans to trade in Asia and they return each year in increasing numbers – clearly they find it profitable. We should do the same.

One part of the Company’s commerce that was fairly well-understood was the production of woven fabric in India. Rickards noted the circumstances of the Indian weaver was scarcely distinguishable from slavery. They are in perpetual financial bondage to the Company’s employees who provide the cotton to their looms and buy it back as fabric at fixed low prices which set the value of their labour at almost zero. Should these people wish to protest their conditions, they must Petition the Company which metes out its justice through those very servants who create the intolerable conditions.

A report from Madras Presidency of July 1804 showed the private merchants there procured their supplies of Indian produce from the Company’s employees. Those employees, when their Indian workers refused to supply on the low terms on offer, prevented the workers leaving the Presidency and demanded fees of thousands of Rupees for their resignation from employment. This willing use of coercion equates India with the workhouse.

Sovereign power at Bombay was once used to confiscate all cotton that was not offered at the standard value and was not required by the Company. This is what monopoly does to an economy. In Gujerat the Company’s officers settled the price to be paid for cotton. When the farmers attempted to smuggle their supply elsewhere and get the market prices, the Company’s army was employed to prevent them. This ended the farming of cotton in Bombay and transferred it to the adjacent Maratha states.

There are many monopolies operated by the Company – its not just salt and opium. In every case the producer appears to get the Company’s fixed price but he has to share his profit with the Company’s officers supervising the monopoly.

Rickards continued his appalling catalogue of robbery for two hours and ended with a strong recommendation that, if the Charter must be renewed, it should be for the shortest practical period – not more than ten years.

Lushington for the Company said there had been occasional abuses in Indian commerce but they were years ago and had all been corrected. He wanted a 20-year Charter.[87]

Whitbread said the trade should be opened. The Charter is about to expire. Trade should be removed from the Company’s monopoly before renewal. The Company had no claim to compensation for buildings it had erected for trade or for the loss of profit by its sub-monopolists (the auction rings) in London.

Marryat said all monopolies were injurious to trade. He adduced the example of the Cadiz Company which had monopolised the trade to Spanish South America. When the Spanish government recently decreed that trade open, a great expansion of commerce followed, and the Cadiz Company profited more than the private traders who competed with it.

In Asia we have been in possession of Java for over a year. In that period the Company has sent out two ships to Batavia. Had trade been opened, there should be no doubt that the extent of shipping sent out by private merchants would have been a hundred times greater than the Company’s effort.

The House then voted. A substantial majority of MPs wished the Company retain its monopoly for another 20 years and for the China-trade to continue closed to private merchants.

Sat 20th Nov 1813

The House of Commons resolutions for Charter renewal appear to be a complete victory for the Company. It gets a 20-year renewal, monopoly of China-trade and the Indian trade is opened only a little more than at present.

British merchants can take ships of 350+ tons to Asia for trade and use the outports for discharge on their return. They have to get a licence from the Company first and the terms of issuance are not published but it is said that every application (and any Company objections) will be seen by the Board of Control. Any exports of silk, human hair or raw cotton from India will still have to come to London, pass through the Company’s warehouses and be sold at the Company’s auctions (to ensure full collection of the payable duty).

The Company’s territorial revenue, nett of collection costs, will be used to maintain the army, pay interest on the Company’s debt and pay for the civil and commercial establishments in Asia. Any remaining balance will be applied to the Company’s investment in India, remittances to China for the Company’s investment there and to service Indian debt.

There follows the formulaic arrangements for debt:

The Company’s receipts in England from sale of its goods (and its share of the sale of privileged and private tonnage) will be applied to settlement of Bills of Exchange, repayment of debt (excluding principal on bond debt) and on interest and the commercial charges of the Company, to payment of the 10% dividend, to payment of ½% dividend after the fund earmarked for that is exhausted, to reduction of debt in India or the bond debt in England.

When the Company’s debt in India is reduced to £10 millions and the bonded debt in London is reduced to £3 millions, any surplus revenue and trade profit will be applied to paying down all its public funds. Any surplus still remaining will be paid into the national Treasury without interest and applied as parliament directs. It will form a security for the capital of the Company and the payment of 10½% dividend. Should this sum reach £12 millions, any excess will be shared 1/6th by the Company and 5/6ths by the country.

The Company will maintain proper accounts in all its territories showing receipts, expenses, debts and assets in each of the territorial, political and commercial branches of its operations.

Governors and CiCs in all the Company’s Presidencies will be nominated by the Company and approved by the King and Board of Control.

The 25,000 British troops in India will continue to be paid by the Company and their number will not be increased unless the Company asks for it.

The Anglican Church and the education of natives is to be encouraged but the natives are not to be coerced into apostasy.

Hertford College (academic, the forerunner of Haileybury) and Addington College (military) and their staff are to be controlled by the Board of Control.

Sat 29th Jan 1814

The farm for operating the four ferry services – to Mahim, Tannah, Caranja and the stopping service to Colgon, Mandwim, Thull, Ravance and Allibag – is for sale by auction. Service to commence on expiry of the current licence on 15th February. Send your proposals to the Treasury.

Sat 29th Jan 1814

HMS Hussar (Elliot) has arrived Madras with the ex-Governor-General and another relative, J E Elliot. The frigate will load £80,000 of bullion which private British merchants of Madras are sending to London.

HMS Stirling Castle (Home Popham) has also loaded bullion at Madras for London. It belongs to the Company. He will sail to Trincomalee via Pondicherry and then convoy the home-bound fleet of Indiamen.

Sat 29th Jan 1814

The charter has been renewed on good terms for the Company. It gets continued sovereignty over its present and future territories in Asia. It gets the exclusive trade of China and a monopoly on tea (and military stores to certain places). These terms to cease after three years notice and refund of the debt the country owes to the Company.

After 14th April 1814 any Briton can trade to / from Asia. The names of English ports opened for Asian trade will be notified by Orders-in-Council. Private shipping will require a licence from the Company. Licences to / from the principal Indian ports will be always granted; licences to non-Indian ports in Asia require special conditions. The Board of Control will also licence voyages to anywhere between India and Japan, north of Australia. No private ships under 350 tons allowed. All cargo to be manifested (there are numerous other trading conditions).

The Charter also requires separate Company accounts for territorial, political and commercial affairs. Many rules are made for terms of service of Company employees. Offences of forgery and counterfeiting of coins to be punished by no more than transportation (it is a capital felony in England).

Sat 5th Feb 1814

Java Proclamation, 22nd October 1813:

The old Dutch government proscribed private trade in spices, wild nutmegs, mace and in opium. These commodities were reserved as VOC monopolies.

It is the policy of British government to promote free trade and Minto promised this to the Javanese in his Proclamation of 10th September 1811.

The British provisional administration of Java has repealed all the restrictive laws. You may now trade in all these commodities, provided you bought them from the Company. This Proclamation is to be translated into native languages and posted at Batavia, Semarang and Surabaya.[88]

Sat 19th Feb 1814

A meeting of Company shareholders in London has agreed to require the Directors to obtain government approval that Property Tax on dividends will be paid from the Territorial Revenue and not by individual shareholders.

They have linked the concession to their agreement to sanction an increase in the salaries of Directors.

Sat 26th Feb 1814

Java, 1st January 1814 – the Dutch system of farming the revenue has been abandoned in Java on the assumption of sovereignty by England. Only the ports of Batavia, Surabaya and Semarang are open for international trade for Javan and Maduran produce.

Customs Houses are built at the three ports. Collectors are appointed. All imports and exports must be sent to the Customs House wharf in the first instance.

The other minor ports are open to native coasting ships and British-registered ships. 10% ad valorem duty is charged on all imports. An extra 15% ad valorem is charged on goods imported in non-British ships except those of natives or neighbouring states in alliance with the Company.

Bengal opium, bullion and gem stones are free of import and export duty.

Spices, wild nutmegs and mace may be imported if they have been bought from the Company.

Export duty is 3%. Export of arrack to New South Wales is prohibited (the Company engrosses the liquor supply to Australia)

A 5% surcharge on the declared amount of duties is allowed to the Collector for weighing and measuring. Port Clearance certificates will be issued only after all Customs dues have been settled.

Committees will be appointed in the ports to publish Prices Current.

Anchorage fees are $10 for every 100 tons. Ships registered at non-British ports pay $20 per 100 tons.

Sat 26th Feb 1814

A copy of the 125 clauses of the new Charter, granted in the name of George III, is shown – it takes effect from 10th April 1814.

Sat 2nd April 1814

The Company has advertised its latest quarterly sale – woollens, iron, copper, window glass, etc. They promise not to sell any similar goods until the next quarterly sale. Purchases may be exported to an other part of India or the Persian Gulf.

Formerly the Company reserved the Gulf trade in European staples to itself but under the new Charter terms it has withdrawn from that business. It however continues to close the Gulf market to private ships from England whose supply would undersell the Company’s supply from India. Nothing may be sent by private British ships to China.

Sat 2nd April 1814

The Company’s Directors have been discussing the salary increase that the shareholders have approved (the Directors agree to pay Income Tax on the dividend; the shareholders approve a salary increase for the Directors).

One said the pay-rise should be dated from 1st April (laughter). Another said people complain about patronage but the Directors have to give the jobs to someone and that is always likely to be their friends whom they know and can vouch for – its not really corruption. Look at the China factory – the names of the writers and officers at Macau are the same as many of the Directors. Increasing the Directors’ pay is small beer compared with their incomes through family members.

When Fox tried to seize the patronage of the Directors for the ministry, it was valued in total at £350,000 a year. Writerships now costs up to £3,000 but taking a modest valuation of $2,000 each and assuming a low value for a cadetship at the price of an army commission (although they are often £500), the 770 writerships and 4,423 cadetships awarded during the validity of the last Charter (20 years) produced an immense value.

The Board of Control received patronage equivalent to 2 Directors; the Chairman and deputy Chairman also each had a double patronage; all the other Directors had a single patronage. That totals 28 shares between the Board and the 24 Directors amongst whom the patronage was distributed – its nearly £5,000 a year for each share.

Another source of patronage is the selection of ships for charter. Ship owners generally reckon a Company charter, if it can be bought, is worth £500 per ship.

Then there is the appointment of barristers and solicitors to India.

The Directors also appoint the staff of India House, the Company’s warehouses, the two colleges, etc.

Formerly the Directors received a commission from British manufacturers whose goods were selected for sale in Asia but they professedly abandoned that a few years ago.

The political administrators of this country are paid less than the Directors although their duties are often more onerous and time-consuming.

He thought wealthy men were better rewarded with honours than more money.

Lushington said £300 a year (the Directors salary at present) is not worth as much today as a few years ago (due to inflation of the paper money supply). The Company’s business had grown immensely in turnover and complexity in recent years.

The comparison of Directors’ and ministers’ incomes was flawed as it excluded the patronage of the latter. Melville in the last two months of his service as First Lord of the Admiralty appointed Captains to naval service in which they each made £10,000 – £20,000 (freighting bullion and share of prize money). On that basis should Melville receive no salary? The Auditor of the Exchequer also has the disposal of many profitable jobs.

Shareholder Lowndes said he had spent decades trying to penetrate the mystical workings of the Company but his questions were always laughed-at. If the Directors’ salaries are increased, it will start a new round of corruption and he intended to sell his shares (laughter). He knew that people were queuing-up to become Directors and the salary was clearly more than ample. The matter of patronage had made the Company odious to the people – jobs in India should be distributed fairly.

Grant said Directors who had sons found the patronage advantageous but not all Directors had sons. Of 30 Directors he had known, only 18 had relatives serving in the East.

The meeting finally approved the appointment of a committee of fifteen (quorum of five) to look into the patronage of the Directors.

Sat 18th June 1814

The House of Commons is still unhappy with East Indian trade. They continued to debate it on 2nd and 3rd December 1813:

American merchants are better served than British merchants. The Americans can trade to Asia in ships of any size and take their Asian purchases to anywhere in the World. They do so largely on British credit provided in London but that is no advantage to the generality of British merchants, only the bankers.

An Act was passed last session for the renewal of the Company’s Charter which provided for a heavily regulated British trade with India and numerous limitations from which foreigners are exempt.

The restrictions do not protect the Company’s trade – no British merchant is going to bring indigo, sugar, pepper, etc., to the rigged market in London when he routinely gets a better price at Amsterdam, Rotterdam, et al. What is going-on?

The effect of these arrangements must be an increase in American trade at the expense of our own. It is well-known that more East Indian goods are sold at Hamburg and Copenhagen than in England. The Americans (and when the war ends, the Dutch, Danes, French and Swedes) will be buying direct whereas British merchants will have to bring their cargoes to a British port first and pay British tax before re-exportation.

Castlereagh agreed on the propriety of extending all Indian trade to British merchants. He would exclude a free trade with British colonies, where a different commercial system was followed. If it is apparent that British merchants are being disadvantaged by the arrangements, they will be reviewed and changed. At present international trade is not competitive – the Americans have no European trade to speak of and no prospect of getting any until they make peace with us. Its the same with the Europeans.

Until that time, it is our fundamental national policy to bring all goods to London and make this city the emporium of world trade. By creating a market in all the world’s products here in London, we attract all the world’s business. This benefits our banking and insurance markets. The availability of every staple commodity here and the finance to trade in it, is the basic intention that British policy over the last twenty years has been shaped to achieve. London is a one-stop shop.

On 3rd December, the second day of debate, Charles Grant arrived and asked that any further discussion on East Indian trade be postponed until the Company could consider and present its position.

Fawcett said if British merchants have unfettered access to Asia they will take those goods to West Indies and South America and destabilise our markets there. A direct supply from Asia would at least partially be reshipped from Cuba and South America to British colonies where it would undersell the London supply of several commodities.

Finlay said British domestic manufacturers are unconcerned by competition – there isn’t any – its only the raw cotton, indigo, etc., that is competitive and there is no market for that outside Europe.

Castlereagh then agreed to postpone the Bill.

Sat 30th July 1814

The Company has published its weekly storage costs for private goods imported to England. It is a condition for the private trade that goods must be stored and sold by the Company. Storage is generally £2 – £4 per bale or bag per week. All the spices are 1 – 2% ad valorem per week.

Sat 6th Aug 1814

Calcutta, Financial Dept, 1st July 1814 – subscriptions are invited for a new 6% loan. Payment may be in cash, Company Bills, Bills for Arrears of Salary, all sorts of Company Promissory Note and any other authorised public demand. Minimum subscription 1,000 Sicca Rupees.

The Company may make repayment and discharge the Notes at any time without notice by paying cash or Bills on London at an exchange of 2/6d per Sicca Rupee payable 18-months Sight. Purchasers will give 2-months notice of intention to sell. Interest after such notice until sale and repayment is reduced to 5%.

The Note interest of 6% is payable 6-monthly in arrears in cash or 12-month Bills on London. Holders of Bombay 8% Notes may be paid-off or transfer into the new Loan. The Commissioners of the Sinking Fund are qualified to buy these Promissory Notes.[89]

Sat 13th August 1814

The interest on India debt in London is guaranteed by the British government under the new Charter. To ensure the guarantee is not invoked, the Board of Control has proposed the Company amass a fund by issuing Bills on Bengal here in London. Alternatively the Board of Control suggests the Company fund the new free trade in Indian exports by issuing the appropriate amount of Bills on London in India and taking settlement in London. Either way the Company would amass capital in London with which to pay the bank charges. The Company is deeply opposed to both proposals.

Sat 27th Aug 1814

Notice – the Company is offering a three year licence to operate the stone quarry at Byculla. Apply to the Bombay Governor-in-Council before 7th Sept indicating how much rent you will pay.

Sat 17th Sept 1814

India House, 5th April – Sir Hugh Inglis has resigned from the Direction of the Company. A resignation is a rare event and no reason is assigned.

Lord Melville is to return to the Board of Control from the Admiralty as part of the ministerial changes following peace.

The Directors discussed the proposed salary increase offered by the shareholders. The Directors’ salaries were doubled in 1793.

Twining opposed the salary increase – we are giving away too much power. ‘The only advantage I have received from my directorship is a writer’s job for my grandson,’ he said.

The salary increase was then voted and rejected.

Sat 15th Oct 1814

The new Charter introduces a measure of free trade. It is effective from 10th April 1814. It excludes travel to the domains of the Emperor of China and excludes trade in tea.

It permits any British merchant to trade in Indian goods to North and South America, except British colonies in America, and with Madeira, Canary Islands, Cape Verde Islands, St Helena and the Cape of Good Hope.

The area from the Indus in the west to Malacca in the east (plus Bencoolen and its dependencies and any islands in northern hemisphere currently administered by the Company) forms the Company’s reserved area and subject to its Regulations.[90]

The subsidiary legislation for the free trade is shown in this edition. It applies the Company’s warehouse duty of 4% ad valorem and sets a tariff of Customs duties. All the Company monopolies in India are taxed ad valorem at 50+% if competing products are imported to India viz. pearls and precious stones 50%, Chinaware 100%, glass 90%, most piece-goods 50%, manufactured copper 50%, cotton 50%, hair 50%, tanned leather 50%, Japanware 50%, lacquerware 50%, processed tortoise-shell 50%, feathers 40%, etc.

Appended to the Warehouse charges and Customs duty is a list of Company charges for the management of private goods landed in India – 1 – 4% ad valorem on handling bagged or baled goods and 2 – 7% for goods shipped by weight.

Sat 3rd Dec 1814

The Company’s ship Prince Regent left Calcutta on 10th November on a voyage to Amboinya to collect this year’s spice harvest and transport it to London.[91]

Sat 10th Dec 1814

The Company’s new 6% Promissory Note has been well received and all previous Promissory Notes are now being determined and will be paid-off on 2nd Feb 1815.

Sat 17th Dec 1814

Calcutta –3,000,000 Rupees in gold and silver coin is coming down river from the Nawab Vizier as part of the subsidy due to the Company from him. Over the next month we should also receive the silver proceeds of China-trade at Calcutta.

These receipts will facilitate the discharge of the 6% Promissory Notes in February and will relieve the Calcutta merchants of the cash shortage that has limited their trade for the last several months.

Sat 17th Dec 1814

The Fourth Calcutta Laudable Society has been opened by five Calcutta businessmen (Alex Colvin, George Cruttenden, John Palmer, John Fulton and John Fullerton). It provides insurance on peoples’ lives and will run for several years. It differs from a life assurer in having a tiny management staff and not retaining any profits. The whole of customers’ payments, less the management charge, are invested in government paper and the dividends, etc., re-invested so the client’s Estate may expect a good pay-out on making a claim. The payout is currently 4,000 Rupees per share. It is also possible to loan against the Society. Investors become members of the Society – it’s a Mutual. Alexander & Co is the manager and charges the Society 200 Rupees a month as service fee.

Customers buy shares in the Society at prices that increase with age. They pay one year’s fees up front. It’s the same fee for men and women. They must declare their age, that they are in good health and have already had smallpox or are protected by the cowpox vaccination. A certificate of Good Health may be required from your Doctor. The investments are held in the names of the five Directors with dividends payable to Alexander & Co.

The Third Society will close one year after the Fourth commences. Investors in the Third are welcome to transfer their investments to the Fourth.

Sat 14th Jan 1815

Calcutta, 20th December – The value of cargo shipped from Calcutta to London between August – November 1814 is nearly 13,000,000 Rupees. This is a response to the terms of the new Charter opening a ‘free trade’ to British ports.

The effect at Calcutta of the removal of £1½ million from local exchange has been a dramatic shortage of circulating currency. This is revealed by various financial statistics – the Company’s 6% promissory notes are selling at 14% discount, cash is earning 1¼ – 1½% per month on deposit and private Bills are offering 2-3% per month. We need Chinese silver.

Sat 18th Feb 1815

The Company has licensed five private ships – Minstrel, Moira, Francis, Eliza, General Stuart – to sail from England to India between 5th June – 27th July 1815.

Sat 18th Feb 1815

The import and town duties on jewels, pearls and made-up jewelry brought into Bombay is abolished from 17th February.

Sat 18th Feb 1815

An Act has passed parliament in London validating various taxes in the Indian Presidencies with retrospective effect. Amongst them is the wheel tax which was commenced 30 years ago. Those people who knew the Company had no legal right to levy this tax and withheld payment will now have to pay thirty years of arrears – you can’t beat City Hall.

Sat 22nd April 1815

The Company has procured the Ship Letter Act from Parliament setting the postage rate from London to India at 6d per ounce. This is for the sea voyage – the inland postage is extra. The Company’s own internal letters continue to be carried free of charge. These changes take effect on 10th October 1814. The legislation was enacted adroitly on the last day of the parliamentary session and hardly anyone in the country was aware of it until the Post Office announcement.

The 6d rate applies to letters sent via the Post Office in one of the licensed private ships – their service is infrequent and irregular. If you deliver your letters to India House for postage they will be sent on an Indiaman at 13.2d per letter.

On 10th October, we (the Editor of the unidentified newspaper this is recited from) made a check of the numbers of letters accumulated at India House since the last ship (29th July) and there were approximately 50,000 letters there, representing 2½ months of private correspondence or say 20,000 a month. On the assumption they are all one ounce letters and include the inland postage then the ship charge of 6d per letter and the Captain’s 2d commission per bag makes the post office service to India worth over £1,000 a month. The Company’s service is much more expensive.

The London Agency Houses dealing in India goods belatedly petitioned the Treasury requesting a chance to present their case to the Commons before the Act became operative. No answer was received and the Act has now come into operation.

Sat 27th May 1815

The Manila galleon this year is the San Fernando. She left San Blas on the Mexican west coast in January with $3 million in coin and bars. She was expected at Manila in late March. Two of the Company’s cruisers are at Manila but the Governor has prohibited the export of silver until the San Fernando arrives. We have 2,500 bales of piecegoods ready for sale at Manila. It equates with three year’s supply to that market.

Sat 17th June 1815

The Company has contracted with the Board of Ordnance in London to supply the entire British national requirement of saltpetre from India.

Saltpetre was a monopoly of the Company, and a banned substance for private shipment until the renewed Charter allowed its carriage to the free traders.

Under this agreement, the Company will engross most of the Indian supply contractually and continue to monopolise saltpetre to its own profit.

Sat 26th Aug 1815

A Portuguese ship has arrived at Calcutta from Pernambuco with a cargo of silver dollars. It should revitalise our trade. Specie has been scarcely procurable since last December and could only be had by depositing government securities and paying a huge interest. Now its available at 7-8% p a. The discount on Bills has fallen by 10%.

Thurs 26th Oct 1815 Extraordinary

The Bombay Governor has passed a new Revenue Regulation, No. 14, in conformity with instructions received from the Directors. Britain wishes to increase her exports. All ad valorem duties on British goods imported or Indian goods exported to / from Britain by Indiamen or private ships are modified.

British exports: All British woollen yarn and cloth and all British metals are to be imported here free of duty. All sorts of ships’ stores made in Britain 2½%; all European produce except alcohol 5%. Wines continue to pay the 1805 rate of duty.

British imports: indigo exporters get a drawback of the usual British duty which will be deducted from the Company’s production tax. So do exporters of wool, cotton, sunn[92] and hemp. Exports of saltpetre will get a partial drawback on local taxes to reduce the effective British import duty to 2½%.

As regards the production of British-dependent states in India, the total duty payable on wool, cotton, etc., including transit dues and export duty may not exceed 5%.

Apart from these exceptions, the Company’s inland tax, transit tax and sayer tax[93] continue to apply in British India.

All trade in foreign-registered ships continues to be taxed at the old rates.

Sat 28th Oct 1815

The American ships Triumph, Unity, Galatea and Sydney have arrived at Calcutta with 600,000 Rupees worth of silver for trade.

Sat 4th Nov 1815

The Mowrah Distillery is discontinued from 30th Nov. The indulgence to Parsees to distil their own spirits is also discontinued. Tenders are invited for the operation of ten stills for one year. Mowrah spirits will attract duty of 50% on the prime cost of the article. The stills belong to Cursetjee Monackjee who requires to be paid a rent by the successful tenderer of 553 Rupees per month.

The successful bidder will pay the Bombay Collector on 1st of each month.

Sat 25th Nov 1815

The Calcutta merchants are planning to reduce the acreage under indigo in Bengal. Indigo production is also undertaken on the coast but that is supposed to be quite limited and is not involved in these plans. It appears the great Agencies are concerned that the end of the war will cause the resurrection of the Spanish supply which was formerly preferred in Britain. Even without Spanish competition, we are producing too much indigo ourselves.

Prior to 1814 Bengal produced 74,000 Maunds annually which was considerably more than Europe requires. This had been apparent by the increasing stock levels in the Company’s London warehouses. In 1814 all the Bengal factories increased their acreage and production last year was 102,524 Maunds. The increase has continued and the estimated crop this year will be at least 120,000 Maunds although there is no corresponding increase in consumption. In 1814 the European market was again re-opened to British trade but the extra sales were only 15,500 Maunds while the imports from India in the same period inevitably and considerably exceeded the extra sales. Prices at the Company’s London sales have fallen and in May 1815 were 50% below the prices of May 1814.

The difficulty with indigo in India is the same as with sugar in West Indies. The trade requires an investment in processing equipment which is unique to indigo and cannot be adapted for any other known use. The farmer investing in indigo production is thus induced to fight for his share without reducing his production – a price war ensues, bankruptcies result and only the richest survive.

The Calcutta merchants are offering loans to indigo farmers as an inducement to them to withdraw from the business. The fund will come from the farmers themselves who are invited to pay 5% of their gross annual produce into it. The Agency Houses themselves will contribute a fifth of their annual commission on indigo sales. The compensation offered will be 80% of the appraised value of production of the farm. All the farms surrendering in this way will cease planting indigo.

The value of indigo farms that are expected to be abandoned is estimated at 18 million Rupees and they produce 16,000 Maunds of indigo a year. It will take the fund 3½ years to pay-off this number of farms. The organisers hope that the remaining indigo farmers will recognise the trend of events and decrease their acreage voluntarily. The organisers have assessed the highest predictable demand for our indigo in Europe at 75,000 Maunds which requires the elimination of at least a quarter of present production. They want a legislative proscription on new or revived factories.

Thurs 28th Dec 1815 Extraordinary

Restatement of the Housing Rate:

A tax on houses erected on the Island of Bombay was enacted on 6th September 1815 to finance the costs of policing the Presidency and cleaning / maintaining the streets. All Houses of Worship and temporary structures are exempt. The rental value of all houses will be assessed and 5% of that assessment is payable annually as tax. Bonded collectors will be employed to collect it and will be paid salaries instead of a percentage of the take. There is provision for the seizure and sale of the goods and chattels of any delinquents.

1816 – Whole year missing in BL copy

1817 – Whole year missing in BL copy

Sat 3rd Jan 1818

Non-Company opium imported to Bombay Presidency will pay a duty of 12 Rupees per Surat Seer (c. 2 lbs). Smuggled opium will be confiscated and disposed of – proceeds of disposal distributed two thirds to the Company and one third to the informer.

(This Notice is published in English only. It is targeted at the Maratha supply of opium from Malwa)

Sat 10th Jan 1818

Letter to the Editor, 8th January – I left India a few years ago and have just returned. While I was away peace returned to the World and a free trade was established from Britain to India. The effects of peace were apparent in England from the great reduction in the costs of everything. Before I left India the costs of British goods sold here had increased greatly due, it was said, to the war. Common necessaries were sold at a 50% increase on the sale price of the ships’ officers who imported and sold the goods. Now there is peace and trade is flourishing and free, I assumed the prices would have declined, at least to their former levels, as they have in England.

In fact, they have increased in India even more. It appears the competitive mechanism that assures low prices in England does not operate in India in spite of a supposedly free trade.

The ships’ officers are suffering from free-trade competition and occasionally sell their goods at cost or even less, but local retail prices continue to increase. Privileged tonnage is sold in two ways – either the officers sell outright to the local merchant who assumes title and sells for his own benefit; or the officers supply their imports to the merchant on commission basis whereby the shop-keeper pays for the goods and takes his commission only as he makes sales.

There are two related factors that should be considered. Firstly, under the Company’s monopoly the cost of freight was enormous but now it has become a trifling amount; secondly, the population of Europeans in India, who comprise the market for these imports, has increased year after year.

It appears the British merchants of India are frustrating the natural tendency of the market by operating cartels. Sgd Anon.

Sat 17th Jan 1818

Letter to the Editor – Anon’s letter deserves a reply. The ships’ officers only bring the finest British goods to the Indian market – Gibson’s saddles, Hoby’s boots, Bicknell’s hats, Smyth’s perfumes and all those other suppliers who sell their goods at the highest prices on their assertion of superior quality. These famous suppliers command high prices. Until consumers become willing to shop around and buy competing goods which are available here at lower prices but are not so prestigious, they will continue to pay high prices.

Had Anon been a wine drinker he would know that port, brandy and claret are cheaper here than England because they avoid the high British import duties.

The things that make imports expensive in India are the enormous rents required for shop properties and the cost and number of servants required who all live in the European style here.

Our Bombay shop-keepers do not buy direct from England because it ties-up their capital for a year when they have other uses for it. If the order costs £12,000 that is $1,080 in interest per year that is lost and must be recovered from buyers. This is another reason why British goods are expensive here.

The shipping agents who act for the ships officers in placing goods on commission with local shop-keepers always require 35% of the CIF cost of goods as their commission. They say some beers and wines that they import have short shelf-lives and arrive in unmarketable condition.

It is also true that the shop-keepers themselves choose to deal in the prestigious goods that this market prefers and this discourages the shipping agents from asking the officers to buy cheaper less-famous brands.

When the first ships from England arrive in May there is always a strong demand for the goods of their officers and those chaps cannily hold-out for high prices. The value of the May deliveries from the officers of Indiamen is commonly £80,000. In Oct the Extra ships arrive with about £20,000 more goods. By that time the May delivery has been sold.

Last year the traders got 35-40% advance on their imports in spite of the activities of free traders. However goods sent to the bazaar – iron, steel, lead, etc – sold at a 25% increase over cost. Formerly bazaar investments were worth 60-70% profit to the officers. This is because the free trade is not competing with the prestigious goods of the officers but is involved in the metals and similar items. Should the consumers in the Indian market change their preference for prestige goods to unbranded goods, there will be a dramatic fall in retail prices. If there is any skullduggery going on, it does not involve local shop-keepers.

Sgd A Bombay Shop-keeper.

Sat 24th Jan 1818

The East India Ship-Owners Bill had its third reading on 4th July 1817.

A former Act of Parliament caused competition amongst ship owners wishing to charter their ships to the Company. In one year the Company experienced a reduction of charter hire of £138,000 due to the gradual inroads made by private ship-owners into the Company’s market.

Last year, to ensure they got the business, the Company’s shipping interest (a related party of Shareholders and/or Directors) quoted a very low price and they have made losses. This Bill is moved to permit the Company to pay the ship owners more than they contracted to receive. It will enable them to recover their profitability.

Grant said building ships had become more expensive. The Bill was passed.

Sat 14th Feb 1818

Advertisement – The Company seeks for silver for the reduction of its debt. The Treasury is open to accept silver either for 12-month Bills on London at 2/6d to the Bombay Rupee at ¾% per month interest or at 5% per year if held locally.

Sat 21st Feb 1818

Notice 7th January – Madras has stopped minting the Star Pagoda, fanams and cash. The former currency is replaced by a silver Rupee of 165 grams silver plus 15 grams of alloy. This brings Madras into line with the other Presidencies. As Madras has the huge Kolar gold mines within its Presidency, it will continue to mint gold coins but they will in future be valued in Rupees.

Sat 21st Feb 1818

The Directors have announced the end of their 5% bonds w.e.f. 31st March 1818 from which date the bonds will earn 4%. Take your original bonds to the Company for alteration before 20th Feb. If you fail to do so, we assume you are selling and you will be paid-off on 31st March.

Sat 21st Feb 1818

Calcutta is selling 6-month Bills on London at 2/6 per Sicca Rupee or 3-month Bills at 2/5½d.

Sat 21st Feb 1818

The Bank of Bengal continues to be highly profitable. It has just announced its 18th half-year dividend of 12½%, the highest pay-out in ten years of trading.

Sat 21st Feb 1818

An interesting claim has been heard in the London Court of Chancery arising out of the debts of the Nabob of the Carnatic. He borrowed 5,000 Pagodas from Peter Davison in 1797 and gave his bond to pay 12% annual compound interest until repayment. Davison sold the bond to Cassel who sold it to Masery who sold half of it to Lancer on the latter’s return to England.

Lancer obtained the agreement of Balfour, the Madras-based defendant to this action, to send the interest to him in London. Balfour told Lancer he could pay only 3% interest, as a British Court of Equity would never approve a 12% compound interest rate which is statutorily illegal in that country. Balfour said he had nothing to do with the original deal with the Nabob whereby the Company had obtained title to his lands and appointed Commissioners to assess his debts for payment by the Company. He himself had obtained title to interest on this bond at a later time and he would apply the Commissioners’ usual interest rate that they had applied to the Nabob’s other unpaid bonds – that was 3%.

The plaintiffs, Raithby and others, claimed the principal of 2,500 Pagodas and interest of 12% since 1797. The Lord Chancellor gave them their claim in full but declined to make an order for costs saying he had given enough already.

Sat 4th April 1818

The British government has permitted direct trade between India and the Mediterranean, a trade that was formerly monopolised by the Americans. During the war, they developed markets for sugar, coffee, nankeens, pepper and cassia lignea (Kwai Pay in Cantonese – an inexpensive type of cinnamon) at both Gibraltar and Malta. Gibraltar is a free port and does not even have a Customs House let alone Customs duties.

Formerly British trade in India-goods to the Mediterranean was done via London but was too expensive. Sugar is always sellable in the Levant provided it is dry and only lightly-coloured. Pepper sells well throughout the Mediterranean and rice is popular in Spain.

The Company has appointed Wm Cozins & Co of Gibraltar as its Agent . This is the Gibraltar branch of the Anglo-Spanish trading house Coles Cozins & Co of London.

Sat 25th April 1818

The port of Calcutta has published a list of ships on its registry as of January 1818. There are 165 ships totalling 58,000 tons and they employ 1,000 Europeans and 7,000 natives.

Sat 9th May 1818

The costs of the extensive war with the Marathas has reduced the Company’s revenue sufficiently for the Governor-General to authorise a new loan.

On 4th April he called upon the community to subscribe in sums of 1,000 Rupees or more (970 Sicca Rupees). There is a 3% discount on purchase and 10% interest is payable up to 30th June 1819 when the new notes will be merged into the 6% loan. It will be popular with employees for a year and bridge the Company’s shortfall in revenue.

The Company employs Commissioners at Calcutta to buy its own stock and manage the price as Pitt has shown it to be effective. It is also called a Sinking Fund.

Sat 6th June 1818

The government bank has announced that interest on late payments due to Madras government will in future be 10% per annum.

Sat 27th June 1818

Government Gazette, 4th June – During May 4,495,635 Rupees of silver were imported to Calcutta.

Sat 11th July 1818

Indian Gazette, 15th June – Captain Briggs, who has been on a diplomatic mission to the Deccan for the Governor-General, has acquired the late Peshwa’s treasure. It amounts to £½ million.

Sat 8th Aug 1818

Bullion imported to Calcutta in June 1818 was valued at 3,196,803 Rupees

Sat 5th Sept 1818

The new Commercial Exchange has been opened in Calcutta. By bringing all transactions under one roof, it should regularise the trading of Company and commercial paper and make prices more uniform.

At end July the sale of the ship Bombay Trader and her cargo of opium and cassia was held in the new Exchange. Everything sold and the opium got a very good price.

Sat 12th Sept 1818

Calcutta, 11th August to the Indian Presidencies – all subscriptions to the new loan are to be stopped from the date of your receipt of this advice.

Thurs 29th Sept 1818 Extraordinary

There is a new Regulation for foreign trade in India. Countries with their own possessions in India and who are at peace with Britain may enter any British Indian port and trade. In war time they need a Company licence to export grain, saltpetre and military stores.

Countries without Indian possessions but at peace with Britain may enter Bombay, Madras, Calcutta or Penang for trade. Same restriction in wartime.

Foreign ships taking Indian exports must take them to their home country. The coasting trade of India is ours. They may enter the river at Calcutta only for trade, refreshment or repairs.[94]

Thurs 29th Sept 1818 Extraordinary

The Company’s ‘market fees’ in Bombay are revised. The costs of policing and cleaning the town are increasing and the administration needs more income. There is already a quarterly assessment and collection of rates but ‘market fees’ relate to temporary stalls in the night markets.

All shops and stalls in Bombay pay a tax to the Company called ‘market fees’. The rate for the present is 5 Rupees per night for every 10 sq yds occupied and 1 Rupee per night for each additional sq yd. There is a fixed tariff for permanent shops annexed to the Regulation.[95]

Sat 5th Dec 1818

The Company held a quarterly shareholders’ meeting on 17th June. The half-year dividend was confirmed at 5¼%.

Hume enquired about St Helena. In 1814 it cost the Company £79,000 to run the island; in 1817 it was £173,000. He had been told the increase related to new circumstances (Napoleon).

The Chairman said he had an undertaking of the ministry to repay any extra expenses the Company incurred as a result of the ‘new circumstances’.

Sat 27th Feb 1819

Calcutta, 4th February – the money market is deranged. Ten days ago the Company’s 6% paper was selling at 7½% discount. That has now improved to 2¼% discount. Money in the bazaar has dropped from 18% annual interest for loans secured on government paper to 8% today. The cause is three-fold:

  • There have been large imports of silver from China (and some from London where the expectation of receipt of French indemnity payments is depressing bullion values);
  • the Indian banks are discounting and
  • the cotton that comes to Calcutta for sale is accidentally stopped by our war with the Marathas.

When the interruption of cotton supply is overcome, the large harvest this year will absorb much of the excess silver.

Sat 20th March 1819

HMS Phaeton arrived Bombay on 21st October with £250,000 of bullion.

Sat 3rd April 1819

The Ministry is opening British ports to Indian trade one by one. They use Orders-in-Council to legalise the trade. The latest addition on 1st November 1818 is Leith which is now permitted to import Indian goods direct.

Sat 1st May 1819

Calcutta Journal, 9th April – India is not getting the prices it expects for its goods. Cotton has been selling to the free trade in India at about 8d per pound but at Liverpool it sells for less than that. We fear we are about to be squeezed.

The only chaps laughing are the occasional lucky traders, like the American captain of the Malabar who bought in Bombay at 8d and sold in Boston for 20 cents (c. 1/-) but that cargo was re-exported to Liverpool and sold six weeks later at 7¼d. The other people laughing are the issuers of Bills – they get theirs whatever happens in the market.

Coffee is also marked down to the same extent as cotton.

A shipment of Java cotton that cost the high price of $37.50 per picul (due to the new taxes at Batavia) was sold in London at various prices between 12d – 14d per pound (average $29 per picul)

Indigo and rice are also expected to be down but there have been no recent sales.

Sat 22nd May 1819

Our monopolisation of the spice trade before the Dutch returned has not profited us as much as we expected. Spices are selling at such reduced prices in London that a large consignment has been sent back to India for local consumption.

In mid-May 22,000 lbs of nutmegs and cloves arrived from London at the Bombay Customs House.

Sat 5th June 1819

Treasury, 31st December 1818 – The Lords Commissioners agree to permit the import of East Indian rice duty free provided shipments are made in good time to arrive in England before the end of the year. Ports approved for rice imports are London, Bristol, Hull and Liverpool.

Tues 7th Sept 1819 Extraordinary

The Company petitioned parliament in 1802 and again in 1815 to permit it to pay more to the ‘shipping interest.’ It said on each occasion, after the declaration of peace, the market for naval stores and equipment was deranged and the ship owners were unable to profit from their charters with the Company. Parliament enacted on each occasion that the charter hire rates be increased.[96]

To enable the Company to fix rates that were workable for itself and the shipping interest, Cap 83 of George III has been enacted on 5th June 1818. It consolidates into one act all former acts controlling the Company’s hire of ships. It is specifically enacted to enable the Company to pay more to the owners of the Atlas, Bridgewater, General Harris, General Kyd, Herefordshire and Vansittart, who could not be sufficiently recompensed under existing legislation.

The Company will advertise the specifications of ships it requires for India and China. The charters will be guaranteed for six voyages and may be extended if the ships remain in seaworthy condition. Tenderers will submit sealed bids. The parties may vary the peace rate for charter adding additional charges relative to war. Master Attendants will provide annual lists of the various costs of building and equipping ships for the Company’s service. The lists will be used to adjust the charter rates according to the national state of peace or war. The Company is empowered to charter ready-made ships. The ship owners are partially released from liability for negligence or misconduct in cases where the ship is lost after completing four voyages.

Sat 11th Sept 1819

A list of the Company’s Territorial Debts at the three continental Presidencies in India in Pounds Sterling at 31st January 1818:






Bearing Debt
























Notes – Total debt includes £314,161 passed to the Commissioners for the Sinking Fund in Calcutta for purchase of Company securities.

– The temporary 10% loan in April 1818 to conclude the war with the Marathas raised £1,413,460 which will be transferred into the 6%s in June 1819.

Wed 27th Oct 1819 Extraordinary

Territorial Dept, Calcutta 1st Oct – the Governor-General is raising another loan at all three Presidencies. Minimum subscription 1,000 Sicca Rupees.[97] Outstanding Treasury Notes or the Company’s Bills of Exchange both qualify for subscriptions. Interest payable is 6%. When the Promissory Notes fall due for repayment, subscribers may opt for cash or 18-month Bills of Exchange on London at 2/6d per Rupee. The Notes may be extended up to 3 years at a reduced 5% interest.

Wed 27th Oct 1819 Extraordinary

Commercial Dept, London 23rd March 1819 – The Company’s rate in London for handling and storing private merchants’ cargoes from India is increased. A new tariff is published. The schedule published in October 1814 will cease in January 1820 when the new rate becomes effective.

At the same time the ½% ad valorem tax paid to the Accounts Office and the 10/6d per mille paid to the Treasury Office are both rescinded and replaced by ¼% ad valorem charge on all private goods.

Sat 27th Nov 1819

The Assessor of Wheel Tax in Bombay has a new supply of badges available to fix on your carts, whether they are drawn by bullocks, horses or men.

Every cart owner must buy a badge for ¼ Rupee and affix it to his cart before 1st January 1820. The badges are non-transferrable.

Sat 1st Jan 1820

Notice – the Company’s cardamom monopoly at Malabar has provided a consignment for auction on 6th January.

Conditions will be advised at time of sale.

Sat 15th Jan 1820

Calcutta Government Notice, 7th December – the 6% loan we advertised in October is fully subscribed. All Treasurers are to decline any further investments.

Sat 22nd Jan 1820

Notice, 17th January – requests for copies of government documents will in future attract a fee of 5 Rupees per one hundred words.

Sat 25th March 1820

The Bengal Commercial Bank has appointed Wm Milburn as their Agent in Bombay. He reports to MacIntosh & Co, the managers of the Bank at Calcutta. The Bank will advance money on good security, discount Bills and negotiate the Company’s debt paper.

Sgd Joseph Barretto, Luis Joseph Barretto, Joseph Barretto Jr, John d’Cruz, Eneas MacIntosh, Edward Brightman, James Calder, John Melville and Soorjee Kumar Takoor, Directors.

Sat 29th July 1820

Bank of Bengal – this week’s rates for services:

Discounting private Bills

Discounting Company Bills of Exchange

Discounting Company salary Bills

Interest on loans on deposits




½% p.m.

Sat 14th Oct 1820

Robert Townsend Farquhar, the Governor of Mauritius, has abandoned the previous legislative measures to regulate the import and export of specie and bullion. The restrictive laws enacted in 1812 are repealed effective 11th July 1820.

Sat 11th Nov 1820

The Company is selling 90-day Sight Bills on Calcutta to raise 800,000 Sicca Rupees in Bombay for local purposes. The auction is 15th November at the General Treasury. The Bills are already prepared in amounts of 1,000 to 25,000 Rupees each.[98]

Sat 20th Jan 1821

Notice, 16th January – The licence to operate the Mandawah ferry service will be auctioned on 31st January, service to commence 15th February 1821.

Thurs 24th May 1821 Extraordinary

The first 10,000 Rupees of 6% Promissory Notes issued for the Loan of 30th June 1811 are being paid-off. Interest payments cease on 31st July 1821.

A rollover loan is opened also paying 6%. The Commissioners of the Indian Sinking Fund may make purchases of the new loan. All public officers are invited to subscribe. Investors can exchange their old certificates or take out new ones. Interest payable every 6 months.

Apply to the Treasury of your Presidency.

Sat 21st July 1821

Regulation, 23rd May 1821 – The rates of duty on European, American or Chinese goods imported to Bombay Presidency from non-British ports in India are liable to an import duty of 4½% of the invoice value + 60%; or 7½% ad valorem if no original invoice is available.

The duty on exports from the Presidency to Goa, etc., for re-export to Europe, America or China is 3½%

Sat 18th Aug 1821

House of Lords, 11th April – A big report on Asiatic Trade was produced to the Lords by Lansdowne. It details both the Company’s commerce and the new free trade. The Foreign Trade Committee has also considered the possible role of free traders in China under licences granted by the Board of Control on behalf of the Company.

The Committee wishes to extend the opportunities of China trade to British merchants generally. The Company has objected but the committee nevertheless feels consideration should be given by the House providing it can be done with the Company’s support and without damaging its monopoly.

Sat 1st Sept 1821

Notice, 21st August – the Governor-General is borrowing 800,000 Rupees secured on an issue of 60-day Sight Bills valued at 1,000 – 25,000 Rupees each.

It’s a repeat of the loan raised last November. They will be auctioned at the Treasury on 8th September. No other details provided.

Sat 1st Sept 1821

An Assay Report dated 4th August 1821 on the mint standards for all the gold and silver coins current in India is published showing weight, purity and intrinsic value:

The three continental Presidencies each issue a gold Mohur but of differing weights from 164.68 – 187.65 grains. The English guinea (118.7 gr), Venetian Sequin (52.6 gr), Dutch Ducat (52.31 gr), Portuguese Dollar (201.98 gr) and Persian Toman (71.47 gr) are also current gold coins as are 25 types of Indian Pagoda (22.1 – 44.85 gr) and 2 Fanams (3.40 – 3.43 gr).

Current silver coins are the English Crown (403.63 gr), the Spanish Dollar (370.95 gr), the Chilean Independence 1817 Dollar (376.34), German Crown (358.74 gr), the Rupee of each Presidency (164.68 – 175.92 gr), 11 varieties of Indian Rupee (99.47 – 169.41 gr) and 2 Cowries (43.8 – 52.0 gr)

Sat 1st Dec 1821

Cap 65 of George IV regulates British trade in Asia except China. It allows any British ship to trade in America or Africa in the course of a voyage to or from India. Ship masters trading to Asia may take Asiatic seamen on crew if they cannot obtain Europeans but must give security to the Company for the costs of their return. The Act excludes trade to China and trade in tea which both remain controlled by the Company and available to others only under Company licence. It defines the Company’s monopoly area as between the Indus in the west and Malacca in the east, plus any islands governed by the Company sited north of the Equator, plus the enclave at Bencoolen south of the Equator.[99]

Sat 2nd Feb 1822

India House, 6th July – The Directors give notice they intend to discharge a large part of the 6% loans they have raised in India. They concurrently advertised a new 6% loan into which the old notes are transferable. It will not be redeemable for ten years except at Company’s option. Subscriptions will be received only in Bengal. This advertisement is for holders of Indian paper in Europe who receive their interest by Bills payable on the Court of Directors. Interest payments on the old stock will be continued for 15 months after the new loan is opened. Within that time they should instruct their agents to recover their capital or transfer it to the new loan.[100]

A meeting of holders of the old 6% scrip was held at Thatched House, St James Street, London on 22nd August to consider how best to protect their interests. Colonel White reminded the creditors (mostly ex-employees) that they had supported the 1811 loan (which reduced interest from 8% to 6%) to enable the Company to carry on the war with the Marathas successfully. At that time they were promised that the 6% interest would not be subject to exchange fluctuations due to the Company’s financial arrangements. The new scheme would reduce the interest payable to holders in Europe (in Sterling) whilst continuing that payable in India at the old level (in Rupees). Specifically, it selected against the retired employees in England by applying a new exchange rate of 2/- per Rupee to the new loan whereas it had all along been 2/6d per Rupee on the old loans.

The Company says the value of Sterling has increased on the contraction of the British money supply to restore its gold value. Holders of Company paper in India (mostly employees) had exchanged their scrip for Bills on London to take advantage of the appreciation in Sterling and it was causing the Company to lose money. The Company had not kept complete records of what was held where, and the great increase in payments in London was potentially embarrassing. To prevent a financial loss they had agreed to cancel the old loan and start a new one on terms that reflected current exchange rates.

It was agreed at the meeting to petition the Court of Directors for relief.

Sat 23rd Feb 1822

Director’s letter, 15th August – Two Acts of Parliament, relating to sugar and pepper, passed in July. They will affect East India trade.

Loose pepper in the Company’s warehouses in bags of less that 100 lbs will be forfeited. Indian exporters to England should take care to ensure their bagged pepper well exceeds 100 lbs.

An extra 5/- duty per cwt has been assessed on Asian white sugar. The sugar trade from India is mainly in brown sugar, however Chinese and Javan sugar is refined and will be uncompetitive in future.

Sat 23rd Feb 1822

The London Morning Chronicle has published a critical opinion on the Company’s financial policy in India:

Ten and more years ago, the Company exchanged Current Rupees to Sterling at 1/11d with a premium of 3%. This was effectively 2/4d per Sicca Rupee. Then the first 8% loan was opened, offering an exchange rate of 2/6d per Sicca Rupee. The latest Bengal loan, for which payment is in Rupees, is paying 6% and offers an exchange rate of 2/- per Sicca Rupee.

Say the loan raises 100 million Rupees, at the new 2/- exchange rate it is worth £10 millions on the Company’s books in London. Had it been continued at 2/6d per Rupee, it would be a liability of £12.5 millions on the accounts.

The likely effect of the unrealistic exchange rate will be to encourage investors to take their interest in Rupees in India and find some alternative way of remittance to London, either by investing in Indian exports to this country through the Agency Houses or by (illegally) using Dutch or Danish Bills to remit the interest to Amsterdam or Copenhagen for transfer to London.

The Company’s exchange rate of 2/6d on the 8% paper was injudicious. Until then, the rate used by the Agency Houses for commerce had been 2/3d. Once the new paper became available, the Agencies had to offer more than 2/6d to compete for funds. That made the costs of exports higher and reduced the profitability of Indian trade.

Incidentally, this squeeze was not felt by the Governor-General, his Council members or the Judges of the Supreme Court who all have their salaries paid in Sterling at a fixed exchange rate of 1/9d per Current Rupee, which approximates to 2/- per Sicca Rupee. Thus senior civil servants in India could increase their salaries 25% by remitting them to London in Company Bills or by 30% if they used Bills from the Agency Houses which were then obliged to pay 2/8d per Sicca Rupee to compete for the exchange.

By offering the 2/6d exchange rate on the 8% loan, the Company effectively caused a slow-down of trade in India and this reduced demand for money. As the slow-down took hold, the rates on commercial Bills fell to ultimately 2/2d – 2/3d per Rupee and this presaged the increased investment in Company’s paper to take advantage of its better exchange rate. That was the occurrence that decided the Directors to pay-off the old loans and start this new one at the lower exchange rate. They appear intent on absorbing all surplus capital in India and it appears they will get it cheaply.

The Company’s better policy to fund its war-making is to raise short-term loans on high interest, as has occasionally been done. The exchange rate is irrelevant to the native investors in Company stock – it is only the European employees who remit. To better preserve the balance of funds in India and London, the Company might well have fixed 2/6d for the exchange rate for interest payments in London and published a lower rate for the repayment of principal when the loan closed. That would have kept the money in India and avoided the problem the Company is now obliged to address.

Many of the Company’s retired employees, relying on the good faith of the Company’s pledge not to vary the exchange rate to Sterling, invested their life savings in the 8% loans and planned their lifestyles according to that level of income. Those investors, some of whom are widows and children who receive interest in Sterling, have been devalued by the reduction of the exchange rate.

Tues 12th March 1822 Extraordinary

All the Company’s former Promissory Notes issued between 1813 and 1820 are recalled for repayment or transfer to the new 6% Notes.

Sat 16th March 1822

The remittable 1820 loan and all the earlier Company loans are trading on the Calcutta Exchange at 17 Rupees to buy and 16 Rupees 12 Annas to sell, a spread of ¼ Rupee (±2%) to the broker. These loans will all be repaid on 30th April 1823 or may be transferred to the new 6% loan. No cash subscriptions will be received for the new loan – it is solely funded by transfer from the previous loans.

The new loan is trading at 14.14 / 14.10 Rupees. Interest payments in Sterling are now extended to holders in Europe as well as locally, both at an exchange rate of 2/1d per Rupee payable by 12-month Sight Bills.

Sat 23rd March 1822

A Treaty has been concluded with the Rajah of Kotah whereby the Company will receive 5 annas (30%) and the Rajah 11 annas (70%), from each Rupee of revenue collected in his domains.

Sat 13th July 1822

The Bank of Bengal rates are now:

Discount on private Bills

Discount on Government Bills of Exchange

Interest on loans on deposit




Exchange rate on 6-month Sight Bills on London is 2/- to 2/1½d per Sicca Rupee

Shares in the Bank are trading at a 38 – 40% premium to face value.[101]

Sat 13th July 1822

Bengal Hurkaru – The Company’s 3rd auction of salt was held last week. It was influenced by a Shroff acting for 7-8 bazaar merchants but the ring that forced-up prices in the previous sales was not in attendance having failed to recover their previous investment. The sale was of 800,000 Maunds.

Successful bids started at 550 Rupees but declined to 420 Rupees later. Average price was 520 Rupees (c. 6 Rupees per lb).

Sat 7th Sept 1822

Notice, 7th September – W Nicolls of Meadows Street is preparing to form a bank in Bombay. It will be a joint-stock concern with a capital of 1 million Rupees divided into 100 shares of 10,000 Rupees each. It is not proposed to compete in the mercantile or Agency business. Contact Nicolls for details.

Sat 14th Sept 1822

Calcutta – The Company is selling 6-month Sight Bills on the Directors in London at an exchange rate of 2/1d – 2/2d per Sicca Rupee.

Sat 19th Oct 1822

The withdrawal of Promissory Notes with interest payable in London and their substitution by the new 6% Notes payable in India, has created an artificial shortage of the means of remittance from India to England and reduced the Company’s exposure to Sterling debt.

Its main effect has been on the prices of those commodities that we export to London. These days that is almost solely indigo, which trade should continue buoyantly so long as the unsettled state of Spain continues. As a consequence, a demand for indigo, even at high prices, has developed.

The Sicca Rupee is currently worth 1/10¼d, a notional loss of at least 12% in respect of Sterling.

Sat 9th Nov 1822

Sir Charles Forbes has told a shareholders’ meeting of the India Company on 12th June that the East Indian interest must increase its representation in parliament in order to compete with the West Indian interest (the Company can call upon about 60 MPs for support in the Commons).

The failure of the Company to resist the discriminatory duty on East Indian sugar has highlighted the need for enhanced political power.

He suggested making one of the qualifications for a seat on the Company’s board the prior possession of a seat in the House of Commons. It was manifest that free trade to India was beneficial to Britain. In 1813 when the free trade commenced, British exports of £180,000 were exported to the Company’s domains. By 1818, the value exceeded £700,000. He estimated British exports to India in 1821 were about £1 million.

Something should be given in return to the consumers of these British goods. India should require Indian-built ships to equate with British-built ships in English law. We now have 40,000 tons of shipping unemployed in Bengal ports and the ministry does not care because our parliamentary representation is inadequate. This government is quite able to destroy one interest to exalt another and the only difference is in parliamentary political power. The Company has restrained itself from bombarding the two Houses with Petitions out of an inappropriate regard for the value of private meetings, he thought.

Shareholder Ricardo said the House of Commons as presently constituted was not a body of representatives of the people but a body of vested interests each vying for the support of the minister. He agreed with Forbes that there should be only one scale of duty on sugar irrespective of where it was made. He agreed that the minister was presently obliged to support one interest over another. A case in point was the recent ability of the shipping interest to force the abandonment of a clause in the amended Navigation Bill, although its effect was doubtless in the national interest.

Sat 7th Dec 1822

The Board of Control has commended the Company to permit the use of private ships of less than 350 tons in the trade between Asia and Britain. The Board believes the requirement for only larger ships has prevented private merchants from developing the free trade of Asia appropriately. The Company’s concern is that smaller ships will be capable of accessing the myriad small ports of Asia and competing in the coasting trade.

The Directors say they already have the agreement of the ministry to a minimum of 350 tons and do not expect it to resile. If it is obliged to forego this, it will require some reciprocal advantage – either in acceptance of India-built ships on the British registry or equalisation of the duties on East Indian sugar.

Government is willing to yield on the shipping but says it needs a year to gauge the effect of the present sugar duties before amending them. The West Indian planters are in difficulty due to the legislative requirement they abjure slave labour. This has closed all European markets to British West Indian sugar on price grounds. Until the ministry can obtain the agreement of the European competitors to cease using slaves for colonial production, the problem will continue and the temporary solution is to guarantee our West Indian planters a market for their entire harvest in Britain.

Sat 7th Dec 1822

The Company is also resentful of an Act of Parliament that permits ships from any port in Europe to proceed directly to the Company’s settlements in India. No proper notice of the ministerial intention was given. The Directors hope this will not occur again. The effect of this Act, the Directors say, will be to drive the East Indian sugar trade into the hands of foreigners who will take it from India direct to Europe, by-passing London and defeating the ministerial intention of maintaining that city as the entrepot of Europe.

Its not only sugar. India produces an immense cotton crop which is kept out of Britain by high duties. On the other hand India imports several hundred thousand Pounds worth of British calicoes.[102]

Sat 7th Dec 1822

House of Commons, 4th July – Brougham introduced a Petition of the Bengal bankers. It arose from a loan made by the bankers to the Company, as Guarantor of the Vizier to the Grand Mughal, secured on the domains of the Grand Mughal, i.e. the province of Oudh. The loan was to enable the Vizier to make early payment of subsidies due to the Company which the Governor-General of the time urgently wished to remit to London.

Shortly thereafter, the Company partitioned the province of Oudh. Half was transferred to the Company and produces £3 millions revenue each year. That is a drastic reduction in the security underpinning the bank loan.

The petitioners have not been completely repaid and about £150,000 remained outstanding. Charles Watkin Williams-Wynn as President of the Board of Control instructed the Directors to write to the Governor-General requiring he pay off the bankers, but all 24 Directors combined to refuse his order. The claimant bankers doubt the efficacy of making their claims through the Indian courts which are staffed and controlled by the debtor. They consequently Petition parliament for relief. Several Governors-General had commented on the case in writing and Wellesley was particularly supportive of the bankers’ position.

Brougham moved that a committee be formed to enquire into the justice of the claim.

Robertson said the money was lent to the Vizier at a usurious rate and the bankers did not deserve repayment – they had already got enough.

Wetherall said regardless of the terms, both parties had agreed and it was too late for one to renege.

Hume said commercial disputes should routinely be left to the parties to resolve. Had any Governor-General really been concerned, as is suggested of Wellesley, he had adequate powers to intervene. He said the way the native Princes of India conducted business was no different from the instant case – if we intervene here we will have a flood of similar disputes to settle.

Prendergast said his own experience of loans business in India suggested that the richest party called the shots and you had to take whatever was on offer. Prendergast had loaned money to the Vizier of the Mughal in this case and, on the cession of half of Oudh to the Company, had been obliged to accept a 50% repayment or nothing.

George Smith said Prendergast’s residual claim was just and should be paid. Astell said he would like to hear the Company’s version.

Plunkett for the Company noted that from 1787 – 1793 the Company paid interest on the loan. It seemed that the parties were content with their agreement for many years. Plunkett said there were three classes of creditor – European and Indian subjects of the Company and Indian subjects of the Mughal. He thought the foundation of the Company’s power was its willingness to extend even-handed justice to all its subjects regardless of race. At least the British and Indian subjects of the Company should be protected.

The Vizier with whom the Company had contracted the agreement had died. The Company appointed his successor and one of the terms of his appointment was that he should honour his predecessor’s debt. In 1793 this undertaking was breached and the Company took sovereignty over half of the province of Oudh in satisfaction of the outstanding balance due. It released the new Vizier from his inherited obligation towards them. The Company overlooked the interests of the bankers in the discharge they gave to the new Vizier at that time. Plunkett thought this brief background should suffice for the House to vote for an enquiry.

Wigram, the Company Director, shareholder and ship-owner, said the Company was really uninvolved. The matter was entirely between the bankers and the late Vizier.

The House then divided 82 / 39 in favour of a committee. The 39 opponents were all ex-employees, shareholders, Directors or contractors of the Company – a list of their names is published in the paper.

Sat 21st Dec 1822

The Assessor of Wheel Tax will renew the badges on all carts and coaches that evidence payment. Tax is due 1st January 1823. Every cart-owner should attend the Assessor’s office timely. The tax is ¼ Rupee for each cart. Owners of untaxed carts will be fined with a part of the fine going to the informant.

Sat 11th Jan 1823

Notice, 11th January – Governor Elphinstone has approved a Charter for a bank in Bombay (this is W Nicolls’ proposal of last September). It is subject to confirmation from London which will take a few months to arrive.

Private merchants have subscribed all the intended stock of 1 million Rupees but it is lawful for Company staff to own shares and the subscribers have been persuaded to double the intended capital to permit Company employees to participate.

New subscriptions will be received at William Nicoll’s office.

Sat 15th Feb 1823

Notice – Governor Elphinstone has reason to suspect that country ships in Bombay harbour are involved in widespread smuggling at night. He has revived the Regulation of 1768 whereby all communication between the shipping and the shore is prohibited after dusk and before dawn unless under special licence of the Customs Master, the Police Superintendent or the Town Mayor.

The bum boats that ply between the shipping and the shore are unregulated. In future all bum boats will be numbered and their owners registered.

To give effect to this Regulation, the Customs Master has been provided with some patrol boats.

Sat 8th March 1823

Accountant General’s Office, 7th March – Agents submitting Promissory Notes for transfer into the new 5% loan should specify whether their Principals are resident in Europe or elsewhere. A Power of Attorney of each Principal should accompany each application.

For the information of investors, the old loans being paid-off amount to 130 million Rupees (c. £16 million) of which 40 million will be paid-off in cash (i.e. the Company is emulating the British government in reducing the volume of its credit notes). All applications received after 30th April will indubitably be paid-off in cash. The new loan is already trading at Calcutta at an 8% premium.[103]

Sat 24th May 1823

Bombay Commercial Dept – the Company requires 2,500 candies of cotton suitable for the China market. Tenderers must show where it is grown, in which season and the price in Bombay Rupees.

Sat 24th May 1823

Calcutta 2nd May – the Commissioners for the Reduction of the Company’s Debt in India announce that 6% Promissory Notes to 129,288,800 Rupees have been tendered for transfer to the 5% loan paper.

In accordance with Clauses 11 & 12 of the advertisement, 70% of the Notes tendered will be converted to the new Notes and 30% will be discharged in cash.

Sat 14th June 1823

Bombay news – The Company has bought a steam-operated press from Boulton & Co of Birmingham for the minting of coin. It will be shipped to Bombay from London in about April 1824. This will provide the means of establishing a uniform currency throughout this Presidency.

Sat 13th Sept 1823

Letter to the Editor, 12th September:

The exchange rate between Britain and India fluctuates in accordance with the balance of trade. For some time the Company and the Agencies have been great exporters of bullion to Britain. It gives a better return than Indian produce. This has masked a large reduction in the value of Indian commodity trade.

The intrinsic silver value of the Bombay Rupee is 1/11d. Until recently it was exchanging at 2/6d. That better rate for Indian exporters of capital was due to:

  • a relative shortage of silver in India before 1806.

(refuted by a commentator Amicus – the shortages were occasional and infrequent and merely evidenced a natural demand for capital),

  • to the high interest rate on the Company’s loan paper.

(which interest was remittable at ±2/6d to the Rupee. NB – Amicus says this was an effect of the high rate not a cause)

  • and to the Indian trade being a monopoly trade.

(this is also discountenanced by Amicus – the Company is a commercial organisation; it will not forego the profit on silver trade merely to maintain an unrealistic price in India)

  • Subsequent to 1806 the rate was exacerbated by the depreciation of Sterling due to printing – that made an exchange of 2/6d about right.

(Amicus approves this as the prime, perhaps only, cause. He notes the balance of trade is always in favour of Britain and against India)

The British government repealed the suspension of cash payments when the Pound Sterling had appreciated by 25%, sufficient to return to its pre-war gold value. Once that occurred the possibility of a Rupee exchange at 2/6d ended.

Only if the Bank of England again depreciates the British currency or if the free trade is ended and monopoly restored, will the exchange rate again fall towards 2/6d.

These observations suggest that India has sustained a great apparent loss through no fault of her own. The Company charges a high price for its remittance service – we should seek for Company understanding of our diminished ability to remit to England for our pensions. The value of the remittance service is predicated on the alternative cost of sending silver instead – that is the freight cost to the frigate, minting and packaging. If the Company’s rate becomes unattractive commercially, people will send their own silver back. Sgd Verax

Sat 11th Oct 1823

In the Commons, Huskisson has justified the different duties on West and East Indian sugar imports to England. He says the Company is able to export directly to America and Europe but found it inconvenient to do so. The greatest import of East Indian sugar had been 11,000 tons one year of which 4,000 tons had been re-exported to Europe. Its markedly lower price compared with the sugar from British West Indian colonies had not benefited the Company because the French were able to supply the European markets with comparatively priced sugar from Santo Domingo. French West Indian supply was cheaper for two reasons – their farmers were not in hock to London capitalists and the French operated a slave economy in Haiti.

In 1789 British West Indian colonies produced 90,000 tons at which time British consumption was 70,000 tons. Now those colonies produce 140,000 tons and British consumption is also 140,000 tons. He concluded there was no demand for cheap East Indian sugar.

Ricardo said it would be best to free the trade to the greatest extent possible. He thought the present duties should be equalised. There is nothing to fear from competition, he said.[104]

Sat 11th Oct 1823

Letter to the Editor from Mercury (one of the leading Bombay merchants):

The gold Mohurs which are one of the gold coins of India are disappearing – it is because they afford the best remittance to London at present.

South American silver dollars, since the wars of independence commenced in 1810, have occasionally been impossible to bring to town for minting. At those times, capitalists have bought bar silver at 1-2% discount. To address this leakage of value, the Mexican government extended minting to several towns. This has both been expensive and unpredictable. The silver content of some provincially minted coins is less than advertised.[105]

British gold and silver coin is prohibited to export. Parliament fears its export might raise the money price of bullion.

The Spanish government has complex regulations for transfer of gold and silver that involve heavy deterrent duties. This gave rise to the extensive smuggling that has characterised South American trade. Smuggling fees have varied from 1 – 8% ad valorem. Recently at Vera Cruz, British government Bills could be negotiated at 4/2d per dollar whereas the formal rate at Jamaica was 4/8d.

An interesting aspect of economics is that the removal of restrictions has the same effect as their creation. This removal may not occur in the places that are effected by it. So, for example, British Corn Laws and the new free trade with India have both had severe effects on the commerce of USA and their exchange rate with England.

Government loans are the usual concomitant of war. This extra demand for capital to meet war expenses tends to increase interest rates. The increased interest attracts more capital. The relative security (Sinking Fund, sequestration of gold and silver by government, new taxes and surcharges, near monopoly of international trade) underpinning British war loans in the recent struggle with France, attracted many million Pounds of foreign capital to London. Today we see that every government that is intent on borrowing comes to London for its financial needs.

The Company’s loans in India had the effect of stopping any inflow of capital here. The savings of the army and navy officers and the profits of the Agencies were invested in the Company’s loans and very little British capital from London could access this market. That was the cause of the demand for remittable interest which was probably doubled for European surplus income.

In 1813 the Company sent back as much silver as it could to London because the price of bullion in depreciated Sterling appeared advantageous.

From 1813 – 1819 the Company issued a series of loans that absorbed all the surplus capital of the employees and Agencies – they allowed an exchange rate of 2/6d on the interest which was remitted to London. Ultimately, the Company had to remit bullion to settle these London expenses.

Throughout this period we had the beginnings of free trade. It was characterised by an enormous increase in Indian cotton farming for shipment to England. These cotton speculators supported the exchange rate until the latter part of the period when it declined to the rate of bullion remittance. By 1820 cotton trade to Europe was impossible. Bullion had flowed into India in 1819 from Europe and America in a huge amount and the purchases of British manufactures locally was trebled. The Company necessarily started to change its system. Instead of loans with remittable interest, it issued loans with interest payable here.

This caused a search for other means of remitting capital surpluses to London. Indigo reached its lowest price in Britain. Silk, sugar, spices, medicines – all were tried – but produced less than shipments of bullion. Once the exchange rate lost its artificial supports, it fell rapidly to the same rate as a specie remittance, which is where it is at now. The time when we received 8% interest on our savings and 2/6d per Rupee on our remittances has passed.

Sat 22nd Nov 1823

Calcutta Journal – 150 African eunuchs have been landed from Arab dhows at Calcutta for sale this season. The ships take away Indian females to the Arabian markets and barter them for eunuchs whom they sell here. The Arabian end of the trade is centred on Jeddah where African boys are castrated prior to the voyage here.

Sat 6th Dec 1823

A letter from the Directors dated 9th April is published for information:

Our lawyers say that the 12% maximum legal interest on contracts made in India extends to those Asian places at which we trade but which are not under the sovereignty of the Company. It also extends to those banks that are owned partly by British and partly by Indian shareholders.

Loans to native princes, their ministers or their governments are regulated by 37th George III, Cap 142 Sec 28.

This is irrespective of where the contract is made or where the loan is paid / repaid. Any bankers contravening this law may be prosecuted for the misdemeanour.

Vol 1 No 10 – 8th March 1828

We have an estimate of the overall value of foreign trade at Manila for 1827:

Exports $1,093,690 (38% Spanish, 18% American, 18% Chinese 11% French, 9% British 6% all others);

Imports $1,048,680 (33% Chinese, 24% Spanish, 20% American, 10% British 13% others)

Major exports – coffee, dried prawns, ebony, indigo, capiz shell, rice, sugar. (also some tortoise shell, beche de mer, animal skins and sinews and bird’s nest)

Vol 3 No 8 – Thurs 15th April 1830

Luconia (Luzon) – We have the Manila trade statistics for 1829:





41 Spanish ships brought $682,726 goods & $1,600 treasure.

78 foreign ships brought $971,776 goods and $396,847 treasure.

This is a 10% increase over 1828.

43 Spanish ships took $415,444 goods and $8,286 treasure.

80 foreign ships took $982,179 goods and $53,989 treasure.

This is a 5% decrease on 1828.

The 78 foreign ships are 33 American, 14 English, 7 French, 6 Dutch, 5 Danish, 5 Chinese, 1 Prussian, 1 Hamburger and 2 Hawaiian.

Principal exports were indigo 11,800 quintals, sugar 120,274 piculs, ebony 8,723 piculs, sapanwood (used to make red dye) 11,675 piculs, white rice 114,793 cavans, rice in husk 30,830 cavans, hides 34,853 pieces, cigars 4,595 arrobas, rum 7,889 gallons.[106]

Vol 5 No 7 – Sat 7th April 1832

Manila trade for the year April 1831 – March 1832

Ships arrived – Spanish 43, American 25, English 19, Danish 7, Chinese 5, Portuguese 5, Dutch 4, Hamburg 2, France 1, Prussia 1 – Total 112

Main exports – rice, sugar and hemp; Other exports – sapanwood, indigo, hides, coffee and ebony.

Value of imports $1,794,379 + $337,287 silver

Value of exports $1,414,719 + $45,219 silver

Gross duties on trade paid to government $244,006

Vol 7 No 11 – Tues 18th March 1834

Manila trade statistics for 1833:

Ships (in and out – a double count) – Spanish 120 (of which 97 to/from Macau); American 58; English 56; French 16; Chinese 4.

Trade Spanish



$535,586 imports + $31,730 silver from Macau;

$549,786 exports + $168,896 silver to Cadiz.

$494,588 imports + $457,063 silver (of which $286,000 from British Empire);

$853,330 exports + $1,680 silver.

Vol 7 No 12 – Tues 25th March 1834

The Governor of Bombay has proposed making his city a free port. It is fortunate for mankind that the true principles of existence are now becoming apparent. The pursuit and defence of individual happiness, unshackled by false legislation, is the aim. Knowledge, progress, the happiness of mankind and nations depend on commerce. All British Indian ports should soon be free. Hopefully Goa, Macau and Manila will follow. Then four great European nations (England, France, Spain and Portugal) with America, will have unrestricted commerce.

How can Chinese ports remained closed against our joint perseverance and enterprise? We append a letter from Lord Clare (the governor of Bombay) of 4th January 1834 to the merchants concerning free trade:

“Sirs, On determination of the Company’s charter, our Bombay shipping could be injured by competition when the trade to China is made free. I wish to prevent this while not prejudicing the free traders. Please consult the principal European and Indian merchants and ship owners and let us have your advice. I myself suspect that all aims can be achieved by declaring Bombay a free port for Chinese produce going to England and vice versa.”

Vol 7 No 12 – Tues 25th March 1834

To Richard Jones, President of the Sydney Chamber of Commerce:

The British Treasury and Customs Department have recommended parliament that Sydney be constituted a free port. Please canvass your chamber members.

Vol 7 No 19 – Tues 13th May 1834

The recent collapse of Indian Agency and finance houses:

It is notorious in each of these failed businesses, that every two or three years a partner has sold out and taken his fortune back to England and is replaced by another who, after 2-3 years, does the same. This constant withdrawal of profits has impoverished the houses and contributed to their failure.[107]

How did recent partners withdraw with profits when the business as a whole was in debt to millions of dollars? How did they make up their accounts to do this? It seems the creditors of the companies have effectively given vast sums to retiring partners who now claim to be beyond reach.

The Times of London says since the beginning of January 1830 four Calcutta houses have closed owing £12 millions, one Bombay house owing £250,000 and two associated London houses owing nearly £3 millions. They are:

John Palmer & Co of Calcutta

Alexander & Co of Calcutta

Mackintosh & Co of Calcutta

Colvin & Co of Calcutta

Shotton & Co of Bombay

Fairlie & Co of London

Rickards & Macintosh of London





£ 250,000


£ 950,000

The majority of these failures were known to be approaching by the partners of the involved firms. There has been no natural disaster or war to cause them. There has been no change in the law or fraud or extortion by the Indian government to explain them. They derive solely from the way the Indian firms and their London agents have been transacting business during the last 10-15 years. The directors speculate for inordinate gains and their customers become overly confident of windfall profits.

On the last renewal of the Company’s charter in 1813, Indian commerce was opened to private investors and many new trading companies were started in Calcutta. These had to compete vigorously with the established businesses for market share and the commercial community generally was tempted into types of business that they would not formerly have contemplated entering. Their investments in sugar and cotton have not yielded the expected returns but indigo was worse. They made large advances (£1,500,000 – 2,000,000 a year) to indigo planters who grow an unpredictable commodity. In 1825 they produced 10,750,000 lbs and in 1826 produced 6,700,000 lbs. Consequently its value moves like a yo-yo and a third of their loans to indigo growers are non-performing. Throughout these vicissitudes the companies continued to pay the same interest each year on customer’s deposits. This is the crux of the financial problem.[108]

About 18 months ago a partner of Alexander & Co of Calcutta gave evidence to a Select Committee of the Commons of the above facts. He implicated the formation of a Government Bank of Issue, Discount and Deposit as contributing to the financial collapse. This Bank competed with the Agency houses for deposits. They continued to pay the customary 6-8% per annum to their investors whilst at the same time the Government Bank was lending its revenue at 4-5%.

Over-trading, unprofitable investments and the partners’ high personal costs of living are the causes of all the failures. The investors who have been ruined should have reflected that security and speculation never go hand-in-hand. Great gains cannot be had without taking great risks.

A slightly different view has been expressed by people close to the banking industry in India. They say that the ill-advised and unexpected war with the King of Burma was the beginning of the end. Before the war, commercial interest rates were at 5% but even at that rate the agency houses were refusing many deposits and requiring their big investors to withdraw some of their funds. Money was washing around the city. Then the government suddenly announced it was at war and published its requirement for a new loan which soaked up all surplus capital and a good deal more besides. The Agency houses responded by competing with the government by increasing interest payable to stem their loss of funds. An additional factor in this scenario was the reduction of Indian government spending that resulted from retrenchment associated with the costs of war. This reduced many debtors’ ability to repay. On this analysis from the banking industry, the proximate cause of the failures was the policy of the Company’s government.

A final note – we are informed by letter that the great agency house Palmer & Co is about to reopen its office in Hyderabad (the Calcutta head office and other branches continue closed) and is soliciting funds at 12% (Editor – that’s too much).[109] Sir Wm Rumbold is to manage the firm and he is living in opulence in his new palace at Neilgheries which cost 100,000 Rupees to build. This intelligence can only be true if Palmers have recovered the whole of their claims on the Nizam plus interest due. If that is the case, Palmer’s creditors everywhere can expect a full repayment.

Vol 8 No 1 – Tues 6th January 1835

Two men from the Eastern Uzbeg city of Kokand have visited Bombay and described their trade. Uzbeg, the first of their horde, was a direct descendant, possibly a grandson, of Jenghiz Khan.

“The Chinese allow us free trade at Kashgar and the other Muslim cities around the Takla Makan. They permit entry to our religious missionaries as well. But none of us may enter China proper. In the event of an embassy we would apply to the Chinese viceroy at Kashgar and await approval from Peking. Chinese merchants come to Kashgar on the southern route around the Takla Makan. Their caravans are of horses. They mainly bring bricks of tea with some silk, satin, porcelain and other things (Brick Tea was the tea of choice in Central Asia, Mongolia and Russia. It was repackaged from the Fukien chests in compressed bricks. Chuan Zi was the leading brand supplied by the famous Chang Yu Chuan house) One horse can carry 30-40 bricks of tea. Tea is widely consumed in central Asia and is prepared like the Europeans but with the addition of butter. Our merchants cross the Tien Shan mountains to trade at Kashgar. We barter shawls, raw silk, European manufactures and horses for the Chinese goods.

“The Chinese do not like us to trade with India and the route through Tibet to Kashmir is closed to us. Indian produce comes to us via Kabul, Balkh and Bokhara.

“We take all the Kashgar purchases back to Kokand. Some are sold locally but most of the tea together with local raw silk, camlets and cotton yarn is taken to Tashkent where we annually met with the Bokhara merchants and form a large single caravan through the steppes to Omsk and Orenburg. The returms from this trade are furs, gun barrels, locks, cutlery, leather and other Russian manufactures”.

The Uzbegs also reported on Jahangir Khoja’s rebellion in Chinese Tartary and their information duplicated that of H H Lindsay, previously of Canton and now staying here in Bombay. What they have said seems true. They appear to be straightforward and honest people, more like Europeans than Persians.

Vol 8 No 36 – Tues 8th September 1835

Observations of the Manchester Chamber of Commerce on the Company Bills business in India and China. This takes a view based on bilateral trade Britain / China:

A sovereign power should not compete with individuals in trade. This principle has been acknowledged in our law. The Company makes advances, secured on Calcutta goods, consigned to Leadenhall Street (the Company head office). The rate of exchange is disproportionate to existing rates in London.

Now they have established a finance committee at Canton to effect exchange operations there. They might soon do so in Manila, Batavia and other foreign countries. The China trade is essentially a barter trade. The Company’s cash advances produce an excess of capital in Canton which enhances the prices of goods we buy to the advantage of the Chinese sellers and to the disadvantage of the British manufacturer.

The Chinese trader has historically bartered his goods for ours. Now he is getting money for his goods he does not have to buy ours, which value is accordingly reduced.

Prior to starting the Bills business in China last August (1834) the exchange rate on London was 4/10d – 5/0d per Spanish dollar and on Bengal was 204 Sicca Rupees per $100. By October the Company was advertising funds at 4/7d per dollar thus making the Bengal exchange rate 208 Sicca Rupees per $100. This caused the value of money in London to advance from 5½% to 7¼% and in Bengal to increase by about 2%. Silk in August was $335 per picul but by October it was $380 per picul (+11%) at a time when the harvest was abundant and the prices should have been falling. Tea is equally affected while selling prices of British manufactures for China have concurrently decreased by 25%.

Some of the finance committee are the sons of Company directors

The ready availability of cheap money in China will increase speculation and cause recklessness. We would willingly invest in Bills business in China if the Company withdrew. The interests of India should be made compatible with the interests of England. As so much of the Company revenue must be remitted to England, the correct course would be to open the treasury at Leadenhall Street and close those in India and China. This will enable the company to receive what it needs here without interfering with trade.

When London issues Bills on Bengal they are invariably 60 days sight Bills. These Bills arrive in India about 4½ months after they are drawn. They are paid in India about 6½ months after they are drawn in London. When Bengal issues Bills (on London) they are paid about 12 months later. This means the turnaround takes approximately 19 months. Most of the company’s debt is issued at 5% per annum. These bills accordingly cost about 8% plus the expenses of operating the agencies in India and China, say 2%. This halves the value of the Sicca Rupee in London (i.e. the equivalent to a Calcutta rate on London at 12 months of 2/1d per Sicca Rupee becomes in London 1/1½d per Sicca Rupee.)

In December 1833 the Company opened its Calcutta treasury for advances secured on goods consigned to Leadenhall Street at 2/1d per sicca rupee. At that time the London treasury was issuing Bills on Calcutta at 2/- per sicca rupee. The corresponding price here should have been about 1/10½d per sicca rupee but they in fact increased it to 2/1d, about 10% above what it should have been in consideration of their own prices in Calcutta. This naturally deterred investors from paying money into Leadenhall Street.

This can be solved by London issuing Bills on India at the fair rate and by completely closing the Bills business in India and China. When the treasury in China is closed, traders can apply in London for Bills on Bengal and Bombay which will allow them to place funds in China for tea and silk. British imports from China greatly exceed in value of our exports of manufactures and metals. Thus these bills will be highly sought after in China to make remittance to India of the trade balance drawn annually from China to India for cotton and opium. But while the Company funds the China trade at Canton, the exchange rate fluctuates following the company’s own interests and private capital is deterred from competing.

Canton Register, Vol 8 No 41 – 13th October 1835

A splendid work on Turkey is by David Urquhart. Here is a review by the Canton Register Editor, comparing the British economy with the Turkish:

“Our ancient institutions allowed some individuals to control others. When control was united with responsibility it was admirable. But our foreign policy was to look on the foreigner as a hostage and commerce as prey. This resulted in restrictions and laws that neutralised our natural advantages and placed barriers between nations. Our harbours are mined with fiscal intricacies and an anti-social spirit infected our commercial system. It does not harmonise with the enlightenment and urbanity that characterises the individuals and nations upon whom the system operates.

“When feudalism divided men into owners and property, hospitality was erased from our national character. Then Christianity united us with some nations and set us more firmly against others. Aliens were taxed like goods, their property was detained, they were capriciously fined, their inheritance at death was legally seized (a law which was only recently repealed) and it was said of them that ‘no man could sin against them’. What can be expected of commercial legislation enacted in such a period?

“In the east, the right to hospitality was preserved. Merchants enjoyed the rights of guests. If a powerful chief plundered a visitor, his host became his avenger. In the lands of the Turks and the Saracens the exchange of commodities is the only right respected and hospitality the only obligation observed.

“The Turkish economy is simple and creates prosperity but more importantly commerce in Turkey is readily intelligible. There are no fluctuations to fear, no fictitious credit is created. Neither consumer nor producer is dependent on powerful capitalists operating in between them. There is no effecting of transfers, running risks, circumventing gratuitous obstacles (all of which increase prices and accumulate wealth in the hands of the intermediaries). Freedom of exchange of goods prevents great gains and great losses. No-one is excluded. Competition diminishes difficulties, expenses and profits. Prices relate to the labour expended, its transport cost and the commercial exchange.

“Notwithstanding bandits, Eastern commerce extends from North Africa to the Pacific, without banks, insurance, post offices, canals and roads, and unprotected by law, or courts, or Consuls.

“When a caravan arrives and the camels are unladen, there are bales from everywhere with markings in exotic languages. It is an eloquent contradiction of our preconceived notions of despotism and insecurity in the East. Our goods are avidly sought. Birmingham over Indian muslins, Glasgow over Golconda chintzes, Sheffield over Damascus steel, English broadcloth over Cashmere shawls. Seeing their vibrant commercial spirit makes me regret the gulf that has so long divided east from west.

“The earlier nomadic habits are still apparent. Pilgrimages are a religious obligation, hospitality a duty (and a privilege). The connection of commerce with religion is not extraordinary. The arrival of a caravan relieved immediate needs and removed the local surpluses. It is a rapturous time and the benefits of commerce were universally understood. Religion made sacred that which was useful. The annual games of Apollo were the great commercial fairs of Greece. The consecration of land for temple use secures title in Turkey to this day. Hajis and fakirs are merchants; their religious character protects their goods. All great pilgrimages produced trade fairs. Commerce was sacred even when distinct from religion. The piety of a Turk is expressed in building a bridge or planting a shade tree but most commonly in constructing a shop. The Turkish shop of solid stone with its iron gates protects commerce from thief and fire and the spacious courts within are for all men of every quality, condition or religion. The poorest has the same room as the richest.

“Anarchy has from time to time destroyed commerce but on the return of tranquillity there is always a return of commerce. Occasionally it is free of all tax but usually there are transit tolls to pay. This simplicity and the absence of legislation is apparent in the trader’s records. He keeps one book. No credit is given, no Bills discounted, no bonds, no receipts. Sales are for money or goods – no fictitious capital is created, no risk of bankruptcy arises. A prosperous merchant with say £20,000 will likely not even have a clerk. He sits on his carpet, his elbow on his cash box, which is at once his bank and counting house.

“The merchant travelling by caravan in reality runs few risks and incurs only trifling expenses. He lodges safely and without cost in a Han. He is never alarmed by fluctuations in price. He is free of agents and brokers. He brings his goods or his money, examines what he wants and makes exchange accordingly. He will not make a fortune but he adequately finances his life and is rewarded for his industry. Very little capital is required. He needs no licences, no connections – merely industry, intelligence, perseverance and frugality. No matter how small his profits, if his expenses are less, he is on the way to wealth.”[110]

Vol 9 No 7 – 16th February 1836

The Company’s Patronage (from Alexander’s East India Magazine, August 1835):

This information comes from those Company employees who were permitted by the Directors to give evidence to the House Select Committee. In 1813 the company employed tens of thousands in its home establishment and operated 100 large ships of over 100,000 measurement tons.

A group of self-elected Directors governed India and monopolised tea. This unequalled patronage was abused. The Company bought many an old English borough and Scottish county. It seated over half its 24 Directors in parliament. It converted a mercantile association into a political power which consistently sided with the aristocracy and church against the people. It made its own laws.

Every Company Director systematically dispenses patronage amongst shareholders to ensure his re-election. He bribes the electors of some small old borough and, having entered parliament, wangles his way onto the Treasury bench. His son gets a China writership; his nephews get Indian writerships (writerships are governed by requests from India which the Director must first obtain. There are no superfluous writers on strength). Any surplus cadetships are sold off (to improve appearances sales are made by the Director’s banker in return for meeting his London apartment rent or some such thing). If he is approached for a job, he tells the applicant “my nephew needs a loan on favourable rates” or “I have a cargo of tallow for sale”.

Company officials succeed in rotation to appointments in the Home Department. Only people in the company’s service may apply. Prospective Directors are taken on as junior clerks and serve for three years without pay. This is how they make their money. All jobs for writers, cadets, assistant surgeons, Bombay marine volunteers and free mariners are in the gift of individual Directors whereas the Committee of Correspondence controls access to employment in India of barristers, solicitors and chaplains. Free merchants can only apply for some commercial pursuit in India if a member proposes them. All the ships to be sent to India and China for the year are listed and the Committee of Correspondence, according to seniority, then names which ships will travel to which ports. The Company gets loans from government – say £300,000 is borrowed, it is apportioned on the following scale – 2 Chairmen £16,000 each; 22 Directors £10,000 each and the 6 past Directors (six retire by rotation each year) £8,000 each. Patronage is so pervasive that some posts remain unfilled for years until someone pays the fee but normally half the posts are filled in the first year and the rest in the subsequent year.

Patronage is apportioned so the Chairmen receive double what an ordinary Director gets. The Commissioners at the Board of Control get the same as one Chairman. Thus the division is into 28 parts – 26 for the Court (24 Directors plus 2 extra shares for the Chairmen and his Deputy) and 2 for the Board of Control.

Patronage also depends on age. If the number of writers required in India is less than the number of Directors, the youngest Directors get nothing.

It is also distributed in rotation. In 1805 after the siege of Bhurtpore (now Bharatpur in Rajastan, a rare defeat of the Company’s army that took 20 years to avenge), many casualties were sustained and the numbers of replacement cadets increased. But in 1813, 56 writers and 28 assistant surgeons were required but no cadets. That year each Director got two writerships and one assistant surgeonship.

The Court of Directors in London also fills the following Indian offices – Governors, Commanders-in-chief, Members of Council, Advocates-General and Master Attendant of the Bombay Marine. It is unusual for Directors to interfere with appointments made locally in India where patronage is also considerable.[111]

Vol 9 No 39 – Tues 27th September 1836

London news – A Bank of India is to be incorporated in England with £3,000,000 capital. The Bank of Bengal (the Company’s bank) is invited to merge with the new bank whereupon its capital will be repaid to the Company. The Company’s establishment at Madras and the ‘Finance Committee’ at Canton are to be abandoned (This all follows the Company’s withdrawal from commerce under the new Charter).

The proposed joint-stock Bank in London will have 24 Directors and 3 Governors. 1 Governor and 6 Directors will be permanent Directors of the Company. The remainder will be elected by those shareholders holding a qualifying amount of stock. Shareholders are eligible to become Governors and Directors. The bank management in India (at Calcutta) will have 2 Governors and 12 Directors. 1 Governor and 3 Directors will be chosen by the Indian Government; the other Governor and 9 Directors will be chosen by Company shareholders in India but subject to the final approval of the London shareholders. Branch offices will be formed at Madras, Bombay, Singapore and Canton subject to confirmation by the English Board.

The Bank will receive deposits (without paying interest), discount bills and issue demand notes. It will undertake the financial business of government throughout India if requested, receiving revenue, making payments and remitting to England the sums required for home charges, all upon such terms as may be agreed between the Indian Government and the bank.

Vol 9 No 42 – Tuesday 18th October 1836

London Morning Advertiser 23rd June – Sir James (Rivett) Carnac for the Company has negotiated the agreement of the Board of Control to have Indian sugar imported into England on the same revenue tariff as West Indian sugar. This equalisation of duties is expected to divert some of the Company’s excess capital back into sugar production in India rather than putting it at the disposal of the China trade in Bills of Exchange.

Canton Register Editor – We now look forward to the withdrawal of the Company’s ‘finance committee’ from Chinese affairs.

Vol 10 No 7 – 14th February 1837

Commentary on the proposed Bank of India by an India merchant:

“A prospectus has been issued by influential London merchants for the incorporation of a Bank of India to provide banking services throughout all British India. The purpose of the bank is to take advantage of redundant capital in the burgeoning money market in London and provide £5 millions of it to invest in India (and probably £10 millions in paper issues and deposits) and to accumulate capital there. The shares are offered solely in London and no merchants in India have been invited to subscribe.

The prospectus was issued towards the end of a time when paper money had flooded the London market. Now the paper supply has been reduced, it has collapsed the gambling spirit that has influenced investments for the past few years. It may be true that British India provides an ample field for the investment of British capital but the outline given in the prospectus of existing banking services in this proposal is incorrect. The prospectus lists the Bengal and Union Banks of Calcutta, the Government Bank at Madras and the Military Bank of Agra as the sole providers.

In fact every European house of Agency in India provides banking services – they advance money to the indigo, cotton, silk, sugar and rice planters and to their constituents and they do everything a bank does except issue demand notes. There are also immensely wealthy native Shroffs who service the native landowners, farmers, merchants and tradesmen. Over one hundred Shroffs are resident in Calcutta alone and every other city has its own. These men are completely familiar with the risks they underwrite and even the poorest classes can obtain funding from them.

Nevertheless, the promoters of this Chartered Bank of India assert the great profits of the established Indian banks and the high interest rates pertaining throughout the country together evidence a lack of banking facilities. In fact the profits of Indian banks have historically been marginally less than the profits of London banks. Indian government loans at 4% are negotiable at 1-2% discount on par. Banks pay 4% on permanent deposits; they discount government and salary bills at the same rate and they loan on stock at 5%. This reveals that interest rates in India have become moderate and there is surplus capital awaiting investment. The commercial rates of interest may be higher in India than London but these reflect the risk rather than a shortage of money. Surplus funds are such that the Indian banks supply much of the needs of the American and French traders for their business in India and China. Indian banks often make their returns to London in bullion imported into India rather than in domestic production. This bullion re-export further reveals that capital is adequate.

The funds of the new bank, if forced on the market, will displace a like amount of capital at present provided by private individuals. One need look no further than the regular statements of the Indian Houses of Agency to their creditors to illustrate the ruinous consequences of forcing capital into employment in that country. These statements list debts due from civil, military and commercial constituents in respect of merchant ventures in India and abroad and in loans to indigo, coffee and sugar producers that today total nearly £20 millions. The unlimited credit of these agency houses, their consequent command of capital and need to employ it profitably have encouraged imprudent investments in which loans have been made without establishing basic supply and demand statistics for the commodity being produced with the loan. Production moved beyond demand, stocks of one or two year’s supply of each commodity accumulated, prices (on which the loan was notionally secured) collapsed and repayment became impossible. Numerous houses failed and the market has since returned to a solid foundation. This should be preserved.

Before any new flood of capital be permitted, some opening for its employment must be identified. This might be achieved by removing barriers to Indian foreign trade. I have in mind three measures:

  • the reduction of British duty on Indian produce,
  • the improvement in the quality of Indian production by encouraging the emigration of experienced and practical agriculturalists to the country and
  • a rationalisation of internal factors – revenue and customs tariffs, improved communications and better law and order.

The bank’s promoters should be required to indicate how they can trade profitably when the value of Indian imports plus the tributary demand for ‘home charges’ equate with exports. They will likely say their Indian directors will identify and develop new business. More realistically, those directors are unlikely to take the trouble if they can seize existing business. In other words I anticipate a simple substitution of the Chartered bank’s new capital for existing old capital. The bank’s business plan allows the inference that corporate capital is intended to supplant individual enterprise. They propose to establish their principal branches at Calcutta, Madras, Bombay, Singapore and Canton with smaller branches in the other major cities.

They propose to amalgamate the business of the Bank of Bengal into the new bank. The Bank of Bengal is the only existing bank with sufficient resources to provide the new bank with competition. Irrespective of this monopolist tendency in the proposal, the intention to operate India-wide in a hierarchical structure will increase the risks of mismanagement and make the local distress of the parent a matter of national discomfort. Provinces will find capital availability tightened or loosened irrespective of local conditions. Better that each province and city had its own bank built on local capital and managed by independent local people.

The promoters suggest that

  • all government treasuries and financial agencies be abolished and the new bank substituted for receipt and payment of Indian revenues and the transaction of all other government financial business;
  • that their notes be made legal tender for payment of revenue and
  • that they be allowed an intimate relationship with the British and Indian governments and the East India Company.

These suggestions would add a political dimension to a commercial body. Its India-wide note issue would tend to preclude other banks from issuing notes and prevent the existing financial institutions – banks, agency houses and shroffs – from competing with it. Its temporary possession of the revenues and monopoly of the paper currency and banking facilities would thus provide it with absolute control over the commerce and prosperity of India. This immensely powerful institution, over which British banking law can provide no restraint, is to be directed by a Board in London composed chiefly of people concerned in the London and Indian Houses of Agency.

Its primary object is to take over the East India Company’s exclusive privilege of remitting the ‘home charges’ – some £3 millions annually – to London. It has obtained the Company’s support by agreeing to take over the Company’s own Bank of Bengal which disposal was required by the British government but for which the Company has found no buyer. The new bank has submitted to accept whatever terms the Indian government (the Company) thought appropriate for the sale. Thus a mutuality of London capitalist interests (the London banks and Indian Agency houses) and the Company was obtained in support of the new bank.

The Company could never afford to discharge the ‘home charges’ in bullion and always sent produce either direct or via barter transactions in China. This necessarily created a permanent excess of Indian exports over imports. The cessation of the Company’s charter has disabled it from remitting the ‘home charges’ in produce and it is now accomplished by the company’s Bills business.

Effectively it is the Indian merchant who exports Indian produce and the Company cashes his Bills on London and credits the value to its home treasury. In transferring the remittance of ‘home charges’ to the bank, the government is giving it control over the Indian export trade at least to the value of the ‘home charges’. The bank may influence the value of that trade through its Bills on India issued in China and further by its Bills on London issued in India and China. This is an immense trading advantage over the private merchants of India and China.

The Company’s provincial governments in India and its ‘Finance Committee’ at Canton impartially distributed this money to commerce at each place but the proposed bank, having Directors interested in the London Agency houses, might be less equitable.

Apart from this, the bank would require various foreign exchange accounts which, to be secure and profitable, would allure the bank into assuming a commercial character. It would be exposed to the monopolistic temptation, in the active season when demand for funds is high, to secure larger profits on its foreign accounts.

Exchange operations between Calcutta and London and advances on Indian exports are presently handled by private merchants. The bank would represent unfair competition and those merchants, who are obliged to use the bank’s services, would feel resentment instead of the normal relationship between bank and customer, based on mutual benefit.

The promoters however say that, by assuming these functions of the defunct Company, they can procure its withdrawal from commerce. This is true. But the Company’s concern has been for Indian prosperity generally whereas the bank’s interest is solely for its own prosperity. And in any event the complaints against the Company’s purported continuance in trade can be obviated by the company selling Bills in London drawn on its Indian treasuries.

The British government should legislatively require the bank’s calculation of exchange rates to duplicate that presently used by the merchants. If not, its profit will come at the expense of the merchants’ business. If India was located near England it would have to adopt the same exchange rates or risk a transfer of bullion to effect the same end. As it is so remote, the costs of transferring bullion between the two countries are greater and anyway the bank proposes to be almost the sole source of supply. In such circumstances how can the merchants continue to calculate the exchange rates with any degree of certainty?

The promoters ask the British government for a charter of limited liability.[112] Such limitations are entirely appropriate to undertakings that greatly benefit the public – infrastructural construction, for example, whereby communications are speeded and property values enhanced – but a company established at the expense of many for the benefit of few, which will print money and enjoy other concessions, is not an appropriate venture for limited liability.

The direction of the bank will be entrusted to a board of 24 members, mainly resident in London and mainly partners in Indian agency houses. Two thirds of its capital is to be raised in England from people who may have no community of feeling with the people of India. The Indian boards are to be nominated by the London board. This is effectively a Bank owned and managed in England that will trade in India and China, twelve months away by ship. If the situation was reversed it would cause an insurrection.

The bank’s directors are to be elected for a term of five years after which one third must retire but are eligible for re-election. Effectively a Directorship of this bank will become a permanent appointment like the India Company.

I do not wish to deter the extension of banking services in India or the transmission of capital to that country but I believe existing facilities are adequate. There is no need for a corporation, a charter, limited liability or the concession of privileges that this proposal requires. British merchants have already taken up the lapsed business of the Company and India can very well organise and fund what banks she needs – she has huge agricultural production and large amounts of specie in circulation. All that is required to utilise them is mutual trust and confidence. Signed …….. , 15th September 1836

Vol 10 No 10 – 7th March 1837

We recently published an argument against the incorporation of a Chartered Bank of India. We have now an article from the Bombay Courier of 26th December 1836 which reveals that another local bank is to be formed in Bombay. The prospectus says:

The increase of commerce and consequent increase in available capital make the establishment of a new bank in Bombay timely. For the last few years local merchants have had over 2 million rupees on deposit at the government treasury. The recent withdrawal by government of the privilege whereby merchants could make deposits to and transfers from the treasury suggests all these deposits will become available to the new bank.

Using silver as currency is expensive when money has to be transferred over long distances. The bank will issue paper currency and use its capital to discount trade bills. This will enable customers to employ their capital more than once and thus stimulate trade.

There is however a plan in England and Calcutta to create a national bank which, if effected, will transfer the control of our money transactions to London and expose us to the vicissitudes of commerce elsewhere. We must move quickly.

The proposed Bombay bank will have a capital of 3 million Rupees issued in shares of 1,000 rupees each. Half the capital will be subscribed by the proposers and the balance obtained from a public offering. A maximum limit on individual shareholdings will be placed to prevent the business being dominated by great capitalists.

The provisional committee is T R Richmond, T S Finlay, J Wright, D Greenhill, W Turner, M Brownrigg, E C Morgan, C Ashburner, Colonel Wood, Captain Henderson and Dadabhoy Pestonjee.

Dadabhoy and Muncherjee Pestonjee will be treasurers; Ashburner is secretary.

Further report 30th December – the shares have already been oversubscribed but applications will continue to be received until 1st February when a formula for distribution will be published.

Vol 10 No 25 – 20th June 1837

Banks in India – We reviewed the prospectus of the proposed Chartered Bank of India in February. The terms covering the existing Bank of Bengal and Union Bank of Calcutta are compared here:

  • Bank of Bengal – Charter of Incorporation from Indian Government with limited liability.[113] One seventh of its stock held by Indian Govt the rest by the community. Nine directors, six from the British Indian community, three from Government. Issues demand notes for settlement of Bengal Customs and Land Tax secured by the value of a quarter of the note issue being deposited with government. No foreign exchange or trade finance functions. Has no branches but the Charter permits them to operate throughout Bengal province.
  • Union Bank of Calcutta – No charter. Incorporated on the Scottish joint-stock plan. Shareholders are the Indian community. Direction by English and Indian residents. Issues demand notes but these are not accorded legal tender status. No foreign exchange or trade finance functions. No branches but may establish them if prudent.

Vol 10 No 27 – 4th July 1837

Calcutta Courier 29th April. Mr T Horsley Palmer, former Governor of the Bank of England, has written to the Editor concerning the proposed Chartered Bank of India. Here is an extract:

“….. my last objection is the assumption that capital in India is deficient. With the single exception of Australia, there is no precedent for a bank to be formed and capitalised in one country for the purpose of trading in another. The basic principle of banking has always been to apply capital and deposits to the invigoration of its indigenous community. Do this Bank’s proposers mean that India is in need of a few millions to stimulate its productive abilities?

Capital is not just gold and silver, it includes all types of created property – the public debt of India, investment in agriculture, the extent of real property, foreign and domestic commerce. To imagine that a few millions Sterling cannot be found in this accumulated wealth of India is absurd.

We should also recall the many times that the Company has required and received financing from the local community. There is manifestly no deficiency of capital in India.”

Vol 12 No 8 – 19th February 1839

The Bombay Times of 3rd November 1838 contains an Extract from their local Journal of Commerce:

The most valuable branch of our (Bombay Presidency) trade is with China. The latest figures for 1836 and 1837 (currency not identified but likely Bombay Rupees) are :










The startling 40% drop in 1837 exports reflects the smaller shipments and reduced value of Malwa due to Chinese enforcement action at Canton. Bombay exports are almost entirely cotton and Malwa; our imports are mostly silver dollars, sycee and gold with some silk, cassia, tea and sugar candy.

The balance of trade is comprised of:

  • Bombay merchants’ exports of China produce to England,
  • English traders’ returns to England via Bombay and
  • remittance of Bills on India or London sent to Bombay for negotiation.

30 ships (22,000 tons) are employed on our China trade. They are mainly owned by Indians and Parsees in Bombay.

Our second trade partner is England:










The 50% decrease in our exports to England in 1837 is due to the suspension of shipments after the commercial crisis in London of July and the consequent collapse of demand in Europe. We import cottons and woollens from England and export local produce – cotton, coffee, pepper, senna, etc.

Vol 12 No 10 – Tuesday 5th March 1839

The Company’s revised terms for trade finance in China:

  • Up to 60% of our valuation of the cargo is available to borrow.
  • The goods must be stored in a warehouse in England that we approve.
  • Repayment is effected by 6-month Sight Bills at our published exchange rate for silver dollars.
  • Lenders must surrender the original B/L’s and original insurance policy, both endorsed to us.
  • The Company will release the goods to consignee once payment has been received. It may sell the goods if repayment is delayed.
  • Lenders must undertake to have their London agent arrange fire insurance once the cargo arrives in England.
  • Tea exporters must give two day’s notice once the goods are ready for inspection (one day for silk) and ship off within three days thereafter.
  • Non-resident exporters will need a guarantee from a resident company.

Vol 12 No 30 – 23rd July 1839

Some Company statistics in Rupees:








Imports of treasure to India






1836 – 37

1837 – 38

1836 – 37

1837 – 38



1836 – 37

1837 – 38

1836 – 37

1837 – 38
















of which opium







of which – from China






















NB – As a generalisation, English traders are strong in the Calcutta market and remit part of their treasure back to England whereas the Parsees dominate the Bombay market and remit all their treasure back to India.

Friend of China , 2nd June 1842:

The export of sugar from Calcutta has tripled in the last 3 years. In 1839 it was 587,000 maunds, in 1842 it was 1,592,000.

In England 33 tons of untaxed sugar made from potatoes was recently seized by the Excise. A large processing factory exists somewhere in London and its production is used by the grocers to mix with East Indian sugar.

A large quantity of slave-grown coarse sugar was recently introduced into London via the Channel Islands. The duty is much less and, after processing, is still a saving of 10/- per ton.

There is a north China supply of bing tong (a solid brown sugar) at $2 – 2½ per picul which should be admissible at a lower rate than slave sugar and could thus find a market.

Friend of China , 9th June 1842:

The Union Bank of India, Singapore Branch, ceased discounting bills on 6th May at the direction of its head office in Calcutta, apparently due to the state of monetary affairs there.

We hear capitalists in London are arranging to open a bank here in China. The convenience of having paper money is attractive but all the colonial banks print too much, then the money gets too cheap and trade is destroyed by mad speculation. Finally the bank reduces the issue, credit tightens and a panic ensues.

This has happened repeatedly in England and America and we don’t want it introduced here.

Vol 15 No 26, 28th June 1842

Friend of India – Six great Calcutta Agencies have stopped payments due to the financial problems of the London East India houses. They are Cantor & Co, Boyd & Co, Bruce Shand & Co, Gilmore & Co, MacLeod Fagan & Co and Harrison Brothers & Co,

J W Cragg of Bruce Shand & Co has drowned himself in the Hoogly.

Nevertheless, the Friend of China 23rd June edition notes that the reduction of the money supply that was forced on the Calcutta banks (by government’s withdrawal of funds from the market to fight the war with China) has ended, silver is returning to Calcutta from China and the money market is loosening. It says confidence should return and prices become stable again.

Vol 15 No 26, 28th June 1842

Friend of India – The commercial problem in Calcutta was triggered by the failure of Boggs Taylor & Co in London which company precipitately declared itself bankrupt without hinting anything to the market thus disabling rich and poor alike from extricating themselves.

Taylor, who is influential with the ‘great house with pillars’ (the Company’s India House head office at Leadenhall St), got a cushy job within a month as Master Attendant at Calcutta on a salary of GBP3,000 p a while one of his victims (Craggs) killed himself.

Editor – Actually Capt Rogers got the Master Attendant’s job on the recommendation of Bremer for services rendered in China. We do not know what job Taylor got eventually.

Vol 15 No 26, 28th June 1842

The London East India firm of Forman Hadlow & Co has failed with liabilities of over £100,000.

Vol 15 No 26, 28th June 1842

The Company’s Court of Directors has instructed Calcutta to cease advancing money for crops grown in India as the investments have become considerably loss-making. They commend a gradual reduction of advances to avoid disturbing the Indian economy.[114]

Canton Register Vol 15 No 27 – 28th June 1842

A series of bankruptcy actions have been held in London in March 1842 against numerous East India merchants. These companies failed subsequent to the collapse of Calcutta finance. All the debtors have personal debts of £100,000+ and assets of rather less.

Cantor, Cockburn, Taylor, Shand, Fairlie, Hare and Scott and others are the involved merchants – it’s a ‘who’s who’ of the India trade.

Friend of China , 14th July 1842:

In the year ending 5.5.36 the revenue of British India had a surplus of £1,530,000. Last year the deficit was nearly £2,000,000. In the present year a deficit of £3,000,000 is expected. It is inflated by the costs of containing the Afghan outbreak and preparing for the threatened invasion of Tharawaddy in Burma.

Peel should have noted in his budget speech the direct connection between Indian and English finances through the credit mechanism. England is pledged to make good the dividends on Company stock on expiration of its charter. If India cannot pay, England will have to.

All these financial dangers flow from Lord Auckland’s fear of Russian influence in Persia. It is sad that Lord Wm Bentinck did not continue as Governor-General. As England is the final guarantor of the Company’s debt, it would make sense to raise any loans for India in London where the cost of funds is so much less. Everyone knows the new India 5% loan is only slowly receiving subscriptions and many say a 6% loan will be necessary. In London the money could be had for 3½ – 3¾%. Foreign and American securities have lost us millions which could have been safely invested in Indian and Colonial stocks. It was not long ago that the Indian Government had to pay 10% for money.

Friend of China 14.7.42 edition

England should repeal all duties and imposts on trade and instead raise revenue from a ½ – 1% tax on real property both in England and its colonies. This will finance the empire and permit its occupants to eat, dress and buy luxuries all at market cost.

We would become the cheapest country in the World; all our countrymen who have left because of the expense would return; a flood of wealth would enter the country.[115]

Friend of China 21.7.42 edition

British East India merchants and their related ship owners, the importers of Bengal rice, are concerned that Peel proposes to reduce the duty on foreign rice from 15/- to 5/- per cwt. They wonder why India does not produce a long grained rice like Carolina rice which is preferred in England and Germany. It does not need Carolina slaves to produce – it can be grown just as well with free labour. The Chinese long grained white table rice would also find a market in Europe under the proposed tariff. We estimate it could be wholesaled at 1½d per lb (14/- per cwt) and we think it tastes better than Carolina and would soon be preferred. The advantage of the reduced tariff will be to Carolina and Java. Carolina rice, once cleared for consumption, is 36/- per cwt. Bengal is 18/- per cwt but the superior grain from Carolina preserves its market. With the duty reduction, Carolina will clear for 26/- per cwt and Bengal will sell for some 8/- per cwt. Java rice which has become popular in North Europe could be imported at a sale price of 16/- to 20/- per cwt. It is comparable to Carolina and would probably take the entire market at that price. This is why the traders and shipowners think the colonial supply is not sufficiently protected.

Canton Register Vol 15, No 31 – 2nd August 1842

East India and China Association Annual Report:

…. We addressed the subject of the remittance of Indian revenue in our 2nd year. The Company has since maintained records of the amount of Indian revenue sent home to meet charges arising in England. The records are copied to parliament.

Recently we obtained the Company’s agreement to let us have monthly reports (before the departure of the Indian mail) of the amount of Bills drawn on each Presidency.

The Home Charges approximate £3.5 millions annually. The evil we complain of arises from having two channels for remittance of the Home Charges. First there is the sale of Bills in England payable in India; secondly there are the loans made to the free trade in India and China, secured on their exports to England. We wish the Company to confine the transfer of its capital to the first channel.

We understand that the Court and the Governor-General both agree it would be equitable. City merchants have obtained the Company’s agreement to cease using its Agency at Canton for financing purposes and we understand no advances are now made. The value of Bills issued here December 41 – February 42 for payment in India is about £375,000. 90% is payable at Calcutta and the balance at Bombay and Madras.

The sum raised from sale of Bills here, payable in an Indian presidency, has steadily increased from £1.2 millions (1838) to £1.3 millions (1839) to £2.0 millions (1840) and is expected in 1841 to be £2.2 millions. The Company intends to maintain its new system averring it will enhance commercial stability in its domains.

Canton Register Vol 15 No 34 – 23rd August 1842

In 1834 linseed was not exported from India at all. Now Yorkshire cattle are raised on Indian linseed.

Friend of China 20.10.42 edition

The failure of the large house of Fergusson Brothers and Company (in India) is said to be due to their connection with the bankrupt London house of Briggs and Company.

Friend of China 10.11.42 edition

Manila is the port of the fine and fertile island of Luconia. The islands belong to Spain and under liberal rule would be commercially important but the colonial government largely excludes foreigners from participating in trade and the island remains commercially insignificant.

Sugar and coffee could be produced here in huge quantities but Spain only requires 20,000 tons of sugar, 600 tons of coffee, 2,000 chests of indigo and some fine tobacco, As Spain has become so poor with the loss of her silver colonies, Manila is always pressed to send money home – like the Dutch and Java.

The Spanish government draws Bills on Manila and negotiates them in London but the amounts are so much greater than the resources of Luconia can bear that a part is protested and unpaid. One well-known firm holds $1,250,000 in protested Bills and only occasionally gets a few thousands towards payment.

The civil servants and army are regularly paid and maintain a firm control of the colony. The chief product is rice of high quality. It is esteemed in China. Sugar cane grows extremely well. The farmer gives it a single boil and brings it to market in Manila in that semi-processed condition. The cost is said to be very low – $2 per picul – but the quantity produced is small and only 18,000 tons are exported. Coffee grows well on the hills but is planted by the natives and not diligently tended so the beans are small but the flavour is pleasant. Indigo farming is also entirely in the hands of the natives.

The only thing that is really good is the tobacco. The government asserts a monopoly on the supply and makes cheroots in well-managed factories. It is the principal source of government income. 8,000 women and 1,500 men are employed in it. The annual profit is a secret but is estimated at $1,500,000.

Friend of China , 1.12.42 edition

Salt evaporation is a big business in Bengal where it costs half a rupee to 14 annas for a maund (80lbs). The monopoly that Warren Hastings established resells this at 6 – 8 times more. The profit in 1827 for Calcutta was 18,278,185 Rupees. The latest price for salt we have from Bengal is 14-15 rupees per Rash. Three months ago it was 18-20 rupees. In 1840-41 1,498 tons was exported to Singapore and the Straits for 6,316 Rupees.

Friend of China 29.12.42 edition

Afghan War – The Company’s Court of Directors asked Peel to pay a portion of the expenses incurred in the recent war to install our man on the throne of Kabul. Peel told them to ‘go away’.

The India Company need not worry. With the end of the opium war, demand for the Drug along the China coast has increased and prices in some places have more than doubled. This has translated into higher auction prices.

We expect the increase to be worth 5,000,000 – 7,500,000 Rupees beyond this year’s sale proceeds. Together with Lord Ellenborough’s general policy of economy, this should satisfy the India Company.

Friend of China 5.1.43 edition

Australian trade report – exports for the year 1.10.41 – 30.9.42:

Colonial goods

British goods re-exported

Foreign goods re-exported

£577,500 (of which wool = £437,000)



Friend of China 2.3.43 edition

Report from the Bombay Mint on re-minting of silver coin. A company rupee is one tola (180 grains) and is 91% pure (i.e. 165 grains of pure silver).

Chinese Sycee averages 98% purity and the various old Spanish dollars average 89% purity. The silver in Spanish coins was worth fractionally less than face value.

Assay of sycee, old Spanish and new Spanish dollars was done at the Bombay Mint in November 1842 in respect of silver coins received in the quarter ending 31st October 1842.

Every piece of silver sycee weighs 100 tolas and is 98% pure. A tola is an Indian measurement equivalent to 180 grains.

The new silver dollars we use (Mexican and Peruvian) contain 230 tolas (230 x 180 grains) containing 207 tolas of pure silver and are intrinsically worth 1% more than the old head dollars (Spanish Carolus dollars).

The old heads contain 206 tolas of pure silver but are loved by the Chinese and trade at 13% premium to face value whereas the new coins are at a 6% discount to face value.

Friend of China 16.3.43 edition

Manila trading partners and tax rates:





Export tax



Import Tax

Sugar 60% to Singapore, 20% to Europe 20% to Australia

Hemp 70 % to America

Rice 90% to China 10% to Australia

Cigars 70% Singapore 30% Australia

Exports to Spain by Sp ships 1% (elsewhere 1½%)

Exports to Spain by foreign ships 2% (elsewhere 3%)

Rice shipped on Spanish ship free, foreign ship 4½%

Gold and silver free.

Spanish goods in Sp bottoms 3% ad valorem duty

Spanish goods in foreign bottoms 8% ad valorem duty

Foreign goods in Sp vessels 7% ad valorem duty

Foreign goods in foreign vessels 14% ad valorem duty

Add extra tax in each case depending on the nature of the item imported.

Competing tropical products – arrack and gunpowder – are prohibited.

Friend of China 30.3.43 supplement

Manila trade report:

The US buys much of the Manila production of hides, coffee and sugar and a predominate share of the entire national supply of hemp. Sydney buys 40% of the sugar and 20% of the rope.

Friend of China 6.4.43 edition

Russian trade with China

The figures have historically been misleading. The Times now says this trade is worth 4 million Roubles (including contraband).[116]

The Government Gazette issued at St Petersburg reports the 1841 trade at 8 million silver roubles (£1,300,000), attributing the increase to ‘the extraordinary development of trade with China this year’.

Russia now has a large body of expatriate English artisans (forced from home by our restrictive policy). They manufacture woollen cloth at prices that well compete with the English supply.

A translation of Dr Pallas and M Muller’s work “The Conquest of Siberia” contains a detailed account of Russian commerce. It started in 17th century when the Russians were spreading east along the Amur and subduing the Tongusian tribes as they went. This eventually brought the two empires into contact and a regular treaty was signed in 1689. This allowed the Russians permanent trade with China but denied them navigation on the Amur. Considerable disputes arose and in 1728 a new Treaty of Kiakhta was made which regulates the relationship up to today.

It allows one Russian caravan to go to Peking every three years. The caravan should have less than 200 people. On arriving at the frontier it should await an escort. Trade was allowed at the frontier towns of Kiakhta and Tuenchaitu. It is entirely a barter trade as the Russians are prohibited to export their silver rouble. The Russians bring their goods to Kiakhta. The Chinese merchants come and examine, a price is agreed and the goods are sealed. Both parties go to Mai Mai Chun where the Chinese goods are stored. The Russian picks what he wants to the value of his export and leaves a confederate to guard them. When the Russian goods have been delivered he returns with the Chinese merchant to Kiakhta. Furs from Siberia and the North Pacific islands are the most important Russian exports and supplemented by foreign furs brought in from St Petersburg. They export cloth – coarse Russian cloth and finer Prussian, English and French material – camlets, white flannel, coarse linen and velvet. They also trade in leather, glassware, cattle, hunting dogs, tin and talc.

The Chinese supply raw and manufactured silk, cotton, brick tea, porcelain, furniture and toys, artificial flowers, tiger and panther skins, rubies, canes, tobacco, rhubarb and musk. Furs in Siberia have little value as the cost of their transport is enormous so Russia is happy to get anything for them. Only the very special furs would be worth transporting but there are few people in Russia who can afford them so, all in all, it makes sense to sell everything in China. Many of the things they buy from China are much cheaper than the equivalent item from Europe. This year’s trade volume, excluding contraband, is calculated at 2,868,333 Roubles (£466,000).

Friend of China 10.8.43 edition

Newspapers from our Australian colonies at Sydney and Port Phillip say their communities are in financial trouble. The banks have been reckless with credit. They have given away the peoples’ savings and two have now suspended payments. Some of the finest land in the colony can be had now for 5/- per acre (£1 today buys what £1,000 bought five years ago).

On the other hand, New Zealand is doing well. 600 ships have visited Wellington in the last three years.

Friend of China 10.8.43 supplement

Sydney Morning Herald of 14th April 1843:

Mismanagement at the Bank of Australia has shocked all Sydney. The day before discovery of the bankruptcy, the cashier extracted the last £15,000 from the iron chest that is the bank’s treasury and took ship to America.

Examination of the accounts reveals a local firm, for no commercial reason, received an unsecured loan of £108,000. The same firm had another prior loan of £50,000. One bank director is indebted to the bank in £40,000; another to £80,000.

The thing is that men will do concertedly what they would be ashamed to do individually. The managers have jointly approved a loan of £20,000 on the security of one name only. The result is that the shareholders have probably lost all their capital and will no doubt be asked to make-up any deficiency.

Friend of China 17.8.43 edition

The ports of Wellington, Auckland and Russell (in the Bay of Islands) in New Zealand have been declared free ports as of 1st January 43

Friend of China 5.10.43 edition

The Friend of India – Singapore has received 952 square-rigged ships in the last year. 2,824 native vessels have visited in the same period. Prosperity is immense. The tonnage of the above shipping exceeds 360,000 tons and the value of cargoes exceeded 50 million Rupees. The cost of maintaining Singapore is £50,000 pa which is raised entirely within the island itself.

This Company outpost stands alone in our Empire as a self-supporting colony.

Footnotes    (↵ returns to text)

  1. These figures indicate both the immense costs that the Company purports to incur on its trade and the immense profits. The China trade purchases are primarily tea, raw silk and nankeens for a nett £500,000 or a little more each year. How this is multiplied five times in the statement is not apparent.
    The freight on Company ships is absurdly high but can only account for a small part of the costs. The reader should recall that a China writership at this time sells to the employee at £10,000. The Company’s commercial records were destroyed on the order of Sir James Graham after it lost its trade monopoly in 1850s and no better explanation is likely available but one might suppose there are a great many intermediaries between purchase and sale.
  2. The usual cargo that the Company’s ship officers bring to India is garments, food and wine – the Company expects the private merchants to ship the same goods i.e. this allowance to the private trade operates against the self-interest of the Company’s ship officers and not the Company itself.
  3. In November 1805 the Bombay Presidency starts advertising for supply of various timbers and planks – it’s a list of the items necessary to build a sailing ship. The Company has the docks and slips to build ships. It can engross this market
  4. This article refers to the formation of a Bombay Bank. The bankers are stalwart capitalists. Directors and shareholders of the Bank of Calcutta, which was later renamed Bank of Bengal in 1809, importuned Cornwallis on his return to India to permit their limited liability. They said the Bank of England avoids bankruptcy in that way and he should protect his government similarly. Every capitalist wishes to keep the profits and transfer the losses and limited liability is a big step on the way to that desired state. They wish to become the owners of a central bank with control over money printing and interest rates nationwide. Those interested in new Bank of Bombay have similar expectations.
  5. For advances to feed and pay H M forces; the invasion of the Cape; preparations for the intended invasions of Manila and Mauritius; construction and supply of warships for the Royal Navy, capture of Danish settlements in India; additional extraordinary expenses of the Company’s army in Egypt; balance due for the capture of Ceylon; expenses in connection with the Chinese settlers to Trinidad, and the invasion of Buenos Aires.
  6. This reference to the Sultan of Aden may in fact mean the Imam of Sana who was earlier stated to control the coffee supply. He was independent of the Ottomans until 1830s.
  7. This is what annoys the private merchants – they are ordered to prepare their cargoes in time or face fines but the Company can and does unilaterally alter shipping dates, on this occasion to save the costs of two convoys by amalgamating them into one, leaving the private merchants with cargo occupying warehouse space for a couple of extra months.
  8. Alluvial gold dust by weight is used as a form of money in the spice islands and Sumatra
  9. Dhal is a delicious stew made of split peas or lentils or any of a great variety of other small peas and flavoured with spices and chillie.
  10. French wines and brandies are currently imported under licences to trade with the enemy issued usually by Canning for the ministry. The goods are carried in neutral ships at high freight rates. The Licences have been made transferrable to create a market in them.
  11. The ministry’s problem is that the Company is the faithful creature of the King whom the ministry has been systematically devaluing. It had its own army which is bigger than the British Army and provides its own protection. It was another government and Britain had little to offer it to gain a foothold in its affairs beyond a few King’s regiments in India, which the Company pays for, all loyal to the Crown. The King granted the Charter and might withdraw it on expiry, but it could not practically be withdrawn without the Company’s agreement. Indeed if the war with France goes badly and an invasion of Britain succeeds, India will become the home of the Royal Family and the political ‘war criminals’.
    The Directors for their part thought the £3-4 millions revenue they paid on the tea imports should be sufficient for the ministry. It was an almost guaranteed annual payment and cost the ministry nothing to collect. Every other part of the Empire costs London to maintain – colonies are only profitable to the City (I exclude the Customs revenue on West Indian sugar) but India excludes London capitalists and pays its way.
    Finally the ministry wants the Company’s debts in India and London, over £15 millions, to be reduced. These debts are another defensive ploy by the Company that ensure, if they are relieved of the monopoly, that the share price collapses and all the W&O funds invested will be impoverished. It is in a strong negotiating position and has little to fear.
  12. West Africa, Red Sea and Philippines.
  13. See principally the Europe and Economy chapters for the retaliatory Decrees closing Europe to British trade.
  14. This is Robert Hobart, 4th Earl of Buckinghamshire, 2nd son of George Grenville and brother of the 1st Baron Grenville. The variety of names by which British statement were known in this period is very trying. He is President of the Board of Control from 1812 – 1816. Buckingham’s proposals are shown later in the article. As Lord Hobart in 1796 he was Governor of Madras and exposed the predatory loans scams of the merchants at that town causing his return to Britain – he was a bête noire of the Company then.
  15. A result of Cornwallis’ land ownership and decennial land tax laws.
  16. This early disclosure was overlooked by British charities who invested in the Company’s trade financing, saw the metals and woollens exported and the tea imported and took their profit without noticing the opium trade in between. When the matter becomes contentious in 1840s it is said to have disabled their protesting – see the China chapter.
  17. A devout free-trader and now President of the Board of Control.
  18. Then U S Secretary for the Treasury.
  19. There can be no shadow of doubt that it was a handful of private merchants who caused the Opium War with China in 1840s.
  20. This is misleading. The Americans do trade in colonial ports but they actually work hard to source their Asian cargoes. American provision of sea cucumbers, bird’s nests, sandalwood and other oriental delicacies are all independent of the Company. The seal skin and sea-otter pelt trade is also under American control. Increasingly, they supply American metals – iron and copper. And they bring Far Kay Sum, the American ginseng, which has a market in China as a tea. However, they do also trade in Asian ports as alleged.
  21. See the China chapter for this matter.
  22. It seems to be R Grant’s position that the Company’s Treaties do not inure to the benefit of the British government but are made on behalf of the Mughal. Recall that General Lake’s recent treaties in Hindustan were made in the name of the British government. That was a new departure.
  23. There are two ‘continuous quarrels’ in the vicinity of the Company’s lands – the disputes between members of the Durrani clan in Afghanistan and the wars between Burma and Thailand.
  24. See the North America chapter for US legislation against trade.
  25. See the Prize-Taking chapter for details of American privateering in Asia.
  26. “maintaining remittances” means transferring assets from India to London, in this case by shipping India production for sale in Britain.
  27. This is the admirable Joseph Hume MP who is eulogised in the Europe chapters. He is the subject of a useful albeit belated biography recently – “The Peoples’ MP” by Ronald Huch and Paul Ziegler.
  28. Ninth Report of the Select Committee of 1783.
  29. Silk is produced in India but the Company prefers to trade the Chinese supply which allows them to get in and out without involvement in farm or factory investment – this is accordingly largely a business of private merchants; it has repeatedly brought tea saplings to India from China during the last 50 years but again prefers to trade tea rather than grow it. Its trade is self-limited. Then as now in the British economy, there is more profit in trading commodities than producing them.
  30. Taxation in British India impoverished the people and disabled many from making savings. They were permitted a subsistence. They were also oppressed by the nature of aspects of their own society, particularly cultural duties and the influence of the Zemindars and Patels in village life and production, which the Company retained, but the two over-riding British concerns – ‘divide & rule’ and ‘tax’ – also retarded the development of a middle class that might have purchased British manufactures.
  31. I had hitherto thought that was 10½% of the issue price (face value) of the Company’s share; it seems not to be a percentage of profits which amount was never known to the Directors, but some figures in the estimates presented to the Commons and some previous news reports suggest it may be 10½% of the market share price. That would better explain the fixed identities of shareholders – a Company share is something you very rarely sell.
  32. The invasions of Buenos Aires, Malacca, Mauritius, Reunion, Batavia, Palembang, Macau, Timor, the Spice Islands, etc., are not mentioned.
  33. Formerly John Shore in his previous incarnation, acting Governor-General.
  34. Investments by the Anglican Church and church-affiliated organisations and charities are important in financing the Company’s trade – its necessitates cooperation.
  35. He made a further speech on this same subject which is partially reported below.
  36. This is a continual problem for the Company. Without the presence of its army it will instantly be dispossessed and evicted, but with a standing army there is the matter of quarters, salaries and provision of training, arms & ammunition and all the rest. The Company is a commercial organisation – it needs to make its capital work.
    Newspaper articles from 1796 indicate Madras Presidency has routinely employed its army in revenue collection as indicated in Rickards speech above, but the whole enormous force needs to be exercised. By incrementally seizing territory, the Company increases its revenue and keeps its military busy and hopefully troublefree. As Warren Hastings observed ‘we hold India by force.’
  37. The Company’s London debts if unserviced would constitute a greater commercial disaster than the loss of the Baltic convoy. It would no doubt precipitate peace with France.
  38. A perceptive forecast. The Company has created an artificially high price structure for British manufactures sold at Canton. It can be maintained only so long as the Company monopolises supply. It sends several hundred thousand Pounds of Indian and British goods to Canton and exchanges them for tea which it sells for £4 millions at auction and on which the British revenue gets another £4 million – win,win.
    If the trade becomes competitive, all prices will fall and profits abate.
  39. A popular political viewpoint. All problems happened yesterday. Today everything is perfect.
  40. Note the Proviso about pre-payment of Company tax. This is how the India Company inserts itself between producer and consumer.
  41. This is a Calcutta Sinking Fund which duplicates Walpole / Pitt’s financial arrangements in London in support of government bonds – it encourages investors by suggesting the value of Company’s loans are as well preserved from fluctuations in value as the ministry’s.
  42. The acquisition of Singapore in a few year’s time provides a loophole in the Company’s arrangements to exclude the free traders; one that is fully exploited by its early Governors.
  43. The Company has spread spice culture throughout its trading area but has retained control of the original supply for its own sale.
  44. An Indian species of hemp.
  45. A form of transit tax inherited from the Mughal Raj and applicable in some recently acquired lands.
  46. NB – The Danes and Dutch have settlements in the river and have used that access on former occasions to approach the Company’s heartland and attack.
  47. This is a tax on the night markets which are popular with the locals but which leave rubbish for government clearance
  48. The ship-owners build ships to the Company’s specifications. The ships are bigger than those used in the Baltic or West Indies etc. They are unique to Asian trade. This is said to entail a duty of fair remuneration on the Company – its all part of the ‘London system’ and helps to explain how a small country like England can have a capital city the size of Paris.
  49. The Bombay and new Madras Rupees are worth slightly less than the Sicca Rupee of Calcutta. The Company has not established a uniform currency for India thus permitting an exchange rate differential on all inter-Provincial trade on which the banks / agencies take a commission.
  50. The entire lot was sold at 109½ Bombay Rupees per 100 Sicca Rupees, i.e. an advance on the face value. The Company is drawing-off some of the surplus money in Bombay presumably against prospective military costs in Sind.
  51. Charter renewal in 1814 necessarily left the new acquisition of Singapore unmentioned in law. This permitted the argument it was not within the Company’s monopoly area. This clause appears intended to remedy the anomaly. In fact the Governors of Singapore were always keen to increase trade and contribute to its phenomenal commercial success.
  52. The only advantage in closing and opening loans at the same interest rate is to change the declared exchange rate to Sterling – its an aspect of the reduced money supply consequent on the restoration of gold value and convertibility in England. The Pound has become comparatively more valuable
  53. The discount rate and interest on loans varies with the availability of money, commonly it has been 5-8% but these are unusual times
  54. There is a new President of the Board of Control, Williams-Wynn, who does not liaise much and is consequently disliked by the Directors.
  55. The Company’s discharge of a large part of its unremittable debt and its allowance of a partial transfer into a reduced interest loan has alarmed the native investors in India. They say the unremittable 6% debt has never attained a premium of 20% and consequently cannot be converted into 5% paper.
    Funds in London across the board now produce no more than 4% but their quoted prices continue to rise. In fact the effect of the reduced interest on unremittable stock will likely cause a huge increase in the premium on remittable stock, a smaller premium on bank stock and on the unremittable (already at 8%) and a certain increase in the value of landed property and a stimulus for trade.
    The only people who are likely to be devalued by the measure are retired people but the concept is so advantageous in other respects its irresistible. An expatriate in India planning retirement will now calculate the amount of his ‘competence’ on 5% income on savings and an exchange rate of 2/1d per Rupee.
  56. This article reveals an underlying confrontation between the City bankers who control and benefit from the West Indian supply through their financing operations in West Indies on the one part and the India Company which monopolises East Indian supply. The City cartels (banks, insurers, ship-owners) could not use their capital to directly influence India because the Company raised the funds it needed in India from its past and present employees and the Agencies. The bankers’ only access was through the Agency trade but the Agents also received substantial deposits from Company employees.
  57. This uncertain silver value is behind the Chinese preference for ‘old head’ Spanish dollars
  58. A cavan is said to equate with 75 kgs; a Spanish arroba with 25 lbs.
  59. The cause of Barings inability to contend with Rothschilds
  60. The characteristic of all capitalist booms and busts over the centuries. So long as new investment exceeds old withdrawals, the endeavour appears profitable.
  61. This is an attempt to re-establish the usurious loans business in which the Madras army was involved at the time of the mutiny. Such records as I have found are inscrutable but a good place to start for a feel of the affair is the Zemindar of Nozeed Act of the British legislature. Palmer is an AngloIndian and thus exempt from the Company’s restriction of English trade to within the Presidencies. He is able to open businesses in the native states.
  62. This book has been long out of print but a copy has been found in the Parsons Library of the University of Michigan and digitalised by Google Books. It may now be read online.
  63. No mention of the Company’s Residents in Ottoman lands or Persia, in the Mediterranean and Burma; Nor of the Judiciary or the Company’s Aide-de-Camp to the King of Brazil. There is slight evidence that the Ottoman appointments are made in Calcutta.
  64. This has become flavour of the month in the City since the Bank of England received limited liability by the suspension of payments legislation during the wars with France and thereafter. The Bank of Bengal actually asked Cornwallis for limited liability during his Governor-Generalship – all bankers want profits divorced from losses.
  65. One of Barlow’s initiatives in 1806 in the interregnum between the Viceroyalties of Cornwallis and Minto. Limited liability was the first and the greatest of all legislative concessions obtained by merchants. Together with the 1862 Companies Act provision that a company is a person with its own natural rights, these two concessions underlie the predatory nature of British and now American capitalism.
  66. The profitability of the great Agency Houses depends on controlling the volume of production of cotton and indigo by funding the farmer to plant and buying his subsequent harvest. Without these investments the surviving Agencies will inevitably be tempted into other fields. The withdrawal of the Company from these markets should assist the Agencies.
  67. But don’t forget the national debt.
  68. At this time the silver rouble is worth 3/3d, the paper rouble 11d. Russian trade with China has increased greatly due to Chinese attempts to develop alternative markets.

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