The joint stock arrangement, as distinct from the separate voyages, which had been instituted in 1613 worked very well: and after the Restoration the practice of buying and selling shares became common, the system approximating to that of modern times. The Company’s ships were continuing to bring back much wealth to the shareholders, but again covetous desires had to be appeased. In the year 1649 the Commissioners of the Navy constrained the East India Company to lend them ￡4000. It was in the year 1654 that Cromwell, by means of his treaty with the Portuguese, obtained the right of English ships to trade with any Portuguese possessions in the East Indies. Now this meant a very handsome additional benefit to the East India Company’s ships. Cromwell was shrewd enough to know what he was about, and accordingly in the following year got his quid pro quo when he succeeded in borrowing ￡50,000 from the Company, seeing that the latter had gained so much from national successes; and a little later on in the same year obtained from the same source another ￡10,000 to pay Blake’s seamen, whose wages were in arrears. And this was not the last instance of the Company being fleeced by the State.

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In the year 1640 permission had been obtained from the native authorities to build the first of the Company’s forts in India. This became known as Fort St George (Madras), and in the year 1658 the Madras settlement was raised to a presidency. In 1645 the Company had begun to establish factories in Bengal, so the ports for the East Indiamen were now becoming more numerous, and the area from which the cargoes could be obtained was being widely extended. The Portuguese, as we have seen, were now out of the running as regards the East. And as for the repeated collisions which the English had with the Dutch, the three Anglo-Dutch wars which had been long foreseen, as they were destined long to last, had given quite a new complexion to affairs in India, leaving the English East India Company in a position stronger than ever. One of the stipulations had been that the Dutch should indemnify the English merchants and factors in India with regard to the massacre at Amboyna, and the guilty parties therein concerned were to be punished. In 1664 the French East India Company had been formed, and ten years later the foundation of their settlement at Pondicherry was laid.

In the year 1681 the Company had developed their fleet to such an extent that they now owned about thirty-five ships, ranging in size from 775 to 100 tons. In customs alone the Company were paying ￡60,000 a year, and they were carrying out to India ￡60,000 or ￡70,000 worth of lead, tin, cloth and stuffs every year, bringing back raw silk, pepper and other goods of the East. By the year 1683 so profitable were the annual results of the Company’s trading that a ￡100 share would sell for ￡500.126 Before long the size of the ships just mentioned was to increase to 900 and even to 1300 tons, such was the demand for Indian products; and between the years 1682 and 1689 no fewer than sixteen East Indiamen varying in size from 900 to 1300 tons were constructed. All the East Indiamen were well armed, for even in the year 1677, when the Company owned from thirty to thirty-five ships of from 300 to 600 tons apiece, these vessels each mounted from forty to seventy guns.

It will be recollected that Bantam had been the first headquarters or chief factory whither the Company’s ships went for their trade. This continued until 1638, when Surat had developed so much, thanks to the concessions by the Great Mogul, that it replaced Bantam in pre-eminence. The last-mentioned factory, together with Fort St George in Madras, Hooghly in Bengal, and those establishments in Persia were all made subservient to Surat. A far-sighted person could have foreseen that all these scattered strongholds of trade might not improbably develop eventually into something very much more important politically. But it was Sir Josiah Child, the principal manager of the Company’s affairs at home, who was one of the first to project the forming of a territorial Empire in India.

We had reason to mention just now a ship which we described as being an interloper. The reader is well aware that in the first instance the charter granted to the English East India Company by Queen Elizabeth conveyed to them the exclusive privilege of trading to the East. This charter was renewed in the years 1609, 1657, 1661 and subsequently in other years. But such was the jealousy, such the covetousness which were aroused by the127 Company’s successful voyages that a number of interlopers, quite contrary to the terms of the charter, fitted out expeditions of their own. These were evidently successful, too, especially during the latter part of the reign of Charles II., for the number of these private adventurers increased considerably. The result, of course, was that the Company became exceedingly indignant and had to exert themselves to put an end to the trouble. But this, again, opened up the whole of the question as to whether the Company should continue to enjoy such a fine monopoly. There was a good deal of resentment against India being restricted to a favoured few. However the Government favoured the Company, for it had been found more than useful to the country in times of crisis, so again in the year 1693 it received its fresh charter.

But between the years 1694 and 1698 this Eastern trade practically was thrown open. And then the State happened to require a loan of ￡2,000,000. This was found by a newly formed company of associated merchants who had been very vigorous in opposing the East India Company’s privilege. And since this new company wanted only eight per cent. (not a high rate for those days) for their loan, they also received a charter. The result was that there were two companies trading to India and each with its own charter. The title of this fresh association was the New East India Company, and presently a kind of third company arose as an offshoot from this second one. All this competition had a most disastrous effect and brought both the old and new companies almost to ruin. Each company hated the other, while the public detested both most heartily. There were only two possibilities open.128 Either both companies must be wrecked or they must amalgamate. It was wisely decided to choose the latter. They therefore adjusted their differences, and in the year 1708 were amalgamated into one corporation, calling themselves “The United Company of Merchants of England Trading to the East Indies.” The capital was increased to ￡3,200,000. They were the means of aiding the Government by advancing to the latter ￡1,200,000 without interest, and the Government in turn agreed to extend the Company’s charter till the year 1726, with three years’ notice of termination. And it was subsequently extended till 1766.

During the last decade of the seventeenth century when hostilities existed between England and France the East India Company laid before the House of Lords an account of the great losses which the former had incurred at sea, owing to the lack of English cruisers. Those were no easy times for the ships bound either to or from the Orient, for, besides possible attacks from French men-of-war, the English Channel and approaches thereto were alive with privateers, to the great detriment of the Anglo-Indian trade. Some idea of the size and strength of the East India Company’s ships about this time may be gathered from the following list of craft which the French captured from them during the year 1694 alone:—
Name of Ship     Tonnage     Men     Guns
Princess of Denmark     670     133     40
Seymour     500     —     —
Success     400       80     32
Defence     750     150     50
Resolution     650     130     40

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In later years one of the most valuable commodities which India was to produce and send to England in these ships was tea. The first importation by us was in the year 1667. Only a small amount, consisting of 100 lb., was sent, but it was not long before this was greatly exceeded. However, the early years of the eighteenth century were marked by a disappointment in the trade which the Company was doing. Although the latter’s ships were now trading also with China, yet the value of our exports to the East were less than ￡160,000 a year: and this, let it be remembered, included also military stores for the Company’s settlements in the East and at St Helena. The reason for this slump is easily explained. Every authority will admit that the finest tonic for trade is competition. Monopoly is death to enterprise, while a spirit of rivalry encourages progress. The East India Company was suffering from the decaying, deadening influence of its exclusive privilege and this went on till about the middle of the eighteenth century. The first half of that century is decadent, not merely with regard to India, but most things English. Art was at its lowest, manners were never less sincere, morals were corrupt, politics were little better. It almost seems as if England had lost the fair wind which had carried her through the Tudor times and then become gradually becalmed in the Stuart era till she rolled about with no progress, making only stern-way. And then, after a period of profitless existence, she seems to have picked up another breeze which has sent her along through the successful industrial age, the great wars, the Victorian and Edwardian years of prosperity up till to-day. The end of the eighteenth century is a period quite different from its130 first portion. And if it was so generally it could scarcely be different in regard to a corporation directed and managed by men of this period.

Just for a moment let us go back to that time when the East India Company decided it were best to close the Deptford yard and obtain their ships ready built. Now as time went on the hiring of ships to the Company for this Eastern trade led to great abuses. Officially the Company did no longer build their ships. But the Company’s directors used to build them privately and then hire them out to the Company, to the great personal gain of the directors. There were few other ships big enough or strong enough. The directors would know how many to build and to what extent prices could be demanded from the Company: and altogether they feathered their nests very nicely. This went on till the year 1708, when the old and new East India companies had become amalgamated. After this year the directors were prohibited by Act of Parliament from supplying ships to the Company.

Instead of the former corrupt arrangement, ships for the East India Company were to be hired in the future by open tender from the commander and two owners. But here again was a difficulty. Inasmuch as a special type of stalwart ship was required for this trade, the supply was small and in the hands of a ring called the Marine Interest. Therefore the Company was just about as badly off as before. And throughout the eighteenth cent............