No More Learning

“Prosperous settlements and a few well-fortified places will give
[the Company] a great position among these people”, he wrote on
]
15 December, 1700, to Jérôme Pontchartrain, the new minister of
marine. Martin therefore surrounded Pondichery with the solid
walls that had hitherto been wanting; and at the same time under
his vigorous lead the company's trade made real progress in Bengal,
while even the Surat factory itself seemed about to shake off its
ever-growing torpor.
Unluckily this promising situation did not last. In 1701 the War
of the Spanish Succession broke out, and round the Grand Alliance
grouped themselves all who disliked the thought of a son of Louis
XIV succeeding to the throne of Spain. The effects of the new war
were soon felt in India. Trade was once more interrupted; the
factories of Bengal and Surat fell back into inactivity; while at Pondi-
chery the preparation for defence (now completed by the building
of Fort St Louis), and the need of checking Dutch intrigue, fully
occupied the aged but still active Martin, left to his own resources
without the least help from Europe.
Long after the death (31 December, 1706) of the founder of the
first French settlements in India, this wretched situation continued
and actually grew worse, more owing to the distress of the Company
than the events of the war or the worthless nature of Martin's suc-
cessors. The failure of a fleet sent in 1706 to the western coasts of
South America in defiance of the monopoly granted to another
Company in 1697 for the trade of the South Seas, the difficulties of
meeting the Company's obligations, and at last the cession of its
privileges to the Malouins in 1712, were the real, essential causes of
the languor of the French factories in India in the early years of
the eighteenth century. That condition persisted until the death of
Louis XIV (1 September, 1715), or rather till May, 1719, when a
famous edict united the Company of the East Indies and China with


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74
THE FRENCH FACTORIES IN INDIA
the Company of the West founded by Jean Law a little earlier
(August, 1717), giving to the united body the name of the Compagnie
des Indes and confiding to it the whole of French colonial trade.
In Law's mind it was to have been even more than that-the
single trading body of the kingdom, and perhaps the most important
of the institutions by means of which he hoped to restore French
finance. Thus the privileges granted to the great Company which it
had just absorbed were extended for fifty years; and besides this it
received so many other privileges and so wide an extension of its
domain that, as has been said with truth, it became not so much a
colonial enterprise as a sort of farm general of the state.
But could even so powerful a Compagnie des Indes transform into
realities the fair dreams of Colbert? By no means. In fact the speedy
bankruptcy of the System ruined all hopes. In order not to burden
the state with the shares issued on different occasions, first by the
Company of the West, and then by the Company of the Indies itself,
the liquidators named by the king (10 April, 1721) had to re-establish
the Company in its original form. Two years later (23 March, 1723)
its administration was confided to a council of the Indies consisting
of a chief, a president, and twenty councillors nominated by the
crown; but, soon after, to enable shareholders to have representatives,
there were introduced, besides twelve directors and four inspectors
named by the crown, eight syndics appointed by the shareholders.
Such was in its main lines the home administration of the Com-
pany which, as in the time of Louis XIV, held the exclusive privilege
of trade from the west coast of Africa round the Cape up to the Red
Sea, the islands of the Indian seas of which two had already been
occupied by the French (the Isle of Bourbon in 1664 and the Isle
of France in 1721), and finally India itself and the Further East.
For various reasons deriving from the general history of the time
and the particular history of the Company, the French had made no
progress in India since 1706. No doubt the governors who succeeded
Martin were less able than he; but it must also be remembered that
from 1707 to 1720 no less than five governors ruled in succession at
Pondichery. Each in turn adopted a line of policy different from that
of his predecessor, until, in 1720, the new Compagnie des Indes put
an end to this series of conflicts and inconsistencies by taking posses-
sion of the existing factories and imposing an active and coherent
policy. Masulipatam, Calicut, Mahé, and Yanam were occupied
between 1721 and 1723. Although the attempt to found a settlement
on Pulo Kondor-the Iles d'Orléans—south of the Mekong delta
failed altogether, the Company was able to take vengeance for the
insult of the prince Bayanor in driving the French from Mahé. It
re-established itself there by force, for ten months its troops
1 Cultru, Dupleix, p. 2


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LATER POLICY
76
3
victoriously met the attempts of Bayanor and four other rajahs to
expel them, obliged them to make peace, first in 1726,1 and later, after
a blockade of eighteen months, in 1741. Clearly there was a change
in the attitude of the Compagnie des Indes.
It must, however, be observed, that the two governors who held
office from 1720 to 1742 (Lenoir till 1735 and then Benoist Dumas 2)
had none but commercial objects in mind. It was with a purely
commercial object, the protection of a factory expected to yield a
profitable pepper trade, that the Company in 1724 built a fort at
Mahé, which was long a source of great expense; it was with a purely
commercial object too that Dumas brought to reason by a show of
force the governor of Mokha where the French had a factory, and
occupied in February, 1739, Karikal at the request of a native prince.
There was nothing in this exclusively interested conduct that allows
us to credit the Company with political views and still less ideas of
conquest; its factories were more or less fortified, but for motives of
simple security; and although it enlisted troops, it used them only for
purposes of police. In 1664 perhaps Louis XIV ana Colbert dreant
of securing conquests in the Indies; but in 1730 none of the Company's
servants dreamt of supplying funds for trade out of the regular
revenues of territorial possessions, or conceived the idea of obtaining
them by interfering in the lawless conflicts that arose out of th3
decadence of the Moghul Empire, or attempted to interfere in any
persistent, methcdical way in the affairs of native princes. Only in
the period that begins in 1740 does this notion first germinate and
then begin to develop in the admirable brain of Dupleix.
1 Martineau, Les Origines de Mahé. Cf. Les Mémoires du Chevalier de in
Farelle sur la prise de Mahé.
2 Martineau, "Benoist Dumas”, Rev. de l'hist. des col. fr. IX, 145 sqq.
8 Martineau, "La politique de Dumas”, Rev. de l'hist. des col. fr. XIV, 1 sqq.


## p. 76 (#104) #############################################

CHAPTER IV
THE EAST INDIA COMPANY, 1600—1740
THE success of the Portuguese in establishing a lucrative commerce
with the East naturally excited a desire among the other nations of
Western Europe to follow so tempting an example. The Portuguese,
however, had a long start, and it was nearly a century before any
rival made an effective entry into the field. The reasons for this were
largely political. The papal bulls of 1493, and the subsequent agree-
ment with Spain at Tordesillas, prevented any attempt on the part of
the Catholic powers to infringe the monopoly claimed by Lisbon; and
if the union of the crowns of Spain and Portugal in 1580 exposed the
latter to the attacks of the revolted Netherlands, on the other hand
it deterred the cautious Elizabeth of England from countenancing too
openly the audacious schemes of her subjects for ventures into the
forbidden area. For a time, therefore, English merchants concen-
trated their attention upon the discovery of a new sea-road to the,
East, either through or round America on the one side or by the
northern coasts of Europe and Asia on the other; and either route
had the additional attraction that it would bring the adventurers to
Northern China, which was out of the Portuguese sphere and would,
it was hoped, afford for English woollens a market hardly to be
expecteď in the tropical regions to the southward. The story. of these
attempts to find a north-eastern or north-western passage to the
Indies belongs rather to the general history of exploration than to
our special subject, and no detailed account of them is necessary. Their
failure directed attention afresh to the Portuguese route by the Cape
of Good Hope, especially when in 1580 Francis Drake returned that
way from his voyage round the world. New energy was infused into
the project by the defeat of the Spanish Armada, by the return (1591)
of Ralph Fitch from some years of travel in India and Burma, and
by the riches found in Portuguese carracks captured by English
privateers. At last in 1591-3 a ship under James Lancaster succeeded
in penetrating the Indian Ocean and visiting the Nicobars and the
island of Penang. Three years after Lancaster's return another fleet
started under Benjamin Wood, but the enterprise ended in disaster.
The Dutch, who had already imitated the English in endeavouring to
discover a north-east passage, now joined in the attempt to force
the Portuguese barrier; and in 1596 a squadron under Houtman
reached Java, returning in safety a year later. As a result, in 1598
over twenty ships were dispatched from Holland to the East by way
of the Cape.
The merchants of England were in no mood to see the prize they
had so long sought snatched away from them by their Dutch rivals.


## p. 77 (#105) #############################################

!
THE EARLY VOYAGES
77
Preparations were therefore commenced in the autumn of 1599 for
a fresh expedition to the East; but this had to be abandoned owing to
Queen Elizabeth's fear of prejudicing her negotiations with King
Philip for a peace. In the following year, however, these negotiations
having failed, the scheme was revived, and early in 1601 a fleet sailed
for the East under the command of Lancaster. In the meantime, by
a charter dated 31 December, 1600, those interested in the venture
had been incorporated under the title of "The Governor and Com-
pany of Merchants of London Trading into the East Indies”, and the
monopoly of English commerce in eastern waters (from the Cape of
Good Hope to the Straits of Magellan) had been granted to them
and their successors for a term of fifteen years. "
England being still at war with Spain and Portugal, and the
immediate aim being the acquisition of the spices and pepper of the
Far East, the First (1601-3) and Second (1604-6) Voyages were
made, not to India, but to Achin (in Sumatra), Bantam (in Java),
and the Moluccas. However, in August, 1604, peace was at last
concluded, though without any recognition of the English claim to
share in the commerce of the Indian seas; while it was becoming
evident that English manufactures—which it was particularly desir-
able to export, in order to avoid carrying out so much silver-could
find no satisfactory market in the Malay Archipelago. When,
therefore, a Third Voyage was under preparation (1606-7), it was
resolved that the fleet should, on its way to Bantam, endeavour to
open up trade at Aden and Surat. For this purpose the post of second
in command was given to William Hawkins, a merchant who had
had consderable experience in the Levant and could speak Turkish;
and he was provided with a letter from King James to the emperor
Akbar (whose death was as yet unknown in London), desiring
permission to establish trade in his dominions.
The Hector, which was the vessel commanded by Hawkins,
anchored off the mouth of the Tapti on 24 August, 1608, and her
captain at once proceeded up the river to Surat, the principal port of
the Moghul Empire. Early in October the ship departed for Bantam,
and four months later Hawkins set out on his long journey to the
court. He reached Agra in the middle of April, 1609, and was
graciously received by the emperor Jahangir. For some time he was
in high favour, and was admitted to share the revels of the jovial
monarch, who went so far as to take him into his service and marry
him an Armenian damsel. But the Portuguese, alarmed at the
prospect of English competition, were working hard to displace him,
both at Agra, where they found willing helpers among the courtiers,
and in Gujarat. Their arguments and threats prevailed upon the
1 Patent Rolls, 43 Eliz. pt. vi.
2 Narratives of the early expeditions will be found in The Voyages. of Sit
James Lancaster.


## p. 78 (#106) #############################################

78
THE EAST INDIA COMPANY, 1600-1740
1
1
timid officials ana merchants of that province to make representations
against the admission of the English, and in the end these representa-
tions were successful. It was unfortunate for Hawkins that in
September, 1609, the Ascension, which had been dispatched from
England to second his efforts, was wrecked in the Gulf of Cambay,
while her crew, escaping to land, created a bad impression by their
disorder. But this and other obstacles might have been surmounted,
had not the chief merchants of Surat declared that commerce with
the English would mean a rupture with the Portuguese and the con-
sequent ruin of their trade. Thereupon Jahangir reluctantly ordered
the exclusion of the newcomers. After making vain efforts to induce
him to reverse this decision, Hawkins left Agra in November, 1611,
and journeyed down to the coast. 1
Meanwhile the East India Company, encouraged by the grant or
a fresh charter in May, 1609,2 extending its privileges indefinitely
(subject to revocation after three years' notice), had sent out in the
spring of 1610 three ships under Sir Henry Middleton, with orders
to go first to the Red Sea ports and then to those of Gujarat. At
Mokha, Middleton was seized by the Turkish governor and impri-
soned for nearly six months. Escaping by a stratagem, he blockaded
the port until compensation was paid, and then proceeded to India.
He reached the inouth of the Tapti in September, 1611, but only to
find it occupied by a squadron of Portuguese "frigates" (light country-
built vessels, fitted to row or sail), which effectually cut off access to
the shore. After some time information was obtained from a friendly
Indian official of a pool or harbour among the sandbanks to the
northward of the river mouth, where ships might ride close to the
shore; and the discovery of this haven-known to succeeding fleets
as "Swally Hole”-enabled the English to berth their vessels where
their guns could command the shore, and to communicate freely
with the country people. Some trade resulted, and the Governor of
Surat held out hopes that a permanent settlement would be allowed;
but fresh threats on the part of the Portuguese produced a reaction,
and the English, who had meanwhile embarked Hawkins and his
companions, were roughly bidden to be gone. They sailed accordingly
in February, 1612. Middleton was not disposed to put up calmly
with this rebuff. He determined to show that the power of the English
was not less to be dreaded than that of the Portuguese, and that, if
the latter could close the Gujarat ports, the former could do equal
injury to the Red Sea traffic—the main dependence cf the Surat
merchants. Sailing to the Straits of Bab-ul-mandab, he there rounded
up the Indian trading vessels and forced them to exchange their goods
for his English commodities; while, in addition, the ships from Diu
1 His own narrative may be read in Early Travels in India, p. 60.
Patent Rulls, 7 Jac. . I pt XI. There is a contemporary copy at the India
Office (Parchment Records, No. 5).


## p. 79 (#107) #############################################

PORTUGUESE REPRISALS
79
1
and Surat were obliged to pay a heavy ransom before they were
released. He made no further attempt to trade with the Indian
ports, but proceeded straight to Sumatra.
The news of the revenge taken by Middleton produced consterna-
tion at Surat. Besides the damage likely to be done to the trade of
the port should such reprisals continue, there was a possibility that
the large pilgrim traffic to the holy places of Islam might be diverted
to other routes. When, therefore, in September, 1612, two ships from
England, under the command of Thomas Best, anchored at the bar,
unaware of what had happened in the Red Sea, they found a respect-
ful reception and were readily promised full trading privileges. The
news of this roused the Portuguese authorities at Goa to vigorous
action; and in November a strong fleet appeared to try conclusions
with Best's two vessels. The latter put boldly to sea and repelled
their assailants with heavy loss, thus greatly raising the reputation
of the English. A farman arrived from the emperor early in 1613,
confirming the agreement already concluded with the local autho-
rities, and a permanent factory (i. e. a group of merchants, living
together) was now established at Surat under Thomas Aldworth, a
merchant being also sent up to Agra with presents, to watch over
English interests at court.
Disappointed in his endeavours to destroy Best's ships, the viceroy
of Goa decided to bring fresh pressure to bear upon the Indians to
exclude the English; and with this object in view a Surat vessel of
great value, returning from the Red Sea, was captured, although she
was duły provided with a Portuguese pass. Jahangir was very indig-
nant at this affront, and dispatched a force to besiege Daman. The
arrival (October, 1614) of four ships under Nicholas Duwntôn led
the Moghul authorities to expect the active co-operation of the
English in a war largely occasioned by the favour shown to them;
and Downton's unwillingness to engage in hostilities, without express
authority from home, caused much resentment. At this point, how-
ever, the viceroy himself unwittingly helped his enemies. Gathering
together a powerful fleet which he fitted with soldiers, he sailed in
person to crush the English and then punish the Indians for having
harboured them. He found Downton's ships snugly ensconced in
Swally Hole, where his own larger vessels could not reach them; an
attack made by his frigates was smartly repulsed; and in the end he
had to retire discomfited. In March, 1615, one of Downton's vessels,
the Hope, laden chiefly with indigo and cotton goods, sailed for
England—the first vessel to be sent home from an Indian port. Not
long afterwards the Portuguese, finding their commercial interests
suffering from the war, made overtures to the Moghul emperor for
peace, offering compensation for the vessel they had seized, but
requiring the expulsion of the English as an essential condition, lo
1. See. Bestes journal. among the India Office Marine Becords (NO XV)


## p. 80 (#108) #############################################

80
THE EAST INDIA COMPANY, 1600-1740
1
this Jahangir replied that the latter were too powerful at sea for him
to interfere and that, if their recourse to his ports was to be prevented,
the Portuguese themselves must undertake the task. In the end,
towards the close of 1615, an agreement was reached, without any
stipulation on this point.
The position of the newcomers was, however, still precarious,
owing to the certainty that the Goa authorities would continue their
efforts to induce the emperor to forbid further trade; while, as they
well knew, mercantile interests in Gujarat were greatly disturbed
by the resultant bickerings, and the Indian officials were asking them-
selves whether it was worth while, for the sake of the small trade
brought by the English, to risk the large and well-established com-
merce between their ports and Goa. It was, therefore, with much joy
that the English factors greeted the arrival (September, 1615) of a
new fleet, bringing out an ambassador from King James, in the person
of Sir Thomas Roe. The East India Company had decided to make a
great effort to establish permanent relations with India, and the surest
way of effecting this seemed to be the dispatch of a royal envoy to the
Moghul, for the purpose of concluding a treaty which should put the
trade between the two countries on a regular footing. This plan had,
moreover, the advantage of refuting the allegations of the Portuguese
that the Company's attempts to trade in Eastern waters were not
authorised by the English sovereign, while it threw the aegis of the
latter over his subjects at Surat and thus discouraged further attacks
from Goa.
Roe reached the court, which was then at Ajmir, in December,
1615; and for nearly three years he followed in the train of the
emperor, striving diligently to carry out the objects of his mission.
He found, however, that the conclusion of any form of treaty for
commercial purposes was entirely foreign to Indian ideas. Moreover,
his demands included concessions for trade in Bengal and Sind, which
Jahangir's advisers opposed on the ground that the struggle between
the two European nations would thereby be extended to other parts
of India; while most of the remaining demands were looked upon as
matters coming under the jurisdiction of the emperor's favourite son,
Prince Khurram (Shah Jahan), who was then viceroy of Gujarat and
was not disposed to brook any interference in his administration of
that province. In the end Roe had to content himself with concluding
an arrangement with the prince, who willingly conceded most of the
privileges desired. The ambassador thus failed in achieving the
particular end for which he had been sent; yet he had done all that
was really necessary, and indirectly had contributed greatly to the
establishment of his countrymen's position. His own character and
abilities raised considerably the reputation of the English at court;
while his success in obtaining the punishment of the local officials
when guilty of oppression taught them and their successors to be
circumspect in their. dealings with the English traders. His. sage


## p. 81 (#109) #############################################

ROE'S EMBASSY
81
advice to the Company did much also in guiding the development
of its commerce along safe and profitable lines, particularly in regard
to the commerce with Mokha and Persia.
By the time Roe embarked for home (February, 1619) there were
regular English factories at Surat, Agra, Ahmadabad, and Broach.
All these were placed under the authority of the chief factor at Surat,
who was now styled the President, and who in addition controlled
the trade which had been opened up with the Red Sea ports and in
Persia. These trade developments led to trouble; the first with the
Surat merchants who had so long enjoyed this commerce; and the
second with the Portuguese, who, if now hopeless of excluding the
English from India, were determined to keep them, if possible, from
interfering with the commerce of the Persian Gulf, from which they
derived a considerable revenue. In this, however, they failed to take
sufficiently into account the attitude of the Persian monarch, Shah
Abbas, who had already extended his dominions to the sea and was
by no means pleased to find the trade of Southern Persia controlled
by the Portuguese fortress on the island of Ormuz. He was desirous
of developing the new port of Gombroon (the present Bandar Abbas),
which was situated on the mainland opposite to Ormuz; but little
headway could be made in this respect while the Portuguese com-
pelled all vessels to pay dues at the latter place. Naturally, too, he
welcomed English overtures for a seaborne trade with Europe, since
the raw silk of his northern provinces was largely in his hands and he
was anxious to divert the trade as much as possible from its ordinary
channel through the dominions of his hereditary enemies the Turks.
The Portuguese, on their side, far from endeavouring to conciliate
him, dispatched an envoy to demand the restitution of Gombroon
and other territory conquered from their vassal, the titular king of
Ormuz, together with the exclusion of all other Europeans from trade
in his country. Both demands were firmly refused, and the shah de-
clared his intention of supporting English commerce in his dominions.
The determination of the Company's factors to take full advantage
of the Persian monarch's friendship quickly led to fresh hostilities
with the Portuguese; and at the end of 1620 a fight took place off
Jask, in which the English ships gained a fresh success. Their oppu-
nents once more committed the error of driving an Asiatic power into
alliance with the English, for they now declared war against Shah
Abbas and sent a fleet to destroy his port towns. The enraged monarch
in his turn dispatched an army to turn the Portuguese out of Ormuz
and the neighbouring island of Kishm; but this was impossible without
the aid of naval power, and when in December, 1621, a strong
English fleet arrived to cover the embarkation of the Company's silk,
its commanders were practically forced, by threats of exclusion from
further trade, to take part in the operations. The Portuguese castle
1 English Factories in India, 1618-21, p. ix.
6


## p. 82 (#110) #############################################

82
THE EAST INDIA COMPANY, 1600-1740
.
on Kishm was easily captured, but Ormuz itself only yielded after
a siege of over two months (April, 1622). The reward of the English
was a small share in the plunder of the place and the grant for the
future of half the customs revenue of the port, the Company's own
goods being freed from toll in addition. As a matter of fact, though
the Persians garrisoned Ormuz, the trade itself was transferred to
Gombroon. However, the claim of the English to share the customs
of the latter place was recognised and, though the full amount due
to them was seldom paid, they for long drew a considerable revenue
from this source, in addition to the privilege of exemption from
customs. .
Whether an English trading company, operating from so distant
a base and governed by men who were consistently averse from using
any but peaceable methods, would ever have managed to overcome
the opposition of Portugal is, to say the least, doubtful; but, fortunately
for our fellow-countrymen, during the whole of the struggle their
opponents were being increasingly harassed by the Dutch, whose
armaments and commerce alike were on a much larger scale than
those of any of their European competitors. From the beginning of
the seventeenth century the Hollanders had determined to take full
advantage of the weakness of the Portuguese and to oust them from
their eastern trade; and this object was pursued with all the tenacity
and thoroughness of the Dutch character. Though organised, like the
English, in the form of a trading company, the Dutch merchants had
behind them practically the whole power of the state, and their com-
merce with the East was recognised as a most important national
asset; while the vigorous war which their fellow-countrymen were
waging with King Philip gave a special sanction to their attacks upon
his Portuguese subjects. These attacks were at first directed mainly
to the Spice Islands, the source of the cloves and nutmegs so much in
demand in Europe. Here, until their hands were stayed by the con-
clusion of a truce with Spain in 1609, they made great progress in
capturing the Portuguese forts and in concluding agreements with
the native chiefs, by which the latter were guaranteed protection
against the Portuguese in return for a monopoly of the trade in spices.
Naturally this policy aroused much resentment among the English,
who found themselves in danger of being excluded from a valuable
commerce with a thoroughness that would never have been attained
under the Portuguese. On the other hand the Hollanders argued that
it was unfair for the English, who contributed in no way to the defence
of the Spice Islands against the common foe, to expect a share in the
benefits of the trade, under conditions which really gave them an
advantage, since they were spared the heavy expenses of garrisons
and ships of war. The dispute led to much negotiation between
London and the Hague, and to actual hostilities in the Far East,
1 Englisi Factories, 1622-3, p 13.


## p. 83 (#111) #############################################

DUTCH CO-OPERATION
83
confined at first to the Bandas but soon extending over a wider area,
though the English settlements in India were not involved. The news
of these conflicts roused the governments of both nations to action,
and under pressure from them an agreement 1 was concluded (1619)
in London between the Dutch and English Companies, which really
pleased neither party. By its terms the two bodies were to share in
certain proportions the trade of the eastern islands and jointly to bear
the cost of defending their interests against the Portuguese; English
factors were to be admitted to the Dutch settlements, including
Batavia; and each Company was to furnish ten ships for purposes of
the common defence.
This agreement did not extend to Western India, Persia, or the
Red Sea, except as regards united naval action against the Portuguese;
but it embraced the English settlements on the east coast of India,
concerning which a few words must now be said. The first attempt
to open up communication with this part of the peninsula was made
in 1611, when the Company, acting in conjunction with two Dutch
merchants who provided a share of the capital and themselves took
part in the voyage, sent out the Globe to visit the Coromandel Coast
and the countries adjacent. An endeavour was made to settle a factory
at Pulicat (a little to the north of where Madras now stands), but this
was foiled by the Dutch, who had obtained an exclusive concession
from the king of the Carnatic for trade in his dominions. The vessel
then passed on to Masulipatam, the chief port of the Golconda king-
dom, and here a factory was established in September, 1611. The chief
object in view was the provision of chintzes and calicoes for use in the
Far Eastern trade; and, accordingly, from the beginning the factories
on the Coromandel Coast were placed under the. superintendence of
the president at Bantam, and had little in common with those in
Western and Northern India save the geographical tie.
The Dutch notion of defence proved to be much the same as
vigorous aggression; for as soon as the Truce of Antwerp had expired
(1621) they proceeded to push home their attacks on the remaining
Portuguese possessions. Accordingly, in the autumn of that year the
joint Anglo-Dutch "Fleet of Defence" left Batavia for the Malabar
Coast, to intercept the Portuguese carracks in their passage to and
from Goa. In July, 1622, they inflicted much damage on a squadron
that was bringing out a new viceroy; and they followed up this success
by blockaa ng Goa during the cold weather of 1622-3, thus preventing
all intercourse with Lisbon. Before long, however, the co-operation
of the two Protestant powers broke down. The English were by no
means pleased to find themselves dragged by their allies into a series
of warlike operations that brought them much expense and little
benefit; disputes arose as to the fairness of the financial charges and
the amenability of the English to the Dutch tribunals at Batavia and
1 Calendar of State Papers, E. Indies, 1617-21, noș. 679. 81.


## p. 84 (#112) #############################################

84
THE EAST INDIA COMPANY, 1600-1740
elsewhere; while soon money was lacking to pay the English share of
the military and naval charges. The result was that the English
president and council resolved to withdraw their factors from the
various Dutch settlements, since they could no longer carry out their
financial engagements. Before this could be effected occurred the
famous “Massacre of Amboina" (February, 1623), ten members of
the English factory there being tortured and put to death by the Dutch
authorities, after an irregular trial, on a charge of conspiring to-seize
the fortress. This virtually put an end to the alliance, in spite of the
fact that at home, after protracted negotiations, a fresh greement
had been concluded (January, 1623), which removed a few of the
causes of friction. Early in 1624 the English quitted Batavia and
proceeded to form a new head settlement of their own upon an unin-
habited island in the neighbouring Straits of Sụnda. This, however,
proved so unhealthy that a return had to be made (with Dutch
assistance) to their former quarters at Batavia; and there they re-
mained until 1628, when they removed once again to their old station
at Bantam, the king of which was unfriendly to the Dutch and
powerful enough to maintain his independence.
As we have seen, the treaty of 1619 did not extend to Western
India, Persia, or the Red Sea, being in fact intended only for the
regulation of the spice and pepper trade. But the Dutch had now
important interests in those parts, having established themselves at
Surat (1616), Ahmadabad and Agra (1618), Mokha (1620), and in
Persia (1623); and they were quite aware that the surest way to
inflict a damaging blow on their enemy was to attack him in Indian
and Persian waters. The war which broke out in 1625 between
England and Spain, together with the efforts the Portuguese were
making to retrieve their position in those waters, induced the Com-
pany's servants at Surat to join the Hollanders in active hostilities.
Early in 1625 an Anglo-Dutch fleet defeated a Portuguese squadron
near Ormuz, and in the following year a similar joint expedition
destroyed the small Portuguese settlement on the island of Bombay.
Some desultory fighting took place during the next few years, cul-
minating in an attack on shore at Swally (1630); but here the Por-
tuguese were easily routed by a small force of English sailors, to the
surprise of the Indians, who had hitherto deemed the former
invincible on land
In this same year peace was concluded between King Charles and
King Philip. It was expected in London that the Portuguese would
recognise the futility of their opposition to English trade in the East
and would agree to admit its continuance; but the Lisbon authorities
proved yielding on the point, and the Treaty of Madrid left matters
1 British Museum, Add. MSS, . 22866, f.
466 b; also Hague Transcripts (India
Office), series 1, vol. 57, no. 2. The version given in Cal. . S. P. , E. Indies, 1622-
24, no. 263, is incorrect.


## p. 85 (#113) #############################################

CONVENTION OF GOA
85
1
as they were in the East Indies. However, the viceroy of Goa and his
councillors soon began to listen to suggestions of accommodation.
Hard pressed by the Dutch and involved also with various Asiatic
foes, with ever-dwindling resources in Portuguese India itself, they
thought it wise to remove at least one source of difficulty and danger
by making a truce with the English. The latter, on their side, were
eager for the cessation of a warfare which hampered their commercial
operations (already suffering greatly from the effects of the severe
famine of 1630-1) and necessitated the employment of costly fleets in
maintaining communication with their other settlements and with
Europe; and, moreover, they were well aware of the advantages which
would result from the opening of the Portuguese harbours to their
ships and the Portuguese settlements to their trade. The negotiations
extended over a considerable period; but at last, in January, 1635,
William Methwold, the English president at Surat, who had been the
moving spirit, had the satisfaction. of signing at Goa (on his way
home) an accord ? with the viceroy, which established a truce for an
indefinite period—as it proved, a lasting peace. The accord was
extended by the Anglo-Portuguese treaty of 1642, which also provided
for the appointment of commissioners to settle outstanding questions;
but it was not until the conclusion of Cromwell's treaty in July, 1654,
that the right of the English to trade freely with the Portuguese
possessions in the East (with the exception of Macao) was formally
recognised.
The Dutch on their side continued the war with increased vigour
and almost unvarying success. Year after year they blockaded Goa
during the season for the arrival and departure of shipping; allying
themselves with the king of Kandi, they captured several of the Por-
tuguese strongholds in Ceylon; and in 1641, aided by an Achinese
force, they made themselves masters of the city of Malacca, which
controlled the traffic between India and China. By this time Portugal
had regained her independence of Spain (December, 1640) and had
opened up negotiations with Holland, which resulted in a treaty
suspending hostilities for ten years and leaving the Dutch in possession
of their conquests (June, 1641). The authorities at Batavia, however,
were unwilling to halt in their victorious career, and it was not until
sixteen months later that the truce was proclaimed there. Even then
there were disputes, and the peace did not become effective until
November, 1644. Troubles over Brazil brought about a renewal of
the war in 1652, upon the expiration of the truce. Colombo fell in
May, 1656, and Jaffna (the last Portuguese stronghold in Ceylon)
two years later; while on the coast of India Negapatam and all the
Portuguese possessions on the Malabar littoral to the southward of
Goa were taken between 1658 and 1663. Peace between the two
countries had been concluded in 1661; but the news of this did not
1 English Factories, 1634-6, p. 88.


## p. 86 (#114) #############################################

86
THE EAST INDIA COMPANY, 1600-1740
come in time to save Cochin and Kannanur. The only consolation
for the Portuguese was that Dutch schemes for the conquest of their
remaining settlements were thus foiled; while the danger of attacks
in the future was warded off by an English guarantee, as related below.
Meanwhile England had in 1652 become involved in a war with
Holland. At home the Commonwealth fleet proved victorious, after
a hard struggle, and Cromwell was able to dictate practically his own
terms when peace was made in 1654. In the East, however, the
interests of the English had suffered considerably, owing to the pre-
ponderance of Dutch naval power in those waters. Though the
Company's settlements were not attacked, for fear of offending the
monarchs in whose dominions they were situated, ship after ship feli
into the hands of the Hollanders, with the result that not only was
heavy loss inflicted upon the Company but English prestige suffered
greatly, both in India and in Persia. There was, however, some com-
pensation in the outcome of the war; for the commissioners appointed
under the Treaty of Westminster to assess damages awarded the
English Company £85,000 1 in settlement of its claims against its
Dutch rival, decreed the restitution of the island of Pulo Run 2 (in
the Bandas), and provided for the payment of damages to the repre-
sentatives of those Englishmen who had suffered at Amboina in 1623.
Of these decisions the most unpalatable to the Dutch was the second,
since to allow the English a footing in the Spice Islands meant a
serious breach in the Dutch monopoly of cloves. Every mode of
evasion was therefore practised; and although the surrender was again
stipulated in a fresh treaty concluded in 1662, it was not until March,
1665, that the island was actually made over-only to be retaken in
the following November, on the receipt of the news of the outbreak
of the Second Dutch War. The long-standing dispute was finally
settled by the peace of 1667, which assigned the island to Holland.
A further consequence of the hostilities with the Dutch in 1652-4
was a tendency on the part of both English and Portuguese in the
East to draw together for mutual support; and also an increased
desire on the part of the former to find some defensible spot on the
western coast of India, where they could be secure against both the
exactions of Indian officials and the attacks of European foes. The
provision of such a retreat came, however, not from any action on
the part of the East India Company but from the turn of events upon
the accession of Charles II. By a secret article of the marriage treaty
1 of tnis amount the Commonwealth government at once borrowed £50,000,
and the loan was never repaid (Court Minutes of the E. India Co. , 1655-9, p. v).
2 Thi: island had been made over to the English by its inhabitants in 1610,
in hopes of protection against the Dutch, who, however, took advantage of the
subsequent hostilities to effect its capture. By the Anglo-Dutch accord of 1623
it was recognised as English property, but the weakness of the East India Com-
pany was such that no serious attempt was made to take over so distant a
possession, though proposals to that effect were mooted from time to time:


## p. 87 (#115) #############################################

CO-OPERATION WITH THE PORTUGUESE
87
with Portugal (1661) England guaranteed the Portuguese possessions
in the East against the Dutch, and to facilitate this the island of
Bombay was included in the dowry of the new queen. Owing to
difficulties placed in the way by the local officials, to whom the
arrangement was distasteful, the island was not made over to the
king's representatives until February, 1665. Experience soon showed
that the outlay on the maintenance and development of the new
possession would make too heavy a demand upon the royal purse;
and on 27 March, 1668, in consideration of a temporary loan of
£50,000 at 6 per cent. , Charles transferred it to the Company at a
quitrent of £10 per annum. The actual date of the handing over
was 23 September in the same year.
It is time now to turn our attention to more peaceful topics and
to note the progress made by English commerce in India and the
neighbouring countries. The friendly relations established with the
Portuguese by the Convention of Goa (1635) much improved the
position of the East India Company's servants in those regions. It
became possible to dispatch ships singly to and from England and to
develop unhindered the port-to-port traffic, using for this purpose
mainly small India-built vessels in lieu of the cumbrous and expensive
ships built for the long sea-voyage out and home. The Malabar Coast,
too, was opened to English trade, with the result that saltpetre,
pepper, cardamoms, and cassia lignea (wild cinnamon) from those
parts figured largely in the cargoes of the homeward-bound vessels.
The tightening of the Dutch monopoly over the pepper and spice trade
of the Far East and Ceylon drove the English to rely chiefly on the
Malabar trade for these products. In Gujarat agriculture and the
textile industry had not yet recovered from the terrible famine of
1630-1, and the Company's factors were forced to look for fresh sources
of supply to make good the deficiency. Now that the menace of the
Portuguese flotilla at Maskat was removed, trade was extended
to Lahribandar and Tatta in the Indus delta (1635), and to Basra
(1640); while at the same time the commerce with Gombroon was
largely developed, partly owing to the eagerness with which Asiatic
merchants availed themselves of the English and Dutch vessels for
transporting their goods between India and Persia, especially during
the long war between those two countries over the possession of
Kandahar. Ventures were even made to Macao and Manilla; but
these were discouraged by the Portuguese and Spaniards respectively,
as soon as it was found that the English were not willing to risk trouble
with the Dutch by carrying contraband of war; and so no permanent
trade resulted. Further, we may reckon among the consequences of
the Anglo-Portuguese entente the establishment of an English settle-
ment at Madraspatam, on the Coromandel Coast; for, had hostilities
1 The payment of this rent has been traced down to the year 1730. After
that the treasury seems to have neglected to apply for it.


## p. 88 (#116) #############################################

88
THE EAST INDIA COMPANY, 1600-1740
a
continued, it would scarcely have been prudent to settle so near the
Portuguese fortress of St Thomé. Regarding this development
something must now be said.
We have already noted that as early as 1611 the English had
followed the example of the Dutch in starting a factory at Masuli-
patam, the chief port of the kingdom of Golconda. The trade here was
valuable, particularly in piece-goods, for export to Persia and to
Bantam; while the grant in 1634 of freedom from all duties gave the
Company a considerable advantage over their competitors, including
the Dutch. It had already been discovered, however, that most of
the piece-goods wanted for the trade of the Far East were procurable
at cheaper rates in the Hindu territory to the southwards, under the
dominion of the raja of the Carnatic, the shrunken remnant of the
once extensive kingdom of Vijayanagar; and in 1626 the factors at
Masulipatam established a subsidiary settlement at Armagon, a little to
the northward of the Dutch fortress at Pulicat. This place proved to
have many disadvantages, especially in the shallowness and exposed
nature of the roadstead; and so in 1639 an agreement was made with
a local ruler a little further south, by which permission was obtained
to erect a fortified factory close to the little town of Madraspatam.
Thither the English removed from Armagon in February, 1640; and
in September, 1641, Fort St George (as the new station was named)
superseded Masulipatam as their headquarters on the Coromandel
Coast. In thus acquiring. a fortified settlement-a privilege which
would never have been granted in Golconda territory—the factors
were only just in time; for the Hindu kingdom of the Carnatic was
already tottering under the attacks of its Muhammadan neighbours,
and in 1647 the district round Madras fell into the hands of Mir
Jumla, the leader of the Golconda forces. The English, however, were
on good terms with him and easily procured his confirmation of their
privileges, which included the government of Madraspatam, subject
to sharing with the royal treasury the customs paid by strangers. ?
By this time English trade on the eastern side of India had been
extended from Masulipatam to the seaports of Orissa, and factories
had been started (1633) at Hariharpur (in the Mahanadi delta) and
at Balasore. In 1650-1, following the example of the Dutch, this
commerce was carried into Bengal itself and a settlement made at
Hugli. Before long factories were planted at Patna and Kasimbazar;
but for some years little benefit resulted to the Company, owing to
the large amount of private trade carried on by its servants. However,
the commerce on the eastern side of India grew steadily in importance
>
1 This division of the customs continued until 1658, when it was agreed
that an annual sum of 380 pagodas should be paid as the royal share. After
much dispute, the agreement was revised in 1672 and the amount was raised to
1200 pagodas per annum. For righty years that sum was regularly paid, and
then it was remitted altogether by Muhammad 'Ali, nawab of the Carnatic.


## p. 89 (#117) #############################################

COROMANDEL FACTORIES
89
as the merits of the Coromandel piece-goods came to be recognised
at home and as Bengal sugar and saltpetre were likewise found to be
in demand; and a considerable trade was consequently established
between the coast and England. In 1652, under the stress of the war
with the Dutch, the seat of the eastern presidency was removed from
Bantam to Fort St George. Three years after, however, came the
partial collapse of the Company described on a later page. Orders
were sent out for the abandonment of the factories in Bengal and the
reduction of those on the coast to two, viz. Fort St George and
Masulipatam, with a corresponding diminution of staff. From a
presidency the coast became once more an agency, though Greenhill,
who had succeeded to the post of president before the Company's
orders arrived, was generally accorded the higher title until his death
at the beginning of 1659. The period of his administration was the
low-water mark of the Company's trade in those parts, owing to the
financial weakness at home and the competition of private ventures.
The revival that followed the grant by Cromwell of a new charter
will be the theme of a later page.
Meanwhile we must look back to 1635 and follow the course of
the Company's affairs at home. The Convention of Goa, which produced
such beneficial results in the East, had in England the unexpected
result of arousing a dangerous competition. Financially the success
of the Company had by no means answered expectations. The earliest
voyages, it is true, had proved very profitable; but when the full
burden of maintaining so many factories was felt, to say nothing of
the losses caused by Dutch competition and the resulting quarrels,
the profits fell off and the capital required to carry on the trade was
raised with ever-increasing difficulty. The system adopted—that of ter-
minable stocks—each of which was wounded up in turn and its assets
distributed, had many drawbacks. The plan was perhaps the only
practicable one; but it tended to prevent the adoption of any con-
tinuous 'or long-sighted policy, and it concentrated attention on
immediate profits; while, since it necessitated a fresh subscription
every few years, it exposed the Company to the effects of any string-
ency prevailing in the money market. Owing largely to political
troubles, the period from 1636 to 1660 was one of general depression
of trade, especially towards the end of the Commonwealth; and this
depression, together with the practical loss of its monopoly, went
perilously near to extinguishing the Company. During the twenty
years following 1636 the capital raised for four successive Stocks
aggregated only about £600,000, whereas in 1631 a single subscription
(that for the Third Joint Stock) had produced over £ 420,000, while
further back still (1617) no less a sum than £1,600,000 had been
subscribed for the Second Joint Stock.
These financial difficulties, and the small amount of profit earned
in comparison with the Dutch East India Company, evoked much
criticism of the Company's general policy, together with some im-


## p. 90 (#118) #############################################

90
THE EAST INDIA COMPANY, 1600-1740
patience that so large a sphere of possible commercial activity should
be monopolised by a body that was apparently incapable of dealing
with more than a portion of it. The colonising movement-stimulated
by the success of the plantations on the American seaboard and in the
West India islands—produced suggestions that something more was
required than the leaving of a few factors here and there in the East
Indies, and that English trade in those regions would never flourish
until it was based, as in the case of the Dutch and the Portuguese,
upon actual settlements independent of the caprice of local rulers and
strong enough to resist their attacks. The prospect of a considerable
extension of commerce as the result of the Convention of Goa, and
the apparent inability of the existing Company to take full advantage
of this opportunity, provided a plausible excuse for those who were
eager to engage in the trade on their own lines; and by the close of
the same year (1635) a rival body-commonly known as Courteen's
Association, from the name of its principal shareholder—was forme:
in London to trade with China, Japan, the Malabar Coast, and other
parts in which the East India Company had not yet established
factories. Endymion Porter, one of the royal favourites, was an active
supporter of the project, and it was doubtless owing in great part to
his influence that King Charles lent his countenance to the new asso-
ciation by issuing a royal commission for the first voyage and by
granting to Courteen and his partners letters-patent which practically
established them as a rival East India Company (1637). The pro-
moters of the new venture, however, soon found their expectations
disappointed. The result of the first voyage was a heavy loss, for the
leaders, Weddell and Mountney, disappeared with their two vessels
beneath the waves of the Indian Ocean on their homeward way in
1639. Sir William Courteen had died shortly after the departure of
that fleet, and his son had succeeded to a heritage much encumbered
by the cost of the venture; still, he struggled hard to maintain the
trade, with the assistance of friends and of other merchants anxious
to compete with the regular Company. Factories were established at
various places on the Malabar Coast–Rajapur, Bhatkal, Karwar;
and Courteen's captains did not hesitate, in spite of the limitations
in his patent, to visit Surat, Gombroon, Basra, and other places within
the sphere of the East India Company. But what was gained in one
direction was lost in another; money was wasted in ill-judged enter-
prises, such as the attempt to establish a colony at St Augustine's Bay
in Madagascar (1645-6); and supplies from home were both irregular
and inadequate, with the result that one factory after another had to
be abandoned. About 1645 Courteen himself withdrew to the con-
tinent to escape the importunities of his creditors; and although other
merchants continued to send out ships under licence from him, their
1
?
1 For this see Foster, “An English settlement in Madagascar," in the English
Historical Review, XXVII, 239.


## p. 91 (#119) #############################################

TROUBLES OF THE COMPANY
91
interference with the operations of the East India Company became
almost negligible.
However, the monopoly of the latter, once broken, was not easily
re-established; especially as, after the outbreak of the Civil War, the
Company was no longer able to invoke the protection of its royal
. charter, and the efforts made to induce the parliament to grant a
fresh one proved fruitless. An attempt in 1649 to raise capital for a
new joint stock was frustrated by the appearance of another rivai
body (consisting partly of those who had acted with Courteen),
headed by Lord Fairfax, with a scheme for establishing colonies in
the East, particularly on Assada (an island off the north-western coast
of Madagascar), on Pulo Run (when it should be recovered from the
Dutch), and on some part of the coast of India-all these being in-
tended to serve as fortified centres of commerce, after the pattern of
Goa and Batavia. Under pressure from the Council of State, both
bodies agreed to a modified scheme under which the trade was con-
tinued by a "United Joint Stock” for five years, much on the previous
lines. The attempt to colonise Assada proved an utter failure, and the
chief outcome of the new stock was the establishment of trade at
Hugli and other inland places in Bengal. In 1653-4 (as already
noted) the position of the English in the East was severely shaken by
the successes of the Dutch in the war that had broken out between
the two nations; and when the five years for which the United Joint
Stock had undertaken to send out ships came to an end, it was found
impossible, in the disturbed state of England, to raise further capital.
Private merchants took advantage of the situation to dispatch a
considerable number of ships and, although the Company did not
altogether cease its operations, they were on a much diminished scale.
The retrenchments made in consequence on the eastern side of India
have been already noted; in the Moghul's dominions Agra and other
inland stations were ordered to be abandoned; and English trade
was practically confined to a few seaports. Such was the state of things
when the grant of a fresh exclusive charter by Cromwell in 1657 put
new life into the Company and enabled an effective trading stock to
be raised.
The commerce of the English in India, though temporarily at a
low ebb, was by this time firmly established; and it may be well to
examine briefly its general character and the conditions under which
it was carried on. When the English commenced to trade in the
dominions of the Moghul, they found there a voluminous and valuable
commerce and a well-developed mercantile system. Expert mer.
chants, often commanding large supplies of capital, were established
in all the principal centres; money could be remitted readily between
1 For a detailed account see Foster, "English commerce with India 1608-58,"
in the Journal of the Royal Society of Arts, 19 April, 1918.


## p. 92 (#120) #############################################

92
THE EAST INDIA COMPANY, 1600-1740
the chief towns by means of bills of exchange; and marine insurance
is mentioned as early as 1622. The chief trend of trade was westwards,
either by land through Kandahar to Persia or else by sea through the
ports of Gujarat and Sind to the Red Sea or the Persian Gulf; but
there was also, until the Dutch monopolised the traffic, a considerable
commerce between. Surat and Achin and other parts of the Eastern
Archipelago. In Western and Northern India the chief areas with
which the Company's servants at first concerned themselves were
Hindustan proper (the valleys of the Jumna and of the upper Ganges)
and the fertile province of Gujarat. Bengal and Bihar were too remote
from the headquarters at Surat; and although in 1620 some factors
were dispatched from Agra to open up trade at Patna, in order to
procure the local piece-goods and Bengal raw silk, the experiment
proved a failure. The factors were withdrawn in the following year
and (as we have seen) it was not until a later period that English
trade was established in Bengal, this time by way of the Coromandel
Coast. Of the Indian products purchased in the earlier years for the
European markets the most important were indigo and cotton goods;
though from 1625 onwards we note a growing demand in England
for saltpetre and Malabar pepper. The indigo was procured mainly
from Sarkhej (near Ahmadabad) or from Biana (near Agra), and its
extensive use in Europe for dyeing purposes made it at first the most
valuable article of the Company's trade. Soon, however, cotton goods,
both the plain and the patterned, came into favour at home, the
former displacing for household use the more expensive linens
imported from Holland and Germany, the latter finding great accept-
ance for hangings and other decorative purposes; insomuch that in
1624 the governor of the Company declared that England was saved
annually a quarter of a million sterling by the substitution of Indian
calicoes for foreign linens. Of miscellaneous exports to England may
be mentioned cotton yarn (largely used for fustians and other cloth
manufactures), drugs, lac (for dyeing), carpets, and (later) sugar.
Raw silk formed also an important item in the lading of the earlier
ships; this, however, was almost entirely of Persian origin. The chief
commodities brought from England were broadcloth, which was
chiefly in demand at court; tin and lead, though after a time the
competition of supplies from the Malay Peninsula made it unprofit-
able to import the former; quicksilver and vermilion; Mediterranean
coral, for which there was a constant demand; ivory, of African
origin; tapestries; gold and silver embroideries; and other articles of
European manufacture. In the main, however, the factors were
forced to rely, for the purchase of Indian commodities, on the impor-
tation of bullion or specie, the favourite form of the latter being
the Spanish rial of eight. Most of the silver thus imported was at
once coined into rupees at the Indian mints. Gold. was occasionally
brought out, either in bar or in coin, but not at first to any great
extent. Subsidiary supplies were obtained from the Far East, and


## p. 93 (#121) #############################################

THE COMPANY'S TRADE
93
later from Guinea (in the form of gold dust). In providing funds for
lading the returning ships, the English merchants were helped by the
profits made on intermediate voyages in Eastern waters, especially
to Mokha and Gombroon; as also by the sums earned by carrying
native merchants and their goods to and from those ports. Nor did
they hesitate to borrow freely from Indian merchants and bankers to
fill their ships, though these loans went far to reduce the profits on
the
trade, owing to the high rates of interest prevailing. The volume
of English trade with India was by no means large. In the first fifteen
years (1615-29) twenty-seven vessels, averaging rather more than
500 tons apiece, were dispatched from Surat to London; while in the
next fifteen (1630-44) the number was only twenty-one. The cost of
the cargoes (which generally included goods from Persia and Bantam)
is only occasionally given, but it seems to have averaged during the
second of these two periods about £50,000 per annum. To this figure
must be added the value of the goods sent home from the Coromandel
Coast, though as regards this not even an estimate can be framed.
Obviously the commerce carried on by the English was only an in-
significant proportion of the total seaborne trade of India; and it was
not by any means equal to that of the Dutch in the same region. The
Company's servants had many difficulties to contend with, even when
the land was at peace and no extraordinary obstacle presented itself,
such as the attempt made in 1633 to constitute the indigo trade a
royal monopoly, or the embargo laid thirteen years later by Prince
Aurangzib upon the sale of saltpetre to the English, for fear lest, as
an, ingredient of gunpowder, it might be used against Muslims. In
the purchase of goods the factors were hampered by the intricacies
of the monetary system and the varying weights and measures; and
these difficulties, combined with their slight knowledge of the various
languages--in which few of them attained much proficiency-
necessitated the employment of brokers, who fleeced both sides
impartially. Again, the producers of the goods were intensely con-
servative, and when the Company wrote for piece-goods of special
sizes or indigo unmixed with sand, great trouble was experienced in
persuading the weavers or indigo-makers to depart from their cus-
tomary practices. There were also difficulties of transport. Goods
from up-country had to be carried down to the port either in ox-carts
or on the backs of camels or oxen. The roads were mostly mere
tracks, impassable in bad weather, and often infested with robbers.
The exaction of petty duties on the way, in spite of imperial farmans,
proved a constant source of dispute; while in the cities, and especially
at the ports, the officials were apt to be overbearing and extortionate.
It is true that the European trader suffered no worse treatment than
the Hindu or the Armenian; indeed, his position was often strong
enough to enable him to resist with success. It was usually easy to
make friends at court by the presentation of Western curiosities, and
the mere threat of appealing to the emperor was sometimes sufficient


## p. 94 (#122) #############################################

94
THE EAST INDIA COMPANY, 1600-1740
to render the local authorities compliant. Above all, the knowledge
that the English and Dutch were mighty at sea and could easily stop
the commerce of a port—thereby injuring the customs revenue-
formed a powerful restraint. As President Blackman explained in
1652 to the governor of a Malabar port that was undergoing discipli-
nary treatment in this way, “God hath given us power on the sea
that, if wee bee wronged on the land, wee may right ourselves there”;
and although such action involved serious risks, neither the English
nor the Dutch hesitated to take it when more peaceable methods
failed.
One great hindrance to the Company's trade, both outwards and
homewards, was the competition of goods brought out or taken home
by its own servants. For some time attempts were made to suppress
this private trade by requiring the factors and ships' officers to sign
penalty bonds and by confiscating their goods when they offended;
later on, lists were drawn up of commodities in which the Company's
employees might legitimately speculate, while leaving to their masters
the trade in the more valuable items. But all was in vain. The articles
which the Company wished to engross were naturally those most in
demand and yielding the highest profits. Men went to the East to
make money-for their meagre wages offered no temptation-and
though some refrained from trenching upon their employers' mono-
polies, most had no scruple in taking advantage of every opportunity
that presented itself. Capital was easily procured from friends at
home or from Indian merchants, who were only too glad to share
thus in the benefits of the privileges accorded to English goods, includ-
ing favourable terms of freight and freedom from customs at Gom-
broon, Fort St George, Masulipatam, and elsewhere. At last, finding
it hopeless to suppress such competition in the port-to-port trade
(which the factors could carry on, if necessary, under the names of
Indian merchants), the Company in 1661 resolved to confine itself to
the direct trade between England and India. Another step in the
same direction was taken in 1664, when the trade, outwards and home-
wards, in jewels, musk, civet, ambergris, etc. , was thrown open,
subject to registration and the payment of a small percentage for
"permission and freight”. After this the Company's efforts were
mainly devoted to preventing at home the exportation or importation
of forbidden goods, seizing them when found and inflicting penalties
on those responsible. Even then its success was by no means great;
and at home, as in the East, its profits suffered considerably by this
illicit traffic.
Cromwell's hesitation to grant a fresh monopoly of Eastern trade
on the lines of previous charters was largely due to an acute difference
of opinion amongst those concerned as to the advisability of continuing
the joint-stock system. A strong party, including several merchants
whose influence with the Protector was considerable, preferred the
"regulated system” followed by the Levant and certain other com-


## p. 95 (#123) #############################################

CROMWELL'S CHARTER
95
panies, permitting members to trade independently. The controversy
lasted long enough to give the system of more or less open trade a
trial; for since the United Joint Stock virtually ceased to send out
capital after 1654, while the charter restrictions were quite inopera-
tive, for about three years the markets of the East were free to all
comers. As we have seen, advantage was taken of this by a number
of merchants, including many members of the Company, to dispatch
ships to the Indies; but the results were far from satisfactory to those
responsible for the ventures. In India itself there ensued a ruinous
competition among their agents, both in the sale of their cargoes and
in the purchase of goods for the return. voyage; while at home the
rush to dispose of the latter produced a disheartening drop in prices.
The merchants concerned soon realised that after all there were
advantages in the old system, under which such competition was
eliminated. A further sobering influence was exerted by the con-
tinued successes of the Dutch and their evident intention of ousting
the Portuguese from their remaining possessions in India. The most
likely method of countering such schemes seemed to be to oppose to
them a united front such as could scarcely be expected from a
"regulated” company; and it may be added that the spectacle of
the prosperity attained by the Dutch East India Company-itself
working by means of a joint stock-probably went far to remove the
prejudice which had been inspired against the system by the poor
results secured by the English Company in recent years. It is there-
fore not surprising to find that by February, 1657, the principal
merchants engaged in the trade, including many of the chief "inter-
lopers", were agreed in desiring the continuance of the joint-stock
system. At the same time the existing Company resolved to endure
no further delay, but to dispose by auction of all its rights and privi-
leges and to withdraw from the trade. This quickly produced a
decision on the part of the Protector and his advisers to grant a charter
substantially on the lines of those of Elizabeth and James I; and on
19 October, 1657, this document passed the great seal. ' Thereupon
a new joint stock of nearly £740,000 was subscribed, though as a
matter of fact only one-half of the capital was ever called up. The
now stock, it is important to note, was to be a permanent one, with
the proviso that periodical valuations (the first being fixed for 1664)
were to be made, when shareholders were to be allowed to withdraw
their proportionate shares of the assets. For the first time, therefore,
the Company acquired a fixed capital, in lieu of successive stocks
raised and distributed at short intervals.
Cromwell's charter of course lost its validity upon the restoration
of the monarchy. King Charles, however, made no difficulty about
granting a fresh one (3 April, 1661), which repeated with certain
.
1 For its terms see Court Minutes, 1655-59, p. xvii.


## p. 96 (#124) #############################################

96
THE EAST INDIA COMPANY, 1600-1740
modifications and additions the grant of 1609. Power was given to
the Company to seize and send home interlopers : to wage war and
conclude peace with non-Christian princes : and to appoint governors,
who, in conjunction with their councils, were to exercise civil and
criminal jurisdiction at the various settlements. Under this authority
the agent at Madras was in 1666 created governor of Fort St George;
while on the acquisition of Bombay the Company in like manner
appointed the Surat president to be governor of that island. In view
of later controversies, it is worth noting that the Company begge
the king to get the new charter confirmed by parliament. Some steps
were taken in that direction, but nothing was achieved. Similarly,
in the case of Cromwell's charter, the Protector had promised to
obtain parliamentary sanction for the Company's privileges, but had
failed to do so.
The East India Company now entered upon a period of great
commercial prosperity, due chiefly to the increasing demand for
calicoes, tea, and coffee.