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ence from the common people,' the mayor is to ' always have
The charter of 1687 was the last of the Stuart charters Comaffecting the East India Company. The constitutional pany's
of 1689. history of the Company after the Revolution of 1688 may be appropriately ushered in by a reference to the resolution which was passed by them in that year.
* The increase of our revenue is the subject of our care as much as our trade; 'tis that must maintain our force when twenty accidents may interrupt our trade; 'tis that must make us a nation in India ; without that we are but a great number of interlopers, united by His Majesty's royal charter, fit only to trade where nobody of power thinks it their interest to prevent us; and upon this account it is that the wise Dutch, in all their general advices that we have seen, write ten paragraphs concerning their government, their civil and military policy, warfare, and the increase of their revenue, for one paragraph they write concerning trade.'
1 Umbrellas and parasols,
This famous resolution, which was doubtless inspired, if not penned, by Sir Josiah Child, announces in unmistakable terms the determination of the Company to guard their commercial supremacy on the basis of their territorial sove
reignty and foreshadows the annexations of the next century. Con
The Revolution of 1688 dealt a severe blow to the policy troversies after
of Sir Josiah Child, and gave proportionate encouragement Revolu
to his rivals. They organized themselves in an association tion of 1688.
which was popularly known as the New Company, and commenced an active war against the Old Company both in the City and in Parliament. The contending parties presented petitions to the Parliament of 1691, and the House of Commons passed two resolutions, first, that the trade of the East Indies was beneficial to the nation, and secondly, that the trade with the East Indies would be best carried on by a joint-stock company possessed of extensive privileges. The practical question, therefore, was, not whether the trade to the East Indies should be abolished, or should be thrown open, but whether the monopoly of the trade should be left in the hands of Sir Josiah Child and his handful of supporters. On this question the majority of the Commons wished to effect a compromise—to retain the Old Company, but to remodel it and to incorporate it with the New Company. Resolutions were accordingly carried for increasing the capital of the Old Company, and for limiting the amount of the stock which might be held by a single proprietor. A Bill based on these resolutions was introduced and read a second time, but was dropped in consequence of the refusal of Child to accept the terms offered to him. Thereupon the House of Commons requested the king to give the Old Company the three years' warning in pursuance of which their privileges might be determined.
Two years of controversy followed. The situation of the Old Company was critical. By inadvertently omitting to pay a tax which had been recently imposed on joint-stock companies, they had forfeited their charter and might at
any time find themselves deprived of their privileges without any notice at all. At length, by means of profuse bribes, Child obtained an order requiring the Attorney-General to draw up a charter regranting to the Old Company its former privileges, but only on the condition that the Company should submit to further regulations substantially in accordance with those sanctioned by the House of Commons in 1691. However, even these terms were considered insufficient by the opponents of the Company, who now raised the constitutional question whether the Crown could grant a monopoly of trade without the authority of Parliament !. This question, having been argued before the Privy Council, was finally decided in favour of the Company, and an order was passed that the charter should be sealed.
Accordingly the charter of October 7, 1693, confirms the Charters former charter of the Company, but is expressed to be re- and 1694.
of 1693 vocable in the event of the Company failing to submit to such further regulations as might be imposed on them within a year. These regulations were embodied in two supplemental charters dated November 11, 1693, and September 28, 1694. By the first of these charters the capital of the Company was increased by the addition of £744,000. No person was to subscribe more than £10,000. Each subscriber was to have one vote for each £1,000 stock held by him, up to £10,000 but no more. The governor and deputy governor were to be qualified by holding £4,000 stock, and each committee by holding £1,000 stock. The dividends were to be made in money alone. Books were to be kept for recording transfers of stock, and were to be open to public inspection. The joint stock was to continue for twenty-one years and no longer.
The charter of 1694 provided that the governor and deputy governor were not to continue in office for more than two
The question had been previously raised in the great case of The East India Company v. Sandys (1683-85), in which the Company brought an action against Mr. Sandys for trading to the East Indies without a licence, and the Lord Chief Justice (Jeffreys) gave judgement for the plaintiffs. See the report in 10 State Trials, 371.
years, that eight new committees were to be chosen each year, and that a general court must be called within eight days on request by six members holding £1,000 stock each. The three charters were to be revocable after three years' warning, if not found profitable to the realm.
By a charter of 1698 the provisions as to voting powers and qualification were modified. The qualification for a single vote was reduced to £500, and no single member could give more than five votes. The qualification for being a committee
was raised to £2,000. The affair In the meantime, however, the validity of the monopoly of the Redbridge renewed by the charter of 1693 had been successfully assailed. and its results.
Immediately after obtaining a renewal of their charter the directors used their powers to effect the detention of a ship called the Redbridge, which was lying in the Thames and was believed to be bound for countries beyond the Cape of Good Hope. The legality of the detention was questioned, and the matter was brought up in Parliament. And on January II, 1694, the House of Commons passed a resolution that all subjects of England have equal rights to trade to the East Indies unless prohibited by Act of Parliament.'
'It has ever since been held,' says Macaulay, 'to be the sound doctrine that no power but that of the whole legislature can give to any person or to any society an exclusive privilege of trading to any part of the world. It is true that the trade to the East Indies, though theoretically thrown open by this resolution, remained practically closed. The Company's agents in the East Indies were instructed to pay no regard to the resolutions of the House of Commons, and to show no mercy to interlopers. But the constitutional point was finally settled. The question whether the trading privileges of the East India Company should be continued was removed from the council chamber to Parliament, and the period of control by Act of Parliament over the affairs of the Company began.
The first Act of Parliament for regulating the trade to
the East Indies was passed in 1698. The New Company Incorporahad continued their attacks on the monopoly of the Old English Company, a monopoly which had now been declared illegal, Company. and they found a powerful champion in Montagu, the Chancellor of the Exchequer. The Old Company offered, in return for a monopoly secured by law, a loan of £700,000 to the State. But Montagu wanted more money than the Old Company could advance. He also wanted to set up a new company constituted in accordance with the views of his adherents. Unfortunately these adherents were divided in their views. Most of them were in favour of a joint-stock company. But some preferred a regulated company after the model of the Levant Company. The plan which Montagu ultimately devised was extremely intricate, but its general features cannot be more clearly described than in the language of Macaulay: 'He wanted two millions to extricate the State from its financial embarrassments. That sum he proposed to raise by a loan at 8 per cent. The lenders might be either individuals or corporations, but they were all, individuals and corporations, to be united in a new corporation, which was to be called the General Society. Every member of the General Society, whether individual or corporation, might trade separately with India to an extent not exceeding the amount which that member had advanced to the Government. But all the members or any of them might, if they so thought fit, give up the privilege of trading separately, and unite themselves under a royal Charter for the purpose of trading in common. Thus the General Society was, by its original constitution, a regulated company ; but it was provided that either the whole Society or any part of it might become a joint-stock company.'
This arrangement was embodied in an Act and two char. ters. The Act (9 & 10 Will. III, c. 44) authorized the Crown to borrow two millions on the security of taxes on salt, and stamped vellum, parchment, and paper, and to incorporate the subscribers to the loan by the cumbrous name of the