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General Society entitled to the advantages given by an Act of Parliament for advancing a sum not exceeding two millions for the service of the Crown of England.' The Act follows closely the lines of that by which; four years before, Montagu had established the Bank of England in consideration of a loan of £1,200,000. In each case the loan bears interest at the rate of 8 per cent., and is secured on the proceeds of a special tax or set of taxes. In each case the subscribers to the loan are incorporated and obtain special privileges. The system was an advance on that under which bodies of merchants had obtained their privileges by means of presents to the king or bribes to his ministers, and was destined to receive much development in the next generation. The plan of raising special loans on the security of special taxes has since been superseded by the National Debt and the Consolidated Fund. But the debt to the Bank of England still remains separate, and retains some of the features originally imprinted on it by the legislation of Montagu.
Of the charters granted under the Act of 1698, the first 1 incorporated the General Society as a regulated company, whilst the second 2 incorporated most of the subscribers to the General Society as a joint-stock company, under the name of 'The English Company trading to the East Indies.' The constitution of the English Company was formed on the same general lines as that of the Old or London Company, but the members of their governing body were called directors instead of 'committees.'
The New Company were given the exclusive privilege of trading to the East Indies, subject to a reservation of the concurrent rights of the Old Company until September 29, 1701. The New Company, like the Old Company, were authorized to make by-laws and ordinances, to appoint governors, with power to raise and train military forces, and to establish courts of judicature. They were also directed to maintain ministers of religion at their factories in India, and i Charter of September 3, 1698.
2 Charter of September 5, 1698.
to take a chaplain in every ship of 500 tons. The ministers were to learn the Portuguese language and to apply themselves to learn the native language of the country where they shall reside, the better to enable them to instruct the Gentoos that shall be the servants or slaves of the same Company or of their agents, in the Protestant religion.' Schoolmasters were also to be provided. It soon appeared that the Old Company had, to use a Union of
Old and modern phrase, 'captured' the New Company. They had
New Comsubscribed £315,000 towards the capital of two millions panies. authorized by the Act of 1698. They had thus acquired a material interest in their rivals' concern, and, at the same time, they were in possession of the field. They had the capital and plant indispensable for the East India trade, and they retained concurrent privileges of trading. They soon showed their strength by obtaining a private Act of Parliament (11 & 12 Will. III, c. 4) which continued them as a trading corporation until repayment of the whole loan of two millions.
The situation was impossible ; the privileges nominally obtained by the New Company were of no real value to them ; and a coalition between the two Companies was the only practicable solution of the difficulties which had been created by the Act and charters of 1698.
The coalition was effected in 1702, through the intervention of Lord Godolphin, and by means of an Indenture Tripartite to which Queen Anne and the two Companies were parties, and which embodied a scheme for equalizing the capital of the two Companies and for combining their stocks. The Old Company were to maintain their separate existence for seven years, but the trade of the two Companies was to be carried on jointly, in the name of the English Company, but for the common benefit of both, under the direction of twenty-four managers, twelve to be selected by each Company. At the end of the seven years the Old Company were to surrender their charters. The New or English
Company were to continue their trade in accordance with the provisions of the charter of 1698, but were to change their name for that of The United Company of Merchants of England trading to the East Indies.'
A deed of the same date, by which the “dead stock' of the two Companies was conveyed to trustees, contains an interesting catalogue of their Indian possessions at that time.
Difficulties arose in carrying out the arrangement of 1702, and it became necessary to apply for the assistance of Parliament, which was given on the usual terms. By an Act of 1707 1 the English Company were required to advance to the Crown a further loan of £1,200,000 without interest, a transaction which was equivalent to reducing the rate of interest on the total loan of £3,200,000 from 8 to 5 per cent. In consideration of this advance the exclusive privileges of the Company were continued to 1726, and Lord Godolphin was empowered to settle the differences still remaining between the London Company and the English Company. Lord Godolphin's Award was given in 1708, and in 1709 Queen Anne accepted a surrender of the London Company's charters and thus terminated their separate existence. The original charter of the New or English Company thus came to be, in point of law, the root of all the powers and privileges of the United Company, subject to the changes made by statute. Henceforth down to 1833 (see 3 & 4 Will. IV, c. 85, S. 111) the Company bear their new name of The United Company of Merchants of England trading to the East
Indies.' Period For constitutional purposes the half-century which followed between 1908 and the union of the two Companies may be passed over very 1765.
An Act of 1711 ’ provided that the privileges of the United Company were not to be determined by the repayment of the loan of two millions. The exclusive privileges of the United Company were 16 Anne, c. 71.
10 Anne, c. 35.
extended for further terms by Acts of 1730 1 and 1744 2. Extension
of ComThe price paid for the first extension was an advance to the pany's
charter. State of £200,000 without interest, and the reduction of the rate of interest on the previous loan from 5 per cent. to 4 per cent. By another Act of 1730 3 the security for the loan by the Company was transferred from the special taxes on which it had been previously charged to the aggregate fund,' the predecessor of the modern Consolidated Fund. The price of the second extension, which was to 1780, was a further loan of more than a million at 3 per cent. By an Act of 1750 + the interest on the previous loan of £3,200,000 was reduced, first to 31 per cent., and then to 3 per cent.
Successive Acts were passed for increasing the stringency Provisions of the provisions against interlopers and for penalizing any inter
against attempt to support the rival Ostend Company 6.
lopers. In 1726 a charter was granted establishing or reconstituting
3 Geo. II, c. 14.
17 Geo. II, c. 17. 3 Geo. II, c. 20.
23 Geo. II, c. 22. 1718, 5 Geo. I, c. 21 ; 1720, 7 Geo. I, Stat. I, c. 21 ; 1722, 9 Geo. I, c. 26; 1732, 5 Geo. II, c. 29. See the article on 'Interlopers’in the Dictionary of Political Economy. For the career of a typical interloper see the account of Thomas Pitt, afterwards Governor of Madras, and grandfather of the elder William Pitt, given in vol. iii. of Yule's edition of the Diary of William Hedges. The relations between interlopers and the East India Company in the preceding century are well illustrated by Skinner's case, which arose on a petition presented to Charles II soon after the Restoration. According to the statement signed by the counsel of Skinner there was a general liberty of trade to the East Indies in 1657 (under the Protectorate), and he in that year sent a trading ship there ; but the Company's agents at Bantam, under pretence of a debt due to the Company, seized his ship and goods, assaulted him in his warehouse at Jamba in the island of Sumatra, and dispossessed him of the warehouse and of a little island called Barella. After various ineffectual attempts by the Crown to induce the Company to pay compensation, the case was, in 1665, referred by the king in council to the twelve judges, with the question whether Skinner could have full relief in any court of law. The answer was that the king's ordinary courts of justice could give relief in respect of the wrong to person and goods, but not in respect of the house and island. The House of Lords then resolved to relieve Skinner, but these proceedings gave rise to a serious conflict between the House of Lords and the House of Commons. See Hargrave's Preface to Hale's Jurisdiction of the House of Lords, p. cv.
• Charter granted by the Emperor Charles VI in 1722, but withdrawn
Judicial municipalities at Madras, Bombay, and Calcutta, and setting charters of 1726 up or remodelling mayor's and other courts at each of these and 1753. places. At each place the mayor and aldermen were to
constitute a mayor's court with civil jurisdiction, subject to an appeal to the governor or president in council, and a further appeal in more important cases to the king in council. The mayor's court now also gave probates and exercised testamentary jurisdiction. The governor or president and the five seniors of the council were to be justices of the peace, and were to hold quarter sessions four times in the year, with jurisdiction over all offences except high treason. At the same time the Company were authorized, as in previous charters, to appoint generals and other military officers, with power to exercise the inhabitants in arms, to repel force by force, and to exercise martial law in time of war.
The capture of Madras by the French in 1746 having destroyed the continuity of the municipal corporation at that place, the charter of 1726 was surrendered and a fresh charter was granted in 1753.
The charter of 1753 expressly excepted from the jurisdiction of the mayor's court all suits and actions between the Indian natives only, and directed that these suits and actions should be determined among themselves, unless both parties submitted them to the determination of the mayor's courts. But, according to Mr. Morley, it does not appear that the native inhabitants of Bombay were ever actually exempted from the jurisdiction of the mayor's court, or that any peculiar laws were administered to them in that court 1.
The charters of 1726 and 1753 have an important bearing on the question as to the precise date at which the English criminal law was introduced at the presidency towns. This question is discussed by Sir James Stephen with reference to the legality of Nuncomar's conviction for forgery ; the point being whether the English statute of 1728 (2 Geo. II, c. 25) was or was not in force in Calcutta at the time of
Morley's Digest, Introduction, p. clxix.