They had, at the same time, in the name of their treasurer, subscribed, very artfully, three hundred and fifteen thousand pounds into the stock of the new.By a negligence in the expression of the Act of Parliament which vested the East India trade in the subscribers to this loan of two millions, it did not appear evident that they were all obliged to unite into a joint stock.A few private traders, whose subscriptions amounted only to seven thousand two hundred pounds, insisted upon the privilege of trading separately upon their own stocks and at their own risk.The old East India Company had a right to a separate trade upon their old stock till 1701; and they had likewise, both before and after that period, a right, like that of other private traders, to a separate trade upon the three hundred and fifteen thousand pounds which they had subscribed into the stock of the new company.The competition of the two companies with the private traders, and with one another, is said to have well-nigh ruined both.Upon a subsequent occasion, in 1730, when a proposal was made to Parliament for putting the trade under the management of a regulated company, and thereby laying it in some measure open, the East India Company, in opposition to this proposal, represented in very strong terms what had been, at this time, the miserable effects, as they thought them, of this competition.In India, they said, it raised the price of goods so high that they were not worth the buying; and in England, by overstocking the market, it sunk their price so low that no profit could be made by them.That by a more plentiful supply, to the great advantage and conveniency of the public, it must have reduced, very much, the price of Indian goods in the English market, cannot well be doubted; but that it should have raised very much their price in the Indian market seems not very probable, as all the extraordinary demand which that competition could occasion must have been but as a drop of water in the immense ocean of Indian Commerce.The increase of demand, besides, though in the beginning it may sometimes raise the price of goods, never fails to lower it in the run.It encourages production, and thereby increases the competition of the producers, who, in order to undersell one another, have recourse to new divisions of labour and new improvements of art which might never otherwise have been thought of.The miserable effects of which the company complained were the cheapness of consumption and the encouragement given to production, precisely the two effects which it is the great business of political economy to promote.The competition, however, of which they gave this doleful account, had not been allowed to be of long continuance.In 1702, the two companies were, in some measure, united by an indenture tripartite, to which the queen was the third party; and in 1708, they were, by Act of Parliament, perfectly consolidated into one company by their present name of the The United Company of Merchants trading to the East Indies.Into this act it was thought worth while to insert a clause allowing the separate traders to continue their trade till Michaelmas 1711, but at the same time empowering the directors, upon three years' notice, to redeem their little capital of seven thousand two hundred pounds, and thereby to convert the whole stock of the company into a joint stock.By the same act, the capital of the company, in consequence of a new loan to government, was augmented from two millions to three millions two hundred thousand pounds.In 1743, the company advanced another million to government.But this million being raised, not by a call upon the proprietors, but by selling annuities and contracting bond-debts, it did not augment the stock upon which the proprietors could claim a dividend.It augmented, however, their trading stock, it being equally liable with the other three millions two hundred thousand pounds to the losses sustained, and debts contracted, by the company in prosecution of their mercantile projects.From 1708, or at least from 1711, this company, being delivered from all competitors, and fully established in the monopoly of the English commerce to the East Indies, carried on a successful trade, and from their profits made annually a moderate dividend to their proprietors.
During the French war, which began in 1741, the ambition of Mr.
Dupleix, the French governor of Pondicherry, involved them in the wars of the Carnatic, and in the politics of the Indian princes.
