CHAP. 3.

1655.

BOOK I. stock, now raged in the Company's affairs. There were no less than three parties who set up claims to the Island of Polaroon, and to the compensation money which had been obtained from the Dutch; the respective proprietors of the third, fourth, and united joint-stocks. The proprietors of the third joint-stock claimed the whole, as the fourth jointstock and the united stock were not in existence at the time when the debt obtained from the Dutch was incurred; and they prayed that the money might be lodged in safe and responsible hands, till government should determine the question. The owners of the two other stocks demanded that the money should be divided into three equal shares, for the three several stocks, and that they should all have equal rights to the Island of Polaroon.

Five arbitrators, to whom the dispute was referred, were chosen by the Council of State. In the mean time Cromwell proposed to borrow the 85,000l. which had been paid by the Dutch, and which could not be employed till adjudged to whom it belonged.

The Directors, however, had expected the fingering of the money, and they advanced reasons why it should be immediately placed in their hands. The pecuniary distresses of the Company were great: The different stocks were 50,000l. in debt; and many of the proprietors were in difficult circumstances: From gratitude to the Protector, however, they would make exertions to spare him 50,000l. to be repaid in eighteen months by instalments, provided the remaining 35,000l. were immediately assigned them, to pay their most pressing debts, and make a dividend to the Proprietors. It thus appears, that these Directors wanted to forestall the

1 Bruce, i. 503, 504.

decision of the question; and to distribute the money BOOK I. at their own pleasure, before it was known to whom CHAP. 3, it belonged. At the same time, it is matter of 1655. curious uncertainty, who these Directors were, whom they represented, by what set or sets of Proprietors they were chosen, or to whom they were responsible.

While this dispute was yet undecided, the Merchant Adventurers, or Proprietors of the united stock, obtained a commission from the Protector to fit out four ships for the Indian trade, under the management of a committee.1 We are made acquainted upon this occasion with a very interesting fact. The news of this event being carried to Holland, it was interpreted, and understood, by the Dutch, as being an abolition of the exclusive charter, and the adoption of the new measure of a free and open trade. The interests of the Dutch Company made them see, in this supposed revolution, consequences very different from those which the interests of the English Directors made them behold or pretend that they beheld in it. Instead of rejoicing at the loss of a joint-stock in England, as they ought to have done, if by joint-stock alone the trade of their rivals could be successfully carried on; they were filled with dismay at the prospect of freedom, as likely to produce a trade with which competition on their part would be vain.2

Meanwhile the Company, as well as the Merchant Adventurers, were employed in the equipment of a

Bruce, i. 508.

2 Thurloe's State Papers, iii. 80. Anderson says, "The merchants of Amsterdam having heard that the Lord Protector would dissolve the East India Company at London, and declare the navigation and commerce to the Indies to be free and open, were greatly alarmed, considering such a measure as ruinous to their own East India Compauy." Anderson's History of Commerce, in Macpherson's Annals, ii. 459. See Bruce, i. 518.

СНАР. 3.

BOOK I. fleet. The petition of the Company to the Protector for leave to export bullion, specified the sum of 1656. 15,000l.: and the fleet consisted of three ships. They continued to press the government for a decision in favour of their exclusive privileges; and in a petition which they presented in October, 1656, affirmed, that the great number of ships sent by individuals under licenses, had raised the price of India goods from 40 to 50 per cent. and reduced that of English commodities in the same proportion. The Council resolved at last to come to a decision. After some inquiry, they gave it as their advice to the Protector to continue the exclusive trade and the joint-stock; and a committee of the Council was in consequence appointed, to consider the terms of a charter.1

While the want of funds almost annihilated the operations of the Company's agents in every part of India; and while they complained that the competition of the ships of the Merchant Adventurers rendered it, as usual, impracticable for them to trade with a profit in the markets of India, the Dutch pursued their advantages against the Portuguese. They had acquired possession of the island of Ceylon, and in the year 1656-57, blockaded the port of Goa, after which they meditated an attack upon the small island of Diu, which commanded the entrance into the harbour of Swally. From the success of these plans they expected a complete command of the navigation on that side of India, and the power of imposing on the English trade duties under which it would be unable to stand.2

Coalition with the Merchant-Adventurers.

79

CHAP. IV.

From the Coalition between the Company and the Merchant Adventurers, till the Project for a new and a rival East India Company.

CHAP. 4.

1658.

AFTER the decision of the Council of State in favour BOOK I. of the joint-stock scheme of trading to India, the Company and the Merchant Adventurers effected a coalition. On the strength of this union a new subscription, in 1657-58, was opened, and filled up to the amount of 786,000l.1 Whether the expected charter had been actually received is not ascertained.

The first operation of the new body of subscribers was the very necessary one of forming an adjustment with the owners of the preceding funds. A negotiation was opened for obtaining the transfer of the factories, establishments, and privileges in India. After the lofty terms in which the Directors had always spoken of these privileges and possessions, when placing them in the list of reasons for opposing an open trade, we are apt to be surprised at the smallness of the sum which, after all, and "though situated in the dominions of fourteen different sovereigns," they were found to be worth. They were made over in full right for 20,000l., to be paid in two instalments. The ships, merchandise in store, and other trading commodities of the preceding adventurers were taken by the new subscribers at a price; and it was agreed that the sharers in the former trade, who on that account had property in the Indies, should

1 Bruce, i. 529.

1659.

BOOK I. not traffic on a separate fund, but, after a specified CHAP. 4. term, should carry the amount of such property to the account of the new stock. There was, in this manner, only one stock now in the hands of the Directors, and they had one distinct interest to pursue a prodigious improvement on the preceding confusion and embarrassment, when several stocks were managed, and as many contending interests pursued,

at once.

Some new regulations were adopted for the conduct of affairs. The whole of the factories and presidencies were rendered subordinate to the President and Council at Surat. The presidencies, however, at Fort St. George and at Bantam were continued; the factories and agencies on the Coromandel coast and in Bengal being made dependent on the former, and those in the southern islands on the latter.2

As heavy complaints had been made of trade carried on, for their own account, by the agents and servants of the Company, who not only acted as the rivals, but neglected and betrayed the interests, of their masters, it was prohibited, and, in compensation, additional salaries allowed.3

After these preliminary proceedings, the first fleet was dispatched. It consisted of five ships; one for Madras carrying 15,500/. in bullion; one for Bengal; and three for Surat, Persia, and Bantam. The following year, that is the season 1658-59, one ship was consigned to Surat, one to Fort St. George, and two to Bantam. The latter were directed to touch at Fort St. George to obtain coast clothes for the islands, and to return to Bengal and Fort St. George to take in Bengal and Coromandel goods for Europe.