The joint stock arrangement, as distinct from the separate voyages, which had been instituted in 1613 worked very well: and after the Restoration the practice of buying and selling shares became common, the system approximating to that of modern times. The Company’s ships were continuing to bring back much wealth to the shareholders, but again covetous desires had to be appeased. In the year 1649 the Commissioners of the Navy constrained the East India Company to lend them £4000. It was in the year 1654 that Cromwell, by means of his treaty with the Portuguese, obtained the right of English ships to trade with any Portuguese possessions in the East Indies. Now this meant a very handsome additional benefit to the East India Company’s ships. Cromwell was shrewd enough to know what he was about, and accordingly in the following year got his quid pro quo when he succeeded in borrowing £50,000 from the Company, seeing that the latter had gained so much from national successes; and a little later on in the same year obtained from the same source another £10,000 to pay Blake’s seamen, whose wages were in arrears. And this was not the last instance of the Company being fleeced by the State.

In the year 1640 permission had been obtained from the native authorities to build the first of the Company’s forts in India. This became known as Fort St George (Madras), and in the year 1658 the Madras settlement was raised to a presidency. In 1645 the Company had begun to establish factories in Bengal, so the ports for the East Indiamen were now becoming more numerous, and the area from which the cargoes could be obtained was being widely extended. The Portuguese, as we have seen, were now out of the running as regards the East. And as for the repeated collisions which the English had with the Dutch, the three Anglo-Dutch wars which had been long foreseen, as they were destined long to last, had given quite a new complexion to affairs in India, leaving the English East India Company in a position stronger than ever. One of the stipulations had been that the Dutch should indemnify the English merchants and factors in India with regard to the massacre at Amboyna, and the guilty parties therein concerned were to be punished. In 1664 the French East India Company had been formed, and ten years later the foundation of their settlement at Pondicherry was laid.

In the year 1681 the Company had developed their fleet to such an extent that they now owned about thirty-five ships, ranging in size from 775 to 100 tons. In customs alone the Company were paying £60,000 a year, and they were carrying out to India £60,000 or £70,000 worth of lead, tin, cloth and stuffs every year, bringing back raw silk, pepper and other goods of the East. By the year 1683 so profitable were the annual results of the Company’s trading that a £100 share would sell for £500. Before long the size of the ships just mentioned was to increase to 900 and even to 1300 tons, such was the demand for Indian products; and between the years 1682 and 1689 no fewer than sixteen East Indiamen varying in size from 900 to 1300 tons were constructed. All the East Indiamen were well armed, for even in the year 1677, when the Company owned from thirty to thirty-five ships of from 300 to 600 tons apiece, these vessels each mounted from forty to seventy guns.

It will be recollected that Bantam had been the first headquarters or chief factory whither the Company’s ships went for their trade. This continued until 1638, when Surat had developed so much, thanks to the concessions by the Great Mogul, that it replaced Bantam in pre-eminence. The last-mentioned factory, together with Fort St George in Madras, Hooghly in Bengal, and those establishments in Persia were all made subservient to Surat. A far-sighted person could have foreseen that all these scattered strongholds of trade might not improbably develop eventually into something very much more important politically. But it was Sir Josiah Child, the principal manager of the Company’s affairs at home, who was one of the first to project the forming of a territorial Empire in India.

We had reason to mention just now a ship which we described as being an interloper. The reader is well aware that in the first instance the charter granted to the English East India Company by Queen Elizabeth conveyed to them the exclusive privilege of trading to the East. This charter was renewed in the years 1609, 1657, 1661 and subsequently in other years. But such was the jealousy, such the covetousness which were aroused by the Company’s successful voyages that a number of interlopers, quite contrary to the terms of the charter, fitted out expeditions of their own. These were evidently successful, too, especially during the latter part of the reign of Charles II., for the number of these private adventurers increased considerably. The result, of course, was that the Company became exceedingly indignant and had to exert themselves to put an end to the trouble. But this, again, opened up the whole of the question as to whether the Company should continue to enjoy such a fine monopoly. There was a good deal of resentment against India being restricted to a favoured few. However the Government favoured the Company, for it had been found more than useful to the country in times of crisis, so again in the year 1693 it received its fresh charter.

But between the years 1694 and 1698 this Eastern trade practically was thrown open. And then the State happened to require a loan of £2,000,000. This was found by a newly formed company of associated merchants who had been very vigorous in opposing the East India Company’s privilege. And since this new company wanted only eight per cent. (not a high rate for those days) for their loan, they also received a charter. The result was that there were two companies trading to India and each with its own charter. The title of this fresh association was the New East India Company, and presently a kind of third company arose as an offshoot from this second one. All this competition had a most disastrous effect and brought both the old and new companies almost to ruin. Each company hated the other, while the public detested both most heartily. There were only two possibilities open. Either both companies must be wrecked or they must amalgamate. It was wisely decided to choose the latter. They therefore adjusted their differences, and in the year 1708 were amalgamated into one corporation, calling themselves “The United Company of Merchants of England Trading to the East Indies.” The capital was increased to £3,200,000. They were the means of aiding the Government by advancing to the latter £1,200,000 without interest, and the Government in turn agreed to extend the Company’s charter till the year 1726, with three years’ notice of termination. And it was subsequently extended till 1766.

During the last decade of the seventeenth century when hostilities existed between England and France the East India Company laid before the House of Lords an account of the great losses which the former had incurred at sea, owing to the lack of English cruisers. Those were no easy times for the ships bound either to or from the Orient, for, besides possible attacks from French men-of-war, the English Channel and approaches thereto were alive with privateers, to the great detriment of the Anglo-Indian trade. Some idea of the size and strength of the East India Company’s ships about this time may be gathered from the following list of craft which the French captured from them during the year 1694 alone:—

In later years one of the most valuable commodities which India was to produce and send to England in these ships was tea. The first importation by us was in the year 1667. Only a small amount, consisting of 100 lb., was sent, but it was not long before this was greatly exceeded. However, the early years of the eighteenth century were marked by a disappointment in the trade which the Company was doing. Although the latter’s ships were now trading also with China, yet the value of our exports to the East were less than £160,000 a year: and this, let it be remembered, included also military stores for the Company’s settlements in the East and at St Helena. The reason for this slump is easily explained. Every authority will admit that the finest tonic for trade is competition. Monopoly is death to enterprise, while a spirit of rivalry encourages progress. The East India Company was suffering from the decaying, deadening influence of its exclusive privilege and this went on till about the middle of the eighteenth century. The first half of that century is decadent, not merely with regard to India, but most things English. Art was at its lowest, manners were never less sincere, morals were corrupt, politics were little better. It almost seems as if England had lost the fair wind which had carried her through the Tudor times and then become gradually becalmed in the Stuart era till she rolled about with no progress, making only stern-way. And then, after a period of profitless existence, she seems to have picked up another breeze which has sent her along through the successful industrial age, the great wars, the Victorian and Edwardian years of prosperity up till to-day. The end of the eighteenth century is a period quite different from its first portion. And if it was so generally it could scarcely be different in regard to a corporation directed and managed by men of this period.

Just for a moment let us go back to that time when the East India Company decided it were best to close the Deptford yard and obtain their ships ready built. Now as time went on the hiring of ships to the Company for this Eastern trade led to great abuses. Officially the Company did no longer build their ships. But the Company’s directors used to build them privately and then hire them out to the Company, to the great personal gain of the directors. There were few other ships big enough or strong enough. The directors would know how many to build and to what extent prices could be demanded from the Company: and altogether they feathered their nests very nicely. This went on till the year 1708, when the old and new East India companies had become amalgamated. After this year the directors were prohibited by Act of Parliament from supplying ships to the Company.

Instead of the former corrupt arrangement, ships for the East India Company were to be hired in the future by open tender from the commander and two owners. But here again was a difficulty. Inasmuch as a special type of stalwart ship was required for this trade, the supply was small and in the hands of a ring called the Marine Interest. Therefore the Company was just about as badly off as before. And throughout the eighteenth century there was one continued contest between the East India Company and the shipbuilders, who did their level best to fleece the former as it had been fleeced by the State at different dates.

For the East India Company did not literally own their ships, even though they were called East Indiamen, flew the Company’s flag and made their regular voyages. A shipping company to-day buys and owns its own ships, but the East India Company had quite a different method. Up to the time when the old and new companies were amalgamated, in the year 1708, the owners and the Company were unfettered by any legislative provision. They could settle and adjust the points between themselves, and since the directors were part owners you may be sure there was little cause for dispute! But the by-law which came into force after the union of the two companies, prohibiting directors from being concerned in hiring ships to the Company, brought about a rather curious order of things. They were hired for so many voyages at so much a ton, the Company binding itself to freight a stipulated number of tons. These, by the way, were generally less than the official measurement. About the year 1700 the largest East Indiamen were under 500 tons, though their burthen was one-third greater.

Under the new arrangement the ships were to be taken up by the Company and their respective voyages agreed to in a Court of Directors by ballot. No tenders were to be accepted except such as had been made by the commander and two owners of each ship. Furthermore, the sale of the post as captain or any other office was forbidden in the Company’s ships. This latter was an important modification. The actual owner of the ship from whom the vessel was hired was termed the ship’s husband, and the practice had been for him to sell the command of the ship to a captain whom he would select. The expression in this case was to “sell the ship,” and a captain would sometimes pay as much as £8000 or £10,000 for the privilege of the appointment, because this position afforded him unique opportunities of making some handsome profits by the goods he brought home from the East in his ship as his own perquisites. To such an extent did this practice become established that the sale of a command became transferable property of the captain who had bought it. Whenever he died or resigned his heirs or he himself had the undoubted right to dispose of the billet to the highest bidder.

The reason for the abolition of this custom was that it was largely responsible for the high rates of freight which the Company was forced to pay. A compensation was paid to the captains in the service at the time of the abolition, but henceforth money could not buy the command of a ship for a man that was not adequately qualified for the post. Previously commands of ships had been held in some cases by men who possessed no right to such responsible tasks. Captain Eastwick, a master mariner of the eighteenth century, who has happily left behind his autobiography, relates among a number of interesting personal reminiscences that he married the niece of a man who was sole owner of one East Indiaman and part owner of two more of these ships. It was therefore suggested that Eastwick should enter the Honourable Company’s service, and a command was promised as soon as he was qualified. “This was a very tempting offer,” writes the old sailor, “as there was no service equal to it, or more difficult to get into, requiring great interest.”

“It was the practice of the Company in those days to charter ships from their owners; these vessels were especially built for the service, and were generally run for about four voyages, when they were held to be worn out, and their places taken by others built for the purpose. About thirty ships were required for the Company every year,” he states, and then goes on to say that “there was never any written engagement on the part of either the owners or the Company as to the continuance of these charters, but the custom of contract was so well established that both parties mutually relied upon it, and considered themselves bound by ties of honour to observe their implied customary engagements. When, therefore, a ship’s turn arrived to be employed, the owner, as a matter of form, submitted a tender in writing to be engaged, and proposed a particular person as captain, and this tender and proposal were always accepted. Thus the owners of these East Indiamen had everything in their own hands, and the favour of one of them was a fine thing to obtain, leading to appointments of great emolument.”

Some idea of the value of the East Indiaman captain’s appointment may be gathered from what Eastwick remarks under this head. “The captain of an East Indiaman, in addition to his pay and allowances, had the right of free outward freight to the extent of fifty tons, being only debarred from exporting certain articles, such as woollens, metals, and warlike stores. On the homeward voyage he was allotted twenty tons of free freight, each of thirty-two feet; but this tonnage was bound to consist of certain scheduled goods, and duties were payable thereon to the Company. As the rate of freight in those days was about £25 a ton, this privilege was a very valuable one. Of course much depended upon the skill and good management of the individual commander, the risk of the market, his knowledge of its requirements, and his own connections and interest to procure him a good profit. In addition to the free tonnage, he further enjoyed certain advantages in the carrying of passengers, for although the allowance of passage money outward and homeward was arbitrarily fixed by the Company, there being a certain number of passengers assigned to each vessel, and their fares duly determined, ranging from £95 for a subaltern and assistant-surgeon to £235 for a general officer, with from one and a half to three and a half tons of free baggage, exclusive of bedding and furniture for their cabins, yet it was possible for captains, by giving up their own apartments and accommodation, to make very considerable sums for themselves. In short, the gains to a prudent commander averaged from £4000 to £5000 a voyage, sometimes perhaps falling as low as £2000, but at others rising to £10,000 and £12,000. The time occupied from the period of a ship commencing receipt of her outward cargo to her being finally cleared of her homeward one was generally from fourteen to eighteen months, and three or four voyages assured any man a very handsome fortune.”

But though these commands were very expensive to purchase and highly remunerative when obtained, yet like the professional man to-day this high remuneration was preceded by years of bad pay. Before a man could obtain the command of an East Indiaman he must necessarily have made a voyage as fifth or sixth mate, then another voyage as third or fourth mate, and finally a third voyage as first or second mate. Now these junior officers in the Company’s service were quite unable to live on their pay “and it required a private capital of at least five hundred pounds to enable a man to arrive at the position of second mate, which was the lowest station wherein the pay and allowances afforded a maintenance.”

Whenever an Indiaman became worn out, or condemned, another ship was hired to replace her, and was said to be “built upon the bottom” of the first. The member or members of the Marine Interest who had built the first ship claimed the right of building the second, and so it went on. The result was that there arose what were known as “hereditary bottoms.” This went on till the year 1796, when some of the more public-spirited of the directors and shareholders of the East India Company put their heads together and determined to have this system entirely altered. It is indeed most extraordinary that the principle of monopoly seemed to pervade every feature of the Company’s transactions, from the broad, important principle of exclusive trade with the East down to the building of ships and the exclusive privileges of their commanders. In any other line of commerce the rate of freight found its own level, but in the East India Company there was but one bidder, and that also a monopoly. As the voyage was long and difficult and full of dangers, it was natural enough that good commanders should be desired. If an owner had a good captain, the Company were only too pleased to have him.

The passing of a by-law in the year 1773 prevented a ship from being engaged for the Company’s service for more than four voyages at a certain freight, this being calculated on an estimate of the building and the cost of fitting out a vessel with provisions and stores for a certain number of months. In the years 1780 and 1781 differences of opinion arose between the owners of the ships and the Court of Directors of the East India Company as to the rate of freight demanded. Owing to the hostilities with the Dutch, the rates of insurance and fitting out were stated to have caused an additional charge of £10, 14s. a ton. The contest between these two opposing sets of monopolists was always amusing to an outsider. The Company wanted the ships badly, for their very existence depended on their ability to carry cargoes between England and India. On the other hand the owners had built these ships especially for the Company’s service. They represented a great outlay of capital, and they were so big and efficient that there was practically no other trade in which they could be profitably employed. So, after a certain amount of mutual indignation had cooled off, and the usual haggling had proceeded, both parties were wont to come to a compromise and matters went on as before till the next dispute occurred.

Thus, for instance, in the year 1783 the Court of the East India Company’s directors fixed the rate of freight at £32 per ton for a ship of 750 tons. To this the owners replied that it was quite impossible to provide the ships under £35 a ton. The Court then showed their independence. They were resolved not to suffer the intolerable humiliation of being dictated to by these owners, so the Company advertised for tenders. Eventually twenty-eight ships were offered the Company by various private owners in respect of this advertisement. But after the Company’s inspecting officer had carefully examined these vessels he had to report that they were either foreign-built, or weak of structure, or else almost worn out: in any case quite unfitted for the long voyage to India and back. This placed the Company in rather a dilemma, and gave something of a shock to their independent spirit. Meanwhile the owners who had hitherto provided the Company with ships had taken alarm at thus throwing open the tender for competition. They were in serious danger of losing their own monopoly: so they began to climb down and offered the Company the rate of £33 a ton. And inasmuch as the latter required as much as 10,000 tons the two parties agreed on this last-mentioned price, more especially as the ships were known to be sound in every respect, having actually been built under the direction of the Company’s officials.