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FROM THE ESTABLISHMENT, ON LEGISLATIVE AUTHORITY,
OF ONE EXCLUSIVE COMPANY, IN THE YEAR 1708, TILL
The Constitution of the East India Company, its practical Arrangements for the Conduct of Business, and Transactions till the Conclusion of the war with France by the Treaty of Aix-la-Chapelle.
When the competitors for Indian commerce were BOOK IV united into one corporate body, and the privilege of exclusive trade was founded on legislative authority, the business of the East India Company became regular and uniform. Their capital, composed of the shares of the subscribers, was a fixed and definite sum: Of the modes of dealing, adapted to the nature of the business, little information remained to be acquired: Their proceedings were reduced to an established routine, or a series of operations periodi
BOOK IV cally recurring : A general description, therefore,
of the plan upon which the Company conducted themselves, and a statement of its principal results, appear to comprehend every thing which falls within the design of a history of that commercial body, during a period of several years.
When a number of individuals unite themselves in any common interest, reason suggests, that they themselves should manage as much as it is convenient for them to manage; and that they should make choice of persons to execute for them such parts of the business as cannot be conveniently transacted by themselves.
It was upon this principle, that the adventurers in the trade to India originally framed the constitution of their Company. They met in assemblies, which were called Courts of Proprietors, and transacted certain parts of the common business; And they chose a certain number of persons belonging to their own body, and who were called Committees, to manage for them other parts of the business, which they could not so well perform themselves. The whole of the managing business, therefore, or the whole of the government, was in the hands of,
1st. The Proprietors, assembled in general court;
2dly. The Committees, called afterwards the Directors, assembled in their special courts.
At the time of the award of the Earl of Godolphin, power was distributed between these assemblies according to the following plan:
To have a vote in the Court of Proprietors, that
Committees ; i. e. Persons to whom something is committed, or intrusted.
is, any share in its power, it was necessary to be the BOOK. IV owner of 5001. of the Company's stock: and no additional share, contrary to a more early regulation, gave any advantage, or more to any proprietor than a single vote.
The directors were twenty-four in number: No person was competent to be chosen as a Director who possessed less than 2,0001. of the Company's stock: And of these directors, one was Chairman, and another Deputy-Chairman, presiding in the Courts.
The Directors were chosen annually by the Proprietors in their General Court; and no Director could serve for more than a year, except by reelection.
Four Courts of Proprietors, or General Courts, were held regularly in each year, in the months of December, March, June, and September, respectively; the Directors might summon Courts at other times, as often as they saw cause, and were bound to summon Courts within ten days, upon a requisition signed by any nine of the Proprietors, qualified to vote.
The Courts of Directors, of whom thirteen were requisite to constitute a Court, were held by appointment of the Directors themselves, as often, and at such times and places, as they might deem expedient for the despatch of affairs.
According to this constitution, the supreme power was vested in the Court of Proprietors. In the first place they held the legislative power entire: All laws and regulations, all determinations of dividend, all
Letters Patent, 10 Will. III., Collection of Charters, &e,
Char. 1. grants of money, were made by the Court of Pro
prietors. To act under their ordinances, and manage the business of routine, was the department reserved for the Court of Directors. In the second place, the supreme power was secured to the Court of Proprietors, by the important power of displacing, annually, the
persons whom they chose to act in their behalf.
In this constitution, if the Court of Proprietors be regarded as representing the general body of the people, the Court of Directors as representing an aristocratical senate, and the Chairman as representing the sovereign, we have an image of the British constitution; a system in which the forms of the different species of government, the monarchical, aristocratical, and democratical, are mixed and combined.
In the constitution however of the East India Company, the power allotted to the democratical part was so great, that a small portion may seem to have been reserved to the other two. Not only were the sovereignty, and the aristocracy, both elective, but they were elected from year to year; that is, were in a state of complete dependence upon the democratical part. This was not all: no decrees, but those of the democracy, were binding, at least in the last resort; the aristocracy, therefore, and monarchy, were subordinate, and subject. Under the common impression of democratic ambition, irregularity, and violence, it might be concluded, that the democratic assembly would grasp at the whole of the power; would constrain and disturb the proceedings of the Chairmen and Directors; would deliberate with violence and animosity; and exhibit all the confusion,
precipitation, and imprudence, which are so commonly ascribed to the exercise of popular power.
The actual result is extremely different from what the common modes of reasoning incite common minds to infer. Notwithstanding the power which, by the theory of the constitution, was thus reserved to the popular parts of the system, all power has centred in the court of directors; and the government of the Company has been an oligarchy, in fact. So far from meddling too much, the Court of Proprietors have not attended to the common affairs even sufficiently for the business of inspection; and the known principles of human nature abundantly secured that unfortunate result. To watch, to scrutinize, to inquire, is labour, and labour is pain. To confide, to take for granted that all is well, is easy, is exempt from trouble, and, to the great mass of mankind, comparatively delightful. On all ordinary occasions, on all occasions which present not a powerful motive to action, the great mass of mankind are sure to be led by the soft and agreeable feeling. And if they who act have only sufficient prudence to avoid those occurrences which are calculated to rouse the people on account of whom they act, the people will allow them abundant
scope to manage the common concerns in a way conformable to their own liking and advantage. It is thus that all constitutions, however democratically formed, have a tendency to become oligarchical in practice. By the numerous body who constitute the democracy, the objects of ambition are beheld at so great a distance, and the competition for them is shared with so great a number, that in general they make but a feeble impression upon their minds; the