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Title: Free Trade with India
An Enquiry
Author: Common Sense
Release Date: August 1, 2011 [EBook #36939]
Language: English
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THIRD EDITION.
_Free Trade with India._
AN ENQUIRY
INTO
THE TRUE STATE
OF
THE QUESTION AT ISSUE
BETWEEN
HIS MAJESTY'S MINISTERS,
THE HONORABLE
_THE EAST INDIA COMPANY_,
AND
THE PUBLIC AT LARGE,
ON
_THE JUSTICE AND POLICY_
OF
A FREE TRADE TO INDIA.
_By COMMON SENSE._
LONDON:
SOLD BY MESSRS. SHERWOOD, NEELY & JONES, PATERNOSTER-ROW.
1813.
[_Price One Shilling._]
_Printed by W. Glendinning, 25, Hatton Garden._
PREFACE
TO THE
_SECOND EDITION_.
The first edition of the following view of the question of _a Free
Trade_ to India having been sold off in the space of two days, is a
proof of the interest the public take in the question of a Free Trade;
my aim has been to clear the subject of all extraneous matter, and
present it in a plain and perspicuous manner to my readers, I have
neither addressed myself to their prejudices nor their passions, but
have endeavoured by a simple chain of reasoning to come at the truth,
which is my single object, for being totally unconnected with
Government, the East India Company, or mercantile concerns, I can have
no motive for disguising it. Soon after the publication of the first
edition on the 23d instant, I received the following letter, which will
perhaps be more acceptable than any thing further from me by way of
preface.
_Tavistock Place, Jan. 25, 1813._
DEAR SIR,
I have read your Common Sense, which is good sense, and so intelligible
that he who runs may read, and he who reads can scarcely fail to
understand.
I wish you had treated the subject of monopolies more copiously, and
informed your readers that in the early ages of commerce monopolies were
so extended, and the principle so abused, that they could not fail to
become obnoxious to all, and tradition has made the name hateful ever
since.
The kings of France, particularly Louis XIV. to raise money sold
_maitrices_, as they were called, or a sort of privilege for exercising
certain trades, and he at the same time limited the number, this
practice, together with the former monopolies not abolished, created a
general wish for _Freedom of Trade_ in France.[A] The sect of economists
were composed of republican philosophers, who proclaimed the grand
advantages to be derived from the entire Freedom of Trade, nor was it
then foreseen that under that pretext they were seeking _Liberty and
Equality_, which but a few years after deluged France with the blood of
her best sons, and had nearly ruined the world.
You mention Adam Smith, he was the disciple and admirer of the
economists; in a word he was what we denominate a democrat. As to entire
Freedom of Trade, who that ever thought on the subject could dream of
it. The corn laws, all bounties and drawbacks, the regulation even of
weights and measures, the assay of silver and gold, the interest of
money, &c. &c. &c. are directly in opposition to it, and prove the
economists were wrong. When the French revolution broke out, excepting
in weights and measures, every restraint was done away, but instead of
things improving thereby they grew visibly worse. A short history of
monopolies would be a very useful work, as it would clear up many
mistakes concerning them.
If Adam Smith were now alive he would probably have changed many of his
opinions, for he was a good, and honest, as well as an able man, but he
was deceived, not being initiated in the ulterior mysteries of M. Turgot
and his associates.
I am your's, &c.
FREE TRADE WITH INDIA.
_&c. &c._
The questions that have arisen of late respecting the East India
Company, or rather _the Commerce with India_, for that is the stake and
nothing less, are undoubtedly of great and serious importance. To enter
into all the ramifications of the subject would require volumes, the
mere bulk of which would startle most readers, and prevent their going
into the question, and induce them to take up with the opinions of one,
who appearing to have bestowed labour and attention on the subject,
shapes his results in the manner best suited to his purpose. This mode
of proceeding almost as old as the creation, and which will continue as
long as any man pays a deference to the judgment of another, is the
grand engine of designing men to bias the minds of the million who "hate
the labour of a serious thought," a specious appellation is enough for
the million to form a decision upon. I could instance many of these
senseless war-whoops from "_Liberty_ and _Equality_" to "_a Free
Trade_,"[B] were it necessary, or at all to the point.
This mode, however, is only objectionable in the hands of sinister
persons, for where the question at issue like the present, is very
intricate, some such mode must be had recourse to, in order to simplify
the question; I have therefore always considered that to take a popular
view of a subject, some great leading points must be seized, and from
these our judgment should be formed. This, if not the most accurate, is
at least the best mode, where what is called public feeling is to be
consulted.
To study the interests of Great Britain and of British merchants with
regard to the trade with India; to combine those with the territorial
possessions and the interests of the country at large; to investigate
also not only what would be the immediate consequences of a sudden
change, but what might be the ultimate effects, are all necessary, to
form that sort of judgment proper for the basis of action. That those
immediately concerned with the affairs of India have examined the
subject with great care and to good purpose, is abundantly evident from
the correspondence, speeches, and pamphlets, already before the public;
fraught as they are with many important facts, much acute observation,
and for the most part dictated by a desire to come, if possible, to the
best conclusion, all this is evident, yet it strikes me that something
useful remains behind.
Were the question simply between _Government_ and _the Company_, I
should not descant upon it; aware as I am that it has been canvassed by
the parties on every ground and in every shape; but there is a _third_
party who has interfered. The _merchants at large_ all over the kingdom,
the _shippers_ at _the out-ports_, and the manufacturers in the
interior, all urged on by what is termed the _public voice_, crying out
_A Free Trade_ and _No Monopoly_.
The trading towns, cities, and manufacturers do not pretend to have
considered the subject minutely; therefore, for aught they know to the
contrary, they are acting honestly and right; I will therefore address
them with that open frankness which such conduct deserves, and which
may lead to a conclusion very different from what was aimed at in the
last Session of Parliament.
For the sake of perspicuity I shall consider the subject under different
heads.
I. All monopolies are not wrong or injurious, as in some cases, we
are the best and cheapest served by a monopoly; this proved, it
follows that the India Company being possessed of a monopoly, does
not of itself argue that it should be withdrawn.
II. That the trade with India is far from being carried on, on the
principle of monopoly.
III. That any great change must be attended with great danger,
consequently we must not follow theory too readily, but pay great
respect to practice and experience.
IV. That the public at large have no reason to complain of the India
Company, as the articles brought by it have not increased in price
in proportion either to rums or sugars from the West Indies, where
there is no monopoly.
V. That the merchants of Liverpool, Hull, &c. and the manufacturers
in their endeavours to share the trade with London, are seeking
what would be injurious to them.
VI. That some errors were fallen into in the present Charter, which
may be advantageously corrected in the next, and a few slight
amendments may be attempted with safety, but no great change or
innovation.
* * * * *
I. _All monopolies are not wrong or injurious, as in some cases, we
are the best and cheapest served by a monopoly, this once proved, it
follows that the India Company being possessed of a monopoly, does
not of itself argue that it should be withdrawn._
The manner in which the public can be the best and cheapest supplied
with an article, is in itself the _best_, whether it be by a monopoly
or not. This is conceded even by Adam Smith, that great enemy to
monopolies; and he adduces in proof _the Post Office_, which is _one of
the strictest and most complete monopolies in existence_, yet the
business is done remarkably cheap and well, and with a degree of
security not otherwise attainable. It is infinitely more correct than
the carriage of small parcels, which is by open competition, and all
circumstances considered much cheaper.
The Bank of England is partly a monopoly, but by no means a complete
one, and it is better regulated and does business better than private
banks that issue notes, and which are so far its rivals.
Most of the concerns which have been brought to maturity in this country
have first flourished as _monopolies_ under the name of patents, and
indeed there are many reasons for highly praising those temporary
monopolies.[C]
The insurance companies are not exactly monopolies, neither are they
free traders in the true acceptation of the term, jointly or separately
taking insurances without legislative interference; and, without such
companies, it would be impracticable to carry on insurance so well as it
is done.
Navigations and water-works companies are monopolies in _principle_, but
they are necessary and advantageous.
From all these examples it follows, that _monopoly_ is not bad _merely_
as _monopoly_, and that its being _injurious_ depends on particular
circumstances, and therefore the India Company being a company of
monopolists, would not be a sufficient reason for its abolition, even
were it proved to be so, but this has not yet been done.
II. _That the Trade with India is far from being carried on, upon
the principle of monopoly._
From the first discovery of India, and the most ancient and authentic
records in existence, we learn that the trade to the East, which
produces whatever is most brilliant to the eye, most delicious to the
taste, or agreeable to the smell, has been the envy of nations. To
share in them, Solomon built Tadmor in the desert, (the Hebrew name, in
Greek, Palmyra); for this Alexander the Great destroyed Tyre, built
Alexandria and invaded India; for this trade Venice, Genoa, and
Constantinople contended above eight hundred years, when the discovery
of a passage by the Cape of Good Hope, wrested that commerce from the
ancient competitors, and the Dutch and Portuguese became the successors
of those inland merchants, who partly by caravans and partly by
navigation, had supplied Europe with the silks, the pearls, the
perfumes, and the precious stones of Asia from the earliest ages.
At so great a distance every power that traded found it necessary to
have an establishment. The Inhabitants have not laws sufficient to
protect the merchant, such as are necessary to a flourishing state of
commerce; hence arose settlements and conquests, of the moral justice of
which, I have nothing to say in this place; but being established, in
order to maintain them, it was necessary to have revenues, and to
continue certain privileges to the first traders, in order that they
might act as a body, and supply from the general stock what was for the
general advantage.
The great body of the public are perhaps not aware that so far from ever
intending to make a monopoly of the trade to India, there were in fact
_two_ companies _at one time_, and that experience proved it was
necessary to unite them into one, since which period, the public, as
well as the servants of the company have always been permitted to
participate on certain conditions.[D]
The above is a very brief, but true history of the trade to India; now
we will consider its present state as a _supposed monopoly_. As to the
trade to China in tea, and to certain other articles, and also to ships
there is monopoly, but if the trade to China were open to all the
irregularities of common trading vessels, we should be excluded from it
entirely in six months. The utmost circumspection and delicacy being
necessary in trading with that country, besides which, the commerce
demands such a large extent of capital and produces so little profit,
that it would not answer the purpose of individual merchants.
It is however sufficient for this article to say, that the company carry
out and bring home a great variety of articles, at a fixed, and indeed
at a very low rate of freight, such as no individual would do, or ever
attempted to do. That if any manufacturer or merchant can find out an
article that will sell in India, the company so far from preventing his
doing so, afford him facilities not otherwise attainable. No mistake can
in fact be greater than to say, with the uninformed and misled public,
that the East India Company is a monopoly, and injures trade by
preventing our merchants and manufacturers from having a scope for their
capital and industry. Thus then the clamour raised last year, in favour
of what is called a free trade, is entirely founded in error, but even
were it not so, we may fairly enquire.
III. _Whether any great Change would not be attended with great
Danger? If so we must not follow theory too readily, but pay great
respect to practice and experience._
The trade to India, in its present state, produces a great influx of
wealth to the country, though but a very moderate average profit to the
Proprietors as a trading company. We must, therefore, risk this, if we
consider that the French had an East India Company in 1789, and that by
way of being liberal and free, they did what an inconsiderate public
want us to do. They abolished the company, and let every one do as he
pleased, when the trade vanished like a dream. L'Orient, the seat of
French East India trade, fell, and no one rose in its place, neither
towns nor individuals, and the trade with India became extinct in
France. I will admit that such would not be precisely the case here,
still we ought to keep such an example in our minds to warn us against
the dangers of innovation; besides it is sufficient that our _present
state_ is good, for that is a sufficient reason to prevent our risking
it by too sudden a change. If we follow experience slowly, we may
perhaps make things better, and perhaps not; but at all events the error
will be small and may be repaired, we can come back to the point we
left. Whereas if we throw open the trade, or extend it even to a limited
number of out-ports, we may find it impossible to retrieve the error,
supposing it should turn out to be one. Softly and sure is a maxim which
could never be better applied than in the present instance; and if a
thousand sheets were to be written upon the expediency of the measure,
after what has happened in France, it is quite evident that to the same
conclusion we must come.
IV. _That the public at large have no reason to complain of the
India Company, as the articles brought by it have not increased in
price in proportion to either Rums or Sugars from the West Indies,
where there is no monopoly._
A single instance must convince the most sceptical. The East India
Company carry British manufactures out to India at about 40_s._ per
ton--a distance of seven thousand miles--a rate cheaper than the
carriage for five hundred miles in any other direction; therefore our
manufacturers have a good chance of selling their goods, owing to their
not being greatly enhanced by freight, and the servants of the Company
are allowed to traffic, so that every article adapted for the India
market can find its way there without difficulty, though the Company
itself may not enter into such details.
Those who wish to send goods to India are therefore highly indebted to
the Company; and as to the imports I will ask the public only one simple
question: Have East India commodities risen in price, notwithstanding
the heavy duties and increased expences of ship-building, and every
article relating thereto, so much as West India produce?
It is not necessary to dwell on this point; it is an evident fact that
the East India goods are far cheaper than they would be if brought over
by individual merchants, and the supply is more regular. If sales are
slow the Company keeps its goods at its own loss, with admirable good
nature, or at least with admirable _sang froid_, and it never creates an
artificial scarcity to enhance the price. The sales are by fair
competition and without favour; what would the public wish or desire
more? We come now to the next point.
V. _That the merchants of Liverpool, Hull, &c. and the
manufacturers, in their endeavour to share the trade with London,
are asking what would be injurious to themselves._
Having already shewn the danger of any great change, let us consider the
probability of advantage. When goods are shipped for such a remote
market, it is essentially necessary, previously to ascertain, that they
are wanted. Now when the exports are confined to one company, from its
accurate knowledge of trade, it can proportion the quantities of the
articles to the general demand for each; but if there are 500 merchants,
entirely ignorant of what each other are doing; or what is worse,
deceiving each other, in order to insure a better market for their own
shipment, they will necessarily send too much of some articles and not
enough of others; hence many will be ruined, for they cannot carry their
cargoes from port to port as in Europe or America: if the market is
over-stocked at the port they are bound to, there is no alternative, but
sacrificing the cargo for what it will fetch, or leaving it on hand to
await the chance of a future sale. On the return of the vessel, here the
merchant awakes from his golden dream, and finds himself on the verge of
bankruptcy, for the utmost limit of credit has expired--He is ruined!
As to our manufactures it is not probable that more would be consumed
than at present, for as we have already observed, the officers in the
Company's service carry out goods of all descriptions, and enter into
competition with each other, and that whatever can be sold they can and
do take out[E]; however if this reasoning be not satisfactory, there is
a very easy way of extending that species of traffic without any
danger.
At present none of our manufacturers lose by bad debts with India; were
the trade laid open, it would undoubtedly be worse than at Beunos Ayres,
when one call from Sir Home Popham took out from three to four millions
of British capital, (as a boatswain whistles his crew on deck,) to the
great loss and disappointment of some, and the absolute ruin of many
more. Now should the consumption of our goods not be increased; opening
the trade would manifestly injure all embarking in it; for the freight
and insurance could not be lower, but would be considerably higher than
at present.
As to a few individual towns asserting a claim to participate in the
commerce of India, it is a very singular and novel kind of claim: if I
apprehend aright, the nature of things attaches particular advantages to
particular places; I mean privileges which are _naturally_ local.
The court, for example, is held at London, which brings a great influx
of wealth to the metropolis. On this principle Edinburgh might put in a
claim to have the court some part of the year, and such claim might be
followed up by similar ones from the _keel-men_ of Newcastle, the
locksmiths of Walsal, and the tinmen of Cornwall. The thing is really
too ridiculous to think seriously upon. Some advantages are not only
local, but indivisible, and there is no injustice arising therefrom,
though with a little sophistry in certain cases it may be made to appear
injustice when it is really not so, which is the case in the present
instance, for it is in the revenue that the nation is a gainer by the
East India Company, and that must suffer considerably in the collection;
besides, all the docks, warehouses, and other establishments made here,
on the faith of the trade remaining as it is, must come into the
question.
If trade must be dispersed equally over a country, like spreading manure
on a field, it would be different; but there is an absurdity in the very
idea of spreading it equally, and justice has absolutely nothing to do
with the question; it is entirely a matter of policy and expediency.
VI. _That some errors were fallen into in the present charter, which
may be advantageously corrected in the next; and a few slight
amendments may be attempted with safety, but no great change or
innovation._
Making the dividends fixed, and independent of loss or gain, is wrong
and absurd. No effort can increase the dividend, no extravagance or
negligence can lessen it, and it cannot be concealed, that from such a
state of things it necessarily arises that patronage is the only bonus
on India stock. There is some connection either with ship-builders,
sail-makers, or the furnishers of stores, officers, secretaries, clerks,
or appointments abroad.
It is true the connection is circuitous, and the patronage difficult to
trace, but the fact resolves itself to this, that however it may be
divided amongst them, the whole of the patronage of places and profits,
at home and abroad, civil and military, is vested in the Directors and
Proprietors, and that patronage is of an amazing amount and extent.
In this enquiry I have endeavoured at impartiality, I write not to
serve the East India Company, but the country itself--Ministers want
the East India patronage, it was for this, Charles Fox made his
celebrated struggle; it is this golden prize that makes the present
ministers hazard every thing to obtain; it is not the flimsy
net-work mask of freedom of trade, the very worst pretext they
could have found, IT IS THE PATRONAGE OF INDIA they fight for, and
to obtain which, would break down every barrier, destroy every
establishment, and trample on every right.--_Let those then who
already think the influence of the Crown too great beware how they
throw into the scale_ THE PATRONAGE OF INDIA. Freedom of trade is
like the Trojan horse, from it will issue what will destroy the
freedom of the country.--There are many other errors in the
arrangements of the Company, but they are minor ones and not worth
detailing here. The grand question to be decided is, the opening of
the trade, which I have already treated.
In conclusion then, MONOPOLY IS NOT ALWAYS INJURIOUS.--THE EAST INDIA
COMPANY DOES NOT POSSESS A MONOPOLY.--GREAT CHANGES will be ATTENDED
WITH GREAT DANGER. _The public has no reason to complain, nor the
merchants any right to arrogate to themselves claims which do not
exist._ There would be great risk and no advantage in sharing the trade
with the out-ports; and lastly, that the faults in the present system
are entirely of a different nature, and may be easily and safely
amended.
FINIS.
Glendinning, Printer, Hatton Garden, London.
FOOTNOTES:
[A] My friend does not seem to be aware that Buonaparte has generalized
the principle; nearly all the tradesmen in Paris being compelled to
purchase those maitrices. The principle is in some degree known and
acted upon in England, as in the case of bankers, wine-merchants, &c.
&c. &c. and the _limited_ principle in the case of licences of public
houses, &c.
[B] It would be a curious piece of history to enumerate the instances in
which such watch-words have been used, by whom, for what purposes, and
what were the results arising therefrom in each case.
[C] Lloyd's Coffee-House is in fact a monopoly, self created, and of a
new species, a sort of _republican company_, resembling in some things,
what are termed regulated companies, in contradiction to the joint stock
companies, with this difference however, that the present members may
exclude whom they please which is a monopoly principle.
[D] The public does not, perhaps, know also, that Oliver Cromwell in
levelling times, abolished the charter, but that like the _House of
Peers_, which was also abolished, it was obliged to be restored. The
present attempt, is in fact, a small attack of liberty and equality,
that epidemical disease that raged in England at the time of the great
rebellion, and in France at the beginning of the revolution. Destruction
or a strait waistcoat must be the consequence of such a disease.
[E] Besides, the Portuguese, Spaniards, Dutch, French, and English
settlers in the interior have explored the country, and tried what
extension they could give to the trade, so that the British merchants,
who proceed on the idea that they will make discoveries, and form new
connections, labour under a total mistake.
TRANSCRIBER'S NOTES:
Text in italics is indicated by underscores: _italics_.
Inconsistencies in spelling and hyphenation have been retained from the
original.
Obvious typographical errors have been corrected as follows:
Page 3: "copously" changed to "copiously"
Page 12: "desart" changed to "desert"
Page 20: "advantageouly" changed to "advantageously"
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