manner in which they govern their new subjects, the natural genius of an exclusive company has shown itself most distinctly. Nothing, however, can be more contrary to the real interest of those companies as sovereigns than the destructive plan which they have pursued. The revenue of the sovereign is drawn from that of the people. The greater the revenue of the people, the more they can afford to the sovereign; it is his interest, therefore, to increase as much as possible that revenue; consequently to open the most extensive market for the produce of his country, and to abolish all monopolies and all restraints upon free trade. But a company of merchants are incapable of considering themselves as sovereigns, even after they have become such. Trade they consider as their principal business. Their mercantile habits draw them to prefer the transitory profit of the monopolist to the manent revenue of the sovereign. As sovereigns, their interest is the same with that of the country they govern. As merchants it is directly opposite, pp. 219-22.

per

If the genius of such a government, even as to what concerns its direction in Europe, is, in this manner, essentially faulty, that of its administration in India is still more so. That administration is composed of a council of merchants, who can command obedience only by military force. Their proper business is that of merchants. The genius of the administration tends, therefore, to make government subservient to the interest of monopoly. All the members of the administration, besides, trade more or less upon their own account, and it is in vain to prohibit them from so doing. They will endeavour to establish the same

2

For a clear and graphic account of the plan adopted by the East India Company to insure minute and truthful accounts of the proceedings of its servants, see Burke, Speeches on the Impeachment of Warren Hastings.

2 This evil (of the private trade) was partly due to the folly of the home authorities of the East India Company, who from the foundation

monopoly in favour of their own private trade as of the public trade of the company; but the private trade will extend to the greater variety of articles. They will be more disposed to support with rigorous severity their own interest against that of the country which they govern than their masters can be to support theirs. The country belongs to their masters, who must have some regard for the interest of what belongs to them; but it does not belong to the servants, every one of whom wishes to make his fortune, and then to get out of the country as quickly as he can. The real interest of the masters is the same with that of the country, and it is from ignorance that they oppress it. The regulations accordingly which have been sent out from Europe, though frequently weak, have upon most occasions been well meant, nor is it my intention to throw any odious imputation upon any particular persons. It is the system of government, the situation in which the members of the Councils of Madras and Calcutta are placed, that I mean to censure, whilst fully admitting the decisive wisdom and undaunted resolution, in war and negotiation, which those councils have upon many trying occasions exhibited,' pp. 222-25.

of the society in 1600, down to the second administration of Lord Clive (1765-67), systematically underpaid its agents, and connived at their private trade. As early as the time of James I., Sir Thomas Roe had pointed out the folly of this practice, and also dissuaded the Company from territorial acquisition. See Lord Macaulay's Essay upon Lord Clive, and Malcolm's Memoirs of Lord Clive, cap. xiv.-xvi. For the opinions of Sir Thomas Roe, see Mill, History of British India, book i. cap. 2.

Our author writes as though the virtual conquest of India by the East India Company were the result of a settled and deliberate plan. Nothing can be more false. It followed naturally on the resistance they offered to the schemes of Dupleix in Southern India, a resistance due, not to the hope of being great if they succeeded, but to the dread of not even being secure if they failed. In a similar manner the acquisition of Bengal, &c., was due to the unprovoked aggressions of its Nabob, culminating in the fearful atrocity of the Black Hole. See The Political History of India, by Sir John Malcolm, cap. i., and his Memoirs of Lord Clive (Introduction), and J. S. Mill's Few Words on Non-Intervention (Diss. and Disc. iii. 169 seq.).

91 CONCLUSION OF THE MERCANTILE SYSTEM. BOOK IV.

CHAPTER VIII.

Conclusion of the Mercantile System.

THOUGH the encouragement of exportation and the discouragement of importation are the two great engines by which the mercantile system proposes to enrich every country, yet with regard to some commodities it discourages exportation and encourages importation. Its ultimate object is always the same, to enrich the country by an advantageous balance of trade. It discourages the exportation of the materials of manufacture, and of the instruments of trade, to give our workmen an advantage. It encourages the importation of the materials of manufacture that our workmen may be enabled to work them up more cheaply. To encourage the importation of the instruments of trade would interfere too much with the interest of our manufactures of those articles. Such importation has therefore frequently been prohibited, p. 226.

The importation of the materials of manufacture has sometimes been encouraged by an exemption from duties to which other goods are subject, and sometimes by bounties. The importation of sheeps' wool, cotton wool, undressed flax, and hides, dyeing drugs, and iron has been encouraged by an exemption from all duties, These exemptions, which are in themselves reasonable and advantageous to the public, have sometimes been extended beyond what can be justly called the rude materials of work, as in the case of linen yarn, in which the interests of the spinners have been sacrificed to those of the manufacturers, pp. 227, 228.

The encouragement given to the importation of the materials of manufacture by bounties has been principally confined to such as were imported from our

American plantations. The first bounties of this kind were granted about the beginning of the present century, pp. 228-30.

The same commodities upon which we gave bounties when imported from America were subjected to considerable duties when imported from any other country; a foolish distinction, as experience has sufficiently demonstrated, and which would at best have been liable to all the objections to which bounties on production are liable, pp. 230, 231.

The exportation of the materials of manufacture is sometimes discouraged by absolute prohibitions, and sometimes by high duties. Our woollen manufacturers have obtained a monopoly against the consumers by a prohibition of importing woollen cloths; and also another monopoly against wool-producers by a prohibition of the exportation of live sheep and wool. By the 8th Elizabeth, cap. 3, the exporter of sheep was, for the first offence, to forfeit all his goods, to suffer a year's imprisonment, and to have his left hand cut off; and for the second offence to suffer death. By 13 and 14 Charles II. cap. 18, the exportation of wool was made felony. The first of these statutes was virtually repealed by the 12th of Charles II., which imposes a penalty of twenty shillings for every sheep exported; and the second was expressly repealed by the 7th and 8th William III. c. 28. The penalties are still sufficiently severe. Besides the forfeiture of the goods, the exporter incurs the penalty of 38. for every pound of wool exported or attempted to be exported. A person convicted of this offence is disabled from requiring any debt belonging to him: and if he is not able to pay those heavy penalties he is to be transported for seven years, pp. 231-33.

In order to prevent exportation, the whole inland commerce of wool is laid under very oppressive restrictions. But the restrictions in the counties of Kent and

96 CONCLUSION OF THE MERCANTILE SYSTEM. BOOK IV.

Sussex are more troublesome than those in the rest of the kingdom. The coasting trade is also subject to many restrictions, pp. 233, 234.

Our woollen manufacturers, to justify their demand of such regulations, asserted that English wool was superior to that of any other country, and that if the exportation of it could be totally prevented, England could monopolise the whole woollen trade of the world. This is so false that English wool is entirely unfit for making fine cloth, which is made altogether of Spanish wool, pp. 234, 235.

It has been shown that the effect of these regulations has been to depress the price of English wool even below what it was in the time of Edward III. The price of Scots wool since the Union is said to have fallen about one half. This reduction of price has not probably much reduced the quantity of the annual produce, since the growing of wool is not the chief purpose for which the sheep-farmer employs his industry and stock. Neither does this reduction of price seem to have had any effect upon the quality of wool. The quality of the fleece depends upon the health, growth, and bulk of the animal; the same attention which is necessary for the improvement of the carcass is, in some respects, sufficient for the fleece. The violence of these regulations, therefore, seems to have affected neither the quantity nor the quality of the annual produce of wool so much as it might have been expected to do, pp. 235-37.

These considerations, however, will not justify the prohibition of the exportation of wool; but they will fully justify the imposition of a considerable tax upon that exportation, which would produce a considerable revenue to the sovereign with little inconvenience to anybody. The prohibition injures one order of citizens for the benefit of another, which is unjust. A tax would hurt the interest of the growers of wool less than