to establish in their own favour the 
monopoly of some of the most important 
branches, not only of the foreign, but of the 
inland trade of the country. Had they been 
allowed to go on, it is impossible that they 
should not, at some time or another, have attempted 
to restrain the production of the particular 
articles of which they had thus usurped 
the monopoly, not only to the quantity which 
they themselves could purchase, but to that 
which they could expect to sell with such a 
profit as they might think sufficient. In the 
course of a century or two, the policy of the 
English company would, in this manner, have 
probably proved as completely destructive as 
that of the Dutch
Nothing, however, can be more directly 
contrary to the real interest of those companies
considered as the sovereigns of the 
countries which they have conquered, than 
this destructive plan. In almost all countries
the revenue of the sovereign is drawn 
from that of the people. The greater the 
revenue of the people, therefore, the greater 
the annual produce of their land and labour, 
the more they can afford to the sovereign. It 
is his interest, therefore, to increase as much 
as possible that annual produce. But if this 
is the interest of every sovereign, it is peculiarly 
so of one whose revenue, like that of 
the sovereign of Bengal, arises chiefly from a 
land-rent. That rent must necessarily be in 
proportion to the quantity and value of the 
produce; and both the one and the other 
must depend upon the extent of the market
The quantity will always be suited, with 
more or less exactness, to the consumption of 
those who can afford to pay for it; and the 
price which they will pay will always be in proportion 
to the eagerness of their competition
It is the interest of such a sovereign, therefore, 
to open the most extensive market for 
the produce of his country, to allow the most 
perfect freedom of commerce, in order to increase 
as much as possible the number and 
competition of buyers; and upon this account 
to abolish, not only all monopolies, but all 
restraints upon the transportation of the home 
produce from one part of the country to 
another, upon its exportation to foreign countries, 
or upon the importation of goods of 
any kind for which it can be exchanged. He 
is in this manner most likely to increase both 
the quantity and value of that produce, and 
consequently of his own share of it, or of his 
own revenue
But a company of merchants, are, it seems, 
incapable of considering themselves as sovereigns
even after they have become such. 
Trade, or buying in order to sell again, they 
still consider as their principal business, and 
by a strange absurdity, regard the character 
of the sovereign as but an appendix to that of 
the merchant; as something which ought to 
be made subservient to it, or by means of 
which they may be enabled to buy cheaper in 
India, and thereby to sell with a better profit 
in Europe. They endeavour, for this purpose
to keep out as much as possible all 
competitors from the market of the countries 
which are subject to their government, and 
consequently to reduce, at least, some part of 
the surplus produce of those countries to what 
is barely sufficient for supplying their own 
demand, or to what they can expect to sell in 
Europe, with such a profit as they may think 
reasonable. Their mercantile habits draw them 
in this manner, almost necessarily, though 
perhaps insensibly, to prefer, upon all ordinary 
occasions, the little and transitory profit 
of the monopolist to the great and permanent 
revenue of the sovereign; and would gradually 
lead them to treat the countries subject 
to their government nearly as the Dutch 
treat the Moluccas. It is the interest of the 
East India company, considered as sovereigns
that the European goods which are carried to 
their Indian dominions should be sold there 
as cheap as possible; and that the Indian 
goods which are brought from thence should 
bring there as good a price, or should be sold 
there as dear as possible. But the reverse 
of this is their interest as merchants. As 
sovereigns, their interest is exactly the same 
with that of the country which they govern
As merchants, their interest is directly opposite 
to that interest
But if the genius of such a government
even as to what concerns its direction in Europe
is in this manner essentially, and perhaps 
incurably faulty, that of its administration 
in India is still more so. That administration 
is necessarily composed of a council 
of merchants, a profession no doubt extremely 
respectable, but which in no country in the 
world carries along with it that sort of authority 
which naturally overawes the people, and 
without force commands their willing obedience. 
Such a council can command obedience 
only by the military force with which 
they are accompanied; and their government 
is, therefore, necessarily military and despotical
Their proper business, however, is that 
of merchants. It is to sell, upon their 
master's account, the European goods consigned 
to them, and to buy, in return, Indian goods 
for the European market. It is to sell the 
one as dear, and to buy the other as cheap as 
possible, and consequently to exclude, as 
much as possible, all rivals from the particular 
market where they keep their shop. The 
genius of the administration, therefore, so 
far as concerns the trade of the company, is 
the same as that of the direction. It tends 
to make government subservient to the interest 
of monopoly, and consequently to stunt 
the natural growth of some parts, at least, of 
the surplus produce of the country, to what 
is barely sufficient for answering the demand 
of the company