laying it in some measure open, the East India 
company, in opposition to this proposal
represented, in very strong terms, what had 
been, at this time, the miserable effects, as 
they thought them, of this competition. In 
India, they said, it raised the price of goods 
so high, that they were not worth the buying
and in England, by overstocking the market
it sunk their price so low, that no profit could 
be made by them. That by a more plentiful 
supply, to the great advantage and conveniency 
of the public, it must have reduced very 
much the price of India goods in the English 
market, cannot well be doubted; but that it 
should have raised very much their price in 
the Indian market, seems not very probable, 
as all the extraordinary demand which that 
competition could occasion must have been 
but as a drop of water in the immense ocean 
of Indian commerce. The increase of demand
besides, though in the beginning it may 
sometimes raise the price of goods, never fails 
to lower it in the long-run. It encourages 
production, and thereby increases the competition 
of the producers, who, in order to undersell 
one another, have recourse to new divisions 
of labour and new improvements of 
art, which might never otherwise have been 
thought of. The miserable effects of which 
the company complained, were the cheapness 
of consumption, and the encouragement given 
to production; precisely the two effects which 
it is the great business of political economy to 
promote. The competition, however, of which 
they gave this doleful account, had not been 
allowed to be of long continuance. In 1702, 
the two companies were, in some measure
united by an indenture tripartite, to which the 
queen was the third party; and in 1708, they 
were by act of parliament, perfectly consolidated 
into one company, by their present 
name of the United Company of Merchants 
trading to the East Indies. Into this act it 
was thought worth while to insert a clause, 
allowing the separate traders to continue their 
trade till Michaelmas 1711; but at the same 
time empowering the directors, upon three 
years notice, to redeem their little capital of 
seven thousand two hundred pounds, and 
thereby to convert the whole stock of the company 
into a joint stock. By the same act, the 
capital of the company, in consequence of a 
new loan to government, was augmented from 
two millions to three millions two hundred 
thousand pounds. In 1743, the company advanced 
another million to government. But 
this million being raised, not by a call upon 
the proprietors, but by selling annuities and 
contracting bond-debts, it did not augment 
the stock upon which the proprietors could 
claim a dividend. It augmented, however, 
their trading stock, it being equally liable 
with the other three millions two hundred 
thousand pounds, to the losses sustained, and 
debts contracted by the company in prosecution 
of their mercantile projects. From 1708, 
or at least from 1711, this company, being 
delivered from all competitors, and fully established 
in the monopoly of the English 
commerce to the East Indies, carried on a 
successful trade, and from their profits, made 
annually a moderate dividend to their proprietors. 
During the French war, which began 
in 1741, the ambition of Mr. Dupleix, the 
French governor of Pondicherry, involved 
them in the wars of the Carnatic, and in the 
politics of the Indian princes. After many 
signal successes, and equally signal losses
they at last lost Madras, at that time their 
principal settlement in India. It was restored 
to them by the treaty of Aix-la-Chapelle
and, about this time the spirit of war and 
conquest seems to have taken possession of 
their servants in India, and never since to 
have left them. During the French war
which began in 1755, their arms partook of 
the general good fortune of those of Great 
Britain. They defended Madras, took Pondicherry
recovered Calcutta, and acquired the 
revenues of a rich and extensive territory, amounting
it was then said, to upwards of 
three millions a-year. They remained for 
several years in quiet possession of this revenue
but in 1767, administration laid claim 
to their territorial acquisitions, and the revenue 
arising from them, as of right belonging 
to the crown; and the company, in compensation 
for this claim, agreed to pay to government 
four hundred thousand pounds a-year
They had, before this, gradually augmented 
their dividend from about six to ten per cent.; 
that is, upon their capital of three millions 
two hundred thousand pounds, they had increased 
it by a hundred and twenty-eight 
thousand pounds, or had raised it from one 
hundred and ninety-two thousand to three 
hundred and twenty thousand pounds a-year
They were attempting about this time to raise 
it still further, to twelve and a-half per cent., 
which would have made their annual payments 
to their proprietors equal to what they 
had agreed to pay annually to government, or 
to four hundred thousand pounds a-year
But during the two years in which their agreement 
with government was to take place
they were restrained from any further increase 
of dividend by two successive acts of parliament
of which the object was to enable them 
to make a speedier progress in the payment 
of their debts, which were at this time estimated 
at upwards of six or seven millions 
sterling. In 1769, they renewed their agreement 
with government for five years more, 
and stipulated, that during the course of that 
period, they should be allowed gradually to 
increase their dividend to twelve and a-half 
per cent; never increasing it, however, more 
than one per cent. in one year. This increase 
of dividend, therefore, when it had risen to its 
utmost height, could augment their annual