all along displayed in suppressing such in"formation as they wished not to appear, it "is often impossible to collect more than gleanings of intelligence, respecting the Company's debts. At the present period "however (1685) they appear to have been

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heavy and distressing. In 1676 it was as"serted by their opponents in England that "their debts amounted to 600,000l., and we "have already seen that in 1674 the debt of Surat alone amounted to 135,000l. In "1682-3 the Directors authorized the Agency " in Bengal to borrow 200,000l., and in 1683-4 "it is stated that the debt on the dead stock "at Bombay alone amounted to 300,000l. "It seems highly probable that at this time "their debts exceeded their capital."

In the Company's stock accounts, or balance-sheet, although there is always an imposing display of assets, at an arbitrary valuation, to counterbalance the amount of debt, and to give a colouring of prosperous solvency to the general aspect of their affairs, still accounts so constructed as to give any desired result at the pleasure of the framers, can have no claim to our confidence. With assets of uncertain value, the debt itself was a fixed amount, neither to be questioned, nor evaded. It was a claim requiring to be dis

charged, whatever may have been its precise aggregate amount; but apparently without available means for the purpose. Debt, indeed, was no more than the natural consequence of the difficulties and perplexities in which the Company's affairs were involved throughout the period reviewed. The fact is fully confirmed by the best authorities extant; and though the actual sum of debt may be unknown, its character cannot be denied to have been, at this time, purely and exclusively commercial.

CHAPTER II.

SUBJECT CONTINUED FROM 1711 TO 1765.

THE details given in the preceding chapter are intended to draw, from historical facts, the state of the Company's affairs from the earliest period; the mode in which they were habitually carried on; the circumstances by which they were chiefly affected; and the natural result of joint stock operations conducted with the indifference, and disregard of economy, common to privileged bodies.

The period accordingly exhibits an almost uninterrupted series of fierce conflict with rivals; feeble and insignificant commercial operations; with vast outlays for the equipment of "most warlike merchant ships;" the maintenance of useless forts and factories; severe and continued losses, as well from the open hostility of foreign enemies, as the competition of domestic interlopers; together with bribes to men in power-the whole producing pecuniary embarrassment, frequently bordering on utter ruin, and the natural, if not inevitable, consequence, accumulation of debt.

Although the amount of debt is nowhere precisely stated in official returns before the public, we may yet rest assured that, even at this early period, it was no inconsiderable sum, when we revert to the various notices, and enumerations, of it in the preceding chapter; to the causes of its progressive increase; and to Mill's belief that it actually exceeded the amount of the Company's capital stock, which the act of parliament requiring them to confine their loans within this amount, seems in some degree to confirm.*

The Company however having procured an extension of their charter to 1733, with three

years' grace, an association of merchants, in 1730. 1730, wishing to supplant the Company, proposed to H. M.'s Government to advance the 3,200,0001, due by them to the Company at four percent till the 25th March 1733, and afterwards at two percent, on obtaining a charter for thirtyone years. This project was defeated by the Company paying into the Exchequer 200,0007. as a free gift, and giving up 1 per cent of the interest payable on the abovementioned loan to Government; by which the Company's receipts on this account were reduced from 160,000l., to 128,000l. per annum. Dividends

* Vide page 445. supra, and the Act there referred to.

to proprietors, which had been raised from 5 per cent. in 1708 to 10 per cent. in 1711, but had fallen to 8 per cent. from 1722 to 1732, were further reduced, in consequence of the preceding operations, to 7 per cent, and continued at that rate till Midsummer 1743, when they rose for twelve successive years, or till 1755, to 8 per cent.

In 1745, H. M.'s Government being in want of money to carry on the war in which they were then engaged with France and Spain, the Company advanced another million at 3 per cent, interest, in consideration of their charter being extended to 25 March, 1780, with three years' grace. The loan to Government was thus encreased to 4,200,000l.; and the interest on the whole sum being further reduced in 1750 to 3 per cent., the Company's loss of interest, on the two millions first advanced to Government in 1708 at 8 per cent., was a net 100,000l. per annum; whence dividends to proprietors again fell, and continued for eleven years, or from 1755 to 1766, at 6 per cent.

This sum of 4,200,000l. has been commonly, but erroneously, called the capital of the E.I. Company. Whilst tied up in the hands of Government it could not in any way have contributed to the commercial operations of the

1745.