to the South of Cape Non, on the west coast of Africa, in 27° 54' North Latitude; and the Pontiff, desirous to display, and at the same time extend his power, immediately issued a Bull to this effect. Nor, preposterous as a proceeding like this sort would now appear, did any one then doubt that the Pope had a right to issue such a Bull, and that all States and Empires were bound to obey it?

In consequence, the Portuguese were for a lengthened period, allowed to prosecute their conquests in India without the interference of any other European power. And it was not till a considerable period after this beginning of the war, which the blind and brutal bigotry of Philip II. kindled in the Low Countries, that the Dutch navigators began to display their flag on the Eastern Ocean, and laid the foundations of their Indian Empire.

The desire to comply with the injunctions in the Pope's Bull, and to avoid coming into collision, first with the Portuguese and subsequently with the Spaniards, who had conquered Portugal in 1580, seems to have been the principal cause that led the English to make repeated attempts, in the reign of Henry VIII. and Edward VI., and the early part of the reign of Elizabeth, to discover a route to India by a North East or North West channel, from which the Portuguese would have had no pretence for excluding them. But these attempts having proved unsuccessful, and the Pope's Bull having ceased to be of any effect in this country, the English Merchants and Navigators resolved to be no longer deterred by the imaginary rights of the Portuguese from directly entering upon what was then reckoned by far the most lucrative and advantageous branch of commerce. Captain Stevens, who performed the voyage in 1582, was the first Englishman who sailed to India by the Cape of Good Hope. The voyage of the famous Sir Francis Drake contributed greatly to diffuse a spirit of naval enterprise, and to render the English better acquainted with the newly-opened route to India. But the voyage of the celebrated Mr. Thomas Cavendish was, in the latter respect, the most important. Cavendish sailed from England at his own expence, in a little squadron fitted out in July, 1586; and having explored the greater part of the Indian Ocean, as far as the Phillippine Islands, and carefully observed the most important features of the people and countries which he visited, returned to England after a prosperous navigation, in September, 1588. Perhaps, however, nothing contributed so much to inspire the English with a desire to embark in the Indian trade, as the

capture that was made, about this period, from the Spaniards, of a Portuguese East India ship or carack, taken by Sir Francis Drake during his expedition to the coast of Spain, inflaming the cupidity of the merchants by the richness of her cargo, at the same time that the papers found on board gave specific information respecting the traffic in which she had been engaged. A still more important capture of the same sort was made in 1593. An armament, fitted out for the East Indies, by Sir Walter Raleigh, and conmanded by Sir John Borroughs, fell in, near the Azores, with the largest of all the Portuguese caracks; a ship of 1,600 tons burden, carrying 700 men and 36 brass cannon; and after an obstinate conflict, carried her into Dartmouth. She was the largest vessel that had been seen in England; and her cargo, consisting of gold, specie. calicoes, silks, pearls, drugs, porcelain, ivory, &c., excited the ardour of the English to engage in so opulent a commerce.

In consequence of those and other concurring causes, an association was formed in London, in 1599, for prosecuting the trade to India. The adventurers applied to the Queen for a Charter of Incorporation, and also for power to exclude all other English subjects who had not obtained a licence from them, from carrying on a species of the traffic beyond the Cape of Good Hope or the Straits of Magellan.

As exclusive companies were then looked upon as the best instruments for prosecuting most branches of commerce and industry, the adventurers seem to have had little difficulty in obtaining their charter, which was dated the 31st of December, 1600. The Corporation was entitled, "The Governor and Company of Merchants of London trading into the East Indies" the first Governor (Thomas Smythe, Esq.,) and 24 Directors were nominated in the charter; but power was given to the Company to elect a Deputy Governor, and, in future to elect their Governor and Directors, and such other office-bearers as they might think fit to appoint. They were empowered to make bye-laws; to inflict punishments, either corporeal or pecuniary, provided such punishments were in accordance with the laws of England; to export all sorts of goods, free of duty, for four years; and to export foreign coin or bullion, to the amount of Thirty thousand Pounds a-year, Six thousand Pounds of the same being previously coined at the Mint; but they were obliged to import, within six months after the completion of every voyage, except the first, the same quantity of silver, gold, and foreign coin that they had exported. The duration

of the charter was limited to a period of fifteen years, but with and under the condition that if it were not found for the public advantage, it might be cancelled at any time upon two years' notice being given. Such was the origin of the British East India Company,-the most celebrated commercial association either of ancient or modern times, and which has now extended its sway over the whole of the Mogul empire.

It might have been expected that, after the charter was obtained, considerable eagerness would have been manifested to engage in the trade. But such was not the case. Notwithstanding the earnest calls and threat of the Directors, many of the adventurers could not be induced to come forward to pay their proportion of the charges incident to the fitting-out of the first expedition. And as the Directors seem either to have wanted power to enforce their resolutions or thought it better not to exercise it, they formed & subordinate association, consisting of such members of the Company as were really willing to defray the cost of the voyage, and to bear the risks and losses attending it, on condition of their having the exclusive right to whatever profits might arise from it. And it was by such subordinate associations that the trade was conducted during the first thirteen years of the Company's existence.

The first expedition to India, the cost of which amounted -ships and cargoes included-to Sixty-nine Thousand and Ninety-one Pounds, consisted of five ships, the largest being 600 and the smallest 130 tons burden. The goods put on board were principally bullion, tin, broad cloths, cutlery, glass, &c. The chief command was intrusted to Captain James Lancaster, who had already been in India. They set sail from Torbay, on the 13th of February, 1601. Being very imperfectly acquainted with the seas and countries they were to visit, they did not arrive at their destination, Acheen, in the Sumatra, till the 5th of June 1602. But though tedious, the voyage was, on the whole, uncommonly prosperous. Lancaster entered into commercial treaties with the kings of Acheen and Bantam; and having taken on board a valuable cargo of pepper and other produce, he was fortunate enough, in his way home, to fall in with and capture, in concert with a Dutch vessel, a Portuguese carrack of 900 tons burden. Lancaster returned to the Downs on the 11th September, 1603.-(Modern Universal History, vol. x. p. 16; Macpherson's Commerce of the European Powers with India, p. 81.)

But notwithstanding the favourable result of this voyage, the expedition fitted out in the years immediately following, though sometimes consisting of larger ships. were not, at an

average, materially increased. In 1612, Captain Best obtained from the Court at Delhi several considerable privileges; and, amongst others, that of establishing a factory at Surat; which city was, henceforth, looked upon as the principal British station in the West of India, till the acquisition of Bombay.

In establishing factories in India, the English only followed the example of the Portuguese and Dutch. It was contended, that they were necessary to serve as depòts for the goods collected in the country for exportation to Europe, as well as for those imported into India, in the event of their not meeting with a ready market on the arrival of the ships. Such establishments, it was admitted, are not required in civilised countries; but the peculiar and unsettled state of India was said to render them indispensible there.

Whatever weight may be attached to this statement, it is obvious that factories formed for such purposes could hardly fail of speedily degenerating into a species of forts.

The security of the valuable property deposited in them, furnished a specious pretext for putting them in a condition to withstand an attack, while the Agents, Clerks, Warehousemen, &c., formed a sort of garrison. Possessing such strong holds, the Europeans were early emboldened to act in a manner quite inconsistent with their character as merchants; and but a very short time elapsed before they began to form schemes for monopolising the commerce of particular districts, and acquiring territorial dominions.

Though the Company met with several losses during the earlier part of their traffic with India, from shipwrecks and other unforseen accidents and still more from the hostility of the Dutch, yet, on the whole, the trade was decidedly profitable. There can, however, be little doubt, that their gains at this period, have been very much exaggerated. During the first thirteen years, they are said to have amounted to 132 per cent. But then it should be borne in mind, as Mr. Grant has justly stated, that the voyages were seldom accomplished in less than thirty months, and sometimes extended to three or four years: and it should be further remarked, that, on the arrival of the ships at home, the cargoes were disposed of at long credits of eighteen months or two years; and that it was frequently even six or seven years before the concerns of a single voyage were finally adjusted. (Sketch of the History of the Company, p. 13.) When these circumstances are taken into view it will immediately be seen that the Company's profits were not, really, by any means, so real as had been represented. It may not, however, be unin

structive to remark, that the principal complaint that was then made against the Company did not proceed so much on the circumstance of its Charter excluding the public from any share in an advantageous traffic, as in its authorising the Company to export gold and silver of the value of Thirty Thousand Pounds a-year. It is true that the Charter stipulated that the Company should import an equal quantity of gold and silver within six months of the termination of every voyage but the enemies of the Company contended that this condition was not complied with; and that it was, besides highly injurious to the public interest, and contrary to all principle, to allow gold and silver to be sent out of the kingdom. The Merchants and others interested in the support of the Company could not controvert the reasoning of their opponents without openly impugning the ancient policy of absolutely preventing the exportation of the precious metals.They did not, however, venture to contend, if the idea really occurred to them, that the exportation of bullion to the East was advantageous, on the broad ground of the commodities purchased by it being of greater value in England.

But they contended that the exportation of bullion to India was advantageous, because the commodities thence imported were chiefly re-exported to other countries from which a much greater quantity of bullion was obtained than had been required to pay for them in India. Mr Thomas Mun, a Director of the East India Company, and the ablest of its early advocates, ingeniously compares the operations of the Merchants in conducting a trade carried on by the exportation of gold and silver to the seed time and harvest of agriculture. "If we only behold," says he, "the actions of the husbandman in the seed time, when he casteth away much good corn into the ground, we shall account him rather a madman than a husbandman. But when we consider his labours in the harvest, which is the end of his endeavours, we find the worth and plentiful increase of his actions." (Treasure by Foreign Trade, p. 50, ed. 1664.)

We may here remark, that what has been called the Mercantile system of political economy, or that system which measures the progress of a country in the career of wealth by the supposed balance of payments in its favour, or by the estimated excess of the value of its exports over that of its imports, appears to have originated in the excuses now set up for the exportation of bullion. Previously to this epoch, the poliey of prohibiting the exportation of bullion had been universally admitted; but it now began

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