sent from England with a fleet of ten armed vessels and a force of 600 men, to be reinforced by 400 taken on board at Madras. He was ordered to capture and fortify Chittagong on the north-eastern shore of the Bay of Bengal (though the Court of Committees believed it to be somewhere up the great Ganges'), as the future seat of the Company in those regions, to go to war with the King of Siam, and to capture Salsette from the Portuguese. Not one of these ambitious aims was realized. When the expedition arrived at Hughli in October 1686, hostilities broke out prematurely, and after the town had been bombarded the English retired twenty-seven miles down the river to a village called Sutanati, the site of the modern Calcutta. The Emperor now gave orders for a general attack on the English settlements. The factories at Patna, Cossimbazar, Masulipatam, and Vizagapatam were seized, and Bombay was besieged. Captain Heath was sent out from England with reinforcements, and in 1688 took on board all the English in Bengal with the Company's goods, bombarded and burnt Balasore and sailed to effect the conquest of Chittagong. But he found the place strongly defended and after a month of futile negotiations, made his way to Madras. There he arrived in March 1689. And so the consequence of the Company's spirited war policy was the evacuation of Bengal and the loss of the results of half a century's painful toil and effort.

The position of the English in India was only saved by their sea power. Sir John Child on the western coast seized all the Mughal shipping he could lay his hands on, and sent his captains to the Red Sea and Persian Gulf to arrest the pilgrimage traffic to Mecca. This bold stroke induced Aurangzeb at last to listen to overtures for peace, though the terms he conceded were harsh and contemptuous. In February 1690 he granted the English pardon and a new licence for trade, provided they paid a fine of £17,000,

engaged 'to behave themselves for the future no more in such a shameful manner', and that 'Mr. Child who did the disgrace, be turned out and expelled'. The English were spared this last humiliation, for Sir John Child, worn out with his exertions, had died earlier in the month, having, in the words of his employers, despite his final failure, 'done more for the Company and the honour of his country than ever any Englishman did in India'. The tale of disaster was relieved by one episode, the importance of which could not be realized at the time. Job Charnock, the English agent at Hughli, had twice since 1686 endeavoured to establish a settlement on the site of Calcutta, and had twice been forced to abandon it, when the open breach occurred with the viceroy of Bengal. At the conclusion of the peace the English were contemptuously granted permission to resume their settlements in the delta of the Ganges. And so after fifteen months' sojourn at Madras he made his way back almost unnoticed to his ruined settlement. The same year, therefore, which witnessed the abasement of the Company before Aurangzeb, also witnessed the humble foundation of a future capital of British India, the first step in the realization of the half unconscious prophecy of 1687.

CHAPTER VII

THE NEW EAST INDIA COMPANY

THE opponents of the Company in England inveighed against 'the unjust and wicked war with the Great Mogul',' and the news of the humiliating peace concluded in India gave them a welcome handle against the Court of Committees. Opposition to the East India monopoly had been growing for many years and took many forms. There was a considerable section which objected to the trade altogether for economic reasons that are not unknown at the present time. They disliked it because of the export of bullion which was its necessary concomitant, and because it imported manufactured goods and commodities which they supposed to be positively harmful, for instance coffee, which as a contemporary writer quaintly remarked was 'most useless since it serves neither for nourishment nor debauchery'.' Such opponents laid down the principle that no foreign trade was advantageous to the kingdom which did not export produce and manufactured goods and import raw materials. It is interesting to note that, if these specious arguments which are often enunciated to-day-had prevailed, the incalculable advantage of the Indian trade would have been lost to England.

The Company's apologists in their attempts to answer these objections groped their way to a sounder economic theory which often anticipated the conclusions of Adam Smith and the Free Trade school. They declared stoutly that 'no

1 Some Remarks upon the present state of the East India Company's Affairs, 1690.

2 Britannia Languens, or a Discourse of Trade, 1680.

nation ever was or will be considerable in trade, that prohibits the exportation of bullion'. It was a fallacy to regard bullion or specie as different from any other form of wealth, 'gold and silver and... money are nothing but the weights and measures by which traffic is more conveniently carried on than could be done without them'.2 These writers objected to the whole principle of state interference in commercial matters, 'Laws to hamper trade whether foreign or domestic relating to money or other merchandizes are not ingredients to make a people rich. . . . No people ever yet grew rich by policies.'2 'Few laws relating to trade', wrote Davenant, 'are the mark of a nation that thrives by traffic.' But they based the main defence of the India trade on yet wider grounds: 'Since the discovery of the East Indies, the dominion of the sea depends much upon the wane or increase of that trade, and consequently the security of the liberty, property, and protestant religion of this kingdom.'1

A second party were opposed simply to the Joint Stock theory and clamoured for a company on a regulated basis, i. e. one in which merchants traded on their individual capital as members of a guild.

Thirdly, a large and increasing number objected to the existing Company as resting on a too narrow and exclusive basis. When these men urged the dissolution of the Company, they only meant the winding up of the particular group of subscribers who had monopolized the trade since 1657, and there was little doubt that the Company might well have increased its capital and admitted a greater number to share its high profits. This section inveighed fiercely against the autocratic power which Sir Josia Child wielded in the Courts of the Company. In 1681 a prominent member of 1 A Treatise wherein is demonstrated, that the East India Trade is the most national of all foreign trades, by giλónarpis, 1681.

2 Discourses upon Trade, Sir Dudley North, London, 1691. 8 An Essay on the East India Trade, 1696 [by Charles Davenant].

the Court, Thomas Papillon, foreseeing the tendency of affairs, suggested that the Company itself should take the initiative by admitting more outsiders to a share in its privileges. But Sir Josia Child refused to accept the proposal and hounded Papillon and his associates out of the Company. 'The great Ministers and chief men at court fell in with Sir Josia', and he and his supporters'do tumble the members in and out of the Committee according as they serve their own terms'.1

For many years individual interlopers' in India had defied the Company's servants, or acted in collusion with them; one of the most famous of the interlopers was Thomas Pitt, grandfather of the Earl of Chatham, who made a large fortune by unlawful, or, at least, unauthorized trading, and purchased a large landed estate together with the pocket borough of Old Sarum. These men had in vain attempted to get a pronouncement that the monopoly of the Company was illegal, in the famous trial of Thomas Sandys in 1683, when Judge Jeffreys decided for the Company. The only result seems to have been the charter of 1686, which strengthened the Company's power against both native chiefs in India and contumacious Englishmen, 'forming us', as Sir Josia Child triumphantly wrote, 'into the condition of a sovereign state in India'."

The fall of the Stuart dynasty was a serious blow to Child. The Revolution', says Sir William Hunter, 'brought the Company face to face with Parliament.' The London Company's numerous enemies associated themselves with the Whig Party, and as early as 1690 succeeded in inducing a parliamentary committee to pass a resolution in favour of a new Company. About this time they banded them

1 Some Remarks upon the present state of the East India Company's Affairs, 1690.

2 India Office Records, Letter Book No. 8, Dispatch to Fort St. George, Sept. 28, 1687.

3A History of British India, vol. ii, p. 275.