The Letters of Gracchus on the East India Question

by William Augustus Miles

LETTER X. THE RIGHTS AND PRETENSIONS OF THE EAST INDIA COMPANY.

Monday, March 8, 1813.

It is now become a matter of the most solemn importance, that the public attention should be called to a clear and deliberate survey of the Rights and Pretensions of the East India Company; and that the judgment of Parliament should be directed to, and its sense declared upon, the subject of those pretensions, which have generated a new Constitutional Question, and are now carried to an height to affect the supreme Sovereignty of the State. To discuss those Rights and Pretensions at large, would demand a far more extended space than the present occasion can supply; but it would be altogether unnecessary to enter into a more enlarged discussion; because, in order to obtain the end here proposed, of drawing and fixing the attention of Parliament and the Public upon the subject, little more is required, than to bring those several Rights and Pretensions into one compressed and distinct point of view; and to leave it to the legislative wisdom to determine finally upon their validity.

The rights of the East India Company, are usually distinguished into their temporary rights, and their perpetual or permanent rights.

I. The temporary rights of the Company are:

1. A right to the exclusive trade with all the countries lying eastward from the Cape of Good Hope to the Straits of Magellan. This right is a lease of all the public right to the trade of those parts of the world; which lease has been renewed to the Company, from time to time, in consideration of a varying premium to be paid by them to the Public.

2. A right to administer the government and revenue of all the territories in India acquired by them during their term in the exclusive trade. This is a right delegated from the Crown, with the assent of Parliament; and which can be possessed by the Company no longer, than the authority from which it emanates has, or shall prescribe.

Upon the expiration of these temporary rights, which determine, as the law at present stands, in the ensuing year, 1814, the East India Company will remain in possession of whatever permanent rights shall be found to pertain to them.

II. The perpetual, or more properly, the permanent rights of the Company, must be considered under two distinct heads, viz. admitted and alleged.

§ 1. The admitted permanent rights are,

1. To be a Body Politic and Corporate, with perpetual succession.—This right has been confirmed by various succeeding Charters and Statutes. But there are some observations, which it is important to make upon this subject. The first Charter, granted by Queen Elizabeth, in 1601, to the first or London East India Company, created both its corporate capacity and its exclusive privilege, to continue for a term of fifteen years; but it provided, that, in case it should not prove beneficial to the Public, the whole of the grant might at any time be determined, upon two years notice given to the Company. The succeeding Charters of James I. Charles II. James II. and William and Mary, conferred, in the same manner, both the corporate capacity and the exclusive privilege; and though they did not, like the former, fix a term for their duration, yet they rendered the whole grant determinable upon three years notice. No provision is introduced into any of these Charters, to make the corporate capacity outlast the exclusive trade. When the principle of "a more national, general and extensive trade to India," declared in the Charter of the 5th of William and Mary, had been followed by the measure of creating a General Society of Merchants, and of erecting a New Company, the advocates for that measure took particular care to show, "That the Old Company, in reciting their Charters, had forgot to mention the provisos therein, viz. that the respective Kings of England, who granted them, reserved a discretionary power to make them void on three years warning[9]." This observation did not apply to their exclusive privilege only, but extended equally to their corporate capacity; both being determinable by the same warning, because both were derived from the same grant, the whole of which grant was made liable to that determination, notwithstanding their corporate capacity was to enjoy "perpetual succession." Hence it is manifest, that the perpetuity conferred by the Charter was not perpetuity of exclusive trade, or political power, but of corporate succession. But perpetual succession in a body corporate, does not imply perpetuity of duration, but merely uninterrupted succession of the individuals who compose it; which every corporate body must possess, whatever may be the term of its duration, in order that it may become, and may be able to perform the acts of, a legal person.

The Statute of 9 and 10, and the Charter of 10 William III. which created both the corporate capacity and the exclusive privilege of the New, or English Company, followed the example of the former Charter, granted to the Old Company, and rendered the whole grant determinable by the same process. But, in the 10th year of Queen Anne, after the two Companies had become United, they represented the great hazard they should encounter, by engaging in any considerable expenses for securing the Pepper Trade, under the limitation of that clause; in consequence of which representation the clause was repealed, and the limitation was left open. The Company from thence inferred, that they had acquired a perpetuity of duration, both for their corporate capacity and their exclusive privilege; the continuance of both of which had ever been subjected to the same rule of determination. They soon, however, became sensible that such could not be the true intention of the Act, and they "submitted themselves to Parliament[10]" on the subject; in consequence of which a limited term of exclusive trade was assigned them, without any limitation being imposed upon the negative perpetuity of duration, which they had acquired for their Corporation by the repeal of the determining clause. But it was not till the year 1730, the third year of the late King, that the Company obtained a true and positive perpetuity of duration for their Body Corporate; at which time an Act was passed, empowering them to continue to trade to the East Indies, as a Company of Merchants, although their exclusive right to the trade, and their power of administering the government and revenues of India, should be determined by Parliament. From that time only, the Incorporation and the Exclusive Privilege become distinguished. The distinctions here made will be found of material importance, in another part of this statement.

2. A right to acquire and possess lands, tenements, and property of every kind; and to dispose of the same, under a Common Seal.—This right was conferred by the Charter of the 10th of King William; but by Stat. 3 G. 2. c. 14. § 14. the Company's estates in Great Britain were limited to the value of 10,000l. per annum. In virtue of this right, the East India Company were empowered to settle "factories and plantations," within the limits of their exclusive trade. The Charter of William, indeed, adds also "forts," with the power of "ruling, ordering, and governing them;" but that this privilege cannot attach upon their corporate and permanent capacity, will presently be made to appear. Fortresses and fortifications cannot, from their nature and use, become absolute private property; being part of the public defences of the Empire, they are (to speak with Lord Hale) "affected with a public interest, and therefore cease to be juris privati only[11]." The building a fort is an act done, in its nature, by virtue of a sovereign authority, and is therefore the dereliction of the private right of property for a public and general purpose. In asserting for the Company a private right to forts and fortifications, the Company's advocates have therefore fallen into an extreme error, from not discriminating between the rights which necessarily belong to their delegated sovereignty, and those which can alone be annexed to their commercial corporation. And this brings us to the consideration of

§ 2. The alleged permanent rights of the Company, which require to be considered under two descriptions, viz. rights alleged for them at the expiration of their last exclusive Charter, and rights alleged by them at the present moment, with a view to the renewal of their present Charter. These are the rights, or more properly the pretensions, which have been pronounced by Gracchus, "absolutely unmaintainable, and incompatible with the freedom of British subjects;" and not their true legitimate rights, as the writer of a letter under the signature of Probus has chosen to assume.

The rights alleged for them were these:—

1. A right to possess in perpetuity certain extensive territories and seaports in India, after their right to the exclusive trade with those places shall cease. In consequence of different ancient Charters, granting to the Company an exclusive trade, together with certain powers of Government, they have acquired, and actually possess, various islands, seaports, forts, factories, settlements, districts, and territories in India, together with the island of St. Helena; either by grants from the Crown, by conquest, purchase, or by grants from the native powers in India. The nature and extent of their property in these several possessions, is an important public question. By grants from the Crown to the original or London Company, and by conveyance from that Company, they possess St. Helena and Bombay. By purchase, conquest, or by Indian grants, they possess Calcutta and Fort William, Madras, and Fort St. George, and various other important seats of trade; of all of which, for a long course of time; they have enjoyed the exclusive benefit.

With respect to the first of these; it is evident, that the Old Company could only convey the places which they held of the Crown as they themselves held them, and subject to the same principles of policy and state under which they themselves had received them. The Grants of Charles II., which conceded Bombay and St. Helena to the first Company, refer to the Charter of the 13th of the same reign, which Charter refers to, and confirms the preceding Charters of Elizabeth and James I., making them the ground of the Grants. The Charter of Elizabeth declares its principle to be, "the tendering the honour of the nation, the wealth of the people, the increase of navigation, the advancement of lawful traffic, and the benefit of the Commonwealth." The principle declared in the Charter of James I. is, "that it will be a very great honour, and in many respects profitable, to the Crown and the Commonwealth." By a reference to, and confirmation of, these several Charters, in the Charter of Charles II., and in the grants of St. Helena and Bombay, these principles are virtually adopted; the end and purpose of the Grants is declared; and their ground is proclaimed to be, the honour of the British Crown, and the welfare of the British Nation. It was those great public interests, and not the separate interests of the Company, that the Crown had in view, in conceding the property of those distant dependencies.

By grants from the native powers, the Company are in actual possession of many extensive and valuable territories. The doctrine of the law of England, in regard to the operation of these Grants, was distinctly and officially declared in the Report of the Attorney-General Mr. Pratt, and Solicitor-General Mr. Charles Yorke, in the year 1757, viz. That the moment the right of property vested in the Company by the Indian Grants, the right of sovereignty vested necessarily in the Crown of England. "The property of the soil (said those eminent lawyers) vested in the Company by the Indian Grants, subject only to Your Majesty's right of sovereignty over the settlements, and over the inhabitants as British subjects; who carry with them Your Majesty's laws, wherever they form colonies, and receive Your Majesty's protection by virtue of your Royal Charters[12]." In considering this head of right, the case of the five Northern Circars, to which the Company lay claim in their Petition, demands a particular attention; because, the advocates of the Company's pretensions are under a manifest error, with respect to their tenure of those territories. They maintain, that the Circars are held by the Company in perpetuity, under a military service, as tributaries to the Indian Power or Powers by which they were originally ceded; and that the Crown of England has no title to interfere, between them and their supposed Indian Chief. This pretension renders it absolutely necessary, to take a general view of the situation of the Company with respect to the Circars.

In the year 1753, the French were in the confirmed possession of the five Circars, together with the adjoining fort and dependencies of Masulipatam; of all of which they declared themselves to have obtained "the complete sovereignty for ever," by a grant from the Subah of the Deccan, a Prince nominally dependent on the Imperial Crown of the Mogul. "So that these territories (says Mr. Orme), rendered the French masters of the greatest dominion, both in extent and value, that had ever been possessed in Indostan by Europeans, not excepting the Portuguese when at the height of their prosperity[13]." The establishment of the French power in these important provinces, during the war between England and France, excited the most serious alarm in the Company, by threatening their settlements and possessions in Bengal; and called forth the vigorous and splendid exertions of Lord Clive, who, in the year 1759, sent a military force against Conflans, the French Commander, under the command of Colonel Forde. That gallant Officer succeeded in defeating the enemy in a pitched battle at Peddipore; and, pursuing him from one extremity of the Circars to the other, terminated the campaign by the capture of Masulipatam: and thus, by obliging the French to abandon the Circars, the right of conquest was made good against the French. For it is not necessary that every part of a conquered country should be acquired by a separate victory, if the enemy is compelled to evacuate his territory in consequence of any decisive operation; and the retention of Masulipatam, was the evidence of the triumph of the British arms over the French. That this was the object of the campaign, is distinctly shown in the declaration made by Lord Clive before the Select Committee of the House of Commons, in the year 1772. Lord Clive stated to the House, "That soon after his appointment of President of the Company's affairs in Bengal, in 1758, he took into his most serious consideration the situation of affairs upon the coast of Coromandel. Monsieur Lally was arrived with such a force, as threatened not only the destruction of all the settlements there, but of all the East India Company's possessions. That he thought it was his duty to contribute his mite towards the destruction of the French, and therefore projected the scheme of depriving the French of the Northern Circars, contrary to the inclination of his whole Council. That this expedition succeeded completely, for the French were totally driven out by Col. Forde, with the Company's troops, whose conduct and gallantry upon that occasion was equal, if not superior, to any thing that had happened during the whole course of the war[14]." This evidence of Lord Clive proves, that the scheme was entirely military, and that the success was the success of arms. By the Treaty of Peace concluded at Paris in 1763, (Art. 11,) "the Crown of France renounced all pretensions to those territories," which thus devolved, by an indisputable right of conquest, to the Crown of England. The Company, indeed, in the same year obtained a grant of Masulipatam from the Subah of the Deccan, which they now set forth in their Petition to Parliament: but yet, their most strenuous advocates admit, that Masulipatam belongs to the Crown of England, by right of conquest over the French[15]. And the same argument, that proves a right of conquest to Masulipatam, proves also a similar right to the Northern Circars.

In 1765, however, the Company being desirous of acquiring the form of an Indian title to the Circars, against the Subah, who might reclaim them, negotiated for a grant of those provinces at Delhi, over the head of the Subah; which grant they obtained. But the pretensions of the Subah, who was close at hand, might disturb them in their attempts to occupy the provinces; they therefore thought it expedient, to temporize with the Subah, and to enter into a separate negotiation with him, to induce him to surrender them; and they agreed to hold the provinces of him also, under an engagement to supply him with a contingent aid of military force, when called upon; and moreover, to pay him annually a tribute in money. By thus confusing their titles (which, instead of confirming, mutually defeated each other), they fully demonstrated the inefficacy and impotency of the Mogul's grant, in the present fallen state of that Empire. But the Company could only engage themselves for military service, so far as they possessed the ability; and their ability, is limited by the extent of their military power; which, being a part of their sovereign power, must necessarily determine with their sovereign capacity: as will be shown in the next article. Whenever that capacity ceases, they will be unable to furnish a single soldier, because they will be unable to raise a single soldier for the defence of the provinces. In that event, the Crown must of necessity interfere, to maintain and defend the territories; and then, the original cause which led to the acquirement of the Circars, namely, the expulsion of the French by force of arms, and their exclusion by the influence of the same arms in the Treaty of 1763, will be the true ground on which to rest the question of right: a right in the Crown of England, which had existence, prior to the form of the Mogul's grant, and prior also to the expedient of the grant from the Subah. And here we must keep in mind, that all territories possessed by the Company in India, by whatever means they have been acquired, are necessarily incorporated into the British Empire, and become subject to its Imperial Crown; conformably to the resolution of the House of Commons, in the year 1773: "That all acquisitions made under the influence of a military force, or by treaty with foreign Princes, do of right belong to the State." And as the whole fabric of British India grew out of a principle of advancing the public welfare, and was not an edifice raised merely for the separate welfare of the Company, every private interest comprehended in that fabric is, by every acknowledged maxim of State, public right, and consistency, subordinate; and must be determined by the security of the public good.

2. A right to retain in perpetuity certain essential rights of sovereignty, after the present delegated sovereignty of the Company shall have reverted to the Crown.—Although this pretension is a contradiction in terms, yet the assertors of it entertained no doubts of its reality. They claimed for the Company, in their permanent capacity of a trading body corporate, a right "to appoint governors, to build and maintain forts, to muster forces by sea and land, to coin money, and to erect Courts of Judicature[16]," even after they shall have lost their power of administering the Government of India; and this claim is renewed for the Company at the present day[17]. There is in this pretension so radical an ignorance of the nature of sovereignty, that it is inconceivable how it could have been entertained by any one, who had ever given a thought to the subject of law or government. The powers here enumerated, are essential prerogatives of sovereignty; which may indeed be delegated for a time by authority of Parliament, but can never be granted in full property by the Crown. In order to appoint governors, it is first necessary to be invested with the power of government. The same power is manifestly necessary, in order to be able legally to raise or muster any force by sea or land, either for defence, or for any other military service. And it is acknowledged, that the power of government has never been granted to the East India Company, but with limitation. In the grants of Bombay and St. Helena, the Company is certainly empowered to erect forts, and to raise and employ forces; but by the same grants they are invested with the powers of Captain General in order to that end; virtually in the first, and expressly in the second. Will it be imagined, that they are to retain the authority of Captain General, after their powers of government shall cease? And if not, it must be evident, that their authority over forts, and all their military power, must determine, whenever their delegated power of Captain General shall determine. It would be an insult to any reader, who has ever cast his eye even on the elementary Commentaries of Sir William Blackstone, to insist upon a truth so obvious and simple. With regard to the erecting of Courts, no such power is given in any of the Charters produced in evidence. The Crown erects the Court, and the power granted to the Company is, and necessarily must be, limited and subordinate. The true cause of that extraordinary error, is plainly this: the Charters of King William and Queen Anne, upon which they rest these pretensions, conferred at one and the same time (as has been already observed), both their corporate capacity and their exclusive privilege. The assertors of those permanent sovereign rights, not discriminating, by the principles of things, between the several powers conferred in those Charters, have confused the provisions; and have construed all the powers above enumerated, which by their nature could only appertain to them as delegated Sovereigns, to belong to their capacity of an incorporated Company. And, under this illusion, they have imagined, that those powers are annexed to that perpetuity of their corporate body which was first enacted in 1730, and confirmed in the 33d year of the present reign; and that they do not constitute a part of those powers of government, which have been conferred upon them, from time to time, by their exclusive Charters. As this construction is entirely arbitrary on the part of the Company, and as it is unsupported by the principles either of law or sound reason, it will be best refuted by the authority of Parliament.

3. A right to exclude all British subjects from the Company's Indian ports, after their own exclusive privilege shall be expired.—This right has been claimed in the following words:—"Although their exclusive right to the trade, and their power of administering the government and revenues of India, were to be determined, they would still remain an incorporated Company in perpetuity, with the exclusive property and possession of Calcutta and Fort William, Madras and Fort St. George, Bombay, Bencoolen, and St. Helena, and various other estates and settlements in India. Whether, in the event of the sole trade being determined, individuals would be able to carry on a successful trade to India, if the Company were to debar them the use of their ports and factories, may require a serious consideration[18]."

This is a claim, not only to a practical exclusive trade, after the right to exclusive trade expressly granted by Parliament shall cease and determine, but involves also claims of perpetual sovereignty. It is incomprehensible, how it could be alleged by a writer who, in the preceding page, had pointedly excepted from their powers, that of converting the trade into "a mischievous monopoly[19];" for, what more mischievous form could monopoly, or an hostile sovereignty, assume, than that of excluding all British individuals from the chief ports and seats of trade in India? By this alleged right, the grants of Charters and the provisions of Parliament would be reduced to an absurdity. But as this is a claim of private right to cause a public wrong, it cannot fail particularly to engage the consideration of Parliament.

The rights alleged by the Company at the present day, are these:—

1. A right to all the ports and territories in India, possessed by the Company, of the same kind and extent as the right by which they hold their freeholds in London.—This right has been solemnly asserted for the Company, by the Chairman and Deputy Chairman of the Court of Directors, in these words:—"The Company are AS MUCH owners of THE CHIEF SEATS of European trade in the Indian Empire, as they are of their freeholds in London[20]." This is an open and unreserved declaration of the East India Company, renewing and asserting the preceding allegations made on their behalf at the expiration of their last exclusive Charter; and the same allegation is now repeated in their Petition to Parliament, though in terms somewhat more qualified than those which they addressed to the Government; viz. "that no person can have a right, except with the consent of the proprietors of India stock, to use the seats of trade which the stockholders have acquired." But they must bring an oblivion over all the reasons of state and policy by which they exist at all, before they can carry in the face of the nation the proud assertion, that they stand equally circumstanced, in regard of private right, with respect to "the chief seats of European commerce in the Indian Empire," and with respect to "their freeholds in London." They will assuredly be told by Parliament, that they may not exercise the same arbitrary authority over the chief seats of Indian commerce, which they may over their freeholds in London. With regard to their freeholds in London, they may exclude all persons from entering them, they may desert them themselves, or they may let them fall to ruin. But it is NOT SO with regard to the chief seats of Indian commerce; they will find, that they cannot arbitrarily exclude British subjects from those seats, beyond a limited time; that they cannot debar the nation the beneficial use of them; and that they will not be suffered to render them unavailable, or unprofitable. As soon as the India Trade shall be thrown open, the ports of India will necessarily become open; and, if the Company should then search for their private right to close them, they will find, that it is merged in the public right to use them; or, to use the words of Lord Hale, that "their jus privatum is clothed and superinduced with a jus publicum[21]."

2. The last right alleged by the Company at the present crisis, which forms the CLIMAX of their pretensions, and is the key to all their late proceedings, is that of a perpetual union and incorporation with the Supreme Government of the Indian Empire; so that the Indian trade and government must ever continue to be united in them, and cannot now be separated, without endangering "the British Empire in India, and the British Constitution at home." This pretension renders the question of a temporary exclusive trade entirely nugatory, because it is the unqualified assertion of a perpetual one; not to be received any more as a grant from Parliament, as hitherto it has been, but to be extorted from Parliament through fear of the subversion of Parliament. This pretension is founded upon the Company's interpretation of an observation, made by a late eminent Minister to the Managers of the Company's affairs, in the year 1800; viz. that "the Government and the trade of India are now so interwoven together," as to establish an indissoluble "connexion of government and trade." This dictum, is assumed by the Company for an incontestable maxim of State, as applicable to their own Corporation; and for an eternal principle, connecting that Body Corporate with all future Indian Government. This they denominate, "THE SYSTEM, by which the relations between Great Britain and the East Indies are now regulated;" and, in their sanguine hopes of gaining perpetuity for their system, they already congratulate themselves upon their Incorporation into the Sovereignty, as a NEW, and FOURTH ESTATE of the Empire.

It is that maxim, evidently embraced for this construction at the present crisis, that has emboldened the conductors of the Company's concerns to assume so lofty a demeanour towards the King's servants; and to venture to represent the cautious proceedings of Government in a great political question (in which it appears only as a moderator between two conflicting interests), to be an aggression against their indisputable rights. It has been asked in the Court of Proprietors, "whether the Ministers of the present day are become so far exalted above their predecessors, or the Company so newly fallen, that adequate communications should not be made to the latter, of the plans and intentions of the former?" It is neither the one nor the other; but it is, that the Company are become so elated and intoxicated by the ambitious expectation of being incorporated as a perpetual Member of the Supreme Government, that they conceive they have no longer any measures to keep with the Ministers of the Crown.

And can the British people now fail to open their eyes, and to discern the strait to which the ancient crown and realm of England would be reduced, by submitting to acknowledge this new estate in the Empire? Greatly as it would be to be lamented that any thing should disturb the present internal tranquillity of our political system, yet, if such should be the necessary result of a resistance to the ambitious views of the East India Company, it ought to be manfully and cheerfully encountered; rather than admit, by a temporizing concession, a claim which shall bend Parliament to the will of, and degrade the Crown to an alliance with, a Company of its own subjects; which owes its recent existence to the charters of the Crown, and the enactments of Parliament, and yet aspires to seat itself for ever, side by side, by its own supreme Government.

The Company have carried too far their confidence in the constitutional defence by which they hoped to ride in triumph over the Executive Government. Their exorbitant pretensions have bred a new constitutional question, to which the public mind is now turning. In their solicitude to fortify themselves with constitutional jealousies, they have constructed a formidable fortress, which threatens to embarrass the Citadel of the State, and must therefore of necessity awaken its jealousy. A change in the Administration of the Indian Government (should the Company finally provoke such a change), need not necessarily throw the patronage of India into the hands of the Crown; means are to be found, by which that political and constitutional evil may be effectually guarded against. But if, through a precipitate assumption, that no such adequate substitute can be provided for the present system, Parliament should, at this critical moment, unguardedly yield to the demands of the Company, and give its sanction to their claims to a perpetuity of those privileges which they have hitherto been contented to receive with limitation, what difficulties would it not entail upon its own future proceedings? If the corporate sovereignty of the Company is once absolutely engrafted upon the Sovereignty of the State, it cannot be extracted without lacerating the ancient stock, and convulsing the general system.

The Company would have done wisely, if, instead of resting their case upon pretensions erroneous in fact, inadmissible in law, and derogatory of the authority addressed, they had rested it wholly upon their own endeavours to promote the original purpose of their incorporation: namely, the honour of the Crown, and the advantage of the commonwealth. Upon that ground the Company might have stood strong; and all that would then have remained for the consideration of Parliament, would have been a question, how those great interests could, under existing circumstances, be best advanced; either by continuing the present arrangement without alteration, or by modifying it in such particulars, as Parliament in its wisdom might judge to be necessary. But instead of this, they have taken ground upon high pretensions of Right, which must necessarily provoke investigation; and we have discovered, in the foregoing inquiry, how far those pretensions are supported.

The determination of this great question, however, is now reserved for Parliament; and, upon the wisdom of Parliament, the Country may with confidence rely, for a full consideration of all the public rights, commercial as well as political; and likewise, for the final adoption of such an arrangement for the government and trade of India, as shall appear to be the best calculated to advance the real interests, and to promote the general prosperity of the Empire, both in the East and West.

GRACCHUS.

THE END.