But the answer is very obvious: the power of borrowing given to the East India Company is not granted under any condition whatever, but is given in positive and direct words, to the amount of five millions—and the act does not proceed upon the intention to incorporate the nine millions of South Sea stock as a condition, but only recites that as a proposition, and gives leave to the several Companies to carry it into execution if they thought proper.
But if any doubt had remained concerning this power of the Company to borrow five millions, it is fully removed, not only by their having in practice explained the act in the most extensive manner, without challenge, but by the subsequent act 23 Geo. II. c. 22. § 5 and 6. which plainly proceeds upon the supposition, that the Company was at that time intitled to borrow to the amount of six millions, and allows them to convert 4,200,000l. as part of their bonds into annuities.
The 33d section of the same act is a repetition almost verbatim of the 75th section of the act 9 and 10th of king William, c. 44. by which, in order to prevent the Company from interfering with the Bank of England, they are allowed to borrow on the credit of their capital stock, provided the sum so borrowed shall be laid out in goods to be exported or otherwise employed in their trade, or lent on bottomry, and that such sums shall only be borrowed under their common seal, and shall not be payable on demand but at six months, and that they shall not discount bills or notes, or keep cash for other persons.—In this clause the words "it shall not be lawful," in place of "it shall and may be lawful," are erroneously copied from the printed clause 75th of the act 9 and 10th of William, c. 44.
The act 17th Geo. II. c. 17. § 8. gives the Company simply a power in order to raise the sum of one million paid by them to Government, of borrowing under their common seal to the amount of one million more than they could before lawfully borrow.
This seems to be a compleat view of the whole subsisting statutes by which the East India Company is restrained from borrowing money; and it must appear evident, that by none of them the Company is prohibited from purchasing goods upon credit, or incurring book debts, and therefore the great clamour which has been raised, as if the Company had acted contrary to law, or in an inexpedient or improper manner, by incurring the book debts which it presently owes, over and above its bonds and annuities, must appear totally groundless and absurd.
It further appears, that the Company's affairs are now in such a situation, that every one of these debts will be paid off in a very few months, and that the 40,000l. of additional dividend, voted to take place at Christmas next, will in no respect retard the payment of these debts; and that the Company will be further possessed, when the ships of this season shall have arrived, of effects equal to the payment of almost the whole of their bond debts, which, however, there is no intention nor no occasion to pay off.
But supposing the whole of the Company's book debts could not be so soon discharged, this can be no objection to the small additional dividend of 40,000l. considering the present flourishing state of the Company's affairs. The creditors to whom the book debts are owing are under no uneasiness, nor do they complain of the increase of dividend, which it is now allowed the Company are fully able to pay, and to continue that payment out of the profits of their trade alone.
Every merchant, when he regulates the sum to be bestowed by him upon his subsistence, or the annual expence of his family, considers, first, what is the total amount of his effects, compared with his debts; and secondly, what is the amount of his annual profits; and if he finds that he has a considerable fortune over and above his debts, and that his annual profits are also considerable; he freely resolves, and with great propriety, to bestow a share of his annual profits upon the support and expence of his family; and it never can enter into his deliberation, in fixing what that annual expence shall be, whether or not at every particular period of the year, he is sure of having a balance of cash in his banker's hand; because, if his total expence is properly regulated, so as not to exceed what he can really afford, he knows the goods he is possessed of, must always be able to command cash sufficient for his temporary occasions: and indeed, if this rule were erroneous, there are many merchants in London possessed of fortunes to the amount of 150,000l. and their annual profits two or three thousands, who could not afford 50l. a year for their usual subsistence. If they were to be restricted in the manner now proposed for the India Company, they could not purchase a dinner and pay their debts; their effects probably in America or the West Indies, in the way of trade, their returns uncertain, as to the particular time, and large debts due in England, as the price of cargoes sent abroad; so that, upon the footing of their banker's book, after deducting all their debts due at home, they might be obliged to subsist upon air for several years together.
The credit of a public company is much superior to that of private merchants; those to whom they owe the prices of goods, freights or other book debts, are much more ready to indulge them with delays of payment than the creditors of particular merchants. The India Company is under no embarrasment with respect to its creditors; its only embarrasment is from the choice it has unhappily made of a set of Directors, who seem determined, if possible, to stab the credit of the Company, and to try to what degree of injuries and insults the patience of the Proprietors will tamely submit.
The Proprietors have resolved to apply to Parliament, by petition against a bill now depending, for rescinding the 2½ per cent. additional dividend, voted by the general court on the 6th of May last, in strict conformity to the powers granted by charter. The respect due to the Legislature restrains me from expressing my sentiments with regard to this retrospective law relating to private property and public credit. If any thing is interesting in this happy constitution, these points certainly are. The questions concerning general warrants, and dispensing powers, were, in respect of these, of very inferior importance. It is the duty of every British subject to submit with reverence and veneration, to whatever obtains the sanction of the three branches of the Legislature; but when any particular bill appears, to common apprehension, to be of dangerous consequence, we are entitled to hope and presume that it never will pass into a law.