IV. The East India Company

Thus far the monetary legislation of the 17th century related to a legal decision and to a mechanical invention by which coins could be manufactured of a uniform weight and size, a thing practically impossible by the process of hammering and hand-punching.

By the new invention coins could also be produced cheaply, so that small coins of silver, of billon and even of tin and copper, could be manufactured economically, rapidly and measuredly safe from the arts of forgers. Afterwards, the monetary legislation related to an intrigue which originated with the billoneurs, the goldsmiths or bankers and their commercial colleagues, namely, the 215 nobles, knights, aldermen and merchants, trading with the Indies, under the title of the East India Company. It was consummated under the auspices of the king's mistress, Barbara Villiers, Countess of Castlemaine, and afterwards Duchess of Cleveland. Finally, it fell altogether under the influence of the all-absorbing East India Company.

By the charter granted to the East India Company, December 31, 1600, it was permitted to export foreign coin or bullion to the amount of £30,000 a year, upon condition that the Company imported within six months after the completion of every voyage, except the first one, the same quantity of foreign coin and bullion that it had exported." It may here be stated that from the year 1600 the seigniorage on silver coins levied by Elizabeth was two shillings on 62 shillings, the coinage value of the pound weight of standard silver; by James I., two shillings-and-six pence; by Charles I. and the Commonwealth it was two shillings, and by Charles II., until 1667, it was two shillings to the Crown and two pence to Barbara Villiers. The privileges granted in 1600 to the East India Company were so lucrative that the restrictions which accompanied them had not yet produced dissatisfaction.

The trade in general commodities was slow, hazardous, and comparatively small. After 1635 the Company was handicapped by the charter granted to Sir William Courten (the son of a thrifty tailor) and others, authorizing them to trade with those parts of India which the Company had neglected. In 1637 Courten's Company was granted further privileges, including that of exporting within five years not over £40,000 in coin and bullion to India. This practically meant silver coin or bullion; and it enabled the whole sum to be exported in one year.

During the Commonwealth the operations of this rival association were conducted upon a scale of such magnitude and with such concessions to buyers that profits were reduced to a minimum, and the continuance of both the original British and Dutch East India Companies was seriously endangered. In this emergency the billoneurs and capitalists of Amsterdam and London took counsel of one another, and in 1649 succeeded in forming a union of the rival associations; after which prices and profits both took an upward turn.

However, the union was not a lasting one. It had its disadvantages, and prominent among these were the restrictions placed upon the East India Company by the government of Elizabeth with regard to the export of coin and bullion. These restrictions were still, at least outwardly, observed by the Company, whereas Courten and his associates had never previous to the amalgamation deemed themselves bound to pay any respect to the like restrictions upon their Company. The latter, therefore, longed to be free. They represented to the Government, as indeed they had done several years previously, that the East India Company's charter legally expired with the death of Charles I; that the East India Company had in fact exceeded their privilege in the export of coin and bullion, and had thereby occasioned a great scarcity of silver coin in England; and that they had "neglected to establish fortified factories or seats of trade to which British subjects in the Orient could resort with safety."

In consequence of these specious representations, Cromwell, in 1655 proclaimed free trade to the Indies for three years; but he does not appear to have been satisfied with the results of the experiment; for in 1657 (February 10) the Council of State gave it as their advice to the Protector, "that the trade of East India be managed by a United Joint Stock, exclusive of all others." This led in the same year to a renewal of the envied charter to the East India Company. This charter was confirmed and the powers of the Company, except as to the export of coin and bullion, were greatly enlarged by Charles II., April 3, 1661.

In a work entitled "The Halcyon Age of the World" I have set forth the various expeditions, legal and illegal, which were organised in England and the West Indies during the 17th century to rob the Spaniards of the spoil which they had previously plundered from the natives of America. Hawkins, Drake, Frobisher, Morgan and many others had conducted these expeditions, whose fruit was chiefly the gold and silver which had been wrung from the blood and tears of the Indians. To convert this spoil into money was the first desire of the plunderers. The Buccaneers sold it at 10 percent, discount to the illicit mint at Boston, Mass.; the pirates sold it to the fences in England at 25 percent, off, and the privateers to the goldsmiths at 5 to 10 percent. off. All these parties sighed for a purchaser who would buy without question every lot that was offered, pay for it in money containing precisely the same weight of pure metal, and place no restriction upon its exportation to India or elsewhere.