CHAPTER XXI. Free Trade. Observations on the General Question.-Lord Wellesley's Measures respecting the Trade of India. - Hostility excited against him.-Soundness of his View.-Adam Smith's Theories.-The Controversies ended in 1832.-Statement of the Question of the Private Trade of India, by Mr. Udny, in a Minute to Marquess Wellesley.— His Lordship's Anxiety on the Subject.-Letter to Lord Castlereagh respecting Mr. Udny and the Question of Private Trade. FREEDOM is the life of trade; monopoly its bane. These propositions, if viewed as abstract questions by men unswayed by party prepossessions, or the bias of self-interest, guided solely by the light of reason and the principles of justice, would be regarded as economical axioms, the truth of which was self-evident. It was intended by the Great Author of our being, that nations should freely exchange their commodities with each other; the liberty of commerce is based upon the law of nature. England does not produce cotton, sugar, tea, oranges, &c.; but it is peculiarly adapted by its geographical position, its mineral wealth, its geological formation, and the habits of its population, to produce manufactured articles better and cheaper than the countries where those commodities grow; we supply our wants by means of exchange, traffic, commerce; nature itself suggests intercourse between kingdoms; it has prepared the great deep as a highway for * trade; for though the sea seems to keep different countries separate, it in reality facilitates the intercourse of man and man, and enables us to transfer the most bulky articles from one hemisphere to another! Any interference with the liberty of trading either by restrictions in peace or blockades in time of hostilities, are abnegations of the common rights of mankind, and the onus probandi must always rest on those who place fetters upon the freedom of action to justify such an infraction of inherent rights, and such restraints on natural liberty. However prepossessed a man may be in favour of existing systems, it is probable that he would not withhold his assent from a broad proposition for the establishment of one uniform, comprehensive, and general system of unfettered trade among all the nations of the earth. He sees a restrictive system in the adjoining kingdom; he does not think it fair to give that country an advantage it will not reciprocate; he therefore retaliates by a restrictive tariff. But if it were possible to begin de novo, and arrange in a convention of all the maritime and commercial nations under heaven one grand system of trade, which should be constructed on the most rational principles,—if he had no fears for existing interests, that grew up under a gigantic blockade that encircled the globe, would he ask for prohibitions, monopolies, or protections ?— "If there were only land between this and America, we should have no cotton; for the carriage of it by land would cost more than it is worth. Think how many horses would be wanted to draw such a load as comes in one ship; and they must eat and rest on their journey. But the winds are the horses which carry the ship along; and they cost us nothing but to spread a sail.”—Archbishop Whately. "No! let all lands exchange with all The good which freights this foodful ball ! For Free Exchange is Peace! is Peace!" The controversies in which the Marquess Wellesley found himself involved by his measures respecting the trade of India, have lost much of their interest since the abolition of the East India Company's monopolies, and the general recognition, in our own day, of the principles of commercial liberty; but it cannot be uninstructive to mark the career of the cause of free trade which then commenced a struggle with monopoly, which issued in the victory of 1832, and prepared the public mind for subsequent economical changes of the same liberal character. The great work of Adam Smith* was attracting attention about the time when Lord Wellesley entered upon public life; and there can be no doubt that his Lordship's views were influenced by the lucid reasonings and demonstrations of that admirable writer. Lord Wellesley proposed a very moderate reform of the restrictive system of the East India Company; but he was at once assailed with every species of obloquy, and accused of designs against the very existence of the Company;-designs which it may here be stated, once for all, his Lordship never had harboured. The nature of the Governor-General's plans will be understood by the following minute drawn up by the Honourable G. Udny, a member of the council, at the request of his Excellency, on the 15th of September, 1800: "Wealth of Nations;" 1784. "I beg leave to offer, with diffidence, some observations upon the letter from Mr. Dundas to the chairman of the Court of Directors, which your Lordship put hands. into my "That the trade to be carried on by the East India Company must be limited by the extent of their capital; that this capital cannot embrace the whole trade of India, that of the remainder foreigners should participate in no greater degree than to the extent of their own capitals; and that the fortunes of the Company's servants resident in India should, by means of this trade, be carried to England, in the manner most beneficial to their interests and to that of the mother country, where it is desirable that all that capital should ultimately settle, are positions established in this letter. "In arguing on the fittest mode of conducting this trade, Mr. Dundas appears to consider it merely as a vehicle for conveying to England the fortunes of the Company's servants in India. But it may be shown that this is not strictly the case. The largest portion of the community of British India, viz. the servants of the Company in the military, judicial, and revenue lines (in Bengal at least), are prohibited from trade: of their servants who engage in it, trade is for a series of years carried on with a view first to acquire a fortune, and only ultimately does it serve, and that perhaps but in part, for the remittance of it. 66 The great channels of remittance for fortunes acquired in India are of late years, "1. By bills of exchange granted by the different governments of India on the Court of Directors, or by loan to the Company in India, payable at the expiration of their term, in England. "2. By bills drawn by the mercantile houses at the different presidencies upon consignments of goods made by them to England, on their own proper account, or by the bills of their constituents, whether servants of the Company, traders, or free merchants or others out of the Company's employ, upon similar consignments of goods made on their behalf. "A great part of the capital of British subjects resident in India thus employed in the provision of goods for the purpose of consignment to England, is not that the produce of them may remain there, but that it may again be brought back to this country to be reinvested in the trade of it. "Mercantile houses also employ not only their own capital in this trade, but the capitals of the houses of agency with whom they are connected in England, and some capital borrowed from thence. "With respect to the mode in which the provision of goods in India for this trade should be made, Mr. Dundas lays it down as his settled opinion, that no agent should be employed in India or permitted to reside there, except with the licence of the East India Company, subject to the control of such regulations as the habits, prejudices, and trade of the country may render expedient, from this decisive circumstance, in addition to every other consideration, that the tolerance of unlicensed adventurers would lead to colonization of the worst kind, tending to undermine the permanence of the British power and preeminence in India.' This unquestionably is the prime object to be kept in view, |