TheHudson’sBayCompany，beforetheirmisfortunesinthelatewar，hadbeenmuchmorefortunatethantheRoyalAfricanCompany。Theirnecessaryexpenseismuchsmaller。Thewholenumberofpeoplewhomtheymaintainintheirdifferentsettlementsandhabitations，whichtheyhavehonouredwiththenameofforts，issaidnottoexceedahundredandtwentypersons。Thisnumber，however，issufficienttopreparebeforehandthecargooffursandothergoodsnecessaryforloadingtheirships，which，onaccountoftheice，canseldomremainabovesixoreightweeksinthoseseas。Thisadvantageofhavingacargoreadypreparedcouldnotforseveralyearsbeacquiredbyprivateadventurers，andwithoutitthereseemstobenopossibilityoftradingtoHudson’sBay。Themoderatecapitalofthecompany，which，itissaid，doesnotexceedonehundredandtenthousandpounds，maybesidesbesufficienttoenablethemtoengrossthewhole，oralmostthewhole，tradeandsurplusproduceofthemiserable，thoughextensivecountry，comprehendedwithintheircharter。Noprivateadventurers，accordingly，haveeverattemptedtotradetothatcountryincompetitionwiththem。
　　Thiscompany，therefore，havealwaysenjoyedanexclusivetradeinfact，thoughtheymayhavenorighttoitinlaw。Overandaboveallthis，themoderatecapitalofthiscompanyissaidtobedividedamongaverysmallnumberofproprietors。Butajointstockcompany，consistingofasmallnumberofproprietors，withamoderatecapital，approachesverynearlytothenatureofaprivatecopartnery，andmaybecapableofnearlythesamedegreeofvigilanceandattention。Itisnottobewonderedat，therefore，if，inconsequenceofthesedifferentadvantages，theHudson’sBayCompanyhad，beforethelatewar，beenabletocarryontheirtradewithaconsiderabledegreeofsuccess。Itdoesnotseemprobable，however，thattheirprofitseverapproachedtowhatthelateMr。Dobbsimaginedthem。Amuchmoresoberandjudiciouswriter，Mr。Anderson，authorofTheHistoricalandChronologicalDeductionofCommerce，veryjustlyobservesthat，uponexaminingtheaccountsofwhichMr。Dobbshimselfwasgivenforseveralyearstogetheroftheirexportsandimports，anduponmakingproperallowancesfortheirextraordinaryriskandexpense，itdoesnotappearthattheirprofitsdeservetobeenvied，orthattheycanmuch，ifatall，exceedtheordinaryprofitsoftrade。
　　TheSouthSeaCompanyneverhadanyfortsorgarrisonstomaintain，andthereforewereentirelyexemptedfromonegreatexpensetowhichotherjointstockcompaniesforforeigntradearesubject。Buttheyhadanimmensecapitaldividedamonganimmensenumberofproprietors。Itwasnaturallytobeexpected，therefore，thatfolly，negligence，andprofusionshouldprevailinthewholemanagementoftheiraffairs。Theknaveryandextravaganceoftheirstock—jobbingprojectsaresufficientlyknown，andtheexplicationofthemwouldbeforeigntothepresentsubject。Theirmercantileprojectswerenotmuchbetterconducted。ThefirsttradewhichtheyengagedinwasthatofsupplyingtheSpanishWestIndieswithnegroes，ofwhich（inconsequenceofwhatwascalledtheAssientocontractgrantedthembytheTreatyofUtrecht）theyhadtheexclusiveprivilege。Butasitwasnotexpectedthatmuchprofitcouldbemadebythistrade，boththePortugueseandFrenchcompanies，whohadenjoyedituponthesametermsbeforethem，havingbeenruinedbyit，theywereallowed，ascompensation，tosendannuallyashipofacertainburdentotradedirectlytotheSpanishWestIndies。Ofthetenvoyageswhichthisannualshipwasallowedtomake，theyaresaidtohavegainedconsiderablybyone，thatoftheRoyalCarolinein1731，andtohavebeenlosers，moreorless，byalmostalltherest。Theirillsuccesswasimputed，bytheirfactorsandagents，totheextortionandoppressionoftheSpanishgovernment;butwas，perhaps，principallyowingtotheprofusionanddepredationsofthoseveryfactorsandagents，someofwhomaresaidtohaveacquiredgreatfortuneseveninoneyear。In1734，thecompanypetitionedthekingthattheymightbeallowedtodisposeofthetradeandtonnageoftheirannualship，onaccountofthelittleprofitwhichtheymadebyit，andtoacceptsuchequivalentastheycouldobtainfromtheofSpain。
　　In1724，thiscompanyhadundertakenthewhale—fishery。Ofthis，indeed，theyhadnomonopoly;butaslongastheycarriediton，nootherBritishsubjectsappeartohaveengagedinit。OftheeightvoyageswhichtheirshipsmadetoGreenland，theyweregainersbyone，andlosersbyalltherest。Aftertheireighthandlastvoyage，whentheyhadsoldtheirships，stores，andutensils，theyfoundthattheirwholeloss，uponthisbranch，capitalandinterestincluded，amountedtoupwardsoftwohundredandthirty—seventhousandpounds。
　　In1722，thiscompanypetitionedtheParliamenttobeallowedtodividetheirimmensecapitalofmorethanthirty—threemillionseighthundredthousandpounds，thewholeofwhichhadbeenlenttogovernment，intotwoequalparts:Theonehalf，orupwardsofsixteenmillionsninehundredthousandpounds，tobeputuponthesamefootingwithothergovernmentannuities，andnottobesubjecttothedebtscontracted，orlossesincurred，bythedirectorsofthecompanyintheprosecutionoftheirmercantileprojects;theotherhalftoremain，asbefore，atradingstock，andtobesubjecttothosedebtsandlosses。Thepetitionwastooreasonablenottobegranted。In1733，theyagainpetitionedtheParliamentthatthree—fourthsoftheirtradingstockmightbeturnedintoannuitystock，andonlyone—fourthremainastradingstock，orexposedtothehazardsarisingfromthebadmanagementoftheirdirectors。Boththeirannuityandtradingstockshad，bythistime，beenreducedmorethantwomillionseachbyseveraldifferentpaymentsfromgovernment;sothatthisfourthamountedonlytoL3，662，7848s。
　　6d。In1748，allthedemandsofthecompanyupontheKingofSpain，inconsequenceoftheAssientocontract，were，bytheTreatyofAix—la—Chapelle，givenupforwhatwassupposedanequivalent。AnendwasputtotheirtradewiththeSpanishWestIndies，theremainderoftheirtradingstockwasturnedintoanannuitystock，andthecompanyceasedineveryrespecttobeatradingcompany。
　　ItoughttobeobservedthatinthetradewhichtheSouthSeaCompanycarriedonbymeansoftheirannualship，theonlytradebywhichiteverwasexpectedthattheycouldmakeanyconsiderableprofit，theywerenotwithoutcompetitors，eitherintheforeignorinthehomemarket。AtCarthagena，PortoBello，andLaVeraCruz，theyhadtoencounterthecompetitionoftheSpanishmerchants，whobroughtfromCadiz，tothosemarkets，Europeangoodsofthesamekindwiththeoutwardcargooftheirship;andinEnglandtheyhadtoencounterthatoftheEnglishmerchants，whoimportedfromCadizgoodsoftheSpanishWestIndiesofthesamekindwiththeinwardcargo。ThegoodsbothoftheSpanishandEnglishmerchants，indeed，were，perhaps，subjecttohigherduties。Butthelossoccasionedbythenegligence，profusion，andmalversationoftheservantsofthecompanyhadprobablybeenataxmuchheavierthanallthoseduties。Thatajointstockcompanyshouldbeabletocarryonsuccessfullyanybranchofforeigntrade，whenprivateadventurerscancomeintoanysortofopenandfaircompetitionwiththem，seemscontrarytoallexperience。
　　TheoldEnglishEastIndiaCompanywasestablishedin1600
　　byacharterfromQueenElizabeth。InthefirsttwelvevoyageswhichtheyfittedoutforIndia，theyappeartohavetradedasaregulatedcompany，withseparatestocks，thoughonlyinthegeneralshipsofthecompany。In1612，theyunitedintoajointstock。Theircharterwasexclusive，andthoughnotconfirmedbyActofParliament，wasinthosedayssupposedtoconveyarealexclusiveprivilege。Formanyyears，therefore，theywerenotmuchdisturbedbyinterlopers。Theircapital，whichneverexceededsevenhundredandforty—fourthousandpounds，andofwhichfiftypoundswasashare，wasnotsoexorbitant，northeirdealingssoextensive，astoaffordeitherapretextforgrossnegligenceandprofusion，oracovertogrossmalversation。
　　Notwithstandingsomeextraordinarylosses，occasionedpartlybythemaliceoftheDutchEastIndiaCompany，andpartlybyotheraccidents，theycarriedonformanyyearsasuccessfultrade。Butinprocessoftime，whentheprinciplesoflibertywerebetterunderstood，itbecameeverydaymoreandmoredoubtfulhowfaraRoyalCharter，notconfirmedbyActofParliament，couldconveyanexclusiveprivilege。Uponthisquestionthedecisionsofthecourtsofjusticewerenotuniform，butvariedwiththeauthorityofgovernmentandthehumoursofthetimes。Interlopersmultiplieduponthem，andtowardstheendofthereignofCharlesII，throughthewholeofthatofJamesIIandduringapartofthatofWilliamIII，reducedthemtogreatdistress。In1698，aproposalwasmadetoParliamentofadvancingtwomillionstogovernmentateightpercent，providedthesubscriberswereerectedintoanewEastIndiaCompanywithexclusiveprivileges。
　　TheoldEastIndiaCompanyofferedsevenhundredthousandpounds，nearlytheamountoftheircapital，atfourpercentuponthesameconditions。Butsuchwasatthattimethestateofpubliccredit，thatitwasmoreconvenientforgovernmenttoborrowtwomillionsateightpercentthansevenhundredthousandpoundsatfour。Theproposalofthenewsubscriberswasaccepted，andanewEastIndiaCompanyestablishedinconsequence。TheoldEastIndiaCompany，however，hadarighttocontinuetheirtradetill1701。
　　Theyhad，atthesametime，inthenameoftheirtreasurer，subscribed，veryartfully，threehundredandfifteenthousandpoundsintothestockofthenew。ByanegligenceintheexpressionoftheActofParliamentwhichvestedtheEastIndiatradeinthesubscriberstothisloanoftwomillions，itdidnotappearevidentthattheywereallobligedtouniteintoajointstock。Afewprivatetraders，whosesubscriptionsamountedonlytoseventhousandtwohundredpounds，insistedupontheprivilegeoftradingseparatelyupontheirownstocksandattheirownrisk。TheoldEastIndiaCompanyhadarighttoaseparatetradeupontheiroldstocktill1701;andtheyhadlikewise，bothbeforeandafterthatperiod，aright，likethatofotherprivatetraders，toaseparatetradeuponthethreehundredandfifteenthousandpoundswhichtheyhadsubscribedintothestockofthenewcompany。Thecompetitionofthetwocompanieswiththeprivatetraders，andwithoneanother，issaidtohavewell—nighruinedboth。Uponasubsequentoccasion，in1730，whenaproposalwasmadetoParliamentforputtingthetradeunderthemanagementofaregulatedcompany，andtherebylayingitinsomemeasureopen，theEastIndiaCompany，inoppositiontothisproposal，representedinverystrongtermswhathadbeen，atthistime，themiserableeffects，astheythoughtthem，ofthiscompetition。InIndia，theysaid，itraisedthepriceofgoodssohighthattheywerenotworththebuying;andinEngland，byoverstockingthemarket，itsunktheirpricesolowthatnoprofitcouldbemadebythem。Thatbyamoreplentifulsupply，tothegreatadvantageandconveniencyofthepublic，itmusthavereduced，verymuch，thepriceofIndiangoodsintheEnglishmarket，cannotwellbedoubted;butthatitshouldhaveraisedverymuchtheirpriceintheIndianmarketseemsnotveryprobable，asalltheextraordinarydemandwhichthatcompetitioncouldoccasionmusthavebeenbutasadropofwaterintheimmenseoceanofIndianCommerce。Theincreaseofdemand，besides，thoughinthebeginningitmaysometimesraisethepriceofgoods，neverfailstoloweritintherun。Itencouragesproduction，andtherebyincreasesthecompetitionoftheproducers，who，inordertounderselloneanother，haverecoursetonewdivisionsoflabourandnewimprovementsofartwhichmightneverotherwisehavebeenthoughtof。Themiserableeffectsofwhichthecompanycomplainedwerethecheapnessofconsumptionandtheencouragementgiventoproduction，preciselythetwoeffectswhichitisthegreatbusinessofpoliticaleconomytopromote。Thecompetition，however，ofwhichtheygavethisdolefulaccount，hadnotbeenallowedtobeoflongcontinuance。In1702，thetwocompanieswere，insomemeasure，unitedbyanindenturetripartite，towhichthequeenwasthethirdparty;andin1708，theywere，byActofParliament，perfectlyconsolidatedintoonecompanybytheirpresentnameoftheTheUnitedCompanyofMerchantstradingtotheEastIndies。IntothisactitwasthoughtworthwhiletoinsertaclauseallowingtheseparatetraderstocontinuetheirtradetillMichaelmas1711，butatthesametimeempoweringthedirectors，uponthreeyears’notice，toredeemtheirlittlecapitalofseventhousandtwohundredpounds，andtherebytoconvertthewholestockofthecompanyintoajointstock。Bythesameact，thecapitalofthecompany，inconsequenceofanewloantogovernment，wasaugmentedfromtwomillionstothreemillionstwohundredthousandpounds。In1743，thecompanyadvancedanothermilliontogovernment。Butthismillionbeingraised，notbyacallupontheproprietors，butbysellingannuitiesandcontractingbond—debts，itdidnotaugmentthestockuponwhichtheproprietorscouldclaimadividend。Itaugmented，however，theirtradingstock，itbeingequallyliablewiththeotherthreemillionstwohundredthousandpoundstothelossessustained，anddebtscontracted，bythecompanyinprosecutionoftheirmercantileprojects。From1708，oratleastfrom1711，thiscompany，beingdeliveredfromallcompetitors，andfullyestablishedinthemonopolyoftheEnglishcommercetotheEastIndies，carriedonasuccessfultrade，andfromtheirprofitsmadeannuallyamoderatedividendtotheirproprietors。
　　DuringtheFrenchwar，whichbeganin1741，theambitionofMr。
　　Dupleix，theFrenchgovernorofPondicherry，involvedtheminthewarsoftheCarnatic，andinthepoliticsoftheIndianprinces。
　　Aftermanysignalsuccesses，andequallysignallosses，theyatlastlostMadras，atthattimetheirprincipalsettlementinIndia。ItwasrestoredtothembytheTreatyofAix—la—Chapelle;
　　andaboutthistimethespiritofwarandconquestseemstohavetakenpossessionoftheirservantsinIndia，andneversincetohaveleftthem。DuringtheFrenchwar，whichbeganin1755，theirarmspartookofthegeneralgoodfortuneofthoseofGreatBritain。TheydefendedMadras，tookPondicherry，recoveredCalcutta，andacquiredtherevenuesofarichandextensiveterritory，amounting，itwasthensaid，toupwardsofthreemillionsayear。Theyremainedforseveralyearsinquietpossessionofthisrevenue:butin1767，administrationlaidclaimtotheirterritorialacquisitions，andtherevenuearisingfromthem，asofrightbelongingtothecrown;andthecompany，incompensationforthisclaim，agreedtopaythegovernmentfourhundredthousandpoundsayear。Theyhadbeforethisgraduallyaugmentedtheirdividendfromaboutsixtotenpercent;thatis，upontheircapitalofthreemillionstwohundredthousandpoundstheyhadincreaseditbyahundredandtwenty—eightthousandpounds，orhadraiseditfromonehundredandninety—twothousandtothreehundredandtwentythousandpoundsayear。Theywereattemptingaboutthistimetoraiseitstillfurther，totwelveandahalfpercent，whichwouldhavemadetheirannualpaymentstotheirproprietorsequaltowhattheyhadagreedtopayannuallytogovernment，ortofourhundredthousandpoundsayear。
　　Butduringthetwoyearsinwhichtheiragreementwithgovernmentwastotakeplace，theywererestrainedfromanyfurtherincreaseofdividendbytwosuccessiveActsofParliament，ofwhichtheobjectwastoenablethemtomakeaspeedierprogressinthepaymentoftheirdebts，whichwereatthistimeestimatedatupwardsofsixorsevenmillionssterling。
　　In1769，theyrenewedtheiragreementwithgovernmentforfiveyearsmore，andstipulatedthatduringthecourseofthatperiodtheyshouldbeallowedgraduallytoincreasetheirdividendtotwelveandahalfpercent;neverincreasingit，however，morethanonepercentinoneyear。Thisincreaseofdividend，therefore，whenithadrisentoitsutmostheight，couldaugmenttheirannualpayments，totheirproprietorsandgovernmenttogether，butbysixhundredandeightthousandpoundsbeyondwhattheyhadbeenbeforetheirlateterritorialacquisitions。
　　Whatthegrossrevenueofthoseterritorialacquisitionswassupposedtoamounttohasalreadybeenmentioned;andbyanaccountbroughtbytheCruttendenEastIndiamanin1768，thenetrevenue，clearofalldeductionsandmilitarycharges，wasstatedattwomillionsforty—eightthousandsevenhundredandforty—sevenpounds。Theyweresaidatthesametimetopossessanotherrevenue，arisingpartlyfromlands，butchieflyfromthecustomsestablishedattheirdifferentsettlements，amountingtofourhundredandthirty—ninethousandpounds。Theprofitsoftheirtradetoo，accordingtotheevidenceoftheirchairmanbeforetheHouseofCommons，amountedatthistimetoatleastfourhundredthousandpoundsayear，accordingtothatoftheiraccountant，toatleastfivehundredthousand;accordingtothelowestaccount，atleastequaltothehighestdividendthatwastobepaidtotheirproprietors。Sogreatarevenuemightcertainlyhaveaffordedanaugmentationofsixhundredandeightthousandpoundsintheirannualpayments，andatthesametimehaveleftalargesinkingfundsufficientforthespeedyreductionoftheirdebts。In1773，however，theirdebts，insteadofbeingreduced，wereaugmentedbyanarreartothetreasuryinthepaymentofthefourhundredthousandpounds，byanothertothecustom—housefordutiesunpaid，byalargedebttothebankformoneyborrowed，andbyafourthforbillsdrawnuponthemfromIndia，andwantonlyaccepted，totheamountofupwardsoftwelvehundredthousandpounds。Thedistresswhichtheseaccumulatedclaimsbroughtuponthem，obligedthemnotonlytoreduceallatoncetheirdividendtosixpercent，buttothrowthemselvesuponthemercyofgovernment，andtosupplicate，first，areleasefromfurtherpaymentofthestipulatedfourhundredthousandpoundsayear;and，secondly，aloanoffourteenhundredthousand，tosavethemfromimmediatebankruptcy。Thegreatincreaseoftheirfortunehad，itseems，onlyservedtofurnishtheirservantswithapretextforgreaterprofusion，andacoverforgreatermalversation，thaninproportioneventothatincreaseoffortune。TheconductoftheirservantsinIndia，andthegeneralstateoftheiraffairsbothinIndiaandinEurope，becamethesubjectofaParliamentaryinquiry，inconsequenceofwhichseveralveryimportantalternationsweremadeintheconstitutionoftheirgovernment，bothathomeandabroad。InIndiatheirprincipalsettlementsofMadras，Bombay，andCalcutta，whichhadbeforebeenaltogetherindependentofoneanother，weresubjectedtoagovernor—general，assistedbyacounciloffourassessors，ParliamentassumingtoitselfthefirstnominationofthisgovernorandcouncilwhoweretoresideatCalcutta;thatcityhavingnowbecome，whatMadraswasbefore，themostimportantoftheEnglishsettlementsinIndia。TheCourtoftheMayorofCalcutta，originallyinstitutedforthetrialofmercantilecauseswhicharoseincityandneighbourhood，hadgraduallyextendeditsjurisdictionwiththeextensionoftheempire。Itwasnowreducedandconfinedtotheoriginalpurposeofitsinstitution。Insteadofitanewsupremecourtofjudicaturewasestablished，consistingofachiefjusticeandthreejudgestobeappointedbythecrown。InEurope，thequalificationnecessarytoentitleaproprietortovoteattheirgeneralcourtswasraisedfromfivehundredpounds，theoriginalpriceofashareinthestockofthecompany，toathousandpounds。Inordertovoteuponthisqualificationtoo，itwasdeclarednecessarythatheshouldhavepossessedit，ifacquiredbyhisownpurchase，andnotbyinheritance，foratleastoneyear，insteadofsixmonths，thetermrequisitebefore。Thecourtoftwenty—fourdirectorshadbeforebeenchosenannually;butitwasnowenactedthateachdirectorshould，forthefuture，bechosenforfouryears;sixofthem，however，togooutofofficebyrotationeveryyear，andnottobecapableofbeingre—chosenattheelectionofthesixnewdirectorsfortheensuingyear。Inconsequenceofthesealterations，thecourts，bothoftheproprietorsanddirectors，itwasexpected，wouldbelikelytoactwithmoredignityandsteadinessthantheyhadusuallydonebefore。Butitseemsimpossible，byanyalterations，torenderthosecourts，inanyrespect，fittogovern，oreventoshareinthegovernmentofagreatempire;becausethegreaterpartoftheirmembersmustalwayshavetoolittleinterestintheprosperityofthatempiretogiveanyseriousattentiontowhatmaypromoteit。Frequentlyamanofgreat，sometimesevenamanofsmallfortune，iswillingtopurchaseathousandpounds’shareinIndiastockmerelyfortheinfluencewhichheexpectstoacquirebyavoteinthecourtofproprietors。Itgiveshimashare，thoughnotintheplunder，yetintheappointmentoftheplunderersofIndia;thecourtofdirectors，thoughtheymakethatappointment，beingnecessarilymoreorlessundertheinfluenceoftheproprietors，whonotonlyelectthosedirectors，butsometimesoverruletheappointmentsoftheirservantsinIndia。Providedhecanenjoythisinfluenceforafewyears，andtherebyprovideforacertainnumberofhisfriends，hefrequentlycareslittleaboutthedividend，orevenaboutthevalueofthestockuponwhichhisvoteisfounded。Abouttheprosperityofthegreatempire，inthegovernmentofwhichthatvotegiveshimashare，heseldomcaresatall。Noothersovereignseverwere，or，fromthenatureofthings，evercouldbe，soperfectlyindifferentaboutthehappinessormiseryoftheirsubjects，theimprovementorwasteoftheirdominions，thegloryordisgraceoftheiradministration，as，fromirresistiblemoralcauses，thegreaterpartoftheproprietorsofsuchamercantilecompanyare，andnecessarilymustbe。Thisindifference，too，wasmorelikelytobeincreasedthandiminishedbysomeofthenewregulationswhichweremadeinconsequenceoftheParliamentaryinquiry。ByaresolutionoftheHouseofCommons，forexample，itwasdeclared，thatwhenthefourteenhundredthousandpoundslenttothecompanybygovernmentshouldbepaid，andtheirbond—debtsbereducedtofifteenhundredthousandpounds，theymightthen，andnottillthen，divideeightpercentupontheircapital;andthatwhateverremainedoftheirrevenuesandnetprofitsathomeshouldbedividedintofourparts;threeofthemtobepaidintotheexchequerfortheuseofthepublic，andthefourthtobereservedasafundeitherforthefurtherreductionoftheirbond—debts，orforthedischargeofothercontingentexigencieswhichthecompanymightlabourunder。Butifthecompanywerebadstewards，andbadsovereigns，whenthewholeoftheirnetrevenueandprofitsbelongedtothemselves，andwereattheirowndisposal，theyweresurelynotlikelytobebetterwhenthree—fourthsofthemweretobelongtootherpeople，andtheotherfourth，thoughtobelaidoutforthebenefitofthecompany，yettobesoundertheinspectionandwiththeapprobationofotherpeople。
　　Itmightbemoreagreeabletothecompanythattheirownservantsanddependantsshouldhaveeitherthepleasureofwastingortheprofitofembezzlingwhateversurplusmightremainafterpayingtheproposeddividendofeightpercentthanthatitshouldcomeintothehandsofasetofpeoplewithwhomthoseresolutionscouldscarcefailtosetthem，insomemeasure，atvariance。Theinterestofthoseservantsanddependantsmightsofarpredominateinthecourtofproprietorsassometimestodisposeittosupporttheauthorsofdepredationswhichhadbeencommittedindirectviolationofitsownauthority。Withthemajorityofproprietors，thesupportevenoftheauthorityoftheirowncourtmightsometimesbeamatteroflessconsequencethanthesupportofthosewhohadsetthatauthorityatdefiance。
　　Theregulationsof1773，accordingly，didnotputanendtothedisordersofthecompany’sgovernmentinIndia。
　　Notwithstandingthat，duringamomentaryfitofgoodconduct，theyhadatonetimecollectedintothetreasuryofCalcuttamorethanthreemillionssterling;notwithstandingthattheyhadafterwardsextended，eithertheirdominion，ortheirdepredations，overavastaccessionofsomeoftherichestandmostfertilecountriesinIndia，allwaswastedanddestroyed。
　　TheyfoundthemselvesaltogetherunpreparedtostoporresisttheincursionofHyderAli;and，inconsequenceofthosedisorders，thecompanyisnow（1784）ingreaterdistressthanever;and，inordertopreventimmediatebankruptcy，isoncemorereducedtosupplicatetheassistanceofgovernment。DifferentplanshavebeenproposedbythedifferentpartiesinParliamentforthebettermanagementofitsaffairs。Andallthoseplansseemtoagreeinsupposing，whatwasindeedalwaysabundantlyevident，thatitisaltogetherunfittogovernitsterritorialpossessions。Eventhecompanyitselfseemstobeconvincedofitsownincapacitysofar，andseems，uponthataccount，willingtogivethemuptogovernment。
　　Withtherightofpossessingfortsandgarrisonsindistantandbarbarouscountriesisnecessarilyconnectedtherightofmakingpeaceandwarinthosecountries。Thejointstockcompanieswhichhavehadtheonerighthaveconstantlyexercisedtheother，andhavefrequentlyhaditexpresslyconferreduponthem。Howunjustly，howcapriciously，howcruellytheyhavecommonlyexercisedit，istoowellknownfromrecentexperience。
　　Whenacompanyofmerchantsundertake，attheirownriskandexpense，toestablishanewtradewithsomeremoteandbarbarousnation，itmaynotbeunreasonabletoincorporatethemintoajointstockcompany，andtograntthem，incaseoftheirsuccess，amonopolyofthetradeforacertainnumberofyears。Itistheeasiestandmostnaturalwayinwhichthestatecanrecompensethemforhazardingadangerousandexpensiveexperiment，ofwhichthepublicisafterwardstoreapthebenefit。Atemporarymonopolyofthiskindmaybevindicateduponthesameprinciplesuponwhichalikemonopolyofanewmachineisgrantedtoitsinventor，andthatofanewbooktoitsauthor。Butupontheexpirationoftheterm，themonopolyoughtcertainlytodetermine;thefortsandgarrisons，ifitwasfoundnecessarytoestablishany，tobetakenintothehandsofgovernment，theirvaluetobepaidtothecompany，andthetradetobelaidopentoallthesubjectsofthestate。Byaperpetualmonopoly，alltheothersubjectsofthestatearetaxedveryabsurdlyintwodifferentways:first，bythehighpriceofgoods，which，inthecaseofafreetrade，theycouldbuymuchcheaper;and，secondly，bytheirtotalexclusionfromabranchofbusinesswhichitmightbebothconvenientandprofitableformanyofthemtocarryon。
　　Itisforthemostworthlessofallpurposes，too，thattheyaretaxedinthismanner。Itismerelytoenablethecompanytosupportthenegligence，profusion，andmalversationoftheirownservants，whosedisorderlyconductseldomallowsthedividendofthecompanytoexceedtheordinaryrateofprofitintradeswhicharealtogetherfree，andveryfrequentlymakesitfallevenagooddealshortofthatrate。Withoutamonopoly，however，ajointstockcompany，itwouldappearfromexperience，cannotlongcarryonanybranchofforeigntrade。Tobuyinonemarket，inordertosell，withprofit，inanother，whentherearemanycompetitorsinboth，towatchover，notonlytheoccasionalvariationsinthedemand，butthemuchgreaterandmorefrequentvariationsinthecompetition，orinthesupplywhichthatdemandislikelytogetfromotherpeople，andtosuitwithdexterityandjudgmentboththequantityandqualityofeachassortmentofgoodstoallthesecircumstances，isaspeciesofwarfareofwhichtheoperationsarecontinuallychanging，andwhichcanscarceeverbeconductedsuccessfullywithoutsuchanunremittingexertionofvigilanceandattentionascannotlongbeexpectedfromthedirectorsofajointstockcompany。TheEastIndiaCompany，upontheredemptionoftheirfunds，andtheexpirationoftheirexclusiveprivilege，haveright，byActofParliament，tocontinueacorporationwithajointstock，andtotradeintheircorporatecapacitytotheEastIndiesincommonwiththerestoftheirfellow—subjects。Butinthissituation，thesuperiorvigilanceandattentionofprivateadventurerswould，inallprobability，soonmakethemwearyofthetrade。
　　AneminentFrenchauthor，ofgreatknowledgeinmattersofpoliticaleconomy，theAbbeMorellet，givesalistoffifty—fivejointstockcompaniesforforeigntradewhichhavebeenestablishedindifferentpartsofEuropesincetheyear1600，andwhich，accordingtohim，haveallfailedfrommismanagement，notwithstandingtheyhadexclusiveprivileges。Hehasbeenmisinformedwithregardtothehistoryoftwoorthreeofthem，whichwerenotjointstockcompaniesandhavenotfailed。But，incompensation，therehavebeenseveraljointstockcompanieswhichhavefailed，andwhichhehasomitted。
　　TheonlytradeswhichitseemspossibleforajointstockcompanytocarryonsuccessfullywithoutanexclusiveprivilegearethoseofwhichalltheoperationsarecapableofbeingreducedtowhatiscalledaRoutine，ortosuchauniformityofmethodasadmitsoflittleornovariation。Ofthiskindis，first，thebankingtrade;secondly，thetradeofinsurancefromfire，andfromseariskandcaptureintimeofwar;thirdly，thetradeofmakingandmaintaininganavigablecutorcanal;and，fourthly，thesimilartradeofbringingwaterforthesupplyofagreatcity。
　　Thoughtheprinciplesofthebankingtrademayappearsomewhatabstruse，thepracticeiscapableofbeingreducedtostrictrules。Todepartuponanyoccasionfromthoserules，inconsequenceofsomeflatteringspeculationofextraordinarygain，isalmostalwaysextremelydangerous，andfrequentlyfatal，tothebankingcompanywhichattemptsit。Buttheconstitutionofjointstockcompaniesrendersthemingeneralmoretenaciousofestablishedrulesthananyprivatecopartnery。Suchcompanies，therefore，seemextremelywellfittedforthistrade。TheprincipalbankingcompaniesinEurope，accordingly，arejointstockcompanies，manyofwhichmanagetheirtradeverysuccessfullywithoutanyexclusiveprivilege。TheBankofEnglandhasnootherexclusiveprivilegeexceptthatnootherbankingcompanyinEnglandshallconsistofmorethansixpersons。ThetwobanksofEdinburgharejointstockcompanieswithoutanyexclusiveprivilege。
　　Thevalueoftherisk，eitherfromfire，orfromlossbysea，orbycapture，thoughitcannot，perhaps，becalculatedveryexactly，admits，however，ofsuchagrossestimationasrendersit，insomedegree，reducibletostrictruleandmethod。Thetradeofinsurance，therefore，maybecarriedonsuccessfullybyajointstockcompanywithoutanyexclusiveprivilege。NeithertheLondonAssurancenortheRoyalExchangeAssurancecompanieshaveanysuchprivilege。
　　Whenanavigablecutorcanalhasbeenoncemade，themanagementofitbecomesquitesimpleandeasy，anditisreducibletostrictruleandmethod。Eventhemakingofitissoasitmaybecontractedforwithundertakersatsomuchamile，andsomuchalock。Thesamethingmaybesaidofacanal，anaqueduct，oragreatpipeforbringingwatertosupplyagreatcity。Suchundertakings，therefore，maybe，andaccordinglyfrequentlyare，verysuccessfullymanagedbyjointstockcompanieswithoutanyexclusiveprivilege。
　　Toestablishajointstockcompany，however，foranyundertaking，merelybecausesuchacompanymightbecapableofmanagingitsuccessfully;ortoexemptaparticularsetofdealersfromsomeofthegenerallawswhichtakeplacewithregardtoalltheirneighbours，merelybecausetheymightbecapableofthrivingiftheyhadsuchanexemption，wouldcertainlynotbereasonable。Torendersuchanestablishmentperfectlyreasonable，withthecircumstanceofbeingreducibletostrictruleandmethod，twoothercircumstancesoughttoconcur。
　　First，itoughttoappearwiththeclearestevidencethattheundertakingisofgreaterandmoregeneralutilitythanthegreaterpartofcommontrades;andsecondly，thatitrequiresagreatercapitalthancaneasilybecollectedintoaprivatecopartnery。Ifamoderatecapitalweresufficient，thegreatutilityoftheundertakingwouldnotbeasufficientreasonforestablishingajointstockcompany;because，inthiscase，thedemandforwhatitwastoproducewouldreadilyandeasilybesuppliedbyprivateadventures。Inthefourtradesabovementioned，boththosecircumstancesconcur。
　　Thegreatandgeneralutilityofthebankingtradewhenprudentlymanagedhasbeenfullyexplainedinthesecond，bookofthisInquiry。Butapublicbankwhichistosupportpubliccredit，anduponparticularemergenciestoadvancetogovernmentthewholeproduceofatax，totheamount，perhaps，ofseveralmillions，ayearortwobeforeitcomesin，requiresagreatercapitalthancaneasilybecollectedintoanyprivatecopartnery。
　　Thetradeofinsurancegivesgreatsecuritytothefortunesofprivatepeople，andbydividingamongagreatmanythatlosswhichwouldruinanindividual，makesitfalllightandeasyuponthewholesociety。Inordertogivethissecurity，however，itisnecessarythattheinsurersshouldhaveaverylargecapital。
　　BeforetheestablishmentofthetwojointstockcompaniesforinsuranceinLondon，alist，itissaid，waslaidbeforetheattorney—generalofonehundredandfiftyprivateinsurerswhohadfailedinthecourseofafewyears。
　　Thatnavigablecutsandcanals，andtheworkswhicharesometimesnecessaryforsupplyingagreatcitywithwater，areofgreatandgeneralutility，whileatthesametimetheyfrequentlyrequireagreaterexpensethansuitsthefortunesofprivatepeople，issufficientlyobvious。
　　Exceptthefourtradesabovementioned，Ihavenotbeenabletorecollectanyotherinwhichallthethreecircumstancesrequisiteforrenderingreasonabletheestablishmentofajointstockcompanyconcur。TheEnglishcoppercompanyofLondon，theleadsmeltingcompany，theglassgrindingcompany，havenoteventhepretextofanygreatorsingularutilityintheobjectwhichtheypursue;nordoesthepursuitofthatobjectseemtorequireanyexpenseunsuitabletothefortunesofmanyprivatemen。
　　Whetherthetradewhichthosecompaniescarryonisreducibletosuchstrictruleandmethodastorenderitfitforthemanagementofajointstockcompany，orwhethertheyhaveanyreasontoboastoftheirextraordinaryprofits，Idonotpretendtoknow。Themine—adventurers’companyhasbeenlongagobankrupt。AshareinthestockoftheBritishLinenCompanyofEdinburghsells，atpresent，verymuchbelowpar，thoughlesssothatitdidsomeyearsago。Thejointstockcompanieswhichareestablishedforthepublic—spiritedpurposeofpromotingsomeparticularmanufacture，overandabovemanagingtheirownaffairsill，tothedimunitionofthegeneralstockofthesociety，caninotherrespectsscarceeverfailtodomoreharmthangood。
　　Notwithstandingthemostuprightintentions，theunavoidablepartialityoftheirdirectorstoparticularbranchesofthemanufactureofwhichtheundertakersmisleadandimposeuponthemisarealdiscouragementtotherest，andnecessarilybreaks，moreorless，thatnaturalproportionwhichwouldotherwiseestablishitselfbetweenjudiciousindustryandprofit，andwhich，tothegeneralindustryofthecountry，isofallencouragementsthegreatestandthemosteffectual。