The Act of 1793, relieved the trade carried on under this indulgence, by reducing the rates of charge to 3 per cent.; which was established as the rate, at which the more enlarged trade, for the first time allowed by that Act to private merchants unconnected with the Company, should pay to the Company; which trade was then limited to 3000 tons, the shipping for which was to be provided by the Company, who were to be paid freight for such tonnage, and were to have the same control over the goods which might be imported, as they already exercised over the trade of their Captains and Officers.
It was soon found, that the conditions, under which this trade was opened, changed its operations, so as to render the privilege of little value. The residents in India, for whose benefit it was professed to have been principally intended, presented memorials upon the subject to the Governments abroad; and the merchants of London represented to the authorities in England, the necessity of an enlargement of the principle, as well as a correction of the regulations. It is not necessary, to go into any detail of the reasons upon which those applications were supported; because Mr. Dundas, who then presided over the affairs of India, and who had introduced and carried through Parliament the Bill of 1793, did in the most explicit terms inform the Court of Directors, in his letter of the 2d April, 1800, that "he should be uncandid, if he did not fairly acknowledge, that experience had proved it to be inadequate to the purposes for which it was intended--and that therefore he was clear, that the clause in the Act ought to be repealed, and in place thereof _a power be given to the Governments abroad, to allow the British subjects, resident in India, to bring home their funds to Britain on the shipping of the country_;" that is to say, on ships built in India. This letter, of the President of the Board of Control, was referred by the Court of Directors to a special Committee of their body; who, in a very elaborate Report, dated 27th Jan. 1801, that is to say, after the deliberation of eight months, declared that it was impossible for them to acquiesce in the proposition then made by Mr. Dundas. They supported their opposition by a variety of arguments, from which the following short passage need alone be selected:--"The proposals which have been brought forward by certain descriptions of men, both in India and in England, for the admission of their ships into the trade and navigation between India and Europe, _proposals which extend to the establishment of a regular and systematic privilege_ in favour of such ships, appear, when maturely weighed, and followed into all their operations, _to involve principles and effects dangerous to the interests both of the Company and of the nation_; that _the adoption of those principles would, immediately and essentially, affect both the system of policy which the Legislature has established for maintaining the connexion and communication between this country and British India, and the chartered privileges of the East India Company_. And the introduction of any practice of this nature, would tend to widen gradually, and indefinitely, the channel of intercourse between India and Britain; to multiply the relations between the two countries; and to pour Europeans of the lower sort into India, and Indian sailors into this country; to lessen, by both these means, the respect for the European character; _to disturb and shake our government there_; and, in a word, to lead progressively but surely to colonization."