T11 li WEALTH OK NATIONS.

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Lave reduced, very much, the price of India goods in theEnglish market, cannot well be doubted ; but that it shouldhave raised very much their price in the Indian market seemsnot very probable, as all the extraordinary demand whichthat competition could occasion must have been but as a dropof water in the immense ocean of Indian commerce. Theincrease of demand, besides, though in the beginning it maysometimes raise the price of goods, never fails to lower it inthe long run. It encourages production, and thereby increasesthe competition of the producers, who, in order to undersellone another, have recourse to new divisions of labour and newimprovements of art, which might never otherwise have beenthought of. The miserable effects of which the company com-plained, were the cheapness of consumption and the encou-ragement given to production, precisely the two effects whichit is the great business of political economy to promote. Thecompetition, however, of which they gave this doleful ac-count, had not been allowed to be of long continuance. In1702, the two companies were, in some measure, united byan indenture tripartite, to which the queen was the thirdparty ; an^. in 1708, they were, by act of parliament, perfectlyconsolidated into one company by their present name of TheUnited Company of Merchants trading to the East Indies.Into this act it was thought worth while to insert a clause,allowing the separate traders to continue their trade toMichaelmas, 1711, but at the same time empowering the di-rectors, upon three years' notice, to redeem their little capitalof seven thousand two hundred pounds, and thereby to con-vert the whole stock of the company into a joint stock. Bythe same act, the capital of the company, in consequence ofa new loan to government, was augmented from two millionsto three millions two hundred thousand pounds. In 1743,the company advanced another million to government. Butthis million being raised, not by a call upon the proprietors,but by selling annuities and contracting bond debts, it didnot augment the stock upon which the proprietors could claima dividend. It augmented, however, their trading stock, itbeingequally liable with the other three millions two hundredthousand pounds to the losses sustained, and debts contracted,by the company in prosecution of their mercantile projects.l'Torn 1708, or at least irom 17 11, this company, being- deli-vered from all competitors, and fully established in the mo-nopoly of the English commerce to the East Indies, carried