ABSTRACT
The success of the English East India Company’s trade in Bengal depended on several factors other than the purely economic ones of supply and demand. Of these, an important factor was the Company’s organisation of its commerce, specially the financing of investments in Bengal.1 Throughout the period under review, the Company in Bengal, as in other parts of India, suffered from a chronic shortage of funds for investment. The problem of inadequate working capital was accentuated by the poor demand for the Company’s European imports in Bengal. Though the quantity of merchandise imported by the Company was not generally large, the market for even this small amount was strictly limited. The only item for which there was a steady demand in Bengal was bullion and specie. But as their supply was seasonal and often limited, the Company had to explore additional means for financing its investments. The extensive credit market in Bengal, short-term direct borrowings from the servants of the European Companies and free traders, and the Company’s coastal and freight trade to various Asian ports ultimately played a significant role in reducing the shortage of liquid capital for the Company.
