Indian Antiquary Vol 47

Author(s): Richard Carnac Temple, Devadatta Ramkrishna Bhandarkar
Publisher: Swati Publications

Page 93

APRIL, 1918]
AUSTRIA'S COMMERCIAL VENTURE IN INDIA
89
and each to the other Directors. 22 The balance of the net profits on the voyage, which were to include the value of the ship taken at of the total capital (i.e., at 266,000 florins), and the guarantee of the promoter, was to be divided, half to the promoter and half to the shareholders. The ship was to be insured by the Society, and in case of loss the insurance money was to be available for dividend. Any incidental profits, i.e., any made during the voyage by trading in goods not included in the original cargo, were to be divided, to the promoter and I to the shareholders.
The objects of the issue were to purchase the ship Cobenzel of 600 tons, valued at 130,000 florins, but sold to the Society by the promoter for 110,000 florins for the purposes of the issue, and to equip her and take her on a voyage to India, China and the East and back, the total cost of the scheme being estimated at 400,000 florins. The outward trade cargo was to consist of copper, gunpowder, iron, cloths and wine, and also porcelain, cannon, etc., as presents for Haidar Ali of Mysore and other Indian potenates ; and the homeward cargo was to be pepper. It was stated in the prospectus that the promoter's previous voyage for the Society to the East had been very profitable.
The subscription to the issue was opened on 20 December 1782, the capital was fully subscribed by 23 June 1783, and the ship had commenced her voyage before 29 September 1783, but I have not been able to trace her arrival in the East. The promoter reserved the right to undertake arrangements for a similar voyage for the Society immediately on completion of those for the present one, and he set to work to raise funds for another venture to the East as soon as the Cobenzel had started on her voyage.
It will be seen from the foregoing statement that what Bolts did was this. Heguaranteed his subscribers nominally 20%, but in reality only 5% 23 on the capital they put up, 260,000 florins, risking thus 13,000 forins; but he sold his ship to them for 110,000 florins in cash. so he made them pay handsomely for his guarantee. He also guaranteed to buy the ship nominally for 266,000 florins on ber return, but the shareholders were to have her insured ; and so if she was lost on the voyage he not only risked nothing, but got his share of the insurance money as owner of 14% of the total capital.25 If the ship returned safely, his share of the profit would cover the risk, as it would necessarily be great.28
Thus he got 56,000 florins worth of shares (14% of the total capital as above noted ) for nothing 27; half the gross profit boyond 20% as the shareholders paid all the charges of the venture including bis remuneration ; three-fourths of any trading profit (beyond those on the proceeds of the outward and homeward cargo ) made during the voyage : and one per vent. (of 21%) on all sales of both the outward and homeward cargo which were always very high in those days.
It was these considerations that apparently made business men of the day accept his guarantee, as at that time he was practically bankrupt, the voyage of the Joseph and Theresa not being the success he would appear to have made it out to be. It is probable that he
I. e., 1% to the promoter and 3% to each of the other Directors.
27 That is until the return of the ship the only dividend payable on the prospectus was 5% for the time before the ship started.
* This was the outside risk, as the 5% it represented was only payable after deduction of " expenses."
15 By the prospectus the insurance money was specially earmarked as available for dividend. # The value of the ship was also to be available for dividend.
17 His total outside risk was 56,000 florins for shares and 13,000 florins as guaranteed dividend against 110,000 florins, the price of his ship paid him by the shareholders.