Their great error was
in mistaking nominal for real profits. Calculating their dividend on
the nominal profits, and never supposing that there could be any such
things as losses in commercial speculation, or bad debts from
misfortunes and bad faith, they squandered them in lavish hospitality
and ostentatious display, or allowed their retiring members to take
them to England and to every other part of the world where their
creditors might not find them, till they discovered that all the real
capital left at their command was hardly sufficient to pay back with
the stipulated interest one-tenth of what they had borrowed. The
members of those houses who remained in India up to the time of the
general wreck were of course reduced to ruin, and obliged to bear the
burthen of the odium and indignation which the ruin of so many
thousands of confiding constituents brought down upon them. Since
that time the savings of civil and military servants have been
invested either in Government securities at a small interest, or in
banks, which make their profit in the ordinary way, by discounting
bills of exchange, and circulating their own notes for the purpose,
or by lending out their money at a high interest of 10 or 12 per
cent.
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