Chapter II: Front Matter (2)

On the above letter your Committee find that the Committee of Correspondence proceeded; and on their recommendation the Court of Directors unanimously approved of Mr. Sulivan to be appointed to succeed to the posts of Secretary and Persian Translator.

[Sidenote: Mr. Sulivan's succession of offices.]

Conformably to the orders of the court, Mr. Sulivan succeeded to those posts; and the President and Council acquainted the Court of Directors that they had been obeyed. About five months after, it appears that Mr. Sulivan thought fit to resign the office of Persian Translator, to which he had been appointed by the Directors. In April, 1780, Mr. Sulivan is commended for his _great diligence as Secretary_; in August following he obtains leave to accompany Mrs. Sulivan to Bengal, whence she is to proceed to Europe on account of her health; and he is charged with a commission from the President and Council of Fort St. George to obtain for that settlement supplies of grain, troops, and money, from the Governor-General and Council of Bengal. In October the Governor-General requests permission of the Council there to employ Mr. Sulivan as his _Assistant_, for that he had experienced (between his arrival in Bengal and that time) the abilities of Mr. Sulivan, and made choice of him as _completely qualified for that trust_; also requests the board to appoint him Judge-Advocate-General, and likewise to apply to the Presidency of Madras for him to remain in Bengal without prejudice to his rank on their establishment: which several requests the board at Madras readily complied with, notwithstanding their natural sensibility to the loss of a Secretary of such ability and diligence as they had described Mr. Sulivan to be.

On the 5th of December following, the President and Council received a letter from Bengal, requesting that Mr. Sulivan might be allowed to keep his rank. This request brought on some discussion. A Mr. Freeman, it seems, who had acted under Mr. Sulivan as Sub-Secretary whilst his principal obtained so much praise for his diligence, addressed the board on the same day, and observed, "that, since Mr. Sulivan's arrival, _he_ [Mr. Freeman] had, _without intermission_, done almost the _whole_ of the duty allotted to the post of Secretary, _which it was notorious Mr. Sulivan had paid but little attention to_; and neither his inclination or duty led him to act any longer as Mr. Sulivan's deputy."

Here your Committee cannot avoid remarking the direct contradiction which this address of Mr. Freeman's gives to the letter from the President and Council to the Court of Directors in April, 1780, wherein Mr. Sulivan is praised for his "diligence and attention in his office of Secretary."

The President and Council do not show any displeasure at Mr. Freeman's representation, (so contrary to their own,) the truth of which they thus tacitly admit, but agree to write to the Governor-General and Council, "that it could not be supposed that they could carry on the public business for any length of time without _the services of a Secretary_ and Clerk of Appeals, two offices that required personal attendance, and which would be a general injury to the servants on their establishment, and in particular to the person who acted in those capacities, as they learnt that Mr. Sulivan had been appointed Judge-Advocate-General in Bengal,--and to request the Governor-General and Council to inform Mr. Sulivan of their sentiments, and to desire him to inform them whether he meant to return to his station or to remain in Bengal."

On the 5th December, as a mark of their approbation of Mr. Freeman, who had so plainly contradicted their opinion of Mr. Sulivan, the President and Council agree to appoint him to act as Secretary and Clerk of Appeals, till Mr. Sulivan's answer should arrive, with the emoluments, and to confirm him therein, if Mr. Sulivan should remain in Bengal.

On the 14th February, 1781, the President and Council received a letter from Bengal in reply, and stating their request that Mr. Sulivan might reserve the right of returning to his original situation on the Madras establishment, if the Court of Directors should disapprove of his being transferred to Bengal. To this request the board at Madras declare they have no objection: and here the matter rests; the Court of Directors not having given any tokens of approbation or disapprobation of the transaction.

Such is the history of Mr. Sulivan's service from the time of his appointment; such were the qualifications, and such the proofs of assiduity and diligence given by him in holding so many incompatible offices, (as well as being engaged in other dealings, which will appear in their place,) when, after three years' desultory residence in India, he was thought worthy to be nominated to the succession to the Supreme Council. No proof whatsoever of distinguished capacity in any line preceded his original appointment to the service: so that the whole of his fitness for the Supreme Council rested upon his conduct and character since his appointment as Persian Translator.

Your Committee find that his Majesty has not yet given his approbation to the nomination, made by the Court of Directors on the 30th of August, 1781, of Messrs. Stuart and Sulivan to succeed to the Supreme Council on the first vacancies, though the Court applied for the royal approbation so long ago as the 19th of September, 1781; and in these instances the king's ministers performed their duty, in withholding their countenance from a proceeding so exceptionable and of so dangerous an example.

Your Committee, from a full view of the situation and duties of the Court of Directors, are of opinion that effectual means ought to be taken for regulating that court in such a manner as to prevent either rivalship with or subserviency to their servants. It might, therefore, be proper for the House to consider whether it is fit that those who are, or have been within some given time, Directors of the Company, should be capable of an appointment to any offices in India. Directors can never properly govern those for whose employments they are or may be themselves candidates; they can neither protect nor coerce them with due impartiality or due authority.

If such rules as are stated by your Committee under this head were observed in the regular service at home and abroad, the necessity of superseding the regular service by strangers would be more rare; and whenever the servants were so superseded, those who put forward other candidates would be obliged to produce a strong plea of merit and ability, which, in the judgment of mankind, ought to overpower pretensions so authentically established, and so rigorously guarded from abuse.

[Sidenote: Deficiency of powers to ministers of government.]

The second object, in this part of the plan, of the act of 1773, namely, that of inspection by the ministers of the crown, appears not to have been provided for, so as to draw the timely and productive attention of the state on the grievances of the people of India, and on the abuses of its government. By the Regulating Act, the ministers were enabled to inspect one part of the correspondence, that which was received in England, but not that which went outward. They might know something, but that very imperfectly and unsystematically, of the state of affairs; but they were neither authorized to advance nor to retard any measure taken by the Directors in consequence of that state: they were not provided even with sufficient means of knowing what any of these measures were. And this imperfect information, together with the want of a direct call to any specific duty, might have, in some degree, occasioned that remissness which rendered even the imperfect powers originally given by the act of 1773 the less efficient. This defect was in a great measure remedied by a subsequent act; but that act was not passed until the year 1780.

[Sidenote: Disorders increased since 1773.]

Your Committee find that during the whole period which elapsed from 1773 to the commencement of 1782 disorders and abuses of every kind multiplied. Wars contrary to policy and contrary to public faith were carrying on in various parts of India. The allies, dependants, and subjects of the Company were everywhere oppressed;[2] dissensions in the Supreme Council prevailed, and continued for the greater part of that time; the contests between the civil and judicial powers threatened that issue to which they came at last, an armed resistance to the authority of the king's court of justice; the orders which by an act of Parliament the servants were bound to obey were avowedly and on principle contemned; until at length the fatal effects of accumulated misdemeanors abroad and neglects at home broke out in the alarming manner which your Committee have so fully reported to this House.[3]

[Sidenote: Proceedings in India not known to Parliament.]

In all this time the true state of the several Presidencies, and the real conduct of the British government towards the natives, was not at all known to Parliament: it seems to have been very imperfectly known even to ministers. Indeed, it required an unbroken attention, and much comparison of facts and reasonings, to form a true judgment on that difficult and complicated system of politics, revenue, and commerce, whilst affairs were only in their progress to that state which produced the present inquiries. Therefore, whilst the causes of their ruin were in the height of their operation, both the Company and the natives were understood by the public as in circumstances the most assured and most flourishing; insomuch that, whenever the affairs of India were brought before Parliament, as they were two or three times during that period, the only subject-matter of discussion anywise important was concerning the sums which might be taken out of the Company's surplus profits for the advantage of the state. Little was thought of but the disengagement of the Company from their debts in _England_, and to prevent the servants abroad from drawing upon them, so as that body might be enabled, without exciting clamors here, to afford the contribution that was demanded. All descriptions of persons, either here or in India, looking solely to appearances at home, the reputation of the Directors depended on the keeping the Company's sales in a situation to support the dividend, that of the ministers depended on the most lucrative bargains for the Exchequer, and that of the servants abroad on the largest investments; until at length there is great reason to apprehend, that, unless some very substantial reform takes place in the management of the Company's affairs, nothing will be left for investment, for dividend, or for bargain, and India, instead of a resource to the public, may itself come, in no great length of time, to be reckoned amongst the public burdens.

[Sidenote: Inspection of ministers has failed in effect.]

In this manner the inspection of the ministers of the crown, the great cementing regulation of the whole act of 1773, has, along with all the others, entirely failed in its effect.

[Sidenote: Failure in the act.]

Your Committee, in observing on the failure of this act, do not consider the intrinsic defects or mistakes in the law itself as the sole cause of its miscarriage. The general policy of the nation with regard to this object has been, they conceive, erroneous; and no remedy by laws, under the prevalence of that policy, can be effectual. Before any remedial law can have its just operation, the affairs of India must be restored to their natural order. The prosperity of the natives must be previously secured, before any profit from them whatsoever is attempted. For as long as a system prevails which regards the transmission of great wealth to this country, either for the Company or the state, as its principal end, so long will it be impossible that those who are the instruments of that scheme should not be actuated by the same spirit for their own private purposes. It will be worse: they will support the injuries done to the natives for their selfish ends by new injuries done in favor of those before whom they are to account. It is not reasonably to be expected that a public rapacious and improvident should be served by any of its subordinates with disinterestedness or foresight.

II.--CONNECTION OF GREAT BRITAIN WITH INDIA.

In order to open more fully the tendency of the policy which has hitherto prevailed, and that the House may be enabled, in any regulations which may be made, to follow the tracks of the abuse, and to apply an appropriated remedy to a particular distemper, your Committee think it expedient to consider in some detail the manner in which India is connected with this kingdom,--which is the second head of their plan.

The two great links by which this connection is maintained are, first, the East India Company's commerce, and, next, the government set over the natives by that company and by the crown. The first of these principles of connection, namely, the East India Company's trade, is to be first considered, not only as it operates by itself, but as having a powerful influence over the general policy and the particular measures of the Company's government. Your Committee apprehend that the present state, nature, and tendency of this trade are not generally understood.

[Sidenote: Trade to India formerly carried on chiefly in silver.]

Until the acquisition of great territorial revenues by the East India Company, the trade with India was carried on upon the common principles of commerce,--namely, by sending out such commodities as found a demand in the India market, and, where that demand was not adequate to the reciprocal call of the European market for Indian goods, by a large annual exportation of treasure, chiefly in silver. In some years that export has been as high as six hundred and eighty thousand pounds sterling. The other European companies trading to India traded thither on the same footing. Their export of bullion was probably larger in proportion to the total of their commerce, as their commerce itself bore a much larger proportion to the British than it does at this time or has done for many years past. But stating it to be equal to the British, the whole of the silver sent annually from Europe into Hindostan could not fall very short of twelve or thirteen hundred thousand pounds a year. This influx of money, poured into India by an emulation of all the commercial nations of Europe, encouraged industry and promoted cultivation in a high degree, notwithstanding the frequent wars with which that country was harassed, and the vices which existed in its internal government. On the other hand, the export of so much silver was sometimes a subject of grudging and uneasiness in Europe, and a commerce carried on through such a medium to many appeared in speculation of doubtful advantage. But the practical demands of commerce bore down those speculative objections. The East India commodities were so essential for animating all other branches of trade, and for completing the commercial circle, that all nations contended for it with the greatest avidity. The English company flourished under this exportation for a very long series of years. The nation was considerably benefited both in trade and in revenue; and the dividends of the proprietors were often high, and always sufficient to keep up the credit of the Company's stock in heart and vigor.

[Sidenote: How trade carried on since.]

But at or very soon after the acquisition of the territorial revenues to the English company, the period of which may be reckoned as completed about the year 1765, a very great revolution took place in commerce as well as in dominion; and it was a revolution which affected the trade of Hindostan with all other European nations, as well as with that in whose favor and by whose power it was accomplished. From that time bullion was no longer regularly exported by the English East India Company to Bengal, or any part of Hindostan; and it was soon exported in much smaller quantities by any other nation. A new way of supplying the market of Europe, by means of the British power and influence, was invented: a species of trade (if such it may be called) by which it is absolutely impossible that India should not be radically and irretrievably ruined, although our possessions there were to be ordered and governed upon principles diametrically opposite to those which now prevail in the system and practice of the British company's administration.

[Sidenote: Investments.]

A certain portion of the revenues of Bengal has been for many years set apart to be employed in the purchase of goods for exportation to England, and this is called the _Investment_. The greatness of this investment has been the standard by which the merit of the Company's principal servants has been too generally estimated; and this main cause of the impoverishment of India has been generally taken as a measure of its wealth and prosperity. Numerous fleets of large ships, loaded with the most valuable commodities of the East, annually arriving in England, in a constant and increasing succession, imposed upon the public eye, and naturally gave rise to an opinion of the happy condition and growing opulence of a country whose surplus productions occupied so vast a space in the commercial world. This export from India seemed to imply also a reciprocal supply, by which the trading capital employed in those productions was continually strengthened and enlarged. But the payment of a tribute, and not a beneficial commerce to that country, wore this specious and delusive appearance.

[Sidenote: Increase of expenses.]

The fame of a great territorial revenue, exaggerated, as is usual in such cases, beyond even its value, and the abundant fortunes of the Company's officers, military and civil, which flowed into Europe with a full tide, raised in the proprietors of East India stock a premature desire of partaking with their servants in the fruits of that splendid adventure. Government also thought they could not be too early in their claims for a share of what they considered themselves as entitled to in every foreign acquisition made by the power of this kingdom, through whatever hands or by whatever means it was made. These two parties, after some struggle, came to an agreement to divide between them the profits which their speculation proposed to realize in England from the territorial revenue in Bengal. About two hundred thousand pounds was added to the annual dividends of the proprietors. Four hundred thousand was given to the state, which, added to the old dividend, brought a constant charge upon the mixed interest of Indian trade and revenue of eight hundred thousand pounds a year. This was to be provided for at all events.

By that vast demand on the territorial fund, the correctives and qualifications which might have been gradually applied to the abuses in Indian commerce and government were rendered extremely difficult.

[Sidenote: Progress of investments.]

The practice of an investment from the revenue began in the year 1766, before arrangements were made for securing and appropriating an assured fund for that purpose in the treasury, and for diffusing it from thence upon the manufactures of the country in a just proportion and in the proper season. There was, indeed, for a short time, a surplus of cash in the treasury. It was in some shape to be sent home to its owners. To send it out in silver was subject to two manifest inconveniences. First, the country would be exhausted of its circulating medium. A scarcity of coin was already felt in Bengal. Cossim Ali Khân, (the Nabob whom the Company's servants had lately set up, and newly expelled,) during the short period of his power, had exhausted the country by every mode of extortion; in his flight he carried off an immense treasure, which has been variously computed, but by none at less than three millions sterling. A country so exhausted of its coin, and harassed by three revolutions rapidly succeeding each other, was rather an object that stood in need of every kind of refreshment and recruit than one which could subsist under new evacuations. The next, and equally obvious inconvenience, was to the Company itself. To send silver into Europe would be to send it from the best to the worst market. When arrived, the most profitable use which could be made of it would be to send it back to Bengal for the purchase of Indian merchandise. It was necessary, therefore, to turn the Company's revenue into its commerce. The first investment was about five hundred thousand pounds, and care was taken afterwards to enlarge it. In the years 1767 and 1768 it arose to seven hundred thousand.

[Sidenote: Consequences of them.]

This new system of trade, carried on through the medium of power and public revenue, very soon produced its natural effects. The loudest complaints arose among the natives, and among all the foreigners who traded to Bengal. It must unquestionably have thrown the whole mercantile system of the country into the greatest confusion. With regard to the natives, no expedient was proposed for their relief. The case was serious with respect to European powers. The Presidency plainly represented to the Directors, that some agreement should be made with foreign nations for providing their investment to a certain amount, or that the deficiencies then subsisting must terminate in an open rupture with France. The Directors, pressed by the large payments in England, were not free to abandon their system; and all possible means of diverting the manufactures into the Company's investment were still anxiously sought and pursued, until the difficulties of the foreign companies were at length removed by the natural flow of the fortunes of the Company's servants into Europe, in the manner which will be stated hereafter.

But, with all these endeavors of the Presidency, the investment sunk in 1769, and they were even obliged to pay for a part of the goods to private merchants in the Company's bonds, bearing interest. It was plain that this course of business could not hold. The manufacturers of Bengal, far from being generally in a condition to give credit, have always required advances to be made to them; so have the merchants very generally,--at least, since the prevalence of the English power in India. It was necessary, therefore, and so the Presidency of Calcutta represented the matter, to provide beforehand a year's advance. This required great efforts; and they were made. Notwithstanding the famine in 1770, which wasted Bengal in a manner dreadful beyond all example, the investment, by a variety of successive expedients, many of them of the most dangerous nature and tendency, was forcibly kept up; and even in that forced and unnatural state it gathered strength almost every year. The debts contracted in the infancy of the system were gradually reduced, and the advances to contractors and manufacturers were regularly made; so that the goods from Bengal, purchased from the territorial revenues, from the sale of European goods, and from the produce of the monopolies, for the four years which ended with 1780, when the investment from the surplus revenues finally closed, were never less than a million sterling, and commonly nearer twelve hundred thousand pounds. This million is the lowest value of the goods sent to Europe for which no satisfaction is made.[4]

[Sidenote: Remittances from Bengal to China and the Presidencies.]

About an hundred thousand pounds a year is also remitted from Bengal, on the Company's account, to China; and the whole of the product of that money flows into the direct trade from China to Europe. Besides this, Bengal sends a regular supply in time of peace to those Presidencies which are unequal to their own establishment. To Bombay the remittance in money, bills, or goods, for none of which there is a return, amounts to one hundred and sixty thousand pounds a year at a medium.

[Sidenote: Exports from England to India.]

The goods which are exported from Europe to India consist chiefly of military and naval stores, of clothing for troops, and of other objects for the consumption of the Europeans residing there; and, excepting some lead, copper utensils and sheet copper, woollen cloth, and other commodities of little comparative value, no sort of merchandise is sent from England that is in demand for the wants or desires of the native inhabitants.

[Sidenote: Bad effects of investment.]

When an account is taken of the intercourse (for it is not commerce) which is carried on between Bengal and England, the pernicious effects of the system of investment from revenue will appear in the strongest point of view. In that view, the whole exported produce of the country, so far as the Company is concerned, is not exchanged in the course of barter, but is taken away without any return or payment whatsoever. In a commercial light, therefore, England becomes annually bankrupt to Bengal to the amount nearly of its whole dealing; or rather, the country has suffered what is tantamount to an annual plunder of its manufactures and its produce to the value of twelve hundred thousand pounds.

[Sidenote: Foreign companies.]

[Sidenote: Consequences of their trade.]

In time of peace, three foreign companies appear at first sight to bring their contribution of trade to the supply of this continual drain. These are the companies of France, Holland, and Denmark. But when the object is considered more nearly, instead of relief, these companies, who from their want of authority in the country might seem to trade upon a principle merely commercial, will be found to add their full proportion to the calamity brought upon Bengal by the destructive system of the ruling power; because the greater part of the capital of all these companies, and perhaps the whole capital of some of them, is furnished exactly as the British is, out of the revenues of the country. The civil and military servants of the English East India Company being restricted in drawing bills upon Europe, and none of them ever making or proposing an establishment in India, a very great part of their fortunes, well or ill gotten, is in all probability thrown, as fast as required, into the cash of these companies.

In all other countries, the revenue, following the natural course and order of things, arises out of their commerce. Here, by a mischievous inversion of that order, the whole foreign maritime trade, whether English, French, Dutch, or Danish, arises from the revenues; and these are carried out of the country without producing anything to compensate so heavy a loss.

[Sidenote: Foreign companies' investments.]

Your Committee have not been able to discover the entire value of the investment made by foreign companies. But, as the investment which the English East India Company derived from its revenues, and even from its public credit, is for the year 1783 to be wholly stopped, it has been proposed to private persons to make a subscription for an investment on their own account. This investment is to be equal to the sum of 800,000_l._ Another loan has been also made for an investment on the Company's account to China of 200,000_l._ This makes a million; and there is no question that much more could be readily had for bills upon Europe. Now, as there is no doubt that the whole of the money remitted is the property of British subjects, (none else having any interest in remitting to Europe,) it is not unfair to suppose that a very great part, if not the whole, of what may find its way into this new channel is not newly created, but only diverted from those channels in which it formerly ran, that is, the cash of the foreign trading companies.

[Sidenote: Of the silver sent to China.]

Besides the investment made in goods by foreign companies from the funds of British subjects, these subjects have been for some time in the practice of sending very great sums in gold and silver directly to China on their own account. In a memorial presented to the Governor-General and Council, in March, 1782, it appears that the principal money lent by British subjects to one company of merchants in China then amounted to seven millions of dollars, about one million seven hundred thousand pounds sterling; and not the smallest particle of silver sent to China ever returns to India. It is not easy to determine in what proportions this enormous sum of money has been sent from Madras or from Bengal; but it equally exhausts a country belonging to this kingdom, whether it comes from the one or from the other.

[Sidenote: Revenue above the investment, how applied.]

[Sidenote: Allowance to Nabob of Bengal.]

[Sidenote: How reduced.]

But that the greatness of all these drains, and their effects, may be rendered more visible, your Committee have turned their consideration to the employment of those parts of the Bengal revenue which are not employed in the Company's own investments for China and for Europe. What is taken over and above the investment (when any investment can be made) from the gross revenue, either for the charge of collection or for civil and military establishments, is in time of peace two millions at the least. From the portion of that sum which goes to the support of civil government the natives are almost wholly excluded, as they are from the principal collections of revenue. With very few exceptions, they are only employed as servants and agents to Europeans, or in the inferior departments of collection, when it is absolutely impossible to proceed a step without their assistance. For some time after the acquisition of the territorial revenue, the sum of 420,000_l._ a year was paid, according to the stipulation of a treaty, to the Nabob of Bengal, for the support of his government. This sum, however inconsiderable, compared to the revenues of the province, yet, distributed through the various departments of civil administration, served in some degree to preserve the natives of the better sort, particularly those of the Mahomedan profession, from being utterly ruined. The people of that persuasion, not being so generally engaged in trade, and not having on their conquest of Bengal divested the ancient Gentoo proprietors of their lands of inheritance, had for their chief, if not their sole support, the share of a moderate conqueror in all offices, civil and military. But your Committee find that this arrangement was of a short duration. Without the least regard to the subsistence of this innocent people, or to the faith of the agreement on which they were brought under the British government, this sum was reduced by a new treaty to 320,000_l._, and soon after, (upon a pretence of the present Nabob's minority, and a temporary sequestration for the discharge of his debts,) to 160,000_l._: but when he arrived at his majority, and when the debts were paid, (if ever they were paid,) the sequestration still continued; and so far as the late advices may be understood, the allowance to the Nabob appears still to stand at the reduced sum of 160,000_l._

[Sidenote: Native officers.]

The other resource of the Mahomedans, and of the Gentoos of certain of the higher castes, was the army. In this army, nine tenths of which consists of natives, no native, of whatever description, holds any rank higher than that of a _Subahdar Commandant_, that is, of an officer below the rank of an English subaltern, who is appointed to each company of the native soldiery.

[Sidenote: All lucrative employments in the hands of the English.]

Your Committee here would be understood to state the ordinary establishment: for the war may have made some alteration. All the honorable, all the lucrative situations of the army, all the supplies and contracts of whatever species that belong to it, are solely in the hands of the English; so that whatever is beyond the mere subsistence of a common soldier and some officers of a lower rank, together with the immediate expenses of the English officers at their table, is sooner or later, in one shape or another, sent out of the country.

Such was the state of Bengal even in time of profound peace, and before the whole weight of the public charge fell upon that unhappy country for the support of other parts of India, which have been desolated in such a manner as to contribute little or nothing to their own protection.

[Sidenote: Former state of trade.]

Your Committee have given this short comparative account of the effects of the maritime traffic of Bengal, when in its natural state, and as it has stood since the prevalence of the system of an investment from the revenues. But before the formation of that system Bengal did by no means depend for its resources on its maritime commerce. The inland trade, from whence it derived a very great supply of silver and gold and many kinds of merchantable goods, was very considerable. The higher provinces of the Mogul Empire were then populous and opulent, and intercourse to an immense amount was carried on between them and Bengal. A great trade also passed through these provinces from all the countries on the frontier of Persia, and the frontier provinces of Tartary, as well as from Surat and Baroach on the western side of India. These parts opened to Bengal a communication with the Persian Gulf and with the Red Sea, and through them with the whole Turkish and the maritime parts of the Persian Empire, besides the commercial intercourse which it maintained with those and many other countries through its own seaports.

[Sidenote: And the trade to Turkey.]

During that period the remittances to the Mogul's treasury from Bengal were never very large, at least for any considerable time, nor very regularly sent; and the impositions of the state were soon repaid with interest through the medium of a lucrative commerce. But the disorders of Persia, since the death of Kouli Khân, have wholly destroyed the trade of that country; and the trade to Turkey, by Jidda and Bussorah, which was the greatest and perhaps best branch of the Indian trade, is very much diminished. The fall of the throne of the Mogul emperors has drawn with it that of the great marts of Agra and Delhi. The utmost confusion of the northwestern provinces followed this revolution, which was not absolutely complete until it received the last hand from Great Britain. Still greater calamities have fallen upon the fine provinces of Rohilcund and Oude, and on the countries of Corah and Allahabad. By the operations of the British arms and influence, they are in many places turned to mere deserts, or so reduced and decayed as to afford very few materials or means of commerce.

[Sidenote: State of trade in the Carnatic.]

Such is the actual condition of the trade of Bengal since the establishment of the British power there. The commerce of the Carnatic, as far as the inquiries of your Committee have extended, did not appear with a better aspect, even before the invasion of Hyder Ali Khân, and the consequent desolation, which for many years to come must exclude it from any considerable part of the trading system.

It appears, on the examination of an intelligent person concerned in trade, and who resided at Madras for several years, that on his arrival there, which was in the year 1767, that city was in a flourishing condition, and one of the first marts in India; but when he left it, in 1779, there was little or no trade remaining, and but one ship belonging to the whole place. The evidence of this gentleman purports, that at his first acquaintance with the Carnatic it was a well-cultivated and populous country, and as such consumed many articles of merchandise; that at his departure he left it much circumscribed in trade, greatly in the decline as to population and culture, and with a correspondent decay of the territorial revenue.

Your Committee find that there has also been from Madras an investment on the Company's account, taking one year with another, very nearly on the same principles and with the same effects as that from Bengal; and they think it is highly probable, that, besides the large sums remitted directly from Madras to China, there has likewise been a great deal on a private account, for that and other countries, invested in the cash of foreign European powers trading on the coast of Coromandel. But your Committee have not extended their inquiries relative to the commerce of the countries dependent on Madras so far as they have done with regard to Bengal. They have reason to apprehend that the condition is rather worse; but if the House requires a more minute examination of this important subject, your Committee is willing to enter into it without delay.

III.--EFFECT OF THE REVENUE INVESTMENT ON THE COMPANY.

Hitherto your Committee has considered this system of revenue investment, substituted in the place of a commercial link between India and Europe, so far as it affects India only: they are now to consider it as it affects the Company. So long as that corporation continued to receive a vast quantity of merchantable goods without any disbursement for the purchase, so long it possessed wherewithal to continue a dividend to pay debts, and to contribute to the state. But it must have been always evident to considerate persons, that this vast extraction of wealth from a country lessening in its resources in proportion to the increase of its burdens was not calculated for a very long duration. For a while the Company's servants kept up this investment, not by improving commerce, manufacture, or agriculture, but by forcibly raising the land-rents, on the principles and in the manner hereafter to be described. When these extortions disappointed or threatened to disappoint expectation, in order to purvey for the avarice which raged in England, they sought for expedients in breaches of all the agreements by which they were bound by any payment to the country powers, and in exciting disturbances among all the neighboring princes. Stimulating their ambition, and fomenting their mutual animosities, they sold to them reciprocally their common servitude and ruin.

The Governor-General, Mr. Hastings, and the Council, tell the Directors, "that the supply for the investment has arisen from _casual_ and _extraordinary_ resources, which they could not expect _always_ to command." In an earlier minute he expresses himself still more distinctly: he says, "If the internal resources of a state fail it, or are not equal to its _occasional_ wants, whence can it obtain immediate relief but from _external_ means?" Indeed, the investment has not been for any long time the natural product of the revenue of Bengal. When, by the vast charge and by the ill return of an evil political and military traffic, and by a prodigal increase of establishments, and a profuse conduct in distributing agencies and contracts, they found themselves under difficulties, instead of being cured of their immoral and impolitic delusion, they plunged deeper into it, and were drawn from expedient to expedient for the supply of the investment into that endless chain of wars which this House by its resolutions has so justly condemned. At home these measures were sometimes countenanced, sometimes winked at, sometimes censured, but always with an acceptance of whatever profit they afforded.

At length, the funds for the investment and for these wars together could no longer be supplied. In the year 1778 the provision for the investment from the revenues and from the monopolies stood very high. It was estimated at a million four hundred thousand pounds; and of this it appears that a great deal was realized. But this was the high flood-tide of the investment; for in that year they announce its probable decline, and that such extensive supplies could not be continued. The advances to the Board of Trade became less punctual, and many disputes arose about the time of making them. However, knowing that all their credit at home depended on the investment, or upon an opinion of its magnitude, whilst they repeat their warning of a probable deficiency, and that their "finances bore an unfavorable aspect," in the year 1779 they rate their investment still higher. But their payments becoming less and less regular, and the war carrying away all the supplies, at length Mr. Hastings, in December, 1780, denounced sentence of approaching dissolution to this system, and tells the Directors that "he bore too high a respect for their characters to treat them with the management of a preparatory and gradual introduction to an unpleasing report: that it is the _only substantial_ information he shall have to convey in that letter." In confidence, therefore, of their fortitude, he tells them without ceremony, "that there will be a necessity of making a large reduction, or possibly a _total suspension_, of their investment;--that they had already been reduced to borrow near 700,000_l._ This resource," says he, "cannot last; it must cease at a certain period, and that perhaps not far _distant_."

He was not mistaken in his prognostic. Loans now becoming the regular resource for retrieving the investment, whose ruin was inevitable, the Council enable the Board of Trade, in April, 1781, to grant certificates for government bonds at eight per cent interest for about 650,000_l._ The investment was fixed at 900,000_l._

But now another alarming system appeared. These new bonds overloaded the market. Those which had been formerly issued were at a discount; the Board of Trade was obliged to advance, therefore, a fourth more than usual to the contractors. This seemed to satisfy that description of dealers. But as those who bought on agency were limited to no terms of mutual advantage, and the bonds on the new issue falling from three to eight, nine, and ten per cent discount, the agents were unable to furnish at the usual prices. Accordingly a discount was settled on such terms as could be made: the lowest discount, and that at two places only, was at four per cent; which, with the interest on the bonds, made (besides the earlier advance) at the least twelve per cent additional charge upon all goods. It was evident, that, as the investment, instead of being supported by the revenues, was sunk by the fall of their credit, so the net revenues were diminished by the daily accumulation of an interest accruing on account of the investment. What was done to alleviate one complaint thus aggravating the other, and at length proving pernicious to both, this trade on bonds likewise came to its period.

Your Committee has reason to think that the bonds have since that time sunk to a discount much greater even than what is now stated. The Board of Trade justly denominates their resource for that year "the sinking credit of a paper currency, laboring, from the uncommon scarcity of specie, under disadvantages scarcely surmountable." From this they value themselves "on having effected an _ostensible_ provision, at least for that investment." For 1783 nothing appears even ostensible.

By this failure a total revolution ensued, of the most extraordinary nature, and to which your Committee wish to call the particular attention of the House. For the Council-General, in their letter of the 8th of April, 1782, after stating that they were disappointed in their expectations, (how grounded it does not appear,) "thought that they should be able to spare a sum to the Board of Trade,"--tell the Court of Directors, "that they had adopted a _new_ method of keeping up the investment, by private subscribers for eighty lacs of rupees, which will find _cargoes for their ships_ on the usual terms of privilege, _at the risk of the individuals_, and is to be repaid to them _according to the produce of the sales in England_,"--and they tell the Directors, that "a copy of the plan makes a number in their separate dispatches over land."

It is impossible, in reporting this revolution to the House, to avoid remarking with what fidelity Mr. Hastings and his Council have adhered to the mode of transmitting their accounts which your Committee found it necessary to mark and censure in their First Report. Its pernicious tendency is there fully set forth. They were peculiarly called on for a most accurate state of their affairs, in order to explain the necessity of having recourse to such a scheme, as well as for a full and correct account of the scheme itself. But they send only the above short minute by one dispatch over land, whilst the copy of the plan itself, on which the Directors must form their judgment, is sent separately in another dispatch over land, which has never arrived. A third dispatch, which also contained the plan, was sent by a sea conveyance, and arrived late. The Directors have, for very obvious reasons, ordered, by a strict injunction, that they should send _duplicates of all_ their dispatches by _every ship_. The spirit of this rule, perhaps, ought to extend to every mode of conveyance. In this case, so far from sending a duplicate, they do not send even one perfect account. They announce a plan by one conveyance, and they send it by another conveyance, with other delays and other risks.

At length, at nearly four months' distance, the plan has been received, and appears to be substantially that which had been announced, but developing in the particulars many new circumstances of the greatest importance. By this plan it appears that the subscription, even in idea or pretence, is not for the use of the Company, but that the subscribers are united into a sort of society for the remitting their _private fortunes_: the goods, indeed, are said to be _shipped on the Company's account_, and they are directed to be sold on the same account, and at the usual periods of sales; but, after the payment of duties, and such other allowances as they choose to make, in the eleventh article they provide "that _the remainder of the sales shall revert to the subscribers_, and be declared to be _their property_, and divided in proportion to _their_ respective shares." The compensation which they allow in this plan to their masters for their brokerage is, that, if, after deducting all the charges which they impose, "the amount of the sales _should be found_ to exceed two shillings and twopence for the current rupee of the invoice account, it shall be taken by the Company." For the management of this concern in Bengal they choose commissioners by their own authority. By the same authority they form them into a body, they put them under rules and regulations, and they empower them also to make regulations of their own. They remit, by the like authority, the duties to which all private trade is subject; and they charge the whole concern with seven per cent, to be paid from the net produce of the sales in England, as a recompense to the commissioners: for this the commissioners contract to bear all the charges on the goods to the time of shipping.

The servants having formed this plan of trade, and a new commission for the conduct of it, on their private account, it is a matter of consideration to know who the commissioners are. They turn out to be the three senior servants of the Company's Board of Trade, who choose to take upon them to be the factors of others for large emoluments, whilst they receive salaries of two thousand pounds and fifteen hundred pounds a year from the Company. As the Company have no other fund than the new investment from whence they are to be paid for the care of their servants' property, this commission and those salaries being to take place of their brokerage, they in effect render it very difficult, if not impossible, for them to derive advantage from their new occupation.

As to the benefit of this _plan_: besides preventing the loss which must happen from the Company's ships returning empty to Europe, and the stopping of all trade between India and England, the authors of it state, that it will "_open a new channel_ of remittance, and abolish the practice, by precluding the necessity, of remitting _private fortunes_ by _foreign bottoms_, and that it may lead to some _permanent mode_ for remittance of private fortunes, and of combining it with the regular provision of the Company's investment,--that it will yield _some_ profit to the Company without risk, and the national gain will be the same as upon the regular trade."

As to the combination of this mode of remittance with the Company's investment, nothing can be affirmed concerning it until some satisfactory assurance can be held out that such an investment can ever be realized. Mr. Hastings and the gentlemen of the Council have not afforded any ground for such an expectation. That the Indian trade may become a permanent vehicle of the private fortunes of the Company's servants is very probable,--that is, as permanent as the means of acquiring fortunes in India; but that _some profit_ will accrue to the Company is absolutely impossible. The Company are to bear all the charge outwards, and a very great part of that homewards; and their only compensation is the surplus commission on the sale of other people's goods. The nation will undoubtedly avoid great loss and detriment, which would be the inevitable consequence of the total cessation of the trade with Bengal and the ships returning without cargoes. But if this temporary expedient should be improved into a system, no occasional advantages to be derived from it would be sufficient to balance the mischiefs of finding a great Parliamentary corporation turned into a vehicle for remitting to England the private fortunes of those for whose benefit the territorial possessions in India are in effect and substance under this project to be _solely_ held.

By this extraordinary scheme the Company is totally overturned, and all its relations inverted. From being a body concerned in trade on their own account, and employing their servants as factors, the servants have at one stroke taken the whole trade into their own hands, on their own capital of 800,000_l._, at their own risk, and the Company are become agents and factors to them, to sell by commission _their_ goods for _their_ profit.

To enable your Committee to form some judgment upon the profit which may accrue to the Company from its new relation and employment, they directed that an estimate should be made of the probable proceeds of an investment conducted on the principles of that intended to be realized for 1783. By this estimate, which is subjoined,[5] it appears to your Committee, that, so far from any surplus profit from this transaction, the Bengal adventurers themselves, instead of realizing 2_s._ 2_d._ the rupee, (the standard they fix for their payment,) will not receive the 1_s._ 9_d._ which is its utmost value in silver at the Mint, nor probably above 1_s._ 5_d._ With this certain loss before their eyes, it is impossible that they can ever complete their subscription, unless, by management among themselves, they should be able to procure the goods for their own account upon other terms than those on which they purchased them for their masters, or unless they have for the supply of the Company on their hands a quantity of goods which they cannot otherwise dispose of. This latter case is not very improbable, from their proposing to send ten sixteenths of the whole investment in silk,--which, as will be seen hereafter, the Company has prohibited to be sent on their account, as a disadvantageous article. Nothing but the servants being overloaded can rationally account for their choice of so great a proportion of so dubious a commodity.

On the state made by two reports of a committee of the General Court in 1782, their affairs were even then reduced to a low ebb. But under the arrangement announced by Mr. Hastings and his colleagues, it does not appear, after this period of the servants' investment, from what fund the proprietors are to make any dividend at all. The objects of the sale from whence the dividend is to arise are not _their_ goods: they stand accountable to others for the whole probable produce. The state of the Company's commerce will therefore become an object of serious consideration: an affair, as your Committee apprehends, of as much difficulty as ever tried the faculties of this House. For, on the one hand, it is plain that the system of providing the Company's import into Europe, resting almost wholly by an investment from its territorial revenues, has failed: during its continuance it was supported on principles fatal to the prosperity of that country. On the other hand, if the nominal commerce of the Company is suffered to be carried on for the account of the servants abroad, by investing the emoluments made in their stations, these emoluments are therefore inclusively authorized, and with them the practices from which they accrue. All Parliamentary attempts to reform this system will be contradictory to its institution. If, for instance, five hundred thousand pounds sterling annually be necessary for this kind of investment, any regulation which may prevent the acquisition of that sum operates against the investment which is the end proposed by the plan.