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 700,000l. 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 650,000l. The investment was fixed at 900,000l.

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 800,000l., 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 2s. 2d. the rupee, (the standard they fix for their payment,) will not receive the 1s. 9d. which is its utmost value in silver at the Mint, nor probably above 1s. 5d. 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.

On this new scheme, (which is neither calculated for a future security nor for a present relief to the Company,) it is not visible in what manner the settlements in India can be at all upheld. The gentlemen in employments abroad call for the whole produce of the year's investment from Bengal; but for the payment of the counter-investment from Europe, which is for the far greater part sent out for the support of their power, no provision at all is made: they have not, it seems, agreed that it should be charged to their account, or that any deduction should be made for it from the produce of their sales in Leadenhall Street. How far such a scheme is preferable to the total suspension of trade your Committee cannot positively determine. In all likelihood, extraordinary expedients were necessary; but the causes which induced this necessity ought to be more fully inquired into; for the last step in a series of conduct may be justifiable upon principles that suppose great blame in those which preceded it.

After your Committee had made the foregoing observations upon the plan of Mr. Hastings and his colleagues, transmitted to the Court of Directors, an extract of the Madras Consultations was a few days ago laid before us. This extract contains a letter from the Governor-General and Council of Bengal to the Presidency of Fort St. George, which affords a very striking, though to your Committee by no means an unexpected, picture of the instability of their opinions and conduct. On the 8th of April the servants had regularly formed and digested the above-mentioned plan, which was to form the basis for the investment of their own fortunes, and to furnish the sole means of the commercial existence of their masters. Before the 10th of the following May, which is the date of their letter to Madras, they inform Lord Macartney that they had fundamentally altered the whole scheme. "Instead," say they, "of allowing the subscribers to retain an interest in the goods, they are to be provided entirely on account of the Company, and transported at their risk; and the subscribers, instead of receiving certificates payable out of the produce of the sales in Europe, are to be granted receipts, on the payment of their advances, bearing an interest of eight per cent per annum, until exchanged for drafts on the Court of Directors, payable 365 days after sight, at the rate of two shillings per current rupee,—which drafts shall be granted in the proper time, of three eighths of the amount subscribed, on the 31st of December next, and the remaining five eighths on the 31st of December, 1783."

The plan of April divests the Company of all property in Bengal goods transported to Europe: but in recompense they are freed from all the risk and expense, they are not loaded with interest, and they are not embarrassed with bills. The plan of May reinstates them in their old relation: but in return, their revenues in Bengal are charged with an interest of eight per cent on the sum subscribed, until bills shall be drawn; they are made proprietors of cargoes purchased, under the disadvantage of that interest, at their own hazard; they are subjected to all losses; and they are involved in Europe for payments of bills to the amount of eighty lacs of rupees, at two shillings the rupee,—that is, in bills for eight hundred thousand pounds sterling. It is probably on account of the previous interest of eight per cent that the value of the rupee on this scheme is reduced. Mr. Hastings and his colleagues announce to Lord Macartney no other than the foregoing alteration in their plan.

It is discouraging to attempt any sort of observation on plans thus shifting their principle whilst their merits are under examination. The judgment formed on the scheme of April has nothing to do with the project of May. Your Committee has not suppressed any part of the reflections which occurred to them on the former of these plans: first, because the Company knows of no other by any regular transmissions; secondly, because it is by no means certain that before the expiration of June the Governor-General and Council may not revert to the plan of April. They speak of that plan as likely to be, or make a part of one that shall be, permanent. Many reasons are alleged by its authors in its favor, grounded on the state of their affairs; none whatever are assigned for the alteration. It is, indeed, morally certain that persons who had money to remit must have made the same calculation which has been made by the directions of your Committee, and the result must have been equally clear to them,—which is, that, instead of realizing two shillings and twopence the rupee on their subscription, as they proposed, they could never hope to see more than one shilling and ninepence. This calculation probably shook the main pillar of the project of April. But, on the other hand, as the subscribers to the second scheme can have no certain assurance that the Company will accept bills so far exceeding their allowance in this particular, the necessity of remitting their fortunes may beat them back to their old ground. The Danish Company was the only means of remitting which remained. Attempts have been made with success to revive a Portuguese trade for that purpose. It is by no means clear whether Mr. Hastings and his colleagues will adhere to either of the foregoing plans, or, indeed, whether any investment at all to that amount can be realized; because nothing but the convenience of remitting the gains of British subjects to London can support any of these projects.

The situation of the Company, under this perpetual variation in the system of their investment, is truly perplexing. The manner in which they arrive at any knowledge of it is no less so. The letter to Lord Macartney, by which the variation is discovered, was not intended for transmission to the Directors. It was merely for the information of those who were admitted to a share of the subscription at Madras. When Mr. Hastings sent this information to those subscribers, he might well enough have presumed an event to happen which did happen,—that is, that a vessel might be dispatched from Madras to Europe: and indeed, by that, and by every devisable means, he ought not only to have apprised the Directors of this most material change in the plan of the investment, but to have entered fully into the grounds and reasons of his making it.

It appears to your Committee that the ships which brought to England the plan of the 8th of April did not sail from Bengal until the 1st of May. If the change had been in contemplation for any time before the 30th of April, two days would have sufficed to send an account of it, and it might have arrived along with the plan which it affected. If, therefore, such a change was in agitation before the sailing of the ships, and yet was concealed when it might have been communicated, the concealment is censurable. It is not improbable that some change of the kind was made or meditated before the sailing of the ships for Europe: for it is hardly to be imagined that reasons wholly unlooked-for should appear for setting aside a plan concerning the success of which the Council-General seemed so very confident, that a new one should be proposed, that its merits should be discussed among the moneyed men, that it should be adopted in Council, and officially ready for transmission to Madras, in twelve or thirteen days. In this perplexity of plan and of transmission, the Court of Directors may have made an arrangement of their affairs on the groundwork of the first scheme, which was officially and authentically conveyed to them. The fundamental alteration of that plan in India might require another of a very different kind in England, which the arrangements taken in consequence of the first might make it difficult, if not impossible, to execute. What must add to the confusion is, that the alteration has not the regular and official authority of the original plan, and may be presumed to indicate with certainty nothing more than that the business is again afloat, and that no scheme is finally determined on. Thus the Company is left without any fixed data upon which they can make a rational disposition of their affairs.

The fact is, that the principles and economy of the Company's trade have been so completely corrupted by turning it into a vehicle for tribute, that, whenever circumstances require it to be replaced again upon a bottom truly commercial, hardly anything but confusion and disasters can be expected as the first results. Even before the acquisition of the territorial revenues, the system of the Company's commerce was not formed upon principles the most favorable to its prosperity; for, whilst, on the one hand, that body received encouragement by royal and Parliamentary charters, was invested with several ample privileges, and even with a delegation of the most essential prerogatives of the crown,—on the other, its commerce was watched with an insidious jealousy, as a species of dealing dangerous to the national interests. In that light, with regard to the Company's imports, there was a total prohibition from domestic use of the most considerable articles of their trade,—that is, of all silk stuffs, and stained and painted cottons. The British market was in a great measure interdicted to the British trader. Whatever advantages might arise to the general trading interests of the kingdom by this restraint, its East India interest was undoubtedly injured by it. The Company is also, and has been from a very early period, obliged to furnish the Ordnance with a quantity of saltpetre at a certain price, without any reference to the standard of the markets either of purchase or of sale. With regard to their export, they were put also under difficulties upon very mistaken notions; for they were obliged to export annually a certain proportion of British manufactures, even though they should find for them in India none or but an unprofitable want. This compulsory export might operate, and in some instances has operated, in a manner more grievous than a tax to the amount of the loss in trade: for the payment of a tax is in general divided in unequal portions between the vender and consumer, the largest part falling upon the latter; in the case before us the tax may be as a dead charge on the trading capital of the Company.

The spirit of all these regulations naturally tended to weaken, in the very original constitution of the Company, the main-spring of the commercial machine, the principles of profit and loss. And the mischief arising from an inattention to those principles has constantly increased with the increase of its power. For when the Company had acquired the rights of sovereignty in India, it was not to be expected that the attention to profit and loss would have increased. The idea of remitting tribute in goods naturally produced an indifference to their price and quality,—the goods themselves appearing little else than a sort of package to the tribute. Merchandise taken as tribute, or bought in lieu of it, can never long be of a kind or of a price fitted to a market which stands solely on its commercial reputation. The indifference of the mercantile sovereign to his trading advantages naturally relaxed the diligence of his subordinate factor-magistrates through all their gradations and in all their functions; it gave rise, at least so far as the principal was concerned, to much neglect of price and of goodness in their purchases. If ever they showed any extraordinary degrees of accuracy and selection, it would naturally be in favor of that interest to which they could not be indifferent. The Company might suffer above, the natives might suffer below; the intermediate party must profit to the prejudice of both.

Your Committee are of opinion that the Company is now arrived at that point, when, the investment from surplus revenue or from the spoil of war ceasing, it is become much more necessary to fix its commerce upon a commercial basis. And this opinion led your Committee to a detailed review of all the articles of the Indian traffic upon which the profit and loss was steady; and we have chosen a period of four years, during the continuance of the revenue investment, and prior to any borrowing or any extraordinary drawing of bills, in order to find out how far the trade, under circumstances when it will be necessary to carry it on by borrowing, or by bills, or by exportation of bullion, can be sustained in the former course, so as to secure the capital and to afford a reasonable dividend. And your Committee find that in the first four years the investment from Bengal amounted to 4,176,525l.; upon 2,260,277l. there was a gain of 186,337l., and upon 1,916,248l. a loss of 705,566l.: so that the excess of loss above gain, upon the whole of the foregoing capital, was in the four years no less than 519,229l.

If the trade were confined to Bengal, and the Company were to trade on those terms upon a capital borrowed at eight per cent Indian interest, their revenues in that province would be soon so overpowered with debt, that those revenues, instead of supporting the trade, would be totally destroyed by it. If, on the other hand, the Company traded upon bills with every advantage, far from being in a condition to divide the smallest percentage, their bankruptcy here would be inevitable.

Your Committee then turned to the trade of the other factories and Presidencies, and they constantly found, that, as the power and dominion of the Company was less, their profit on the goods was greater. The investments of Madras, Bombay, and Bencoolen have, in the foregoing four years, upon a capital of 1,151,176l., had a gain upon the whole of 329,622l. The greatest of all is that of Bencoolen, which, on a capital of 76,571l., produced a profit of 107,760l. This, however, is but a small branch of the Company's trade. The trade to China, on a capital of 1,717,463l., produced an excess of gain amounting to 874,096l., which is about fifty per cent. But such was the evil influence of the Bengal investment, that not only the profits of the Chinese trade, but of all the lucrative branches taken together, were so sunk and ingulfed in it, that the whole profit on a capital of 7,045,164l. reached to no more than 684,489l., that is, to 189,607l. less than the profit on the Chinese trade alone,—less than the total profits on the gainful trades taken together, 520,727l.

It is very remarkable, that in the year 1778, when the Bengal investment stood at the highest, that is, so high as 1,223,316l., though the Chinese trade produced an excess of gain in that year of 209,243l., and that no loss of moment could be added to that of Bengal, (except about 45,000l. on the Bombay trade,) the whole profit of a capital of 2,040,787l. amounted only to the sum of 9,480l.

The detail of the articles in which loss was incurred or gain made will be found in the Appendix, No. 24. The circumstances of the time have rendered it necessary to call up a vigorous attention to this state of the trade of the Company between Europe and India.

INTERNAL TRADE OF BENGAL.

The internal trade of Bengal has next attracted the inquiries of your Committee.

The great and valuable articles of the Company's investment, drawn from the articles of internal trade, are raw silk, and various descriptions of piece-goods made of silk and cotton. These articles are not under any formal monopoly; nor does the Company at present exercise a declared right of preemption with regard to them. But it does not appear that the trade in these particulars is or can be perfectly free,—not so much on account of any direct measures taken to prevent it as from the circumstances of the country, and the manner of carrying on business there: for the present trade, even in these articles, is built from the ruins of old monopolies and preemptions, and necessarily partakes of the nature of its materials.

In order to show in what manner manufactures and trade so constituted contribute to the prosperity of the natives, your Committee conceives it proper to take, in this place, a short general view of the progress of the English policy with relation to the commerce of Bengal, and the several stages and gradations by which it has been brought into its actual state. The modes of abuse, and the means by which commerce has suffered, will be considered in greater detail under the distinct heads of those objects which have chiefly suffered by them.

During the time of the Mogul government, the princes of that race, who omitted nothing for the encouragement of commerce in their dominions, bestowed very large privileges and immunities on the English East India Company, exempting them from several duties to which their natural-born subjects were liable. The Company's dustuck, or passport, secured to them this exemption at all the custom-houses and toll-bars of the country. The Company, not being able or not choosing to make use of their privilege to the full extent to which it might be carried, indulged their servants with a qualified use of their passport, under which, and in the name of the Company, they carried on a private trade, either by themselves or in society with natives, and thus found a compensation for the scanty allowances made to them by their masters in England. As the country government was at that time in the fulness of its strength, and that this immunity existed by a double connivance, it was naturally kept within tolerable limits.

But by the revolution in 1757 the Company's servants obtained a mighty ascendant over the native princes of Bengal, who owed their elevation to the British arms. The Company, which was new to that kind of power, and not yet thoroughly apprised of its real character and situation, considered itself still as a trader in the territories of a foreign potentate, in the prosperity of whose country it had neither interest nor duty. The servants, with the same ideas, followed their fortune in the channels in which it had hitherto ran, only enlarging them with the enlargement of their power. For their first ideas of profit were not official; nor were their oppressions those of ordinary despotism. The first instruments of their power were formed out of evasions of their ancient subjection. The passport of the Company in the hands of its servants was no longer under any restraint; and in a very short time their immunity began to cover all the merchandise of the country. Cossim Ali Khan, the second of the Nabobs whom they had set up, was but ill disposed to the instruments of his greatness. He bore the yoke of this imperious commerce with the utmost impatience: he saw his subjects excluded as aliens from their own trade, and the revenues of the prince overwhelmed in the ruin of the commerce of his dominions. Finding his reiterated remonstrances on the extent and abuse of the passport ineffectual, he had recourse to an unexpected expedient, which was, to declare his resolution at once to annul all the duties on trade, setting it equally free to subjects and to foreigners.

Never was a method of defeating the oppressions of monopoly more forcible, more simple, or more equitable: no sort of plausible objection could be made; and it was in vain to think of evading it. It was therefore met with the confidence of avowed and determined injustice. The Presidency of Calcutta openly denied to the prince the power of protecting the trade of his subjects by the remission of his own duties. It was evident that his authority drew to its period: many reasons and motives concurred, and his fall was hastened by the odium of the oppressions which he exercised voluntarily, as well as of those to which he was obliged to submit.

When this example was made, Jaffier Ali Khan, who had been deposed to make room for the last actor, was brought from penury and exile to a station the terms of which he could not misunderstand. During his life, and in the time of his children who succeeded to him, parts of the territorial revenue were assigned to the Company; and the whole, under the name of residency at the Nabob's court, was brought, directly or indirectly, under the control of British subjects. The Company's servants, armed with authorities delegated from the nominal government, or attended with what was a stronger guard, the fame of their own power, appeared as magistrates in the markets in which they dealt as traders. It was impossible for the natives in general to distinguish, in the proceedings of the same persons, what was transacted on the Company's account from what was done on their own; and it will ever be so difficult to draw this line of distinction, that as long as the Company does, directly or indirectly, aim at any advantage to itself in the purchase of any commodity whatever, so long will it be impracticable to prevent the servants availing themselves of the same privilege.

The servants, therefore, for themselves or for their employers, monopolized every article of trade, foreign and domestic: not only the raw merchantable commodities, but the manufactures; and not only these, but the necessaries of life, or what in these countries habit has confounded with them,—not only silk, cotton, piece-goods, opium, saltpetre, but not unfrequently salt, tobacco, betel-nut, and the grain of most ordinary consumption. In the name of the country government they laid on or took off, and at their pleasure heightened or lowered, all duties upon goods: the whole trade of the country was either destroyed or in shackles. The acquisition of the Duanne, in 1765, bringing the English into the immediate government of the country in its most essential branches, extended and confirmed all the former means of monopoly.

In the progress of these ruinous measures through all their details, innumerable grievances were suffered by the native inhabitants, which were represented in the strongest, that is, their true colors, in England. Whilst the far greater part of the British in India were in eager pursuit of the forced and exorbitant gains of a trade carried on by power, contests naturally arose among the competitors: those who were overpowered by their rivals became loud in their complaints to the Court of Directors, and were very capable, from experience, of pointing out every mode of abuse.

The Court of Directors, on their part, began, though very slowly, to perceive that the country which was ravaged by this sort of commerce was their own. These complaints obliged the Directors to a strict examination into the real sources of the mismanagement of their concerns in India, and to lay the foundations of a system of restraint on the exorbitancies of their servants. Accordingly, so early as the year 1765, they confine them to a trade only in articles of export and import, and strictly prohibit them from all dealing in objects of internal consumption. About the same time the Presidency of Calcutta found it necessary to put a restraint upon themselves, or at least to make show of a disposition (with which the Directors appear much satisfied) to keep their own enormous power within bounds.

But whatever might have been the intentions either of the Directors or the Presidency, both found themselves unequal to the execution of a plan which went to defeat the projects of almost all the English in India,—possibly comprehending some who were makers of the regulations. For, as the complaint of the country or as their own interest predominated with the Presidency, they were always shifting from one course to the other; so that it became as impossible for the natives to know upon what principle to ground any commercial speculation, from the uncertainty of the law under which they acted, as it was when they were oppressed by power without any color of law at all: for the Directors, in a few months after they had given these tokens of approbation to the above regulations in favor of the country trade, tell the Presidency, "It is with concern we see in every page of your Consultations restrictions, limitations, prohibitions, affecting various articles of trade." On their side, the Presidency freely confess that these monopolies of inland trade "were the foundation of all the bloodsheds, massacres, and confusions which have happened of late in Bengal."

Pressed in this urgent manner, the Directors came more specifically to the grievance, and at once annul all the passports with which their servants traded without duties, holding out means of compensation, of which it does not appear that any advantage was taken. In order that the duties which existed should no longer continue to burden the trade either of the servants or natives, they ordered that a number of oppressive toll-bars should be taken away, and the whole number reduced to nine of the most considerable.

When Lord Clive was sent to Bengal to effect a reformation of the many abuses which prevailed there, he considered monopoly to be so inveterate and deeply rooted, and the just rewards of the Company's servants to be so complicated with that injustice to the country, that the latter could not easily be removed without taking away the former. He adopted, therefore, a plan for dealing in certain articles, which, as he conceived, rather ought to be called "a regulated and restricted trade" than a formal monopoly. By this plan he intended that the profits should be distributed in an orderly and proportioned manner for the reward of services, and not seized by each individual according to the measure of his boldness, dexterity, or influence.

But this scheme of monopoly did not subsist long, at least in that mode and for those purposes. Three of the grand monopolies, those of opium, salt, and saltpetre, were successively by the Company taken into their own hands. The produce of the sale of the two former articles was applied to the purchase of goods for their investment; the latter was exported in kind for their sales in Europe. The senior servants had a certain share of emolument allotted to them from a commission on the revenues. The junior servants were rigorously confined to salaries, on which they were unable to subsist according to their rank. They were strictly ordered to abstain from all dealing in objects of internal commerce. Those of export and import were left open to young men without mercantile experience, and wholly unprovided with mercantile capitals, but abundantly furnished with large trusts of the public money, and with all the powers of an absolute government. In this situation, a religious abstinence from all illicit game was prescribed to men at nine thousand miles' distance from the seat of the supreme authority.

Your Committee is far from meaning to justify, or even to excuse, the oppressions and cruelties used by many in supplying the deficiencies of their regular allowances by all manner of extortion; but many smaller irregularities may admit some alleviation from thence. Nor does your Committee mean to express any desire of reverting to the mode (contrived in India, but condemned by the Directors) of rewarding the servants of an higher class by a regulated monopoly. Their object is to point out the deficiencies in the system, by which restrictions were laid that could have little or no effect whilst want and power were suffered to be united.

But the proceedings of the Directors at that time, though not altogether judicious, were in many respects honorable to them, and favorable, in the intention at least, to the country they governed. For, finding their trading capital employed against themselves and against the natives, and struggling in vain against abuses which were inseparably connected with the system of their own preference in trade, in the year 1773 they came to the manly resolution of setting an example to their servants, and gave up all use of power and influence in the two grand articles of their investment, silk and piece-goods. They directed that the articles should be bought at an equal and public market from the native merchants; and this order they directed to be published in all the principal marts of Bengal.

Your Committee are clearly of opinion that no better method of purchase could be adopted. But it soon appeared that in deep-rooted and inveterate abuses the wisest principles of reform may be made to operate so destructively as wholly to discredit the design, and to dishearten all persons from the prosecution of it. The Presidency, who seemed to yield with the utmost reluctance to the execution of these orders, soon made the Directors feel their evil influence upon their own investment; for they found the silk and cotton cloths rose twenty-five per cent above their former price, and a further rise of forty per cent was announced to them.

SILK.

What happened with regard to raw silk is still more remarkable, and tends still more clearly to illustrate the effects of commercial servitude during its unchecked existence, and the consequences which may be made to arise from its sudden reformation. On laying open the trade, the article of raw silk was instantly enhanced to the Company full eighty per cent. The contract made for that commodity, wound off in the Bengal method, which used to sell for less than six rupees, or thirteen shillings, for two pounds' weight, arose to nine rupees, or near twenty shillings, and the filature silk was very soon after contracted for at fourteen.

The Presidency accounted for this rise by observing that the price had before been arbitrary, and that the persons who purveyed for the Company paid no more than "what was judged sufficient for the maintenance of the first providers." This fact explains more fully than the most labored description can do the dreadful effects of the monopoly on the cultivators. They had the sufficiency of their maintenance measured out by the judgment of those who were to profit by their labor; and this measure was not a great deal more, by their own account, than about two thirds of the value of that labor. In all probability it was much less, as these dealings rarely passed through intermediate hands without leaving a considerable profit. These oppressions, it will be observed, were not confined to the Company's share, which, however, covered a great part of the trade; but as this was an article permitted to the servants, the same power of arbitrary valuation must have been extended over the whole, as the market must be equalized, if any authority at all is extended over it by those who have an interest in the restraint. The price was not only raised, but in the manufactures the quality was debased nearly in an equal proportion. The Directors conceived, with great reason, that this rise of price and debasement of quality arose, not from the effect of a free market, but from the servants having taken that opportunity of throwing upon the market of their masters the refuse goods of their own private trade at such exorbitant prices as by mutual connivance they were pleased to settle. The mischief was greatly aggravated by its happening at a time when the Company were obliged to pay for their goods with bonds bearing an high interest.

The perplexed system of the Company's concerns, composed of so many opposite movements and contradictory principles, appears nowhere in a more clear light. If trade continued under restraint, their territorial revenues must suffer by checking the general prosperity of the country: if they set it free, means were taken to raise the price and debase the quality of the goods; and this again fell upon the revenues, out of which the payment for the goods was to arise. The observations of the Company on that occasion are just and sagacious; and they will not permit the least doubt concerning the policy of these unnatural trades. "The amount of our Bengal cargoes, from 1769 to 1773, is 2,901,194l. sterling; and if the average increase of price be estimated at twenty-five per cent only, the amount of such increase is 725,298l. sterling. The above circumstances are exceedingly alarming to us; but what must be our concern, to find by the advices of our President and Council of 1773, that a further advance of forty per cent on Bengal goods was expected, and allowed to be the consequence of advertisements then published, authorizing a free trade in the service? We find the Duanne revenues are in general farmed for five years, and the aggregate increase estimated at only 183,170l. sterling (on a supposition that such increase will be realized); yet if the annual investment be sixty lacs, and the advance of price thirty per cent only, such advance will exceed the increase of the revenue by no less than 829,330l. sterling."

The indignation which the Directors felt at being reduced to this distressing situation was expressed to their servants in very strong terms. They attributed the whole to their practices, and say, "We are far from being convinced that the competition which tends to raise the price of goods in Bengal is wholly between public European companies, or between merchants in general who export to foreign markets: we are rather of opinion that the sources of this grand evil have been the extraordinary privileges granted to individuals in our service or under our license to trade without restriction throughout the provinces of Bengal, and the encouragement they have had to extend their trade to the uttermost, even in such goods as were proper for our investment, by observing the success of those persons who have from time to time found means to dispose of their merchandise to our Governor and Council, though of so bad a quality as to be sold here with great difficulty, after having been frequently refused, and put up at the next sale without price, to the very great discredit and disadvantage of the Company." In all probability the Directors were not mistaken; for, upon an inquiry instituted soon after, it was found that Cantu Babu, the banian or native steward and manager to Mr. Hastings, (late President,) held two of these contracts in his own name and that of his son for considerably more than 150,000l. This discovery brought on a prohibition from the Court of Directors of that suspicious and dangerous dealing in the stewards of persons in high office. The same man held likewise farms to the amount of 140,000l. a year of the landed revenue, with the same suspicious appearance, contrary to the regulations made under Mr. Hastings's own administration.

In the mortifying dilemma to which the Directors found themselves reduced, whereby the ruin of the revenues either by the freedom or the restraint of trade was evident, they considered the first as most rapid and urgent, and therefore once more revert to the system of their ancient preemption, and destroy that freedom which they had so lately and with so much solemnity proclaimed, and that before it could be abused or even enjoyed. They declare, that, "unwilling as we are to return to the former coercive system of providing an investment, or to abridge that freedom of commerce which has been so lately established in Bengal, yet at the same time finding it our indispensable duty to strike at the root of an evil which has been so severely felt by the Company, and which can no longer be supported, we hereby direct that all persons whatever in the Company's service, or under our protection, be absolutely prohibited, by public advertisement, from trading in any of those articles which compose our investment, directly or indirectly, except on account of and for the East India Company, until their investment is completed."

As soon as this order was received in Bengal, it was construed, as indeed the words seemed directly to warrant, to exclude all natives as well as servants from the trade, until the Company was supplied. The Company's preemption was now authoritatively reestablished, and some feeble and ostensible regulations were made to relieve the weavers who might suffer by it. The Directors imagined that the reestablishment of their coercive system would remove the evil which fraud and artifice had grafted upon one more rational and liberal. But they were mistaken; for it only varied, if it did so much as vary, the abuse. The servants might as essentially injure their interest by a direct exercise of their power as by pretexts drawn from the freedom of the natives,—but with this fatal difference, that the frauds upon the Company must be of shorter duration under a scheme of freedom. That state admitted, and indeed led to, means of discovery and correction; whereas the system of coercion was likely to be permanent. It carried force further than served the purposes of those who authorized it: it tended to cover all frauds with obscurity, and to bury all complaint in despair. The next year, therefore, that is, in the year 1776, the Company, who complained that their orders had been extended beyond their intentions, made a third revolution in the trade of Bengal. It was set free again,—so far, at least, as regarded the native merchants,—but in so imperfect a manner as evidently to leave the roots of old abuses in the ground. The Supreme Court of Judicature about this time (1776) also fulminated a charge against monopolies, without any exception of those authorized by the Company: but it does not appear that anything very material was done in consequence of it.

The trade became nominally free; but the course of business established in consequence of coercive monopoly was not easily altered. In order to render more distinct the principles which led to the establishment of a course and habit of business so very difficult to change as long as those principles exist, your Committee think it will not be useless here to enter into the history of the regulations made in the first and favorite matter of the Company's investment, the trade in raw silk, from the commencement of these regulations to the Company's perhaps finally abandoning all share in the trade which was their object.

RAW SILK

The trade in raw silk was at all times more popular in England than really advantageous to the Company. In addition to the old jealousy which prevailed between the Company and the manufactory interest of England, they came to labor under no small odium on account of the distresses of India. The public in England perceived, and felt with a proper sympathy, the sufferings of the Eastern provinces in all cases in which they might be attributed to the abuses of power exercised under the Company's authority. But they were not equally sensible to the evils which arose from a system of sacrificing the being of that country to the advantage of this. They entered very readily into the former, but with regard to the latter were slow and incredulous. It is not, therefore, extraordinary that the Company should endeavor to ingratiate themselves with the public by falling in with its prejudices. Thus they were led to increase the grievance in order to allay the clamor. They continued still, upon a larger scale, and still more systematically, that plan of conduct which was the principal, though not the most blamed, cause of the decay and depopulation of the country committed to their care.

With that view, and to furnish a cheap supply of materials to the manufactures of England, they formed a scheme which tended to destroy, or at least essentially to impair, the whole manufacturing interest of Bengal. A policy of that sort could not fail of being highly popular, when the Company submitted itself as an instrument for the improvement of British manufactures, instead of being their most dangerous rival, as heretofore they had been always represented.

They accordingly notified to their Presidency in Bengal, in their letter of the 17th of March, 1769, that "there was no branch of their trade they more ardently wish to extend than that of raw silk." They disclaim, however, all desire of employing compulsory measures for that purpose, but recommended every mode of encouragement, and particularly by augmented wages, "in order to induce manufacturers of wrought silk to quit that branch and take to the winding of raw silk."

Having thus found means to draw hands from the manufacture, and confiding in the strength of a capital drawn from the public revenues, they pursue their ideas from the purchase of their manufacture to the purchase of the material in its crudest state. "We recommend you to give an increased price, if necessary, so as to take that trade out of the hands of other merchants and rival nations." A double bounty was thus given against the manufactures, both in the labor and in the materials.

It is very remarkable in what manner their vehement pursuit of this object led the Directors to a speedy oblivion of those equitable correctives before interposed by them, in order to prevent the mischiefs which were apparent in the scheme, if left to itself. They could venture so little to trust to the bounties given from the revenues a trade which had a tendency to dry up their source, that, by the time they had proceeded to the thirty-third paragraph of their letter, they revert to those very compulsory means which they had disclaimed but three paragraphs before. To prevent silk-winders from working in their private houses, where they might work for private traders, and to confine them to the Company's factories, where they could only be employed for the Company's benefit, they desire that the newly acquired power of government should be effectually employed. "Should," say they, "this practice, through inattention, have been suffered to take place again, it will be proper to put a stop to it, which may now be more effectually done by an absolute prohibition, under severe penalties, by the authority of government."

This letter contains a perfect plan of policy, both of compulsion and encouragement, which must in a very considerable degree operate destructively to the manufactures of Bengal. Its effect must be (so far as it could operate without being eluded) to change the whole face of that industrious country, in order to render it a field for the produce of crude materials subservient to the manufactures of Great Britain. The manufacturing hands were to be seduced from their looms by high wages, in order to prepare a raw produce for our market; they were to be locked up in the factories; and the commodity acquired by these operations was, in this immature state, carried out of the country, whilst its looms would be left without any material but the debased refuse of a market enhanced in its price and scanted in its supply. By the increase of the price of this and other materials, manufactures formerly the most flourishing gradually disappeared under the protection of Great Britain, and were seen to rise again and flourish on the opposite coast of India, under the dominion of the Mahrattas.

These restraints and encouragements seem to have had the desired effect in Bengal with regard to the diversion of labor from manufacture to materials. The trade of raw silk increased rapidly. But the Company very soon felt, in the increase of price and debasement of quality of the wrought goods, a loss to themselves which fully counterbalanced all the advantages to be derived to the nation from the increase of the raw commodity. The necessary effect on the revenue was also foretold very early: for their servants in the principal silk-factories declared that the obstruction to the private trade in silk must in the end prove detrimental to the revenues, and that the investment clashes with the collection of these revenues. Whatsoever by bounties or immunities is encouraged out of a landed revenue has certainly some tendency to lessen the net amount of that revenue, and to forward a produce which does not yield to the gross collection, rather than one that does.

The Directors declare themselves unable to understand how this could be. Perhaps it was not so difficult. But, pressed as they were by the greatness of the payments which they were compelled to make to government in England, the cries of Bengal could not be heard among the contending claims of the General Court, of the Treasury, and of Spitalfields. The speculation of the Directors was originally fair and plausible,—so far as the mere encouragement of the commodity extended. Situated as they were, it was hardly in their power to stop themselves in the course they had begun. They were obliged to continue their resolution, at any hazard, increasing the investment. "The state of our affairs," say they, "requires the utmost extension of your investments. You are not to forbear sending even those sorts which are attended with loss, in case such should be necessary to supply an investment to as great an amount as you can provide from your own resources; and we have not the least doubt of your being thereby enabled to increase your consignments of this valuable branch of national commerce, even to the utmost of your wishes. But it is our positive order that no part of such investment be provided with borrowed money which is to be repaid by drafts upon our treasury in London; since the license which has already been taken in this respect has involved us in difficulties which we yet know not how we shall surmount."

This very instructive paragraph lays open the true origin of the internal decay of Bengal. The trade and revenues of that country were (as the then system must necessarily have been) of secondary consideration at best. Present supplies were to be obtained, and present demands in England were to be avoided, at every expense to Bengal.

The spirit of increasing the investment from revenue at any rate, and the resolution of driving all competitors, Europeans or natives, out of the market, prevailed at a period still more early, and prevailed not only in Bengal, but seems, more or less, to have diffused itself through the whole sphere of the Company's influence. In 1768 they gave to the Presidency of Madras the following memorable instruction, strongly declaratory of their general system of policy.

"We shall depend upon your prudence," say they, "to discourage foreigners; and being intent, as you have been repeatedly acquainted, on bringing home as great a part of the revenues as possible in your manufactures, the outbidding them in those parts where they interfere with you would certainly prove an effectual step for answering that end. We therefore recommend it to you to offer such increase of price as you shall deem may be consistently given,—that, by beating them out of the market, the quantities by you to be provided may be proportionally enlarged; and if you take this method, it is to be so cautiously practised as not to enhance the prices in the places immediately under your control. On this subject we must not omit the approval of your prohibiting the weavers of Cuddalore from making up any cloth of the same sortments that are provided for us; and if such prohibition is not now, it should by all means be in future, made general, and strictly maintained."

This system must have an immediate tendency towards disordering the trade of India, and must finally end in great detriment to the Company itself. The effect of the restrictive system on the weaver is evident. The authority given to the servants to buy at an advanced price did of necessity furnish means and excuses for every sort of fraud in their purchases. The instant the servant of a merchant is admitted on his own judgment to overbid the market, or to send goods to his master which shall sell at loss, there is no longer any standard upon which his unfair practices can be estimated, or any effectual means by which they can be restrained. The hope entertained by the Directors, of confining this destructive practice of giving an enhanced price to a particular spot, must ever be found totally delusive. Speculations will be affected by this artificial price in every quarter in which markets can have the least communication with each other.

In a very few years the Court of Directors began to feel, even in Leadenhall Street, the effects of trading to loss upon the revenues, especially on those of Bengal. In the letter of February, 1774, they observe, that, "looking back to their accounts for the four preceding years, on several of the descriptions of silk there has been an increasing loss, instead of any alteration for the better in the last year's productions. This," they say, "threatens the destruction of that valuable branch of national commerce." And then they recommend such regulations (as if regulations in that state of things could be of any service) as may obtain "a profit in future, instead of so considerable a loss, which we can no longer sustain."

Your Committee thought it necessary to inquire into the losses which had actually been suffered by this unnatural forced trade, and find the loss so early as the season of 1776 to be 77,650l., that in the year 1777 it arose to 168,205l. This was so great that worse could hardly be apprehended: however, in the season of 1778 it amounted to 255,070l. In 1779 it was not so ruinously great, because the whole import was not so considerable; but it still stood enormously high,—so high as 141,800l. In the whole four years it came to 642,725l. The observations of the Directors were found to be fully verified. It is remarkable that the same article in the China trade produced a considerable and uniform profit. On this circumstance little observation is necessary.

During the time of their struggles for enlarging this losing trade, which they considered as a national object,—what in one point of view it was, and, if it had not been grossly mismanaged, might have been in more than one,—in this part it is impossible to refuse to the Directors a very great share of merit. No degree of thought, of trouble, or of reasonable expense was spared by them for the improvement of the commodity. They framed with diligence, and apparently on very good information, a code of manufacturing regulations for that purpose; and several persons were sent out, conversant in the Italian method of preparing and winding silk, aided by proper machines for facilitating and perfecting the work. This, under proper care, and in course of time, might have produced a real improvement to Bengal; but in the first instance it naturally drew the business from native management, and it caused a revulsion from the trade and manufactures of India which led as naturally and inevitably to an European monopoly, in some hands or other, as any of the modes of coercion which were or could be employed. The evil was present and inherent in the act. The means of letting the natives into the benefit of the improved system of produce was likely to be counteracted by the general ill conduct of the Company's concerns abroad. For a while, at least, it had an effect still worse: for the Company purchasing the raw cocoon or silk-pod at a fixed rate, the first producer, who, whilst he could wind at his own house, employed his family in this labor, and could procure a reasonable livelihood by buying up the cocoons for the Italian filature, now incurred the enormous and ruinous loss of fifty per cent. This appears in a letter to the Presidency, written by Mr. Boughton Rouse, now a member of your Committee. But for a long time a considerable quantity of that in the old Bengal mode of winding was bought for the Company from contractors, and it continues to be so bought to the present time: but the Directors complain, in their letter of the 12th of May, 1780, that both species, and particularly the latter, had risen so extravagantly that it was become more than forty per cent dearer than it had been fifteen years ago. In that state of price, they condemn their servants, very justly, for entering into contracts for three years,—and that for several kinds of silk, of very different goodness, upon averages unfairly formed, where the commodities averaged at an equal price differed from twenty to thirty per cent on the sale. Soon after, they formed a regular scale of fixed prices, above which they found they could not trade without loss.

Whilst they were continuing these methods to secure themselves against future losses, the Bengal ships which arrived in that year announced nothing but their continuance. Some articles by the high price, and others from their ill quality, were such "as never could answer to be sent to Europe at any price." The Directors renew their prohibition of making fresh contracts, the present being generally to expire in the year 1781. But this trade, whose fundamental policy might have admitted of a doubt, as applied to Bengal, (whatever it might have been with regard to England,) was now itself expiring in the hands of the Company, so that they were obliged to apply to government for power to enlarge their capacity of receiving bills upon Europe. The purchase by these bills they entirely divert from raw silk, and order to be laid out wholly in piece-goods.

Thus, having found by experience that this trade, whilst carried on upon the old principles, of whatever advantage it might have been to the British manufacturers, or to the individuals who were concerned in it in Bengal, had proved highly detrimental to the Company, the Directors resolved to expunge the raw silk from their investment. They gave up the whole to private traders, on condition of paying the freight, charges, and duties,—permitting them to send it to Europe in the Company's ships upon their own account.

The whole of this history will serve to demonstrate that all attempts, which in their original system or in their necessary consequences tend to the distress of India, must, and in a very short time will, make themselves felt even by those in whose favor such attempts have been made. India may possibly in some future time bear and support itself under an extraction of measure [treasure?] or of goods; but much care ought to be taken that the influx of wealth shall be greater in quantity and prior in time to the waste.

On abandoning the trade in silk to private hands, the Directors issued some prohibitions to prevent monopoly, and they gave some directions about the improvement of the trade. The prohibitions were proper, and the directions prudent; but it is much to be feared, that, whilst all the means, instruments, and powers remain, by which monopolies were made, and through which abuses formerly prevailed, all verbal orders will be fruitless.

This branch of trade, being so long principally managed by the Company's servants for the Company and under its authority, cannot be easily taken out of their hands and pass to the natives, especially when it is to be carried on without the control naturally inherent in all participation. It is not difficult to conceive how this forced preference of traffic in a raw commodity must have injured the manufactures, while it was the policy of the Company to continue the trade on their own account. The servants, so far from deviating from their course, since they have taken the trade into their own management, have gone much further into it. The proportion of raw silk in the investment is to be augmented. The proportion of the whole cargoes for the year 1783, divided into sixteen parts, is ten of raw silk, and six only of manufactured goods. Such is the proportion of this losing article in the scheme for the investment of private fortunes.

In the reformed scheme of sending the investment on account of the Company, to be paid in bills upon Europe, no mention is made of any change of these proportions. Indeed, some limits are attempted on the article of silk, with regard to its price; and it is not improbable that the price to the master and the servant will be very different: but they cannot make profitable purchases of this article without strongly condemning all the former purchases of the Board of Trade.

CLOTHS, OR PIECE-GOODS.

The general system above stated, relative to the silk trade, must materially have affected the manufactures of Bengal, merely as it was a system of preference. It does by no means satisfactorily appear to your Committee that the freedom held out by the Company's various orders has been ever fully enjoyed, or that the grievances of the native merchants and manufacturers have been redressed; for we find, on good authority, that, at that very period at which it might be supposed that these orders had their operation, the oppressions were in full vigor. They appear to have fallen heaviest on the city of Dacca, formerly the great staple for the finest goods in India,—a place once full of opulent merchants and dealers of all descriptions.

The city and district of Dacca, before the prevalence of the East India Company's influence and authority, manufactured annually to about three hundred thousand pounds' value in cloths. In the year 1776 it had fallen to about two hundred thousand, or two thirds of its former produce. Of this the Company's demand amounted only to a fourth part, that is, about fifty thousand pounds yearly. This was at that time provided by agents for the Company, under the inspection of their commercial servants. On pretence of securing an advantage for this fourth part for their masters, they exerted a most violent and arbitrary power over the whole. It was asserted, that they fixed the Company's mark to such goods as they thought fit, (to all goods, as stated in one complaint,) and disposed of them as they thought proper, excluding not only all the native dealers, but the Dutch Company, and private English merchants,—that they made advances to the weavers often beyond their known ability to repay in goods within the year, and by this means, having got them in debt, held them in perpetual servitude. Their inability to keep accounts left them at the discretion of the agents of the supreme power to make their balances what they pleased, and they recovered them, not by legal process, but by seizure of their goods and arbitrary imprisonment of their persons. One and the same dealer made the advance, valued the return, stated the account, passed the judgment, and executed the process.

Mr. Rouse, Chief of the Dacca Province, who struggled against those evils, says, that in the year 1773 there were no balances due, as the trade was then carried on by the native brokers. In less than three years these balances amounted to an immense sum,—a sum lost to the Company, but existing in full force for every purpose of oppression. In the amount of these balances almost every weaver in the country bore a part, and consequently they were almost all caught in this snare. "They are in general," says Mr. Rouse, in a letter to General Clavering, delivered to your Committee, "a timid, helpless people; many of them poor to the utmost degree of wretchedness; incapable of keeping accounts; industrious as it were by instinct; unable to defend themselves, if oppressed; and satisfied, if with continual labor they derive from the fair dealing and humanity of their employer a moderate subsistence for their families."

Such were the people who stood accused by the Company's agents as pretending grievances, in order to be excused the payment of their balances. As to the commercial state of the province in general, Mr. Rouse represents it "to be for those two years a perpetual scene of complaint and disputation;—the Company's agents professing to pay higher rates to weavers, whilst the Leadenhall sales showed an heavy loss to the Company; the weavers have even travelled in multitudes to prefer their complaints at the Presidency; the amount of the investment comparatively small, with balances comparatively large, and, as I understand, generally contested by the weavers; the native merchants, called delals, removed from their influence, as prejudicial to the Company's concerns; and European merchants complaining against undue influence of the Company's commercial agents, in preventing the free purchase even of those goods which the Company never takes."

The spirit of those agents will be fully comprehended from a state of the proceedings before Mr. Rouse and Council, on the complaint of a Mr. Cree, an English free merchant at Dacca, who had been twice treated in the same injurious manner by the agents of Mr. Hurst, the Commercial Chief at that place. On his complaint to the board of the seizure of the goods, and imprisonment of his agents, Mr. Hurst was called upon for an explanation. In return he informed them that he had sent to one of the villages to inquire concerning the matter of fact alleged. The impartial person sent to make this inquiry was the very man accused of the oppressions into which he was sent to examine. The answer of Mr. Hurst is in an high and determined tone. He does not deny that there are some instances of abuse of power. "But I ask," says he, "what authority can guard against the conduct of individuals? but that a single instance cannot be brought of a general depravity." Your Committee have reason to believe these coercive measures to have been very general, though employed according to the degree of resistance opposed to the monopoly; for we find at one time the whole trade of the Dutch involved in the general servitude. But it appears very extraordinary that nothing but the actual proof of a general abuse could affect a practice the very principle of which tends to make the coercion as general as the trade. Mr. Hurst's reflection concerning the abuse of authority is just, but in this case it is altogether inapplicable; because the complaint was not of the abuse, but of the use of authority in matters of trade, which ought to have been free. He throws out a variety of invidious reflections against the Council, as if they wanted zeal for the Company's service; his justification of his practices, and his declaration of his resolution to persevere in them, are firm and determined,—asserting the right and policy of such restraints, and laying down a rule for his conduct at the factory, which, he says, will give no cause of just complaint to private traders. He adds, "I have no doubt but that they have hitherto provided investments, and it cannot turn to my interest to preclude them now, though I must ever think it my duty to combat the private views of individuals who set themselves up as competitors under that very body under whose license and indulgence only they can derive their privilege of trade: all I contend for is the same influence my employers have ever had." He ends by declining any reply to any of their future references of this nature.

The whole of this extraordinary letter is inserted in the Appendix, No. 51,—and Mr. Rouse's minute of observations upon it in Appendix, No. 52, fully refuting the few pretexts alleged in that extraordinary performance in support of the trade by influence and authority. Mr. Hollond, one of the Council, joined Mr. Rouse in opinion that a letter to the purport of that minute should be written; but they were overruled by Messrs. Purling, Hogarth, and Shakespeare, who passed a resolution to defer sending any reply to Mr. Hurst: and none was ever sent. Thus they gave countenance to the doctrine contained in that letter, as well as to the mischievous practices which must inevitably arise from the exercise of such power. Some temporary and partial relief was given by the vigorous exertions of Mr. Rouse; but he shortly after removing from that government, all complaints were dropped.

It is remarkable, that, during the long and warm contest between the Company's agents and the dealers of Dacca, the Board of Trade seem to have taken a decided part against the latter. They allow some sort of justice in the complaints of the manufacturers with regard to low valuation, and other particulars; but they say, that, "although" (during the time of preemption) "it appears that the weavers were not allowed the same liberty of selling to individuals they before enjoyed, our opinion on the whole is, that these complaints have originated upon the premeditated designs of the delals [factors or brokers] to thwart the new mode of carrying on the Company's business, and to render themselves necessary." They say, in another place, that there is no ground for the dissatisfactions and difficulties of the weavers: "that they are owing to the delals, whose aim it is to be employed."

This desire of being employed, and of rendering themselves necessary, in men whose only business it is to be employed in trade, is considered by the gentlemen of the board as no trivial offence; and accordingly they declare, "they have established it as an invariable rule, that, whatever deficiency there might be in the Dacca investment, no purchase of the manufactures of that quarter shall be made for account of the Company from private merchants. We have passed this resolution, which we deem of importance, from a persuasion that private merchants are often induced to make advances for Dacca goods, not by the ordinary chance of sale, but merely from an expectation of disposing of them at an enhanced price to the Company, against whom a rivalship is by this manner encouraged"; and they say, "that they intend to observe the same rule with respect to the investment of other of the factories from whence similar complaints may come."

This positive rule is opposed to the positive directions of the Company to employ those obnoxious persons by preference. How far this violent use of authority for the purpose of destroying rivalship has succeeded in reducing the price of goods to the Company has been made manifest by the facts before stated in their place.

The recriminatory charges of the Company's agents on the native merchants have made very little impression on your Committee. We have nothing in favor of them, but the assertion of a party powerful and interested. In such cases of mutual assertion and denial, your Committee are led irresistibly to attach abuse to power, and to presume that suffering and hardship are more likely to attend on weakness than that any combination of unprotected individuals is of force to prevail over influence, power, wealth, and authority. The complaints of the native merchants ought not to have been treated in any of those modes in which they were then treated. And when men are in the situation of complainants against unbounded power, their abandoning their suit is far from a full and clear proof of their complaints being groundless. It is not because redress has been rendered impracticable that oppression does not exist; nor is the despair of sufferers any alleviation of their afflictions. A review of some of the most remarkable of the complaints made by the native merchants in that province is so essential for laying open the true spirit of the commercial administration, and the real condition of those concerned in trade there, that your Committee observing the records on this subject and at this period full of them, they could not think themselves justifiable in not stating them to the House.

Your Committee have found many heavy charges of oppression against Mr. Barwell, whilst Factory Chief at Dacca; which oppressions are stated to have continued, and even to have been aggravated, on complaint at Calcutta. These complaints appear in several memorials presented to the Supreme Council of Calcutta, of which Mr. Barwell was a member. They appeared yet more fully and more strongly in a bill in Chancery filed in the Supreme Court, which was afterwards recorded before the Governor-General and Council, and transmitted to the Court of Directors.

Your Committee, struck with the magnitude and importance of these charges, and finding that with regard to those before the Council no regular investigation has ever taken place, and finding also that Mr. Barwell had asserted in a Minute of Council that he had given a full answer to the allegations in that bill, ordered a copy of the answer to be laid before your Committee, that they might be enabled to state to the House how far it appeared to them to be full, how far the charges were denied as to the fact, or, where the facts might be admitted, what justification was set up. It appeared necessary, in order to determine on the true situation of the trade and the merchants of that great city and district.

The Secretary to the Court of Directors has informed your Committee that no copy of the answer is to be found in the India House; nor has your Committee been able to discover that any has been transmitted. On this failure, your Committee ordered an application to be made to Mr. Barwell for a copy of his answer to the bill, and any other information with which he might be furnished with regard to that subject.

Mr. Barwell, after reciting the above letter, returned in answer what follows.

"Whether the records of the Supreme Court of Judicature are lodged at the India House I am ignorant, but on those records my answer is certainly to be found. At this distance of time I am sorry I cannot from memory recover the circumstances of this affair; but this I know, that the bill did receive a complete answer, and the people the fullest satisfaction: nor is it necessary for me to remark, that [in?] the state of parties at that time in Bengal, could party have brought forward any particle of that bill supported by any verified fact, the principle that introduced it in the proceedings of the Governor-General and Council would likewise have given the verification of that one circumstance, whatever that might have been. As I generally attend in my place in the House, I shall with pleasure answer any invitation of the gentlemen of the Committee to attend their investigations up stairs with every information and light in my power to give them.

"St. James's Square, 15th April, 1783."

Your Committee considered, that, with regard to the matter charged in the several petitions to the board, no sort of specific answer had been given at the time and place where they were made, and when and where the parties might be examined and confronted. It was considered also, that the bill had been transmitted, with other papers relating to the same matter, to the Court of Directors, with the knowledge and consent of Mr. Barwell,—and that he states that his answer had been filed, and no proceedings had upon it for eighteen months. In that situation it was thought something extraordinary that no care was taken by him to transmit so essential a paper as his answer, and that he had no copy of it in his hands.

Your Committee, in this difficulty, thought themselves obliged to decline any verbal explanation from the person who is defendant in the suit, relative to matters which on the part of the complainant appear upon record, and to leave the whole matter, as it is charged, to the judgment of the House to determine how far it may be worthy of a further inquiry, or how far they may admit such allegations as your Committee could not think themselves justified in receiving. To this effect your Committee ordered a letter to be written Mr. Barwell; from whom they received the following answer.

"Sir,—In consequence of your letter of the 17th, I must request the favor of you to inform the Select Committee that I expect from their justice, on any matter of public record in which I am personally to be brought forward to the notice of the House, that they will at the same time point out to the House what part of such matter has been verified, and what parts have not nor ever were attempted to be verified, though introduced in debate and entered on the records of the Governor-General and Council of Bengal. I am anxious the information should be complete, or the House will not be competent to judge; and if it is complete, it will preclude all explanation as unnecessary.

"I am, Sir, "Your most obedient humble servant, "RICHARD BARWELL.

"St. James's Square, 22nd April, 1783.

"P.S. As I am this moment returned from the country, I had it not in my power to be earlier in acknowledging your letter of the 17th."

Your Committee applied to Mr. Barwell to communicate any papers which might tend to the elucidation of matters before them in which he was concerned. This he has declined to do. Your Committee conceive that under the orders of the House they are by no means obliged to make a complete state of all the evidence which may tend to criminate or exculpate every person whose transactions they may find it expedient to report: this, if not specially ordered, has not hitherto been, as they apprehend, the usage of any committee of this House. It is not for your Committee, but for the discretion of the party, to call for, and for the wisdom of the House to institute, such proceedings as may tend finally to condemn or acquit. The Reports of your Committee are no charges, though they may possibly furnish matter for charge; and no representations or observations of theirs can either clear or convict on any proceeding which may hereafter be grounded on the facts which they produce to the House. Their opinions are not of a judicial nature. Your Committee has taken abundant care that every important fact in their Report should be attended with the authority for it, either in the course of their reflections or in the Appendix: to report everything upon every subject before them which is to be found on the records of the Company would be to transcribe, and in the event to print, almost the whole of those voluminous papers. The matter which appears before them is in a summary manner this.

The Dacca merchants begin by complaining that in November, 1773, Mr. Richard Barwell, then Chief of Dacca, had deprived them of their employment and means of subsistence; that he had extorted from them 44,224 Arcot rupees (4,731l.) by the terror of his threats, by long imprisonment, and cruel confinement in the stocks; that afterwards they were confined in a small room near the factory-gate, under a guard of sepoys; that their food was stopped, and they remained starving a whole day; that they were not permitted to take their food till next day at noon, and were again brought back to the same confinement, in which they were continued for six days, and were not set at liberty until they had given Mr. Barwell's banian a certificate for forty thousand rupees; that in July, 1774, when Mr. Barwell had left Dacca, they went to Calcutta to seek justice; that Mr. Barwell confined them in his house at Calcutta, and sent them back under a guard of peons to Dacca; that in December, 1774, on the arrival of the gentlemen from Europe, they returned to Calcutta, and preferred their complaint to the Supreme Court of Judicature.

The bill in Chancery filed against Richard Barwell, John Shakespeare, and others, contains a minute specification of the various acts of personal cruelty said to be practised by Mr. Barwell's orders, to extort money from these people. Among other acts of a similar nature he is charged with having ordered the appraiser of the Company's cloths, who was an old man, and who asserts that he had faithfully served the Company above sixteen years without the least censure on his conduct, to be severely flogged without reason.