In the manner of confining the delals, with ten of their servants, it is charged on him, that, "when he first ordered them to be put into the stocks, it was at a time when the weather was exceedingly bad and the rain very heavy, without allowing them the least covering for their heads or any part of their body, or anything to raise them from the wet ground; in which condition they were continued for many hours, until the said Richard Barwell thought proper to remove them into a far worse state, if possible, as if studying to exercise the most cruel acts of barbarity on them, &c.; and that during their imprisonment they were frequently carried to and tortured in the stocks in the middle of the day, when the scorching heat of the sun was insupportable, notwithstanding which they were denied the least covering." These men assert that they had served the Company without blame for thirty years,—a period commencing long before the power of the Company in India.

It was no slight aggravation of this severity, that the objects were not young, nor of the lowest of the people, who might, by the vigor of their constitutions, or by the habits of hardship, be enabled to bear up against treatment so full of rigor. They were aged persons; they were men of a reputable profession.

The account given by these merchants of their first journey to Calcutta, in July, 1774, is circumstantial and remarkable. They say, "that, on their arrival, to their astonishment, they soon learned that the Governor, who had formerly been violently enraged against the said Richard Barwell for different improprieties in his conduct, was now reconciled to him; and that ever since there was a certainty of his Majesty's appointments taking place in India, from being the most inveterate enemies they were now become the most intimate friends; and that this account soon taught them to believe they were not any nearer justice from their journey to Calcutta than they had been before at Dacca."

When this bill of complaint was, in 1776, laid before the Council, to be transmitted to the Court of Directors, Mr. Barwell complained of the introduction of such a paper, and asserted, that he had answered to every particular of it on oath about eighteen months, and that during this long period no attempt had been made to controvert, refute, or even to reply to it.

He did not, however, think it proper to enter his answer on the records along with the bill of whose introduction he complained.

On the declarations made by Mr. Barwell in his minute (September, 1776) your Committee observe, that, considering him only as an individual under prosecution in a court of justice, it might be sufficient for him to exhibit his defence in the court where he was accused; but that, as a member of government, specifically charged before that very government with abusing the powers of his office in a very extraordinary manner, and for purposes (as they allege) highly corrupt and criminal, it appears to your Committee hardly sufficient to say that he had answered elsewhere. The matter was to go before the Court of Directors, to whom the question of his conduct in that situation, a situation of the highest power and trust, was as much at least a question of state as a matter of redress to be solely left to the discretion, capacity, or perseverance of individuals. Mr. Barwell might possibly be generous enough to take no advantage of his eminent situation; but these unfortunate people would rather look to his power than his disposition. In general, a man so circumstanced and so charged (though we do not know this to be the case with Mr. Barwell) might easily contrive by legal advantages to escape. The plaintiffs being at a great distance from the seat of government, and possibly affected by fear or fatigue, or seeing the impossibility of sustaining with the ruins of fortunes never perhaps very opulent a suit against wealth, power, and influence, a compromise might even take place, in which circumstances might make the complainants gladly acquiesce. But the public injury is not in the least repaired by the acquiescence of individuals, as it touched the honor of the very highest parts of government. In the opinion of your Committee some means ought to have been taken to bring the bill to a discussion on the merits; or supposing that such decree could not be obtained by reason of any failure of proceeding on the part of the plaintiffs, that some process official or juridical ought to have been instituted against them which might prove them guilty of slander and defamation in as authentic a manner as they had made their charge, before the Council as well as the Court.

By the determination of Mr. Hurst, and the resolutions of the Board of Trade, it is much to be apprehended that the native mercantile interest must be exceedingly reduced. The above-mentioned resolutions of the Board of Trade, if executed in their rigor, must almost inevitably accomplish its ruin. The subsequent transactions are covered with an obscurity which your Committee have not been able to dispel. All which they can collect, but that by no means distinctly, is, that, as those who trade for the Company in the articles of investment may also trade for themselves in the same articles, the old opportunities of confounding the capacities must remain, and all the oppressions by which this confusion has been attended. The Company's investments, as the General Letter from Bengal of the 20th of November, 1775, par. 28, states the matter, "are never at a stand; advances are made and goods are received all the year round." Balances, the grand instrument of oppression, naturally accumulate on poor manufacturers who are intrusted with money. Where there is not a vigorous rivalship, not only tolerated, but encouraged, it is impossible ever to redeem the manufacturers from the servitude induced by those unpaid balances.

No such rivalship does exist: the policy practised and avowed is directly against it. The reason assigned in the Board of Trade's letter of the 28th of November, 1778, for its making their advances early in the season is, to prevent the foreign merchants and private traders interfering with the purchase of their (the Company's) assortments. "They also refer to the means taken to prevent this interference in their letter of 26th January, 1779." It is impossible that the small part of the trade should not fall into the hands of those who, with the name and authority of the governing persons, have such extensive contracts in their hands. It appears in evidence that natives can hardly trade to the best advantage, (your Committee doubt whether they can trade to any advantage at all,) if not joined with or countenanced by British subjects. The Directors were in 1775 so strongly impressed with this notion, and conceived the native merchants to have been even then reduced to so low a state, that, notwithstanding the Company's earnest desire of giving them a preference, they "doubt whether there are at this time in Bengal native merchants possessed of property adequate to such undertaking, or of credit and responsibility sufficient to make it safe and prudent to trust them with such sums as might be necessary to enable them to fulfil their engagements with the Company."

The effect which so long continued a monopoly, followed by a preemption, and then by partial preferences supported by power, must necessarily have in weakening the mercantile capital, and disabling the merchants from all undertakings of magnitude, is but too visible. However, a witness of understanding and credit does not believe the capitals of the natives to be yet so reduced as to disable them from partaking in the trade, if they were otherwise able to put themselves on an equal footing with Europeans.

The difficulties at the outset will, however, be considerable. For the long continuance of abuse has in some measure conformed the whole trade of the country to its false principle. To make a sudden change, therefore, might destroy the few advantages which attend any trade, without securing those which must flow from one established upon sound mercantile principles, whenever such a trade can be established. The fact is, that the forcible direction which the trade of India has had towards Europe, to the neglect, or rather to the total abandoning, of the Asiatic, has of itself tended to carry even the internal business from the native merchant. The revival of trade in the native hands is of absolute necessity; but your Committee is of opinion that it will rather be the effect of a regular progressive course of endeavors for that purpose than of any one regulation, however wisely conceived.

After this examination into the condition of the trade and traders in the principal articles provided for the investment to Europe, your Committee proceeded to take into consideration those articles the produce of which, after sale in Bengal, is to form a part of the fund for the purchase of other articles of investment, or to make a part of it in kind. These are, 1st, Opium,—2ndly, Saltpetre,—and, 3rdly, Salt. These are all monopolized.

OPIUM.

The first of the internal authorized monopolies is that of opium. This drug, extracted from a species of the poppy, is of extensive consumption in most of the Eastern markets. The best is produced in the province of Bahar: in Bengal it is of an inferior sort, though of late it has been improved. This monopoly is to be traced to the very origin of our influence in Bengal. It is stated to have begun at Patna so early as the year 1761, but it received no considerable degree of strength or consistence until the year 1765, when the acquisition of the Duanne opened a wide field for all projects of this nature. It was then adopted and owned as a resource for persons in office,—was managed chiefly by the civil servants of the Patna factory, and for their own benefit. The policy was justified on the usual principles on which monopolies are supported, and on some peculiar to the commodity, to the nature of the trade, and to the state of the country: the security against adulteration; the prevention of the excessive home consumption of a pernicious drug; the stopping an excessive competition, which by an over-proportioned supply would at length destroy the market abroad; the inability of the cultivator to proceed in an expensive and precarious culture without a large advance of capital; and, lastly, the incapacity of private merchants to supply that capital on the feeble security of wretched farmers.

These were the principal topics on which the monopoly was supported. The last topic leads to a serious consideration on the state of the country; for, in pushing it, the gentlemen argued, that, in case such private merchants should advance the necessary capital, the lower cultivators "would get money in abundance." Admitting this fact, it seems to be a part of the policy of this monopoly to prevent the cultivator from obtaining the natural fruits of his labor. Dealing with a private merchant, he could not get money in abundance, unless his commodity could produce an abundant profit. Further reasons, relative to the peace and good order of the province, were assigned for thus preventing the course of trade from the equitable distribution of the advantages of the produce, in which the first, the poorest, and the most laborious producer ought to have his first share. The cultivators, they add, would squander part of the money, and not be able to complete their engagements to the full; lawsuits, and even battles, would ensue between the factors, contending for a deficient produce; and the farmers would discourage the culture of an object which brought so much disturbance into their districts. This competition, the operation of which they endeavor to prevent, is the natural corrective of the abuse, and the best remedy which could be applied to the disorder, even supposing its probable existence.

Upon whatever reasons or pretences the monopoly of opium was supported, the real motive appears to be the profit of those who were in hopes to be concerned in it. As these profits promised to be very considerable, at length it engaged the attention of the Company; and after many discussions, and various plans of application, it was at length taken for their benefit, and the produce of the sale ordered to be employed in the purchase of goods for their investment.

In the year 1773 it had been taken out of the hands of the Council of Patna, and leased to two of the natives,—but for a year only. The contractors were to supply a certain quantity of opium at a given price. Half the value was to be paid to those contractors in advance, and the other half on the delivery.

The proceedings on this contract demonstrated the futility of all the principles on which the monopoly was founded. The Council, as a part of their plan, were obliged, by heavy duties, and by a limitation of the right of emption of foreign opium to the contractors for the home produce, to check the influx of that commodity from the territories of the Nabob of Oude and the Rajah of Benares. In these countries no monopoly existed; and yet there the commodity was of such a quality and so abundant as to bear the duty, and even with the duty in some degree to rival the monopolist even in his own market. There was no complaint in those countries of want of advances to cultivators, or of lawsuits and tumults among the factors; nor was there any appearance of the multitude of other evils which had been so much dreaded from the vivacity of competition.

On the other hand, several of the precautions inserted in this contract, and repeated in all the subsequent, strongly indicated the evils against which it is extremely difficult, if not impossible, to guard a monopoly of this nature and in that country. For in the first contract entered into with the two natives it was strictly forbidden to compel the tenants to the cultivation of this drug. Indeed, very shocking rumors had gone abroad, and they were aggravated by an opinion universally prevalent, that, even in the season immediately following that dreadful famine which swept off one third of the inhabitants of Bengal, several of the poorer farmers were compelled to plough up the fields they had sown with grain in order to plant them with poppies for the benefit of the engrossers of opium. This opinion grew into a strong presumption, when it was seen that in the next year the produce of opium (contrary to what might be naturally expected in a year following such a dearth) was nearly doubled. It is true, that, when the quantity of land necessary for the production of the largest quantity of opium is considered, it is not just to attribute that famine to these practices, nor to any that were or could be used; yet, where such practices did prevail, they must have been very oppressive to individuals, extremely insulting to the feelings of the people, and must tend to bring great and deserved discredit on the British government. The English are a people who appear in India as a conquering nation; all dealing with them is therefore, more or less, a dealing with power. It is such when they trade on a private account; and it is much more so in any authorized monopoly, where the hand of government, which ought never to appear but to protect, is felt as the instrument in every act of oppression. Abuses must exist in a trade and a revenue so constituted, and there is no effectual cure for them but to entirely cut off their cause.

Things continued in this train, until the great revolution in the Company's government was wrought by the Regulating Act of the thirteenth of the king. In 1775 the new Council-General appointed by the act took this troublesome business again into consideration. General Clavering, Colonel Monson, and Mr. Francis expressed such strong doubts of the propriety of this and of all other monopolies, that the Directors, in their letter of the year following, left the Council at liberty to throw the trade open, under a duty, if they should find it practicable. But General Clavering, who most severely censured monopoly in general, thought that this monopoly ought to be retained,—but for a reason which shows his opinion of the wretched state of the country: for he supposed it impossible, with the power and influence which must attend British subjects in all their transactions, that monopoly could be avoided; and he preferred an avowed monopoly, which brought benefit to government, to a virtual engrossing, attended with profit only to individuals. But in this opinion he did not seem to be joined by Mr. Francis, who thought the suppression of this and of all monopolies to be practicable, and strongly recommended their abolition in a plan sent to the Court of Directors the year following.[6]

The Council, however, submitting to the opinion of this necessity, endeavored to render that dubious engagement as beneficial as possible to the Company. They began by putting up the contract to the highest bidder. The proposals were to be sealed. When the seals came to be opened, a very extraordinary scene appeared. Every step in this business develops more and more the effect of this junction of public monopoly and private influence. Four English and eight natives were candidates for the contract; three of the English far overbid the eight natives. They who consider that the natives, from their superior dexterity, from their knowledge of the country and of business, and from their extreme industry, vigilance, and parsimony, are generally an over-match for Europeans, and indeed are, and must ultimately be, employed by them in all transactions whatsoever, will find it very extraordinary that they did not by the best offers secure this dealing to themselves. It can be attributed to this cause, and this only,—that they were conscious, that, without power and influence to subdue the cultivators of the land to their own purposes, they never could afford to engage on the lowest possible terms. Those whose power entered into the calculation of their profits could offer, as they did offer, terms without comparison better; and therefore one of the English bidders, without partiality, secured the preference.

The contract to this first bidder, Mr. Griffiths, was prolonged from year to year; and as during that time frequent complaints were made by him to the Council Board, on the principle that the years answered very differently, and that the business of one year ran into the other, reasons or excuses were furnished for giving the next contract to Mr. Mackenzie for three years. This third contract was not put up to auction, as the second had been, and as this ought to have been. The terms were, indeed, something better for the Company; and the engagement was subject to qualifications, which, though they did not remove the objection to the breach of the Company's orders, prevented the hands of the Directors from being tied up. A proviso was inserted in the contract, that it should not be anyways binding, if the Company by orders from home should alter the existing practice with regard to such dealing.

Whilst these things were going on, the evils which this monopoly was in show and pretence formed to prevent still existed, and those which were naturally to be expected from a monopoly existed too. Complaints were made of the bad quality of the opium; trials were made, and on those trials the opium was found faulty. An office of inspection at Calcutta, to ascertain its goodness, was established, and directions given to the Provincial Councils at the places of growth to certify the quantity and quality of the commodity transmitted to the Presidency.

In 1776, notwithstanding an engagement in the contract strictly prohibiting all compulsory culture of the poppy, information was given to a member of the Council-General, that fields green with rice had been forcibly ploughed up to make way for that plant,—and that this was done in the presence of several English gentlemen, who beheld the spectacle with a just and natural indignation. The board, struck with this representation, ordered the Council of Patna to make an inquiry into the fact; but your Committee can find no return whatsoever to this order. The complaints were not solely on the part of the cultivators against the contractor. The contractor for opium made loud complaints against the inferior collectors of the landed revenue, stating their undue and vexatious exactions from the cultivators of opium,—their throwing these unfortunate people into prison upon frivolous pretences, by which the tenants were ruined, and the contractor's advances lost. He stated, that, if the contractor should interfere in favor of the cultivator, then a deficiency would be caused to appear in the landed revenues, and that deficiency would be charged on his interposition; he desired, therefore, that the cultivators of opium should be taken out of the general system of the landed revenue, and put under "his protection." Here the effect naturally to be expected from the clashing of inconsistent revenues appeared in its full light, as well as the state of the unfortunate peasants of Bengal between such rival protectors, where the ploughman, flying from the tax-gatherer, is obliged to take refuge under the wings of the monopolist. No dispute arises amongst the English subjects which does not divulge the misery of the natives; when the former are in harmony, all is well with the latter.

This monopoly continuing and gathering strength through a succession of contractors, and being probably a most lucrative dealing, it grew to be every day a greater object of competition. The Council of Patna endeavored to recover the contract, or at least the agency, by the most inviting terms; and in this eager state of mutual complaint and competition between private men and public bodies things continued until the arrival in Bengal of Mr. Stephen Sulivan, son of Mr. Sulivan, Chairman of the East India Company, which soon put an end to all strife and emulation.

To form a clear judgment on the decisive step taken at this period, it is proper to keep in view the opinion of the Court of Directors concerning monopolies, against which they had uniformly declared in the most precise terms. They never submitted to them, but as to a present necessity; it was therefore not necessary for them to express any particular approbation of a clause in Mr. Mackenzie's contract which was made in favor of their own liberty. Every motive led them to preserve it. On the security of that clause they could alone have suffered to pass over in silence (for they never approved) the grant of the contract which contained it for three years. It must also be remembered that they had from the beginning positively directed that the contract should be put up to public auction; and this not having been done in Mr. Mackenzie's case, they severely reprimanded the Governor-General and Council in their letter of the 23rd December, 1778.

The Court of Directors were perfectly right in showing themselves tenacious of this regulation,—not so much to secure the best practicable revenue from their monopoly whilst it existed, but for a much more essential reason, that is, from the corrective which this method administered to that monopoly itself: it prevented the British contractor from becoming doubly terrible to the natives, when they should see that his contract was in effect a grant, and therefore indicated particular favor and private influence with the ruling members of an absolute government.

On the expiration of Mr. Mackenzie's term, and but a few months after Mr. Sulivan's arrival, the Governor-General, as if the contract was a matter of patronage, and not of dealing, pitched upon Mr. Sulivan as the most proper person for the management of this critical concern. Mr. Sulivan, though a perfect stranger to Bengal, and to that sort and to all sorts of local commerce, made no difficulty of accepting it. The Governor-General was so fearful that his true motives in this business should be mistaken, or that the smallest suspicion should arise of his attending to the Company's orders, that, far from putting up the contract (which, on account of its known profits, had become the object of such pursuit) to public auction, he did not wait for receiving so much as a private proposal from Mr. Sulivan. The Secretary perceived that in the rough draught of the contract the old recital of a proposal to the board was inserted as a matter of course, but was contrary to the fact; he therefore remarked it to Mr. Hastings. Mr. Hastings, with great indifference, ordered that recital to be omitted; and the omission, with the remark that led to it, has, with the same easy indifference, been sent over to his masters.

The Governor-General and Council declare themselves apprehensive that Mr. Sulivan might be a loser by his bargain, upon account of troubles which they supposed existing in the country which was the object of it. This was the more indulgent, because the contractor was tolerably secured against all losses. He received a certain price for his commodity; but he was not obliged to pay any certain price to the cultivator, who, having no other market than his, must sell it to him at his own terms. He was to receive half the yearly payment by advance, and he was not obliged to advance to the cultivator more than what he thought expedient; but if this should not be enough, he might, if he pleased, draw the whole payment before the total delivery: such were the terms of the engagement with him. He is a contractor of a new species, who employs no capital whatsoever of his own, and has the market of compulsion at his entire command. But all these securities were not sufficient for the anxious attention of the Supreme Council to Mr. Sulivan's welfare: Mr. Hastings had before given him the contract without any proposal on his part; and to make their gift perfect, in a second instance they proceed a step beyond their former ill precedent, and they contract with Mr. Sulivan for four years.

Nothing appears to have been considered but the benefit of the contractor, and for this purpose the solicitude shown in all the provisions could not be exceeded. One of the first things that struck Mr. Hastings as a blemish on his gift was the largeness of the penalty which he had on former occasions settled as the sanction of the contract: this he now discovered to be so great as to be likely to frustrate its end by the impossibility of recovering so large a sum. How a large penalty can prevent the recovery of any, even the smallest part of it, is not quite apparent. In so vast a concern as that of opium, a fraud which at first view may not appear of much importance, and which may be very difficult in the discovery, may easily counterbalance the reduced penalty in this contract, which was settled in favor of Mr. Sulivan at about 20,000l.

Monopolies were (as the House has observed) only tolerated evils, and at best upon trial; a clause, therefore, was inserted in the contracts to Mackenzie, annulling the obligation, if the Court of Directors should resolve to abolish the monopoly; but at the request of Mr. Sulivan the contract was without difficulty purged of this obnoxious clause. The term was made absolute, the monopoly rendered irrevocable, and the discretion of the Directors wholly excluded. Mr. Hastings declared the reserved condition to be no longer necessary, "because the Directors had approved the monopoly."

The Chiefs and Councils at the principal factories had been obliged to certify the quantity and quality of the opium before its transport to Calcutta; and their control over the contractor had been assigned as the reason for not leaving to those factories the management of this monopoly. Now things were changed. Orders were sent to discontinue this measure of invidious precaution, and the opium was sent to Calcutta without anything done to ascertain its quality or even its quantity.

An office of inspection had been also appointed to examine the quality of the opium on its delivery at the capital settlement. In order to ease Mr. Sulivan from this troublesome formality, Mr. Hastings abolished the office; so that Mr. Sulivan was then totally freed from all examination, or control whatsoever, either first or last.

These extraordinary changes in favor of Mr. Sulivan were attended with losses to others, and seem to have excited much discontent. This discontent it was necessary in some manner to appease. The vendue-master, who was deprived of his accustomed dues on the public sales of the opium by the private dealing, made a formal complaint to the board against this, as well as other proceedings relative to the same business. He attributed the private sale to "reasons of state"; and this strong reflection both on the Board of Trade and the Council Board was passed over without observation. He was quieted by appointing him to the duty of these very inspectors whose office had been just abolished as useless. The House will judge of the efficacy of the revival of this office by the motives to it, and by Mr. Hastings giving that to one as a compensation which had been executed by several as a duty. However, the orders for taking away the precautionary inspection at Patna still remained in force.

Some benefits, which had been given to former contractors at the discretion of the board, were no longer held under that loose indulgence, but were secured to Mr. Sulivan by his contract. Other indulgences, of a lesser nature, and to which no considerable objection could be made, were on the application of a Mr. Benn, calling himself his attorney, granted.

Your Committee, examining Mr. Higginson, late a member of the Board of Trade, on that subject, were informed, that this contract, very soon after the making, was generally understood at Calcutta to have been sold to this Mr. Benn, but he could not particularize the sum for which it had been assigned,—and that Mr. Benn had afterwards sold it to a Mr. Young. By this transaction it appears clearly that the contract was given to Mr. Sulivan for no other purpose than to supply him with a sum of money; and the sale and re-sale seem strongly to indicate that the reduction of the penalty, and the other favorable conditions, were not granted for his ease in a business which he never was to execute, but to heighten the value of the object which he was to sell. Mr. Sulivan was at the time in Mr. Hastings's family, accompanied him in his progresses, and held the office of Judge-Advocate.

The monopoly given for these purposes thus permanently secured, all power of reformation cut off, and almost every precaution against fraud and oppression removed, the Supreme Council found, or pretended to find, that the commodity for which they had just made such a contract was not a salable article,—and in consequence of this opinion, or pretence, entered upon a daring speculation hitherto unthought of, that of sending the commodity on the Company's account to the market of Canton. The Council alleged, that, the Dutch being driven from Bengal, and the seas being infested with privateers, this commodity had none, or a very dull and depreciated demand.

Had this been true, Mr. Hastings's conduct could admit of no excuse. He ought not to burden a falling market by long and heavy engagements. He ought studiously to have kept in his power the means of proportioning the supply to the demand. But his arguments, and those of the Council on that occasion, do not deserve the smallest attention. Facts, to which there is no testimony but the assertion of those who produce them in apology for the ill consequences of their own irregular actions, cannot be admitted. Mr. Hastings and the Council had nothing at all to do with that business: the Court of Directors had wholly taken the management of opium out of his and their hands, and by a solemn adjudication fixed it in the Board of Trade. But after it had continued there some years, Mr. Hastings, a little before his grant of the monopoly to Mr. Sulivan, thought proper to reverse the decree of his masters, and by his own authority to recall it to the Council. By this step he became responsible for all the consequences.

The Board of Trade appear, indeed, to merit reprehension for disposing of the opium by private contract, as by that means the unerring standard of the public market cannot be applied to it. But they justified themselves by their success; and one of their members informed your Committee that their last sale had been a good one: and though he apprehended a fall in the next, it was not such as in the opinion of your Committee could justify the Council-General in having recourse to untried and hazardous speculations of commerce. It appears that there must have been a market, and one sufficiently lively. They assign as a reason of this assigned [alleged?] dulness of demand, that the Dutch had been expelled from Bengal, and could not carry the usual quantity to Batavia. But the Danes were not expelled from Bengal, and Portuguese ships traded there: neither of them were interdicted at Batavia, and the trade to the eastern ports was free to them. The Danes actually applied for and obtained an increase of the quantity to which their purchases had been limited; and as they asked, so they received this indulgence as a great favor. It does not appear that they were not very ready to supply the place of the Dutch. On the other hand, there is no doubt that the Dutch would most gladly receive an article, convenient, if not necessary, to the circulation of their commerce, from the Danes, or under any name; nor was it fit that the Company should use an extreme strictness in any inquiry concerning the necessary disposal of one of their own staple commodities.

The supply of the Canton treasury with funds for the provision of the next year's China investment was the ground of this plan. But the Council-General appear still to have the particular advantage of Mr. Sulivan in view,—and, not satisfied with breaking so many of the Company's orders for that purpose, to make the contract an object salable to the greatest advantage, were obliged to transfer their personal partiality from Mr. Sulivan to the contract itself, and to hand it over to the assignees through all their successions. When the opium was delivered, the duties and emoluments of the contractor ended; but (it appears from Mr. Williamson's letter, 18th October, 1781, and it is not denied by the Council-General) this new scheme furnished them with a pretext of making him broker for the China investment, with the profit of a new commission,—to what amount does not appear. But here their constant and vigilant observer, the vendue-master, met them again:—they seemed to live in no small terror of this gentleman. To satisfy him for the loss of his fee to which he was entitled upon the public sale, they gave him also a commission of one per cent on the investment. Thus was this object loaded with a double commission; and every act of partiality to one person produced a chargeable compensation to some other for the injustice that such partiality produced. Nor was this the whole. The discontent and envy excited by this act went infinitely further than to those immediately affected, and something or other was to be found out to satisfy as many as possible.

As soon as it was discovered that the Council entertained a design of opening a trade on those principles, it immediately engaged the attention of such as had an interest in speculations of freight.

A memorial seems to have been drawn early, as it is dated on the 29th of March, though it was not the first publicly presented to the board. This memorial was presented on the 17th of September, 1781, by Mr. Wheler, conformably (as he says) to the desire of the Governor-General; and it contained a long and elaborate dissertation on the trade to China, tending to prove the advantage of extending the sale of English manufactures and other goods to the North of that country, beyond the usual emporium of European nations. This ample and not ill-reasoned theoretical performance (though not altogether new either in speculation or attempt) ended by a practical proposition, very short, indeed, of the ideas opened in the preliminary discourse, but better adapted to the immediate effect. It was, that the Company should undertake the sale of its own opium in China, and commit the management of the business to the memorialist, who offered to furnish them with a strong armed ship for that purpose. The offer was accepted, and the agreement made with him for the transport of two thousand chests.

A proposal by another person was made the July following the date of this project: it appears to have been early in the formal delivery at the board: this was for the export of one thousand four hundred and eighty chests. This, too, was accepted, but with new conditions and restrictions: for in so vast and so new an undertaking great difficulties occurred. In the first place, all importation of that commodity is rigorously forbidden by the laws of China. The impropriety of a political trader, who is lord over a great empire, being concerned in a contraband trade upon his own account, did not seem in the least to affect them; but they were struck with the obvious danger of subjecting their goods to seizure by the vastness of the prohibited import. To secure the larger adventure, they require of the China factory that Colonel Watson's ship should enter the port of Canton as an armed ship, (they would not say a ship of war, though that must be meant,) that her cargo should not be reported; they also ordered that other measures should be adopted to secure this prohibited article from seizure. If the cargo should get in safe, another danger was in view,—the overloading the Chinese market by a supply beyond the demand; for it is obvious that contraband trade must exist by small quantities of goods poured in by intervals, and not by great importations at one time. To guard against this inconvenience, they divide their second, though the smaller adventure, into two parts; one of which was to go to the markets of the barbarous natives which inhabit the coast of Malacca, where the chances of its being disposed of by robbery or sale were at least equal. If the opium should be disposed of there, the produce was to be invested in merchandise salable in China, or in dollars, if to be had. The other part (about one half) was to go in kind directly to the port of Canton.

The dealing at this time seemed closed; but the gentlemen who chartered the ships, always recollecting something, applied anew to the board to be furnished with cannon from the Company's ordnance. Some was delivered to them; but the Office of Ordnance (so heavily expensive to the Company) was not sufficient to spare a few iron guns for a merchant ship. Orders were given to cast a few cannon, and an application made to Madras, at a thousand miles' distance, for the rest. Madras answers, that they cannot exactly comply with the requisition; but still the board at Bengal hopes better things from them than they promise, and flatter themselves that with their assistance they shall properly arm a ship of thirty-two guns.

Whilst these dispositions were making, the first proposer, perceiving advantages from the circuitous voyage of the second which had escaped his observation, to make amends for his first omission, improved both on his own proposal and on that of the person who had improved on him. He therefore applied for leave to take two hundred and fifty chests on his own account, which he said could "be readily disposed of at the several places where it was necessary for the ship to touch for wood and water, or intelligence, during her intended voyage through the Eastern Islands." As a corrective to this extraordinary request, he assured the board, that, if he should meet with any unexpected delay at these markets, he would send their cargo to its destination, having secured a swift-sailing sloop for the protection of his ship; and this sloop he proposed, in such a case, to leave behind. Such an extraordinary eagerness to deal in opium lets in another view of the merits of the alleged dulness of the market, on which this trade was undertaken for the Company's account.

The Council, who had with great condescension and official facility consented to every demand hitherto made, were not reluctant with regard to this last. The quantity of opium required by the freighters, and the permission of a trading voyage, were granted without hesitation. The cargo having become far more valuable by this small infusion of private interest, the armament which was deemed sufficient to defend the Company's large share of the adventure was now discovered to be unequal to the protection of the whole. For the convoy of these two ships the Council hire and arm another. How they were armed, or whether in fact they were properly armed at all, does not appear. It is true that the Supreme Council proposed that these ships should also convey supplies to Madras; but this was a secondary consideration: their primary object was the adventure of opium. To this they were permanently attached, and were obliged to attend to its final destination.

The difficulty of disposing of the opium according to this project being thus got over, a material preliminary difficulty still stood in the way of the whole scheme. The contractor, or his assignees, were to be paid. The Company's treasure was wholly exhausted, and even its credit was exceedingly strained. The latter, however, was the better resource, and to this they resolved to apply. They therefore, at different times, opened two loans of one hundred thousand pounds each. The first was reserved for the Company's servants, civil and military, to be distributed in shares according to their rank; the other was more general. The terms of both loans were, that the risk of the voyage was to be on account of the Company. The payment was to be in bills (at a rate of exchange settled from the supercargoes at Canton) upon the same Company. In whatever proportion the adventure should fail, either in the ships not safely arriving in China or otherwise, in that proportion the subscribers were to content themselves with the Company's bonds for their money, bearing eight per cent interest. A share in this subscription was thought exceeding desirable; for Mr. Hastings writes from Benares, where he was employed in the manner already reported and hereafter to be observed upon, requesting that the subscription should be left open to his officers who were employed in the military operations against Cheyt Sing; and accordingly three majors, seven captains, twenty-three lieutenants, the surgeon belonging to the detachment, and two civil servants of high rank who attended him, were admitted to subscribe.

Bills upon Europe without interest are always preferred to the Company's bonds, even at the high interest allowed in India. They are, indeed, so greedily sought there, and (because they tend to bring an immediate and visible distress in Leadenhall Street) so much dreaded here, that by an act of Parliament the Company's servants are restricted from drawing bills beyond a certain amount upon the Company in England. In Bengal they have been restrained to about one hundred and eighty thousand pounds annually. The legislature, influenced more strongly with the same apprehensions, has restrained the Directors, as the Directors have restrained their servants, and have gone so far as to call in the power of the Lords of the Treasury to authorize the acceptance of any bills beyond an amount prescribed in the act.

The false principles of this unmercantile transaction (to speak of it in the mildest terms) were too gross not to be visible to those who contrived it. That the Company should be made to borrow such a sum as two hundred thousand pounds[7] at eight per cent, (or terms deemed by the Company to be worse,) in order first to buy a commodity represented by themselves as depreciated in its ordinary market, in order afterwards to carry one half of it through a circuitous trading voyage, depending for its ultimate success on the prudent and fortunate management of two or three sales, and purchases and re-sales of goods, and the chance of two or three markets, with all the risks of sea and enemy, was plainly no undertaking for such a body. The activity, private interest, and the sharp eye of personal superintendency may now and then succeed in such projects; but the remote inspection and unwieldy movements of great public bodies can find nothing but loss in them. Their gains, comparatively small, ought to be upon sure grounds; but here (as the Council states the matter) the private trader actually declines to deal, which is a proof more than necessary to demonstrate the extreme imprudence of such an undertaking on the Company's account. Still stronger and equally obvious objections lay to that member of the project which regards the introduction of a contraband commodity into China, sent at such a risk of seizure not only of the immediate object to be smuggled in, but of all the Company's property in Canton, and possibly at a hazard to the existence of the British factory at that port.

It is stated, indeed, that a monopolizing company in Canton, called the Cohong, had reduced commerce there to a deplorable state, and had rendered the gains of private merchants, either in opium or anything else, so small and so precarious that they were no longer able by purchasing that article to furnish the Company with money for a China investment. For this purpose the person whose proposal is accepted declares his project to be to set up a monopoly on the part of the Company against the monopoly of the Chinese merchants: but as the Chinese monopoly is at home, and supported (as the minute referred to asserts) by the country magistrates, it is plain it is the Chinese company, not the English, which must prescribe the terms,—particularly in a commodity which, if withheld from them at their market price, they can, whenever they please, be certain of purchasing as a condemned contraband.

There are two further circumstances in this transaction which strongly mark its character. The first is, that this adventure to China was not recommended to them by the factory of Canton; it was dangerous to attempt it without their previous advice, and an assurance, grounded on the state of the market and the dispositions of the government, that the measure, in a commercial light, would be profitable, or at least safe. Neither was that factory applied to on the state of the bills which, upon their own account, they might be obliged to draw upon Europe, at a time when the Council of Bengal direct them to draw bills to so enormous an amount.

The second remarkable circumstance is, that the Board of Trade in Calcutta (the proper administrator of all that relates to the Company's investment) does not seem to have given its approbation to the project, or to have been at all consulted upon it. The sale of opium had been adjudged to the Board of Trade for the express purpose of selling it in Bengal, not in China,—and of employing the produce of such sale in the manufactures of the country in which the original commodity was produced. On the whole, it appears a mere trading speculation of the Council, invading the department of others, without lights of its own, without authority or information from any other quarter. In a commercial view, it straitened the Company's investment to which it was destined; as a measure of finance, it is a contrivance by which a monopoly formed for the increase of revenue, instead of becoming one of its resources, involves the treasury, in the first instance, in a debt of two hundred thousand pounds.

If Mr. Hastings, on the expiration of Mr. Mackenzie's contract, the advantages of which to the Company had been long doubtful, had put himself in a situation to do his duty, some immediate loss to the revenue would have been the worst consequence of the alleged depreciation; probably it would not have been considerable. Mr. Mackenzie's contract, which at first was for three years, had been only renewed for a year. Had the same course been pursued with Mr. Sulivan, they would have had it in their power to adopt some plan which might have secured them from any loss at all. But they pursued another plan: they carefully put all remedy still longer out of their reach by giving their contract for four years. To cover all these irregularities, they interest the settlement in their favor by holding out to them the most tempting of all baits in a chance of bills upon Europe.

In this manner the servants abroad have conducted themselves with regard to Mr. Sulivan's contract for opium, and the disposal of the commodity. In England the Court of Directors took it into consideration. First, as to the contract, in a letter dated 12th July, 1782, they say, that, "having condemned the contract entered into with Mr. Mackenzie for the provision of opium, they cannot but be surprised at your having concluded a new contract for four years relative to that article with Mr. Stephen Sulivan, without leaving the decision of it to the Court of Directors."

The sentiments of the Directors are proper, and worthy of persons in public trust. Their surprise, indeed, at the disobedience to their orders is not perfectly natural in those who for many years have scarcely been obeyed in a single instance. They probably asserted their authority at this time with as much vigor as their condition admitted.

They proceed: "We do not mean," say they, "to convey any censure on Mr. Sulivan respecting the transaction; but we cannot withhold our displeasure from the Governor-General and Council at such an instance of contempt of our authority." They then proceed justly to censure the removal of the inspection, and some other particulars of this gross proceeding. As to the criminality of the parties, it is undoubtedly true that a breach of duty in servants is highly aggravated by the rank, station, and trust of the offending party; but no party, in such conspiracy to break orders, appear to us wholly free from fault.

The Directors did their duty in reprobating this contract; but it is the opinion of your Committee that further steps ought to be taken to inquire into the legal validity of a transaction which manifestly attempts to prevent the Court of Directors from applying any remedy to a grievance which has been for years the constant subject of complaints.

Both Mr. Sulivan and Mr. Hastings are the Company's servants, bound by their covenants and their oaths to promote the interest of their masters, and both equally bound to be obedient to their orders. If the Governor-General had contracted with a stranger, not apprised of the Company's orders, and not bound by any previous engagement, the contract might have been good; but whether a contract made between two servants, contrary to the orders of their common master, and to the prejudice of his known interest, be a breach of trust on both sides, and whether the contract can in equity have force to bind the Company, whenever they shall be inclined to free themselves and the country they govern from this mischievous monopoly, your Committee think a subject worthy of further inquiry.

With regard to the disposal of the opium, the Directors very properly condemn the direct contraband, but they approve the trading voyage. The Directors have observed nothing concerning the loans: they probably reserved that matter for future consideration.

In no affair has the connection between servants abroad and persons in power among the proprietors of the India Company been more discernible than in this. But if such confederacies, cemented by such means, are suffered to pass without due animadversion, the authority of Parliament must become as inefficacious as all other authorities have proved to restrain the growth of disorders either in India or in Europe.

SALT.

The reports made by the two committees of the House which sat in the years 1772 and 1773 of the state and conduct of the inland trade of Bengal up to that period have assisted the inquiries of your Committee with respect to the third and last article of monopoly, viz., that of salt, and made it unnecessary for them to enter into so minute a detail on that subject as they have done on some others.

Your Committee find that the late Lord Clive constantly asserted that the salt trade in Bengal had been a monopoly time immemorial,—that it ever was and ever must be a monopoly,—and that Coja Wazid, and other merchants long before him, had given to the Nabob and his ministers two hundred thousand pounds per annum for the exclusive privilege. The Directors, in their letter of the 24th December, 1776, paragraph 76, say, "that it has ever been in a great measure an exclusive trade."

The Secret Committee report,[8] that under the government of the Nabobs the duty on salt made in Bengal was two and an half per cent paid by Mussulmen, and five per cent paid by Gentoos. On the accession of Mir Cassim, in 1760, the claim of the Company's servants to trade in salt duty-free was first avowed. Mr. Vansittart made an agreement with him by which the duties should be fixed at nine per cent. The Council annulled the agreement, and reduced the duty to two and an half per cent. On this Mir Cassim ordered that no customs or duties whatsoever should be collected for the future. But a majority of the Council (22nd March, 1763) resolved, that the making the exemption general was a breach of the Company's privileges, and that the Nabob should be positively required to recall it, and collect duties as before from the country merchants, and all other persons who had not the protection of the Company's dustuck. The Directors, as the evident reason of the thing and as their duty required, disapproved highly of these transactions, and ordered (8th February, 1764) a final and effectual stop to be put to the inland trade in salt, and several other articles of commerce. But other politics and other interests prevailed, so that in the May following a General Court resolved, that it should be recommended to the Court of Directors to reconsider the preceding orders; in consequence of which the Directors ordered the Governor and Council to form a plan, in concert with the Nabob, for regulating the inland trade.

On these last orders Lord Clive's plan was formed, in 1765, for engrossing the sole purchase of salt, and dividing the profits among the Company's senior servants. The Directors, who had hitherto reluctantly given way to a monopoly under any ideas or for any purposes, disapproved of this plan, and on the 17th May, 1766, ordered it to be abolished; but they substituted no other in its room.[9] In this manner things continued until November, 1767, when the Directors repeated their orders for excluding all persons whatever, excepting the natives only, from being concerned in the inland trade in salt; and they declared that (vide par. 90) "such trade is hereby abolished and put a final end to." In the same letter (par. 92) they ordered that the salt trade should be laid open to the natives in general, subject to such a duty as might produce one hundred and twenty thousand pounds a year. This policy was adopted by the legislature. In the act of 1773 it was expressly provided, that it should not be lawful for any of his Majesty's subjects to engage, intermeddle, or be any way concerned, directly or indirectly, in the inland trade in salt, except on the India Company's account.

Under the positive orders of the Company, the salt trade appears to have continued open from 1768 to 1772. The act, indeed, contained an exception in favor of the Company, and left them a liberty of dealing in salt upon their own account. But still this policy remained unchanged, and their orders unrevoked. But in the year 1772, without any instruction from the Court of Directors indicating a change of opinion or system, the whole produce was again monopolized, professedly for the use of the Company, by Mr. Hastings. Speaking of this plan, he says (letter to the Directors, 22d February, 1775): "No new hardship has been imposed upon the salt manufacturers by taking the management of that article into the hands of government; the only difference is, that the profit which was before reaped by English gentlemen and by banians is now acquired by the Company." In May, 1766, the Directors had condemned the monopoly on any conditions whatsoever. "At that time they thought it neither consistent with their honor nor their dignity to promote such an exclusive trade."[10] "They considered it, too, as disgraceful, and below the dignity of their present situation, to allow of such a monopoly, and that, were they to allow it under any restrictions, they should consider themselves as assenting and subscribing to all the mischiefs which Bengal had presented to them for four years past."[11]

Notwithstanding this solemn declaration, in their letter of 24th December, 1776, they approve the plan of Mr. Hastings, and say, "that the monopoly, on its present footing, can be no considerable grievance to the country," &c.

This, however, was a rigorous monopoly. The account given of it by General Clavering, Colonel Monson, and Mr. Francis, in their minute of 11th January, 1775, in which the situation of the molungees, or persons employed in the salt manufacture, is particularly described, is stated at length in the Appendix. Mr. Hastings himself says, "The power of obliging molungees to work has been customary from time immemorial."

Nothing but great and clear advantage to government could account for, and nothing at all perhaps could justify, the revival of a monopoly thus circumstanced. The advantage proposed by its revival was the transferring the profit, which was before reaped by English gentlemen and banians, to the Company. The profits of the former were not problematical. It was to be seen what the effect would be of a scheme to transfer them to the latter, even under the management of the projector himself. In the Revenue Consultations of September, 1776, Mr. Hastings said, "Many causes have since combined to reduce this article of revenue almost to nothing. The plan which I am now inclined to recommend for the future management of the salt revenue differs widely from that which I adopted under different circumstances."

It appears that the ill success of his former scheme did not deter him from recommending another. Accordingly, in July, 1777, Mr. Hastings proposed, and it was resolved, that the salt mahls should be let, with the lands, to the farmers and zemindars for a ready-money rent, including duties,—the salt to be left to their disposal. After some trial of this method, Mr. Hastings thought fit to abandon it. In September, 1780, he changed his plan a third time, and proposed the institution of a salt office; the salt was to be again engrossed for the benefit of the Company, and the management conducted by a number of salt agents.

From the preceding facts it appears that in this branch of the Company's government little regard has been paid to the ease and welfare of the natives, and that the Directors have nowhere shown greater inconsistency than in their orders on this subject. Yet salt, considering it as a necessary of life, was by no means a safe and proper subject for so many experiments and innovations. For ten years together the Directors reprobated the idea of suffering this necessary of life to be engrossed on any condition whatsoever, and strictly prohibited all Europeans from trading in it. Yet, as soon as they were made to expect from Mr. Hastings that the profits of the monopoly should be converted to their own use, they immediately declared that it "could be no considerable grievance to the country," and authorized its continuance, until he himself, finding it produced little or nothing, renounced it of his own accord. Your Committee are apprehensive that this will at all times, whatever flattering appearance it may wear for a time, be the fate of any attempt to monopolize the salt for the profit of government. In the first instance it will raise the price on the consumer beyond its just level; but that evil will soon be corrected by means ruinous to the Company as monopolists, viz., by the embezzlement of their own salt, and by the importation of foreign salt, neither of which the government of Bengal may have power for any long time to prevent. In the end government will probably be undersold and beaten down to a losing price. Or, if they should attempt to force all the advantages from this article of which by every exertion it may be made capable, it may distress some other part of their possessions in India, and destroy, or at least impair, the natural intercourse between them. Ultimately it may hurt Bengal itself, and the produce of its landed revenue, by destroying the vent of that grain which it would otherwise barter for salt.

Your Committee think it hardly necessary to observe, that the many changes of plan which have taken place in the management of the salt trade are far from honorable to the Company's government,—and that, even if the monopoly of this article were a profitable concern, it should not be permitted. Exclusive of the general effect of this and of all monopolies, the oppressions which the manufacturers of salt, called molungees, still suffer under it, though perhaps alleviated in some particulars, deserve particular attention. There is evidence enough on the Company's records to satisfy your Committee that these people have been treated with great rigor, and not only defrauded of the due payment of their labor, but delivered over, like cattle, in succession, to different masters, who, under pretence of buying up the balances due to their preceding employers, find means of keeping them in perpetual slavery. For evils of this nature there can be no perfect remedy as long as the monopoly continues. They are in the nature of the thing, and cannot be cured, or effectually counteracted, even by a just and vigilant administration on the spot. Many objections occur to the farming of any branch of the public revenue in Bengal, particularly against farming the salt lands. But the dilemma to which government by this system is constantly reduced, of authorizing great injustice or suffering great loss, is alone sufficient to condemn it. Either government is expected to support the farmer or contractor in all his pretensions by an exertion of power, which tends of necessity to the ruin of the parties subjected to the farmer's contract, and to the suppression of free trade,—or, if such assistance be refused him, he complains that he is not supported, that private persons interfere with his contract, that the manufacturers desert their labor, and that proportionate deductions must be allowed him.

After the result of their examination into the general nature and effect of this monopoly, it remains only for your Committee to inquire whether there was any valid foundation for that declaration of Mr. Hastings which we conclude must have principally recommended the monopoly of salt to the favor of the Court of Directors, viz., "that the profit, which was before reaped by English gentlemen, and by banians, was now acquired by the Company." On the contrary, it was proved and acknowledged before the Governor-General and Council, when they inquired into this matter, in March, 1775, that the Chiefs and Councils of those districts in which there were salt mahls reserved particular salt farms for their own use, and divided the profits, in certain stated proportions, among themselves and their assistants. But, unless a detail of these transactions, and of the persons concerned in them, should be called for by the House, it is our wish to avoid entering into it. On one example only your Committee think it just and proper to insist, stating first to the House on what principles they have made this selection.

In pursuing their inquiries, your Committee have endeavored chiefly to keep in view the conduct of persons in the highest station, particularly of those in whom the legislature, as well as the Company, have placed a special confidence,—judging that the conduct of such persons is not only most important in itself, but most likely to influence the subordinate ranks of the service. Your Committee have also examined the proceedings of the Court of Directors on all those instances of the behavior of their servants that seemed to deserve, and did sometimes attract, their immediate attention. They constantly find that the negligence of the Court of Directors has kept pace with, and must naturally have quickened, the growth of the practices which they have condemned. Breach of duty abroad will always go hand in hand with neglect of it at home. In general, the Court of Directors, though sufficiently severe in censuring offences, and sometimes in punishing those whom they have regarded as offenders of a lower rank, appear to have suffered the most conspicuous and therefore the most dangerous examples of disobedience and misconduct in the first department of their service to pass with a feeble and ineffectual condemnation. In those cases which they have deemed too apparent and too strong to be disregarded even with safety to themselves, and against which their heaviest displeasure has been declared, it appears to your Committee that their interference, such as it was, had a mischievous rather than a useful tendency. A total neglect of duty in this respect, however culpable, is not to be compared, either in its nature or in its consequences, with the destructive principles on which they have acted. It has been their practice, if not system, to inquire, to censure, and not to punish. As long as the misconduct of persons in power in Bengal was encouraged by nothing but the hopes of concealment, it may be presumed that they felt some restraint upon their actions, and that they stood in some awe of the power placed over them; whereas it is to be apprehended that the late conduct of the Court of Directors tells them, in effect, that they have nothing to fear from the certainty of a discovery.

On the same principle on which your Committee have generally limited their researches to the persons placed by Parliament or raised or put in nomination by the Court of Directors to the highest station in Bengal, it was also their original wish to limit those inquiries to the period at which Parliament interposed its authority between the Company and their servants, and gave a new constitution to the Presidency of Fort William. If the Company's servants had taken a new date from that period, and if from thenceforward their conduct had corresponded with the views of the legislature, it is probable that a review of the transactions of remoter periods would not have been deemed necessary, and that the remembrance of them would have been gradually effaced and finally buried in oblivion. But the reports which your Committee have already made have shown the House that from the year 1772, when those proceedings commenced in Parliament on which the act of the following year was founded, abuses of every kind have prevailed and multiplied in Bengal to a degree unknown in former times, and are perfectly sufficient to account for the present distress of the Company's affairs both at home and abroad. The affair which your Committee now lays before the House occupies too large a space in the Company's records, and is of too much importance in every point of view, to be passed over.

Your Committee find that in March, 1775, a petition was presented to the Governor-General and Council by a person called Coja Kaworke, an Armenian merchant, resident at Dacca, (of which division Mr. Richard Barwell had lately been Chief,) setting forth in substance, that in November, 1772, the petitioner had farmed a certain salt district, called Savagepoor, and had entered into a contract with the Committee of Circuit for providing and delivering to the India Company the salt produced in that district; that in 1773 he farmed another, called Selimabad, on similar conditions. He alleges, that in February, 1774, when Mr. Barwell arrived at Dacca, he charged the petitioner with 1,25,500 rupees, (equal to 13,000l.,) as a contribution, and, in order to levy it, did the same year deduct 20,799 rupees from the amount of the advance money which was ordered to be paid to the petitioner, on account of the India Company, for the provision of salt in the two farms, and, after doing so, compelled the petitioner to execute and give him four different bonds for 77,627 rupees, in the name of one Porran Paul, for the remainder of such contribution, or unjust profit.

Such were the allegations of the petition relative to the unjust exaction. The harsh means of compelling the payment make another and very material part; for the petitioner asserts, that, in order to recover the amount of these bonds, guards were placed over him, and that Mr. Barwell by ill usage and oppressions recovered from him at different times 48,656 Arcot rupees, besides 283 rupees extorted by the guard,—that, after this payment, two of the bonds, containing 36,313 rupees, were restored to him, and he was again committed to the charge of four peons, or guards, to pay the amount of the remaining two bonds. The petition further charges, that the said gentleman and his people had also extorted from the petitioner other sums of money, which, taken together, amounted to 25,000 rupees.

But the heaviest grievance alleged by him is, that, after the sums of money had been extorted on account of the farms, the faith usual in such transactions is allowed not to have been kept; but, after the petitioner had been obliged to buy or compound for the farms, that they were taken from him,—"that the said Richard Barwell, Esquire, about his departure from Dacca, in October, 1774, for self-interest wrested from the petitioner the aforesaid two mahls, (or districts,) and farmed them to another person, notwithstanding he had extorted from the petitioner a considerable sum of money on account of those purgunnahs."

To this petition your Committee find two accounts annexed, in which the sums said to be paid to or taken by Mr. Barwell, and the respective dates of the several payments, are specified; and they find that the account of particulars agrees with and makes up the gross sum charged in the petition.

Mr. Barwell's immediate answer to the preceding charge is contained in two letters to the board, dated 23rd and 24th of March, 1775. The answer is remarkable. He asserts, that "the whole of Kaworke's relation is a gross misrepresentation of facts;—that the simple fact was, that in January, 1774, the salt mahls of Savagepoor and Selimabad became his, and were re-let by him to this man, in the names of Bussunt Roy and Kissen Deb, on condition that he should account with him [Mr. Barwell] for profits to a certain sum, and that he [Mr. Barwell] engaged for Savagepoor in the persuasion of its being a very profitable farm"; and he concludes with saying, "If I am mistaken in my reasoning, and the wish to add to my fortune has warped my judgment, in a transaction that may appear to the board in a light different to what I view it in, it is past,—I cannot recall it,—and I rather choose to admit an error than deny a fact." In his second letter he says, "To the Honorable Court of Directors I will submit all my rights in the salt contracts I engaged in; and if in their opinion those rights vest in the Company, I will account to them for the last shilling I have received from such contracts, my intentions being upright; and as I never did wish to profit myself to the prejudice of my employers, by their judgment I will be implicitly directed."

The majority of the board desired that Kaworke's petition should be transmitted to England by the ship then under dispatch; and it was accordingly sent with Mr. Barwell's replies. Mr. Barwell moved that a committee should be appointed to take into consideration what he had to offer on the subject of Kaworke's petition; and a committee was accordingly appointed, consisting of all the members of the Council except the Governor-General.

The committee opened their proceedings with reading a second petition from Kaworke, containing corrected accounts of cash said to be forcibly taken, and of the extraordinary and unwarrantable profits taken or received from him by Richard Barwell, Esquire; all which are inserted at large in the Appendix. By these accounts Mr. Barwell is charged with a balance or debt of 22,421 rupees to Kaworke. The principal difference between him and Mr. Barwell arises from a different mode of stating the accounts acknowledged to exist between them. In the account current signed by Mr. Barwell, he gives Kaworke credit for the receipt of 98,426 rupees, and charges him with a balance of 27,073 rupees.

The facts stated or admitted by Mr. Barwell are as follow: that the salt farms of Selimabad and Savagepoor were his, and re-let by him to the two Armenian merchants, Michael and Kaworke, on condition of their paying him 1,25,000 rupees, exclusive of their engagements to the Company; that the engagement was written in the name of Bussunt Roy and Kissen Deb Sing; and Mr. Barwell says, that the reason of its being "in these people's names was because it was not thought consistent with the public regulations that the names of any Europeans should appear."

It is remarkable that this policy was carried to still greater length. Means were used to remove such an obnoxious proceeding, as far as possible, from the public eye; and they were such as will strongly impress the House with the facility of abuse and the extreme difficulty of detection in everything which relates to the Indian administration. For these substituted persons were again represented by the further substitution of another name, viz., Rada Churn Dey, whom Mr. Barwell asserts to be a real person living at Dacca, and who stood for the factory of Dacca; whereas the Armenian affirms that there was no such person as Rada Churn, and that it was a fictitious name.

Mr. Barwell, in his justification, proceeds to affirm, that Coja Kaworke never had the management of the salt mahls, "but on condition of accounting to the former Chief, and to Mr. Barwell, for a specified advantage arising from them,—that Mr. Barwell determined, without he could reconcile the interests of the public with his own private emoluments, that he would not engage in this concern,—and that, when he took an interest in it, it was for specified benefit in money, and every condition in the public engagement to be answered."

Your Committee have stated the preceding facts in the same terms in which they are stated by Mr. Barwell. The House is to judge how far they amount to a defence against the charges contained in Kaworke's petition, or to an admission of the truth of the principal part of it. Mr. Barwell does not allow that compulsion was used to extort the money which he received from the petitioner, or that the latter was dispossessed of the farms in consequence of an offer made to Mr. Barwell by another person (Ramsunder Paulet) to pay him a lac of rupees more for them. The truth of these charges has not been ascertained. They were declared by Mr. Barwell to be false, but no attempt was made by him to invalidate or confute them, though it concerned his reputation, and it was his duty, in the station wherein he was placed, that charges of such a nature should have been disproved,—at least, the accuser should have been pushed to the proof of them. Nothing of this kind appears to have been done, or even attempted.

The transaction itself, as it stands, is clearly collusive; the form in which it is conducted is clandestine and mysterious in an extraordinary degree; and the acknowledged object of it a great illicit profit, to be gained by an agent and trustee of the Company at the expense of his employers, and of which he confesses he has received a considerable part.

The committee of the Governor-General and Council appear to have closed their proceedings with several resolutions, which, with the answers given by Mr. Barwell as a defence, are inserted in the Appendix. The whole are referred thither together, on account of the ample extent of the answer. These papers will be found to throw considerable light not only on the points in question, but on the general administration of the Company's revenues in Bengal. On some passages in Mr. Barwell's defence, or account of his conduct, your Committee offer the following remarks to the judgment of the House.

In his letter of the 23rd March, 1775, he says, that he engaged for Savagepoor in the persuasion of its being a very profitable farm. In this place your Committee think it proper to state the 17th article of the regulations of the Committee of Circuit, formed in May, 1772, by the President and Council, of which Mr. Barwell was a member, together with their own observations thereupon.

17th. "That no peshcar, banian, or other servant, of whatever denomination, of the collector, or relation or dependant of any such servant, be allowed to farm lands, nor directly or indirectly to hold a concern in any farm, nor to be security for any farmer; that the collector be strictly enjoined to prevent such practices; and that, if it shall be discovered that any one, under a false name, or any kind of collusion, hath found means to evade this order, he shall be subject to an heavy fine, proportionate to the amount of the farm, and the farm shall be re-let, or made khas: and if it shall appear that the collector shall have countenanced, approved, or connived at a breach of this regulation, he shall stand ipso facto dismissed from his collectorship. Neither shall any European, directly or indirectly, be permitted to rent lands in any part of the country."

Remark by the Board.

17th. "If the collector, or any persons who partake of his authority, are permitted to be the farmers of the country, no other persons will dare to be their competitors: of course they will obtain the farms on their own terms. It is not fit that the servants of the Company should be dealers with their masters. The collectors are checks on the farmers. If they themselves turn farmers, what checks can be found for them? What security will the Company have for their property, or where are the ryots to look for relief against oppressions?"

The reasons assigned for the preceding regulation seem to your Committee to be perfectly just; but they can by no means be reconciled to those which induced Mr. Barwell to engage in the salt farms of Selimabad and Savagepoor. In the first place, his doing so is at length a direct and avowed, though at first a covert, violation of the public regulation, to which he was himself a party as a member of the government, as well as an act of disobedience to the Company's positive orders on this subject. In their General Letter of the 17th May, 1766, the Court of Directors say, "We positively order, that no covenanted servant, or Englishman residing under our protection, shall be suffered to hold any land for his own account, directly or indirectly, in his own name or that of others, or to be concerned in any farms or revenues whatsoever."

Secondly, if, instead of letting the Company's lands or farms to indifferent persons, their agent or trustee be at liberty to hold them himself, he will always (on principles stated and adhered to in the defence) have a sufficient reason for farming them on his own account, since he can at all times make them as profitable as he pleases; or if he leases them to a third person, yet reserves an intermediate profit for himself, that profit may be as great as he thinks fit, and must be necessarily made at the Company's expense. If at the same time he be collector of the revenues, it will be his interest to recommend remissions in favor of the nominal farmer, and he will have it in his power to sink the amount of his collections.

These principles, and the correspondent practices, leave the India Company without any security that all the leases of the lands of Bengal may not have been disposed of, under that administration which made the five years' settlement in 1772, in the same manner and for the same purpose.

To enable the House to judge how far this apprehension may be founded, it will be proper to state, that Mr. Nicholas Grueber, who preceded Mr. Barwell in the Chiefship of Dacca, in a letter dated 29th of April, 1775, declares that he paid to the Committee of Circuit twelve thousand rupees as their profit on a single salt farm,—which sum, he says, "I paid the Committee at their request, before their departure from Dacca, and reimbursed myself out of the advances directed to be issued for the provision of the salt." Thus one illicit and mischievous transaction always leads to another; and the irregular farming of revenue brings on the misapplication of the commercial advances.

Mr. Barwell professes himself to be sensible "that a wish to add to his fortune may possibly have warped his judgment, and that he rather chooses to admit an error than deny a fact." But your Committee are of opinion that the extraordinary caution and the intricate contrivances with which his share in this transaction is wrapped up form a sufficient proof that he was not altogether misled in his judgment; and though there might be some merit in acknowledging an error before it was discovered, there could be very little in a confession produced by previous detection.

The reasons assigned by Mr. Barwell, in defence of the clandestine part of this transaction, seem to your Committee to be insufficient in themselves, and not very fit to be urged by a man in his station. In one place he says, that "it was not thought consistent with the public regulations that the names of any Europeans should appear." In another he says, "I am aware of the objection that has been made to the English taking farms under the names of natives, as prohibited by the Company's orders; and I must deviate a little upon this. It has been generally understood that the scope and tendency of the Honorable Company's prohibition of farms to Europeans was meant only to exclude such as could not possibly, in their own persons, come under the jurisdiction of the Duanne courts of Adawlet, because, upon any failure of engagements, upon any complaint of unjust oppression, or other cause of discontent whatever, it was supposed an European might screen himself from the process of the country judicature. But it was never supposed that an European of credit and responsibility was absolutely incapable from holding certain tenures under the sanction and authority of the country laws, or from becoming security for such native farmers, contractors, &c., &c., as he might protect and employ."

Your Committee have opposed this construction of Mr. Barwell's to the positive order which the conduct it is meant to color has violated. "Europeans of credit and responsibility," that is, Europeans armed with wealth and power, and exercising offices of authority and trust, instead of being excepted from the spirit of the restriction, must be supposed the persons who are chiefly meant to be comprehended in it; for abstract the idea of an European from the ideas of power and influence, and the restriction is no longer rational.

Your Committee are therefore of opinion that the nature of the evil which was meant to be prevented by the above orders and regulations was not altered, or the evil itself diminished, by the collusive methods made use of to evade them,—and that, if the regulations were proper, (as they unquestionably were,) they ought to have been punctually complied with, particularly by the members of the government, who formed the plan, and who, as trustees of the Company, were especially answerable for their being duly carried into execution. Your Committee have no reason to believe that it could ever have been generally understood "that the Company's prohibition of farms to Europeans was meant only to exclude such as could not possibly, in their own persons, come under the jurisdiction of the Duanne courts": no such restriction is so much as hinted at. And if it had been so understood, Mr. Barwell was one of the persons who, from their rank, station, and influence, must have been the principal objects of the prohibition. Since the establishment of the Company's influence in Bengal, no Europeans, of any rank whatever, have been subject to the process of the country judicature; and whether they act avowedly for themselves, and take farms in their own name, or substitute native Indians to act for them, the difference is not material. The same influence that screened an European from the jurisdiction of the country courts would have equally protected his native agent and representative. For many years past the Company's servants have presided in those courts, and in comparison with their authority the native authority is nothing.