"
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.
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.
Edmund Burke
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.
? ? ? ? 110 NINTH REPORT OF SELECT COMMITTEE
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 (4,7311. ) 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.
? ? ? ? ON THE AFFAIRS OF INDIA. 111
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 ill the stocks ill 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 Barwellfor different improprieties in
his conduct, was now reconciled to him; and that ever
? ? ? ? 112 NINTH REPORT OF SELECT COMMITTEE
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 be.
fore the Council, to be transmitted to the Court of
Directors, Mr. Barwell complained of the introduc
tion 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 indi
? ? ? ? ON THE AFFAIRS OF INDIA. 113
viduals. 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 ac.
quiescence 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 ap -- prehended 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.
VOL. VIII. 8
? ? ? ? 114 NINTH REPORT OF SELECT COMMITTEE
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
? ? ? ? ON THE AFFAIRS OF INDIA. 115
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 Comn
? ? ? ? 116 NINTH REPORT OF SELECT COMMITTEE
mittee 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 Duann6 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
? ? ? ? ON THE AFFAIRS OF INDIA. 117
state of the country: the security against adultera
tion; 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 engage.
ments 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 d;;,ricts. This competition, the operation
? ? ? ? 118 NINTH REPORT OF SELECT COMMITTEE
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 con
tractors 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
? ? ? ? ON THE AFFAIRS OF INDIA. 119
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
? ? ? ? 120 NINTH REPORT OF SELECT COMMITTEE
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
? ? ? ? ON THE AFFAIRS OF INDIA. 121
their abolition in a plan sent to the Court of Directors the year following. *
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
* Vide Mr. Francis's plan in Appendix, No. 14, to the Select
Committee's Sixth Report.
? ? ? ? 122 NINTH REPORT OF SELECT COMMITTEE
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 coinmodity 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
? ? ? ? ON THE AFFAIRS OF INDIA. 123
and natural indignation. The board, struck with
this representation, ordered the Council of Patna to
make an inquiry into the fact; but your Committee
tan 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
? ? ? ? 124 NINTH REPORT OF SELECT COMMITTEE
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
? ? ? ? ON THE AFFAIRS OF INDIA. 125
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
? ? ? ? 126 NINTH REPORT OF SELECT COMMITTEE
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,
? ? ? ? ON THE AFFAIRS OF INDIA. 127
may easily counterbalance the reduced penalty in this
contract, which was settled in favor of Mr. Sulivan at
about 20,0001.
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
? ? ? ? 128 NINTH REPORT OF SELECT COMMITTEE
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
illformed, that this contract, very soon after the makilg, 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
? ? ? ? ON THE AFFAIRS OF INDIA. 129
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 occasionl, 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.
VOL VIII. 9
? ? ? ? 130 NINTH REPORT OF SELECT COMMITTEE
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 reprelelnsion 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
? ? ? ? ON THE AFFAIRS OF INDIA. 131
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, alud something
? ? ? ? 132 NINTH REPORT OF SELECT COMMITTEE
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;n 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
? ? ? ? ON THE AFFAIRS OF INDIA. 133
an undertaking great difficulties occurred. In the
first place, all importation of that commodity is rigorously forbidden by the laws of China. The impro.
priety 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 fur
? ? ? ? 134 NINTH REPORT OF SELECT COMMITTEE
nished 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 ivith great condescension
? ? ? ? ON THE AFFAIRS OF INDIA. 135
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.
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.
? ? ? ? 110 NINTH REPORT OF SELECT COMMITTEE
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 (4,7311. ) 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.
? ? ? ? ON THE AFFAIRS OF INDIA. 111
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 ill the stocks ill 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 Barwellfor different improprieties in
his conduct, was now reconciled to him; and that ever
? ? ? ? 112 NINTH REPORT OF SELECT COMMITTEE
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 be.
fore the Council, to be transmitted to the Court of
Directors, Mr. Barwell complained of the introduc
tion 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 indi
? ? ? ? ON THE AFFAIRS OF INDIA. 113
viduals. 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 ac.
quiescence 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 ap -- prehended 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.
VOL. VIII. 8
? ? ? ? 114 NINTH REPORT OF SELECT COMMITTEE
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
? ? ? ? ON THE AFFAIRS OF INDIA. 115
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 Comn
? ? ? ? 116 NINTH REPORT OF SELECT COMMITTEE
mittee 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 Duann6 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
? ? ? ? ON THE AFFAIRS OF INDIA. 117
state of the country: the security against adultera
tion; 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 engage.
ments 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 d;;,ricts. This competition, the operation
? ? ? ? 118 NINTH REPORT OF SELECT COMMITTEE
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 con
tractors 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
? ? ? ? ON THE AFFAIRS OF INDIA. 119
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
? ? ? ? 120 NINTH REPORT OF SELECT COMMITTEE
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
? ? ? ? ON THE AFFAIRS OF INDIA. 121
their abolition in a plan sent to the Court of Directors the year following. *
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
* Vide Mr. Francis's plan in Appendix, No. 14, to the Select
Committee's Sixth Report.
? ? ? ? 122 NINTH REPORT OF SELECT COMMITTEE
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 coinmodity 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
? ? ? ? ON THE AFFAIRS OF INDIA. 123
and natural indignation. The board, struck with
this representation, ordered the Council of Patna to
make an inquiry into the fact; but your Committee
tan 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
? ? ? ? 124 NINTH REPORT OF SELECT COMMITTEE
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
? ? ? ? ON THE AFFAIRS OF INDIA. 125
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
? ? ? ? 126 NINTH REPORT OF SELECT COMMITTEE
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,
? ? ? ? ON THE AFFAIRS OF INDIA. 127
may easily counterbalance the reduced penalty in this
contract, which was settled in favor of Mr. Sulivan at
about 20,0001.
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
? ? ? ? 128 NINTH REPORT OF SELECT COMMITTEE
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
illformed, that this contract, very soon after the makilg, 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
? ? ? ? ON THE AFFAIRS OF INDIA. 129
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 occasionl, 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.
VOL VIII. 9
? ? ? ? 130 NINTH REPORT OF SELECT COMMITTEE
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 reprelelnsion 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
? ? ? ? ON THE AFFAIRS OF INDIA. 131
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, alud something
? ? ? ? 132 NINTH REPORT OF SELECT COMMITTEE
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;n 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
? ? ? ? ON THE AFFAIRS OF INDIA. 133
an undertaking great difficulties occurred. In the
first place, all importation of that commodity is rigorously forbidden by the laws of China. The impro.
priety 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 fur
? ? ? ? 134 NINTH REPORT OF SELECT COMMITTEE
nished 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 ivith great condescension
? ? ? ? ON THE AFFAIRS OF INDIA. 135
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.
