He was content, as
Hastings
had never been, to plead a
command from home as a final cause for decision, and this respect
for authority was his outstanding characteristic.
command from home as a final cause for decision, and this respect
for authority was his outstanding characteristic.
Cambridge History of India - v5 - British India
he conferred on the raiyats who were the actual
cultivators, the protection of formal contracts.
Neither of these encomiums can be substantiated. The assessment of
1772 was summary and admitted by its authors to have been too high.
The system of putting up the farms to open auction resulted in utterly
fictitious values that were never realised and was soon afterwards
forbidden by the Company. The system of pattahs, or leases, com-
pletely broke down, and failed, then as later, to protect the ryot.
Furthermore, the reinstatement of the kanungos, the abolition of
collectors, the establishment of the provincial diwans, and lastly the
excessive power placed in the hands of the diwan of the Committee
of Revenue, all testify to the incapacity of Hastings in his administra-
.
1
1 Letter from the Burdwan Council, Governor-General's Proceedings; ia
April, 1777.
## p. 431 (#459) ############################################
)
MACPHERSON'S REFORMS
431
tion of the Bengal land revenue; it is not too much to say that in this
respect his achievements compare unfavourably with those of
Muhammad Reza Khan. But Hastings was not a civil servant of the
To judge him, therefore, by the crown standard of a later
date is unjust and unhistorical. The Company's servants were imbued
with one idea : they came to serve the Company first and last; their
intensity of purpose made the East India Company master of India;
and this purpose was not the less strong because it did not profess to
be governed by the restrictions which are attached to an administra-
tive service of the crown. Hastings gave his employers a service and
devotion that was unflinching in its loyalty, that feared no difficulty,
that shrank from no adversary; although he may have failed in his
personal handling of the land revenue, he is entitled to the credit of
having selected some most able officers to deal with this branch of
the administration. Conspicuous among these were Shore, David
Anderson, Samuel Charters, Charles Croftes and James Grant. In
the same week as Hastings handed over charge of the government, a
letter 1 from the court of directors was received calling for an accu-
rate account of the administration at the precise period at which
Hastings resigned his office; a foretaste, had he but known, of the
anxious days ahead.
On 25 April, 1786, the new scheme was published: it spelt
decentralisation. “The division of the province into districts is the
backbone of the whole system of the reforms. ” 2 The collector becomes
a responsible officer, making the settlement and collecting the reve-
nue; the provincial diwans were abolished; and the districts were
reorganised into thirty-five more or less fiscal units, instead of the
previous "series of fiscal divisions over which the earlier collectors
had exercised their doubtful authority";g these thirty-five districts
were reduced in 1787 to twenty-three. These measures of the local
government were reinforced by orders from the court of directors
dated 21 September, 1785, which were published in Calcutta on 12
June, 1786; under them the Committee of Revenue was reconstituted
and officially declared to be the Board of Revenue. The president of
the board was to be a member of the governor-general's council. The
special regulations drawn up for the guidance of the board may be
read in the pages of Harington and Colebrooke. Its duties were those
of controlling and advising the collectors and sanctioning their settle-
ment. On 19 July the office of Chief Saristadar was instituted to bring
the revenue records, hitherto the property of the kanungos, under the
control of government. This measure was long overdue, and had been
urged by the abler district officers since 1772, as being "no less
calculated to protect the great body of the people from oppression
2
1 Committee of Revenue's Proceedings, 14 February, 1785.
2 Ascoli, op. cit. pp. 38-40.
8 Idem.
## p. 432 (#460) ############################################
432
REVENUE ADMINISTRATION OF BENGAL, 1765-86
than to secure the full and legal right of the Sovereign". James Grant
was selected to be the first Chief Saristadar, being specially chosen
for his interest in and research among the revenue records. For the
first time since the assumption of the diwanni, government had made
a resolute effort to reduce the kanungos to their constitutional position
in the state.
The reforms of 1786 were, therefore, the work of men who desired
to gain the confidence of and to co-operate with the local district
officer. The authors of the reforms were convinced from their own
district experience that the real work of the revenue must be carried
out by trusted officers on the spot; they set themselves to create the
conditions and atmosphere in which those officers could best work.
The period 1765-86 in the administration of the land revenue in
Bengal by the Company's servants is a record of progress from the
employment of untested theories to the establishment of an adminis-
tration based on much solid knowledge. A careful perusal of the
voluminous manuscript proceedings of the Committees of Revenue
during those years reveals a fact too little known, namely, that this
progress was largely the result of unrecognised work by the district
officers of the Company in their own districts where, generally
speaking, they laboured to establish a just and humane collection of
the land revenue. Their advice, based on sound local knowledge, was
too often rejected by their official superiors in Calcutta, by whom,
as well as by the Court of Directors, they were regarded with suspi-
cion and even hostility. Their persistence had its reward; twenty
years after the assumption of the diwanni the first sound and just
administration of the land revenue was established.
NOTE. The reader has doubtless found the various references to boards and
committees of revenue confusing.
In 1769 the Council had delegated its authority in revenue matters to a
"select committee” drawn from its own members. This select committee in
1772 appointed the Committee of Circuit to examine the conditions with a view
to making a new settlement. The Committee of Circuit in August, 1772, pro-
posed that the whole Council should compose a Board of Revenue—this was
established in October, 1772, as the Committee of Revenue, and remained in
existence till 1781, when it was reorganised and composed of members junior
to and subordinate to the Supreme Council, but still retained its name "Com-
mittee of Revenue”. The term “board" is used indifferently by contemporary
writers up to 1781; after 1781 it indicates the Supreme Council when sitting to
hear revenue appeal cases from the Committee of Revenue. The modern Board
of Revenue dates from 1786, when it replaced the second Committee of Revenue.
## p. 433 (#461) ############################################
CHAPTER XXVI
1
THE BENGAL ADMINISTRATIVE SYSTEM,
1786-1818
THE Select Committee of 1781 had been directed to find means
for gaining not only "security and advantage" for Britain but "the
happiness of the native inhabitants," and from the discussions of the
years 1781-4 certain maxims of local government had clearly emerged.
There must be a reform of abuses among the Company's servants;
the methods by which they grew rich must be watched; they must
no longer take presents. Their trading activities must no longer
operate to destroy the trade of native merchants and bankers. The
system of monopolies must be restricted. The rights of zamindars
and land-holders must not be superseded in order to increase the
revenues. There must be even-handed justice for Europeans and
Indians alike.
The instructions to Cornwallis embodied the principles thus de-
scribed. In relation to local government three main subjects were
discussed. First, there was the land revenue. It was to be handled
leniently : “a moderate jama, regularly and punctually collected"
was to be preferred to grandiose but unrealised schemes. It was to
be settled “in every practicable instance” with the zamindars. Ulti-
mately the settlement was to be permanent, but at present it was to
be made for ten years. Secondly, there was the question of adminis-
tration. This was to be organised upon a simple and uniform basis.
The frequent changes of recent years had produced injury and
extravagance, and made "steady adherence to almost any one system”
a preferable policy. The higher officers should be Europeans; and
the subordinates Indians, as being more suited to the detailed work
of the province. These higher officers were to be chosen carefully
froni the principal servants of the Company; men "distinguished for
good conduct and abilities, and conversant with the country langu-
ages". They should be adequately paid, partly by salary, partly
by commission. Their districts were to be large; there should not be
more than twenty, or at most twenty-five, in the whole province. In
the -settlement of the revenue, and in the administration of justice,
they were to have wide authority.
Thirdly, there was the judicial system. The instructions contem-
plated the continuance of the existing system of civil justice, under
European judges. In the districts the collectors of revenue were to
be, also, judges of the civil courts; for this would "tend more to
simplicity, energy, justice and economy" In criminal jurisdiction,
too, the existing system was to be maintained. Indian control was to
28
## p. 434 (#462) ############################################
434
BENGAL ADMINISTRATIVE SYSTEM, 1786-1818
continue. Although the collector was to enjoy magisterial powers of
arrest, “the power of trial and punishment must on no account be
exercised by any other than the established officers of Mahomedan
judicature". The judicial system indeed was to be informed with.
European ideas of justice, but to be governed by Indian usages. One
point recurred frequently throughout the instructions. There was to
be a general movement for purification and economy. Abuses of all
kinds were to be swept away; peculation was to cease; useless offices
were to be reduced, and the interests of economy and simplicity were
to regulate the various branches of the administrative system. Such
was the task of Cornwallis.
The proposal to make Cornwallis the first instrument of the new
policy was first mooted in 1782 during the administration of 'Shel-
burne;a and his appointment had been one feature of the scheme for
Indian reform proposed by Dundas in the report of the Secret Com-
mittee of 1781. The Fox-North coalition rejected the idea, but Pitt
revived it on their defeat. The negotiations began in April, 1784;3
at the end of the year they seemed to have failed completely; a
renewal in February, 1785, was again a failure; and it was not until
February, 1786, that Cornwallis accepted. Then the union of the
military command with the governor-generalship, and the promise
that the governor-general should be independent of his council,
induced Cornwallis to accept. He finally landed at Calcutta in
September, 1786.
Cornwallis was a man of middle age with extensive military
experience. He had taken part in the campaigns of the Seven Years'
War, and had gained sufficient reputation to secure his appointment
in 1776 to command in America. There, his ultimate failure, after
some brilliant preliminary successes, did not suffice to ruin his career.
Even his opponent, Fox, paid homage to his abilities in 1783, and his
employment under Pitt on the mission of 1785 to Prussia was sufficient
evidence of the trust in which he held him. Of the affairs of India,
he had little knowledge and no experience. He is distinguished as
the first governor-general who did not climb to power from the ranks
of the Company's service. Appointed by the Company, he owed his
nomination to the ministry. His selection was one more evidence of
the new spirit in Indian affairs. It brought India a stage nearer to
incorporation in the overseas empire of Britain.
Inexperience made Cornwallis largely dependent on advisers both
in framing his policy, and, still more, in working it out. The broad
1 The instructions are in a series of dispatches dated 12 April, 1786. They are
to be found in I. O. Records, Despatches to Bengal, vol. XV. One of the most
important of these is printed as Appendix 12 to the Second Report from the
Select Committee of the House of Commons on the Affairs of the East India
Company. Parliamentary Papers, 1810, V, 13.
Cornwallis to Pitt, & November, 1784. Ross, Correspondence, 1, 179.
Ross, op. cit. I, 167.
4 Idem, p. 208.
3
## p. 435 (#463) ############################################
CORNWALLIS'S ADVISERS
435
lines of his action were laid down by the administration; the instruc-
tions of the court of directors gave more detailed guidance. But
much was left necessarily to the men on the spot, and hence the
servants of the Company by their practical knowledge had great
influence on the result: Cornwallis acknowledged plainly his debt
to them. Perhaps the chief of them was John Shore, chosen especially
by the directors to supply the local knowledge which Cornwallis
lacked. “The abilities of Mr. Shore", Cornwallis wrote a month after
his arrival, "and his knowledge in every branch of the business of
this country, and the very high character which he holds in the settle-
ment, render his assistance to me invaluable. ”i And again in 1789
in connection with the revenue settlement, he said, “I consider it as
singularly fortunate that the public could profit from his great ex-
perience and uncommon abilities". 2 In revenue matters Cornwallis
trusted mainly to Shore. He was by far the most experienced of the
Company's servants in this branch, for he had been in its service
since 1769, and had held important revenue offices since 1774. Francis
had brought him to the front, but Hastings also had recognised his
merit.
James Grant is indeed as famous as Shore in connection with the
revenue settlement. But Grant had but little practical experience.
His reputation has come from his wide study of the revenue system,
and the series of published works in which he stated the results of his
learning. He was an expert rather than a man of affairs. As saristadar
he had unrivalled opportunity for studying revenue records, and
Cornwallis retained the office of saristadar till Grant went home in
1789. But in making important decisions he preferred men of experi-
ence to men of learning. After Shore, Cornwallis therefore put
Jonathan Duncan, another experienced collector; and later governor
of Bombay. He was little known in England when Cornwallis arrived,
but "he is held in the highest estimation by every man, both European
and native, in Bengal", wrote Cornwallis in 1787, "and, next to Mr
Shore, was more capable of assisting me, particularly in re
matiers, than any man in this country”. 3 He had, said Cornwallis in
1789, “besides good health . . . knowledge, application, integrity, and
temper", the last “not the least useful”. * Although a junior, he was
recommended by Cornwallis for a seat on the council as early as
1788. 5 And in the last stages of the revenue settlement Cornwallis
found consolation in the approval of Duncan for his differences with
Shore over the question of permanence.
The final decision in that matter was due, however, largely to
Charles Grant. When Dundas decided to support Cornwallis against
enue
")
1 Cornwallis to Dundas, 15 November, 1786. Ross, op. cit. 1, 227.
2 Cornwallis to Court of Directors, 2 August, 1789. Ross, op. cit. I, 545.
3 Cornwallis to Dundas, 14 August, 1787. Ross, op. cit. I, 271.
4 Cornwallis to N. Smith, 9 November, 1789. Ross, op. cit. I, 449.
5 Dundas to Cornwallis, 20 February, 1789. Ross, op. cit. 1, 410-11.
## p. 436 (#464) ############################################
436
BENGAL ADMINISTRATIVE SYSTEM, 1786-1818
1
the advice of Shore, it was partly at least owing to the representations
of Charles Grant. He had no personal knowledge of revenue matters,
but he received the greatest share in the confidence of Cornwallis,
and had given him invaluable help during the years 1786-90. When
Grant sailed for home in 1790 Cornwallis recommended Dundas "to
converse with him frequently upon every part of the business of this
Country", and his zeal for the governor-general's interests gave him
considerable influence over Dundas during the years 1790-3. James
Grant (a cousin of Charles),- like Shore and Duncan, specialised on
the revenue side. But Charles Grant was the chief adviser in matters
of trade. His loss "in the commercial line", wrote Cornwallis when
he left India, "is irreparable". He had been secretary to the Board
of Trade in the time of Hastings and had been appointed by the
board in 1781 commercial resident at Malda. He was outstanding
both in experience and integrity. At first, at least, Cornwallis thought
him the only honest man on the commercial side, and trusted very
largely to him in his attempt to reform that branch of the adminis-
tration. In this work Cornwallis had also the help of Charles Stuart,
member of council and president of the Board of Trade (1786-9).
Stuart, however, never gained in the same degree the confidence of
Cornwallis, and he lacked the wide commercial experience of
Charles Grant.
In his judicial work Cornwallis had also an invaluable adviser.
Here the Company's servants could be of but limited use. Cornwallis
took full advantage of their experience in judicial business, but their
experience was relatively small and they lacked expert knowledge.
Some of them-Charles Grant among them-were of great value in
carrying out reforms: but only the judges could help in devising them.
Cornwallis was, therefore, fortunate in the aid of Sir William Jones,
an oriental scholar of reputation unrivalled in his own time, and a
man of great practical ability, who had devoted many years to the
study and practice of the law. In 1783 he had come to India as judge
of the Supreme Court of Judicature at Calcutta, and he brought to his
task the zeal of an enthusiast, and the knowledge of an expert. “A
good system of laws" seemed to him the first necessity of India; and,
following the lead of Hastings, he set himself to this end to codify
the existing Hindu and Muhammadan laws. But he realised also the
need for "due administration" and a "well-established peace". He
gave, therefore, full aid to Cornwallis in his reform of the judicial
administration and in the regulation of the police.
Although the policy that Cornwallis came to enforce in 1786 was
new, it was not wholly new. In every direction Cornwallis built
1 Cornwallis to Dundas, 12 February, 1790. Ross, op. cit. I, 480.
2 Firminger (ed. ), Fifth Report . . . on the Affairs of the East India Com-
pany . . . 1812, 1, p. xiv.
:: Ross, op. cit. 1, 306.
.
## p. 437 (#465) ############################################
CORNWALLIS'S CHARACTER
437
on foundations already laid or begun to be laid by his predecessors,
and especially by Hastings. It was the emphasis rather than the
principle that was new; but the principles were now clearly stated,
and the strength of the home government was used to enforce them.
Every aspect of reform was foreshadowed in the work or in the
projects of Hastings, and hence the solidity of the work of Cornwallis.
Yet even when all allowance has been made, much credit must be
given to Cornwallis himself. Certainly no man of genius, he con-
tributed no new ideas to the work he undertook. He was not an
expert like Jones or Grant, nor a man of wide experience like Shore.
He was not a doctrinaire like Francis, nor an inventive genius like
Hastings.
He was content, as Hastings had never been, to plead a
command from home as a final cause for decision, and this respect
for authority was his outstanding characteristic. But in spite of this
he possessed great qualities and stood for important principles. Above
all, he was, beyond reproach, upright and honest. He had not to
fear a sudden decline in favour; he had no pettiness of ambition;
he was not a time-server; and he left behind him a tradition of service
a
which was of lasting value in Indian administration. Loyalty and
integrity there had been before, but it was a loyalty to the Company
and an integrity in the Company's affairs. Cornwallis was a public
servant who upheld national and not private traditions. His service
was to the Crown and not to the people over whom he ruled, and he
thus embodied fitly the new spirit of Indian rule.
To this invincible honesty and desire for the public good, he added
a soldier's sense of duty to his superiors. The command of Dundas
or Pitt, or even of the court of directors, was decisive to him. He had
a belief in the possibilities of justice, a faith in the standards by which
conduct would be judged at home. He was determined that these
standards should not be lowered in India, nor overlaid by native
practices. To secure this he gave the higher administrative posts to
Englishmen, and he was always loth to leave real responsibility in
native hands. Yet he was wise enough to see that this was not enough :
these Englishmen must maintain the English standards. They must
be appointed and promoted for merit, not by patronage. In the interests
of this maxim he was prepared to resist the recommendations of all,
even of the Prince Regent or of the directors. Lastly, every deviation
from honesty must be rigorously punished.
This is the system Cornwallis set out to establish, and no doubt
because it was practical rather than ideal, he came much nearer than
most reformers to a realisation of his aims.
а
When Cornwallis landed in Bengal in September, 1786, important
changes in administration had just taken place. More than twenty
years of experiment had gone to make them, and the recent innovations
were rather a further stage in experiment than a final reorganisation.
Much of the work of Cornwallis also was experimental in character,
## p. 438 (#466) ############################################
438
BENGAL ADMINISTRATIVE SYSTEM, 1786-1818
but his greatest claim to importance is that he permanently established
some features of administration.
It is necessary to go back more than twenty years to explain the
character of the system with which Cornwallis dealt. The main work
of the Company in India had at one time consisted, like that of any
other company for overseas trade, in import from England and export
home. The import had from early times consisted mainly of specie,
so that the most burdensome duty of the Company's servants was
the provision of the cargoes for England, cargoes for the most part of
raw silk, wool, cotton, or indigo; in other words the “investment". In
the mid-eighteenth century the import of specie ceased : the import of
English goods, never large, was still comparatively small, and the main
source from which the investment was provided—and the local
expenses paid-was the territorial revenue of Bengal.
The result was a dual system of administration. The management
of this revenue and the exercise of responsibilities arising from it, was
one branch of the Company's work; the provision of the investment
the other. Hastings in 1785 had written of the division between “the
general and commercial departments". The Company's servants in
all parts of Bengal wrote to Cornwallis on his arrival describing their
years of experience in the "revenue" or the "commercial line". The
commercial was the senior branch, but the revenue line was already
becoming the more important.
Since 1774 the investment had been under the supervision of the
Board of Trade. Originally a body of eleven members, very imper-
fectly controlled by the Supreme Council, the Board of Trade had been
reorganised in May, 1786. It was now definitely subordinated to the
Supreme Council, and reduced to five members. One of them, the
president, was Charles Stuart, a member of council. Under the board,
the investment was in the hands of the Company's servants stationed
at scattered centres in Bengal. The chief "residents” at the various
stations were responsible to the board for such share of the investment
as had been assigned to them. In dealing with it they had great op-
portunities for good or evil in coming into contact with the people, and
especially they had valuable and recognised facilities for private trade.
From the time of the board's first appointment in 1774 it had been
increasingly the practice to obtain the investment by a series of
contracts. At first these contracts were generally direct with Indian
manufacturers or agents, the residents merely exercising supervision
over them. Since 1778, however, the contracts had been made more
frequently with the Company's servants themselves. So a resident
at one of the Company's stations contracted with the Board of Trade,
and then obtained the goods from the Indian manufacturers at as great
profit as he could get. This system, though a direct breach of their
covenants and of an order of the Company of 1759, was none the less
the general rule. The directors were so complaisant of the breach that
## p. 439 (#467) ############################################
THE EXISTING SYSTEM
439
.
even in their reform proposals of 1786 they did not think hat it was
"necessary to exclude our servants from entering into contracts".
Their criticism was not one of principle, but of practice. The prices
paid were high, the quality of the goods was poor, and there was a
general feeling that corruption and oppression were frequent. The
reform of the Board of Trade and the commercial establishment gene-
rally was one of the first tasks of Cornwallis.
The "general department" was more complicated if less corrupt
in its management of local administration. It had come into existence
slowly during the eighteenth century, and bore still a few marks of its
piecemeal origin, though broadly speaking in 1786 there was one
system for the whole province. It is in this sphere that those frequent
changes had taken place which the directors deprecated. The changes
were really a series of attempts, on the “rule of false” extolled by
Hastings, to reach some satisfactory system for a most complicated and
varied work.
In the “general department”, it may be said without question,
the chief concern was the revenue, and the second the administration
of civil justice. As diwan the Company was responsible for both these
branches of administration. Criminal justice was outside the scope
of the diwan, although the Company here also had obtained a large
measure of control. One of the results of the work of Cornwallis was
that before he left, in 1793, this side of the administrative system had
definitely bifurcated. There was the management of revenue on the
one side: the administration of civil and criminal justice on the other.
But this involved a breach with historical origins, and it was not
achieved until 1793.
In 1786 the chief machinery in the sphere of revenue was the
Board of Revenue. This body was stationed at Calcutta, and beforc
Cornwallis landed, had just undergone change, like the Board of
Trade. In July, 1786, at the instance of the court of directors it had
received an addition to its existing membership. There were to be,
as previously, four members; but a president was added, who must be
a member of the Supreme Council. The president appointed in 1786
was John Shore.
The work of the revenue administration concerned certain main
sources of revenue. By far the most important was the revenue from
land, and the machinery for revenue administration had grown up
mainly in connection with this. There was also, however, the sair
revenue-from customs and excise-and the revenues from the opium
contract and the monopoly of salt. In 1786 the sair revenue was
managed by the same agencies as the revenue from land. The opium
revenue had been managed ever since 1773 by a contract with certain
Indians, who paid a royalty to the Company. In 1785 the contract
had been disposed of to the highest bidder on a four-years' agreement.
This system was, therefore, in force when Cornwallis arrived. In
## p. 440 (#468) ############################################
440
BENGAL ADMINISTRATIVE SYSTEM, 1786-1818
connection with the opium, the duties of the Company's servants,
when once the contract had been let, were limited to a general right
of enquiry to prevent the oppression of the cultivators. The monopoly
of salt was another source of revenue. Here again the system in force
was at one time one of contract. But in 1780 Hastings had substituted
a system of European agency. A number of the Company's servants
were employed to superintend the manufacture and sale of salt, the
price being fixed annually by the Supreme Council. Whereas, there-
fore, work in connection with the sair revenue and the opium contract
was undertaken by the same officers as those of the land revenue, a
small separate establishment, responsible directly to the Supreme
Council, dealt with the monopoly of salt.
The land revenue organisation consisted, under the board of
Revenue, of a number of the Company's servants, known already as
collectors. Here also reorganisation had taken place. 1
In addition to the collection of revenue, and of the information
upon which the assessment was made, the collectors, like the zamin-
dars, had originally judicial functions. The judicial system, however,
like the revenue administration, had been the subject of repeated
experiments, and as a result, when Cornwallis arrived, the work of
collecting the revenue was almost wholly divorced from that of
administering justice. Civil justice was administered in local civil
courts (diwanni adalat) presided over by Company's servants; from
them appeal lay to the governor-general in council in the capacity
of judges of the sadr diwanni adalat. For. criminal cases there was
again a separate organisation. Magisterial powers were indeed vested
in the judges of the civil courts; but the power of trial and punishment
lay in district courts for criminal cases, presided over by Indian judges.
Appeal lay from them to the nizamat adalat, now under the 'super-
vision of the governor-general in council. The final power, therefore,
in civil cases directly, and in criminal cases indirectly, lay with the
Supreme Council, but the local courts were almost everywhere outside
the control of the Company's collectors. In most districts then there
were collectors of revenue, judges of the diwanni adalat, and in some
also commercial residents, all of them Company's servants, with
functions in many particulars defined rather by tradition than by
regulation; all of them in the minds of critics at home suspected of
too great concentration on "private interests".
In 1786, Bengal contained all the pieces that were to form the
administrative mosaic of British India, but the pattern had not yet
been decided; and even the collector was not yet established as the
centre-piece. The system was complicated, illogical, wasteful and
suspected of being corrupt. Cornwallis had justly received instruc-
tions to simplify, to purify and to cheapen the administrative system.
>
1 Cf. pp. 417. sag. supra.
## p. 441 (#469) ############################################
THE BOARD OF TRADE
441
>
In a letter to Cornwallis of 12 April, 1786, the Secret Committee
pressed on him the urgency of removing abuses and corruption in
the Company's service. The reforms were most needed in the com-
mercial administration. The Board of Trade, which should have
acted as a check, was suspected of collusion; and fraud and neglect
went alike unpunished. Cornwallis was directed that suits should,
if necessary, be instituted against defrauding officials, and that they
should be suspended from the Company's service.
In fact the task of Cornwallis here, as in the question of revenues,
was two-fold. He had to cleanse the establishment from corruption,
and to revise the system into which the corruption had grown. It
needed only a few weeks to convince him of the need for cleansing
the establishment; there would be no lack of "legal proofs” of both
"corruption" and "shameful negligence”. As the weeks passed,
information poured in upon him as to the methods and difficuīties of
the trade. Requisitions were sent to the commercial residents for
accounts, stretching back in some cases over twenty years. In
October, Cornwallis summoned Charles Grant from Malda to Calcutta,
to obtain his information and advice.
In Janviary, 1787, Cornwallis was ready to act. He informed a
number of contractors and members of the Board of Trade that bills
in equity would be filed against them; pending judgment the sus-
pected persons were suspended from office. The result was the
dismissal of several of the Company's servants, including members of
the old Board of Trade. The directors urged further enquiries, but
Cornwallis had confidence in the effect of these examples, and a
stricter system of surveillance for the future.
Meanwhile he was taking measures to build up the system anew.
In January, he had appointed Charles Grant as fourth member of
the Board of Trade, and with his help set himself to collect informa-
tion upon which to base a revision of the commercial system. Already
he had decided on a change. Instead of contracts with the commercial
residents and others, he revived the system of agency by the commer-
cial residents. It was possible, as yet, to introduce the new plan only
partially, but "in all practicable instances" it was adopted even for
the 1787 investments. By the end of 1788 Cornwallis thought the trial
had been sufficiently long, and definitely adopted the agency system.
The decision was typical of the early period of Cornwallis's reforms.
His experience of the culpability of the Company's servants did not
prejudice him against their employment. He did not feel justified, he
told the directors, in laying down “at the outset as a determined point,
that fidelity was not to be expected from your servants”. He
preferred to try the effect of "open and reasonable compensation for
1 Ross, op. cit. I, 242.
2 P. R. O. , Cornwallis Papers, Packet XVIII. Charles Stuart to Cornwallis,
18 August, 1787.
## p. 442 (#470) ############################################
442
BENGAL ADMINISTRATIVE SYSTEM, 1786-1818
1
honest service”, and believed that many would prefer this to "con-
cealed emolument", if it could be obtained. So in the new system
he made the commercial residents the representatives of the Com-
pany in the direct control of the investment. They were responsible
to the Board of Trade, but even so, their own responsibilities were
great. They were to arrange the prices with the manufacturers, to
make the necessary advances to them, to receive from them the
goods produced, and to supervise the carrying out of the work. The
residents were to be paid adequately by a commission on the
investments passing through their hands. There was to be no
prohibition of private trade, for it could not be enforced, and in such
circumstances "to impose restraints. . . would not remove supposed
evils, but beget new ones”.
The new system was enforced by strict regulations issued as early
as March, 1787. There was to be no oppression of the Indian producer,
or the Indian or foreign trader. It had been the former practice to
prevent weavers, working for the Company, from undertaking any
other work. This system, which had tended to squeeze out all Indian
trade, was now revoked, and it was required only that work should
be executed in the order of the advances received for it. Cornwallis,
indeed, looked to the resident for the protection of the Indian workers.
These commercial servants came into closer contact with the people
than did the collectors of revenue, and, therefore, acted as "useful
barriers" to the oppression of Indian farmers or zamindars.
The bad season of 1788-9 was a severe trial to the new system,
but Cornwallis held that it had "stood the test". From this time he
made no material change in its organisation. The investment, he
wrote in 1789, "is now reasonably and intelligently purchased, and
delivered to the Government at its real cost”. From the commercial
standpoint, this was what had so long been wanted. Characteristically,
he went further, and foresaw the spread downwards, "through the
wide chain of the natives" connected with trade, of the new "prin-
ciple of integrity"; and, as he said, "the establishment of such a
principle must. . . be regarded as a solid good of the highest kind”. ?
If the system did not prove to have so wide an effect as this, it was
justified in its more immediate results, and the system for conducting
the Company's trade which Cornwallis set up was not materially
altered after him. These reforms, therefore, were among the lasting
achievements of Cornwallis.
1
While Stuart and Grant on the Board of Trade were reforming
the commercial side, a similar process was being applied to the ad-
ministration of revenue and justice. Here the chief instrument and
adviser of Cornwallis was John Shore. Already a member of the
11. 0. Records, Bengal Letters Received, XXVIII, 310. Letter dated 1 August,
1789.
## p. 443 (#471) ############################################
REVENUE REFORMS, 1787
443
Supreme Council and the Board of Revenue, he was appointed pre-
sident of the Board of Revenue in January, 1787, and was largely
responsible for the character of the changes.
The preceding reforms, under Macpherson, had created thirty-
five revenue districts, each under a European collector. This officer
was the real authority in revenue matters in the district. For a post
of such importance his salary was ludicrously small, only 1200 rupees
per month. The collectors were "almost all", Cornwallis said," "in
collusion with some relative or friend engaged in commerce", and it
was suspected that even less honourable means were sometimes used.
The reforms in relation to the collector aimed at three things :
economy, simplification and purification. In the interests of economy
the number of districts was to be reduced; in the interests of both
economy and simplification, the divorce of revenue from justice was
to cease; in the interests of purification adequate payment was to
obviate the need for illicit gains.
Rumours of these changes were current as early as January, 1787,
but it was not until March (the end of the Bengal year) that definite
steps were taken. Then, in accordance with a scheme drawn up by
the Board of Revenue, the number of districts was reduced to twenty-
three; a reduction that brought down upon Cornwallis the protests
of the dispossessed. At the same time, preparations were made for a
second change : the union of revenue and judicial duties. In February
a preliminary investigation was made. By June it was complete, and
regulations were issued to enforce it. The collectors were given once
more the office of judge of the courts of diwanni adalat. In this
capacity they dealt with civil cases, appeal lying for the more im-
portant to the sadr diwanni adalat. To relieve the collector, an Indian
"register" was attached to each court to try cases up to 200 rupees.
The courts were prohibited from dealing with revenue cases, these
being reserved for the Board of Revenue. At the same time (27 June,
1787) the collectors were also given powers in criminal justice. The
authority of the magistrates was increased and conferred on the
collectors. They now had power, not merely of arrest, but of hearing
and deciding cases of affray, and of inflicting punishments up to
certain prescribed limits. The trial of more important cases lay still
with the Indian courts, and appeal lay with the nizamat adalat at
Murshidabad.
The new collectors had, therefore, larger districts and far greater
powers, for with the exception of the fifteen commercial residents they
were the only instruments of the Company's authority in the districts.
It was an essential feature of the scheme that they should be ade-
quately paid. "For if all chance of saving any money. . . without
acting dishonestly, is removed, there will be an end of my reforma-
tion. ” And so, instead of the 1200 rupees per month formerly received,
they were now to have a salary of 1500. But this was to be regarded
as "the means of subsistence". "In the nature of reward" they had
## p. 444 (#472) ############################################
444
BENGAL ADMINISTRATIVE SYSTEM, 1786-1818
a commission on the revenue they collected. Fixed at an average
rate of “rather short of 1 per cent. on the actual collections”, it varied
according to the size of their charge. For the largest collectorship-
Burdwan-the amount expected to be realised was 27,500 rupees per
annum. The collectors were provided further with adequate assistance.
Two European assistants were given to each district: the first to
receive 500 rupees per month and the other 400. Where a third was
necessary he should receive 300. So rewarded, the collectors were
forbidden, by letter of 18 July, 1787, directly or indirectly to enter
upon trade. In their case, unlike that of the commercial residents,
breach of this rule could easily be detected; and Cornwallis, there-
fore, did not hesitate to assert it.
With these changes the more fundamental reforms in the ad-
ministrative system were for the time complete, and Cornwallis was
able to issue detailed regulations covering all sides of the collectors'
work.
cultivators, the protection of formal contracts.
Neither of these encomiums can be substantiated. The assessment of
1772 was summary and admitted by its authors to have been too high.
The system of putting up the farms to open auction resulted in utterly
fictitious values that were never realised and was soon afterwards
forbidden by the Company. The system of pattahs, or leases, com-
pletely broke down, and failed, then as later, to protect the ryot.
Furthermore, the reinstatement of the kanungos, the abolition of
collectors, the establishment of the provincial diwans, and lastly the
excessive power placed in the hands of the diwan of the Committee
of Revenue, all testify to the incapacity of Hastings in his administra-
.
1
1 Letter from the Burdwan Council, Governor-General's Proceedings; ia
April, 1777.
## p. 431 (#459) ############################################
)
MACPHERSON'S REFORMS
431
tion of the Bengal land revenue; it is not too much to say that in this
respect his achievements compare unfavourably with those of
Muhammad Reza Khan. But Hastings was not a civil servant of the
To judge him, therefore, by the crown standard of a later
date is unjust and unhistorical. The Company's servants were imbued
with one idea : they came to serve the Company first and last; their
intensity of purpose made the East India Company master of India;
and this purpose was not the less strong because it did not profess to
be governed by the restrictions which are attached to an administra-
tive service of the crown. Hastings gave his employers a service and
devotion that was unflinching in its loyalty, that feared no difficulty,
that shrank from no adversary; although he may have failed in his
personal handling of the land revenue, he is entitled to the credit of
having selected some most able officers to deal with this branch of
the administration. Conspicuous among these were Shore, David
Anderson, Samuel Charters, Charles Croftes and James Grant. In
the same week as Hastings handed over charge of the government, a
letter 1 from the court of directors was received calling for an accu-
rate account of the administration at the precise period at which
Hastings resigned his office; a foretaste, had he but known, of the
anxious days ahead.
On 25 April, 1786, the new scheme was published: it spelt
decentralisation. “The division of the province into districts is the
backbone of the whole system of the reforms. ” 2 The collector becomes
a responsible officer, making the settlement and collecting the reve-
nue; the provincial diwans were abolished; and the districts were
reorganised into thirty-five more or less fiscal units, instead of the
previous "series of fiscal divisions over which the earlier collectors
had exercised their doubtful authority";g these thirty-five districts
were reduced in 1787 to twenty-three. These measures of the local
government were reinforced by orders from the court of directors
dated 21 September, 1785, which were published in Calcutta on 12
June, 1786; under them the Committee of Revenue was reconstituted
and officially declared to be the Board of Revenue. The president of
the board was to be a member of the governor-general's council. The
special regulations drawn up for the guidance of the board may be
read in the pages of Harington and Colebrooke. Its duties were those
of controlling and advising the collectors and sanctioning their settle-
ment. On 19 July the office of Chief Saristadar was instituted to bring
the revenue records, hitherto the property of the kanungos, under the
control of government. This measure was long overdue, and had been
urged by the abler district officers since 1772, as being "no less
calculated to protect the great body of the people from oppression
2
1 Committee of Revenue's Proceedings, 14 February, 1785.
2 Ascoli, op. cit. pp. 38-40.
8 Idem.
## p. 432 (#460) ############################################
432
REVENUE ADMINISTRATION OF BENGAL, 1765-86
than to secure the full and legal right of the Sovereign". James Grant
was selected to be the first Chief Saristadar, being specially chosen
for his interest in and research among the revenue records. For the
first time since the assumption of the diwanni, government had made
a resolute effort to reduce the kanungos to their constitutional position
in the state.
The reforms of 1786 were, therefore, the work of men who desired
to gain the confidence of and to co-operate with the local district
officer. The authors of the reforms were convinced from their own
district experience that the real work of the revenue must be carried
out by trusted officers on the spot; they set themselves to create the
conditions and atmosphere in which those officers could best work.
The period 1765-86 in the administration of the land revenue in
Bengal by the Company's servants is a record of progress from the
employment of untested theories to the establishment of an adminis-
tration based on much solid knowledge. A careful perusal of the
voluminous manuscript proceedings of the Committees of Revenue
during those years reveals a fact too little known, namely, that this
progress was largely the result of unrecognised work by the district
officers of the Company in their own districts where, generally
speaking, they laboured to establish a just and humane collection of
the land revenue. Their advice, based on sound local knowledge, was
too often rejected by their official superiors in Calcutta, by whom,
as well as by the Court of Directors, they were regarded with suspi-
cion and even hostility. Their persistence had its reward; twenty
years after the assumption of the diwanni the first sound and just
administration of the land revenue was established.
NOTE. The reader has doubtless found the various references to boards and
committees of revenue confusing.
In 1769 the Council had delegated its authority in revenue matters to a
"select committee” drawn from its own members. This select committee in
1772 appointed the Committee of Circuit to examine the conditions with a view
to making a new settlement. The Committee of Circuit in August, 1772, pro-
posed that the whole Council should compose a Board of Revenue—this was
established in October, 1772, as the Committee of Revenue, and remained in
existence till 1781, when it was reorganised and composed of members junior
to and subordinate to the Supreme Council, but still retained its name "Com-
mittee of Revenue”. The term “board" is used indifferently by contemporary
writers up to 1781; after 1781 it indicates the Supreme Council when sitting to
hear revenue appeal cases from the Committee of Revenue. The modern Board
of Revenue dates from 1786, when it replaced the second Committee of Revenue.
## p. 433 (#461) ############################################
CHAPTER XXVI
1
THE BENGAL ADMINISTRATIVE SYSTEM,
1786-1818
THE Select Committee of 1781 had been directed to find means
for gaining not only "security and advantage" for Britain but "the
happiness of the native inhabitants," and from the discussions of the
years 1781-4 certain maxims of local government had clearly emerged.
There must be a reform of abuses among the Company's servants;
the methods by which they grew rich must be watched; they must
no longer take presents. Their trading activities must no longer
operate to destroy the trade of native merchants and bankers. The
system of monopolies must be restricted. The rights of zamindars
and land-holders must not be superseded in order to increase the
revenues. There must be even-handed justice for Europeans and
Indians alike.
The instructions to Cornwallis embodied the principles thus de-
scribed. In relation to local government three main subjects were
discussed. First, there was the land revenue. It was to be handled
leniently : “a moderate jama, regularly and punctually collected"
was to be preferred to grandiose but unrealised schemes. It was to
be settled “in every practicable instance” with the zamindars. Ulti-
mately the settlement was to be permanent, but at present it was to
be made for ten years. Secondly, there was the question of adminis-
tration. This was to be organised upon a simple and uniform basis.
The frequent changes of recent years had produced injury and
extravagance, and made "steady adherence to almost any one system”
a preferable policy. The higher officers should be Europeans; and
the subordinates Indians, as being more suited to the detailed work
of the province. These higher officers were to be chosen carefully
froni the principal servants of the Company; men "distinguished for
good conduct and abilities, and conversant with the country langu-
ages". They should be adequately paid, partly by salary, partly
by commission. Their districts were to be large; there should not be
more than twenty, or at most twenty-five, in the whole province. In
the -settlement of the revenue, and in the administration of justice,
they were to have wide authority.
Thirdly, there was the judicial system. The instructions contem-
plated the continuance of the existing system of civil justice, under
European judges. In the districts the collectors of revenue were to
be, also, judges of the civil courts; for this would "tend more to
simplicity, energy, justice and economy" In criminal jurisdiction,
too, the existing system was to be maintained. Indian control was to
28
## p. 434 (#462) ############################################
434
BENGAL ADMINISTRATIVE SYSTEM, 1786-1818
continue. Although the collector was to enjoy magisterial powers of
arrest, “the power of trial and punishment must on no account be
exercised by any other than the established officers of Mahomedan
judicature". The judicial system indeed was to be informed with.
European ideas of justice, but to be governed by Indian usages. One
point recurred frequently throughout the instructions. There was to
be a general movement for purification and economy. Abuses of all
kinds were to be swept away; peculation was to cease; useless offices
were to be reduced, and the interests of economy and simplicity were
to regulate the various branches of the administrative system. Such
was the task of Cornwallis.
The proposal to make Cornwallis the first instrument of the new
policy was first mooted in 1782 during the administration of 'Shel-
burne;a and his appointment had been one feature of the scheme for
Indian reform proposed by Dundas in the report of the Secret Com-
mittee of 1781. The Fox-North coalition rejected the idea, but Pitt
revived it on their defeat. The negotiations began in April, 1784;3
at the end of the year they seemed to have failed completely; a
renewal in February, 1785, was again a failure; and it was not until
February, 1786, that Cornwallis accepted. Then the union of the
military command with the governor-generalship, and the promise
that the governor-general should be independent of his council,
induced Cornwallis to accept. He finally landed at Calcutta in
September, 1786.
Cornwallis was a man of middle age with extensive military
experience. He had taken part in the campaigns of the Seven Years'
War, and had gained sufficient reputation to secure his appointment
in 1776 to command in America. There, his ultimate failure, after
some brilliant preliminary successes, did not suffice to ruin his career.
Even his opponent, Fox, paid homage to his abilities in 1783, and his
employment under Pitt on the mission of 1785 to Prussia was sufficient
evidence of the trust in which he held him. Of the affairs of India,
he had little knowledge and no experience. He is distinguished as
the first governor-general who did not climb to power from the ranks
of the Company's service. Appointed by the Company, he owed his
nomination to the ministry. His selection was one more evidence of
the new spirit in Indian affairs. It brought India a stage nearer to
incorporation in the overseas empire of Britain.
Inexperience made Cornwallis largely dependent on advisers both
in framing his policy, and, still more, in working it out. The broad
1 The instructions are in a series of dispatches dated 12 April, 1786. They are
to be found in I. O. Records, Despatches to Bengal, vol. XV. One of the most
important of these is printed as Appendix 12 to the Second Report from the
Select Committee of the House of Commons on the Affairs of the East India
Company. Parliamentary Papers, 1810, V, 13.
Cornwallis to Pitt, & November, 1784. Ross, Correspondence, 1, 179.
Ross, op. cit. I, 167.
4 Idem, p. 208.
3
## p. 435 (#463) ############################################
CORNWALLIS'S ADVISERS
435
lines of his action were laid down by the administration; the instruc-
tions of the court of directors gave more detailed guidance. But
much was left necessarily to the men on the spot, and hence the
servants of the Company by their practical knowledge had great
influence on the result: Cornwallis acknowledged plainly his debt
to them. Perhaps the chief of them was John Shore, chosen especially
by the directors to supply the local knowledge which Cornwallis
lacked. “The abilities of Mr. Shore", Cornwallis wrote a month after
his arrival, "and his knowledge in every branch of the business of
this country, and the very high character which he holds in the settle-
ment, render his assistance to me invaluable. ”i And again in 1789
in connection with the revenue settlement, he said, “I consider it as
singularly fortunate that the public could profit from his great ex-
perience and uncommon abilities". 2 In revenue matters Cornwallis
trusted mainly to Shore. He was by far the most experienced of the
Company's servants in this branch, for he had been in its service
since 1769, and had held important revenue offices since 1774. Francis
had brought him to the front, but Hastings also had recognised his
merit.
James Grant is indeed as famous as Shore in connection with the
revenue settlement. But Grant had but little practical experience.
His reputation has come from his wide study of the revenue system,
and the series of published works in which he stated the results of his
learning. He was an expert rather than a man of affairs. As saristadar
he had unrivalled opportunity for studying revenue records, and
Cornwallis retained the office of saristadar till Grant went home in
1789. But in making important decisions he preferred men of experi-
ence to men of learning. After Shore, Cornwallis therefore put
Jonathan Duncan, another experienced collector; and later governor
of Bombay. He was little known in England when Cornwallis arrived,
but "he is held in the highest estimation by every man, both European
and native, in Bengal", wrote Cornwallis in 1787, "and, next to Mr
Shore, was more capable of assisting me, particularly in re
matiers, than any man in this country”. 3 He had, said Cornwallis in
1789, “besides good health . . . knowledge, application, integrity, and
temper", the last “not the least useful”. * Although a junior, he was
recommended by Cornwallis for a seat on the council as early as
1788. 5 And in the last stages of the revenue settlement Cornwallis
found consolation in the approval of Duncan for his differences with
Shore over the question of permanence.
The final decision in that matter was due, however, largely to
Charles Grant. When Dundas decided to support Cornwallis against
enue
")
1 Cornwallis to Dundas, 15 November, 1786. Ross, op. cit. 1, 227.
2 Cornwallis to Court of Directors, 2 August, 1789. Ross, op. cit. I, 545.
3 Cornwallis to Dundas, 14 August, 1787. Ross, op. cit. I, 271.
4 Cornwallis to N. Smith, 9 November, 1789. Ross, op. cit. I, 449.
5 Dundas to Cornwallis, 20 February, 1789. Ross, op. cit. 1, 410-11.
## p. 436 (#464) ############################################
436
BENGAL ADMINISTRATIVE SYSTEM, 1786-1818
1
the advice of Shore, it was partly at least owing to the representations
of Charles Grant. He had no personal knowledge of revenue matters,
but he received the greatest share in the confidence of Cornwallis,
and had given him invaluable help during the years 1786-90. When
Grant sailed for home in 1790 Cornwallis recommended Dundas "to
converse with him frequently upon every part of the business of this
Country", and his zeal for the governor-general's interests gave him
considerable influence over Dundas during the years 1790-3. James
Grant (a cousin of Charles),- like Shore and Duncan, specialised on
the revenue side. But Charles Grant was the chief adviser in matters
of trade. His loss "in the commercial line", wrote Cornwallis when
he left India, "is irreparable". He had been secretary to the Board
of Trade in the time of Hastings and had been appointed by the
board in 1781 commercial resident at Malda. He was outstanding
both in experience and integrity. At first, at least, Cornwallis thought
him the only honest man on the commercial side, and trusted very
largely to him in his attempt to reform that branch of the adminis-
tration. In this work Cornwallis had also the help of Charles Stuart,
member of council and president of the Board of Trade (1786-9).
Stuart, however, never gained in the same degree the confidence of
Cornwallis, and he lacked the wide commercial experience of
Charles Grant.
In his judicial work Cornwallis had also an invaluable adviser.
Here the Company's servants could be of but limited use. Cornwallis
took full advantage of their experience in judicial business, but their
experience was relatively small and they lacked expert knowledge.
Some of them-Charles Grant among them-were of great value in
carrying out reforms: but only the judges could help in devising them.
Cornwallis was, therefore, fortunate in the aid of Sir William Jones,
an oriental scholar of reputation unrivalled in his own time, and a
man of great practical ability, who had devoted many years to the
study and practice of the law. In 1783 he had come to India as judge
of the Supreme Court of Judicature at Calcutta, and he brought to his
task the zeal of an enthusiast, and the knowledge of an expert. “A
good system of laws" seemed to him the first necessity of India; and,
following the lead of Hastings, he set himself to this end to codify
the existing Hindu and Muhammadan laws. But he realised also the
need for "due administration" and a "well-established peace". He
gave, therefore, full aid to Cornwallis in his reform of the judicial
administration and in the regulation of the police.
Although the policy that Cornwallis came to enforce in 1786 was
new, it was not wholly new. In every direction Cornwallis built
1 Cornwallis to Dundas, 12 February, 1790. Ross, op. cit. I, 480.
2 Firminger (ed. ), Fifth Report . . . on the Affairs of the East India Com-
pany . . . 1812, 1, p. xiv.
:: Ross, op. cit. 1, 306.
.
## p. 437 (#465) ############################################
CORNWALLIS'S CHARACTER
437
on foundations already laid or begun to be laid by his predecessors,
and especially by Hastings. It was the emphasis rather than the
principle that was new; but the principles were now clearly stated,
and the strength of the home government was used to enforce them.
Every aspect of reform was foreshadowed in the work or in the
projects of Hastings, and hence the solidity of the work of Cornwallis.
Yet even when all allowance has been made, much credit must be
given to Cornwallis himself. Certainly no man of genius, he con-
tributed no new ideas to the work he undertook. He was not an
expert like Jones or Grant, nor a man of wide experience like Shore.
He was not a doctrinaire like Francis, nor an inventive genius like
Hastings.
He was content, as Hastings had never been, to plead a
command from home as a final cause for decision, and this respect
for authority was his outstanding characteristic. But in spite of this
he possessed great qualities and stood for important principles. Above
all, he was, beyond reproach, upright and honest. He had not to
fear a sudden decline in favour; he had no pettiness of ambition;
he was not a time-server; and he left behind him a tradition of service
a
which was of lasting value in Indian administration. Loyalty and
integrity there had been before, but it was a loyalty to the Company
and an integrity in the Company's affairs. Cornwallis was a public
servant who upheld national and not private traditions. His service
was to the Crown and not to the people over whom he ruled, and he
thus embodied fitly the new spirit of Indian rule.
To this invincible honesty and desire for the public good, he added
a soldier's sense of duty to his superiors. The command of Dundas
or Pitt, or even of the court of directors, was decisive to him. He had
a belief in the possibilities of justice, a faith in the standards by which
conduct would be judged at home. He was determined that these
standards should not be lowered in India, nor overlaid by native
practices. To secure this he gave the higher administrative posts to
Englishmen, and he was always loth to leave real responsibility in
native hands. Yet he was wise enough to see that this was not enough :
these Englishmen must maintain the English standards. They must
be appointed and promoted for merit, not by patronage. In the interests
of this maxim he was prepared to resist the recommendations of all,
even of the Prince Regent or of the directors. Lastly, every deviation
from honesty must be rigorously punished.
This is the system Cornwallis set out to establish, and no doubt
because it was practical rather than ideal, he came much nearer than
most reformers to a realisation of his aims.
а
When Cornwallis landed in Bengal in September, 1786, important
changes in administration had just taken place. More than twenty
years of experiment had gone to make them, and the recent innovations
were rather a further stage in experiment than a final reorganisation.
Much of the work of Cornwallis also was experimental in character,
## p. 438 (#466) ############################################
438
BENGAL ADMINISTRATIVE SYSTEM, 1786-1818
but his greatest claim to importance is that he permanently established
some features of administration.
It is necessary to go back more than twenty years to explain the
character of the system with which Cornwallis dealt. The main work
of the Company in India had at one time consisted, like that of any
other company for overseas trade, in import from England and export
home. The import had from early times consisted mainly of specie,
so that the most burdensome duty of the Company's servants was
the provision of the cargoes for England, cargoes for the most part of
raw silk, wool, cotton, or indigo; in other words the “investment". In
the mid-eighteenth century the import of specie ceased : the import of
English goods, never large, was still comparatively small, and the main
source from which the investment was provided—and the local
expenses paid-was the territorial revenue of Bengal.
The result was a dual system of administration. The management
of this revenue and the exercise of responsibilities arising from it, was
one branch of the Company's work; the provision of the investment
the other. Hastings in 1785 had written of the division between “the
general and commercial departments". The Company's servants in
all parts of Bengal wrote to Cornwallis on his arrival describing their
years of experience in the "revenue" or the "commercial line". The
commercial was the senior branch, but the revenue line was already
becoming the more important.
Since 1774 the investment had been under the supervision of the
Board of Trade. Originally a body of eleven members, very imper-
fectly controlled by the Supreme Council, the Board of Trade had been
reorganised in May, 1786. It was now definitely subordinated to the
Supreme Council, and reduced to five members. One of them, the
president, was Charles Stuart, a member of council. Under the board,
the investment was in the hands of the Company's servants stationed
at scattered centres in Bengal. The chief "residents” at the various
stations were responsible to the board for such share of the investment
as had been assigned to them. In dealing with it they had great op-
portunities for good or evil in coming into contact with the people, and
especially they had valuable and recognised facilities for private trade.
From the time of the board's first appointment in 1774 it had been
increasingly the practice to obtain the investment by a series of
contracts. At first these contracts were generally direct with Indian
manufacturers or agents, the residents merely exercising supervision
over them. Since 1778, however, the contracts had been made more
frequently with the Company's servants themselves. So a resident
at one of the Company's stations contracted with the Board of Trade,
and then obtained the goods from the Indian manufacturers at as great
profit as he could get. This system, though a direct breach of their
covenants and of an order of the Company of 1759, was none the less
the general rule. The directors were so complaisant of the breach that
## p. 439 (#467) ############################################
THE EXISTING SYSTEM
439
.
even in their reform proposals of 1786 they did not think hat it was
"necessary to exclude our servants from entering into contracts".
Their criticism was not one of principle, but of practice. The prices
paid were high, the quality of the goods was poor, and there was a
general feeling that corruption and oppression were frequent. The
reform of the Board of Trade and the commercial establishment gene-
rally was one of the first tasks of Cornwallis.
The "general department" was more complicated if less corrupt
in its management of local administration. It had come into existence
slowly during the eighteenth century, and bore still a few marks of its
piecemeal origin, though broadly speaking in 1786 there was one
system for the whole province. It is in this sphere that those frequent
changes had taken place which the directors deprecated. The changes
were really a series of attempts, on the “rule of false” extolled by
Hastings, to reach some satisfactory system for a most complicated and
varied work.
In the “general department”, it may be said without question,
the chief concern was the revenue, and the second the administration
of civil justice. As diwan the Company was responsible for both these
branches of administration. Criminal justice was outside the scope
of the diwan, although the Company here also had obtained a large
measure of control. One of the results of the work of Cornwallis was
that before he left, in 1793, this side of the administrative system had
definitely bifurcated. There was the management of revenue on the
one side: the administration of civil and criminal justice on the other.
But this involved a breach with historical origins, and it was not
achieved until 1793.
In 1786 the chief machinery in the sphere of revenue was the
Board of Revenue. This body was stationed at Calcutta, and beforc
Cornwallis landed, had just undergone change, like the Board of
Trade. In July, 1786, at the instance of the court of directors it had
received an addition to its existing membership. There were to be,
as previously, four members; but a president was added, who must be
a member of the Supreme Council. The president appointed in 1786
was John Shore.
The work of the revenue administration concerned certain main
sources of revenue. By far the most important was the revenue from
land, and the machinery for revenue administration had grown up
mainly in connection with this. There was also, however, the sair
revenue-from customs and excise-and the revenues from the opium
contract and the monopoly of salt. In 1786 the sair revenue was
managed by the same agencies as the revenue from land. The opium
revenue had been managed ever since 1773 by a contract with certain
Indians, who paid a royalty to the Company. In 1785 the contract
had been disposed of to the highest bidder on a four-years' agreement.
This system was, therefore, in force when Cornwallis arrived. In
## p. 440 (#468) ############################################
440
BENGAL ADMINISTRATIVE SYSTEM, 1786-1818
connection with the opium, the duties of the Company's servants,
when once the contract had been let, were limited to a general right
of enquiry to prevent the oppression of the cultivators. The monopoly
of salt was another source of revenue. Here again the system in force
was at one time one of contract. But in 1780 Hastings had substituted
a system of European agency. A number of the Company's servants
were employed to superintend the manufacture and sale of salt, the
price being fixed annually by the Supreme Council. Whereas, there-
fore, work in connection with the sair revenue and the opium contract
was undertaken by the same officers as those of the land revenue, a
small separate establishment, responsible directly to the Supreme
Council, dealt with the monopoly of salt.
The land revenue organisation consisted, under the board of
Revenue, of a number of the Company's servants, known already as
collectors. Here also reorganisation had taken place. 1
In addition to the collection of revenue, and of the information
upon which the assessment was made, the collectors, like the zamin-
dars, had originally judicial functions. The judicial system, however,
like the revenue administration, had been the subject of repeated
experiments, and as a result, when Cornwallis arrived, the work of
collecting the revenue was almost wholly divorced from that of
administering justice. Civil justice was administered in local civil
courts (diwanni adalat) presided over by Company's servants; from
them appeal lay to the governor-general in council in the capacity
of judges of the sadr diwanni adalat. For. criminal cases there was
again a separate organisation. Magisterial powers were indeed vested
in the judges of the civil courts; but the power of trial and punishment
lay in district courts for criminal cases, presided over by Indian judges.
Appeal lay from them to the nizamat adalat, now under the 'super-
vision of the governor-general in council. The final power, therefore,
in civil cases directly, and in criminal cases indirectly, lay with the
Supreme Council, but the local courts were almost everywhere outside
the control of the Company's collectors. In most districts then there
were collectors of revenue, judges of the diwanni adalat, and in some
also commercial residents, all of them Company's servants, with
functions in many particulars defined rather by tradition than by
regulation; all of them in the minds of critics at home suspected of
too great concentration on "private interests".
In 1786, Bengal contained all the pieces that were to form the
administrative mosaic of British India, but the pattern had not yet
been decided; and even the collector was not yet established as the
centre-piece. The system was complicated, illogical, wasteful and
suspected of being corrupt. Cornwallis had justly received instruc-
tions to simplify, to purify and to cheapen the administrative system.
>
1 Cf. pp. 417. sag. supra.
## p. 441 (#469) ############################################
THE BOARD OF TRADE
441
>
In a letter to Cornwallis of 12 April, 1786, the Secret Committee
pressed on him the urgency of removing abuses and corruption in
the Company's service. The reforms were most needed in the com-
mercial administration. The Board of Trade, which should have
acted as a check, was suspected of collusion; and fraud and neglect
went alike unpunished. Cornwallis was directed that suits should,
if necessary, be instituted against defrauding officials, and that they
should be suspended from the Company's service.
In fact the task of Cornwallis here, as in the question of revenues,
was two-fold. He had to cleanse the establishment from corruption,
and to revise the system into which the corruption had grown. It
needed only a few weeks to convince him of the need for cleansing
the establishment; there would be no lack of "legal proofs” of both
"corruption" and "shameful negligence”. As the weeks passed,
information poured in upon him as to the methods and difficuīties of
the trade. Requisitions were sent to the commercial residents for
accounts, stretching back in some cases over twenty years. In
October, Cornwallis summoned Charles Grant from Malda to Calcutta,
to obtain his information and advice.
In Janviary, 1787, Cornwallis was ready to act. He informed a
number of contractors and members of the Board of Trade that bills
in equity would be filed against them; pending judgment the sus-
pected persons were suspended from office. The result was the
dismissal of several of the Company's servants, including members of
the old Board of Trade. The directors urged further enquiries, but
Cornwallis had confidence in the effect of these examples, and a
stricter system of surveillance for the future.
Meanwhile he was taking measures to build up the system anew.
In January, he had appointed Charles Grant as fourth member of
the Board of Trade, and with his help set himself to collect informa-
tion upon which to base a revision of the commercial system. Already
he had decided on a change. Instead of contracts with the commercial
residents and others, he revived the system of agency by the commer-
cial residents. It was possible, as yet, to introduce the new plan only
partially, but "in all practicable instances" it was adopted even for
the 1787 investments. By the end of 1788 Cornwallis thought the trial
had been sufficiently long, and definitely adopted the agency system.
The decision was typical of the early period of Cornwallis's reforms.
His experience of the culpability of the Company's servants did not
prejudice him against their employment. He did not feel justified, he
told the directors, in laying down “at the outset as a determined point,
that fidelity was not to be expected from your servants”. He
preferred to try the effect of "open and reasonable compensation for
1 Ross, op. cit. I, 242.
2 P. R. O. , Cornwallis Papers, Packet XVIII. Charles Stuart to Cornwallis,
18 August, 1787.
## p. 442 (#470) ############################################
442
BENGAL ADMINISTRATIVE SYSTEM, 1786-1818
1
honest service”, and believed that many would prefer this to "con-
cealed emolument", if it could be obtained. So in the new system
he made the commercial residents the representatives of the Com-
pany in the direct control of the investment. They were responsible
to the Board of Trade, but even so, their own responsibilities were
great. They were to arrange the prices with the manufacturers, to
make the necessary advances to them, to receive from them the
goods produced, and to supervise the carrying out of the work. The
residents were to be paid adequately by a commission on the
investments passing through their hands. There was to be no
prohibition of private trade, for it could not be enforced, and in such
circumstances "to impose restraints. . . would not remove supposed
evils, but beget new ones”.
The new system was enforced by strict regulations issued as early
as March, 1787. There was to be no oppression of the Indian producer,
or the Indian or foreign trader. It had been the former practice to
prevent weavers, working for the Company, from undertaking any
other work. This system, which had tended to squeeze out all Indian
trade, was now revoked, and it was required only that work should
be executed in the order of the advances received for it. Cornwallis,
indeed, looked to the resident for the protection of the Indian workers.
These commercial servants came into closer contact with the people
than did the collectors of revenue, and, therefore, acted as "useful
barriers" to the oppression of Indian farmers or zamindars.
The bad season of 1788-9 was a severe trial to the new system,
but Cornwallis held that it had "stood the test". From this time he
made no material change in its organisation. The investment, he
wrote in 1789, "is now reasonably and intelligently purchased, and
delivered to the Government at its real cost”. From the commercial
standpoint, this was what had so long been wanted. Characteristically,
he went further, and foresaw the spread downwards, "through the
wide chain of the natives" connected with trade, of the new "prin-
ciple of integrity"; and, as he said, "the establishment of such a
principle must. . . be regarded as a solid good of the highest kind”. ?
If the system did not prove to have so wide an effect as this, it was
justified in its more immediate results, and the system for conducting
the Company's trade which Cornwallis set up was not materially
altered after him. These reforms, therefore, were among the lasting
achievements of Cornwallis.
1
While Stuart and Grant on the Board of Trade were reforming
the commercial side, a similar process was being applied to the ad-
ministration of revenue and justice. Here the chief instrument and
adviser of Cornwallis was John Shore. Already a member of the
11. 0. Records, Bengal Letters Received, XXVIII, 310. Letter dated 1 August,
1789.
## p. 443 (#471) ############################################
REVENUE REFORMS, 1787
443
Supreme Council and the Board of Revenue, he was appointed pre-
sident of the Board of Revenue in January, 1787, and was largely
responsible for the character of the changes.
The preceding reforms, under Macpherson, had created thirty-
five revenue districts, each under a European collector. This officer
was the real authority in revenue matters in the district. For a post
of such importance his salary was ludicrously small, only 1200 rupees
per month. The collectors were "almost all", Cornwallis said," "in
collusion with some relative or friend engaged in commerce", and it
was suspected that even less honourable means were sometimes used.
The reforms in relation to the collector aimed at three things :
economy, simplification and purification. In the interests of economy
the number of districts was to be reduced; in the interests of both
economy and simplification, the divorce of revenue from justice was
to cease; in the interests of purification adequate payment was to
obviate the need for illicit gains.
Rumours of these changes were current as early as January, 1787,
but it was not until March (the end of the Bengal year) that definite
steps were taken. Then, in accordance with a scheme drawn up by
the Board of Revenue, the number of districts was reduced to twenty-
three; a reduction that brought down upon Cornwallis the protests
of the dispossessed. At the same time, preparations were made for a
second change : the union of revenue and judicial duties. In February
a preliminary investigation was made. By June it was complete, and
regulations were issued to enforce it. The collectors were given once
more the office of judge of the courts of diwanni adalat. In this
capacity they dealt with civil cases, appeal lying for the more im-
portant to the sadr diwanni adalat. To relieve the collector, an Indian
"register" was attached to each court to try cases up to 200 rupees.
The courts were prohibited from dealing with revenue cases, these
being reserved for the Board of Revenue. At the same time (27 June,
1787) the collectors were also given powers in criminal justice. The
authority of the magistrates was increased and conferred on the
collectors. They now had power, not merely of arrest, but of hearing
and deciding cases of affray, and of inflicting punishments up to
certain prescribed limits. The trial of more important cases lay still
with the Indian courts, and appeal lay with the nizamat adalat at
Murshidabad.
The new collectors had, therefore, larger districts and far greater
powers, for with the exception of the fifteen commercial residents they
were the only instruments of the Company's authority in the districts.
It was an essential feature of the scheme that they should be ade-
quately paid. "For if all chance of saving any money. . . without
acting dishonestly, is removed, there will be an end of my reforma-
tion. ” And so, instead of the 1200 rupees per month formerly received,
they were now to have a salary of 1500. But this was to be regarded
as "the means of subsistence". "In the nature of reward" they had
## p. 444 (#472) ############################################
444
BENGAL ADMINISTRATIVE SYSTEM, 1786-1818
a commission on the revenue they collected. Fixed at an average
rate of “rather short of 1 per cent. on the actual collections”, it varied
according to the size of their charge. For the largest collectorship-
Burdwan-the amount expected to be realised was 27,500 rupees per
annum. The collectors were provided further with adequate assistance.
Two European assistants were given to each district: the first to
receive 500 rupees per month and the other 400. Where a third was
necessary he should receive 300. So rewarded, the collectors were
forbidden, by letter of 18 July, 1787, directly or indirectly to enter
upon trade. In their case, unlike that of the commercial residents,
breach of this rule could easily be detected; and Cornwallis, there-
fore, did not hesitate to assert it.
With these changes the more fundamental reforms in the ad-
ministrative system were for the time complete, and Cornwallis was
able to issue detailed regulations covering all sides of the collectors'
work.
