No More Learning

Never was a method of defeating the oppressions of
monopoly more forcible, more simple, or more equitable: no sort of plausible objection could be made;
and it was in vain to think of evading it. It was
therefore met with the confidence of avowed and
determined injustice. The Presidency of Calcutta
openly denied to the prince the power of protecting
the trade of his subjects by the remission of his own
duties. It was evident that his authority drew to its
period: many reasons and motives concurred, and
? ? ? ? 78 NINTH REPORT OF SELECT COMMITTEE
his fall was hastened by the odium of the oppressions
which he exercised voluntarily, as well as of those to
which he was obliged to submit.
When this example was made, Jaffier Ali Khln,
who had been deposed to make room for the last actor, was brought from penury and exile to a station
the terms of which he could not misunderstand.
During his life, and in the time of his children who
succeeded to him, parts of the territorial revenue
were assigned to the Company; and the whole, under
the name of residency at the Nabob's court, was
brought, directly or indirectly, under the control of
British subjects. The Company's servants, armed
with authorities delegated from the nominal govern
ment, or attended with what was a stronger guard,
the fame of their own power, appeared as magistrates
in the markets in which they dealt as traders. It was
impossible for the natives in general to distinguish,
in the proceedings of the same persons, what was
transacted on the Company's account from what was
done on their own; and it will ever be so difficult to
draw this line of distinction, that as long as the Company does, directly or indirectly, aim at any advantage to itself in the purchase of any commodity whatever, so long will it be impracticable to prevent the servants availing themselves of the same privilege.
The servants, therefore, for themselves or for their
employers, monopolized every article of trade, foreign and domestic: not only the raw merchantable
commodities, but the manufactures; and not only
these, but the necessaries of life, or what in these
countries habit has confounded with them, - not ohily silk, cotton, piece-goods, opium, saltpetre, but not
unfrequently salt, tobacco, betel-nut, and the grain
? ? ? ? ON THE AFFAIRS OF INDIA. 79
of most ordinary consumption. In the name of the
country government they laid on or took off, and at
their pleasure heightened or lowered, all duties upon
goods: the whole trade of the country was either
destroyed or in shackles. The acquisition of the
Duanne, in 1765, bringing the Enlglish into the immnediate government of the country in its most essential branches, extended and confirmed all the former means of monopoly.
In the progress of these ruinous measures through
all their details, innumerable grievances were suffered
by the native inhabitants, which were represented in
the strongest, that is, their true colors, in England.
Whilst the far greater part of the British in India
were in eager pursuit of the forced and exorbitant
gains of a trade carried on by power, contests naturally arose among the competitors: those who were
overpowered by their rivals became loud in their complaints to the Court of Directors, and were very capable, from experience, of pointing out every mode of abuse.
The Court of Directors, on their part, began,
though very slowly, to perceive that the country which
was ravaged by this sort of commerce was their own.
These complaints obliged tile Directors to a strict
examination into the real sources of the mismanagement of their concerns in India, and to lay the folundations of a system of restraint on the exorbitancies of their servants. Accordingly, so early as the year
1765, they confine them to a trade only in articles
of export and import, and strictly prohibit them
from all dealing in objects of internal consumption.
About the same time the Presidency of Calcutta
found it necessary to put a restraint upon themselves,
? ? ? ? 80 NINTH REPORT OF SELECT COMMITTEE
or at least to make show of a disposition (with which
the Directors appear much satisfied) to keep their
own enormous power within bounds.
But whatever might have been the intentions either of the Directors or the Presidency, both found themselves unequal to the execution of a plan which
went to defeat the projects of almost all the English
in India, -possibly comprehending some who were
makers of the regulations. For, as the complaint
of the country or as their own interest predominated
with the Presidency, they were always shifting from
one course to the other; so that it became as impossible for the natives to know upon what principle to ground any commercial speculation, from the uncertainty of the law under which they acted, as it was when they were oppressed by power without any color
of law at all: for the Directors, in a few months after
they had given these tokens of approbation to the
above regulations in favor of the country trade, tell
the Presidency, " It is with concern we see in every
page of your Consultations restrictions, limitations,
prohibitions, affecting various articles of trade. " On
their side, the Presidency freely confess that these
monopolies of inland trade " were the foundation of
all the bloodsheds, massacres, and confusions which
have happened of late in Bengal. "
Pressed in this urgent manner, the Directors came
more specifically to the grievance, and at once annul
all the passports with which their servants traded
without duties, holding out means of compensation,
of which it does not appear that any advantage was
taken. In order that the duties which existed should
no longer continue to burden the trade either of the
servants or natives, they ordered that a number of
? ? ? ? ON THE AFFAIRS OF INDIA. 81
oppressive toll-bars should be taken away, and the
whole number reduced to nine of the most considerable.
When Lord Clive was sent to Bengal to effect a reformation of the many abuses which prevailed there,
he considered monopoly to be so inveterate and deeply rooted, and the just rewards of the Company's servants to be so complicated with that injustice to the country, that the latter could not easily be removed
without taking away the former. He adopted, therefore, a plan for dealing in certain articles, which, as
he conceived, rather ought to be called " a regulated
and restricted trade " than a formal monopoly. ByJ
this plan he intended that the profits should be distributed in an orderly and proportioned manner for
the reward of services, and not seized by each individual according to the measure of his boldness, dexterity, or influence.
But this scheme of monopoly did not subsist long,
at least in that mode and for those purposes. Three
of the grand monopolies, those of opium, salt, and
saltpetre, were successively by the Company taken
into their own hands, The produce of the sale of the
two former articles was applied to the purchase of
goods for their investment; the latter was exported
in kind for their sales in Europe. Tile senior servants had a certain share of emolument allotted to
them from a commission on the revenues. The junior servants were rigorously confined to salaries, on
which they were unable to subsist according to their
rank. -They were strictly ordered to abstain from all
dealing in objects of internal commerce. Those of
export and import were left open to young men without mercantile experience, and wholly unprovided
VOL. VIII. 6
? ? ? ? 82) NINTH REPORT OF SELECT COMMITTEE
with mercantile capitals, but abundantly furnished
witll large trusts of the public money, and with all
the powers of an absolute government. In this situation, a religious abstinence from all illicit game
was prescribed to men at nine thousand miles' distance from the seat of the supreme authority.
Your Committee is far from meaning to justify, or
eveni to excuse, the oppressions and cruelties used by
many ill supplying the deficiencies of their regular
allowances by all manner of extortion; but many
smaller irregularities may admit some alleviation
from thence. Nor does your Committee mean to
express any desire of reverting to the mode (contrived in India, but condemned by the Directors) of
rewarding the servants of an higher class by a regulated monopoly. Their object is to point out the
deficiencies in the system, by which restrictions were
laid that could have little or no effect whilst want
and power were suffered to be united.
But the proceedings of the Directors at that time,
though not altogether judicious, were in many respects honorable to them, and favorable, in the intention at least, to the, country they governed. For, finding their trading capital employed against themselves and against the natives, and struggling in vain
against abuses which were inseparably connected with
the system of their own preference in trade, in the
year 1773 they came to the manly resolution of setting an example to their servants, and gave up all
use of power and influence in the two grand articles
of their investment, silk and piece-goods. They directed that the articles should be bought at an equal
and public market from the native merchants; and
this order they directed to be published in all the
principal marts of Benigal.
? ? ? ? ON THE AFFAIRS OF INDIA. 83
Your Committee are clearly of opinion that no better method of purchase could be adopted. But it soon
appeared that in deep-rooted and inveterate abuses
the wisest principles of reform may be made to operate so destructively as wholly to discredit the design, and to dishearten all persons from the prosecution of it. The Presidency, who seemed to yield with the utmost reluctance to the execution of these
orders, soon made the Directors feel their evil influence upon their own investment; for they found the
silk and cotton cloths rose twenty-five per cent above
their former price, and a further rise of forty per
cent was announced to them.
SILK.
WHAT happened with regard to raw silk is still
more remarkable, and tends still more clearly to illustrate the effects of commercial servitude during
its unchecked existence, and the consequences which
may be made to arise from its sudden reformation.
On laying open the trade, the article of raw silk was
instantly enhanced to the Company full eighty per
cent. The contract made for that commodity, wound
off in the Bengal method, which used to sell for less
than six rupees, or thirteen shillings, for two pounds'
weight, arose to nine rupees, or near twenty shillings,
and the filature silk was very soon after contracted
for at fourteen.
The Presidency accounted for this rise by observing that the price had before been arbitrary, and that
the persons who purveyed for the Company paid no
more than " what was judged sufficient for the maintenance of the first providers. " This fact explains
? ? ? ? 84 NINTH REPORT OF SELECT COMMITTEE
more fully than the most labored description can
do the dreadful effects of the monopoly on the cultivators. They had the sufficiency of their maintenance measured out by the judgment of those who were to profit by their labor; and this measure was
not a great deal more, by their own account, than
about two thirds of the value of that labor. In all
probability it was much less, as these dealings rarely
passed through intermediate hands without leaving
a considerable profit. These oppressions, it will be
observed, were not confined to the Company's share,
which, however, covered a great part of the trade;
but as this was an article permitted to the servants,
the same power of arbitrary valuation must have been
extended over the whole, as the market must be
equalized, if any authority at all is extended over
it by those who have an interest in the restraint.
The price was not only raised, but in the manufactures the quality was debased nearly in an equal
proportion. The Directors conceived, with great reason, that this rise of price and debasement of quality
arose, not from the effect of a free market, but from
the servants having taken that opportunity of throwing upon the market of their masters the refuse
goods of their own private trade at such exorbitant
prices as by mutual connivance they were pleased
to settle. The mischief was greatly aggravated by
its happening at a time when the Company were
obliged to pay for their goods with bonds bearing
an high interest.
The perplexed system of the Company's concerns,
composed of so many opposite movements and contradictory principles, appears nowhere in a more
clear light. If trade continued under restraint,
? ? ? ? ON THE AFFAIRS OF INDIA. 85
their territorial revenues must suffer by checking
the general prosperity of the country: if they set
it free, means were taken to raise the price and debase the quality of the goods; and this again fell
upon the revenues, out of which the payment for
the goods was to arise. The observations of the
Company on that occasion are just and sagacious;
and they will not permit the least doubt concerning the policy of these unnatural trades. " The
amount of our Bengal cargoes, from 1769 to 1773, is
2,901,1941. sterling; and if the average increase of
price be estimated at twenty-five per cent only, the
amount of such increase is 725,2981. sterling. The
above circumstances are exceedingly alarming to us;
but what must be our concern, to find by the advices
of our President and Council of 1773, that a further
advance of forty per cent on Bengal goods was expected, and allowed to be the consequence of advertisements then published, authorizing a free trade in the service? We find the Duanne revenues are in general farmed for five years, and the aggregate increase
estimated at only 183,1701. sterling (on a supposition
that such increase will be realized); yet if the annual
investment be sixty lacs, and the advance of price
thirty per cent only, such advance will exceed the increase of the revenue by no less than 829,3301. sterling. "
The indignation which the Directors felt at being
reduced to this distressing situation was expressed
to their servants in very strong terms. They attributed the whole to their practices, and say, " We are
far from being convinced that the competition which
tends to raise the price of goods in Bengal is wholly
between public European companies, or between merchants in general who export to foreign markets:
? ? ? ? 86 NINTH REPORT OF SELECT COMMITTEE
we are rather of opinion that the sources of this
grand evil have been the extraordinary privileges
granted to individuals in our service or under our
license to trade without restriction throughout the
provinces of Bengal, and the encouragement they
have had to extend their trade to the uttermost, even
in such goods as were proper for our investment,
by observing the success of those persons who have
from time to time found means to dispose of their merchandise to our Governor and Council, though of so bad a quality as to be sold here with great difficulty,
after having been frequently refused, and put up at
the next sale without price, to the very great discredit and disadvantage of the Company. " In all probability the Directors were not mistaken; for,
upon an inquiry instituted soon after, it was found
that Cantuf Babui, the banian or native steward and
manager to Mr. Hastings, (late President,) held two
of these contracts in his own name and that of his
son for considerably more than 150,0001. This discovery brought on a prohibition from the Court of Directors of that suspicious and dangerous dealing
in the stewards of persons in high office. The same
man held likewise farms to the amount of 140,0001.
a year of the landed revenue, with the same suspicious appearance, contrary to the regulations made under Mr. Hastings's own administration.
In the mortifying dilemma to which the Directors
found themselves reduced, whereby the ruin of the
revenues either by the freedom or the restraint of
trade was evident, they considered the first as most
rapid and urgent, and therefore once more revert to
the system of their ancient preSmption, and destroy
that freedom which they had so lately and with so
? ? ? ? ON THE AFFAIRS OF INDIA. 87
much solemnity proclaimed, and that before it could
be abused or even enjoyed. They declare, that, " unwilling as we are to return to the former coercive system of providing an investment, or to abridge that
freedom of commerce which has been so lately established in Bengal, yet at the same time finding it our
indispensable duty to strike at the root of an evil
which has been so severely felt by the Company, and
which can no longer be supported, we hereby direct
that all persons whatever in the Company's service,
or under our protection, be absolutely prohibited, by
public advertisement, from trading in any of those
articles which compose our investment, directly or
indirectly, except on account of and for the East India Company, until their investment is completed. "
As soon as this order was received in Bengal, it
was construed, as indeed the words seemed directly
to warrant, to exclude all natives as well as servants
from the trade, until the Company was supplied.
The Company's preemption was now authoritatively
reestablished, and some feeble and ostensible regulations were made to relieve the weavers who might suffer by it. The Directors imagined that the reestablishment of their coercive system would remove the evil which fraud and artifice had grafted upon one
more rational and liberal. But they were mistaken;
for it only varied, if it did so much as vary, the
abuse. The servants might as essentially injure
their interest by a direct exercise of their power as
by pretexts drawn from the freedom of the natives,- but with this fatal difference, that the frauds
upon the Company must be of shorter duration under a scheme of freedom. That state admitted, and
indeed led to, means of discovery and correction;
? ? ? ? 88 NINTH REPORT OF SELECT COMMITTEE
whereas the system of coercion was likely to be permanent. It carried force further than served the purposes of those who authorized it: it tended to covei all frauds with obscurity, and to bury all complaint
in despair. The next year, therefore, that is, in the
year 1776, the Company, who complained that their
orders had been extended beyond their intentions,
made a third revolution in the trade of Bengal. It
was set free again,- so far, at least, as regarded the
native merchants, -- but in so imperfect a manner
as evidently to leave the roots of old abuses in the
ground. The Supreme Court of Judicature about
this time (1776) also fulminated a charge against
monopolies, without any exception of those authorized by the Company: but it does not appear that
anything very material was done in consequence of it.
The trade became nominally free; but the course
of business established in consequence of coercive monopoly was not easily altered. In order to render
more distinct the principles which led to. the establishment of a course and habit of business so very
difficult to change as long as those principles exist,
your Committee think it will not be useless here to
enter into the history of the regulations made in the
first and favorite matter of the Company's investment, the trade in raw silk, from the commencement
of these regulations to the Company's perhaps finally
abandoning all share in the trade which was their
object.
RAW SILK.
THE trade in raw silk was at all times more popular in England than really advantageous to the Company. In addition to the old jealousy which pre
? ? ? ? ON THE AFFAIRS OF INDIA. 89
vailed between the Company and the manufactory
interest of England, they came to labor under no
small odium on account of the distresses of India.
The public in England perceived, and felt with a
proper sympathy, the sufferings of the Eastern provinces in all cases in which they might be attributed
to the abuses of power exercised under the Company's authority. But they were not equally sensible to the evils which arose from a system of sacrificing the being of that country to the advantage of this. They entered very readily into the former, but
with regard to the latter were slow and incredulous.
It is not, therefore, extraordinary that the Company
should endeavor to ingratiate themselves with the
public by falling in with its prejudices. Thus they
were led to-increase the grievance in order to allay
the clamor. They continued still, upon a larger
scale, and still more systematically, that plan of conduct which was the principal, though not the most
blamed, cause of the decay and depopulation of the
country committed to their care.
With that view, and to furnish a cheap supply
of materials to the manufactures of England, they
formed a scheme which tended to destroy, or at least
essentially to impair, the whole manufacturing interest of Bengal. A policy of that sort could not fail
of being highly popular, when the Company submitted itself as an instrument for the improvement of
British manufactures, instead of being their most
dangerous rival, as heretofore they had been always
represented.
They accordingly notified to their Presidency in
Bengal, in their letter of the 17th of March, 1769,
that " there was no branch of their trade they more
? ? ? ? 90 NINTH REPORT OF SELECT COMMIITTEE
ardently wish to extend than that of raw silk. " They
disclaim, however, all desire of employing compulsory measures for that purpose, but recommended every mode of encouragement, and particularly by augmented wages, " in order to induce nmanufacturers of wrought silk to quit that branch and take to the winding
of raw silk. "
Having thus found means to draw hands from the
manufacture, and confiding in the strength of a capital drawn from the public revenues, they pursue their
ideas from the purchase of their manufacture to the
purchase of the material in its crudest, state. "We
recommend you to give an increased price, if necessary, so as to take that trade out of the hands of other,merchants and rival nations. " A double bounty was
thus given against the manufactures, both in the labor and in the materials.
It is very remarkable in what manner their vehement pursuit of this object led the Directors to a
speedy oblivion of those equitable correctives before
interposed by them, in order to prevent the mischiefs
which were apparent in the scheme, if left to itself.
They could venture so little to trust to the bounties
given from the revenues a trade which had a tendency to dry up their source, that, by the time they
had proceeded to the thirty-third paragraph of their
letter, they revert to those very compulsory means
which they had disclaimed but three paragraphs before. To prevent silk-winders from working in their
private houses, where they might work for private
traders, and to confine them to the Company's factories, where they could only be employed for the Company's benefit, they desire that the newly acquired
power of government should bie effectually employed.
? ? ? ? ON. THE AFFAIRS OF INDIA. 91
"Should," say they, " thi practice, through inattention, have been suffered to take place again, it will be proper to put a stop to it, which may now be more effectually done by an absolute prohibition, under severe penalties, by the authority of government. "
This letter contains a perfect plan of policy, botli
of compulsion and encouragement, which must in a
very considerable degree operate destructively to the
manufactures of Bengal. Its effect must be (so far
as it could operate without being eluded) to change
the whole face of that industrious country, in order
to render it a field for the produce of crude materials
subservient to the manufactures of Great Britain.
The manufacturing hands were to be seduced from
their looms by high wages, in order to prepare a raw
produce for our market; they were to be locked
up in the factories; and the commodity acquired by
these operations was, in this immature state, carried
out of the country, whilst its looms would be left
without any material but the debased refuse of a
market enhanced in its price and scanted in its
supply. By the increase of the price of this and
other materials, manufactures formerly the most
flourishing gradually disappeared under the protection of Great Britain, and were seen to rise again
and flourish on the opposite coast of India, under the
dominion of the Mahrattas.
These restraints and encouragements seem to have
had the desired effect in Bengal with regard to the
diversion of labor from manufacture to materials.
The trade of raw silk increased rapidly. But the
Company very soon felt, in the increase of price and
debasement of quality of the wrought goods, a loss to
themselves which fully counterbalanced all the advan
? ? ? ? 92 NINTH REPORT OF SELECT COMMITTEE
tages to be derived to the nation from the increase of
the raw commodity. The necessary effect on the revenue was also foretold very early: for their servants
in the principal silk-factories declared that the obstruction to the private trade in silk must in the end
prove detrimental to the revenues, and that the investment clashes with the collection of these revenues. Whatsoever by bounties or immunities is encouraged out of a landed revenue has certainly
some tendency to lessen the net amount of that revenue, and to forward a produce which does not yield
to the gross collection, rather than one that does.
The Directors declare themselves unable to understand how this could be. Perhaps it was not so difficult. But, pressed as they were by the greatness of the payments which they were compelled to make
to government in England, the cries of Bengal could
not be heard among the contending claims of the
General Court, of the Treasury, and of Spitalfields.
The speculation of the Directors was originally fair
and plausible, --so far as the mere encouragement
of the commodity extended. Situated as they were,
it was hardly in their power to stop themselves in the
course they had begun. They were obliged to continue their resolution, at any hazard, increasing the
investment. "The state of our affairs," say they,
"requires the utmost extension of your investments.
You are not to forbear sending even those sorts which
are attended with loss, in case such should be necessary to supply an investment to as great an amount
as you can provide from your own resources; and we
have not the least doubt of your being thereby enabled to increase your consignments of this valuable
branch of national commerce, even to the utmost of
? ? ? ? ON THE AFFAIRS OF INDIA. 93
your wishes. But it is our positive order that no part
of such investment be provided with borrowed money
which is to be repaid by drafts upon our treasury in
London; since the license which has already been
taken in this respect has involved us in difficulties
which we yet know not how we shall surmount. "
This very instructive paragraph lays open the true
origin of the internal decay of Bengal.
The trade
and revenues of that country were (as the then system must necessarily have been) of secondary consideration at best. Present supplies were to be obtained,
and present demands in England were to be avoided,
at every expense to Bengal.
The spirit of increasing the investment from revenue at any rate, and the resolution of driving all
competitors, Europeans or natives, out of the market,
prevailed at a period still more early, and prevailed
not only in Bengal, but seems, more or less, to have
diffused itself through the whole sphere of the Company's influence. In 1768 they gave to the Presidency of Madras the following memorable instruction, strongly declaratory of their general system of policy.
"We shall depend upon your prudence," say they,
" to discourage foreigners; and being intent, as you
have been repeatedly acquainted, on bringing home
as great a part of the revenues as possible in your
manufactures, the outbidding them in those parts
where they interfere with you would certainly prove
an effectual step for answering that end. We therefore recommend it to you to offer such increase of
price as you shall deem may be consistently given, -
that, by beating them out of the market, the quantities by you to be provided may be proportionably
? ? ? ? 94 NINTH REPORT OF SELECT COMMITTEE
enlarged; and if you take this method, it is to be
so cautiously practised as not to enhance the prices
in the places immediately under your control. On
this subject we must not omit thle approval of your
prohibiting the weavers of Cuddalore from making up
any cloth of the same sortments that are provided
for us; and if such prohibition is not now, it should
by all means be in future, made general, and strictly
maintained. "
This system must have an immediate tendency
towards disordering the trade of India, and must
finally end in great detriment to the Company itself.
The effect of the restrictive system on the weaver is
evident. The authority given to the servants to buy
at an advanced price did of necessity furnish means
and excuses for every sort of fraud in their purchases.
The instant the servant of a merchant is admitted on
his own judgment to overbid the market, or to send
goods to his master which shall sell at loss, there is
no longer any standard upon which his unfair practices can be estimated, or ally effectual means by which they can be restrained. The hope entertained
by the Directors, of confining this destructive practice
of giving an enhanced price to a particular spot, must
ever be found totally delusive. Speculations will
be affected by this artificial price in every quarter
in which markets can have the least communication
with each other.
In a very few years the Court of Directors began
to feel, even in Leadenhall Street, the effects of trading to loss upon the revenues, especially on those of Bengal. In the letter of February, 1774, they observe, that, "looking back to their accounts for the
four preceding years, on several of the descriptions
? ? ? ? ON THE AFFAIRS OF INDIA. 95
of silk there has been an increasing loss, instead of
any alteration for the better in the last year's productions. This," they say, "threatens the destruction
of that valuable branch of national commerce. " And
then they recommend such regulations (as if regulations in that state of things could be of any service)
as may obtain " a profit in future, instead of so considerable a loss, which we can no longer sustain. "
Your Committee thought it necessary to inquire
into the losses which had actiually been suffered by
this unnatural forced trade, and find the loss so early as the season of 1776 to be 77,6501. , that in the
year 1777 it arose to 168,2051. This was so great that
worse could hardly be apprehended: however, in the
season of 1778 it amounted to 255,0701. In 1779 it
was not so ruinously great, because the whole import
was not so considerable; but it still stood enormously
high, - so high as 141,8001. In the whole four years
it came to 642,7251. The observations of the Directors were found to be fully verified. It is remarkable
that the same article in the China trade produced
a considerable and uniform profit. On this circumstance little observation is necessary.
During the time of their struggles for enlarging
this losing trade, which they considered as a national
object, - what in one point of view it was, and, if it
had not been grossly mismanaged, might have been
in more than one, -in this part it is impossible to
refuse to the Directors a very great share of merit.
No degree of thought, of trouble, or of reasonable expense was spared by them for the improvement of the
commodity. They framed with diligence, and apparently on very good information, a code of manufacturing regulations for that purpose; and several per
? ? ? ? 96 NINTH REPORT OF SELECT COMMITTEE
sons were sent out, conversant in the Italian method
of preparing and winding silk, aided by proper machines for facilitating and perfecting the work. This,
under proper care, and ill course of time, might have
produced a real improvement to Bengal; but in the
first instance it naturally drew the business from native management, and it caused a revulsion from the
trade and manufactures of India which led as naturally and inevitably to an European monopoly, in
some hands or other, as any of the modes of coercion which were or could be employed. The evil was
present and inherent in the act. The means of letting the natives into the benefit of the improved system of produce was likely to be counteracted by the general ill conduct of the Company's concerns abroad.
For a while, at least, it had an effect still worse: for
the Company purchasing the raw cocoon or silk-pod
at a fixed rate, the first producer, who, whilst he could
wind at his own house, employed his family in this
labor, and could procure a reasonable livelihood by
buying up the cocoons for the Italian filature, now incurred the enormous and ruinous loss of fifty per cent.
This appears in a letter to the Presidency, written by
Mr. Boughton Rouse, now a member of your Committee. But for a long time a considerable quantity
of that in the old Bengal mode of winding was bought
for the Company from contractors, and it continues to
be so bought to the present time: but the Directors
complain, in their letter of the 12th of May, 1780, that
both species, and particularly the latter, had risen so
extravagantly that it was become more than forty per
cent dearer than it had been fifteen years ago. In
that state of price, they condemn their servants, very
justly, for entering into contracts for three years, --
? ? ? ? ON THE AFFAIRS OF INDIA. 97
and that for several kinds of silk, of very different
goodness, upon averages unfairly formed, where the
commodities averaged at an equal price differed from
twenty to thirty per cent on the sale. Soon after,
they formed a regular scale of fixed prices, above
which they found they could not trade without loss.
Whilst they were continuing these methods to secure themselves against future losses, the Bengal ships
which arrived in that year announced nothing but
their continuance. Some articles by the high price,
and others from their ill quality, were such " as never could answer to be sent to Europe at any price. "
The Directors renew their prohibition of making fresh,
contracts, the present being generally to expire irr
the year 1781. But this trade, whose fundamentalt
policy might have admitted of a doubt, as applied:
to Bengal, (whatever it might have been with regard
to England,) was now itself expiring in the hands
of the Company, so that they were obliged to apply
to government for power to enlarge their capacity of
receiving bills upon Europe. The purchase by these
bills they entirely divert from raw silk, and order
to be laid out wholly in piece-goods.
Thus, having found by experience that this trade,
whilst carried on upon the old principles, of whatever advantage it might have been to the British
manufacturers, or to the individuals who were concerned in it in Bengal, had proved highly detrimental to the Company, the Directors resolved to expunge the raw silk from their investment. They gave up
the whole to private traders, on condition of paying
the freight, charges, and duties, -- permitting them
to send it to Europe in the Company's ships upon
their own account.
VOL. VIII. 7
? ? ? ? 98 NINTHt REPORT OF SELECT COMMITTEE
The whole of this history will serve to demonstrate
that all attempts, which in their original system or
in their necessary consequences tend to the distress
of India, must, and in a very short time will, make
themselves felt even by those in whose favor such attempts have been made. India may possibly in some
future time bear and support itself under an extraction of measure [treasure? ] Jr of goods: but much
care ought to be taken that the influx of wealth shall
be greater in quantity and prior in time to the waste.
On abandoning the trade in silk to private hands,
the Directors issued some prohibitions to prevent
monopoly, and they gave some directions about the
improvement of the trade. The prohibitions were
proper, and the directions prudent; but it is much
to be feared, that, whilst all the means, instruments,
and powers remain, by which monopolies were made,
and through which abuses formerly prevailed, all
verbal orders will be fruitless.
This branch of trade, being so long principally managed by the Company's servants for the Company and
under its authority, cannot be easily taken out of
their hands and pass to the natives, especially when it
is to be carried on without the control naturally inherent in all participation. It is not difficult to conceive how this forced preference of traffic in a raw commodity must have injured the manufactures, while it was the policy of the Company to continue the trade
on their own account. The servants, so far from deviating from their course, since they have taken the
trade into their own management, have gone much
further into it. The proportion of raw silk in the investment is to be augmented. The proportion of the
whole cargoes for the year 1783, divided into sixteen
? ? ? ? ON THE AFFAIRS OF INDIA. 99
parts, is ten of raw silk, and six only of manufactured
goods. Such is the proportion of this losing article
in the scheme for the investment of private fortunes.
In the reformed scheme of sending the investment
on account of the Company, to be paid in bills upon
Europe, no mention is made of any change of these
proportions. Indeed, some limits are attempted on
the article of silk, with regard to its price; and it is
not improbable that the price to the master and the
servant will be very different: but they cannot make
profitable purchases of this article without strongly
condemning all the former purchases of the Board of
Trade.
CLOTHS, OR PIECE-GOODS.
THE general system above stated, relative to the silk
trade, must materially have affected the manufactures
of Bengal, merely as it was a system of preference.
It does by no means satisfactorily appear to your
Committee that the freedom held out by the Company's various orders has been ever fully enjoyed, or that the grievances of the native merchants and manufacturers have been redressed; for we find, on good authority, that, at that very period at which it might
be supposed that these orders had their operation, the
oppressions were in full vigor. They appear to have
fallen heaviest on the city of Dacca, formerly the
great staple for the finest goods in India, -- a place
once full of opulent merchants and dealers of all descriptions.
The city and district of Dacca, before the prevalence of the East India Company's influence and
authority, manufactured annually to about three
? ? ? ? 100 NINTH REPORT OF SELECT COMMITTEE
hundred thousand pounds' value in cloths. In the
year 1776 it had fallen to about two hundred thousand, or two thirds of its former produce. Of this
the Company's demand amounted only to a fourth
part, that is, about fifty thousand pounds yearly.
This was at that time provided by agents for the
Company, under the inspection of their commercial
servants. On pretence of securing an advantage for
this fourth part for their masters, they exerted a most
violent and arbitrary power over the whole. It was
asserted, that they fixed the Company's mark to such
goods as they thought fit, (to all goods, as stated in
one complaint,) and disposed of them as they thought
proper, excluding not only all the native dealers, but
the Dutch Company, and private English merchants,
- that they made advances to the weavers often beyond their known ability to repay in goods within the year, and by this means, having got them in debt,
held them in perpetual servitude. Their inability
to keep accounts left them at the discretion of the
agents of the supreme power to make their balances
what they pleased, and they recovered them, not by
legal process, but byseizure of their goods and arbitrary imprisonment of their persons. One and the same dealer made the advance, valued the return,
stated the account, passed the judgment, and executed the process.
Mr. Rouse, Chief of the Dacca Province, who struggled against those evils, says, that in the year 1773 there were no balances due, as the trade was then
carried on by the native brokers. In less than three
years these balances amounted to an immense sum,
- a sum lost to the Company, but existing in full
force for every purpose of oppression. In the amount
? ? ? ? ON THE AFFAIRS OF INDIA. 101
of these balances almost every weaver in the country
bore a part, and consequently they were almost all
caught in this snare. " They are in general," says
Mr. Rouse, in a letter to General Clavering, delivered to your Committee, " a timid, helpless people; many of them poor to the utmost degree of wretchedness; incapable of keeping accounts; industrious as it were by instinct; unable to defend themselves, if
oppressed; and satisfied, if with continual labor they
derive from the fair dealing and humanity of their employer a moderate subsistence for their families. " Such were the people who stood accused by the
Company's agents as pretending grievances, in order
to be excused the payment of their balances. As to
the commercial state of the province in general, Mr.
Rouse represents it " to be for these two years a
perpetual scene of complaint and disputation; - the
Company's agents professing to pay higher rates to
weavers, whilst the Leadenhall sales showed an heavy
loss to the Company; the weavers have even travelled in multitudes to prefer their complaints at the Presidency; the amount of the investment comparatively small, with balances comparatively large, and, as I understand, generally contested by the weavers;
the native merchants, called dellis, removed from
their influence, as prejudicial to the Company's concerns; and European merchants complaining against undue influence of the Company's commercial agents,
in preventing the free purchase even of those goods
which the Company never takes. "
The spirit of those agents will be fully comprehended from a state of the proceedings before Mr.
Rouse and Council, on the complaint of a Mr. Cree,
an English free merchant at Dacca, who had been
? ? ? ? 102 NINTH REPORT OF SELECT COMMITTEE
twice treated in the same injurious manner by the
agents of Mr. Hurst, the Commercial Chief at that
place. On his complaint to the board of the seizure
of the goods, and imprisonment of his agents, Mr.
Hurst was called upon for an explanation. In return he informed them that he had sent to one of the
villages to inquire concerning the matter of fact alleged. The impartial person sent to make this inquiry was the very man accused of the oppressions
into which he was sent to examine. The answer of
Mr. Hurst is in an high and determined tone. He
does not deny that there are some instances of abuse
of power. " But I ask," says he, " what authority
can guard against the conduct of individuals? but
that a single instance cannot be brought of a general
depravity. " Your Committee have reason to believe
these coercive measures to have been very general,
though employed according to the degree of resistance opposed to the monopoly; for we find at one
time the whole trade of the Dutch involved in the
general servitude. But it appears very extraordinary
that nothing but the actual proof of a general abuse
could affect a practice the very principle of which
tends to make the coercion as general as the trade.
Mr. Hurst's reflection concerning the abuse of authority is just, but in this case it is altogether inapplicable; because the complaint was not of the abuse, but
of the use of authority in matters of trade, which
ought to have been free. He throws out a variety of
invidious reflections against the Council, as if they
wanted zeal for the Company's service; his justification of his practices, and his declaration of his resolution to persevere in them, are firm and determined,- asserting the right and policy of such re
? ? ? ? ON THE AFFAIRS OF INDIA. 103
straints, and laying down a rule for his'conduct at
the factory, which, he says, will give no cause of just
complaint to private traders. He adds, "I have no
doubt but that they have hitherto provided investments, and it cannot turn to my interest to preclude
them now, though I must ever think it my duty to
combat the private views of individuals who set themselves up as competitors under that very body under
whose license and indulgence only they can derive
their privilege of trade: all I contend for is the same
influence my employers have ever had. " He ends by
declining any reply to any of their future references
of this nature.
The whole of this extraordinary letter is inserted in
the Appendix, No. 51, - and Mr. Rouse's minute of
observations upon it in Appendix, No. 52, fully refuting the few pretexts alleged in that extraordinary performance in support of the trade by influence and authority. Mr. Hollond, one of the Council, joined
Mr. Rouse in opinion that a letter to the purport of
that minute should be written; but they were overruled by Messrs. Purling, HIogarth, and Shakespeare,
who passed a resolution to defer sending any reply to
Mr. Hurst: and none was ever sent. Thus they gave
countenance to the doctrine contained in that letter,
as well as to the mischievous practices which must inevitably arise from the exercise of such power. Some
temporary and partial relief was given by the vigorous exertions of Mr. Rouse; but he shortly after
removing from that government, all complaints were
dropped.
It is remarkable, that, during the long and warm
contest between the Company's agents and the dealers
of Dacca, the Board of Trade seem to have taken a de
? ? ? ? 104 NINTH REPORT OF SELECT COMMITTEE
cided part against the latter. They allow some sort
of justice in the complaints of the manufacturers with
regard to low valuation, and other particulars; but
they say, that, " although " (during the time of preemption)'" it appears that the weavers were not allowed the same liberty of selling to individuals they before enjoyed, our opinion on the whole is, that these complaints have originated upon the premeditated designs of the del'ls [factors or brokers] to thwart the
new mode of carrying on the Company's business, and
to render themselves necessary. " They say, in another
place, that there is no ground for the dissatisfactions
and difficulties of the weavers: 1" that they are owing
to the delals, whose aim it is to be employed. "
This desire of being employed, and of rendering
themselves necessary, in men whose only business it
is to be employed in trade, is considered by the gentlemen of the board as no trivial offence; and accordingly they declare, " they have established it as
an invariable rule, that, whatever deficiency there might
be in the Dacca investment, no purchase of the manufactures of that quarter shall be made for account
of the Company from private merchants. We have
passed this resolution, which we deem of importance,
from a persuasion that private merchants are often
induced to make advances for Dacca goods, not by
the ordinary chance of sale, but merely from an
expectation of disposing of them at an enhanced
price to the. Company, against whom a rivalship is by
this manner encouraged "; and they say, " that they
intend to observe the same rule with respect to the
investment of other of the factories from whence similar complaints may comle. "
This positive rule is opposed to the positive direc
? ? ? ? ON THE AFFAIRS OF INDIA. 105
tions of the Company to employ those obnoxious persons by preference. How far this violent use of authority for the purpose of destroying rivalship has succeeded in reducing the price of goods to the Company has been made manifest by the facts before
stated in their place.
The recriminatory charges of the Company's agents
on the native merchants have made very little impression on your Committee. We have nothing in
favor of them but the assertion of a party powerful
and interested. In such cases of mutual assertion
and denial, your Committee are led irresistibly to
attach abuse to power, and to presume that suffering
and hardship are more likely to attend on weakness
than that any combination of unprotected individuals
is of force to prevail over influence, power, wealth,
and authority. The complaints of the native merchants ought not to have been treated in any of those
modes in which they were then treated. And when
men are in the situation of complainants against unbounded power, their abandoning their suit is far
from a full and clear proof of their complaints being
groundless. It is not because redress has been rendered impracticable that oppression does not exist;
nor is the despair of sufferers any alleviation of
their afflictions. A review of some of the most remarkable of the complaints made by the native merchants in that province is so essential for laying open the true spirit of the commercial administration, and
the real condition of those concerned in trade there,
that your Committee observing the records on this
subject and at this period full of them, they could
not think themselves justifiable in not stating them
to the House
? ? ? ? 106 NINTH REPORT OF SELECT COMMITTEE
Your Committee have found many heavy charges
of oppression against Mr. Barwell, whilst Factory
Chief at Dacca; which oppressions are stated to have
continued, and even to have been aggravated, on
complaint at Calcutta. These complaints appear ill
several memorials presented to the Supreme Council
of Calcutta, of which Mr. Barwell was a member.
They appeared yet more fully and more strongly
in a bill in Chancery filed in the Supreme Court,
which was afterwards recorded before the GovernorGeneral and Council, and transmitted to the Court of Directors.
Your Committee, struck with the magnitude and
importance of these charges, and finding that with
regard to those before the Council no regular investigation has ever taken place, and finding also thatAMr. Barwell had asserted in a Minute of Council that he had given a full answer to the allegations in that bill, ordered a copy of the answer to be laid
before your Committee, that they might be enabled
to state to the House how far it appeared to them
to be full, how far the charges were denied as to
the fact, or, where the facts might be admitted, what
justification was set up. It appeared necessary, in
order to determine on the true situation of the trade
and the merchants of that great city and district.
The Secretary to the Court of Directors has informed your Committee that no copy of the answer
is to be found in the India House; nor has your
Committee been able to discover that any has been
transmitted. On this failure, your Committee ordered an application to be made to Mr. Barwell for
a copy of his answer to the bill, and any other information with which he might be furnished with regard to that subject.
? ? ? ? ON THE AFFAIRS OF INDIA. 107
Mr.