No More Learning

ON THE AFFAIRS OF INDIA. 125
should see that his contract was in effect a grant, and
therefore indicated particular favor and private influence with the ruling members of an absolute government.
On the expiration of Mr. Mackenzie's term, and
but a few months after Mr. Sulivan's arrival, the
Governor-General, as if the contract was a matter
of patronage, and not of dealing, pitched upon Mr.
Sulivan as the most proper person for the management of this critical concern. Mr. Sulivan, though a
perfect stranger to Bengal, and to that sort and to all
sorts of local commerce, made no difficulty of accepting it. The Governor-General was so fearful that his
true motives in this business should be mistaken, or
that the smallest suspicion should arise of his attending to the Company's orders, that, far from putting
up the contract (which, on account of its known
profits, had become the object of such pursuit) to
public auction, he did not wait for receiving so much
as a private proposal from Mr. Sulivan. The Secretary perceived that in the rough draught of the contract the old recital of a proposal to the board was inserted as a matter of course, but was contrary to
the fact; he therefore remarked it to Mr. Hastings.
Mr Hastings, with great indifference, ordered that
recital to be omitted; and the omission, with the remark that led to it, has, with the same easy indifference, been sent over to his masters.
The Governor-General and Council declare themselves apprehensive that Mr. Sulivan might be a loser
by his bargain, upon account of troubles which they
supposed existing in the country which was the object
of it. This was the more indulgent, because the contractor was tolerably secured against all losses. He
? ? ? ? 126 NINTH REPORT OF SELECT COMMITTEE
received a certain price for his commodity; but he was
not obliged to pay any certain price to the cultivator,
who, having no other market than his, must sell it to
him at his own terms. He was to receive half the
yearly payment by advance, and he was not obliged
to advance to the cultivator more than what he
thought expedient; but if this should not be enough,
he might, if he pleased, draw the whole payment before the total delivery: such were the terms of the
engagement with him. He is a contractor of a new
species, who employs no capital whatsoever of his
own, and has the market of compulsion at his entire command. But all these securities were not
sufficient for the anxious attention of the Supreme
Council to Mr. Sulivan's welfare: Mr. Hastings had
before given him the contract without any proposal on his part; and to make their gift perfect, in
a second instance they proceed a step beyond their
former ill precedent, and they contract with Mr. Sulivan for four years.
Nothing appears to have been considered but the
benefit of the contractor, and for this purpose the
solicitude shown in all the provisions could not be
exceeded. One of the first things that struck Mr.
Hastings as a blemish on his gift was the largeness
of the penalty which he had on former occasions settled as the sanction of the contract: this he now discovered to be so great as to be likely to frustrate its end by the impossibility of recovering so large a sum.
How a large penalty can prevent the recovery of any,
even the smallest part of it, is not quite apparent.
In so vast a concern as that of opium, a fraud which
at first view may not appear of much importance,
and which may be very difficult in the discovery,
? ? ? ? ON THE AFFAIRS OF INDIA. 127
may easily counterbalance the reduced penalty in this
contract, which was settled in favor of Mr. Sulivan at
about 20,0001.
Monopolies were (as the House has observed) only tolerated evils, and at best upon trial; a clause,
therefore, was inserted in the contracts to Mackenzie,
annulling the obligation, if the Court of Directors
should resolve to abolish the monopoly; but at the
request of Mr. Sulivan the contract was without difficulty purged of this obnoxious clause. The term
was made absolute, the monopoly rendered irrevocable, and the discretion of the Directors wholly excluded. Mr. Hastings declared the reserved condition to be no longer necessary, " because the Directors
had approved the monopoly. "
The Chiefs and Councils at the principal factories
had been obliged to certify the quantity and quality
of the opium before its transport to Calcutta; and
their control over the contractor had been assigned
as the reason for not leaving to those factories the
management of this monopoly. Now things were
changed. Orders were sent to discontinue this measure of invidious precaution, and the opium was sent
to Calcutta without anything done to ascertain its
quality or even its quantity.
An office of inspection had been also appointed
to examine the quality of the opium on its delivery
at the capital settlement. In order to ease Mr. Sulivan from this troublesome formality, Mr. Hastings
abolished the office; so that Mr. Sulivan was then
totally freed from all examination or control whatsoever, either first or last.
These extraordinary changes in favor of Mr. Sulivan were attended with losses to others, and seem to
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have excited much discontent. This discontent it
was necessary in some manner to appease. The
vendue-master, who was deprived of his accustomed
dues on the public sales of the opium by the private dealing, made a formal complaint to the board
against this, as well as other proceedings relative to
the same business. He attributed the private sale
to " reasons of state "; and this strong reflection both
on the Board of Trade and the Council Board was
passed over without observation. He was quieted by
appointing him to the duty of these very inspectors
whose office had been just abolished as useless. The
House will judge of the efficacy of the revival of this
office by the motives to it, and by Mr. Hastings giving that to one as a compensation which had been executed by several as a duty. However, the orders for taking away the precautionary inspection at Patna
still remained in force.
Some benefits, which had been given to former contractors at the discretion of the board, were no longer
held under that loose indulgence, but were secured to
Mr. Sulivan by his contract. Other indulgences, of a
lesser nature, and to which no considerable objection
could be made, were on the application of a Mr.
Benn, calling himself his attorney, granted.
Your Committee, examining Mr. Higginson, late a
member of the Board of Trade, on that subject, were
illformed, that this contract, very soon after the makilg, was generally understood at Calcutta to have
been sold to this Mr. Benn, but he could not particularize the sum for which it had been assigned, -- and
that Mr. Benn had afterwards sold it to a Mr. Young.
By this transaction it appears clearly that the contract
was given to Mr. Sulivan for no other purpose than
? ? ? ? ON THE AFFAIRS OF INDIA. 129
to supply him with a sum of money; and the sale and
re-sale seem strongly to indicate that the reduction of
the penalty, and the other favorable conditions, were
not granted for his ease in a business which he never
was to execute, but to heighten the value of the object
which he was to sell. Mr. Sulivan was at the time in
Mr. Hastings's family, accompanied him in his progresses, and held the office of Judge-Advocate.
The monopoly given for these purposes thus permanently secured, all power of reformation cut off,
and almost every precaution against fraud and oppression removed, the Supreme Council found, or pretended to find, that the commodity for which they had just made such a contract was not a salable article, -- and in consequence of this opinion, or pretence,,
entered upon a daring speculation hitherto unthought
of, that of sending the commodity on the Company's
account to the market of Canton. The Council alleged, that, the Dutch being driven from Bengal, and
the seas being infested with privateers, this commodity had none, or a very dull and depreciated demand.
Had this been true, Mr. Hastings's conduct could
admit of no excuse. He ought not to burden a, falling
market by long and heavy engagements. He, ought
studiously to have kept in his power the means of
proportioning the supply to the demand. But his:
arguments, and those of the Council on that occasionl, do not deserve the smallest attention. Facts, to
which there is no testimony but the assertion of those
who produce them in apology for the ill consequences
of their own irregular actions, cannot be admitted.
Mr. Hastings and the Council had nothing at all to
do with that business: the Court of Directors had
wholly taken the management of opium out of his.
VOL VIII. 9
? ? ? ? 130 NINTH REPORT OF SELECT COMMITTEE
and their hands, and by a solemn adjudication fixed
it in the Board of Trade. But after it had continued there some years, Mr. Hastings, a little before his
grant of the monopoly to Mr. Sulivan, thought proper
to reverse the decree of his masters, and by his own
authority to recall it to the Council. By this step he
became responsible for all the consequences.
The Board of Trade appear, indeed, to merit reprelelnsion for disposing of the opium by private contract,
as by that means the unerring standard of the public
market cannot be applied to it. But they justified
themselves by their success; and one of their members informed your Committee that their last sale had
been a good one: and though he apprehended a fall
in the next, it was not such as in the opinion of your
Committee could justify the Council-General in having recourse to untried and hazardous speculations of
commerce. It appears that there must have been a
market, and one sufficiently lively. They assign as a
reason of this assigned [alleged? ] dulness of demand,
that the Dutch had been expelled from Bengal, and
could not carry the usual quantity to Batavia. But
the Danes were not expelled from Bengal, and Portuguese ships traded there: neither of them were interdicted at Batavia, and the trade to the eastern ports was free to them. The Danes actually applied for and
obtained an increase of the quantity to which their
purchases had been limited; and as they asked, so they
received this indulgence as a great favor. It does not
appear that they were not very ready to supply the
place of the Dutch. On the other hand, there is no
doubt that the Dutch would most gladly receive an
article, convenient, if not necessary, to the circulation of their commerce, from the Danes, or under any
? ? ? ? ON THE AFFAIRS OF INDIA. 131
name; nor was it fit that the Company should use
an extreme strictness in any inquiry concerning the
necessary disposal of one of their own staple commodities.
The supply of the Canton treasury with funds for
the provision of the next year's China investment
was the ground of this plan. But the Council-General appear still to have the particular advantage of
Mr. Sulivan in view, --and, not satisfied with breaking so many of the Company's orders for that purpose,. to make the contract an object salable to the greatest advantage, were obliged to transfer their
personal partiality from Mr. Sulivan to the contract
itself, and to hand it over to the assignees through
all their successions. When the opium was delivered, the duties and emoluments of the contractor
ended; but (it appears from Mr. Williamson's letter, 18th October, 1781, and it is not denied by the
Council-General) this new scheme furnished them
with a pretext of making him broker for the China
investment, with the profit of a new commission, - to
what amount does not appear. . But here their constant and vigilant observer, the vendue-master, met
them again: - they seemed to live in no small terror
of this gentleman. To satisfy him for the loss of his
fee to which he was entitled upon the public sale,
they gave him also a commission of one per cent on
the investment. Thus was this object loaded with
a double commission; and every act of partiality to
one person produced a chargeable compensation to
some other for the injustice that such partiality produced. Nor was this the whole. The discontent
and envy excited by this act went infinitely further
than to those immediately affected, alud something
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or other was to be found out to satisfy as many as
possible.
As soon as it was discovered that the Council entertained a design of opening a trade on those principles, it immediately engaged the attention of such as had;n interest in speculations of freight.
A memorial seems to have been drawn early, as it
is dated on the 29th of March, though it was not the
first publicly presented to the board. This memorial was presented on the 17th of September, 1781,
by Mr. Wheler, conformably (as he says) to the
desire of the Governor-General; and it contained a
long and elaborate dissertation on the trade to China,
tending to prove the advantage of extending the sale
of English manufactures and other goods to the North
of that country, beyond the usual emporium of European nations. This ample and not ill-reasoned theoretical performance (though not altogether new either in speculation or attempt) ended by a practical proposition, very short, indeed, of the ideas opened in the
preliminary discourse, but better adapted to the immediate effect. It. was, that the Company should
undertake the sale of its own opium in China, and
commit the management of the business to the memorialist, who offered to furnish them with a strong
armed ship for that purpose. The offer was accepted, and the agreement made with him for the transport of two thousand chests.
A proposal by another person was made the July
following the date of this project: it appears to have
been early in the formal delivery at the board: this
was for the export of one thousand four hundred and
eighty chests. This, too, was accepted, but with new
conditions and restrictions: for in so vast and so new
? ? ? ? ON THE AFFAIRS OF INDIA. 133
an undertaking great difficulties occurred. In the
first place, all importation of that commodity is rigorously forbidden by the laws of China. The impro.
priety of a political trader, who is lord over a great
empire, being concerned in a contraband trade upon
his own account, did not seem in the least to affect
them; but they were struck with the obvious danger
of subjecting their goods to seizure by the vastness of
the prohibited import. To secure the larger adventure, they require of the China factory that Colonel
Watson's ship should enter the port of Canton as an
armed ship, (they would not say a ship of war, though
that must be meant,) that her cargo should not be reported; they also ordered that other measures should
be adopted to secure this prohibited article from seizure. If the cargo should get in safe, another danger
was in view, -- the overloading the Chinese market
by a supply beyond the demand; for it is obvious
that contraband trade must exist by small quantities
of goods poured in by intervals, and not by great importations at one time. To guard against this inconvenience, they divide their second, though the smaller adventure, into two parts; one of which was
to go to the markets of the barbarous natives which
inhabit the coast of Malacca. where the chances of
its being disposed of by robbery or sale were at least
equal. If the opium should be disposed of there,
the produce was to be invested in merchandise salable in China, or in dollars, if to be had. The other
part (about one half) was to go in kind directly to
the port of Canton.
The dealing at this time seemed closed; but the
gentlemen who chartered the ships, always recollecting something, applied anew to the board to be fur
? ? ? ? 134 NINTH REPORT OF SELECT COMMITTEE
nished with cannon from the Company's ordnance.
Some was delivered to them; but the Office of Ordnance (so heavily expensive to the Company) was
not sufficient to spare a few iron guns for a merchant ship. Orders were given to cast a few cannon,
and an application made to Madras, at a thousand
miles' distance, for the rest. Madras answers, that
they cannot exactly comply with the requisition;
but still the board at Bengal hopes better things
from them than they promise, and flatter themselves
that with their assistance they shall properly arm
a ship of thirty-two guns.
Whilst these dispositions were making, the first
proposer, perceiving advantages from the circuitous
voyage of the second which had escaped his observation, to make amends for his first omission, improved both on his own proposal and on that of the person who had improved on him. He therefore applied for leave to take two hundred and fifty chests
on his own account, which he said could " be readily
disposed of at the several places where it was necessary for the ship to touch for wood and water, or intelligence, during her intended voyage through the Eastern Islands. " As a corrective to this extraordinary request, he assured the board, that, if he should
meet with any unexpected delay at these markets, he
would send their cargo to its destination, having secured a swift-sailing sloop for the protection of his
ship; and this sloop he proposed, in such a case, to
leave behind. Such an extraordinary eagerness to
deal in opium lets in another view of the merits of
the alleged dulness of the: market, on which this
trade was undertaken for the Company's account.
The Council, who had ivith great condescension
? ? ? ? ON THE AFFAIRS OF INDIA. 135
and official facility consented to every demand hitherto made, were not reluctant with regard to this last.
The quantity of opium required by the freighters, and
the permission of a trading voyage, were granted
without hesitation. The cargo having become far
more valuable by this small infusion of private interest, the armament which was deemed sufficient to defend the Company's large share of the adventure was now discovered to be unequal to the protection of the
whole. For the convoy of these two ships the Council hire and arm another. How they were armed,
or whether in fact they were properly armed at all,
does not appear. It is true that the Supreme Council
proposed that these ships should also convey supplies
to Madras; but this was a secondary consideration:
their primary object was the adventure of opium. To
this they were permanently attached, and were obliged
to attend to its final destination.
The difficulty of disposing of the opium according
to this project being thus got over, a material preliminary difficulty still stood in the way of the whole
scheme. The contractor, or his assignees, were to be
paid. The Company's treasure was wholly exhausted, and even its credit was exceedingly strained.
The latter, however, was the better resource, and to
this they resolved to apply. They therefore, at different times, opened two loans of one hundred thousand
pounds each. The first was reserved for the Company's servants, civil and military, to be distributed in
shares according to their rank; the other was more
general. The terms of both loans were, that the risk
of the voyage was to be on account of the Company.
The payment was to be in bills (at a rate of exchange
settled from the supercargoes at Cantonl) upon the
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same Company. In whatever proportion the adventure should fail, either in the ships not safely arriving
in China or otherwise, in that proportion the subscribers were to content themselves with the Company's
bonds for their money, bearing eight per cent interest. A share in this subscription was thought exceeding desirable; for Mr. Hastings writes from Benares,
where he was employed in the manner already reported and hereafter to be observed upon, requesting
that the subscription should be left open to his officers
who were employed in the military operations against
Cheyt Sing; and accordingly three majors, seven captains, twenty-three lieutenants, the surgeon belonging
to the detachment, and two civil servants of high rank
who attended him, were admitted to subscribe.
Bills upon Europe without interest are always preferred to the Company's bonds, even at the high interest allowed in India. They are, indeed, so greedily sought there, and (because they tend to bring an immediate and visible distress in Leadenhall Street)
so much dreaded here, that by an act of Parliament
the Company's servants are restricted from drawing
bills beyond a certain amount upon the Company in
England. In Bellgal they have been restrained to
about one hundred and eighty thousand pounds annually.
The legislature, influenced more strongly
with the same apprehensions, has restrained the Directors, as the Directors have restrained their servants, and have gone so far as to call in the power of
the Lords of the Treasury to authorize the acceptance
of any bills beyond an amount prescribed in the act.
The false principles of this unmercantile transaction (to speak of it in the mildest terms) were too
gross not to be visible to those who contrived it.
? ? ? ? ON THE AFFAIRS OF INDIA. 137
That the Company should be made to borrow such a
sum as two hundred thousand pounds * at eight per
cent, (or terms deemed by the Company to be worse,)
in order first to buy a commodity represented by
themselves as depreciated in its ordinary market, in
order afterwards to carry one half of it through a circuitous trading voyage, depending for its ultimate
success on the prudent and fortunate management
of two or three sales, and purchases and re-sales of
goods, and the chance of two or three markets, with
all the risks of sea and enemy, was plainly no undertaking for such a body. The activity, private interest, and the sharp eye of personal superintendency may now and then succeed in such projects; but the
remote inspection and unwieldy movements of great
public bodies can find nothing but loss in them.
Their gains, comparatively small, ought to be upon
sure grounds; but here (as the Council states the
matter) the private trader actually declines to deal,
which is a proof more than necessary to demonstrate
the extreme imprudence of such an undertaking on
the Company's account. Still stronger and equally
obvious objections lay to that member of the project
which regards the introduction of a contraband commodity into China, sent at such a risk of seizure not
only of the immediate object to be smuggled in, but
of all the Company's property in Canton, and possibly
at a hazard to the existence of the British factory at
that port.
It is stated, indeed, that a monopolizing company
in Canton, called the Cohong, had reduced commerce
there to a deplorable state, and had rendered the
* The whole sum has not been actually raised; but the deficiency
is not very considerable.
? ? ? ? 138 NINTH REPORT OF SELECT COMMITTEE
gains of private merchants, either in opium or anything else, so small and so precarious that they were
no longer able by purchasing that article to furnish
the Company with money for a China investment.
For this purpose the person whose proposal is accepted declares his project to be to set up a monopoly
on the part of the Company against the monopoly
of the Chinese merchants: but as thile Chinese monopoly is at home, and supported (as the minute referred to asserts) by the country magistrates, it is plain it is the Chinese company, not the English,
which must prescribe the terms, - particularly in a
commodity which, if withheld from them at their
market price, they can, whenever they please, be certain of purchasing as a condemned contraband.
There are two further circumstances in this transaction which strongly mark its character. The first
is, that this adventure to China was not recommended
to them by the factory of Canton; it was dangerous
to attempt it without their previous advice, and an
assurance, grounded on the state of the market and
the dispositions of the government, that the measure,
in a commercial light, would be profitable, or at least
safe. Neither was that factory applied to on the
state of the bills which, upon their own account,
they might be obliged to draw upon Europe, at a
time when the Council of Bengal direct them to draw
bills to so enormous an amount.
The second remarkable circumstance is, that the
Board of Trade in Calcutta (the proper administrator of all that relates to the Company's investment) does not seem to have given its approbation
to the project, or to have been at all consulted upon
it. The sale of opium had been adjudged to the
? ? ? ? ON THE AFFAIRS OF INDIA. 139
Board of Trade for the express purpose of selling it
in Bengal, not in China, - and of employing the produce of such sale in the manufactures of the country
in which the original commodity was produced. On
the whole, it appears a mere trading speculation of
the Council, invading the department of others, without lights of its own, without authority or information firom any other quarter. In a commercial view, it straitened the Company's investment to which it
was destined; as a measure of finance, it is a contrivance by which a monopoly formed for the increase of revenue, instead of becoming one of its resources, involves the treasury, in the first instance,
in a debt of two hundred thousand pounds.
If Mr. Hastings, on the expiration of Mr. Mackenzie's contract, the advantages of which to the
Company had been long doubtful, had put himself
in a situation to do his duty, some immediate loss
to the revenue would have been the worst consequence of the alleged depreciation; probably it would
not have been considerable. Mr. Mackenzie's contract, which at first was for three years, had been
only renewed for a year. Had the same course
been pursued with Mr. Sulivan, they would have
had it in their power to adopt some plan which
might have secured them from any loss at all. But
they pursued another plan: they carefully put all
remedy still longer out of their reach by giving their
contract for four years. To cover all these irregularities, they interest the settlement in their favor
by holding out to them the most tempting of all
baits in a chance of bills upon Europe.
In this manner the servants abroad have conducted themselves with regard to Mr. Sulivan's con
? ? ? ? 140 NINTH REPORT OF SELECT COMMITTEE
tract for opium, and the disposal of the commodity.
In England the Court of Directors took it into consideration. First, as to the contract, in a letter dated
12th July, 1782, they say, that, "' having condemned
the contract entered into with Mr. Mackenzie for the
provision of opium, they cannot but be surprised at
your having concluded a new contract for four years
relative to that article with Mr. Stephen Sulivan,
without leaving the decision of it to the Court of Directors. "
The sentiments of the Directors are proper, and
worthy of persons in public trust. Their surprise,
indeed, at the disobedience to their orders is not
perfectly natural in those who for many years have
scarcely been obeyed in a single instance. They
probably asserted their authority at this time with
as much vigor as their condition admitted.
They proceed: 1" We do not mean," say they, " to
convey any censure on Mr. Sulivan respecting the
transaction; but we cannot withhold our displeasure
from the Governor-General and Council at such an
instance of contempt of our authority. " They then
proceed justly to censure the removal of the inspection, and some other particulars of this gross proceeding. As to the criminality of the parties, it is undoubtedly true that a breach of duty in servants is highly aggravated by the rank, station, and trust of
the offending party; but no party, in such conspiracy
to break orders, appear to us wholly free from fault.
The Directors did their duty in reprobating this
contract; but it is the opinion of your Committee
that further steps ought to be taken to inquire into
the legal validity of a transaction which manifestly
attempts to prevent the Court of Directors from ap
? ? ? ? ON THE AFFAIRS OF INDIA. 141
plying any remedy to a grievance which has been for
years the constant subject of complaints.
Both Mr. Sulivan and Mr. Hastings are the Company's servants, bound by their covenants and their
oaths to promote the interest of their masters, and
both equally bound to be obedient to their orders.
If the Governor-General had contracted with a stranger, not apprised of the Company's orders, and not
bound by any previous engagement, the contract
might have been good; but whether a contract
made between two servants, contrary to the orders of their common master, and to the prejudice of his known interest, be a breach of trust on both sides, and whether the contract can in
equity have force to bind the Company, whenever
they shall be inclined to free themselves and the
country they govern from this mischievous monopoly, your Committee think a subject worthy of further inquiry.
With regard to the disposal of the opium, the Directors very properly condemn the direct contraband,
but they approve the trading voyage. The Directors
have observed nothing concerning the loans: they
probably reserved that matter for future consideration.
In no affair has the connection between servants
abroad and persons in power among the proprietors
of the India Company been more discernible than in
this. . But if such confederacies, cemented by such
means, are suffered to pass without due animadversion, the authority of Parliament must become as
inefficacious as all other authorities have proved to
restrain the growth of disorders either in India or in
Europe.
? ? ? ? 142 NINTH REPORT OF SELECT COMMITTEE
SALT.
THE reports made by the two committees of the
House which sat in the years 1772 and 1773 of the
state and conduct of the inland trade of Bengal up to
that period have assisted the inquiries of your Committee with respect to the third and last article of monopoly, viz. , that of salt, and made it unnecessary
for them to enter into so minute a detail on that subject as they have done on some others.
Your Committee find that the late Lord Clive constantly asserted that the salt trade in Bengal had
been a monopoly time immemorial, -- that it ever
was and ever must be a monopoly, -and that Coja
Wazid, and other merchants long before him, had
given to the Nabob and his ministers two hundred
thousand pounds per annum for the exclusive privilege. The Directors, in their letter of the 24th December, 1776, paragraph 76, say, "that it has ever
been in a great measure an exclusive trade. "
The Secret Committee report,* that under the goverlment of the' Nabobs the duty on salt made in Bengal was two and an half per cent paid by Mussulmen, and five per cent paid by Gentoos. On the accession
of Mir Cassim, in 1760, the claim of the Company's
servants to trade in salt duty-free was first avowed.
Mr. Vansittart made an agreement with him by
which the duties should be fixed at nine per cent.
The Council annulled the agreement, and reduced
the duty to two and an half per cent. On this Mir
Cassim ordered that no customs or duties whatsoever
should be collected for the future. But a majority
of the Council (22nd March, 1763) resolved, that the
* Fourth Report, page 106.
? ? ? ? ON THE AFFAIRS OF INDIA. 143
making the exemption general was a breach of the
Company's privileges, and that the Nabob should be
positively required to recall it, and collect duties as
before from the country merchants, and all other
persons who had not the protection of the Company's dustuck. The Directors, as the evident reason
of the thing and as their duty required, disapproved
highly of these transactions, and ordered (8th February, 1764) a final and effectual stop to be put to the
inland trade in salt, and several other articles of commerce. But other politics and other interests prevailed, so that in the May following a General Court resolved, that it should be recommended to the Court
of Directors to reconsider the preceding orders; in
ctnsequence of which the Directors ordered the Governor and Council to form a plan, in concert with the
Nabob, for regulating the inland trade.
On these last orders Lord Clive's plan was formed,
in 1765, for engrossing the sole purchase of salt, and
dividing the profits among the Company's senior servants. The Directors, who had hitherto reluctantly
given way to a monopoly under any ideas or for any
purposes, disapproved of this plan, and on the 17th
May, 1766, ordered it to be abolished; but they substituted no other ill its room. * In this manner things
continued until November, 1767, when the Directors
repeated their orders for excluding all persons whatever, excepting the natives only, from being concerned in the inland trade in salt; and they declared that (vide par. 90) " such trade is hereby abolished
and put a final end to. " In the same letter (par.
92) they ordered that the salt trade should be laid
* Par. 36. Vide Fourth Report from Com. of Secrecy in 1773,
Appendix, No. 45.
? ? ? ? 144 NINTH REPORT- OF SELECT COMMITTEE
open to the natives in general, subject to such a duty
as might produce one hundred and twenty thousand
pounds a year. This policy was adopted by the legislature. In the act of 1773 it was expressly provided, that it should not be lawful for anlly of his Majesty's subjects to engage, intermeddle, or be any
way concerned, directly or indirectly, in the inland
trade in salt, except on the India Company's account.
Under the positive orders of the Company, the salt
trade appears to have continued open from 1768 to
1772. The act, indeed, contained an exception in favor of the Company, and left them a liberty of dealing
in salt upon their own account. But still this policy remained unchanged, and their orders unrevoked.
But in the year 1772, without any instruction from
the Court of Directors indicating a change of opinion or system, the whole produce was again monopolized, professedly for the use of the Company, by Mr. Hastings. Speaking of this plan, he says (letter to
the Directors, 22d February, 1775): ":No new hardship has been imposed upon the salt manufacturers
by taking the management of that article into the
hands of government; the only difference is, that the
profit which was before reaped by English gentlemen
and by banians is now acquired by the Company. "
In May, 1766, the Directors had condemned the monopoly on any conditions whatsoever. " At that time
they thought it neither consistent with their honor
nor their dignity to promote such an exclusive
trade. " * "They considered it, too, as disgraceful,
and below the dignity of their present situation, to allow
V* ide Sel. Letter to Bengal, 17 May, 1766, Par. 36, in Fourth
Report from Com. of Secrecy, in 1773, Appendix, No. 45.
? ? ? ? ON THE AFFAIRS OF INDIA. 145
of such a monopoly, and that, were they to allow it
under any restrictions, they should consider themselves as assenting and subscribing to all the mis chiefs which Bengal had presented to them for four
years past. " *
Notwithstanding this solemn declaration, in their
letter of 24th December, 1776, they approve the
plan of Mr. Hastings, and say, " that the monopoly,
on its present footing, can be no considerable grievance to the country," &c.
This, however, was a rigorous monopoly. The
account given of it by General Clavering, Colonel
Monson, and Mr. Francis, in their minute of 11th
January, 1775, in which the situation of the molungees, or persons employed in the salt manufacture.
is particularly described, is stated at length in the
Appendix. Mr. Hastings himself says, " The power
of obliging molungees to work has been customary
from time immemorial. "
Nothing but great and clear advantage to government could account for, and nothing at all perhaps could justify, the revival of a monopoly thus circumstanced. The advantage proposed by its revival. was the transferring the profit, which was before reaped
by English gentlemen and banians, to the Company.
The profits of the former were not problematical. It
was to be seen what the effect would be of a scheme
to transfer them to the latter, even under the management of the projector himself. In the Revenue Consultations of September, 1776, Mr. Hastings said,
" Many causes have since combined to reduce this article of revenue almost to nothing. The plan which I am now ilclined to recommend for the future
* Ibid. Par. 37.
VOL. VIII. 10
? ? ? ? 146 NINTH REPORT OF SELECT COMMITTEE
management of the salt revenue differs widely from
that which I adopted under different circumstances. "
It appears that the ill success of his former scheme
did not deter him from recommending another. Accordingly, in July, 1777, Mr. Hastings proposed, and
it was resolved, that the salt mahls should be let,
with the lands, to the farmers and zemindars for a
ready-money rent, including duties,-the salt to be
left to their disposal. After some trial of this method, Mr. Hastings thought fit to abandon it. In September, 1780, he changed his plan a third time, and proposed the institution of a salt office; the salt was
to be again engrossed for the benefit of the Company,
and the management conducted by a number of salt
agents.
From the preceding facts it appears that in this
branch of the Company's government little regard
has been paid to the ease and welfare of the natives,
and that the Directors have nowhere shown greater
inconsistency than in their orders on this subject.
Yet salt, considering it as a necessary of life, was by
no means a safe and proper subject for so many experiments and innovations. For ten years together
the Directors reprobated the idea of suffering this
necessary of life to be engrossed on any condition
whatsoever, and strictly prohibited all Europeans from
trading in it. Yet, as soon as they were made to
expect from Mr. Hastings that the profits of the
monopoly should be converted to their own use, they
immediately declared that it " could be no considerable grievance to the country," and authorized its continuance, until he himself, finding it produced little or nothing, renounced it of his own accord. Your
Committee are apprehensive that this will at all
? ? ? ? ON THE AFFAIRS OF INDIA. 147
times, whatever flattering appearance it may wear
for a time, be the fate of any attempt to monopolize
the salt for the profit of government. In the first
instance it will raise the price on the consumer
beyond its just level; but that evil will soon be
corrected by means ruinous to the Company as
monopolists, viz. , by the embezzlement of their own
salt, and by the importation of foreign salt, neither
of which the government of Bengal may have power
for ally long time to prevent. In the end government will probably be undersold and beaten down to
a losing price; Or, if they should attempt to force
all the advantages from this article of which by every exertion it may be made capable, it may distress
some other part of their possessions in India, and
destroy, or at least impair, the natural intercourse
between them. Ultimately it may hurt Bengal itself,
and the produce of its landed revenue, by destroying
the vent of that grain which it would otherwise barter for salt.
Your Committee think it hardly necessary to observe, that the many changes of plan which have taken place in the management of the salt trade are far from honorable to the Company's government, - and
that, even if the monopoly of this article were a profitable concern, it should not be permitted. Exclusive of the general effect of this and of all monopolies, the oppressions which the manufacturers of salt, called
molungees, still suffer under it, though perhaps alleviated in some particulars, deserve particular attention. There is evidence enough on the Company's records to satisfy your Committee that these people
have been treated with great rigor, and not only defraltded of the due payment of their labor, but deliv
? ? ? ? 148 NINTH REPORT OF SELECT COMMITTEE
ered over, like cattle, in succession, to different masters, who, under pretence of buying up the balances
due to their preceding employers, find means of keeping them in perpetual slavery. For evils of this nature there can be no perfect remedy as long as the monopoly continues. They are in the nature of the
thing, and cannot be cured, or effectually counteracted, even by a just and vigilant administration on the
spot. Many objections occur to the farming of any
branch of the public revenue in Bengal, particularly against farming the salt lands. But the dilemma
to which government by this system is constantly reduced, of authorizing great injustice or suffering great
loss, is alone sufficient to condemn it. Either government is expected to support the farmer or contractor in all his pretensions by an exertion of power, which tends of necessity to the ruin of the parties
subjected to the farmer's contract, and to the suppression of free trade, - or, if such assistance be refused him, he complains that he is not supported, that private persons interfere with his contract, that the
manufacturers desert their labor, and that proportionate deductions must be allowed him.
After the result of their examination into the general nature and effect of this monopoly, it remains
only for your Committee to inquire whether there
was any valid foundation for that declaration of Mr.
Hastings which we conclude must have principally
recommended the monopoly of salt to the favor of the
Court of Directors, viz. , " that the profit, which was
before reaped by English gentlemen, and by banians,
was now acquired by the Company. " On the contrary, it was proved and acknowledged before the Governor-General and Council, when they inquired into
? ? ? ? ON THE AFFAIRS OF INDIA. 149
this matter, in March, 1775, that the Chiefs and
Councils of those districts in which there were salt
mahls reserved particular salt farms for their own use,
and divided the profits, in certain stated proportions,
among themselves and their assistants. But, unless
a detail of these transactions, and of the persons concerned in them, should be called for by the House, it
is our wish to avoid entering into it. On one example only your Committee think it just and proper to
insist, stating first to the House on what principles
they have made this selection.
In pursuing their inquiries, your Committee have
endeavored chiefly to keep in view the conduct of
persons in the highest station, particularly of those
in whom the legislature, as well as the Company, have
placed a special confidence, -- judging that the conduct of such persons is not only most important in
itself, but most likely to influence the subordinate
ranks of the service.