[Sidenote: How reduced.]
But that the greatness of all these drains, and their effects, may be rendered more visible, your Committee have turned their consideration to the employment of those parts of the Bengal revenue which are not employed in the Company"s own investments for China and for Europe. What is taken over and above the investment (when any investment can be made) from the gross revenue, either for the charge of collection or for civil and military establishments, is in time of peace two millions at the least. From the portion of that sum which goes to the support of civil government the natives are almost wholly excluded, as they are from the princ.i.p.al collections of revenue. With very few exceptions, they are only employed as servants and agents to Europeans, or in the inferior departments of collection, when it is absolutely impossible to proceed a step without their a.s.sistance. For some time after the acquisition of the territorial revenue, the sum of 420,000_l._ a year was paid, according to the stipulation of a treaty, to the Nabob of Bengal, for the support of his government. This sum, however inconsiderable, compared to the revenues of the province, yet, distributed through the various departments of civil administration, served in some degree to preserve the natives of the better sort, particularly those of the Mahomedan profession, from being utterly ruined. The people of that persuasion, not being so generally engaged in trade, and not having on their conquest of Bengal divested the ancient Gentoo proprietors of their lands of inheritance, had for their chief, if not their sole support, the share of a moderate conqueror in all offices, civil and military. But your Committee find that this arrangement was of a short duration. Without the least regard to the subsistence of this innocent people, or to the faith of the agreement on which they were brought under the British government, this sum was reduced by a new treaty to 320,000_l._, and soon after, (upon a pretence of the present Nabob"s minority, and a temporary sequestration for the discharge of his debts,) to 160,000_l._: but when he arrived at his majority, and when the debts were paid, (if ever they were paid,) the sequestration still continued; and so far as the late advices may be understood, the allowance to the Nabob appears still to stand at the reduced sum of 160,000_l._
[Sidenote: Native officers.]
The other resource of the Mahomedans, and of the Gentoos of certain of the higher castes, was the army. In this army, nine tenths of which consists of natives, no native, of whatever description, holds any rank higher than that of a _Subahdar Commandant_, that is, of an officer below the rank of an English subaltern, who is appointed to each company of the native soldiery.
[Sidenote: All lucrative employments in the hands of the English.]
Your Committee here would be understood to state the ordinary establishment: for the war may have made some alteration. All the honorable, all the lucrative situations of the army, all the supplies and contracts of whatever species that belong to it, are solely in the hands of the English; so that whatever is beyond the mere subsistence of a common soldier and some officers of a lower rank, together with the immediate expenses of the English officers at their table, is sooner or later, in one shape or another, sent out of the country.
Such was the state of Bengal even in time of profound peace, and before the whole weight of the public charge fell upon that unhappy country for the support of other parts of India, which have been desolated in such a manner as to contribute little or nothing to their own protection.
[Sidenote: Former state of trade.]
Your Committee have given this short comparative account of the effects of the maritime traffic of Bengal, when in its natural state, and as it has stood since the prevalence of the system of an investment from the revenues. But before the formation of that system Bengal did by no means depend for its resources on its maritime commerce. The inland trade, from whence it derived a very great supply of silver and gold and many kinds of merchantable goods, was very considerable. The higher provinces of the Mogul Empire were then populous and opulent, and intercourse to an immense amount was carried on between them and Bengal. A great trade also pa.s.sed through these provinces from all the countries on the frontier of Persia, and the frontier provinces of Tartary, as well as from Surat and Baroach on the western side of India. These parts opened to Bengal a communication with the Persian Gulf and with the Red Sea, and through them with the whole Turkish and the maritime parts of the Persian Empire, besides the commercial intercourse which it maintained with those and many other countries through its own seaports.
[Sidenote: And the trade to Turkey.]
During that period the remittances to the Mogul"s treasury from Bengal were never very large, at least for any considerable time, nor very regularly sent; and the impositions of the state were soon repaid with interest through the medium of a lucrative commerce. But the disorders of Persia, since the death of Kouli Khan, have wholly destroyed the trade of that country; and the trade to Turkey, by Jidda and Bussorah, which was the greatest and perhaps best branch of the Indian trade, is very much diminished. The fall of the throne of the Mogul emperors has drawn with it that of the great marts of Agra and Delhi. The utmost confusion of the northwestern provinces followed this revolution, which was not absolutely complete until it received the last hand from Great Britain. Still greater calamities have fallen upon the fine provinces of Rohilcund and Oude, and on the countries of Corah and Allahabad. By the operations of the British arms and influence, they are in many places turned to mere deserts, or so reduced and decayed as to afford very few materials or means of commerce.
[Sidenote: State of trade in the Carnatic.]
Such is the actual condition of the trade of Bengal since the establishment of the British power there. The commerce of the Carnatic, as far as the inquiries of your Committee have extended, did not appear with a better aspect, even before the invasion of Hyder Ali Khan, and the consequent desolation, which for many years to come must exclude it from any considerable part of the trading system.
It appears, on the examination of an intelligent person concerned in trade, and who resided at Madras for several years, that on his arrival there, which was in the year 1767, that city was in a flourishing condition, and one of the first marts in India; but when he left it, in 1779, there was little or no trade remaining, and but one ship belonging to the whole place. The evidence of this gentleman purports, that at his first acquaintance with the Carnatic it was a well-cultivated and populous country, and as such consumed many articles of merchandise; that at his departure he left it much circ.u.mscribed in trade, greatly in the decline as to population and culture, and with a correspondent decay of the territorial revenue.
Your Committee find that there has also been from Madras an investment on the Company"s account, taking one year with another, very nearly on the same principles and with the same effects as that from Bengal; and they think it is highly probable, that, besides the large sums remitted directly from Madras to China, there has likewise been a great deal on a private account, for that and other countries, invested in the cash of foreign European powers trading on the coast of Coromandel. But your Committee have not extended their inquiries relative to the commerce of the countries dependent on Madras so far as they have done with regard to Bengal. They have reason to apprehend that the condition is rather worse; but if the House requires a more minute examination of this important subject, your Committee is willing to enter into it without delay.
III.--EFFECT OF THE REVENUE INVESTMENT ON THE COMPANY.
Hitherto your Committee has considered this system of revenue investment, subst.i.tuted in the place of a commercial link between India and Europe, so far as it affects India only: they are now to consider it as it affects the Company. So long as that corporation continued to receive a vast quant.i.ty of merchantable goods without any disburs.e.m.e.nt for the purchase, so long it possessed wherewithal to continue a dividend to pay debts, and to contribute to the state. But it must have been always evident to considerate persons, that this vast extraction of wealth from a country lessening in its resources in proportion to the increase of its burdens was not calculated for a very long duration. For a while the Company"s servants kept up this investment, not by improving commerce, manufacture, or agriculture, but by forcibly raising the land-rents, on the principles and in the manner hereafter to be described. When these extortions disappointed or threatened to disappoint expectation, in order to purvey for the avarice which raged in England, they sought for expedients in breaches of all the agreements by which they were bound by any payment to the country powers, and in exciting disturbances among all the neighboring princes. Stimulating their ambition, and fomenting their mutual animosities, they sold to them reciprocally their common servitude and ruin.
The Governor-General, Mr. Hastings, and the Council, tell the Directors, "that the supply for the investment has arisen from _casual_ and _extraordinary_ resources, which they could not expect _always_ to command." In an earlier minute he expresses himself still more distinctly: he says, "If the internal resources of a state fail it, or are not equal to its _occasional_ wants, whence can it obtain immediate relief but from _external_ means?" Indeed, the investment has not been for any long time the natural product of the revenue of Bengal. When, by the vast charge and by the ill return of an evil political and military traffic, and by a prodigal increase of establishments, and a profuse conduct in distributing agencies and contracts, they found themselves under difficulties, instead of being cured of their immoral and impolitic delusion, they plunged deeper into it, and were drawn from expedient to expedient for the supply of the investment into that endless chain of wars which this House by its resolutions has so justly condemned. At home these measures were sometimes countenanced, sometimes winked at, sometimes censured, but always with an acceptance of whatever profit they afforded.
At length, the funds for the investment and for these wars together could no longer be supplied. In the year 1778 the provision for the investment from the revenues and from the monopolies stood very high. It was estimated at a million four hundred thousand pounds; and of this it appears that a great deal was realized. But this was the high flood-tide of the investment; for in that year they announce its probable decline, and that such extensive supplies could not be continued. The advances to the Board of Trade became less punctual, and many disputes arose about the time of making them. However, knowing that all their credit at home depended on the investment, or upon an opinion of its magnitude, whilst they repeat their warning of a probable deficiency, and that their "finances bore an unfavorable aspect," in the year 1779 they rate their investment still higher. But their payments becoming less and less regular, and the war carrying away all the supplies, at length Mr.
Hastings, in December, 1780, denounced sentence of approaching dissolution to this system, and tells the Directors that "he bore too high a respect for their characters to treat them with the management of a preparatory and gradual introduction to an unpleasing report: that it is the _only substantial_ information he shall have to convey in that letter." In confidence, therefore, of their fort.i.tude, he tells them without ceremony, "that there will be a necessity of making a large reduction, or possibly a _total suspension_, of their investment;--that they had already been reduced to borrow near 700,000_l._ This resource,"
says he, "cannot last; it must cease at a certain period, and that perhaps not far _distant_."
He was not mistaken in his prognostic. Loans now becoming the regular resource for retrieving the investment, whose ruin was inevitable, the Council enable the Board of Trade, in April, 1781, to grant certificates for government bonds at eight per cent interest for about 650,000_l._ The investment was fixed at 900,000_l._
But now another alarming system appeared. These new bonds overloaded the market. Those which had been formerly issued were at a discount; the Board of Trade was obliged to advance, therefore, a fourth more than usual to the contractors. This seemed to satisfy that description of dealers. But as those who bought on agency were limited to no terms of mutual advantage, and the bonds on the new issue falling from three to eight, nine, and ten per cent discount, the agents were unable to furnish at the usual prices. Accordingly a discount was settled on such terms as could be made: the lowest discount, and that at two places only, was at four per cent; which, with the interest on the bonds, made (besides the earlier advance) at the least twelve per cent additional charge upon all goods. It was evident, that, as the investment, instead of being supported by the revenues, was sunk by the fall of their credit, so the net revenues were diminished by the daily acc.u.mulation of an interest accruing on account of the investment. What was done to alleviate one complaint thus aggravating the other, and at length proving pernicious to both, this trade on bonds likewise came to its period.
Your Committee has reason to think that the bonds have since that time sunk to a discount much greater even than what is now stated. The Board of Trade justly denominates their resource for that year "the sinking credit of a paper currency, laboring, from the uncommon scarcity of specie, under disadvantages scarcely surmountable." From this they value themselves "on having effected an _ostensible_ provision, at least for that investment." For 1783 nothing appears even ostensible.
By this failure a total revolution ensued, of the most extraordinary nature, and to which your Committee wish to call the particular attention of the House. For the Council-General, in their letter of the 8th of April, 1782, after stating that they were disappointed in their expectations, (how grounded it does not appear,) "thought that they should be able to spare a sum to the Board of Trade,"--tell the Court of Directors, "that they had adopted a _new_ method of keeping up the investment, by private subscribers for eighty lacs of rupees, which will find _cargoes for their ships_ on the usual terms of privilege, _at the risk of the individuals_, and is to be repaid to them _according to the produce of the sales in England_,"--and they tell the Directors, that "a copy of the plan makes a number in their separate dispatches over land."
It is impossible, in reporting this revolution to the House, to avoid remarking with what fidelity Mr. Hastings and his Council have adhered to the mode of transmitting their accounts which your Committee found it necessary to mark and censure in their First Report. Its pernicious tendency is there fully set forth. They were peculiarly called on for a most accurate state of their affairs, in order to explain the necessity of having recourse to such a scheme, as well as for a full and correct account of the scheme itself. But they send only the above short minute by one dispatch over land, whilst the copy of the plan itself, on which the Directors must form their judgment, is sent separately in another dispatch over land, which has never arrived. A third dispatch, which also contained the plan, was sent by a sea conveyance, and arrived late.
The Directors have, for very obvious reasons, ordered, by a strict injunction, that they should send _duplicates of all_ their dispatches by _every ship_. The spirit of this rule, perhaps, ought to extend to every mode of conveyance. In this case, so far from sending a duplicate, they do not send even one perfect account. They announce a plan by one conveyance, and they send it by another conveyance, with other delays and other risks.
At length, at nearly four months" distance, the plan has been received, and appears to be substantially that which had been announced, but developing in the particulars many new circ.u.mstances of the greatest importance. By this plan it appears that the subscription, even in idea or pretence, is not for the use of the Company, but that the subscribers are united into a sort of society for the remitting their _private fortunes_: the goods, indeed, are said to be _shipped on the Company"s account_, and they are directed to be sold on the same account, and at the usual periods of sales; but, after the payment of duties, and such other allowances as they choose to make, in the eleventh article they provide "that _the remainder of the sales shall revert to the subscribers_, and be declared to be _their property_, and divided in proportion to _their_ respective shares." The compensation which they allow in this plan to their masters for their brokerage is, that, if, after deducting all the charges which they impose, "the amount of the sales _should be found_ to exceed two shillings and twopence for the current rupee of the invoice account, it shall be taken by the Company."
For the management of this concern in Bengal they choose commissioners by their own authority. By the same authority they form them into a body, they put them under rules and regulations, and they empower them also to make regulations of their own. They remit, by the like authority, the duties to which all private trade is subject; and they charge the whole concern with seven per cent, to be paid from the net produce of the sales in England, as a recompense to the commissioners: for this the commissioners contract to bear all the charges on the goods to the time of shipping.
The servants having formed this plan of trade, and a new commission for the conduct of it, on their private account, it is a matter of consideration to know who the commissioners are. They turn out to be the three senior servants of the Company"s Board of Trade, who choose to take upon them to be the factors of others for large emoluments, whilst they receive salaries of two thousand pounds and fifteen hundred pounds a year from the Company. As the Company have no other fund than the new investment from whence they are to be paid for the care of their servants" property, this commission and those salaries being to take place of their brokerage, they in effect render it very difficult, if not impossible, for them to derive advantage from their new occupation.
As to the benefit of this _plan_: besides preventing the loss which must happen from the Company"s ships returning empty to Europe, and the stopping of all trade between India and England, the authors of it state, that it will "_open a new channel_ of remittance, and abolish the practice, by precluding the necessity, of remitting _private fortunes_ by _foreign bottoms_, and that it may lead to some _permanent mode_ for remittance of private fortunes, and of combining it with the regular provision of the Company"s investment,--that it will yield _some_ profit to the Company without risk, and the national gain will be the same as upon the regular trade."
As to the combination of this mode of remittance with the Company"s investment, nothing can be affirmed concerning it until some satisfactory a.s.surance can be held out that such an investment can ever be realized. Mr. Hastings and the gentlemen of the Council have not afforded any ground for such an expectation. That the Indian trade may become a permanent vehicle of the private fortunes of the Company"s servants is very probable,--that is, as permanent as the means of acquiring fortunes in India; but that _some profit_ will accrue to the Company is absolutely impossible. The Company are to bear all the charge outwards, and a very great part of that homewards; and their only compensation is the surplus commission on the sale of other people"s goods. The nation will undoubtedly avoid great loss and detriment, which would be the inevitable consequence of the total cessation of the trade with Bengal and the ships returning without cargoes. But if this temporary expedient should be improved into a system, no occasional advantages to be derived from it would be sufficient to balance the mischiefs of finding a great Parliamentary corporation turned into a vehicle for remitting to England the private fortunes of those for whose benefit the territorial possessions in India are in effect and substance under this project to be _solely_ held.
By this extraordinary scheme the Company is totally overturned, and all its relations inverted. From being a body concerned in trade on their own account, and employing their servants as factors, the servants have at one stroke taken the whole trade into their own hands, on their own capital of 800,000_l._, at their own risk, and the Company are become agents and factors to them, to sell by commission _their_ goods for _their_ profit.
To enable your Committee to form some judgment upon the profit which may accrue to the Company from its new relation and employment, they directed that an estimate should be made of the probable proceeds of an investment conducted on the principles of that intended to be realized for 1783. By this estimate, which is subjoined,[5] it appears to your Committee, that, so far from any surplus profit from this transaction, the Bengal adventurers themselves, instead of realizing 2_s._ 2_d._ the rupee, (the standard they fix for their payment,) will not receive the 1_s._ 9_d._ which is its utmost value in silver at the Mint, nor probably above 1_s._ 5_d._ With this certain loss before their eyes, it is impossible that they can ever complete their subscription, unless, by management among themselves, they should be able to procure the goods for their own account upon other terms than those on which they purchased them for their masters, or unless they have for the supply of the Company on their hands a quant.i.ty of goods which they cannot otherwise dispose of. This latter case is not very improbable, from their proposing to send ten sixteenths of the whole investment in silk,--which, as will be seen hereafter, the Company has prohibited to be sent on their account, as a disadvantageous article. Nothing but the servants being overloaded can rationally account for their choice of so great a proportion of so dubious a commodity.
On the state made by two reports of a committee of the General Court in 1782, their affairs were even then reduced to a low ebb. But under the arrangement announced by Mr. Hastings and his colleagues, it does not appear, after this period of the servants" investment, from what fund the proprietors are to make any dividend at all. The objects of the sale from whence the dividend is to arise are not _their_ goods: they stand accountable to others for the whole probable produce. The state of the Company"s commerce will therefore become an object of serious consideration: an affair, as your Committee apprehends, of as much difficulty as ever tried the faculties of this House. For, on the one hand, it is plain that the system of providing the Company"s import into Europe, resting almost wholly by an investment from its territorial revenues, has failed: during its continuance it was supported on principles fatal to the prosperity of that country. On the other hand, if the nominal commerce of the Company is suffered to be carried on for the account of the servants abroad, by investing the emoluments made in their stations, these emoluments are therefore inclusively authorized, and with them the practices from which they accrue. All Parliamentary attempts to reform this system will be contradictory to its inst.i.tution.
If, for instance, five hundred thousand pounds sterling annually be necessary for this kind of investment, any regulation which may prevent the acquisition of that sum operates against the investment which is the end proposed by the plan.
On this new scheme, (which is neither calculated for a future security nor for a present relief to the Company,) it is not visible in what manner the settlements in India can be at all upheld. The gentlemen in employments abroad call for the whole produce of the year"s investment from Bengal; but for the payment of the counter-investment from Europe, which is for the far greater part sent out for the support of their power, no provision at all is made: they have not, it seems, agreed that it should be charged to their account, or that any deduction should be made for it from the produce of their sales in Leadenhall Street. How far such a scheme is preferable to the total suspension of trade your Committee cannot positively determine. In all likelihood, extraordinary expedients were necessary; but the causes which induced this necessity ought to be more fully inquired into; for the last step in a series of conduct may be justifiable upon principles that suppose great blame in those which preceded it.
After your Committee had made the foregoing observations upon the plan of Mr. Hastings and his colleagues, transmitted to the Court of Directors, an extract of the Madras Consultations was a few days ago laid before us. This extract contains a letter from the Governor-General and Council of Bengal to the Presidency of Fort St. George, which affords a very striking, though to your Committee by no means an unexpected, picture of the instability of their opinions and conduct. On the 8th of April the servants had regularly formed and digested the above-mentioned plan, which was to form the basis for the investment of their own fortunes, and to furnish the sole means of the commercial existence of their masters. Before the 10th of the following May, which is the date of their letter to Madras, they inform Lord Macartney that they had fundamentally altered the whole scheme. "Instead," say they, "of allowing the subscribers to retain an interest in the goods, they are to be provided entirely on account of the Company, and transported _at their risk_; and the subscribers, instead of receiving certificates payable out of the produce of the sales in Europe, are to be granted receipts, on the payment of their advances, bearing an interest of eight per cent per annum, until exchanged for drafts on the Court of Directors, payable 365 days after sight, at the rate of two shillings per current rupee,--which drafts shall be granted in the proper time, of three eighths of the amount subscribed, on the 31st of December next, and the remaining five eighths on the 31st of December, 1783."
The plan of April divests the Company of all property in Bengal goods transported to Europe: but in recompense they are freed from all the risk and expense, they are not loaded with interest, and they are not embarra.s.sed with bills. The plan of May reinstates them in their old relation: but in return, their revenues in Bengal are charged with an interest of eight per cent on the sum subscribed, until bills shall be drawn; they are made proprietors of cargoes purchased, under the disadvantage of that interest, at their own hazard; they are subjected to all losses; and they are involved in Europe for payments of bills to the amount of eighty lacs of rupees, at two shillings the rupee,--that is, in bills for eight hundred thousand pounds sterling. It is probably on account of the previous interest of eight per cent that the value of the rupee on this scheme is reduced. Mr. Hastings and his colleagues announce to Lord Macartney no other than the foregoing alteration in their plan.
It is discouraging to attempt any sort of observation on plans thus shifting their principle whilst their merits are under examination. The judgment formed on the scheme of April has nothing to do with the project of May. Your Committee has not suppressed any part of the reflections which occurred to them on the former of these plans: first, because the Company knows of no other by any regular transmissions; secondly, because it is by no means certain that before the expiration of June the Governor-General and Council may not revert to the plan of April. They speak of that plan as likely to be, or make a part of one that shall be, _permanent_. Many reasons are alleged by its authors in its favor, grounded on the state of their affairs; none whatever are a.s.signed for the alteration. It is, indeed, morally certain that persons who had money to remit must have made the same calculation which has been made by the directions of your Committee, and the result must have been equally clear to them,--which is, that, instead of realizing two shillings and twopence the rupee on their subscription, as they proposed, they could never hope to see more than one shilling and ninepence. This calculation probably shook the main pillar of the project of April. But, on the other hand, as the subscribers to the second scheme can have no certain a.s.surance that the Company will accept bills so far exceeding their allowance in this particular, the necessity of remitting their fortunes may beat them back to their old ground. The Danish Company was the only means of remitting which remained. Attempts have been made with success to revive a Portuguese trade for that purpose. It is by no means clear whether Mr. Hastings and his colleagues will adhere to either of the foregoing plans, or, indeed, whether any investment at all to that amount can be realized; because nothing but the convenience of remitting the gains of British subjects to London can support any of these projects.
The situation of the Company, under this perpetual variation in the system of their investment, is truly perplexing. The manner in which they arrive at any knowledge of it is no less so. The letter to Lord Macartney, by which the variation is discovered, was not intended for transmission to the Directors. It was merely for the information of those who were admitted to a share of the subscription at Madras. When Mr. Hastings sent this information to those subscribers, he might well enough have presumed an event to happen which did happen,--that is, that a vessel might be dispatched from Madras to Europe: and indeed, by that, and by every devisable means, he ought not only to have apprised the Directors of this most material change in the plan of the investment, but to have entered fully into the grounds and reasons of his making it.
It appears to your Committee that the ships which brought to England the plan of the 8th of April did not sail from Bengal until the 1st of May.
If the change had been in contemplation for any time before the 30th of April, two days would have sufficed to send an account of it, and it might have arrived along with the plan which it affected. If, therefore, such a change was in agitation before the sailing of the ships, and yet was concealed when it might have been communicated, the concealment is censurable. It is not improbable that some change of the kind was made or meditated before the sailing of the ships for Europe: for it is hardly to be imagined that reasons wholly unlooked-for should appear for setting aside a plan concerning the success of which the Council-General seemed so very confident, that a new one should be proposed, that its merits should be discussed among the moneyed men, that it should be adopted in Council, and officially ready for transmission to Madras, in twelve or thirteen days. In this perplexity of plan and of transmission, the Court of Directors may have made an arrangement of their affairs on the groundwork of the first scheme, which was officially and authentically conveyed to them. The fundamental alteration of that plan in India might require another of a very different kind in England, which the arrangements taken in consequence of the first might make it difficult, if not impossible, to execute. What must add to the confusion is, that the alteration has not the regular and official authority of the original plan, and may be presumed to indicate with certainty nothing more than that the business is _again_ afloat, and that no scheme is finally determined on. Thus the Company is left without any fixed data upon which they can make a rational disposition of their affairs.
The fact is, that the principles and economy of the Company"s trade have been so completely corrupted by turning it into a vehicle for tribute, that, whenever circ.u.mstances require it to be replaced again upon a bottom truly commercial, hardly anything but confusion and disasters can be expected as the first results. Even before the acquisition of the territorial revenues, the system of the Company"s commerce was not formed upon principles the most favorable to its prosperity; for, whilst, on the one hand, that body received encouragement by royal and Parliamentary charters, was invested with several ample privileges, and even with a delegation of the most essential prerogatives of the crown,--on the other, its commerce was watched with an insidious jealousy, as a species of dealing dangerous to the national interests.
In that light, with regard to the Company"s imports, there was a total prohibition from domestic use of the most considerable articles of their trade,--that is, of all silk stuffs, and stained and painted cottons.
The British market was in a great measure interdicted to the British trader. Whatever advantages might arise to the general trading interests of the kingdom by this restraint, its East India interest was undoubtedly injured by it. The Company is also, and has been from a very early period, obliged to furnish the Ordnance with a quant.i.ty of saltpetre at a certain price, without any reference to the standard of the markets either of purchase or of sale. With regard to their export, they were put also under difficulties upon very mistaken notions; for they were obliged to export annually a certain proportion of British manufactures, even though they should find for them in India none or but an unprofitable want. This compulsory export might operate, and in some instances has operated, in a manner more grievous than a tax to the amount of the loss in trade: for the payment of a tax is in general divided in unequal portions between the vender and consumer, the largest part falling upon the latter; in the case before us the tax may be as a dead charge on the trading capital of the Company.
The spirit of all these regulations naturally tended to weaken, in the very original const.i.tution of the Company, the main-spring of the commercial machine, _the principles of profit and loss_. And the mischief arising from an inattention to those principles has constantly increased with the increase of its power. For when the Company had acquired the rights of sovereignty in India, it was not to be expected that the attention to profit and loss would have increased. The idea of remitting tribute in goods naturally produced an indifference to their price and quality,--the goods themselves appearing little else than a sort of package to the tribute. Merchandise taken as tribute, or bought in lieu of it, can never long be of a kind or of a price fitted to a market which stands solely on its commercial reputation. The indifference of the mercantile sovereign to his trading advantages naturally relaxed the diligence of his subordinate factor-magistrates through all their gradations and in all their functions; it gave rise, at least so far as the princ.i.p.al was concerned, to much neglect of price and of goodness in their purchases. If ever they showed any extraordinary degrees of accuracy and selection, it would naturally be in favor of that interest to which they could not be indifferent. The Company might suffer above, the natives might suffer below; the intermediate party must profit to the prejudice of both.
Your Committee are of opinion that the Company is now arrived at that point, when, the investment from surplus revenue or from the spoil of war ceasing, it is become much more necessary to fix its commerce upon a commercial basis. And this opinion led your Committee to a detailed review of all the articles of the Indian traffic upon which the profit and loss was steady; and we have chosen a period of four years, during the continuance of the revenue investment, and prior to any borrowing or any extraordinary drawing of bills, in order to find out how far the trade, under circ.u.mstances when it will be necessary to carry it on by borrowing, or by bills, or by exportation of bullion, can be sustained in the former course, so as to secure the capital and to afford a reasonable dividend. And your Committee find that in the first four years the investment from Bengal amounted to 4,176,525_l._; upon 2,260,277_l._ there was a gain of 186,337_l._, and upon 1,916,248_l._ a loss of 705,566_l._: so that the excess of loss above gain, upon the whole of the foregoing capital, was in the four years no less than 519,229_l._
If the trade were confined to Bengal, and the Company were to trade on those terms upon a capital borrowed at eight per cent Indian interest, their revenues in that province would be soon so overpowered with debt, that those revenues, instead of supporting the trade, would be totally destroyed by it. If, on the other hand, the Company traded upon bills with every advantage, far from being in a condition to divide the smallest percentage, their bankruptcy here would be inevitable.
Your Committee then turned to the trade of the other factories and Presidencies, and they constantly found, that, as the power and dominion of the Company was less, their profit on the goods was greater. The investments of Madras, Bombay, and Bencoolen have, in the foregoing four years, upon a capital of 1,151,176_l._, had a gain upon the whole of 329,622_l._ The greatest of all is that of Bencoolen, which, on a capital of 76,571_l._, produced a profit of 107,760_l._ This, however, is but a small branch of the Company"s trade. The trade to China, on a capital of 1,717,463_l._, produced an excess of gain amounting to 874,096_l._, which is about fifty per cent. But such was the evil influence of the Bengal investment, that not only the profits of the Chinese trade, but of all the lucrative branches taken together, were so sunk and ingulfed in it, that the whole profit on a capital of 7,045,164_l._ reached to no more than 684,489_l._, that is, to 189,607_l._ less than the profit on the Chinese trade alone,--less than the total profits on the gainful trades taken together, 520,727_l._
It is very remarkable, that in the year 1778, when the Bengal investment stood at the highest, that is, so high as 1,223,316_l._, though the Chinese trade produced an excess of gain in that year of 209,243_l._, and that no loss of moment could be added to that of Bengal, (except about 45,000_l._ on the Bombay trade,) the whole profit of a capital of 2,040,787_l._ amounted only to the sum of 9,480_l._
The detail of the articles in which loss was incurred or gain made will be found in the Appendix, No. 24. The circ.u.mstances of the time have rendered it necessary to call up a vigorous attention to this state of the trade of the Company between Europe and India.
INTERNAL TRADE OF BENGAL.