ing to this kingdom, whether it comes from the vestment, Allowance to gal. some alteration: all the honourable, 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 expences 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 publick charge fell upon that unhappy country for the support of other parts of India, which had been desolated in such a manner as to contribute little or nothing to their own protection. of trade. But that the greatness of all these above the in- drains, and their effects, may be renhow applied. dered 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 an 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 principal collections of revenue. With very few exceptions, they are only employed as servants and agents to Your committee have given this Former state Europeans, or in the inferiour departments of col- short comparative account of the lection, when it is absolutely impossible to proceed effects of the maritime traffick of Bengal when in a step without their assistance. For some time its natural state, and as it has stood since the preafter the acquisition of the territorial revenue, the valence of the system of an investment from sum of four hundred and twenty the revenues. But before the formation of that nabob of Ben- thousand pounds a year was paid, system, Bengal did by no means depend for its according to the stipulation of a resources on its maritime commerce. The intreaty, to the nabob of Bengal for the support of land trade, from whence it derived a very great his government. This sum, however inconsider- supply of silver and gold, and many kinds of merable compared to the revenues of the province, yet chantable goods, was very considerable.-The distributed through the various departments of higher provinces of the Mogul empire were then civil administration, served in some degree to pre- populous and opulent, and intercourse to an imserve the natives of the better sort, particularly mense amount was carried on between them and those of the Mahomedan profession, from being Bengal. A great trade also passed through these utterly ruined. The people of that persuasion not provinces from all the countries on the frontier of being so generally engaged in trade, and not hav- Persia, and the frontier provinces of Tartary, as ing on their conquest of Bengal divested the an- well as from Surat and Baroach on the western cient Gentû proprietors of their lands of inherit- side of India. These parts opened to Bengal a ance, had for their chief, if not their sole, support communication with the Persian gulf and with the the share of a moderate conqueror in all offices Red sea, and through them with the whole Turkcivil and military. But your committee find, that ish, and the maritime parts of the Persian empire, this arrangement was of a short duration. With- besides the commercial intercourse, which it mainout the least regard to the subsistence of this in-tained with those and many other countries through nocent people, or to the faith of the agreement its own sea-ports. on which they were brought under the British How reduced. government, this sum was reduced by a new treaty to £.320,000; 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: but when he arrived at his majority, and when the debts 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. The other resource of the MahomeNative officers. dans, and of the Gentûs of certain of the higher casts, was the army. In this army, nine tenths of which consist of natives, no native, of whatever description, holds any rank higher than that of a subadar commandant, that is, of an officer below the rank of an English subaltern, who is appointed to each company of the native soldiery. All lucrative Your committee here would be unemployments derstood to state the ordinary estain the hands of the English. blishment, for the war may have made 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 Khân, have wholly destroyed the trade of that country; and the trade to Turkey, by Judda and Bussorah, And the trade which was the greatest, and perhaps to Turkey. the best branch of the Indian trade, is very much diminished. The fall of the throne of the Mogul emperours has drawn with it that of the great marts of Agra and Delhi. The utmost confusion of the north-western 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 Coral 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. State of trade Such is the actual condition of the in Carnatic. trade of Bengal since the establishment of the British power there. The commerce of the Carnatic, as far as the enquiries of your committee have extended, did not appear with a better aspect, even before the invasion of Hyder Ali Khân, 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 circumscribed 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 and European powers trading on the coast of Coromandel. But your committee have not extended their enquiries 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. for a very long duration. For a while the company's servants kept up this investment, not by improving commerce, manufactures, 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 neighbouring princes. Stimulating their ambition, and fomenting their mutual animosities, they sold to them reciprocally their common servitude and ruin. The governour-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 traffick, and by a prodigal encrease of establishments, and a profuse conduct in distributing agencies and contracts, they found themselves under difficulties, instead of being cured of their immoral and impolitick 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 III.-EFFECT OF THE REVENUE INVESTMENT ON THE high flood-tide of the investment; for in that year COMPANY. HITHERTO, your committee has considered this system of revenue investment, substituted 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 quantity of merchantable goods without any disbursement 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 encrease of its burthens, was not calculated 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 unfavourable aspect," in the year 1779 they rate the 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 re spect for their characters to treat them with the 66 66 "management of a preparatory and gradual intró"duction to an unpleasing report. That it is the only substantial information he shall have to convey in that letter." In confidence therefore of their fortitude, 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. 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 prognostick. Loans now becoming the regular resource for retrieving the investment, whose ruin was inevitable, the council enabled the board of trade, in April 1781, to grant certificates for government bonds at eight per cent. interest for about £.650,000. The investment was fixed at £.900,000. 66 66 " they had adopted a new method of keeping up "the investment by private subscribers for eighty "lacks 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 66 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 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. 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, there-form their judgment, is sent separately in another fore, 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 accumulation 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, la"bouring, from the uncommon scarcity of species, "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. 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 circumstances 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 sale; but, after the payment of duties, and such other allowances as they choose to make, in the 11th 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 By this failure a total revolution ensued of the deducting all the charges, which they impose) most extraordinary nature, and to which your "the amount of the sales should be found to excommittee wish to call the particular attention of" ceed two shillings and twopence for the current 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”—they tell the court of directors, "that 66 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. 66 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 66 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 assurance 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 impos * ESTIMATE of the Sale Amount, and net Proceeds in England, of the Cargoes to be sent from Bengal, agreeable to the plan, received by Letter dated the 8th April 1782. sible. The company are to bear all the charge outwards, and a very great part of that homewaras; 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, 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, it appears to your committee, that so far from any surplus profit from this transaction, the Bengal adventurers themselves, instead of realizing 2s. 2d. the rupee, (the standard they fix for their payment,) will not receive the 1s. 9d. which is its utmost value in silver at the mint; nor probably above 1s. 5d. 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 quantity 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 in a 1. The sale amount is computed on an average of the sales of the two last years' imports. b 2. The custom is computed on an average of what was paid on piece goods and raw silk of said imports, adding additional imposts. 3. The ships going out of this season (1782) by which the above investment is expected to be sent home, are taken up at £.47. 58. per ton, for the homeward cargo; this charge amounts to £35,815 each ship; the additional wages to the men, which the company pay, and a very small charge for demurrage, will encrease the freight, &c. to £.40,000 per ship, agreeable to above estimate. d 4. The duty of 5 per cent. is charged by the company on the gross sale amount of all private trade licensed to be brought from India; the amount of this duty is the only benefit the company are likely to receive from the subscription investment. 5. This charge is likewise made on private trade goods, and is little (if any thing) more than the real expence the company are at on account of the same; therefore no benefit will probably arise to the company from it on the sale of the said investment. 16. This is the sum, which will probably be realized in England, and is only equal to Is. 5d. per rupee, on the 80 lacks subscribed. vestment in silk the which, as will be seen hereafter, 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 on 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 institution. 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 counterinvestment 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 sary; but the causes, which induced this necessity, ought to be more fully enquired into; for the last step in a series of conduct may be justifiable upon principles that suppose great blame in those which preceded it. neces 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 governour-general and council of Bengal to the presidency of Fort SaintGeorge, 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, in"stead 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 draughts on the court "of directors, payable 365 days after sight, at "the rate of two shillings per current rupee; "which draughts shall be granted in the proper "time of 3-8ths of the amount subscribed on the "31st of December next; and the remaining "5-8ths on the 31st of December 1783." 66 66 66 66 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 expence; they are not loaded with interest; and they are not embarrassed 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 lacks 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 governour-general and council may not revert to the plan of April. They speak of that plan as |