But this scheme of monopoly did not subsist long, at least in that mode and for those purposes. Three of the grand monopolies, those of opium, salt, and saltpetre, were successively by the Company taken into their own hands. The produce of the sale of the two former articles was applied to the purchase of goods for their investment; the latter was exported in kind for their sales in Europe. The senior servants had a certain share of emolument allotted to them from a commission on the revenues. The junior servants were rigorously confined to salaries, on which they were unable to subsist according to their rank. They were strictly ordered to abstain from all dealing in objects of internal commerce. Those of export and import were left open to young men without mercantile experience, and wholly unprovided with mercantile capitals, but abundantly furnished with large trusts of the public money, and with all the powers of an absolute government. In this situation, a religious abstinence from all illicit game was prescribed to men at nine thousand miles' distance from the seat of the supreme authority.
Your Committee is far from meaning to justify, or even to excuse, the oppressions and cruelties used by many in supplying the deficiencies of their regular allowances by all manner of extortion; but many smaller irregularities may admit some alleviation from thence. Nor does your Committee mean to express any desire of reverting to the mode (contrived in India, but condemned by the Directors) of rewarding the servants of an higher class by a regulated monopoly. Their object is to point out the deficiencies in the system, by which restrictions were laid that could have little or no effect whilst want and power were suffered to be united.
But the proceedings of the Directors at that time, though not altogether judicious, were in many respects honorable to them, and favorable, in the intention at least, to the country they governed. For, finding their trading capital employed against themselves and against the natives, and struggling in vain against abuses which were inseparably connected with the system of their own preference in trade, in the year 1773 they came to the manly resolution of setting an example to their servants, and gave up all use of power and influence in the two grand articles of their investment, silk and piece-goods. They directed that the articles should be bought at an equal and public market from the native merchants; and this order they directed to be published in all the principal marts of Bengal.
Your Committee are clearly of opinion that no better method of purchase could be adopted. But it soon appeared that in deep-rooted and inveterate abuses the wisest principles of reform may be made to operate so destructively as wholly to discredit the design, and to dishearten all persons from the prosecution of it. The Presidency, who seemed to yield with the utmost reluctance to the execution of these orders, soon made the Directors feel their evil influence upon their own investment; for they found the silk and cotton cloths rose twenty-five per cent above their former price, and a further rise of forty per cent was announced to them.
SILK
What happened with regard to raw silk is still more remarkable, and tends still more clearly to illustrate the effects of commercial servitude during its unchecked existence, and the consequences which may be made to arise from its sudden reformation. On laying open the trade, the article of raw silk was instantly enhanced to the Company full eighty per cent. The contract made for that commodity, wound off in the Bengal method, which used to sell for less than six rupees, or thirteen shillings, for two pounds' weight, arose to nine rupees, or near twenty shillings, and the filature silk was very soon after contracted for at fourteen.
The Presidency accounted for this rise by observing that the price had before been arbitrary, and that the persons who purveyed for the Company paid no more than "what was judged sufficient for the maintenance of the first providers." This fact explains more fully than the most labored description can do the dreadful effects of the monopoly on the cultivators. They had the sufficiency of their maintenance measured out by the judgment of those who were to profit by their labor; and this measure was not a great deal more, by their own account, than about two thirds of the value of that labor. In all probability it was much less, as these dealings rarely passed through intermediate hands without leaving a considerable profit. These oppressions, it will be observed, were not confined to the Company's share, which, however, covered a great part of the trade; but as this was an article permitted to the servants, the same power of arbitrary valuation must have been extended over the whole, as the market must be equalized, if any authority at all is extended over it by those who have an interest in the restraint. The price was not only raised, but in the manufactures the quality was debased nearly in an equal proportion. The Directors conceived, with great reason, that this rise of price and debasement of quality arose, not from the effect of a free market, but from the servants having taken that opportunity of throwing upon the market of their masters the refuse goods of their own private trade at such exorbitant prices as by mutual connivance they were pleased to settle. The mischief was greatly aggravated by its happening at a time when the Company were obliged to pay for their goods with bonds bearing an high interest.
The perplexed system of the Company's concerns, composed of so many opposite movements and contradictory principles, appears nowhere in a more clear light. If trade continued under restraint, their territorial revenues must suffer by checking the general prosperity of the country: if they set it free, means were taken to raise the price and debase the quality of the goods; and this again fell upon the revenues, out of which the payment for the goods was to arise. The observations of the Company on that occasion are just and sagacious; and they will not permit the least doubt concerning the policy of these unnatural trades. "The amount of our Bengal cargoes, from 1769 to 1773, is 2,901,194l. sterling; and if the average increase of price be estimated at twenty-five per cent only, the amount of such increase is 725,298l. sterling. The above circumstances are exceedingly alarming to us; but what must be our concern, to find by the advices of our President and Council of 1773, that a further advance of forty per cent on Bengal goods was expected, and allowed to be the consequence of advertisements then published, authorizing a free trade in the service? We find the Duanné revenues are in general farmed for five years, and the aggregate increase estimated at only 183,170l. sterling (on a supposition that such increase will be realized); yet if the annual investment be sixty lacs, and the advance of price thirty per cent only, such advance will exceed the increase of the revenue by no less than 829,330l. sterling."
The indignation which the Directors felt at being reduced to this distressing situation was expressed to their servants in very strong terms. They attributed the whole to their practices, and say, "We are far from being convinced that the competition which tends to raise the price of goods in Bengal is wholly between public European companies, or between merchants in general who export to foreign markets: we are rather of opinion that the sources of this grand evil have been the extraordinary privileges granted to individuals in our service or under our license to trade without restriction throughout the provinces of Bengal, and the encouragement they have had to extend their trade to the uttermost, even in such goods as were proper for our investment, by observing the success of those persons who have from time to time found means to dispose of their merchandise to our Governor and Council, though of so bad a quality as to be sold here with great difficulty, after having been frequently refused, and put up at the next sale without price, to the very great discredit and disadvantage of the Company." In all probability the Directors were not mistaken; for, upon an inquiry instituted soon after, it was found that Cantû Babû, the banian or native steward and manager to Mr. Hastings, (late President,) held two of these contracts in his own name and that of his son for considerably more than 150,000l. This discovery brought on a prohibition from the Court of Directors of that suspicious and dangerous dealing in the stewards of persons in high office. The same man held likewise farms to the amount of 140,000l. a year of the landed revenue, with the same suspicious appearance, contrary to the regulations made under Mr. Hastings's own administration.
In the mortifying dilemma to which the Directors found themselves reduced, whereby the ruin of the revenues either by the freedom or the restraint of trade was evident, they considered the first as most rapid and urgent, and therefore once more revert to the system of their ancient preëmption, and destroy that freedom which they had so lately and with so much solemnity proclaimed, and that before it could be abused or even enjoyed. They declare, that, "unwilling as we are to return to the former coercive system of providing an investment,