In order to open more fully the tendency of the policy which has hitherto prevailed, and that the House may be enabled, in any regulations which may be made, to follow the tracks of the abuse, and to apply an appropriated remedy to a particular distemper, your Committee think it expedient to consider in some detail the manner in which India is connected with this kingdom,—which is the second head of their plan.
The two great links by which this connection is maintained are, first, the East India Company's commerce, and, next, the government set over the natives by that company and by the crown. The first of these principles of connection, namely, the East India Company's trade, is to be first considered, not only as it operates by itself, but as having a powerful influence over the general policy and the particular measures of the Company's government. Your Committee apprehend that the present state, nature, and tendency of this trade are not generally understood.
Trade to India formerly carried on chiefly in silver. Until the acquisition of great territorial revenues by the East India Company, the trade with India was carried on upon the common principles of commerce,—namely, by sending out such commodities as found a demand in the India market, and, where that demand was not adequate to the reciprocal call of the European market for Indian goods, by a large annual exportation of treasure, chiefly in silver. In some years that export has been as high as six hundred and eighty thousand pounds sterling. The other European companies trading to India traded thither on the same footing. Their export of bullion was probably larger in proportion to the total of their commerce, as their commerce itself bore a much larger proportion to the British than it does at this time or has done for many years past. But stating it to be equal to the British, the whole of the silver sent annually from Europe into Hindostan could not fall very short of twelve or thirteen hundred thousand pounds a year. This influx of money, poured into India by an emulation of all the commercial nations of Europe, encouraged industry and promoted cultivation in a high degree, notwithstanding the frequent wars with which that country was harassed, and the vices which existed in its internal government. On the other hand, the export of so much silver was sometimes a subject of grudging and uneasiness in Europe, and a commerce carried on through such a medium to many appeared in speculation of doubtful advantage. But the practical demands of commerce bore down those speculative objections. The East India commodities were so essential for animating all other branches of trade, and for completing the commercial circle, that all nations contended for it with the greatest avidity. The English company flourished under this exportation for a very long series of years. The nation was considerably benefited both in trade and in revenue; and the dividends of the proprietors were often high, and always sufficient to keep up the credit of the Company's stock in heart and vigor.
How trade carried on since. But at or very soon after the acquisition of the territorial revenues to the English company, the period of which may be reckoned as completed about the year 1765, a very great revolution took place in commerce as well as in dominion; and it was a revolution which affected the trade of Hindostan with all other European nations, as well as with that in whose favor and by whose power it was accomplished. From that time bullion was no longer regularly exported by the English East India Company to Bengal, or any part of Hindostan; and it was soon exported in much smaller quantities by any other nation. A new way of supplying the market of Europe, by means of the British power and influence, was invented: a species of trade (if such it may be called) by which it is absolutely impossible that India should not be radically and irretrievably ruined, although our possessions there were to be ordered and governed upon principles diametrically opposite to those which now prevail in the system and practice of the British company's administration.
Investments. A certain portion of the revenues of Bengal has been for many years set apart to be employed in the purchase of goods for exportation to England, and this is called the Investment. The greatness of this investment has been the standard by which the merit of the Company's principal servants has been too generally estimated; and this main cause of the impoverishment of India has been generally taken as a measure of its wealth and prosperity. Numerous fleets of large ships, loaded with the most valuable commodities of the East, annually arriving in England, in a constant and increasing succession, imposed upon the public eye, and naturally gave rise to an opinion of the happy condition and growing opulence of a country whose surplus productions occupied so vast a space in the commercial world. This export from India seemed to imply also a reciprocal supply, by which the trading capital employed in those productions was continually strengthened and enlarged. But the payment of a tribute, and not a beneficial commerce to that country, wore this specious and delusive appearance.
Increase of expenses. The fame of a great territorial revenue, exaggerated, as is usual in such cases, beyond even its value, and the abundant fortunes of the Company's officers, military and civil, which flowed into Europe with a full tide, raised in the proprietors of East India stock a premature desire of partaking with their servants in the fruits of that splendid adventure. Government also thought they could not be too early in their claims for a share of what they considered themselves as entitled to in every foreign acquisition made by the power of this kingdom, through whatever hands or by whatever means it was made. These two parties, after some struggle, came to an agreement to divide between them the profits which their speculation proposed to realize in England from the territorial revenue in Bengal. About two hundred thousand pounds was added to the annual dividends of the proprietors. Four hundred thousand was given to the state, which, added to the old dividend, brought a constant charge upon the mixed interest of Indian trade and revenue of eight hundred thousand pounds a year. This was to be provided for at all events.
By that vast demand on the territorial fund, the correctives and qualifications which might have been gradually applied to the abuses in Indian commerce and government were rendered extremely difficult.
Progress of investments. The practice of an investment from the revenue began in the year 1766, before arrangements were made for securing and appropriating an assured fund for that purpose in the treasury, and for diffusing it from thence upon the manufactures of the country in a just proportion and in the proper season. There was, indeed, for a short time, a surplus of cash in the treasury. It was in some shape to be sent home to its owners. To send it out in silver was subject to two manifest inconveniences. First, the country would be exhausted of its circulating medium. A scarcity of coin was already felt in Bengal. Cossim Ali Khân, (the Nabob whom the Company's servants had lately set up, and newly expelled,) during the short period of his power, had exhausted the country by every mode of extortion; in his flight he carried off an immense treasure, which has been variously computed, but by none at less than three millions sterling. A country so exhausted of its coin, and harassed by three revolutions rapidly succeeding each other, was rather an object that stood in need of every kind of refreshment and recruit than one which could subsist under new evacuations. The next, and equally obvious inconvenience, was to the Company itself. To send silver into Europe would be to send it from the best to the worst market. When arrived, the most profitable use which could be made of it would be to send it back to Bengal for the purchase of Indian merchandise. It was necessary, therefore, to turn the Company's revenue into its commerce. The first investment was about five hundred thousand pounds, and care was taken afterwards to enlarge it. In the years 1767 and 1768 it arose to seven hundred thousand.
Consequences of them. This new system of trade, carried on through the medium of power and public revenue, very soon produced its natural effects. The loudest complaints arose among the natives, and among all the foreigners who traded to Bengal. It must unquestionably have thrown the whole mercantile system of the country into the greatest confusion. With regard to the natives, no expedient was proposed for their relief. The case was serious with respect to European powers. The Presidency plainly represented to the Directors, that some agreement should be made with foreign nations for providing their investment to a certain amount, or that the deficiencies then subsisting must terminate in an open rupture with France. The Directors, pressed by the large payments in England, were not free to abandon their system; and all possible means of diverting the manufactures into the Company's investment were still anxiously sought and pursued, until the difficulties of the foreign companies were at length removed by the natural flow of the fortunes of the Company's servants into Europe, in the manner which will be stated hereafter.
But,