Court of Directors, on their part, began, though very slowly, to perceive that the country which was ravaged by this sort of commerce was their own. These complaints obliged the Directors to a strict examination into the real sources of the mismanagement of their concerns in India, and to lay the foundations of a system of restraint on the exorbitancies of their servants. Accordingly, so early as the year 1765, they confine them to a trade only in articles of export and import, and strictly prohibit them from all dealing in objects of internal consumption. About the same time the Presidency of Calcutta found it necessary to put a restraint upon themselves, or at least to make show of a disposition (with which the Directors appear much satisfied) to keep their own enormous power within bounds.
But whatever might have been the intentions either of the Directors or the Presidency, both found themselves unequal to the execution of a plan which went to defeat the projects of almost all the English in India,—possibly comprehending some who were makers of the regulations. For, as the complaint of the country or as their own interest predominated with the Presidency, they were always shifting from one course to the other; so that it became as impossible for the natives to know upon what principle to ground any commercial speculation, from the uncertainty of the law under which they acted, as it was when they were oppressed by power without any color of law at all: for the Directors, in a few months after they had given these tokens of approbation to the above regulations in favor of the country trade, tell the Presidency, "It is with concern we see in every page of your Consultations restrictions, limitations, prohibitions, affecting various articles of trade." On their side, the Presidency freely confess that these monopolies of inland trade "were the foundation of all the bloodsheds, massacres, and confusions which have happened of late in Bengal."
Pressed in this urgent manner, the Directors came more specifically to the grievance, and at once annul all the passports with which their servants traded without duties, holding out means of compensation, of which it does not appear that any advantage was taken. In order that the duties which existed should no longer continue to burden the trade either of the servants or natives, they ordered that a number of oppressive toll-bars should be taken away, and the whole number reduced to nine of the most considerable.
When Lord Clive was sent to Bengal to effect a reformation of the many abuses which prevailed there, he considered monopoly to be so inveterate and deeply rooted, and the just rewards of the Company's servants to be so complicated with that injustice to the country, that the latter could not easily be removed without taking away the former. He adopted, therefore, a plan for dealing in certain articles, which, as he conceived, rather ought to be called "a regulated and restricted trade" than a formal monopoly. By this plan he intended that the profits should be distributed in an orderly and proportioned manner for the reward of services, and not seized by each individual according to the measure of his boldness, dexterity, or influence.
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,
