The Works of the Right Honourable Edmund Burke, Vol. 08 (of 12)

It is very remarkable, that in the year 1778, when the Bengal investment stood at the highest, that is, so high as 1,223,316l., though the Chinese trade produced an excess of gain in that year of 209,243l., and that no loss of moment could be added to that of Bengal, (except about 45,000l. on the Bombay trade,) the whole profit of a capital of 2,040,787l. amounted only to the sum of 9,480l.

The detail of the articles in which loss was incurred or gain made will be found in the Appendix, No. 24. The circumstances 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

The internal trade of Bengal has next attracted the inquiries of your Committee.

The great and valuable articles of the Company's investment, drawn from the articles of internal trade, are raw silk, and various descriptions of piece-goods made of silk and cotton. These articles are not under any formal monopoly; nor does the Company at present exercise a declared right of preëmption with regard to them. But it does not appear that the trade in these particulars is or can be perfectly free,—not so much on account of any direct measures taken to prevent it as from the circumstances of the country, and the manner of carrying on business there: for the present trade, even in these articles, is built from the ruins of old monopolies and preëmptions, and necessarily partakes of the nature of its materials.

In order to show in what manner manufactures and trade so constituted contribute to the prosperity of the natives, your Committee conceives it proper to take, in this place, a short general view of the progress of the English policy with relation to the commerce of Bengal, and the several stages and gradations by which it has been brought into its actual state. The modes of abuse, and the means by which commerce has suffered, will be considered in greater detail under the distinct heads of those objects which have chiefly suffered by them.

During the time of the Mogul government, the princes of that race, who omitted nothing for the encouragement of commerce in their dominions, bestowed very large privileges and immunities on the English East India Company, exempting them from several duties to which their natural-born subjects were liable. The Company's dustuck, or passport, secured to them this exemption at all the custom-houses and toll-bars of the country. The Company, not being able or not choosing to make use of their privilege to the full extent to which it might be carried, indulged their servants with a qualified use of their passport, under which, and in the name of the Company, they carried on a private trade, either by themselves or in society with natives, and thus found a compensation for the scanty allowances made to them by their masters in England. As the country government was at that time in the fulness of its strength, and that this immunity existed by a double connivance, it was naturally kept within tolerable limits.

But by the revolution in 1757 the Company's servants obtained a mighty ascendant over the native princes of Bengal, who owed their elevation to the British arms. The Company, which was new to that kind of power, and not yet thoroughly apprised of its real character and situation, considered itself still as a trader in the territories of a foreign potentate, in the prosperity of whose country it had neither interest nor duty. The servants, with the same ideas, followed their fortune in the channels in which it had hitherto ran, only enlarging them with the enlargement of their power. For their first ideas of profit were not official; nor were their oppressions those of ordinary despotism. The first instruments of their power were formed out of evasions of their ancient subjection. The passport of the Company in the hands of its servants was no longer under any restraint; and in a very short time their immunity began to cover all the merchandise of the country. Cossim Ali Khân, the second of the Nabobs whom they had set up, was but ill disposed to the instruments of his greatness. He bore the yoke of this imperious commerce with the utmost impatience: he saw his subjects excluded as aliens from their own trade, and the revenues of the prince overwhelmed in the ruin of the commerce of his dominions. Finding his reiterated remonstrances on the extent and abuse of the passport ineffectual, he had recourse to an unexpected expedient, which was, to declare his resolution at once to annul all the duties on trade, setting it equally free to subjects and to foreigners.

Never was a method of defeating the oppressions of monopoly more forcible, more simple, or more equitable: no sort of plausible objection could be made; and it was in vain to think of evading it. It was therefore met with the confidence of avowed and determined injustice. The Presidency of Calcutta openly denied to the prince the power of protecting the trade of his subjects by the remission of his own duties. It was evident that his authority drew to its period: many reasons and motives concurred, and his fall was hastened by the odium of the oppressions which he exercised voluntarily, as well as of those to which he was obliged to submit.

When this example was made, Jaffier Ali Khân, who had been deposed to make room for the last actor, was brought from penury and exile to a station the terms of which he could not misunderstand. During his life, and in the time of his children who succeeded to him, parts of the territorial revenue were assigned to the Company; and the whole, under the name of residency at the Nabob's court, was brought, directly or indirectly, under the control of British subjects. The Company's servants, armed with authorities delegated from the nominal government, or attended with what was a stronger guard, the fame of their own power, appeared as magistrates in the markets in which they dealt as traders. It was impossible for the natives in general to distinguish, in the proceedings of the same persons, what was transacted on the Company's account from what was done on their own; and it will ever be so difficult to draw this line of distinction, that as long as the Company does, directly or indirectly, aim at any advantage to itself in the purchase of any commodity whatever, so long will it be impracticable to prevent the servants availing themselves of the same privilege.

The servants, therefore, for themselves or for their employers, monopolized every article of trade, foreign and domestic: not only the raw merchantable commodities, but the manufactures; and not only these, but the necessaries of life, or what in these countries habit has confounded with them,—not only silk, cotton, piece-goods, opium, saltpetre, but not unfrequently salt, tobacco, betel-nut, and the grain of most ordinary consumption. In the name of the country government they laid on or took off, and at their pleasure heightened or lowered, all duties upon goods: the whole trade of the country was either destroyed or in shackles. The acquisition of the Duanné, in 1765, bringing the English into the immediate government of the country in its most essential branches, extended and confirmed all the former means of monopoly.

In the progress of these ruinous measures through all their details, innumerable grievances were suffered by the native inhabitants, which were represented in the strongest, that is, their true colors, in England. Whilst the far greater part of the British in India were in eager pursuit of the forced and exorbitant gains of a trade carried on by power, contests naturally arose among the competitors: those who were overpowered by their rivals became loud in their complaints to the Court of Directors, and were very capable, from experience, of pointing out every mode of abuse.

The 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, 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, or to abridge that freedom of commerce which has been so lately established in Bengal, yet at the same time finding it our indispensable duty to strike at the root of an evil which has been so severely felt by the Company, and which can no longer be supported, we hereby direct that all persons whatever in the Company's service, or under our protection, be absolutely prohibited, by public advertisement, from trading in any of those articles which compose our investment, directly or indirectly, except on account of and for the East India Company, until their investment is completed."

As soon as this order was received in Bengal, it was construed, as indeed the words seemed directly to warrant, to exclude all natives as well as servants from the trade, until the Company was supplied. The Company's preëmption was now authoritatively reëstablished, and some feeble and ostensible regulations were made to relieve the weavers who might suffer by it. The Directors imagined that the reëstablishment of their coercive system would remove the evil which fraud and artifice had grafted upon one more rational and liberal. But they were mistaken; for it only varied, if it did so much as vary, the abuse. The servants might as essentially injure their interest by a direct exercise of their power as by pretexts drawn from the freedom of the natives,—but with this fatal difference, that the frauds upon the Company must be of shorter duration under a scheme of freedom. That state admitted, and indeed led to, means of discovery and correction; whereas the system of coercion was likely to be permanent. It carried force further than served the purposes of those who authorized it: it tended to cover all frauds with obscurity, and to bury all complaint in despair. The next year, therefore, that is, in the year 1776, the Company, who complained that their orders had been extended beyond their intentions, made a third revolution in the trade of Bengal. It was set free again,—so far, at least, as regarded the native merchants,—but in so imperfect a manner as evidently to leave the roots of old abuses in the ground. The Supreme Court of Judicature about this time (1776) also fulminated a charge against monopolies, without any exception of those authorized by the Company: but it does not appear that anything very material was done in consequence of it.

The trade became nominally free; but the course of business established in consequence of coercive monopoly was not easily altered. In order to render more distinct the principles which led to the establishment of a course and habit of business so very difficult to change as long as those principles exist, your Committee think it will not be useless here to enter into the history of the regulations made in the first and favorite matter of the Company's investment, the trade in raw silk, from the commencement of these regulations to the Company's perhaps finally abandoning all share in the trade which was their object.