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RAW SILK

The trade in raw silk was at all times more popular in England than really advantageous to the Company. In addition to the old jealousy which prevailed between the Company and the manufactory interest of England, they came to labor under no small odium on account of the distresses of India. The public in England perceived, and felt with a proper sympathy, the sufferings of the Eastern provinces in all cases in which they might be attributed to the abuses of power exercised under the Company's authority. But they were not equally sensible to the evils which arose from a system of sacrificing the being of that country to the advantage of this. They entered very readily into the former, but with regard to the latter were slow and incredulous. It is not, therefore, extraordinary that the Company should endeavor to ingratiate themselves with the public by falling in with its prejudices. Thus they were led to increase the grievance in order to allay the clamor. They continued still, upon a larger scale, and still more systematically, that plan of conduct which was the principal, though not the most blamed, cause of the decay and depopulation of the country committed to their care.

With that view, and to furnish a cheap supply of materials to the manufactures of England, they formed a scheme which tended to destroy, or at least essentially to impair, the whole manufacturing interest of Bengal. A policy of that sort could not fail of being highly popular, when the Company submitted itself as an instrument for the improvement of British manufactures, instead of being their most dangerous rival, as heretofore they had been always represented.

They accordingly notified to their Presidency in Bengal, in their letter of the 17th of March, 1769, that "there was no branch of their trade they more ardently wish to extend than that of raw silk." They disclaim, however, all desire of employing compulsory measures for that purpose, but recommended every mode of encouragement, and particularly by augmented wages, "in order to induce manufacturers of wrought silk to quit that branch and take to the winding of raw silk."

Having thus found means to draw hands from the manufacture, and confiding in the strength of a capital drawn from the public revenues, they pursue their ideas from the purchase of their manufacture to the purchase of the material in its crudest state. "We recommend you to give an increased price, if necessary, so as to take that trade out of the hands of other merchants and rival nations." A double bounty was thus given against the manufactures, both in the labor and in the materials.

It is very remarkable in what manner their vehement pursuit of this object led the Directors to a speedy oblivion of those equitable correctives before interposed by them, in order to prevent the mischiefs which were apparent in the scheme, if left to itself. They could venture so little to trust to the bounties given from the revenues a trade which had a tendency to dry up their source, that, by the time they had proceeded to the thirty-third paragraph of their letter, they revert to those very compulsory means which they had disclaimed but three paragraphs before. To prevent silk-winders from working in their private houses, where they might work for private traders, and to confine them to the Company's factories, where they could only be employed for the Company's benefit, they desire that the newly acquired power of government should be effectually employed. "Should," say they, "this practice, through inattention, have been suffered to take place again, it will be proper to put a stop to it, which may now be more effectually done by an absolute prohibition, under severe penalties, by the authority of government."

This letter contains a perfect plan of policy, both of compulsion and encouragement, which must in a very considerable degree operate destructively to the manufactures of Bengal. Its effect must be (so far as it could operate without being eluded) to change the whole face of that industrious country, in order to render it a field for the produce of crude materials subservient to the manufactures of Great Britain. The manufacturing hands were to be seduced from their looms by high wages, in order to prepare a raw produce for our market; they were to be locked up in the factories; and the commodity acquired by these operations was, in this immature state, carried out of the country, whilst its looms would be left without any material but the debased refuse of a market enhanced in its price and scanted in its supply. By the increase of the price of this and other materials, manufactures formerly the most flourishing gradually disappeared under the protection of Great Britain, and were seen to rise again and flourish on the opposite coast of India, under the dominion of the Mahrattas.

These restraints and encouragements seem to have had the desired effect in Bengal with regard to the diversion of labor from manufacture to materials. The trade of raw silk increased rapidly. But the Company very soon felt, in the increase of price and debasement of quality of the wrought goods, a loss to themselves which fully counterbalanced all the advantages to be derived to the nation from the increase of the raw commodity. The necessary effect on the revenue was also foretold very early: for their servants in the principal silk-factories declared that the obstruction to the private trade in silk must in the end prove detrimental to the revenues, and that the investment clashes with the collection of these revenues. Whatsoever by bounties or immunities is encouraged out of a landed revenue has certainly some tendency to lessen the net amount of that revenue, and to forward a produce which does not yield to the gross collection, rather than one that does.

The Directors declare themselves unable to understand how this could be. Perhaps it was not so difficult. But, pressed as they were by the greatness of the payments which they were compelled to make to government in England, the cries of Bengal could not be heard among the contending claims of the General Court, of the Treasury, and of Spitalfields. The speculation of the Directors was originally fair and plausible,—so far as the mere encouragement of the commodity extended. Situated as they were, it was hardly in their power to stop themselves in the course they had begun. They were obliged to continue their resolution, at any hazard, increasing the investment. "The state of our affairs," say they, "requires the utmost extension of your investments. You are not to forbear sending even those sorts which are attended with loss, in case such should be necessary to supply an investment to as great an amount as you can provide from your own resources; and we have not the least doubt of your being thereby enabled to increase your consignments of this valuable branch of national commerce, even to the utmost of your wishes. But it is our positive order that no part of such investment be provided with borrowed money which is to be repaid by drafts upon our treasury in London; since the license which has already been taken in this respect has involved us in difficulties which we yet know not how we shall surmount."

This very instructive paragraph lays open the true origin of the internal decay of Bengal. The trade and revenues of that country were (as the then system must necessarily have been) of secondary consideration at best. Present supplies were to be obtained, and present demands in England were to be avoided, at every expense to Bengal.

The spirit of increasing the investment from revenue at any rate, and the resolution of driving all competitors, Europeans or natives, out of the market, prevailed at a period still more early, and prevailed not only in Bengal, but seems, more or less, to have diffused itself through the whole sphere of the Company's influence. In 1768 they gave to the Presidency of Madras the following memorable instruction, strongly declaratory of their general system of policy.

"We shall depend upon your prudence," say they, "to discourage foreigners; and being intent, as you have been repeatedly acquainted, on bringing home as great a part of the revenues as possible in your manufactures, the outbidding them in those parts where they interfere with you would certainly prove an effectual step for answering that end. We therefore recommend it to you to offer such increase of price as you shall deem may be consistently given,—that, by beating them out of the market, the quantities by you to be provided may be proportionally enlarged; and if you take this method, it is to be so cautiously practised as not to enhance the prices in the places immediately under your control. On this subject we must not omit the approval of your prohibiting the weavers of Cuddalore from making up any cloth of the same sortments that are provided for us; and if such prohibition is not now, it should by all means be in future, made general, and strictly maintained."

This system must have an immediate tendency towards disordering the trade of India, and must finally end in great detriment to the Company itself. The effect of the restrictive system on the weaver is evident. The authority given to the servants to buy at an advanced price did of necessity furnish means and excuses for every sort of fraud in their purchases. The instant the servant of a merchant is admitted on his own judgment to overbid the market, or to send goods to his master which shall sell at loss, there is no longer any standard upon which his unfair practices can be estimated, or any effectual means by which they can be restrained. The hope entertained by the Directors, of confining this destructive practice of giving an enhanced price to a particular spot, must ever be found totally delusive. Speculations will be affected by this artificial price in every quarter in which markets can have the least communication with each other.

In a very few years the Court of Directors began to feel, even in Leadenhall Street, the effects of trading to loss upon the revenues, especially on those of Bengal. In the letter of February, 1774, they observe, that, "looking back to their accounts for the four preceding years, on several of the descriptions of silk there has been an increasing loss, instead of any alteration for the better in the last year's productions. This," they say, "threatens the destruction of that valuable branch of national commerce." And then they recommend such regulations (as if regulations in that state of things could be of any service) as may obtain "a profit in future, instead of so considerable a loss, which we can no longer sustain."

Your Committee thought it necessary to inquire into the losses which had actually been suffered by this unnatural forced trade, and find the loss so early as the season of 1776 to be 77,650l., that in the year 1777 it arose to 168,205l. This was so great that worse could hardly be apprehended: however, in the season of 1778 it amounted to 255,070l. In 1779 it was not so ruinously great, because the whole import was not so considerable; but it still stood enormously high,—so high as 141,800l. In the whole four years it came to 642,725l. The observations of the Directors were found to be fully verified. It is remarkable that the same article in the China trade produced a considerable and uniform profit. On this circumstance little observation is necessary.

During the time of their struggles for enlarging this losing trade, which they considered as a national object,—what in one point of view it was, and, if it had not been grossly mismanaged, might have been in more than one,—in this part it is impossible to refuse to the Directors a very great share of merit. No degree of thought, of trouble, or of reasonable expense was spared by them for the improvement of the commodity. They framed with diligence, and apparently on very good information, a code of manufacturing regulations for that purpose; and several persons were sent out, conversant in the Italian method of preparing and winding silk, aided by proper machines for facilitating and perfecting the work. This, under proper care, and in course of time, might have produced a real improvement to Bengal; but in the first instance it naturally drew the business from native management, and it caused a revulsion from the trade and manufactures of India which led as naturally and inevitably to an European monopoly, in some hands or other, as any of the modes of coercion which were or could be employed. The evil was present and inherent in the act. The means of letting the natives into the benefit of the improved system of produce was likely to be counteracted by the general ill conduct of the Company's concerns abroad. For a while, at least, it had an effect still worse: for the Company purchasing the raw cocoon or silk-pod at a fixed rate, the first producer, who, whilst he could wind at his own house, employed his family in this labor, and could procure a reasonable livelihood by buying up the cocoons for the Italian filature, now incurred the enormous and ruinous loss of fifty per cent. This appears in a letter to the Presidency, written by Mr. Boughton Rouse, now a member of your Committee. But for a long time a considerable quantity of that in the old Bengal mode of winding was bought for the Company from contractors, and it continues to be so bought to the present time: but the Directors complain, in their letter of the 12th of May, 1780, that both species, and particularly the latter, had risen so extravagantly that it was become more than forty per cent dearer than it had been fifteen years ago. In that state of price, they condemn their servants, very justly, for entering into contracts for three years,—and that for several kinds of silk, of very different goodness, upon averages unfairly formed, where the commodities averaged at an equal price differed from twenty to thirty per cent on the sale. Soon after, they formed a regular scale of fixed prices, above which they found they could not trade without loss.

Whilst they were continuing these methods to secure themselves against future losses, the Bengal ships which arrived in that year announced nothing but their continuance. Some articles by the high price, and others from their ill quality, were such "as never could answer to be sent to Europe at any price." The Directors renew their prohibition of making fresh contracts, the present being generally to expire in the year 1781. But this trade, whose fundamental policy might have admitted of a doubt, as applied to Bengal, (whatever it might have been with regard to England,) was now itself expiring in the hands of the Company, so that they were obliged to apply to government for power to enlarge their capacity of receiving bills upon Europe. The purchase by these bills they entirely divert from raw silk, and order to be laid out wholly in piece-goods.

Thus, having found by experience that this trade, whilst carried on upon the old principles, of whatever advantage it might have been to the British manufacturers, or to the individuals who were concerned in it in Bengal, had proved highly detrimental to the Company, the Directors resolved to expunge the raw silk from their investment. They gave up the whole to private traders, on condition of paying the freight, charges, and duties,—permitting them to send it to Europe in the Company's ships upon their own account.

The whole of this history will serve to demonstrate that all attempts, which in their original system or in their necessary consequences tend to the distress of India, must, and in a very short time will, make themselves felt even by those in whose favor such attempts have been made. India may possibly in some future time bear and support itself under an extraction of measure [treasure?] or of goods; but much care ought to be taken that the influx of wealth shall be greater in quantity and prior in time to the waste.

On abandoning the trade in silk to private hands, the Directors issued some prohibitions to prevent monopoly, and they gave some directions about the improvement of the trade. The prohibitions were proper, and the directions prudent; but it is much to be feared, that, whilst all the means, instruments, and powers remain, by which monopolies were made, and through which abuses formerly prevailed, all verbal orders will be fruitless.

This branch of trade, being so long principally managed by the Company's servants for the Company and under its authority, cannot be easily taken out of their hands and pass to the natives, especially when it is to be carried on without the control naturally inherent in all participation. It is not difficult to conceive how this forced preference of traffic in a raw commodity must have injured the manufactures, while it was the policy of the Company to continue the trade on their own account. The servants, so far from deviating from their course, since they have taken the trade into their own management, have gone much further into it. The proportion of raw silk in the investment is to be augmented. The proportion of the whole cargoes for the year 1783, divided into sixteen parts, is ten of raw silk, and six only of manufactured goods. Such is the proportion of this losing article in the scheme for the investment of private fortunes.

In the reformed scheme of sending the investment on account of the Company, to be paid in bills upon Europe, no mention is made of any change of these proportions. Indeed, some limits are attempted on the article of silk, with regard to its price; and it is not improbable that the price to the master and the servant will be very different: but they cannot make profitable purchases of this article without strongly condemning all the former purchases of the Board of Trade.

CLOTHS, OR PIECE-GOODS

The general system above stated, relative to the silk trade, must materially have affected the manufactures of Bengal, merely as it was a system of preference. It does by no means satisfactorily appear to your Committee that the freedom held out by the Company's various orders has been ever fully enjoyed, or that the grievances of the native merchants and manufacturers have been redressed; for we find, on good authority, that, at that very period at which it might be supposed that these orders had their operation, the oppressions were in full vigor. They appear to have fallen heaviest on the city of Dacca, formerly the great staple for the finest goods in India,—a place once full of opulent merchants and dealers of all descriptions.

The city and district of Dacca, before the prevalence of the East India Company's influence and authority, manufactured annually to about three hundred thousand pounds' value in cloths. In the year 1776 it had fallen to about two hundred thousand, or two thirds of its former produce. Of this the Company's demand amounted only to a fourth part, that is, about fifty thousand pounds yearly. This was at that time provided by agents for the Company, under the inspection of their commercial servants. On pretence of securing an advantage for this fourth part for their masters, they exerted a most violent and arbitrary power over the whole. It was asserted, that they fixed the Company's mark to such goods as they thought fit, (to all goods, as stated in one complaint,) and disposed of them as they thought proper, excluding not only all the native dealers, but the Dutch Company, and private English merchants,—that they made advances to the weavers often beyond their known ability to repay in goods within the year, and by this means, having got them in debt, held them in perpetual servitude. Their inability to keep accounts left them at the discretion of the agents of the supreme power to make their balances what they pleased, and they recovered them, not by legal process, but by seizure of their goods and arbitrary imprisonment of their persons. One and the same dealer made the advance, valued the return, stated the account, passed the judgment, and executed the process.

Mr. Rouse, Chief of the Dacca Province, who struggled against those evils, says, that in the year 1773 there were no balances due, as the trade was then carried on by the native brokers. In less than three years these balances amounted to an immense sum,—a sum lost to the Company, but existing in full force for every purpose of oppression. In the amount of these balances almost every weaver in the country bore a part, and consequently they were almost all caught in this snare. "They are in general," says Mr. Rouse, in a letter to General Clavering, delivered to your Committee, "a timid, helpless people; many of them poor to the utmost degree of wretchedness; incapable of keeping accounts; industrious as it were by instinct; unable to defend themselves, if oppressed; and satisfied, if with continual labor they derive from the fair dealing and humanity of their employer a moderate subsistence for their families."

Such were the people who stood accused by the Company's agents as pretending grievances, in order to be excused the payment of their balances. As to the commercial state of the province in general, Mr. Rouse represents it "to be for those two years a perpetual scene of complaint and disputation;—the Company's agents professing to pay higher rates to weavers, whilst the Leadenhall sales showed an heavy loss to the Company; the weavers have even travelled in multitudes to prefer their complaints at the Presidency; the amount of the investment comparatively small, with balances comparatively large, and, as I understand, generally contested by the weavers; the native merchants, called delâls, removed from their influence, as prejudicial to the Company's concerns; and European merchants complaining against undue influence of the Company's commercial agents, in preventing the free purchase even of those goods which the Company never takes."

The spirit of those agents will be fully comprehended from a state of the proceedings before Mr. Rouse and Council, on the complaint of a Mr. Cree, an English free merchant at Dacca, who had been twice treated in the same injurious manner by the agents of Mr. Hurst, the Commercial Chief at that place. On his complaint to the board of the seizure of the goods, and imprisonment of his agents, Mr. Hurst was called upon for an explanation. In return he informed them that he had sent to one of the villages to inquire concerning the matter of fact alleged. The impartial person sent to make this inquiry was the very man accused of the oppressions into which he was sent to examine. The answer of Mr. Hurst is in an high and determined tone. He does not deny that there are some instances of abuse of power. "But I ask," says he, "what authority can guard against the conduct of individuals? but that a single instance cannot be brought of a general depravity." Your Committee have reason to believe these coercive measures to have been very general, though employed according to the degree of resistance opposed to the monopoly; for we find at one time the whole trade of the Dutch involved in the general servitude. But it appears very extraordinary that nothing but the actual proof of a general abuse could affect a practice the very principle of which tends to make the coercion as general as the trade. Mr. Hurst's reflection concerning the abuse of authority is just, but in this case it is altogether inapplicable; because the complaint was not of the abuse, but of the use of authority in matters of trade, which ought to have been free. He throws out a variety of invidious reflections against the Council, as if they wanted zeal for the Company's service; his justification of his practices, and his declaration of his resolution to persevere in them, are firm and determined,—asserting the right and policy of such restraints, and laying down a rule for his conduct at the factory, which, he says, will give no cause of just complaint to private traders. He adds, "I have no doubt but that they have hitherto provided investments, and it cannot turn to my interest to preclude them now, though I must ever think it my duty to combat the private views of individuals who set themselves up as competitors under that very body under whose license and indulgence only they can derive their privilege of trade: all I contend for is the same influence my employers have ever had." He ends by declining any reply to any of their future references of this nature.

The whole of this extraordinary letter is inserted in the Appendix, No. 51,—and Mr. Rouse's minute of observations upon it in Appendix, No. 52, fully refuting the few pretexts alleged in that extraordinary performance in support of the trade by influence and authority. Mr. Hollond, one of the Council, joined Mr. Rouse in opinion that a letter to the purport of that minute should be written; but they were overruled by Messrs. Purling, Hogarth, and Shakespeare, who passed a resolution to defer sending any reply to Mr. Hurst: and none was ever sent. Thus they gave countenance to the doctrine contained in that letter, as well as to the mischievous practices which must inevitably arise from the exercise of such power. Some temporary and partial relief was given by the vigorous exertions of Mr. Rouse; but he shortly after removing from that government, all complaints were dropped.

It is remarkable, that, during the long and warm contest between the Company's agents and the dealers of Dacca, the Board of Trade seem to have taken a decided part against the latter. They allow some sort of justice in the complaints of the manufacturers with regard to low valuation, and other particulars; but they say, that, "although" (during the time of preëmption) "it appears that the weavers were not allowed the same liberty of selling to individuals they before enjoyed, our opinion on the whole is, that these complaints have originated upon the premeditated designs of the delâls [factors or brokers] to thwart the new mode of carrying on the Company's business, and to render themselves necessary." They say, in another place, that there is no ground for the dissatisfactions and difficulties of the weavers: "that they are owing to the delâls, whose aim it is to be employed."

This desire of being employed, and of rendering themselves necessary, in men whose only business it is to be employed in trade, is considered by the gentlemen of the board as no trivial offence; and accordingly they declare, "they have established it as an invariable rule, that, whatever deficiency there might be in the Dacca investment, no purchase of the manufactures of that quarter shall be made for account of the Company from private merchants. We have passed this resolution, which we deem of importance, from a persuasion that private merchants are often induced to make advances for Dacca goods, not by the ordinary chance of sale, but merely from an expectation of disposing of them at an enhanced price to the Company, against whom a rivalship is by this manner encouraged"; and they say, "that they intend to observe the same rule with respect to the investment of other of the factories from whence similar complaints may come."

This positive rule is opposed to the positive directions of the Company to employ those obnoxious persons by preference. How far this violent use of authority for the purpose of destroying rivalship has succeeded in reducing the price of goods to the Company has been made manifest by the facts before stated in their place.

The recriminatory charges of the Company's agents on the native merchants have made very little impression on your Committee. We have nothing in favor of them, but the assertion of a party powerful and interested. In such cases of mutual assertion and denial, your Committee are led irresistibly to attach abuse to power, and to presume that suffering and hardship are more likely to attend on weakness than that any combination of unprotected individuals is of force to prevail over influence, power, wealth, and authority. The complaints of the native merchants ought not to have been treated in any of those modes in which they were then treated. And when men are in the situation of complainants against unbounded power, their abandoning their suit is far from a full and clear proof of their complaints being groundless. It is not because redress has been rendered impracticable that oppression does not exist; nor is the despair of sufferers any alleviation of their afflictions. A review of some of the most remarkable of the complaints made by the native merchants in that province is so essential for laying open the true spirit of the commercial administration, and the real condition of those concerned in trade there, that your Committee observing the records on this subject and at this period full of them, they could not think themselves justifiable in not stating them to the House.

Your Committee have found many heavy charges of oppression against Mr. Barwell, whilst Factory Chief at Dacca; which oppressions are stated to have continued, and even to have been aggravated, on complaint at Calcutta. These complaints appear in several memorials presented to the Supreme Council of Calcutta, of which Mr. Barwell was a member. They appeared yet more fully and more strongly in a bill in Chancery filed in the Supreme Court, which was afterwards recorded before the Governor-General and Council, and transmitted to the Court of Directors.

Your Committee, struck with the magnitude and importance of these charges, and finding that with regard to those before the Council no regular investigation has ever taken place, and finding also that Mr. Barwell had asserted in a Minute of Council that he had given a full answer to the allegations in that bill, ordered a copy of the answer to be laid before your Committee, that they might be enabled to state to the House how far it appeared to them to be full, how far the charges were denied as to the fact, or, where the facts might be admitted, what justification was set up. It appeared necessary, in order to determine on the true situation of the trade and the merchants of that great city and district.