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

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, with all these endeavors of the Presidency, the investment sunk in 1769, and they were even obliged to pay for a part of the goods to private merchants in the Company's bonds, bearing interest. It was plain that this course of business could not hold. The manufacturers of Bengal, far from being generally in a condition to give credit, have always required advances to be made to them; so have the merchants very generally,—at least, since the prevalence of the English power in India. It was necessary, therefore, and so the Presidency of Calcutta represented the matter, to provide beforehand a year's advance. This required great efforts; and they were made. Notwithstanding the famine in 1770, which wasted Bengal in a manner dreadful beyond all example, the investment, by a variety of successive expedients, many of them of the most dangerous nature and tendency, was forcibly kept up; and even in that forced and unnatural state it gathered strength almost every year. The debts contracted in the infancy of the system were gradually reduced, and the advances to contractors and manufacturers were regularly made; so that the goods from Bengal, purchased from the territorial revenues, from the sale of European goods, and from the produce of the monopolies, for the four years which ended with 1780, when the investment from the surplus revenues finally closed, were never less than a million sterling, and commonly nearer twelve hundred thousand pounds. This million is the lowest value of the goods sent to Europe for which no satisfaction is made.4

Remittances from Bengal to China and the Presidencies. About an hundred thousand pounds a year is also remitted from Bengal, on the Company's account, to China; and the whole of the product of that money flows into the direct trade from China to Europe. Besides this, Bengal sends a regular supply in time of peace to those Presidencies which are unequal to their own establishment. To Bombay the remittance in money, bills, or goods, for none of which there is a return, amounts to one hundred and sixty thousand pounds a year at a medium.

Exports from England to India. The goods which are exported from Europe to India consist chiefly of military and naval stores, of clothing for troops, and of other objects for the consumption of the Europeans residing there; and, excepting some lead, copper utensils and sheet copper, woollen cloth, and other commodities of little comparative value, no sort of merchandise is sent from England that is in demand for the wants or desires of the native inhabitants.

Bad effects of investment. When an account is taken of the intercourse (for it is not commerce) which is carried on between Bengal and England, the pernicious effects of the system of investment from revenue will appear in the strongest point of view. In that view, the whole exported produce of the country, so far as the Company is concerned, is not exchanged in the course of barter, but is taken away without any return or payment whatsoever. In a commercial light, therefore, England becomes annually bankrupt to Bengal to the amount nearly of its whole dealing; or rather, the country has suffered what is tantamount to an annual plunder of its manufactures and its produce to the value of twelve hundred thousand pounds.

Foreign companies. In time of peace, three foreign companies appear at first sight to bring their contribution of trade to the supply of this continual drain. These are the companies of France, Holland, and Denmark. Consequences of their trade. But when the object is considered more nearly, instead of relief, these companies, who from their want of authority in the country might seem to trade upon a principle merely commercial, will be found to add their full proportion to the calamity brought upon Bengal by the destructive system of the ruling power; because the greater part of the capital of all these companies, and perhaps the whole capital of some of them, is furnished exactly as the British is, out of the revenues of the country. The civil and military servants of the English East India Company being restricted in drawing bills upon Europe, and none of them ever making or proposing an establishment in India, a very great part of their fortunes, well or ill gotten, is in all probability thrown, as fast as required, into the cash of these companies.

In all other countries, the revenue, following the natural course and order of things, arises out of their commerce. Here, by a mischievous inversion of that order, the whole foreign maritime trade, whether English, French, Dutch, or Danish, arises from the revenues; and these are carried out of the country without producing anything to compensate so heavy a loss.

Foreign companies' investments. Your Committee have not been able to discover the entire value of the investment made by foreign companies. But, as the investment which the English East India Company derived from its revenues, and even from its public credit, is for the year 1783 to be wholly stopped, it has been proposed to private persons to make a subscription for an investment on their own account. This investment is to be equal to the sum of 800,000l. Another loan has been also made for an investment on the Company's account to China of 200,000l. This makes a million; and there is no question that much more could be readily had for bills upon Europe. Now, as there is no doubt that the whole of the money remitted is the property of British subjects, (none else having any interest in remitting to Europe,) it is not unfair to suppose that a very great part, if not the whole, of what may find its way into this new channel is not newly created, but only diverted from those channels in which it formerly ran, that is, the cash of the foreign trading companies.

Of the silver sent to China. Besides the investment made in goods by foreign companies from the funds of British subjects, these subjects have been for some time in the practice of sending very great sums in gold and silver directly to China on their own account. In a memorial presented to the Governor-General and Council, in March, 1782, it appears that the principal money lent by British subjects to one company of merchants in China then amounted to seven millions of dollars, about one million seven hundred thousand pounds sterling; and not the smallest particle of silver sent to China ever returns to India. It is not easy to determine in what proportions this enormous sum of money has been sent from Madras or from Bengal; but it equally exhausts a country belonging to this kingdom, whether it comes from the one or from the other.

Revenue above the investment, how applied. But that the greatness of all these drains, and their effects, may be rendered more visible, your Committee have turned their consideration to the employment of those parts of the Bengal revenue which are not employed in the Company's own investments for China and for Europe. What is taken over and above the investment (when any investment can be made) from the gross revenue, either for the charge of collection or for civil and military establishments, is in time of peace two millions at the least. From the portion of that sum which goes to the support of civil government the natives are almost wholly excluded, as they are from the principal collections of revenue. With very few exceptions, they are only employed as servants and agents to Europeans, or in the inferior departments of collection, when it is absolutely impossible to proceed a step without their assistance. Allowance to Nabob of Bengal. For some time after the acquisition of the territorial revenue, the sum of 420,000l. a year was paid, according to the stipulation of a treaty, to the Nabob of Bengal, for the support of his government. This sum, however inconsiderable, compared to the revenues of the province, yet, distributed through the various departments of civil administration, served in some degree to preserve the natives of the better sort, particularly those of the Mahomedan profession, from being utterly ruined. The people of that persuasion, not being so generally engaged in trade, and not having on their conquest of Bengal divested the ancient Gentoo proprietors of their lands of inheritance, had for their chief, if not their sole support, the share of a moderate conqueror in all offices, civil and military. But your Committee find that this arrangement was of a short duration. Without the least regard to the subsistence of this innocent people, or to the faith of the agreement on which they were brought under the British government, How reduced. this sum was reduced by a new treaty to 320,000l., and soon after, (upon a pretence of the present Nabob's minority, and a temporary sequestration for the discharge of his debts,) to 160,000l.: but when he arrived at his majority, and when the debts were paid, (if ever they were paid,) the sequestration still continued; and so far as the late advices may be understood, the allowance to the Nabob appears still to stand at the reduced sum of 160,000l.

Native officers. The other resource of the Mahomedans, and of the Gentoos of certain of the higher castes, was the army. In this army, nine tenths of which consists of natives, no native, of whatever description, holds any rank higher than that of a Subahdar Commandant, that is, of an officer below the rank of an English subaltern, who is appointed to each company of the native soldiery.

All lucrative employments in the hands of the English. Your Committee here would be understood to state the ordinary establishment: for the war may have made some alteration. All the honorable, all the lucrative situations of the army, all the supplies and contracts of whatever species that belong to it, are solely in the hands of the English; so that whatever is beyond the mere subsistence of a common soldier and some officers of a lower rank, together with the immediate expenses of the English officers at their table, is sooner or later, in one shape or another, sent out of the country.

Such was the state of Bengal even in time of profound peace, and before the whole weight of the public charge fell upon that unhappy country for the support of other parts of India, which have been desolated in such a manner as to contribute little or nothing to their own protection.

Your Committee have given this short comparative account of the effects of the maritime traffic of Bengal, when in its natural state, and as it has stood since the prevalence of the system of an investment from the revenues. Former state of trade. But before the formation of that system Bengal did by no means depend for its resources on its maritime commerce. The inland trade, from whence it derived a very great supply of silver and gold and many kinds of merchantable goods, was very considerable. The higher provinces of the Mogul Empire were then populous and opulent, and intercourse to an immense amount was carried on between them and Bengal. A great trade also passed through these provinces from all the countries on the frontier of Persia, and the frontier provinces of Tartary, as well as from Surat and Baroach on the western side of India. These parts opened to Bengal a communication with the Persian Gulf and with the Red Sea, and through them with the whole Turkish and the maritime parts of the Persian Empire, besides the commercial intercourse which it maintained with those and many other countries through its own seaports.

During that period the remittances to the Mogul's treasury from Bengal were never very large, at least for any considerable time, nor very regularly sent; and the impositions of the state were soon repaid with interest through the medium of a lucrative commerce. But the disorders of Persia, since the death of Kouli Khân, have wholly destroyed the trade of that country; And the trade to Turkey. and the trade to Turkey, by Jidda and Bussorah, which was the greatest and perhaps best branch of the Indian trade, is very much diminished. The fall of the throne of the Mogul emperors has drawn with it that of the great marts of Agra and Delhi. The utmost confusion of the northwestern provinces followed this revolution, which was not absolutely complete until it received the last hand from Great Britain. Still greater calamities have fallen upon the fine provinces of Rohilcund and Oude, and on the countries of Corah and Allahabad. By the operations of the British arms and influence, they are in many places turned to mere deserts, or so reduced and decayed as to afford very few materials or means of commerce.

State of trade in the Carnatic. Such is the actual condition of the trade of Bengal since the establishment of the British power there. The commerce of the Carnatic, as far as the inquiries of your Committee have extended, did not appear with a better aspect, even before the invasion of Hyder Ali Khân, and the consequent desolation, which for many years to come must exclude it from any considerable part of the trading system.

It appears, on the examination of an intelligent person concerned in trade, and who resided at Madras for several years, that on his arrival there, which was in the year 1767, that city was in a flourishing condition, and one of the first marts in India; but when he left it, in 1779, there was little or no trade remaining, and but one ship belonging to the whole place. The evidence of this gentleman purports, that at his first acquaintance with the Carnatic it was a well-cultivated and populous country, and as such consumed many articles of merchandise; that at his departure he left it much circumscribed in trade, greatly in the decline as to population and culture, and with a correspondent decay of the territorial revenue.

Your Committee find that there has also been from Madras an investment on the Company's account, taking one year with another, very nearly on the same principles and with the same effects as that from Bengal; and they think it is highly probable, that, besides the large sums remitted directly from Madras to China, there has likewise been a great deal on a private account, for that and other countries, invested in the cash of foreign European powers trading on the coast of Coromandel. But your Committee have not extended their inquiries relative to the commerce of the countries dependent on Madras so far as they have done with regard to Bengal. They have reason to apprehend that the condition is rather worse; but if the House requires a more minute examination of this important subject, your Committee is willing to enter into it without delay.

III.—EFFECT OF THE REVENUE INVESTMENT ON THE COMPANY

Hitherto your Committee has considered this system of revenue investment, substituted in the place of a commercial link between India and Europe, so far as it affects India only: they are now to consider it as it affects the Company. So long as that corporation continued to receive a vast quantity of merchantable goods without any disbursement for the purchase, so long it possessed wherewithal to continue a dividend to pay debts, and to contribute to the state. But it must have been always evident to considerate persons, that this vast extraction of wealth from a country lessening in its resources in proportion to the increase of its burdens was not calculated for a very long duration. For a while the Company's servants kept up this investment, not by improving commerce, manufacture, or agriculture, but by forcibly raising the land-rents, on the principles and in the manner hereafter to be described. When these extortions disappointed or threatened to disappoint expectation, in order to purvey for the avarice which raged in England, they sought for expedients in breaches of all the agreements by which they were bound by any payment to the country powers, and in exciting disturbances among all the neighboring princes. Stimulating their ambition, and fomenting their mutual animosities, they sold to them reciprocally their common servitude and ruin.

The Governor-General, Mr. Hastings, and the Council, tell the Directors, "that the supply for the investment has arisen from casual and extraordinary resources, which they could not expect always to command." In an earlier minute he expresses himself still more distinctly: he says, "If the internal resources of a state fail it, or are not equal to its occasional wants, whence can it obtain immediate relief but from external means?" Indeed, the investment has not been for any long time the natural product of the revenue of Bengal. When, by the vast charge and by the ill return of an evil political and military traffic, and by a prodigal increase of establishments, and a profuse conduct in distributing agencies and contracts, they found themselves under difficulties, instead of being cured of their immoral and impolitic delusion, they plunged deeper into it, and were drawn from expedient to expedient for the supply of the investment into that endless chain of wars which this House by its resolutions has so justly condemned. At home these measures were sometimes countenanced, sometimes winked at, sometimes censured, but always with an acceptance of whatever profit they afforded.

At length, the funds for the investment and for these wars together could no longer be supplied. In the year 1778 the provision for the investment from the revenues and from the monopolies stood very high. It was estimated at a million four hundred thousand pounds; and of this it appears that a great deal was realized. But this was the high flood-tide of the investment; for in that year they announce its probable decline, and that such extensive supplies could not be continued. The advances to the Board of Trade became less punctual, and many disputes arose about the time of making them. However, knowing that all their credit at home depended on the investment, or upon an opinion of its magnitude, whilst they repeat their warning of a probable deficiency, and that their "finances bore an unfavorable aspect," in the year 1779 they rate their investment still higher. But their payments becoming less and less regular, and the war carrying away all the supplies, at length Mr. Hastings, in December, 1780, denounced sentence of approaching dissolution to this system, and tells the Directors that "he bore too high a respect for their characters to treat them with the management of a preparatory and gradual introduction to an unpleasing report: that it is the only substantial information he shall have to convey in that letter." In confidence, therefore, of their fortitude, he tells them without ceremony, "that there will be a necessity of making a large reduction, or possibly a total suspension, of their investment;—that they had already been reduced to borrow near 700,000l. This resource," says he, "cannot last; it must cease at a certain period, and that perhaps not far distant."

He was not mistaken in his prognostic. Loans now becoming the regular resource for retrieving the investment, whose ruin was inevitable, the Council enable the Board of Trade, in April, 1781, to grant certificates for government bonds at eight per cent interest for about 650,000l. The investment was fixed at 900,000l.

But now another alarming system appeared. These new bonds overloaded the market. Those which had been formerly issued were at a discount; the Board of Trade was obliged to advance, therefore, a fourth more than usual to the contractors. This seemed to satisfy that description of dealers. But as those who bought on agency were limited to no terms of mutual advantage, and the bonds on the new issue falling from three to eight, nine, and ten per cent discount, the agents were unable to furnish at the usual prices. Accordingly a discount was settled on such terms as could be made: the lowest discount, and that at two places only, was at four per cent; which, with the interest on the bonds, made (besides the earlier advance) at the least twelve per cent additional charge upon all goods. It was evident, that, as the investment, instead of being supported by the revenues, was sunk by the fall of their credit, so the net revenues were diminished by the daily accumulation of an interest accruing on account of the investment. What was done to alleviate one complaint thus aggravating the other, and at length proving pernicious to both, this trade on bonds likewise came to its period.

Your Committee has reason to think that the bonds have since that time sunk to a discount much greater even than what is now stated. The Board of Trade justly denominates their resource for that year "the sinking credit of a paper currency, laboring, from the uncommon scarcity of specie, under disadvantages scarcely surmountable." From this they value themselves "on having effected an ostensible provision, at least for that investment." For 1783 nothing appears even ostensible.

By this failure a total revolution ensued, of the most extraordinary nature, and to which your Committee wish to call the particular attention of the House. For the Council-General, in their letter of the 8th of April, 1782, after stating that they were disappointed in their expectations, (how grounded it does not appear,) "thought that they should be able to spare a sum to the Board of Trade,"—tell the Court of Directors, "that they had adopted a new method of keeping up the investment, by private subscribers for eighty lacs of rupees, which will find cargoes for their ships on the usual terms of privilege, at the risk of the individuals, and is to be repaid to them according to the produce of the sales in England,"—and they tell the Directors, that "a copy of the plan makes a number in their separate dispatches over land."

It is impossible, in reporting this revolution to the House, to avoid remarking with what fidelity Mr. Hastings and his Council have adhered to the mode of transmitting their accounts which your Committee found it necessary to mark and censure in their First Report. Its pernicious tendency is there fully set forth. They were peculiarly called on for a most accurate state of their affairs, in order to explain the necessity of having recourse to such a scheme, as well as for a full and correct account of the scheme itself. But they send only the above short minute by one dispatch over land, whilst the copy of the plan itself, on which the Directors must form their judgment, is sent separately in another dispatch over land, which has never arrived. A third dispatch, which also contained the plan, was sent by a sea conveyance, and arrived late. The Directors have, for very obvious reasons, ordered, by a strict injunction, that they should send duplicates of all their dispatches by every ship. The spirit of this rule, perhaps, ought to extend to every mode of conveyance. In this case, so far from sending a duplicate, they do not send even one perfect account. They announce a plan by one conveyance, and they send it by another conveyance, with other delays and other risks.

At length, at nearly four months' distance, the plan has been received, and appears to be substantially that which had been announced, but developing in the particulars many new circumstances of the greatest importance. By this plan it appears that the subscription, even in idea or pretence, is not for the use of the Company, but that the subscribers are united into a sort of society for the remitting their private fortunes: the goods, indeed, are said to be shipped on the Company's account, and they are directed to be sold on the same account, and at the usual periods of sales; but, after the payment of duties, and such other allowances as they choose to make, in the eleventh article they provide "that the remainder of the sales shall revert to the subscribers, and be declared to be their property, and divided in proportion to their respective shares." The compensation which they allow in this plan to their masters for their brokerage is, that, if, after deducting all the charges which they impose, "the amount of the sales should be found to exceed two shillings and two pence for the current rupee of the invoice account, it shall be taken by the Company." For the management of this concern in Bengal they choose commissioners by their own authority. By the same authority they form them into a body, they put them under rules and regulations, and they empower them also to make regulations of their own. They remit, by the like authority, the duties to which all private trade is subject; and they charge the whole concern with seven per cent, to be paid from the net produce of the sales in England, as a recompense to the commissioners: for this the commissioners contract to bear all the charges on the goods to the time of shipping.