Front Page Titles (by Subject) CHAP. VII. - The History of British India, vol. 3
The Online Library of Liberty
A project of Liberty Fund, Inc.
Search this Title:
Also in the Library:
CHAP. VII. - James Mill, The History of British India, vol. 3 
The History of British India in 6 vols. (3rd edition) (London: Baldwin, Cradock, and Joy, 1826). Vol. 3.
About Liberty Fund:
Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.
The text is in the public domain.
Fair use statement:
This material is put online to further the educational goals of Liberty Fund, Inc. Unless otherwise stated in the Copyright Information section above, this material may be used freely for educational and academic purposes. It may not be used in any way for profit.
Second Administration of Clive—Company’s Orders respecting the Private Trade disregarded—Arrangements with the Vizir—With the Emperor—Acquisition of the Duannee—Private Trade created a Monopoly for the Benefit of the superior Servants—Reduction of the Military Allowances—Its effects—Clive resigns, and Verelst succeeds—Proceedings in England relative to the Rate of Dividend on Company’s Stock—Financial difficulties—Verelst resigns, and Cartier succeeds.
Lord Clive, together with Mr. Sumner and Mr.book iv.Chap. 7. 1765. Sykes, who had accompanied him from England, and were two of the persons empowered to form the Select Committee, arrived at Calcutta, on the 3d of May, 1765. The two other persons of whom that extraordinary machine of government was to be composed, were absent: General Carnac, beyond the confines of the province of Bahar, with the army; and Mr. Verelst, at the distant settlement of Chittagong. For as much as the disturbances, which guided the resolves of the Company, when they decreed that such a new organ of government should exist, were now removed; and for as much as the Select Committee were empowered to exercise their extraordinary powers for so long a time only as those disturbances should remain; it was a question, whether they were entitled to form themselves into a governing book iv.Chap. 7. 1765. body; but a question of which they speedily disposed.1 On the 7th of May, exactly four days after their arrival, Lord Clive, and the two gentlemen who accompanied him, assembled; and without waiting for communication with the rest of the destined members declared the Select Committee formed; assumed the whole powers of government civil and military; and administered to themselves and their secretaries an oath of secrecy.
The great corruption which they represented as prevailing in the government, and tainting to a prodigious degree the conduct of the Company’s servants, was the foundation on which they placed the necessity for the establishment of the Committee. The picture which they drew of these corruptions exhibited, it is true, the most hideous and the most disgusting features. But the impartial judge will probably find, that the interest of the Committee to make out the appearance of a strong necessity for investing themselves with extraordinary powers, after the original cause for them had ceased to exist, had some influence on their delineations. In the letter, addressed to the Committee, with which Lord Clive opened their proceedings, on the 7th of May, “A very few days,” he says, “are elapsed since our arrival; and yet, if we consider what has already come to our knowledge, we cannot hesitate a moment upon the necessity of assuming the power that is in us of conducting, as a Select Committee, the affairs both civil and military of this settlement. What do we hear of, what do we see, but anarchy, confusion, and,book iv.Chap. 7. 1765. what is worse, an almost general corruption.—Happy, I am sure, you would have been, as well as myself, had the late conduct of affairs been so irreproachable as to have permitted them still to continue in the hands of the Governor and Council.” Yet one would imagine that four days afforded not a very ample space for collecting a satisfactory body of evidence on so extensive a field, especially if we must believe the noble declarer, that the determination to which it led was a disagreeable one.
“Three paths,” observed his Lordship, when afterwards defending himself, “were before me. 1. One was strewed with abundance of fair advantages. I might have put myself at the head of the government as I found it. I might have encouraged the resolution which the gentlemen had taken not to execute the new covenants which prohibited the receipt of presents: and although I had executed the covenants myself, I might have contrived to return to England with an immense fortune, infamously added to the one before honourably obtained.—2. Finding my powers disputed, I might in despair have given up the commonwealth, and have left Bengal without making an effort to save it. Such a conduct would have been deemed the effect of folly and cowardice.—3. The third path was intricate. Dangers and difficulties were on every side. But I resolved to pursue it. In short, I was determined to do my duty to the public, although I should incur the odium of the whole settlement. The welfare of the Company required a vigorous exertion, and I took the resolution of cleansing the Augean Stable.”1
book iv.Chap. 7. 1765. Another circumstance deserves to be mentioned, of which Lord Clive takes no notice in his speech, though on other occasions it is not forgotten; that without the formation of the Select Committee, he would, as Governor, have enjoyed only a shadow, or at best a small fragment of power. In his letter to the Directors, dated the 30th of February, in which he describes the transactions of the first five months of his new administration, he says, “The gentlemen in Council of late years at Bengal, seem to have been actuated, in every consultation, by a very obstinate and mischievous spirit. The office of Governor has been in a manner hunted down, stripped of its dignity, and then divided into sixteen shares,”—the number of persons of whom the board consisted.—“Two paths,” he observes, in nearly the same language as was afterwards used in his speech, “were evidently open to me: The one smooth, and strewed with abundance of rich advantages that might easily be picked up; the other untrodden, and every step opposed with obstacles. I might have taken charge of the government upon the same footing on which I found it; that is, I might have enjoyed the name of Governor, and have suffered the honour, importance, and dignity of the post to continue in their state of annihilation. I might have contented myself as others had before me, with being a cypher, or, what is little better, the first among sixteen equals: And I might have allowed this passive conduct to be attended with the usual douceur of sharing largely with the rest of the gentlemen in all donations, perquisites, &c. arising from the absolute government and disposal of all places in the revenues of this opulent kingdom; by which means I might soon have acquired an immense addition to my fortune, notwithstanding the obligations in the new covenants; for the man who can so easily get over the bar of conscience as to receive presents after the execution of them, will not scruple to make use of any evasions that may protect him from the consequence. The settlement, in general, would thus have been my friends, and only the natives of the country my enemies.” It deserves to be remarked, as twice declared by this celebrated Governor, that the covenants against the receipt of presents afforded no effectual security, and might be violated, by the connivance and participation of the presiding individuals, to any amount. It follows, as a pretty necessary consequence, that independent of that connivance they might in many instances be violated to a considerable amount.
The language in which Clive describes the corruption of the Company’s government and the conduct of their servants, at this era, ought to be received with caution; and, doubtless, with considerable deductions; though it is an historical document, or rather a matter of fact, singularly curious and important. “Upon my arrival,” he tells the Directors, “I am sorry to say, I found your affairs in a condition so nearly desperate, as would have alarmed any set of men, whose sense of honour and duty to their employers had not been estranged by the too eager pursuit of their own immediate advantages. The sudden, and among many, the unwarrantable acquisition of riches, had introduced luxury in every shape, and in its most pernicious excess. These two enormous evils went hand in hand together through the whole presidency, infecting almost every member of each department. Every inferior seemed to have grasped at wealth, that he might be enabled to assume that spirit of profusion, which was now the only distinction between him and his superior. Thus book iv.Chap. 7. 1765. all distinction ceased; and every rank became, in a manner, upon an equality. Nor was this the end of the mischief; for a contest of such a nature among our servants necessarily destroyed all proportion between their wants and the honest means of satisfying them. In a country where money is plenty, where fear is the principle of government, and where your arms are ever victorious, it is no wonder that the lust of riches should readily embrace the proffered means of its gratification, or that the instruments of your power should avail themselves of their authority, and proceed even to extortion in those cases where simple corruption could not keep pace with their rapacity. Examples of this sort, set by superiors, could not fail of being followed in a proportionable degree by inferiors. The evil was contagious, and spread among the civil and military, down to the writer, the ensign, and the free merchant.”1 The language of the Directors held pace with that of the Governor. In their answer to the letter from which this extract is taken, they say, “We have the strongest sense of the deplorable state to which our affairs were on the point of being reduced, from the corruption and rapacity of our servants, and the universal depravity of manners throughout the settlement. The generalbook iv.Chap. 7. 1765. relaxation of all discipline and obedience, both military and civil, was hastily tending to a dissolution of all government. Our letter to the Select Committee expresses our sentiments of what has been obtained by way of donations; and to that we must add, that we think the vast fortunes acquired in the inland trade have been obtained by a scene of the most tyrannic and oppressive conduct that ever was known in any age or country.”1
The letters from the Court of Directors, commanding the immediate and total abandonment of the inland trade and the execution of the new covenants against the receipt of presents, had arrived on the 24th of January, 1765, previous to the formation of the treaty with Nujeem ad Dowla. Yet so far was the inland trade from being abandoned, that the unlimited exercise of it, free from all duties except two and a half per cent. upon the article of salt, and along with that unlimited exercise, the prohibition, or what amounted to the prohibition, of all other traders, the exaction of oppressive duties, from which the English were exempt, had been inserted, as leading articles, in the treaty. Again, as to what regarded the covenants, not only had presents upon the accession of Nujeem ad Dowla been received, with unabated alacrity, in defiance of them; but they remained unexecuted to that very hour. The Committee of the House of Commons could not discover from the records that the Governor had so much as brought them under the consultation of the Council Board; and it is certain that no notice whatsoever had been communicated to the other servants of the Company, that any such engagements were required.
book iv.Chap. 7. 1765. The execution of the covenants, as a very easy and simple transaction, was one of the earliest of the measures of the Committee. They were signed, first by the Members of the Council, and the servants on the spot; and afterwards transmitted to the armies and factories, where they were immediately executed by every body; with one remarkable exception. General Carnac, when they arrived, distributed them to his officers, among whom the signature met with no evasion. But general Carnac himself, on the pretence that they were dated several months previous to the time at which intimation of them was conveyed to him, forbore privately to execute his own. A few weeks afterwards, upon his return to Calcutta, he signed it, indeed, without any scruple; but, in the interval, he had received a present of two lacs of rupees from the reduced and impoverished Emperor.
The Nabob, Nujeem ad Dowla, hastened to Calcutta, upon the arrival of Clive; and being exceedingly displeased with the restraints imposed upon him, presented a letter of complaints. Mahomed Reza Khan, whose appointment to the office of Naib Subah was the most offensive to the Nabob of all the hard conditions to which he had been compelled to submit, had given presents on account of his elevation to the amount of nearly twenty lacs of rupees. There was nothing, in this, unusual or surprising; but the Nabob, who was eager to obtain the ground of an accusation against a man whose person and office were alike odious to him, complained of it as a dilapidation of his treasury. The servants of the Company, among whom the principal part of the money was distributed, were those who had the most strongly contested the authority of Clive’s Committee; and they seem to have excited, by that opposition, a very warm resentment. The accusationbook iv.Chap. 7. 1765. was treated as a matter of great and serious importance. Some of the native officers engaged in the negotiation of the presents, though required only for the purpose of evidence, were put under arrest. A formal investigation was instituted. It was alleged that threats had been used to extort the gifts: And the Committee pronounced certain facts to be proved; but in their great forbearance reserved the decision to the Court of Directors. The servants, whose conduct was arraigned, solemnly denied the charge of using terror or force; and it is true that their declaration was opposed by only the testimony of a few natives, whose veracity is always questionable when they have the smallest interest to depart from the truth: who in the present case were not examined upon oath; were deeply interested in finding an apology for their own conduct, and had an exquisite feeling of the sentiments which prevailed towards the persons whom they accused in the breasts of those who now wielded the sceptre. There seems not, in reality, to have been any difference in the applications for presents on this and on former occasions, except perhaps in some little ceremoniousness of manner. A significant expression escapes from Verelst, who was an actor in the scene; “Mahomed Reza Khan,” he says, “affirms that these sums were not voluntarily given. This the English gentlemen deny. Perhaps the reader, who considers the increased power of the English, may regard this as a verbal dispute.”1
On the 25th of June Lord Clive departed from Calcutta, on a progress up the country, for the purpose book iv.Chap. 7. 1765. of forming a new arrangement with the Nabob for the government of the provinces, and of concluding a treaty of peace with Suja Dowla the Vizir.
The first negotiation was of easy management. Whatever the Committee were pleased to command, Nujeem ad Dowla was constrained to obey. The whole of the power reserved to the Nabob, and lodged with the Naib Subah, was too great, they said, to be deposited in a single hand; they resolved, therefore, to associate the Rajah Dooloob Ram, and Juggut Seet, the Hindu banker, with Mahomed Reza Khan, in the superintendance of the Nabob’s affairs. To preserve concord among these colleagues, it was determined to employ the vigilant control of a servant of the Company, resident upon the spot. The Nabob was also now required to resign the whole of the revenues, and to make over the management of the Subahdaree, with every advantage arising from it, to the Company; by whom an annual pension of fifty lacs of rupees, subject to the management of their three nominees, were to be allowed to himself. The final arrangement of these terms was notified to the Committee on the 28th of July, by a letter dispatched from Moorshedabad, whence, a few days before, Clive had proceeded on his journey.
The army had prosecuted the advantages gained over the Vizir; and at this time had penetrated far into the territories of Oude. The arrangement, however, which had been concluded with the Emperor, and in conformity with which the English were to receive the Gauzeepore country for themselves, and to bestow the dominions of Suja Dowla on the Emperor, had been severely condemned by the Court of Directors. They denounced it, not only as a violation of their repeated instructions and commands not to extend the dominions of the Company; but as inbook iv.Chap. 7. 1765. itself an impolitic engagement; full of burden, but destitute of profit.1 Lord Clive, and, what is the same thing, Lord Clive’s Committee, professed a deep conviction of the wisdom of that policy (the limitation of dominion) which the Directors prescribed;2 declaring, “that an influence maintained by force of arms was destructive of that commercial spirit which the servants of the Company ought to promote; oppressive to the country, and ruinous to the Company; whose military expenses had hitherto rendered fruitless their extraordinary success, and even the cession of rich provinces.”3
After the battle of Buxar, the Vizir, who no longer considered his own dominions secure, had sent his women and treasures to Bareily, the strong fort of a Rohilla chief; and, having gained as much time as possible by negotiations with the English, endeavoured to obtain assistance from Ghazee ad dien Khan, from the Rohilla chiefs, and a body of Mahrattas, who were at that time under Mulhar Row, in the vicinity of Gualior. The Mahrattas, and Ghazee ad dien Khan, with a handful of followers, the miserable remains of his former power, had, in reality, joined him. But the Rohillas had amused him with only deceitful promises: And he had been abandoned even by Sumroo; who, with a book iv.Chap. 7. 1765. body of about 300 Europeans of various nations, and a few thousand Sepoys, was negotiating for service with the Jaats.
The English had detached two battalions of Sepoys, which took possession of Lucknow, the capital of Oude, and made an attempt upon the fortress of Chunar, the strength of which enabled the garrison to make a successful resistance; when the preparations of Suja Dowla induced Sir Robert Fletcher, on whom, till the arrival of Carnac, after the departure of Sir Hector Munro, the command of the troops had devolved, to endeavour to anticipate that Nabob by taking the important fortress of Allahabad. Nujeef Khan, as a partisan of the Emperor, had joined the English with his followers from Bundelcund, and being well acquainted with the fortress, pointed out the weakest part. It was speedily breached; and the garrison, too irresolute to brave a storm, immediately surrendered. Soon after this event General Carnac arrived, and took the command of the army. The situation of the enemy, which rendered their designs uncertain, puzzled, for a time, the General; who over-estimated their strength, and was afraid of leaving the frontiers exposed. Having received undoubted intelligence that the enemy had begun to march on the Corah road; and suspecting that an attack was designed upon Sir Robert Fletcher, who commanded a separate corps in the same direction; he made some forced marches to effect a junction with that commander; and, having joined him, advanced with united forces towards the enemy. On the 3d of May a battle was fought in the neighbourhood of Corah; or rather a skirmish, for, by the absence of the Rohillas, and the weakness of Ghazee ad dien Khan, the force of the Vizir was inconsiderable, and he was still intimidated by remembrance of Buxar. The Mahrattas, on whom he chiefly depended,book iv.Chap. 7. 1765. were soon dispersed by the English artillery. The Vizir separated from them; and they retired with precipitation towards the Jumna. Observing the English to remit the pursuit in order to watch the Vizir, who made no attempt to join his allies, they ventured a second effort to enter Corah. To stop their incursions the General resolved to drive them beyond the Jumna; crossed that river on the 22d; dislodged them from their post on the opposite side; and obliged them to retire to the hills.
The Vizir impelled, on the one side by the desperate state of his affairs, on the other by hopes of moderate treatment from the English, resolved to throw himself entirely upon their generosity, by placing his person in their hands. On the 19th of May, General Carnac received, written partly by the Nabob with his own hand, a letter, in which he informed that officer that he was on his way to meet him. The General received him with the highest marks of distinction; and all parties recommended a delicate and liberal treatment. The final settlement of the terms of pacification was reserved for the presence of Clive. As it was unanimously agreed, that it would cost the Company more to defend the country of the Vizir, than it would yield in revenue; that Suja Dowla was more capable of defending it than the Emperor, to whom it had been formerly promised, or than any other chief who could be set up; and that in the hands of the Vizir it might form a barrier against the Mahrattas and Afghauns; it was determined to restore to him the whole of his dominions, with the exception of Allahabad and Corah, which were to be reserved to the Emperor.
When the first conference was held with the Vizir on the 2d of August, he strongly expressed his gratitude for the extent of dominion which his conquerors were willing to restore; and readily agreed to the payment of fifty lacks of rupees demanded in compensation for the expences of the war: But, when it was proposed to him to permit the English to trade, free from duties, and erect factories in his dominions, he represented so earnestly the abuses which, under the name of trade, the Company’s servants and their agents had perpetrated in the provinces of Bengal, Bahar, and Orissa; and expressed with so much vehemence his apprehension of disputes, and the impossibility they would create of long preserving the blessings of peace, that Clive agreed, in the terms of the treaty, to omit the very names of trade and factories.
The Raja Bulwant Sing, who held, as dependencies of the Subah of Oude, the Zemindarees of Benares and Gauzeepore, had joined the English and rendered important service, in the late wars against the Vizir. It was, therefore, incumbent upon them to yield him protection against the resentment of a chief whose power he could not resist. The Vizir bound himself not to molest the Rajah, in the possession of his former dominions; and the Rajah was held bound to pay him the same tribute as before. The Vizir and the English engaged to afford assistance, each to the other, in case the territory of the other was invaded; and the Vizir engaged never to harbour or employ Meer Causim or Sumroo.
The business with the Emperor was the next subject of negotiation which claimed the exertions of Clive. Of the annual tribute to the Emperor, contracted for in the names of Meer Jaffier, Meer Causim, and Nujeem and Dowla, as the imperial revenue from Bengal, Bahar, and Orissa, thirty lacks were unpaid. Of this debt, the indigent sovereign was frankly and definitively told, that not a singlebook iv.Chap. 7. 1765. rupee would ever be given him. The sum which had, under the English authority, been assigned as the share due to him of the revenue of these provinces, was twenty-six lacks of rupees in money, and jaghires or land to the annual amount of five lacks and a half. The jaghires, it was now made known to him, he must henceforth renounce. He expressed warmth, and even resentment, upon the hardness of these arbitrary conditions; but the necessities of the humbled monarch left him without means of relief. The twenty-six lacks of rupees were continued as his portion of the revenues; and he was put in possession of the countries of Corah and Allahabad. On his part was required the imperial grant of the duannee, or collection and receipt of the revenues, in Bengal, Bahar, and Orissa. The phirmaun of the duannee, which marks one of the most conspicuous eras in the history of the Company, constituting them masters of so great an empire, in name and in responsibility, as well as in power,1 was dated the 12th day of August, 1765. Along with the duannee was required of the Emperor his imperial confirmation of all the territory which the Company possessed throughout the nominal extent of the Mogul empire. Among these confirmations was not forgotten the jaghire of Lord Clive; a possession, the dispute about which that powerful servant had compromised before his departure from England, by yielding the reversion to the Company, after ten years’ payment, if so long he should live.
It was in the course of this summer that, in pursuance book iv.Chap. 7. 1765. of the terms of the treaty concluded in Europe between the English and the French, the settlements of that nation at Chandernagor and other places in Bengal, were restored.
On the 7th of September, Lord Clive resumed his seat, in the Select Committee; in which the urgent questions respecting the inland trade now constituted the grand subject of consultation. The Company’s letter of the 8th of February, 1764, completely prohibiting the inland trade of their servants, was taken into consideration by the Board, on the 17th of October, in the same year. And it was resolved that all the branches of that trade, which it was worth while to carry on, should still be stedfastly retained; but that proper respect should be shown to the commands of their masters; and what was of no value to keep should be immediately and completely resigned. The grand articles of the interior trade of Bengal were salt, beetel-nut, and tobacco; of which salt was out of all proportion the most important: Tobacco in particular was so inconsiderable, that few, if any, of the Company’s servants had engaged in it. The determination was, to give up the tobacco, preserving and securing the beetel-nut and the salt. It must not, however, be forgotten that an order was now issued, prohibiting the practice of forcing the natives to buy and sell at any price which the Company’s servants thought proper to command.
On the 1st of June, 1764, a letter was written by the Court of Directors, in consequence of the resolution of the Court of Proprietors that the letter of the 8th of February should be reconsidered. In this, the Directors declared, that the terms imposed upon Meer Causim for the regulation of the private trade in the interior “appeared to them so injurious to the Nabob and the natives, that they could not, in the very nature of them, tend to any thing but the producingbook iv.Chap. 7. 1765. general heart-burning and dissatisfactions: That the orders, therefore, in their letter of the 8th of February should remain in force until a more equitable and satisfactory plan could be formed and adopted; and, as it was impossible for them to frame such a plan at home, destitute as they were of the informations and lights necessary to guide them in settling such an important affair—the Committee were therefore ordered, as soon after the receipt of this letter as might be convenient, to consult the Nabob as to the manner of carrying on the inland trade, and thereupon to form a proper and equitable plan for that purpose, and transmit the same to the Directors; accompanied by such explanations, observations, and remarks, as might enable them to give their sentiments and directions thereupon in a full and explicit manner:—And in doing this, as before observed, they were to have a particular regard to the interest and entire satisfaction of the Nabob.” It was agreed, in general consultation at Fort William, on the 25th of January, 1765, to defer all proceedings on this order, till the arrival of Lord Clive; and in the mean time, in defiance of both letters, the course of the inland trade remained undisturbed.
One important circumstance in the letter of the 1st of June, the Directors themselves interpreted, one way; their servants in India chose to interpret, another. The servants inferred that the letter empowered them not only to contrive a plan, but also to put it in practice. It was maintained on the other hand, that the letter only authorized them to devise a plan, and transmit the account of it to the Directors. The letter, as usual, was vague and ambiguous; and those who had to act upon it, at so vast a distance, preferred, as might have been expected, the interpretation which best suited their own interests.
It is worthy of particular remark, that Lord Clive, as he declares to the Directors themselves,1 framed the plan, which was afterwards adopted, during his voyage to India. But, as he could not then have any lights which he had not in England, he might, unless he had determined not to be governed by the Directors, have opened to them his project, before he departed; and have allowed to his masters the privilege of deciding.
It is not less worthy of remark, that Clive and the other Members of the Select Committee; Carnac excepted, who had not left the army; formed a partnership before the beginning of June, for buying up large quantities of salt; that all the purchases were made during the month of June, and that in nine months the parties realized a profit, including interest, of about forty-five per cent. In apology for Clive, it was stated, that he brought out with him three gentlemen from England, Mr. Strachey, his secretary; Mr. Maskelyne, an old friend and fellow-servant of the Company; and Mr. Ingham, his surgeon; and that for the sake of making a fortune to them he engaged in that suspicious transaction. If a proceeding, however, is in its own nature shameful; there is but little saved, when the emolument is only made to go into the pocket of a connexion.
On the 10th of August, after these purchases had for some time been completed, and after certain inquiries had been made respecting the usual prices of salt in different places; it was resolved, in a Select Committee composed of only Mr. Sumner and Mr. Verelst, That a monopoly should be formed of the trade in salt, beetel-nut, and tobacco, to be carried onbook iv.Chap. 7. 1765. exclusively for the benefit of the superior servants of the Company. After several consultations, the following rules were adopted: That, deducting a duty to the Company, computed to produce 100,000l. per annum, the profits should be divided among three classes of proprietors: That, in the first class, should be allowed; to the governor, five shares; to the second in council, three shares; to the general, three shares; ten gentlemen of council, each, two shares; two colonels, each, two shares—in all thirty-five: That, in the second class, consisting of one chaplain, fourteen senior merchants, and three lieutenant-colonels, in all eighteen persons, two-thirds of one share should be granted to each, or twelve shares to the whole: In the third class, consisting of thirteen factors, four majors, four first surgeons at the presidency, two first surgeons at the army, one secretary to the council, one sub-accountant, one Persian translator, and one sub-export-warehouse-keeper, in all twenty-seven persons, one-third of a share should be distributed to each, or nine shares to the whole: That a committee of four, empowered to make bye-laws, borrow money, and determine the amount of capital, should be appointed for the entire management of the concern: That the purchases should be made by contract: That the goods should be conveyed by the agents of the association to certain fixed places, and there sold to the native merchants and retailers at established and invariable prices: That the exclusive power of making those purchases should be insured to the association for one year: And that European agents should be allowed to conduct the business of the society in different parts of the country.
In defence of this scheme, it was urged, that by the prohibition of presents, and the growing share of book iv.Chap. 7. 1765. the export and import trade engrossed by the Company’s investment, the pay of their servants was reduced to the means of a bare subsistence; that besides the hardship of this policy, the wisdom was very defective, since it was absurd to suppose that men deprived of the means of enriching themselves by legitimate, would abstain from illegitimate means, when placed to a boundless extent in their power; that a too rapid enriching of their servants, by enabling them to hurry to England, and leaving none but inexperienced youths to conduct their affairs, was ruinous to their interests; and that, by the admirable arrangements of the trade society, a proper fortune was secured to those who had attained a certain station in the service, without incurring the danger of sending them home enriched at too early a period.
Upon these arguments, one reflection cannot be withheld, because the occasions for its application are exceedingly numerous, and because it appears, unhappily, to be not frequently made. It is contrary to experience, that by deriving large emoluments from an office the person who holds it will be less eager to grasp at any unlawful gains which are within his reach. The avidity for more is not in general diminished by the amount of what is possessed. A trifling sum will doubtless lose something of its apparent magnitude in the eye of a man of wealth; but the vast sums are those alone which are of much importance; and they, we find, are as resistless a temptation to the rich as to the poor. The prevalence of the idea that satiating the servants of the public with wealth is a secret for rendering them honest, only proves how little the art of government has borrowed as yet from the science of human nature. If, with immense emoluments, a door is left open to misconduct, the misconduct is but the more ensured; because the power of the offender affords him a shieldbook iv.Chap. 7. 1765. against both popular contempt and legal chastisement. If the servants of the Company, as Clive and his Committee so positively affirmed, had it in their power, and in their inclination, to pillage and embezzle, when their incomes were small; the mere enlargement of their incomes would add to the power, and could not much detract from the inclination.
At the time of these proceedings, the Select Committee were deprived of the shelter even of an ambiguous expression; and knew that they were acting in express defiance of the wishes and commands of their superiors. Under date the 15th of February, 1765, the Directors had written in the following terms: “In our letters of the 8th February, and 1st June last, we gave our sentiments and directions very fully in respect to the inland trade of Bengal;—we now enforce the same in the strongest manner, and positively insist that you take no steps whatever towards renewing this trade, without our express leave; for which reason you must not fail to give us the fullest information upon the subject, agreeable to our abovementioned directions.”
Having thus established the private trade Society, the Committee proceeded to introduce other regulations which the state of affairs appeared to require. It had been a common practice with members of the Council, instead of remaining at the Board for the business of the Presidency, to receive nomination to the chiefship of factories, as often as additional means of accumulating money were there placed in their hands. To this practice the Committee, on very good grounds, resolved to put an end. “We are convinced,” they said, “by very late experience, that the most flagrant oppressions may be wantonly committed book iv.Chap. 7. 1765. in those employments, by members of the Board, which would not be tolerated in junior servants; and that the dread and awe annexed to their station, as counsellors, has too frequently screened them from complaints, which would be lodged without fear or scruple against inferior servants.” Yet, with this experience before them, they recommended great emoluments as a security against corruption. The Committee further remarked, that not only the business, which was thus engrossed by the Members of the Board, could be as well transacted by a junior servant, at much less expense; but that other inconveniences, still more pernicious, were incurred; that by the absence of so many members of the board, it had been necessary to increase their numbers from twelve to sixteen; that by the regular departure to the out-settlements of those Members of the Council who had the greatest influence to procure their own appointment, there was so rapid a change of counsellors at the board, where only the youngest and most inexperienced remained, that the business of the Presidency was obliged to be conducted by men deficient in the knowledge and experience necessary for carrying it on.
Another measure, productive of considerable irritation and disturbance, was promoted by Clive. The rapid acquisition of riches in Bengal had recently sent so many of the superior servants, along with their fortunes, to Europe, that few remained to fill up the vacancies in the Council, except either men very young and inexperienced, or those whom Clive described as tainted with the corruptions which had vitiated the administration. The Committee say, “It is with the utmost regret we think it incumbent on us to declare, that in the whole list of your junior merchants, there are not more than three or four gentlemen whom we could possibly recommend tobook iv.Chap. 7. 1765. higher stations at present.” They accordingly forbore to supply the vacancies which occurred in the Council, and resolved upon calling a certain number of servants at the other presidencies, to supersede those in Bengal. They paid to their employers the compliment of recommending the measure to their consideration; but waited not for their decision, for, in two months from the date of their letter, four gentlemen arrived from Madras, and soon after took their seats at the Board.1
Among the circumstances most strongly recommended to Lord Clive by the Company, was the reduction of the military expenses; which absorbed all their revenues, and rendered their ascendancy in the country a burden rather than advantage. As service in the field is, in India, attended with peculiar charges to the officers, the Company had at an early period of their wars, found it necessary to allow their officers, during the time of campaign, a certain addition to their daily pay, which, in the language of the country, was styled batta, or indemnity for field expenses.
When the English forces took the field with Meer Jaffier after the battle of Plassy, to cherish their good-will, on which he was so dependant, that Nabob afforded to the officers twice the ordinary sum, and this allowance was distinguished by the name of double batta. As long as the troops continued to be paid by Meer Causim, the Company felt no prevailing motive to lessen an expense, which pleased the officers, and oppressed only the Nabob. When they perceived upon the assignment of territorial revenues for the expense of the army, that what could be with held from the army would accrue to themselves, they issued repeated orders for the reduction of the batta. But the dangers of the country had rendered the exertions of the army so necessary; and they to whom the powers of government were entrusted had so little dared to venture their authority in a contest with the military, that double batta had hitherto been allowed to remain.
Upon the conclusion of the war with Suja Dowla, the troops were regimented, according to a plan proposed by Clive and sanctioned by the Company before his departure from England; divided into three brigades, each consisting of one regiment of European infantry, one company of artillery, six battalions of Sepoys, and one troop of black cavalry; and were stationed, one brigade at Mongheer, 300 miles from Calcutta; another at Bankipore, near Patna, 100 miles beyond Mongheer; and the third at Allahabad, 200 miles beyond Patna; whither it had been sent as abook iv.Chap. 7. 1766. security against the Mahrattas, whom the Emperor and Vizir were far too reduced to be able to oppose.
In this situation the Select Committee issued an order, that on the 1st of January, 1766, the double batta should cease; and that the officers in Bengal, with some exceptions in favour of the troops in the most distant and expensive stations, should be placed on the same footing with those on the coast of Coromandel; that is, receive single batta, when in the field; in garrison or cantonments, no batta at all.
The officers, who, along with the rest of their countrymen, had formed unbounded notions of the wealth of India, and whose imaginations naturally exaggerated the fortunes which were making in the civil branch of the service, had received every previous intimation of this reduction with the loudest complaints and remonstrances; and treated the peremptory decree which was now issued, as an act of the highest injustice; and as a most unworthy attempt to deprive them of a share of those rich advantages for which they had fought and bled, only that a larger stream of emolument might flow into the laps of those very men who were the instruments of their oppression.
At all times, and especially in situations in any degree resembling that of the British in India, it has been found a hazardous act to reduce the advantages of an army; and Clive appears to have greatly miscalculated either the weight of his own authority, or the delicacy of the operation. Without any endeavour to prepare the minds of the men, the order was issued and enforced; and without any care to watch its effects, the Governor remained in perfect security and ignorance, till the end of April, when he received book iv.Chap. 7. 1766. a letter informing him, that a most alarming conspiracy, embracing almost every officer in the army, was ripe for execution.
As early as the month of December a combination began. Private meetings and consultation were held, secret committees were formed, and correspondence carried on. The combustion first began in the brigade at Mongheer; but was soon, by letter, communicated to the rest, whose bosoms were perfectly prepared for inflammation. The plan concerted was, that the officers should resign their commissions in a body, and, by leaving the army totally ungoverned, make the constituted authorities submit to their terms. Nearly two hundred dommissions of captains and subalterns were in a short time collected. Besides a solemn oath of secrecy, they bound them selves by a similar obligation, to preserve at the hazard of their own lives, the life of any officer, whom a Court Martial might condemn to death. Each officer executed a penalty bond of 500l., not to accept his commission till double batta was restored. A subscription was raised among them to establish a fund for the indemnification of those who might suffer in the prosecution of the enterprise; and to this, it was understood, that the gentlemen in the civil service, and even those at the Presidency, largely contributed.
When the army was in this situation, a body of between fifty and sixty thousand Mahrattas appeared on the frontiers of Corah, about one hundred and fifty miles from Allahabad. To watch their motions, the brigade remaining in garrison at that city was ordered to encamp at Seragepore. Early in April Lord Clive, accompanied by General Carnac, had repaired to Moorshedabad, in order to regulate the collections of the revenue for the succeeding year, to receive from Sujah Dowla the balance of his payments, and tobook iv.Chap. 7. 1766. hold a congress of the native chiefs or princes, who were disposed to form an alliance for mutual defence against the Mahrattas. On the 19th was transmitted to him, from the Select Committee, a remonstrance received from the officers of the third brigade, expressed in very high language, which he directed to be answered with little respect. It was not till late in the evening of the 28th; when he received a letter from Sir Robert Fletcher, the commanding officer at Mongheer; that Clive had the slightest knowledge or suspicion of a conspiracy so extensive, and of which the complicated operations had been going on for several months.
At Bankipore, a considerable part of the cantonments had been burnt down; and a Court Martial was held upon one of the officers, accused of having been the voluntary cause. The act proceeded from a quarrel between him and another officer, who attempted to take away his commission by force: and, upon exploring the reason of this extraordinary operation, the existence of the combination was disclosed. The commanding officer immediately dispatched an account of the discovery to Sir Robert Fletcher at Mongheer; who was by no means unacquainted with the proceedings in his own brigade, but was only now induced to give intimation of them to his superiors. It was the plan of the officers to resign their commissions on the 1st of June; but this discovery determined them, with the exception of the brigade at Allahabad, to whom information could not be forwarded in time, to execute their purpose a month earlier.
Clive at first could not allow himself to believe that the combination was extensive; or that any considerable number of men, the whole of whose book iv.Chap. 7. 1766. prospects in life was founded upon the service, would have resolution to persevere in a scheme, by which the danger of exclusion from it, not to speak of other consequences, was unavoidably incurred. It was one of those scenes, however, in which he was admirably calculated to act with success. Resolute and daring, fear never turned him aside from his purposes; or deprived him of the most collected exertion of his mind in the greatest emergencies. To submit to the violent demands of a body of armed men, was to resign the government. He had a few officers in his suite upon whom he could depend; a few more, he concluded, might yet be found at Calcutta, and the factories; and some of the free merchants might accept of commissions. The grand object was to preserve the common soldiers in order and obedience, till a fresh supply of officers from the other Presidencies could be obtained.
He remained not long without sufficient evidence that almost all the officers of all the three brigades were involved in the combination, and that their resignations were tendered. Directions were immediately sent to the commanding officers, to find, if possible, the leaders in the conspiracy; to arrest those officers whose conduct appeared the most dangerous, and detain them prisoners; above all things to secure the obedience of the Sepoys and black commanders, if the European troops should appear to be infected with the disobedience of their officers. Letters were dispatched to the Council at Calcutta, and the Presidency at Fort St. George, to make the greatest exertions for a supply of officers; and Clive himself hastened towards Mongheer. On the road he received a letter from Colonel Smith, who commanded at Allahabad, informing him that the Mahrattas were in motion, and that Ballagee Row was at Calpee, with 60,000 men collecting boats. If reduced to extremity, but not before, Smith was instructed to promise the officers compliance with their demands.
Expecting their resignation to produce all the effects which they desired, the officers had concerted no ulterior measures. Their desperation had not led them to make any attempts to debauch the common soldiers. The Sepoys every where exhibited a steady obedience; and the commanding officers of all the brigades remained in perfect confidence of being able, in case of mutiny, to put every European soldier to death. Except, however, at Mongheer, where symptoms of mutiny, among the Europeans were quickly dispelled by the steady countenance of the Sepoys drawn out to attack them, no disturbance occurred. The officers at Mongheer submitted quietly to be sent down to Calcutta; the greater part of those belonging to the other brigades retracted: And this extraordinary combination, which, with a somewhat longer sight on the part of the officers, or less of vigour and of the awe of a high reputation on the part of the Governor, would have effected a revolution in India, produced, as ineffectual resistance generally does, a subjection more complete than what would have existed, if the disturbance had never been raised. Some of the officers, upon profession of repentance, were allowed to resume the service; others were tried and cashiered. The case of Sir Robert Fletcher was the most remarkable. He had been active in subduing the confederacy; but was found to have encouraged its formation. He apologized for himself on two grounds; that he wished, through the guilt of the conspiracy, to be able to dismiss a number of officers, whose bad conduct rendered them an injury to the service; and that he wished, through the appearance of favouring the views of the officers in some things, to have the book iv.Chap. 7. 1766. advantage of a complete knowledge of their proceedings: A Court Martial, notwithstanding, found him guilty of mutiny, of sedition, and concealment of mutiny; and he was punished by ejection from the service.
Upon the termination of this dangerous disaffection, Lord Clive proceeded to Chopprah, where he was met by Suja Dowla, by the Minister of the Emperor, and by deputies from the Mahratta Chiefs. Suja Dowla continued to express the highest satisfaction with the treaty which he had lately concluded with the Company; and cheerfully advanced the remainder of the sum which he had promised as the price of peace. The grand desire of the Emperor was to regain possession of the capital of his ancestors, and to mount the throne at Delhi. He had exhausted all his arts of negotiation and intrigue to obtain the assistance of the English; and had, without their concurrence, formed engagements with the Mahrattas, who, at his persuasion, it now appeared, and under assurances that the English would join them in escorting him to his capital, were assembled on the confines of Corah. This ambition of the Emperor was offensive to the English; who, as they had no intention to second his views, dreaded violently his connexion with the Mahrattas. The formation of a treaty for mutual defence, including the Emperor, the Company, the Jaat and Rohilla chiefs, was left to be conducted by Suja Dowla.
During these transactions died the Nabob of Bengal, Nujeem ul Dowla. He expired on the 8th of May, a few days after Clive had left him at Moorshedabad. He was an intemperate youth, of a gross habit of body; and his death had in it nothing surprising. Its suddenness, however, failed not, in a country habituated to deeds of darkness around a throne, to cover it with odious suspicions. His brother, Syeff ul Dowla, a youth of sixteen, was elevated to his nominal office;book iv.Chap. 7. 1766. a change of less importance now than that of the chief of a factory.
Upon the return of Clive to the Presidency, the private trade, so dear to individuals, demanded the attention of the Committee. The native merchants, to whom the salt had been disposed of, at the places of the society’s sales, had re-sold or retailed it at a profit which the Committee deemed extravagant. Instead of inquiring whether, if the trade, as alleged by the Committee, was monopolized and engrossed by a combination, the means could not be devised of yielding it the benefit of free competition; they contented themselves with the easy and despotical expedient of ordering the commodity to be retailed at an established price: and by an ex-post-facto law fined the native merchants to the amount of their additional gains.1
On the 3d of September the Select Committee proceeded to arrange the business of the inland trade society for another year. The Company in their letter of the 19th of February, already received, had declared that they considered the continuance of this trade “as an express breach and violation of their orders, and as a determined resolution to sacrifice the interests of the Company, and the peace of the country, to lucrative and selfish views.” Pronouncing, “that every servant concerned in that trade stood guilty of a breach of his covenants, and of their orders,” they added, “Whatever government may be established, or whatever unforeseen circumstances may arise, it is our resolution to prohibit, and we do absolutely forbid, this trade of salt, beetle-nut, and tobacco, and of all articles that are not for export book iv.Chap. 7. 1766. and import, according to the spirit of the phirmaund, which does not in the least give any latitude whatsoever for carrying on such an inland trade; and moreover, we shall deem every European concerned therein, directly or indirectly, guilty of a breach of his covenants; and direct that he be forthwith sent to England, that we may proceed against him accordingly.”
Notwithstanding these clear and forcible prohibitions, the Committee proceeded to a renewal of the monopoly, as if the orders of the Directors deserved not a moment’s regard. Clive, in his Minute, turned them carelessly aside, observing that when the Company sent them, “they could not have the least idea of that favourable change in the affairs of these provinces, whereby the interest of the Nabob, with regard to salt, is no longer immediately concerned.” As a reason against lodging the government of India in hands at the distance of half the circumference of the globe, the remark would merit attention: For the disobedience of servants to those who employed them, it is no justification at all; because, extended as far as it is applicable, it rendered the servants of the Company independent; and constituted them masters of India.
One change alone, of any importance, was introduced upon the regulations of the preceding year: The salt, instead of being conveyed to the interior, was to be sold at Calcutta, and the several places of manufacture. The transportation of the commodity to distant places, by the agents of the society, was attended with great trouble and expense: By selling it immediately at the places of manufacture, so much was saved: And by reserving the distribution to the merchants of the country, a pretended boon was granted to the natives. A maximum price was fixed; and on the 8th of September a Committee ofbook iv.Chap. 7. 1766. trade was formed with directions for carrying the plan into execution.
No sooner was this arrangement formed, than Clive brought forward a proposition for prohibiting all future Governors and Presidents from any concern whatsoever in trade. On the 19th of the very same month, in a Minute presented to the Select Committee, he represented, that, “Where such immense revenues are concerned, where power and authority are so enlarged, and where the eye of justice and equity should be ever watchful, a Governor ought not to be embarrassed with private business. He ought to be free from every occupation in which his judgment can possibly be biassed by his interest.” He therefore proposed, that the Governor should receive a commission of one and one-eighth per cent. upon the revenues; and in return should take a solemn and public oath, and bind himself in a penalty of 150,000l. to derive no emolument or advantage from his situation as Governor of Bengal, beyond this commission, with the usual salary and perquisites: And a covenant to this effect was formally executed by him. That good reasons existed for precluding the Governor from such oblique channels of gain, both as giving him sinister interests, and engrossing his time, it is not difficult to perceive: That the same reasons should not have been seen to be good, for precluding, also, the members of the Select Committee and the Council, might, though it need not, excite our surprise.
On the 8th of December, letters arrived from England, dated the 17th of May, addressed both to Clive and the Committee. In these documents the Directors pronounced the inland trade society to be a book iv.Chap. 7. 1767. violation of their repeated orders; declared that all those servants who had been engaged in that society should be held responsible for a breach of their covenants; and commanded that the trade should be abandoned, and should be reserved, free from European competition, to the natives. There was no longer any room for direct disobedience. The dissolution of the society was pronounced. But on the score of the contracts which had been formed and the advances made, the whole of the existing year was reserved; and the society was not abolished in fact till the 14th of September, 1768.1
Upon the 16th of January, 1767, Lord Clive declared his intention of returning immediately to Europe, on account of his health; and directed the attention of the Select Committee to the regulations which, previous to his departure, it might appear expedient to adopt. By recent instructions the Directors had empowered him, either to abolish, or continue the Select Committee, upon his departure, according as the state of affairs might to him appear to require. He felt no hesitation in deciding for its continuance; and named as members Mr. Verelst, who was to succeed him in the chair, Mr. Cartier, Colonel Smith, Mr. Sykes, and Mr. Beecher. He departed in the Britannia; and on the 17th of Februarybook iv.Chap. 7. 1767. Mr. Verelst took his oath as successor in the chair.1
It was the interest of the servants in India, diligently cultivated, perpetually to feast the Company with the most flattering accounts of the state of their affairs. The magnitude of the transactions, which had recently taken place; the vast riches with which the new acquisitions were said to abound; the general credulity on the subject of Indian opulence; and the great fortunes with which a few individuals had returned to Europe; inflamed the avarice of the proprietors of East India Stock; and rendered them impatient for a share of treasures, which the imaginations of their countrymen, as well as their own, represented as not only vast, but unlimited. This impulse carried them in 1766 to raise their dividend from six to ten per cent. The inflated conceptions of the nation at large multiplied the purchasers of India stock; and it rose so high as 263 per cent. The proprietors called with importunity for a higher return. It was in vain that the Directors represented the heavy debts of the Company; and pointed out the imprudence of taking an augmented dividend, when money at a heavy interest must be taken up to discharge it. In a general Court held on the 6th of May, 1767, a dividend of twelve and a half per cent. was voted for the year. The public attention was vehemently roused. Even the interference of the minister was commanded. He had condemned the rapacity of the proprietors in augmenting the dividend; and recommended a Committee of the House of Commons, book iv.Chap. 7. 1767. which was actually formed in November 1766, for the purpose of inquiring into the state of their affairs. The relation between the public, and the territory now held by the Company in India, called for definition. It was maintained on the one hand, as an indisputable maxim of law, supported by the strongest considerations of utility, that no subjects of the crown could acquire the sovereignty of any territory for themselves, but only for the nation. On the side of the Company, the abstract rights of property, and the endless train of evils which arise from their infringement, were vehemently enforced; while it was affirmed that the Company held not their territories in sovereignty, but only as a farm granted by the Mogul, to whom they actually paid an annual rent. An act was passed, which directed that after the 24th of June, 1767, dividends should be voted only by ballot, in general courts summoned expressly for that purpose; and that no dividend above ten per cent. for the year should be made before the next session of parliament. The resolution of the Court of Proprietors respecting a dividend of twelve and a half per cent. was thus rescinded; and the right of parliament to control and command the Company in the distribution of their own money asserted and established. The question of the sovereignty was not pushed at that time to a direct and express decision; though a decision was virtually involved in another act, by which the Company, in consideration of holding the territorial revenues for two years, were obliged to pay annually 400,000l. into the public exchequer.
The opinion which Lord Clive had artfully raised of the high prosperity of the Company’s affairs, and of his own extraordinary share in producing it, directed the overflowings of their gratitude towards himself; and a proposition was brought forward andbook iv.Chap. 7. 1767. carried, to grant him, for ten years certain, the produce of his jaghire.
Other acquisitions of Clive come subsequently to view. Notwithstanding the covenants executed by the servants of the Company, not to receive any presents from the natives, that Governor had accepted five lacks of rupees during his late residence in Bengal from the Nabob Nujeem ul Dowla. It was represented, indeed, as a legacy left to him by Meer Jaffier, though all indications pointed out a present, to which the name of legacy was artfully attached. At any rate, if any sums might be acquired under the name of legacies, the covenants against receiving presents were useless forms. Lord Clive represented; that upon the first intimation of this gift, his resolution was to refuse it; that he changed his mind, upon reflecting of what importance it would prove as a fund for the benefit of invalided officers and soldiers in the Company’s service; and that he afterwards prevailed upon Syeff ul Dowla, the successor of Nujeem ul Dowla, to bestow three lacks more for this excellent end. The Company sanctioned the appropriation; and to this ambiguous transaction the Institution at Poplar owes its foundation.
Upon this, as upon his former departure, the regulations which Clive left behind, calculated for present applause rather than permanent advantage, produced a brilliant appearance of immediate prosperity, but were fraught with the elements of future difficulty and distress. A double government, or an administration carried on in name by the Nabob, in reality by the Company, was the favourite policy of Clive;1book iv.Chap. 7. 1767. to whose mind a certain degree of crooked artifice seems to have presented itself pretty congenially in the light of profound and skilful politics. The collection of the revenues was still made as for the exchequer of the Nabob; justice was still administered by his officers and in his name; and all transactions with foreign powers were covered with the mask of his authority. For the benefit of certain false pretexts which imposed upon nobody, the government of the country, as far as regarded the protection of the people, was dissolved. Neither the Nabob nor his officers dared to exert any authority against the English, of whatsoever injustice and oppression they might be guilty. The gomastahs, or Indian agents employed by the Company’s servants, not only practised unbounded tyranny, but overawing the Nabob and his highest officers, converted the tribunals of justice themselves into instruments ofbook iv.Chap. 7. 1767. cruelty, making them inflict punishment upon the very wretches whom they oppressed and whose only crime was their not submitting with sufficient willingness to the insolent rapacity of those subordinate tyrants. While the ancient administration of the country was rendered inefficient, this suspension of the powers of government was supplied by nothing in the regulations of the English. Beyond the ancient limits of the Presidency, the Company had no legal power over the natives: Beyond these limits the English themselves were not amenable to the British laws; and the Company had no power of coercion except by sending persons out of the country; a remedy always inconvenient, and, except for very heinous offences, operating too severely upon the individual to be willingly applied. The natural consequence was, that the crimes of the English and their agents were in a great measure secured from punishment, and the unhappy natives lay prostrate at their feet. As the revenue of the government depended upon the productive operations of the people; and as a people are productive only in proportion to the share of their own produce which they are permitted to enjoy; this wretched administration could not fail, in time, to make itself felt in the Company’s exchequer.1 Other sources were not wanting, whence a copious stream of evils was derived. Though the Governor and Council placed book iv.Chap. 7. 1767. the powers of the Nabob in a sort of commission, by compelling him to resign the entire management of business to one or more persons of their own choosing; and though they placed a confidential servant of the Company to watch them at the Nabob’s durbar; yet they possessed not over these depositaries of power, whom they could only punish by dismissal, sufficient means of control: Before detection, or much of suspicion, it was always possible for each of them to appropriate a treasure, and be gone; leaving his place to be filled by another who had both temptation and opportunity to repeat his crimes. With men whose interests were so little united with those of their employers, and whose situation was so very precarious, the Zemindars, Rajahs, and other agents of the revenue, might easily settle their own terms, and place the fallacy of their accounts beyond the reach of detection. The mischief was less in practice than reason would have anticipated, because in the choice of these native functionaries the English were both judicious and happy. Another, and that the most pernicious perhaps of all the errors into which Clive exerted himself to mislead the Company, was, the belief which he created, that India overflowed with riches, the expectations he raised, and on which the credulous Company so fondly relied, that a torrent of treasure was about to flow into their laps. As such expectations were adverse to the best use and improvement of their resources, they only hastened that disappointment and distress which their inconsistency with the matters of fact rendered a necessary consequence. In political affairs it is long before even experience teaches wisdom. Till the present moment incessant promises of treasure have never failed to deceive, without ceasing to delude. As often as the pain of disappointment has become exceedingly severe, we have condemned abook iv.Chap. 7. 1767. Governor, in whose conduct we believed that we had found the cause of our misery; and have begun immediately to pamper our fancy anew, with endless hopes and delusions.
Under the feebleness of Suja Dowla, and the quarrels which occupied the Mahrattas at home, the Company enjoyed profound tranquillity in Bengal for a considerable number of years; and during the administrations of Mr. Verelst and Mr. Cartier, who occupied the chair till the elevation of Mr. Hastings, and were calm, unambitious men, few events of historical importance occurred. It was during a period like this, if ever, that the Company ought to have replenished their exchequer, and to have attained financial prosperity. During this period, on the other hand, financial difficulties were continually increasing; and rose at last to a height which threatened them with immediate destruction. Doubtless, the anarchical state, in which, by the double government, the provinces were placed, contributed powerfully to impoverishment; but the surplus revenue, with which the people of England were taught to delude themselves, was hindered by more permanent causes. Though no body should believe it, India, like other countries, in which the industrious arts are in their infancy, and in which law is too imperfect to render property secure, has always been poor. It is only the last perfection of government, which enables a government to keep its own expense from absorbing every thing which it is possible to extract from the people: And the government of India, under the East India Company, by a delegation of servants at the distance of half the circumference of the globe from control, was most unhappily circumstanced for economy. On a subject like this, authority is useful. book iv.Chap. 7. 1767. “With regard to the increase of the expenses,” says Clive, “I take the case to stand thus. Before the Company became possessed of the duannee, their agents had other ways of making fortunes. Presents were open to them. They are now at an end. It was expedient for them to find some other channel: the channel of the civil and military charges. Every man now who is permitted to make a bill, makes a fortune.”1
During the year 1767, a march of the Abdalee Shah, towards Delhi, excited the attention, though not much the alarm, of the Presidency. After some contests with the Seiks, and over-running a few of the provinces, that powerful Chief returned to his own country. An expedition was undertaken for the restoration of the Rajah of Nepaul, who had been dispossessed by his neighbour of Ghurka. The motives were; that Nepaul had carried on a considerable traffic with the province of Berar; that its vicinity to the district of Bettea afforded great opportunities for the improvement of trade; that all intercourse was now destroyed; and that the accomplishment of the object was easy. On the last point, at least, the authors of the war were not very correctly informed; and found they had miscalculated the difficulties of subduing a country, surrounded by mountains, and accessible only by a few narrow and nearly impenetrable defiles. The officer sent to command the expedition was unable to proceed, and wrote for reinforcements. The Presidency were violently disappointed; and felt a strong inclination to wreak their vengeance upon the Commander. Being obliged to send assistance to Madras, they were unable to afford reinforcements, and recalled the detachment.1 The war with Hyder Ali had now broken out in Carnatic; and considerable supplies, both in men and money, were demanded from Bengal. This year, financial distress began to be experienced. Complaints were first emitted of the scarcity of money; ascribed, not to impoverishment of the country, but to a drain of specie, occasioned by the annual exportation of the precious metals, chiefly to China, on account of the Company’s investment, and also in other directions; while the usual supplies of bullion from Europe (the Company providing their investment from the revenues, the Dutch and French from the fortunes of the English consigned to them for transmission) were almost wholly cut off.2
Early in the year 1768, arrived the Company’s peremptory order for abolishing entirely the trade of their servants in salt, and other articles of inferior book iv.Chap. 7. 1768. traffic; for laying it open, and confining it to the natives; and for restricting their servants entirely to the maritime branches of commerce.1
The commission of one and one-eighth per cent. upon the duanee revenues, which by the Select Committee had been settled upon the Governor as a compensation for relinquishing his share in the salt trade, was also commanded to cease. For as much, however, as the income of their servants, if thus cut off from irregular sources of gain, was represented as not sufficiently opulent, the Company granted a commission of two and a half per cent. upon the net produce of the duanee revenues, to be divided into 100 equal shares, and distributed in the following proportions: to the Governor, thirty-one shares; to the second in Council, four and a half; to the rest of the Select Committee, not having a chiefship, each three and a half shares; to the Members of the Council not having a chiefship, each one and a half; to the Commander-in-Chief, seven and a half shares; to Colonels, each, two and a half; Lieutenant-Colonels, each, one and a half; and to Majors, three fourths. An additional pay was allotted, to Captains, of three shillings, Lieutenants two shillings, and Ensigns one shilling per day.
Some uneasiness still continued with respect to the designs of Suja Dowla; between whom and the Emperor considerable discordance prevailed. The Directors had forwarded the most positive orders for recallingbook iv.Chap. 7. 1769. the brigade from Allahabad; and for confining the operations of the Company’s army entirely within the limits of the Company’s territory. The Council thought it necessary to disobey; and in their letter went so far as to say that they “must express their great astonishment at such an absolute restriction, without permitting them upon the spot to judge how far, from time and circumstances, it might be detrimental to their affairs.”
The most important particular in the situation of the Company in Bengal was the growing scarcity of pecuniary means. In the letter from the Select Committee to the Court of Directors, dated 21st November, 1768, “You will perceive,” they say, “by the state of your treasury, a total inability to discharge many sums which you are indebted to individuals for deposits in your cash, as well as to issue any part of the considerable advances required for the service of every public department. And you will no longer deem us reprehensible, if a decrease in the amount of your future investments, and a debasement of their quality, should prove the consequence.”
By a correspondence between the Presidencies of Fort William and Fort St. George, in the beginning of March, 1769, the dangerous consequences to be apprehended from the exhausted state of their treasuries, and the necessity of establishing a fund against future emergencies, were mutually explained and acknowledged. In two separate consultations, held by the President and Council at Fort William, in the months of May and August, the utility, or rather the indispensable necessity of such a fund underwent a solemn discussion; and was pronounced to be without dispute. But as the expenses of the government left no resource for the creation of it, except the book iv.Chap. 7. 1769. diminution of the investment, or quantity of goods transmitted to the Company in England, they resolved upon that reduction, and limited to forty-five lacs the investment of the year.
Even this resource was in a very short time perceived to be insufficient. On the 23d of October a deficiency of 6,63,055 rupees appeared on the balance of receipts and disbursements; and the President and Council in their Minute declared, “That however the public might have been flattered, they could not flatter themselves, with any expectations from their revenue; and that the only expedient within their reach was to open their treasury doors for remittances.”1
These remittances consisted chiefly of the money or fortunes of the individuals who had grown rich in the Company’s service, and who were desirous of transmitting their acquisitions to Europe. Such persons were eager to pay their money to the Company’s government in India, upon receiving an obligation for repayment from the Company in England; in the language of commerce, for a bill upon the Company payable in England. The money thus received, in other words borrowed, was applied to the exigencies of the service; and by augmenting their resources was always highly agreeable to the servants in India. The payment however of these loans or bills in England was apt to become exceedingly inconvenient to the Directors. The sole fund out of which the payment could be made was the sale of the investment, or the goods transmitted to them frombook iv.Chap. 7. 1769. India and China. If the quantity of these goods was less in value than afforded a surplus equal to the amount of the bills which were drawn upon them, they remained so far deficient in the ability to pay. And if the goods were sent in too exorbitant a quantity, the market was insufficient to carry them off.
An opposition of interests was thus created between the governing part of the servants abroad, and the Courts of Directors and Proprietors at home. For the facility of their operations, and the success of their government, it was of great importance for the servants to preserve a full treasury in India, secured by a small investment, and the receipt of money for bills. It was the interest of the Directors to have an ample supply of money at home, which on the other hand could only be produced by a large investment, and a moderate transmission of bills. The Directors, accordingly, had given very explicit instructions on this subject; and in their letter of the 11th of November, 1768, after acknowledging the growing deficiency of the funds in India, had said; “Nevertheless, we cannot suffer ourselves to be drawn upon to an unlimited amount, the state of the Company’s affairs here not yet admitting us to answer large drafts upon us from India; but should the exigency of your affairs require your receiving money into your treasury, we prefer the mode of borrowing at interest to that of granting bills upon us: We therefore permit you to take up such sums on interest, for one year certain, as will answer your various demands, which are to be paid off at the expiration of that period, or as soon after as the state of your treasury will admit of. You are therefore to confine your drafts upon us, by the ships to be dispatched from your Presidency in the season of 1769, book iv.Chap. 7. 1769. to the same amount as we allowed last year, viz. 70,000l.”1
When the amount of the sums which it was the desire of individuals to send home exceeded the amount which it was permitted to the government in India to receive, in other words to draw bills for upon the Company at home, the parties who were deprived of this channel of remittance betook themselves to the French and Dutch factories, and paid the money into their treasuries for bills upon their respective companies, payable in Europe. This, from an early period of Mr. Verelst’s administration, had constituted a heavy subject of complaint; as making these subordinate settlers to abound with money, while the English were oppressed with want. As he ascribed the financial difficulties of the Company’s government merely to a defect of currency not of revenue, so he ascribed the defect of currency to the remittances which were forced into the Dutch and French channels; though neither of these nations carried any specie out of India, and were only saved to a certain extent the necessity of importing bullion. To him it appeared surprising that the Dutch and French Company should find it easy to pay the bills whichbook iv.Chap. 7. 1769. were drawn upon them for money received in India; but that the English Company should find it impossible; and he ascribed the restrictions which they imposed to a timid and narrow spirit.1 One circumstance, however, which constituted a most important difference, he was ill situated to perceive. The French and Dutch Companies were chiefly commercial; and whatever money was received in India was laid out in the purchase of goods; these goods were carried to Europe, and sold before the bills became due; the bills were paid out of the proceeds; and a great trade was thus carried on upon English capital. The English Company, on the other hand, was become a regal, as well as a commercial body; the money book iv.Chap. 7. 1769. which was paid for remittance into their treasury in India was absorbed in the expense of the government; and so much only as could be spared was employed in the purchase of investment. This was one cause undoubtedly of the comparative inability of the English Directors to pay the bills which were drawn upon them.
In the Consultation of the 23d of October, in consideration of great exigency, it was resolved, that the Board would receive all monies tendered to the Company’s treasury from that day to the 1st of November, 1770; and at the option of the lenders, grant, either interest notes payable in one year; or receipts bearing interest at eight per cent. for bills to be granted at the sailing of the first ship after the 22d of November, 1770, payable with three per cent. interest, in equal proportions on each tender, at one, two, and three years sight. And as a resource to the Directors, it was resolved to enlarge the investment by purchasing, not with ready money, but with bonds at eight per cent. and one year’s credit. This was the last considerable act in which the Governor was engaged. He resigned his office on the 24th of December, and was succeeded by Mr. Cartier. A new treaty had been concluded with Suja Dowla, which allayed whatever suspicions the ambiguous conduct of that Governor had raised, and Mr. Verelst left the three provinces in profound tranquillity.1
“Upon my arrival in Bengal,” sad Clive (in his Speech in the House of Commons, ut supra p. 3.), “I found the powers given were so loosely and jesuitically worded, that they were immediately contested by the Council. I was determined, however, to put the most extensive construction upon them, because I was determined to do my duty to my country.”
Speech, ut supra, p. 4.
Letter, dated Calcutta, 30th September, 1765, from Lord Clive to the Court of Directors, Third Report of Committee, 1772, Appendix, No. 73. In the letter of the same date from the select Committee, which was merely another letter from Clive, by whose nod the other Members of the Committee were governed, they express themselves bound “to lay open to the view of the Directors a series of transactions too notoriously known to be suppressed, and too affecting to their interest, to the national character, and to the existence of the Company in Bengal, to escape unnoticed and uncensured;—transactions which seem to demonstrate that every spring of this government was smeared with corruption; that principles of rapacity and oppression universally prevailed, and that every spark of sentiment and public spirit was lost and extinguished in the unbounded lost of unmerited wealth.” Ib. App. No. 86.
Report, ut supra, Appendix, No. 74.
Verelst’s View of the English Government in Bengal, p. 50. For the sums received, and the rate they bore to the sums received by the managers of the preceding revolutions, see the preceding table, p. 326.
See the Letters to Bengal, dated 24th Dec. 1765, and 19th Feb. 1766, in the Appendix to the Third Report.
Clive, in his letter to the Directors, dated 30th Sept. 1765, says, “My resolution was, and my hopes will always be, to confine our assistance, our conquest, and our possessions, to Bengal, Bahar, and Orixa; To go further is, in my opinion, a scheme so extravagantly ambitious and absurd, that no governor and council in their senses can ever adopt it, unless the whole scheme of the Company’s interest be first entirely new modelled.”
Instructions from the Select Committee to the President, dated 21st June, 1765; and their Letter to General Carnac, dated 1st July.
The Select Committee express strongly their sense of the ostensible change; in their Consultation, 18th Sept. 1765, describing the Company as having “come into the place of the country government, by his Majesty’s royal grant of the duannee.” See Fourth Report, Committee of Secrecy of House of Commons, 1773. Appendix, No. 38.
In his letter, dated Calcutta, 1st February, 1766.
The effects of this measure are thus described by the Committee themselves: “As soon as this measure became known by reports from Madras, the young gentlemen of the settlement had set themselves up for judges of the propriety of our conduct, and the degree of their own merit.” It is to be observed that by “young gentlemen,” here is to be understood all those, without exception, who were not of the council, that is, all those whose interests were affected by this unusual proceeding; and they were even joined by several Members of the Council. That Clive should treat it as unendurable in such persons to express an unfavourable opinion upon his conduct, or upon a treatment which they naturally regarded as highly injurious to themselves, is in the genuine strain of power, both in India and Europe. The Committee continue: “They have not only set their hands to the memorial of complaint, but entered into associations unbecoming at their years, and destructive of that subordination, without which no government can stand; all visits to the President are forbidden; all invitations from him and the Members of the Committee are to be alighted; the gentlemen called down by our authority from Madras are to he treated with neglect and contempt.” Even the Secretary to the Council distinguished himself in this association; was dismissed from his office; and suspended the service. The Committee add, “You will be astonished to observe at the head of this list, two members of your Council, who subscribe their names in testimony of their sense of the injustice done to the younger servants.” Letter from the Select Committee to the Directors, dated 1st January, 1766.
Select Consultation, 15th August, 1766.
Governor Vansittart is very severe in his condemnation of this society. “As I am of opinion,” he says, “that an universal equality of trade in these articles (salt, beetel-nut, and tobacco,) would be the most beneficial footing it could stand upon; so I think that a monopoly of it in the hands of a few men of power is the most cruel and oppressive. The poor people of the country have not now a hope of redress.—It is a monopoly, in my opinion, of the most injurious nature.—I could set forth the unhappy condition of the people, under this grievous monopoly, in the words of a letter, which I have received from one of the country merchants; but I think it needless, because it must occur sufficiently to every reader who has any feeling.” A Letter to the Proprietors of India Stock from Mr. Henry Vansittart, 1767, p. 88, 89, 93.
For the preceding train of events, the principal sources of information were the Reports of the Two Committees of the House of Commons in 1772 and 1773; Vansittart’s Narrative; Verelst’s View of Bengal; Scott’s History of Bengal; Seer Mutakhareen; Clive’s Speech.
The following is au extract of Clive’s Letter to the Select Committee of 16th of January, 1767, upon his leaving India: “The first point in politics which I offer to your consideration is the form of government. We are sensible that since the acquisition of the duanny, the power formerly belonging to the Subah of these provinces is totally, in fact, vested in the East India Company. Nothing remains to him but the name and shadow of authority. This name, however, this shadow, it is indispensably necessary we should seem to venerate.—Under the sanction of a Subah (Subahdar), every encroachment that may be attempted by foreign powers can effectually be crushed, without any apparent interposition of our own authority; and all real grievances complained of by them can, through the same channel, be examined into and redressed. Be it therefore always remembered, that there is a Subah; and that though the revenues belong to the Company; the territorial jurisdiction must still rest in the chiefs of the country, acting under him and this Presidency in conjunction. To appoint th Company’s servants to the offices of collectors, or indeed to do any act by any exertion of the English power, which can equally be done by the Nabob at our instance, would be throwing off the mask, would be declaring the Company Subah of the provinces. Foreign nations would immediately take umbrage; and complaints preferred to the British court might be attended with very embarrassing consequences. Nor can it be supposed that either the French, Dutch, or Danes, would readily acknowledge the Company’s Subahship, and pay into the hands of their servants the duties upon trade, or the quit-rents of those districts which they may have long been possessed of by virtue of the royal phirmauns, or grants from former Nabobs.”
Governor Verelst, in his letter to the Directors, immediately before his resignation, dated 16th December, 1769, says, “We insensibly broke down the barrier betwixt us and government, and the native grew uncertain where his obedience was due. Such a divided and complicated authority gave rise to oppressions and intrigues, unknown at any other period; the officers of government caught the infection, and, being removed from any immediate control, proceeded with still greater audacity. In the mean time we were repeatedly and peremptorily forbid to avow any public authority over the officers of government in our own names,” &c.
Clive’s Speech, as published by himself, reprinted in Almon’s Debates for 1772, p. 44.
Letters from the Presidency, to the Directors, Verelst’s Appendix.
In the letter of the Select Committee to the Directors, dated Fort William, September 26th, 1767, they say, “We have frequently expressed to you our apprehensions lest the annual exportation of treasure to China would produce a scarcity of money in the country. This subject becomes every day more serious, as we already feel in a very sensible manner, the effects of the considerable drain made from the silver currency.” And in their letter of the 16th of December, they add, “We foresee the difficulties before us in making provision agreeably to your orders for supplying China with silver bullion even for this season. We have before repeatedly requested your attention to the consequences of this exportation of bullion; and we now beg leave to recommend the subject to your most serious consideration—assuring you, that, should we find it at all practicable to make the usual remittances next year to China, the measure will prove fatal to your investment, and ruinous to the commerce of Bengal.”—The absurdity of the theory which they invented to account for the want of money, that is, of resources (to wit, the drain of specie) is shown by this fact; that the price of commodities all the while, instead of falling had immensely risen. See the testimonies of Hastings and Francis, in their minutes on the revenue plans, Sixth Report of the Select Committe in 1781, Appendix xiv. and xv.
“Past experience,” they say, “has so impressed us with the idea of the necessity of confining our servants, and Europeans residing under our protection, within the ancient limits of our export and import trade, that we look on every innovation in the inland trade as an intrusion on the natural right of the natives of the country, who now more particularly claim our protection; and we esteem it as much our duty to maintain this barrier between the two commercial rights, as to defend the provinces from foreign invasion.” Letter from the Directors, dated 20th November, 1767.
The President and Council of Fort William, in their letter (dated the 21st of March, 1769) to the President and Council of Fort St. George, speak in pathetic terms of “the incontestible evidence they had transmitted to their honourable masters of the exaggerated light in which their new acquired advantages had been placed,” and the change of views which they expected them in consequence to adopt.
Eighth Report from the Committee of Secrecy, 1773, Appendix, No. i. In their letter 17th March, 1769, they so far modify their former directions as to say, “Upon reconsidering the subject of remittances we find it so connected with that of the investment, that the increase of the former must always depend on that of the latter. The produce of our sales here is the only channel of our receipts; and our flourishing situation in India would not avail us, if we were to suffer ourselves to he drawn upon to the amount of the cost of our homeward cargoes. In order therefore to unite the advantages of the Company and their servants, we do permit you to increase your remittances, by the ships dispatched from Bengal in the season of 1769, beyond the limitation in our letter of the 11th November last, so far as one half of the sum which your investment sent home in that season shall exceed the amount of sixty lacks. But if you do not send home an investment exceeding that sum, you must then confine your drafts upon us agreeably to our said letter of the 11th November last.”
In his letter to the Directors, dated 26th September, 1768, he says, “The extent of the Dutch and French credit exceeds all conception, and their bills are even solicited as favours. The precise sums received by them for some years I have endeavoured to ascertain, though hitherto without success; but if we only form our idea from the bills drawn this year from Europe on individuals here and Madras, the amount will appear prodigious and alarming. Advices of drafts and letters of credit have been already received to the amount of twenty-eight lacks on Bengal, and ten on Madras; and I have the most certain information that their treasures at Pondicherry and Chandernagore are amply furnished with all provision for both their investments and expenses for three years to come. You have often complained of the increase and superiority of the French and Dutch investments; but your orders and regulations have furnished them with the most extensive means of both. It is in vain to threaten dismission from your service, or forfeiture of your protection, for sending home money by foreign cash, while you open no doors for remittances yourselves. Such menaces may render the practice more secret and cautious; but will never diminish, much less remove the evil.” Verelst’s Appendix, p. 113. So much did Mr. Verelst’s imagination deceive him, in regard to the prosperity of the English rivals, that the exclusive privileges of the French Company, after they had struggled for some time on the verge of bankruptcy, were suspended by the King, and the trade laid open to all the nation. They were found unable to extricate themselves from their difficulties; and resigning their effects into the hands of government, for certain government annuities to the proprietors of stock, the Company were in reality dissolved. Raynal, liv. viii. sect. 26, 27.
The principal materials, before the public, for the history of Verelst’s administration, are found in the Reports of the Two Committees of 1772, and in the Appendix to his own View of Bengal. Information, but needing to be cautiously gleaned, is obtained from the numerous Tracts of the day.