Front Page Titles (by Subject) CHAP. IX. - The History of British India, vol. 3
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CHAP. IX. - 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.
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Public opinion in England, Proceedings in the India House, and in Parliament—Plan of Supervisors—Plan of a King’s Commissioner—Increase of pecuniary Difficulties—Dividend raised—Company unable to meet their Obligations—Parliamentary Inquiry—Ministerial Relief—An Act, which changes the Constitution of the Company—Tendency of the Change—Financial and Commercial State
book iv.Chap. 9. 1769.The affairs of the Company excited various and conflicting passions in England; and gave rise to measures of more than ordinary importance. The act of parliament having expired which limited the amount of dividend in 1767, the Directors exclaimed against a renewal of the restriction, as transferring the powers of the Company to parliament, subverting the privileges of their charter, and rendering insecure the property of every commercial and corporate body in the kingdom. They even presented to parliament a petition, in which these arguments were vehemently enforced; and so well by this time were they represented in that assembly, that a sufficiency of orators was not wanting, who in both Houses supported their claims. Opposite views, notwithstanding, prevailed; and an act was passed to prevent the increase of the dividend beyond ten per cent. till the 1st day of February, 1769.
Before the expiration of this term, the Company, who were anxious to evade the question respectingbook iv.Chap. 9. 1769. the public claim to the sovereignty of the Indian territory, very assiduously negotiated with the minister a temporary arrangement. After a great deal of conference and correspondence, an act was passed, in April, 1769, to the following effect: That the territorial revenues in India should be held by the Company for five years to come; that in consideration of this benefit they should pay into the exchequer 400,000l. every year; that if the revenues allowed, they might increase the dividend, by augmentations not exceeding one per cent. in one year, to twelve and a half per cent.; that if, on the other hand, the dividend should fall below ten per cent., the payment into the exchequer should obtain a proportional reduction, and entirely cease if the dividend should decline to six per cent.; that the Company should, during each year of the term, export British merchandise, exclusive of naval and military stores, to the amount of 380,837l.; and that when they should have paid their simple contract debts bearing interest, and reduced their bonded debt to an equality with their loans to government, they should add to these loans the surplus of their receipts at an interest of two per cent.1 This agreement between the public and the Company, was made, it is obvious, upon the same supposition, that of a great surplus revenue, upon which succeeding agreements have been made, and with the same result.
In the mean time, the grievous failure in the annual treasures, which they had been so confidently promised; and which, with all the credulity of violent wishes, they had so fondly and confidently promised themselves; excited, both in the Company, book iv.Chap. 9. 1769. and in the nation, the most vehement complaints against the managers in India, to whose misconduct was ascribed the disappointment of hopes which no conduct could have realized.1 A grand investigation and reform were decreed. And for the performance, after great consultation, it was resolved; that three persons should be chosen, whose acquaintance with Indian affairs, and whose character for talents, diligence, and probity, should afford the best security for the right discharge of so important a trust; and that they should be sent out, in the name and with the character of Supervisors, and with powers adapted to the exigence of the case. Mr. Vansittart, the late Governor of Bengal, Mr. Scrafton, and Colonel Ford, were recommended as the three commissioners; and it was proposed to invest them with almost all the powers which the Company themselves, if present in India, would possess; a power of superseding the operations and suspending the authority of the Presidents and Councils, of investigating every department of the service, and establishing such regulations as the interests of the Company might seem to require. The scheme was indeed opposed with great vehemence, by all those who favoured the persons now invested with the governing powers in India; by all those who had any pique against the individuals proposed; and by all those who disliked the accumulation of exorbitant authority in a small number of hands. But though they formed no inconsiderable party, the disappointment of the golden dreams of the Proprietors prevailed, inbook iv.Chap. 9. 1769. the General Court; and supervisors with extraordinary powers, it was resolved, were the very remedy which the maladies of the Indian government required.
But the pretensions of the ministry again interfered. Not only was the legality disputed of the commission by which the supervisors were appointed; but a share was claimed in the government of India, which the Directors regarded with alarm and abhorrence. As an accession to their power and influence in India, which they imagined would be of the utmost importance, they had applied to government for two ships of the line, and some frigates. No aversion to this proposition was betrayed by the ministry; but when the Company were elated with the hopes which a compliance was calculated to inspire, they were suddenly informed that the naval officer whom the Crown should appoint to command in India, must be vested with full powers to adjust all maritime affairs; to transact with the native princes; and, in short, to act the principal part in the offensive and defensive policy of the country. The Directors represented this proposal as affecting the honour, and the very existence of the Company. The General Court was adjourned from time to time to afford sufficient space for the consideration of so important a subject; and the Proprietors were entreated to consider the present moment as the very crisis of their fate; and to devote to the question a proportional share of their attention. To vest the officers of the Crown in India with powers independent of the Company, was in reality, they said, to extrude the Company from the government; to lay the foundation of endless contests between the servants of the King and those of the Company; and to prepare the book iv.Chap. 9. 1769. ruin of the national interests in that part of the world; If the Company were incapable of maintaining their territorial acquisitions, to surrender them to the powers of the country, upon terms advantageous to their commerce, was better, it was averred, than to lie at the mercy of a minister: And the fatal effects of the interference of the servants of the Crown in the affairs of a Company, formed for upholding a beneficial intercourse with India, were illustrated by contrasting the ruin of the French East India Company, the affairs of which the ministers of the French King had so officiously controled, with the prosperity of the Dutch East India Company, the affairs of which had been left entirely to themselves. The grand argument, on the other side, was furnished by Clive and the Directors themselves; who had used so many and such emphatical terms to impress a belief that the unprosperous state of their government was wholly produced by the rapacity and misconduct of those who conducted it in India. In the first place, the authority of a King’s officer was held up as an indipensable security against the vices of the Company’s servants; and in the next place the dignity of the master whom he served was represented as necessary to give majesty to the negotiations which a company of merchants might be required to conduct with the potentates of India.1 After long and acrimonious debates, the powers demanded for an officer of the Crown werebook iv.Chap. 9. 1770. condemned in a Court of Proprietors; and the ministers were not disposed to enforce, by any violent procedure, the acceptance of their terms. The Company would agree to sanction the interference of the officer commanding the ships of the King only within the Gulf of Persia, where they were embroiled with some of the neighbouring chiefs; the demand of two ships of the line for the Bay of Bengal was suspended; and the legal objection to the commission of the supervisors was withdrawn. In this manner, at the present conjuncture, was the dispute between the Government and the Company compromised. Two frigates, beside the squadron for the Gulf of Persia, were ordered upon Indian service. In one of them the supervisors took their passage. Their fate was remarkable. The vessel which carried them never reached her port; nor was any intelligence of her or her passengers ever received.
Mr. Cartier assumed the government of Bengal at the beginning of the year 1770.
The first year of his administration was distinguished by one of those dreadful famines which so often afflict the provinces of India; a calamity by book iv.Chap. 9. 1770. which more than a third of the inhabitants of Bengal were computed to have been destroyed.1
On the 10th of March, 1770, the Nabob Syef al Dowla died of the small-pox; and his brother Mubarek al Dowla, a minor, was appointed to occupy his station. The President and Council made with him the same arrangements, and afforded the same allowance for the support of his family and dignity, as had been established in the time of his predecessor. But this agreement was condemned in very unceremonious terms by the Directors. “When we advert,” say they, “to the encomiums you have passed on your own abilities and prudence, and on your attention to the Company’s interest (in the expostulations you have thought proper to make on our appointment of commissioners to superintend our general affairs in India), we cannot but observe with astonishment, that an event of so much importance as the death of the Nabob Syef al Dowla, and the establishment of a successor in so great a degree of nonage, should not have been attended with those advantages for the Company, which such a circumstance offered to your view.—Convinced, as we are, that an allowance of sixteen lacks per annum will be sufficient for the support of the Nabob’s state and rank, while a minor, we must consider every addition thereto as so much to be wasted on a herd of parasites and sycophants, who will continually surround him; or at least be hoarded up, a consequence still more pernicious to the Company. You are therefore, during the non-age of the Nabob, to reduce his annual stipend to sixteen lacks of rupees.”2
By the last regulations of the Directors, the inland trade in salt, beetle-nut, and tobacco, was reserved to the natives, and Europeans were excluded from it.book iv.Chap. 9. 1771. By a letter of theirs, however, dated the 23d of March, 1770, it was commanded to be laid open to all persons, Europeans as well as natives, but without any privileges to their countrymen or servants beyond what were enjoyed by natives and other subjects. These regulations were promulgated on the 12th of December.
In the mean time financial difficulties were every day becoming more heavy and oppressive. On the 1st of January, 1771, when the President and Council at Fort William had received into their treasury 95,43,855 current rupees, for which they had granted bills on the Court of Directors, the cash remaining in it was only 35,42,761 rupees. At the same period the amount of bond debts in Bengal was 612,628l. And at the beginning of the following year it had swelled to 1,039,478l.
Notwithstanding the intelligence which the Directors had received of the inadequacy of their revenues, and the accumulation of their debts in all parts of India; and notwithstanding their knowledge of the great amount of bills drawn upon them, for which they were altogether unable to provide, they signalized their rapacity on the 26th of September, 1770, by coming to a resolution for recommending it to the General Court, to avail themselves of the permission accorded in the late act, by making a dividend at the rate of twelve per cent. per annum. The approbation of the General Court was unanimous. On the 14th of March and 25th of September, 1771, it was resolved, by the Court of Directors, to recommend to the General Court an augmentation of the dividend to six and a quarter per cent. for the six months respectively ensuing: approved in the General Court, by ninety-four voices against five in the first book iv.Chap. 9. 1772. instance, and 374 against thirty in the second. On the 17th of March, 1772, the Directors again resolved to recommend a dividend of six and a quarter per cent. for the current half year, which the Court of Proprietors in a similar manner confirmed.
These desperate proceedings hurried the affairs of the Company to a crisis. On the 8th of July, on an estimate of cash for the next three months, that is, of the payments falling due, and the cash and receipts which were applicable to meet them, there appeared a deficiency of no less than 1,293,000l. On the 15th of July the Directors were reduced to the necessity of applying to the Bank for a loan of 400,000l. On the 29th of July they applied to it for an additional loan of 300,000l. of which the Bank was prevailed upon to advance only 200,000l. And on the 10th of August the Chairman and Deputy waited upon the Minister to represent to him the deplorable state of the Company, and the necessity of being supported by a loan of at least one million from the public.1
The glorious promises which had been so confidently made of unbounded riches from India, their total failure, the violent imputations of corrupt and erroneous conduct which the Directors and the agents of their government mutually cast upon one another, had, previous to this disclosure, raised a great ferment in the nation, the most violent suspicions of extreme misconduct on the part of the Company and their servants, and a desire for some effectual interference on the part of the legislature. In the King’s speech, on the 21st of January, at the opening of the preceding session, it had been intimated that one branch of the national concerns which, “as well from remoteness of place, as from other circumstances, was peculiarlybook iv.Chap. 9. 1772. liable to abuses, and exposed to danger, might stand in need of the interposition of the legislature, and require new laws either for supplying defects or remedying disorders.” On the 30th of March a motion was made by the Deputy Chairman for leave to bring in a bill for the better regulation of the Company’s servants, and for improving the administration of justice in India. The grand evil of which the Directors complained was the want of powers to inflict upon their servants adequate punishment either for disobedience of orders, or any other species of misconduct. The Charter of Justice, granted in 1753, empowered the Mayor’s Court of Calcutta, which it converted into a Court of Record, to try all civil suits arising between Europeans, within the town or factory of Calcutta, or the factories dependant upon it: it also constituted the President and Council a Court of Record, to receive and determine appeals from the Mayors; it further erected them into Justices of the Peace, with power to hold quarter sessions; and into Commissioners of oyer and terminer, and general gaol-delivery, for the trying and punishing of all offences, high treason excepted, committed within the limits of Calcutta and its dependant factories. This extent of jurisdiction, measured by the sphere of the Company’s possessions at the time when it was assigned, deprived them of all powers of juridical coercion with regard to Europeans over the wide extent of territory of which they now acted as the sovereigns. They possessed, indeed, the power of suing or prosecuting Englishmen in the Courts at Westminster; but under the necessity of bringing evidence from India, this was a privilege more nominal than real.
One object, therefore, of the present bill was to obtain authority for sending a chief justice with some book iv.Chap. 9. 1772. puisne judges, and an attorney-general, according to the model of the Courts of England, for the administration of justice throughout the territory of the Company.
The next object was, the regulation of the trade. The author of the motion, the Deputy Chairman of the Company, represented it as a solecism in politics, and monstrous in reason, “that the governors of any country should be merchants; and thus have a great temptation to become the only merchants, especially in those articles which were of most extensive and necessary consumption, and on which, with the powers of government, unlimited profits might be made.” It was, therefore, proposed that the Governors and Councils, and the rest of the Company’s servants, should be debarred from all concern in trade. But it neither occurred to the Deputy Chairman, nor was it pressed upon his notice by any other member of the legislative body, that the argument against the union of trade and government was equally conclusive, applied to the Company, as applied to their servants; to those who held the powers of government in the first instance, as to those who held them by delegation and at will.
It was in the debate upon this motion that Lord Clive made the celebrated speech, in which he vindicated his own conduct, against the charges to which, as well from authority as from individuals, it had been severely exposed. He spared not the character either of his fellow-servants, or of the Directors. “I attribute the present situation of our affairs,” he said, “to four causes; a relaxation of government in my successors; great neglect on the part of administration; notorious misconduct on the part of the Directors; and the violent and outrageous proceedings of general courts.” To hear his account, no one would believe that any creature who had ever had any thing to do with the governmentbook iv.Chap. 9. 1772. had ever behaved well but himself. It was much easier for him, however, to prove that his conduct was liable to no peculiar blame, than that it was entitled to extraordinary applause. With great audacity, both military and political, fortunately adapted to the scene in which he acted, and with considerable skill in the adaptation of temporary expedients to temporary exigencies, he had no capacity for a comprehensive scheme, including any moderate anticipation of the future; and it was the effects of his short-sighted regulations, and of the unfounded and extravagant hopes he had raised, with which the Company were now struggling on the verge of ruin, and on account of which the conduct both of them and of their servants was exposed to far more than its due share of obloquy and condemnation.
The suspicions of the nation were now sufficiently roused to produce a general demand for investigation; and on the 13th of April a motion was made and carried in the House of Commons for a select Committee to gratify the public desire. The bill which had been introduced by the Deputy Chairman was thrown out on the second reading, to afford time for the operations of the Committee, and parliament was prorogued on the 10th of June.
During the recess, took place the extraordinary disclosure of the deficiency of the Company’s funds, their solicitation of loans from the Bank, and their application for support to the Minister. He received their proposals with coldness; and referred them to parliament. That assembly was convened on the 26th of November, much earlier, as the King from the throne informed them, than had been otherwise intended, to afford them an opportunity of taking cognizance of the present condition of the East India Company. The Minister had already book iv.Chap. 9. 1772. come to the resolution of acceding to the request of the Directors; it therefore suited his purpose to affirm that how great soever the existing embarrassment, it was only temporary; and a Committee of Secrecy was appointed, as the most effectual and expeditious method for gaining that knowledge of the subject from which it was proper that the measures of parliament should originate.
Among the expedients which the urgency of their affairs had dictated to the Company, a new commission of supervision had been resolved upon during the recess; and six gentlemen were selected for that important service. The measure, however, was not approved by the ministry; and on the 7th of December the Committee of Secrecy presented a report, stating, that notwithstanding the financial difficulties of the Company, they were preparing to send out a commission of supervisors at a great expense, and that, in the opinion of the Committee, a bill ought to be passed to restrain them from the execution of that purpose for a limited time. The introduction of this bill excited the most vehement remonstrances on the part of the Company, and of those by whom their cause was supported in the two houses of parliament. It was asserted to be a violation of property, by curtailing the powers which the Company possessed by charter of managing their own affairs; and all the evils which can arise from shaking the security of property were held up in their most alarming colours to deter men from approbation of the threatened restraint. The Company’s claims of property, however, so frequently, during the whole course of their history, brought to oppose the interposition of parliament in their affairs, proved of as little force upon this as upon other occasions; and their privileges, they were told, to which the term property, in its unlimited sense, could not without sophistry be applied, were insufficient to set aside that for whichbook iv.Chap. 9. 1773. all property is created—the good of the community; now in one important article so formidably threatened in their mismanaging hands.
After this decisive act of control, the next ostensible proceeding was the petition for a loan, presented by the Company to parliament on the 9th day of March. The propositions urged by the Directors were: that they should receive a loan of 1,500,000l. for four years, at four per cent. interest; that they should make no dividend of more than six per cent. per annum until the loan should be reduced to 750,000l.; that the dividend in that event should rise to eight per cent.; that the surplus of receipts above disbursements in England should be applied to the reduction of the Company’s bond debts to 1,500,000l.; that after such reduction, the surplus should be divided equally between the public and the Company; and that the Company should be released from payment of the annual 400,000l. to the public, for the remainder of the five years specified in the former agreement, and from the payments to which they were bound in consequence of the late acts for the indemnity on teas. In lieu of these, the following were the propositions offered by the Minister: to lend the Company 1,400,000l. at an interest of four per cent.; to forego the claim of 400,000l. a-year from the territorial revenue till that debt is discharged; to restrict them from making any dividend above six per cent. till that discharge is accomplished, and from making any dividend above seven per cent. till their bond debt is reduced to 1,500,000l.; after that reduction to receive from them, in behalf of the public, three-fourths of the surplus receipts at home, the remaining fourth being appropriated either for the further reduction of the bond debt, or the book iv.Chap. 9. 1773. formation of a fund to meet contingent exigencies; and, under these conditions, to permit the territorial acquisitions to remain in their possession for six years, the unexpired term of their charter.
The Company treated these conditions as harsh, arbitrary and illegal; petitioned against them in the strongest terms; and were supported with great vehemence of language by their own friends, and the enemies of the Minister, in both houses of parliament. The restriction of the dividend after payment of the debt, the exaction of so great a proportion of the surplus receipts, and in particular the appropriation even of that part which it was proposed to leave as their own, they arraigned as a violent disposal of their property without their own consent, equalling the most arbitrary acts of the most despotical governments, and setting a precedent which lessened the security of every right of a British subject. These considerations, however vehemently urged, produced but little effect: the ministerial influence was predominating; the Company were odious; and it was felt, perhaps, rather than distinctly seen, that the rules of individual property were not applicable, without great restrictions, to an artificial body, whose proceedings were of such a magnitude as deeply to affect the interests of the nation at large. Of all these pretensions, however, that which seemed most to alarm the Company was the claim now distinctly asserted by the government to the territorial acquisitions; and though a definitive discussion was still waved by the Minister, the Company expostulated against the limitation of their possession to six years, as involving in it a decision of the question at issue.
A more important exercise of power over their affairs was still meditated by the Minister; an entire change in the constitution of the Company. On thebook iv.Chap. 9. 1773. 3d of May he introduced a series of propositions, as the foundation for a law, which should raise the qualification to vote in the Court of Proprietors from 500l. to 1,000l., and give to every proprietor possessed of 3,000l. two votes, possessed of 6,000l. three votes, and of 10,000l. four votes; which should change the annual election of the whole number of Directors to that of six new ones, or one-fourth of the whole number each year; vest the government of Bengal, Bahar, and Orissa, in a governor-general, with a salary of 25,000l., and four counsellors of 8,000l. each; render the other Presidencies subordinate to that of Bengal: establish at Calcutta a supreme court of judicature, consisting of a chief justice with 8,000l. a-year, and three other judges, with each 6,000l. a-year, appointed by the Crown.
As subsidiary articles it was proposed; that the first governor-general, and counsellors, should be nominated by parliament in the act, and hold their office for five years, after which the patronage of those great offices should revert to the Directors, but still subject to the approbation of the Crown; that every thing in the Company’s correspondence from India, which related to the civil or military affairs, to the government of the country, or the administration of the revenues, should be laid before the ministry; that no person in the service, either of the King or of the Company, should be allowed to receive presents; and that the governor-general, the counsellors, and judges, should be excluded from all commercial profits and pursuits.
If the alarm and indignation of the Company, Directors and Proprietors, were excited before; that body were now struck with the highest terror and resentment. They exclaimed, that the very constitution book iv.Chap. 9. 1779. was threatened with subversion, and the rights conferred by charter treated as dust. They tendered a direct application to the city of London, to join them with its influence in resisting a measure; which destroyed the principle on which its own privileges and those of every chartered body in the nation depended; and threatened the very freedom of the people, both by setting a conspicuous and prolific example of the arbitrary violation of law, and by adding the whole of the revenue and government of India to the power and influence of the Crown. They represented, that by the clause which raised the qualification of the voters, above twelve hundred Proprietors were disfranchised; violently, and without compensation, robbed of an important right, and excluded from all share, direct or indirect, in the management of their own immediate property: That by destroying the annual election of Directors, those Trustees for the Company were placed above the control of their constituents, and vested with new powers to gratify their own ease or corruption, at the expense of those whose interests were lodged in their hands: That by reducing to a small number the votes of the Proprietors, the ministerial management of that body became more easy: That, by rendering the situation of Director permanent for so great a number of years, under the incapacitation of the Proprietors either to punish or reward, and under the great power of the Minister to do both, the subserviency of the Court of Directors to all ministerial purposes was perfectly secured; and that, from these sources combined, the power of the Minister over the Company was rendered hardly any thing inferior to absolute: That the whole government of the settlements in India was taken from the Company, and, in effect, transferred to the Crown, by establishing a general presidency over all their affairs, of which thebook iv.Chap. 9. 1773. agents were in the first instance named by parliament, and ever after, in reality, under the condition of its approbation, named by the Crown: And that, “notwithstanding the Company were thus deprived of their franchise in the choice of their servants, by an unparalleled strain of injustice and oppression they were compelled to pay such salaries, as ministers might think fit to direct, to persons in whose appointment, approbation, or removal, the Company were to have no share.”1
These considerations were frequently urged, with the utmost vehemence and asperity, in both assemblies of Parliament. Every question, every clause, was warmly debated, and pressed to a division. The city of London, the Company themselves, and those stockholders who were deprived of their votes, presented strong and earnest petitions. In behalf of the Company, and the disfranchised Proprietors, counsel, at their prayer, were heard. And two protests, couched in censorial language of extraordinary strength, obtained a numerous signature in the upper house.
All this opposition, however, and all this ferment were of little avail. The propositions of the ministry were all carried by great and decisive majorities, and being reduced into two acts, the one relating to the financial relief of the Company, the other to the establishment of their new constitution, received the royal assent on the 21st of June and the 1st of July. The arrangements which concerned the business at home were appointed to commence from the 1st of book iv.Chap. 9. 1773. October, 1773; those which concerned the foreign administration not till the 1st of August, 1774.1
Practical statesmen, so apt to assume to themselves the monopoly of political wisdom, are commonly shortsighted legislators.
In one respect the present experiment fulfilled the purpose very completely for which it was intended. It followed the current of that policy, which for many reasons has run with perfect regularity and considerable strength, diminishing the influence of numbers in affairs of government, and reducing things as much as possible to the oligarchical state.
For the rest; it had not so much as a tendency to remove the principal evils to which it pretended to find a remedy; and it created some, of the greatest magnitude, which previously had no existence.
The evils in question were—I. Such as had their operation in India; and—II. Such as had their operation in England.
I. Those which had their operation in India might all be ranked under two heads; 1. The absorption of more than the revenues by expense; and 2. The plunder and oppression of the people.
The only parts of the new constitution which had a direct influence upon the government in India were—1. The new appointment and powers of the Governor-general and Council; and 2. The Supreme Court of Judicature.
1. The mode of appointing public functionaries, and the extent of their power, distinct from the motives to good or evil conduct which operate upon them in the discharge of their functions, are evidently of no avail. Upon the Governor and Council in India the motives to evil conduct, and the scope for its exercise, were, if not augmented by the new regulations,book iv.Chap. 9. 1773. at any rate not impaired.1 As ingenuity may be challenged to refute this proposition, it follows, that from this branch of the arrangement no good was derived.2
2. The Supreme Court of Judicature was intended to supply the limited powers of criminal jurisdiction, which, in their ancient commercial capacity, had been committed to the Company. The terrors of law, brought nearer home to the inferior servants of the Company, and those who enjoyed their protection, might have restrained in some degree their subordinate oppressions. But it was easy to see that the operations of the supreme functionaries in India must remain exempt from the control of the Supreme Court; otherwise, that court became itself the government. This consequence was not sufficiently foreseen; and the vague and indefinite powers assigned to the judicatory, introduced immediately, between the Governor General and the Judges, those struggles which threatened the existence of English authority.
book iv.Chap. 9. 1773. So long, on the other hand, as the Governor General and Council remained exempt from the control of law, the great oppressors were safe; and, from the community of interests, and the necessity of mutual compliance and mutual concealment, between the high offenders and the low, impunity was pretty well secured to the class.
The grand source, however, of mischief to the natives, in the jurisprudential plan, was the unfortunate inattention of its authors to the general principles of law, detached from its accidental and national forms. As the vulgar of every nation think their language the natural one, and all others arbitrary and artificial; so, a large mass of Englishmen consider English law as the pure extract of reason, adapted to the exigencies of human nature itself; and are wholly ignorant that, for the greater part, it is arbitrary, technical, and ill-adapted to the general ends which it is intended to serve; that it has more of singularity, and less capacity of adaptation to the state of other nations, than any scheme of law, to be found in any other civilized country. The English law, which in general has neither definition nor words, to guide the discretion or circumscribe the license of the Judge, presented neither rule nor analogy in cases totally altered by diversity of ideas, manners, and pre-existing rights; and the violent efforts which were made to bend the rights of the natives to a conformity with the English laws, for the purpose of extending jurisdiction, and gratifying a pedantic and mechanical attachment to the arbitrary forms of the Westminster courts, produced more injustice and oppression and excited more alarm, than probably was experienced, through the whole of its duration, from the previous imperfection of law and judicature.1
II. If, towards the amelioration of the governmentbook iv.Chap. 9. 1773. in India, the new effort in legislation performed no more than this; it injured, rather than improved, the condition of both the Company and the natives. Against the government at home, the only objection, of any real moment, was, its inefficiency, as the ruling power, to produce, by means of its servants, a good government in India, or, what in this case was meant by good government, a large surplus of revenue or treasure to England, without oppression to the natives. The total change which was effected in the Constitution of the Company pretended to have for its End the improvement and perfection of the Company in that respect: And it employed as its whole and only Means, dependance upon the Minister.
If the Minister had more knowledge of the affairs of India, more leisure to devote to their management, and more interest in their being well managed, this was an improvement. If he had less knowledge; less leisure; and, far above all, if his interest was likely to be most promoted by that system of patronage which creates dependance, and which is at irreconcilable enmity with the very principle of good government, the change was wholly the reverse. book iv.Chap. 9. 1773. How dependance upon the Minister was to render the agents of government more faithful and economical stewards of the revenues in India, or less disposed to accumulate wealth at the expense of the prostrate natives, it is not easy to make appear: In regard to responsibility, or eventual punishment, the only caution was, to act in concert with the minister; and then they were out of all comparison more assured of impunity than before.
From dependance upon the Court of Proprietors, by annual elections, to render the Directors in a great degree independent of their constituents by elections in four years, gave them greater powers, and hence motives, to pursue their own interests at the expense of the Proprietors; but that it should increase their interest in the good government of India, and hence their motives for exertion to procure it, is impossible.
To diminish the number of votes in the Court of Proprietors, and confine the power to the rich, was contrived, it was said, to render that assembly less tumultuous. But tumultuousness, in itself, is not an evil. It is evil only when it has a tendency to produce evil effects. What is more tumultuous than a public market, a theatre, or a church? To know the merit then of a reform of tumultuousness, we ought to know the specific evils which the tumultuousness in question produced. In the case of the East India Company, the authors of the measure failed in exhibiting any mischievous effects; though by their reform they unquestionably created a field for other effects of a very pernicious description. “If tumult and disorder,” as was well remarked by an illustrious Committee of the Commons House, “were lessened by reducing the number of Proprietors, private cabal and intrigue were facilitated at least in an equal degree; and it is cabal and corruption, rather than disorderbook iv.Chap. 9. 1773. and confusion, that are most to be dreaded in transacting the affairs of India;”1 that are most to be dreaded in transacting the affairs of every country under the sun.
The virtues of a Court of Proprietors, as of every political body, are intelligence and probity. The owner of 500l. stock was just as likely to be intelligent as the owner of 1000l. But a small number of men are much more easily corrupted than a large; and, where the matter of corruption operates, much more sure of being corrupt.2
To the grand complaint against the Court of Proprietors, that, being filled by the servants of the Company who had returned loaded to Europe with illgotten wealth, it proved a barrier against exposure and punishment, the amount of the qualification provided no sort of remedy, but rather facilitated and confirmed the abuse.
As soon as the management of the East India Company’s affairs became a source of great patronage and power, it necessarily followed that stock was generally held for the promotion of interests of much greater value than the dividend. It was distributed mostly among three great classes of Proprietors; 1. Those who aspired to a share in the Direction, and who were careful to possess themselves of whatever share of stock was calculated to strengthen their influence; 2. The large class of those who were competitors for the Company’s favours and employment, book iv.Chap. 9. 1773. all those concerned in the immense supply of their shipping and goods, constituting a considerable proportion of the ship-owners and tradesmen in London, who strengthened their influence with the great customer, by the number of votes which they could assure to the Directors in the General Court; 3. Those who aspired to contracts with the Treasury, Admiralty, and Ordnance, and clerks in public offices, who discovered that one ground of influence with the Minister was, to have votes at his disposal in the East India Proprietary Court.1
By every thing which tended to lessen the number of voting Proprietors, the force of all these sinister interests was increased. The only expedient which had a tendency to counteract them was, to render such Proprietors as numerous as possible. This would have promoted the interests of the public, but not those of the minister; the interests of the many, but not those of the few.2
One part of the ancient constitution, for the preservation of which the authors of the present reform were condemned by the Select Committee of 1783,book iv.Chap. 9. 1773. was the ballot; “by means of which, acts,” they said, “of the highest concern to the Company and to the state, might be done by individuals with perfect impunity.” There are occasions on which the use of the ballot is advantageous. There are occasions on which it is hurtful. If we look steadily to the end, to which all institutions profess to be directed, we shall not find it very difficult to draw the line of demarcation.
A voter may be considered as subject to the operation of two sets of interests: the one, interests rising out of the good or evil for which he is dependent upon the will of other men: the other, interests in respect to which he cannot be considered as dependent upon any determinate man or men.
There are cases in which the interests for which he is not dependent upon other men impel him in the right direction. If not acted upon by other interests, he will, in such cases, vote in that direction. If, however, he is acted upon, by interests dependent upon other men, interests more powerful than the former, and impelling in the opposite direction, he will vote in the opposite direction. What is necessary, therefore, is, to save him from the operation of those interests. This is accomplished by enabling him to vote in secret; for in that case, the man, who could otherwise compel his vote, is ignorant in what direction it has been given. In all cases, therefore, in which the independent interests of the voter, those which in propriety of language may be called his own interests, would dictate the good and useful vote; but in which cases, at the same time, he is liable to be acted upon in the way either of good or of evil, by men whose interests would dictate a base and mischievous vote, the ballot is a great and invaluable security. In this set of cases is book iv.Chap. 9. 1773. included, the important instance of the votes of the people for representatives in the legislative assembly of a nation. Those interests of each of the individuals composing the great mass of the people, for which he is not dependent upon other men, compose the interests of the nation. But it is very possible for a majority out of any number of voters to be acted upon by the will of other men, whose interests are opposite to those of the nation. It is, therefore, of the highest importance that they should be protected from that influence.
There is, however, another set of cases, in which those interests of the voter, which have their origin primarily in himself, and not in other men, draw in the hurtful direction; and in which he is not liable to be operated upon by any other interests of other men than those which each possesses in common with the rest of the community. If allowed, in this set of cases, to vote in secret, he will be sure to vote as the sinister interest impells. If forced to vote in public, he will be subject to all the restraint, which the eye of the community, fixed upon his virtue or knavery, is calculated to produce: and in such cases, the ballot is only an encouragement to evil. If it cannot be affirmed that the interests of the individuals, composing the court of proprietors of the East India Company, are incapable of being promoted at the cost of the British and Indian communities, it cannot be denied that the case of these proprietors belongs to this latter description.
At the very time when the discussions upon the new regulations were taking place, the Chairman of the Select Committee of the House of Commons came forward with a motion for enquiry into the circumstances of the deposition and death of Suraja Dowla; into the imposture, by a fictitious treaty, practised upon Omichund; the elevation of Meerbook iv.Chap. 9. 1773. Jaffier; and the sums of money, in the shape of presents, obtained at the time of that revolution. Crimes of the blackest dye, rapacity, treachery, cruelty, were charged upon the principal actors in that suspicious scene; and the punishment, even of Clive, as the first and principal delinquent, was represented as a necessary act of justice and policy. On the 10th of May, the following resolutions were moved; 1. “That all acquisitions, made under the influence of a military force, or by treaty with foreign Princes, do of right belong to the state; 2. That to appropriate acquisitions so made, to the private emolument of persons entrusted with any civil or military power of the state, is illegal; 3. That very great sums of money, and other valuable property, have been acquired in Bengal, from Princes and others of that country, by persons entrusted with the military and civil powers of the state, by means of such powers; which sums of money and valuable property have been appropriated to the private use of such persons.” These resolutions were warmly adopted by the house. But when the application of them came to be made to individuals; and especially when the ruin was contemplated which that application would draw down upon Clive; compassion for the man, and the consideration of his services, blotted by offences, yet splendid and great, operated with effect in the breasts of the assembly, and put an end to the enquiry. According to the style, which the spirit of English laws renders predominant in English councils, inquiry was rejected ostensibly upon a subterfuge, of the nature of a legal shuffle; incompetence, to wit, in the reports of the Select Committee to be received as evidence. As if that were true! As if no other evidence had been to be found! On the other hand, the considerations which fairly recommended book iv.Chap. 9. 1773. the rejection, or at least a very great modification of the penal proceeding, were not so much as mentioned; That the punishment threatened was more grievous than the offence; that it was punishment by an ex-post-facto law, because, however contrary to the principles of right government the presents received from Meer Jaffier, and however odious to the moral sense the deception practised upon Omichund, there was no law at the time which forbid them; that the presents, how contrary soever to European morals and ideas, were perfectly correspondent to those of the country in which they were received, and to the expectations of the parties by whom they were bestowed; that the treachery to Omichund was countenanced and palliated by some of the principles and many of the admired incidents of European diplomacy; that Clive, though never inattentive to his own interests, was actuated by a sincere desire to promote the prosperity of the Company, and appears not in any instance to have sacrificed what he regarded as their interests to his own; and that it would have required an extraordinary man, which no one ought to be punished for not being, to have acted, in that most trying situation in which he was placed, with greater disinterestedness than he displayed.
The inquiry into the financial and commercial state of the Company exhibited the following results. The whole of their effects and credits in England, estimated on the 1st day of March, 1773, amounted to 7,784,689l. 12s. 10d.; and the whole of their debts to 9,219,114l. 12s. 6d.; leaving a balance against the Company of 1,434,424l. 19s. 8d. The whole of their effects and credits in India, China, and St. Helena, and afloat on the sea, amounted to 6,397,299l. 10s.6d. The whole of their debts abroad amounted to 2,032,306l.; producing a balance in their favourbook iv.Chap. 9. 1773. of 4,364,993l. 10s. 6d. Deducting from this sum the balance against the Company in England, we find the whole amount of their available property no more than 2,930,568l. 10s. 10d.; so that of their capital stock of 4,200,000l., 1,269,431l. 9s. 2d. was expended and gone.1
From the year 1744, the period to which in a former passage2 is brought down the account of the dividend paid annually to the Proprietors on the capital stock, that payment continued at eight per cent. to the year 1756, in which it was reduced to six per cent. It continued at that low rate till Christmas, 1766, when it was raised by the General Court, repugnant to the sense of the Court of Directors, to five per cent. for the next half year. On the 7th of May, 1767, it was resolved in the General Court, that for the following half year the dividend should be six and a quarter per cent. But this resolution was rescinded by act of parliament, and the dividend limited, till further permission, to ten per cent. per annum. It was continued at ten per cent. till the year commencing at Christmas, 1769, when, in pursuance of the new regulations, it was advanced to eleven per cent. The next year it rose to twelve per cent. The following year it was carried to its prescribed limits, book iv.Chap. 9. 1773. twelve and a half per cent.; at which it continued for eighteen months, when the funds of the Company being totally exhausted, it was suddenly reduced to six per cent. per annum, by a resolution passed on the 3d of December, 1772.1
In the interval between 1774 and 1772, the sales at the India House had increased from about 2,000,000l. to 3,000,000l. annually; their annual exports, including both goods and stores, had fully doubled. In the year 1751, the total amount of shipping in the service of the Company was 38,441 tons, in the year 1772 it was 61,860.2
from the first great change in the constitution of the east india company and in the government of india, in 1773; till the second great change by the act commonly called mr. pitt’s act, in 1784.
Act 9 Geo. III. c. 24.
The manner in which Clive, to enhance the merit of his own services, had puffed the importance of the Indian territory, and inflamed the hopes of treasure which it was to produce, misled the Company. The perpetually recurring interest of their servants to delude them with these hopes, and their perpetual readiness to believe flattering accounts, has been a perennial fountain of misgovernment.
These debates are reported in various periodical publications of the time. A good abstract of them is presented in the Annual Register for 1769. A variety of pamphlets was produced by the dispute; of those which have come under the author’s inspection, the following are the titles of the more remarkable: “An Address to the Proprietors of India Stock, showing, from the Political State of Indostan, the Necessity of sending Commissioners to regulate and direct their Affairs abroad; and likewise the Expediency of joining a Servant of Government in the Commission. Printed for S. Bladon in Paternoster Row, 1769;” “A Letter to the Proprietors of East India Stock, containing a brief Relation of the Negotiations with Government, from the Year 1767 to the present Time, respecting the Company’s Acquisitions in India, together with some Considerations on the principal Plans for adjusting the Matters in dispute, which have been discussed in the General Court of Proprietors. Printed for B. White, at Horace’s Head, in Fleet Street, 1769;” “A Letter to the Proprietors of India Stock, containing a Reply to some Insinuations in AN OLD PROPRIETOR’S LETTER TO THE PROPRIETORS on the 13th Inst. relative to the Ballot of that Day. Printed for W. Nicholl, No 51, St. Paul’s Church Yard, 1769;” “A Letter to the Proprietors of E. 1. Stock, by Governor Johnstone. Printed for W. Nicholl, 1769;” “A Letter to the Proprietors of East India Stock, relative to some Propositions intended to be moved at the next General Court, on Wednesday the 12th of July.” Printed as above, 1769.
Letter of the Governor and Council to the Directors, 3d Nov. 1772.
General Letter to Bengal, 10th April, 1771.
For the details and documents relative to this curious part of the history of the Company, see the Eighth Report of the Committee of Secrecy, 1773.
Message from the East India Company to the Right Hon. the Lord Mayor, Aldermen, and Commons of the city of London, in Common Council assembled, dated 27th May, 1773.
See 13 Geo. III. c. 63, and 13 Geo. III. c. 64.
They were previously debarred from the acceptance of presents, and the Governor from trade. Reliance for probity was placed, as it is so commonly placed, on the greatness of the salaries; as if there was a point of saturation in cupidity; as if the great power which great salaries conter was not the most effectual of all instruments for the undue acquisition of more; and the most effectual of all instruments for covering such acquisition from inquiry or punishment. In as far, then, as the prospect of impunity is a motive, and it is one of the strongest, so far great salaries do not take from, they add to the temptations to corruption. Even Burke, upon this particular, remarked, that “ample salaries removed the necessity indeed, but by no means the inducements, to corruption and oppression.” See Ninth Report of the Select Committee, 1781.
That part of the regulations which subjected to the Bengal Council the other Presidencies in matters of peace and war with foreign states, had some effect, though not without drawbacks, in giving unity to the international proceedings of the Company. With the goodness or badness of the internal government, it had no connexion.
Mr. Burke, in the Ninth Report of the Select Committee, in 1783, says, “The defect in the institution seemed to be this; that no rule was laid down, either in the act or the charter, by which the Court was to judge. No descriptions of offenders, or species of delinquency, were properly ascertained, according to the nature of the place, or to the prevalent mode of abuse. Provision was made for the administration of justice in the remotest part of Hindostan, as if it were a province in Great Britain. Your Committee have long had the constitution and conduct of this Court before them, and they have as yet been able to discover very few instances (not one that appears to them of leading importance) of relief given to the natives against the corruptions or oppressions of British subjects in power.—So far as your Committee have been able to discover, the Court has been generally terrible to the natives, and has distracted the government of the Company, without substantially reforming any one of its abuses.”
Ninth Report of the Select Committee, in 1783.
“The whole of the regulations concerning the Court of Proprietors relied upon two principles, which have often proved fallacious; namely, that small numbers were a security against faction and disorder; and, that integrity of conduct would follow the greater property.” Ninth Report, ut supra.
This is pretty nearly the description of the East India Proprietary which is given by the Committee of the House of Commons. See Ninth Report of the Select Committee in 1783.
It was urged by the Minister, that by raising the qualification from 500l. to 1000l., the value of the dividend would govern the Proprietor more than that of the vote; with what sincerity, or what discernment, it is easy to see. Burke, moreover, very justly remarked, that this pecuniary interest might be most effectually served by some signal misdemeanour, which should produce a great immediate advantage, though productive of ultimate ruin. “Accordingly,” he adds, “the Company’s servants have ever since covered over the worst oppressions of the people under their government, and the most cruel and wanton ravages of all the neighbouring countries, by holding out, and for a time actually realizing, additions of revenue to the territorial funds of the Company, and great quantities of valuable goods to their investment.” He added, with obvious truth, “The Indian Proprietor will always be, in the first instance, a politician: and the bolder his enterprise, and the more corrupt his views, the less will be his consideration of the price to be paid for compassing them.” Ninth Report, ut supra.
Second Report of the Committee of Secrecy in 1773. The Committee say, “They have not included in the above account any valuation of the fortifications and buildings of the Company abroad. They can by no means agree in opinion with the Court of Directors, ’That the amount of the fortifications, &c. should be added to the annual statement.’”—Undoubtedly no assets of any party can be compared with his debts, farther than they can be disposed of for the payment of those debts; the manure which a farmer has spread upon his fields, or the hedges and ditches with which he has surrounded them, are nothing to him, the moment his lease is expired. The money expended in fortifications and buildings, from May 1757, was stated at nearly four millions.
Supra, vol. iii. p. 44.
See the third and Eighth Reports of the Committee of Secrecy in 1773.
Fifth Report of the Committee of Secrecy.