Complete Works of Edmund Burke

by Edmund Burke

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

  III. — EFFECT OF THE REVENUE INVESTMENT ON THE COMPANY.

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

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

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

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

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

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

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

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

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

  The servants having formed this plan of trade, and a new commission for the conduct of it, on their private account, it is a matter of consideration to know who the commissioners are. They turn out to be the three senior servants of the Company’s Board of Trade, who choose to take upon them to be the factors of others for large emoluments, whilst they receive salaries of two thousand pounds and fifteen hundred pounds a year from the Company. As the Company have no other fund than the new investment from whence they are to be paid for the care of their servants’ property, this commission and those salaries being to take place of their brokerage, they in effect render it very difficult, if not impossible, for them to derive advantage from their new occupation.

  As to the benefit of this plan: besides preventing the loss which must happen from the Company’s ships returning empty to Europe, and the stopping of all trade between India and England, the authors of it state, that it will “open a new channel of remittance, and abolish the practice, by precluding the necessity, of remitting private fortunes by foreign bottoms, and that it may lead to some permanent mode for remittance of private fortunes, and of combining it with the regular provision of the Company’s investment, — that it will yield some profit to the Company without risk, and the national gain will be the same as upon the regular trade.”

  As to the combination of this mode of remittance with the Company’s investment, nothing can be affirmed concerning it until some satisfactory assurance can be held out that such an investment can ever be realized. Mr. Hastings and the gentlemen of the Council have not afforded any ground for such an expectation. That the Indian trade may become a permanent vehicle of the private fortunes of the Company’s servants is very probable, — that is, as permanent as the means of acquiring fortunes in India; but that some profit will accrue to the Company is absolutely impossible. The Company are to bear all the charge outwards, and a very great part of that homewards; and their only compensation is the surplus commission on the sale of other people’s goods. The nation will undoubtedly avoid great loss and detriment, which would be the inevitable consequence of the total cessation of the trade with Bengal and the ships returning without cargoes. But if this temporary expedient should be improved into a system, no occasional advantages to be derived from it would be sufficient to balance the mischiefs of finding a great Parliamentary corporation turned into a vehicle for remitting to England the private fortunes of those for whose benefit the territorial possessions in India are in effect and substance under this project to be solely held.

  By this extraordinary scheme the Company is totally overturned, and all its relations inverted. From being a body concerned in trade on their own account, and employing their servants as factors, the servants have at one stroke taken the whole trade into their own hands, on their own capital of 800,000l., at their own risk, and the Company are become agents and factors to them, to sell by commission their goods for their profit.

  To enable your Committee to form some judgment upon the profit which may accrue to the Company from its new relation and employment, they directed that an estimate should be made of the probable proceeds of an investment conducted on the principles of that intended to be realized for 1783. By this estimate, which is subjoined, it appears to your Committee, that, so far from any surplus profit from this transaction, the Bengal adventurers themselves, instead of realizing 2s. 2d. the rupee, (the standard they fix for their payment,) will not receive the 1s. 9d. which is its utmost value in silver at the Mint, nor probably above 1s. 5d. With this certain loss before their eyes, it is impossible that they can ever complete their subscription, unless, by management among themselves, they should be able to procure the goods for their own account upon other terms than those on which they purchased them for their masters, or unless they have for the supply of the Company on their hands a quantity of goods which they cannot otherwise dispose of. This latter case is not very improbable, from their proposing to send ten sixteenths of the whole investment in silk, — which, as will be seen hereafter, the Company has prohibited to be sent on their account, as a disadvantageous article. Nothing but the servants being overloaded can rationally account for their choice of so great a proportion of so dubious a commodity.

  On the state made by two reports of a committee of the General Court in 1782, their affairs were even then reduced to a low ebb. But under the arrangement announced by Mr. Hastings and his colleagues, it does not appear, after this period of the servants’ investment, from what fund the proprietors are to make any dividend at all. The objects of the sale from whence the dividend is to arise are not their goods: they stand accountable to others for the whole probable produce. The state of the Company’s commerce will therefore become an object of serious consideration: an affair, as your Committee apprehends, of as much difficulty as ever tried the faculties of this House. For, on the one hand, it is plain that the system of providing the Company’s import into Europe, resting almost wholly by an investment from its territorial revenues, has failed: during its continuance it was supported on principles fatal to the prosperity of that country. On the other hand, if the nominal commerce of the Company is suffered to be carried on for the account of the servants abroad, by investing the emoluments made in their stations, these emoluments are therefore inclusively authorized, and with them the practices from which they accrue. All Parliamentary attempts to reform this system will be contradictory to its institution. If, for instance, five hundred thousand pounds sterling annually be necessary for this kind of investment, any regulation which may prevent the acquisition of that sum operates against the investment which is the end proposed by the plan.

  On this new scheme, (which is neither calculated for a future security nor for a present relief to the Company,) it is not visible in what manner the settlements in India can be at all upheld. The gentlemen in employments abroad call for the whole produce of the year’s investment from Bengal; but
for the payment of the counter-investment from Europe, which is for the far greater part sent out for the support of their power, no provision at all is made: they have not, it seems, agreed that it should be charged to their account, or that any deduction should be made for it from the produce of their sales in Leadenhall Street. How far such a scheme is preferable to the total suspension of trade your Committee cannot positively determine. In all likelihood, extraordinary expedients were necessary; but the causes which induced this necessity ought to be more fully inquired into; for the last step in a series of conduct may be justifiable upon principles that suppose great blame in those which preceded it.

  After your Committee had made the foregoing observations upon the plan of Mr. Hastings and his colleagues, transmitted to the Court of Directors, an extract of the Madras Consultations was a few days ago laid before us. This extract contains a letter from the Governor-General and Council of Bengal to the Presidency of Fort St. George, which affords a very striking, though to your Committee by no means an unexpected, picture of the instability of their opinions and conduct. On the 8th of April the servants had regularly formed and digested the above-mentioned plan, which was to form the basis for the investment of their own fortunes, and to furnish the sole means of the commercial existence of their masters. Before the 10th of the following May, which is the date of their letter to Madras, they inform Lord Macartney that they had fundamentally altered the whole scheme. “Instead,” say they, “of allowing the subscribers to retain an interest in the goods, they are to be provided entirely on account of the Company, and transported at their risk; and the subscribers, instead of receiving certificates payable out of the produce of the sales in Europe, are to be granted receipts, on the payment of their advances, bearing an interest of eight per cent per annum, until exchanged for drafts on the Court of Directors, payable 365 days after sight, at the rate of two shillings per current rupee, — which drafts shall be granted in the proper time, of three eighths of the amount subscribed, on the 31st of December next, and the remaining five eighths on the 31st of December, 1783.”