by Edmund Burke
The false principles of this unmercantile transaction (to speak of it in the mildest terms) were too gross not to be visible to those who contrived it. That the Company should be made to borrow such a sum as two hundred thousand pounds at eight per cent, (or terms deemed by the Company to be worse,) in order first to buy a commodity represented by themselves as depreciated in its ordinary market, in order afterwards to carry one half of it through a circuitous trading voyage, depending for its ultimate success on the prudent and fortunate management of two or three sales, and purchases and re-sales of goods, and the chance of two or three markets, with all the risks of sea and enemy, was plainly no undertaking for such a body. The activity, private interest, and the sharp eye of personal superintendency may now and then succeed in such projects; but the remote inspection and unwieldy movements of great public bodies can find nothing but loss in them. Their gains, comparatively small, ought to be upon sure grounds; but here (as the Council states the matter) the private trader actually declines to deal, which is a proof more than necessary to demonstrate the extreme imprudence of such an undertaking on the Company’s account. Still stronger and equally obvious objections lay to that member of the project which regards the introduction of a contraband commodity into China, sent at such a risk of seizure not only of the immediate object to be smuggled in, but of all the Company’s property in Canton, and possibly at a hazard to the existence of the British factory at that port.
It is stated, indeed, that a monopolizing company in Canton, called the Cohong, had reduced commerce there to a deplorable state, and had rendered the gains of private merchants, either in opium or anything else, so small and so precarious that they were no longer able by purchasing that article to furnish the Company with money for a China investment. For this purpose the person whose proposal is accepted declares his project to be to set up a monopoly on the part of the Company against the monopoly of the Chinese merchants: but as the Chinese monopoly is at home, and supported (as the minute referred to asserts) by the country magistrates, it is plain it is the Chinese company, not the English, which must prescribe the terms, — particularly in a commodity which, if withheld from them at their market price, they can, whenever they please, be certain of purchasing as a condemned contraband.
There are two further circumstances in this transaction which strongly mark its character. The first is, that this adventure to China was not recommended to them by the factory of Canton; it was dangerous to attempt it without their previous advice, and an assurance, grounded on the state of the market and the dispositions of the government, that the measure, in a commercial light, would be profitable, or at least safe. Neither was that factory applied to on the state of the bills which, upon their own account, they might be obliged to draw upon Europe, at a time when the Council of Bengal direct them to draw bills to so enormous an amount.
The second remarkable circumstance is, that the Board of Trade in Calcutta (the proper administrator of all that relates to the Company’s investment) does not seem to have given its approbation to the project, or to have been at all consulted upon it. The sale of opium had been adjudged to the Board of Trade for the express purpose of selling it in Bengal, not in China, — and of employing the produce of such sale in the manufactures of the country in which the original commodity was produced. On the whole, it appears a mere trading speculation of the Council, invading the department of others, without lights of its own, without authority or information from any other quarter. In a commercial view, it straitened the Company’s investment to which it was destined; as a measure of finance, it is a contrivance by which a monopoly formed for the increase of revenue, instead of becoming one of its resources, involves the treasury, in the first instance, in a debt of two hundred thousand pounds.
If Mr. Hastings, on the expiration of Mr. Mackenzie’s contract, the advantages of which to the Company had been long doubtful, had put himself in a situation to do his duty, some immediate loss to the revenue would have been the worst consequence of the alleged depreciation; probably it would not have been considerable. Mr. Mackenzie’s contract, which at first was for three years, had been only renewed for a year. Had the same course been pursued with Mr. Sulivan, they would have had it in their power to adopt some plan which might have secured them from any loss at all. But they pursued another plan: they carefully put all remedy still longer out of their reach by giving their contract for four years. To cover all these irregularities, they interest the settlement in their favor by holding out to them the most tempting of all baits in a chance of bills upon Europe.
In this manner the servants abroad have conducted themselves with regard to Mr. Sulivan’s contract for opium, and the disposal of the commodity. In England the Court of Directors took it into consideration. First, as to the contract, in a letter dated 12th July, 1782, they say, that, “having condemned the contract entered into with Mr. Mackenzie for the provision of opium, they cannot but be surprised at your having concluded a new contract for four years relative to that article with Mr. Stephen Sulivan, without leaving the decision of it to the Court of Directors.”
The sentiments of the Directors are proper, and worthy of persons in public trust. Their surprise, indeed, at the disobedience to their orders is not perfectly natural in those who for many years have scarcely been obeyed in a single instance. They probably asserted their authority at this time with as much vigor as their condition admitted.
They proceed: “We do not mean,” say they, “to convey any censure on Mr. Sulivan respecting the transaction; but we cannot withhold our displeasure from the Governor-General and Council at such an instance of contempt of our authority.” They then proceed justly to censure the removal of the inspection, and some other particulars of this gross proceeding. As to the criminality of the parties, it is undoubtedly true that a breach of duty in servants is highly aggravated by the rank, station, and trust of the offending party; but no party, in such conspiracy to break orders, appear to us wholly free from fault.
The Directors did their duty in reprobating this contract; but it is the opinion of your Committee that further steps ought to be taken to inquire into the legal validity of a transaction which manifestly attempts to prevent the Court of Directors from applying any remedy to a grievance which has been for years the constant subject of complaints.
Both Mr. Sulivan and Mr. Hastings are the Company’s servants, bound by their covenants and their oaths to promote the interest of their masters, and both equally bound to be obedient to their orders. If the Governor-General had contracted with a stranger, not apprised of the Company’s orders, and not bound by any previous engagement, the contract might have been good; but whether a contract made between two servants, contrary to the orders of their common master, and to the prejudice of his known interest, be a breach of trust on both sides, and whether the contract can in equity have force to bind the Company, whenever they shall be inclined to free themselves and the country they govern from this mischievous monopoly, your Committee think a subject worthy of further inquiry.
With regard to the disposal of the opium, the Directors very properly condemn the direct contraband, but they approve the trading voyage. The Directors have observed nothing concerning the loans: they probably reserved that matter for future consideration.
In no affair has the connection between servants abroad and persons in power among the proprietors of the India Company been more discernible than in this. But if such confederacies, cemented by such means, are suffered to pass without due animadversion, the authority of Parliament must become as inefficacious as all other authorities have proved to restrain the growth of disorders either in India or in Europe.
SALT.
The reports made by the two committees of the House which sat in the years 1772 and 1773 of the state and conduct of the inland trade of Bengal up to that period have assisted the inquiries of your Committee with respect to the third and last article of monopoly, viz., that of salt, and made it unnecessary for them
to enter into so minute a detail on that subject as they have done on some others.
Your Committee find that the late Lord Clive constantly asserted that the salt trade in Bengal had been a monopoly time immemorial, — that it ever was and ever must be a monopoly, — and that Coja Wazid, and other merchants long before him, had given to the Nabob and his ministers two hundred thousand pounds per annum for the exclusive privilege. The Directors, in their letter of the 24th December, 1776, paragraph 76, say, “that it has ever been in a great measure an exclusive trade.”
The Secret Committee report, that under the government of the Nabobs the duty on salt made in Bengal was two and an half per cent paid by Mussulmen, and five per cent paid by Gentoos. On the accession of Mir Cassim, in 1760, the claim of the Company’s servants to trade in salt duty-free was first avowed. Mr. Vansittart made an agreement with him by which the duties should be fixed at nine per cent. The Council annulled the agreement, and reduced the duty to two and an half per cent. On this Mir Cassim ordered that no customs or duties whatsoever should be collected for the future. But a majority of the Council (22nd March, 1763) resolved, that the making the exemption general was a breach of the Company’s privileges, and that the Nabob should be positively required to recall it, and collect duties as before from the country merchants, and all other persons who had not the protection of the Company’s dustuck. The Directors, as the evident reason of the thing and as their duty required, disapproved highly of these transactions, and ordered (8th February, 1764) a final and effectual stop to be put to the inland trade in salt, and several other articles of commerce. But other politics and other interests prevailed, so that in the May following a General Court resolved, that it should be recommended to the Court of Directors to reconsider the preceding orders; in consequence of which the Directors ordered the Governor and Council to form a plan, in concert with the Nabob, for regulating the inland trade.
On these last orders Lord Clive’s plan was formed, in 1765, for engrossing the sole purchase of salt, and dividing the profits among the Company’s senior servants. The Directors, who had hitherto reluctantly given way to a monopoly under any ideas or for any purposes, disapproved of this plan, and on the 17th May, 1766, ordered it to be abolished; but they substituted no other in its room. In this manner things continued until November, 1767, when the Directors repeated their orders for excluding all persons whatever, excepting the natives only, from being concerned in the inland trade in salt; and they declared that (vide par. 90) “such trade is hereby abolished and put a final end to.” In the same letter (par. 92) they ordered that the salt trade should be laid open to the natives in general, subject to such a duty as might produce one hundred and twenty thousand pounds a year. This policy was adopted by the legislature. In the act of 1773 it was expressly provided, that it should not be lawful for any of his Majesty’s subjects to engage, intermeddle, or be any way concerned, directly or indirectly, in the inland trade in salt, except on the India Company’s account.
Under the positive orders of the Company, the salt trade appears to have continued open from 1768 to 1772. The act, indeed, contained an exception in favor of the Company, and left them a liberty of dealing in salt upon their own account. But still this policy remained unchanged, and their orders unrevoked. But in the year 1772, without any instruction from the Court of Directors indicating a change of opinion or system, the whole produce was again monopolized, professedly for the use of the Company, by Mr. Hastings. Speaking of this plan, he says (letter to the Directors, 22d February, 1775): “No new hardship has been imposed upon the salt manufacturers by taking the management of that article into the hands of government; the only difference is, that the profit which was before reaped by English gentlemen and by banians is now acquired by the Company.” In May, 1766, the Directors had condemned the monopoly on any conditions whatsoever. “At that time they thought it neither consistent with their honor nor their dignity to promote such an exclusive trade.” “They considered it, too, as disgraceful, and below the dignity of their present situation, to allow of such a monopoly, and that, were they to allow it under any restrictions, they should consider themselves as assenting and subscribing to all the mischiefs which Bengal had presented to them for four years past.”
Notwithstanding this solemn declaration, in their letter of 24th December, 1776, they approve the plan of Mr. Hastings, and say, “that the monopoly, on its present footing, can be no considerable grievance to the country,” &c.
This, however, was a rigorous monopoly. The account given of it by General Clavering, Colonel Monson, and Mr. Francis, in their minute of 11th January, 1775, in which the situation of the molungees, or persons employed in the salt manufacture, is particularly described, is stated at length in the Appendix. Mr. Hastings himself says, “The power of obliging molungees to work has been customary from time immemorial.”
Nothing but great and clear advantage to government could account for, and nothing at all perhaps could justify, the revival of a monopoly thus circumstanced. The advantage proposed by its revival was the transferring the profit, which was before reaped by English gentlemen and banians, to the Company. The profits of the former were not problematical. It was to be seen what the effect would be of a scheme to transfer them to the latter, even under the management of the projector himself. In the Revenue Consultations of September, 1776, Mr. Hastings said, “Many causes have since combined to reduce this article of revenue almost to nothing. The plan which I am now inclined to recommend for the future management of the salt revenue differs widely from that which I adopted under different circumstances.”
It appears that the ill success of his former scheme did not deter him from recommending another. Accordingly, in July, 1777, Mr. Hastings proposed, and it was resolved, that the salt mahls should be let, with the lands, to the farmers and zemindars for a ready-money rent, including duties, — the salt to be left to their disposal. After some trial of this method, Mr. Hastings thought fit to abandon it. In September, 1780, he changed his plan a third time, and proposed the institution of a salt office; the salt was to be again engrossed for the benefit of the Company, and the management conducted by a number of salt agents.
From the preceding facts it appears that in this branch of the Company’s government little regard has been paid to the ease and welfare of the natives, and that the Directors have nowhere shown greater inconsistency than in their orders on this subject. Yet salt, considering it as a necessary of life, was by no means a safe and proper subject for so many experiments and innovations. For ten years together the Directors reprobated the idea of suffering this necessary of life to be engrossed on any condition whatsoever, and strictly prohibited all Europeans from trading in it. Yet, as soon as they were made to expect from Mr. Hastings that the profits of the monopoly should be converted to their own use, they immediately declared that it “could be no considerable grievance to the country,” and authorized its continuance, until he himself, finding it produced little or nothing, renounced it of his own accord. Your Committee are apprehensive that this will at all times, whatever flattering appearance it may wear for a time, be the fate of any attempt to monopolize the salt for the profit of government. In the first instance it will raise the price on the consumer beyond its just level; but that evil will soon be corrected by means ruinous to the Company as monopolists, viz., by the embezzlement of their own salt, and by the importation of foreign salt, neither of which the government of Bengal may have power for any long time to prevent. In the end government will probably be undersold and beaten down to a losing price. Or, if they should attempt to force all the advantages from this article of which by every exertion it may be made capable, it may distress some other part of their possessions in India, and destroy, or at least impair, the natural intercourse between them. Ultimately it may hurt Bengal itself, and the produce of its landed revenue, by destroying the vent of that grain which it would otherwise barter for salt.
Your Committee think it hardly nec
essary to observe, that the many changes of plan which have taken place in the management of the salt trade are far from honorable to the Company’s government, — and that, even if the monopoly of this article were a profitable concern, it should not be permitted. Exclusive of the general effect of this and of all monopolies, the oppressions which the manufacturers of salt, called molungees, still suffer under it, though perhaps alleviated in some particulars, deserve particular attention. There is evidence enough on the Company’s records to satisfy your Committee that these people have been treated with great rigor, and not only defrauded of the due payment of their labor, but delivered over, like cattle, in succession, to different masters, who, under pretence of buying up the balances due to their preceding employers, find means of keeping them in perpetual slavery. For evils of this nature there can be no perfect remedy as long as the monopoly continues. They are in the nature of the thing, and cannot be cured, or effectually counteracted, even by a just and vigilant administration on the spot. Many objections occur to the farming of any branch of the public revenue in Bengal, particularly against farming the salt lands. But the dilemma to which government by this system is constantly reduced, of authorizing great injustice or suffering great loss, is alone sufficient to condemn it. Either government is expected to support the farmer or contractor in all his pretensions by an exertion of power, which tends of necessity to the ruin of the parties subjected to the farmer’s contract, and to the suppression of free trade, — or, if such assistance be refused him, he complains that he is not supported, that private persons interfere with his contract, that the manufacturers desert their labor, and that proportionate deductions must be allowed him.