Volume VIII Part 6 (1/2)
The first of the internal authorized monopolies is that of opium. This drug, extracted from a species of the poppy, is of extensive consumption in most of the Eastern markets. The best is produced in the province of Bahar: in Bengal it is of an inferior sort, though of late it has been improved. This monopoly is to be traced to the very origin of our influence in Bengal. It is stated to have begun at Patna so early as the year 1761, but it received no considerable degree of strength or consistence until the year 1765, when the acquisition of the Duanne opened a wide field for all projects of this nature. It was then adopted and owned as a resource for persons in office,--was managed chiefly by the civil servants of the Patna factory, and for their own benefit. The policy was justified on the usual principles on which monopolies are supported, and on some peculiar to the commodity, to the nature of the trade, and to the state of the country: the security against adulteration; the prevention of the excessive home consumption of a pernicious drug; the stopping an excessive compet.i.tion, which by an over-proportioned supply would at length destroy the market abroad; the inability of the cultivator to proceed in an expensive and precarious culture without a large advance of capital; and, lastly, the incapacity of private merchants to supply that capital on the feeble security of wretched farmers.
These were the princ.i.p.al topics on which the monopoly was supported. The last topic leads to a serious consideration on the state of the country; for, in pus.h.i.+ng it, the gentlemen argued, that, in case such private merchants should advance the necessary capital, the lower cultivators ”_would get money in abundance_.” Admitting this fact, it seems to be a part of the policy of this monopoly to prevent the cultivator from obtaining the natural fruits of his labor. Dealing with a private merchant, he could not get _money in abundance_, unless his commodity could produce an _abundant_ profit. Further reasons, relative to the peace and good order of the province, were a.s.signed for thus preventing the course of trade from the equitable distribution of the advantages of the produce, in which the first, the poorest, and the most laborious producer ought to have his first share. The cultivators, they add, would squander part of the money, and not be able to complete their engagements to the full; lawsuits, and even battles, would ensue between the factors, contending for a deficient produce; and the farmers would discourage the culture of an object which brought so much disturbance into their districts. This compet.i.tion, the operation of which they endeavor to prevent, is the natural corrective of the abuse, and the best remedy which could be applied to the disorder, even supposing its probable existence.
Upon whatever reasons or pretences the monopoly of opium was supported, the real motive appears to be the profit of those who were in hopes to be concerned in it. As these profits promised to be very considerable, at length it engaged the attention of the Company; and after many discussions, and various plans of application, it was at length taken for their benefit, and the produce of the sale ordered to be employed in the purchase of goods for their investment.
In the year 1773 it had been taken out of the hands of the Council of Patna, and leased to two of the natives,--but for a year only. The contractors were to supply a certain quant.i.ty of opium at a given price.
Half the value was to be paid to those contractors in advance, and the other half on the delivery.
The proceedings on this contract demonstrated the futility of all the principles on which the monopoly was founded. The Council, as a part of their plan, were obliged, by heavy duties, and by a limitation of the right of emption of foreign opium to the contractors for the home produce, to check the influx of that commodity from the territories of the Nabob of Oude and the Rajah of Benares. In these countries no monopoly existed; and yet there the commodity was of such a quality and so abundant as to bear the duty, and even with the duty in some degree to rival the monopolist even in his own market. There was no complaint in those countries of want of advances to cultivators, or of lawsuits and tumults among the factors; nor was there any appearance of the mult.i.tude of other evils which had been so much dreaded from the vivacity of compet.i.tion.
On the other hand, several of the precautions inserted in this contract, and repeated in all the subsequent, strongly indicated the evils against which it is extremely difficult, if not impossible, to guard a monopoly of this nature and in that country. For in the first contract entered into with the two natives it was strictly forbidden to compel the tenants to the cultivation of this drug. Indeed, very shocking rumors had gone abroad, and they were aggravated by an opinion universally prevalent, that, even in the season immediately following that dreadful famine which swept off one third of the inhabitants of Bengal, several of the poorer farmers were compelled to plough up the fields they had sown with grain in order to plant them with poppies for the benefit of the engrossers of opium. This opinion grew into a strong presumption, when it was seen that in the next year the produce of opium (contrary to what might be naturally expected in a year following such a dearth) was nearly doubled. It is true, that, when the quant.i.ty of land necessary for the production of the largest quant.i.ty of opium is considered, it is not just to attribute that famine to these practices, nor to any that were or could be used; yet, where such practices did prevail, they must have been very oppressive to individuals, extremely insulting to the feelings of the people, and must tend to bring great and deserved discredit on the British government. The English are a people who appear in India as a conquering nation; all dealing with them is therefore, more or less, a dealing with power. It is such when they trade on a private account; and it is much more so in any authorized monopoly, where the hand of government, which ought never to appear but to protect, is felt as the instrument in every act of oppression. Abuses must exist in a trade and a revenue so const.i.tuted, and there is no effectual cure for them but to entirely cut off their cause.
Things continued in this train, until the great revolution in the Company's government was wrought by the Regulating Act of the thirteenth of the king. In 1775 the new Council-General appointed by the act took this troublesome business again into consideration. General Clavering, Colonel Monson, and Mr. Francis expressed such strong doubts of the propriety of this and of all other monopolies, that the Directors, in their letter of the year following, left the Council at liberty to throw the trade open, under a duty, if they should find it practicable. But General Clavering, who most severely censured monopoly in general, thought that this monopoly ought to be retained,--but for a reason which shows his opinion of the wretched state of the country: for he supposed it impossible, with the power and influence which must attend British subjects in all their transactions, that monopoly could be avoided; and he preferred an avowed monopoly, which brought benefit to government, to a virtual engrossing, attended with profit only to individuals. But in this opinion he did not seem to be joined by Mr. Francis, who thought the suppression of this and of all monopolies to be practicable, and strongly recommended their abolition in a plan sent to the Court of Directors the year following.[6]
The Council, however, submitting to the opinion of this necessity, endeavored to render that dubious engagement as beneficial as possible to the Company. They began by putting up the contract to the highest bidder. The proposals were to be sealed. When the seals came to be opened, a very extraordinary scene appeared. Every step in this business develops more and more the effect of this junction of public monopoly and private influence. Four English and eight natives were candidates for the contract; three of the English far overbid the eight natives.
They who consider that the natives, from their superior dexterity, from their knowledge of the country and of business, and from their extreme industry, vigilance, and parsimony, are generally an over-match for Europeans, and indeed are, and must ultimately be, employed by them in all transactions whatsoever, will find it very extraordinary that they did not by the best offers secure this dealing to themselves. It can be attributed to this cause, and this only,--that they were conscious, that, without power and influence to subdue the cultivators of the land to their own purposes, they never could afford to engage on the lowest possible terms. Those whose power entered into the calculation of their profits could offer, as they did offer, terms without comparison better; and therefore one of the English bidders, without partiality, secured the preference.
The contract to this first bidder, Mr. Griffiths, was prolonged from year to year; and as during that time frequent complaints were made by him to the Council Board, on the principle that the years answered very differently, and that the business of one year ran into the other, reasons or excuses were furnished for giving the next contract to Mr.
Mackenzie for three years. This third contract was not put up to auction, as the second had been, and as this ought to have been. The terms were, indeed, something better for the Company; and the engagement was subject to qualifications, which, though they did not remove the objection to the breach of the Company's orders, prevented the hands of the Directors from being tied up. A proviso was inserted in the contract, that it should not be anyways binding, if the Company by orders from home should alter the existing practice with regard to such dealing.
Whilst these things were going on, the evils which this monopoly was in show and pretence formed to prevent still existed, and those which were naturally to be expected from a monopoly existed too. Complaints were made of the bad quality of the opium; trials were made, and on those trials the opium was found faulty. An office of inspection at Calcutta, to ascertain its goodness, was established, and directions given to the Provincial Councils at the places of growth to certify the quant.i.ty and quality of the commodity transmitted to the Presidency.
In 1776, notwithstanding an engagement in the contract strictly prohibiting all compulsory culture of the poppy, information was given to a member of the Council-General, that fields green with rice had been forcibly ploughed up to make way for that plant,--and that this was done in the presence of several English gentlemen, who beheld the spectacle with a just and natural indignation. The board, struck with this representation, ordered the Council of Patna to make an inquiry into the fact; but your Committee can find no return whatsoever to this order.
The complaints were not solely on the part of the cultivators against the contractor. The contractor for opium made loud complaints against the inferior collectors of the landed revenue, stating their undue and vexatious exactions from the cultivators of opium,--their throwing these unfortunate people into prison upon frivolous pretences, by which the tenants were ruined, and the contractor's advances lost. He stated, that, if the contractor should interfere in favor of the cultivator, then a deficiency would be caused to appear in the landed revenues, and that deficiency would be charged on his interposition; he desired, therefore, that the cultivators of opium should be taken out of the general system of the landed revenue, and put under ”his _protection_.”
Here the effect naturally to be expected from the clas.h.i.+ng of inconsistent revenues appeared in its full light, as well as the state of the unfortunate peasants of Bengal between such rival protectors, where the ploughman, flying from the tax-gatherer, is obliged to take refuge under the wings of the monopolist. No dispute arises amongst the English subjects which does not divulge the misery of the natives; when the former are in harmony, all is well with the latter.
This monopoly continuing and gathering strength through a succession of contractors, and being probably a most lucrative dealing, it grew to be every day a greater object of compet.i.tion. The Council of Patna endeavored to recover the contract, or at least the agency, by the most inviting terms; and in this eager state of mutual complaint and compet.i.tion between private men and public bodies things continued until the arrival in Bengal of Mr. Stephen Sulivan, son of Mr. Sulivan, Chairman of the East India Company, which soon put an end to all strife and emulation.
To form a clear judgment on the decisive step taken at this period, it is proper to keep in view the opinion of the Court of Directors concerning monopolies, against which they had uniformly declared in the most precise terms. They never submitted to them, but as to a present necessity; it was therefore not necessary for them to express any particular approbation of a clause in Mr. Mackenzie's contract which was made in favor of their own liberty. Every motive led them to preserve it. On the security of that clause they could alone have suffered to pa.s.s over in silence (for they never approved) the grant of the contract which contained it for three years. It must also be remembered that they had from the beginning positively directed that the contract should be put up to public auction; and this not having been done in Mr.
Mackenzie's case, they severely reprimanded the Governor-General and Council in their letter of the 23rd December, 1778.
The Court of Directors were perfectly right in showing themselves tenacious of this regulation,--not so much to secure the best practicable revenue from their monopoly whilst it existed, but for a much more essential reason, that is, from the corrective which this method administered to that monopoly itself: it prevented the British contractor from becoming doubly terrible to the natives, when they should see that his contract was in effect _a grant_, and therefore indicated particular favor and private influence with the ruling members of an absolute government.
On the expiration of Mr. Mackenzie's term, and but a few months after Mr. Sulivan's arrival, the Governor-General, as if the contract was a matter of patronage, and not of dealing, pitched upon Mr. Sulivan as the most proper person for the management of this critical concern. Mr.
Sulivan, though a perfect stranger to Bengal, and to that sort and to all sorts of local commerce, made no difficulty of accepting it. The Governor-General was so fearful that his true motives in this business should be mistaken, or that the smallest suspicion should arise of his attending to the Company's orders, that, far from putting up the contract (which, on account of its known profits, had become the object of such pursuit) to _public auction_, he did not wait for receiving so much as a _private proposal_ from Mr. Sulivan. The Secretary perceived that in the rough draught of the contract the old recital of a proposal to the board was inserted as a matter of course, but was contrary to the fact; he therefore remarked it to Mr. Hastings. Mr. Hastings, with great indifference, ordered that recital to be _omitted_; and the omission, with the remark that led to it, has, with the same easy indifference, been sent over to his masters.
The Governor-General and Council declare themselves apprehensive that Mr. Sulivan might be a loser by his bargain, upon account of troubles which they supposed existing in the country which was the object of it.
This was the more indulgent, because the contractor was tolerably secured against all losses. He received a certain price for his commodity; but he was not obliged to pay any certain price to the cultivator, who, having no other market than his, must sell it to him at his own terms. He was to receive half the yearly payment by _advance_, and he was not obliged to advance to the cultivator more than what he thought expedient; but if this should not be enough, he might, if he pleased, draw the _whole_ payment before the total delivery: such were the terms of the engagement with him. He is a contractor of a new species, who employs no capital whatsoever of his own, and has the market of compulsion at his entire command. But all these securities were not sufficient for the anxious attention of the Supreme Council to Mr. Sulivan's welfare: Mr. Hastings had before given him the contract without any proposal on his part; and to make their gift perfect, in a second instance they proceed a step beyond their former ill precedent, and they contract with Mr. Sulivan for _four_ years.
Nothing appears to have been considered but the benefit of the contractor, and for this purpose the solicitude shown in all the provisions could not be exceeded. One of the first things that struck Mr. Hastings as a blemish on his gift was the largeness of the penalty which he had on former occasions settled as the sanction of the contract: this he now discovered to be so great as to be likely to frustrate its end by the impossibility of recovering so large a sum. How a large penalty can prevent the recovery of any, even the smallest part of it, is not quite apparent. In so vast a concern as that of opium, a fraud which at first view may not appear of much importance, and which may be very difficult in the discovery, may easily counterbalance the reduced penalty in this contract, which was settled in favor of Mr.
Sulivan at about 20,000_l._
Monopolies were (as the House has observed) only tolerated evils, and at best upon trial; a clause, therefore, was inserted in the contracts to Mackenzie, annulling the obligation, if the Court of Directors should resolve to abolish the monopoly; but at the request of Mr. Sulivan the contract was without difficulty purged of this obnoxious clause. The term was made absolute, the monopoly rendered irrevocable, and the discretion of the Directors wholly excluded. Mr. Hastings declared the reserved condition to be no longer necessary, ”because the Directors had approved the monopoly.”
The Chiefs and Councils at the princ.i.p.al factories had been obliged to certify the quant.i.ty and quality of the opium before its transport to Calcutta; and their control over the contractor had been a.s.signed as the reason for not leaving to those factories the management of this monopoly. Now things were changed. Orders were sent to discontinue this measure of invidious precaution, and the opium was sent to Calcutta without anything done to ascertain its quality or even its quant.i.ty.
An office of inspection had been also appointed to examine the quality of the opium on its delivery at the capital settlement. In order to ease Mr. Sulivan from this troublesome formality, Mr. Hastings abolished the office; so that Mr. Sulivan was then totally freed from all examination, or control whatsoever, either first or last.
These extraordinary changes in favor of Mr. Sulivan were attended with losses to others, and seem to have excited much discontent. This discontent it was necessary in some manner to appease. The vendue-master, who was deprived of his accustomed dues on the public sales of the opium by the private dealing, made a formal complaint to the board against this, as well as other proceedings relative to the same business. He attributed the private sale to ”_reasons of state_”; and this strong reflection both on the Board of Trade and the Council Board was pa.s.sed over without observation. He was quieted by appointing him to the duty of these very inspectors whose office had been just abolished as useless. The House will judge of the efficacy of the revival of this office by the motives to it, and by Mr. Hastings giving that to _one_ as _a compensation_ which had been executed by several as _a duty_. However, the orders for taking away the precautionary inspection at Patna still remained in force.