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'i^^\y
A
REVIEW,
e^c, s§c, ^c.
REVIEW
FINANCIAL SITUATION
OF THE
EAST. INDIA COMPANY,
IN 1824.
By HENRY ST. GEORGE TUCKER, ESQ.
i'
LONDON:
PRINTED FOR KINGSBURY, PARBURY, AND ALLEN,
LEADEN HALL STREET.
1825.
...^^^
v^^-"'"
^^^
LONDON:
PK!KTE1> J8Y COX AND UAYUS» GREAT QUKEN bXKEfiT.
JJtL.
TO
THE RIGHT HONOURABLE
GEORGE CANNING,
^c. Sfc. 8fc.
SIR:
As the Friend of India, and as the
Minister and Friend of your Country, I
presume to address to you the following
Essay ; not merely for the purpose of pay-
ing a just tribute of respect, but with the
view of calling your attention to a question,
which deeply affects the interests and welU
being of the Agricultural Population of
British India ; and which may, eventually,
affect the tranquillity and security of our
Possessions in the East.
If I have not mistaken your character,
the prospect of doing a public good, or of
averting an impending evil, would recom-
mend
6
mend any question to your best attention ;
but, associated as you have been in the
Administration of India, the People of that
Country may be considered to have parti-
cular claims upon you ; and I may be
permitted to add, that, by exerting your
influence to promote the prosperity of this
remote, but valuable dependency, you will
consult the best interests of the Empire
at large, and thus discharge the sacred
duty imposed on you as a Minister of the
Crown.
I have the honour to be,
With great respect,
SIR,
Your obedient humble servant,
H. ST. G.TUCKER.
Upper Portland Place,
March 1825.
ADVERTISEMENT.
The following' pages were intended to form
part of a larger work ; but^ as the undertaking
originally contemplated could not have been
completed for a considerable time ; and as
the subject which these pages embrace is of
more immediate interest ; I have been induced
to submit to the Public the present Essay^ de-
tached from other matter. And if I should have
succeeded in exhibiting a distinct Analysis of the
Accounts of the East- India Company, and in
giving a just delineation of the Financial Situation
of that body, I may indulge the hope that I shall
have performed no unacceptable service.
INTRODUCTORY OBSERVATIONS.
Although Great Britain has possessed
for more than half a century, in the remote
regions of the East, a territory of vast ex-
tent, containing a numerous and industrious
population, and rich in its manufactures,
as well as in the productions of the soil, it
still remains a problem whether this posses-
sion is to be esteemed a treasure, or the
source of weakness to the mother country.
That any doubt should exist upon such a
question, can arise only from our ignorance
of those facts and circumstances upon which
the solution of the problem must depend.
We are, in truth, very imperfectly ac-
quainted with the state of our empire in the
East ; our ignorance has produced indiffe-
rence towards the country and its inhabi-
B tants ;
%
tants ; and it would not be extraordinary
if, under the influence of indifference and
neglect, a possession, otherwise of the
highest value, should become worthless in
our hands.
On the continent of Europe the posses-
sion of India has hitherto been regarded
with very diflferent feelings : for as it has
long been observed, that those countries
which successively engrossed the commerce
of Asia, had all attained an extraordinary
degree of wealth, power, and commercial
prosperity, it was assumed, and with some
appearance of reason, that our territorial
dominion in the East had raised Great Bri-
tain from her natural level to that high and
pre-eminent station which she at present
occupies. That the possession of British
India has contributed mainly to augment
the resources of this country, and to give it
weight and influence among the nations of
Europe, is a proposition which I have not
now to advance for the first time ; but, on
the other hand, it is as much a mistake to
refer our commercial grandeur, our wealth,
and our power, exclusively to this source,
as
as it would be to maintain that British
India has become a burthen to the mother
country.
Strange as it may appear, this latter pro-
position has now been put forth, and from
a quarter where, heretofore, it had been so
much the fashion to exaggerate the value
of our Eastern possessions. M. Say, one of
the most celebrated of the French econo-
mists, in an essay lately published, has grave-
ly maintained, that British India is a charge
upon this country to the extent of above
two millions sterling per annum ; and that
far from being viewed, as it long has been,
by Russia and France with feelings of envy
and jealousy, it ought rather to be regarded
as an excrescence which wastes and con-
sumes a portion of our vital strength.
If the opinions of this philosopher exer-
cised no influence beyond the continent of
Europe, we might safely leave them to pro-
duce their effects ; and if they tended in any
degree to allay the spirit of avarice and the
rage of ambition among our continental
rivals, we should have reason to congratu-
B 2 late
late them and M. Say on the success of his
speculations.
But, unfortunately, there are persons in
this country who are sufficiently prone to
adopt the same erroneous notions ; and
whose errors, far from conducing to any
salutary end, must exert a baneful influence
over the destinies of India.
In all cases, erroneous opinions are liable
to produce erroneous measures ; and in the
present instance, the impression that India
is become a bankrupt concern, and a drain
upon the resources of the mother country,
would not only have a tendency to depre-
ciate the value of the large capital which is
invested in the Company's securities, both
abroad and at home, but it would also pro-
bably lead to a course of policy highly
injurious to the interests of both countries.
It is remarkable that, at the very moment
when M. Say declares the East-India Com-
pany to be in a state of bankruptcy, the
Marquess of Hastings should announce to
that body the existence of a surplus reve-
nue in India to the amount of four millions
sterling
5
sterling per annum ; but these contradic-
tory statements will be found, in both in-
stances, to have been hazarded upon insuf-
ficient grounds. A net revenue of four
millions has never been realized by the
Company, in any one year since our acqui-
sition of territorial dominion in India ; nor
is it to be desired, I think, that such a
revenue should be drawn from the coun-
try : but if M. Say's deficit of two mil-
lions be deducted from his Lordship's sur-
plus of four millions, a near approximation
will be made to the truth.
But the contradictions and errors ob-
servable in the different descriptions which
have been given of the Company's affairs,
and of the condition of British India, are
not by any means confined to the financial
branch of the subject. The Government
has been described as a pure despotism ;
the ancient institutions of the country are
represented to have been wantonly sub-
verted ; the rights of the tenantry to have
been disregarded and invaded; while the
hereditary aristocracy is said to have dis-
appeared
appeared from the face of the land ; new
systems, unsuitable to the character and
habits of the people, and abhorrent to
their feelings, are stated to have been in-
troduced by rash innovators ; the public
revenue is supposed to be extracted from
our native subjects by means of grinding
monopolies ; and, in short, our dominion,
far from being recognised as the source of
mutual benefit, has been represented as
entailing poverty upon India, without pro-
ducing any corresponding advantage to the
mother country.
These sweeping allegations would all
require a distinct and particular exami-
nation ; and he who should faithfully and
successfully execute the work, would per-
form a useful and important service. My
present undertaking will be confined within
narrower limits, and be directed to an ob-
ject more within my reach. I propose to
offer a digest of the Company's accounts,
for the purpose of removing misconcep-
tions upon matters of fact, and of exhibit-
ing a clear and connected view of the pre-
sent condition of their finances.
It
It is scarcely necessary for me to point
out how essential it is, that those who have
invested their funds in the securities of the
Company, either abroad or at home, should
possess correct information with respect to
the state of the concern in which their
property has been embarked. The public
securities of the Indian Governments have
been negotiated of late at a premium of
near forty per cent., and East-India Stock
bears at present a premium of one hundred
and ninety per cent. ; and it is obvi-
ously of the last importance that the cre-
ditors abroad, and the proprietors at home,
should know whether this enhanced valua-
tion of their capital rests upon any solid
foundation. The debt of India is secured
on the territory ; but this territory M. Say
pronounces to be an unproductive posses-
sion. The dividends on India Stock are
made payable by Act of Parliament from
the commercial profits of the Company,
and, failing such profits, from the sur-
plus revenue of India; but M. Say de-
clares that there does not exist either profit
or surplus. This assertion I shall not find
it
' 8
it difficult to controvert ; but it will not fol-
low as matter of course that, upon a sober
consideration of the Company's situation,
financial and political, a rational conclusion
can be drawn, either that the present an-
nuity will be guaranteed to the proprietors
in perpetuity, or that they will obtain ulti-
mately a full indemnification for the capital
which they may have embarked.
Moderate as are my pretensions, I may
have engaged in an undertaking beyond
my strength : but the question is one which
calls for professional experience, rather than
for the higher powers of mind ; and as I
shall not deviate far from the beaten path
which has long been familiar to me, the
reader will not, I hope, see occasion to
charge me with presumption.
A
REVIEW,
CHAPTER I.
TERRITORIAL REVENUE OF BRITISH INDIA.
*' On est done fond^ a regarder la Compagnie Anglaise des Indes comme
** une association, tout a la fois commer^ante et souveraine, qui, ne gagnant
** rien ni dans sa souverainete, ni dans son commerce, est reduite a emprunter
** chaque ann^e de quoi distribuer a ses actionnaires un semblant de profit."
'^Essai Jlistoriguey etc. Par J. B. Say.
M. SaYj in a late essay published in " la Re-
vue Encyclopedique/' has exhibited a statement
of the finances of the East-India Company, which
is not only unsupported by any recent documents,
but which is completely at variance with the
public accounts annually submitted to the British
Parliament under the sanction of the highest au-
thority.
This writer has too high a reputation at stake to
put forth a statement intended to mislead; and
c the
10
the just and liberal admissions which he seems
disposed to make in favour of our administration of
India^ furnish a presumption that he is by no means
deficient in that spirit of candour^ which should
characterize the philosopher and the historian.
M. Say would apt)ear, however^ to have con-
sulted very old authorities, and to iiave taken as
the foundation of his estimates the results of a
year of actual war, or averages deduced from a
series of years, in which war very generally pre-
vailed. But if this be the correct mode of pro-
ceeding for the purpose of ascertaining the finan-
cial situation of a country, in what kingdom of
Europe shall we discover any thing beyond the
traces of a deplorable bankruptcy ? If an average
of thirty years were taken for the purpose of de-
termining the revenue and charge of Great Britain,
instead of an annual surplus of five millions ap-
plicable to the extinction of debt, should we not
be a[)palled with the re-appearance of a spectre
which once threatened to paralize the energies of
this nation ? If the process apparently adopted by
M. Say were applied to this country, we should
be found struggling still with an annual deficit
of twenty millions, instead of scattering, with a
lavish hand, our surplus capital over every part of
the civilized world.
In India we have had our full share of warfare
in common with the rest of mankind, and we
have
11
have not only been engaged in wars, originating
in our own local and peculiar objects and inte-
rests^ but we have incidentally been led into
hostilities, whose origin could be distinctly traced
to the political relations of the parent state
in Europe. The late Sultan 9f Mysore, after
having been subdued and stript of half his do-
minions, would scarcely have dared, single-
handed, to provoke that power which had over-
thrown him in the fulness of his strength, if he
had not been encouraged to expect a powerful
auxiliary in the republican government of France.
The fabulous representations and extravagant
suggestions of an obscure French adventurer,* sti-
mulating the pride, the restless ambition, and
deep-rooted resentment of Tippoo Sultan, en-
gaged him to make overtures to the Governor
of the Isle of France, which not only manifested
a hostile
* This is an instance of the most important events being produced
by very mean instruments. Ripaud, the French adventurer alluded
to, had been tlie master of a small privateer, and was detained by
Tippoo Sultan at Seringapatam. To extricate himself from this state
of durance which had become extremely irksome to him, he repre-
sented to the Sultan that there were fleets and armies at the Isle of
France ready to obey his call, and that he had only to despatch him
{Ripaud) to the Island in order to obtain a force, which would
enable him to crush his mortal enemy, the English. The papers of
this Frenchman, which were found at Seringapatam after the capture
of that place, are extremely curious.
c 2
12
a hostile spirit, but which justified the Marquess
of Wellesley in proceeding against that infatuated
despot as the ally of France and the enemy of the
British power.
In the same manner the ascendancy of a French
party at Hyderabad gave occasion to that bold
and masterly enterprize of Lord Wellesley's Go-
vernment, by which a large army, disciplined
and commanded by French officers, was suddenly
surrounded and disarmed without the loss of a
man. So, also, the predominance of French in-
fluence at the Court of Dowlut Rao Scindiah,
and the formidable position occupied by the nu-
merous forces of General Perron on our most
accessible frontier, furnished perhaps the best
justification of those extensive military operations
which, in 1804, terminated in the expulsion of
the Mahratta power from the North of Hindoos-
tan, and in placing the imperial city of Delhi
and the once august house of Timour, under the
protection of a company of British merchants.
The wars in which the Marquess of Hastings
engaged had their origin, it is true, in our local
politics, and may be regarded as exclusively our
own. We had no French interests to counteract
or destroy : no French Generals to displace or
overthrow ; and if these wars were of annual oc-
currence, or of continued duration, the statement
of M. Say, with respect to the pecuniary value
of
13
Deficit in
Sicca Rupees.
of our Indiaa possessions,, would not be entirely
destitute of foundation.
Without, however, indulging in speculations,
either with regard to the past or the future, I will
proceed to exhibit the actual result of the
account of Indian revenue and expenditure
for a period of thirty years ; and as this statement
has been prepared from official and authentic
documents, it may be received with confidence.
Surplus in
GOVERNMENT. Sicca Rupees.
1792-3* Lord Cornwallis' . .. .1,65,57,675
1793-4* Lord Cornwallis' and
Lord Teignmouth's . .1,22,12,636
1794-5.. Lord Teignmouth's .. 94,58,486
1795-6.. Do 64,66,225
1796-7.. Do 19,70,197
1797-8.. Do
1798-9 . .Lord Wellesley's
1799-1800 Do.
1800-1 . . Do
1801-2.. Do
1802-3.. Do 96,35,832
1803-4 . . Do 98,95,346
1804-5 . . Do 2,69,69,509
32,73,982
75,97,009
14,10,455
89,16,178
4,01,211
* In the revenue of 1792-3 is included the sum of Sicca Rupees
16,83,514; and in that of 1793-4, the sum of Sicca Rupees 33,67,028,
received at Fort St. George from the late Tippoo Sultan in satisfaction
of the conditions of the treaty concluded with Lord Cornwallis. So,
also, in 1815-16, the sum of Sicca Rupees 95,68,750 was received
from the Nawaub of Oude for the cession of Kyraghur ; apd although
none of the^ sums properly constitute revenucj they augment the
. surplus,
14
Deficit in
Sicca Rupees.
2,86,49,795
1,02,06,904
Surplus in
GOVERNMENT. Sicca Rupees.
1805-6* Lord W.'s and Sir G.
Barlow's .
1806-7.. Sir G. Barlow's and
Lord Minto's
1807-8 . .Lord Minto's 10,39,730
1808-9 .. Do 5,25,883
1809-10.. Do 33,16,866
1810-11.. Do 42,36,094
1811-12.. Do 1,30,47,521
1812-13.. Do 83,04,269
1813-14 . .Lord Minto's and Lord
Hastings' 1,45,33,190
1814-15 . .Lord Hastings' 1, 18,57,412
1815-16.. Do 35,77,488
1816 17.. Do 1,09,37,338
1817-18.. Do 41,70,103
1818-19.. Do 11,77,201
1819-20.. Do 16^51^241
1820-21 , . Do 1,09,68,799
1821-22t > . Do 1,76,33,616
If
surplus. They may be regarded as a receipt for defraying the extra-
ordinary war charge.
* Lord Cornwallis, on his return to India, held the Government
only for about three months.
f Statements of this kind are usually^thrown into an Appendix ;
but this is sometimes to throw them out of sight, and I am desirous
that the alternations of our Indian revenue, should appear in one
connected view in this place as a basis for my subsequent remarks.
The annual surplus is exhibited in the Calcutta sicca rupee ; for as
that currency is reduced into English money by different parties at
different rates of exchange, no accurate comparison could be drawn
between the revenue of particular years, unless one common standard
were assumed for the whole.
15
If the revenues of India were not liable to any
deductions^ the foregoing statenaent would furnish
a most satisfactory picture of the financial re-
sources of British India, since, notwithstanding
the many expensive wars in which we have been
engaged, we should appear to have realized
within the thirty years a considerable surplus be-
yond the local expenditure (including the interest
of the public debt), after deducting the deficit
which occurred in particular years of the term.
In fact, there is this distinction between the wars
carried on by the States of Europe and those in
which our Indian Government have engaged,
that while the one, after inflicting mutual injuries
and incurring an enormous expenditure of money,
generally terminate in the status quo ante, the
other have usually been attended with an acces-
sion of territory and revenue, and sometimes
with pecuniary indemnification for the expenses
incurred in maintaining our political ascendancy.
But the surplus revenue realized in India can-
not all be considered as clear and independent
income, subject to no further deduction, for there
is a large disbursement in this country on account
of our Eastern possessions, which is not included
in the Indian accounts, but which properly con-
stitutes a charge upon the local revenue. This
disbursement was heretofore inconsiderable ; but
from the augmentation of our army . and other
causes,
16
causes^ it has gradually increased, and it now
amounts to a large sum annually. No useful
purpose would be answered by exhibiting the
particulars of the home charge for a series of
years, nor indeed are there materials for a re-
trospect beyond the year 1813,* when the political
and commercial charges were^ for the first time, se-
parated and particularly distinguished ; and I shall
therefore confine myself in this place to a statement
of the disbursements in the two last years, which
will sufficiently shew their nature and extent.
Statement of territorial, or political charges,
incurred in England on account of India :
1821-22.
Military and Marine Stores supplied from
England £306,489
Payments on account of furlough and allow-
ances to retired officers 257,808
Passage-money to officers and troops 69,447
Political Freight, &c 142,944
Interest and Charges on account of the Car-
natic Debt 85,123
Disbursements on account of St. Helena 150,962
Do. on account of Bencoolen 479
Do. on account of Prince of Wales' Island 2,426
Political Charges General (Establishments at
the India-House, &c. &c.) 371,070
Total £1,386,748
* Prior to 1812-13, the home charge appears to have been estimated
by the Court of Directors at ^^850,000 per annum.
1822-23.
17
1822-23.
Military and Marine Stores £ 348,426
Furlough and retired officers 261,071
Passage money 102,092
Political freight 106,452
Carnatic debt 96,013
St. Helena , 117,498
Bencoolen and Prince of Wales' Island .... 11,110
Political charges general 391,665
Total €1,434,327
It is not my intention to enter into an exa-
mination of these charges* Some of them may
possibly be reduced hereafter ; but in general,
they may be considered in a course of increase ;
for in consequence of the recent augmentation of
the Indian army, a greater number of ofhcers
may be expected to come upon the retired list,
while the late regulations for dividing the regi-
ments and otherwise accelerating promotion, will
place upon that list, at an earlier period, officers
entitled by their rank to higher allowances.
Far, indeed, am 1 from intimating the slightest
objection to these just and salutary concessions
to our Indian army : my business is to explain
their effects. There is, indeed, an elastic force
in expenditure, which makes it difficult for
the most prudent government to repress it ;
and in the instance under consideration, we must
be prepared for a further increase of charge.
D The
18
The territorial disbursement in Eno^hmd already
amounts to a million and a half sterling * per
annum ; and it cannot safely be estimated below
that standard in any prospective calculation which
may be made to determine the surplus revenue of
India.
The following abstract will shew the net sur-
plus drawn from British India in 1821-22^ and the
expected surplus of 1822-23, respectively.
Surplus revenue realized in India in 1821-22, £.
deducting St. Helena \l,927,263
Deduct :
Amount of territorial charge disbursed in
England in 1821-22, exclusive of St. Helena 1,235,786
Net surplus revenue in 1821-22 . . /691,477
Indian
♦ I have seen this charge variously stated ; but I have satisfied
myself completely that it amounts at present to £1,500,000 at the
least. It is, indeed, estimated this year at ;^1,535,288.
f The surplus of 1821-22 was stated above in Sicca Rupees at
1,76,33,616. The intrinsic or bullion value of the Sicca Rupee is
2s. 566d.y and this is also nearly its present value in exchange, although
the exchange has fluctuated between wide extremes, i.e. from 2s. lOd.
down to Is. }0d. the Sicca Rupee. la exhibiting the surplus in English
money, I have followed the printed statements in which the current
rupee is valued at two shillings. This rate exceeds both its bullion
value and its present value in exchange. Lord Hastings has stated
the sicca rupee at 2s. 6d. which makes the revenue appear higher.
It is proper to point out that discrepances occasionally occur in the
printed statements which I have not always the means of reconciling.
For example : in the account printed under date the 8th July 1823,
the Indian surplus of 1821-22 is stated at ^^2,1 11,337, or deducting
St. Helena at iGl, 995,033; whereas, in the account published under
date
19
Indian surplus of 1822-23 per estimate .... *2,274,646
Deduct :
Territorial charge in England in 1822 23,
exclusive of St. Helena 1,316,829
Estimated net surplus in 1822-23. . . £957,817
It will be apparent from this abstract that M.
Say, in estimating an annual deficit of fifty-seven t
millions of francs, or £2,280,000 upon our Indian
account of revenue and charge, is completely in
error ; while the Marquess of Hastings, from a
very natural feeling, has taken too favourable a
view of our financial situation and prospects.
M. Say has perhaps considered that a corrobo-
ration of his assumption of a deficit will be found
in the rapid increase of the public debt of India ;
but it is very possible for the local debt to in-
crease, even during the existence of a territorial
surplus, since that surplus may be transferred
to
date the 13th May 1824, the surplus of the same year is stated at
jE 1,927,263. I have followed the latest account as likely to be the
most accurate. The difference seems to have arisen chiefly on the
adjustment of the St. Helena account, the charge for this island
being stated in one account at jSl 16,304, and in the other at
if208,038.
* I have the satisfaction to learn from private sources, that this es-
timate has been exceeded in the sum of about .£300,000, making the
surplus about £2,600,000.
f M. Say, taking the accounts of 1806 as his basis, estimates the ter-
ritorial deficit at 57 millions, and the commercial loss at 1 1 millions —
together 68 millions francs.
D 2
"20
to England or to China^ for the purpose of
discharging debt, or for other services, or it
may beconne an addition to the local assets (the
cash balances, &c.) wliich constitute a fund ap-
plicable to the liquidation of debt. It will be
useful, however, to trace the progress of the Indian
debt, and with this view I have prepared two
statements A and B, which will be found in the
appendix. The one is formed from the Indian
accounts and correspondence, as far as they were
accessible to me, and exhibits the debt in Sicca
Rupees from the year 1793 : the other has been
prepared from the accounts which are printed in
this country for the use of Parliament, and ex-
hibits both the debt and assets, in English money,
at the end of each year, from 1814. Referring to
these accounts for more detailed information, it
appears to me essential only to state in this place
the amount of the debt at particular periods, and
I have selected the years 1793, 1798, 1805, 1814,
and 1821, for the purpose of shewing its periodi-
cal increase.
Public debt of India bearing interest :
Principal.
On the 30th April 1793, Sa. Rs. 5,33,68,683
Do 1798, .... 7,57,04,769
Do 1805, .... 19,09,71,445
Do 1814, .... 21,39,92,502
Do 1821, .... 27,92,31,000
Annual
Interest.
45,58,798
48,96,510
1,39,98,771
1,27,93,896
1,70 68,261
In
21
III order that I may he enabled at the same
time to bring M. Say's statement of the Indian
debt to a decisive test^ it will be necessary for me
to enter into a little detail. M. Say has not spe-
cified the precise period to which his general re-
marks apply ; nor the documents from which
some of his inferences are drawn ; but in stating
the Indian debt at *640 millions of francs^ or
£25,600,000^ he has expressly referred to the
accounts of 1805.
The debt of India in that year was Sicca Ru-
pees 19,09,71,445, as stated above, and valuing
the rupee at 2s. 6d.^ the rate probably assumed
by M. Say, that writer's statement in the first
instance is not materially overcharged ; but he
afterwards falls into a most unaccountable mis-
take, and contrives to augment the Company's
imcumbrances in the aggregate, including the
home
* " D'apres cet expose; on sera peu surpris que la Compagnle des
Indes soit si prodigieusement endette, soit aux Indes, soit en Eu-
rope, d'autant mieux que, malgre ses pertes, elle n' a jamais cessede
payer a ses actionnaires un dividende de lOi pour cent. En 1805
elle avouait une dette en Angleterre de 150 millions et dans I'lnde
de 640, en tout 790 millions. Mais j'observe qu'elle n'etablit cette
dette, qu'apres en avoir deduit les repetitions qu'elle se croit en droit
de former. Or, si ces repetitions ne sont pour la plupart composees
que de mauvaises creances, dont il est impossible qu'elle soit jamais
payee, elles ne sauraient passer pour un actif qu'on puisse employer
a diminuer les dettes passives." — P. 289. M. Say appears to have
drawn some of his materials from the " History of British India,"
vol. S. ; but if his statements had been perfectly correct, our present
situation is surely not to be deduced by going back to the year 1 805.
22
home debt of 150 millions of francs, (or six mil-
lions sterling,) to the enormous sum of 1,200
millions of francs, or £48,000,000.*
He first alleges that the sum of £25,600,000
is the amount of our Indian debt, after de-
dvcting the amount of assets, and that in these
assets we have included what is technically
termed *^' dead stock/' or the value of forst,
buildings, furniture, bad debts, and the like ;
and he, therefore, proceeds to add the sum of
400 millions francs, or sixteen millions sterling,
to our acknowledged debt, for the purpose of
exhibiting, as he conceives, the real condition of
our finances.
But it is not true that in arriving at the sum
quoted by M. Say, the ''dead stock,'' or even
the '' quick stock," had been deducted from the
Indian debt, although the latter, consisting as it
does of cash and other available assets, must be
deducted in order to shew the true state of the
Company's affairs ; and that writer has conse-
quently committed a two-fold mistake, first, in
assuming a deduction to have been made which
never was made ; and next, in adding to the
assumed debt of £25,600,000, a sum whih, if
correct, ought to have been deducted from it.
But
* " Or, toutes ces mauvaises creances ne s'elevant pas k moins de
400 millions, lesquels ne devant pas etre deduits, ainsi que le pretend
la Compagnie, de sa dette avou^e de 790 millions, laissent le principal
de cette dette de pr^s de 1 ,*<J00 millions de notre monnaie."— P. 290.
is
But without going so far back as the year 1805,
for the purpose of ascertaining our present con-
dition, I will subjoin an account of the Indian
debt and credits on the 30th April 1822, extracted
from the printed statements which were laid
before parliament in the last sessions, and which
are the latest documents at present before the
public.
Amount of bond, register, and otherdebts £,
bearing interest 31,623,780
Arrears and debts not bearing interest .... 6,966,877
Gross amount of territorial debt on the 30th
April 1822 *38,590,657
Deduct, territorial assets : £.
Cash in the public treasuries . . 10,634,459
Bills receivable 449,475
Stores 3,027,818
Debts owing to Government 6,412,023
Salt, opium, grain, &c. in store 1,680,929
Total amount of territorial assets 22,204,704
Net excess of territorial debts in India be-
yond the assets .£16,385,953
It will be seen, then, that instead of an over-
whelming debt in India of forty-eight millions
sterling,
* The Indian coins are converted into English money at the Com-
pany's established rates, to which I have generally adhered, in order
that my statement may be more easily verified by a reference to the
document from which it is taken.
24
sterlin"\ with which M. Sav has alarmed our
imaginations, the actual incumbrance amounts
only to ^16,385,953, or less than a year's reve-
nue, without taking credit for those fortifications
and other immovable property, which, as he
justly observes, do not constitute disposable pos-
sessions, and which must be left to our successors,
whenever we may happen to be deprived of the
sovereignty.
Nor have I taken credit for the commercial
assets in India, amounting to about £3,000,000,
being unwilling to confound the commercial with
the territorial account; but had the two been,
embodied together, the local debt would have
been reduced to the sum of £13,404,998.
It may be apprehended that a portion of the
political assets, (such as the value of stores, debts
owing to the government, &c.) cannot justly be
regarded as a real available resource, applicable
to the discharge of debt.
It is certainly true that we cannot tender to our
creditors military and marine stores in satisfac-
tion of their legal claims upon us ; but it is
equally true that these indispensable articles have
been procured at a certain cost ; that they repre-
sent a certain determinate value ; and that this
value is ultimately realized, since, on being used
or expended, they serve to defray charge, and
prevent
25
prevent the disbursement which must otherwise
have taken place in procuring them.
The amount of what is termed *^'dead stock*' is
not calculated upon by the Company to any ex-
tent as a set-ofF* against their debt, although
this property, in which M. Say considers them to
possess only an usufructuary interest, is kept in
sight with a view to some future adjnstment with
the crown. The " quick stock/' on the contrary,
should contain only genuine funds, capable of
being realized ; and as far as my experience ex-
tends, the public officers are sufficiently careful to
exclude from that account all items of a ques-
tionable character, whose introduction might tend
to mislead.
In order to prevent the attention from being
embarrassed by the accumulation of figures, I
have stated merely the surplus, or deficit, of India
in each of the last thirty years, without exhibiting
the account of revenue and charge from which the
results are deduced ; but as our information would
be incomplete if this account were omitted alto-
gether, I shall subjoin an abstract of it for five
years, selecting those periods which appear to me
best calculated to shew the progress of our Indian
revenue.
Lord
* Credit has been taken in some of the Company's statements for
" Dead Stock," to the amount of ^400,000 out of above ten millions.
E
26
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27
The "real increase of the revenue will iialurally
attract attention ; but the amount of the gross
revenue of a country ciocis not afford a corrett
standard for judging of the condition of its
finances. If we were to apply this scale of mea-
surement^ Great Britain would appear to have
reached the utmost height of her prosperity
during the most calamitous periods of the late
war, for her income was then at the highest ; and
she might be considered to have since declined,
and to be verging now towards a state of poverty
and decay, because her taxes are less productive
than heretofore. So, too, in India, it would be
fallacious to draw any conclusions from (he
amount of the gross revenue. The increase of
income has, in general, arisen from the acquisi-
tion of new territory ; but the new territory has
brought with it, its own peculiar charge, which
in general has equalled, or nearly equalled, the
new resource. The Marquess of Hastings has
observed, '' I have uo hesitation in saying that
'' the increase of the current year 1822-2r^, may
'* be anticipated as exceeding by six millions
'' sterling that of IS13-H;" but his Lordsiiip
seems to have been aware that the increase of
charge, in a certain degree, kept pace with the
increase of resource, for he sooij after adds,
" After revolving every circumstance with the
" coolest caution, I cannot find any reason \yhy,
E 2 '' subse-
28
" subsequently to tlie present year, an annual
'' surplus of four millions sterling' should not be
^' conlidently reckoned upon. This ought natu-
" rally to increase, for the causes which will
" augment the receipt have nothing in them tend-
*' ing to require further charges/'
I have the utmost deference for such high
authority ; but following, as I have done, the
statements printed for the use of parliament, I
have already stated the Indian surplus of 1821 -22
at £1,927,263, (or, if St. Helena be omitted^
£2,135,301,) and the surplus estimated for the
year 1882-23 at *£2,274,646, (or, omitting St.
Helena, £2,394,739.) What the revenue may
be hereafter it is impossible for me to predict ; but
I shall submit in the sequel certain considerations
which dispose me to believe that we have less
reason to anticipate an increase than we have to
apprehend a diminution of the territorial income
in future years.
If I were called upon to point out the period
when the Company's finances abroad were in the
most prosperous state, I should probably fix on
the year 1792-93, for we then possessed an annual
surplus sufficient to liquidate the territorial debt
in
* I have great satisfaction in stating, from private information re-
cently received, that the surplus of 1822-23 amounted to about
£2,600,000, the largest revenue ever realized from British India.
29
in little more than three years.* The territorial
charge incurred in England was inconsiderable ;
our possessions were more compact and manage-
able, and more productive with reference to their
extent ; and the produce and manufactures of In-
dia being in great demand in the west, our remit-
tances could be effected on advantageous terms in
commodities, produced by the labour of an indus-
trious population. But it did not certainly depend
upon us to give permanency to our commercial
advantages; nor was it, perhaps, in our option
to continue in the same political situation : having
once crossed the Caramnassa, our progress suc-
cessively to the Jumna and Sutlege was, perhaps,
inevitable. We were drawn on by a sort of gra-
vitation, to fill that vacuum ; to occupy that
waste which the desolating policy of the native
states had produced, until we found ourselves in
the possession of a sovereignty, without a parallel
in the history of the world.
But although the Company were in a condition
of greater affluence about the close of Lord Corn-
wallis's administration than at any other period,
much remained to be done in the way of financial
arrangement ; the rates of interest were high, and
fluctuated
Purchase.
Debt. Surplus. Yrs. Mihs.
* 1792-3 5,33,68,683 1,65,57,675 equal to about 3 3
1813-14 21,39,92,502 1,45,33,190 14 9
1821-22 27,27,86,000 1,76,32,616 15 5
30
fluctuated suddenly and between wide extremes;
the theory of exchanges was little understood, or
seldom acted upon ; the gold and silver coins,
which circulated indifferently, did not bear a
determinate value with relation to each other, and
the latter could not sometimes be procured, even
by the government itself, without a sacrifice of 5
or 6 per cent. ; a capital had not accumulated
commensurate with the agricultural and commer-
cial wants and resources of the country ; the
natives had not learnt to place confidence in our
public securities or to bring the limited funds
which they possessed into active and useful em-
ployment ; and, in short, what is termed '' Public
Credit" had scarcely been called into existence.
During the greater part of Lord Wellesley's
administration we were engaged in expensive
wars, and the utmost difficulty was experienced
in providing for the public expenditure. This
consequently was not a favourable season for
introducing financial improvements ; but the
comprehensive mind of that nobleman fully appre-
ciated the value of a well-regulated system of
finance ; and by the establishment of a public
bank and other salutary arrangements, a founda-
tion w as laid for those important operations which
bis successors prosecuted with such eminent suc-
cess ; the tree was planted in this administration ;
it grew under the fostering care oS Sir G. Barlow
and
31
and the Earl of Minto ; and the Marquess of
Hastings had the nrierit (and it was no inconsider-
able merit) of dihgently gathering, and carefully
preserving the fruit : hence the noble Marquess
was enabled to carry on extensive military oper-
ations throughout the whole frontier ofNepaul;
in Hindoostan and the Deccan, without experi-
encing those* pecuniary difficulties which had so
much embarrassed his predecessors. It will not
be contended that financial resources can be gene-
rated in a moment to meet the emergency of par-
ticular occasions; they are the growth of time;
public credit cannot^ like a liot-house plant, be
forced out of season into existence ; it is the off-
spring of confidence ; and confidence is the result
of experience.
it is very far from my wish to under-rate the
merits of Lord Hastings* administration; but
justice
* We obtained, it is true, about 2,00,00,000 rupees (or about two
millions sterling) from the King of Oude, and the sum of 53,00,000
Sicca Rupees (more than half a million) from the estate of the Bhow
Begum ; and these large supplies enabled Lord Hastings to carry on
his wars without experiencing those pecuniary difficulties which
Lord Wellesley had to contend with.
1st. Loan from the King of Oude as a fund for the
payment of annuities to his family Sicca Rupees 1,03,82,093
2d. Loan, which was afterwards satisfied by ceding
to his Majesty the districts of Ky raghur, conquered from
the Rajah of Nepaul 95,68,750
Treasure of the late Bhow Begum, committed to our
custody 53,00,000
32
justice is due to the memory of his predecessor ;
and where genuine merit exists^ it cannot be
tarnished or diminished^ by the proximity of
merit.
We owe much to the prudent and judicious
management of Lord Minto ; the previous wars
in which we had been involved had left us in a
state of complete* exhaustion ; but the pacific
policy which his Lordship pursued, gave us time
to recruit and improve our resources, and enabled
the Government of India to adopt a course of
measures, military and political, of the utmost
importance to the public welfare.
I shall only notice two circumstances which
more particularly distinguish his Lordship's ad-
ministration of the finances ; the one, the reduc-
tion of the rate of interest on the Indian debt from
8 to 6 per cent., by which a saving of charge to
the extent of about half a million sterling per
annum, was effected in perpetuity ; the other, the
remittance of a large supply of bullion to this
country, at a time when the precious metals had
nearly disappeared from every part of the empire,
and
* It is not my plan to enter into details further than may be
necessary to trace and explain our present situation. Otherwise it
would be easy for me to set forth the pecuniary difficulties and distress
produced by theMahratta wars of 1803 and 1804, and to shew what
extraordinary exertions were required to surmount those difficulties.
33
and when they were urgently required to enable
Great Britain to prosecute to a successful issue
the most fearful struggle in \vhich she had ever
been engaged.
Butj in the letter addressed to the Court of
Directors by the Marquess of Hastings^ it is inti-
mated that his Lordship took charge of the Go-
vernment at a season of pecuniary distress ; and
this statement is corroborated by the tenor of the
correspondence from India (recently published
by the Court of Directors), at the period in ques-
tion.
The temporary distress alluded to is, however,
easily explained. It was, in part, that of the
commercial community. In a country where the
rate of interest is high, the merchant has a strong
motive for economizing his funds as much as
possible ; and, when unexpected demands occur,
he is liable to be exposed to temporary inconve-
nience and distress : such precisely was the case
in India about the period of his Lordship's arri-
val. An emergency had arisen among the com-
mercial community of Calcutta ; but the Govern-
ment very properly came forward to their relief;
and, by granting temporary loans to those who
required assistance, the cloud passed over without
producing any serious mischief.
The government treasury was, also, 1 am
aware, reduced to a low ebb at the period
F in
34
ill question : but this proceeded entirely from our
overstrained* efforts to effect large remittances
to England. The living spring was drained for
the moment ; but it was not destroyed. Embar-
rassed as we were, in some degree, at the instant,
the o:overnment consio^ned to the Court of Direc-
tors, in the very ship which conveyed Lord Has-
tings to India, the sum of three hundred thousand
pounds in specie and bullion ; nor could it have
been prepared in 1815 to undertake an expensive
war, if at the close of 1813, the sources of our
prosperity had not remained unimpaired and
abundant.
The Marquess of Hastings unquestionably left
the finances of India in a most flourishing con-
dition. Hostilities had been carried on upon an
extensive scale without causing any very large ad-
dition
* Excess ofsupply to London, 1811-12 Sa. Rups. 3,46,40,832
Ditto 1812-13 2,71,49,075
Estimated Ditto 1813-14 1,80,00,000
Sa. Rups 7,97,98,907
Or, at 2s. 6d. per Sa. Rups £4,331,229
Ditto 3,393,634
Ditto 2,000,000
£9,724,868
(See Financial Despatch from Bengal, dated I8th December 1813.)
35
ditioii to be made to the public burthens.* The
public treasuries contained the enormous sum of
ten imllions sterling ; the territorial surplus might
fairly be assumed at two millions sterling* per
annum ; a disposable fund of from three to four
millions sterling was ready to be applied to the
extinction of debt ; the government remittable
securities, bearing an interest of six per cent.^
had risen to a premium of near forty per cent.,
and '' public credit'' shewed every symptom of
health and maturity. This is a splendid picture
of financial prosperity ; but its merits are scarcely
enhanced by comparison. It will be found, I
think, that we possessed in 1813-14 all the ele-
ments of financial prosperity in as sound a con-
dition
* The sum of Rupees 95,68,750, received from the King of Oude,
for the sale of Kyraghur, reduced the military charge of 1815-16.
Large consignments in bullion were also received from England, re-
mitted from the " Surplus Fund of Commercial Profit ;*' and these
tended materially to prevent the increase of debt, and to facilitate all
the financial operations of the Government abroad. Still, it is but
just to Lord Hastings, to notice, that his Lordship's military expen-
diture, as compared with that in the preceding Mahratta war, was
very moderate, as was shewn by the Commissary-General. This
is to be ascribed, partly to the establishment of an efficient Commis-
sariat by Sir George Hewett, during the administration of Lord
Minto, partly to the extent of our pecuniary resources, which
enabled the Government to discharge the irregular troops the
moment their services were no longer wanted, and partly to the strict
attention paid by Lord Hastings to economy in his military dispositions
as Commander-in-chief.
f2
36
dition as in 1822-23. Our temtorial debt and
the annual charge of interest were less ; our
surplus revenue was nearly the same ; and
although we did not possess the same amount
of specie^ it must not be forgotten that the pre-
sent accumulation of funds in India originates in
circumstances which constitute a positive evil.
The decrease in the exports from India^ conse-
(|uent to a very extraordinary revolution in the
course of the trade^ created the utmost difficulty
in effecting remittances from that country to
England ; and individuals were compelled to
purchase^ at a high premium^ the bills which
the government were under engagement to grant
to the public creditors in payment of the in-
terest on the territorial debt. The payment
being thus transferred from the Indian to the
home treasury^ the former was relieved from an
annual demand to the amount of above a million
and a half sterling, and a corresponding accu-
mulation of funds took place in the Indian trea-
suries in consequence. A portion, therefore, of
the ten millions of specie with which the local
treasuries are surcharged, must not be viewed as
capital saved from a surplus revenue. It is capi-
tal which has remained in India from the want
of means to remove it to London; and both the
cause and the effect are to be regarded as matter
of regret rather than of gratulation.
The
The fall in the exchange suggested to Lord
Hastings^ as well as to the Court of Directors,
the practicability and expediency of effecting a
reduction in the rate of exchange, at which the
public creditors were entitled to a remittance for
the interest of the territorial debt, and a course
of measures was accordingly commenced by his
Lordship for this purpose early in 1821, with the
concurrence of the Honourable Court. The
operation succeeded completely ; the rate of ex-
change was reduced from 2^. 6d. to 2s. Id. the
sicca rupee ; and as long as the present ex-
changes continue, a saving to the Company will
probably be effected to the extent of twenty per
cent, on the annual interest, for which they were
under engagement to furnish a remittance.
I have already presumed to submit my opinion
on this subject to the public : and 1 should not
now recur to it^ if the measure did not form a dis-
tinguishing feature in Lord Hastings' administra-
tion of the finances ; and if, in passing it over
unnoticed, I might not be supposed to keep out
of view a plan of singular merit.
If the object proposed was valuable and desi-
rable in itself, it has been accomplished in the
completest manner ; if no future evil should
result, the Company have been relieved from an
apprehended inconvenience, and an immediate
expense ; nor will 1 urge as an objection, that
they
38
they have smoothed the way for the crown to
uadertake the niauagemeiit of the territory. The
obligation to pay the interest of the debt in
England, opposed one great obstacle to the re-
sumption of the charter ; because it was hereto-
fore maintained that the Company constituted
the only safe and convenient organ of remittance.
That obligation has now been withdrawn in a
great degree ; the Company have succeeded in
rendering a large portion of the territorial debt
a local demand, the interest of which is payable
only in India ; and as the local revenue is quite
adequate to the payment,, the crown, in assuming
the territory, would have no inconvenient engage-
ments or financial difficulties to encounter. In
affording facilities to our successors, there may
be nothing exceptionable, if the measure be right
in itself, for the end and aim of every public
measure ought to be the public good, without
regard to partial and temporary interests. My
object, indeed, in recurring to past transactions,
has not been to discover defects. The great use
of a retrospect to the past is to obtain a proper
guide for the future. But if it be true that the
sudden and extreme depression of the exchange,
although originating in causes beyond our con-
troul, were an evil, as 1 conceive it to have been,
then would I submit that, instead of aggravating
it bv availin": ourselves to the utmost of a tern-
39
porary advantage, our object should have been,
and should still be, to alleviate its effects by all
unobjectionable means.
From the statement given in a preceding page
of the result of the accounts for the last thirty
years, it will have appeared that, in nineteen years
of the term, a surplus has been realized in India;
and when it is recollected that the intervals of
peace during this period were short and inter-
rupted, and that the wars carried on embraced
objects of no ordinary magnitude, it is as much
matter of surprise as of satisfaction, that the
event should have been so favourable.
In the calm and prudent administration of
Lord Teignmouth, we had a Rohilla war ; a revo-
lution in Oude ; a formidable demonstration of
defensive war* against the Affghan state of Cau-
bul ; and, lastly, an expedition against the Phil-
lippine Islands, which was arrested in mid-career
at Penang.
Lord Wellesley's administration was alto-
gether of a belligerent character. We had, first,
a Mysore war ; and as a sort of corollary, an ac-
tive campaign against the fragments of the My-
sore force under " Dhoondiah Khan,'* with sub-
sequent operations against the Southern Poly-
gars, and the Insurgents of Malabar. Then, the
expe-
* The bloodless, but useful campaign of the late Sir James
Craig on our Western frontier.
40
expeditions to Egypt, and the Persian Gulpli ;
and at short intervals, two successive Marhatta
wars ; and, lastly, hostilities with the Rajah of
Burtpore, which were not attended with our ac-
customed success ; and such was the expense
occasioned by our severe contest with the Mar-
hatta States, that the heavy arrear* of war
charge absorbed our resources for two years
after its termination.
In the pacific administration of SirG. Barlow
and Lord Minto^ we were compelled to set on
foot a large army to quell a refractory landholder
of the Doaub, (the country between the Ganges
and Jumna), who, encouraged by our failure at
Burtpore, defended for some time the petty forts
of " Cumouna" and '^ Girnouri/" against the
utmost efforts of our arms. We sent forth, at
a subsequent period, those expeditions which
achieved the conquest of Java and the French
islands ;
* The late Lord Lake entertained a large body of irregular troops
(Asiatic " Brabancons "), which Lord Cornwallis on his return to
India, ordered to be disbanded ; but we had not the means of paying
their arrears, and they could not, therefore, be immediately dis-
charged from the service. In this dilemma, they were paid off and
disbanded as funds could be obtained, and our regular army was
allowed to continue in arrear. The preference given to the irre-
gulars in regard to the discharge of arrears had the appearance of
great injustice ; but our troops, both European officers and sepoys,
submitted with patience under great privations, and manifested an
admirable temper on the occasion.
41
islands; and we furnished costly subsidies* and
the materiel of war to our ally, the Kin^ of Per-
sia, to enable him to contend with our other ally,
the Emperor of Russia.
In Lord Hastings' government we had a Nepaul
War ; a Pindarry War,f and a Mahratta War ;
with another expedition against the pirates of the
Persian Gulf; and yet, notwithstanding this
almost uninterrupted series of military enterprizes,
we have come forth with renewed strength, enlarg-
ing the wide circle of our dominion after every
struggle.
In a season of peace the surplus revenue of
India may safely be estimated, I think, at two
millions sterling per annum, taking the year
1821-1822 as a basis for the calculation. The
surplus in that year amounted to £1,927,000
sterling,
* It is somewhat singular, that we were assisting the King of
Persia against the Emperor of Russia, at the same moment that we
were assisting the Emperor of Russia against the late Emperor of
France. This political solecism is not however chargeable to the In-
dian Government.
f If ever a war were justified on grounds of humanity, it was the
Pindarry war. These freebooters^ the bane, the scourge, and the
opprobrium of India, have been rooted out for the time, and I am
willing to hope for a very long time; and the contest, in its origin,
progress, and termination, must be contemplated with sentiments of
unmingled satisfaction. It was not less honourable than that
which placed the British standard on the proud heights of Himma-
layah.
G
42
sterling, at the exchange of 2s. the current rupee,
and the accounts exhibit a fair specimen of the
ordinary revenue and charge upon a peace es-
tablishuient. The military establishments, it is
true, have since been augmented, and fluctua-
tions may be expected to take place in different
branches of the revenue ; but had peace conti-
nued, a reduction of interest would have been
effected in the present year to the amount of
£150,000 or £f200,C00 per annum, by the appli-
cation of from three to four millions to the extinc-
tioii of debt. For estimating a larger surplus than
two millions, I can perceive no safe ground what-
ever; and there is quite sufficient ground for just
exultation, that so ample a tribute should be
drawn from a dependent territory, without impo-
verishing the people. This surplus, as I have
before explained, is liable to a deduction to the
extent of a million and a half sterling, on account
of the territorial, or political charges incurred in
England; and the net territorial income of the
East-India Company from British India, may,
therefore, be stated, during the continuance of
peace, at the sum of five hundred thousand pounds
per annum.
But we are againat war. Those golden assu-
rances have not been realised, which promised us
along continuance of peace and security. How
many short months have passed since we were
43
laught to believe that there remained no state in
India which could oppose the British power ; that
the relations of annity had been established with
all around us upon a firm and durable foundation ;
and that we were at length arrived at that happy
epoch when we might expect to enjoy, under our
vines and fig trees, the produce of all our toil^
the fruits of so many victories in the field, and
triumphs in the cabinet !
And are those who gave us such assurances to
be condemned, because this pleasing illusion has
been dispelled ? certainly not — appearances justi-
fied their hopes, and seemed to countenance all the
flattering anticipations which were indulged. Lord
Hastings observed the same policy towards the
Birman State of Ava, which Lord Minto had ob-
served towards the Goorka State of Nepaul, and
upon similar considerations. Our practice had
been^ in both instances^ to forbear and overlook
slight offences and aggressions, rather than involve
ourselves in an arduous and unprofitable contest.
The chain of mountains on our northern frontier,
and a wild impervious jungle, or wood, on our
eastern border, constituted a natural barrier, which
it was not easy to penetrate, and which it was not
our interest to open. A judgment may be formed
of the advantage which we derived fiom this sup-
posed barrier, from the fact, that a single regiment
of sepoys was found sufficient for the service of
G 2 the
44.
the extensive tract of country possessed by us to
the east of the Ganges^ while a force, scarcely
more considerable, was considered adequate to
the protection of our northern frontier from the
Burrumpooter to the Gogra. Thus, nearly the
whole of our military strength was concentrated in
our western provinces, the most accessible part
of our territory ; and we had always a disposable
force which could be thrown upon any point where
its service might happen to be required.
This is not the fit place for inquiring into the
origin of the Burmese war, or for examining the
political bearings of an event so much to be de-
precated ; my present purpose is merely to notice
its probable effects upon our finances ; and with-
out pretending to furnish any accurate estimate
of the war charge likely to be incurred^ I may safely
assume, that during the continuance of hostilities,
not only will the surplus revenue be absorbed, but
we must be prepared for an expenditure exceed-
ing our ordinary income. The army employed
in the field cannot be less than 30,000 men, and
with the expense* of transports for the convey-
* Twenty thousand tons of shipping, or forty ships averaging 50O
tons, will probably be required, and their freight or hire may be
computed at 6000 Rupees per month each, 2,40,000 Rupees per
month, or per annum Rupees 28,80,000. The excess of military
charge in Bengal is estimated at Sicca Rupees 38,46,000 : that of
Madras at Rupees 42,00,000. Of Bombay I cannot speak at pre-
sent ;
45
ance of the troops, military stores^ and supplies
necessary for their subsistence in a hostile coun-
try^ the war charge may be expected to amount
to from two millions to two millions and a-half
per annum. Should then the contest be pro-
longed to a second year, the extraordinary expen-
diture will not probably fall short of five millions
sterling, aitd instead of extinguishing debt in the
present year 1824-25 to the amount of three mil-
lions, as contemplated, we shall probably add to
the public debt of India in the course of 1825-26,
the sum of one million, while the territorial ac-
count abroad and at home, will be deteriorated in
the sum of four millions sterling.*
Whether any pecuniary indemnification will be
found in the success of our arms, is a speculation
in which it would be idle to indulge at present ;
all we can fairly look forward to is the speedy
termi-
sent ; and in fact the estimates are all likely, I think, to be exceeded,
for they seldom provide sufficiently for the expenditure of military
stores, and the various contingencies incidental to a state of war.
* Indian peace surplus for two years £4,000,000
Deduct, home charge do £3,000,000
War charge do. 5,000,000
8,000,000
Territorial deterioration 4,000,000
Deduct, surplus cash balance applicable to the discharge
of debt 3,000,000
Debt to be raised in 1 825-26 £1 ,000,000
46
termination of a war which it was not our interest
to provoke, and which we can have no motive
for prolonging beyond the necessity of the case.
Although this unexpected event will, for a time,
derange all our calculations with respect to the
future, I hope that the statements and explana-
tions which I have furnished, will have satisfied
the reader that the gloomy picture drawn by M.
Say does not, in any of its features, represent the
present financial situation of the East-India Com-
pany in India. We are neither burthened with a
territorial debt of forty-eight millions, nor are we
consuming the vital substance of the mother
country by an annual deficit, which absorbs the
produce of its labour.
I cannot, at the same time, upon a deliberate
examination of the public accounts, corroborate
the sanguine views and anticipations of the Mar-
quess of Hastings. We have never had a surplus
of four millions in India, and I cannot discover
any sufficient ground for estimating such a reve-
nue for the time to come;* but we have lately,
realised a surplus of about two millions sterling,
and we may reasonably expect to realise it again
during
* The revenue of the new territory will probably improve, but it
will be seen in the sequel, that the receipts from the opkim monopoly
have already decreased, and are likely to fall off hereafter in a still
greater degree. I have, also, great doubts abgut the stability of the
land revenue of Fort St. George.
47
during a period of peace. Even for this sum it is,
however^ extremely difficult to find a remittance
under a system of commercial regulation, which
i^oes far to exclude a portion of the produce and
manufactures of British India from the home mar-
ket ; and if^ under such circumstances, it were
in our option to extend the annual tribute to four
millions^ 1 should not hesitate to say that consi-
derations of policy^ of justice and humanity^, would
all alike concur to condemn the unmeasured
exaction. If the public revenue should unex-
pectedly become more productive^ it would be
the duty of the Government to repeal or to reduce
objectionable taxes ; to increase the judicial and
other establishments, so as to render justice more
accessible to the great body of the people ; to
endow public institutions for providing better
means of education, or hospitals for the care of
the sick and the destitute; to construct roads
and bridges^ reservoirs and water-courses; to
support caravansaries for the accommodation of
the traveller; and otherwise to promote those
objects which may conduce to the comfort, con-
venience and well-being of our native subjects.
A certain revenue is required to maintain our
establishments abroad, to defray the political ex-
penses incurred at home, and to provide a mode-
rate fund for the gradual extinction of debt ; but
whatever may be collected beyond the fund
required
48
required for these several purposes^ ought to be
expended on the spot for the benefit of the
people^ whose industry supplies such ample
contributions.
CHAPTER II.
SOURCES OF THE REVENUE OF INDIA-SALT-OPIUM
-CUSTOMS-ABKARRY-STAMPS, &c.
Having submitted a brief statement of the re-
venue of India in the ag<^regate^ 1 now propose to
particukirize the items, or ingredients^ of which it
is composed, and to consider how far our system
of taxation has been established and regulated
upon just principles, and how far we can rea-
sonably expect that the plenteous spring which
now periodically replenishes our exchequer, will
continue to afford the same abundant supply.
From time immemorial the land has constituted
the chief source of revenue in India, and for plain
and obvious reasons. The habits of the great
body of the people are simple and uniform; their
diet is spare, and confined generally to a few arti-
cles of the first necessity, rice, vegetables, fish,
and the smaller grains ; their clothing is scanty
and mean ; their habitations poor and unfurnished ;
what we term luxuries, are confined to the opulent
few. Capital is thinly distributed over the surface,
H and
50
and even the advantages of a genial climate, a
prolific soil, and of manufacturing skill, were not
found sufficient to swell the stream of commerce.
In all this the keen eye of the financier could
see nothing to touch ; the objects were too minute
and worthless, or too widely dispersed to come
fairly within his grasp; and he was compelled to
have recourse to the expedient of taxing produce
in the aggregate. Such is the land tax, which,
without being applied to any individual article,
takes a portion of the gross produce of each par-
ticular portion of land.
As the land revenue of India is still our prin-
cipal resource, I shall reserve the observations
which I may have occasion to offer regarding it,
until I shall have noticed the other less important
branches of revenue, which will be more easily
disposed of.
The salt stands second in point of importance ;
and, as it has been so often stigmatized under the
reproachful term '' monopoly/' it will be proper
to bestow a little attention upon the principles on
which this tax has been established.
If a certain revenue be required beyond what
the land will produce; and if the number of opu-
lent consumers, in whose hands luxuries, and other
tangible objects of taxation, might be found, be
so small and so dispersed that the charge of col-
lection would go far to absorb the produce of the
51
tax, then it would appear that a government has
no alternative but to have recourse to some article
of general consumption as the object of taxation.
It never can answer any useful purpose to teaze
and torment a country with taxes and tax-ga-
therers, when such taxes are unproductive, or
produce little more than is sufficient to maintain
a host of revenue officers. These officers are an
evil in any country ; but in India, where it is
almost impossible to prevent their mal-practices,
they are a serious evil. Such is the force of long
established habit under a bad government, that,
even now, when there is an anxiety felt by the
ruling power to repress abuse and to affiDrd pro-
tection to all, the revenue officer exacts, and the
people suffer his exaction, as a matter of course,
and almost without a complaint.
If, again, a people be constitutionally timid, or
unable, from whatever cause, to defend their pro-
perty and to resist oppression, then it would seem
to be a happy discovery, if, instead of subjecting
them by direct taxation to the screw of the Ex-
chequer, the government should succeed in draw-
ing from them the periodical contribution required,
by a process scarcely perceptible, in sums so
minute as scarcely to be felt, and by means totally
divested of the odious character o^ force.
I will not say that these were the considerations
which led to the establishment of the salt mono-
H 2 poly ;
52
poly ; but they are the considerations which may
be urged to justify it. The government have
selected it as an article of general consuniption^
which can be rendered productive ; and as a me-
dium or instrument^ for levying contributions^ by
a sort of voluntary process, without the interven-
tion of the tax-gatherer. It approaches, I own,
to a poll tax ; but it is a very light poll tax, which
is paid almost insensibly : and where, as in India,
the great mass of the people, with few exceptions,
are in nearly the same condition, there is no in-
justice, and little inequality in applying to them
one common scale of taxation, regulated by the
scale of their consumption.
In Bengal the manufacture of salt is a strict
monopoly, and the article is not allowed to be
imported, even from the coast of Coromandel and
other parts of our own territory/, except on account
of Government, or under ''permits" from Govern-
ment, requiring its delivery into the public stores
at a stipulated price.
The manufacture is carried on in Bengal
throughout the districts which skirt the Delta of
the Ganges, on low lands periodically overflowed
by the spring tides ; and as it is confined to as
narrow a tract as possible, smuggling may be
sufficiently guarded against. The zemindars, or
landholders, in whose estates it was found con-
venient to establish the manufacture, were allowed
com pen-
53
compensation for the lands which were appro-
priated to the purpose, ('' kalary rents/' as they
are termed); and this compensation was generally,
I believe, regulated on fair and equitable terms.
But, heretofore, the manufacture was the source
of great misery to the inhabitants of the adjacent
districts, who were often forced into the service,
and compelled to expose themselves in the un-
healthy marshes of thesunderbunds, to the attacks
of tigers and alligators, and to all the physical
ills engendered by a pestilential chmate. This
grievance has, 1 trust, been removed ; we have
established courts of justice to protect all our na-
tive subjects, and the wretched Molungees among
the rest ; recourse is no longer had to compulsory
service ; from one of the most objectionable
stations the manufacture was long since with-
drawn ; the advance of cultivation, by gradually
diminishing the jungle, may be expected to ren-
der the country more healthy ; and as the Molun-
gees are generally natives of the districts in which
they are now employed, they are not so liable to
suffer from the effects of the climate. But still
these Molungees are, I fear, among the worst
conditioned of our subjects ; and the necessity
for employing men in situations where they may
become the victims of ferocious animals and dis-
ease, forms, in my opinion, the greatest objection
to the salt monopoly. This objection it would
be
51
be idle to urge^ if there were no alternative^ for
men will have salt at whatever risk or sacrifice it
may be obtained ; and if the Government should
decline to supply the article^ it would be manu-
factured by private individuals ; but in point of
fact, there is an alternative, which is not liable to
the same objections : salt can be manufactured
in almost any quantity on the neighbouring coast
of Coromandel, under a warmer sun, in a drier
atmosphere, and with every circumstance of ad-
vantage ; and it appears to me that we should
consult both the interests of the revenue and the
interests of humanity, by a partial transfer at
least of the salt manufacture from some of our
Bengal districts to those of the northern sircars.
The following statement will shew the produce
of the salt sales in Bengal, and the cost and
charges of manufacture in the last fourteen years,
or from 1808-9.
Gross Sale. Cost and Charge.
1808-9 ... Ct. Rs. 1,82,69,505 ... Ct. Rs. 40,45,276
1809-10 1,77,14,711... 42,36,073
1810-11 1,72,27,019 41,24,303
1811-12 1,81,47,129 49,00,001
1812 13 1,67,46,642 60,76,677
1813-14 1,77,86,141 65,11,578
1814-15 1,56,86,433 42,58,169
1815-16 1,60,04,989 39,05,288
1816-17 1,71,31,682 47,61,455
1817-18 1,86,71,974 ,48,77,123
1818-
55
Gross Sale. Cost and Charges.
1818-19... Ct.Rs. 1,85,03,785 ... Ct.Rs. 54,32,192
1819-20 1,90,27,939 60,23,041
1820-12 1,90,35,117 56,65,403
1821-22 2,06,07,680 59,71,710
The quantity of salt sold within the year was
formerly from 40 to 45,00,000 maunds, but it
has been gradually increased, and of late years
the sales have been extended to 48,00,000 maunds.
The selling prices varied heretofore from 320 to
*350 sicca rupees the 100 maunds ; but the
average has been higher of late, and at the March
and May sales of 1822 the article reached the ex-
orbitant price of Sicca Rupees 437. 1. 2. at the
former, and Sicca Rupees 593. 14. 7. at the latter
sale. This is much too high an average, for when
the article attains this price the tax is really felt
as a grievance by the people, whose simple diet
requires the addition of salt as a stimulant. When
the
* The average of 1821-22 was Sicca Rupees 358 2 6 per 100
maunds. When reference is made to the Bengal accounts it is ne-
cessary to quote the Sicca Rupee, in which those accounts are kept.
In the English accounts, the Current Rupee is used, and in quoting
from them, I think it right to give that rupee, for my statements
could not otherwise be verified. The Current Rupee is a nominal
value, used to bring the different coins of India to one common
standard; but I should be glad to see it altogether disused. The
Sicca is as 100 to 116 of the Current Rupee. The latter is easily
converted into English money, being valued by the Company at two
shillings. The pound sterling is therefore arrived at by taking one-
tenth.
56
the average exceeds 350 rupees the 100 maunds,
the quantity at the public sales should be aug-
mented ; and by retaining a sufficient stock of the
article and supplying the market according to cir-
cumstances, it is very much in the power of the
Government to regulate the price to the consumer,
who will not complain while it does not exceed
350 rupees per 100 maunds. Taking the con-
sumption of the Bengal provinces east of Benares^
in which the Bengal salt is chiefly consumed, at
45,00,000 maunds, and the population at thirty
millions, the inhabitants will consume annually,
on a medium, six seers per head, which at 350
sicca rupees per 100 maunds will cost about I2^d.
to each individual ; of this fourpence may be
considered the natural price of the article, being
the cost of production, and the remaining 8^d. is
the tax received by Government. This sum,*
insignificant as it may appear, would not be a
very trifling contribution from the lowest classes
of India ; but as these do not consume at the rate
of the general average, they do not pay quite so
much. The opulent few, with their families and
numerous retainers, consume upon a more liberal
scale
♦ The people of Great Britain contribute in taxes at the rate of
about ^3. per head on a medium. The people of India at about
5s. per head (or 1-1 2th of that rate); but [ am disposed to think
that the latter are, nevertheless, more heavily assessed than the
former, regard being had to their respective means of paying taxes.
Dl
scale of allowance ; and salt is supplied also in
some instances to the cattle.
But^ although I have endeavoured to justify
the principle of the tax^ or^ rather, the necessity
which exists in India for levying the public con-
tributions from articles of general consumption,
1 am very far from justifying its immoderate ex-
tension. Our object ought to be to draw our
present income from a larger quantity ; for it is
unquestionable that the people do not consume
as much salt as they desire to use, and we cer-
tainly have it in our power to place the article
more within their reach, and to afford them a
more liberal measure of indulgence, without any
sacrifice of the present revenue.
Benares, and the territory west and north of
that province, are supplied with rock salt, and
other salts from the country beyond the Jumna :
and soon after our acquisition of what are called
" the Ceded and Conquered Provinces," an at-
tempt was made to draw a revenue from the
monopoly of the salt which is imported from
Malwa, Lahore, and other districts lying beyond
our own frontier. The experiment, however,
failed, and was abandoned, not one moment
sooner than was desirable ; for it was undertaken
without due attention to circumstances. The
manufacture was not in our own hands ; and it
was impossible to prevent the introduction of
I the
58
the article into our provinces, where the price
had been artificially raised far beyond its natural
level, without employing an army of custom-
house officers, who would have been a pest to
the country. The project was also injudicious
on another ground, since it tended to check a
barter trade between our territory and the dis-
tricts west of the Jumna, which was found highly
beneficial to both parties.
At the Presidency of Fort St. George, a reve-
nue is, also, drawn from salt, which, in the year
1821-22, amounted to current rupees 31,85,763 ;
but I am not aware that any useful purpose
would be answered by entering into further de-
tails on this subject.
In concluding it, 1 may observe, that the salt
revenue is one of the branches of our Indian
resources, upon whose stability and permanency
we can most confidently rely ; and, although I
do not pretend to maintain that it is free from
all objections, I consider it less objectionable
and less injurious in its effects than some other
taxes which we have imposed ; and while the
present revenue is required, the mere circum-
stance of its bearing an unpopular designation
ought not to prejudice us against it, or to induce
us to give it up for the purpose of substituting a
system of taxation, more consistent with Euro-
pean theory, but at the same time, much more
likely
59
likely to expose our Asiatic subjects to exac-
tions and to personal oppression.
THE OPIUM MONOPOLY.
This branch of revenue is associated in cha-
racter with the salt monopoly, and naturally fol-
lows it, although, in other respects, it is not
entitled to take precedence of the customs. In
principle, the two monoplies bear a close resem-
blance; but there are circumstances which dis-
tinguish them. The salt is a tax levied upon
our own subjects ; the opium is a tax levied
upon the people of China and the inhabitants of
the Eastern Archipelago. Salt, if not an absolute
necessary of life, is highly conducive to comfort
and health. Opium, except when used as a medi-
cine, is an intoxicating drug ; hence, the object
should be in the one instance to draw the same
revenue from the largest possible quantity ; in
the other, to draw the same revenue from the
smallest possible quantity ; and experience has
shewn in the case of opium, that the amount of
revenue is in general inversely as the quantity
sold. In fact, we have found (fortunately for the
character of our .^morals) that 4,000 chests of
that article will yield a larger produce than 5,000 |
chests.
I 2 The
^>
60
The manufacture of opium in Bengal is a strict
monopoly^ and I have to vindicate this tax against
the same prejudices, which the very term *^ mono-
poly" never fails to excite ; but, although I can-
not, in a manner quite satisfactory to myself, get
over one objection to which the monopoly is lia-
ble, namely, that the government have been com-
pelled, as a means of securing it, to prohibit the
cultivation of the poppy in particular districts,
and thus to trench upon the rights of property ;
yet, even for this stretch of power, some excuse
may be found, since the general use of an intoxi-
cating drug is not only productive of physical
evil, but is, moreover, calculated to have a pre-
judicial effect upon the morals and good order of
society.
In other respects, 1 have no formidable diffi-
culty to surmount. When strictly examined, the
tax on opium will be found to resolve itself into
a high export duty, which is paid by the foreign
consumer, and which is regulated by the export-
ing merchant, who determines the price to be
paid for the article upon his own view of what
the foreign consumer can, or will, pay for it.
Tiie opium costs the Company in Bengal from
225 to 250 rupees per chest :* it is exposed to
public sale, periodically, under an express stipu-
lation
* The chest contains two factory maunds— 149] lbs.
61
latioii that the article shall be exported. The
merchant bids for it what he pleases ; sometimes
more and sometimes less : there is free compe-
tition^ and the difference between the actual cost
of the article and the sale price, is evidently
nothing more nor less than a custom-house duty.
Wherein would be the difFerence, if the Govern-
ment disposed of the opium at prime cost, or
allowed others to manufacture it, and afterwards
imposed a duty of 100 or 1,000 per cent, on the
exportation of the article ? The existing system
is, no doubt, to be preferred, because it is better
calculated to prevent smuggling, and because the
exporting merchant is better qualified to deter-
mine the proper rate of duty than the Govern-
ment can pretend to be.
High rates of customs may have a prejudicial
effect in checking exportation ; but in this in-
stance the tax is paid 'voluntarily/, and does not
prevent exportation. . The Chinese are certainly
made to pay very high for our opium ; and they
in return make us pay very high for their teas :
but we scarcely can be said to do them an injury
by raising the price, so as to discourage the use
of a drug, which, however excellent as a medi-
cine, cannot be used habitually, or in excess,
without injury to the individual who indulges in
the habit.
Prior
62
Prior to the administration of Lord Teign-
mouth, the opium revenue was of small account.
The article was provided by contract : the drug
was in general impure ; it was not held in esti-
mation in the foreign market ; and so late as the
year 1797-8^ it averaged only Sicca Rupees 414. 15.
per chest. In the following year 1798-9^ the
price rose to Sicca Rupees 775. 3. per chest : it
continued to rise from that time^ fluctuating,
however^ at particular periods, until in 1822-23
it averaged 3,090 Sicca Rupees per chest ;* the
quantity brought to sale in that year, being only
3,504 chests, or 1,000 chests below the quantity
usually disposed of by the Government.
The improvement in the revenue is, in a very
great degree, to be ascribed to the change in
the system of management introduced by Lord
Teign mouth. The contracts were abolished ;
the opium was provided by public agents, to
whom a liberal commission was granted on the
sales ; the manufacture was confined to the dis-
tricts most favourable to the growth of the
poppy; a rigid examination was established at
the Presidency to insure the purity of the drug ;
its quality was rapidly improved ; the confidence
of the exporting merchant and foreign consumer
was gradually secured ; and, in the course of a
few
* It has averaged as high as Sicca Rupees 4,001. 4. 11. per chest.
63
few yearSj a chest of opium^ bearing the Com-
pany's nnarks, passed among the Malays and
Chinese like a bank-note^ unexamined and un-
questioned.
The quantity of the article annually brought
to sale in Calcutta, has been from 4/X)0 to 4^500
chests^ 2,500 of which were understood to be
consumed in China ; while about 2,000 chests
were distributed among the inhabitants of Java,
Sumatra, Borneo, Celebes, and the other islands
in the Eastern Seas. Four thousand five hundred
chests were heretofore supposed to be the largest
quantity which could be disposed of with advan-
tage ; and although the consumption has proba-
bly increased, and is increasing, there are strong
grounds for believing that we shall not consult
the interests of the revenue by extending the
sales beyond that quantity.
The following statement will shew the gross
produce of the sales of Bengal opium during the
last 14 years, or from 1808-9, with the cost
and charges of manufacture, viz.
Gross Receipts. Cost and Charges.
1808-9 CurrentRs. 59,56,354 Current Rs. 9,67,278
1809-10 82,23,431 8,31,275
1810-11 93,59,961 9,61,879
1811-12 92,46,775 8,77,325
1812 13. 72,99,401 8,80,528
1813-14.^. 96,40,729 10,77,638
1814 15.* 1,10,35,626 8,29,881
1815-
(34
Gross Receipts. Costs and Charges.
1815-16 ...a. Rs. 1,05(12,601... CL Rs. 10,97,585
1816-17 94,16,539 11,85,490
1817-18 87,35,983 8,92,496
1818-19 83,05,846 8,89,915
1819-20 79,98,248 10,35,066
1820-21 1,43,64,321 13,57,259
1821-22 1,12,57,275 9,86,722
It willa|5pear, from this statement, that, although
the revenue has fluctuated from time to time, it has
been in a course of progressive advancement, and
I have been accustomed to consider the opium as
one of those branches of our Indian revenue upon
whose stability and improvement we could most
confidently rely. Very different views have, how-
ever^ been lately adopted with respect to the
means of encreasing this resource ; and 1 am led
to apprehend that the change of plan will not only
fail to produce the advantages expected, but that
it will have the effect of rendering the existing
revenue extremely precarious.
In the province of JVIalwa, and other districts on
the western side of India, opium had long been
produced, and had found its way, through various
indirect channels, into China and the other mar-
kets in the Indian Seas, interfering, more or less,
with the sale of our Bengal produce.
When this territory came into our possession
by the successful termination of the Mahratta
65
War in 1818^ ihe government appear to have
adopted the notion that a field was opened for
extending the opium monopoly; and departing
at once from the maxim, heretofore acted upon, of
circumscribing the produce and of confining the
manufacture to particular districts, supposed to
be most favourably situated for the growth of the
poppy, they made large advances for its cultiva-
tion in Malwa, paid high prices for the drug, and
otherwise held out every encouragement to the
extension of the manufacture. Nor has this new
course of policy been restricted in its application
to the new territory. The government of Bengal
have more recently taken measures for increasing^
the produce in the districts under that Presidency ;
they have even appointed the collectors of the land
revenue to act as deputies to the opium agent,
and have stimulated their exertions to favour the
cultivation of the poppy by granting them a com-
mission, or per centage, on any increase which
may be made to the produce. In short, without
entering into the reasoning, which led to the
change, it will be sufficient to state that it is now
broadly maintained that our object should be to
encourage production^ and to draw a revenue upon
a larger quantity, which, being disposed of at
moderate prices, may be expected to check foreign
competition, and not only to secure, but to en-
large, the markets of consumption. The article
K is
66
is also supplied for our own domestic occa-
sions_, and there seems to be no longer any
intention to discouraore the use of the druo' bv our
native subjects ; ahhough, heretofore, the utmost
precaution was observed to prevent their obtain-
ing it, even in the smallest quantity.
in the instance of salt and tea, I concur en-
tirely in the position, that we should endeavour to
raise a moderate revenue upon a large consump-
tion ; but in the case of opium, a different policy
should, I think, be pursued. I do not mean to
affirm that the quantity may not be too small and
the prices too high ; because very high prices
operate as a premium, which promotes smuggling
and adulteration, as well as foreign* competition ;
but as far as it can be circumscribed without ^vo-
ducing such effects, it is desirable, 1 think, that it
should be limited. The accounts printed for
Parliament do not shew the number of chests
brought to sale annually by the government, or it
would, I believe^ appear that, in almost every
instance, the proceeds of those sales have been
nearly in the inverse ratio of the quantity disposed
of; and, with this evidence before us, it is surely
not
* The cultivation of the poppy has, I understand, been success-
fully introduced into the Philippine Islands, which are placed in the
very centre of the opium consumers ; and I am apprehensive that
our sales will be affected by a competition from this quarter.
67
not wise or prudent to extend the manufacture
unnecessarily.
The following memorandum will shew the pro-
gress which has been made in realizing an opium
revenue from Malwa, in the two first years of the
experiment.
Gross Receipts. Advance and Charges.
Current Rupees. Current Rupees.
1820-21 3,23,347
1821-22 33,89,333 41,99,741
Per Estimate. Per Estimate.
1822-23 32,12,500 65,60,600
Here we have a very heavy charge in lieu of a
revenue; but 1 do not mean to say that this is a
just exhibition of the ultimate result. The large
advances which have been made (most improvi-
dently, as I conceive) have produced^ and will
produce^ opium, more than sufficient, probably, to
replace the disbursement ; but 1 have reason to
know that we are going on with our advances
upon a very large scale, and 1 see reason to
apprehend, not only that the proceeds of the sales
of Malwa opium will do little more than reimburse
the cost of the article, but that those sales will, in
a very material degree, affect the sale of our Ben-
gal produce.
When we advert, moreover, to the magnitude
of the sum advanced for the article in Malwa, in
1822-23, it is impossible not to feel a little startled :
K 2 it
68
it is more than six times the amount paid for the
whole produce of Bengal (about 4,500 chests) ; and
we must conclude, either that we are to obtain six
times the quantity, or that we are to pay six
times the price for the Malwa opium, or that both
quantity and price are to be augmented. The
latter is the true supposition : we are to pay
much more than the natural price or cost of pro-
duction in Bengal ; and this most powerful stimu-
lant is to be applied to obtain an article which we
do not want. We place an enormous sum in the
hands of an agent, so far removed from the seat*
of
* This, in itself, is one among many strong reasons for establish-
ing a separate Government in " Central India," or in some conve-
nient situation west of the Jumna. Sir John Malcolm has warmly
recommended the measure, and I entirely concur in its expediency.
Our connections and interests have become so multifarious and com-
plicated in that quarter that they require constant and vigilant atten-
tion. A spark which might be extinguished at the moment by a
Government on the spot, may rise into a flame before a reference
can be made to the distant Presidency of Fort William — and sur-
rounded as we are by Marhattahs — Affghans — Rajapoots — Sikhs —
Jaats — and other tribes, having dissimilar views and interests, such
sparks must frequently be elicited. Seventeen years ago my colleague
and myself, when employed as a Board of Commissioners for the
settlement of the Ceded and Conquered Provinces, " urged the expe-
diency of a responsible and respectable administration being esta-
blished in that distant and valuable territory ;" but the necessity
for it is become much more urgent and apparent, now that we have
extended our frontier to the west, and that the attention of the
Supreme Government has unfortunately been called by a new enemy
to the east. See Report from Commissioners, printed in the " Reve-
nue Selections," pages 6 to 44.
69
ofGovernment as to be beyond all efficient cou-
troul ; and the credit of that officer is to depend^
in a great measure, upon his exertions to produce
an excessive quantity of a deleterious drug! If
the money thus expended found its way to the
cultivators of thesoil^ or to the village zemindars^
who would return a part in the shape of rent or
revenue^ there would be less to regret ; but is
this the case ? Some of the native chiefs may
receive a portion of the amount ; but a portion by
no means inconsiderable is likely^ I fear, to be
engrossed by contractors,, native officers, inter-
mediate agents, and others, whom it cannot be
the interest of the Government to maintain and
encourage.
Two reasons may be assigned for the late pro-
ceeding of the Government of India : the one,
that they could not, with justice to the landholders,
suppress the cultivation of the poppy in our new
territory ; the other, that we could not prevent
the opium, which is produced in the territories of
the native chiefs, who enjoy a real or nominal in-
dependence, from finding its way through clan-
destine channels to the sea-coast, and from thence
to the markets of consumption.
The former reason is plausible, and I am no
advocate for interfering with the free use of pro-
perty ; but we ought to be consistent : we
peremptorily suppressed the cultivation of the
poppy
70
poppy in the Bengal districts of Rungpore, Pur-
neah^ and Baugulpore, where it had been grown
for ages, and where a permanent settlement of
the revenue had been concluded with the land-
holders^ limiting the public demand, and recog-
nizing all the rights of property on their part ;
and yet we hesitate about doing the same thing
in places where it had not been cultivated beforCj
where no settlement has been made, and where,
consequently^ it is open to the Government to
make any ari-angements they may think proper
with the occupants of the soil. Is not this to
strain at the knat after having swallowed the
camel ? The proceeding in Bengal was arbi-
trary ; but some excuse may be found for it, if, in
addition to the desire naturally felt to preserve an
important branch of revenue, the Government
was influenced by considerations having reference
to objects of police.
The second reason appears to me to be quite
unsatisfactory and inconclusive. It is surely
more easy for us to prevent the illicit manufacture
and exportation of opium, now that nearly the
whole of central and westerh India is under our
direct authority or subject to our influence, than
it was when this territory was held by independent
and even hostile states. Malwa opium was always
exported to a certain extent, from the western
side of India, and a small quantity might still find
its
n
its way to the sea through the Portuguese ports
of Diu and Damaun, but it would be in our
power to render that quantity very small, and its
price very high, either by the imposition of high
transit duties, or by declaring the article contra-
band. This is not an expedient perfectly satisfac-
tory to the mind ; but the principle and the prac-
tice are recognised and have been long enforced
by the enlightened Government of Great Britain,
against those fearful articles, French lace, China
crape, and Indian brocades.
Under these circumstances we must, J fear,
look for the true explanation of our measures, in
the desire felt by the Government to establish in
Malwa the same profitable monopoly which we
have succeeded in establishing in Bengal ; but I
apprehend that the expectation will be disap-
pointed. Whether the monopoly in itself be
justifiable or not in principle, it is not for me to
decide ; but viewed only as an instrument of tax-
ation, I must contend that the means which have
lately been pursued for its extension, are calcu-
lated to produce effects the very reverse of those
contemplated, and that far from looking to any
improvement, the experiment, if persevered in for
two or three years, will end in the destruction of
the present revenue.*
Another
* The receipts in 1822-23 and 1823-^i will, however, be very
large, as there was an arrear outstanding of Sicca Rupees 34,76,000,
Another disadvantage has attended our opera-
tions in Malwa : under the very judicious arrange-
ments which had been for some time in operation,
a considerable gain by exchange had been derived
by the Government, on the very large supplies
annually furnished from Bengal in aid of the
limited resources of Bombay ; but in consequence
of the enormous sum required for the provision
of the Malv^a opium, the agent has been allowed
to negotiate bills on Calcutta and its dependen-
cies, to an extent exceeding what the trade could
supply ; his bills have come into competition with
those of the Bombay Government, and instead of
gaining, as heretofore, a difference of exchange of
not less than eight per cent., a loss is likely now to
be sustained on our remittances to the western
parts of India.
Every thing had been so well regulated that the
Government of India gained invariably upon
almost all its exchange transactions, and the
difference of exchange had become no insignifi-
cant source of income; butlobserve, with regret,
that even our rennttances to China have not of
late
on th« 30th April 1822, and the' prices continued high in 1822-23.
They have now fallen, and will, I fear, continue to fall. The revenue
of 1824-5 from the Bengal opium is not expected to exceed Sicca
Rupees 72,00,000 on Rupees 56,70,000 below the actual receipts of
1822-23; and even this reduced revenue will not be realized, if we
continue to encourage the production of opium in Malwa.
73
late been effected with the same advantage as
heretofore. In the course of the last year a large
remittance was made from Calcutta to Canton in
specie ; but as it was composed of the coins of
Bengal (the Spanish dollar not being procurable
probably in sufficient quantity)^ and as those
coins would not answer the purposes of the supra-
cargoeSj the money has been sent back through a
private house of business^ and a loss is likely to
be sustained by the Company in freight^, insur-
ance (or risk), interest^ and the charges of
agency^ to the extent of not less than ten or twelve
per cent. The very circumstance of. the supra-
cargoes calling for a remittance in specie, shews
that the exchange had fallen, or was expected to
fall, and the fact is corroborated by late advices
from Canton.
Sayer, or Excise, including the Abkarry, or Tax
on Spirituous Liquors and intoxicating Drugs.
The sayer will be taken next in order, as the
abkarry, which constitutes the principal branch
of it, bears some affinity to the tax on opium in
one of its features.
The abkarry was established by us upon a
regular footing, partly with a view to objects of
police, and partly for the purpose of drawing a
revenue, at the same time that we discouraged
and checked the bad habits of our native subjects.
L It
74
It was imagined that we should diminish the use
of fermented liquors and drugs, by rendering the
article more expensive to the consumer ; and
that we should, also, by licensing the shops for its
sale, have it in our power to maintain a more
effectual controul over the haunts of depredators
and other ill disposed persons, accustomed to
disturb the peace and good order of society.
In both these speculations we have, I fe^r,
been disappointed, and had we looked a little
deeper into human nature, we might, perhaps,
originally have come to a different conclusion.
The use of spirituous liquors and drugs by the
natives has increased, and is still increasing, and
with it, I apprehend, their vices. In India, habits
of intoxication are not regarded as they are in
some other countries, with indulgence and even
favour ; they are revolting to all the feelings of the
people, and to all their notions of propriety ; and
the Hindoo^ who once addicts himself to drinking,
must be content to take a very low place in the
scale of society : in truth, the practice prevails
only among the lower orders both of Hindoos and
Mussulmans ; and if a few individuals at the*
opposite extremity of the scale should addict
themselves to it, the gratification is indulged in
private, for no person, at all scrupulous about cha-
racter, would expose himself to the certainty of
forfeiting the esteem of his countrymen by pub-
licly
75
licly manifesting a disregard of all their feelings
and prejudices.
In the Hindoo Zemindary of Nuddeah I have
heard that not a single shop existed until we
licensed the vend of spirituous liquors and drugs ;
and at present not a village in it could probably
be pointed out, in which such a shop wouhl not be
found. Men used spirits, no doubt, in former times,
and the lowest classes largely in some places ; but
while they did so in private, the evil did not ex-
tend so far. The license of government gave a
sort of public sanction to the practice, and the
disgrace incurred by individuals, was diminished
by being participated with their rulers. The in-
crease which has taken place in the Abkarry, is
not perhaps in itself sufficient to justify me in
asserting that habits of intoxication have become
more generally prevalent ; but such is the received
opinion, and it is quite certain that among the
Hindoos, such habits must have a very prejudicial
effect upon the morals and social condition of that
people.
It w^as, also, I fear, a miscalculation to assume
that the police could exercise a more efficient
superintendence over persons of bad character, in
consequence of our licensing '' Public Houses.'*
The '' Abkars/' or publicans, are themselves peo-
ple of very low caste and condition in India ; it
is their interest to have customers, and they would
L 2 not
76
not long retain customers if they habitually be-
trayed them. Public houses are the usual resort of
the idle and dissolute, and a convenient rendezvous
for those who meditate felonious designs which
must be executed by the concert of numbers.
Drinking is often the prelude, and the incentive
to their crimes ; men drink that they may rob,
and rob that they may drink : gaming, if not a
kindred vice, is not unfrequently associated with
drinking ; and both exercise a baneful influence
by inflaming the passions, by lowering the tone
of character, and rendering the fortunes of men
desperate.
It was equally a miscalculation to assume that
the use of spirituous liquors would be diminished
by enhancing the price of the article by means of
taxation. The materials for intoxication are every-
where to be found in India, at so cheap a rate,
that the duty can produce no sensible effect. If
it be moderate, it will not be felt ; if it be very
high, it can be, and will be, evaded.
What then remains to be done ? Can we retrace
our steps ? I fear not, for when a habit is once
established among a people^ it is extremely diffi-
cult to eradicate it. We could not now, without
great violence, abolish our abkarry system ; but
we might have refrained from supplying (as we
have done lately) a large quantity of opium for
our domestic consumption, since this article is a
powerful
77
powerful ingredient in the different preparations
which are made for producing intoxication.
The abkarry will probably continue to increase ;
but it iSj I thinkj to be regretted that it was ever
made an object of revenue by the British Govern-
ment.
1 shall only notice, and that very slightly, one
other branch of the sayer, or excise ; I mean the
duty levied on pilgrims resorting to the temples of
Jagurnath, Gya, and other places.
This tax does not harmonize^ 1 think, with the
character of a great and liberal government ; and
our interference in the internal management of the
temple at Jagurnath, can scarcely be, considered
judicious or respectable. It was intended, how-
ever, to prevent fraud and imposition, and to
guard the pilgrims against violence and extortion ;
but such interference has not been found neces-
sary at Gya, and, if not necessary, it is undoubt-
edly to be avoided : I own, at the same time,
that, although wishing to see the tax abolished,
I cannot enter into the feelings of some worthy
persons in this country, who regard it with as
much horror, as if they were the identical Hindoos
who are the immediate objects of it.
I may observe, generally, in this place, that an
excise* is not suited to the situation and habits of
the
* The sayer gungeaut, abolished by Lord Cornwallis, was a species
of excise to which the natives had been long familiarized, but it was
78
the people of India. It requires a multiplicity of
officers for its collection ; these officers, receiving
very small allowances, cannot be depended upon ;
personal oppression would often be committed ;
thepower of visiting dwelling-houses is everywhere
odious: but, in India, where the female apartments
cannot be entered without inflicting disgrace,
such a power would be viewed with horror and
detestation, and might be exercised to effect the
worst purposes. Moreover, commodities which,
might be judged proper objects of the excise, are
found in such scanty quantity, or so widely dis-
persed, that a revenue could not be drawn from
them without entailing a charge quite dispropor-
tionate, nor without subjecting the people to
grievous vexations.
Tobacco is an article which promised better than
any other, because it is one of general consump-
tion ; and several projects have, at different times,
been entertained for subjecting it to an excise;
but
a vexatious imposition. It consisted of duties levied in gunges,
hauts, and bazaars (fairs, markets, &c.), on the sale of all commo-
dities, partly as rent and partly to defray the expense of providing
sheds, stalls, and other accommodations. One disadvantage attended
the abolition ; the gunges were neglected and fell into decay, and
buyers and sellers, who have an interest in meeting together, being
deprived of the accustomed accommodations, did not resort to those
places so generally as heretofore. The " rahdarry," or transit
duty, was very properly abolished as vexatious and injurious to
commerce.
79
but the objections to which 1 have adverted, were
considered to be decisive against it, although I
have learnt, with regret^ that the project of taxing
it^ has lately been resumed. It is an article which
is usually grown in garden-ground, adjoining the
habitations of the natives; and as they can thus
supply themselves at their very doors^ it could not
be brought under an excise without a heavy ex-
pense, nor without subjecting the growers and
consumers to an inquisitorial power, which would
be perfectly intolerable.
Attempts have been made to introduce some
other taxes of an objectionable character, (the
house tax, shop tax, &c.) ; but as they were found
to be unpopular, the good sense and proper feehng
of the Goverment induced them to give way, and
to withdraw the obnoxious impost, before it pro-
duced, as it threatened to do, a serious ferment
and popular commotion.
THE STAMPS.
This is a tax of European origin, and Jittle
suitable to the character and habits of our native
subjects. It is very expensive in collection (one
of the tests of a bad tax) ; it is extremely vex-
atious, and it holds out great temptations to
fraud from the ease with which the stamps can be
imitated.
80
imitated, and from the ignorance of the people
who are compelled to use them.
This immoral tendency ought especially to be
guarded against in fiscal legislation, for, although
the individual who will evade a tax, or defraud the
revenue with little scruple, will not always de-
fraud his neighbour, it is dangerous to shake the
moral principle, since men who begin by com-
mitting what they consider (however erroneously)
venial trespasses, are decidedly on a road which
may conduct them to more serious offences. A
tax, moreover, which can be easily evaded operates
injuriously towards the fair dealer ; and a tax
which admits of impositions upon the ignorant
and unwary, by throwing doubts over all contracts
and commercial transactions, is liable to very
serious objections.
The stamps, too, were superadded to other
taxes : the individual who had to pay customs
was called upon at the same time to pay for a
stamp ; he who had to deposit a judicial fee on
entering his suit, was also required to add to it
the price of a stamp. Now, one direct tax is
surely enough at a time ; and it certainly tended
little to the credit of our Government to send away
an ignorant native, several miles perhaps, in search
of a stamp, before he was allowed to present a
petition. This ground of reproach has, I believe,
been removed.
This
81
The stamp duties made little progress for
several years after their institution^ but they have
lately advanced more rapidly ; and if we could
be satisfied that their increase is fairly to be
ascribed to the increasini^ wealth of the people,
and not to the imposition of higher rates, to
their extension to new objects, or to the
stricter enforcement of revenue laws, there would
be something to reconcile us to the conti-
nuance of the tax. The following is a memo-
randum of the receipts and charges in the last
three years.
BENGAL STAMP DUTIES.
Receipts. Charges.
1819-20 Ct.Rs. 14,61,280 Ct. Rs. 6,51,610
1820-21 15,08,971 6,51,446
1821-22 *15,14,992 6,16,916
Per Estimate.
1822-23 21,57,600 5,80,000
FORT
* In Account No. 1, page 6, of the last printed statements (bear-
ing date May 1824) the stamps in 1821-22 are stated at Current
Rupees 15,14,992 : and in Account No. 9, page 22, of the same
series of statements, they are stated at Sicca Rupees 18,40,843, or
Cur7'ent Rupees 21,35,377. This difference arises from the omission
of the Stamp Revenue of the " Ceded and Conquered Provinces '*
in Account No. 1, which is prepared in this country. It would, how*
ever, in my opinion, have been much better if the Bengal arrangement
had been adhered to: 1st. Because the whole Stamp Revenue ap-
pears in one sum in the Bengal account, whereas in the English
yi account
82
FORT ST. GEORGE STAMP DUTIES.
Receipts. Charges.
1819-20 ... Pcigudas 1,29,797 ... Pagodas 8,909
1820-21 1,55,607..... 24,379
1821-22 1,61,859 24,801
Per Estimate.
1822-23 1,43,916 21,235
BOMBAY STAMP DUTIES.
1819-20 Rupees 1,59,717 ^^i
1820-21 1,42,898 ^.s I
1821-22 1,79,026 l| I
Per Estimate. ^M ^
1822-23.... 1,65,000 g|i
It will iaimediately strike those who have given
attention to the principles of taxation, that the
high rate of charge^ which in Bengal has hitherto
absorbed a large portion of the collections, con-
stitutes a great objection to the stamp duties. It
is improvident in any Government to take £15
from
account we can only discover a part, the remainder being incorpo-
rated with the Land Revenue. 2dly. Because in the English account
a part of the revenue stands opposed to the whole charge, unless,
indeed, the charge of the stamps in " the Ceded and Conquered
Provinces " be also incorporated (which is not probable) with the
charge of the Land Revenue ; and, lastly, because the two accounts
ought to be made to correspond, unless there be some strong reason
for a deviation, which assuredly cannot be alleged in the present
instance. Such discrepancies produce doubt, whereas the Company's
accounts are entitled generally to the fullest confidence, for they are
prepared by men of high character and great professional knowledge.
83
from the pockets of the subject, when only ^9 of
the amount* comes into the public exchequer ;
and althoutrh it would appear from the estimate of
1822-23^ that the disproportion of the charge to
the revenue is expected to be less hereafter^ I
cannot bring myself to regard the stamps as an
economical tax, nor as one which can be consi-
dered free from other objections.
THE CUSTOMS.
It is gratifying always when we find the cus-
toms prosperous and improving, because from
their healthful condition we may generally infer
that the bounteous gifts of nature, and the works
of human industry and skill, are freely distributed
among the sons of man. Their productiveness is
also in general an indication of wisdom and mo-
deration on the part of the Government, for it
rarely
* Receipts in 1821-22, say in round numbers 15,00,000
Deduct charge ditto 6,00,000
Net Revenue 9,00,000
The charge of 6,00,000 on 9,00,000 is equal to 66f per cent. But
I suspect (as intimated in the preceding note) that the sum of 6,00,000,
is the total charge n^on the total revenue o^Cnnent Rupees 21,35,377,
and, in this case, the rate of charge will be reduced to about 28 per
cent.
M 2
84
rarely happens that excessive duties produce a
large revenue.
The great secret of finance is to promote civ-
culation and consumption ; for although in the
natural order of things production must precede
consumption, it is quite certain that if consumers
be found, and no interruptions to the circulation
of commodities be interposed, production will
take place. But what avails it to France that
the banks of the Seine are covered with the fruits
of her vineyards, if they cannot find a purchaser?
Her light wines, however grateful they would be
to the taste of our people, are nearly excluded
from this country by disproportionate duties, and
this interdiction virtually excludes from France
our hardware, our beautiful cottons, and other
articles, which would be highly appreciated by her
population. fVe cannot urge the plea of having
rival manufactures to protect, for throughout the
wide extent of our dominion we do not make a
single hogshead of wine from the juice of the
grape, except at the Cape of Good Hope. France
has cotton manufactures^ but our capital and our
machinery would enable us to supply a part of
her large consumption with advantage to both
parties, if we were content to receive her wines in
exchange. As the dawn of a more liberal policy
has lately appeared in our councils, we may
indulge
85
indulge a hope that the experiment* will be
made, and that commercial interests, which are
always favourable to peace, will tend to check
hereafter those military and political feelings,
which have so often involved the two countries in
unprofitable warfare.
The manufactures of India have had to struggle
of late years against desperate odds, and the pow-
ers of machinery threaten soon to annihilate them
altogether. It would be idle in the people of
that country to complain of the introduction of
machinery, which must be regarded as one of the
great improvements of the age, and it would be
not less so to attempt to counteract its effects by
bounties and protecting duties, even if India
possessed the power to legislate for herself. But
our Indian subjects have just cause to complain
of being treated as aliens in our system of com-
mercial policy ; and if the stream of wealth which
has flowed into the mother country should become
languid, or altogether fail, it will be no more than
the natural result of those restrictive measures
which seem to say, *' you shall not produce, either
for our benefit or your own.'* The people of
India are British subjects, and they have claims
to
* Since these pages were written, the Chancellor of the Exchequer
has proposed a large reduction in the duties on French wines, and I
congratulate him and the country on the wisdom of the measur?.
86
to something beyond the privilege of paying
twenty-two millions sterling in annual re-
venue.
The Government abroad has always been at-
tentive to the interests of commerce^ and has been
solicitous to promote the external trade of the
country. The customs^ both on imports and ex-
ports^ are moderate^ seldom exceeding five per
cent, ad valorem^ with double rates on foreign
bottoms, or on foreign produce. We cannot, in
the first instance, levy duties on the foreign trade,
which passes the port of Calcutta to the settle-
ments of Chinsurah,* Chandernagore, and Se-
rampore, the river being free and open to them ;
but, by a sort of fiction, we treat those places as
ports beyond sea ; and, in order that the merchants
frequenting them may not enjoy an exemption
from the customs, we levy the import duty on all
commodities coming from thence into our terri-
tory, and the export duty on goods passing from
our territory to the foreign settlements. Their
own consumption of articles imported from be-
yond sea, of course, escapes the tax.
At
* Chinsurah has now been ceded to us by the Dutch ; but it is
much to be regretted that these small settlements were restored at
the peace. They are the source of inconvenience to us, without
being the source of advantage to their possessors. The same may
be said of the Portuguese settlements of Diu and Damaun, and even
of Goa on the Malabar coast.
87
At a period not very remote^ the customs were
levied in almost every district in our western pro-
vinceSj and goods proceeding from the Jumna to
the Presidency, paid duties repeatedly in transitu^
and were repeatedly detained for examination ;
but this system, which caused great embarrass-
ment, delay, and expense to the merchant, has
since been corrected. Town duties are still col-
lected in the cities and principal towns as a means
of taxing the consumption of those places ; but
as they are generally the resort of the more opu-
lent, the tax is not, I think, justly liable to objec-
tions.
Under the circumstances in which British India
is now placed, with her manufactures in a state of
decay, and her trade to the mother country la-
bouring under restrictions, it would not have
been surprising if the customs had declined ; but
it will be satisfactory to find from the following
abstract that this is not the case.
BENGAL CUSTOMS (ancient Territory).
Receipts. Charges.
1819-20 Ct. Rs. 42,77,870 Ct.Rs. 5,81,589
1820-21 44,48,417 5,89,846
1821-22 47,90,014 7.06,651
BENGAL CUSTOMS, including the " Ceded and
Conquered Provinces."
1819-20 Ct.Rs. 73,82,537... Ct. Rs. 10,41,337
1820-21 82,48,810 10,77,567
1821-22 84,74,496 12,01,932
MADRAS
88
MADRAS CUSTOMS (ancient Territory).
Receipts. Charges.
1819-90 ... Pagodas 4,54,282 ... Pagodas 1,27,145
182021 4,61,624 1,38,062
1821-22 5,66,101 1,74,395
The customs collected under the Madras Presi-
dency^ in the territory more recently acquired
by us^ appear also to have increased gradually^
and they amounted in 1821-22 to the sum of
Rupees 35,37^878. The customs at the port of
Bombay appear to have been nearly stationary
for several years.
In 1816-17 they amounted to Rupees 9,82,001
And in 1821-22 to 10,28,624
There has^ however, been a considerable aug-
mentation of territory at Bombay, in consequence
of the favourable termination of the late war
with the Peishwa ; and the customs under this
Presidency niay now be stated as follow : —
Total collections in 1816-17, prior to the
late acquisitions Rupees 15,35,290
Collections in 1821-22 34,33,708
It is scarcely necessary for me to mention that,
in the observations which I have offered on the
different branches of our revenue^ I have had
more especially in view the Presidency of Bengal,
where 1 was myself employed ; but, in truth, this
is
89
is the great mine of our wealth. The revenues
of Port St. George scarcely do more than defray
the charge of the civil and military establish-
ments^ the surplus at that Presidency^ even dur-
ing peace^ having rarely exceeded the sum of
£300,000. At Bombay there has been always
a considerable deficit, which was supplied from
the surplus resources of Bengal. In 1816-17,
prior to the commencement of the late war,
it amounted to £1,042,056; but in conse-
quence of our recent acquisitions, the deficit
has been reduced, in 1821-22, to the sum of
£754,154.
In addition to the branches of revenue already
enumerated, there are receipts at the different
Presidencies from various less important sources.
Peishcush, or tribute, from independent chiefs ;
mint duties ; post-office collections, &c. &c. ;
but these did not appear to me to call for
explanation. 1 have, indeed, avoided, as far as
possible, all unnecessary details, which would
only have taxed unprofitably the attention of the
reader. My object has been to give a slight
sketch of the sources of our reveime ; to exa-
mine, in a cursory manner, how far the dilFerent
branches of it are reconcileable with sound prin-
ciples of policy ; and to ascertain, from this exa-
mination, how far we may, with confidence, rely
upon their permanency, and upon their contain-
N ing
90
ing within them the seeds of future improvement.
The chief branch of our revenue still remains to
be noticed ; and it is one which demands a dis-
tinct and a more deliberate consideration.
CHAPTER in.
LAND REVENUE OF INDIA.
I HAVE already observed that the land has^ for
ages, constituted the chief source of revenue in
India^ and I have endeavoured to explain the cir-
cumstances which have led to the adoption of
this particular mode of taxation.
Prior to the administration of Lord Cornwallis,
the land revenue had usually been let out to farm,
sometimes for a single year, and sometimes for a
period of five years ; and occasionally whole dis-
tricts were leased out to a single individual. In
other instances, what is termed '' Khas" manage-
ment, was resorted to ; that is, the European col-
lector of a district, by means of the agency of
native officers, collected the rents directly from
the village communities, or individual occupants
of the soil : and in both cases the rule seems to
have been, to levy the utmost which the land
would yield, without actually compelling the pea-
santry to desert their fields and homes.
This vicious system, which prevented the pro-
gress of cultivation, which had already impove-
N 2 ' rished
92
rished the country, and which threatened to reduce
it to a state of irretrievable poverty and ruin,*
soon attracted the notice of Lord Cornwallis ;
and after a long, patient, and able discussion, that
upright statesman was convinced that considera-
tions of justice, o[ humanity, and policy, all con-
curred to render a total change of plan abso-
lutely necessary.
The revenue system, to which the just views
of Lord Cornwallis disposed him to give a prefe-
rence, involved questions of some difficulty. We
were, at the time, imperfectly acquainted with the
state of the country ; our information with re-
spect to the tenures under which the lands were
held was incomplete ; and we had not decided
in whom the right of property in the land actu-
ally vested. The Zemindars (literally landhold-
ers) were generally supposed to be the proprie-
tors,
♦ The following just description of the farming system is given in
a letter from the Court of Directors, bearing date the 29th January
1813. " We observe that the revenue of a considerable proportion
" of the lands, both in Etawah and Allighur, has been let in farm :
" a system which, wherever it has obtained, experience has shewn to
" be productive of fatal effects. It was this system which ruined
" the Carnatic under the late Nabobs; and we fear that all the
" modifications which may be applied to it under a British adminis-
" tration, will fail in preventing its pernicious effects, &c. &c."
See " Revenue Selections," page 76. I need not refer to the exag-
gerated description of the farming system given at the trial of Mr.
Hastings, but it is notorious that it was productive of the most
serious evils in Bengal, as well as in the Carnatic.
93
tors, partly from their Persian designation, and
partly from their being fonnd more generally in
possession ; but it was maintained on the other
hand, that these persons were mere officers of
government, and that, according both to theory
and usage, the sovereign, as lord paramount,
possessed a right to a certain portion of the pro-
duce of every acre of land : others contended,
that the Malicks, or village zemindars, were the
rightful proprietors; and others, again, that no
right of property could be traced beyond the
ryot (or husbandman), the heads of villages, or
the village community^ who cultivated the land
in common.
It would be quite out of place were 1 to renew
the discussion of a question, which is only inci-
dentally connected with my subject, and which,
as far as it regards the Bengal settlement, has
been set at rest. I could not indeed pretend to
throw any new light on what has been written on
the landed tenures of India. The rights of the
zemindars were contested by persons of high
authority ; but Lord Cornwallis, who naturally
revolted at the extravagant proposition of the
sovereign being the universal landlord, at once
cut the knot, by deciding, that if landholders did
notexist, they ought to exist, and must be created ;
and as a consequence of this determination the
zemindars, whose connexion with the land was
more
94
inore immediate and apparent^ were recognized
by our Government as the proprietors of the soil ;
a reservation bein*^ expressly made at the same
time in favour of the rights of any other parties,
who^ by virtue of prescriptive usage or otherwise,
might be able subsequently to establish an inte-
rest'in the land.
That in assigning the lands, in the first instance,
generally and indiscriminately to the zemindars,
we may have overlooked the situation of other
parties, having equal or superior claims, I am
not prepared to deny ; nor can I deny that we
may have attempted to reconcile things incom-
patible, by admitting a full right of property on
the part of the zemindars, while we endeavoured
at the same time to limit their demands for rent,
and to preserve the right of occupancy to their
ryots and under tenants. It must, moreover, be
conceded, that Government, in the first instance,
armed itself with more summary powers for col-
lecting its revenue, than it was willing to entrust
to the zemindar for collecting his rent: and the
consequence was that the under tenants succeed-
ing in some cases, by means of combination, in
resisting for a time the demands of the land-
holders, several of the larger and more unma-
nageable estates were brought to sale, and passed
away from the hereditary aristocracy of the coun-
try. They passed, no doubt, into the hatuls of
more
96
more prudent managers, and the subdivision of
these principalities was favourable to the exten-
sion of agriculture ; but still it is to be regretted
that it should have taken place by any severe
operation of our laws ; and^ as frequently happens
in such cases, the anxiety to correct one evil led
to another in the opposite extreme. Regulation
VII. of 1799^ was enacted for the express purpose
of relieving the zemindars : but it invested them
with powers which are liable to be abused, and
which have since been supposed to sanction a great
degree of violence and oppression on their part.
Some minor objections may be urged against
the recognition of the zemindarry right, before we
had accurately ascertained and defined the rights
of the inferior Talookdars, and others, who held
an interest in the land under different tenures ;
but it was considered necessary to take some de-
cided step, and the Government proceeded upon
the assumption, that all questions relating to the
rights of these parties might safely be committed
to the courts of justice. This would have been a
safe and judicious course, if the laws had accurately
defined rights, or if usage could have been safely
referred to as authority, in a country where nothing
had been stable, where no rights had been re-
spected, and where, for a long series of years,
the weak had been more or less at the mercy of
the strong.
The
96
The next question to be decided was, whether
the settlement to be made with the zemuidars
should be concluded for a term of years ? or whe-
ther the Government, limiting its demand upon
the land, should declare the amount to be fixed
in perpetuity ?*
I could not possibly,, by any abridgment, do
justice to the able discussion which took place
between Lord Cornwallis and Mr. Shore (now
Lord Teign mouth) on this important question ;
and 1 shall, therefore, merely mention, that it was
determined by his lordship, after mature delibera-
tion, that the settlement should be declared
permanent ; and that this determination was
approved and confirmed by the authorities in
England, in a letter from the Court of Directors,
bearing date the 29th August 1792,f in which
the principles of the settlement are reviewed with
a spirit of liberality, and with a statesman-like
comprehension, highly honourable to those from
whom it proceeded.
Lord
* The plan of a permanent settlement was first urged upon the
attention of Lord Cornwallis by Mr. Thomas Law, one of a family
highly distinguished in this country in the Law and the Church.
It was urged with characteristic ardour by one, who is an enthusiast
in every thing which concerns the interests of humanity.
f This admirable letter is supposed to have been written under
the immediate dictation of the late Lord Melville , and with the entire
concurrence of the ministry of the day— Mr. Pitt—Lord Grenville,
&c.
97
Lord Wellesley, actuated by similar views of
an enlightened and benevolent policy, enacted cer-
tain regulations in the years 1803 and 1805^ for
the formation of a decennial settlement in the
'' Ceded and Conquered Provinces;''* and in these
regulations a formal pledge was given (subject to
the approval and confirmation of the Court of
Directors), that the settlement would be rendered
permanent in all cases where the cultivation of
the lands shotdd have been sufficiently advanced,
and the landholders should have punctually ful-
filled their eno'ao'ements with the Government
throughout the term of the decennial lease.
The Honourable Court is understood to have
recognized the promise made to the landholders
of the '• Ceded Provinces'' by the regulations of
1803 ; but no such recognition appears to have
been extended, otherwise than by implication, to
the landholders of the '' Conquered Provinces,'*
although, the circumstances of Jhe two cases being
precisely similar, the spirit of the Honourable
Court's instructions applied equally to both.f
Sir
* Regulations xxv, 1803, and ix, 1805.
f This question has been nlost ably examined by Mr. Edmonstone,
in a late minute which unfortunately is not before the public. The
Court of Directors, if they had disapproved of the promise made by
the Supreme Government to the landholders of the Ceded Provinces
in 1803, could scarcely have written as follows on the 28th August
1804: — " As the permanent settlement for these extensive districts is
" not to be carried into execution for ten years, from the coramence-
Q ment
98
Sir George Barlow and the lale Lord Minto,
impressed with a deep conviction of the great
advantages which had resulted from the '' per-
manent settlement," both to the Government and
to the people, were solicitous to extend the
benefit of the measure to the '^ ceded and con-
quered provinces/* evenbefore the expiration of the
decennial leases ; and a board of commissioners
was deputed in 1807, to those provinces, for the
purpose of carrying the arrangement into imme-
diate effect.
Upon grounds, however/ which are fully de-
tailed in a report* from the commissioners, bear-
ing date the 13th April 1808, the expediency of
postponing the measure, except in two particular
instances, was strongly urged to the Government :
it was accordingly suspended for the time ; and
the country continuing from that period under
temporary settlements, an encreasef of Tevenue
has
" ment of the first triennial settlement, there will be full time, under
" the operation of that principle, and during the continuance of the
" respective periods of intermediate settlement, to ascertain their fuU
" value, and for enabling you to conclude a permanent settlement on
" such terms as shall be fair and equitable." — Mr. Edmonstone's ex-
cellent Minute should have put the question at rest for ever.
* See Report in " Revenue Selections," pages 6 to 44, by the
commissioners, Messrs. Cox and Tucker. See also Mr. H. Cole-
brooke's Minute in reply to this Report, pages 44 et seq.
t This encrease is to be ascribed, in a great degree, to the ablg
management of the late commissiouerj, Sir E. Colebrooke and Mr-
• Deane
99
has been obtained^ abundantly sufficient to justify
the delay which had been contended for bv the
commissioners in the first instance.
But the pledge of the Government to grant a
'' permanent settlement'' on the expiration of the
decennial leases, remained in full force ; and if
in any one instance the two conditions of the
pledge were complied with, (and it is matter of
notoriety that •they were complied with in very
many instances^) the benefitbf the measurfe could
not be withheld without an absolute breach of
faith. For the reasons which have caused it to be
so long withheld, 1 must refer to the Honourable
Court's
Deane, and to the indefatigable and successful exertions of some of
the collectors under them, Mr. Trant, Mr. C. Lloyd, Mr. Ross, Mr.
Christian, &c. The following comparison will shew the encrease of
Revenue between 1808 and 1819 : —
1807-8. 1818-19. ' Encrease.
Land Sa. Rs. 2,18,78,040 3,14,9^^,570 96,14,530
Sayer 7,75,920 13,30,420 5,54,500
Customs 14,83,510 29,58,290 14,74,780
Total Sa.Rs...2,41,37,470 3,57,81,280 1,16,43,810
Mr. Trant, by a course of laborious exertion, encreased the reve-
nue of one district in the sum of ^6100,000 per annum, viz.
Bareilly : amount of first triennial settlement in 1 803, Rs. 22,97,588
Mr. Trant's settlement in 1809-10 31,65,495
Encrease Rupees 8,67,907
o 2
100
Court's letter to Bengal, of the 16th March*
1813^ and other official correspondence on the
subject. It has been stated, that it would be in-
convenient to sanction two different kinds of
settlement, permanent in one place, and tempo-
rary in another ; but this objection is not entitled
to the slightest weight, even if considerations of
expediency could be admitted to supersede the
obligations of justice. Mokurrer^ and Istimrary
grants*(perpetual grants at a iixed assessment),
were made not unfrequently by our Mahomedan
predecessors ; and the people throughout our pro-
vinces were familiarized and attached to them,
long before they had before their eyes the '^ per-
manent settlement" concluded by Lord Corn-
wallis in the Bengal districts. If one single
landholder had then complied with our condi-
tions, his claim ought to have been admitted,
and we could have no plea for withholding the
boon, on the ground that his neighbours had not
performed ^AeiV engagements. By conceding /i«s
right, we should not only have done an act of
justice, but we should have encouraged others to
follow^ his salutary example.
It is of importance to all governments that they
should preserve faith with their subjects ; but
situated as we are in India, our dominion resting
in a great degree upon moral influences, it is of
peculiar
t See " Revenue Selections,^' pages 136 et seq.
101
peculiar importance that we should command the
confidence and esteem of the people. By grant-
ing fixed tenures^ and limiting the public demand
upon the land, we give the landholders an interest
in the stability of our Government. This is a
great point gained in any part of our territory ;
but it is more especially desirable and essential to
our security, that such an interest should be ex-
cited in our favour in our western provinces, where
we have an open frontier accessible to our most
formidable enemies, and where we have a brave
and warlike population, ready at all times to ex-
change the ploughshare for the sword.* The
peasantry/ of RohWkund in 1794, boldly encoun-
tered,
' * See Secret Letter fromBengal — " Revenue Selections," page 134,
para. 17. " It is under circumsta^jces, such as we have just stated,
" that we are commanded to announce to the great body of the
" people, that tha permanency of the Jumraa no longer exists. The
" assurances given to the landholders.in the years 1803 and 1805, and
" which for the reasons already stated, we consider to be in full
" force and effect, may, in some degree, alleviate the disappointment
" which must be experienced from the operation of the present
" orders. Still it is impossible to judge, a priori, of the effects with
" which that disappointment may be attended. It is a feeling which
** is nearly allied to discontent ; and when these impressions are felt
" in any considerable degree, resistance to public authority is always
" to be apprehended. The people have furnished on affairs of com-
" paratively small and trivial interest, examples of a disposition to
" assist their wishes by tumult and outrage. A more powerful in-
"* citement to seek redress by combination and violence, cannot be
" given in any country, and cannot extend to a larger and more
" powerfiil class of the community than injustice supposed to be
" done to the great body of landed proprietors."
tered, and nearly defeated, a large army of regu-
lars, under the personal command of a gallant and
experienced officer.*
The public authorities in Bengal, with scarcely
an exception, have all concurred in the propriety
of redeeming our pledge to the landholders of
the " Ceded and Conquered Provinces,'' both on
grounds of justice and of policy. We have had
the country under our management for twenty
years, and have become acquainted with its situ-
ation and resources ; those resources have been
gradually developed and improved ; and we have
been enabled, in consequence, to add above a
million sterling to our annual revenue ; and we
have had, at the same time, an opportunity of
acquiring better information with respect to the
nature of the tenures und other circumstances,
which it was necessary to ascertain, in order that
we might not compromise the right's of different
parties, whose interests might be aiiected by the
settlement.
The Court of Directors do not, I believe, pro-
fess to be solicitous to augment the ample reve-
nue which is, at present, derived from the '' Ceded
and Conquered Provinces;" and few persons will
iiow be found so visionary as to fancy that per-
fect equality in the assessment, even if it were
practicable in the first instance, and absolutely
essential
* Sir Robert Abercrombie, Comraander-in-Chief in India.
103
essential at any time^ could long be preserved in
a country, where changes in the course of agri-
culture and of connmerce, must necessarily occa-
sion variations in the value of agricultural pro-
ductions. In a particular estate, the introduc-
tion of the cultivation of Indigo alone, may
double the value of the produce ; while in a
neighbouring zemindarry, originally of equal
value, some unfavourable change may take place
to reduce its natural resources.
Still, there are persons who, witnessing the
flourishing condition of the Bengal provinces,
and knowing that the rents and income of the
Zemindars have, in many instances, been immo-
derately encreased, seem disposed to impute to
Lord Cornwallis an improvident sacrifice of the
public revenue. The inference is as gratuitous,
as the imputation is unjust. The prosperity of
the country and the growing opulence of the ze-
mindars, are the happy effects of the '' perma-
nent settlement/'
Those effects would probably never have been
produced, if the settlement had never been made.
Secure to man the produce of his industry, and
he will be industrious. Provide for the security
of his property, and it will be embarked in works
of public utility^ advantageo.us to the individual,
and beneficial to the community at larrge. But
if the deadly hand of the tax-gatherer perpe-
tually
104
ually hover over the land and threaten to grasp
that which is not yet called into existence^ its
benumbing- influence must be fatal, and the fruits
of the earth will be stifled in the very germ.
Lord Cornwallis was the benefactor* of British
India^ and the '' permanent settlement" is^ per-
hapSj '' the noblest monument of a just and
'•' liberal policy, which was ever erected in a
'' conquered country." But we must not look
to this great measure as the sole and exclusive
source of the prosperity of our Bengal provinces.
Lord Cornwallis did not stop here ; he introduced
sound principles, and a just system of revenue
administration.
1st. He separated the revenue and judicial
authorities, and thus put an end to that mono-
poly of power, which not only leads to abuse,
but which tends at the same time to secure to it
impunity.
2dly. He established independent courts^ to
whose
* Lord Cornwallis did almost as much for British India as General
Washington for America ; and, I fancy, strong points of resemblance
between these eminent personages : they possessed alike dignity of
character united with simplicity of manners and habits ; firmness of
purpose; undeviating rectitude ; disinterestedness; prudence; mode-
ration ; patriotism. The difference between them may be referred to
the circumstances of their birth. Had those circumstances been
reversed, Lord Cornwallis would probaSly have been the leader of a
republican army, and General Washington the pride of the British
peerage and a pillar of the throne.
105
whose jurisdiction both the government and its
officers were made amenable for all official acts.
3dly. He established a code of regulations,
which supplied a rule of conduct to the public offi-
cers ; which assured personal freedom and protec-
tion to our native subjects; which explained in
every case the reason for the enactment; which
softened and corrected the barbarisms* of the Ma-
homedan law ; and which, however immature and
imperfect, must be regarded as a great advance
in the difficult science of legislation from a state
approaching to anarchy, and the absence of all
law.
Lastly, he assigned to the officers of govern-
ment
* For example. The punishment of mutilation was abolished, and
the heir of the slain was deprived of the right of making his election
between " D^eM^'* and " Kissaa«" — (the price of blood, or retalia-
tion). The government of India is often reproached for having sub-
verted tbe native institutions; but those who prefer the ^charge, have
seldom been at the pains to specify the institutions which have been
displaced, or superseded. Lord Cornwallis, it is true, abolished the
office of hereditary canoongo (an office for recording grants, titles,
usages, boundary lines, revenue accounts, &c.) ; and this was, I think,
a mistake. The office had become corrupt, and had fallen into disre-
pute ; but it would have been more prudent if we had endeavoured
to reform its abuses, instead of sweeping it away altogether. The
registry, which was established as a substitute for it, was found quite
inefficient ; and existed, indeed, only in the regulations. My colleague
(Mr. Cox), and myself proposed the continuance of the office in the
western provinces ; and, at a subsequent period, its re-establishment
in Bengal, in a modified shape. It has since been revived.
P
lOG
ment fair and liberal allowances, which placed
them above temptation ; which took away every
plea and excuse for peculation ; and which^ by
rendering the service independent and respecta-
ble, raised its character, inspired it with a higher
tone of feeling, and secured our native subjects,
as far as this can be done by such means, against
official malversation.
These are among the solid benefits conferred
by Lord Cornwallis on the people of Bengal. It
is not attempted to conceal that the '' perma-
nent settlement " may have been open to objec-
tions. To the natives of India, within whose
narrow horizon every thing had hitherto an-
nounced uncertainty, and an evanescent exist-
ence, leases for a term of twenty or twenty-one
years, or for the lives of the incumbents, would,
probably, have been received with nearly the
same sentiments as a perpetuity ; and such leases
as preparatory to a permanent settlement would,
no doubt, have furnished an opportunity for cor-
recting gross inequalities in the assessment. It
might also, perhaps, have been practicable to
secure the proprietors of the unwieldy zemindar-
ries against the consequences of that improvi-
dence and dissipation, which their early educa-
tion and acquired habits were likely to produce ;
and if the antient families could have been pre-
served
107
served in their possessions* by any safe and un-
objectionable means, the credit of the British Go-
vernment would certainly have been raised in
the eyes of the people. But with all its imperfec-
tions/real or imputed, the '^permanent settle-
ment/' as the source of genuine good, stands
unrivalled among all the measures of our admi-
nistration in India. By limiting the demand of
the exchequer, the residuary produce of industry
became a property, and the labour of the country
was stimulated into active employment. A wil-
derness, as if by magic, was converted into a
garden ;f capital was created ; the surplus pro-
duce
* The zemindarry of Burdwan, paying an annual revenue to go-
vernment of ^£400,000, remains entire, I believe, to the present day.
The zemindarries next in extent, and equal at least in antiquity (those
of Rajeshahy andNuddeah), have both, I fear, been broken down, and
sold ; but certainly not as a consequence of over-assessment. Some
of the estates of more moderate extent (such as that of Tikarry in
Bahar), which were of little value before the assessment was fixed,
yield at present princely incomes to their proprietors ; and we ought
to rejoice at this, instead of regretting the supposed sacrifice of reve-
nue. There is reason, perhaps, for regret, that the estates which have
been sold, had not been sequestrated for a time, by which means they
might have been preserved to the ancient proprietors.
f The change in the state of our Bengal provinces within the last
thirty years, is so much matter of notoriety, that it would be quite
superfluous to adduce written evidence of the extraordinary improve-
ment which has taken place. Many of us have witnessed it with our
own eyes. Nor is it necessary for me to insist that the revenue is
now collected with ease and with scarcely the fraction of a balance;
whereas, heretofore, the collections were made with great severity,
P 2 and
108
duce of the soil was preserved ; and the abun-
dance of one province^ or of one season^ supplied
the deficiencies of another. Famine, that scourge
of a numerous population, has been averted, as
far as it can be averted by human means ; and
during a period of thirty-five years, in which
unfavourable seasons and deficient harvests have
certainly been experienced, Bengal has not only
enjoyed plenty at home, but has assisted largely
in supplying the wants of other countries.
I now come to the consideration of a measure
of a totally different complexion.
While the plan of a permanent settlement was
popular in Etigland^ steps had been taken to ex-
tend its benefits to the territory under the govern-
ment of Fort St. George, and considerable pro-
gress had been made in introducing it into the
districts under that Presidency ; but at a subse-
quent period, an entire change of sentiment ap-
pears unfortunately to have taken place, both in
the Court of Directors and at the Board of Con-
trol ;* and, instead of prosecuting to a conclu-
sion
and the balances at the end of every year were considerable. More-
over, periodical settlements were the never-failing source of periodi-
cal corruption and abuse.
* I might also add in Parliament, if the 5th Report of a Com-
mittee of the House of Commons, which was drawn up by two
individuals, highly respectable and estimable, but altogether uncon-
nected with that Body, can be supposed to have expressed the sense
of Parliament.
109
sion the undertaking which had been commenced^
there was a disposition to trace back our steps,, to
undo what had been done^ and even to purchase
upon account of government, those estates in
which the settlement had been actually concluded
in perpetuity.
I am unwilling to believe that this change had
any connection with a design or wish to encrease
the public revenue; and if any such expectation
were cherished, it has certainly been disappointed.
Novel doctrines were, in fact, brought forward,
which impeached the principle of the settlement •
and a system of revenue administration was
recommended to a preference, on various grounds ;
but chiefly on an assumption that it harmonized
better with the habits and dispositions of our
native subjects, and was more in accordance with
the usages and institutions of the country.
This plan of management, which is now fami-
liarly known as the '' Rj/otwar system,'' found
an able, intelligent, and zealous advocate in Sir
Thomas Munro, the present governor of Fort St.
George ; and in delineating its character, I pro-
pose, as far as possible, to use his own words,
while, in offering my own free comments upon
the merits of the system, 1 hope not to deviate
from the respect which is due to such high au-
thority.
Sir T. Munro advances the following singular
pro-
no
proposition ; and, startling as the dictum* may
appear, it was a necessary preliminary to clear
the ground for the structure intended to be
erected.
" But nothing can be plainer than that private
'' landed property has never existed in India,
'' excepting on the Malabar coast ; and that,
" therefore, in all other districts, the share of
'' the produce which ought to constitute the rent
^' to Government, must be determined rather by
'' opinion than by experience/'f Again : '' In
'" the Ceded Districts and throughout the Dec-
" can, the Ryot has little or no property in land ;
*' he has no possessory right : he does not even
'^ claim it ; he is so far from asserting either a
'' proprietory or possessory right, that he is
'' always ready to relinquish his land and take
*' some other which he supposes is lighter as-
" sessed. All land is supposed to revert to Go-
'' vernment at the end of every year, to be dis-
"' tributed
* I find this dictum quoted, and most satisfactorily controverted
by a writer for whom I have the greatest respect. See History of
the South of India, by Col. M. Wilks, vol. 1, pages 105 et seq.
The whole of Chapter 5, containing a dissertation on the Landed
Property of India, claims particular attention. It did not occur to
me to look into this valuable treatise, until I had finished these
pages J but I have had the satisfaction to find my opinion, with
respect to the existence of private property in land in India, com-
pletely confirmed.
f See " Revenue Selections," pages 95 and 102.
Ill
'' tributed as it may Ibink proper ; and land is
'" accordingly sometimes taken from one ryot
" and given to another^ who is willing to pay a
'' higher rent. If this power is exercised with
'' caution, it is not from the fear of violating
'' any possessory rights but of losing revenue ;
'' for the assessment is generally so high, that if
'' the ryot is dispossessed, the same rent can
'' seldom be got from a new one/'*
The state of things here announced can scarcely
be said to exist, even in the first stage of the
human race. The savage has a notion of pro-
perty, and retains possession of the hunting
ground which he first occupied, defending it as
his own, until he is ejected from it by a stronger
arm.
I will not appeal to the Altumga and other
royal grants of the Mahomedan rulers, which are
every where to be met with, nor to the Birmooter
and other religious grants of the Hindoos, which are
to be found in every part of the country ; because
these, as well as the '' Enam" or free grants, may
be considered as alienations of the royal domain,
which do not come within the precise terms of
the proposition ; but if I were called upon to
point out the country where landed property is
most highly appreciated and cherished, where
landed
* See " Revenue Selections." Pages 95 and 102.
112
landed possessions are most tenaciously retained,
and where the land makes up the sum and essence
of all which the individual can properly call
his own, I should point to India. 1 do not mean
to aver that the people enjoy English freeholds^
protected by courts of justice of a structure highly
artificial, and fenced round by laws and elaborate
forms which almost preclude the conveyance of a
title; but I do contend that land was held as private
property in India ; and that it was respected as
such, although often the object of extortion and
violence, by the ruling power.*
When a proposition is enunciated, apparently
at variance with all our experience and with the
ordinary course of human affairs, we may fairly
require
* It is impossible to read the description of " Meerds" and " Wut-
tmi'^ in the correspondence of the public officers at Madras, and in
Mr. Elphinstone's report on the Marhatta territories, without being
satisfied that these tenures constituted complete hereditary property.
The sovereign himself was compelled sometimes to purchase land
held under these tenures, at very high prices ; and what has effaced
in some places every trace of private property in land ? Nothing but
over-assessmenty which has compelled the people to abandon their
possessions. Some of the collectors observe, that " light assessment
creates private property in land.*^ True : just as heavy assessment
destroys it. " Meerds** is an Arabic word, signifying inheritance,
which must have been introduced by the Mahomedans ; so that we
see these despotic conquerors acknowledging a right, which an en-
lightened British government seems disposed now to question. Nume-
rous decisions might be cited, recognizing a right of property in the
land to vest in the Meerassydars of the Carnatic.
113
require that it be established by precise and sa-
tisfactory evidence ; but in this instance we have
to deal with a negative proposition^ which can be
met and refuted only by establishing the affirma-
tive: still the party denying generally, has no
right to shelter himself in a defensive position, if
a single instance can be cited which contra-
dicts the negative averment. It might safely
have been affirmed a century ago, that the elec-
tric fluid could not be brought down from the
clouds by means of a string, or that flame could
not be made to issue out of water ; but after the
exhibition of a single experiment in proof of these
facts, we should not be entitled to insist further
in denying them.*
I shall content myself, therefore, with adducing
a single instance, for the purpose of shewing that
the people of Bengal, at least, not only possessed
land, but manfully resisted any attempt to usurp
or alienate it on the part of the sovereign. The
documentf which is given in a note below, con-
tains
* Sir T. Munro admits an exception from his proposition on the
coast of Malabar ; but if the sphere of his observation had been
extended, the exception would, I think, have been found to be
the rule. Sir T. M. had the merit of giving to landed property in
Canara, a real value, by lowering the oppressive rates of assessment
established by Hyder Ali and Tippoo Sultan in that province, and
Malabar.
f Inscription on a rock at Tarachandi, near Sahasram, in South
Bahar, from a fac simile, taken by the learned Dr. Buchanan Hamil-
Q tOM,
114
tains the protest of a Hindoo landholder against
grant made by the rajah^ or sovereign of
Canouge^ in favour of certain priests,, to the pre-
judice of the rights of the party : it is dated in
1229 Sanvat, or 1173 of the Christian aera ; and
it is curious to observe a Hindoo boklly remon-
strating against the act of his liege lord^ at a
time when our Saxon ancestors were sufFerinof
o
grievous oppressions from their Norman con-
querors^ without daring to resist their violence
and usurpations.
The
ton, and translated by the distinguished Oriental scholar, Mr. H. Cole-
brooke. " Prdtdpa dhavala, wholly divine (deva), possessor of hap-
" pily-risen and celebrated glory, addresses his own race. In these
" villages contiguous to Callahaudi, that contemptible ill-copper
" (grant) which has been obtained by fraud and bribery from the
" slaves of the Sovereign of Godhinagara, by priests sprung from
" Sa-valuhala ; there is no ground of faith to be put therein by the
" people around. Not a bit of land, so much as a needle's point
" might pierce, is theirs.'*
« Sanvat 1229 (A. D. 1173) lyeshta vadi 3d Wednesday. The
" feet of the sovereign of Japela^ the great chieftain, the fortunate
" Prdtdpa Dhavala deva, declares the truth to his sons, grandsons,
" and other descendants sprung of his race. This ill-copper (grant)
" of the villages of Callahaudi and Bidai/pifa, obtained by fraud and
" bribery from the slaves of the fortunate Vijaya Chandra, the king
" sovereign of Canyacahja, by plundering folks : no faith is to be
" placed therein. Those priests are every way libertines. Not so
" much land as might be pierced by a needle's point, is theirs. Know-
" ing this, you will take the share of produce and other dues ; or "
" Signature of the great Rajaputra (king's son), the fortunate
" Satrughira."
115
The protest shews in a very striking manner
the strong' feeling which existed at a remote period
with regard to landed property^ and the jealousy
with which any encroachment was viewed by
the landholder. In the present case, the right of
the prince to make grants for religious purposes,,
does not seem to be denied ; but it is practically
resisted on the ground that the grant was fraudu-
lently obtained, or was an imposition ; and the
protest, by recording the transaction, appears to
have been intended to keep the alienation in
view, that the heirs and descendants of the
landholder might reassert and resume their
rights^ whenever a favourable opportunity should
occur.
It may be urged, that this sturdy rajepoot was
some powerful feudatory, who was in a condition
to defy his liege lord ; some duke of Burgundy
resisting a king of Prance; but the pompous
titles which he assumes are not sufficient to war-
rant such a conclusion.
The mountain of " Rotas/' situated at no great
distance from Sahasram (Sasseram)^ is certainly
a strong* natural fortification, where a refractory
chief might, no doubt, have bade defiance to his
sovereign ; but Sahasram is itself situated in an
open country ; and the proud rajepoot who was
strong enough to dispute the encroachments of
his liege, would have been much more likely
d 2 to
llf)
to make his appeal to the sword than to the
pen.
This single instance must be admitted as evi-
dence of the understanding of the people upon the
question of property inland; but let us ascend
to the source^ in order to determine whether the
popular feeling is in unison with the law.
I own myself incompetent to the task of disen-
tangling a text of Hindoo law* from the subtilties
of commentators^ so as to reduce it to a simple
elementary proposition ; but on this occasion I
have fortunately the authority and assistance of
the eminent orientalist, to whom we are indebted
for the translation of the digest of that law.
The Mimansa, which is the subject of a disser-
tation by Mr. Colebrooke, is a work of great
authority among the Hindoos, professedly treating
upon the rules of interpretation, and principles
of construction, applicable to the precepts of the
Veda, and maxims of law, religious and civil. The
question concerning property in the soil in India,
is discussed in the sixth lecture of that work, and
the following quotation is calculated to shew the
view
* See " Digest of Hindoo Law," vol. ii, pages 74 and 75, in which
the distinction between the property of the subject and the rights of
the sovereign, is drawn ; but all which can be safely affirmed is, that
property, or ownership, vests in the occupant of the soil, " founded
on the reason of the law and on settled usage ;" but that it is subject
to qualifications and restrictions in favour of the sovereign rights.
117
view taken of this important question by the
author.
'' At certain sacrifices;, such as that which is
'' called Visivajit, the votary for whose benefit the
'' rehgious ceremony is performed^ is enjoined to
'' bestow all his property on the officiating priests.
'' It is asked whether a paramount sovereign
'' shall give all the land, including pasture
'' ground^ highways^ and the site of lakes and
'' ponds ? — an universal monarch the whole
" earth ? — and a subordinate prince the entire
" province over which he rules? To that ques-
*' tion the answer is, the monarch has not pro-
'' perty in the earth, nor the subordinate sovereign
" in the land. By conquest the kingly power is
'' obtained, and property in the house and field
'' that belonged to the enemy. The maxim of
'* the law, that the king is the lord of all, sacer-
" dotal wealth excepted, concerns his authority
" for correction of the wicked, and protection of
'' the good ; his kingly power is for the protec-
'' tion of the realm, and extirpation of wrong,
" and for that cause he receives taxes (cara) from
^' husbandmen, and levies fines from ofienders,
'' But a right of property is not thereby vested in
'' him; else he would have property in house
" and land appertaining to the subjects abiding
" in his dominions. ' It belongs,' says Jaimini,
'' * to all alike.' Therefore, although a gift of a
'' piece
118
'' piece of ground^ an individual's property, does
'' take place, the whole land cannot be given by
'' a monarch, nor a province by a subordinate
'' prince ; but house and field, acquired by pur-
'' chase, and similar means, are liable to gift."
It is not necessary for me to cite the various
authorities which are referred to, in support of the
text ; nor shall I look further for the proof of that
which is found to exist, in a degree more or less
perfect, under the most despotic and barbarous
governments.* The Hindoos are a people whose
law
* In addition to other authorities, I have in my possession copy
of a report by Major James Tod, on the state of landed property
in Meywar, a pure Hindoo district, little affected in its internal
arrangements by Mahomedan intrusion. Major Tod has not only
had the benefit of much practical experience, but he has made Hin-
doo literature and history the particular object of his study ; and
his opinion is decidedly in favour of the existence of private pro-
perty in land in India. The historian of British India considers the
right of property to vest in the sovereign. See vol 1, pages 179,
et seq, : but Mr. Mill makes, at the same time, certain admissions
in favour of the ryot. " By practice the possession of the ryot be-
" came, in this manner, a permanent possession ; a possession from
" which he was not removed except when he failed to pay his
" assessment, or rent ; a possession which he could sell during his
" life, or leave by inheritance, when he died. As far as rights can
" be established by prescription, these rights came undoubtedly to be
" established in the case of the ryots in India. And to take them
" away is one of the most flagrant violations of property which it is
" possible to commit," If the rights of occupancy — of sale — and of
bequest (to which we may add that of mortgage) be admitted, we go
far to establish ownership^ and the only further question in this case
would be, whether the object of this ownership be a thing of any
value.
] 1 J
law inculcates submission to their princes and
their priests ; but they are a civilized people^ and
it is difficult to believe that they can^ at any
period
value. Despotic power may render the property in land of no value
—it may efface all rights — and it may set up pretensions of its own
in the place of those which it has obliterated; but this is plain usur-
pation. To say that the sovereign is universal owner of the soil, is
to say neither more nor less than that power may, or can, destroy all
rights. Of the right, however, (under sufferance of the sovereign,
if it must be so) to occupy — to sell — to mortgage — and to bequeathe
land, we have incontestible evidence in numberless authentic deeds,
which have been produced by parties, who are not merely ryotz.
The just observations of Mr. Milt, applied to the ryot, may, there-
fore, with equal justice be applied to these parties ; but without un-
dertaking to advocate the claims of any particular class of land-
holders, I contend that the pretensions of the sovereign to universal
ownership, can be admitted only upon the assumption of an unmiti-
gated despotism, which recognizes no rights in opposition to its un-
controlled will. I am aware that the Hindoo law seems to require
the sanction of the sovereign to all transfers of landed property;
but this may be explained in two ways. 1st. The sovereign having an
interest in the land from which he draws revenue^ would naturally
require all deeds of sale or mortgage to be formally registered, in order
to preserve regularity, and in order, perhaps, to give security to the
title of the purchaser. This is done in Scotland universally, at the
present day, and for the reason suggested. 2dly. The sovereign, on
failure of natural heirs, being the universal heir of his subjects, had
a reversionary interest in the land ; and his concurrence was required
as an heir of entail, just as the concurrence of the co-sharers, sons,
and others, holding an immediate or reversionary interest in the
estate, appears to have been required by the Hindoo law. Both
Hindoos and Mahomedans rigidly insisted upon the registry of all
transfers of land ; and a fee of two per cent, (sud-doee) was, I be-
lieve, levied by the Canoongos of Bengal, on the transfer even of
Lakheraje land, or land held exempt from taxation.
120
period of their history, have renounced^ in favour
of kingly power, the idea of private property, and
those feelings which are common to the whole
human race.
I am far from undertaking to decide between
the claims of different descriptions of landholders
in India; and it would be unsafe to attach any
particular weight to the designations which they
respectively bear. The meaning of the term
'' zemindar " is, no doubt, landholder ; that of
'' rnalick," proprietor ; that of '' meerass7/dar,'*
heritor. But the application of these and other
designations, is different in different places — for
example : in Bengal Proper, the zemindar is the
principal landholder, and the talookdar the depen-
dent, or tenant ; whereas, in our western pro-
vinces, the case is reversed, and the talookdar is
the principal, and the village zemindar the infe-
rior landholder, or yeoman.
Sir T. Munro having assumed that the govern-
ment was lord paramount of the soil, and as such
free to make those arrangements which might be
most conducive to the public interests, proceeded,
with the sanction of the Madras Government, to
form the settlement of the country entrusted to
his charge, upon the following plan and principles.
" 1st. The settlement shall be ryotwarry."
'' 2d. The amount of the settlement shall
'' encrease
121
'' encrease and decrease annually, according to
'^ the extent of the land in cultivation."
'' 3d. A reduction of twenty-five per cent, on
^' all land shall be made in the survey rate of
'' assessment.*'
'' 4th. An additional reduction in the assess-
^'' ment of eight per cent., or thirty-three per cent.
'' in all, shall be allowed on all lands watered by
^' wells, or by water raised by machinery from
'^ rivers and nullahs, provided the cultivators keep
" the wells or embankments (dirroas) in repair
^' at their own expense. A similar reduction
^' shall be allowed on the lands watered by small
^' tanks, whenever the cultivators agree to bear
^' the expense of repairs.''
'' 5th. Every ryot shall be at liberty, at the end
" of every year, either to throw up a part of his
" land, or to occupy more, according to his cir-
'' cumstances ; but whether he throw up or oc-
'*' cupy, shall not be permitted to select; but
'' shall take or reject proportional shares of the
'' good and bad together."
'" 6th. Every ryot, as long as he pays the rent
'' of his land, shall be considered as the complete
^' owner of the soil, and shall be at liberty to let
^' it to a tenant without any hesitation as to rent,
'' and to sell it as he pleases."
'' 7th. No remission shall be made on ordinary
*' occasions for bad crops or other accidents.
R '' Should
I '22
'' Should failures occur, which cannot be made
" good from the property or land of the defaul-
'' ters, the village in which they happen shall be
'' liable for them, to the extent often per cent, addi-
'' tional on the rent of the remaining ryots ; but no
'' farther."
'' 8th. All unoccupied land shall remain in the
*' hands of Government, and the rent of whatever
'' part of it may be hereafter cultivated, shall be
" added to the public revenue."
'' 9th. All taxes on houses, shops, and profes-
^' sions ; all duties, licences, &c. — shall belong;
'' exclusively to Govenmient. The ryot on whose
'' lands houses or shops may be built, sliall not
'' be entitled to receive a higher rent from them
'' than the equivalent of the survey rent of the
^' ground which they occupy/'
'' 10th. The repairs of all tanks, which are not
'' rendered private property by an extra remis-
'' sion, or duswundum-enam, shall be made at the
*' expense of Government."
'' 11th. Tuckavy (/. e. advances to the culti-
'' vators) shall be gradually discontinued."
'' 12th. Potails, curnums^ and all other vil-
'' lage servants, shall remain^ as hertofore, under
'' the collector."
'' 13th. Private creditors who may distrain the
" property of ryots, shall discharge the rent
^' which may be due from such ryots to Govern-
'' ment ;
123
" ment ; and shall give security for it before they
*' begin to distrain."*
It would not be difficult to predicate what a
philosopher in his closet would think of a system^
which levels every thing in a country between the
sovereign and the labouring peasant ; but when
plans come recommended from high authority^ on
the ground of experience, we are bound to pause
ere we admit the deductions of theory. Still, we
must not so far defer to authority as to receive,
without examination, propositions which seem to
run counter to our reason ; and 1 propose, there-
fore, to canvas those parts of the plan, which a
person of common understanding maybe supposed
capable of appreciating.
The basis of Sir T. Munro's settlement is an
actual survet/ of the land. Native officers, deno-
minated '*^ gomashtahs," were deputed into the
country '' in parties of six, but afterwards of ten^*'
for the purpose of measuring every field. f '' Head
surveyors, or inspectors," were afterwards em-
ployed, to examine the measurement of the sur-
veyors, or gomashtahs. ^' The surveyors were
'' followed by assessors, two of whom were
" allotted
* See Report of Sir T. Munro in " Revenue Selections," pages
98 and 99.
f See Sir T. Munro*s detailed instructions to the surveyors and
assessors, pages 121 to 131, " Revenue Selections."
11 2
124
" allotted for the assessment of the land rnea-
" sured by each party of ten surveyors. The
'' assessor, on arriving in a village, went over the
" land with the potail, curnum, and ryots, and
*' arranged it in different classes according to its
'' quality. In all villages, the land, both wet
" and dry, had, from ancient custom, been divi-
*' ded into first, second, and third sorts, agreeably
" to their supposed respective produce; but these
'' divisions not being sufficiently minute for a
" permanent settlement, the classes of wet land in
'' a village were often encreased to five or six, and
'' those of dry to eight or ten."*
But as these assessors could not be entirely de-
pended upon, it was thought advisable, for the
purpose of preserving uniformity and of checking
abuses, to appoint five '' head assessors," selected
from the most intelHgent of the ordinary assessors.
Each head assessor had four ordinary ones under
him ; his business was to review their classifica-
tion and assessment, and to correct them when
wrong.
After this preparatory process, the settlement
is
* See Sir T. Munro's Letter of the 26th July 1807—" Revenue
Selections," pages 116^^ seq. These surveys were attended with an
enormous expense. That of the " Ceded Districts" cost 83,000
pagodas (or above £33,000) ; and, as the revenue of those districts
was only 16,00,000 pagodas, the charge exceeded five per cent.
See page 121.
125
is concluded with the ryots, sometimes by the
European collector, but more generally by his
native officers ; for Sir T. Munro observes,*
*' The most experienced collector could hardly
" make the settlement of ten villages in a whole
'- year, and after all it would most likely be
'' done very indifferently. "f And, that expe-
rienced officer remarks in another place, " Even
"' where the ryots neglect to bring the grievance
*' forward
* See Sir T. Munro's Letter of the 30th November 1806—" Reve-
nue Selections," page 94.
f If this be the utmost which an experienced collector can accom-
plish, what is to be expected from an inexperienced collector, as
described by Mr. Thackery, one of the advocates of the " Ryotwar
System ?" He observes, " Over- zealous, but honourable young men,
" might plunder the country more completely, perhaps, than a Mar-
** hatta array could have done." Now, this system, embracing as it
does multitudinous details, requires a greater number of collectors
than any other ; or (what is worse) a greater number of native officers.
— See, also, Mr. Thackery*s opinion of Surveys — " Revenue Selec-
tions," page 859. " If, indeed, tlie survey had been equal at first,
" and could continue so, no loss would result from this freedom {i. e.
" liberty to throw up over-assessed lands), because the rent being
" every where exactly proportioned to the value of the land, the
" ryot, wherever he went, and whatever extent of land he occupied,
" would have to pay the proportionate rent. But, no survey rate
" can be so nicely adjusted at first ; and, if it could, would soon
" change. The value and rent of land fluctuates like the value of
" any thing else. But, even at first, we cannot so nicely appraise
" earth ; and, if we could, ten thousand mistakes must find their way
" into a survey. Frauds cannot be prevented, and erroneous principles
" are frequently adopted." And yet this is to be the foundation of
the Ryotwar Settlement !
126
^' forward i in media lei}' ^ they hardly ever omit to
'' state it when assembled for the settlement of
^' the ensuing' year ; and the tehsildar, knowing
" that gross negligence or partiality will be at-
*' tended with the loss of his place, seldom ven-
'' tures to make an unfair settlement. There
'' are, however, cases in which he does so, either
'* from ignorance or corrupt motives ; but where
*' the collector is vigilant, they are not frequent.
'' There is, indeed, no possibility of preventing
'' them altogether ; for the collector, when he
"' makes the settlement in person, may be de-
" ceived occasionally by the servants of his own
'' cutcherry, who may be dishonest as well as the
'' tehsildar. The business of a collector is not
'' properly so much to labour through all the
'^ details of the settlement, as to make those do
" it who can do it best. The potails and cur-
'' nums of villages, are the persons most capable
'' of making the settlements correctly ; but they
*' cannot be trusted, because they are cultivators
'' themselves, and have always friends and ene-
" mies among the ryots. It, therefore, becomes
'' necessary to employ a tehsildar,* who, not
'' being
* See SirT. Munro's Letter of the 30th November 1806—" Reve-
nue Collections," page 93.
Then read Mr. Ravenshaw's character of a Tehsildar—" Revenue
Selections,'* page 113, para. 12. " Hence arises that want of energy,
" that deplorable negligence, shameful ignorance, and, in some cases,
corruption ;
127
'' being a native of the district, is not so liable to
'' be influenced by partialities."
The settlement appears to be made by assem-
bling the ryots, or cultivators, early in the year ;
and " when a country/ has been surveyed,^ the
'' indi-
" corruption; for which the generality of the tehsildars and other
" native servants are so remarkable in this soubah (Arcot). I have
" met with very few who know any other village than .their cusba,
" who know any thing of the resources of their districts, or who can
" give a satisfactory answer to any question relative thereto."
( Para. 16, " Such is the present indolence as well as ignorance
" of the generality of tehsildars, that I have little hope of their exe-
" cuting the orders sent them with any degree of vigour, unless they
" are stimulated thereto by your presence in the talooks."
Next, read Sir T. Munro*s own description of his Revenue Ser-
vants, in vol. ii. of Judicial Selections, page 231, Report 10th April
1806, para. 56. " As there is a general combination down to the
" lowest village servant against the collectors, it is not easy for him
" to learn what is going on ; and when he has made the discovery, he
" perhaps only removes one set of servants, to make way for another
" equally corrupt : and hence, in order to prevent their falling
" into sunilar practices, he is forced to act rather as a spy, than in the
" superintendance of the province committed to his charge. Of
" about a hundred principal division and district servants who have
" acted under me during the last seven years, there have not been
" more than five or six against whom peculation to a greater or
" smaller extent has not been proved."
* The following is the opinion of the Supreme Government with
respect to surveys: — See Letter of the 14th December 1811 —
" Revenue Selections," pages 17-4 and 175. " In treating of the
•* advantages which may be derived from actual surveys, your Honour-
" able Court observe, that * in the management of the Conquered
" and Ceded Territories which have been annexed to the two subor-
" dinate Presidencies, this course has been successfully pursued,'
" &c.
128
" individual supersedes both the village and dis-
" trict settlennent, because it is then no longer
'' necessary to waste time in endeavouring to
" persuade the cultivators to accede to the as-
'' sessment. The rent of every field being fixed,
" each cultivator takes, or rejects, what he
'' pleases, and the rents of all the fields occupied
'' in the course of the year in any one village,
" form what is called the settlement of that vil-
" lage/'* But where the lands have not been
sur-
" &c. Possessing only general knowledge of the measures adopted
" with a view to the adjustment of the assessment in the territories
" dependent on the Presidencies of Fort St. George and Bombay,
" and of the effect of those measures, we are necessarily precluded
" from offering any opinion upon the expediency of the surveys made
" in those parts of the British dominions ; but the experience ob-
" tained on the subject in Bengal, would by no means warrant us in
" recommending that a similar course should be observed in the terri-
" tories dependent on this Presidency. In former times, recourse
" was not unfrequently had to this expedient ; but the chicanery and
" corruption practised by the large body of native officers necessarily
" employed in the performance of that duty, the exactions and injus-
" tice to which the zemindars were consequently exposed, and the
" heavy expense with which all such surveys were attended, gradually
" induced succeeding governments to abandon the plan of fixing the
" public assessment by an actual measurement and computation of
" the produce of the land of each individual. The practice has
" long been entirely discontinued, and we are satisfied that the most
" experienced and capable of the revenue officers would deem the
" revival of it an evil ; burthensome, and oppressive to the people,
" and unproductive of any substantial benefit to the pecuniary inte-
" rests of the state." ,
* See Sir T. Munro's Letter, " Revenue Selections," p. 89 and 91.
129
surveyed, tlie process would seem to be much
more elaborate and difficult ; and, as '' the cur*
num's accounts are always false/' it is found
necessary to have recourse to various indirect
modes of proceeding for the purpose of acqui-
ring the necessary information with respect to the
land, and tlie situation and circumstances of the
cultivators.
'' *The chief obstacles in the way of it, (a set-
' tlement with the individual cultivators,) arise
' from false accounts, from doubts concerning
' the rate of assessment, and from the difficulty
' of ascertaining the condition of the poorer
' ryots. There is, perhaps, no curnum who in any
' one year ever gives a perfectly true statement
' of the cultivation of his village; and it is only
' the fear of removal or suspension that can make
' him give such accounts as are tolerably accu-
' rate. The proper rate of assessment is found
' either by reference to the accounts of former
' years, or by comparison with the rent of lands
' of the same quality, which have long been
' nearly stationary ; and the condition of the
' poorer ryots is learned from the concurring tes-
' timony of their neighbours, who, at the same
' time, will not exaggerate their poverty, lest the
'' re-
* See Sir T Munro's Letter, " Revenue Selections," pages 89
and 91.
" remissions which may in consequence be grant-
'* ed, should fall upon themselves. A short ex-
" planation of what takes place in the Kulwar
'^ settlement of a single district or tehsildarry^
" will equally apply to the whole number of dis-
'* tricts forming a collectorate. I shall here speak
'' of a district in its ordinary/ state of prosperitt/ ;
" not of one that has been reduced below it, by
" war or any other calamity."
" A district paying a revenue of fifty thousand
'' pagodas, usually contains about a hundred
" villages, differing greatly in extent and pro-
'* duce ; some of them not paying more than a
" hundred pagodas, and others as much as five
'" thousand, annual rent. Every village has
'' within itself a complete establishment of here-
" ditary revenue servants : a potail to direct the
" cultivation, realise the rent, and manage its
'' affairs in general ; a curnum to keep the ac-
" counts ; and a certain number of peons to act
" under the potail, in collecting the kists from
'' the ryots. When the ploughing season begins,
*' the potail ascertains what land each ryot can
" cultivate ; he permits those who may have met
" with losses, to relinquish a part of their land,
"^ which he distributes to others who may be wil-
*"^^ ling to take it ; and to such as require none
''^ he continues their former land. He does not
'' fix their rents/ because this is done by the co^
'' lector.
131
" lector^ when the season is so far advanced that
"^^ a judgment can be formed of the crop ; but he
*' assures them that their respective rents will
" continue the same as last year^ only making'
"^ allowance for such alterations as may become
" unavoidable^ from the total revenue of the
" village being somewhat raised or lowered by
'r the collector : they are satisfied with this pro-
" mise^ receive betel from him as a confirmation
" of it, and yoke their ploughs. Specific written
" engagements cannot be made with them at this
" early period of the year, because, as in annual
'' settlements, where the failure of the crop is
" great, remissions must be allowed, so where
" the produce is uncommonly abundant, increase
*' must be taken to balance such failures, because
*' the potail having relations and friends in the
'' village to whom he would be partial, could not
'!; be safely entrusted with the power of fixing
*' .rents ; and because the ryots themselves will
•' not in this year agree to pay the same rent in
^' the ensuing one, lest they should meet with
" losses, which would be aggravated by a rent
fr, which they might then be unable to bear.
'' The tehsildar goes round his district in the
*' early part of the season ; his business is chiefly
" to regulate cultivation in those villages where
'' it is mismanaged from the incapacity of the
'* potail, or impeded by disputes among the prin-
s 2 '' cipal
f«
132
cipal ryots, and to make advances to the poorer
sort for the purchase of seed, ploughs, or cattle.
He also ascertains what land each ryot has
already cultivated, or engaged to cultivate, du-
ring the year, which he does by assembling* the
ryots in their respective villages, and examining
them in the presence of the potails and cur-
nums ; and accounts of the lands occupied and
unoccupied, are taken by his cutcherry, which
accompanies him. He goes round again when
the crops are ripening, to see their condition,
and to ascertain whether the quantity of land
actually cultivated is more or less than that
which the ryots had engaged to take."
'" The collector sets out on his circuit in Sep-
tember or October, when the early crops begin
to be reaped, and the late ones to be sown. On
arriving in a district, he assembles all the ryots
of the four or five nearest villages. The first
business is to learn how far the cultivation of
the present year is more or less than that of the
last; this is soon done by the help of the
tehsildar's and curnum's accounts, compared
with the reports of the potails and ryots.
Where there is a decrease, it is commonly owing
to deaths, emigration, or loss of cattle ; where
there is an increase, it is usually derived from
new settlers, or additional lands being occu-
pied by the old ones. In the case of decrease,
'' the
\33
'' the rent of the lands thrown up is deducled
"" from the settlement of last year ; in that of
'' increase^ the rent of the land newly occupied is
'' added ; and in both cases, the rent of the re-
*' mainin^ lands remains the same as before. The
"' rent of the land newly occupied is determined
'" by the accounts of what it was in former times ;
'" or, if such accounts cannot be procured^ by the
'' opinions of the most intelligent ryots; but the
"" full rent of waste land is not exacted, until it
'' has been in cultivation from two to seven years.
" The number of years, and the gradational rise
" in each year, depend upon the nature of the
'' land, and the custom of the village. They
'' are known to all parties ; and all doubts are
'' removed by their being detailed in a proclama-
'' tion, or cowle-namah, under the collector's
'" seal, circulated to every village.
''If the cultivation is the same as last year's,
'' and no failures occur among the ryots, the rents
" remain unaltered ; if the crops are bad, and it
'' appears that some of the poor ryots must have
'' a remission, the loss, or part of it, is assessed
'' upon the lands of the rest, where it can be done
'' without causing any material inconvenience.
''^ This assessment never exceeds ten or twelve
'' per cent., and is much oftener relinquished
" than carried into effect. Jn cases where it can
"" be easily borne, it is frequently agreed to with-
" out
134
' out dilficuUy ; and if opposition is made, it is
'' generally soon got over by the mediation of the
' ryots of the neighbouring villages present.
' These discuss the point in question with the
' ryots of the objecting village ; tell them that
'' it is the custom of the country ; use such other
'' arguments as may be applicable to the subject ;
'' and never fail in persuading them to accede to
" the demand, mdess it is really too high, iu
'' which event it is lowered. Whenever indivi-
'' duals, or villages, object to their rent, it is
*' always the most expeditious and satisfactory
'' way of settling the dispute, to refer it to the
'' ryots of other villages, who do more on such
'' occasions in half an hour, than a collector and
'' his cutcherry in a whole year."
My wish is not to exaggerate ; but when ^X
find a system requiring a multiplicity of instru-
ments, surveyors, and inspectors ; assessors, ordi-
nary and extraordinary ; potails, curnums, teh-
sildars, and cutcherry servants ; and when 1 read
the description given of these officers by the most
zealous advocates of the system, their periodical
visitations are pictured in my imagination as the
passage of a flight of locusts, devouring in their
course the fruits of the earth. For such compli-
cated details, the most select agency would be
required ; whereas the agency which we can com-
mand, is represented to be of the most question-
able
135
able character. We do not merely require expe-
rience and honesty to execute one great under-
taking ; the work is ever beginning and never
endings and calls for a perennial stream of intel-
ligence and integritj/. And can it be doubted,
that the people are oppressed and plundered by
these multiform agents ? The principle of the
settlement is to take one-third of the gross pro-
duce on account of Government ; and, in order
to render the assessment moderate. Sir T. Munro
proposed to grant a considerable deduction from
the rates deducible from the survey reports. But
if it be moderate, how does it happen, that the
people continue in the same uniform condition
of labouring peasants ? Why do not the same
changes take place here as in other communities ?
One man is industrious, economical, prudent, or
fortunate ; another is idle, wasteful, improvident,
or unlucky. In the ordinary course of things, one
should rise and the other fall : the former should,
by degrees, absorb the possessions of the latter ;
should become rich, while his neighbour remained
poor ; gradations in society should take place ;
and, in the course of time, we might naturally
expect to see the landlord, the yeoman, and the
labourer. And what prevents this natural pro-
gression ? I should answer, the officers of govern-
ment. The fruits of industry are nipt in the bud.
If one man produce more than his fellows, there
i$
is a public servant at liaiid^ always ready to snatch
the superfluity. And^ wherefore, then, should the
husbandman toil that a stranger may reap the
produce ?
There are two other circumstances which tend
to perpetuate this uniform condition. The ryots
have no fixed possession ; they are liable to be
moved from field to field : this they sometimes
do of their own accord, for the purpose of obtain-
ing land, supposed to be more lightly assessed ;
at other times, the land is assigned by lot, with a
view to a more equal and impartial distribution
of the good and the bad, among the different cul-
tivators. But these evolutions tend to destroy
all local attachments, and are evidently calculated
to take away one great incentive to exertion.
The other levelling principle is to be found in
the rule, which requires that the ryot shall make
good the deficiencies of his neighbour to the ex-
tent of ten per cent. ; that is, to the extent, pro-
bably, of his whole surplus earnings. Of what
avail is it that the husbandman be diligent, skil-
ful, and successful, if he is to be mulcted for
his neighbour's negligence, or misfortune? A
must pay the debt of B. If a village be pros-
perous, it matters little, for the next village may
have been exposed to some calamity ; and, from
the abundance of the one, we exact wherewithal
to
137
to supply the deficiency of the other.* Is it
possible to fancy a system better calculated to
baffle the efforts of the individual, to repress in-
dustry, to extinguish hope, and to reduce all to
one common state of universal pauperism ?
It may be asked, is there not a poor and la-
bouring^ peasantry to be seen under the zemin-
darry system ? Most assuredly there is. In every
country a large part of the population must be in
the condition of labourers ; but the zemindar has
an interest in protecting and conciliating his ryot,
or he will migrate to another estate. Jf a scarcity
unhappily occur, he has an interest in assisting
to preserve the existence of the peasant, and in
replacing the seed which his necessities may have
compelled him to consume, in order that the
deficiency of one season may not be aggravated
in the next ; and he probably will have the
means of furnishing such assistance, for he will,
in general, be in possession of a stock of grain,
the superfluity of preceding harvests. What
store
♦ It may be said, that if one tax fail, it is usual for Governments
(and our own among the rest) to substitute another; but there
is no analogy between this case and that where an individual is
compelled to pay the debt of his neighbour. It is but justice to
the Court of Directors to mention, that their minds seem to
have revolted at the proposition; and the Board of Revenue at
Madras proposed to dispense with the rule ; but Sir T. Munro re-
mained firm in the opinion that it was necessary. What must that
system be which requires such a rule !
T
138
store can the labour! iii^ peasaiit be expected to
hoard up? Is he not likely to be relieved of his
surplus produce by the officers of Government^
either on the plea of making good the failure of
his neighbours, or to administer to their own
avarice ? What capital can he accumulate ? The
larger proprietors may accumulate ; and they
have the means of bestowing, and a motive for
bestowing, a pittance upon their poorer depen-
dents. The stipendiary servants of the Govern-
ment have no such motive. They are liable to
be removed from their situations from day to day ;
they have no permanent interest in the prosperity
of the district in which they happen to be em-
ployed : their object is, generally, to make the
most of their situations during the term of their
precarious tenure.
1 shall only notice one other peculiarity of the
" Rj/otwar'* System; unfler it, say the Board of
Revenue, ^' the ryot was not allowed, on pay-
'' ment even of the high survey assessment fixed
'' on each field, to cultivate only those fields to
'' which he gave the preference ; his task was
" assigned to him ; he was constrained to occupy
'' all such fields as were allotted to him by the
'' revenue officers ; and, whether he cultivated
" them or not, he was, as Mr. Thackeray empha-
'* tically terms it, saddled with the rent of each.
" To use the words of Mr. Chaplin, the collector
of
139
" of Bellary, one of the most able of Colonel
'' Munro's former assistants, and still one of the
" most strenuous advocates for the ' Ryotwar '
*' system^ it was the custom under it to exert^ in
" a great degree, the authority which is incom-
" patible with the existing regulations, of com-
'' pelting the inhabitants to cultivate a quantity
" of ground proportionate to their circumstances.
" This he explains to have been done by ' the
'' poiver to confine and punish' them, exercised by
^' the collector and his native revenue servants :
" and he expressly adds, that, if the ryot was
" driven by these oppressions from the fields
*' which he tilled, it was the established practice
'^ to follow the fugitive wherever he went, and,
" by assessing him at discretion, to deprive him
'^ of all advantage that he might expect to derive
'' from a change of residence."*
If forced residence and compulsory service be
essential to the success of the '' Ryotwar/' or
any other system of revenue administration, this
single fact ought to call for its unqualified con-
demnation. In vain shall we profess moderation,
justice, and humanity, or pretend to be actuated
by an enlightened policy, if a practice be tole-
rated which places our agricultural population in
the condition of Russian or Polish serfs in the
most
* See " Revenue Selections," p. 942.
T 2
140
most barbarous age. I feel interested in uphold-
ing' the credit of our Indian administration ; but
no plea of necessity can justify, no pretence
of expediency can excuse, a species of coer-
cion, alike revolting to all good feeling, sub-
versive of personal freedom, and at variance with
all sound principle. Is this a '' native usage/'
which we are so vehemently called upon to re-
establish ? Is this a practice so congenial with
the feelings and the habits of the people, that it
cannot safely be dispensed with ? And is this a
part of the consecrated machinery which Lord
Cornwallis is reproached for having broken to
pieces ? This system is not only to be continued
where it already exists ; but it is understood that
the public authorities in this country contemplate
its extension to our western provinces under the
government of Bengal, where it will be an inno^
vation, and where it must encounter the oppo-
sition of an irritated and warlike people.*
The
* It may be imagined that the peasantry will be well pleased to hold
the lands which they cultivate direct from the Government ; but the
alternative presented to their minds will be this : " shall we conti-
nue under our native chiefs, to whom we are attached, and who
protect us— or shall we place ourselves under revenue officers, whom
we detest, and who will oppress us ?" What would have been the
election of a Scotch Highlander a century ago, if this alternative
had been presented to him? In fact, the " ryotwar^* question re-
solves itself into this — whether a stipendiary agency (probably cor-
rupt) shall be employed between the Government and the peasantry —
£>r whether we shall interpose a proprietary between Government and
the
141
The Board of Revenue at Fort St. George sum
up the character of the " E^otwar" system in the
following very forcible language :—
"' Ignorant of the true resources of the newly-
" acquired countries, as of the precise nature of
" their landed tenures, we find a small band of
'^ foreign conquerors no sooner obtaining pos-
'' session of a vast extent of territory, peopled
"' by various nations, differing from each other in
'^ language, customs and habits, than they at-
" tempt what would be deemed a Herculean task,
'" or rather a visionary project, even in the most
'' civilized countries of Europe, of which every
" statistical information is possessed, and of
" which the government are one with the people,
'' viz., to fix a land-rent, not on each province,
" district, or country ; not on each estate or farm ;
" but on everj/ separate field in their dominions.
*' In pursuit of this supposed improvement, we
" find them unintentionally dissolving the ancient
" ties, the ' ancient usages,' which united the
" republic of each Hindoo village, and by a kind
'' of Agrarian law, newly assessing and parcel-
'* ling out the lands which, from time imme-
"' morial, had belonged to the village commu-
'' munity collectively ; not only among the indi-
'' vidual
the cultivator of the soil. In Bengal, such a proprietary is found to
exist, and one chief object of the present publication is to call the
attention of the public authorities to the injustice ^ the impolicy y and
the danger of displacing it in our " Ceded and Conquered provinces."
H2
^ vidual members of the privileged order (the
' Meerassidars and Cadeems), but even among
' the inferior tenantry (the Pyacarries) : we ob-
' serve them ignorantly denying, and by their
' denial, abolishing, private property in the land ;
' resuming what belonged to a public body (the
' grama manium), and conferring, in lieu of it,
' a stipend in money on one individual ; profes-
' sing to limit their demand on each field, and, in
' fact, by establishing for such limit an unat-
' tainable maximum, assessing the ryot at dis-
' cretion ; and, like the Mussulman government
' which preceded them, binding the ryot by force
' to the plough, compelling him to till land ac-
' knowledged to be over-assessed, dragging him
' back to it if he absconded, deferring their de-
' mand upon him until his crop came to matu-
' rity^ then taking from him all that could be
' obtained, and leaving to him nothing but his
' bullocks and his seed-grain ; nay, perhaps,
' obliged to supply him even with these, in order
' to renew his melancholy task of cultivating,
' not for himself, but for them/'*
To this picture I must add the delineation given
of the same original by Mr. R, Fuller ton, who
witnessed and condemned the system, and with his
colleague, Mr. Hodgson, inanfully but unsuccess-
fully opposed its introduction at Fort St. George.
Extract
• See " Revenue Selections," pages 942 and 943.
143
Extract from an unrecorded memoir by Mr.
Fullerton, written in 1823.
'' To convey to the mind of an English reader
even a slight impression of the nature, opera-
tion^ and results of the ryotwav system of reve-
nue^ connected with the judicial arrangements
of 1816, must be a matter of some difficulty.
Let him, in the first place, imagine the whole
' landed interest, that is, all the landlords of
' Great Britain, and even the capital farmers, at
' once swept away from off the face of the earth ;
' let him imagine a cess or rent fixed on every
' field in the kingdom, seldom under, generally
' above, its means of payment ; let him imagine
' the land so assessed lotted out to the villagers,
' according to the number of their cattle and
' ploughs, to the extent of forty or fifty acres
' each ! Let him imagine the revenue, rated as
' above, leviable through the agency of a hundred
' thousand revenue officers, collected or remitted
' at their discretion, according to their idea of
' the occupant's means of paying, whether from
' the produce of his land or his separate pro-
' perty. And in order to encourage every man
* to act as a spy on his neighbour, and report his
^ means of paying, that he may eventually save
' himself from extra demand, let him imagine all
' the cultivators of a village liable at all times to
' a separate demand, in order to make up for the
'' failure
144
' failure of one or more individuals of their
' parish. Let him imagine collectors to every
' county acting under the orders of a boards on
* the avowed principle of destroying all compe-
* tition for labour by a general equalization
' of assessment ; seizing and sending back run-
' avvays to each other. And lastly, let him
' imaorine the collector the sole maiiistrate or
' justice of the peace of the coimty, through the
' medium and instrumentality of whom alone
' any criminal complaint of personal grievance,
^ suffered by the subject, can reach the superior
' courts. Let him imagine at the same time
' every subordinate officer, employed in the col-
' lection of the land revenue, to be a police officer,
' vested with power to fine, confine, put in the
' stocks, and Jiog, any inhabitant within his
' range, on any charge, without oath of the ac-
' cuser, or sworn recorded evidence on the case.
' If the reader can bring his mind to contemplate
'- such a course, he may then form some judg-
' ment of the civil administration in progress of
' re-introduction into the territories under the
' Presidency of Madras, containing 125,000
' square miles, and a population of twelve
' millions.*'*
The
* I am indebted to Mr. Hodgson for the document from which
the above extract is taken, as well as for much useful information
regarding the revenue administration at Fort St. George.
145
The rigours of the system were, no doubt, sof-
tened in many instances by the good se!!se and
proper feeling of the ministerial officers who were
employed in its execution, and Sir T. Munro
himself has always been an advocate for mode-
ration in the assessment. The judicial regula-
tions which were introduced into the Madras
territory in 1802 and 1806, were also calculated
to impose some salutary restraints upon the reve-
nue servants ; but still it is unwise to place in the
hands of public functionaries a dangerous instru-
ment, which, if not always used with prudence
and forbearance, must become the source of
mischief.
The '' ryotwar'' system seems for a time to
have given place in some of the Madras districts
to "" village settlements,'' which appear to me
to have had much to recommend them to a
preference, in those instances where a superior
order of landholders was not found to exist j but
the " ryotmav'' \vdi^ once more obtained the ascen-
dancy, and is become the prevailing fashion of
the day.
In the quotations which I have given, let it
not be supposed that I have selected partial ex-
tracts for the purpose of exhibiting an unfair and
unfavourable view of a particular system. I
could wish that every thing which has been writ-
u tea
146
ten in support of it;, were submitted to the pub-
lic. I have studied it in the writings of its
warmest advocates : I have sought for an illus-
tration of its defects in their pages ; and to this
source I appeal for those facts, which^, in my judg-
ment, must determine its true character. I
have, it is true, given only a sketch of its leading
features. To discuss it thoroughly, much more
ample materials must be brought together ; but
this will, 1 trust, be done ; and 1 have the satis-
factory assurance that the work is in excellent
hands.*
It remains for me to notice some arrangements
which have been judged necessary, or expedient,
as auxiliary to the '* ryotwar" system : and I shall
then proceed to deduce its practical effects in a
financial point of view.
1st. The collectors of the land revenue at Fort
St.
" Mr. J. Hodgson, late member of council at Fort St. George,
who, with his colleague, Mr. Fullerton, so ably opposed the " ryot-
war " system abroad, is likely, I hope, to bring the merits of the
question fully and fairly before the public in this country. 1 could
only pretend to give an outline, without losing sight of my main
object; but that outline will, I trust, be completely filled up. In the
mean time, I beg to refer to the minute of the Board of Revenue at
Fort St. George, bearing date the 5th January 1818, " Revenue
Selections," pages 885 and 951, as containing a full exposition
of the " ryotwar " system, and of the revenue administration at
that Presidency, generally.
147
St. George have been re-invested with the office
of magistrate in their i^espective districts.
2d. The tehsildars, or native officers employed
in collecting the land revenue, have been invested
w^ith powers to act as officers of police.
3d. These tehsildars have, by Regulation IV.
of 1821, been empowered to impose fines, and to
inflict corporal punishment.
4th. Seven or eight of the zillah, or district
courts, for the administration of civil justice,
have been abolished.
There are situations in which the union of the
offices of collector and magistrate may be con-
venient ; there are individuals in whose hands the
powers of the two offices may be united with
safety ; and it is unquestionable that the infor-
mation which the revenue servants possess, with
respect to the people and their concerns, affi)rd
them great facilities as judicial functionaries,
while their numbers are such as to constitute an
efficient police establishment. In the jungle dis-
tricts, in particular, where both the people and
their chiefs are in a rude, uncivilized state, our
institutions, to be intelligible and suitable, must
be very simple ; and the simplest form of admi-
nistration is, no doubt, that which places all
power in the hands of a single individual.
But it is also true that this combination of
power may lead to great abuse ; that it holds
u 2 out
148
out a teinptatioii to abuse ; and that it secures
impunity to the corrupt or tyrannical oificer, who
deviates from the path of duty. As a system, it
is dangerous : and whatever may be its practical
usefulness in particular instances, its general ap-
plication cannot be justified upon any sound
principles.
Regulation IV. of 1821, of the Madras Govern-
ment, empowers the tehsildars to impose fines, and
to inflict corporal punishment for theft and petty
misdemeanours: and although the correction is
limited to six strokes of the rattan for each
offence, the power to inflict corporal punishment,
however slight, involves the power to inflict dis-
grace ; and this, in India, where the better classes
are extremely sensitive in all matters affecting
reputation, is liable to be a|3plied to the very
worst purposes.
it is by no means my intention to assert that
the authority of magistrate was given to invigo-
rate and uphold the '' ryotimr'' system, or to
strengthen the hands of the '' tehsildar*' in his
revenue capacity. It was honestly given with
very different views : but when a public officer,
exercising two functions, is seen armed with the
fasces, it requires very nice discrimination to de-
termine in what quality they are intended to be
used ; and, certainly, no prudent man would op-
pose the will of an officer so fatally armed, should
it
I
149
it occur to him to enforce a revenue exaction by
the threat of a summary judicial process. That
the tehsildars have ample powers to do mischief^
cannot be doubted, and that they will exert their
power for corrupt and oppressive purposes, can-
not be doubted by those who do not discredit the
description which has been given of those func-
tionaries.
Nor is it intended by me to affirm that the
abolition of the zillah, or district courts of justice,
had for its object to afford the revenue servants
freer scope for their operations ; but 1 do appre-
hend that such must inevitably be the conse-
quence of their suppression. They were abolished,
partly *' for the sake of public economy/' and
partly, because Sir T. Munro seems disposed to
consider those courts as the source of inconve-
nience, if not a positive evil. He observes, ^' but
"^ whatever mode of settlement may be finally
'^ adopted, the inhabitants, but particularly the
'' ryots, must suffer great inconvenience, and even
'' distress, from the judicial regulations, as they
'' now stand. The evils which they are likely
'' to increase rather than to diminish, are delay,
'' vexation, bribery, wrong decisions.* The
" delay
* A man of a dull understanding may be consistent in error. A
man of talents, like Sir T. Munro, is not likely to continue so, for
the " experimentum crucis " brings him back, sooner or later, to
the
150
'' delay will necessarily arise from the forms,
" which not only the judge, but the native com-
'' missioners must adhere to in their proceedings,
" and from all the principal, and a great part of
*' even the petty suits, being brought before the
** judge/'* &c. &c.
To this opinion, I must oppose one of the
highest authority on all questions relating to the
administration of justice in India — Sir Henry
Strachey, whose experience and attainments give
to his opinions a genuine value, and whose can-
dour and independent mind assure us that we
have always his unbiassed sentiments, thus ex-
presses himself.
'' My opinion of the judicial administration
" established in Bengal, and the provinces de-
'' pending upon it, is on the whole very favour-
'' able. To the system itself, the institution of
'' the
the right road. As an illustration of this remark, I will quote a
passage from the report of Sir T. M. and Mr. Stratton in 1818, on
the Zillah Courts.
" If not a single original suit were to come before them (the
Zillah Courts), they would still be of the most essential use to the
country as Courts of Appeal and Criminal Courts ; and still more,
perhaps, by the salutary check which they would maintain over the
districts and village moonsifs, by which they would compel them
to perform properly those subordinate judicial duties, which can by
no other agents be so conveniently discharged." Upon what ground,
I ask, are these courts to be abolished ? I understand that in one
instance, the native inhabitants have themselves protested against
the abolition— and with reason, no doubt.
* See " Revenue Selections," page 105, et seq.
151
" the courts of justice^ formed as they are upon
*' the English model, and the rules by which they
" are guided^ I see no material objection."
'* If the ' ryotwar' plan can be carried on suc-
'' cessfully after the establishment of the judicial
*' authorities ; if rules can be framed^ under
'^ which the ryotwar collector shall act as manager
'' only of an estate, and the judge shall have the
'' usual power of redressing grievances, then I
" shall not condemn the plan ; but 1 protest
'* against, the ryotwar collector having any judi-
" cial power whatever. As manager of an estate
'' only he ought to be considered ; consequently,
'' we must be jealous of his power, lest he should
'" pervert it to purposes of extortion. Every
" manager of an estate has, in India, a natural
'' inclination or tendency towards extortion. If
'' any man^ whose business it is to collect rent
'' from the ryots, shall persuade himself that,
'' while so occupied, he is the fittest person in the
" world to defend these ryots from the oppres-
'' sions which he and his dependents commit, that
'' his occupation supersedes the necessity of all
'' control, that person, in my opinion, most
^' grossly errs.''*
Mr. T. H. Ernst, another judicial servant of
great experience, writes as follows.
'' One
* See " Judicial Selections," pages 52, 64, and 65.
152
" One of the most important benefits which the
"' natives have derived from it/' (the judicial
system) '' is the security which it has afforded them
'' in their persons. They are no longer beat and
^' tortured, and imprisoned, as they used to be,
*' by the officers employed in the collections^ and
^' by their private creditors ; and this very ma-
" terial change in their condition should never be
'' lost sight of in discussiiig the merits of the
" present system.'**
Mr.
* See " Judicial Selections," page 31. The following extracts ex-
hibit another contrast between the opinions of Sir T. Miinro and
Sir H. Strachey.
Extract from a Memorandum by Colonel Munro, on the Judicial
System : page 1 05, vol. ii, " Judicial Selections."
** In the various plans that have been suggested for reducing the
public expenditure, none seem to have been thought of for lessening
that of the Judicial Department, though there is none in which re-
trenchment may be made with more advantage both to Government
and the inhabitants." &c. &c.
" In a civilized populous country, like India, justice can be well
dispensed only through the agency of the natives themselves. It is
absurd to suppose, that they are so corrupt as to be altogether unfit
to be intrusted with the discharge of this important duty," &c &c.
Extract from Sir Henry Strachey's Answer to the Questions put
by the Court of Directors in 1813 : page 72, vol. ii, " Judicial Se-
lections."
" It is, I should hope, superfluous to consider the native system :
we cannot seriously talk of reviving it in Bengal : what we have
done cannot be revoked. We have produced great changes, and,
occasionally, done some mischief, which cannot easily be repaired.
But barbarism and confusion will, I am sure, overwhelm the country,
if we give up our system now, and throw the natives suddenly upon
their own resources."
" With
153
Mr. Ravenshaw, also, expresses himself in the
following enriphatic terms.
'' In saying thus much, 1 beg I may not be
" understood as deprecating the system itself,
** for I have no hesitation in pronouncing, that
" our present Indian constitution is the proudest
" monument of wisdom ever erected in India ;
** that the regulations, as they stand at present,
" are capable of rendering the system in time in a
'* great measure fit and efficient ; that they re-
** quire only a few alterations and additions to
" make it as perfectly so as human institutions
" can be ; and that when the full benefits of it
*' are generally felt as well as seen, the natives
** will consider it as the greatest blessing ever
*^ conferred on them.
" So far from thinking the expense of the pre-
** sent system could with propriety be diminished,
*^ either by reducing the number of courts or
" the scale of establishment, I am decidedly of
" opinion that, if the expense could be borne,
'' great
** W^ith all the abuses and want of skill that are visible in our
system, it displays, I firmly believe, more of intellect and rationality,
and consequently of substantial justice, than can be found in the
policy and legislation of the whole eastern world, from Constantino-
ple to China. It would be unpardonable to withhold these blessings,
which a series of astonishing events has enabled England to dis-
pense to Hindostan."
X
154
*' great advantage would be derived from increa^-
*^ ing the number of courts/'*
It would not be difficult to multiply authorities,
for the purpose of shewing that the judicial powers
cannot generally be intrusted to the re\^enue ser-
vants with safety, and that the courts of justice,
although not perfectly free from objections, and
not yet harmonizing with the notions and habits
of the natives, cannot be dispensed with, without
exposing the people to very great oppression.
But, let Sir T. Munro himself describe the state of
a country, where the '' native institutions,'' so
highly vaunted, have had full scope and effect,
unfettered by English courts of law.
''' A very large proportion of the talliars* are
'* themselves thieves; all the kawillgars* are
'* themselves robbers exempting them, and many
" of them are murderers ; and, though they are
** now afraid to act openly, there is no doubt
** that many of them still secretly follow their for-
** mer practices. Many potails and curnums,
'• also, harbour thieves ; so that no traveller can
'' pass
* See " Judicial Selections/' pages 131 to 135. There is an
able minute on the subject, by Mr, Fullerton, from which I should
quote largely, if I were not unwilling to extend this Essay beyond
its more immediate object. I should also refer to the opinions of
Lord Teignmouth, of the Marquess of Wellesley, and of the Go-
vernment of Fort St. George, in 1812: as well as to the report of
the Select Committee of the House of Commons, on the merits of
our judicial system.
1*- r^
00
*' pass through the ceded districts without being
" robbed, who does not employ either his own
" servants, or those of the village, to watch at
" night ; and even this precaution is very often
" ineffectual. Many offenders . are taken, but
" great numbers also escape, for connivance must
" be expected among the kawillgars and the
" talliars, who are themselves thieves; and the
" inhabitants are often backward in giving infor-
'' mation_, from the fear of assassination, which
^' icas formerly very common^ and sometimes hap-
" pens on such occasions/'*
It has been said, and very justly, I admit/ that
the natives of India are attached to their usages
and institutions ; but they are an intelHgent
people, and although they may be incommoded
by the forms and process of our courts, to which
they are not yet familiarized, they are fully sen-
sible of the value of British protection, and it is
impossible to believe that they can be attached to
the state of anarchy described in the foregoing
extract.
Sir T. Munro is too much of a statesman not
to
* See " Judicial Selections," pages 220, 221, et seq. The kawill-
gar was a head-officer of police under the native administration.
" The talliar acts under the potail of the village ; and the potail
" under the Amildar of the district ; but all these persons are, at
" least, as much revenue as police-officers. The talliar and potail
" hold their offices by inheritance."
156
to be aware that no society can exist without civil
institutions ; and after enlargini^ upon the defects
and insufficiency of our judicial system, he pro-
ceeds to explain the native system of judicature,
which he consijiers us to have displaced, and
which it has been his object to re-establish.
Para. 24. ** It is to be feared that no complete
" remedy for these evils can be found ; but the
** most effectual one would be to resort to the
" trial by jury, termed by the inhabitants * pun-
*' chayet/ or subba, according to their respective
" languages. The judicial code in civil cases
" authorizes trial by referees, arbitrators and
" munsifs ; but it says nothing of trial by ' Pun-
" chai/et/ It seems strange that this code, which
** has been framed expressly for the benefit of the
" natives, should omit entirely the only mode of
** trial which is general and popular among them,
" and regarded as fair and legal ; for there can
*' be no doubt that the trial by * punchayet ' is
'' as much the common law of India, in civil mat-
" ters, as that by jury in England. No native
" thinks that justice is done where it is not
** adopted ; and in appeals of causes formerly
*' settled, whether under a native government, or
" under that of the Company, previous to the
'' establishment of the courts, the reason assign-
** ed, in almost every instance, was, that the de-
" cision was not given by a 'punchayet/ but
by
157
** by a public officer, or by persons acting under
'' his influence, or sitting in his presence. The
" native who has a good cause, always applies
'^ for a ^ punchayet/ while he who has a bad one
'* seeks the decision of a collector or a judge,
" because he knows that it is easier to deceive
*' them. It may be objected that a ' pun-
" chayet * has no fixed constitution ; that the
'* number of its members may vary from five to
" fifty, or even more, and that its verdicts are
** often capricious. But all these objections for-
** merly lay against juries, and they might un-
" questionably be removed from ^ punchayets *
** by future improvements."*
The ^^ punchayet"\ is an assembly of arbitra-
tors ; and, although it had fallen much into disuse
in most of the Bengal districts, it was never in-
tended by our Government to suppress it. On
the contrary, the judicial code expressly en-
couraged appeals to arbitration, and the people
have always been perfectly free to use the
*' punchayet/* whenever they were mutually dis-
posed to give it a preference. It was, however,
judged
* See " Revenue Selections," page 106.
\ See Appendix C, on the origin and nature of " Funchayet^^
by H. T. Colebrooke, Esq., than whom there can be no higher autho-
rity on questions of Hindoo law and Hindoo institutions. This
brief Memoir should satisfy those who have been accustomed to
regard the " Punchayet^* as constituting the entire system of Hindoo
judicature, that they have been entirely in a mistake.
158
judged necessary to render awards liable to be set
aside for corruption, and this enactment operated,
no doubt, to discourage individuals of respec-
tability from undertaking the office of arbitrator ;
it in consequence gradually declined in the es-
timation of the people, and there is reason
perhaps to regret that an institution of the kind
could not have been secured from abuse by means
short of those which appear to have occasioned
its disuse.
As an auxiliary to a regular system of judica-
ture, the '' punchai/et " may be found extremely
useful. It was in general resorted to for the
purpose of settling questions relating to caste,
professional privileges and usages, the customs
of merchants, and the like ; and it might be em-
ployed, quite as usefully, in adjusting boundary
disputes, questions between landlord and tenant,
and simple contracts generally. But as a system
standing alone and unsupported, its incompetency
must at once be apparent. How is it possible for
such an assembly to stand as a bulwark between
Government, or its officers, and the people ? How
could such an assembly be called upon to decide
an intricate question of inheritance, or any ques-
tion whose solution should depend upon a know-
ledge of the general principles of law } To
maintain that it is all-sufficient, and adequate to
all the ends of justice, would be as unreasonable
as
159
as to contend that it can never be used with ad-
vantage.*
Sir John Malcolm^ in his " Memoir on Central
India/' has given a particular account of the
'' punchayety'' and his opinions are strongly in
favour of the institution. The Hon. Mountstuart
Elphinstone^ in his " Report f on the Territories
conquered from the Peishwa/' gives^ aiso^ a fair
and impartial description of it^ and delineates its
merits and defects with a clear and just discrimi-
nation. From these and other authorities, there
are satisfactory grounds for concluding that the
** Punchai/et," as a court of arbitration, acting
iDith consent of parties, ought to be sustained and
countenanced by the Government wherever it is
found to exist ; and that, as such, it is likely to
prove a very useful engine in the administration
of justice. It is, however, an institution rather
suited to a rude state of society, in which friends
and neighbours are naturally called in to arbitrate
differences between individuals; but it would seem
to be scarcely adapted to a more advanced stage
of civilization, when, the concerns of the com-
munity becoming complex and multifarious, writ-
ten
* In a short Memoir which I wrote in India some fifteen years ago
on our judicial system, I recommended the use of the ^^ punchayeV
in a modified shape j so that I have no prejudices to overcome
on this subject.
t See Report, printed in Calcutta in 1831.
160
ten laws are found necessary, and nicer distinc-
tions must be made in the administration of those
laws.
The advocates of the ^^ punchayet" may
perhaps be surprised to learn that their favourite
institution has been tried upon a large scale in
modern times, and that the experiment is con-
sidered entirely to have failed.
The first National Assembly of France, by a
law of the 24th August 1790, which was followed
by many subsequent enactments in the same
spirit, decreed that '* arbitration afforded the
" means the most reasonable for settling suits
" between citizens ;'* and this principle having
obtained high favour for the time, it was every
where extended, and found its way into the legis-
lation of the remote Cantons of Switzerland. It
was applied even to cases of inheritance, and
** dans cpMe manie d* arbitrage,'* observes M.
Bellot,* ** on alia plus oin ; le mot dejwge cessa
" d'etre un terme legal; on ne reconnut plus que
" des arbitres volontaires, ou des arbitres publics,
" selon qu'ils etaient nommes par les parties, ou
*' par les assemblees electorales/'
But what was the result of this expulsion of
the very name of judge from the judicial code?
'' L ex-
* See " Expose des Motifs de la Loi sur la procedure Civile,
pour le Canton de Geneve," par P. F. Bellot.
161
** L*experience mit bientOt a decouvert les
** vices (\e ce systeme ; et une voix geiierale ac-
" cusa rimprevoyance du legislature.
" De toutes parts on citait en France des sen-
" tences arbitrales^ ou les lois avaient ete im-
'* pudemment violees, les interets les plus sacres
" connpromis ; ou des arbitres ignorans^ pusil-
" lanimes, subornes^ n 'avaient ecoute que leurs
" prejuges^ la crainte, ou la faveur. Deux ans
^' de re£:ne suffirent a rarbitrao:e force nour ac-
'O
pour
" cumuler plus d'abus que n'en avait presente
" Tordre judiciaire dans une longue suite
" d'annees.
'* Enfin, les tribunaux de famille et Tarbitrage
** force^ furent supprimes ; et nous detruisimes, a
** notre tour^ roeuvre d'une imitation servile/*
Such was the early fate of the French and the
Swiss '* Punchai/et ;" but let it not be supposed
that the learned Juris-consult of Geneva condemns
all arbitrations indiscriminately : on the contrary,
he seems to be fully sensible that voluntary/ ar-
bitrations may be resorted to with great advan-
tage, and that provision ought to be made in
every system of judicature forgiving proper effect
to this mode of arbitrament between contending
parties.
1 have been led into a digression upon the
*' Punchayet/' in consequence of observing that
expectations have been encouraged with respect
y to
162
to it^ which are not likely, I fear, to be realized ;
and, in consequence of the disposition which has
been manifested of late, to exaggerate the merits
of the native institutions, and to condemn every
thing which is supposed (however erroneously) to
innovate upon them. Will the warmest advocates
of the ** Punchayet" pretend that it can protect
the people of India against the Government, or
its revenue officers? And will any person be
found to maintain that they ought not to be
protected ? Will it be contended that we ought
not to have v^'ritten laws? that we ought not to
have courts of justice to administer and enforce
those laws ? Or that the people of England
are so ignorant of general principles, have made
such slight advances in knowledge and the
science of legislation, as to be incapable of im-
proving the institutions and jurisprudence of
India^ in which revenue, religion, and law, all
take their places together with scarcely a line
of demarcation between them ? Simple^ suitable,
and sufficient as these institutions are represented
to be, they are not all alike entitled to our admi-
ration and support ; and, although they ought not
in any case to be hastily subverted, they must be
accommodated to the altered condition of the
people and the peculiar situation of their rulers ;
and it should be the study of the government^ as
it unquestionably is its duty, to give to our native
subjects^
163
subjects^ not only the most perfect institutions,
which may be compatible with the existing state
of society among them^ but to model those insti-
tutions in such manner that they may operate
towards improving the morale intellectual, and
social condition of the population of India.*
I shall
* I am induced to quote the following remarks by Mr. Fullerton
on the retrograde movement made at Fort St. George, towards the
re-introduction of the native system of administration.
" The whole reasoning and argument of the Honourable the Court
of Directors, introducing the late innovations, form one tissue of
individual opinion, and few of those individuals quoted were in a sta-
tion high enough to take a wide and extensive view of the subjects
they were discussing : their opinions were generally founded on the
narrow and contracted scale of personal feelings under subordinate
situations. No Governor, from the days of Lord Cornwallis, and no
member of council at any of the Presidencies, has ever questioned
the general policy of the judicial system ; none have ever proposed the
union of executive and judicial powers. In the controul and direc-
tion of departments, in which hundreds are employed, they have been
placed in a situation to observe the variations of human intellect and
propensities, and the results brought about by them in the adminis-
tration of human afiairs : when they contemplated the indolence and
inactivity, the no less ruinous effects of the opposite extremes, over
real of others, the exclusive union of pre-eminent qualities in the
few, the partial defects of the many, they are led to consider that
system the best which keeps distinct separate powers, and trusts least
to individual perfection. The innovations of 1816 had not their
origin with the Government of India, they were founded on private
opinions : they have been justly resisted in Bengal ; and their opera-
tion at Madras is certainly against the united opinion of the whole
experience of the civil service and civil government there."
Mr. Fullerton further remarks : —
" The institutions of one province were most erroneously supposed
Y 2 those
164
I shall now proceed to examine the fiscal
effects of the '' ri/otivar*' system^ which not only
had the benefit of Sir T. Munio's personal ser-
vices on its introduction into the ceded and other
districts^ but which has enjoyed his fostering care
as head of the government of Fort St. George ;
a situation in which he was^ of course, enabled
to select for its execution and superintendence,
those officers who were best qualified to promote
its success.
1 regret that my materials are not more com-
plete ; but as the Court of Directors could not,,
consistently with their rules and practice (the
propriety of which I am not at all prepared to dis-
pute),
those of the whole territories under Madras, were reported as such
by the individual presiding there ; and, on the faith of that individual
opinion, were peremptorily ordered to be applied to all ether dis-
tricts, many of which were in quite a different state; the order being
peremptory, it became the duty of the local government to make
them fit, by requisite alterations, the best way they could; but it natu-
rally enough became the object of the first promoter of the change to
make good the pre-asserted grounds for innovation, rather to keep the
incongruity out of sight than to admit its existence, and meet it by
further arrangements. The remark is not confined to judicial alte-
rations ; the whole projected changes in the revenue department,
the general introduction of the ryotwar system, are founded on the
tenures and occupancy of land in the " Ceded Districts " alone, and
the absence of all landed property there ; the difference has been
since admitted, and it is to be hoped, the error of founding a general
system on local circumstances and individual opinions is now divS-
covered,"
165
pute), allow me access to their records and books
of account, I have not been able to ascertain
with certainty the exact degree in which the occa-
sional failures in the Land revenue of Madras
are to be ascribed to the '' rj/otwar*' system of
administration.
The Honourable Court in their letter to the
Bengal Government, bearing date the 14th May
1823, observe generally, '" that the land revenues
** of Madras have fallen off considerably since
** 1813-14 ;'' and it is understood that, since the
date of this letter, information has been received
that remissions will be required at that Presi-
dency in the past year 1823-24, to the extent of
from 25 to 32 per cent, on the jumma, or assess-
ment.
But how does it happen that the revenue
should be even stationary at Madras, when it has
advanced so rapidly in the Bengal provinces ?
In om^ '" Ceded and Conquered" territory, the
revenue has increased in the proportion of about
one-third in the course of fourteen years ; and in
the districts in which the '' permanent settle-
ment'' has been concluded, the rents of the land-
holders are supposed, in many instances, to have
doubled, and quadrupled. Of this fact we have
strong presumptive evidence in the augmented
value of landed property ; and Lord Cornwallis
may be said to have bestowed millions on the
people
166
people of India^ since^ prior to the '' permanent
settlement/' the land had scarcely any saleable
value^ whereas at the present day, the rate of
purchase is, perhaps, higher than in most of the
countries of Europe.* Is this the case at Madras?
Can the privilege of cuUivatino* land, the rent of
which it is proposed to raise with the increase of
every blade of corn, become a valuable, or a sale-
able property ?
And how is the improvement in the Bengal
provinces to be accounted for? Partly from the
stimulus given to industry by the limitation of
the public demand on the land ; partly, from the
greater security of property, which has tended to
promote the accumulation of capital ; partly,
from the existence of large estates (a thing pro-
scribed by the '' ri/otivar" system), the proprie-
tors of which find it their interest to lay out capi-
tal in the improvement of their lands ; partly,
from the produce of land being in greater de-
mand to supply the consumption of a population
increasing in numbers and in wealth ; and partly,
from the introduction, or extension, of valuable
articles of agricultural produce, such as indigo,
cotton, sugar, and the like.
And why has not the same improvement taken
place in the Madras districts ? Sir T. Munro, in
his
* See Letter from Bengal ** Revenue Selections," page 166.
167
his report on the " Ceded Districts/' which were
under his immediate charge, observes as follows :
" It (the statement) was made out in 1211, since
" which period, the proportions of some of the
" more valuable articles, as indigo and sugar,
" have greatly augmented. Indigo to the value
" of star pagodas 1,05,000, paid duty in 1215;
" and it is supposed that the export to the Car-
" natic, for which no duty was paid, was equal
*' to star pagodas 20,000. The quantity would
*' have been nearly doubled in 1216, had not the
** crops been destroyed by the drought. The
" coarse sugar, or jaggery, manufactured in 1216,
*' was double the quantity of any preceding year.
" The increase of these articles is occasioned by
*^ the addition of an extra land-rent, amounting
" to twice or three times the ordinary rate; to
" which all land employed in their culture was
" subjected ; and this increase is likely to go on
*' progressively, as the demand for them is great.
" Cotton, one of the chief products of the ' Ceded
" Districts,' has not increased in a similar de-
'•' gree, because the demand for it is not greater
" than usual, and because from its being a com-
" mon article of cultivation, and never having
*' paid more than the ordinary land-rent, it has
'* obtained no advantage from the equalization
" of rent by the survey/'*
These
« See "Revenue Selections," page 120.
168
These remarks go very far to answer my ques-
tion, for if an extra assessment of twice or three
times the ordinarj/ rate, as well as a transit duty^
is to be applied whenever a promising article of
cultivation makes its appearance^ the most effec-
tual means are taken to prevent its introduction,
or at least its extension. Some articles may, for
a tim.e, succeed in spite of this discouragement ;
but (although the language is somewhat obscure)
we see that cotton, a valuable product, can
scarcely bear up against the ordinari/ land-rent ;
and in fact, if it could yield more, it is quite clear
that it would be immediately subjected to a
higher rate.
The seasons in the Peninsula may be more
irregular than in our Bengal provinces, and the
harvest may, in consequence, be more uncertain ;
the rivers not being navigable, are not calculated
to facilitate the internal commerce of the country ;
and there may be other local circumstances unfa-
vourable to the improvement of the Madras ter-
ritory. But who can fail to perceive, that the
system of revenue administration has much to do
in arresting the progress of improvement ? Will
industry be called into action when the demand
of the tax-gatherer keeps pace with its produce ?
Will capital accumulate where there is no secu-
rity for property, no law but that which is admi-
nistered under the auspices of a revenue officer ?
Will
169
Will opulent consumers be found where no capi-
tal is allowed to accumulate ? And can any
country advance and become prosperous where
tlie land has no saleable value^ where there is no
motive for laying out capital in its improvement,
and where no order of human beings is to be
found between the government and the labouring
peasant ? Certainly not. The '' permanent settle-
ment" contains within it a principle of vitality/ ;
the '^ ri/otwar" system, a principle of decai/.
The one works out a remedy even for the evil
of over assessment ; the other, whenever the ob-
ject of over-assessment, must become its victim.
Let us now compare the revenue realised from
the ^' Ceded Districts/' which were settled by Sir
T. Munro, with the revenue which has been
realised from the '' Ceded and Conquered Pro-
vinces" under the Bengal Presidency.
Madras—" Ceded Districts."
1808-9.* 1821-22. Increase.
S:;i?Cu"sto^s,! P«S- 17,04,517 18,14,303 1,09,786
= £681,807 725,721 43,914
Bengal — ^' Ceded and Conquered Provinces :"
Do. do. C.Rups.3,01,90,334 4,28,81,803 1,26,91,469
= ^3,019,033 4,288,180 . 1,269,146
The
• That I may not be suspected of having taken an unfavourable
period for comparison, I subjoin a memorandum of the revenues of
the Madras "Ceded Districts" from 1808-9 to the latest period,
1821-22, for which the accounts have been printed. I am aware
that these districts were not under " ryotwar" management during
Z the
170
The " Ceded Districts'* of Madras furnish, 1
believe, as favoui'able a specimen as could be
taken, to shew the effects of the '* ryotwar'' sys-
tem : they are pointed out by the Court of Di-
rectors as an instance to prove " that the difficul-
" ties attending the system may be surmounted ;"
they were placed under this system of manage-
ment soon after the period of their cession ; they
have enjoyed the benefit of select agency ; the
Government itself has countenanced and en-
couraged the experiment; and the officer with
whom it originated was allowed to model and
apply the system in the manner most likely to
insure its success ; and yet, with all these special
advantages, the land revenue has continued nearly
stationary during fourteen years, while our Ben-
gal provinces, enjoying only \X\q 'promise of a ^''per-
manent settlement^" have yielded, within the same
period,
the whole period, but if they do not furnish a complete specimen of
continued " ryotwar" management, they shew what is to be ex-
pected from the unsettled and ever-varying systems adopted from
time to time at Fort St. George.
1808-9 ... Pagodasl 7,04,517 1815-16... Pagodas 17,67,828
1809-10 16,57,103 1816-17 ' 17,82,463
1810-11 17,20,842 1817-18 16,05,774
1811-12 16,21,466 1818-19 18,68,184
1812-1 :$ 16,83,575 1819-20 18,10,309
1813-14 17,13,686 1820-21 16,58,753
1814-15 17,13,032 1821-22 18,14,303
If the " Ceded Districts " should not be considered a fair specimen
of" Ryotwar " management, let me refer the reader to Appendix D,
where he will find the fiscal effects of this System, exhibited in the
Province of ** Canara.^*
171
period^ an increase of annual revenue to the
amount of £ 1,270,000 ! A greater contrast could
not well be exhibited, and it would be quite un-
reasonable to deny that the difference in the two
cases is to be referred, in a very great degree, to
the difference in the system of management.
Had a permanent settlement been concluded in
the Madras districts fourteen years ago, some spe-
culative financier would doubtless now be found
to deplore and to condemn the improvident sacri-
fice of revenue. Lord Cornwallis' settlement (most
unjustly, as I contend) has thus been arraigned ;
but the event has shewn, in the present instance,
that the assumption would have been altogether
gratuitous, for those Mines of Wealth which his
Lordship is reproached for having sacrificed, have
here produced nothing. If we had fixed our
demand on the Madras Ceded Districts, in perpe-
tuity, fourteen years ago, the land, it is true, might
not have yielded more than it does at present; but
the customs and the " sai/er" would have in-
creased, for the people would have emerged from
a state of pauperism ; the cultivation of the soil
would have been extended ; and with its ex-
tension, tangible articles of taxation would have
been found.
We should certainly have sacrificed above a
million of annual revenue, if we had concluded
the permanent settlement of our Bengal '* Ceded
andConqnered Provinces'' at the same period, for
z 2 some
J 72
!some of the districts (Goruckpore in particular),
were waste, or only partially cultivated ; but we
have the declaration of the local officers, that
many parts of that territory are now arrived at a
high state of improvement ; and it is extremely
doubtful J whether a further delay in fixing the
assessment, will be attended with any pecuniary
advantage to the government.* Of one fact we
may be quite certain from the concurring testi-
mony of the local authorities, that a further delay,
will be attended with discredit to our name, if it
do not excite a spirit of disaffection throughout
our western territory. The landholders have re-
ceived, in the most authentic form, repeated assu*
ranees of our intention, to conclude a "perma-
nent settlement" with them; and whatever we
may pretend, they can never be made to believe
that, in disappointing their just expectations, we
have not been actuated by a sordid, rapacious
policy. Is it possible, indeed, for them to believe
that
* I have learnt, with regret, that, in consequence of a drought,
remissions of Revenue are likely to be necessary in these provinces in
the present year 1824-25, and I doubt whether we shall hereafter
obtain from them the same revenue which they would have yielded
if the permanent settlement had been concluded three years ago. I
doubt, moreover, whether the remissions now required would have
been called for in that case, for the Landholders, under a permanent
settlement, could have borne partial losses, and would have had
sufficient credit with the Native Bankers, to enable them to advance
the public Revenue, even under circumstances of temporary incon-
venience to themselves.
173
that a government, which seems disposed to ap-
propriate a vast territory as universal landlord,
and to collect, not revenue but rent, can have
any other view than to extract from the people
the utmost fraction which they can pay ?
The Honourable Court of Directors, in their
letter to the supreme Government of the 16th
March 1813,* appear to attach great weight to
the opinion of the first commissioners who were
deputed to form the settlement of the western
provinces in 1807 ; but the objections of those
officers did not apply at all to the principle of the
permanent settlement ; they considered the mea-
sure, with reference to time and circumstances, to
be generally premature; but, in two particular
instances, they recommended its immediate intro-
duction, and nothing could be more remote from
their intentions than to countenance the project of
substituting the '' ryotwar*' system of manage-
ment in any part of our territory.
If we wish to preserve tranquillity in our wes-
tern provinces, if we wish to secure the ample
revenue which they at present yield, if we wish
to
♦ See "Revenue Selections," page 140, et seq. I am anxious,
as one of the commissioners, to explain my sentiments on this im-
portant question, the decision of which may affect the tranquillity of
a valuable portion of our Indian territory. Its tranquillity will not, in
my opinion, be long preserved, if the project of sending out a host
of surveyors to measure and assess every field be carried into
effect, and I understand that steps have already been taken for the
execution of this ill-judged project.
174
to attach to our government, by the strong ties of
interest^ that class of individuals who possess
the most powerful influence over the minds of the
people, we shall redeem ourpledge_, and fix the as-
sessment in perpetuity in all those estates which
''may he in a sufficienth/ improved state ofctiltiva-
''tion."^ In those instances where the lands have not
yet been extensively cultivated, it would be advis-
able, 1 think, to grant, (preparatory to a permanent
settlement, )longleases,or leases forthe incumbent's
life (if there be no joint proprietors) ; and in the
course of twenty years, we should not only have
the satisfaction of seeing the country in the
highest state of improvement, and the people
contented and well affected to our Government,
but we should also have it in our power to draw,
if necessary, a larger revenue from the land, with-
out imposing burthens disproportionate to its
resources.
We have not yet the means of judging, with
any degree of certainty, of the probable resources
of the country acquired by conquest from the
Marhattas in 1818; but as the administration of
our predecessors appears to have been corrupt
and oppressive, we may presume that much time
will be required to develope its natural powers,
and that the present revenue may admit of con-
siderable
* I quote the words of the Regulation, in which the promise is made
to the Landholders.
175
siderable augmentation under a better system of
management. The gross receipts from the ter-
ritory on the Nurbuddah^ immediately dependent
upon the Bengal Presidency^ have been as follow^
in ihe last three years^ viz.
1819-20 Current Rupees 20,55,317
1820-21 77,99,088
1821-22* 60,34,198
The gross receipts from the province of Can-
deish and the other districts, which were con-
quered from the Peishwa^ and placed under the
Bombay government,, amounted in 1819-20 to
the sum of Current Rupees 78,37,092; but, as
the revenue of this territory is not separately
stated in the accounts of the two last years, I
cannot ascertain exactly what progress has been
made in calling forth its resources. There is
reason, however, to believe, from the increase
which has taken place in the aggregate receipts
at Bombay, that an improvement has already
been effected ; and although tlie increase of
military and other charges will necessarily
absorb a large portion of the revenue, the new
territory is likely to prove a valuable acquisition.
Upon the whole, the land revenue of India may
be relied upon generally, as a firm and legitimate
resource; and the only doubts which I entertain
of its permanency and productiveness, have refe-
rence
* I cannot explain the cause of the decrease in this year.
176
rence to the system of management which has
been adopted in particular quarters. 1 do not
pretend to decide who are, or ought to be, the
proprietors of the soil, whether zemindars, talook-
dars, or malicks, meerassydars, ryots, or the village
corporation*; but in every stage of my inquiry I
find reason to be satisfied that the government nei-
ther isy nor ought to be, that proprietor. I am
sensible that we ought not to disturb existing in-
stitutions without a necessity, or some strong and
obvious reason. 1 am aware that all changes
are attended with more or less inconvenience,
and sudden and violent changes, with more or
less danger ; and that the prospect of improve-
ment ought to be very satisfactory before we
determine to innovate upon long-established
habits and usages. But if notions and customs,
consecrated by their antiquity, are never to be
meddled with, why have we discountenanced and
sup-
* Consisting of the following personages, some of whom are,
however, to be considered rather as servants of the corporation than
the corporation itself. They constitute evidently the rudiments of a
society, performing those offices which are first called for when
men begin to form themselves into communities.
The potail, or head inhabitant, Goldsmith,
Curnum, or accountant. Potter,
Barber, The bard,
. Washerman, Currier,
Carpenter, Astrologer, or schoolmaster.
Smith, Watchman.
177
suppressed the trial by ordeal ? the punishment
for witchcraft — the practice of infanticide, and
other gross superstitions ? The practice of sitting
dhurna* was resorted to as an expedient for
enforcing demands where the administration of
public justice was not sufficiently provided for ;
but such a practice ought not surely to be tole-
rated by a government, which is both able and
willing to assist its subjects in asserting their
rights, and in obtaining the redress of their
wrongs ? Is it fitting that the British Government
shotild regard with unconcern the state of villa-
nage and slavery which exists in the southern and
western parts of the Peninsula, merely because
our Hindoo and Mahomedan predecessors were
indifferent to the condition of those, whom their
anti-social institutions degraded in the scale of
society ? I am not the advocate of innovation ; but
still there are certain principles, whose operation
may always be depended upon : certain feelings
which are common to men in all situations. We
may be quite sure that all men desire to possess
property, and landed property, perhaps, in as
great a degree as any other ; that the more
moderate the demands of the government may
be
* The practice of sitting at the door of a debtor, or supposed
a^ressor, without taking food, until some compromise be ef-
fected. The ceremony was usually performed by a Bramin, whose
life it would have been criminal to endanger by a refusal to comply
with the demand.
2 A
178
be upon that property, the better pleased will be
its proprietor : that if the demand upon the land
be moderate, the longer it continues to be so,
and the more binding and absolute the pledge for
its continuance, the better satisfied will be the
landholder : in other words, that where the as-
sessment is moderate, long leases will be pre-
ferred to a precarious tenure, and perpetuity to
either* We may also be sure that men do not
covet the visitations of '' surveyors,'* and '' public
inspectors," nor take delight in the presence of
the tax-gatherer, especially/ if he be armed with
judicial powers; that they are likely to work
when they are allowed to enjoy the fruits of
their labour ; that where industry is encou-
raged
* The following just remarks are quoted from Captain Briggs, po'
litical agent in Candeish. " I am disposed to think that the system
" adopted by Mullick Umber, of making lands over in perpetuity, is
" 9f g^^ot antiquity among the Hindoos, and was probably once uni-
" formly adopted throughout India. Whenever the Eyen Jumma ap-
" pears to have increased, it has been in consequence of additionaj
" cultivation, not of an increased rate of assessment, and nothing is
** more favourable to the extension and improvement of agriculture
" than a moderate, but permanent tax, and an interest in the soil.
" The portion remaining to the cultivator should be such as to enable
" him to add indirectly to the wealth of the State ; he should not
" only have the means of improving his field and taking in more
** ground, but he should have sufficient left to live in such a way as
" to encourage manufactures and trade, and thus become an indirect
" promoter of the revenue derived from the customs, as it must be
" evident, where there is] no opulence in the people, there can be no
'* source from whence revenue can be derived."
179
raged and protected^ a country is likely to
flourish, and that its prosperity reflects back a
real good upon the protecting Govern nrient. The
mines of America may inundate us with the pre-
cious metalSj and the Government which has
fixed its demand upon the land^ may experience
some diminution of its effective income from a
fall in the value of money ; but it is also certain
that, in a country where agriculture and com-
merce flourish, and where capital is allowed to
accumulate, a more extensive medium of ex-
change becomes necessary, and a larger quantity
of the precious metals is likely to be absorbed ;
and, lastly, it may be safely affirmed that, if the
population of a country be contented and rich, it
never can be difficult for its rulers to draw from it
those pecuniary resources which are necessary for
the due administration of public affairs, and that
although debts may be incurred during war to an
inconvenient amount, a wise and just Government
is likely to find a prosperous and well disposed
people, able and willing to bear the burthen.
2 A 2 Chapter
CHAPTER IV.
FINANCIAL AND COMMERCIAL SITUATION OF
THE EAST-INDIA COMPANY.
After the review which has been taken of the
resources of the East-India Company abroad^ I
propose to combine the territorial with the com-
mercial accounts^ in order to obtain^ as far as
may be practicable^ materials for forming a cor-
rect judgment with respect to the financial situa-
tion of the Company generalh/.
It is not easy to form an accurate estimate of
the commercial concerns of theCompany^ because
they are not required to submit to Parliament an
account of their profits or loss, and there is no
direct evidence from which we can deduce the
exact result of their commercial transactions.
The Court of Directors have, however, in their
financial correspondence, lately published, ac-
knowledged on various occasions the existence of
a commercial profit, and in a note subjoined to the
last statement of their commercial stock, it is ex-
pressly declared that ''the sum of £4,754,900
'• sterling has been advanced, or set apart, from
'' the
181
'^ the surplus commercial profits in England^
'' towards the liquidation of Indian territorial
'' debt.'^
It is true that the Company do not estimate their
gains or loss v\^ith that degree of precision which
a private merchant would consider necessary.
They are their own insurers ; and as the casual-
ties at sea occur very irregularly^ the charge under
this head is never determinate or equally distri-
buted. Nor is interest charged on the exact
amount of the capital* employed in the trade^
including the cost of factories^ warehouses, and
other buildings. Moreover, until the late separa-
tion of the commercial and political accounts, the
Customs in India, the salaries ofthe Boards of Trade,
and other commercial establishments, were not
charged on the Investment ; and there are still,
I have reason to believe, various outlays incidental
to the trade, which do not constitute a regular
commercial charge : for example, the advances
made to the manufacturers are, sometimes, irre-
coverable ; and although the amount, after a time,
is perhaps transferred to the account of '' dead
stock,'' as a desperate balance, the loss never
appears
* The dividends on the Company's stock, and the interest on the
bond debt, are charged in the commercial account j but their amount
is scarcely equal to an interest of five per cent, per annum on the
capital employed in the trade, including the " Dead Stock," and the
Company pay in India, at the rate of six per cent, per annum.
182
appears as a direct charge upon the trade. In
particular seasons^ the loss occasioned by bad ba-
lances is very considerable, and this happens more
especially in the instance of the silk investment ;
for as the rearins: of the silk-worm is liable to be
affected by different natural causes, a failure not
unfrequently takes place ; and whenever this oc-
curs, the Company are the principal sufferers.
Without, however, enlarging on these and other
circumstances, which make it impossible for me
to ascertain with perfect precision the extent of
the Company's commercial losses or gains, I shall
proceed to examine those documents which may
enable us to arrive, by an approximation, at the
pecuniary results of their trade.
It is evident that, if we can obtain satisfactory
evidence of the Company's situation at two given
periods, at some distance from each other, a com-
parison between them will furnish a strong pre-
sumption with respect to the intervening events.
If we can shew that the Company are richer at the
present period than they were nine or ten years
ago, the inference necessarily is, that they have
realized a profit in the intermediate term. If they
have become poorer, they must, of course, have
sustained a loss.
Now, the statement of the Company's finances,
which was submitted to Parliament soon after the
renewal of their present charter, is very circum-
stantial.
stantial, and contains a full, and apparently a fair,
exposition of their debts and assets, territorial and
commercial, both abroad and at home, in the year
1815. The account for India is made up to the
SOth of April, 1814 ; the home account is brought
down to the SOth of April, 1815; but although it
would, perhaps, have been more satisfactory if the
two accounts had been made up to the same pe-
riod, I am unwilling to destroy the identity of the
statement, by introducing corrections* of my own,
and 1 shall accordingly adhere to the official docu-
ments, preserving the same difference of a year at the
close, as at the commencement of the term, which
has been taken for the purposes of comparison.
The following abstract will shew the state of
the commercial concern in 1814 and 1815_, abroad
and at home, respectively :
Commercial assets in India, on the SOth of
April, 1814 £ 4,525,394
Ditto at home, ditto 1815 18,261,640
Total commercial assets £22,787,034
i Yr>d t Carry over £22,787,034
* The net commercial assets in India in 1815, fell short of the
amount in 1814, in the sum of £865,201, as follow:
Assets in 1815, after deducting debts £3,332,340
Ditto, 1814, ditto 4,197,541
Less in 1815 £ 865,201
184
Brought over £22,787,034
Deduct
Commercial debt in India, on
theSOthof April, 1814... £ 327,853
Ditto at home, ditto 1815... 2,156,417
— 2,484,270
Commercial assets «£20,302,764
Deduct, also.
Amount of bond debt at home, 30th of
April, 1815 4,487,170
Net commercial balance in favour do. .;^15,815,594
In this account the value of the India house and
other buildings and dead -stock is stated at the
sum of £1,143,000; and although the property
may not be saleable for this amount, it does not
appear to be an exaggerated valuation. Credit
is also taken for advances made in England, in
1814-15, on account of the territory, to the amount
of £2,304,626 ; and as it is to be presumed that
the statement is correct, I shall only observe that
the political charge in that year (£1,844,735) ap-
pears to have been on a much larger scale than it
is represented to have been at a later period.
I shall novyr proceed to contrast this state of the
commercial concern at the commencement of the
present charter with the results which the Indian
accounts of 1822, and the home accounts of 1823,
severally exhibit. I could bring down the state-
ment
185
ment a year later, by making use of the manuscript
accounts which were laid before the General Court
of Proprietors on the 22d of December last ; but
as they have not yet been printed^ and as the re-
sult of the comparison would not be materially
different, I prefer to adhere to those public docu-
ments which can, if necessary, be referred to for
the purpose of authenticating my statements.
Commercial assets in India, on the 30th of
April, 1822 £ 3,085,724
Ditto at home, ditto 1823 23,792,441
Total commercial assets £26,878,165
Deduct
Commercial debt in India, on
the 30th of April, 1822... £ 104,769
Ditto at home, ditto 1823... 2,147,538
2,252,307
Commercial assets £24,625,858
Deduct, also,
Amount of bond debt at home, 30th of
April, 1823 3,937,729
Commercial balance in favour do £20,688,129
This account, however, requires some adjust-
ment, as it appears from the notes subjoined to the
printed statements, that advances had been made
in India on the commercial account in 1821-22
2 B . and
186
and 1822-23, to the amount of £4,600,000, which
should properly be deducted from the commercial
assets. On the other hand, it appears, that funds
have been advanced from '' the surplus commer-
'' cial profits" towards the liquidation of the ter-
ritorial debt, between the 1st of May 1814, and
the 1st of May 1823, to the amount of £3,358,060;
and on the present occasion, where the object is to
ascertain the extent of the commercial profit, this
sum should be added to the commercial assets, as
constituting a loan, or advance, made to the terri-
torial department.
Commercial assets as above £20,688,129
Deduct
Territorial advances in India 4,600,000
16,088,129
Add
Advance on account of territorial
debt from Commercial profit 3,358,060
Commercial balance in favour, in 18^2-23 £19,446,189
Ditto do. do. in 1814-15 15,815,594
Increase of commercial assets *£3,630,595
If
* Tiiis sum corresponds very nearly with the amount stated to have
been advanced from the surplus of commercial profit to the territorial
department, or £3,358,060.
187
If this estimate be correct, it would appear that
a profit has been realized on the Company's com-
merce, in the course of eight years, to the amount
of ^3,630,595, or, on an average, at the rate of
^453,824 per annum.
If the account were brought down to the 30th
of April last, the result would not be quite so fa-
vourable, as there seems to have been a decrease
in the commercial assets in the course of 1823-rM;*
but
* Commercial assets abroad on the 30th of April, 1823 £ 1,938,541
Ditto at home, ditto 1824 22,746,469
Total assets £24,685,010
Deduct
Commercial debt abroad, 30th of
April, 1823 £ 537,487
Ditto at home, ditto 1824 3,335,369
Total debts 3,872,856
Net assets £20,812,154
Deduct
Advance in India from territory, for Commercial
purposes, in 1823-24 2,450,000
£18,362,154
Add
Advance from the " surplus commercial profit,"
for the liquidation of territorial debt 4,754,902
^23,117,056
Carryover £23,117,056
2 B 2
188
but I still think, upon the whole, that we may,
with safety, estimate the average profit on the
Company's trade at the sum of ^^450,000 per an-
num.
At this rate of profit an addition would be made
to the commercial assets of £4,950,000 in the
course of the next eleven years ; and the Company
at the expiration of the present charter in 1834,
would remain possessed of a commercial capital to
the amount of £24,500,000 sterling, after dis-
charging the whole of the bond debt in this
country.
This is the fund upon which the proprietors of
India stock have a fair and legitimate claim for
their indemnification ; and it is quite clear, that,
if the charter should not be renewed in 1834, they
must be considered to be entitled to a division of
the commercial capital, which ought to be quite
sufficient
Brought over £23,117,056
Deduct
Amount of bond debt, 30th of April, 1824 3,937,654
Commercial balance in favour of ditto ... .£19,179,402
The decrease appears to have arisen chiefly from the following
commercial losses, viz. : —
Cargo ofthe Prince Regent, lost at sea ^£^123,000
Value of woollens, &c. consumed by fire at Canton... 316,000
Bad balances written off and transferred to dead stock 200,000
£639,000
189
sufficient to secure to them the value of their stock
at its present price (290 per 100), after making
ample allowance for the loss likely to be sustained
on the sale of the India house and other immove-
able property.
It should be observed^ however, that in the com-
mercial assets is included the sum set apart from
the '' surplus commercial profits/' and appro-
priated to the liquidation of the territorial debt ;
and if this advance^ amounting, according to the
latest statement, to ^4,754,000,* should not ulti-
mately be reclaimable from the territory, a corres-
ponding deduction must be made from the amount
of commercial capital. Whether it was intended
by the act of the 53d Geo. III. sec. 57, ch. 155,
that the alienation of commercial profits, by their
application to the fourth head of appropriation,
should be final, or otherwise, is a question which
I am not competent to decide ; but if the existing
charter should not be renewed, it is to be presumed
that the arrangement to be made with the proprie-
tors of India stock, will proceed upon the principle
that
* There may appear to be a contradiction in admitting a profit to
this amount (<£'4,754,000) when I estimate the whole commercial pro-
fit realized in the course of eight years at only ^63,630,595 ; but the
former sum probably included profit realized in 1813-14, and
indeed we find that the sum of ^2,304,626, is stated to have been
advanced to the Territory, from the Surplus of commercial Profits,
prior to the 20th April, 1815. A profit may also have been credited
in 1823-24, although it does not appear to me that any was realized,
after deducting the losses enumerated in a former note.
190
that they are entitled to any fund vvliich can fairly
be shewn to have arisen out of their commercial
dealings.
It is also proper to explain^ that^ when the terri-
torial and commercial accounts, were, for the first
time separated in 18I3-14_, it had not been deter-
mined whether the bond debt in England apper-
tained to the territory, or the commerce; but as
the interest of that debt has been regularly paid
from the commercial funds of the Company, it is
to be inferred (although no adjustment appears yet
to have taken place) that the whole of that debt
is now considered to be chargeable to the com-
merce. In appropriating, then, the future com-
mercial profits to the discharge of debt, it will be
the interest of the proprietors of India stock that
these bonds should be paid off in preference ; and
as the Court of Directors, with the sanction of the
board of commissioners, may exercise a discretion,
under the 57th clause of the act already referred to,
with respect to the selection of the debt to he first
discharged, they will, no doubt, be attentive to the
interests of the proprietors, as far as these interests
can be consulted without prejudice to objects of
higher consideration. Indeed, the honourable
Court cannot be reproached with inattention to
the commercial interests of the Company, real or
supposed. On the contrary, a very narrow com-
mercial spirit was known to prevail at a former pe-
riod in their councils ; and it is even now more than
suspected that the feelings of the merchant some-
times
191
times prevail over the views of the statesman^ and
that the honourable Court have not yet so com-
pletely entered into their political character^ as in
all cases to assume with dignity the station, and
to practise with constancy the duties^ of legisla-
tors and sovereigns.
In estimating, as 1 have done, the future profits
on the Company's trade, on the same scale as their
past gains, or nearly half a million sterling per
annum, it may be objected that their commerce is
very much reduced, that their exports to India and
China have been diminished, and that their home
sales have of late fallen off in a still greater de-
gree. The facts are certainly true ; but it does not
follow that the inference drawn from them, is ne-
cessarily correct.
The exports to India and China, never, I be-
lieve, produced a profit generally, or for a con-
tinuance. The trade was resorted to, and perse-
vered in, upon a variety of mixed considerations,
partly, to supply a remittance to the East, where,
until lately, we required funds for the purchase of
return cargoes ; partly, to supply the Chinese and
our Indian subjects with articles which they could
not obtain through other channels while the ex-
clusive trade was vested in the Company ; partly,
to occupy tonnage, which would otherwise have
been unproductive ; but chiefly to benefit the
manufacturing and other interests of this country,
by
192
by introducing and circulating our Fabrics
and the produce of our mines throughout the
wide resrions of Asia which were accessible to our
enterprize.
But as the Company no longer require a remit-
tance to India^ and as the trade to that country
has been thrown open to the British merchant^
who is not likely to be backward in supplying all
the demands of the foreign market, the Com-
pany have acted prudently and judiciously in cir-
cumscribing their* exports ; and it is to be hoped
• The consignments to India, have rarely been attended with ad-
vantage. The Out-turns of those to China, from England and India,
have fluctuated greatly, especially in the instance of Cotton. A profit
of above 50 percent, has sometimes been realized by the Company, on
this article; but on the other hand, severe losses have occasionally
been sustained on it and other articles (Long Ells, &c.). The follow-
ing may be taken as a specimen (although I hope an unfavourable one)
of the result of the consignments to China.
In 1815-16, there was a Loss on the Woollens and
Metals sold, of about 16^ per cent.
In 1816-17, do do lOi do.
1817-18, do do 3i do.
1818-19, there was a Profit of about 8 do.
In 1815-16, the Cotton consigned from India, produced the following
rates of profit, viz-
That from Bombay 66i per cent.
Do.. ..do.. .Bengal 39i do.
Do.. ..do. ..Madras 7i do.
The total supply to China, in that year, from England and India,
amounting to Taels 6,813,204, was attended with a loss of Taels
310,529, or about 4^ per cent. It may be doubted, however, whether
all the charges incidental to the trade (interest, insurance, &c. &c.),
are very accurately computed.
VJ3
they will not hereafter recur to the practice of en-
gaging in a trade, promising only to be attended
with loss. T find the produce of their sales of
British goods in India in the last five years to have
been as follows : — viz.
In 1817-18 £605,706 sterling.
1818-19 7'27Mo
1819-20 623,918
182021 513,404
1821-22 677.423
With respect to China^ the case is somewhat
different, because that country is not directly open
to the enterprize of the British merchant ; and
while the Company retain the right to the exclu-
sive trade, it is certainly incumbent upon them,
either to supply the China market themselves, as
far as this can be done with the prospect of ad-
vantage, or to allow others to supply it, to the full
extent of its demand for the produce of our mines
and of our manufacturing industry.
It has long been matter of doubt whether the
Company's trade from India has been attended
with a profit ; but since the late improvements in
the manufacture of British cottons, it has become
apparent that one great branch of that trade must
soon cease altogether. The human hand cannot
contend against the power of machinery ; and al-
though some of the finer fabrics of India have never
been excelled, and its cotton manufactures gene-
2 c , rallj^
194
rally are more durable than those which are pro-
duced by machinery, the latter^ by their superior
cheapness, must ultimately command a preference.
The Company, with a laudable desire to support
their distressed manufacturers, and to preserve a
beautiful and valuable fabric, have struggled to
uphold a declining trade ;* and the British Legis-
lature ought, upon every principle of justice, to
seQoiid their efforts byf lowering the duties on the
importation of Indian calicoes into this country,
and its dependencies, to the rates which British
calicoes pay on their introduction into India ; but
even with this concession in their favour, there are
very few articles which could maintain a success-
ful competition with our home-manufactures in
any of the markets of consumption.
The following statement will shew the amount
of the investments purchased by the Company in
India,
* Whether this struggle can be justified by the principles of political
econoTtiT/ J may he {airly questioned; but the wish to support theirstarv-
ing manufacturers was natural and praiseworthy ; and the exertions of
a respectable Director (Mr. Bebb) to save them from ruin, were cha-
racteristic of that just and upright man.
■ f Since these pages have been in the press, the exorbitant duties
on Indian Cotton Goods, have been reduced, and I hail this fair com-
mencement of a wise and just policy; but much remains to be done
to place the commerce of India upon a proper footing. The present
concession i.s valuable, as a pledge that more will be done hereafter ;
the immediate boon is not very great, as I fear that Indian Calicoes
cannot be imported even at the reduced duty of ten per cent, ad
valorem.
195
India, for consignment to this country, in the last
ten years : — viz.
In 1812-13 £2,0J7,092
1813 14 1,686,580
1814-15 r 1,136,525
1815-16 1,234,096
1816-17 1,162,263
1817-18 1,553,733
1818 19 1,166,946
1819-20 1,477,820
1820-21 1,534,917
1821-22 1,266,046
In some instances the purchases may be said to
have been forced, there existing an urgent neces-
sity at the time for the Company to obtain a remit-
tance, on whatever terms, to enable them to pro-
vide for the payment of bills drawn from India in
discharge of the principal and interest of the terri-
torial debt. Large remittances in bullion were
also made at ditlerent times for the same purpose;
and it is to be apprehended that they may again
be necessary, in the ensuing year, to enable
the Court of Directors to provide for the payment
of the septennial loan of 1818, and of the bills which
will have been drawn by the supreme government
on the 30th of September last in satisfaction of a
portion of the loan of 1811. The honourable
Court very properly granted the option of a re-
2 c 2 mittance
1%
mittance to the public creditors iii this country,
whose notes were to be paid off; and the accommo-
dation is not likely to be attended with loss to the
Company at the exchange fixed for the bills
(viz, 2s. the Sicca rupee). Indeed, if there be
any thing- to regret, it is that more liberal terms
were not granted to these creditors, who have suf-
fered severely under the operation of our financial
arrangements.
The aggregate produce of the Company's sales
in England, in the last three years, will shew a
very great falling off when compared with the
amount sales in the first two years of the present
charter : — viz.
Amount of sales in 1813-14 £8,452,828
1814-15 7,359,978
Sales in 1821 -22 5,262,348
1822-23 5,566,564
1823-24 5,260,680
The sales, however, in 1813-14 and 1814-15,
were unusually large, owing probably in a great
degree to the opening of the continental markets
on the return of peace ; and, although they are
now on a reduced scale, yet, as by far the larger
portion of the amount is the produce of the China
trade, which alone is supposed to have yielded a
regular profit, I see no reason to apprehend that
the commercial gain is less, at the present mo-
ment.
19T
ineiit, than it was when the importations of the
Company were much more extensive.
It has been supposed that the Company derive
an inordinate profit from their trade in tea, and
a clamour has been raised against them on the
ground that the people of this country are heavily
taxed to administer to the avarice of a body of
insatiate monopolists. It may be useful then
to examine the facts of the case, in order to
ascertain how far there is a foundation for the
complaint.
If the British consumer pay, on an average, six
shillings per pound for his tea, let it be remem-
bered that a moiety of this sum (or three shil-
lings) goes into the public exchequer. The
government duty does not amount, it is true, to
quite a moiety of the cost lo the consumer, it
being levied on the wholesale prices ; but the
difference is not material, and my computation
of the Company's profit will, of course, be
founded upon the wholesale prices.
Now, with respect to this first element in the
price of tea, the question to be decided is, whether
the tax on that article he judicious^ or otherwise.
The duty is, no doubt, very high, and excessive
duties on this, or any other article of consumption,
have a tendency to encourage smuggling and to
produce adulteration, as well as to check con-
sumption. It was on this ground that the late
Mr.
198
Mr. Pitt lowered the duties on tea^ and substi-
tuted a commutation tax ; but they have again
been raised, and very recently too ; and we are
bound, therefore, to presume that the contribution
of near four millions per annum, which is levied
from the consumers of tea, is required for national
objects, and that it cannot be otherwise obtained
by any better expedient. I do not mean to affirm
that the tax on tea is the best of all possible
taxes ; .but, 1 do maintain, that a tax which can
be avoided, and which does not press heavily on
the lower orders, is less objectionable than the
tax on coals, or the tax on light and air, and
other objects, the use of which cannot be dis-
pensed with by any class of the people, without
a deprivation of comfort, and possible injury to
health. For the present, then, it must be admitted,
that nearly half the price paid by the consumers
of tea finds its way to the public exchequer for
national purposes, and does not enter the coffers
of the East India Company.
The second element in the price of this article
is the interest on the capital etnphi/ed ; and, we
must not suppose that it is chargeable only
on the amount of the annual sale, or four
millions : the capital on which the charge of
interest is incurred, is probably not less than
ten millions, consisting, as it does, of the value of
tea held in store in this country and in China,
as
199
as well as the cost of the tea in transitu, and of
the export cargoes, which are intended as a
remittance for the purchase of the article, together
with the value of the buildings, warehouses, and
other apparatus required for the trade. An
interest at the rate of 4 per cent, on this capital^
would amount to the sum of £400,000 ;* and, in
point of fact, the commercial account is charged
annually under this head, in the shape of dividends
to the proprietors and interest on the bond debt,
to the amount of about £7^0,000, the greater
part of which is properly a charge on the tea
investment.
It may be alleged, that the private merchant
would carry on the trade with a much smaller
capital,
* The Company charge the tea of 1822-23 with interest to the
amount of £237,899 only ; but this is much below the charge actually
incurred. I do not know the data assumed for the calculation ; but,
it would be quite an error to suppose, that interest is incurred only
on the amount sales of one year. I should calculate it on the follow-
ing capital, viz. : —
Prime cost of tea brought to said annually £2,000,000
Ditto of one year's consumption in store 2,000,000
Ditto ditto in transitu from China 2,000,000
Value of outward cargoes and remittances from India
for the purchase of tea 2,000,000
Advances to merchants, cash and stock at Canton, &c. 1,000,000
Cash and stock in England 1,000,000
£10,000,000
200
capital^ since his returns would be annual, by
reason of his employing- smaller ships, calculated
to perform the voyage out and home within the
year. This is partly true; but, under any circum-
stances, the capital employed must far exceed the
amount of the annual sale. A stock of tea must
always be held in reserve, into whatever hands
the trade might devolve ; and upon the whole
capital employed, the charge of interest is neces-
sarily incurred. Were no such stock maintained,
not only would the public be exposed to incon-
venience from a failure in the accustomed supply,
but the prices would be liable to sudden and
violent fluctuations ; and the consumer would
often have to pay, in the advance of price, much
more than he would save in consequence of a
smaller amount of interest entering into the
original cost of the article. Warehouses, too,
and all the other appurtenances of trade, would
be required, whether the commerce were carried
on by the Company, or by private individuals.
The third element in the price of tea is the
charge o( freight and demurrage, which, on the
quantity annually consumed in England, may be
stated at £450,000, at the rate at present paid
by the Company for their China tonnage. In
this estimate it is assumed, that the return cargo
is properly chargeable with the whole freight,
since the exports from hence, as well as the ex-
ports
201
ports of cotton, sandal wood, and other arti-
cles from the Presidencies of India^ are under-
stood to produce no more than a saving re-
mittance.*
It may here, also, he objected, that the private
merchant, by employing a different class of ships,
would be able to procure tonnage on much
cheaper terms. f This is unquestionably true ;
but a preference has been given to the ships at
present employed, on the ground that they are
peculiarly well adapted to the trade. They are
certainly equipped and appointed in the com-
pletest manner : they are navigated by experi-
enced officers ; are capable of defence in time of
war ; and, although they perform only one voyage
in two years, which necessarily renders the freight
more expensive, it is to be presumed that they
would not command a preference, if those in
whom the decision of the question has been vest-
ed, were not satisfied that there are circumstances
in their favour, sufficient to outweigh the ob-
jections,
* See a former note on the subject.
f The freight paid by the Company last year, for their China
cargoes, averaged £21 : lis. Id. per ton. Smaller ships which should
perform the voyage within the year, could afford to sail at £12 per
ton, out and home ; but the port charges at Canton are somewhat
higher, I believe, in proportion, on smaller ships. The rate of in-
surance, or value of the risk, might also be somewhat higher ; but the
difference would not be material in either of these items.
2d
202
jections, originating in the higher charge of freight.
Another item connected with the foregoing, is the
charge for insurance, or the value of the risk (the
Company being their own insurers) ; but this is of
small account, for in the instance of such superior
ships as the larger class of Indiamen, sailing as
they do from China almost invariably at the
favourable season, and bearing a light buoyant
cargo, the sea risk on the homeward voyage
is very inconsiderable. It does not probably
exceed 2j per cent., or about £50,000^ on the
value of the tea annually imported ; and I find
it stated accordingly in the Company's accounts
of IS22-23 at £59,528, say £60,000.
The commercial disbursements of the Company
at Canton amount to about £50,000 per annum,
and the charges of merchandize in this country
to £412,000. The whole of the former, and a
large portion of the latter, must be placed to the
account of the tea investment, the only part
of the trade which can bear the charge ; and I
should be disposed to state the aggregate at not
less than £325,000, or about 9 per cent, on the
annual sales. It is stated at only £307,006,* in
• Charges in China «^ 50,649
Do. in England 176,841
Commission and allowances to supra'^argoes, &c 79,516
je.307,006
the
the printed accounts of 1822-23; but this sum
appears to me to be below the proportion pro-
perly chargeable to the tea investment.
It may be urged that, if the trade were in
private hands, it would be managed in a more
economical way; but, the private merchant
would have occasion to employ an agent in China,
to whom he must pay a Commission* on his sales
and purchases ; and, if the commerce were distri-
buted among fifty or an hundred merchants, as it
probably would be, on the trade being opened, the
aggregate of their separate establishments (count-
ing-houses, clerks, &c. &c.} would not probably
fall short of the expense at present incurred by
the Company.
Into the retail price paid by the consumer,
another ingredient necessarily enters, namely :
the profit of the broker, wholesale merchant, and
retail trader, and all the expenses incurred by
these parties, respectively, in supplying the con-
sumption from the time that the tea leaves the
Company's warehouse. But, without attempting
to estimate this item, I shall proceed to recapitu-
late
* A commission of 2 per cent is divided among the Company's
supra-cargoes and servants at Canton ; and, the usual rate of com-
mission, on purchases and sales in India and China, is, I believe, 2^
per cent. There would, consequently, be no saving in this item by
the private merchant J nor does it appear to me probable, that his
charges of merchandize, in the aggregate, would fall short of the
amount incurred by the Company.
*2'd2
204
late the elements which compose the wholesale
price of the article ;
1st Government duty of 100 per cent... £3,725^000
2d Prime cost oftlie tea in China 1,925,000
3d Interest on capital employed at 4 per
cent per annum ^ 400,000
4th Freight and demurrage 450,000
5th Insurance *60,000
6th Charges of merchandize in China
and England 325,000
Government duty^ and cost and charges £6,885,000
Gross amount sales on an average of
eleven years, including duty 7?450,00O
Estimated profit annually £565,000
equal to about 15 per cent, on the amount sales,
exclusive of duty, or to about 5| per cent, on the
capital employed, after defraying' the charge of
interest. This rate of profit would not be con-
sidered very exorbitant^ or unreasonable, if it
were, drawn by the private merchant as the re-
muneration of his personal labour ; and, it is, as
nearly as I can estimate it, the sum total of the
contribution
f I ought, perhaps, to charge insurance also on the outward cargo,
since it in reality constitutes the purchase money of the tea investment.
I have adopted this principle in charging the tea with the whole freight
of the tonnage which it occupies ; but the outward cargo ought, one
year with another, to furnish a saving remittance after defraying
charges, freight excepted.
205
contribution levied by the East India Company on
the British consumer of tea.
The annual profit on the tea investment, de-
duced as above-mentioned, amounts to £565,000 ;
and^ as this sum exceeds the average profit which
1 have supposed to be realized on the ichole trade
(£450^000 per annum)^ it follows, either that the
annual gain has been under-estimated by me,
or that a part of the profit on the tea trade is
absorbed in losses sustained on other branches
of the Company's commerce. The latter sup-
position I take to be the more probable of the two.
Nbw^ it may be urged that the rate of profit
drawn by the Company, or about 5^ per cent.,
exceeds the average profits of trade at the pre-
sent period in this country ; and that their mo-
nopoly consequently operates as a tax upon the
consumer, to the extent at least of the excess.
This may, or may not, be true ; but, admitting
the fact, in what manner are the profits of the
Company appropriated ? are they applied to in-
crease the fortunes of individuals ? to gratify the
avarice of the proprietors of India stock ? Cer-
tainly not. Those proprietors are restrained by
law from dividing more than 10|^ per cent, on
the nominal amount of their stock, or about 3^
per cent, on the real value of the capital. The
surplus commercial profits of the Company, have
been appropriated to the discharge of a portion of
the
206
the territorial debt ; which, sooner or later, must
become a national concern. The territory is
pledged for that debt ; and^ although the secupty
is ample^ the incumbrance would have been much
greater^ if the debt had not been reduced, or
kept within bounds, by the application of the
commercial profits to its liquidation. That ele-
ment, therefore, in the price of tea, which is
composed of the Company's profit^ may be
regarded very much in the same light as the
government duty of 100 per cent, the tax being
levied for public * purposes.
If the people of Great Britain are desirous of
drinking their tea on the same terms as the
people of America, it is undoubtedly in their
option to have it at 3s, or 2s. 6d. per pounds
instead of 6s. or 5s. 6d. per pound, after the
verj/ next session of Parliament. They have im-
posed upon themselves the duty of 100 per cent.,
and it rests with them to take it off, whenever
they please ; but^ before they resort to such a
measure, it will certaiidy be proper for them to
consider whether any better alternative presents
itself; and whether, in repealing or reducing one
tax, they might not find it necessary to have
recourse
<*
• Unless, indeed, the whole of the profits so appropriated, should
hereafter be refunded to the proprietors of India Stock, who have
certainly a claim upon this fund.
207
recourse to a substitute of a still more objection-
able character.
I am, at the same time, far from meaning to
contend that the East India Company are not
bound to attend to the interests, and to consult
the convenience and comfort of the British con-
sumer. Their monopoly was granted with a
view to great national objects ; and, in order to
render the prices of their teas more moderate,
they ought, I think, by degrees to increase their
annual sales, and to endeavour to draw the same
profits, or even a reduced profit (if the present
rate be unreasonably high), upon a more extend-
ed consumption of the article. I have observed
with regret, that the annual purchases in China,
as well as the sales in this country, have been
nearly stationary'^ of late years ; but, from the
increase which appears to have taken place in
the sales of the last year, it is intended, 1 hope,
gradually
lbs.
sterling.
♦ Purchases of tea in China in 1819-20 28,476,231
£1,877,402
Ditto ditto
1820-21 28,545,960
1,896,476
Ditto ditto
1821-22 25,746,439
1,852,715
Ditto ditto
1822-23 27.478,813
1,924,738
Sales in England,
lbs.
1820 about 26,100,000
1821 .
.. 27,600,000
1822 .
.. 27,800,000
1823 .
.. 27,700,000
1824 .
.. 28,300,000
208
gradually to extend them. Tea is not an article,
like opium, where it is desirable to levy the
largest revenue upon the smallest quantity. The
consumption of the latter it may be proper to
check, as injurious to health and morals. The
consumption of tea^ on the contrary, ought per-
haps to be encouraged, as being conducive to
comfort, and as tending to exclude the use of a
less harmless beverage.
The Court of Directors have lately adopted
a judicious arrangement for supplying our Ameri-
can colonies with tea, by a direct importation
from China; and it is only surprising, that a
measure so well calculated to accommodate the
colonial consumer, to encourage our own ship-
ping, and to put an end to a contraband trade
from the United States, should not have been
resorted to at an earlier period.
1 have now given a hasty, and, I fear, an im-
perfect sketch of the commercial affairs of the
East-India Company, and it is, I am aware, much
too concise to satisfy those who are accustomed
to look minutely into a subject. He, however,
who undertakes to treat of Indian topics, and to
draw attention to the state of our remote posses-
sions in the East,* sees presented to him the horns
of
* The affairs of India seem to attract more attention at present on
the continent than they do in this country, deeply as we are interest-
ed in them. M. de Sismondi has followed closely on the footsteps of
209
of a dilemma : it he enter much into detail, he
commands few readers ; if he condense his mat-
ter, there is reason to apprehend that he will not
satisfy the understanding of those to whom he ad-
dresses himselr. With this difficulty before me, I
have confined myself to such a statement as ap-
peared to me likely to convey some general and
useful information, without being absolutely repuK
sive by the extent and complicacy of the details.
1 shall now proceed to combine the territorial
with the commercial accounts, and to place in one
view the general results at which we have arrived.
It has been shewn that, during a season of
peace, a surplus territorial revenue is likely to be
realized in India to the extent of two millions
sterling per annum, after defraying all local
charges, and providing for the interest of the ter-
ritorial debt.
2dly. That this surplus is liable to an annual
deduction, to the amount of one million and a half,
on account of territorial and political disburse-
ments
M. Say, vide " La Revue Encyclopedique" for December, pages 635
ad 656. These writers do not appear to have drawn their informa-
tion always from the latest or most authentic sources ; but we should
not disregard the remarks of intelligent spectators, who sometimes see
the game better than the players. I cannot admit either M. de Sis-
mondi's premises or deductions on several important points j but as
the questions which he notices are much too weighty to be disposed
of in a summary way, I shall not undertake to discuss them in
this place.
2 K
210
ments made in this couiitry, leaving' a net surplus
revenue, derivable from our Eastern possessions,
of five hundred thousand pounds per annum.
3dly. That the debt of India, bearing interest,
amoimted, on the 30th of April 1823, to the sum
of ^31,623,780 sterling, entailing an annual
charge of £1,896,524; and the net territorial
debt^ abroad and at home, after deducting assets,
to the sum of ^16,386,953.
4thly. That the commercial assets, and credits
abroad and at home, after deducting the bond
debt and other commercial debts, amounted, in
1823, 24, to the sum of *£14,424,500, constituting
a fund, properly belonging to the proprietors of
India stock for the replacement of their capital. f
5thly. That a profit is drawn from the Com-
pany's trade, after providing for the dividends to
the proprietors and the interest of the bond debt,
and after defraying all the expenses of their esta-
blishment, abroad and at home, to the estimated
amount of £450,000 per annum.
6thly. That the net income of the Company,
terri-
* Or above nineteen millions, if the accounts between the com*
merce and the territory be adjusted upon the basis that the former can
reclaim the amount of commercial profits, which has been applied to
the liquidation of territorial debt. — See Appendix B.
f This capital is stated in the Company's accounts at ^67,780,000,
which I presume to be the sum actually received into the treasury
from the proprietors. It may now be considered worth between
ifl7,000,000 and jg 18,000,000.
211
territorial and commercial^ during' a period of
peace^ may accordingly be assumed at about one
million sterling per annum, which is applicable to
the gradual liquidation of debt, or to the augmen-
tation of their commercial capital.
7thiy. That since the commencement of the
present charter, an improvement has taken place
in the financial situation of the Company, terri-
toricd and commercial, abroad and at home, to the
extent of near three millions sterling,* notwith-
standing our having been engaged intermediately
in 5«everal expensive wars.
This exposition of the Company's finances must
certainly be regarded as highly favourable and
Satisfactory, and nothing but the intervention of
an unfortunate war, which the authorities in this
country could neither foresee nor prevent, was
likely to have checked the prosperous course of
their affairs.
The proprietors of India stock will perceive
from this summary that they possess security for
their capital, if the charter of the Company
should be withdrawn. In that case, they would
either
♦ Vide Appendix B. Net Deficiency in 1814-15 ... £2,611,311
Net Surplus in 1823-24 187,807
Amelioration ^2,799,118
2 E 2 ^
212
either be entitled to a division of the com-
niereial assets; or their present dividends must
be continued to them as perpetual annuities,
should the government think proper to dispose
otherwise of those assets. In common justice,
their claims to be reco^^nized, in one or other
character, either as the proprietors of the commer-
cial capital^ or as fixed annuitants, cannot well be
disputed ; and while there are funds upon which
they have so just a claim, no plea could be urged
for placing them in a worse condition than that of
other corporate bodies, who^ after the expiration
of the term for which they have been associated,
are allowed to divide their profits and their capital.
Even if the sum which has been taken from the
" surplus commercial profits'* (£4,754,900), for
the liquidation of the political debt, should not be
restored, and the commerce should be charged
with the home bond debt (£3,937,000), the com-
mercial capital at the expiration of the charter in
18^, may still be expected to amount, at the
computed rate of profit, to a sum sutficient to
indemnify the proprietors of East India stock
for their capital at its present valuation.
The creditors abroad have the security of a
territory, yielding a revenue of twenty-two mil-
lions sterling per annum, and a net surplus of half
a million ; and whenever the administration of
that territory shall be assumed by the Crown, it is
to
213
I to be presumed that their interests and the secu-
rity of their property, will be effectually provided
for.
Whether the existing system for the administra-
tion of the territory and for regulating the trade,
be the best which can be devised, and be essen-
tially calculated to produce the greatest attainable
good, both to India and to the mother country, is
a question which will come before the British
public at no distant period. It is one of incalcu-
lable importance, both as it affects the interests of
Great Britain and the well-being of the vast po-
pulation which has been subjected to her domi-
nion ; and whenever the proper season shall
arrive, it will, 1 trust, be examined with un-
prejudiced feelings, and be disposed of, after ma-
ture consideration, upon those sound and just
views of policy, which ought to decide all ques-
tions of great national concern. I have contined
myself as much as possible to the professional sub-
ject which 1 undertook to discuss, and I am un-
willing to pass the bounds which I have prescribed
to myself; but without intending to encroach
upon the province of the statesman, it is natural to
ask, loith views merely financial, how has a re-
venue of twenty-two millions per annum been ac-
quired by us ? Under what wise and salutary in-
stitutions has it been preserved ? And what as-
surance
214
sLiiaiice have we of its future prosperity and per-
manency ?
The government abroad has^ in general, been
ably and successfully administered,* and the great
body of our native subjects enjoy a degree of pro-
tection and security in their persons and property,
unknown to the subjects of the Hindoo and Ma-
homedan states around us. The constitution of
that government is, I think, well suited to the pe-
culiar circumstances of our situation, the charac-
ter of our dominion, and the disposition and habits
of the people with whom we are associated, either
in our domestic or external relations. This go-
vernment is not a pure despotism, as has been al-
leged . It is a government of laio aiul responsibilifi/,
acting under numerous and sahitary checks. The
administrators of that government exercise a de-
legated power; they are accountable agents, who
are
* I ain not called upon to offer an opinion on the justice and neces-
sity of our different wars, nor on the character of our proceedings to-
wards our dependent allies, the most questionable branch of our ad-
ministration in India. The philosopher, meditating on these events at
a distance from the scene of action, may, no doubt, find much to con.
demn and to lament; but after the recent exposure of the condi-
tion of the Hyderabad territory, it cannot be doubted that the public
authorities will see the necessity of rescuing the national character
from reproach by placing our connection with the dependent states
on a less objectionable footing.
215
are amenable to the courts of law in England, io
the authority of the Court of Directors, the Court
of Proprietors, the Commissioners for Indian Af-
fairs, the two Houses of Parliament, the Crown,
and the British Public. To render this control
efficient, they are required to record their most mi-
nute transactions, and they do record, regularly
and faithfully, every public act, with a scrupulous
exactness, unprecedented in any other country.
They are also required, in their legislative capa-
city, to record, upon the face of every law, the
special reasons for the enactment ; and if these
laws are neglected and thrown upon the shelf on
their arrival in England, the defect lies in the
practice and not in the theory.
Moreover, the government, for all official acts,
and the public officers, in their individual capa-
city, are subject to the jurisdiction of the King's
courts, established at the three presidencies, as
well as to the jurisdiction of the courts of Adawlut,
established throughout our provinces, and acting
under the authority of written laws, recognised and
sanctioned by the British legislature.
The government of India has, it is true, been
entrusted with vast powers ; and they are neces-
sary, I think, for the preservation of our dominion ;
but these powers are exercised by agents, who are
removeable at pleasure ; and if they be grossly
abused, and the abuse be not visited with the
penaltieiTj
216
penalties justly incurred ; if at any time acts of
violence and injustice obtain unmerited impunity,
it is not that responsibility does not attach^ but
that it has not been duly enforced.
The selection of the supreme Governors of In-
dia^ for more than half a century, has been either
very judicious^ or very fortunate ; and there has
been this remarkable felicity attending it, that the
individuals seem to have been peculiarly suited to
the particular times and circumstances in which
they happen to have been placed. They could
not, perhaps, in any one instance, have changed
places with advantage. The genius and enter-
prize of Lord Clive achieved the conquest of an
empire. The fertile resources of Mr. Hastings'
mind enabled him to preserve that empire under
circumstances of extraordinary difficulty. Lord
Cornwallis, eminent alike as a statesman and sol-
dier^ took charge of the government at a time when
the elements of our power were beginning to as-
sume consistency, but required to be moulded
into form by a powerful hand ; and the natural
rectitude and energy of his character disposed him
to introduce wholesome reforms, and to establish a
regular system of internal administration, founded
upon principles of justice, and the viev\s of a be-
nevolent policy. Lord Teignmouth, possessing
great knowledge and experience, followed in the
footsteps of his illustrious predecessor ; and with
scrupulous
217
scrupulous good faith^ gave eftbct to plans which,
as a member of Lord Cornwallis' governiiieiit^ he
had felt it his duty to oppose.* The great talents
of Lord Wellesley w«re called into action at a
momentous crisis. France, after overpowering
the continent of Europe by a great convulsive
movement, directed her ambitious views to the
East, and there found powerful allies in the Ma-
homedan state of Mysore, and in the French
commanders, who, at the head of large bodies of
organized troops in the seivice of the Nizam and
of Dowlut Rao Scindiah, were prepared to dis-
pute with us our ascendancy in India. The mo-
ther-country was engaged in a struggle for exis-
tence, and we were left to our own resources and
exertions. Egypt was already occupied by the
French, as the first step in their adventurous ca-
reer; but the talents of Lord Wellesley were equal
to the emergency, and surmounted it ; and the
novel spectacle was exhibited in tliis administra-
tion of an Indian army co-operating with British
troops on the banks of the Nile. When, after sus-
taining successive conflicts, our strength was im-
paired, and repose became necessary to recruit our
exhausted resources, the wisdom and prudence
and
* I allude merely to the question of the " Permanent Settlement."
The general maxims of Lord Teignmouth's government corresponded,
I believe, with those which Lord Cornwallis had acted upon.
218
and pacific policy of Sir George Barlow and the
Earl of MintOj restored the state to all its pristine
vigour; while the conquest of Java and the French
islands sufficiently attests, that^ on proper occa-
sionSj Lord Minto could display all the decision
and enterprize which usually give assurance of a
superior mind : and, finally, the military and po-
litical administration of the Marquess of Hastings,
full of energy and spirit, added new lustre to the
reputation of our arms, and gave a wider range to
British supremacy in the East.
But I may be told, that our success and the
merits of our rule are to be referred to the personal
qualities of the rulers, rather than to the inherent
merits of our institutions. This must, in part, be
admitted ; and in what country does it not happen
that the well-being of the governed is to be re-
ferred mainly to the qualities of the governors ?
It is true that there is this peculiarity in our situa-
tion in India : the rulers being foreigners, and as
such not identified with the people, they cannot
be displaced by the people, without the overthrow
of the sovereignty itself; whereas in countries in
which the governors and the governed have one
common origin, the rulers may be removed with-
out destroying the constitution or system of go-
vernment.
I fully admit that much depends upon the per-
sonal qualities of those who are selected to admi-
nister
219
nister our affairs in India. The government can
never become a safe sinecure: it is a fatal mistake
to suppose that our work in that country has been
consummated, or ever can be consummated : it
requires scarcely less talent to preserve than was
necessary to create. Although our dominion has
been extended to the utmost verge which could
have been desired^ although our power has been
consolidated, and our name is respected and feared,
we can never with safety relax in vigilant circum-
spection, or entrust our aiikirs to feeble hands.
The transitory days of peace ought to be wel-
comed when they do arrive; but they ought never
to be regarded as a season exempt from difficulty
and danger. It cannot be concealed, and it ought
not to be concealed, that the position in which the
native states* of India are placed^, is not a natural
one^ nor one of their own choice, which they
submit to willingly. They are under a certain
pressure, enforced by superior power. He who
has
* The same may be said of some of our own once-powerful subjects
and dependents. For instance, the Rajahs of Hatras, Moorsan, Pritch-
etghur, Lundoura, &c., once feudatory chieftains, have been compressed
into the condition of simple landholders. In fact, although I have
thought it right to point out that we never can depend upon the con-
tinuance of peace (for even the resuscitation of the Pindarries would
not greatly surprise me), I do not consider our external enemies as the
chief source of danger to our power. Our greatest danger^ in my
opinion, will always be from within,
2 F 2
220
has seen (the illustration is homely, I own) a bale
of cotton compresserl into one-fourth of its natural
dimensions;, may form a notion of the sort of force
which restrains them in their present situations.
The mass seems inert ; but there is an elastic
force within^, which is ready to expand : relax the
cords, and it immediately manifests itself.
And the philanthropist may say^, cut the cords^
and let them be free and happy. But this is an
operation which involves many serious contin-
gencies ; not merely the subversion of our own em-
pirC;, but the introduction of absolute anarchy and
misrule throughout a large portion of Asia. Who
that has read in the pages of Sir John Malcolm
the teeming record of massacres and pillage,
would wish to see the population of the desolated
region which he describes, committed once more
to a Mahratta * plunderer, or an Affghan adven-
turer ? Who could see, without deep regret^ the
flourishing provinces of Bengal converted into a
waste, the scene of bloodshed and disorder, of
religious contention, unbridled violence, and law-
less oppression ? No ; the people of India are
not prepared for self government ; they are not
sufficiently advanced in knowledge ; they do not
properly
* The administration of Ahilya Bhye throws a gleam of sunshine
over Marhatta history, and Sir John has succeeded in giving a dramatic
interest to the character of this princess j but the other side of the
picture is only darkened by the contrast : it is an Oasis in the
desert.
2^1
properly appreciate the advantages of political
morality ; and they are unacquainted with those
great principles and maxims of political wisdom^
upon which all government ought to be founded.
Whatever may be our disqualifications as fo-
reignerSj we govern them better than they
could govern themselves ; and our dominion^ if
it avert no other evil than the sanguinary struggle
which is likely to take place whenever our au-
thority may be withdrawn, must be regarded
as eminently calculated to promote the great
interests of humanity.
Of the administration at home, 1 have observed,
that it may claim the rare merit of having made
a judicious selection of functionaries to conduct
the public affairs abroad. This is doing much
for India ; since, in point of fact, the great busi-
ness of government must be carried on abroad.
Measures relating to its internal administration
can seldom be originated here with advantage :
but still the system of administration at home
is very far from being matter of indifference.
Where the powers committed to the local authori-
ties are so extensive, and the discretion so ample,
the means of controlling those authorities should be
proportionally strong and efficient.* If they are
commissioned
* The honourable Court of Directors well observe, " It is a self-
" evident proposition that in proportion to the extent of power
222
commissioned to make laws upon which the
welfare of millions may depend, we should see
that those laws are founded on principles of justice,
and are not inconsistent with those important
truths, which the reason and experience of an
enlightened age have established.
And may we fairly assume, that this great duty
has been adequately provided for ? Are our in-
stitutions at home well adapted to the ends which
they are intendeil to accomplish ? Those who
have seen the workings of the machinery, and who
are most friendly to the existing order of things^
will scarcely venture to pronounce that it is
perfect. The two administrative bodies are con-
flicting and not cowrwrrmg authorities ; and their
collision is calculated to produce delay, incon-
gruities, and sometimes an absolute suspension
of the functions of government. The process by
which a decision on any important question is
arrived at, is so slow and embarrassed, that the
proper season of action may pass away before
a resolution can be carried into effect. He who
introduces a measure, is often obliged to leave
it to be executed by another ; and, perhaps, by
the very individual by whom it had been opposed.
He
** vested in any individual, ought to be the strictness of responsibility
" for its due exercise and the checks upon its abuse."— See Letter to
Bengal, in Hyderabad Papers, page 390.
223
He who is indolent, timid, or wavering, allows
the machine to remain at rest, to be propelled
by a more adventurous successor. The mode of
distributing the business among the public func-
tionaries may also admit of question, since it has
no reference to their respective qualifications and
previous habits ; but, on the other hand, it is
contended that the experience which is obtained
in the course of passing through the different
committees, has been found of great advantage
to those who are ultimately called upon to
execute the high office of chairman. To this
consideration 1 am disposed to allow every degree
of weight ; and 1 am seldom inclined to oppose
mere speculative opinions to the safer deductions
which experience supplies : yet, admitting all
which is contended for, I still think that pro-
fessional knowledge and peculiar attainments
might be brought to bear with better effect upon
the public service, under a modification of the
existing arrangement.
But the great defect in the system is the total
absence of all responsibility . By responsibility, I
do not mean merely the liability to penalties
imposed by the law : high public functionaries
can seldom be brought to punishment; but, if
the individual be identified with his acts, an opera-
tive principle is supplied in the honest love of
fame, and in the dread of public odium. Public
censure,
224
censure, justly incurred, is one of the severest
punrshnients to which a nriind, not hardened and
callous^ can well be exposed.
The government of India, holding only a
delegated trust, can be rendered strictly account-
able to the superintending authorities at home,
to the law, and to parliament 5 and all its acts can
be distinctly referred to the individuals by whom
they have been committed : but the administra-
tive authorities at home are so constituted, that
responsibility, the best check and restraint upon
the exercise of power, is rio where found to attach
to any beneficial purpose. When divided among
numbers, responsibility is necessarily reduced to
a fraction of small value ; but the practice of
deciding public (|uestions by the ballot is calcu-
lated^ to do away even the semblance of it.
I am aware that the Directors are at liberty to
record, within fourteen days, their dissent from
any decision of a majority : but, although this
privilege is calculated to answer a useful purpose,
and would, if more frequently exercised, point to
the authors of particular measures, by shewing
who have not been parties to them ; yet it is rather
intended to exonerate from responsibility than to
fix it upon individuals : besides, the Court of
Directors, in merely originating measures, cannot
justly be held responsible for them, if those
measures be altered and perhaps reversed by a
higher
22rj
higher authority — and that higher authority can-
not justly be made responsible for the general
conduct of affairs, to which it cannot give the first
momentum, and over which it exerts only a
repressive control. The good sense and good
feeling of the two authorities, acting under a
strong sense of public duty, and interchanging
their respective opinions in the liberal spirit which
is habitual to men of high intellectual endowment,
may prevent colHsion, and may produce measures
distinguished for their wisdom and propriety ; but
this, when it happens, is a contingent good, result-
ing from individual character, and we can have no
assurance of its continuance, when the powers of
government are exercised by irresponsible agents,
or when they are liable to be paralised or enfeebled
by the contentions of those agents.
If these defects were not susceptible of a re-
medy, it would be worse than useless to notice
them, and they have not been noticed in the spirit
of crimination ; but, every well-wisher of the
Company (without adverting to concerns of
higher interest) must be desirous of seeing its
administration so far improved as to be free from
all just reproach, and to become the object of
public esteem. To correct defects is the obvious
way to disarm adversaries, and to justify the
support of friends.
Whatever may be the imperfections of the
2 G system.
226
s^ysteni, it cannot justly be arraigned on the
ground that it has led to an improvident ad-
ministration of the finances, the question which
more immediately concerns us at present. They
have, in general, been managed both abroad and
at home, with integrity, intelligence, and zeal.
Instances of profuse and even wasteful expen-
diture might be pointed out ; but they are not
numerous^ and the instances of embezzlement
and corruption, which have come to light, have
not been more frequent ; and, far from being
screened, on discovery, by the public authorities
abroad or at home, the individuals have been vi-
sited with merited punishment, and have met with
no countenance or support from a service which
highly estimates the value of its public character.
Nor can it be alleged that public services have
been rewarded with too munificent a hand : on the
contrary, the Court of Directors have been re-
proached for unseasonable parsimony ; and, they
have not, perhaps, always recollected that, as they
have no civil honors to bestow, pecuniary rewards
and just commendation can alone mark their sense
of public merit.* The liberal remuneration of
eminent
» Let it be recollected that, while the Crown has with great pro-
priety, justice, and policy established a graduated scale of honors to
be conferred as the reward of military service, the civil officers of the
Company, however eminent their merits and services, cannot look
forward
go'
eminent services is quite consistent with the prac
tice of a just economy^ and may be vindicated
upon public principles ; but, the Court of Di-
rectors are the trustees of the public purse, and
in closing it against importunate claims they
can have no private feeling to gratify.
To conclude: When we reflect that an empire,
acquired by valour and skill, and preserved by
wisdom and prudence, has been governed in the
spirit of moderation and justice; that the countries
over which our sway extends, enjoy a state of
tranquillity and prosperity unknown in the neigh-
bouring territory ; and that a revenue has been
created in this remote dependency, exceeding the
income of some of the most powerful states of
Europe^ we must acknowledge that the system of
administration, whatever may be its theoretical
defects, must have its redeeming virtues, and
must have been regulated and superintended by
men of no ordinary capacity and merit. And
whatever may be the fate of the East-India Com-
pany, at whatever period that body shall cease to
exist,
forward to any public distinction. This is, I think, a deficiency.
Fortune, no doubt, gives consideration in this country ; but, wealth
is not the paramount good with some men, and the civil servants of
the Company can seldom realize large fortunes by honourable means*
In no country are the minds of men more exercised, and in no
country can a government have stronger motives for exciting its
servants to honorable exertion.
2 G 2
228
exists it may challenge comparison with any co-
lonial administration^ of which we have record in
any age or country ; while the pages of its history,
fertile in instances of political wisdom and military
skill, of gallant enterprize and splendid success,
will perpetuate the memory of a brilliant and
eventful career, not surpassed by the proudest
achievements of Gallic ambition, or the noblest
triumphs of Roman heroism. I will not say of
this Company, *' Esto perpetua ;'' but ''"sen plu-
'* rimas tribuit Jupiter Hyemes, sive banc ulti-
" mam/' a heavy responsibility will rest with
those who subvert it without clear and satisfac-
tory grounds for presuming that a more perfect
system of administration will be substituted in its
place; that the well-poised constitution of this
country will not be affected by the change; and
that the people of India, albeit possessing no re-
presentatives in the British Parliament, will in
their future rulers find protectors and friends, ac-
quainted with their situation and wants, indulgent
to their feelings and prejudices, determined to
maintain their rights and interests, and solicitous
to promote their prosperity and happiness.
Appendix
APPENDIX.
APPENDIX A.
Statement of the Territorial Debt of India, bearing
Interesty for a period of Thirty Years ; or from the
30tli April 1793 to the 30th April 1822, with the
Annual Interest thereon.
Principal.
Sicca Rupees.
On the 30th April 1793 5,33,68,683
Ditto 1794 4,77.69,240
Ditto 1795 4,77,60,064
Ditto 1796 5,03,25,644
Ditto 1797 5,71,29,008
Ditto 1798 7.57,04,769
Ditto 1799 8,49,74,559
Ditto 1800 10,11,24,828
Ditto 1801 12,39,42,360
Ditto 1802 13,63,51,420
Ditto 1803 14,45,73,061
Ditto 1804 16,18,54,265!
Ditto 1805 19,09,71,445J
Ditto 1806 21,72,71,2521
Ditto 1807 23,15,30,1251
Ditto 1808 24,48,92,828j
Ditto 1809. .... .24,33,30,220
Ditto 1810 23,82,36,344
Ditto 1811 21,41,19,640
Ditto 1812 22,11,82,349
Ditto.... 1813 22,68,48,000
Interest.
Sicca Rupees.
45,58,798
35,69,555
38,66,964
33,85,686
35,79,716
48,96,510
62,73,496
76,66,946
90,93,323
1,19,02,293
1,18,81,854
1,24,55,045
1,39,98,771
1,67,26,998
1,97,13,929
1,95,21,929
1,96,45,058
1,89,04,303
1,93,06,167
1,26,12,248
1,37,80,000
2^0
Principal.
Sicca Rupees.
On the 30th April 1814... *21,39,92,502
Ditto 1815... 123,86,30,000
Ditto 1816 24,20,00,000
Ditto 1817 24,84,60,000
Ditto 1818 25,36,00,000
Ditto 1819 26,78,00,000
Ditto 1820... 129,14,10,000
Ditto 1821 27,92,31,000
Ditto 1822... §27,27,86,000
Interest.
Sicca Rupees.
1,27,93,896
1,43,25,000
1,45,24,000
1,49,13,000
1,52,63,000
1,60,91,600
1,48,50,000
1,70,68,261
1,65,45,000
The results of the first twenty years, or from 1793 to
1812, are taken from statements prepared by the Ac-
countant-General of Bengal in March 1813, and sub-
mitted to the Court of Directors, through the Supreme
Government, in a despatch bearing date the 27th of that
month. The results of the first twenty years of my
account of the surplus and deficit of India for thirty
years, are also taken from statements prepared by the
same officer ; and as these documents were formed with
the utmost care and attention, I have followed them in
preference even to the English accounts, which are, no
doubt, of high authority.
The amount of the debt, bearing interest, cannot
always be taken as decisive evidence of our financial
situation ; because we have also a debt, not hearing
• [ find it elsewhere stated at Sicca Rupees 21,16,90,520 ; and the
statement printed for parliament shews it to be £26,959,454.
f This sum includes the loan from the Vizier, Rupees 1,03,82,093.
X This includes also the sum received from the estate of the Bhow
Begum, Sicca Rupees 55,98,436-
§ The debt of 1822 appears, from the printed statement, to have
been £31,623,779.
231
interest, and because the proportion which the assets
bear to the debt varies very considerably at different
periods. Still the debt, bearing interest^ is what should
be kept always in sight, since it determines the annual
charge, and it ought not to increase if there be a sur-
plus of assets which can be applied to its liquidation.
APPENDIX B.
Statement of the Territorial and Commercial Debt and
Assets of the East-India Company, Abroad and at
Home :
remVoWtt/.— 1814 and 1815.
l)ebt in India, bearing interest, on the 30th
April 1814 £26,802,045
Do. not bearing interest do 3,923,948
Total, Debt in India ^^30,725,993
Debt in England due from Territory, on the
30th April 1815 5,001,531
Total, Territorial Debt ^35,727,524
Deduct :— Territorial Assets 17,300,619
Territorial Deficit £18,426,905
CommerciaL
Assets, abroad and at home, at
the two periods respectively £22,787,034
Debt do. do 2,484,2/0
Commercial Surplus £20,302,764
Carried forward £20,302,764
232
Brought forward £20,302,764
Deduct, Home Bond Debt,
principal and interest, on the
30th April 1815 (it not hav-
ing been determined whether
it constituted, wholly, or in
part, a Territorial or Com-
mercial Debt) 4,487,170
Net Commercial Surplus 15,815,594
Net Deficit £2,611,311
Exclusive of the Capital Stock stated at £7,780,000
N.B. In the Territorial Assets above, the sum of
£400,000 is included, in part of the "Deadstock,"
amounting to £12,210,896.
And in the Commercial Assets, the sum of £1,143,000
is included as the vahie of the India- House, and other
Commercial " Dead Stock."
Statement of Territorial Debt and Assets in India.
Territorial, — 1815.
Debt in India, bearing interest on the 30th
April 1815 £27,831,877
Do. not bearing interest do , 4,689,695
Total, Debt in India.., £32,521,572
Deduct, Assets in India on the 30th April
1815 16,401,357
Territorial Deficit in India, in 1815... £16,120,215
exclusive of Territorial Debt in Enghmd.
IWriforiiiL
233
Territorial.' — 1816.
Debt in India^ bearing interest 30th April
1816 £28,067,964
Do. not bearing interest do 5,071,7^"^
Total, Debt in India £33,139,,
Deduct, Assets in India 30th April 1816 16,941,813
Deficit in India in 1816 £16,197,885
Territorial — 1817.
Debt in India, bearing interest 30th April
1817 , £28,821,457
Do. not bearing interest do 4,866,540
Total, Debt in India £33,687,997
Deduct, Assets . 17,834,755
Deficit in 1817 £15,853,242
TerritoriaL—lSlS^
Debt, bearing interest 30th April 1818 £29,417,578
Do. not bearing interest do 5,241,703
Total, Debt £34,659,281
Deduct, Assets 17,491,987
Deficit hi 1818 £17,167,294
TerritoriaL'-lSld.
Debt, bearing interest 30th April 1819...... £31,065,547
Do. not bearing interest do 6,286,723
Total, Debt £37,352,270
Deduct, Assets CO 18,492,312
Deficit in 1819 £18,859,958
2 H TerritoriaL
234
Territorial.'— \S20,
Debt, bearing interest, 30th April 1820... £33,801,961
Do. not bearing interest do 6,909,374
Total, Debt 40,711,335
Deduct, Assets 19,506,302
Deficit in 1820 £21,205,033
Territoriah — 1 821 .
Debt, bearing interest, 30th April 1821 ...£33,427,106
Do. not bearing interest do 73436,344
Total, Debt £40,863,450
Deduct, Assets 22,429,312
Deficit in 1821 £18,434,138
TernVom/.— 1822.
Debt in India, bearing interest, 30th April
1822 £31,623,779
Do. not bearing interest do 6,967,878
Total, Debt £38,391,657
Deduct, Assets 22,204,704
Deficit in 1822 £16,386,953
Statement of Indian Debt and Assets in 1823, and
Home Debt and Assets in 1824, taken from MS. Ac-
counts.
Territorial— \S2^ and 1824.
Debt in India, bearing interest,, 30th April
1823 r £29,283,345
Carried forward £29,283,345
235
Brought forward £29,283,345
Add Bill? returned to be reinvested in Loan 245,653
Debt not bearing interest 30th April 1823 9,796,339
^\yr. ' *^M Total Debt in India, ditto £39,325,337
Territorial Debt in England, 30th April 1824, =^7,033,971
Total, Territorial Debt,Abroad and atHonie, £46,359,308
Deduct, Assets in India £27,911,946
Ditto, at Home 1,760,669 29,672,615
Territorial Deficit £1 6,686,693
Commercial,
Assets, Abroad, 30thApril 1823 £1,938,541
Ditto at Home, ditto ... 1824 22,7415,469
Total assets... £24,685,010
Deduct, Commercial
Debt in India, 1823 £537,487
Ditto, at Home, 1824 3,335,369
3,872,856
\iy%
Commercial Surplus. ..£20,812,154
Deduct, Bond Debt in England,
April 1824 3,937,654
Net Commercial Surplus £16,874,500
Net Surplus upon the two Accounts £187,807
NetSurplus upon the two Accounts in 1823-24 £187,807
Deficit upon these Accounts in 1814-15 2,611,311
Improvement in the general result
since 1814-15 £2,799,118
* Of this sum i'6,090,076 is owing by the Territory to the Com-
236
N.B. — The Capital Stock is not included in
til e above, being £7,780,000
I hav^e only given the Commercial Account at the
commencement of the term, 1814-15, and at its close,
1823-24, as I could not trace it with great exactness
throughout the whole period, and the chief object was
to shew the result of the comparison between the two
periods.
In explanation of the great variation in the amount of
the Territorial Debt in the course of a single year (be-
tween 1820 and 1821, for instance), it is necessary to ex-
plain, that the statement only includes the debt in India,
and that nearly corresponding variations may have taken
place in the Account of Territorial Debts and Assets in
England.
I had prepared a statement of the Indian and Home
Debts and Assets in April 1823, in order to obviate
the objection which may be urged, that no certain
conclusion can be drawn from accounts which are*
brought down to two different periods; but I found
that I could not adjust the Debits and Credits be-
tween the Territory and Commerce in a manner quite
satisfactory to myself, or which would perhaps have
been satisfactory to the reader, and I have accord-
ingly omitted the Statement, and adhered to the Printed
Accounts, which are closed for India and England at
two different periods. The circumstance of the Company
having to render two distinct accounts (Commercial and
Territorial), and of the Indian Accounts being always a
year in arrear, renders it difficult to blend and adjust the
two, in a way to render the g/wieral results perfectly
clear and intelligible.
237-
The above account sufficiently proves, I think, that
since the commencement of the present charter an im-
provement has taken place in the situation of the Com-
pany, Territorial and Commercial, abroad and at home,
to the amount of near three millions sterling, notwith-
standing our having been engaged intermediately in
several expensive wars.
I have prepared the figured statements given in this
publication with the utmost care, and 1 have referred to
the best authorities within my reach for the purpose of
discovering and correcting errors, but I shall still pro-
bably have occasion to claim indulgence for mistakes,
into which I may have fallen in the course of reducing
into a more compact form such numerous details.
In the body of the work, where I give the general
results of the accounts, I have stated the Commercial
Assets in 1823-24, at only £14,424,500, whereas the Net
Commercial Surplus is stated above at £16,874,500.
The difference arises from my having deducted from the
latter sum, £2,450,000, stated to have been advanced
in India, from the Territory to the Commerce in 1823-24.
If however we add the sum of £4,754,902, advanced to
the Territory from the Commercial Profits, the Commer-
cial Surplus will appear to be £19,170,402, on the 30th of
April last.
238
APPENDIX C,
BY H. T. COLEBROOKE, ESQ.
As very incorrect notions appear to have been enter-
tained concerning the nature of the " Panchdt/eti^''' pre-
vailing from ancient times in India, it is expedient to
consult the writings of the Hindus themselves, who in
treating of the administration of justice, have occasion to
advert to the subject. The following is a brief summary
from very ample disquisitions, contained in Treatises of
Hindu Law.
An assembly for the administration of justice is of
various sorts : either stationary, being held in the town
or village ; or moveable, being held in field or forest ; or
it is a tribunal, superintended by the chief judge ap-
pointed by the sovereign, and entrusted with the Royal
Seal, to empower him to summon parties; or, it is a
Court held before the Sovereign in person. The two
first of these, are constituted at the request of parties,
who solicit cognizance and determination of their differ-
ences; they are not established by operation of law, or
by the act of the King, but by voluntary consent. The
two last are Courts of Judicature, established by the
Sovereign's authority : such a Court is resorted to for
relief, as occasions occur ; and not as the first mentioned,
constituted merely for the particular purpose.
To accommodate or determine a dispute between con-
tending parties ; the heads of the family, or the chiefs of
the Society, or the inhabitants of the town or village,
select a referee approved by both parties.
Among persons who roam the forest, an assembly for
terminating litigation, is to be held in the wilderness;
239
among those who belong to an army, in the camp; and
among merchants and artisans, in their societies.
Places of resort for redress, are, 1st. The Court of the
Sovereign, who is assisted by learned Brahmans, as
Assessors. It is ambulatory, being held where the King
abides or sojourns.
2nd. The tribunal of the Chief Judge (" Prddvivdca,''
or " Dharmadhi/acsha *') appointed by the Sovereign,
and sitting with three or more assessors. This is a
stationary Court, being held at an appointed place.
Srd. Inferior Judges, appointed by the Sovereign's
authority, for local jurisdictions. From their decisions,
an appeal lies to the Court of the Chief Judge, and thence
to the Raja, or King, in person.
The gradations in arbitration, are also three.
1st. Assemblies of townsmen, or meetings of persons
belonging to various tribes, and following different pro-
fessions, but inhabiting the same place.
2nd. Companies of traders or artisans : conventions of
persons belonging to different tribes, but subsisting by
the practice of the same profession. * sdo li:>jfo?? fa
3rd. Meetings of kinsmen, or assemblages of relations,
connected by consanguinity.
The technical terms in the Hindu, for these three
gradations of assemblies are, 1st, Fuga ; 2nd, Srtni ;
3rd, Cula,
Their decisions or awards are subject to revision : an
unsatisfactory determination of the '^ Cnla " or family, is
revised by the " Sreni " or company, as less liable to
suspicion of partiality, than the kindred ; and an unsatis-
factory decision of fellow-artisans, is revised by the
'' Pugcty'^ or assembly of cohabitants, who are still less
to be suspected of partiality. From the award of the
240
" Puga^ '' or assembly, an appeal lies, according to in-
stitutes of Hindu Law, to the tribunal of the " Prdd-
vimcay' or Judge ; and, finally, to the Court of the Rciju^
or Sovereign Prince.
The " Puga;' " Sr6ni;' and '' Cula,'' are different
degrees of" Panckdj/eti y" which, as is apparent, is not
in the nature either of a jury, or of a rustic tribunal ;
but merely a system of arbitration, subordinate to regu-
larly constituted tribunals, or Courts of Justice.
It was not the design of the Bengal regulations to
abrogate the " Panchdj/eti,'* or to discourage arbitration.
The judicial regulations of 1772, provided that, " in
all cases of disputed accounts, &c., it shall be recom-
mended to the parties, to submit the decision of their
cause to arbitration ; the award of which shall become
a decree of the court. Every encouragement is to be
afforded to persons of character and credit, to become
arbitrators ; but no coercive means to be employed for
that purpose.
This provision, in nearly the same words, of which the
above is an extract, occurs in the regulations passed
in 1780.
It is repeated in the regulations of 1781, with this ad-
dition, that " the judge do recommend, and as far as he
can, without compulsion, prevail upon the parlies to
submit to the arbitration of one person, to be mutually
agreed upon by the parties;" and, with this further pro-
vision, that no award of any arbitrator or arbitrators, be
set aside, except on full proof, made by oath, of two
credible witnesses, that the arbitrators had been guilty of
gross corruption, or partiality in the cause in which they
had made their award.
Here
£41
Here we find the first deviation from the spirit of
Hindu arbitration : the regulations of 1781 were drawn
up by Sir E. Impey, and that deviation, which was in-
tended to render arbitration more effectual, has, in its
consequences, overset the system. Every dissatisfied
party, unable to impeach the award of an arbitrator
without proving partiality or corruption, set about,'ca-
lumniating.the arbitrator; and imputed corrurptt^v^i to
him simply, that he might obtain a revision oA'the away*^,
which, in the Hindu system, he mi^h^c'tiave obtained in
regular course of appeal, witho'^at any such imputation.
As the practice grew, all n espectable persons declined
references, lest they sho'xlld be calumniated by the discon-
tented litigant ; and "^Panchdi/eti " has fallen into disuse.
APPE.NDIX D.
f PROVINCE OF CAN A R A.
In th'^^i '^ Revenue Selections," page 532, a Minute,
dated "^in 1816, of Lord William Bentinck, then Go-
vernr :ir of Fort St. George, is inserted ; in which his
Lor'^fiship observes, that, "from the first transfer of Ca-
^' ^hara to the British authority, it has continued a
'^J solitary example of tranquillity, of an easy and regular
*'^ realization of the revenue, and of general prosperity.
" The causes of such effects are, in my opinion, (observes
" his Lordship) to be found in the tenure of landed
property, peculiar to the province, and in the mode-
" ration with which the rights of the Sircar, to a propor-
" tion of the land revenue, have been exercised," &c.
His Lordship, of course, confined the remark to the
districts under his own Government ; because, in Bengal,
we had abundant instances of the same description.
2 I
(.
242
The Court of Directors also observe, in noticing this
Minute, that the '' Ryotwar " or Field Assessment,
secured to them what they conceived could be secured
under no other system of management ; •yf;r, the eventual
advantage of an adequate revenue from the waste lands
of the country ; a source vvhich, in their opinion, under a
judicious and enlightened administration of their terri-
torial ijiterest, it was not unreasonable to expect from
past/xperience, would yield a considerable and annually-
i' ^^easing augmentation to the public resources, &c. &c.
Now, let us see how far this expectation has been
realized. The province of Canara has been under
" Ri/otwar " management throughout the whole period
of our possession of it: Lord W. Bentinck notices it as
the only instance of successful management ; and yet,
with all the anticipated benefit from the waste lands,
what is the present state of the revenue ?
Mr. Hodgson has favoured me with the following
Statejnent of the Land Revenue, collected from Canara,
during eighteen years: viz.
From July 1799 Star Pags. 437,923
Do 1800-1 . . 451,409
Do 1801-2 , , . 448,466
Do 1802-3 464,930
Do 1803-4 463,698
Do 1804-5 465,093
Do. . . '. . 1805-6 ^QQ,5\2
Do 1806^-7 459,102
Do 1807-8 465,170
Do lSOS-9 462,994
Do 1809-10 458,718
Do 1810-11 ,. 457,911
Do 1811-12 ...» 458,600
243
From July 1812-13 Star Pags. 458,987
Do 1813-14 458,061
Do 1814-15 458,836
Do 1815-16 455,814
Do 1816-17 457,042
What are we to infer from this statement ? Undoubt-
edly, that the " llyolxsoar " mode of management contains
no principle of improvement; that, when undertaken
under every circumstance of advantage, it remains nearly
stationary ; that under it, the landholder and the peasant
must remain poor, while the Government can never
become rich. If its notorious failure to produce an
increase of revenue were its only demerit, I should never,
probably, have meddled with it ; but it is a system, in my
opinion, calculated to produce poverty and wretchedness,
wherever it exists.
We have the assurance of Lord W. Bentinck, that the
Assessment of Canaj'a was light in 1806 ; the Court of
Directors evidently looked to an increase of resource
from the cultivation of the waste lands ; but what, after
all, has been the result? The province did not, in
1816-17, yield a larger revenue than in 1805-6; and we
have the following declaration from the Board of Revenue
at Fort St. George in 1818, that even this stationary
revenue, is more than the province can pay :
60. " To the practice of loading the lowly assessed or
'• industrious Ryot, with the tax of his less fortunate or
" more improvident neighbour (condemned by the very
" officer who adopted it as both "impolitic and unjust ");
" to the assumption of a maximum standard of assess-
" ment (the Beriz), much beyond the capability of the
*• country, even at the period of its greatest prosperity,
^^ to the gradual approximation made to this high stand-
^44
" ard, in the actual demand on more than half the landed
" property in Canara ; and to the annual variation and
'' consequent uncertainty in the amount of the assessment
" on individual Ryots, as much as to any temporary re-
'^ duced value of produce, or the imposition of new
" indirect taxes, are to be ascribed the decline in airri-
" gulture, the poverty among the Ryots, the increased
" private sale of landed property by the landlords, the
*^ difficulty of realizing the collections, and the ne-
" cessity, before unknown, of disposing of defaulters'
" lands, in satisfaction of revenue demands ; which,
'* after fourteen years residence in Canara, at length
" constrained the late Collector to record his conviction,
" that the present assessment is beyond the resources of
" the province." ! ! !— See Minute of the Board of Re-
venue at Madras, dated the 5th January 1818. — " Re-
venue Selections," page 898.
THE END.
LON DON:
V&IKTKD BV COX AXD BAYLIS, QIHEAT QUEEN iTRl'Sr
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1 KKTUKK TO D^SS'Um WHICH BORKOWBD
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