Chapter XV (3)

[Footnote 63: A repetition of this command was among the particular instructions to Lord Clive in 1764.]

[Footnote 64: Under the establishment of this double batta, a Captain's commission produced little short of 1000_l._ per annum: when reduced, it was worth from 650_l._ to 700_l._, as appeared upon the action of Captain Parker against Lord Clive.]

[Footnote 65: Mill's "History of British India," vol. iii. p. 376.]

CHAP. XVI.

In the preceding two chapters, an account has been given of Lord Clive's successful efforts in the arduous task of reforming the abuses, and restoring order and discipline to the civil and military services of Bengal: it remains to notice other public proceedings of importance during his last residence in India.

No question connected with this period of his service was, at the moment and subsequently, the subject of more comment and discussion, both on the part of the Government at home and of individuals, than the monopoly of the salt trade; the profits of which he divided among the Governor, the Counsellors, and the senior civil and military officers; deeming this indulgence, as he repeatedly states in his official and private letters, indispensable to the integrity and efficiency of the public service. Men in high station, he argued, unless some ample and open allowance was given them, could never be expected to be reconciled to a strict observance of the covenants that prohibited presents, nor to the loss of that internal trade which had been denounced as so ruinous and oppressive. The shares in the profits from salt were, by his plan, divided according to the rank and duties of the parties. The amount was known, and, though liberal, it was limited, and, certainly, would not appear, from the statements made of it, to be more than a fair remuneration to men employed as those were to whom it was allotted.

Whether this mode of remunerating service was the best at the period when it was adopted, and whether the monopoly of the salt produced in the lower parts of Bengal, which the East India Company found existing, and have ever since, under one shape or another, continued, was advantageous or hurtful, on sound financial principles, are questions which merit notice, both as connected with the biography of Clive, and with the source of our Indian revenues.

The habits of thinking, and constitution, of the Court of Directors, rendered them very adverse to granting adequate salaries to those employed in high stations. These had all (including the military) the privilege of trading; and to the exercise of this privilege many of the abuses of the earlier times of the service have been justly attributed. Clive appears to have made reiterated representations upon this subject, impressing the necessity of adequate allowances, in some shape, to the superior officers, in order to animate their zeal, and preserve their public integrity. The narrow allowance to military officers, and their being expected to gain by trade, he particularly condemned. Writing to Major Stibbert[66], he observes, "I have received your letter of the 17th inst., and am not a little surprised that you should so soon request leave to return to Calcutta, considering how short a time you have done duty in your brigade. Your attention, I suspect, is too much taken up with commercial affairs; a study very foreign from an officer, even of an inferior rank, as it must frequently interfere with the services of a military station, but particularly reprehensible in those to whom a share in the profits upon salt is allotted. However, I admit that the death of your attorney may make your presence in Calcutta necessary. You have, therefore, my permission to leave the cantonments immediately, if the service will permit, and Colonel Smith has no objection."

The ground on which he felt the necessity of assuring to military officers of rank liberal allowances, in order that they might suitably maintain their station in life, and enjoy a reward for long service; and the necessity he saw for putting an end, on their part, to all indefinite and indirect perquisites, and of giving to their minds a tone that should elevate them above all sordid views, and make them what their stations required they should be, is well stated in a letter[67] to Sir Robert Barker:--"Colonel Smith is making a vigorous progress in reforming the abuses that fall under his notice. The monstrous charges and impositions of quarter-masters, surgeons, &c., &c., require, indeed, the strictest scrutiny; and he seems determined to go through it with great spirit and attention to the Company's interest. Nor shall I be disappointed in the assistance I expect from you in these matters, whilst I shall, at the same time, have the satisfaction of knowing that you can enforce wholesome regulations without creating disgust. The privilege of making bills, and the long track of frauds introduced under the customary disguise of perquisites, I wish to see entirely abolished. Every emolument shall be fixed, plain and open: the medium shall, if possible, be struck between extravagance and niggardly restrictions: but economy shall take place. The allowance to field officers will be so large as to prevent even their wishing for more; and, at the same time, so reasonable, that I think the Company must approve of them. A colonel's share of the salt produce will be from 5000_l._ to 6000_l._ per annum, or more[68]; lieutenant-colonel's and major's in proportion; and as a further encouragement, I intend that all the field officers shall be allowed sufficient to defray the expense of their table. When all mean advantages are disclaimed and held in contempt by gentlemen high in the service, reformation will, of course, be with greater ease introduced among inferiors. You will do me the justice to believe that I mean this as a general observation only, and not as a necessary hint, either to yourself or any of the field officers of your regiment, as I know you are all men of honour and principle."

The reasons of expediency that led Clive to recommend that high public officers, civil and military, should be remunerated by shares in the profits of the salt trade, are stated in numerous letters. He thought that an open, direct, pecuniary allowance would not willingly be sanctioned by the Company out of any of the revenues which flowed into their treasury, and still less from the profits of their trade; and that, besides, such large avowed allowances would invite an attack from the Crown on their patronage; and that the grasping character of the administration in England would lead to a ruinous interference in the nomination of men to India who had no recommendation but their high birth and great interest.

It was the above considerations that compelled him to devise the means he deemed least objectionable of adequately rewarding service, in order to gain, by the tie of self-interest as well as honour, those instruments without whose aid he was sensible the great reform he had resolved to introduce could neither be complete nor permanent. In Clive's correspondence and measures, at this period, will be found the origin and introduction of that important principle of a fair and honourable payment for service, suited to its nature and the rank and responsibility of the individuals employed, which has been generally ascribed to the more enlightened policy of a subsequent administration. That his efforts failed, was owing to the conduct of others, and particularly the public authorities in England, who, in their attack upon the salt monopoly and its appropriation, and in the condemnation of his measures, threw, for a period, a disrepute upon all that he had done, which led to a revival of a great proportion of the abuses he had corrected, and a disregard of the principles he had established. As the salt monopoly and its appropriation has been a subject of constant attack upon his character, and continues, so far as the monopoly is concerned, to be still one upon the Indian Government, the subject merits a cursory notice, which is all that the limits and objects of this Memoir will permit.[69]

We have already seen that, by the firman of the King of Delhi, the English Company possessed the right of trading free from duties. This privilege was granted to favour the kind of trade they then carried on, which was confined to exports and imports by sea: and the dustuck, or passport, of the English presidents or chiefs, was respected by the Subahdar's officers to that extent. Under this privilege the President favoured also the private trade of the Company's servants or officers, which, though not strictly according to the words of the firman, was never objected to.

As to the internal or carrying trade of the country, to engage in it never entered into the plans of the Company or its servants, which were confined to the valuable and profitable traffic between Europe and India; and, had they thought of it, it is clear that it could not have been profitably conducted by foreigners under a native government, which had the power of enforcing justice in the transactions between them and its own subjects.

But after the deposition of Suraj-u-Dowlah, and the elevation of Meer Jaffier, the influence of the English in Bengal became paramount; and, as they were all traders, some of them extended their views, and availed themselves of their political superiority to enter into the internal trade also; and, applying their partial freedom from duties on foreign trade to circumstances totally different, employed it to exempt themselves from duties even on their illegal internal commerce; an indulgence which, of course, had never been intended.

As long as Clive remained in Bengal, he checked these pretensions by his characteristic firmness and spirit; but no sooner had he left the country, than there was a general rush of the Company's servants, and of Europeans of all classes, towards the interior trade of the three provinces. In the foreign trade, the Company and its officers had, indeed, the advantage of trading free of duties, but the returns were tardy, and in some instances uncertain; whereas in the internal trade the return was rapid and certain; and, as they most unjustly claimed for this trade the same exemption from duties which they had enjoyed for the articles of their foreign export trade, it is clear that they had it in their power to undersell the native merchant in his own market; that, to the extent of their capital, they had all the advantages of a monopoly; and that, as their trade increased, the revenues of the sovereign must decay. By this assumption they, in fact, made themselves participators in the benefit of the taxes imposed for the public service.

Of all the articles of inland trade, that of salt was by much the most important. Its manufacture and trade had always, to a certain extent, been a monopoly, and was generally farmed or granted for a price, as a boon, to some favourite of the prince. Being a necessary of life, the demand was great and steady; and the capital employed in the trade being limited, the return on it was very large. It seems, under the frugal management of the natives, to have amounted to 200 per cent. After the deposition of Meer Jaffier in favour of Cossim Ali, planned, as we have seen, by Mr. Holwell, and imprudently executed by Mr. Vansittart in 1760, not long after Lord Clive's departure, the abuses of the English private trade in this and all its other branches, no longer sufficiently checked by the Governor, increased daily. Fortunes were amassed with singular rapidity; and such was the certainty of gain, that native capital flowed plentifully into the hands of the English merchant, who employed it himself, or permitted the trade of natives to be carried on covertly under his name. It could not be otherwise; for, while the native purchased the commodity at a high rate, paid an enormous duty, and was subject to all the expense and annoyance of frequent tolls, exactions, and stoppages, the English had become possessed of the principal salt works, paid no duty, and carried their wares at pleasure about the country for sale free from all demand or exaction whatever.

Cossim Ali, a prince of great sagacity, and no mean financier, remonstrated with Mr. Vansittart on the abuses exercised by the English, and still more under their name, all over the country, to the oppression of his subjects, and the ruin of the public revenues; for not only did the Gomashtahs, and others in the service of the English, refuse payment of customs, but they insulted, and sometimes even insolently punished, on their own authority, the officers of the native Government. Mr. Vansittart, quite aware of the justice of the complaints, and not unwilling to remedy them, as far as the little power left in his hands by the rapacity of his Council, and his own want of vigour, would allow, at length entered into a treaty with the Subah[70], by which, among other stipulations, it was agreed, that the English should be allowed to engage in the inland trade, but subject to duties; and, in particular, were to be allowed to purchase salt, subject to a low duty of 9 per cent. only, and might transport it about the country, free from all the transit duties paid by the Subah's own subjects.[71]

This arrangement, such as it was, afforded but a feeble redress to Meer Cossim: but the Council, themselves the principal traders, were indignant, even at this moderate deduction from their commercial gains, and disavowed the act of the Governor. The consequence was what we have seen: Meer Cossim, seeing his subjects deprived of their trade, and himself of his revenues, proclaimed a general exemption from customs and duties for two years, to his subjects and to all others.

The rage of the Council of Calcutta at this step, rendered necessary by their own conduct, led to a bloody war, the massacre of Patna, the deposition of Meer Cossim, and the restoration of Meer Jaffier. It was not without reason that the Court of Directors regarded "the inland trade as the foundation of all the bloodshed, massacres, and confusion which have happened of late years in Bengal."

By the treaty[72] with the restored prince, the English got a right of trading by their own dustuck, free of all taxes, duties, and impositions, excepting one of two and a half per cent. on salt. This was, in effect, giving them a monopoly of that profitable trade; and it appears that even this duty, trifling as it was, was never levied. The arrangement threw the whole inland trade of the country into the hands of the English and their agents, whose violence totally paralysed the native Government.

These proceedings, and their fatal consequences, were viewed by the Court of Directors with indignation and alarm. The new assumptions had not even the air of being for their benefit, but were exclusively for the advantage of their servants. They therefore, in order to repress the evil, on the 8th of February, 1764, sent out an order to put an end to the inland trade in salt, betle-nut, and tobacco, and all other articles produced and consumed in the country.

It was soon after this order was resolved upon that, the news of the massacre of Patna, the war with Meer Cossim, and other events, having reached England, and diffused the greatest consternation every where, and especially at the India House, Lord Clive was solicited once more to return to Bengal, to restore peace and stability to the empire of which he was the founder. In his letter to the Court of Directors[73], accepting of the government, fully aware of one great source of misrule, he recommended an entire abolition of the inland trade in salt, betle-nut, and tobacco, as having, with other circumstances, concurred to hasten and bring on the late troubles.

But, soon after the date of this letter, the Court of Proprietors, among whom were numbers favourable to the claims of the servants, and who saw with alarm a stop likely to be put to a trade which, in the short space of four years, had already sent many large fortunes to England, had come to a resolution[74] to recommend "to the Court of Directors to reconsider the orders sent to Bengal relative to the trade of the Company's servants in salt, betle-nut, and tobacco; and that they do give such directions for regulating the same, agreeably to the interest of the Company and the Subah, as to them may appear most prudent; either by settling here at home the restrictions under which this trade ought to be carried on, or by referring it to the Governor and Council of Fort William to regulate this important point in such a manner as may prevent all future disputes betwixt the Subah and the Company."

The orders of the 8th of February had been dispatched previously to the arrival of the news of the new treaty with Meer Jaffier; "the terms of which, however," the Directors justly observe, "appear to be so very injurious to the Nabob, and to the natives, that they cannot, in the very nature of them, tend to any thing but the producing general heart-burnings and dissatisfaction;" it is therefore directed, that the orders of the 8th of February remain in force, till a more equitable plan can be formed; the Governor and Council being directed to consult the Nabob as to the manner of carrying on the inland trade of salt, and other articles produced and consumed in the country, which may be most to his satisfaction and advantage, the interest of the Company, and likewise of the Company's servants, and to form and transmit home an equitable plan, to enable the Court to give directions. It is to be remembered, therefore, that in this view there was a threefold interest to be considered; that of the Nabob, of the Company, and of the Company's servants.

This letter was carried out to India in the ship which conveyed Lord Clive; though a copy, sent by another vessel, arrived some time before him.

When Lord Clive reached India, one of the first objects that engaged his attention was the manner in which the public servants were to be remunerated.

At that period, their direct salaries were very trifling; that of councillor being only 350_l._, and the others small in proportion. The Company was originally strictly a trading Company, and its clerks and servants were paid chiefly by being allowed to trade on their own account. When the Company found it necessary to have troops for the defence of their factories, their military officers were paid in the same way. All were merchants and traders, from the governor, the commandant, and the chaplain, down to the youngest writer and ensign.

Now that they were princes with a large territory, and a formidable army, the steps by which they reached that eminence had been so sudden, and the consequences so unforeseen, that their servants still continued to be civil, military, and ecclesiastical traders: the old system remained unchanged.

But a change of circumstances necessarily called for a change of regulations. The relative situation of the English and natives was no longer the same: for instance, the receiving of presents from native princes, or men of rank, had quite altered its nature. While the Company were mere traders, there could be no good reason for hindering their servants and the natives from mutually receiving and bestowing presents. The parties were on a level, bound to each other by common interest, and presents were nothing more than a mark of the good-will that subsisted between them; the consequence of their friendship or relations in trade, exhibited according to the usage and fashion of the country, of which the giving and receiving of presents formed a part.

In the altered situation of the Company, when their servants concluded treaties, influenced the fate of provinces, and made and unmade princes, things were essentially changed. Presents were now liable to become, not the sign and consequence of good-will, but the motive, and sometimes the guilty motive, of public acts; and great sums might be thus extorted, to the injury both of the natives and of the Company: and, indeed, this natural effect did ensue. The paramount influence of the English authority was abused, for purposes of private interest and selfish rapacity. Great fortunes were made in this way during the five years that Lord Clive was absent in England, and these benevolences became a most heavy burden on the men of rank and wealth in India.

To check this evil, the Court of Directors, as we have seen, ordered covenants against receiving presents to be entered into by all their servants.

The orders issued regarding the inland trade nearly shut up another great source of gain. During the five years in which the public servants had carried it on with such amazing profit, the export trade, as an inferior branch, had been left chiefly to free merchants and free mariners. The orders excluding the Company's servants from the inland trade now drove them back, once more, to foreign and general trade, but in more unfavourable circumstances.

They complained to the Directors that, by the course of events, which had done so much for the Company, they were placed in a worse situation than ever, and engaged in an unfavourable competition even with the free traders: that, instead of benefiting, they suffered by being in the Company's service, as they were confined to one spot by the Company's concerns, while the others could run over the country, and had nothing to engage them but their own interests. In this representation there was much truth; though the conclusion might have reached farther than either the Company or their servants would have been willing to allow.

Men who had been accustomed to look to great and immediate returns for their capital, or for the mere use of their name, looked upon the restrictions under which they were now placed as the height of tyranny. The habits of indulgence and expense which they had acquired from the rapid influx of wealth, and the golden prospects which their situation had seemed to hold out to them, were bad preparations for returning to, or for acquiring, the patient, sober, and steady habits of business which general commerce requires. Lord Clive found the settlement in a ferment; and all ranks of the Company's servants resolved to throw every obstacle in the way of executing the Company's orders.

How he triumphed over the civil, as well as military, combinations which threatened ruin to the British ascendency in India, we have already seen: but if he triumphed, it was not by firmness alone; it was equally by the justice, the consideration, the policy, which guided all his measures.

He had all the powers of mind necessary for his new situation; but his instruments were very imperfect. He saw that a grand crisis had arrived in the Company's affairs; that their servants were brought into contact with men possessed of the greatest wealth and power, and whose fate they really held in their hands. "Without proposing a reasonable prospect of independent fortunes," says one of his friends[75], "it was ridiculous to hope that common virtue could withstand the allurements of daily temptation; or that men armed with power would abstain from the spoils of a prostrate nation."

Clive was particularly desirous, as we have seen, that the chief men in the administration of affairs, but especially the Governor, should be withdrawn from trade, and from whatever could warp the freedom of their opinions: it is a subject to which he often reverts in his private correspondence.

But to expect that the Directors would directly sanction large salaries to their servants from the profits of the Company's trade, or from their territorial revenues, was vain. It was quite at variance with the old maxims by which they were accustomed to regulate their concerns.

There seemed to be no alternative, therefore, but either to let things proceed in the ruinous course in which they now were, to enforce the covenants, and enter, unaided, on a hopeless struggle between private interest and public duty; or to find means, from such resources of the country as were not yet claimed by the Company, to pay the superior servants in an adequate and ample manner; and this last he resolved to attempt.

"It was not expedient," says Clive himself, in his speech in the House of Commons[76], "to draw the reins too tight. It was not expedient that the Company's servants should pass from affluence to beggary. It was necessary that some emoluments should accrue to the servants in general, and more especially to those in superior stations, who were to assist in carrying on the measures of Government. The salary of a councillor is, I think, scarcely 300_l._ per annum; and it is well known that he cannot live in that country for less than 3000_l._ The same proportion holds among the other servants. It was requisite, therefore, that an establishment should take place; and the Select Committee, after the most mature deliberation, judged that the trade in salt, betle-nut, and tobacco, under proper regulations, might effectually answer the purpose."

One difficulty had been removed when, about the time of the grant of the dewannee, the young Nabob, Nujum-ed-Dowlah, had yielded up to the Company the whole of the revenues of the three provinces, in consideration of a fixed annuity. The question, after that, no longer regarded the Nabob, or his revenues; it was only between the Company, their servants, and the natives; and Clive believed that, by an arrangement regarding the salt trade, the interest of all could be conciliated: and it is to be recollected, that the Directors had ordered that the new plan should have a view to "the interest of the Company, and likewise of the Company's servants."[77]

It is unnecessary to enter into all the details of the plan finally adopted in September, 1765, which were chiefly arranged by Mr. Sumner. The salt trade was to be conducted solely by a society composed of all the higher officers of Government, civil and military; their capital was to consist of a certain number of shares; the civil servants, as low down as factors, the military, as low down as majors, were to hold shares; chaplains and surgeons had also their shares; the capital for carrying on the trade was to be furnished by the sharers, in their due proportions. The affairs of the Society were conducted by a committee; the salt was to be furnished to them by contractors, and was to be sold at various grand stations by agents, generally Europeans, appointed by the Committee, the purchasers from whom could carry and sell it over the country at pleasure; 35 per cent. on the price was allowed as a tax to the company[78], who had now come into the Nabob's place; the selling price, at the different remote stations, was also fixed at rates 12 or 15 per cent. below what was found to have been the average rate of the twenty years preceding.

Besides providing ample allowances to the chief of the Company's servants, the great advantage of this plan was, that it allowed them to withdraw their attention wholly from trade.[79] They were sleeping partners of a sure and profitable concern, the whole details of which, without any care on their part, was managed by a committee devoted to the business.

The profits of this Society were, as might have been expected, very great. "The capital of the salt trade," says Clive, writing to Colonel Call[80], "is 32 lacs of sicca rupees, upon which the most moderate expect to make 50 per cent., clear of all charges; others, 75 per cent.; and the most sanguine, 100 per cent. Take the lowest, and a councillor's and a colonel's profit will be 7000_l._ sterling per annum; a lieutenant-colonel's and junior merchant's, 3000_l._; majors' and factors', 2000_l._ These advantages, and a free open trade, are in lieu of all presents from the natives, and all perquisites disadvantageous to the Company, and dishonourable to the servants." And in a letter[81] to Mr. Palk, the Governor of Madras, after mentioning the large allowance that the trade would give to the different sharers, he adds, "This extraordinary indulgence is in lieu of perquisites; for I intend the Governor and Council shall take a most solemn oath at the Mayor's Court, in presence of all the inhabitants, that they shall receive no perquisites whatever, or other advantages, excepting what arises from their trade; and to this shall be added a penalty-bond of a very very large sum of money. These articles, upon my arrival, were altogether in the hands of the Company's servants and free merchants, and only yielded to the Company 60,000_l._ per annum, and to the Nabob nothing, for they did not even pay the 2-1/2 per cent. duties. Neither will the method we are pursuing be attended with the least disadvantage to the inhabitants: the same hands who made and worked the salt are still employed at the same rates; and the salt in general will be sold at a much lower price than formerly. Formerly the salt was sold dear or cheap, according to the demand for that article; we shall endeavour to fix upon a price for every market, and always sell it for the same."

The result of the first year's sales was very prosperous, and even exceeded expectation: insomuch that, in forming the plan for the following year, it was resolved to diminish the profits of the proprietors, and to raise those of the East India Company, the duty to whom was now fixed at 50 per cent., which, at a low valuation of the salt, was to produce about 160,000_l._ Clive had, however, in the course of his progress through the country, observed the inconvenience of employing European agents in the trade; and a very material improvement was introduced, by dispensing with their agency altogether, and selling the article at Calcutta, or where it was made, to the natives only, with permission to convey it wherever they pleased. In this way Europeans were totally removed from any direct interference with the natives in the interior, and the trade was as free as any monopoly can be. This second year's Society commenced in September, 1766.

Not long after it began its operations, letters from the Court of Directors reached Bengal, disapproving of the plan of the first year's Society, and commanding the trade to be thrown open, and left entirely to the natives. In coming to this resolution, they were not so much influenced by any views of the particular merits or demerits of the new plan itself, as by consideration of the mischiefs which had for several years attended the general system of internal trade carried on by the English gentlemen with a high hand, free of duties. Their orders, repeatedly sent out, to pay the legal duties to the Nabob, and to keep within the meaning of the Emperor's firman, had been totally neglected, or provokingly evaded. Repeated revolutions had been the consequence, and immense suffering to the country. "We are fully sensible," say the Court of Directors[82], "that these innovations, and illegal traffic, laid the foundation of all the bloodshed, massacres, and confusion which have happened of late years. We cannot suffer ourselves to indulge a thought towards the continuance of them, upon any conditions whatsoever. No regulations can, in our opinion, be formed, that can be effectual to prevent the like consequences which we have seen." They desire, however, that the duties, as forming part of the revenues of Bengal, should not be abolished. In a letter of the same date, to Lord Clive, the Directors, after bestowing the greatest and most merited praise on the penetration with which he had at once discerned their true interest in every branch of their concerns; the rapidity with which he had restored order, peace, and tranquillity; and the integrity which governed all his actions, proceed to give their resolutions on the inland trade. "The vast fortunes," they observe, "acquired in the inland trade have been obtained by a scene of the most tyrannic and oppressive conduct that ever was known, in any age or country. We have been uniform in our sentiments and orders on this subject, from the first knowledge we had of it; and your Lordship will not, therefore, wonder, after the fatal experience we had of the violent abuses committed in this trade, that we could not be brought to approve it, even in the limited and regulated manner with which it comes to us, in the plan laid down in the Committee's proceedings. We agree in opinion with your Lordship on the propriety of holding out such advantages to our chief servants, civil and military, as may open to them the means of honourably acquiring a competency in our service; but the difficulty of the subject, and the short time we have at present to consider it, have obliged us to defer giving our sentiments and directions thereupon, until the next despatch." The letter concludes with entreaties to him to remain for another year in India, and with holding out the prospect of some solid permanent retribution, corresponding to his most important services.

The real causes of the resolutions of public bodies do not always appear in their public acts. To deprive their servants of their principal means of subsistence, without substituting any authorised allowance in its place, was bad policy in itself, and was reducing Lord Clive, in the midst of his exertions, to a very painful dilemma. Mr. Scrafton, in a letter[83] to Lord Clive, explains their secret reasons. The Proprietors had begun to clamour for an increase of dividend, which the Directors thought unsuitable to the situation of the Company's affairs. "This," says he, "has induced the Directors to defer the consideration of the gratification of the servants on abolishing the salt trade. Such consideration could not be but for a vast sum; and if it had got wind that such gratifications were ordered, the Proprietors would be outrageous for an increase of the dividend. Though we cannot open our minds upon it, yet it appears to me an increase of dividend must take place at the Quarterly Court in June; and then the Court will be under no restraint, but will give a per centage on the revenues, in which the Governor will have a great share, in lieu of trade; the rest among the Committee, Council, colonels, and ten below Council, but no lower."--"Your Lordship may be assured it will take place; for, when the last paragraph was added to the letter to you, the Committee declared it was their meaning and intention to do it by the next ship."

The letters of the Directors, the first which Clive had received in answer to his communication on the plan which he had formed, as directed by them, for carrying on the internal trade, reached him only in December, 1766, a month before he left India. He had for some weeks been confined to his chamber by a very severe illness, from which his life was in danger. He now felt himself placed in a most painful predicament, between the Court of Directors and the immediate difficulties of his situation with the civil and military servants. He believed that, with long attention and care, he had succeeded in disarming the salt trade of most of its evils, and by its means had secured to the Company's superior servants a lawful for an unlawful income. But the commands of the Directors were positive; and, though he was of opinion that they were founded on mistake, it was his wish to conform to them. The Company, though aware of the address and spirit of command with which he had checked the machinations of their civil servants in 1765, were still ignorant, when their orders were given, of his still more difficult triumph over the mutiny of their military officers. They had, most justly and wisely, deprived their servants of their means of illicit gain; they now rashly deprived them also of what had been substituted as a lawful provision; they referred these discontented and powerful men, who had vast wealth within their reach, to a future and uncertain time, when their masters should be at leisure to pay some attention to their immediate and urgent necessities. An inferior man would have hesitated and faltered: Clive saw that decision was necessary for the crisis. He could not undo his own work of pacification and reform. The affairs of the Society were too far advanced to be discontinued all at once. He therefore confirmed the grant to the Society, but declared that it was to terminate at the conclusion of the current year, the 1st of September, 1767.[84] At the same time, the Select Committee of Calcutta, by their letter of the 26th of January, 1767, while they mentioned that the orders for discontinuing the Society had been complied with, remonstrated strongly with the Court of Directors on the occasion; calling on them to review their opinion.

Such is an outline of the history of the Society of Trade during Clive's government. He formed a society in unison, as he supposed, with the spirit of the orders of the Court of Directors, which desired him, in the new plan of trade intended to be formed, to consult the benefit of three parties--the Nabob, the Company, and its servants. The Nabob's interest had merged in the Company's. The interest of the natives, however, the most important of all, was consulted by their restoration to the benefits of the trade, from which recently they had nearly been excluded; and by the exclusion of Europeans from any participation in the details of it. How the interests of the Company's servants were to be consulted by any plan that admitted them to the profits, yet excluded them in every shape from the trade, it is not easy to imagine. Lord Clive and the Committee did, therefore, what then, and in all succeeding times, it has been found necessary to do, in India, and in every distant possession, to form and execute a plan on their own responsibility, and to leave the future approbation or disapprobation to their distant masters. Inconvenient as this may be, it is an inconvenience inseparable from distant legislation.

A few words may here be said on the future history of the salt trade. The Court of Directors, after receiving the letters of the Select Committee, still persisted in their desire of abolishing the Society, and of removing Europeans from this and all other concern with the inland trade of the country. They therefore, by their letter of the 20th of November, 1767, written eighteen months after their former letter, ordered the Society of Trade to be abolished, and the salt-pans to be sold by public auction, excluding all Europeans from being bidders or owners, directly or indirectly. Instead of the benefits resulting to the senior servants from this trade, an allotment of 2-1/2 per cent. on the net revenue of the dewannee was assigned to them in certain shares; and a small increase of pay to captains and subalterns.[85]

Meanwhile, in Bengal, when September, 1767, arrived, these last orders having not yet been received, nor indeed written, another year was allowed by Mr. Verelst, the new Governor, and his Council, to the Society of Trade, to collect their debts, and realise their capital. It was not till September, 1768, that it ceased; and the Court of Directors having, in December, 1769[86], by a sudden and singular departure from their opinions, so strongly announced, sent out instructions to lay open the inland trade to all persons, as well natives as Europeans, a proclamation to that effect was published at Calcutta, on the 12th of December, 1770. The effect of this essential change in the Company's plans on the future prosperity of the provinces, it is no part of the present Memoir to investigate; but it is very plain, that, by admitting Europeans into the inland trade, in the state in which the country then was, they really did away with all the benefit that could in any way have been expected to arise from abolishing the monopoly.

But whether Lord Clive's opinions regarding the trade in salt were sound or not, one thing at least is evident,--he was perfectly conscientious in the advice he gave, and on the measures he adopted, on that subject. This is plain from his whole conduct, and from his correspondence, public and private, with numerous persons, while in India. Nor did his anxiety on the subject cease, even after he had reached England, when all private interest in the subject, if he can be supposed ever to have had any, must have been over. Finding accidentally, some months after his arrival, that the plan of abolishing the Salt Society continued to be entertained, he explained his views on the subject to the Committee of Treasury and Correspondence of the Directors, in a detailed and laboured letter.[87] He pointed out the advantages of the trade as then regulated, as the best fund that the Company could appropriate for the payment, without grudging or envy, of their superior servants: that it enabled them to regulate the emoluments of their servants, according to their own wishes; that by it, their servants had the appearance of being paid, not by the Company, but by the profits of their own trade,--an advantage not attending any payment by a percentage on the revenue. "If you grant a commission upon the revenue," says he, "the sum will not only be large, but known to the world; the allowance being publicly ascertained, every man's proportion will at times be the occasion of much discourse, envy, and jealousy; the great will interfere in your appointments, and noblemen will perpetually solicit you to provide for the younger branches of their families." It is evident, that his views originated not in principles of political economy, but of policy, forced upon him by the circumstances in which India was placed. His efforts were directed to insure a desirable object, in what he deemed, not certainly the best, but the only practicable mode.

In spite of this remonstrance, the Committee came to the resolution of throwing the trade open, imposing only a duty of 10 rupees on the hundred maunds of salt. Lord Clive again addressed them[88], showing that they were in reality giving up 300,000_l._ per annum, for a tax of only 31,500_l._; and pointed out that, even on their plan, the trade would continue in some degree a monopoly, and that the servants would still be concerned in it to what extent they pleased, under their banyans and black merchants. His expressions in writing the same day to Mr. Verelst, show how sincere and deep-rooted his opinions on the subject were. Sending him a copy of his letter to the Committee, he adds, "What attention they will pay to my representations I know not: but I have such confidence in your honour and zeal for the Company's welfare, that I cannot help hoping you will take care that the Company be not deprived of 300,000_l._ per annum, however peremptory the orders of the Directors may be."

The letter of the 20th of November, 1767, already mentioned, was written soon after. The only effect of this remonstrance was a change by which the duty was to be advanced to a sum not exceeding 120,000_l._ Lord Clive points out, in several confidential letters to Mr. Verelst, the want of information of the Directors on this occasion, and the pernicious consequences likely to result from the change. That he was sincere, admits not of a doubt. His opinions on the subject he maintained uniformly to the last hour of his life, and the events seem to have justified his foresight.

The tax, as regulated by him, certainly was a monopoly, and so far was exceptionable; but he might justly maintain that the real question was, Are the evils arising from this monopoly, or from the licentiousness of the rulers of the country, if penuriously paid, most to be dreaded? and of this he had no doubt. Even from the question of the comparative merits of a monopoly and free trade, political considerations, unfortunately, could not be altogether excluded. The society of trade was abolished under pretence of being a monopoly. This was not, however, the real cause. That society excluded from the salt trade a body of powerful and wealthy Europeans, who raised a clamour, in name of the natives, but solely for their own private views. On the plan, as reformed by Lord Clive, the natives were restored to their former employment, and Europeans excluded. But when the trade was thrown open to all indiscriminately, natives and Europeans, the change, though in form the result of sound principles of government and of political economy, was really, in substance, quite the reverse. The two parties did not come into the field on equal terms; the society of trade had a direct interest that no oppression should be exercised on the natives in their dealings over the country; and being composed of the leading men of the government, had the means of affording them protection. But when the trade was reduced to a scramble between Europeans having the whole authority of the country, and natives who had none; when redress was to be sought by the natives from their very rivals and competitors; their condition became hopeless; and that fact sufficiently accounts for the melancholy nature of the history of the inland trade in succeeding years.

Two charges connected with this transaction of the salt trade were afterwards brought against Lord Clive: the first, that he obstinately persisted in disobeying the orders of the Company for its abolition; the other, that by having a share in it as Governor, he in some measure deviated from his plan of not trading, and of deriving no pecuniary benefit to himself from his voyage to India.

As to the first, we have seen that several letters were certainly received from the Court of Directors, after his arrival in Bengal, declaring their decided hostility to their servants engaging in the inland trade at all, and especially in that of salt. But a comparison of dates has shown that these letters were directed, not against any measures of Lord Clive, which were not then known, but against the grossly unjust and pernicious proceedings which took place before his arrival. To the letter of the Select Committee of Calcutta, of the 30th of September, 1765, detailing the plan for the first society of trade, an answer, dated the 17th of May, 1766, was received on the 8th of December following: and so far was Lord Clive from obstinately persisting in continuing the trade, as has been asserted, that on the 24th of the following month, while hardly yet recovered from a dangerous illness, he declared the society abolished, at the close of the season. He had fixed so limited a period as one year for its duration, because it was only experimental, and to admit of any change suggested by the Directors.

The second charge was, that, as a sharer in this society of trade, he had deviated from his intention expressed in his letter to the Company, not to improve his fortune by his voyage to India.

His share as Governor in the society of trade (a concern, the details of which were entirely confided to a committee, and the operations of which he knew only from their result) was certainly very different in its nature from private trade on his own account. To his intention not to increase his private fortune by the emoluments of his office, or by trade in any shape, he religiously adhered. Of the allowances to the Governor, the honorary presents that could not be refused without giving offence, the proceeds of the Governor's share of the society of trade, with all other emoluments annexed to his office, he caused a distinct account to be kept. Out of it were defrayed his expenses as Governor, and by the surplus he did not benefit. He had taken with him to India three gentlemen: Mr. Maskelyne, his friend and near connection; Mr. Henry Strachey, his private secretary; and Mr. Ingham, his family physician;--no large establishment for a Governor leaving his family and going abroad in the circumstances Lord Clive did. The sums in question were employed in remunerating them, and some persons of his household; and by the account kept of these and of all other sums received by him from the time he left England till his return, which was communicated to the Company, and afterwards laid before Parliament, far from having added, in any respect, to his private fortune, as this charge supposes, it has never been disputed that there was a balance of 5816_l._ 16_s._ 9_d._ against it. If these gentlemen were remunerated, therefore, it was not at the Company's expense, by any extraordinary charges upon them; but at the expense of the Governor, who gave up to them the allowances which he might have retained to himself.[89] The charge was really as unfounded as it was ungracious, and, it is to be observed, was brought against him by men who had shown no such pecuniary delicacy.

Of another charge, also brought some years after, against Lord Clive's administration, that of having fixed an improper rate of exchange between the gold and silver coinage of Bengal, it is not necessary to say much. In India, gold and silver coin are articles of trade even more directly than in most countries in the world, and the variation in their relative value is often extremely great. In the year 1766, a scarcity of silver existed in Bengal, from the quantity exported to China, from decreased importation, and other causes. It was known that there was much gold in the country, in various shapes; and to inexperienced political economists it seemed a very reasonable expedient to give a premium for its being brought out. A favourable rate was therefore fixed on the new gold mohur then coined. This certainly had the effect of bringing gold to the mint; but, as might have been foreseen, only increased the evil, by causing still more silver coin to be withdrawn from circulation. The bankers and shroffs of the country, who are proficients in the science of exchange, naturally paid their demands in gold, and exported or hoarded the silver. The gold coin they were unwilling to receive at its legal value, without a large batta, or exchange, in reality to compensate its inferior intrinsic value as compared with silver, the ordinary circulation of the country. This necessary measure of self-defence was regarded as a trick or fraud in trade. The proclamation of 30th June, 1766, directing the coin to be taken at certain rates, was one of those ineffectual attempts to force circumstances, formerly so usual with politicians of every class and of every country. It was, of course, ineffectual; and necessarily occasioned no small inconvenience to merchants and retail traders. Its effects were chiefly felt after Clive had left India. The Court of Directors, from their correspondence, seems to have been nearly as much puzzled as the Council of Calcutta; though the fact, that the difference of market value between the gold and the silver coin rose to 17-1/2 per cent., ought to have afforded an easy explanation of the difficulty.[90] Yet those who recollect the discussions, in our own times, in the British parliament, on the difference of value between the guinea and the bank note, and on the bullion question in general, will not be disposed to view with much surprise a similar difficulty that occurred in a distant country, half a century before.

Though these charges were brought against Lord Clive long afterwards, yet, as they all relate to India, it has been judged best to state them at this period of his career, when he was still engaged in his active services in that country.