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value of the crop was eaten up in transit. There were no means to enable the lands of plenty to supply needy districts, and little money with which to buy grain. Also each part of the country had a separate currency which could only be exchanged at a ruinous loss. The lands were held on divers tenures and the collections made by the varying agencies. As to the administration of justice which was the sole province of the Nazim, " the regular course of justice was everywhere suspended; but every man exercised it who had the power of compelling others to submit to his decisions. The people were oppressed; they were discouraged and disabled from improving the culture of their lands.” (W. H. Report.)
The attempts of the Company to call in old coinage and issue new were defeated by the distrust of the people of a new currency, and by the difficulty of establishing a working ratio between gold and silver. In all the letters written from Bengal to the Directors in England dealing with the terrible famine it is only referred to as it affected their remittances. For the chief trouble of the men in India lay with the constant call for money from the islands and the jealousy of the Whigs in Parliament of the supposed wealth of a great monopoly.
Hastings, when in 1774 he became Governor General, though in a minority on the Council, in face of the spiteful opposition of Francis and some of his colleagues in Calcutta, and of expensive wars forced upon him by the native princes, effected great economies in answer to the call of the Directors in England. He thoroughly reformed the collection of the revenue, attempted justice and police and, restoring the credit of the Company, enabled it to pay a good dividend. In the course of his work for the Company he did acts which formed the basis of accusations against them later when Francis, with the help of Burke and other Whigs, was enabled to attack him. Certain provinces had been assigned by Clive to the Mogul Emperor who was now in the hands of the Mahrattas. Hastings sold these provinces to the Wazir of Oudh. They included the district held by the Rohilla Afghans who had remained after Ahmed Shah's invasion in 1761. They were crushed after a long and expensive war by the assistance of British troops who as part of the bargain had been loaned to the Wazir.
In 1774 Hastings, who was Governor of Bombay only, became
the first Governor General of India. But meanwhile the pressure of Parliament had become very heavy on the Company and its Indian servants. Ever since the grant of the Dewani to the Company the men who had stayed at home and talked suggested various schemes for the robbery of the Company which interfered with the linen and woollen trade, and disturbed the exchange of British goods for German and Silesian linen, by limiting their dividends, openly taking their revenue, taking the money by taxation and so on, proposals which, while hampering the men on the spot, did not stop either the corruption or the waste which they were fighting. By which you may see how very unlikely it was that the American colonists would put themselves in any equivalent position.
The Company traded in a variety of goods; their great home industry, the weaving of cotton materials, was gradually being interfered with by the machinery in Britain ; the trade in salt, of which they had practically a monopoly of manufacture, was carried on at Masulipatam and in Persia, employing a great number of men ; they were bound to supply saltpetre for the gunpowder manufacturers at home ; opium, one of their chief manufactures, was exported to China, from which they imported porcelain ; the silk manufacture had to compete with Italy. The Indians being backward in spinning and weaving of silk, Hastings imported Italian workmen from Lombardy to teach them, but the trade never greatly flourished. Also the indigo plant was cultivated at some loss, and the sale of woollen goods in hot climates to satisfy the people at home was a premium paid for their monopoly. The tea trade with China in exchange for opium and silver stood by itself.
There remains only the extensive cotton-growing industry. The delicate Indian hand-weaving was killed by the competition of the machine-made cloth of England ; the growing and marketing of Indian cotton was killed by the ruinous policy of the East India Company towards the grower and by the competition of cotton grown by slave labour in America. This decay of cotton growing is slightly later in date, but had better be treated of here.
The enormous area of India, inhabited by a great industrious population capable of growing fine and cheap cotton, would appear to have been well suited for the industry. But the Com
pany, in their desperate need of money, monopolized all the cotton grown, taking part as revenue, and buying the surplus at a very low price from the ryots. Their revenue system made it impossible for the growers to compete with the American, the taxes, duties and charges, even between the port of shipment and the inland parts, killing all hope of competition.
The Company after deducting taxes and duties left the producer less than a ld. a lb., taking from him in land tax and other charges £4 16s. out of £8 per candy (Committee appointed by the Government of Bombay, quoted in Memorial of British Merchants to Sir John Hobhouse., Effingham Wilson, 184) and also a heavy export duty at the port of shipment. In 1786 and the years following the price of Surat cotton at Bombay was 23 d. per lb., the freight on the East India Company's ships nearly 316d. per lb., the price in London held up by the monopoly was 11fd. per lb. This high price of Indian cotton helped, after the American revolution, to bring on American competition.
Under the British rule the slaves in the American colonies did not tend to increase; the difficulty of finding work for them was so great that many employers were prepared for their emancipation. The growth of cotton gave the opening for their employment, so that soon after the revolution the exports of cotton and the number of slaves mutually increased, driving out the East India cotton produced by free labour.
In 1790 there were only 629,697 negro slaves in the United States; in 1840 there were 2,487,213. In 1786 the total export of cotton from America was some 900 lbs. In 1846 the exports amounted to 768 millions of pounds. So well have slavery and slave-grown cotton flourished when the controlling hand of free Britain was withdrawn. The Indian cotton also has a shorter staple making it less suitable for spinning the finer qualities of yarn.
The inland or country trade gave great trouble. The Moguls and rulers of Bengal had granted considerable exemptions to the Company on goods bought in the interior for export, by which it had a great advantage over the native merchant who was subject to dues collected at various points. The underpaid and uncontrolled servants of the Company, under cover of this exemption, extended it to cover movements of goods from one point to another inland for their profit, and sold their privileges to people not entitled. Meer Jaffier objected and Clive tried to stop the wrong, but in vain. The Company's servants forced sales from the natives at nominal values and robbed them by every means of cruelty and force. Meer Cassim, who followed Meer Jaffier, made a compromise with Vansittart and Hastings, the only two honest and capable members of the Council at Calcutta, to allow the Company to trade under a duty of 9 per cent., as compared with 25 per cent., to be paid by the natives. But the Council, except for Vansittart and Hastings, took up an impossible attitude, which resulted in Meer Cassim taking off all duties, so as to give the Company no advantage over the private trader. Thereupon the Company deposed him and sold the title and office of Nawab to Meer Jaffier. He was to grant free trade to the Company, cede Burdwan, Midnapur and Chittagong, grant a monopoly of saltpetre at Purniah and of making lime at Silhet, make no treaty with the Dutch, not allow the French to fortify in the province, and pay enormous compensation.
Clive, sent out, wrote to the Company from Calcutta (Sept. 30, 1765, 3rd Report of the H. of C. App. 73) and to the Court of Directors. He saw that under the salaries given by the Company the servants could not do without the private trade. In spite of the Directors' orders he drew up a scheme (with Verelst and Sumner) for a monopoly of the trade in salt, betelnut and tobacco for the benefit of the higher grades subject to a duty to the Company which Clive estimated at half the profits (4th Report of H. of C. Committee, App. 7 et seq. 1772). In February 1766 the Directors of the Company refused to accept Clive's scheme and absolutely forbade the private trade. But they made no effort to give adequate salaries, with the result that the power soon passed from them to the party politicians at home. By abolishing the private trade they lost a large revenue, and left the Company's servants free to carry on an illicit trade for their own benefit.
The House of Commons ordered an enquiry into the finances of the Company, an enquiry no doubt needed, if it could have been conducted by a proper authority, but for which the House of Commons was incompetent and unfit. Then in 1767 an Act was passed, continued for a year in 1769, by which a rent of £410,000 was imposed for two years on the Company's territories. Clive objecting that it was unjust to the Company, Grenville (says Walpole, 1768) agreed, but said that four or five hundred thousand pounds was a bait too tempting to be rejected. As a result the affairs of the Company fell into a very bad way, and the Whigs in Parliament representing that the country was immensely wealthy and the Company greatly prosperous, the stock was forced up by stock jobbing as in the days of the South Sea Company. In 1770 came the famine. In 1772 various motions and suggestions were made for enquiry into the affairs of the Company and to improve its desperate condition. A secret Committee restrained them from sending out a commission of supervision to straighten out their own affairs.
iv. The Events of 1773.—The year 1773 produced striking developments in the British Empire and in European affairs. The first partition of Poland was completed. In Ireland, says Walpole, between the profusions of the late Viceroys to gain votes, the want of specie which was spent in England by the great proprietors of estates, the consequential decrease of trade and farms which in their turn produce emigrations, the revenue was almost gone, and necessary cash did not remain either to carry on government, commerce or common traffic ; hence the patriots had determined to propose a tax of two shillings in the pound on the estates of all who should not reside in Ireland. Great English lords, such as Lord Hertford and the Marquis of Rockingham, had great properties in Ireland. The influx of money from Ireland was the more important to England the more prejudicial it was to Ireland ; and as the greater part is spent in the capital, the city of London soon took alarm. But the tax was rejected in the Dublin Parliament.
An important new recruit was gained by the Whigs. Charles Fox had asked for himself and Burke a grant of lands in America; it was refused, and he turned patriot, attacked Lord North and was turned out.
The East India Company's condition had made it necessary for them to borrow largely from the Bank of England, and they now applied for a loan of £1,400,000 from the Government, which was granted by 13 George III., cc. 63, 64, the Regulation Act, of which the terms were that the dividend should be limited to six per cent., a government of Governor General and Council