UNIVERSITY OF CALIFORNIA 
 AT LOS ANGELES
 
 INQUIRY 
 
 INTO THE 
 
 PRACTICAL MERITS OF THE SYSTEM 
 
 FOR THE 
 
 GOVERNMENT OF INDIA. 
 
 3
 
 AN 
 
 INQUIRY 
 
 INTO 
 
 THE PRACTICAL MERITS 
 
 OF THE 
 
 SYSTEM 
 
 FOR 
 
 THE GOVERNMENT OF INDIA, 
 
 UNDER 
 
 THE SUPERINTENDENCE 
 
 OF THE 
 
 BOARD OF CONTROUL. 
 
 BY 
 
 THE EARL OF LAUDERDALE. 
 
 EDINBURGH: 
 
 Printed by George Ramsay fy Company, 
 
 FOR ARCHIBALD CONSTABLE AND COMPANY, EDINBURGH ; AND 
 
 CONSTABLE, HUNTER, PARK, AND HUNTER, 
 
 LONDON. 
 
 1809.
 
 ADVERTISEMENT. 
 
 
 THE Author of the following Inquiry felt 
 it his duty, at the close of the last Session 
 of Parliament, to object to a clause intro- 
 
 Ml 
 
 fcduced into the general hill of appropria- 
 >tion, for the payment of one million five 
 ^hundred thousand pounds, said to be due 
 "'by the public to the East India Com- 
 pany. 
 
 The grounds on which he stated his 
 
 o?objection, he still considers as conclusive. 
 
 They were, 1st, The impropriety of such 
 
 a measure, when sent up to the House of 
 
 ^iLords, in the shape of an enactment, in 
 
 CD one of the clauses of the appropriating 
 
 gZ 
 
 9 bill : Uly, The disgrace of concurring in 
 33 the disposal of one million five hundred 
 
 b 
 
 ^99994
 
 VI 
 
 thousand pounds of public money, with- 
 out inquiry, and without the House of 
 Lords having before them any informa- 
 tion that could substantiate the debt. 
 
 He does not, however, desire to con- 
 ceal that, at the moment, he secretly felt 
 ashamed of his imperfect knowledge of the 
 subject he was called upon to discuss ; a 
 feeling to which he was perhaps more 
 sensibly alive, from the recollection that 
 he had been selected, by the partiality of 
 one who is no more, to fill the first situa- 
 tion in the management of the East India 
 Company's affairs. 
 
 It was this circumstance that induced 
 him to employ his leisure hours, in the 
 course of the summer, in endeavouring to 
 supply what was deficient in his own in- 
 formation on these affairs ; and it is from 
 a similar feeling of duty, that he has since 
 attempted, for the use of others, to com- 
 press the most important results of his re- 
 searches within as moderate a compass as
 
 Vll 
 
 was consistent with distinctness and per- 
 spicuity. The unexpected intention of ex- 
 tending the Company's charter, and of 
 prolonging the duration of the present sys- 
 tem of government, (at one time generally 
 believed,) would, of itself, have been a suf- 
 ficient motive for this undertaking ; but 
 what chiefly weighed with the author, in 
 sending his papers to the press, was the ig- 
 norance in which the public has been 
 kept, with respect to our transactions in 
 the East, not indeed from a want of au- 
 thentic documents, but from the volumi- 
 nous and confused form in which they 
 have been exhibited. 
 
 His sole aim, in the present publica- 
 tion, is, by unveiling the transactions and 
 events that are past, to create an im- 
 pression of the necessity of much mature 
 deliberation, before any decision is form- 
 ed on a subject so interesting to the na- 
 tional welfare, and involving so many dif :
 
 Vlll 
 
 ficult discussions, as that which relates to 
 the future Government of India. 
 
 To him it appears necessary, before 
 the present system can with any degree 
 of propriety be prolonged, to examine, 
 first, what were the malversations, what 
 the difficulties that gave it birth? and, 
 secondly, what have been the malversa- 
 tions, what the difficulties which it has 
 produced ? and if this short tract should be 
 of any use in assisting the public mind 
 to decide on these preliminary topics, 
 the purpose for which it is intended will 
 be fully accomplished. 
 
 The recent history of the world has in- 
 ured the imagination to scenes of over- 
 grown political and financial calamity, 
 and deadened the impression they have 
 a natural tendency to create ; otherwise, 
 those who recollect that the pecuniary 
 embarrassment of 1783 was universally 
 regarded as rendering a change in the 
 system for managing the Company's af-
 
 IX 
 
 fairs necessary, never could have thought 
 of the present crisis, of infinitely more 
 formidable embarrassment, for prolong- 
 ing the system under which it has origi- 
 nated.
 
 VALUATION 
 
 OF THE 
 
 CURRENCY OF INDIA. 
 
 BENGAL. 
 
 Rupee, jfO 2 
 
 1,00,000 Rupees, one lac, 10,000 O 
 
 100 Lacs, one crore, 1,000,000 
 
 BOMBAY. 
 
 Rupee,*. 2 3 
 
 1,00,000 Rupees, one lac, 1 1,250 
 
 100 Lacs, one crore, 1, 125,000 
 
 MADRAS. 
 
 Pegodas, * <0 8 
 
 1, 00,000 Pegodas, one lac, 40,000 
 
 100 Lacs, one crore, 4,000,000 
 
 Though the above is the valuation of India money 
 observed in the abstracts of the official statements, the 
 author, to avoid trouble, has, in other instances f convert- 
 ed the rupee indiscriminately at two shillings.
 
 Sketch rfthe 
 
 &F IN DBA 
 
 before thf f,t<ris future declared \That h> 
 
 tt SeJtnnef f>/{'0n(futjtftridexfen/u>n 
 cfifotniHti-n in //ii/iti are intusuref repiKif 
 
 the wish tin' In-ill in' unit /n>hcv cf 
 " this mttifn " jrpm fA/JJemtmcnj 
 acamrrd 
 
 The acyuuiUenf ftncettt Jerfantfo,, a 
 
 - Anaeiit British Pvjs-r/iwns r>r those ffttte 
 
 * Eaft India. Cernpaty | 
 _ CcwilruJ Cedfdin theAfy-atere 1792 _ 1799 
 
 _ Countries Ceded in the Cainahe f-v 1SO2 
 Ceded in Oudf 18O1 
 
 Cfiinirasf Ceded in Guzeraf WOi 
 
 Conquered Ccuntnes in the War 1303 
 f ewers under the prcttctitni (> ihe Cfrtpmv 
 ^fanratta States vTao/i tn cenfeouenfe fftfte lots 
 Tranfactwnf Subsidized Trvtpf ffthe Conpani' 
 Marhatta States vf'Scindia K- Hotkar u-ticjeBeundana 
 of seated by the Treaties in IS0J an net atcunaffty hu>wn 
 Marfuitta State. ofBcwr 
 Pa/pent States 
 Jaiu 
 Cuteh 
 
 _ 
 
 _ Jaarieu- 
 
 t Ceded tyntm
 
 Shetck cftfie 
 
 OF IN/DM 
 
 (h.itim/ntslutu? the 
 
 /:/; i -i i. v //' POSSESSIONS 
 
 t>ffire tht Legislature declared \Thattv 
 fiurjut Schemes P{ f 'on quest and txtentwn 
 cfdomirucn injndtn aretneafurefrefttuj- 
 nant In the wish tin- //< >// nnd /wlicv cf 
 ffiu nation " ' jrern t&ficminwns <fince 
 oca tuned 
 
 or tfufsetftfie 
 
 ^.Jjft&af 
 
 2 _ Ctun*u* Cededw thetyvore 1792 - 1799 
 
 3 _ Countries Ceded 'in the CatnatK i.v 1SO2 | 
 
 4 . frunJhAt Ceded in Cude is 1 
 
 5 - CfliaOniSf Cedetiin Gu:eraf 1801 
 
 6 - Ctmattered C&utijries in the War 1 803 | 
 
 7 - Powers wider the prc&c&eit of the Cfntpcaw | 
 
 8 . ^faJinttta State-fvJiich tit ccnpeauencf e/the lot? 
 
 Transactums Suhnai:ed Troops r/Af Cc>nf>am> 
 
 9 Marhaitu States vfSctndia ,- Hothai- -tu>teeundarta 
 
 of stated fy the Treaties in ISM are nftaccftmtflrhnewn. 
 
 10 _Aiarfiatta State of Scrar 
 
 11 - H<ypMt State-? 
 
 12 -J'#Ar 
 
 lo - Jaantu' 
 
 16 -Jatfhetrf cfSamrecBecujum 
 
 17 _ Hundtlcunct ejcdianqea by the. Teshwa-jrr ffrn 
 
 . en the frZrfcrn Cenfi |
 
 AN INQUIRY, &c. 
 
 JL o those who have seriously considered the si- 
 tuation of our Indian Empire, in relation, either 
 to its territorial and political, or to its commer- 
 cial interests, it has for some time appeared 
 manifest, that the expiration of the East India 
 Company's charter must inevitably lead to a dis- 
 cussion, as unparalleled in difficulty, as it is in 
 importance. 
 
 Even a slight acquaintance with the transac- 
 tions of the Comppny, whether as sovereigns 
 or as merchants, was sufficient to shew, that the 
 law, as it now stands, had been only made to be 
 neglected. 
 
 It was plain, therefore, that, on the renewal of 
 the charter, Parliament would have to decide, 
 whether they would adhere to the principles
 
 avowed when they formerly legislated for India, 
 or sanction and applaud the practice that has 
 since prevailed ? 
 
 However general the dislike to minute details 
 on Indian affairs, the recent investigations on the 
 charges against Marquis Wellesley, and the dis- 
 putes, at no very distant period, betwixt the Com- 
 pany and their servants abroad, on the commercial 
 regulations of the act 1793, could leave no doubt 
 that there existed a material difference of opinion 
 concerning the success of the system for the go- 
 vernment of our possessions, under the superin- 
 tendance of a Board of Controul. 
 
 It was certain too, that the loss, at the rate of 
 four millions a-year for the last two years, dis- 
 played by the accounts before Parliament*, and 
 
 * In the account of stock, per computation, 
 printed by order of the House of Commons, 
 10th July 1807, the balance in favour of 
 the Company is stated, on the 1st March 
 1806, to be . L. 4,058,969 
 
 In the account of stock, per computation, 
 printed 1 8th July ] 807, the balance is stated 
 
 Carry orer, L. 4,058,969
 
 the admission that the balance against the Com- 
 pany, including what was due to the Proprietors, 
 
 Brought forward, L. 4,058,969 
 
 to be, on the 1st March 1807, against the 
 Company, to the amount of - 836,276 
 
 These, taken together, form a loss, betwixt 
 
 1st March 1806, and 1st March 1807, of L.4-,895,245 
 
 By account of stock, per computation, printed 
 29th April 1808, the balance against the Com- 
 pany, 1st March 1808, is stated to be - 4,533,153 
 
 Ded-ict balance against the Company, 1st March 
 
 1 807, as above stated ... 836,276 
 
 Remains loss, betwixt 1st March 1807 and 1st 
 
 of March 1808, - - L.3,696,877 
 
 Loss as above, year ending 1st March 1807, 4,895,245 
 
 Total loss in two years, ending 1st March 
 
 1808, - - L.8,592,122 
 
 Four millions, two hundred and ninety-six thousand and 
 sixty-one pounds is, therefore, the average annual loss with- 
 in the last two years.
 
 amounted to the enormous sum of L. 1 2,313,153*, 
 were circumstances calculated to provoke suspi- 
 cion and inquiry, and even to prejudice the pub- 
 lic mind against the management of the existing 
 government. 
 
 To those, therefore, who had given the slight- 
 est attention to the subject, it was obvious, that 
 when the Company's charter expired, the merits 
 of the system on which India had been governed 
 must, of necessity, be thoroughly canvassed ; and 
 that Parliament would have to decide, whether, 
 under any, or what modifications, it ought to be 
 continued? or whether the real interests of the na- 
 tion would not be best consulted, by placing our 
 Eastern dominions, like other parts of the Em- 
 pire, under the direct superintendance of the 
 Crown, and leaving its trade open to the enter- 
 prise and industry of our merchants. 
 
 * Balance against the Company, 1st March 
 
 1808, L. 4,533,153 
 
 Capital advanced by the Proprietors, - 7,780,000 
 
 Total loss. - L. 12,313,153
 
 By the 33d of Geo. III. cap. 52. the right of the 
 East India Company to the revenues, and to the 
 exclusive trade, does not expire till the year 1814. 
 In contemplating, therefore, these great impending 
 questions, the consideration that there was at 
 least ample time for inquiry and deliberation, on 
 subjects so deeply interesting to the welfare of 
 the empire, must have afforded general satisfac- 
 tion. 
 
 Unfortunately, however, it is now understood, 
 that this discussion is to be prematurely forced on, 
 as the Company think it expedient, in the pre- 
 sent critical situation of affairs, when the coun- 
 try is engaged in a contest that involves its ex- 
 istence as a nation, suddenly and unexpectedly 
 to call on Parliament to anticipate the moment of 
 its decision. 
 
 The times in which we live have been fertile 
 in the production of subjects of unexampled im- 
 portance for the consideration of Parliament. 
 But history affords no instance of any country 
 being called upon to decide on the fate of a 
 territory so extensive and so productive. It is 
 on the government of a country producing a re- 
 venue of fifteen millions, that Parliament must
 
 now feel itself bound to form an opinion ; it is 
 on the regulation of the commerce of one of the 
 most fertile districts of the world, possessing a 
 population, beyond all measure greater than that 
 of the United Kingdoms, that the representatives 
 of this commercial nation are called upon to 
 legislate; and, on the wisdom of their deci- 
 sion, must depend the benefits their constitu- 
 ents can derive from the connexion ; for the li- 
 beral and enlightened principles universally re- 
 ceived in the present age, has placed it beyond a 
 doubt, that one part of our dominions cannot 
 prosper by the depression of another ; and have 
 even established, to a degree that no longer ad- 
 mits of controversy, that the increased wealth of 
 a nation is the sure prelude to the prosperity of 
 those with whom it deals. 
 
 The system for the management of India, which 
 rumour says is now to be prolonged, originated 
 in a moment of violent political struggles, and at 
 a time when the recent renewal of the Company's 
 charter, and the rights which, under it, the 
 proprietors had acquired, bounded the specula- 
 tions, and controuled the opinions of all; for
 
 Parliament, in the year 1784, had in truth be- 
 fore them, not the general question, what ar- 
 rangement of the government and commerce 
 of the East would be most conducive to the be- 
 nefit of the empire ? but the more limited con- 
 sideration, what checks, and what degree of 
 controul it was necessary to establish, to secure 
 the interest of those who had obtained the ex- 
 clusive grant of both, from the fatal effects of 
 the acknowleged malversation and mismanage- 
 ment of their own servants ? 
 
 But if the circumstances under which this ar- 
 rangement originated, precluded all consideration 
 of its general fitness as a system for regulating 
 our connexion with our Indian dominions, it is 
 equally certain, that no examination, either of its 
 merits or demerits, took place in 1793, when, at 
 the expiration of the charter, it seemingly acquir- 
 ed the sanction of the Legislature. 
 
 By the proprietors of India stock, the prolon- 
 gation of the system was, at that time, petitioned 
 for, on the ground that the experience of the past, 
 afforded just reason to believe its continuance 
 would prove equally advantageous to the public,
 
 8 
 
 and to the company *. Whilst in parliament a 
 compliance with this request was urged, by de- 
 scribing the Company as " an organ of Govern- 
 u ment and of trade, which had experimentally 
 " proved itself to be suited to the administration 
 " of distant provinces, the revenues of which 
 " were to be realized through a regulated com- 
 " mercef.'* 
 
 Though hardly two years had passed since 
 Lord Cornwallis had declared, that the inhabi- 
 tants of our provinces in India were advancing 
 rapidly to a general state of poverty and wretch- 
 
 * Your petitioners humbly represent to this Honour- 
 able House, that the system established by the said act, for 
 the government of the territorial acquisitions in the East 
 Indies, for the management of the revenues, and for con. 
 ducting the affairs of your petitioners, aided by the regu- 
 lations since introduced by the wisdom of Parliament, 
 hath been approved by experience ; and as such experience 
 affords just reason to believe, that a continuance of such 
 system will prove equally advantageous to the public and 
 to your petitioners, &c. Extract ef the Company's Peti- 
 tion to the House of Commons., March 1793. 
 
 f See Mr Dundas's Speech, 23d April 1793.
 
 edness *, yet India was described as having al- 
 ready attained, under the existing arrangements, 
 a state of prosperity, unknown when under the 
 dominion of any of its ancient sovereigns ; and 
 the British possessions, in comparison with any 
 of the neighbouring states, were characterized as 
 a cultivated garden, compared with the field of 
 the sluggard f. 
 
 Notwithstanding the debts of the Company 
 were daily increasing, and the proprietors were, at 
 that moment, to be called upon to contribute two 
 millions towards the payment of them J, the reve- 
 nue and trade were represented as in a sure state 
 of progressive improvement ; and it was repeated- 
 ly stated, in the strongest terms, that the resources 
 of India would administer effectual aid to the re- 
 venues of this country j|. 
 
 From these sanguine, not to say exaggerated de- 
 scriptions, it was inferred, that, in contradiction 
 
 * Letter to the Court of Directors, dated August 2d 
 1789. 
 
 t Mr Dundas's Speech, 23d of April 1793. 
 
 J See 33d Geo. III. cap. 47. 
 
 || Mr Dundas's Speech, 5th Jnnc 1792, and 23d April 
 1793.
 
 10 
 
 to all general reasoning, the experience of past 
 success justified the continuance of the present 
 system, which had so admirably answered the po- 
 litical and commercial purposes for which it had 
 been employed *; and this inference was made 
 palatable, by holding out prospects of immediate 
 advantage to all who were concerned. 
 
 By the additional dividend, and other advanta- 
 geous provisions in his favour, the proprietor of 
 India stock must have sensibly felt, that his pro- 
 perty was to be forcibly raised to a value which 
 far exceeded his most sanguine expectation. 
 The servants of the Company abroad, were flat- 
 tered with the hopes of having obtained an easy 
 and advantageous mode of remitting their for- 
 tunes to Europe ; the Directors at home saw 
 themselves secured in the enjoyment of that pa- 
 tronage, which, by this arrangement, was render- 
 ed more valuable; and the nation was delud- 
 ed with the prospect of an immediate aid of five 
 hundred thousand pounds per annum, destined to 
 the public service, as an earnest of the large sup- 
 plies which the treasury might in future expect, 
 
 * Mr Dundas's Speech, April 23d 1793,
 
 11 
 
 An attempt was even made to persuade the 
 manufacturers, who complained of the exclusive 
 privilege that was about to be prolonged, that, 
 indirectly, their object would be attained by what 
 was pompously called a plan for ingrafting an 
 open trade on the exclusive privilege of the Com- 
 pany ; but which was, in reality, only an attempt 
 to devise a means of flattering the manufactur- 
 ing interest, that they would have an oppor- 
 tunity of sending goods to, and drawing raw ma- 
 terials from India ; and of satisfying the shipping 
 interest, that this should be effected without in- 
 terfering with that advantageous monopoly, which 
 they had established under the wings of the Com- 
 pany's exclusive privilege. 
 
 Such were the temporising means by which 
 the renewal of the charter, in the year 1793, 
 was recommended to all the various interests 
 concerned. 
 
 By this management, the general question of 
 the fitness of the connexion betwixt the Govern- 
 ment and the trade of India was kept in the back- 
 ground. It was seemingly waved by universal 
 consent ; whilst Parliament was persuaded to pro- 
 long, on the ostensible ground of successful ex-
 
 perience, a system declared at the time to be re- 
 probated by all authority, and avowedly repug- 
 nant to all theories *. 
 
 It is a dread, that the ministers who must have 
 secretly encouraged the sudden and unthought of 
 application with which Parliament is now threaten- 
 ed, may resort to similar arts; and an apprehension 
 that they may presume upon the supposed igno- 
 rance of the public in relation to India affairs, that 
 has suggested the propriety of a short examina- 
 tion into the practical merits of this system, whe- 
 ther considered in a political or in a commercial 
 point of view, or estimated by the financial 
 prosperity of the Company. To this last criterion, 
 it seems indeed to be more especially important 
 to direct the public attention, as it has been se- 
 lected by the ostensible author of the system, 
 as the best means of proving to the Legisla- 
 ture, and to the public, the wisdom of leav- 
 ing, in the hands of the East India Company, 
 the share they hold in the executive administra- 
 tion of our Indian Empire^. 
 
 * See Mr Dundas's Speech, 23d April 1793. 
 + If I can inspire your minds with the same enthusiasm 
 on this subject, with which my own is actuated, I shall
 
 13 
 
 A system of Government, generally speaking, 
 is best to be judged of by the ease and affluence 
 of those who are governed ; and by the probabi- 
 lity it affords, that the enjoyment of these bles- 
 sings are secured against interruption from inter- 
 nal commotion, or external attack. 
 
 It is not, however, to the consideration of these 
 topics, comparatively vague and general, that 
 it is necessary to resort in estimating the practical 
 merits of the system- under which our Indian 
 empire has been ruled. 
 
 The times in which, with some essential aliera- 
 
 rcst in confidence, that you will not disregard my parting 
 advice ; but, by adopting the means which are in your 
 hands, speedily overcome your India debt, and thereby ex- 
 alt your own characters, by consulting the best interests 
 of your constituents, and the general prosperity of your 
 country. By such an operation, you will practically 
 establish the expediency of the system under which we 
 have been acting together for these seventeen years past ; 
 and you will prove to the Legislature, and to the public, 
 the wisdom of leaving in the hands of the East lydia Com. 
 pany the share they hold in the executive administration 
 of our Indian Empire. Letter from Mr Dundas to the 
 Chairman of the East India Company, dated 30f,h June 
 1801.
 
 14 
 
 tions, it was prolonged, even those in which it 
 was originally adopted, are as yet so recent, that 
 the objects proposed to be attained must be 
 present to the recollection of the public. But, 
 indeed, at no distance of time can they be mis- 
 taken. They are recorded in the resolutions of 
 the Commons House of Parliament, from whence 
 the measure originated ; nay, they are recited in 
 the acts which gave validity to the system, and 
 sanctioned by Parliament at the moment of its 
 adoption. 
 
 For it is impossible to read the recital intro- 
 duced in the act 1784, and repeated in the act 
 1793, " That, forasmuch as to pursue schemes 
 " of conquest and extension of dominion in 
 " India, are measures repugnant to the wish, the 
 " honour, and policy of this nation*," without 
 being convinced, that it was the primary object of 
 Parliament to inforcethe prohibition of all schemes 
 of conquest and enlargement of dominion, as 
 well as those injunctions in favour of moderation 
 of conduct towards the native princes, which had 
 
 * See 34. 24th Geo, III. c. 25. Also 42. 33d. 
 Ceo. III. c. S2.
 
 15 
 
 uniformly distinguished the orders of the Court 
 of Directors, and which had been so strongly 
 applauded in the resolutions of the House of 
 Commons *. 
 
 * L That the orders of the Court of Directors of the 
 East India Company, which have conveyed to their ser- 
 vants abroad a prohibitory condemnation of all schemes 
 of conquest and enlargement of dominion, by prescribing 
 certain rules and boundaries for the operation of their mi- 
 litary force, and enjoining a strict adherence to a system 
 of defence, upon the principle of the Treaty of Illahabad, 
 were founded no loss in wisdom and policy, than injustice 
 and moderation. 
 
 2. That every transgression of those orders, without 
 evident necessity, by any of the several British govern, 
 ments in India, has been highly reprehensible, and has 
 tended, in a chief degree, to weaken the force and influence, 
 and to diminish the resources of the Company, in those 
 parts. 
 
 3. That every interference as a party, in the domestic or 
 national quarrels of the country powers, and all new en. 
 gagements with them in offensive alliance, have been wisely 
 and providently forbidden by the Company, in their com- 
 mands to their administrators in India* 
 
 4. That every unnecessary or avoidable deviation front 
 those well advised rules, should be followed with very 
 severe reprehension and punishment for it, as an instance 
 of wilful disobedience of orders, and as tending to disturb
 
 16 
 
 Neither can any one attend to the enactments 
 concerning the commerce, and the clause which 
 recites " the advantage to the trade and naviga- 
 " tion of these kingdoms, of insuring to private 
 " merchants and manufacturers the certain and 
 " ample means of exporting their merchandize 
 " to India, and of importing the return for the 
 " same," without conceiving, that, in a mercan- 
 tile point of view, the main object of the Legisla- 
 ture was to increase the exports of our manu- 
 facturers, and the import of raw materials *. 
 
 and destroy that state of tranquillity and peace with all 
 their neighbours, the preservation of which has been re- 
 commended as the first principle of policy to the. British 
 governments in India. 
 
 5. That the maintenance of an inviolable character for 
 moderation, good faith, and scrupulous regard to treaty, 
 ought to have been the simple grounds on which the British 
 governments should have endeavoured to establish an in. 
 fluence superior to that of other Europeans, over the 
 minds of the native powers in India ; and that the danger 
 and discredit arising from the forfeiture of this pre-emi- 
 nence, could not be compensated by the temporary success 
 of any plan of violence or injustice. Resolutions of the 
 House of Commons^ 9th April 1782. - 
 
 * See clause 8. of the 33d, of Geo. ITL r. r>2.
 
 17 
 
 But above all, it is unquestionably impossible 
 to contemplate the provisions in relation to the 
 appropriation of the profits*, without inferring, 
 that the great and united object of the regula- 
 tions, both mercantile and political, was, by ab- 
 stinence from warfare, and schemes of extension 
 of dominion, and by prudent economical ar- 
 rangement, abroad as well as at home, to avoid 
 all chance of the recurrence of those pecuniary 
 difficultfes which authorised the interference of 
 Parliament in the Company's affairs, and to secure 
 funds sufficient to effect the objects to which, by 
 law, the profits arising from the concern, whether 
 territorial or commercial, were solemnly appro- 
 priated. 
 
 Such is the view of the subject that decides 
 the order in which the system for the manage- 
 ment of India, originating in the act 1784, and 
 perfected by the act 1793, is to be treated of ; 
 as it appears that its practical merits may be best 
 examined and submitted to public estimation by 
 considering it under the following heads : 
 
 1st, Of the efficacy of the system of Indian 
 
 * See clause 111. ibid.
 
 18 
 
 government, as established under a Beard of 
 Controul, in preventing schemes of conquest and 
 extension of dominion. 
 
 2dly, Of the success of the arrangement sanc- 
 tioned by the act 1793, in increasing the export 
 of our manufactures and the import of raw ma- 
 terials. 
 
 Sdly, Of the progress made in effecting the 
 objects to which the profits were by law appro- 
 priated ; in considering which, the annual state* 
 ments of the Company's affairs given to Parlia- 
 ment are contrasted with the result exhibited by 
 the present state of their finance.
 
 19 
 
 Of the Efficacy of the System of Indian Go- 
 vernment, as Established under a Board of 
 Controul, in Preventing Schemes of Conquest 
 and Extension of Dominion. 
 
 It is a knowledge of the criticisms that have been 
 resorted to, and of the doubts that have been 
 raised, relative to the meaning of the clause twice 
 enacted by Parliament, to provide against con- 
 quest and extension of dominion in India, that 
 could alone suggest the possibility of a difference 
 of opinion concerning the true import of what it 
 enacts. 
 
 To maintain that Parliament merely intended 
 to pronounce a declaration against unjustifiable 
 or offensive warfare, is to display an ignorance of 
 the temper of the times in which the clause was 
 first adopted, as well as of the transactions that 
 led to the supposed necessity of regulating the 
 government of India. 
 
 Lord Clive had early stated the expediency of 
 confining our conquests in the East to Bengal, 
 Bahar, and Orissa. To go further, appeared to 
 him so extravagantly ambitious and absurd, that 
 no Governor and Council in their senses could 
 ever think of it, unless the whole system of the
 
 20 
 
 Company's interests, in their Indian possessions, 
 was first entirely new-modelled. 
 
 To these, the sentiments of Lord Clive, the 
 Government at home had most cordially subscri- 
 bed ; and the instructions given by the Directors 
 on the subject of our political connexion with the 
 native powers, uniformly prohibited all schemes 
 of extension of dominion, and enlarged on the 
 advantages arising from the preservation of peace. 
 
 To the Government of Madras they had ex- 
 pressed their regret that the boundaries of the 
 Carnatic had been passed, even for the possession 
 of the Circars, stating their apprehension of the 
 consequence of so great a division of their forces, 
 and their doubts, whether the charges for defend- 
 ing that acquisition would not always exceed the 
 collections derived from it *. 
 
 They had long deprecated all negociation and 
 alliance with the country powers, being convin- 
 ced, from experience, that no advantage was to 
 be derived from the co-operation of the natives, 
 whose exertions were of little use against an ene- 
 my, and who never failed to make peace at the 
 
 * Sec Company's separate letter to Fort St George, 
 March 1769.
 
 21 
 
 expence of their allies, when the issue became 
 precarious. 
 
 To the Government of Bengal they had re- 
 peatedly announced their determination not to 
 aim at any power or possessions, but what was 
 held in virtue of the Mogul's grants, and confin- 
 ed within the boundaries of Bengal, Bahar, and 
 Orissa. 
 
 It was these, and similar instructions, that indu- 
 ced the House of Commons to applaud the or- 
 ders of the Directors of the East India Com- 
 pany, in the resolutions that have been referred 
 to * ; and it was to enforce these resolutions, 
 thus adopted by that House, that this clause was 
 introduced into the act of Parliament. 
 
 Mr Fox, an active supporter of that part of the 
 system therein announced, declared, many years 
 afterwards f, that the Legislature meant to con- 
 demn the policy of extending our territorial pos- 
 sessions ; not to pronounce, like the French As- 
 sembly at the commencement of the Revolution, 
 an idle declaration against unjustifiable warfare ; 
 and that this was understood to be the real mean- 
 
 * Sec page 15. 
 
 t Debates, April 1805.
 
 ing of the act by those who acted under it, is ap- 
 parent from Lord Cornwallis's letter to the Ni- 
 zam, in the year 1789, as well as from Lord 
 Wellesley's instructions to the Residents at Poo- 
 na and Hydrabad, in the year 1 798 *. 
 
 But, indeed, no one who recollected the dis- 
 cussions on the act 1784, or who was acquainted 
 
 * See Lord Cornwallis's letter to the Nizam, 7th July 
 1789, which is declared in the treaty of the 4th July 1790 
 to be equivalent to. a treaty. 
 
 In Lord Wellesley's instructions to the resident at Hy- 
 drabad, 8th July 1798, it is observed, " That the prin. 
 *' ciples of justice, good faith, and moderation, enjoined by 
 (f Parliament, and by the orders of the Court of Directors, 
 " must form the basis of those measures, the execution of 
 tc which is demanded by the peculiar circumstances of the 
 11 moment. Pursuing no schemes of conquest or extension 
 c< of dominion, and entertaining no projects of ambition 
 (t or aggrandizement, either for ourselves or for our allies, 
 tf it is both our right and our duty to give vigour and ef- 
 " feet to our subsisting alliances and treaties, by restoring 
 <c to our allies the poMer of fulfilling their defensive en- 
 11 gagements with us, through the means of moderate and 
 u pacific re; resentation." " It must also be our policy 
 11 to convince the several powers of India, that their real 
 t( interests consist in respecting the rights of their neigh. 
 ". hours, and in cultivating their own resources, within the 
 " limits of their several territories." Similar sentiments
 
 with the interests of the Company, in relation to 
 India, could possibly doubt that, at that time, the 
 great object of the Legislature was to limit the 
 extent of our dominions in the East. 
 
 Our connexion with India had been uniformly 
 regarded as solely advantageous, from the remit- 
 tances it secured by means of the investment sent 
 home ; and that, in the nature of things, there is 
 
 were, at the same time, expressed in the Governor-Gene- 
 ral's letter to the resident at Poonah, instructing him to 
 negociate a subsidiary alliance with the Pcshwa. For 
 though he was directed to inform the Peshwa, that 
 the Governor-General was <{ disposed to enter into the 
 " same subsidiary engagements with him which now ex- 
 " ist, or shall hereafter be contracted, between our Go- 
 " verument and the Nizam," he was cautioned not to 
 accept, without previous reference, any assignment of 
 territory or revenue, for defraying the payment of the 
 troops to be furnished, the Govertior-General declaring, 
 i( that it is entirely contrary to the whole object and po- 
 t( licy of the arrangement proposed, to extend the territo- 
 <c ries of the Company, at the expencc of any of the par- 
 " ties concerned. It would be injurious to our character 
 u that any circumstance, attending the negociation, should 
 " betray the symptoms of that species of irregular ainbi- 
 " tiou, which is utterly repugnant to the disposition of 
 M onr Government."
 
 bounds to the possible extent of such a benefit, is 
 a proposition which will hereafter be further ex- 
 plained, though it must be familiar to every man 
 habituated to the consideration of mercantile af- 
 fairs. Neither was it solely mercantile and finan- 
 cial considerations that induced Parliament to dis- 
 play such anxiety to prevent extension of domi- 
 nion. The effects of the climate on the lives of 
 the increased number of European soldiers, which 
 would become necessary to defend our possessions 
 if greatly enlarged, threatened an expenditure of 
 human life to which the scale of our population 
 was inadequate, and for which no speculation of 
 mercantile profit could indemnify the country. 
 
 Unfortunately, however, neither the dictates of 
 reason, nor the authority of the Legislature, have 
 been capable of checking that desire of conquest 
 and of extension of dominion, so repeatedly and 
 so justly reprobated ; for we have now to la- 
 ment, that it has been since displayed to an ex- 
 tent, far exceeding what can be inferred from any 
 thing on record in those reprobated periods of 
 the Company's history, which gave birth to the 
 institution of a Board of Controul. 
 
 In making this assertion, which in the sequel 
 will be amply vindicated, to prevent the possibi-
 
 lity of misconception it appears necessary to de* 
 clare, that it is neither intended to criminate those 
 who governed abroad, nor those who, by the 
 choice of the proprietors, or the appointments of 
 the Crown, have shared the management at home. 
 
 Mr Hastings, in reply to the instructions of the 
 Court of Directors, prohibiting all schemes of con- 
 quest and enlargement of dominion, long ago 
 pointedly asked, " If the internal resources of a 
 " state are not equal to its wants, where can 
 " it obtain immediate relief but from external 
 " means*." 
 
 The remark was not only apposite, but, as 
 urged against the Government at home, it was in 
 some degree just. For if, on examination, it ap- 
 pears that the sure operation of the intercourse 
 carried on with India is to impoverish that coun- 
 try, and to disqualify it from sustaining the in- 
 creased expences it has a tendency to create ; it 
 is to the system itself we must look, as the source 
 of the neglect of those applauded principles to 
 which it is fundamentally repugnant. 
 
 Besides, the conduct of Lord Cornwallis, ex- 
 cept in a few instances, has had the approbation 
 
 * See minute, 10th of January 1775.
 
 of all. His plans and principles regulated the 
 measures of Lord Teignmouth ; the charges 
 against Marquis Wellesley have been dismissed ; 
 the Directors have disclaimed all share in the 
 transactions that have taken place ; and the con- 
 duct of the Board of Controul has never vet been 
 
 J 
 
 publicly and formally called in question. The 
 benevolent principle of our law presumes recti- 
 tude, till guilt is established ; and, in a Govern- 
 ment where the power is divided and shared out, 
 such as that which has had the sway over our 
 Indian possessions, those calamities the system 
 has a tendency to inflict, may arise out of the 
 united conduct of all, when none are exclusively 
 to blame. Indeed, under all Governments pro- 
 ceeding on a system of checks, as it is called, 
 complication, as well as relaxation, may occasion 
 general misconduct, which it is difficult to trace 
 home to any department, in such a manner as to 
 create responsibility. 
 
 Neither is this in itself a circumstance, which, 
 with a view to the present inquiry, is of the 
 smallest consequence. Far from exciting regret, 
 it can only be regarded with satisfaction, as it 
 may contribute to justify and confirm conclu- 
 sions, that might otherwise be difficult to esta-
 
 blish. It is to an examination of the propriety of 
 renewing, of modifying, or of abandoning a sys- 
 tem, in which every interest of the empire is deeply 
 concerned, that it is intended to direct the attention 
 of the public ; and the detection, or even the pu- 
 nishment of individual misconduct, would form 
 but a poor compensation for the doubt that might, 
 by such a circumstance, be created, whether 
 the calamitous result was to be imputed to the 
 system, or to those who shared in the execution 
 of it : whilst, on the other hand, if ruin ensues, 
 where none are deserving of censure, where the 
 exertions of all are deemed praise-worthy, there 
 can exist no dispute concerning the nature of the 
 inference which calamity authorises. 
 
 To this distinct explanation of what is intended, 
 it is proper to add, that it is impossible, consistent 
 with the limited bounds which the general dislike 
 of the subject makes it prudent to prescribe, to go 
 at large into the various transactions with the na- 
 tive powers since the year 1 784, or to dilate on 
 the atrocities with which they have been attended. 
 And, unfortunately, it is unnecessary ; for a very 
 short statement of the circumstances that have dis- 
 tinguished our connexion with each, will be suffi-
 
 28 
 
 cient to shew how thoroughly and uniformly 
 precepts of the Legislature have been despised. 
 
 Practice, in all successful pursuits, whether 
 virtuous or vicious, attains to excellence, through 
 the medium of a systematic conduct, the features 
 of which, in great concerns, are always too strong- 
 ly marked not to be easily discerned. In review- 
 ing the short detail of facts, about to be submit- 
 ted, it is impossible not to perceive, that the object 
 of our friendship and our enmity has been the 
 same ; whether flattery or force was the means, 
 extension of dominion has been uniformly the 
 end. 
 
 Where this has not been aimed at by open hos- 
 tility, our first object has been, under the pretence 
 of friendship, to establish a subsidiary force in the 
 dominions of those with whom we were connect- 
 ed, in return for a stipulated tribute. On gene- 
 ral principles, this measure of subsidising was re- 
 garded as creating a dependence on our arms, 
 which, detaching the states subjected to it from 
 all connexion with other powers, paved the way 
 for future encroachments, by increasing a sense 
 of security in those whose defence we undertook, 
 and producing a relaxation of vigilance and cau- 
 tion convenient to our views.
 
 Such has, in most instances, been the com- 
 mencement of our attack. Its progress has been 
 marked by increase of subsidy ; by demands of 
 security for the regular payment of tribute ; and 
 by commutation of tribute for territorial revenue, 
 when resistance had become desperate. Its ter- 
 mination has varied as expediency appeared to 
 dictate ; and instances, in the course of the follow- 
 ing abridged narrative, will be found, in which 
 the exertions of our friendship have not ceased, 
 till, by placing the interests of the Company up- 
 on what has been stiled the secure and permanent 
 foundation of territorial possession ; of exclusive 
 civil and military Government ; and of undivided 
 influence and power, our allies have been depriv- 
 ed of their dominions, and reduced to the abject 
 state of mere pensioners. 
 
 A treaty of peace with Hyder Ally, the power- 
 ful sovereign of this extensive kingdom, was 
 signed at Mangalore, in the year 1784-, about the 
 time the Board of Controul was first established *. 
 
 * Marten's Treaties, Vol. ii. page 515.
 
 30 
 
 Under this treaty, the relations of peace and 
 amity remained uninterupted, till an attack by 
 Tippoo Saib, the son and successor of Hyder 
 Ally, on our ally the, Rajah of Travencore, rous- 
 ed a desire of revenge that warfare alone could 
 appease. 
 
 Submissive offers to settle all differences, 
 through a person of rank and dignity sent to our 
 camp, were rejected, Lord Cornwallis declaring, 
 that good policy, as well as a regard to our repu- 
 tation in India, required that at present, when we 
 had every prospect of aid from the country 
 powers, and Tippoo could expect no assistance 
 from France, we should exact a severe repara- 
 tion, and take the opportunity of reducing the 
 power of a prince, who avowed so rancorous an 
 enmity to our country *. 
 
 In consequence of this determination, war com- 
 menced in 1 79O, which terminated by a treaty of 
 peace in 1792, transferring to the Company and 
 its allies one half of the kingdom of Mysore and 
 its dependencies. 
 
 By this treaty, the Company acquired terri- 
 
 * Sec Lord Coruwallis's letters to General Meadows?
 
 31 
 
 tory, producing an additional revenue of upwards 
 of half a million annually *. 
 
 From this date, we were at peace with the king- 
 dom of Mysore, till the year 1799, when an al- 
 leged connexion with the French, the terror of 
 a jacobin club at Seringapatam, and the refusal of 
 Tippoo till it was thought too late to receive ex- 
 planations of our demands from an ambassador f, 
 produced an attack on his dominions by the 
 Company and its allies, that ended in the fall of 
 Seringapatam, the death of that prince, and the 
 degradation of his family. 
 
 The result of this successful warfare was, a 
 further acquisition of territory on the part of the 
 Company, to the amount of two hundred and 
 forty thousand pounds per annum, after deduct- 
 ing what was allowed for the maintenance of the 
 deposed family j. 
 
 * Marten's Treaties, vol. v. page 83. Art. 3. 
 
 + See Letters from Earl of Mornington to the Court of 
 Directors, Sept. 13th 1789, 
 
 + This includes not only the territories added to the Com- 
 pany, but also the share it acquired of what was allotted to 
 the Peshwa, and refused by him, as appears from the Go- 
 vernor-General's instructions to the resident at Poona, 23d 
 June 1802. 
 
 See the partition treaty of Mysore, 22d June 1799,
 
 To the family of the ancient Rajah of Mysore, 
 whose representative had been kept a prisoner at 
 Seringapatam, a portion of the conquered territory 
 was allotted ; and, by the treaty immediately con- 
 cluded with that prince, the Company acquired 'a 
 permanent subsidy of two hundred and eighty 
 thousand pounds per annum, together with a right 
 of assuming the exclusive management of the go- 
 vernment and revenue in time of war, on payment 
 of a stipulated pension *. 
 
 Since the year 1 784, therefore, the Company 
 have acquired from the dominions of Mysore, by 
 conquest and treaty, 
 
 March 9th 1792 Revenue from 
 
 territory ceded, - Pag. 13,16,765 L. 526,786 
 
 June 22d 1799 Further revenue 
 from territory ceded, after de- 
 ducting two lack forty thousand 
 pagodas, provision for the depo- 
 sed family, computed at Ct, Pag. 5,37,170 214-,868 
 
 Carry over 18,53,935 L. 741,574 
 
 printed in the Asiatic Annual Register, for the year 1799, 
 page 271. See also the separate articles. 
 
 * See Subsidiary treaty of Seringapatam, 8th July 1799. 
 Asiatic Annual Register, 1799, page 287.
 
 33 
 
 Brought over, Ct. Pag. 18,53,935 L. 741,574 
 
 Share of what was refused by the 
 Peshwa, as settled under the se- 
 parate articles of the same trea- 
 ty*, Ct.Pag. 87,958 35,183 
 
 July 8th 1799. Annual subsidy, 
 acquit J by treaty from the new 
 Rajah of Mysore, - St. Pag. 7,00,000 280,000 
 
 Total revenue acquired by treaty 
 
 and conquest from Mysore, Pag. 26,41,893 L. 1,056,757 
 
 CARNATIC. 
 
 An amicable arrangement with Mahomed Ally, 
 the old and approved ally of the Company, was 
 one of the first exertions of power on the part of 
 the Board of Controul. 
 
 The negociation was conducted by Sir Archi- 
 bald Campbell, and brought to a conclusion in 
 the month of February 1787. 
 
 The annual tribute, payable to the Company 
 
 * It appears that the territory acquired in 1799 actually 
 produced double this estimate. See Lord Melville's Letter 
 to the Chairman of the East India Company, page 52. 
 
 C
 
 in time of peace, was, by this treaty, settled at 
 three hundred and sixty thousand pounds ; and, 
 in time of war, the Nabob, after some stipulated 
 deductions, was bound to pay four-fifths of his 
 whole revenue *. 
 
 In the year 1790, when the war with Mysore 
 was commenced, Lord Cornwallis thought it ne- 
 cessary (in defiance of the stipulations of this 
 treaty), to secure the regular payment of the four- 
 fifths of the Nabob's revenue, by assuming the 
 government of the Carnatic. 
 
 But on the restoration of peace in 1792, a new 
 treaty was framed with this our friend and ally, 
 in which the Company took upon themselves the 
 collection from the tributary Poligars, of a part 
 of the tribute payable in time of peace, and for- 
 mally acquired a right to assume the manage- 
 ment of the Nabob's territority in time of war, 
 on payment to him of four-fifths of the revenue 
 for his maintenance t- 
 
 Both these treaties were received with the 
 strongest expressions of approbation at home. 
 
 * Marten's Treaties, Vol. iy. page 492. 
 
 f Asiatic Annual Register, 1802, page 115
 
 This satisfaction was however transitory, for, we 
 learn from authority, that when Lord Wellesley 
 was about to leave this country .in 1797, the Go- 
 vernment anxiously urged the expediency of seiz- 
 ing the dominions of this Prince. 
 
 By the same authority we are also informed, 
 that, in compliance with the instructions he had re- 
 ceived, various attempts were made by Lord Wel- 
 lesley, without success, to attain this desired ob- 
 ject, in the years 1798 and 1799 *. In the year 
 
 * That such were the instructions of Government, and 
 that repeated attempts were made to put them in execution, 
 appears from the following paragraph of Marquis Welles- 
 ley's letter, 31st July 1 801, to the Secret Committee of the 
 Court of Directors. 
 
 11 I request your Honourable Committee to accept my 
 a congratulations on the conclusion of an arrangement, 
 u which, while it is highly creditable to the justice and 
 < : moderation of the British character, has happily esta- 
 " blished the rights and interests of the Honourable Com- 
 " pany in the Car&atic, upon the secure and permanent 
 " foundations of territorial possession, of exclusive civil 
 " and military government, and of undivided influence 
 <{ and power. It is a great satisfaction to have ultimately 
 " accomplished an object, long and anxiously desired by 
 " the Honourable Company, and earnestly recommended.
 
 36 
 
 1801, however, an opportunity occurred, by the 
 death of the Nabob Oindut ul Omrah, the son 
 
 " by the Court of Directors to my special attention, when 
 " I had the honour to receive the charge of this Govern- 
 " ment. Your Honourable Committee is apprized of the 
 Cl early solicitude which I manifested for the accomplish- 
 li ment of this important measure, upon my first arrival 
 " at Madras, in the month of April 1798, as well as of 
 u the repeated attempts which I made, on various occa- 
 " sions, in the years 1798 and 1799, to effect the same 
 ii salutary arrangement. The successive failure of these 
 " attempts, combined with the reflections arising from the 
 <: equally unpropitious, result of every preceding propo- 
 " sition of a similar nature, has enhanced in my mind the 
 ee pleasure of witnessing the conclusion of the late treaty. 
 61 The intimate connexion of this happy event, with the 
 a success of your arms in Mysore, forms a peculiar and 
 cf interesting feature of the whole transaction ; nor can 
 a your Honourable Committee fail to remark, that the 
 l( possession of the records of the House of Hyder Ally, 
 " in disclosing to your Government the whole system of 
 " the policy of your enemies in India, is the source from 
 <{ which we have derived that information which has ena- 
 C bled us to complete the settlement of the Carnatic." 
 That this arrangement was long and anxiously desired 
 by the Government at home, has been repeatedly avowed, 
 as appears from the following extract of Mr Dundas's 
 Speech, June 12th 1801 :
 
 37 
 
 and successor of Mahomed Ally, of attaining pos- 
 session of the Carnatic. On this occasion a trea- 
 ty was concluded with a distant relation of the 
 deceased Nabob, by which his son and rightful 
 heir was set aside ; whilst the favoured usurper, 
 in return for acknowledging the guilt of his pre- 
 decessor *, and transferring the management of 
 the government and revenue to the Company, 
 was received as Nabob, and secured in a large 
 pension f. 
 
 This revolution was justified by the allegation, 
 that the two last Nabobs had maintained a cor- 
 respondence hostile to the interests of the Com- 
 
 ** The Nabob of Arcot. The treaty, under which 
 
 " our present relation with him stands, was dated in 1792, 
 4i and was entered into with his father, on terms extreme- 
 a ly favourable to him. I have several times mentioned 
 " to the House my wish that the treaty might undergo se. 
 a veral modifications." 
 
 For complete approbation of the measure, when carried 
 into effect, see Lord Castlereagh's Speech, 29th of July 1803. 
 
 * See report of Messrs Webb and Close, explanatory 
 of their proceedings at the palace of the Nabob. Asiatic 
 Annual Register, 1802, page 114. 
 
 + See treaty concluded by the Company with Azeem 
 \il Powlah, dated 31st July 1801, Asiat, An. Reg. 1802, 
 
 299S.
 
 38 
 
 pany, with the regent of Mysore, of which cor- 
 respondence Government was said to have ob- 
 tained possession at the capture of Seringapatam, 
 in the year 1799. 
 
 The remarkable features of this singular trans- 
 action are, 
 
 1st, That, when the proofs were discovered in 
 1799, they did not appear satisfactory, as an in- 
 quiry to obtain explanation and further informa- 
 tion was instituted in 1800. 
 
 2d, That the result of the examination at Vel- 
 lore, in the year 180O, proved the correspon- 
 dence to have been conducted with the know- 
 ledge of Lord Cornwallis, and to have contained 
 nothing but formal declarations of friendship, or 
 overtures on the subject of a negociation of mar- 
 riage*. 
 
 3d, That, though there existed time sufficient 
 for inquiry, it does not appear that Marquis Corn- 
 wallis was ever asked whether it was true that he 
 had authorised these communications. 
 
 4th, That, though the Nabob Omdut ul Om- 
 
 * See examination at Vcllore, May 1800. Asiatic An* 
 THia) Register, 1802, page 171.
 
 39 
 
 rah lived till the month of July 1801, he was 
 never informed of the accusation, and was there- 
 fore precluded from defending himself *. 
 
 * The following is an extract from a paper given to the 
 Commissioners by the guardians of the young Nabo.b who 
 was set aside : 
 
 " We cannot, gentlemen, speak positively as to the 
 <e writings alluded to ; but, from our knowledge of the 
 " temper, disposition, and sentiments of the late Nabob, 
 " we are impressed with a full assurance that he was inca- 
 " pable of acting contrary to his own dignity, and the 
 " engagements of his alliance, which he ever respected ; 
 " and indeed we ourselves know, that he never corre- 
 *' sponded with any power in Hindustan, unless by means 
 li of the Company, and the Company were well acquaint- 
 " ed with the correspondence which did take place, and 
 " which consisted only of letters, couched in warm ex- 
 " pressions of congratulation or condolence. If, besides 
 " the correspondence of this description, any writings 
 " have come to light, containing the matters of which you 
 " have read to us a short abstract, we apprehend they 
 " have originated with evil persons, for the purpose of 
 " shaking the friendship and union so long established 
 11 between the late Nabob and the Company : nor do we 
 ' ( believe that the Company, on mature consideration, can 
 " hold it to be true that the late Nabob engaged in a cor- 
 " respondence contrary to their interests - t and, adverting
 
 40 
 
 5th, That the accusation was brought forward 
 in the year 1801, within a few hours after the 
 death of the accused, as a ground for assuming 
 that which, it was admitted, the Company wish- 
 ed to acquire ever since the year 1 797 *. 
 
 6th, That the young Prince and rightful heir 
 was set aside f, because he could neither be in-; 
 duced to acknowledge the guilt of his father, nor 
 
 u to the amicable and friendly behaviour observed by the 
 " Company till the last moments of the Nabob, the whole 
 " world will be impressed that they entertained no such 
 11 suspicions ; and with us it is matter of regret, that at a 
 " juncture when the Nabob is deprived of the means of 
 (( justification, his reputation should be publicly injured." 
 
 * See paragraph in Marquis Wellesley's dispatch, note, 
 page 35. 
 
 + The right of the heir to succeed to his deceased fa- 
 ther, by the laws of Hindostan, is maintained in strong 
 terms, even by those who enforced this measure, in every 
 case where they could receive no bias from views of mo- 
 mentary expediency. When the Nabob of Oude was 
 supposed to wish to abdicate in favour of one of his younger 
 sons, in the latter end of the year 1799, in the Governor. 
 General's dispatch to the resident at Lucknow, it is stated, 
 
 " Whatever latitude the practice and laws of Hindostan 
 ?' may admit, with regard to questions of succession to so-
 
 41 
 
 to acquiesce In the justice of the proposed punish- 
 ment, by transferring to the Company the domi- 
 nions of his ancestors *. 
 
 7th, That this unfortunate young Prince was 
 left in the custody of his relation, who, in order 
 to secure a pension of four-fifths of the revenue 
 
 " vereign power, the Governor-General is decidedlyof opi- 
 <c nion, that, in the event of his Excellency's abdication, 
 " no reasonable ground would exist for the exclusion of 
 <c his Excellency's eldest son ; his Excellency's abdica. 
 u tion, therefore, on the terms proposed, must be accom.- 
 " panied by the immediate accession of his eldest son to 
 " the Musnud." 
 
 This opinion is also strongly'confirmed, by the follow- 
 ing passage of the instructions from the Governor-Gene- 
 ral to the Commander in Chief, dated 17th of January 1804: 
 
 a The authority exercised by Jeswunt Rao Holkar, in 
 " the name of Khundeh Rao, over the possessions of the 
 lt Holkar family, is manifestly an usurpation of the rights 
 " of Cashee Rao Holkar, the legitimate heir and suc- 
 " cessor of Tuckogee Holkar. Consistently, therefore, 
 ^ with the principles of justice, no arrangement can be 
 " proposed between the British Government and Jeswunt 
 " Rao Holkar, involving a sanction of the exclusion of 
 " Cashee Rao Holkar from his hereditary dominions." 
 
 * See Report of the Commissioners,
 
 42 
 
 of the Carnatic, had both acknowledged the 
 guilt of the late Nabob, and recognised the jus- 
 tice of the punishment j and that he is since 
 dead*. 
 
 By this assumption of the Carnatic, the Com- 
 
 * The following extract of a paper, written by this 
 illustrious youth after he was deposed, sufficiently shews 
 that he had anticipated his fate : 
 
 " I haTe endeavoured, under the mortifying events 
 ' which have happened, and the variety of sensations which 
 " have possessed me, to acquaint you of the unhappy si- 
 ** tuation in which I find myself exposed, and I am afraid 
 i{ that I have ill succeeded. I need not endeavour to im- 
 " press you with the horrors of the situation to which I 
 " feel myself reduced ; you have but to picture to your- 
 : ' selves the height of human grandeur, and the sad and 
 *' miserable reverse of it ; the highest and lowest condition 
 " of which humanity is capable ; but even the meanest 
 " subject of the very worst government possesses a bles- 
 " sing which my fortune and fate forbid. He owns the 
 " gratifying sensation of knowing himself safe amidst the 
 ; ' society of his fellows - 3 while I, alas ! have no friendly 
 ii or kindly sociality, none of those relations and ties 
 " which are made to secure the comforts and happiness of 
 " life ; an unit, as it were, in the sum of the people of the 
 *' Carnatic, I am delivered into the hands of an enemy, 
 {c tc/io has but one act to execute to finish his career."
 
 43 
 
 pany has, however, become possessed of territory, 
 which, on an average of five years, from 1 802 to 
 1807, has produced upwards of twenty-nine lacks 
 of pagodas *, or one million, one hundred and 
 sixty thousand pounds. Deducting, therefore, 
 the three hundred and sixty thousand pounds, 
 formerly paid as annual tribute, there will remain, 
 acquired by seizing the territory of our ally, sub- 
 ject to the payment of his debts, eight hundred 
 thousand pounds of annual receipt. 
 
 TANJOUR. 
 
 In the year 1787, when Sir Archibald Camp, 
 bell negociated his arrangement with the Nabob 
 
 * Annual receipt of the rerenues and customs collected 
 in the Carnatic. 
 
 1802-3 Pagodas 26,85,250 
 1803-4 34,54,702 
 
 1804-5 32,73,126 
 
 1805-6 28,14,548 
 
 1806-7 22,90,938 
 
 Average Pagodas, 29,03,712
 
 of Arcot, a treaty was also concluded with the 
 Rajah of Tanjour. 
 
 In this treaty, the Rajah, in return for the sti- 
 pulated protection of the Company, agreed to 
 the payment of an annual tribute, amounting, in 
 time of peace, to four lacks of pagodas, or 
 L. 160,000*. 
 
 In l?92, a new arrangement was made by 
 Lord Cornwallis, by which the tribute was in- 
 creased to four lacks, 64,285 pagodas, or 
 L. 185,714. 
 
 In 1 796, the prince was persuaded to agree to 
 other terms, which were afterwards set aside ; and, 
 in 1797, we are informed, that summary measures 
 were resorted to with him, by taking possession , 
 of the districts assigned under the treaty of 1792, 
 as security for the Company's demands f. 
 
 By the last treaty, negociated in 1799 with the 
 present Rajah, the Company's connection with 
 Tanjour was placed on the permanent founda- 
 tion of territorial possession ; as the collection 
 of the revenue, and the management of the 
 
 * See Marten's Treaties, Vol. iv. p. 499. 
 
 f See Mr Dundas's Speech, 12th March 1799,
 
 45 
 
 country, were ceded to the Company, who under- 
 took to defend it, to pay all the debts, public 
 and private, of the late and present Rajah *, and 
 to give annually, 
 
 1st, Forty thousand pounds, and one-fifth of 
 the net revenue to the present Nabob. 
 
 2dly, Ten thousand for the support of the fa- 
 mily of the late Nabob. 
 
 The gross collection of the revenues of this 
 country has been stated at L. 600,000 ; but even 
 under British management, in 1792, it amount- 
 ed only to L. 508,426 f, from which deduct- 
 
 * An anecdote is related of this prince, which strongly 
 illustrates the effect of the distribution of property, in 
 fixing the description of commodities for which a demand 
 can exist. Reduced to the state of a mere pensioner, he 
 is said to have betaken himself to scientific pursuits ; and 
 the exports to his court, instead of consisting as formerly 
 of Clock-work of great value, of costly furniture or per. 
 sonal ornaments, were last year confined to a model, exe- 
 cuted in cork and wood, displaying the bones and veins 
 of a human body, for the purpose of enabling him to pro- 
 secute his favourite study of anatomy, in a manner consist- 
 ent with his religious prejudices, which forbid his being in 
 the same apartment with a dead person. 
 
 + See Mr Dundas's Speech, 4th April 1794.
 
 46 
 
 ing L. 141,675, the total allowance payable to 
 the late and present Nabob, there will remain 
 L. 366,741 of annual receipt from Tanjour, in- 
 stead of L. 1 60,000, as stipulated in the treaty 
 negociated by Sir Archibald Campbell. 
 
 This additional receipt of L. 206,74 1 , is, how- 
 ever, subject to the expence of collection, and 
 to the payment of the Nabob's debts. 
 
 THE SUBAH OF THE BEGAN. 
 
 The treaty by which our connection with the 
 Nizam was regulated, at the time Parliament took 
 the controul over India out of the hands of the 
 Company, was concluded in the year 1768 *. 
 
 By this treaty, the right of the Company to 
 the five Circars was confirmed, four of which it 
 seems to have possessed from that time, on pay- 
 ment of L. 20,000 a-year for six years, and 
 L. 20,000 more, whenever the Guntoor Circar, 
 retained by the Nizam as security for the tri- 
 bute, should be given up. 
 
 * Marten's Treaties, Vol. iy. p. 47.
 
 47 
 
 It was stipulated, however, that if the Com- 
 pany retained quiet possession, they should pay, 
 from the year 1794, a pescush or tribute of 
 L. 50,OOO per annum, and L. 20,OOO a-year 
 more, on acquiring possession of the Guntoor 
 Circar. 
 
 In this state things remained till the year 1788, 
 when the Guntoor Circar was given up, on the 
 assurance of Lord Cornwallis, through Captain 
 Kennoway, that the balance of tribute due would 
 be discharged, and that, in future, the payments 
 should be regular. 
 
 From this time the Company appear to have 
 possessed the five Circars under the treaty 1768, 
 on payment of an annual tribute of L. 7O,OOO. 
 
 In 1789, by a letter from Lord Cornwallis, 
 confirming and explaining several articles of 
 this treaty, we became bound to furnish the 
 Nizam with two battalions of seapoys, and 
 six pieces of cannon, manned by Europeans, 
 when called for, under the sole conditions that 
 they were not to be employed against the allies 
 of the Company ; and that their pay and main- 
 tenance should be charged from the time they 
 entered his Highness' s territory.
 
 48 
 
 This letter in the first article of the treaty of 
 offensive and defensive alliance, signed at Paun- 
 gul, on the 4th of July 1790, is declared to be 
 equivalent to a treaty. 
 
 Subsequent to' this, an arrangement seems to 
 have taken place *, by which the Nizam became 
 bound to pay to the Company a tribute nearly 
 equal in amount to that which, under the letter 
 of Lord Cornwallis, he was to receive. 
 
 In 1798, a new treaty of defensive and subsi- 
 diary alliance was concluded with the Nizam, in 
 which it was stipulated, that he should receive 
 into his country a British subsidiary force of 
 
 * It is believed that this treaty is not published, but its 
 contents are inferred from the following paragraph of 
 Lord Wellesley's letter, dated 21st of November 1798. 
 
 " A new subsidiary treaty was signed by his Highness the 
 " Nizam at Hydrabad on the 1st September, and ratified 
 " by me in council on the ,18th of the same month. By 
 " this treaty, an increase is made in the British subsidiary 
 " force serving with his Highness, of 4,400 men, and an 
 11 increase in the annual subsidy paid by his Highness of 
 " about nineteen lacks of rupees ; the former subsidy 
 11 having been 58,713 Arcot rupees per mensem, and the 
 <c subsidy under the new treaty being 201,425 Arcot ru- 
 " pees per mensem, or 2,417. 100 Arcot rupees per annum,"
 
 600O men, for which he was to pay 24,17,100 
 rupees, or L. 241,710. 
 
 In the year 1 800, another treaty was negociated 
 at Hydrabad ; the subsidiary force was then in- 
 creased to 8000 infantry, and 1000 cavalry, with 
 the usual proportion of artillery ; and in lieu of 
 subsidy, a territory was ceded, the gross collec- 
 tion of which has amounted to about 18,00,000 
 pags. or L. 720,OOO. Thus, instead of being 
 bound, as in the treaty 1768, to pay to our ally 
 the Subah of the Decan, a pescush of L. 70,000 
 annually, the Company has progressively increas- 
 ed the tribute payable by him, and ultimately ac- 
 quired from him a territory yielding seven hun- 
 dred and twenty thousand a-year, making a dif- 
 ference, by our transactions with that Prince, 
 in favour of the Company, to the extent of seven 
 hundred and ninety thousand a-year. 
 
 The discontent which this last treaty occasion- 
 ed, is strongly described by Lord Wellesley, un- 
 der whose orders it was negociated, in his dispatch 
 of the 12th of April 1804, paragraphs 731 to 
 750 ; and the Court of Directors have delivered 
 their opinion on the transaction in the following 
 terms :
 
 50 
 
 " With respect to our ally, the Soubadar of the 
 " Decan, the conduct of his officers is represented, 
 " in the 731st paragraph of your letter of the 12th 
 " of April 1804, as contumacious and disobedient. 
 " In the 731st paragraph, it is said, that no exer- 
 tions were made by the several Kelledars, and 
 " other officers of theNizam's Government, either 
 " for the defence of his country against the preda- 
 " tory incursions of the enemy, or for the success 
 " of the common cause ; and that, in some instan- 
 " ces, acts of hostility were committed against the 
 British troops by the Nizam's officers. The con- 
 duct of the Nizam's officers is ascribed by you, 
 in the 737th paragraph, to the jealousy, distrust, 
 and aversion with which the connexion with the 
 c< British Government was viewed by almost all 
 " descriptions of persons in his dominions, and 
 " that the Nizam himself was not free from the 
 " contagion. He is said to have charged the British 
 " Government with an unauthorised interference 
 " in the internal concerns of his administration, 
 " and to have denied our right to remonstrate 
 " against the conduct of his Kelledars and officers. 
 Such astate of circumstances might well be deem- 
 f ed by you as affecting the fundamental principle
 
 5i 
 
 of the alliance, and as requiring a remedy, beyond 
 the immediate redress of particular causes of 
 41 complaint: but, although in consequence of the 
 " remonstrance delivered to the Nizam by our Re- 
 " sident, in public durbar, and of his being admo- 
 nished, that the motives arid principles ascribed 
 < to him, would place him in the situation of a 
 public enemy to the British Government, his 
 Highness was induced to give the most solemn 
 ** and distinct recognition of the principles of the 
 " alliance, and executed an additional article in the 
 treaty to that purpose ; yet we fear, that the 
 " sentiments and disposition of the Nizam and his 
 cc subjects, adverse to the Company's alliance, re- 
 mained unaltered. The feelings of the minister 
 at Hyderabad, during the last negociation for 
 " commuting subsidy for territory, must have 
 been very acute, when he exclaimed, " Surely 
 " there must be some bounds to demand and con- 
 " cession, lest tlie city of Hyderabad should be 
 " claimed of us next"
 
 OUDE. 
 
 In the year 1 804, when the Board of Controui 
 was by law invested with the management of our 
 affairs in India, the connexion of the Company 
 with the Vizier was regulated by an agreement, 
 of date the 19th of September 1781. 
 
 By this treaty, the defence of the Nabob's do- 
 minions was entrusted to the subsidiary brigade, 
 augmented with one regiment of Sepoys j and 
 the subsidy to be paid by the Company was fixed 
 at three hundred and forty-two thousand pounds 
 per annum*. 
 
 But it does not appear that these stipulations 
 were uniformly adhered to, as, from Lord Corn- 
 wallis's letter, dated 28th August 1786, we 
 learn, that a different settlement had been made 
 by the Governor-General in the year 1784, 
 and another by Lieutenant -Colonel Harper, 
 for the year ending September 1786f. A new 
 
 * See Oude treaties, ordered to be printed by the House 
 of Commons, 14th July 1806, No. 4>. 
 
 f Extract of a letter from the Governor-General in 
 Council, to the Secret Committee, dated 28th August 1786 :
 
 arrangement was, however, made by Lord Corn- 
 wallis, in the year 1787, whereby the annual 
 subsidy was increased to five hundred thou- 
 sand pounds*; and, in March 1797, it was 
 still further augmented, by another treaty, to 
 the sum of five hundred and fifty-five thousand 
 pounds f. 
 
 On the accession of the present Nabob, in Feb- 
 ruary 1798, another agreement was made by Sir 
 John Shore, the Governor- General, by which 
 the subsidy was advanced to seven hundred and 
 sixty thousand pounds a-year. 
 
 " Upon our receipt of these instructions, we were ra- 
 " ther embarrassed in which manner to carry them strictly 
 " into execution. His Excellency the Nabob Vizier, hav- 
 " ing concluded a voluntary agreement with Lieutenant. 
 il Colonel Harper, for the present fusalee year, ending in 
 li September 1786, which afforded advantages to the Com- 
 11 pany, superior, in our judgment of them, to those al- 
 " lowed in the treaty of Chunar, or to those obtained by 
 " your late Governor-General in the year 1784." 
 
 * See paper, No. 1. presented to the House of Com- 
 mons on India affairs, ordered to be printed 19th March 
 1806. 
 
 + See Oude treaties, ordered to be printed by the House 
 of .Commons., 14th July 1806, No. 5.
 
 54 
 
 By this treaty, the Nabob agreed to give se- 
 curity for regular payment, if any of the instak 
 ments should fall into arrear ; and to consult the 
 Company's Government concerning the best 
 means of effecting reductions in his establish- 
 ment. But it is expressly stipulated, that the 
 Nabob shall possess full authority over his here- 
 ditary dominions, household affairs, troops and 
 subjects*. 
 
 From many documents it is manifest, that those 
 who negociated this treaty, conceived the Nabob 
 would have difficulty to effect the payment of so 
 large a subsidy out of his revenues! ; yet all the 
 instalments were regularly discharged, and even 
 additional sums, which the Resident applied for, 
 were provided {. 
 
 * See Oude treaties, ordered to be printed by the House 
 of Commons, 14th July 1806, No. 6. 
 
 f See the examination of Lord Teignmouth, Sir Alured 
 Clarke, and others, before the House of Commons, 1 806. 
 
 + Extract of a letter from Lord Mornington, to the 
 Resident at Lucknow, June 18th 1799 : 
 
 " At the same time you will express to his Excellency, 
 H in the strongest terms, my cordial approbation of the
 
 Notwithstanding this acknowledged accuracy 
 in the payment of the tribute, on the 13th Fe- 
 bruary 1 801 , a new arrangement, which appears to 
 have been for some time premeditated*, was ef- 
 fected under the orders of Marquis Wellesley, by 
 which the Vizier ceded territory to the Company, 
 producing an annual revenue of nearly one mil- 
 lion three hundred and fifty thousand pounds f. 
 
 On this transaction, it is unnecessary to make 
 any further comment, than what is contained in 
 
 <c regularity which has marked the payment of the military 
 <( subsidy since my arrival in Bengal." 
 
 Letter from the Vizier, 9th July 1799 : 
 
 tc Of late, what exertions have I not made, which have 
 (i enabled me to pay the subsidy the very day it became 
 " due, nay even a day before ; and what Mr Lumsden has 
 " applied to me for, exclusive of the subsidy, has been 
 ( ' provided without any hesitation on my part." 
 
 * Letter from the Governor-General to the Court of 
 Directors, 21st November 1798, paragraph 34. 
 
 See also letter to Sir Alured Clarke from Lord Morn, 
 ington, dated 25th January 1799 ; and the correspon- 
 dence with Colonel Scott, on his first appointment as Re* 
 sident. 
 
 t See Oude treaties, ordered to be printed by the House 
 of Commons, 14th July 1806, No. 7.
 
 the following observations of the Court of Direc- 
 tors of the East India Company, extracted from 
 a dispatch which the Board of Controul prohibit- 
 ed them to transmit : 
 
 " It is impossible to peruse the papers on the 
 " subject of the negociation with the Nabob 
 " Vizier, which led to the conclusion of the treaty 
 " with his Highness, of the lOth of November 
 " 1801, whereby a territory is ceded to the Com- 
 " pany in perpetual sovereignty, the gross re- 
 " venues of which amount to one crore and thirty- 
 " five lacks of rupees, (L. 1 ,350,000) without 
 " experiencing a great degree of surprise and 
 " concern." 
 
 " Although the treaty of 1798 stipulates, that 
 " if at any time it should be necessary to aug- 
 " ment the British troops, serving in Oude, be- 
 " yond the number of 1 3,000 men, the difference 
 " was to be paid by the Nabob, it is impossible 
 '* to suppose, that if it should be thought neces- 
 " sary by the Company's Government, for the 
 " general defence, to station the whole, or nearly 
 " the whole of the Bengal army in the province 
 " of Oude, that the Nabob Vizier, under a fair 
 " and liberal construction of the treaty, could be
 
 57 
 
 " considered as liable to defray the entire ex- 
 " pence. We, nevertheless, find him willing to 
 " assent to such an augmentation of the Com- 
 " pany's troops, as should be sufficient for the 
 " protection and safety of his country, declar- 
 " ing his readiness to reimburse the expences, 
 " which were fairly and actually incurred by the 
 " Company, at the period of Zemaun Shah's ap- 
 " proach, but objecting to any charges or de- 
 " grading conditions. He appears likewise to 
 " have adopted, though reluctantly, every pro- 
 " position made to him for the reduction of his 
 " own troops, and furnishes cash for the payment 
 " of the Company's additional troops ; and al- 
 " though he is accused of a want of regularity in 
 " the payment of the subsidy, there is but one 
 " instance, during the pending negociation, of his 
 " withholding a monthly kist ; but this kist he 
 " shortly after discharged ; and it was only in case 
 " of the kists falling in arrear, that he was re- 
 " quired by the treaty to give such security for 
 " their discharge, and for their future regular 
 " payment, as might be deemed satisfactory. It 
 " does not appear the Vizier was ever charged 
 " with any breach of the treaty of 1 798 j when
 
 58 
 
 " we consider, therefore, that under the 17th 
 " article, he was to possess full authority over 
 " his household officers, hereditary dominions, his 
 " troops, and his subjects, we cannot avoid ex- 
 " pressing our extreme surprise, that the Resi- 
 " dent at his Highness's Court should have been 
 " instructed to offer to his adoption the following 
 " propositions : 
 
 " 1st, The complete transfer of the whole of 
 " his authority, civil and military, to the Compa- 
 " ny ;~*-or, 2dly, territorial cessions, equal to the 
 " subsidy and the charges of the augmented force. 
 
 " We observe that, at one time, the Vizier 
 " seemed inclined to cede territorial revenue to 
 " the amount of 12O lacks of rupees, on an 
 " abatement being made on account of arrears, 
 " and to be freed from further demands ; but 
 " these terms were rejected, and a demand made 
 " of territory equal, at least, to 1 35 lacks, with- 
 <6 out any abatement of arrears, unless the first 
 " proposition should be agreed to ; but he was 
 " not to be guaranteed from further demands. 
 
 " It is painful to peruse the correspondence on 
 " the negociation, if a positive demand, ac- 
 << companied by threats of a most alarming na-
 
 ture, can be so denominated. The Vizier, we 
 " observe, repeatedly and positively rejected the 
 " first proposition ; and it was not till a declara- 
 tion was made to him, in the most explicit 
 " terms, that, in case of his refusal, it was the re- 
 " solution of the British Government, to assume 
 < ( the entire civil and military government of the 
 " province of Oude, that his assent was ob- 
 " tained. Under such a menace, he appears 
 " to have had no alternative, but to affix his 
 * signature to the treaty which had been pro- 
 " posed, in which not the smallest modifica- 
 " tion in substance was to be admitted, there- 
 '< by assigning over to the Company, in per- 
 " petual sovereignty, a territorial revenue of 
 " Rs. ] ,35,00,000 ; and, though his Highness 
 " appears to have contended for the sole ma- 
 nagement and controul of the reserved terri- 
 " tory, yet the remaining territories are gua- 
 " ranteed to the Vizier, and his heirs, under 
 " such a system of administration as may be re- 
 < { commended by the Company's officers. We 
 are not surprised that, during the progress of 
 " this negociation, the Nabob, as stated in the 
 " records, should have sometimes seemed to be
 
 60 
 
 in a state of intoxication, at others, dejected 
 and in tears, declaring that, after the execution 
 of the treaty, he should be ashamed to shew his 
 " face to his people. 
 
 We observe, that, on the Vizier intimating a 
 " design, previously to the introduction of the 
 before-mentioned propositions, to abdicate the 
 " government, and to appoint his son as his 
 *' successor, the Governor-General deemed the 
 " proposition of importance, as leading to the 
 < grand object of acquiring for the Company the 
 " exclusive authority, civil and military, over the 
 " dominions of Oude ; but the Vizier was not to 
 " be allowed to appoint a successor. 
 
 " Upon the whole, the late arrangements with 
 " the Nabob of Oude, under the specious form 
 " of a treaty, can be considered in no other light 
 tt than as a direct infraction of the treaty of 
 " 1798, and as wresting from him, against his 
 " will, a portion of his territorial dominions, to 
 the amount of Rs. ] ,35,(X),OOO, not as the 
 consequence of any breach of engagement on 
 " his part, but in pursuance of views formed by 
 " the Governor-General, of procuring for the 
 *' Company the dominion of the whole province
 
 61 
 
 of Oude j or, failing in that, such a portion of 
 territory as would be fully equal to the former 
 subsidy of 76 lacks, and for the payment of 
 the additional troops to be stationed in those 
 " dominions, contrary to the established policy, 
 " prohibiting the acquirement of any additional 
 territory, and in direct violation of the treaty 
 with the Nabob Vizier of the 21st February 
 1798." 
 
 Of the accuracy of this commentary, as con- 
 veying a true and unexaggerated statement of the 
 treatment to which the Vizier was subjected, no 
 one can doubt, who is acquainted with the cir- 
 cumstances of the case. 
 
 But in applauding its justice, as exclusively 
 charging the Governor-General with the tran- 
 saction censured, there is ground for hesitation. 
 He may urge the anxiety, as has been already stat- 
 ed *, expressed by the Government at home, for 
 the execution of a similar plan in the case of the 
 Nabob of the Carnatic, as by analogy, authorising 
 his conduct in Oude. At all events, it is clear, that 
 his proceedings were known to and subsequent- 
 
 * See Note, page 35.
 
 62 
 
 ly approved of by the Board of Controul j for 
 the letter addressed by Mr Dundas to the Chair- 
 man and Deputy-Chairman of the East India 
 Company, of date 30th June 1801, proves the 
 author's being well informed that the arrange- 
 ment was in progress * ; and the speech of Lord 
 Castlereagh, the President of the Board, (July 
 29th 1 803), marks complete approbation of the 
 transaction. 
 
 But, to the object of the present inquiry, it is 
 immaterial with whom the measure originated. 
 Certain it is, that, by this conduct towards the 
 Vizier, thus severely censured as oppressive and 
 unjust by the Directors, the Company acquired 
 territorial revenue to the extent of thirteen Jiun- 
 dred and fifty thousand pounds a-year, fromwhich, 
 if we deduct the annual tribute of three hundred 
 and forty thousand pounds, payable in 1784, 
 there will remain a revenue, since acquired by 
 the Company from the dominions of Oude, of 
 one million ten thousand pounds per annum. 
 
 * See Letter from the Right Honourable Henry Dun- 
 das to the Chairman of the Court of Directors, 1801, 
 page 48.
 
 FURRUCKABAD. 
 
 The Nabobs of Furruckabad were tributary to, 
 and held their dominions under the Vizier *. 
 
 By the fourth article of the treaty of Chunar, 
 1781, the Company became bound to recal and 
 not to replace their resident at Furruckabad ; and 
 this engagement was confirmed by Lord Corn- 
 wallis's letter to the Vizier, 21st July l?87t' 
 
 The tribute payable by the Nabob of Furracka- 
 bad to the Vizier or Nabob of Oude, was settled, 
 by treaty, at the sum of forty-five thousand pounds 
 a-year J. 
 
 On the death of the last Nabob, the Company 
 had become guarantee of the agreement betwixt 
 
 * See Copies of Treaties betwixt the Nabobs of Oude 
 and Furruckabadj printed by order of the House of Com- 
 mons, 29th of April 1806. 
 
 t See No. 1. of Papers presented to the House of Com. 
 mons on India Affairs, and ordered to be printed 19th 
 March 1806. 
 
 J See Instructions to the Governor of the ceded pro- 
 vinces, dated 21st of March 1802, par. 6.
 
 64 
 
 the Vizier and the government of Furrucka- 
 bad*. 
 
 Under these circumstances, the tribute payable 
 from this Prince became the property of the 
 Company, being part of the revenue ceded by 
 the Nabob of Oude in the treaty of the 1 3th July 
 1801 f, and this transfer had not long taken place, 
 before there appeared strong symptoms of a de- 
 sire to acquire the territory j. 
 
 The young Nabob being nearly of age, was 
 about to assume the government of his domi- 
 nions. The tribute had been regularly paid. 
 The country over which his family ruled was at 
 too great a distance to give rise to communica- 
 tions with the regents of Mysore. But, in the 
 absence of these apologies to which we had re- 
 sorted in the case of Tanjore and the Carnatic, 
 for indulging our irregular ambition of extend- 
 ing our territory, the immorality of the young 
 
 * See agreement, NO. 12, papers presented to the 
 House of Commons on Indian Affairs, 1806. 
 
 + See Treaty, papers on Indian Affairs, NO. 12, pre- 
 sented to the House of Commons, 1806. 
 
 J Sec Instructions to the Governor of the ceded pro. 
 Tinces.
 
 prince and his companions formed the ground ot 
 our justification * ; and he was compelled, on 
 the 7th of June 1 802, to sign a treaty, accepting 
 
 * The following extract from the instructions to the 
 governor of the ceded provinces, will shew the ground on 
 which this measure was justified: 
 
 " His Excellency considers the measure of abandoning 
 <c the management of that province (Furruckabad) to the 
 (( young Nabob, to be injurious to the prosperity of the 
 " country, and to the welfare of the inhabitants, and ha- 
 (C zardous to the tranquillity of the Company's contiguous 
 " dominions. His Excellency has every reason to believe 
 c < that Khimud Mund Khan's description of the character 
 *' of the young Nabob, and of his associates, is correct ; 
 " (he describes, as appears from another part of the same 
 < paper, the character of the Nabob to be naturally bad, 
 i: and to have been rendered still more depraved by the 
 "example and the counsels of his unprincipled com. 
 " panions ;) and that, if the Nabob were to be invested 
 c< with the management of his own affairs, he would 
 " commit the administration of the province to the hands 
 u of his profligate companions. 
 
 " In his Excellency's judgment, it would be equally 
 ( - unjust and imprudent to commit the independent ma- 
 '" nagement of a territory, situated as Furruckabad is with 
 " respect to the Company's provinces, to the hands of 
 " persons not only wanting in the qualifications requisite 
 " for the due administration of affairs, but of depraved
 
 66 
 
 of a pension, and ceding to the Company the do- 
 minions he inherited from his ancestors *. 
 
 " habits and vicious dispositions. Under actual circum- 
 " stances, the right of the Nabob to exercise the govern. 
 " merit of Furruckabad, cannot, upon any principle of 
 cc justice or policy, be admitted, to an extent injurious to 
 (l the welfare of the province, and to the interests of the 
 " Company. The British government could not justly 
 (( protect the Nawaub in theexercise of authority, without 
 " providing effectual means for precluding the abuse of 
 " it." 
 
 * The Nabob, before signing the treaty, remonstrated 
 in the following terms : 
 
 " I have understood the proposition for delivering up 
 ' c the country of Furruckabad into the hands of the Com- 
 a pany's government. I have no power to make any ob- 
 (t jertions to whatever you propose ; but you know that 
 " the Governor. General, during my minority, delivered 
 " over the country to Khinuid Mund Khan, as deputy ; 
 '* Now that my minority has passed, when I was in 
 i( hopes that I should be put in possession of the country 
 " and property, this proposition is made to me. lam 
 " totally at a loss what to do ; if I deliver over the 
 " country to the English government, all my relations 
 " and my neighbours, and all the nobility of Hindoostan, 
 '' will say that J have been found by the English govcrn- 
 " ment so unfit to be trusted with any management, that 
 " they did not think proper to entrust me with the nia- 

 
 67 
 
 On this measure the Directors of the East 
 India Company have remarked : 
 
 ' The treaty for the surrender of part of the ter- 
 ritories of Oude was succeeded by one equally 
 ' unjustifiable, with the Nabob of Furruckabad, 
 
 < for assuming the civil and military government 
 
 * of that province, and collection of the revenues, 
 
 < on the part of the Company, making an allowance 
 to the Nabob of Rs. 1 ,80,OOO, from a revenue 
 
 * of about ten lacks of rupees per annum. In the 
 
 * 6th paragraph of the instructions for carrying 
 the proposed arrangements into execution, it is 
 
 < observed, that, " by an engagement concluded 
 " between the late Vizier and the Nabob of Fur- 
 " ruckabad, under the guarantee of the Com- 
 " pany, the late Nabob was bound to pay an 
 " annual tribute of four lacks and a half of rupees 
 " to the Vizier. The number of troops to be 
 " maintained by the Nabob of Furruckabad was 
 " limited to the extent requisite for the purposes 
 " of state, and the Vizier was charged with the 
 " protection and defence of the province from 
 
 t( nagement of such a country ; and I shall nerer escape, 
 *,' for many generations, from the sneers of the people."
 
 68 
 
 " internal and external enemies." ' Upon which 
 we shall remark, that had the tribute of Fur- 
 ' ruckabad not been transferred to the Company 
 ' by the late treaty with the Vizier, the Nabob 
 of Furruckabad, under the Company's gua- 
 rantee, would have been continued in the pos- 
 
 < session of his country, and protected from any 
 
 < attempt on the part of the Vizier to disturb 
 
 < him. But no sooner is the Furruckabad tri- 
 bute made over to the Company, than his 
 
 < pretensions to the Company's protection are 
 
 < considered as of no validity, and he is to be 
 
 < dispossessed of the management of his country, 
 
 * upon an allowance of Rs. 1,80,000 per an- 
 
 * num. We observe that, previously to the 
 ' conclusion of the treaty, the Nabob appears 
 
 < extremely anxious to retain his country, at 
 ' the same time declaring his want of power to 
 ' make any objection to whatever is proposed to 
 
 < him : the treaty is accordingly executed, and 
 1 afterwards ratified by the Governor- General.' 
 
 SURAT. 
 
 The East India Company first obtained posses-
 
 69 
 
 sion of the fort and fleet of Surat, by a treaty, of 
 date 1 759, which for years regulated their con- 
 nection with the Nabobs of Surat. 
 
 This treaty originated from an agreement 
 made by the Government of Bombay, 1758, with 
 an adventurer of the name of Pharis Khan, who 
 had held a high office in Surat ; by which it 
 was stipulated, that an expedition should be un- 
 dertaken for the purpose of putting Pharis Khan 
 in possession of the city, under the conditions that 
 the Company should acquire the castle and fleet, 
 and that the expences should be defrayed, or 
 security given for the amount on the receipt of 
 the customhouse. 
 
 When the expedition fitted out on the ground 
 of this agreement arrived at Surat, it was thought 
 expedient to enter into a negociation with the 
 grandfather of the present Nabob, and the treaty 
 1759 was concluded, whereby he agreed to admit 
 Pharis Khan as his Naib or Deputy, and to vest 
 in the Company the exclusive charge of the 
 castle and fleet. 
 
 The arrangement was immediately communi- 
 cated to the Court of Delhi, with a request from 
 the Company and the Nabob, that it might re-
 
 70 
 
 ceive the imperial sanction, which was imme- 
 diately signified by several hookums and imperial 
 firmauns*. 
 
 Under this title, the Company retained posses- 
 sion of the fort and fleet, and exercised the right 
 of collecting certain duties, to defray the expen- 
 ces of the establishment. These, however, never 
 afforded any free revenue ; on the contrary it 
 appears, by a minute of Sir Charles Mallet's, 21st 
 July 1797, that the expence, for 37 years, had 
 been Rs. 69,98,250 or L. 699,825, that is, near- 
 ly L. 18,914 per annum. 
 
 In 1797, instructions were given to the Resi- 
 dent, by the governor of Bombay, to demand from 
 the Nabob a tribute in aid of the Company's 
 charges j and, in May 1 798, a sketch of an agree- 
 ment was transmitted by the Resident, whereby 
 the Nabob stipulated to pay one lack of rupees, 
 that is ten thousand pounds, in quarterly pay- 
 ments, in support of the castle and city f. 
 
 * See Minute of the Governor of Bombay, 13th of 
 August 1799. 
 
 + See agreement transmitted by Mr Seaton, resident at 
 Surat, Gth May 1798.
 
 71 
 
 This, however, was rejected by the government 
 of Bombay, who farther insisted, that either the 
 Sepoy establishment or the funds for its payment 
 should be transferred to the Company, the Nabob 
 only retaining a force sufficient for a night pa- 
 trole*". 
 
 A long negociation and correspondence now 
 ensued, in which the Nabob, till his death in Ja- 
 nuary 1799, uniformly remonstrated against the 
 terms that were demanded. 
 
 As his son, an infant, died a few days after 
 him, the succession then naturally devolved on his 
 brother. 
 
 On this occasion, the Resident was instructed 
 to asceitain from the heir, as from himself, what 
 length he would be willing to go, to obtain the 
 sanction of the English government to his succes- 
 sion, taking care not to acknowledge him as Nabob 
 till he agreed to the draft of the treaty, formerly 
 
 * Sec draft of an agreement between the Governor and 
 Council of the presidency of Bombay and the Nabob of 
 Surat, transmitted to the Resident, 26th of October 1798,
 
 72 
 
 transmitted, and admitted the interposition of the 
 Company in the administration of justice*. 
 
 From various documents it appears, that the 
 heir of the late Nabob manifested the greatest 
 reluctance to make any concessions, further than 
 the payment of one lack of rupees per annum, 
 to which his brother had acceded; and on the 
 18th of August 1799, Mr Seaton, the resi- 
 dent at Surat, in a letter to the governor of 
 
 i 
 Bombay, declared, that he would " stake his 
 
 " life on it, that more than the lack is not 
 "to be got by any means short of military 
 " force. Take the government from the family, 
 " and pension them, though such a measure 
 " woyld, in my humble opinion, be contrary to 
 " good faith, I scarce believe, after all endea- 
 " vours for this pension, and the increased ne- 
 " cessary establishments, that the Company 
 " would be more in pocket than they will now, 
 " with their present establishment and the dona- 
 tion." 
 
 * See letter from Mr Duncan to Mr Seaton, 9th of Feb. 
 ruary 1799.
 
 73 
 
 The affairs of Surat remained in this unsettled 
 state till the year 1800, when a treaty was trans- 
 mitted from the supreme Government of Bengal, 
 with peremptory instructions for a new arrange- 
 ment of the Company's connexion with the heir 
 of the Nabob. 
 
 In these instructions, of date 10th March 1800, 
 the Government of Bombay are informed, that, in 
 the opinion of the Government of Bengal, the 
 demise of the late Nabob of Surat opened a view 
 of the subject entirely different ; and they proceed 
 to state, " that whatever doubt may have arisen 
 "as to the exact limits of the authority of the 
 Company, and the Nabob who negociated the 
 " treaty in 1759, it appears to us, that all ques- 
 ff tions on that subject necessarily ceased on the 
 " demise of that Nabob. 
 
 " On a reference to the treaty of 1 759, con- 
 " eluded with Mayeneddien, we find that it was 
 " only a personal engagement with that Nabob, 
 and that it did not extend to his heirs. Indepen- 
 " dent of the terms of the treaty, the discussions 
 " which passed in 1763, on the death of Mayen- 
 " eddien, as well as the letter from your Govern- 
 " ment, dated the 25th March 1790, when the
 
 74 
 
 " office of Nabob again became vacant, by the 
 " death of Kotubuddeen, prove it to have been 
 c the general sense, that the operation of the 
 " treaty of 1759 ceased on the demise of Mayen- 
 " eddeen. 
 
 " The power of the Mogul having also be- 
 come in fact extinct, as is evinced by the result 
 " of the application made for his sanction to the 
 succession of the late Nabob, it follows that 
 the Company, not being restricted with respect 
 " to the disposal of the office of Nabob by any 
 specific treaty, are at liberty to dispose of it 
 <c as they may think proper. 
 
 This right of disposing of the office of Na- 
 '* bob is accompanied by an indispensable duty of 
 providing a just, wise, and efficient administra- 
 tion for the affairs of Surat, the lapse of the 
 ' powers of government having left no other 
 " party excepting the Company, in a state to 
 " protect the persons and property of the inhabi- 
 ' tants of that city. 
 
 " The late Nabob, therefore, and his father 
 < Kutubuddeen, must be considered to have sue- 
 " ceeded to the office of Nabob, not in virtue of 
 ' the treaty of 1759, concluded with Mayened-
 
 75 
 
 " deen, but through the favour and friendship 
 " of the British Government, extended to them 
 " in consideration of the connexion which sub- 
 " sisted between their ancestor, Mayeneddeen, 
 " and the Company. 
 
 < The same equitable principle will guide our 
 " determination respecting the succession on the 
 " present occasion, but with such limitations as 
 the safety and good government of the city 
 *' demand. 
 
 *' The defenceless state of Surat has for many 
 " years past afforded the most serious grounds 
 of apprehension ; and a variety of additional 
 " considerations, arising out of recent events, 
 " render the placing of the city in a respectable 
 " state of defence an object of the greatest im- 
 *< portance to the British interests. 
 
 With regard to the internal government of 
 " the city, the frauds, exactions, and mismanage- 
 ment in the collection of the revenue, the 
 " avowed corruption in the administration of jus- 
 " tice, and the entire inefficiency of the police, 
 " as manifested in the different tumults which 
 " have occurred in the city, particularly that 
 " excited in 1795, afford abundant evidence, that
 
 76 
 
 the Nabobs were as incompetent to conduct 
 " the internal government of the city, as to pro- 
 " vide for its external defence. 
 
 ** It is obvious, that these important objects 
 " can only be attained by the Company taking 
 " the entire civil and military government of 
 " the city into their own hands, and consequent- 
 " ly it is their duty as well as their right to have 
 " recourse to that measure. 
 
 " You will explain the grounds of this deter- 
 " mination to Nasuruddeen, and deliver to him 
 " the enclosed articles of agreement, his acquies- 
 " cence in which must constitute the conditions 
 " of his being allowed to succeed to the office of 
 " Nabob." 
 
 On the receipt of these instructions, and a draft 
 of the intended treaty, the Governor of Bombay 
 immediately repared to Surat, in order to enforce 
 the execution of it. 
 
 At first, the brother of the deceased Nabob 
 positively refused to agree to the terms, declar- 
 ing, " That he could not survive such an ac- 
 '* quiescence as was demanded of him, not only 
 " from a sense of personal degradation, but from 
 " the odium he would also incur from all the
 
 77 
 
 body of Mussulmans, who, considering Surat 
 " as the door of Mecca, could not desire to see it 
 " in the hands of those of another religion." 
 
 On being informed, however, that the gates of 
 the city would forcibly be taken possession of 
 next day, and that, considering the turn affairs 
 were likely to assume, he must place no reliance 
 on the Company's making any provision for his 
 support, he ultimately executed the treaty in the 
 same form in which it was transmitted from Ben- 
 gal*. 
 
 By this treaty, the Company acquired an ex- 
 clusive right to the government and the manage- 
 ment of the revenues ; and the Nabob and his 
 heirs were secured in the annual receipt of one 
 lack of rupees, and one-fifth of the net reve- 
 nues. 
 
 On this transaction it is to be observed, 
 
 1st, That there is reason to doubt the fact 
 founded on by the Government of Bengal, that 
 the treaty 1759 did not verbally secure the go- 
 vernment to the heirs and descendants of the Na- 
 
 * See Minute of (he Governor of Rom Tray, 25th Jnlv 
 1800.
 
 78 
 
 bob of Surat : for, in the recital introductory to 
 the agreement transmitted by Mr Seaton to the 
 government of Bombay, it is stated, " that the 
 ' treaty made by the late Mr Spencer, with the 
 the Nabob Moineddien Khan, in the year 1759, 
 " stipulated, that the government of this city shall 
 " be secured to the children of the said Nabob, 
 " from generation to generation." 
 
 2dly, That if it was not so distinctly expres- 
 sed, it was certainly so understood, as the title of 
 the father and the brother of the claimant was 
 allowed on that principle ; for, in 1789, the Born- 
 bay Government state themselves to have sub- 
 mitted to Lord Cornwallis, " Whether it might 
 " not be practicable to secure to the Company, 
 through the Court of Delhi, the reversion of 
 " the entire government of the city of Surat, in 
 the event of the death of the Nabob, whose de- 
 " mise was not then looked upon as far distant, 
 " by which the English influence would be ex- 
 ceedingly augmented." They farther add, 
 that, on the death of the Nabob, the " Bengal 
 " Government were of opinion, that the late Na-
 
 79 
 
 bob's eldest son had a right to the office by 
 " inheritance *." 
 
 Sdly, It .must be supposed, that there was 
 some mistake on the subject of the internal go- 
 vernment of Surat, which is assigned as a rea- 
 son for this revolution ; for Mr Seaton, the re- 
 sident, declares, 24th of January 1798, " I 
 " am far from approving Surat, or any other na- 
 " tive government I have heard of in India ; but 
 I believe the Surat Government, such as it now 
 is, by far less oppressive than that of Cambay, 
 Guzerat, nay, even Poonah itself, as people are 
 < daily resorting here to reside with their families, 
 " to be free from the oppressions of those govern- 
 " ments." 
 
 TRAVENCORE. 
 
 With this ally of the Company, in defence of 
 whom the war with Mysore was said to be un- 
 dertaken, in the year 1790, several treaties have 
 
 * Governor Duncan's Minute, 13th August 1799.
 
 80 
 
 subsisted, though it is believed they have not been 
 made public. 
 
 Sufficient mention, however, is made of them, 
 on various occasions, from authority, to shew 
 that, in their general tenor, they accord with 
 those negociated with the other powers of India, 
 since the year 1793. 
 
 In the budget, 20th of December 1796, it is 
 announced, that a treaty has been concluded with 
 the Rajah of Travencore, which will be produc- 
 tive of future revenue to the Company,- 
 
 And, on the 1 2th of January 1 805, a new 
 treaty was negociated with this prince : for, in 
 a note to an estimate of the late acquisitions from 
 conquest and subsidy, transmitted from Bengal, 
 25th July 1805, it is said, " The treaty of the 
 " 1 2th January 1 805, provides for the expence of 
 <c a regiment of native infantry, to be defrayed by 
 the Rajah of Travencore ; the amount estimat- 
 " ed at 29,000 per mensem, will be, per annum, 
 " 3,43,000," that is L. 34,800.
 
 81 
 
 MARHATTA STATES, 
 
 Including details of our connexion with the Pesh- 
 wa, the Rajah of Berar, Scindiah, the Guick- 
 war, and a variety of small states on the nor- 
 thern frontiers of Hindostan. 
 
 The Marhattas have long possessed the most 
 extensive territories, and the various states, when 
 combined, have been considered as the most for- 
 midable power in India. 
 
 The Marhatta empire was originally a mo- 
 narchy, over which the Rajah of Sattarah pre- 
 sided. 
 
 In the time of Sahogee, who concluded a reign 
 of fifty years in the year 1740, the empire of 
 that powerful Prince extended from the western 
 sea to Orissa, and from Agra to the Carnatic, 
 forming a tract nearly one thousand miles long, 
 by seven hundred miles wide, and including some 
 of the most fertile provinces of the peninsula of 
 India.
 
 82 
 
 Age and infirmity during the latter part of this 
 Prince's reign rendering him incapable of con- 
 ducting business, the management of the state 
 was left exclusively to his ministers ; and this 
 arrangement of the Marhatta Government was 
 confirmed by the imbecility of the Ram Rajah his 
 successor, under whose reign the Peshwa (or 
 chief civil minister) assumed the complete 
 controul over the Government at Sattarah, whilst 
 the commander in chief, Ragojee Bhomslah, a 
 relation of the Rajah, and ancestor of the Rajahs 
 of Berar, secured the dominion of the district so 
 called, which he then held in Jaghire. 
 
 This violent partition of the dominions of the 
 Rajahs of Sattarah, encouraged other usurpa- 
 tions, so that the Marhatta empire fell under the 
 dominion of a confederacy of chiefs, of whom 
 the most powerful were the Peshwa, the Rajah 
 of Berar, Scindiah, Holkar, and the Guickwar. 
 
 In the families of these chiefs the dominion of 
 the separate districts they had seized became he- 
 reditary. Still, however, the Rajah of Sattarah 
 and his descendants remained, with the outward 
 appearance of the possession of power, in the 
 custody of the Peshwas, who kept them in a state
 
 of splendid confinement in the palace of the 
 Rajah. 
 
 At first the Peshwas conducted the business 
 of the empire in the name of the Rajahs, their 
 royal prisoners. Ultimately, however, they 
 claimed as their own, the right of exclusively re- 
 gulating the transactions of the Marhatta Empire 
 with foreign states. 
 
 To this claim the policy of the English govern- 
 ment for a length of time gave countenance ; and 
 by the Company the Peshwa was considered as ex- 
 clusively invested, under the existing constitution 
 of the Marhatta states, with the power of con- 
 ducting negociations, forming treaties, and regu- 
 lating the connexion with foreign powers. 
 
 Under this impression, the treaty of Salbey, by 
 which our relation with the Marhattas was re- 
 gulated, when the charge of India was conveyed 
 to the Board of Controul, had been concluded ; 
 for it contained provisions in favour of the 
 Guickwar, and other states, though it was execut- 
 ed by the Peshwa, and guaranteed by Scindiah, in 
 whose camp, and with whose assistance it was 
 negociated *. 
 
 * See Treaty of Salbey, Marten's Treaties, Vol. ii. p. 201..
 
 The conduct of Lord Cornwallis proceeded on 
 the same system of policy, when, previous to the war 
 with Tippoo Sultaun, he, on the 5th of February 
 1 790, contracted an offensive and defensive treaty 
 of alliance with the Peshwa and the Nizam*, 
 under which the Peshwa acquired one third of 
 the territories ceded by the Mysore chief in his 
 treaty of peace with the allies, March 1 792 f. 
 
 Such also was the policy of the Company in 
 1799. For, on the authority of the then Gover- 
 nor-General of India, we learn, that before the 
 war with Tippoo commenced, it was an object of 
 anxious solicitude to strengthen and improve the 
 alliance with the Peshwa j but that he, in a state 
 of degrading subjection to the power of Scindiah, 
 endeavoured even to evade the obligation of the 
 triple alliance, and that, though he ultimately was 
 induced to profess a cordial disposition to co- 
 operate, he in reality maintained a correspon- 
 dence with Tippoo Sultaun, as appeared from the 
 records at SeringapatamJ. 
 
 * Marten's Treaties, Vol. vi. p. 257. 
 + Marten's Treaties, Vol. v. p. 83, 
 + See Governor-General's instructions to the Resident 
 at Poona, dated 23d June 1802. Papers on the Marhatta
 
 Notwithstanding this unprincipled conduct, the 
 proposition for the conclusion of defensive and 
 subsidiary engagements was renewed at the close 
 of the war in 1799, under circumstances pecu- 
 liarly advantageous to the Peshwa, when, after a 
 vexatious and illusory discussion, during a period 
 of several months, the conditions were rejected, 
 in a manner that afforded the strongest reason to 
 believe, that he never seriously intended to enter 
 into any engagements of the kind. 
 
 In the month of April 1 800, overtures of the 
 same nature were again made ; and the negocia- 
 tion that ensued, which terminated unsuccessfully 
 in September 1800, sufficiently proved, that his 
 councils were still guided by the spirit that cha- 
 racterized the former discussions. 
 
 The inference, at the time, drawn by our go- 
 vernment in India was, that, till irresistibly com- 
 pelled by the exigencies of affairs, the Peshwa 
 never would be induced to enter into any engage- 
 ments, which could afford to the British govern- 
 ment the means of acquiring an ascendancy in 
 the Marhatta Empire*. 
 
 War, printed by order of the House of Commons, Jim* 
 5th 1804, page 33. 
 * Ibid.
 
 86 
 
 This conduct on the part of the government 
 at Poona, whilst it released us from all obliga- 
 tions to the Peshwa, under the triple alliance 
 concluded by Lord Cornwallis, left us perhaps 
 in the situation the most desirable relative to the 
 Marhatta states. 
 
 We had in India acquired an extent of domi- 
 nion, far greater than we could ever have attain- 
 ed, if the conduct of the Company's affairs had 
 been regulated on the principles . the Legislature 
 had declared to be consistent with the wish, the 
 honour, and the policy of the British nation. 
 
 We had extended our territories, by assuming 
 the Carnatic, and the greater part of the domi- 
 nions of the Vizier. By conquest in the years 
 1792 and 1799, and by cession from the Nizam 
 in the year 180O, we had acquired most of the 
 territory, and possessed the entire resources of 
 the formidable empire of Mysore, whose power 
 had formed the apology for our first dereliction 
 of the principles laid down by Parliament. 
 
 Except the Marhattas, there was not in the 
 East a state whose existence did not depend on 
 our mercy. 
 
 In attaining this situation of power and pre- 
 eminence, we had, however, unfortunately con-
 
 87 
 
 tracted a debt, which, when estimated only at 
 fourteen millions, was declared (by those sup- 
 posed to be conversant in the affairs of the Com- 
 pany), to be the only formidable enemy to our In- 
 dian prosperity that could rationally be dreaded *. 
 
 For our contest with this enemy, which the 
 injunctions of the Legislature, as well as every 
 motive of duty and interest, ought to have made 
 the ruling object of the Company's pursuit, 
 nothing could be more favourable than the situa- 
 tion of the Marhatta states. 
 
 The weakness of the Peshwa, the distressed si- 
 tuation of the Guickwar government, the feuds 
 between Scindiah and the Holkars, presented that 
 empire to our view, in a state much more cal- 
 culated to produce, by internal commotion, the 
 destruction of its own resources, than to impair 
 the power or injure the means of its neighbours. 
 
 * Extract of Mr Dundas's letter to the Directors, 30th 
 of June 1801. 
 
 u I will not trespass longer on your patience. After the 
 " most mature consideration I can give the subject, in all its 
 a bearings and relations, I have a deep-rooted conviction, 
 " that your Indian debt is the only formidable enemy your 
 ' c Indian prosperity has to encounter. Subdue it, and you 
 <{ have subdued every thing that ought rationally to be 
 " dreaded."
 
 88 
 
 Independent of the respect and obedience due 
 to the principles sanctioned, and the conduct pre- 
 scribed by the Legislature, nothing could be so 
 clear as that sound policy, in the situation of the 
 Company's affairs, forbid all interference in the in- 
 ternal arrangements of the Marhatta states. Indeed 
 no inclination to a contrary line of conduct could 
 have been harboured, but by minds in which am- 
 bitious views of extension of dominion, and love 
 of conquest, had eradicated every remnant of pru- 
 dence. 
 
 Unfortunately, however, the restless policy of 
 the Indian governments, still anxious to extend 
 our territories, and increase our alliances, em- 
 barked in schemes, which this country will long 
 have reason to regret. 
 
 It is immaterial whether this proceeded from 
 the ambitious views of those who presided abroad, 
 or from their desire to fulfil the wish of the go- 
 vernment at home, which, though perhaps no- 
 where clearly expressed, was inferred, from the 
 Secret Committee at the India House* having 
 strongly approved of the treaty of guarantee, and 
 
 * This is the channel through which the Board of Con, 
 troul corresponds with the government of India.
 
 89 
 
 subsidiary alliance with the Nizam in 1798, whilst 
 they commented upon the terms, without convey- 
 ing any disapprobation of the measure of extend- 
 ing the system to the Court of Poona*, though 
 the supposed policy of all these measures had been 
 repeatedly explained to the government at home. 
 
 * Extract of a dispatch to the Secret Committee, dated 
 25th September 1803. 
 
 " Your Honourable Committee on various occasions has 
 " intimated to the Governor-General in Council your 
 ; ' concurrence in the principles of that policy ; and in the 
 a 22d paragraph of your Honourable Committee's dispatch 
 6i of the 10th of September 1800, your Honourable Com- 
 " mittee expressed your approbation of the basis of the 
 " proposed arrangements with the state of Poona. Your 
 " Honourable Committee, on that occasion, signified to the 
 " Governor. General in Council, your opinion that, with 
 (l a view to secure the important objects of those arrange- 
 " ments, the subsidiary force stationed at Poona should 
 " not be less than 6,000 regular infantry, with the usual 
 " proportion of artillery." 
 
 Extract of a dispatch to the Court of Directors, 2ls>t 
 December 1803. 
 
 u An improvement of the alliance between the Company 
 a and the Peshwa, founded on the general principles of 
 *' the treaty concluded at Bassein on the 31st December 
 " 1802, had been the uniform object of assiduous nego- 
 ' ciation between your Government-General and the Court
 
 90 
 
 Certain it is, that if both motives had concur- 
 red, greater activity could not have been display- 
 
 <( of Poona, with the knowledge and approbation of your 
 u Secret Committee, from the time of the discovery of 
 i4 Tippoo Sultaun's hostile designs, in the year 1798, to the 
 (i day on which the Treaty of Bassein was signed. From 
 u the year 1798, to the year 1800, the propositions offered 
 " to the Peshwa, were framed upon the principles of the 
 " subsidiary treaty, concluded with the Nizam in the year 
 ic 1798, and in the year 1800. A treaty was proposed to 
 44 the Peshwa on an enlarged scale of defensive alliance 
 u and guarantee, in exact conformity to the treaty ac* 
 u tually concluded in 1800 with the Nizam." 
 
 a The principles which constitute the basis of the treaty 
 '^ of Bassein, had therefore received the approbation of 
 te your Secret Committee previously to the conclusion of 
 :i that treaty. The treaty of Bassein contains no stipula- 
 a tion in any material degree different from that proposed 
 (f to the Peshwa in the year 1800, of which copies were 
 6{ transmitted to your Secret Committee at that time ; and 
 e( the treaty of Bassein was also transmitted to your Secret 
 ec Committee by the earliest opportunity which offered, 
 " subsequently to its conclusion. 
 
 " The justice and policy of the treaty of Bassein ap- 
 fi pearing to be unexceptionable, and having received the 
 c; previous approbation of your Honourable Court, and of 
 u his Majesty's ministers through your Secret Committee, 
 u the same principles of justice and policy authorized and
 
 91 
 
 ed in involving us in a situation of all others the 
 least likely to reduce that debt, so emphatically 
 described as the only formidable enemy to the 
 British interests in India. 
 
 Our efforts were now no longer confined to a 
 renewal of the attempts, in which we had been so 
 often foiled, of extending the system of gua- 
 rantee and subsidiary alliance to the Peshwa. The 
 policy of considering him as the organ through 
 which all negociation with the Marhatta empire 
 must be conducted, was abandoned ; for, in the 
 year 18O2, whilst the government of Bombay 
 was employed in negociating a subsidiary alliance 
 with the Guickwar family, the Residents with 
 Scindiah and the Peshwa were severally instruct- 
 ed to engage in similar attempts with these Courts. 
 
 With the Guickwar, an arrangement was 
 speedily concluded. Pecuniary aid, and a Bri- 
 tish subsidiary force, afforded so certain a means 
 of relieving the immediate distresses of that go- 
 
 " required your governments in India to maintain the alii. 
 " ance connected with the Peshwa, by the treaty of Bassein, 
 *' against the attempt of any power to dissolve that eiu 
 u gagement/'
 
 92 
 
 vernment, and of intimidating its enemies, that 
 the presidency of Bombay could have had no 
 great difficulty in effecting their object. 
 
 But this unprecedented interference with a se- 
 parate branch of the Marhatta empire, whilst 
 by Scindiah it must have been regarded as an 
 infraction of the eighth article of the treaty of 
 Salbey, of which he was guarantee, was open- 
 ly commented upon by the Berar Vakeels, at the 
 Peshwa's court, and could not fail to excite 
 jealousy of our interference, in the minds of all 
 concerned in the management of the other Mar- 
 hatta States *. 
 
 * On the llth of April 1802, Colonel Close, the resi- 
 dent at Poona, conveyed to the Governor-General the fol- 
 lowing intelligence : t( Cashee Rao has lately written to 
 (C the Peshwa, inclosing copies of letters which he had 
 " recently received from Dowlah Rao Scindia, and Ju- 
 il doo Rao Bhashur, proposing terms of peace, which 
 " the Holkars are urged to accept, on the grounds of jug. 
 fc tice and candour, and because the British power has 
 " now become so formidable, that there can now be no 
 li safety to the Marhatta 'interests, unless union shall be 
 u established between the different members of the state.
 
 93 
 
 At Poona, our renewed attempts to prevail on 
 the Peshwa to accede to a subsidary treaty, were 
 
 " My information further states, that when the above 
 " points were under discussion, the Berar Vakeels took 
 a occasion to insist, with great earnestness, on the neces- 
 " sity of a general union being immediately established in 
 " the Marhatta empire, indispensible to its security and 
 " prosperity ; and that, after the meeting broke up, the 
 { ' Vakeel retired, with Gopaul Rao, to another part of 
 " his Highness's dwelling, where, continuing in the same 
 " strain, they enlarged on the great power of the British 
 li empire in India, adverted particularly, and in very illi- 
 " bcral terms, to the late conquest of Mysore, the esta- 
 el blishment of the subsidiary force at Hydrabad, -and the 
 " transactions that have lately taken place in the Doab, 
 " in relation to the Nawaub of Oude, and then taking a 
 " survey of the weak and decayed state of the Peshwa's 
 " government, and the mistaken tenor of his councils, 
 a required to be informed on what possible ground of 
 " propriety his Highness could have been induced silent. 
 " ly to permit the British government to make itself 
 " master of the district of Chourapy, which, having 
 <J been held by a subordinate branch of the Marhatta 
 " state, could be alienated only by the government to 
 <c which it owed allegiance and homage, namely, the go- 
 " vernment of Poona : that to such interference and se- 
 " parate mode of negociation^ the British government
 
 94 
 
 received with the same undecided, evasive, cold 
 expressions of respect, which had characterized 
 the conduct of that court on the occasion of our 
 former negociations. 
 
 At last, however, the struggles between Scin- 
 diah and the Holkars broke out into open war- 
 fare ; and the approach of the army commanded 
 by Jeswunt Rao Holkar to Poona, rendered the 
 situation of the Peshwa most precarious. 
 
 * 4 could derive no right from the treaty of Salbey, which 
 (l went only to secure the Guickwar family in its old pos- 
 c< sessions, and from the pressure of an increased Nuz- 
 " zurvach, that, unless the Peshwa should immediately as- 
 *' sert his rights, in respect to the Guickwar possessions, 
 " and thus remove the British interference, there could 
 "' be no safety for the Marhatta empire, and that, conse- 
 " quently, should his Highness be neglectful of this prin- 
 '* ciple, he might abandon all hope that the government of 
 <c Bcrar would bear any concern in his views, or proceed 
 <c in harmony with his measures : that it M r as the sincere 
 ** desire of the Berar government to unite the Marhatia 
 " empire for its security, that, on this principle, it has 
 * { abstained from taking any part in the differences be- 
 <c tween Sciudiah and the Holkars. more (ban might tend 
 * ( to terminate them.-''
 
 95 
 
 Under these circumstances, on the lith Octo- 
 ber 1802, he sent to the Resident a paper, which, 
 whilst it apparently expressed a desire to assent 
 to the measure of subsidizing a British force, dis- 
 played a serious dread that he would be under 
 the necessity of retiring for protection to the 
 British territories *. Even at this stage of the 
 negociation, however, strong symptoms of insin- 
 cerity were manifested ; neither was it till after 
 the defeat of his army, combined with that of 
 Scindiah's, that he finally gave his consent to the 
 measure proposed. 
 
 The two armies engaged on the morning of 
 the 25th of October 1 802. In the course of 
 the same day the Peshwa marched with the troops 
 he could collect towards our territories ; and it 
 was at the moment of his departure that he gave, 
 for the first time, a formal declaration of his desire 
 to engage in a defensive alliance, and to retain a 
 
 * See the subsidiary propositions stated in the Cover. 
 or.General'a letters to the Secret Committee, dated 24th 
 December 1802, to have been delivered by the Peshwa's 
 principal minister to the British resident* Papers relative 
 to the Marhatta Mar, printed by the House of Commons 
 iw 1804, page 63.
 
 96 
 
 British subsidiary force, for which he was willing 
 to cede to the Company territory, producing an 
 annual revenue of twenty-five lacks of i upees *. 
 It is impossible, within any moderate limits, to 
 give a detail of the correspondence that now took 
 place betwixt the Bombay government, the Re- 
 sident at Poona and the Peshwa, which ended in 
 his embarking at Severndroog for Bassein, on the 
 1st December 1802. 
 
 * Preliminary proposition from the Peshwa; 25th Oc- 
 tober 1802. 
 
 Here is placed the Peshwa's Sicca. 
 
 Instrument : 
 
 In order that the English may essentially assist and sup. 
 port the Sircar of the Peshwa, and defend his person, 
 the Peshwa hereby subsidizes, from the English afore- 
 said, a corps of British troops, consisting of six native 
 battalions, with their proportion of artillery ; and his said 
 Highness, for the purpose of subsisting and bearing the 
 charge of the said corps, doth hereby cede to the English, 
 forts and territories yielding an annual revenue of twenty- 
 five lacks of rupees, to be furnished in part from the 
 province of Guzerat, and part from the Carnatic, or the 
 whole from either of those quarters. 
 
 Given under the Seal of the Peshwa, &c. 25th of Oc- 
 
 tober!802. 
 
 Here is placed the Peshwa's Signet.
 
 97 
 
 From a perusal of the records of that govern- 
 ment, it appears that, even in the state of calamity 
 to which he was then reduced, there was reason 
 to doubt the sincerity of the Peshwa in adhering 
 to engagements he had thus contracted at the 
 moment of his flight ; and that the Governor 
 and Council of that presidency, doubtful of the 
 line of conduct the Governor-General would, 
 under such extraordinary circumstances, approve, 
 availed themselves of the ad vice of Major Malcolm, 
 his private and confidential secretary, who hap- 
 pened at the time to be at Bombay. 
 
 By him they were referred to Colonel Close, 
 the resident at Poona, as the person the most 
 fully informed of the sentiments of the Bengal 
 government ; at the same time Major Malcolm he- 
 sitated not to pronounce, that, even in the present 
 state of the Peshwa's affairs, the original causes 
 which led Lord Wellesley to seek his alliance, 
 existed in as full force as they had done at any 
 period since the commencement of these negocia- 
 tions *. 
 
 * See Major Malcolm's letter to the Government of 
 Bombay, dated Bombay, 5th November 1802. 
 G
 
 98 
 
 An opinion which was explained and eluci- 
 dated by Colonel Close's declaring, that, " under 
 " the political views entertained by his Excel- 
 cc lency (the Governor-General), it was desirable 
 " that we should have a plea, or rather a right 
 " to interfere in the Marhatta dissensions in the 
 " Dekan*;" and these sentiments subsequently 
 met with complete approbation from the Bengal 
 government!. 
 
 Of the consequences of our forming a subsi- 
 diary alliance with the Peshwa, in the state 
 to which he was then reduced, there could be no 
 
 * See Colonel Close's Letter to the Governor and 
 Council of Bombay, of date December 9th 1802. House 
 of Commons' Papers on the Marhatta War, printed 1804. 
 
 -f- Extract from the postcript to the Governor-General's 
 instructions to the Resident at Poona, dated 2d December 
 1802: Papers on thp Marhatta War, 1804, p. 67. 
 
 " His Excellency has perused a copy of the private let- 
 <{ ter which Major Malcolm addressed to Mr Duncan on. 
 (l the 5th ultimo, and which you have referred to in your 
 (l letter to Mr Duncan of the 9th ultimo, and entirely 
 " approves the sentiments expressed by Major Malcolm, 
 < under the uncertainly which at that time existed with 
 " respect to the determination of the Governor-General, 
 " on the question of supporting the cause of the Peshwa 
 in the present embarrassed crisis of affairs."
 
 doubt. The well-known dislike of the Marhatta 
 states to any interference in their internal ar- 
 rangements ; the murmurs to which our recent 
 treaty with the Guickwar had given rise ; the 
 knowledge of the wishes the Rajah of Berar had 
 so distinctly expressed* j and the evident certainty 
 that Scindia and Holkar, (solely contending for 
 the power of exclusively directing the constitu- 
 tional authority vested in the Peshwa,) would 
 unite to prevent the common object of their 
 wishes from being forever withdrawn from their 
 grasp ; made it impossible to suppose that the 
 Peshwa could be reinstated by a foreign power, 
 and permitted permanently to introduce a con- 
 trolling foreign force, for the support of his au- 
 thority, without a general combination of the 
 Marhatta chiefs, to prevent a measure that sub- 
 stantially transferred the great resources and con- 
 stitutional authority of the head of their empire, 
 to a government which, by the recent transactions 
 in the Mysore, Oude, and the Carnatic, had 
 made it impossible to say whether its friendship 
 or its hostility was the surest prelude to the de- 
 struction of all existing authorities. 
 
 * See note, page 92.
 
 100 
 
 But the execution of a formal treaty was the 
 sure means of securing the envied right of inter- 
 fering in the Marhatta dissensions in the Deccan, 
 It presented to our view the certainty of extend- 
 ing to the Court of Poona that subsidiary and 
 defensive system, (as it was called) the foundation 
 of which had been laid by the subsidiary treaty 
 with the Nizam in 1798. Nay, it even afforded 
 a prospect of further subsidiary engagements, and 
 an opportunity of still greater extension of terri- 
 tory. 
 
 In the Carnatic, a suspicion of the deceased 
 Nabob having secretly corresponded with the 
 Regent of Mysore, had recently furnished us with 
 a pretence for assuming the government of the 
 territory of Arcot, by setting aside the innocent 
 heir of our oldest ally, who was left in the power 
 and the custody of the pliant and subservient usur- 
 per we had engaged to support. 
 
 The records of Seringapatam had not only 
 proved the guilt of the Peshwa*, of what the 
 ancestors of the deposed Prince were suspected, 
 
 * See the statement made of thePeshwa's conduct, in the 
 Governor-General's instructions to the Resident at Poona, 
 dated 23d Juno 1802. House of Commons, Marhatta 
 papers, 1804.
 
 101 
 
 but his refusal to accept a proffered share of our 
 conquest from the Mysore territory, had substan- 
 tiated his inveterate hostility to our interests. For- 
 tunately for him, however, the same ambitious 
 views, which required the destruction of the inno- 
 cent young prince, were to be forwarded by his re- 
 storation to that situation of pre-eminence in the 
 Marhatta empire, from which he had been recent- 
 ly expelled. 
 
 But the disgrace of such glaring inconsistency, 
 had no more effect than the dread of the dangers 
 which obviously attended the measure, in creat- 
 ing even a momentary hesitation in the resolution 
 of the Bengal government, to secure the object at 
 which it had so long aimed. They instantly de- 
 termined to consider the offer made by the Pesh- 
 wa, in the moment of his abdication, as a treaty. 
 As such, it was ratified on the day in which it was 
 received ; and the Resident was immediately in- 
 structed, to conclude a formal and definitive treaty 
 with his Highness the Peshwa, and to inform him, 
 that every effort of the British power would be em- 
 ployed for the restoration of his just authority *. 
 
 * Sec paragraph 40, Governor-General's Letter to the 
 Secret Committee of Directors, 21th December 1802. 
 House of Commons, Marhatta papers, printed 1804.
 
 102 
 
 In the situation in which his Highness was 
 placed, attended with a few followers, and sur- 
 rounded by the Company's troops, it cannot be 
 supposed that the negociation was pregnant with 
 many difficulties. A treaty was immediately 
 framed by that able and active officer, Colonel 
 Close, which almost without variation was form- 
 ally executed, on the 31st December 1802f. 
 
 By the Marhattas, the nature of our engage- 
 ment with the Peshwa must have- been in a de- 
 gree foreseen. For the knowledge of the actual 
 completion and signature of a treaty could hard- 
 ly have reached Poona *, before the intelligence 
 
 + See the draft of the treaty, with the alterations, House 
 of Commons' papers, 1804, page 400. By this treaty, 
 the Peshwa agreed to receive into his country a British 
 subsidiary force of 6000 men, for the payment of which 
 he assigned territory, in the western part of India, of the 
 annual value of L. 260,000. In 1803, an addition of one 
 regiment of native cavalry was made to this subsidiary 
 force, and the territory was exchanged for a tract in 
 Bundlecund, producing a revenue of upwards of 
 L. 360,000 a-year. 
 
 * Translation of a paper of intelligence, Poona, 3d Ja- 
 nuary 1803 :
 
 103 
 
 from thence plainly announced that it was likely 
 to produce that union and co-operation amongst 
 
 " Yesterday, Jeswunt Rao Holkar, attended by Mccr 
 " Khan and Gunput Rao Dewan, visited Emrut Rao. They 
 <c sent for Baba Phurkia, and Muraba Chitiiavecs. Having 
 " conversed for some time on the necessity of raising cash, 
 " the two latter persons retired with Holkar and Emrut 
 " Rao, to hold a conference. Holkar said he had received 
 f< accounts from Bombay, that Baagy Rao had deputed 
 " Ragonaut Rao to Colonel Close at that presidency, and 
 " that his Highness had agreed to cede to the Honourable 
 " Company, the Soubah of Bassein and Guzerat; that, on 
 " their part they promised to furnish hiai with ten batta- 
 <{ lions, and as much money as he might require ; that this 
 " arrangement had been submitted to his Excellency, the 
 " Governor-General, that an answer had been received, and 
 " that, in consequence, some money had been advanced to 
 " the Peshwa, and two battalions seat to Bassein. Emrut 
 <c Rao observed, that he had also received the same Intel li- 
 <c gence, and that Baagy Rao would certainly return to Poo. 
 (t na under the protection of the British troops. Holkar 
 " replied, Baagy Rao has destroyed the Marhatta power. 
 " He has taken money from the English, and given them 
 *' territory. In due time they will seize the whole, as they 
 " have done in Mysore. What do you say to this ? We 
 *' must write to Scindiah, to ascertain whether he has done 
 " all this with his consent, Do you think this is the case ?
 
 104 
 
 the contending chiefs, which, in their instructions 
 to the Resident, the Bengal government had in a 
 manner anticipated *. 
 
 Indeed, o contemplating the communications 
 that took place with th . different Marhatta Dur- 
 bars, it evidently appears, from the moment of the 
 signing of the treaty of Bassein, that abstinence 
 from hostilities was nowise to be attributed to 
 the desire of either party to accommodate their 
 supposed differences ; but that, on the part 
 of the Marhattas, as well as on that of the 
 Company and its allies, it was clearly the effect 
 of a desire to be more completely prepared for 
 the eventful scenes that were about to ensue. 
 
 In this interval, the British army, in conjunc- 
 tion with the subsidiary force of the Nizam, 
 was allowed, without molestation, to advance in- 
 
 <c You (Emrut Rao) must write one letter, and I will dis- 
 tl patch another, reporting what has passed, and saying, 
 " should the English, uniting with Baagy Rao ascend, Scin- 
 " dial) and I should accommodate our differences, and joint- 
 i<r ly oppose the British troops. This was agreed to, and 
 " they returned to the public Durbar." 
 
 * See instructions to Colonel Close, dated 29th No. 
 Tembcr 1802.
 
 105 
 
 to the Marhatta territory. Holkar retired, as the 
 army under the command of Sir Arthur Welles- 
 ley advanced to take possession of Poona, where 
 the Peshwa, in the beginning of May 1803, was 
 reinstated, under the auspices of the Company. 
 
 It seems as unnecessary to enter into the con- 
 sideration of the immediate causes of a war * that 
 appeared inevitable after the execution of the 
 treaty of Bassein, as it is impossible to go into 
 the details of what passed during the two ensu- 
 ing years, which involve the history of hostilities, 
 unprecedented in the annals of British India, for 
 expenditure of men and of money. 
 
 The extended scale of objects we are said to 
 have had in view, sufficiently indicate how tho- 
 
 * The immediate cause of the war was stated to be the he- 
 sitation of the Marhatta chieftains, Scindiah, and the Ra- 
 jah of Berar, to separate and withdraw their troops to their 
 usual stations, when required to do so by Sir Arthur Wel- 
 lesley, after his arrival at Poona. It is to be observed, that 
 this requisition was made from the capital of the Marhatta 
 empire, by a British General, at the head of a British 
 army, to these chiefs, whose armies, at the time, were ac- 
 knowledged to be within that portion of the Marhatta em- 
 pire pver which they exclusively presided.
 
 106 
 
 roughly we had forgot, that conquest and exten- 
 sion of dominion in India were measures repug- 
 nant to the wish, the honour, and policy of this 
 nation ; for, at the commencement of the war, 
 our plans were stated to aim at the following ex- 
 tensive detail of arrangements * : 
 
 1st, The entire reduction of Monsieur Perron's 
 i % 
 
 corps serving under Scindiah f. 
 
 * See Notes by Lord Wellcsley, relative to the peace 
 concluded \vith the Marhatta Chieftains. 
 
 + The existence of this French officer in the service of 
 Scijidia, holding the command which he possessed, was re- 
 presented as a circumstance big with danger to the safety 
 of the British Empre in India ; more particularly, as he 
 was supposed to have manifested a systematic disposition 
 to remove all Englishmen from Scindiah's service. 
 
 The following considerations, however, render it im- 
 possible not to believe that this danger was much exagge- 
 rated : 
 
 1st, Monsieur Perron, and Monsieur du Boigue before 
 Ititn, had held the same situation for a great length of time, 
 a circumstance that had appeared to Lord Cornwallis, and 
 that in fact had proved, nowise detrimental, 
 
 2d, Monsieur Perron had amassed a large fortune, great 
 part of which was in the Company's power j and, he is said,
 
 107 
 
 2d, The annexation to the British dominions ' 
 of the whole territory within the Doab of the 
 Jumna and Ganges, in the possession of Mon- 
 sieur Perron, thereby rendering the River Jum- 
 na the north western frond er of our dominion in 
 that quarter. 
 
 3d, The occupation of Delhi and Agra, and of 
 a chain of posts on the western and southern 
 banks of the Jumna, sufficient to secure the pos- 
 session of both banks of that river. 
 
 4th, The permanent exclusion of the Marhat- 
 tas from the north-west of Hindostan. 
 
 in Lord Wellesley's instructions to Lord Lake, to have 
 shewn, before the commencement of hostilities, an anxious 
 desire to dispose of his command, and to retire to Europe, 
 which he afterwards took an early opportunity of doing. 
 
 3d, So far from having systematically removed all Bri- 
 tish officers from around him, it appeared, when he deserte 
 from Scindiah's service., that his confidential secretary was 
 an Englishman. 
 
 4th, We have the authority of Mr Grant, the Chairman 
 of the East India Company (in his speech in the House of 
 Commons, April 5th 1805), for saying, that a few French 
 officers amongst the natives, a thousand miles from the 
 coast, were not dangerous.
 
 108 
 
 ,5th, The establishment of a system of defen- 
 sive alliances with states of Hindostan, the local 
 position of whose territories might form a barrier 
 between the possession of the Company and the 
 Marhattas, and secure the exclusion of the autho- 
 rity and influence of Scindiah from the north- 
 western division of Hindostan. 
 
 6th, The protection of the person and nominal 
 authority of his Majesty Shah Aulum. 
 
 7th, The occupation of the sea port of Ba- 
 roach, and of the territory annexed to it, together 
 with the reduction of Scindiah's general power in 
 Guzerat, 
 
 8th, The cession of Scindiah's territory inter- 
 mixed with those of our allies, the Soubahdar 
 of the Dekan, and the Peshwa ; and generally 
 the reduction of Scindiah's military and territo- 
 rial resources, within the limits necessary for the 
 purposes of our security, and of the safety and 
 tranquillity of our allies. 
 
 9th, The occupation of the province of Cut- 
 tack, and the cession of all the Rajah of Berar's 
 possessions intermixed with those of the Soubah- 
 dar of the Dekan ; and the general reduction of 
 the Rajah of Berar's influence and power, within
 
 109 
 
 the bounds requisite for the same just and legiti-- 
 mate purposes. 
 
 Neither is it solely the nature and extent of 
 these, the objects of the war, which renders 
 it impossible not to infer a systematic neglect of 
 the injunctions of the Legislature in those, whe- 
 ther abroad or at home, with whom these mea- 
 sures originated ; for the following instructions, 
 given to the commander of our armies before 
 the commencement of hostilities, still more dis- 
 tinctly shew a contempt for that character for 
 inviolable moderation, so strongly recommended 
 in the resolutions of Parliament. 
 
 " In the event of hostilities, you will proceed 
 *' to the utmost extremity which may appear to 
 (f you to promise success, without admitting pa- 
 < cific negociation, till the power of the opposing 
 *' chief shall have been completely destroyed. In 
 ' such case, the actual seizure of the person of 
 " Scindiah, of Ragogee Bhomslah, would be high- 
 ly desirable, and the state of the rivers may per- 
 haps favour such an advantage." 
 
 In seizing the persons of those chiefs, we cer- 
 tainly did not succeed ; but in effecting the other 
 objects proposed to be attained by the war, we
 
 110 
 
 were undoubtedly most fortunate. There ap- 
 peared hardly any bounds to the territory we 
 acquired, or to the number of alliances we 
 formed. By cession, or by conquest, we ac- 
 quired Rohilcund and the Doab ; on the east coast 
 of the peninsula, we united our possessions in 
 Bengal with the northern Circars, by the acquisi- 
 tion of Cuttack. On the west, our territory was 
 increased by the conquest of Baroach, and its de- 
 pendencies, as well as by cessions from the Guick- 
 war, whilst our dominions in the upper parts of 
 India were extended far beyond the banks of the 
 Jumna. 
 
 We formed defensive alliances with the Rajah 
 of Jeypoor, or Jyenagur, with the Rajah of Bhurt- 
 poor or Bhurrutpore *, and with the Rajah of 
 Macherryf ; our system of guarantee, and defen- 
 
 * During a short interlude of hostilities with this petty 
 chief, whose existence was so little known, that he is not 
 mentioned in Reynell's analysis of the map of India, we 
 lost, in killed and wounded, within a month, in an unsuc- 
 cessful attempt to capture oue of his forts, upwards of 
 twelve hundred Europeans. 
 
 -r The Rajah of Macherry, with whom we entered into 
 an alliance, agreeing that his friends and enemies should be
 
 Ill 
 
 sive subsidiary alliance, was extended to the Ra- 
 na of Gohud, and to the Rajah Umbagee, Rao 
 Englah, tributaries and dependants of Scindiah. 
 
 We had negociations with the Rajah of Odey- 
 poor, and the Rajah of Jodepoor * ; and our en- 
 gagements extended to many of the tributaries 
 and dependants of the Rajah of Berar f. 
 
 In short, we acquired territory and allies to 
 such an extent, that, when Lord Cornwallis ar- 
 
 c.onsidercd as our friends and enemies, is said, by Reyncll, 
 to have acquired a considerable part of the Mewat. His 
 capital is Alwar or Alvar. Of this country, Reynell says, 
 " at the present time Mewat is so famous a nursery for 
 ic thieves and robbers, that parties of Mewatti are taken 
 " into pay by the Chiefs of Upper Hindostan, for the pur- 
 il pose of distressing the countries that are made the seat 
 " of warfare." 
 
 * A treaty was actually concluded with this Prince y 
 who subsequently refused to ratify it. Nevertheless, his 
 name was given in to Scindiah as one of the Rajahs and 
 feudatories included under the 9th article. This was stat- 
 ed as one of Scindiah's grounds of complaint, and explain- 
 ed by our government to have been a mistake. See Go- 
 vernor-General's Letter to Scindia, dated 14th April 
 J805. 
 
 t See 10th Article of the Treaty of Dcoganm.
 
 rived in India, in 1805, it appeared, to his dis- 
 cernment, on duly considering the interests of 
 the Company and the empire, that the only wise 
 use to which he could apply a great proportion 
 of the former, was to purchase exemption from, 
 the stipulations and obligations to which, by the 
 latter, we were subjected *. With the bellige- 
 
 * The following are extracts from Lord Cornwallis's 
 Letter to Lord Lake, 19th September 1805 : 
 
 Par. 2. u Your Lordship will have inferred, from the 
 i( general tenor of my letters to your address, and of the 
 " instructions issued under my authority to Lieutenant- 
 " Colonel Malcolm, that I am desirous of abandoning all 
 " concern in the territories on the west of the Jumna, 
 " with the exception of Bundlecund, and of such portion 
 u of land as it may appear necessary to retain in the vici. 
 " nity of Agra, for purposes connected with the posses- 
 <c sion of that fortress, and to render the River Jumna 
 ti the frontier of the Company's dominions to the north- 
 " ward of Bundlecund. Your Lordship has also been 
 " apprized of my anxiety to abandon the alliances at pre- 
 " sent subsisting with the Rajahs of Jeynegur, Bhurt- 
 11 pore, and Macherry, and with the Rana of Gohud. 
 *' It is foreign to the immediate subject of this dispatch, 
 u to enter into a discussion of the general principles of 
 il policy in which these sentiments and resolutions origi-
 
 113 
 
 rents who were opposed to us, after acquiring, at 
 an irreparable loss of men, and by an expendi- 
 
 " nate. Your Lordship will have traced the nature of 
 " those principles, in the various communications which I 
 ** have had occasionto make to you, or which have been 
 (f made to your Lordship by my special authority." 
 
 Again, par. 15. " Agreeable to the intimation con- 
 <; tained in the 7th paragraph of this dispatch, I now 
 <f proceed to state to your Lordship the plan which oc- 
 tc curs to me for the disposal of the territory to the 
 c: westward and southward of Delhi, without assigning 
 a any portion of it to Dowlut Row Scindia." 
 
 Par. 16. u The plan which I propose is, to assign 
 " from it Jaghires to the several chiefs who have joined 
 6i our cause, and for whom, with the irregular troops 
 " under their command, we are bound to provide, and 
 " to divide the remainder between the Rajahs of Macher- 
 " ry and Bhurtpoor, those chieftains consenting to veliu- 
 " quish their alliance with the British government." 
 
 Par. 17. "It appears to me, that those chieftains must 
 *' be interested in excluding the Marhattas, and that their 
 " territories, thus extended, would constitute the desirable 
 *' barrier between the possessions of Scindia in Hindostan, 
 a and our possessions in the Douab, provided they should 
 " be able to resist the power of Scindia. It appears to me 
 " to be probable, that, in the reduced condition of Scindia's 
 " military force, those chieftains would be able to maintain 
 4; their possessions and their independence against his utmost 
 
 H
 
 114 
 
 ture of money, which, it is to be dreaded, has 
 made our only formidable enemy invincible, all 
 
 " efforts, especially if aided by the Jaghiredars, who would 
 a of course be interested in opposing him ; but even the 
 ft probability of Scindia's ultimate success, would not, in 
 " my opinion, constitute a sufficient objection to the pro- 
 61 posed arrangement ; being satisfied of the expediency 
 44 even of admitting into the territories in question the 
 " power of Dowlut Row Scindia, rather than that we 
 " should preserve any controul over or connexion with 
 li them. Cut Scindia's endeavours to wrest those territo- 
 fi TICS from the hand of the Rajahs of Macherry and Bhurt- 
 " poor, may be expected to lay the foundation of intermi- 
 " nable contests, which will afford ample and permanent 
 " employment to Scindia ; and, under any circumstances, 
 " I cannot admit the apprehension of any hostile attempt 
 " on the part of Scindia against the British possessions in 
 (i the Douab ; still less should I deem it probable, in the 
 " event of his rendering the chiefs of Macherry and Bhurt- 
 ft poor his perpetual enemies, which must be the conse- 
 " quence of his endeavours to deprive them of a portion 
 li of their dominions." 
 
 Par. 18. " In dividing the territories in question, be- 
 u tween the chiefs of Macherry and Bhurtpoor, it will be 
 u proper, on principles of distributive justice, to assign 
 " much the largest proportion to the former. 
 
 Par. 19. u The arrangements with the Rajah of Bhurt- 
 " poor, including the restoration of the fortress of Deig, 
 '' may probably afford the means of obtaining an earlier
 
 115 
 
 the fame and eclat which, acting against such 
 enemies, our arms could secure ; negociations 
 took place. Peace was made with the Rajah of 
 Berar at Deogaum, on the 17th of December 
 1803. With Scindia, a treaty was concluded at 
 Surge Angengaum, on the 30th of the same 
 month ; and, on the 27th of February following, a 
 subsidiary treaty of alliance with this Prince was 
 
 <l payment of the whole or a part of the contribution due 
 " by that chieftain to the British government. It may, 
 " however, be a question, whether it would not be both 
 " just and expedient, under the abrogation of the subsist. 
 " ing treaty, to compromise that demand." 
 
 Par. 20. u With regard to the chieftains, for whom we 
 < { propose to provide by Jaghires in the country on the 
 " west of the Jumna, I am anxious, on the general prin- 
 " ciple of withdrawing from all connexion with that couu- 
 u try, (with the exception before stated,) to avoid any 
 " engagement which will impose upon us the obligation to 
 " protect them. Itis my wish, if possible, that they should 
 " be placed in a condition entirely independent of us." 
 
 *' It may, perhaps, be found practicable to render them 
 *' dependent upon the states of Macherry and Bhurtpoor; 
 *' but I shall deem any arrangement zcith regard to them 
 " preferable to one zchich should render them dependent 
 " upon our protectior." 1
 
 arranged at Boorhampoer. Finally, partition trea- 
 ties, distributing the territory that had been acquir- 
 ed, were severally concluded on the 28th of April 
 and 14th of May 1804, with the Soubahdar of 
 the Dekan and the Peshwa. 
 
 So far, however, from effecting a general peace, 
 these treaties hardly produced a cessation of hos- 
 tilities. The war with Holkar continued; and 
 our newly acquired friends cannot be acquitted 
 of having, in some degree, co-operated with our 
 enemy. Our expences and our armies daily in- 
 creased *, and peace cannot be said to have 
 
 * The practice of taking into our service any chief with 
 his followers who chose to desert from the enemy during 
 this war, led to -an unbounded increase of our expence, 
 and a most useless augmentation of our military establish- 
 ment. Of the irregular force so obtained, Lord Corn- 
 wallisgave, on his arrival in India, the following account : 
 
 " The most burthensome, and at the same time the least 
 u useful part of the existing military expences, arises from 
 l( very numerous bodies of irregular troops, which I find 
 61 have been entertained, some of them under implied specific 
 *' engagements, that will render the immediate dismissal of 
 " them a measure of some difficulty ; but by far the greatest 
 " proportion of them under no other obligation than that of 
 " expediency, and these we are at liberty of course to dis--
 
 been restored till 1805, when a treaty was 
 concluded with Holkar, by Lord Lake, and with 
 Scindia, by Sir G. H. Barlow. By the former, 
 Holkar was reinstated in the greatest part of his 
 ancient territory. By the latter, the river 
 Chumbul is established as the northern boundary 
 of Scindia's dominions ; and we renounce all in- 
 terference with the petty states, formerly tributary 
 to him, on the western bank of the Jumna *. 
 
 l( charge, whenever that expediency shall, in the opinion 
 tc of your government, no longer exist. 
 
 " I am aware that it may be urged, that the dismission of 
 " any great number of these troops may be attended with 
 " the consequence of their taking service with our enemies ; 
 tc but weighing the probability of that circumstance in its 
 a utmost extent, and considering that, at this period, your 
 <c regular troops are little short of five months, and many 
 
 I c of the public departments, on which any'movement of our 
 tc armies depend, still more in arrear, and that this descrip. 
 ii tion of irregular troops are a drain upon your treasury 
 li of near six lacks of rupees per month, I see no possible 
 
 II means of keeping your regular army properly paid and; 
 <c equipped, and of retaining at the same time in pay soex- 
 < pensive an establishment, ichich would certainly be less 
 "formidable if opposed to us in the field, than while they 
 11 remain so distressing a drain upon our resources. ," 
 
 * It is believed that these treaties have not yet been 
 published.
 
 118 
 
 It is impossible to give any accurate estimate of 
 the value of the Company's acquisitions resulting 
 from this complicated scene of warfare. From 
 an account transmitted to the Directors by the 
 Bengal government, July 22d 1805, we learn, 
 that the balance arising from revenue or subsi- 
 dy, recently acquired by conquest or by cession, 
 after deducting pensions, jaghires, and the sum 
 necessary for the support of the civil and milita- 
 ry establishment, amounted only to the inconsi- 
 derable sum of L. 34,487 ; and it is to be re- 
 marked, that there is included in this account, a 
 sum arising from the additional subsidy imposed 
 on our ally, the Rajah of Travencore, larger 
 than the balance ; besides which, it takes credit 
 for receipts from territories since ceded. 
 
 In looking back to those details of our con- 
 nexion with the native powers of India, it is a 
 matter of surprise, that there should not exist a 
 single case, whether marked by our friendship 
 or hostility, in which our intercourse has not ter- 
 minated either in acquisitions of tribute or of ter- 
 ritory. 
 
 If a departure from the principles sanctioned 
 and prescribed by the legislature had taken place
 
 119 
 
 only partially, and in singular instances, it might 
 have been attributed to wise views of expediency, 
 suggested by the ambition of those with whom 
 we interfered, or to a feeling of just indignation, 
 roused by provocation we had received. But, 
 without again reverting to the specific details of 
 each particular case, it is impossible not to in- 
 fer, from the generality of our conduct, a power- 
 ful bias in the system itself, to frustrate a rigorous 
 adherence to those principles of moderation and 
 liberality, of which parliament has recorded its 
 applause. 
 
 Those who have justly reprobated that insult- 
 ing progression of libels on the oppressed powers 
 of Europe, by which France has vindicated, and 
 continues to vindicate her usurpations on the 
 Continent, cannot countenance and accredit a 
 defence of our conduct in the East, founded on 
 similar accusations against the native princes, and 
 thus give efficacy to reasoning, which from habit 
 they must reprobate and ridicule. 
 
 Such, indeed, seems to be the feeling, even of 
 the Court of Directors of the East India Com- 
 pany ; for, on taking a general view of their af- 
 fairs, far from attributing these events, either to
 
 120 
 
 want of good faith in the native powers, or to the 
 ambitious views of those who have guided their 
 counsels, they have formally declared, that " the 
 " territories which we have lately acquired, by 
 " treaty and by conquest, are of so vast and ex- 
 " tensive a nature, and the engagements lately 
 " concluded with several chiefs and Rajahs so 
 " complicated, that we cannot take a view of 
 " our situation, and of the political relations in 
 " which we now stand, towards the various In- 
 '* dian powers, without being seriously impres- 
 " sed with the wisdom and necessity of that so- 
 " lemn declaration of the legislature, that, to 
 " pursue schemes of conquest, and extension of 
 " dominion in India, are measures repugnant 
 " to the wish, the honour, and the policy of the 
 " nation*" 
 
 Certain it is, that no one conversant with the 
 history of British India since the year 1793, can 
 deny the justice of this severe censure, pronoun- 
 
 * See the conclusion of the Letter from the Court of 
 Directors in the Political Department, to the Governor. 
 General in Council, dated 28th November 1804, which 
 the Board of Controul prohibited them from sending to 
 India,
 
 121 
 
 ced by the Directors of the East India Company. 
 But, whatever may have been the intention of 
 those who concurred in it, it is equally certain, 
 that it strikes against the system in which the Di- 
 rectors themselves have been compelled by the 
 Legislature to co-operate, more forcibly than a- 
 gainst any of the servants they have employed. 
 
 For this departure from the wise injunctions of 
 Parliament, which has at last, on reflection, so 
 justly excited regret in Leadenhall Street, must 
 either have originated from the instructions of 
 the Government at home, or from the disobe- 
 dience of their servants abroad to the orders they 
 have received. 
 
 If the former is the case, the public has to la- 
 ment, that the management of the Company's af- 
 fairs was taken out of the hands in which it was 
 vested in the year 1783, and placed in those of 
 the Board of Controul. For, if the calamity ori- 
 ginates from their orders, Parliament cannot be- 
 stow on them the same tribute of applause given 
 to those of the government that was set aside, by 
 declaring, that they were founded no less in wis- 
 dom and policy than in justice and moderation *. 
 
 * See Resolutions, note, p. 15.
 
 122 
 
 If, on the other hand, the latter be the case, we 
 have the melancholy reflection, that this superin- 
 tending Board of Controul, on whose energy, in 
 enforcing obedience to the orders from home, Par- 
 liament founded its hopes, has been uniformly em- 
 ployed in sounding the praises of those whose dis- 
 obedience it was instituted to check ; and that, by 
 so doing, it has connived at a system of violation 
 of orders, productive of debt to an extent which, 
 in former times, with the less efficient machinery 
 for doing mischief, it would have been impossible 
 to have contracted.
 
 123 
 
 II. Of the Success of the Arrangements sanc- 
 tioned by the Act 1793, in Increasing the Ex- 
 port of our Manufactures^ and the Import of 
 Haw Materials. 
 
 IN the year 1793, before the expediency of re- 
 newing the charter of the East India Company 
 came under the consideration of Parliament, se- 
 veral interesting reports were made by the Direc- 
 tors, in answer to questions dictated by the anxie- 
 ty of the Lords of Council, to ascertain the means 
 of increasing the import of raw materials, and the 
 export of our manufactures. 
 
 These inquiries originated in the complaints 
 of the manufacturers, who were naturally surpris- 
 ed that, from our possessions in the East, there 
 was less demand for the produce of our industry, 
 than from any other part of the globe to which 
 we had access, of equal extent, and of equal fer- 
 tility. 
 
 Indeed, the great increase of demand which 
 our manufacturers had experienced from almost 
 every other part of the world, when compared
 
 124 
 
 with the inconsiderable augmentation of demand 
 from our settlements in India *, seemed to create 
 a general opinion, that the Company exerted it- 
 self rather to discourage, than to promote the 
 commercial intercourse betwixt India and Great 
 Britain ; and this suspicion was not a little 
 strengthened, by the inflated accounts annually 
 given of the prosperity and increasing wealth of 
 the Company's possessions, coupled with the ad- 
 mission, that a clandestine trade, to a very great 
 extent, was carried on betwixt the Continent of 
 Europe and our possessions in India, on a capital 
 
 * Average value of goods and stores exported to our In- 
 diaii settlements in the following years : 
 
 From 1767 to 1777 per annum, L. 371,840. 
 1777 1784 ditto, 364,746. 
 
 1784 1790 ditto, 357,764. 
 
 1790 1792 ditto, 415,264. 
 
 The greatest proportion of these exports must have been 
 in stores ; for, in the Report of the Committee of Direc- 
 tors on the Export Trade, 1793, we are informed, that 
 woollens and metals, almost exclusively, formed the ar- 
 ticles they exported ; and that, of the former, they had 
 sold, on an average of six years, ending 1790, only 
 L. 961,008 annually ; of the latter L. 168,334,
 
 125 
 
 provided by British subjects, resident both abroad 
 and at home *. 
 
 That such prosperity, and so great an increase 
 of wealth as was loudly boasted of, should take 
 place, without producing any extension of com- 
 mercial transactions, appeared to our merchants 
 and manufacturers repugnant to what experience 
 had taught them to regard as the certain conse- 
 quence of growing opulence ; and, as they did 
 not feel the effects of that increase of demand, of 
 which they could not doubt the existence, they 
 were led to suspect, that it had found some other 
 channel, and naturally concluded, that it was ab- 
 sorbed by this foreign commerce, of which the 
 existence was avowed as notorious. 
 
 An extinction of the Company's exclusive pri- 
 vilege was the remedy suggested by the manu- 
 facturing interest, for this acknowledged eviL 
 
 * Extract from Mr Dumlas's Letter to the Directors, 
 dated February 16, 1793. 
 
 c< The fact is notorious, that a clandestine trade, to a 
 tf considerable extent, is certainly carried on between Eu- 
 ' c rope and India, on a capital provided by British subjerc-, 
 " both in Britain aud India."
 
 126 
 
 By them a free, open, and unfettered communi- 
 cation with our Indian territories, was regarded 
 as the sure receipt for bringing to British ports 
 this trade, conducted by British capital, from 
 which they anticipated a great demand for the 
 produce of our industry. 
 
 The Company, on the other hand, persisted in 
 stating, that, while such a freedom of communi- 
 cation would be ruinous to them, it would be 
 equally so to those whose rage for adventure 
 might induce them to embark in the trade of In- 
 dia ; and that it would ultimately occasion the 
 loss of our possessions in that part of the world, 
 by the unprincipled conduct of the adventurers, 
 who, from the hope of sharing in the profits, 
 would be induced to repair to that country. 
 
 This statement they defended, by a repetition 
 of all those stale arguments, to prove the necessi- 
 ty of the trade of India being conducted by a 
 joint stock Company, possessing an exclusive pri- 
 vilege, so often and so completely refuted, both 
 in France and in England. 
 
 They dwelt on the impossibility of private ad- 
 venturers commanding a capital sufficiently large
 
 127 
 
 to conduct a trade where the commodities were 
 so valuable, and the returns so slow * ; on the 
 necessity of advances to the manufacturers in In- 
 dia f, which could only be properly regulated by 
 
 * The present state of the Company's capital, will pro- 
 bably prevent this observation being repeated. 
 
 t The state of the Coloni Partiarii amongst the Romans, 
 and of the Metayers in France, to whom the proprietors 
 furnished seed, cattle, and agricultural implements, has 
 been considered as the most degraded state of agricultural 
 management ; and this practice, which has been constant- 
 ly urged as one of the grounds that makes it necessary to 
 conduct the trade of India by an exclusive Company, seems 
 to indicate a similar depressed state of manufacturing in- 
 dustry. Indeed, it in part originated in the poverty and 
 oppression which our early practices entailed on the na- 
 tives ; for Mr Bolt, in his considerations of India af- 
 fairs, informs us, that, " In the time of the Mogul go- 
 *' vernment, and even in that of the Nabob Alaverdy 
 *' Khawn^ the weavers manufactured their goods freely, 
 " and without oppression ; and though there is no such 
 " thing at present, it was then a common practice for re- 
 4 < putable families of the Tanty, or weaver cast, to employ 
 " their own capitals in manufacturing goods, which thejr 
 " sold freely, on their own accounts. There is a gentle- 
 '*' man now in England, who, in the time of that Nabob, 
 ' has purchased; in the Decca province, in one morningj
 
 128 
 
 an establishment of servants at the different au- 
 rungs ; and, on the effect of competition, in debas- 
 ing the quality of the commodities brought from 
 the East*, as well as in ruining the trade, by 
 
 *' eight hundred pieces of muslin at his own door, as 
 <c brought to him by the weavers, of their own accord." 
 
 See also Mr Francis's Letter to Lord North, 1777, 
 page 63. 
 
 Lord Cornwallis says, in his Letter, 1st November 1788, 
 " The manufacturers shew a great inclination to quit the 
 t( Company's employ." 
 
 November 1788, Mr Bebb says, " The manufacturers 
 " prefer the employment of the private agent to that 
 '* of the Company." 
 
 * By the Gentoo Accounts, it appears, that the manu- 
 factures in Bengal were formerly incomparably finer than 
 they are at present ; so that they must have fallen off un- 
 der the Company. There was a sort of muslin, called 
 Abrooan, which was manufactured solely for the use of 
 the Emperor's seraglio, a piece of which, costing 400 Ru- 
 pees, or L. 50 Sterling, is said to have weighed only five 
 Sicca rupees ; and, if spread upon wet grass, to have been 
 scarcely visible. They amuse us with two instances of the 
 fineness ofthis cloth : one, that the Emperor Aurengzebe 
 was angry with his daughter, for shewing her skin through 
 her clothes ; whereupon the young princess remonstrated, 
 in her justification, that she had seven jamahs or suits on :
 
 129 
 
 raising the prices in India, and lowering them in 
 Europe. 
 
 To all this, they added the strongest assuran- 
 ces, that every possible exertion had been made 
 to promote the sale of British manufactures. But 
 the summary explanation given on the subject of 
 these exertions, must have created doubt in minds 
 impressed with the belief of the flourishing state 
 of India, and habituated to consider increasing 
 commerce as the certain consequence of increas- 
 ing opulence. 
 
 Woollens were stated to be the only article of 
 British manufacture the Company had exported, 
 except what might be included under the appel- 
 lation of naval and military stores ; for metals, in 
 their crude state, could not be considered as ma- 
 nufactures. 
 
 With regard to all other commodities, they 
 were described as consisting of cotton, silk, and 
 
 And another, that in the Nabob Alaverdy Khawn's time, 
 a weaver was chastised, and turned out of the city of Dec- 
 <sa. for his neglect, in not preventing his cow from eating 
 up a piece of the same sort of muslin, which he had spread, 
 and carelessly left on the grass. 
 
 I
 
 130 
 
 linen, or of earthen Ware, and manufactures made 
 of metals. Of these, the first class were repre- 
 sented as unsaleable, either because they were 
 made better and cheaper in the East, or because 
 substitutes, better suited to the climate, were ma- 
 nufactured by the natives. And it was said, that 
 the other class could not be exported to advan- 
 tage, on account of the heavy freight attending 
 so distant a voyage *. 
 
 Suspicions had certainly been entertained of 
 the sincerity of the Company's endeavours to in- 
 crease its exports ; and these, however ill-found- 
 ed, were not likely to be dispelled by statements, 
 which shewed, that all their exertions had ended 
 in the exportation of no very considerable quan- 
 tity of woollen cloth, which they persevered in 
 sending to India, though attended with an annual 
 and increasing loss f. 
 
 * See Report of the Committee on the Export Trade$ 
 1793, page 15. 
 
 i From the Report on the Export Trade, it appeared, 
 that the net loss on the sale of woollens, ending 1790, a- 
 mounted to L. 37,790. The loss on what was exported, 
 must hare been much greater ; for it was stated, that, on 
 ffce 19tli of January 1789, the Government of Fort S*
 
 These details are sufficient to shew, that, dur- 
 ing the discussion which took place, previous to 
 the renewal of the charter, in the year 1793, the 
 complaints of our manufacturers uniformly flow- 
 ed from an impression, that the injury they sus- 
 tained, was exclusively to be attributed to the mo- 
 nopoly the Company enjoyed j and that, by them, 
 the extinction, or, at least, the regulation of the 
 exclusive right, was considered as necessary for 
 their welfare. Why the language held by the 
 Indian Minister, at the time, authorised the con- 
 clusion, that he did not materially differ on the 
 nature of the disease, or of the remedy, must be 
 
 George, finding there remained on hand 781 bales of for. 
 mer years, that 354 bales were expected by the ships of 
 the season, and that, after using every means to promote 
 a sale, they could only sell twenty bales, had sent 372 to 
 China. 
 
 At Bombay, there were, in December 1789, 1338 bales 
 ef cloth, arid 343 bales of long ells perishing in the ware- 
 houses, whilst the sales did ivot amount to upwards of 533 
 bales annually. In this state, they proposed to send a part 
 of these goods to Bengal ; but the scheme was abandoned, 
 because the market there was equally unfavourable, Re. 
 port, page 13,
 
 132 
 
 accounted for, by supposing, either that he did 
 not understand, or that he was unwilling to un- 
 veil the formidable bar, which the system it- 
 self had placed to the possibility of extending the 
 sales of our exports, even if the monopoly had 
 been done away. 
 
 He is a pitiful statesman, whose genius, con- 
 stantly exerted in devising palliatives for the com- 
 plaints of those with the charge of whose inte-. 
 rests he is invested, never soars to an attempt at 
 discovering the real source of the evil, or aims 
 at affording permanent and effectual relief, by 
 removing the efficient causes from whence the 
 grounds of their complaints originate. 
 
 But he is worse than a pitiful statesman, who, 
 from secret and unavowed motives, conceals the 
 real state of the evil, and flatters the public that 
 relief can be easily administered in a case he 
 knows to be incurable. 
 
 Under which of these descriptions of public" 
 characters, those immediately concerned in the 
 arrangement of this transaction ought to be class- 
 ed, it may be difficult to decide. But certain it 
 is, that the measures proposed must have appear- 
 ed to those who were capable of discerning, or
 
 who really understood the causes from whence 
 the evil originated, at once burthensome and op- 
 pressive to the Company, and completely in- 
 efficacious as a means of relief. 
 
 That monopolies and exclusive privileges are 
 in all cases unnecessary, and even detrimental, 
 has long ago ceased to be seriously disputed. 
 The interested views of individuals in support of 
 their power, their patronage, or their pecuniary 
 emoluments, may give rise to murmurs against 
 innovation ; but that perfect freedom of commu- 
 nication is the vivifying principle of commercial 
 prosperity, cannot in this age be contested. 
 
 In this case, however, the monopoly of the 
 Company was not the most pressing, in truth it 
 was not the real evil from which we suffered. 
 The regulation of the monopoly, nay, even its 
 extinction, could not therefore produce the salu- 
 tary effect of opening that vent for the produce of 
 our industry, so much desired by our manufac- 
 turers. 
 
 To (disclose the real causes of that deficiency 
 of demand, of which it was so natural to complain, 
 it will be necessary shortly to retrace the nature 
 of the Company's connexion with India, and to
 
 134 
 
 explain the principle upon which the commerce 
 of that country has been for a length of time 
 carried op. 
 
 Before the acquisition of the territorial posses- 
 sions, the East India Company conducted their 
 commerce by exporting articles from Europe, for 
 which there existed a demand in the East, and 
 importing the manufactures of India best suited 
 to the taste of their European customers. 
 
 It is true, that India never afforded a great 
 demand for British manufactures, for bullion, evei* 
 in those times, formed the main article of export. 
 But as gold and silver are not of British growth, 
 and could only be acquired in return for our 
 produce, the markets of India indirectly gave rise 
 to a demand for goods of our manufacture, in 
 value equivalent to those we imported. 
 
 Under this system the Company had long 
 flourished. From its efforts the nation was be- 
 nefited both in trade and revenue, and the pro- 
 prietors shared dividends, often high, and always 
 sufficient to mark the credit and prosperity of the 
 concern. 
 
 But, by the acquisition of our territories in the 
 East ? this system, on which the European com-
 
 135 
 
 merce with India had been conducted, was at 
 once completely interrupted ; for the revolution 
 effected by this event, not only in the Company's 
 commerce, .but in that of Europe with India, was 
 not less extraordinary than the revolution in do- 
 minion which produced it. 
 
 The large surplus revenue which the Company 
 enjoyed when it first acquired the territorial pos- 
 session, in value far greater than both the goods 
 and the bullion it had been accustomed to ex- 
 port, at once furnished means of supplying the 
 British market with Indian produce, independent 
 of all export from Europe, far beyond what 
 the stock of the Company, acting as merchants, 
 could antecedently command ; whilst the enor- 
 mous wealth suddenly amassed by its servants, 
 lent to foreign companies for bills on Europe, 
 where they wished to realize their fortunes, pro- 
 duced a similar revolution in the commerce of 
 other countries *. 
 
 * " Since the period of British acquisitions there, the 
 " tribute of India, and the gains of British individuals, have 
 " furnished the capital of the exports to Europe, from at 
 " least all the territories possessed by this country; but 
 " besides that tribute and those gainsj there is, at this day,
 
 136 
 
 This system of trade (if trade it can be called), 
 which precluded all return from Europe to India, 
 has been from that period, with more or less 
 success, the object of the Company's pursuit. To 
 the followers of the mercantile system of political 
 economy, it must undoubtedly have appeared 
 the perfection of commercial prosperity. There 
 was no room for any nice calculation concerning 
 
 e{ no capital in those territories applicable to an extension 
 " of their exports to Europe." Report from the Special 
 Committee of Directors on the Private Trade, 27th Ja- 
 nuary 1801, page 45. 
 
 '* The vast wealth which poured into the coffers of indu 
 ( i viduals upon the ascendancy of the English power in In- 
 '* dia, at the same time that their number, in consequence of 
 <: this great change, rapidly increased there, soon overflow. 
 a ed the usual channel of remittance through the Company, 
 (< who, not having immediately adjusted their measures to 
 e< the policy which this new situation of things ought to 
 " have dictated, had it been regarded as permanent, nor 
 e( indeed being well able at first to invest in goods even 
 " the great revenues which came into their own hands, 
 tf many of the fortunes acquired by individuals found their 
 " way into Europe by foreign channels ; and these chan- 
 " nels being once opened for the remittance of British pro- 
 " perty, have ever since continued to serve, in a greater or 
 ( ' less degree, for the same end, though the modes have v^., 
 * ( ried." Ibid, page 22.
 
 137 
 
 the extent of the balance in our favour. Where 
 nothing was exported but what was necessary for 
 the consumption of our servants, all was consi- 
 dered as gain that reached our shores. 
 
 But to those who have imbibed more liberal 
 and enlightened notions of commercial policy, it 
 must appear, that our intercourse with the East 
 evidently ceased to partake of the nature and 
 character of commerce. There was no exchange 
 of commodities ; nothing was given by this country 
 in return for what it annually took away. The 
 extent of demand which regulates all commer- 
 cial transactions, no longer formed a rule for the 
 conduct of those concerned ; for it was the amount 
 of the tribute that could be collected, and of the 
 fortunes the Company's servants wished to remit, 
 and no consideration of the state of our European 
 markets, that decided the quantity of exports 
 from India* ; whilst, on the other hand, there 
 
 * That in practice this was at an early period the effect 
 of this species of intercourse with India, is apparent from 
 (he following extract of a general letter to Bengal, dated 
 7th of April 1773: " The state of our affairs requires 
 " the utmost extension of your investments. You are 
 ** not to forbear sending even those sorts which are at-
 
 138 
 
 could exist, comparatively speaking, no such thing 
 as imports ; for a country from which all was 
 taken, and to which nothing was returned, could 
 not partake of those desires originating from the 
 possession of surplus wealth, which give birth to 
 a demand for foreign commodities. It is singular 
 that, though the Directors uniformly held out 
 their commerce with India as productive of great 
 mercantile advantage, they advanced distinctly 
 the same opinions here stated in relation to the 
 foreign trade of India, as appears from the follow- 
 ing passage of their report on the export trade, 
 1793. 
 
 " The foreign trade with India has undergone 
 " a total change, since the acquisition of the 
 " Dewannee by the English ; it is no longer a 
 * e commercial adventure ; it has long depended 
 " almost wholly upon agency, an agency for 
 transmitting to Europe the fortunes of British 
 " individuals*." 
 
 " tended with loss, in case such should be necessary to 
 41 supply an investment to as great an amount as you can 
 *' provide from your own resources." 
 * Report on the Export Trade, 1793, page 18.
 
 139 
 
 It would be idle to enter into detailed expla- 
 nations, to point out the obvious tendency of such 
 an intercourse to inflict irretrievable ruin on the 
 country subjected to it * j and he who knows 
 
 * Proofs may be brought, that these destructive effects, 
 which theory would lead us to expect from our inter- 
 course with India, in reality did ensue, to the knowledge of 
 the Directors, and of the servants of the Company abroad, 
 
 " If recourse be had to the situation of the Company, 
 C( previous to the acquisition of the Dewannee, when 
 " their views were purely commercial, AND WHEN INDIA. 
 " ABOUNDKD IN WEALTH, it will be found that they laboured 
 " under extreme difficulty in the disposal of the manufac- 
 <{ tures and produce which they exported." Report on the 
 Export Trade, 1793. p. 17. 
 
 l( Beneficial consequences, of the utmost importance, 
 (l would certainly result to the British Empire in India, 
 " from any considerable increase of its active capital, 
 c< which is known not to be in a just proportion to the 
 " productive power of the country." Letter from Lord 
 Wcllesley, 30th Sept. 1800. 
 
 Extract of a letter from Mr Malet to Lord Cornwallis, 
 1788, to prove the impossibility of extending our commerce: 
 
 " The riches carried annually to Delhi did not stagnate 
 tf there. The internal commerce of the empire, and the spi- 
 " rit of the people, gave full employment to the foreign in. 
 " flux of wealth ; the productions of each province, and the 
 *' performance of every art were in high demand j and the
 
 140 
 
 that demand, in the mercantile sense of the word, 
 implies not a mere wish or desire to possess, but 
 a desire of possessing combined with the means 
 of acquiring, will readily perceive how impossible 
 it is, that, under such a system, there should exist 
 a demand for the produce of British industry. 
 
 By a strange perversion of reasoning, however, 
 the extent of the Company's investment, a sure 
 barometer for ascertaining its success in impo- 
 verishing India, was held out as the measure by 
 which the wealth and the prosperity of our settle- 
 ments was to be estimated ; and pompous de- 
 scriptions of the flourishing state of our posses- 
 
 " paj of the vast armies of the empire kept pace in mag- 
 " iiificence with every other article of ex"pencc. Hence 
 (i arose numberless channels, through which the wealth of 
 ( the empire was again circulated to its extreme branchcsr. 
 
 " The mere accumulation of riches by the inhabitants of 
 i{ an empire is vicious and sordid, but much more so when it 
 " becomes the sole object of the rulers. A wise legislature 
 * l studies to make them the stimulatives of genius, of sci- 
 ** ence, of agriculture, and of commerce ; to convert them 
 u to the consumption of the produce of industry; and so to 
 (t arrange them, as that the coffers of the state may be re- 
 " plenished from the redundance of the subject." Ap, 
 pendix to the First Report on the Export Trade, 1793, 
 No. 6.
 
 sions, grounded on documents from which in 
 reason we ought to have inferred the progress 
 of calamity, dazzled and delighted the multitude, 
 who, always disposed to give credit to a result 
 that flatters their hopes, never thought of disput- 
 ing the truth of reasoning they would have been 
 sorry to see refuted. 
 
 Under these circumstances, it was natural for 
 that aumerous class of the community who, readi- 
 ly and without examination, believed the exag- 
 gerated prophecies of Indian prosperity, and the 
 magnificent statements of the Company's future 
 accumulations, to look to India as a great mar- 
 ket for the produce of our industry. 
 
 To those accustomed to the usual notions of 
 mercantile transactions, who imbibed these gene- 
 rally received impressions of Eastern prosperity, 
 the great extent of imports from India seemed 
 to imply the necessity of a reciprocal supply 
 from Europe ; and, as our manufactures expe- 
 rienced no proportional demand, it was natural 
 for them to conclude, that India was supplied 
 through that foreign European commerce, the ex- 
 istence of which was avowed.
 
 142 
 
 This view of the subject at once explains the 
 conduct, which, under the circumstances of 
 the case, was necessarily pursued by those who 
 conducted the arrangement in 1793, and serves 
 to display the grounds on which it has been as- 
 serted, and will be shewn, that, in the nature of 
 things, the plan adopted was sure to produce 
 mischievous effects on 'the Company's concerns, 
 and to prove inoperative and nugatory, as a 
 means of increasing our exports, or of removing 
 the foreign trade to British ports. 
 
 It requires no detailed explanation to shew, 
 that those who were charged with the arrange- 
 ment of the terms on which the Company's 
 charter should be renewed, had precluded them- 
 selves from urging, in reply to the demands of 
 the manufacturers, that plain statement of the 
 truth which must have at once extinguished 
 their hopes. It was obvious, that it was im- 
 possible for them to state, that the quanti- 
 ty of goods exported by the foreign European 
 traders was trifling, and that no demand either 
 did, or ever could exist, under the system pursu- 
 ed, for European commodities, beyond what was
 
 143 
 
 requisite for the consumption of the Company's 
 servants ; because the reasoning necessary to 
 give credit to these assertions involved a confes- 
 sion of the deceit, annually practised, by inferring 
 the prosperity of India from the means of its im- 
 poverishment. 
 
 To have explained, that the commercial in- 
 tercourse pursued, (productive of no returns 
 to our settlements for what was exported from 
 them,) had the necessary effect, in a commer- 
 cial point of view, of making not only Eng- 
 land, but Europe annually bankrupt to India, 
 to an extent equal in amount to the value of 
 its whole dealings, and to have enforced the 
 inference, that, if there even existed in India a 
 taste for European commodities, it never could 
 give birth to a demand, -whilst the country 
 was constantly despoiled of the means of ac- 
 quiring, would have been to avow, that the sys- 
 tem contained within itself the germ of its 
 own dissolution, and to confess the fallacy of 
 all those intended anticipations, by which the 
 public was to share millions, never to be realiz- 
 ed, and the Company's stock to acquire ideal se*
 
 144 
 
 eurity from accumulated funds, never even in em* 
 bryo to exist *. 
 
 Besides, a true and fair exposition of the case 
 must have suggested a comparison betwixt the 
 annual increasing benefits \^e enjoyed from the 
 growing demand for British manufactures on the 
 part of those American dominions which we had 
 lost, and the benefits we derived from the trade 
 of India, represented as " the greatest commer- 
 " cial concern which had occurred in the annals 
 " of polished nations! j" and this comparison, in 
 itself fatal to the character of the system we pur- 
 sued, was what those conversant with the subject 
 must, above all things, have wished to avoid J. 
 
 * 3d Geo.. III. c. 52. 111. 
 
 t See Mr Dundas's Speech, April 23d 1793. 
 
 J Whilst the exports to India have remained in a man- 
 ner stationary, consisting almost exclusively of stores, 
 woollens, and metals, and that only to the inconsiderable 
 Talue already mentioned, the exports to America were pro- 
 gressively increasing, till, interrupted by the vigorous wis- 
 dom of ministers, they had recently amounted in value t 
 the following enormous sums : 
 
 1805, L. 11,4-46,000 
 
 1806, 12,665,000 
 
 1807, 12,097,000
 
 145 
 
 To prevent all explanation, therefore, it was 
 necessary to devise a plan, which, whilst it fed 
 the hopes, that, by exaggerated statements, had 
 been raised, satisfied in a degree the demands of 
 our manufacturers, which, by the same means, 
 had been created. 
 
 Such were the circumstances that gave birth 
 to the idea of a regulated monopoly, which, 
 when proposed, was explained to be a monopoly 
 so regulated " as to ensure to the merchants and 
 " manufacturers, the certain and ample means 
 " of exporting to India, to the full extent of the 
 " demand of that country for the manufactures 
 " of this ; and likewise a certainty, that, in so far 
 " as the produce of India affords raw materials 
 " for the manufactures of Great Britain or Ire- 
 " land, that produce shall be brought home at a 
 " rate as reasonable as the circumstances of the 
 " two countries will admit of*." 
 
 On this proposal the Directors at first observ- 
 ed, and truly observed, that, in the form in which 
 
 K 
 
 * See letter from Mr Dundas to the Chairman of the 
 East India Company, 16th of February 1793.
 
 146 
 
 it was conveyed, it appeared to go to the full ex- 
 tent of depriving them of that exclusive privi- 
 lege, which was admitted to be so advantage- 
 ous *. Their fears, however, were somewhat 
 allayed, when the proposed system came to be 
 detailed, in the more intelligible and less inflated 
 language of the enactments of an Act of Parlia- 
 ment. 
 
 From these they learnt, that, notwithstanding 
 the renewal of the exclusive privilege, it was to 
 be lawful for any of his Majesty's servants, to 
 convey (with certain exceptions) goods to and 
 from India, on payment to the Company of three 
 per cent, on what was landed in England ; and 
 that the Company was to be bound to provide 
 three thousand tons of shipping, at the least, (at 
 the rate of L. 5 per ton outwards, and L. 1 5 home- 
 wards), for the specific purpose of carrying to the 
 East Indies such goods, wares, and merchandize, 
 as may be lawfully exported thither by individu- 
 als, and for bringing back from thence, as well 
 the returns of the same, as likewise the goods of 
 
 * See observations of the Court of Directors, on Mr 
 Dundas's letter of the 16th of February 1793.
 
 147 
 
 other persons entitled to import the same into 
 this kingdom. 
 
 Of the views which dictated this scheme there 
 cannot be a doubt. 
 
 To the Company it gave an opportunity of 
 haranguing on the benefits of the connexion be- 
 twixt the revenue and the trade of India, and the 
 necessity of continuing their exclusive privilege ; 
 to the nation it gave a pretence for holding out 
 the prospect of seeing the foreign European 
 trade transferred to British ports ; whilst to 
 the manufacturers it permitted the assertion that 
 their object was secured in the best manner ; be- 
 cause, if the Company conducted their business 
 on true commercial principles, they could afford 
 to be the bearers both of European and Indian 
 goods, cheaper than any individual merchant or 
 trader on his own private account *. 
 
 But it was soon discovered, that this arrange- 
 ment, though it afforded plausible pretences for 
 the hand of authority to act upon, gave perfect 
 satisfaction to none of the parties concerned. 
 
 * See Mr Dundas's letter to the Chairman of the East Tn. 
 dia Company, 16th February 1793.
 
 148 
 
 By perseverance, however ; by the liberal use 
 of Mr Pitt's name and authority * ; and by hold- 
 
 * Letter from Mr Dundas to the Chairman of the East 
 India Company, inclosing the propositions for the new an. 
 rangement ; 
 
 Sir, 
 
 I have had so many opportunities of talking at large with 
 you, and the other gentlemen of the Committee, upon the 
 Subject of clandestine trade from India to Europe, that it 
 would be a consumption of your time, as well as my own, 
 to go over the subject again. I am more and more con- 
 vinced, both upon national grounds, and upon a consider, 
 ation of what is due by the East India Company to their 
 own credit and interest, that very considerable sacrifices 
 ought to be made by them, for the purpose of laying a 
 foundation to put all the imports, "which now come 
 from India clandestinely, in a train of being brought into 
 a mode of legitimate trade. I send you inclosed the sug- 
 gestions which have occurred to Mr Pitt and me for this 
 purpose. I trust you will soon be satisfied by experience 
 that the adoption of them is no wise prejudicial to your 
 interests ; but if we have not been fortunate enough to con- 
 vince you in that respect^ and that you still consider these 
 concessions as sacrificing some part of you^commercialin. 
 terestsy we are at least sanguine in our expectations^ thatj 
 in compliance with our opinions, you will not conceive the 
 sacrifices zee call upon you to make* are of such moment 
 as to justify you in refusing to make the experiment. 
 
 (Signed.) HENRY DUNDAS. 
 Whitehallj 22d March 1703.
 
 149 
 
 ing out the prospect of an immediate dividend of 
 ten per cent, at a time when the Directors had 
 never proposed, or even thought of more than 
 eight per cent. * ; the Company were at last in- 
 
 * Extract of a paper sent from the Chairman of the 
 East India Company, to Mr Dundas, 17th of January 
 1793, intituled, Hints for the purpose of forming an ar- 
 rangement for the renewal of the Company's exclusive 
 trade. 
 
 * c As to the Regulations at Home. 
 
 a To secure to the Company, in the first instance, 
 u their commercial dividend of eight per cent, per annum." 
 
 This was the original proposal of the East India Com- 
 pany, in the year 1793, in so far as related to the divi- 
 dend, when the negociations commenced for the renewal of 
 their charter. Mr Dundas , in his letter , in reply to this 
 proposal., dated 16th February 1793, first introduces the 
 subject of increasing the dividend to ten per cent. In 
 this letter, after making out that there was a surplus re- 
 venue of upwards of one million, two hundred thousand 
 pounds, he proceeds ; ii taking it, however, at that sum, 
 " the question is, how it is to be disposed of ? and I have 
 '* no hesitation in giving it as my opinion, that the pro- 
 " prietors ought to have a dividend of ten instead of eight 
 * c per cent, on their capital. I am induced to be of this 
 *' opinion, because I observe, on a retrospective view of 
 u their affairs, that eight per cent, was rather less than 
 * ; their commercial dividend upon an average, before they
 
 150 
 
 duced to acquiesce in that which they could not 
 approve ; and the desire, on the part of the manu- 
 facturers, (at the time expressed) not to throw 
 any obstacles in the way of what government 
 might deem a salutary and necessary arrange- 
 ment, produced a similar effect. 
 
 Such is the origin and true history of the 
 
 " obtained the possession of the territorial revenues ; and 
 " considering the many struggles in which the Company 
 " has been engaged, and the many risks their possessions , 
 t( their trade, and of course their capital has undergone, 
 " it would be unjust if they were not to reap the advan. 
 <; tage of the additional dividend, which the situation of 
 ! f tlieir affairs certainly admits of." 
 
 To the Chairman of the Court of Directors, it appeared 
 that the knowledge of this intention, which till then had 
 been concealed from the Company, would produce such 
 an effect on the value of India stock, that he went to the 
 India House next day, (though a Sunday) and drew out 
 an advertisement, to be sent to the Stock-exchange early 
 next morning, announcing, that Mr Dundas had intimated, 
 as his private opinion, that the Company should be per- 
 mitted to divide ten per cent, per annum on their capital 
 stock, in lieu of the present dividend of eight per cent. 
 See Narrative of the Proceedings at the India House, oa 
 the 17th of February 1793.
 
 151 
 
 scheme, in relation to the private trade of India, 
 which, in detail, received the sanction of Parlia- 
 ment, in the clauses of the act 1793, extending 
 from clause 81, to clause 106. To say that it 
 has been productive of none of the salutary ef- 
 fects aimed at, is but a slight censure of a mea- 
 sure, from which no one, who had the smallest 
 acquaintance with the subject, except those who 
 framed it, ever ventured to prophecy much ad 
 vantage. 
 
 From the moment the act of Parliament took 
 effect, and the merits of the system came to be 
 tried by experience, its inefficacy and futility, as 
 well as the unnecessary inconvenience and ex- 
 pence to which it exposed the Company, must 
 have been apparent to those, whose duty and 
 habits made them familiar with the daily routine 
 of the Company's affairs. 
 
 It could not escape their observation, that, of 
 the three thousand tons of shipping the Company 
 were obliged to appropriate for goods to be con- 
 veyed to India on private account, only nine 
 hundred and nineteen were occupied in the first 
 year*, and that of these, eight hundred and 
 
 * Years 1793-4. See 3d Report of the Directors on 
 Private Trade, 1802.
 
 152 
 
 twenty-two were shipped by a house, so intimately 
 connected with the supposed author of the plan*, 
 that their adventure could only be considered as 
 an overstrained desire to sustain the favourite 
 project, founded on a conviction, that motives of 
 interest would lead no one to co-operate in the 
 attempt. 
 
 That in truth this was the case, became more 
 distinctly evident from the experience of the two 
 ensuing years, in the first of which there was 
 only a demand for forty, in the second, for thirty- 
 one tons, out of the three thousand the Company 
 were obliged to provide to convey goods to India f. 
 
 If this complete failure of the scheme, in so 
 far as it was intended to increase the export of 
 British manufactures to India, forms a strong il- 
 lustration of the justice of the view that has been 
 given of the nature of our intercourse with that 
 country, a further and equally powerful proof 
 of its accuracy is to be derived from the inade^ 
 quacy of the proposed tonnage to supply the 
 demand of those who wished to remit their for- 
 tunes, by sending Indian goods to Europe. 
 
 * Messrs David Scott and Co. Ibid, 
 f Years 1794-5 and 1795.6. Ibid.
 
 153 
 
 For whilst in England it appeared, that, within 
 two years after passing the act in the year 1795- 
 1796, the demand for tonnage to convey British 
 goods to India, was so limited, that only thirty- 
 one tons out of three thousand provided were oc- 
 cupied ; the demand for tonnage to convey Indian 
 goods to England was so great, that in Bengal 
 alone, instead of three thousand tons, five thou- 
 sand three hundred and forty-six*, were in that 
 year furnished to convey goods sent home on 
 private account. And, notwithstanding this great 
 increase of imports from India to England, a large 
 foreign trade, in exports, to our settlements, con- 
 tinued to be carried on, almost entirely with Bri- 
 tish capital, as the Company themselves assert, in 
 a paper explanatory of a memorial delivered to 
 the Treasury, in the year 1797 f. 
 
 * See letter from George Udney, Esq. member of the 
 Supreme Council, to Marquis Wellesley, dated 15th Sep. 
 tember 1800. See also Lord Wellesley's letter to the Di- 
 rectors, dated Berigal, 30th of the same month. 
 
 i The following is an extract from this paper ; it is 
 dated 3d of May 1797: 
 
 " A low duty, collected on the sale prices of goods sold 
 *' for exportation wouldj it is expected; make London the
 
 154 
 
 From this memorial we may also infer, how 
 strongly the Directors must at that time have 
 been impressed, that it was impossible, even for 
 the private trade, to effect that increase in the 
 export of our manufactures, which formed the 
 primary object of the act 1793. 
 
 For though it was drawn for the purpose of 
 persuading the treasury to lower the duties on 
 Indian goods, as a means of effecting the transfer 
 of the foreign trade to British ports, which the 
 act 1793 had been unable to accomplish, and 
 must of course have enumerated all the advan- 
 tages likely to result from the measure, in the 
 estimation of those by whom it was so strenuously 
 recommended, yet it never presumes to suggest, 
 that the increase of our trade from India could 
 be attended with any augmentation of our sales 
 to that country. 
 
 Neither is it possible to attribute this omission 
 to neglect or inadvertency j for the expediency of 
 urging the increased sale of our manufactures, as 
 
 <c great emporium of India commerce, at present carried 
 *' on almost entirely by English capitals, although under 
 " foreign flags even a considerable part of the Danish 
 Company's cargoes are purchased with English funds."
 
 155 
 
 an inducement to adopt what the memorial re- 
 commended, had not escaped the attention of 
 those who drew it, as it dwells on the good 
 effects of extending the sales of the produce of 
 our industry, that would result from the increas- 
 ed number of foreign purchasers at the Indian 
 sales, arguing, that persons frequenting a country 
 for one article, inadvertently buy many others*. 
 Though at this period, therefore, the complete 
 failure of the act 1 793, in producing either an 
 increased sale of our manufactures, or the trans- 
 fer of the foreign trade to our ports, must have 
 been known to all concerned, the public discus- 
 sion of this important question was not renewed, 
 till it was forced on in the year 1 800, in conse- 
 quence of a marked difference of opinion on the 
 manner of conducting the trade, betwixt the go- 
 vernment abroad and the Directors at home, in 
 
 * " The sale of our exports in British manufactures 
 < would also be proportionably increased, from the in- 
 <{ creased number of foreign purchasers of eastern goods 
 44 at the Indian sales, because persons frequenting a coun, 
 c< try for one article, inadvertently buy many others." 
 Extract of the memorial delivered to the Treasury, 3d 
 May 1797.
 
 156 
 
 which the Board of Controul concurred with the 
 former. 
 
 It then appeared, that, of twenty-seven thousand 
 tons of shipping, which the Company, at the rate 
 of three thousand tons per annum, had, during 
 nine years, been obliged to supply, for conveying 
 goods from England to India, only one thousand 
 nine hundred and eighty-eight had been used, 
 and that the remaining twenty-five thousand *, 
 
 * Extracts from the Third Report of the Special Com. 
 mittee on Private Trade, 1802. 
 
 16 Tonnage occupied by private goods, under the act 
 t( 1 793, in the following years : 
 
 " Years. Tons. 
 
 " 1793-1794, 919 
 
 " 1794-1795, 40 
 
 " 1795-1796, 31 
 
 . 1796-1797, 252 
 
 " 1797-1798, 
 " 1798-1799, 374 
 
 " 1799,- 1800 195 
 
 " 1800-1801, 150 
 
 " 1801-1802, 27 applied for, but not shipped. 
 
 " Total, 1988 
 " It thus appears, that the Company are obliged, by the
 
 157 
 
 was not the only unemployed tonnage the scheme 
 had put the Company to the expence of sending 
 out ; as they had been induced, by the great de- 
 mand for tonnage, to convey goods home, to a- 
 dopt the wasteful system of sending unoccupied 
 shipping from England to India for that pur- 
 pose *. 
 
 " act of 1793, to provide annually three thousand tons, for 
 ft the exportation of British manufacture, and which, for 
 11 nine years, amount to - Tons, 27,000 
 
 " There have been applied for only 1,988 
 
 " Remains unemployed tonnage the Company were 
 
 " obliged to provide, - 25,012" 
 
 * " The question which naturally follows, is, by what 
 tc mode of conveyance is that trade to be brought home ? 
 *' I answer, by the India built shipping. Upon the po- 
 *' licy and beneficial tendency of this measure, I have only 
 " to refer you to the unanimous opinion of all your ablest 
 < servants in India, who have, from time to time, and in 
 " the most explicit terms, pointed out to you the expe. 
 *' diency of this indulgence, both with a view to a just 
 " attention to the interests of your servants in India, and 
 <c with a view to make Britain the great emporium of the 
 *' trade of Asia. Indeed, nothing has hindered your ser- 
 " vants abroad, sanctioned by the express advice of your
 
 158 
 
 It was this experience of what had passed 
 since the passing of the act 1793, so different 
 from what was held out as the probable conse- 
 quence of the regulations at the time they were 
 adopted, that made the renewed controversy as- 
 sume a form very different from that in which it 
 had formerly appeared. The manufacturing in- 
 terest was now no longer regarded as a party 
 concerned. Nay, the attempt to increase the 
 sales of our manufactures, formerly the principal 
 object of consideration in promoting these regu- 
 lations, seems to have been abandoned as hope- 
 less. 
 
 By the Directors, it was plainly asserted, that 
 the former concessions had been of so little use 
 to the manufacturers, that their interests in the 
 privilege called for no further consideration *. 
 
 " Board of Trade, from acting upon these principles, at 
 " different times, but the great quantity of unemployed ship. 
 u ping sent out by the East India Company. I trust, 
 " hen cef or \\ard, you will see the izisdom of desisting from 
 li such a wasteful system," Letter from Mr Dundas to 
 the Chairman of the East India Company, 2d of April 
 1800. 
 
 * See First Report on the Private Trade, page 23 of the 
 papers printed by the Court of Directors, April 1802.
 
 159 
 
 And It was now acknowledged, even by the per- 
 son who proposed the plan, that the export trade 
 to India never could be extended in a degree any 
 way proportionate to the wealth and population 
 of our possessions * ; the importance of which 
 was avowed to consist in the quantity of wealth 
 we could draw from them, and not in any ad- 
 vantage our manufacturers could derive from the 
 consumption of the natives f. 
 
 The resumed .discussion was, therefore, solely 
 confined to the means of transferring, from fo- 
 reign to British ports, that export trade from In- 
 dia, which was said to be increasing with won- 
 derful rapidity ; though, probably, it bore only a 
 due proportion to the increased number of our 
 
 * See Mr Dundas's Letter of the 2d of April 1800, ad- 
 dressed to the Chairman of the Court of Directors. 
 
 f- This was falsely attributed to the climate of India, 
 and the religion and manners of its inhabitants ; for there 
 is no country, however opulent, in any climate, whatever 
 may be the religion and manners of its inhabitants, that 
 can long continue to have a demand for foreign commodi- 
 ties, if its surplus wealth, accumulated in the shape of tri- 
 bute or savings, by those not permanently resident in the. 
 country, is annually exported.
 
 160 
 
 servants, and the extension of their transactions, 
 the natural consequences of the enlargement of 
 our dominions. 
 
 The free merchants of India, the proprietors of 
 shipping in the East, and the agents of both in 
 England, seemed now the only parties interested 
 in the discussion. 
 
 It is impossible to enter, with any thing like 
 minuteness, into the protracted details of a con- 
 troversy which lasted two years, and on which vo- 
 lumes were printed. 
 
 By the free merchants it was urged, that the 
 privilege, conceded in the act 1 793, had been ren- 
 dered nugatory by the conduct of the Company. 
 That the extravagant rate of freight charged, the 
 uncertainty of the arrival and departure of their 
 shipping, the deviations for warlike purposes, the 
 state of doubt constantly existing as to the quantity 
 of tonnage to be furnished, and the inconvenience 
 arising from the short time allowed to procure or 
 prepare goods for loading, operated as a prohibi- 
 tion to use the shipping provided by the Com- 
 pany. 
 
 By them, the authority of tfo Governor-Gene- 
 ral, and the servants of the Company abroad, was
 
 161 
 
 relied upon, to prove that the concessions in the 
 act 1 793 had been frustrated, by the insufficien- 
 cy of the tonnage furnished from England, and 
 by the unavoidable expence and inconvenience 
 attending the terms and manner of its provision. 
 
 They argued, that, under the existing impedi- 
 ments, and under the uncertainty which embar- 
 rassed the trade of the British merchant in In- 
 dia, it was impossible his goods could reach 
 the markets of the Continent, at as low a price as 
 the goods conveyed directly in foreign bottoms ; 
 and asserted, that the time lost by the protract- 
 ed voyages of the Company's ships, more than 
 countervailed the expence of the circuitous voy- 
 age to Europe by America ; as the -Americans 
 had been known, after a four months voyage to 
 Calcutta, to quit that port with a return cargo, 
 within twenty days from the date of their arri- 
 val. 
 
 By the Company, these allegations were not 
 wholly denied. They averred, that they had no 
 design of obstructing the operation of the act 
 1793, though it had put them to great and un- 
 necessaiy expence. But they admitted, that
 
 162 
 
 they could not make the greater objects of their 
 complex system bend to private interests ; and 
 they confessed, that the uncertainty in the times 
 of the arrival and departure of their ships ; the 
 doubt of procuring freight in them ; together 
 with the long detention and circuitous routes, 
 might justly be a ground of objection to those 
 who were obliged to depend upon them for 
 freight *. 
 
 In the conduct of this controversy, however, 
 neither party can be acquitted of introducing irre- 
 levant and extraneous matter, calculated to ex- 
 cite the prejudices rather than to influence the 
 judgment of the public. The Company en- 
 deavoured to alarm the ship-owners of Eng- 
 land, and the sugar-planters of the West In- 
 dies, by persuading them that their interests 
 were directly attacked ; whilst those who acted 
 for the merchants of India, with equal regard to 
 truth, attempted once more to impress on the 
 minds of the manufacturers at home, that the 
 small demand for the produce of their industry, 
 
 * See first Report of the Special Committee on Private 
 Trade, page 28 of the papers printed by the Court of Di- 
 rectors, 1802.
 
 163 
 
 arose from the circumstance of the Company's 
 monopoly, and not from the system on which 
 our possessions had been managed. 
 
 With which side the merits of the question 
 rested, there could not exist a doubt. If the 
 trade betwixt India and Great Britain, with the 
 exception of the necessaries or luxuries which 
 the Company's servants may require, is, as at 
 present managed, a trade of pure remittance ; if 
 the loss on the sale of those goods in Europe, by 
 which this remittance is effected, is daily increas- 
 ing ; can there be a doubt, if the system is perse- 
 vered in, of the expediency of conveying the 
 goods to be sent home at the least possible ex- 
 pence, and of making the India built ships, in 
 which they are conveyed, at once a means of 
 saving British ship-timber, (at the scarcity of 
 which we are justly alarmed,) and of contribut- 
 ing, by their sale, to remit those fortunes which 
 we wish to realize in this country ? 
 
 This, indeed, seems to have been the opinion 
 entertained by the President of the Board of 
 Controul * ; for he openly avowed, that he 
 
 * Lord Dartmouth.
 
 thought it would be expedient to permit the im- 
 portation of India goods in India built shipping, 
 and even advantageous, that the option of return* 
 ing to India, or of disposing of the vessel so 
 employed, should be left with the proprietors ; 
 declaring, that this was the principle on which 
 he would have wished to see the trade of India 
 regulated, if, unopposed by charters, and un- 
 shackled by agreements, it had been open to ar- 
 rangement *. 
 
 Betwixt the contending parties a compromise 
 seems at last to have taken place. By the inter- 
 vention of the minister, it was agreed that an 
 experiment should be madef, to ascertain (what 
 nobody could doubt,) whether a remittance trade 
 from India could be conducted cheaper in Indian 
 or in English built shipping. And it is remark- 
 able, that though this is a subject on which it had 
 been avowed the commissioners for the affairs of 
 
 * See Lord Dartmouth's Letter of the 2lst January 
 1802. Papers printed by the Court of Directors, App. 
 page 40. 
 
 + Sec the eleven propositions read in the House of 
 Commons by the Chancellor of the Exchequer.
 
 165 
 
 India had by law no controul*, the dispatch, di- 
 recting the mode of carrying the experiment into 
 execution, was, in contempt of the provisions of 
 the act, so completely altered by the Board of 
 Controul, that they were under the necessity of 
 substituting a new one f. 
 
 Thus the arrangement of the trade of India by 
 the act 1793, devised for the purpose of increas- 
 ing the sale of our manufactures, and facilitating 
 the return of raw materials in exchange for what 
 was exported, has only proved experimentally, 
 
 * " It is scarcely necessary for me to observe, that in all 
 u the discussions I have had on this subject with the Court 
 " of Directors, I have not been entitled to exercise any au- 
 " thority in the determination of the subject. It is a sub- 
 " ject over which the commissioners for the affairs of India 
 " have no controul." Extract of a letter from Mr Dun* 
 das, First Commissioner for the affairs of India, 21st of 
 March 1801. 
 
 + " We return your draft, No. 45, but as many altera, 
 " tions have occurred to us, as indispensably necessary to be 
 " made in it, we have substituted a new one in its room. 
 tc Our object in these alterations is, that a full and fair ex- 
 <f periment should be made." Extract of a letter from the 
 Board of Commissioners, conveying to the Directors the 
 regulations by which the trade of India was to be regu- 
 lated, of date 20th of March 1802.
 
 166 
 
 that which reason might have taught its authors, 
 that an increased demand for the produce of 
 British industry, is, under the present system, 
 hopeless. 
 
 Whilst, on the other hand, the channel it 
 opened for conveying the exports of India to 
 England, beyond what was purchased by the 
 Company's investment, has been found so expen- 
 sive and inadequate, as of necessity to be super- 
 seded, without the intervention of the Legislature, 
 for the purpose of making an experiment, though 
 it was announced, in authorized publications, when, 
 in 1793, this measure was submitted to the Legis- 
 lature, that the bill for the settlement of these 
 great national concerns could not be one of ex- 
 periment, but must be one of system*. 
 
 Since this experimental arrangement was com- 
 municated from England to India, there could 
 exist, comparatively speaking, neither means nor 
 inclination, greatly to increase the exports from 
 that country. 
 
 * Historical View of Plans for the Government of British 
 India, page 23. This is understood to be one of the pub- 
 lications Mr Dundas alluded to as authorized, in his 
 speech, April 23d 1793.
 
 167 
 
 For the expenditure that has resulted from the 
 system of warfare, and of aggrandizement of terri- 
 tory, that has been pursued, has deprived the 
 Company of all resource for investment, and the 
 great annual increase of debt it has occasioned, 
 must have absorbed the savings its servants might 
 have wished to remit in goods, had not the rapid 
 diminution of demand, and consequently of profit 
 on Indian commodities, operated in such a degree 
 to discourage the importation of them, that it has 
 drawn from the Directors a confession, that the 
 want of provision for investment was hardly to be 
 regretted*. 
 
 * This sentiment is aid to be expressed in a paper, inti- 
 tuled, Exposition of the State of the Company's Finances, 
 submitted to the Committee of the House of Commons dur- 
 ing the last Session of Parliament. 
 
 At all events, the following statement of the diminu- 
 tion of the Company's sales (which is believed to be per- 
 fectly accurate) will shew the justice of the observation. 
 
 Value of piece goods sold at the East India sales, on 
 account of the Company, in the following years. 
 
 1801, - - - L. 2,576,034 
 
 1802, ... 1,832,662 
 
 1803, - - - 1,364,794 
 
 1804, ... 1,189,007
 
 168 
 
 This diminution of the sale of India goods, at- 
 tended with a rapid decrease in price of the small 
 
 1805, ... 
 
 908,525 
 
 1806, ... 
 
 1,236,179 
 
 1807, 
 
 777,210 
 
 1808, ... 
 
 432,881 
 
 The general diminution of the Indian trade may be col- 
 lected from the following statement of the total amount 
 of the sale price of the whole goods exposed in each year 
 since the year 1798-9. 
 
 1798-9, ... L. 4,667,295 
 
 1799-1800, . . 3,565,559 
 
 1800,1, . . 3,978,800 
 
 1801-2, ... 3,086,943 
 
 1802-3, - , 2,289,274 
 
 1803-4, ... 2,236,396 
 
 1804-5, ... 1,953,026 
 
 1805-6, ... 2,254,899 
 
 1806-7, -.. 1,472,074 
 
 1807-8, ... 1,309,080 
 
 1808-9, . . 1,191,213 
 
 It appears, too, that the diminution of the quantity of 
 
 goods sold is not more remarkable than the decrease of 
 
 the profit on the small quantity the Company have been 
 
 able to sell ; for example, in 1798-9 there was a profit 
 
 on the goods that brought at *he sales L. 4,667,295 of 
 
 L. 298,014, whereas, in 1806-7, upon the goods which 
 
 brought L. 1,472,074, there was a loss to the extent of 
 
 L. 264,288.
 
 169 
 
 quantity sold, is ascribed to the warfare in Europe, 
 by those who may still fancy that it is impossible, 
 comparing the high price of labour in Europe, 
 with the low price in India, for the manufactu- 
 rer at home to rival his master in the art in which 
 he is only an imitator*. With peace they pro- 
 
 * These are nearly the words used by Mr Dundas ia 
 moving the regulations 1793. 
 
 The want of knowledge of the natural progress of manu- 
 facturing industry discovered in this observation, forms a 
 remarkable contrast to the luminous manner in which the 
 same subject is treated in the following passage of a work, 
 intituled, Considerations upon the East IndiaTrade, printed 
 so early as the 1701 : " The East India trade may be the 
 u cause of doing things with less labour, and then, though 
 t{ wages should not, the price of manufactures might be 
 u abated. If things shall be done with less labour, the price 
 a of it must be less, though the wages of men should be as 
 c? high as ever. Thus a ship is navigated with a great 
 cc number of hands, at very great charge ; if by being un, 
 li dcr-masted, and spreading less canvas the same should be 
 " navigated by two thirds of that number, so as the differ. 
 " ence of speed shall be very inconsiderable, the ship would 
 " be navigated with less charge, though the wages of the 
 f< seamen should be as high as ever. In like mauner, of 
 " any English manufacture, performed by so many hands} 
 c{ and in so long a time, the price is proportionable ; if by 
 '<: the invention of an engine, or by greater order and re.
 
 170 
 
 phecy a restoration of demand for that accumu- 
 lation of piece-goods in the warehouses of Lea- 
 denhall Street, now the only article of Indian 
 trade, in which the Company has retained its 
 monopoly *. 
 
 But to those who have attended to the great 
 improvement of our cotton manufactures, and 
 marked the preference, that taste in pattern, as 
 well as diminution of price, has secured to them, 
 it must be a matter of doubt, whether if, by econo- 
 mical arrangement abroad, the Company should 
 again acquire a surplus revenue, it can be re- 
 mitted in India goods, even if conveyed in India 
 built ships, without a great loss. 
 
 < gularity of the work, the same shall be done by two- 
 t thirds of that number of hands, or in two-thirds of that 
 "time; the labour will be less, the price of it will be 
 il also less, though the wages of men should be as high as 
 
 " 
 
 ever. 
 
 * At the time the Company's charter was renewed, this 
 trade in piece-goods was deemed of such importance, that 
 it is stated, by the Committee of Correspondence, 1st of 
 April 1793, that without it the Company could not li- 
 quidate their political debts, still less furnish the means 
 of participation to the public, to the extent which is 
 proposed. See 8th Resolution, April 1st 1793.
 
 171 
 
 At all events, after learning, from the exami- 
 nation before the India Committee of last session, 
 that our cotton manufactures have in part sup- 
 planted the use of Indian cottons on the Conti- 
 nent, that this interference is likely to continue 
 with increased effect,- and that a return of peace 
 does not promise a restoration of the accustomed 
 demand for India goods *, it must be evident, 
 
 * May 24th 1808. Examination of Mr Robert Brown. 
 
 t( I am a very large dealer in East India cotton goods. 
 11 Has the consumption of East India cotton goods in this 
 t6 country increased or decreased? It has decreased very 
 a considerably. Have East India cotton goods in this 
 ' country increased in their price or decreased ? Some 
 u few fabrics of muslin have increased ; but, speaking ge- 
 " ncrally of East India cotton goods, they are lower. Do 
 a those articles in which ths price has increased, bear a 
 <c small or a large proportion to the East India Company's 
 *' sale of piece-goods? A very small proportion. When 
 " you say, that the prices of certain articles have increas- 
 *' ed, do you mean relative to the late prices of those ar- 
 u ticlcs, or the average prices for some years back ? I 
 " mean relatively to the late prices. Were these late pri- 
 " ces higher or lower than the average prices ? I think 
 te I can state, that they were from 25 to 30 per-cent. low. 
 u cr than the average prices of six or seven years past. 
 *' Has the present price of those articles, which you state
 
 that in consequence of the management which 
 has been pursued, the means of carrying manu- 
 factures to India, or eastern goods to Europe, has 
 become a subordinate question. 
 
 <f to have increased, risen up to the average price ? I 
 <c think it has : speaking generally of East India goods the 
 fe present price is considerably lower than the average of 
 *' the last six or seven years To what do you ascribe 
 " the fall of the price of East India goods for the home 
 < consumption ? Certainly to the interference of British 
 " manufactures.- From your knowledge of the trade, arc 
 " you enabled to state it as a fact, that the British innnu- 
 <e factures have interfered materially with the sale of the 
 * c East India cotton goods ? I am able to state it as u 
 " fact, consistent with my own knowledge, that they 
 " have interfered ; so much so, that our house have been 
 Cl under the necessity of keeping the British muslins, within 
 <c the last two years, to furnish the assortment for our 
 " own immediate connections. Then your opinion is, as 
 <e a person conversant with the trade, that the British 
 ei manufactures have materially interfered, and are likely 
 " to continue to interfere, with the sale of the Company's 
 fi cotton goods for home consumption ? Certainly. 
 " With regard to the East India cotton goods for expor. 
 (i tation, has it increased or diminished in a considerable 
 11 degree ? It has diminished in a considerable degree. 
 V To what cause do you attribute that diminution ? 
 * { Principally to the want of intercourse with the Con* 
 i { (inentj but in a material degree to the improvements
 
 for the prosperity of our Indian remittance 
 trade, and that of our manufactures in their 
 present improved state, must appear incompatible, 
 unless the industry of India is diverted into some 
 new channel, in which it may be instrumental in 
 producing such raw materials as our climate cannot 
 furnish, and thus aid and assist the prosperity of 
 
 ** made in the British manufacture of cotton goods, which 
 ** now supplant the India for many purposes, upon the 
 *' Continent, and particularly in the printing manufac- 
 tl tories, in which the East India cotton goods were for- 
 " merly alone used. Are you a large exporter of cotton 
 " goods ? I am, but principally of India ; our exporta- 
 tf tion has yery considerably diminished within these few 
 " years. Do you ascribe the diminished sale of the East 
 " India cotton goods, in any and what degree to the im- 
 " provement of the manufactures upon the Continent ? 
 <( I think that the improved state of the cotton manufac- 
 * 4 tures upon the Continent, has not entirely prevented 
 * the exportation from this country ; for when the duty 
 <l on the Continent was about 40 per cent, very large 
 '-< quantities were exported, and that it is only since the 
 " absolute prohibition has taken place, that the cotton ma- 
 11 nufactures of the Continent hare greatly increased. 
 " From wliat period do you date the absolute prohibition 
 u on the Continent ? Between two and three years ago. 
 tt Do you think the interference of the British good*
 
 174 
 
 our manufactures, which must otherwise suffer 
 from the rivalship of a remittance trade ; always 
 ruinous to those, the produce of whose industry 
 enters into competition with it, because its extent 
 is neither bounded by the demand for the goods 
 it conveys, nor by the loss it occasions to the ad- 
 venturers on whose account it is conducted. 
 
 " with the East India Company's goods is likely to tfon- 
 11 tinue ? I think it is likely to continue, with increased 
 " effect. 
 
 " Examination of Sir Robert Peel, Bart, a member of the 
 " Committee. 
 
 " Having been examined, said, That he was of opinion 
 u with the witness, Mr Robert Brown, That the sale of 
 " East India cotton goods has been of late years very much 
 " interfered with in Great Britain, by similar fabrics manu- 
 " factored at home. He begged leave to state, in addition, 
 " that though the prices of labour, and the raw material, are 
 u much lower in the East Indies than in this country, yet 
 " these adyantages are more than counterbalanced by the 
 u following circumstances. The invention of ingenious 
 <f machinery, by British subjects, has very much lessened 
 " and assisted human labour, and, what is perhaps of more 
 " importance, the manufacture is established in, the seat of 
 11 consumption, and the home trader is enabled with facility 
 " to supply the demand, and to accommodate himself to the 
 " changes that so frequently take place in fancy articles ; 
 " that the British cotton goods must likewise have very
 
 175 
 
 III. Of the failure in effecting the objects to 'which 
 the profits of the Company were by law appro- 
 priated ; in considering which, the annual 
 budgets stated to Parliament are contrasted 
 with the ultimate result exhibited by the present 
 slate of the Company's finance . 
 
 THOUGH, from this short investigation, it must 
 appear, that neither the commercial nor political 
 regulations for the management of the East India 
 Company's affairs have produced their intended 
 effect, yet, as the advantage resulting from the 
 union betwixt the government and trade of 
 India, has, under this system, been a constant 
 theme of applause, it was natural to look to the 
 result of both combined, with sanguine hopes, 
 
 a much interfered with the sale of East India cotton goods 
 " on the Continent of Europe, from the causes above stat- 
 " ed ; and lately these markets have been lost, by the hos- 
 *' tility of France ; that he deemed it incumbent on him to 
 u state, that, in consequence of the cotton manufactures on 
 u the Continent of Europe, being established on British im- 
 " provements, he apprehends that a return of peace would 
 " not restore to the East India Company their accustomed 
 ** demand in that part of the globe for cotton goods."
 
 176 
 
 that some compensation, for the failure of the 
 system in all other respects, might be found in the 
 amount of the Company's profits, and in the state 
 of its finance. 
 
 Here again, however, the disappointment is 
 great ; for this view of the subject exhibits not 
 only the effects of unprofitable commerce, and 
 ruinous warfare, but of vast increase of expence 
 in the establishments, civil, military, and judicial, 
 and is therefore, more than any other, unfavour- 
 able to the system that has been pursued. 
 
 Before the renewal of the charter in 1793, the 
 Directors and the Board of Controul agreed in 
 their view of the prosperous state of the Com- 
 pany's affairs. Their estimates proceeded on the 
 supposition, that the annual profit would amount 
 to one million two hundred thousand pounds ; 
 and the public were taught to believe, that this 
 was an inadequate representation of what would 
 be the real amount, formed from an excess of 
 caution, to prevent the possibility of disappoint- 
 ment or mistake. 
 
 It was by positive assurances to this effect, 
 coupled with predictions of the certainty pf im- 
 provement, and future increase of revenue, that
 
 177 
 
 the Legislature was induced to appropriate the 
 profits of the Company, in a manner calculated 
 to impress a general belief, that, to a certainty, 
 the sums annually necessary for the accomplish- 
 ment of the various objects provided for would 
 be realized. 
 
 The former appropriation of the Company's 
 profits, in the acts of the 21st and 24-th of the 
 King, by which, after payment of a dividend of 
 8 per cent, one-fourth of the remainder was ap- 
 propriated to the proprietors, and three-fourths 
 to the public, authorised no certain inference in 
 relation to the amount of the Company's gains. 
 The very circumstance, therefore, of adopting a 
 form that seemingly implied a certainty of specific 
 profit, could not fail to enforce on the public mind 
 a conviction, that, under the improved state of the 
 Company's affairs, the gains which Parliament was 
 thus distributing were no longer precarious. 
 
 It is a received maxim in the interpretation of 
 acts of Parliament, that no enactment should be 
 deemed superfluous, to which in reason a meaning 
 can be annexed. 
 
 When therefore it was enacted, that the profits 
 of the Company in Great Britain, after providing
 
 178 
 
 for the current payment of their debts, outgoings, 
 charges and expences, should be disposed of in 
 payment of a dividend, augmented from L.8 to L. ] 
 per cent, on the present or any future amount of 
 their capital stock*. 
 
 It was impossible not to conclude, that Parlia- 
 ment regarded as certain the existence of profits, 
 sufficient not only to discharge the debts and 
 claims against the Company, which had in the 
 first instance a preference, but also to provide for 
 the increased dividend, which, under that condi- 
 tion, was secured. 
 
 But when, subsequent to these two distinct ap- 
 propriations, it was enacted, that five hundred 
 thousand pounds should be set aside and applied 
 to the discharge of bills drawn in India for the 
 transfer or remittance of the debt to Great Bri- 
 tain f, the inference, that sufficient funds must 
 exist, became still more irresistible ; because Par- 
 liament could not with justice have preferred the 
 payment of the enlarged dividend to the arranged 
 discharge of a part of the Company's debts, unless 
 there had been a certainty of means sufficient for 
 the accomplishment cf both. 
 
 * 33d Geo. III. cap. 52. 111. 
 f Ibidem.
 
 179 
 
 Neither can the presumption, arising from the 
 fourth appropriation, be reasonably deemed less 
 conclusive. By the act it is next declared, that 
 five hundred thousand pounds shall be paid in 
 every year to the receipt of his Majesty's Exche- 
 quer, to be applied as Parliament directs*, and 
 this was considered as an advantageous compen- 
 sation to the public, for the increase of dividend 
 from eight to ten per cent, given to the proprietors. 
 The nature of the transaction, therefore, implied, 
 that the sum of five hundred thousand pounds, 
 would to a certainty be received ; because 
 otherwise, the acceptance of that which was ten- 
 dered as a bonus to the treasury, became a sacri- 
 fice of the public interest. For the proprietors 
 of India stock, by the increase of dividend, acquir- 
 ed one hundred and twenty thousand pounds per 
 annum, more than eight per cent, on their capi- 
 tal, of which the public, if the former arrangement 
 had not been done away, must have received 
 ninety thousand pounds, as under it they were 
 entitled to three fourths of the profits, after pay- 
 ment of eight per cent, dividend ; so that if 
 there existed no means of paying the five hundred 
 
 * 33d Geo. III. cap. 52. 111.
 
 180 
 
 thousand pounds to the Exchequer, as well as 
 of satisfying the former appropriations, this alter- 
 ation, represented as highly beneficial to the public, 
 ingeniously contrived to transfer ninety thousand 
 pounds a-year from the Treasury, into the 
 pockets of the proprietors. 
 
 It is needless to detail the specific inferences 
 to the same purport, which the three remaining 
 appropriations of the Company's profits by the 
 act must suggest *. A further sum could not be 
 allotted to the payment of Indian debts transfer- 
 red to England, without confirming the belief of 
 the sure existence of funds to discharge the de- 
 mands preferred ; and the subsequent provision 
 of an additional dividend to the proprietors, as well 
 as that of a fund, to be accumulated to twelve 
 millions, as a security for their capital, were 
 measures which could only answer the purposes 
 of those who chose to speculate in the Company's 
 stock, if there existed a suspicion on the subject 
 of accomplishing them. 
 
 Certain it is, however, that, since the year 1 793, 
 the public have only once received the five hun- 
 dred thousand pounds they were taught annually 
 to expect j and this solitary payment was obvi- 
 
 * 33d Geo. III. cap. 52. 111,
 
 181 
 
 tmsly made, for the purpose of securing to the 
 proprietors an additional half per cent, dividend, 
 which, under a clause of the act, could not other- 
 wise have been assumed *. 
 
 In other respects, this complicated arrangement 
 has remained dormant, with the exception of what 
 relates to the increased dividend, which, though 
 by law only payable out of the profits of the 
 concern, and postponed to the discharge of debts, 
 interest, expences, and other outgoings, has been 
 regularly continued, at a time when the Company 
 have avowed an annual loss of four millions, and 
 stated a large balance against themselves f, on 
 the general view of their concerns. 
 
 * See 33d Geo, III. cap. 52. 124. 
 
 + It appears to admit of little doubt, that, under the 
 present state of the Company's affairs, they have no legal 
 right to the dividend of five and a quarter per cent. } which 
 they continue to assume half-yearly. 
 
 13y the lllth clause of the 33d of Geo. III. cap. 52. the 
 right given to the Company, is to divide ten per cent, 
 yearly " out of their profits in Great Britain, after provid- 
 tl i n gf or payment of bills of exchange already accepted by 
 " the Company, as the same shall become due^ and for the 
 " current payment of other debts, intercut, and other outgo-, 
 11 ings, charges, arid expences" The remaining half per 
 eent. dividend they assume under the 124th clause of the act.
 
 182 
 
 It is impossible to account for this great dis- 
 appointment of the public hopes, authorised by 
 
 By what power does the Company, then, declare this di. 
 ridend payable to the proprietors, when they avow, by the 
 account of stock per computation, an annual loss of mil- 
 lions, and a large balance against themselves, on a general 
 view of their concerns ? 
 
 Has it not occurred to them, that this is a question on 
 which, under circumstances similar, though not so conclu- 
 sive, Parliament has already decided ? 
 
 It certainly cannot have escaped their observation, that, 
 by the 21st Geo. III. cap. 65. 9. it is enacted, that all 
 the clear profit and revenues of the Company, " after pro- 
 <( vidingfor the current payments of interest., out goings , 
 " charges andexpences, shall be disposed of, and applied in 
 cc the manner following :" " In the first place, in each and 
 *' every year, such sum as shall be equal to eight pounds per 
 < centum per annum on their capital stock ;" and that, in 
 the following year, it appears, as recited in the preamble, 
 22d Geo. III. cap. 51. that the net profits of the Company 
 fell short of such a dividend by the sum of twenty-two 
 thousand and twenty-three pounds, for which reason, they 
 are specially authorised by law. to set apart a sum suffi- 
 cient to pay the dividend of eight per cent, betwixt March 
 1st 1782 and March 1st 1783. 
 
 A further doubt may be reasonably entertained, whether, 
 by the 9th and 10th William III. cap. 44. 85. the pro- 
 prietors, receiving dividends under the present circumstan-
 
 183 
 
 these formal proceedings of the Legislature, with- 
 out resorting to the hypothesis, that Parliament 
 was either deceived by the statements of those in 
 whom it confided, or that gross misconduct has 
 taken place under the system of Government, a- 
 dopted to secure the Company's interest against 
 the effects of mismanagement. 
 
 It is true, that the nature of our commercial in- 
 tercourse with India, and the details of the inces- 
 sant, and extended scenes of warfare, which have 
 been already given, coupled with large addi- 
 tional expensive establishments, at once account 
 
 ces of the Company, are not personally liable to their cre- 
 ditors for the amount of what they receive. 
 
 For that clause was introduced for the security of the 
 Company's creditors, and does not seem to be done away 
 by any of the acts regulating the dividends out of the pro- 
 fits, subsequent to the acquisition of the territorial posses- 
 sions, which arc obviously intended to secure to the pub- 
 lic the share of the profits arising from the revenues, to 
 which, in justice, the Legislature conceived them to be en- 
 titled. If this view of the law, in so far as relates to the 
 right of declaring a dividend, is accurate, it certainly re- 
 quires the revision of the Legislature; for the claim of 
 the proprietors to indemnity of some sort, from the ruin in 
 which their affairs are involved by the management of trus- 
 tees, imposed upon them, appears irresistible.
 
 184 
 
 for the mortifying failure of all those inflated an- 
 ticipations, and for the sad calamitous reverse^ 
 which the Company's affairs, under the manage- 
 ment of the Board of Controul, has experienced. 
 
 But this view of our commerce, and this ac- 
 count of our conduct in the East, can neither be 
 urged as a defence by the authors of the system, 
 nor as an apology for its failure by the advocates 
 for its continuance. For, in other words, it would 
 be plainly to admit that the representations given 
 in 1793, of the nature and consequences of our 
 commercial intercourse, were founded on igno- 
 rance or deceit, and that, under the system of Go- 
 vernment by a Board of Controul, instituted to 
 prevent intrigues and warfare with the native pow- 
 ers, both have prevailed to an extent, unknown 
 under that reprobated government by a Court of 
 Directors, which all concurred in suppressing. 
 
 Recently, indeed, it has been insinuated, that it 
 is to the European warfare, which has prevailed 
 almost without interruption, since the renewal of 
 the charter, that these reverses may be in a great 
 measure attributed. But this vindication cannot 
 be seriously relied upon. The war in Europe 
 was not an event unforeseen, which took place 
 long after the public expectation was raised by
 
 185 
 
 the arrangement of the Legislature. On the 
 contrary, we were engaged in hostilities at the 
 time ; and the suggestion of some of our manu- 
 facturers, that a conditional arrangement should 
 be made till the restoration of peace, was treated 
 with neglect *. 
 
 But it is, in truth, ridiculous to assign the war- 
 fare in Europe as the cause of the great losses the 
 Company have experienced. By it they have, in 
 reality, been subjected to little additional expence j 
 for the charge of capturing the French and Dutch 
 settlements, as well as of fitting out the nume- 
 rous expeditions that have been projected, or 
 that have taken place, were all regularly brought 
 to account, and the expences have been repaid 
 from the public purse. 
 
 It is, therefore, indirectly, by its effects on 
 their commerce, in increasing freights and insu- 
 rance, that there is the smallest pretence to say 
 that European warfare has affected the funds of 
 the Company ; and these are circumstances 
 
 * See Letter from the Chairman of the Manufacturers of 
 Glasgow to Mr Dundas, 19th March 1793, printed iu 
 the collection of papers respecting the renewal of the nego- 
 tiation.
 
 186 
 
 which, if they had been thought likely to derange 
 the flattering prospects held forth, could not pos- 
 sibly have escaped the observation of Parliament, 
 or the notice of those in whom it confided, when 
 during war, this arrangement was formed. 
 
 Neither does it appear that the effects of Euro- 
 pean warfare have always been deemed detri- 
 mental to the Company. If, on the one hand, 
 the augmentation of the commercial charges is 
 hostile to its interest, it certainly benefits, on the 
 other hand, by the destruction of the foreign com- 
 merce with the East. At the restoration of peace 
 in 1803, the increased sale prices obtained in 
 time of war were considered as forming an ample 
 equivalent to the additional charges it creates * f 
 and the following abstract of the annual state- 
 ments, made to Parliament since 1793, will at 
 once shew the flattering prospects with which the 
 nation, in time of war, has been deluded, and 
 prove, that the existence of a European warfare 
 was formerly regarded as the cause of augment- 
 ing the scale of the Company's commercial tran- 
 sactions j whilst, more recently, its renewal in 
 
 * See Lord Castlereagh's speech, on opening the Indian? 
 budget, March 14th, 1803.
 
 187 
 
 the year 1 803, was contemplated as a circumstance 
 which would not impede the reduction of the 
 Company's Indian debt *. 
 
 1794. 
 
 This being the first year after the act passed, 
 the budget is introduced with a statement of the 
 form in which the accounts will be annually 
 brought before Parliament ; and it is generally 
 asserted, that every view of the subject amply jus- 
 tified the expectation entertained when the mea- 
 sure was recommended. 
 
 Abstract of the Accounts, shewing the amount of profit 
 and loss, and the state of assets and debts, for the year 
 1793 in India, and 1794 at home. 
 
 Assets. Debts. 
 
 In India, 1793, L.8,733,796 In India, 1793, L.7,857,405 
 At home, 1794, 9,888,836 At home, 1794, 7,006,500 
 
 Total, L.I 8,622,632 Total, L. 14,863,905 
 
 * See Lord Castlereagh's speech, on opening the Indian 
 budget, March 14th, 1803.
 
 188 
 
 Profit and Loss on the Company's affairs since last Year. 
 In India, L. 2, 344, 144 
 
 At home, - - 1,257,792 
 
 China and St Helena, - 274,926 
 
 Total L. 3,876,862 
 Deduct Capital Stock paid in, L. 2,000,000 
 Ditto on account of Error in 
 
 last Account, - - 207,108 
 
 -2,207,108' 
 
 Remains net improvement in one year, after \ 
 
 providing for the payment of five hun- S L. 1,669,754 
 dred thousand pounds to the public, 
 
 Extract from the speech in which this state- 
 ment was introduced : 
 
 Such, therefore, has been the prosperous 
 " state of the East India Company's finances on 
 the whole, that, notwithstanding the defalca- 
 " don in the sales at home, their affairs appear 
 ' better by L. 1,669,749 in the present accounts, 
 than they did in the statements laid before the 
 House last year ; and this, after providing for 
 " the payment of L. 500,000 to Government. 
 ' A considerable part of this improvement has 
 " undoubtedly arisen from temporary resources, 
 ** particularly the sums received from, or owing' 
 w by Tippoo Sultan ; but, independent of that
 
 189 
 
 " amount, the permanent revenues were more 
 productive than in preceding years ; and 
 Ct that those resources will be equally, or, in- 
 " deed, more productive in future, there is 
 " every reason to expect, from the flourishing 
 " state of the Company's affairs in India. In 
 " whatever point of view their situation is con- 
 sidered, the prospect exceeds the most san- 
 * guine expectations that could have been form- 
 ed, when I first brought the annual statements 
 " under the consideration of this House. For 
 this state of prosperity, we are greatly indebt- 
 " ed to the valour in the field, and wisdom in 
 " the council, of the illustrious character just re- 
 turned from India to receive the thanks of his 
 country, a tribute well earned by his indefati- 
 " gable exertions to promote its interests* 
 
 With respect to the continuance of the pre- 
 " sent prosperous state of the Company's affairs 
 " in the East, there is no doubt of its being per- 
 c manent, as far as stability in the course of hu- 
 " man events can be promised. All the posses- 
 " sions (the distant islands excepted) belonging to 
 t( the only European power in that part from 
 " whom we could have any apprehensions of 
 * danger, have been captured."
 
 190 
 
 1795. 
 
 Abstract of the Accounts, shewing the amount of the pro. 
 fit and loss, and the state of the assets and debts, for the 
 year 1794 in India, and 1795 at home. 
 
 Assets. Debts. 
 
 In India, L. 8,807,600 In India, L. 7,305,462 
 At home, 10,413,354 At home, 6,946,323 
 
 Total, L. 19,220,954 Total, L. 14,251,785 
 
 Profit and Loss on the Company's Affairs since last year: 
 
 Increase in India, L. 625,747 
 
 Increase at home, ... 584,695 
 
 Total, L. 1,210,442 
 Deduct Loss at China and St Helena, - % 101,723 
 
 Remains gain, L. 1,108,719 
 Add cargoes shipped after closing the ac-} 
 
 counts in India, compared with the last> 303,530 
 year's statements, 3 
 
 Remains net improvement this year, L. 1,412,249 
 
 Improvement in the Company's Affairs since the year 1793. 
 
 Amount of gains, as stated budget 1794, L. 1,669,754 
 Amount of gains, 1795, as above, - 3,412,249 
 
 Total, L. 3,082,003
 
 191 
 
 Extract from the speech with which this state- 
 ment was introduced : 
 
 " As author of the propositions in 1793, when 
 " the new charter was granted, he thought it in- 
 " cumbent on him to take care that the public 
 " should know, whether, in the estimates and 
 " calculations on which he grounded those pro- 
 " positions, he had taken an exaggerated view of 
 " the revenues of India, or of the appropriations 
 " of them. It was for that reason he had been so 
 (f particular in making the foregoing statements to 
 the House, by which it appeared, that, as in the 
 " revenues, so in the sales at home, his estimates 
 had been greatly exceeded, though the Com- 
 " pany laboured under great disadvantages by 
 " detention of ships ; and though the want of 
 tf coast goods obliged them to narrow then* sales, 
 " had it not been for those disadvantages, the ex- 
 " cess would have amounted, no doubt, to a very 
 " considerable sum. 
 
 If he Jooked to India, he saw no circumstan- 
 ces that did not lead to confidence in the in- 
 ? creasing prosperity of the country." 
 
 Here follows a detail concerning the various 
 settlements on the affairs at home. It is said,
 
 192 
 
 While such was the situation and prospects 
 fl of the Company in India, there was surely 
 nothing discouraging in the state of their affairs 
 " at home. In time of war, and when the 
 markets of a great part of Europe were shut 
 " against them, their sales were greater than 
 " they had ever been before." 
 
 Though the Company was thus represented as in 
 the greatest prosperity, and the improvement of 
 their affairs within the year stated to amount to 
 one millipn four hundred and twelve thousand 
 two hundred and forty nine pounds, yet no pay- 
 ment was made to the public ; and this subject 
 was passed over with the following remarkable 
 observation : " If such was the state of their 
 " affairs at home, it might be asked why they 
 had not been called upon to pay the L. 500,000 
 due, or supposed to be due to the public ? With- 
 out giving any opinion upon the right to call 
 for payment, he would answer, that it would 
 have been imprudent V 
 
 * The extraordinary doubt here stated, on the right of the 
 public to the L. 500,000, under the enactment contained 
 jn the lllth clause of the act, naturally suggested an ex- 
 amination into the history of that transaction, which pre- 
 sented the following curious details'.
 
 193 
 
 1796. 
 
 Abstract of the Accounts, shewing the amount of profit 
 and loss, and state of assets and debts, for the year 
 1795 in India, and 1796 at home. 
 
 Assets. Debts. 
 
 In India, - L.8,867,266 In India, - L.6,8 13,737 
 At home, . 10,413,354 At home, . 7,474,700 
 
 Total, L.I 9,280,620 Total, L.14,288,437 
 
 Extract of the Resolutions intended to be proposed to 
 the House of Commons, as the basis of the act 1793, com. 
 municatcd by Mr Dundas to the Court of Directors, March 
 26th 1793. 
 
 " Thirdly, in payment of a sum not exceeding L. 500,000, 
 " on the day of in every year, into the receipt 
 
 11 of his Majesty's Exchequer, to be applied as Parlia- 
 " ment shall direct, the first payment thereof to commence 
 " and be accounted dus on the day of 179 ; 
 
 " and, in the event of any deficiency of the said funds in 
 tl any year, for satisfying such last mentioned payments 
 " into his Majesty's Exchequer, the same be made good 
 tl out of any surplus which may remain from the said net 
 < proceeds in any subsequent year, after the payment of 
 16 the annual sum of L. 500,000 into his Majesty's Exche. 
 " quer, in each year respectively." 
 
 N
 
 194 
 
 Profit and Loss on the Company's affairs since last Year : 
 Increase in India, ..-.-... L.55J,390 
 Increase at home, - ------- 1,082,581 
 
 Total, L.1,633,971 
 Deduct loss at China and St Helena, - - - 397,978 
 
 Remains, Total Improvement, L.I, 235, 993 
 
 Improvement in the Company's affairs since the Year 1 793 : 
 Amount of gains, as stated budget 1795, - L. 3,082,003 
 Amount of gains 1796 ? as above, - - - - 1,235,993 
 
 L.4,317,996 
 
 Against these resolutions, a remonstrance was made by 
 the Court of Directors, stating, amongst other things, an 
 objection to the clause above recited ; in reply to which 
 Mr Dundas wrote, on the 18th of April 1793, a letter, of 
 which the following is an extract : 
 
 u I think it proper to mention to you, that if, in the 
 < progress of the business, I feel no material objection 
 < against the suggestions you make, I shall be very hap- 
 t{ py to find it in my power to acquiesce in them. This, 
 (i however, must not be understood to relate to what I 
 tl have stated with regard to the participation with the 
 <l public ; for, on that point, / cannot, in Justice to the 
 " interest of the public, depart from the reasoning or con- 
 * e elusions 1 have formerly conveyed to you. 
 
 f ' With regard however, to the explanation you desire to
 
 195 
 
 Extract of the speech by which this statement 
 was introduced : 
 
 " It affords me the most sincere ,satisfaction, 
 " and cannot fail of giving equal pleasure to the 
 " House to learn, that notwithstanding these cir- 
 
 " receive from me, I have no hesitation to state, that I 
 " never meant the participation of the public to operate 
 a as a debt against the Company, either with regard to 
 <( its dividend, or the payment of its creditors ; but I did 
 " mean, that the deficiency of one year should be made up 
 tl from the exceeding of future years ; in bar of such ex. 
 < ( ceeding going to the guarantee fund. To put it in figures : 
 " I shall suppose that the surplus of 1794, should be such 
 " as, after paying the dividend to the proprietors at the 
 *' rate of ten per cent, and after paying L. 500,000 in ex. 
 " tinction of debts, only to yield L. 400,000 of participa- 
 " tion to the public, but that in 1795, the surplus should 
 " amount to L. 600,000, after paying the dividend of ten 
 " per cent, to the proprietors, and the L. 500,000 to 
 " the creditors; in that case, the whole I,. 600,000 of 
 *' the surplus 1795, must go to the public, in place of 
 " L. 100,000 of it going to the guarantee fund, which 
 " it would do under the proposed appropriation, if the 
 " deficiency of the year 1794 had not happened." 
 
 In compliance with this view of zchat the interest of the 
 public injustice required, the resolution was submitted to 
 the House of Commons in the form in which it was sent to 
 the Directors. In framing the act of Parliament, however,
 
 196 
 
 cumstances *, I have it still in my power to 
 " assert, that the appearance of the affairs of the 
 " East India Company, both abroad and at home, 
 " is most favourable, and this satisfaction is in- 
 " creased, by being contrasted with those periods, 
 " when the deliberation was, whether the Com- 
 pany was not in an absolute state of bank- 
 ruptcy, and whether any possible arrangement 
 " could be devised to save them from utter ruin ? 
 " The predictions I then ventured to make, 
 (t have been all fully justified by the events ; and 
 " the sanguine hopes I long professed to enter- 
 tain (contrary to the opinion of those who dis- 
 
 a clause was introduced, providing, that in case the net 
 proceeds should, by circumstances incidental to war, fall 
 short of the sum necessary to make good the L. 500,000 
 to the public, then the deficiency shall not be made good 
 out of the surplus of any future year, but shall be consi- 
 dered as a debt against the Company, at the determination 
 of the exclusive trade, payable only out of any surplus that 
 may exist after the capital stock is replaced to the proprie- 
 tors, at the rate of two hundred per cent. See clauses 111 
 and 122, 33d Geo. III. cap. 52, 
 
 * The circumstances here alluded to, was the increase 
 of pay to the army of India, amounting, as then calculated, 
 to L. 400,000 per annum ; in reality, however, to a mucli 
 larger sum. See note p. 207,
 
 197 
 
 puted the correctness of the statements on 
 which they were founded), have been also com- 
 " pletely realized. Whatever caution may be 
 '* proper to be observed in speaking of future 
 < events, it would be acting uncandidly towards 
 " the committee, nor less so towards the public 
 " at large, if a doubt was suffered to exist of my 
 " opinion respecting the probable improvement 
 " in the state of affairs in India. That the pros- 
 " perity has been hitherto progressive, is fully 
 " ascertained ; and there is no hazard in assert- 
 " ing, that there is every prospect of this prospe- 
 " rity being yet considerably augmented. 
 
 " The internal tranquillity is not likely, at 
 t( present, to suffer interruption ; the most friendly 
 intercourse exists with all the powers upon the 
 " Continent ; and a treaty has been concluded 
 " with the Rajah of Travencore, from which 
 " great advantages may be expected. The war 
 " which agitates Europe, has not reached the 
 f( Company's possessions, nor is it likely to do so 
 " with any serious effect." 
 
 Towards the close of this speech, a deficiency 
 of cash in the Treasury at home is admit- 
 ted ; but it is stated that " the only inference
 
 198 
 
 that can fairly and justly be drawn from this 
 
 circumstance, is, that the capital is not propor- 
 
 tioned to the extent of the trade ; for, if that 
 
 ' capital was, in 1793, not more than sufficient, 
 
 " it must be completely inadequate on the present 
 
 enlarged scale of the commerce. 
 
 " That an increasing trade requires an increas- 
 
 " ed capital, cannot be denied ; and if the pru- 
 
 dence or propriety of extending that trade, at 
 
 the risk of adding to the capital at the present 
 
 " moment, is disputed, on account of the disad- 
 
 " vantageous mode in which money can be raised, 
 
 < c when compared with a time of peace ; the 
 
 '< answer is, that as all competition with the Com- 
 
 pany, in the oriental trade, has been nearly 
 
 '< annihilated by the circumstances of the war, 
 
 " and other causes, it would not have been wise 
 
 " to have deferred, for a moment, the taking 
 
 t( advantage of such favourable and concurring 
 
 " events, in order to bring the riches of the 
 
 " Ganges and of Canton to the Thames."
 
 199 
 
 1797. 
 
 Abstract of the Accounts, shewing the amount of profit 
 and loss, and the state of assets and debts, for the year 
 1796 in India, and 1797 at home. 
 
 Assets. Debts; 
 
 In India, - L. 8,958,669 In India, . L. 7,146,083 
 At home, - 12,476,813 At home, - 7,916,459 
 
 Total, L.21,435,482 Total, L.I 5,062,542 
 
 Profit. and loss on the Company's affairs since last year : 
 Loss in India, ......... L. 240,944 
 
 Deduct increase at home, ....... 10,742 
 
 L.230,202 
 
 To this must be added the loss at China and St 
 
 Helena, ........... 243,461 
 
 L.473,663 
 
 Improvement in the Company's affairs since the year 1793 : 
 Gain, as stated in the abstract 1796, - - L.4,317,996 
 Deduct loss, as above, ........ 473,663 
 
 L..3,844,333 
 
 Speech by which this statement was introduced : 
 This was the first year after the renewal of the 
 charter, in which a loss appeared by the accounts, 
 as stated to Parliament. The attention of the Com-
 
 200 
 
 mittee was, however, called to the general im- 
 provement of the Company's affairs, since the 
 superintendance was vested in a Board of Con* 
 troul ; and it was stated, that " The prosperity 
 " of the East India Company has been increasing 
 " from the period when the operation of the 
 " present system was brought into full effect ; 
 < and the amelioration of their affairs, notwith- 
 " standing the war with Tippoo Sultan, between 
 " that period and the present, amounts to no less 
 than L. 11,OOO,000 Sterling, computing mere- 
 *' ly on the increase of assets, and the decrease 
 " of debts, without taking into the account the 
 " enhanced value of the revenues of India, and 
 " the improved state of the commerce." 
 
 1798. 
 
 Abstract of the accounts, shewing the amount of profit and 
 loss, and the state of assets and debts, for the year 1797 
 in India, and 1798 at home. 
 
 Assets. Debts. 
 
 In India, L. 10,531,145 In India, L. 9,294,539 
 At home, 13,211,370 At home, 7,284,69* 
 
 Total, L. 23,742,515 Total, L. 16,579,233
 
 201 
 
 Profit and Loss on the Company's Affairs since last year : 
 
 Increase at home, - L. 1,366,322 
 
 Deduct loss in India, - 575,979 
 
 Remains increase, L. 790,343 
 
 Against this must be stated loss at China) 
 
 JC.TT, 1,002,410 
 
 and St Helena, > 
 
 Remains loss, L. 212,067 
 To this sum must be added the value of* 
 the cargoes of four ships arrived in Eng- 
 land from Bombay, in time to be includ- v 
 
 > 201 153 
 ed in the home assets, which appear to 
 
 have been included in the assets of that 
 Presidency on the 30th April 1797, 
 
 Total loss in this year, L. 413,220 
 
 Improvement in the Company's Affairs since the year 1793 : 
 
 Gain, as stated in the abstract 1797, L. 3,844,333 
 
 Deduct loss, as above, .... 413,220 
 
 L. 3,431, 113 
 
 Extract from the speech in which this statement 
 was introduced : 
 
 After a statement of the causes of the defi- 
 ciencies of the present year, it is said, " The 
 " successful termination of the several important 
 " expeditions, by which the enemies of this coun- 
 " try have been deprived of their settlements in
 
 f< the East, has afforded additional security to the 
 possessions of the Company, and has, likewise, 
 " opened new sources of wealth, from which, 
 " there is every reason to hope, a full compensa- 
 " tion will eventually be derived for the pecu- 
 " niary sacrifices that have been made. 
 
 w The immediate effect of these measures, has 
 " been to absorb the major part of the funds 
 " which would have been derived from the In- 
 " dian revenue, towards the provision of the in- 
 vestment. The immensely increased demand, 
 on this account, has enhanced the value of mo- 
 ney, so as to occasion the necessity of having 
 " recourse to loans at higher interests than for- 
 " merly in practice ; the rate of exchange has 
 " also increased in proportion ; the additional call 
 " upon the treasuries for interest, will, for a time, 
 " operate unfavourably, and the prime cost of 
 " goods must incur some increase. The result 
 of all these events, however temporarily dis- 
 " tressing, is not to be mentioned in a compari- 
 son with the more substantial and permanent 
 benefits which may ultimately be expected both 
 t f abroad and at home. At home, an increase 
 of assets, and a decrease of debts, has clearly
 
 203 
 
 <* been demonstrated, and the net improvement 
 ascertained to be L. 1 ,366,322. Although the 
 Indian concern has been so considerably affect- 
 " ed, by the circumstances above pointed out, 
 and although the balance of stock at China is 
 '* more unfavourable by near a million, the gene- 
 ral balance, on the comparison with last year, 
 is only L. 413,OOO worse. 
 
 The improvement at home would have still 
 been more considerable, if disappointment had 
 " not occurred, as to the arrival of the goods ; the 
 < property in India, it is true, would been have 
 lessened, but not in proportion. The short 
 amount of the sales has been stated to arise 
 " from this circumstance alone ; and it is satis- 
 " factory to find, that, so far as the commerce is 
 concerned, there is every appearance of pro- 
 sperity. The immense sale of private trade 
 " goods affords a display of the rising commer- 
 " cial prosperity, and increasing wealth of the 
 " settlements abroad, and proves the advantage 
 derived, and to be derived, from the extension 
 " of privilege to private traders, by the act of 
 " 1793. The increasing demand for almost every 
 " species of Indian produce, whether raw or ma-
 
 204 
 
 ft mifactured, strengthens the probability, that, in 
 " this point of view, the prospects formerly held 
 " out, will ultimately be completely realized." 
 
 Towards the conclusion of this speech, it is 
 said, " From what has been stated, the inference 
 " is perfectly just, that the wealth of the Indian 
 " provinces has been progressively improving, 
 " and that the affairs of the East India Company 
 have derived every advantage that could be ex- 
 < pected from this improvement, on contrasting 
 cc the amount of the balance of property at this 
 " time with what it was ten years back." 
 
 1799. 
 
 Abstract of the accounts, shewing the amount of profit an 
 loss, and the state of the assets and debts, for the year' 
 1798 in India, and 1799 at home. 
 
 Assets. Debts. 
 
 In India, L. 9,922,903 In India, L. 11,032,645 
 At home, 17,119,628 At home, 7,103,762 
 
 Total, L.27,042,531 Total, L. 18,136,407 
 
 Profit and Loss on the Company's Affairs since last year : 
 
 Increase at home, ... L. 4,089,190 
 
 Deduct decrease in India, - - 2,346,348 
 
 Increase, L. 1,742,842
 
 205 
 
 Deduct loss at China, - . 354,662 
 
 L. J, 388, 186 
 
 Deduct cargoes which arrived in India pre-"^ 
 vious to closing the quick stock account, f 
 April 30th 1798, which were formerly/" 279,653 
 included in the assets at home, j 
 
 Remains gain, L. 1,108,527 
 
 Improvement in the Company's Affairs since the year 1793: 
 
 Gain, as stated in the abstract 1798, L. 3,4-31,113 
 
 Gain by this year's account, as above, 1,108,527 
 
 L. 4,539,640 
 
 Extract from the speech in which this state- 
 ment was introduced : 
 
 " The estimate of the year 1793, was framed 
 on the most accurate calculations prescribed by 
 " the experience of past years. That the pros- 
 < ( pects might not be over-rated, the resources, 
 though evidently in a state of improvement, 
 were taken on a moderate scale. This is proved 
 by the issue. Their produce has more than 
 justified the expectations ; and although fluc- 
 tuations on so immense a revenue must naturally 
 be expected, the estimate has exceeded in no 
 less a sum than a million Sterling on the
 
 206 
 
 average ; and it is satisfactory to observe, that, 
 * c notwithstanding some disappointments have oc- 
 " casionally happened in the realization of the 
 " Company's own immediate resources, nothing 
 has occurred to raise any doubt of their gene- 
 " ral stability and permanence. 
 
 " From what has been now observed, it must 
 be concluded, that the immense difference has 
 " entirely arisen from the increase of the charges. 
 " // nevertheless appears, that the estimate, in 
 this respect, was framed with an equal degree 
 " of caution. The increase has been occasioned 
 by circumstances which could not possibly be 
 " foreseen ; it has been progressive ; and the 
 " various additions have been annually explained 
 to the Committee as they arose. On the review 
 it will be found, that a part may be looked upon 
 " to be permanent ; as that occasioned by the re- 
 gulations for the administration of justice, that 
 incurred by the military regulations in 1796, 
 " with the increased pay to the Europeans, in 
 < conformity with the same measure in fcng- 
 ' land*j also the addition to the army, in cons e- 
 
 * In Sir Arthur Wellesley's Speech, July 10th 1806, 
 the actual charges of the civil and military establishments.
 
 " quence of the subsidiary treaties ; but a very 
 " material part of the increased expence may be 
 " stated to be temporary and contingent, and 
 " to have arisen from the necessity of various 
 " expeditions, and of warlike preparations, of 
 " which it will not be practicable to ascertain 
 " the whole charge incurred, till accounts of a 
 later date shall be received. It is then intend- 
 *' ed more fully to illustrate the policy of the 
 " measures adopted from time to time ; likewise 
 " the important and beneficial consequences 
 " which may be ultimately expected from the 
 " successful issue of the late military opera- 
 " tions. 
 
 " The expences have certainly been immense ; 
 but, under every circumstance of the war, 
 the revenues have increased, and the trade 
 *' has been advanced to an amount before un- 
 " known" 
 
 in 1798, are stated to exceed the actual charges in the 
 1793, in the amount of L. 1,474,686.
 
 208 
 
 180O. 
 
 Abstract of the Accounts, shewing the amount of profit 
 and loss, and the state of the assets and debts, for the 
 year 1799 in India, and 1800 at home. 
 
 Assets. Debts. 
 
 In India, L. 10,259,107 In India, L. 12,995,526 
 At home, - 16,185,950 At home, - 5,830,222 
 
 Total, L.26,445,057 Total, L. 18,825,748 
 
 Profit and loss^on the Company's affairs since last year : 
 
 Decrease in India, ------ - L. 1,626,67*7 
 
 Deduct increase at home, --.- 339,862 
 
 Loss, L. 1,286,815 
 Deduct gain at China and St Helena, ... 861,572 
 
 L. 425,24-3 
 
 To this must be added, part of the con- 
 signments for which credit is taken in 
 the home assets, that appeared to have V 202,450 
 been included in the India stock ac- 
 counts, 
 
 Total loss, L. 627,693 
 
 Improvement in the Company's affairs since the year 1 793 : 
 
 Gain, as stated in the abstract 1799, - - L. 4,539,640 
 Deduct loss, as above, -------- 627,693 
 
 L.3,911,947
 
 Extracts from the speech in which this state- 
 ment was introduced : 
 
 The final result of the whole is, the financial 
 departments in India have experienced material 
 deterioration, from the united pressure of war 
 " expences, and provision of investments, but not 
 in a degree to afford ground of alarm. 
 
 In the year 1797 I took occasion to offer to 
 * the Committee a most flattering view of the sur- 
 " prising improvement brought about in the 
 course of ten years. The reduction of the 
 debts, and the increase of the assets, were to 
 an amount exceeding L. 11,1OO,OOO Sterling* 
 ( f It is true that, within that period, money had 
 " been raised on additional capital to the amount 
 of L. 3,740,000, but it must likewise be taken 
 " into consideration, that the remainder may be 
 tf termed a net improvement, under the events of 
 " an Indian war, at one time threatening serious 
 " disasters, though finally concluded highly to 
 " the advantage of the Company ; under the 
 " events, likewise, of the present European war, 
 during four years of the period, which caused 
 " enormous additions to the expence of freights, 
 " and of the provision of every article of equip-
 
 210 
 
 ' rtient, and occasioned also great expences by 
 several expeditions, from which our rivals were 
 tf deprived of their possessions in the East. But 
 tf I have carried the comparison three years fur- 
 " ther, which will take in a great part of the im- 
 mense expenditure of the late war with Mysore, 
 and find that the improvement, during these 
 thirteen years, on the same principle, is 
 " L. 11,880,000. If it be inquired, what is the 
 state of the concern between 1796-7 and the 
 " date of the present accounts, in which period 
 " the extraordinary pressure has been mostly felt? 
 " it is satisfactory to discover, that, without any 
 aid from increase of capital, the improvement 
 has still been L. 747,000. 
 
 It is fair, then, to infer, that, so far from ap- 
 " prehensions, the most sanguine hopes may be 
 " indulged, from the present general aspect of 
 the Company's affairs, whether considered po- 
 " litically or commercially, that unless any thing 
 " unforeseen should occur, the debts may, in a 
 " few years, be reduced to the amount at which 
 " it may be prudent to limit them ; and that 
 the surplus produce of the revenues may be 
 applied to the purposes intended, when the 
 last arrangement took place."
 
 211 
 
 1801. 
 
 Abstract of the accounts, shewing the amount of profit 
 and loss, and the state of the assets aud debts, for the 
 year 1800 in India, and 1801 at home. 
 
 Assets. Debts. 
 
 In India, L. 11,569,553 In India, L. 14,640,402 
 At home, 15,404,736 At home, 5,393,689 
 
 Total, L. 26,974,289 Total, L. 20,034,091 
 
 Profit and loss on the Company's affairs since last year : 
 Gain at China and St Helena, .... L. 1,442,232 
 Deduct decrease in India, - L. 334,430 
 Ditto decrease at home, - 344,981 
 
 Deduct bills drawn on the account"] 
 
 of the remittance loan from 
 
 India, and not accepted in Eng. 
 
 land, which therefore, though ^L. 391 915 
 
 a debt, are excluded both from I 
 
 the Indian and home ac- 1 
 
 count, 
 Deduct on account of cargoes in-x 
 
 eluded in the quick stock abroad, C 280,44.1 
 
 and in the assets at home, 
 
 679,411 
 L. 762, 82 T 
 
 L. 90,46$
 
 Improvement in the Company's affairs since the year 1793 : 
 
 Gain, as stated in the abstract 1800, - - L. 3,911,947 
 Gain, year 1801, as above, ....... 90,465 
 
 Total, L. 4,002,4-12 
 
 This statement was made when the person at 
 the head of the Board of Controul was about to 
 retire from office ; and, in the speech in which it is 
 introduced, a general view is given of the increas* 
 ed influence and power of the Company at that 
 period, contrasted with their state in 1784 ; in par- 
 ticular, a view of the acquisition of territory, 
 state of alliances, and of the commerce in India, 
 at China, and at home. 
 
 What relates to the management of the terri- 
 torial possessions is summed up as follows : If 
 " I had been the sole actor in those beneficial 
 " consequences, which have resulted from the 
 " recent administration of India, I should not 
 " have felt it decorous, on my part, to have alluded 
 to them, even in the general way I have done j 
 " but I owe it in common justice, to those who 
 " have either assisted with their judgment in the 
 " formation of plans, or their active exertions in 
 " carrying them into execution ; and it cannot
 
 213 
 
 fail affording high satisfaction to the Commit- 
 " tee, to be informed that every measure, whe- 
 " ther relating to revenue or police, has been 
 " undertaken, no less with the view to the 
 " comfort and welfare of the Indian subjects, than 
 " to the advantage of the state." 
 
 On the subject of the increased establishments, 
 it is admitted, that the charges are greatly increas- 
 ed ; but this is attributed either to circumstances 
 connected with the addition to the resources, or 
 to the absolute prescription of policy and justice. 
 
 On the comparison betwixt the state of the 
 Company's affairs in 1 784 and 1 80 1 , it is asserted, 
 That " the general state of the Company's affairs, 
 " notwithstanding the increase of the expences, 
 and the accumulation of the debts in India, may 
 " be found, upon calculation, to have greatly 
 " amended within the periods of comparison. I 
 have, upon a former occasion, brought to the 
 " notice of the Committee, that the improvement 
 under the operation of the present system, to 
 the period of account then under consideration, 
 " was found to exceed eleven millions Sterling ; 
 < the alteration since not having been to any great 
 amount, the amelioration may, on the same
 
 principle, be now taken at about the like sum. 
 The additional capital must, as then noticed, 
 cl be taken into the account, and some further 
 " adjustments will be required." 
 
 " The debts abroad are certainly much greater 
 ' than at the first period of the comparison ; but 
 e; the assets exhibit an excess still more consider- 
 able. At home, the favourable alteration, in 
 *' both respects, has been to such an amount, as 
 to form, in some degree, the most serious part 
 ft of the present financial embarrassment, inas- 
 much as, what appears to be the chief cause of 
 " the apparent deterioration abroad, has contri- 
 buted to the amelioration at home, to an extent 
 rendering it a matter of great importance, and 
 some difficulty, to restore the balance." 
 
 These details may be considered as tedious ; but 
 in examining the merits of a system constantly ap- 
 plauded for its publicity, it is necessary to tracej 
 xvith accuracy, the impression annually conveyed ; 
 for it is a comparison of the statements given from 
 time to time, with the ultimate result, that can best 
 enable the public to judge, whether their admira- 
 tion is due to the system, or to the dexterity with 
 which they have been deceived. Besides, the
 
 215 
 
 defence lately resorted to makes it necessary to 
 show, that the war in Europe never interrupted 
 the favourable representation of the Company's 
 affairs, uniformly given by the Board of Con- 
 troul. 
 
 That in many respects peace in Europe would 
 have been more advantageous to the Company's 
 commercial concerns, is undoubted ; that in some 
 respects it would have been less so, must be ad- 
 mitted j for, in addition to what has been quoted 
 on this subject from the speeches on opening the 
 budgets, it is of importance to recollect, that the 
 Directors of the East India Company, in their 
 third report on the trade, 1 802, express a clear 
 unequivocal conviction, that it will be impos- 
 sible for the Legislature, by any regulation 
 < whatever, to bring to the river Thames, in 
 " time of peace, the same quantity (in bulk and 
 value) of the produce and manufacture of 
 India, which has been brought in time of war." 
 
 It is, however, evident, that the large additions, 
 made at an early period after the arrangement 
 in 1793, to the establishments, civil, judicial, and 
 military (the last of which became more efficient, 
 as the extension of our conquests rendered the
 
 216 
 
 enlargement of our army necessary), would alone 
 account for the complete failure in accomplish- 
 ing the various objects to which the profits of 
 the Company were appropriated *. 
 
 * Formerly a battalion of native infantry, composed of 
 ten companies, was commanded by a European officer, with 
 the rank of captain, having a European lieutenant at the 
 head of each company. Now, each regiment has of Euro- 
 pean officers one colonel, two lieutenant-colonels, two 
 majors, seven captains, one captain-lieutenant, twenty- 
 two lieutenants, and ten ensigns. It is evident, that the 
 expence of this arrangement must be great in proportion 
 to the number of our troops ; some idea may be formed 
 of the enormous expenditure to which it has given rise, 
 by reflecting that Lord Castlereagh, in 1803, made the 
 following calculation of the peace establishment necessary 
 for the security of our extended possessions : 
 
 Europeans, . 25,000 
 
 Regular native troops, - - 90,000 
 
 Invalids, irregulars, and Lascars, * 10,000 
 
 Total, 125,000 
 
 Let those who think the enormous increase of expendi- 
 ture necessary, which this alteration of establishment, ex- 
 tended to so large an army, must occasion, recollect, that 
 Lord Clive, at the battle of Plassy, was a lieutenant- 
 colonel, with only one major in his army ; and that Sir
 
 217 
 
 If it was true, therefore, that, notwithstanding 
 these additional expences, there had taken place 
 an improvement in the Company's real efficient 
 means, to the amount of L. 1 1,880,000, as stated 
 in 1800, and repeated in 1801, it could only 
 strengthen the presumption of mismanagement, 
 when it appeared that, with such ample funds, 
 all the objects, to the attainment of which the 
 faith of Parliament was solemnly pledged, had 
 remained completely neglected. 
 
 But the Directors in Leadenhall Street enter- 
 tained, even at this time, a very different view 
 of the concerns. Of their partiality to the per- 
 
 Hector Monro, himself a major, had only one field-officer 
 under him at the battle of Buxar. 
 
 It was the measure of introducing King's troops in such 
 numbers, originating with the Board of Controul, and 
 opposed by the Company, that gave rise to the complaints 
 which rendered this expensive change of system necessary. 
 
 The circumstance of the Company's having formed an 
 establishment in India for breeding horses for the use of 
 their army, and an establishment in England for breeding 
 stallions to send out to India^ is, comparatively speaking, 
 of trifling importance ; and it is only mentioned, as illus- 
 trating the wasteful disposition of seizing every pretext 
 for increasing establishmcn ts.
 
 son whose statements have been quoted, and un- 
 der whose controul they had so long acted, the 
 grant of a large pension out of the Company's 
 funds, exhibited proof too substantial to leave 
 any possible doubt * ; it could, therefore, only be 
 a feeling of duty, imposed on them by their know- 
 ledge of the subject, and a conviction of the 
 truth of what they advanced, that induced them, 
 in the following view of the Company's affairs, 
 in opposition to these details, so strongly to ex- 
 
 * A pension of L. 2000 per annum appears, by a list of 
 pensions granted by the East India Company, laid before 
 Parliament 1806, to have been given to Lord Melville 
 llth of February 1801. 
 
 From this list we learn, that the Company have exer- 
 cised the uncontrouled right of giving pensions at their 
 discretion. 
 
 In 1806 the pensions granted since 1793 amounted to 
 L. 30,750. Since that, there has been added as follows : 
 1806, .... L. 4180 
 
 1807, 4504 
 
 1808, - - - ., - 4330 
 
 It appears also, by accounts laid before Parliament, 
 that there had been given away, under the head of gratui- 
 ties and presents at home, not including presents given 
 in India, up to the year 1806, the following sums:
 
 219 
 
 press their opinion of the fatal effects of the man- 
 agement that had been pursued. 
 
 " In the year 1783, Mr Dundas took upon 
 <* himself the administration of Indian affairs ; and, 
 " therefore, we will venture to make a comparison 
 " between the period of distress in which he be- 
 " gan his administration, and the state in which 
 " he has left the Company's affairs, on retiring 
 " from office. 
 
 " The report of the Court of Directors, dated 
 " the 23d January 1784, and laid before the 
 " House of Commons (which was approved and 
 
 From 1st Jan. 
 
 1794 to 
 
 1st Jan. 
 
 1795, 
 
 L.1 1,204 
 
 
 
 
 
 Ditto 
 
 1795 
 
 ditto 
 
 1796, 
 
 16,709 
 
 12 
 
 6 
 
 Ditto 
 
 1796 
 
 ditto 
 
 1797, 
 
 77,086 
 
 6 
 
 6 
 
 Ditto 
 
 1797 
 
 ditto 
 
 1798, 
 
 11,971 
 
 2 
 
 6 
 
 Ditto 
 
 1798 
 
 ditto 
 
 1799, 
 
 15,836 
 
 5 
 
 6 
 
 Ditto 
 
 1799 
 
 ditto 
 
 1800, 
 
 34,445 
 
 12 
 
 6 
 
 Ditto 
 
 1800 
 
 ditto 
 
 1801, 
 
 25,923 
 
 1 
 
 11 
 
 Ditto 
 
 1801 
 
 ditto 
 
 1802, 
 
 15,158 
 
 10 
 
 
 
 Ditto 
 
 1802 
 
 ditto 
 
 1803, 
 
 10,295 
 
 19 
 
 9 
 
 Ditto 
 
 1803 
 
 ditto 
 
 1804, 
 
 27,962 
 
 8 
 
 3 
 
 Ditto 
 
 1804 
 
 ditto 
 
 1805, 
 
 92,283 
 
 8 
 
 5 
 
 Ditto 
 
 1805 
 
 ditto 
 
 1806, 
 
 20,059 
 
 11 
 
 9 
 
 
 
 
 
 L. 358,935 
 
 19 
 
 7
 
 220 
 
 " defended by Mr Dundas), states distinctly the 
 " revenues and debts of India, according to the 
 < last accounts which could be obtained at that 
 period. 
 
 " The net revenue of India, ex- 
 elusive of the profit on salt and 
 ** opium, was L. 1,091,546 
 
 " 'The salt and opium, although 
 they have produced much more, 
 was at that time estimated at 
 only ... 400,000 
 
 . 
 
 " Net surplus at that time, L. 1,491,546 
 " This surplus was subject to charges, and 
 " particularly to the interest of the debts in In- 
 " dia. The salt and opium are estimated at no 
 " more than L. 400,000, but produced, for an 
 " average of above twenty years, L. 800,000 per 
 " annum. 
 
 " By the accounts laid before 
 
 " the House of Commons the 5th 
 
 " of May 1801, the surplus net 
 
 " revenue was - L. 664,397 
 
 " It appeared, at the same time, 
 
 Carry over, L. 664,397
 
 221 
 
 Brought over, L. 664,397 
 
 that the interest upon debts bear- 
 ' ing interest was - - 1,082,204 
 
 Leaving a deficiency of L. 417,806 
 
 Your Committee are aware that the defici- 
 
 " ency is much larger, not only from addition- 
 
 al interest on debts, but for expences which 
 
 are not included." 
 
 If objections are made against this compari- 
 son, there can be none when a comparison is 
 made between different periods of Mr Dun- 
 das's own administration. In 179S, on the 
 " renewal of the charter, the Directors estimat- 
 ed the final surplus in India, as applicable to 
 investment, to be - L. 1,409,127 
 
 Deduct the proceed of the 
 Europe exports - 350,000 
 
 Remains a political surplus of L. 1,159,127 
 It is tr;ie that Mr Dundas objected to this 
 estimate, which, in his opinion, was much too 
 low ; but if to that sum shall be added the 
 present deficiency of L. 417,807, there will 
 appear against the Company, in their annnal 
 " political income, a difference of a million and
 
 222 
 
 < a half, which may easily be swelled to two 
 " millions Sterling annually, when the arrears 
 " of debt are funded, and bear an interest. 
 
 " The differences of opinion which may arise 
 on the question of income, in consequence of 
 " the numberless details necessary for the pur- 
 " pose of forming an estimate, cannot exist on the 
 subject of debts which are comprised within a 
 " few lines. By the returns alluded to before, 
 the debts at the three Presidencies were stated, 
 " the 23d January 1784, L. 4,521,635. 
 
 "At that time there was a large arrear not 
 ' known in Europe, the exact amount of which 
 " it is difficult to ascertain ; but suppose that it 
 swelled the debt to L. 10,000,000. 
 
 In the letter from Mr Dundas, and in the 
 budget which he delivered in the House, the 
 " debt in India is admitted to be L. 14,432,717. 
 
 A very considerable augmentation has been 
 " ascertained, by the advices received by the 
 < Georgina packet." 
 
 That the increase of assets is not, in this state- 
 ment, held out as balancing the augmentation of 
 debt, can hardly be supposed to proceed from 
 inadvertency in the Directors, or from ignorance
 
 223 
 
 that this was the device by which Parliament was 
 made to view the Company's affairs in a flourish- 
 ing state, even in the moment of impending diffi- 
 culties. 
 
 As merchants, their habits never could lead 
 them to regard an unusual and increasing accu- 
 mulation of goods on hand, or of doubtful debts 
 due to the Company, as symptoms of mercantile 
 prosperity ; it was impossible, therefore, they 
 should have thought of staling these circumstan- 
 ces as a satisfactory set off against a growing 
 load of debt, at exorbitant interest, which threat- 
 ened them with ruin. 
 
 Besides, in considering that favourable repre- 
 sentation of the result of the management which 
 they were criticising, the act of Parliament esta- 
 blishing the system must have attracted their at- 
 tention. In it there was to be found a minute 
 appropriation of a large and increasing free reve- 
 nue, and provisions for the diminution of the 
 comparatively small debt which the Company 
 then owed. But the increase of assets was, by the 
 Legislature, unnoticed and unprovided for ; they 
 therefore must have naturally looked, in estimat- 
 ing the merits of the management, to the objects 
 proposed to be attained j and they could not draw
 
 224 
 
 a favourable conclusion, on finding the debt, the 
 diminution of which was anxiously provided for, 
 extravagantly increased, and a great surplus of 
 charge, instead of that surplus of free revenue, on 
 the existence of which the whole regulations had 
 been founded. 
 
 These important observations of the Directors 
 seemed at least calculated to inspire the person, 
 on whom the duty of superintending the Com- 
 pany's affairs next devolved, with a little caution 
 in forming the annual statements submitted to 
 Parliament. On him, however, it will be found, from 
 the abstracts of the budgets for the three follow- 
 ing years, that they produced no such effect * ; for 
 throughout his official career, he uniformly dis- 
 played the same inclination to embellish the state 
 of the Company's affairs he had already shown, 
 when, in recommending the Union to the Parlia- 
 ment of Ireland, he described the tender of a 
 partition of the L. 500,000, annually payable by 
 the East India Company to the Exchequer, as a 
 high effort of British generosity, and flattered the 
 
 * Lord Dartmouth held the office for a short time, dur- 
 ing which no statement was made to Parliament. He was 
 succeeded by Lord Castlereagh ? the person here alluded to.
 
 225 
 
 people of Ireland, that they would thus immedi- 
 ately acquire L. 58,000 a-year in aid of their 
 burdens *. 
 
 1802. 
 
 Abstract of the Accounts, shewing the amount of profit 
 and loss, and the state of the assets and debts, for the 
 year 1801 in India, and 1802 at home. 
 
 Assets. Debts. 
 
 In India, L. 12,113,922 In India, L. 17,674,532 
 At home, - . 16,802,760 At home, - 4,822,683 
 
 Total, L. 28,916,682 Total, L. 22,497,21 5 
 
 Profit and loss on the Company's affairs since last year : 
 Decrease in India, ..>..... L, 2,489,761 
 Deduct increase at home, ...... 1,969,330 
 
 Remains loss, L. 520,431 
 Add loss at China and St Helena, ... - 187,042 
 
 Total loss, L. 707,473 
 
 Improvement in the Company's affairs since the year 1 793. 
 Gain, as stated in the abstract 1801, - - L. 4,002,412 
 Deduct loss as above, - ...... 707,473 
 
 Remains gain, L. 3,294,939 
 
 * See Plowden's Historical View of the State of Ire- 
 land, Vol. ii. part ii. page 1007. 
 
 P
 
 226 
 
 Extract from the speech in which this state- 
 ment was introduced : 
 
 After explaining the grounds upon which it 
 was conceived that there would be in India a clear 
 surplus of L. 1,053,582, all charges defrayed, it 
 is said, " I have, in the former part of my speech, 
 observed, that the result of the estimates for 
 1801-2 was better than the result of the actual 
 accounts of the year 18OO-1 by L. 634,000. 
 *' From what I have now stated of the estimate 
 for 1 802-3, it appears, that an improvement 
 beyond the estimate of 1801-2 may be expect- 
 " ed, of L. 1 ,754,OOO, making, upon the compa- 
 rison of the years 18OO-1 and 1802-3, an im- 
 provement on the balance between revenue and 
 " charge, of no less than L. 2,388,OOO. The 
 " increase on the former year was before explain- 
 " ed. It is necessary now to state, generally, 
 " the principal causes which have led to the great 
 " amelioration in the latter year. They are as 
 " follows, viz. reduction, civil and military r , on 
 *' the peace, L. 783,000. The residue arises 
 from the increase of the revenues from the 
 Carnatic, the late cessions in Oude, and those 
 from the Nizam. There is also a considerable
 
 227 
 
 *' increase under the heads of customs and 
 " salt. 
 
 Having thus briefly laid before the Commit- 
 tee the present state of the Company's revenues 
 " and charges abroadj it is impossible that their 
 " attention should not be directed to the indivi- 
 " dual under whose auspices these resources have 
 < been brought into action. It is unnecessary 
 { for me to recal to the recollection of Parliament 
 " the services of Marquis Wellesley ; they have 
 been too distinguished ever to be forgotten : 
 " but I should do injustice to my own feelings, if 
 ' I did not take this occasion of declaring, THAT, 
 
 " MARKED AS THE WHOLE COURSE OF HIS 
 
 ADMINISTRATION HAS BEEN, BY BRILLIANT 
 
 " AND IMPORTANT ACHIEVEMENTS, BY NO 
 
 ' FEATURE WILL IT STAND ULTIMATELY 
 
 <c MORE DISTINGUISHED, THAN BY THE SOLID 
 
 " FINANCIAL PROSPERITY RESULTING FROM 
 
 * f HIS MEASURES." 
 
 The home accounts are next considered, and 
 the result of both is thus stated : " Adding the 
 " profits at home to the Indian surplus above 
 * stated, the whole furnishes a disposable surplus 
 -'* as follows
 
 228 
 
 Indian surplus, L. 1,053,582 
 
 < Interest on debt redeemed, - 80,OOO 
 
 " Surplus at home, - - 4OO,OOO 
 
 L. 1,533,582 
 
 " After defraying all charges ; liable to the ap- 
 propriations directed by the act of 1793." 
 
 It is then remarked, that the Company will in 
 future have ample means of paying the annual 
 sum of L. 500,000 to the public ; a long disserta- 
 tion is given upon a plan for disposing of the 
 remainder, by which, at the termination of theCom- 
 pany's charter in IS 14-, it is made out that, after 
 paying L. 500 in each year to the Exchequer, 
 and L. 350 additional dividend to the proprietors, 
 they will have a guarantee fund to the extent of 
 L. 9,4S6,OOO. 
 
 This calculation proceeds on the supposed con- 
 tinuance of peace; but it is declared that " with our 
 " present prospects with respect to revenue, theln- 
 dian surplus would more than cover the extra- 
 << ordinaries of a war expenditure ;" and, after an 
 examination of the amount of the excess of reve- 
 nue, that, even on the supposition of war, would 
 remain for the discharge of debt, the whole is 
 summed up as follows :
 
 229 
 
 The result, either in peace or war, may be 
 *< thus stated : in peace, the Company, after 
 " paying L. 500,000 to the Exchequer, may ap- 
 " propriate two millions a-year to the reduction 
 ff of debt : IN WAR, the public must be prepar- 
 ed to forego their participation ; but the Com- 
 " pany may, nevertheless, partly from surplus 
 " proceeds, and partly from other funds } appro- 
 " priate one million annually to the reduction of 
 " debt. 
 
 " What I have stated will, I trust, relieve the 
 " Committee from all apprehensions on the 
 " subject of India. They will recollect ftie 
 " gloomy predictions that prevailed during the 
 " war, in respect to our possessions in that quarter 
 " becoming a charge upon the mother-country ; 
 and they will also call to mind the repeated 
 " declarations of a noble friend of mine (Lord 
 " Melville), that the empire would lean on India, 
 " before India would require support from the 
 " empire. These declarations, received by many 
 " with distrust at the time, have now been ful- 
 " filled j and the result is only one, among the 
 " many proofs, of my noble friend's deep know- 
 " kdge and accurate judgment, THE WHOLE
 
 230 
 
 " OF OUR INDIAN EMPIRE, IN ITS GOVERN- 
 
 f< MENT, AT HOME AND ABROAD, forms a pTOlld 
 
 " monument of his official labours" 
 
 1803. 
 
 Abstract of the Accounts, shewing the amount of profit 
 and loss, and the state of the assets and debts, for the year 
 1802 in India, and 1803 at home. 
 
 Assets. Debts. 
 
 In India, L. 13,372,741 In India, L. 19,965,739 
 At home, - 17,440,593 At home, - 4,773,886 
 
 Total, L. 30,813,334 Total, L. 24,739,625 
 
 Profit and Loss on the Company's Affairs since last year: 
 
 Decrease in India, L. 1,032,389 
 
 Deduct increase at home, - 686,630 
 
 Remains, L. 34-5,759 
 Add Loss at St Helena, - - 927,121 
 
 Total loss, L. 1,272,880 
 
 Improvement in the Company's Affairs since the year 1793: 
 
 Gain, as stated in the abstract 1802, - L. 3,294,939 
 Deduct loss as above, - - . 1,272,880 
 
 Remains gain, L. 2,022,059
 
 231 
 
 1804. 
 
 Abstract of the Accounts, shewing the amount of pre- 
 fit and loss, and the state of the assets and debts, for the 
 year 1803 in India, and 1804 at home. 
 
 Assets. Debts. 
 
 In India, L. 14,630,971 In India, L. 21,881,572 
 At home, 19,168,736 At home, 4,788,865 
 
 Total, L. 33,799,707 Total, L. 26,670,437 
 
 Profit and loss on the Company's affairs since last year : 
 Increase at home, - .._.- L. 1,713,164 
 Deduct decrease in India, ...... 657,602 
 
 L. 1,055,562 
 Deduct loss at St Helena, 325,988 
 
 Gain, L. 729,574 
 
 From this however must be taken value of 
 cargoes arrived in England, included in 
 quick stock there, which, under the head V . _ 
 of cargoes afloat, were included in the 
 home assets 
 
 L. 312,574. 
 
 Improvement in the Company's affairs since the year 1793: 
 Gain, as stated in the abstract 1803, - L. 2,022,059 
 Gain, as above, - 312,5/4 
 
 L. 2,334,633
 
 232 
 
 The speeches by which the two preceding 
 statements were introduced, have already been 
 referred to, in so far as they sanction and approve 
 the conduct of the Indian government in effecting 
 the revolution in the Carnatic, and in accomplish- 
 ing the arrangement with the Nabob of Oude, 
 by enforcing the execution of the treaty conclud- 
 ed in November 1801 *. 
 
 The general observations they contain, in rela- 
 tion to the Company's financial concerns, are 
 confined to a display of the exertions made by 
 the Directors, after the renewal of the war in 
 Europe, to forward the plan for facilitating the 
 discharge of India debt,, by enlarging the remit- 
 tances from Great Britain. 
 
 That this measure has accelerated the crisis 
 of embarrassment in the Company's affairs at 
 home, cannot be disputed ; but this is neither the 
 sole nor the most important consideration it 
 suggests. 
 
 The plan of relieving the Company's difficulties, 
 by contracting debt at home for the purpose of 
 discharging debt in India, or of transferring the 
 
 * See pages 37 and 62.
 
 233 
 
 debt that bears a high interest in the East to 
 Europe, where, with the assistance of government, 
 money might be borrowed at a much lower inte- 
 rest, calls for attention, from the marked appro- 
 bation with which it has been officially and re- 
 peatedly alluded to. 
 
 It requires only the application of a common 
 rule of arithmetic, to discover, that the commuta- 
 tion of the debt in India, when it amounted to 
 sixteen millions, bearing an interest within a frac- 
 tion of nine per cent, into a debt in Europe of 
 equal amount at five per cent, would in figures 
 present a saving of L. 678,000 a-year *. 
 
 But how such an operation will ultimately 
 affect, either the concerns of the Company or the 
 prosperity of the country, is a problem of more 
 difficult solution ; and it is a question of such in- 
 finite importance, at a time when the debt due 
 by the Company in India amounts to thirty- 
 two millions, of which upwards of seven- 
 teen are transferable at the option of the cre- 
 
 * This is the statement made in Lord Castlereagh's 
 speech, 14th March 1803.
 
 234 
 
 / 
 
 ditors, that it cannot be passed over without exa- 
 mination *. 
 
 To illustrate the true and precise effects of this 
 measure of transferring Indian debt to Europe, let 
 us suppose that a debt of ten millions, bearing an 
 interest in India of eight per cent, should be 
 removed to England, where the creditors were 
 willing, on receiving the joint security of govern- 
 ment, to accept of five per cent. 
 
 The first and obvious consequence of such a 
 measure is, that the payment of L. 500,000 
 interest to the creditors, instead of L. 800,000, 
 apparently secures to the debtor a saving of three 
 hundred thousand a-year. 
 
 But as the Company have no funds in England 
 for the payment of this L. 500,000, and as it 
 cannot be intended that an addition should be 
 made to the burdens of the people of this country 
 
 * Amount of debt payable in England, at the option 
 of the holders of the securities, 3d of June 1806, which 
 is probably considerably increased since that period. 
 Decennial loans, at 10 and 8 per cent. - L. 3,82,07,626 
 
 The loans at 8 per cent 13,45,88,233 
 
 Ditto at 6 per cent. . - - - - - 28,75,763 
 
 C. Rs. 17,56 3 71 ; 622
 
 235 
 
 for the purpose of accomplishing it, it is to be 
 considered, on what terms the Company can pro- 
 cure the five hundred thousand pounds necessary 
 to discharge the interest that would become due 
 in England. The funds out of which the eight 
 hundred thousand a-year was paid, antecedent to 
 the transfer, are in India. Such a portion, there- 
 fore, of these funds, as is necessary to realize five 
 hundred thousand pounds in England, must be 
 remitted from thence j and as in India there is 
 an impossibility of getting bullion for the conti- 
 nued remittance of so large a sum, it must be 
 conveyed in commodities, the produce or manu- 
 facture of that country. 
 
 On the comparative value in India and in 
 Europe of the goods employed to make this re- 
 mittance, must therefore depend the benefit the 
 Company will ultimately derive from the measure. 
 
 If commodities, sufficient to bring five hundred 
 thousand at the sales in England, can be had in 
 India, at so low a price, that the difference will 
 cover the expence of freight, insurance, port- 
 charges, warehouse room, interest for the sum 
 laid out, and duties payable to government, three 
 hundred thousand pounds will undoubtedly be the
 
 '236 
 
 saving resulting to the Company from such a 
 transfer. 
 
 But if the comparative value of goods in India, 
 and the sales of Europe, should be such as to re- 
 quire eight hundred thousand pounds to purchase 
 in India a quantity sufficient to produce in Eng- 
 land a um large enough to discharge the five 
 hundred thousand pounds of interest, and to defray 
 all the expence attending the purchase, the sale, 
 and the importation, then, notwithstanding the ap- 
 parent saving the transaction at first sight exhibits, 
 It would be attended with neither profit nor loss. 
 
 It is further obvious, that if by any means the 
 price of articles sent from India should be reduced 
 in Europe to such a degree as to demand an ex- 
 penditure of nine hundred thousand pounds in 
 the East, to acquire what would enable the 
 Company to realize five hundred thousand in Eng- 
 land, after defraying all expences, the supposed 
 transaction, instead of producing a gain, would 
 in reality occasion a loss of one hundred thousand 
 a-year. 
 
 It is certain, too, that the measure has a tendency 
 to defeat the benefits it proposes, by depressing 
 the value of India goods in the European market. 
 For if the debt in India was so inconsiderable, that
 
 237 
 
 its transfer to Europe threatened only the neces- 
 sity of a small additional importation of goods, 
 there might exist a doubt how far that circum- 
 stance could of itself affect the value of Indian 
 imports, so as to counteract the benefit from the re- 
 duction of interest. But those who so sanguinely 
 describe the advantages likely to arise frpm such 
 a transfer, -ought to recollect the amount of Indian 
 debt, and to reflect on the diminution of price, 
 which must be occasioned by pressing on the 
 market an additional quantity -of commodity, suf- 
 ficient to cover even the interest of any consider- 
 able portion of the immense sum due. 
 
 To the East India Directors the consequences 
 of such a proceeding must be evident. The ef- 
 fects of importing a greater quantity of goods 
 than the market requires, is familiar to them. In 
 their answer to the memorial of the clandestine 
 traders, in 17^3, they expressed their astonish- 
 ment that it could have escaped the memorialists, 
 that the price of every commodity, the demand 
 remaining the same, diminishes in proportion as 
 the quantity increases. They there illustrated 
 this well known truth, by stating, that " the week 
 " following the arrival of the Ganges, the Com- 
 " pany's raw silk was sold for above twenty
 
 238 
 
 " thousand pounds less than what the silk would 
 " have sold for if the ship had not arrived ;" 
 and they asserted that " it had frequently hap- 
 *< pened, that the Company had sustained im- 
 " mense losses, in consequence of offering for 
 ** sale a very small quantity of goods more than 
 " what the demand required*." 
 
 These remarks are hitherto confined to show, 
 that there may exist a loss in consequence of a 
 transfer of India debt, by the remittance of the 
 reduced interest, greater than the benefit the re- 
 duction presents. But this is not the only aspect 
 in which the subject must be viewed, to convey 
 an accurate idea of the ultimate consequences to 
 the interest of the Company, arising from the 
 transfer of India debt to Europe. 
 
 In the present situation of their affairs, it must 
 be an object with those who have the manage- 
 ment of them, gradually to redeem the principal 
 of any debt transferred, by means of a sinking 
 fund, as well as to discharge the interest of it. 
 
 It has already been observed, that if the com- 
 
 * See No. 3, papers respecting the negotiation for a re- 
 newal of the East India Company's exclusive trade, p. 46.
 
 239 
 
 parative value of piece-goods in the East, and at 
 the sales in Europe, was such as to require 
 L. 800,OO'.> to purchase goods capable of dis- 
 charging in England the L. 500,OOO interest, and 
 of covering all the expences of conveyance, then 
 the Company would neither gain nor lose by the 
 supposed transfer of a debt of ten millions, bear- 
 ing eight per cent, interest in India, to Europe, 
 where interest at the rate of five per cent, was 
 paid. 
 
 Far different, however, must be the consequence 
 of this situation of things, in regard to that portion 
 of the Company's Indian funds, which is destin- 
 ed to be remitted for the discharge of the debt. 
 For, in the first place, it is evident from the terms 
 of the hypothesis assumed, that the sum which 
 would be necessary to discharge five hundred 
 thousand pounds of the debt transferred to Eng- 
 land, would have liquidated to the extent of eight 
 hundred thousand, if it had remained in India. 
 In the second place, every person, who is in the 
 least conversant in these subjects, knows how 
 much more rapidly any given sum, applied to the 
 redemption of ten millions at eight per cent, must 
 effect its object, than when applied to the dis-
 
 240 
 
 charge of a similiar debt, bearing an interest of 
 five per cent. 
 
 As far as the Company's interests are concern- 
 ed, these are the outlines of the real principles 
 by which the measure of transferring Indian debt 
 to England must be estimated. 
 
 How such an operation will affect the manu- 
 facturing interest at home is a very different ques- 
 tion, and one which suggests considerations so 
 interesting to the welfare of the country, that it 
 is impossible not to regret the cursory manner in 
 which it must be here examined, where it is only 
 incidentally to be discussed. 
 
 The nature of the communication betwixt any 
 two countries which a remittance trade (if trade 
 it can be called) creates, has already been in some 
 degree touched upon. It has been explained 
 how, unlike all other commercial transactions, it 
 is neither regulated in its amount by demand, en- 
 couraged by an increase of profit, nor discour- 
 aged by extraordinary loss, and that it is the 
 amount of the sum which of necessity must be 
 realized, that, without regard to profit, exclusive- 
 ly regulates the extent of the transactions of those 
 who are compelled to conduct it.
 
 But the consequences of one country being 
 tributary to another to a large extent, and of a 
 great annual remittance without any return, was 
 some years ago far more fully investigated, in a 
 short tract, on the system pursued of borrowing in 
 England for the service of Ireland *. 
 
 On that occasion, the effects of such a remit- 
 tance, on the industry of the country that receives 
 it, was minutely explained and exemplified, by 
 showing how completely the agriculture of Italy 
 was destroyed, and the value of land diminished, 
 by the remittance to Rome of the tribute collect- 
 ed in the conquered provinces, and of the private 
 fortunes amassed by those who were sent to 
 govern them : which, in the existing state of in- 
 dustry in the Roman provinces, could only be 
 conveyed in grain. 
 
 The similarity of the situation in which India 
 will be placed, in relation to this country, when, 
 by the transfer of debt, in addition to the expected 
 
 * The pamphlet here referred to, was published in the year 
 1805, and is intituled, Ilints to the Manufacturers of Great 
 Britain, on the consequence of the Irish Union, and the 
 system since pursued, of borrowing in England for the 
 serYioe of Ireland. By Lord Lauderdalc. 
 
 g
 
 242 
 
 tribute, and the fortunes amassed by individuals, 
 a necessity is created for such extended remittan- 
 ces from the East, is too obvious to require ex- 
 planation. 
 
 The nature of Indian industry, indeed, pre- 
 cludes any apprehension of direct injury to our 
 agriculture by a forced importation of grain. But 
 our manufacturers must be blind to their own in- 
 terests, if they feel no alarm at such a scheme, 
 when they reflect, that India has always been 
 famed for the manufacture of piece-goods, and 
 that this is now the only article of which the Com- 
 pany have retained their monopoly *. 
 
 Under such arrangements, all that skill and dex- 
 terity in the application of machinery, which has 
 latterly enabled them, in excellence and in cheap- 
 ness, successfully to rival the articles of Indian fa- 
 bric in every market, abroad and at home, can 
 avail them nothing. For the quantum of bounty 
 given to the purchaser, or what is the same thing, 
 the loss on manufactures imported from India in 
 consequence of this operation, is not fixed or 
 
 * See paragraph 12th, as approved and amended by the 
 Board of Commissioners, of the dispatch sent to India in, 
 1802, on the subject of the private trade.
 
 243 
 
 decided. It must vary as their industry and in- 
 genuity creates a necessity for augmenting it j 
 and regulate itself, through the means of the sale 
 prices, to the exact amount of what is neces- 
 sary to force the produce of British industry out 
 of the market, till it secures the consumption of 
 a sufficiency of Indian manufacture, to enable the 
 Company to realize what will be necessary, in ad- 
 dition to any tribute that economy may produce, 
 to pay the interest, and sinking fund for the re- 
 demption of the transferred debt. 
 
 It is true, the quantity of India piece-goods ex- 
 posed for sale, has been of late years gradual- 
 ly diminished, and the small quantity disposed 
 of has brought a very inferior profit. It is true, 
 that our best informed manufacturers have de- 
 clared this change to proceed from the interfe- 
 rence of British goods, which they think is likely 
 to continue with increased effect * ; an opinion 
 which is strongly confirmed by the state of the 
 sales, during the late short interval of peace. 
 
 It is certain also, that, even in the American 
 market, before the late interruption of our trade 
 
 * See examination of Sir Robert Peele, and of Mr 
 Brown, note, page 177.
 
 244 
 
 With that country, it was, of articles made of 
 cotton brought from India, only, those contain- 
 ing a great quantity of the raw material, that 
 could successfully enter into competition with 
 what was fabricated in Great Britain. 
 
 All this, however, affords no consolation, for 
 the cruel state of things to which the artificial 
 arrangement of property, by the transfer of debt, 
 and the necessity of remittance, must give rise, 
 makes it impossible that any degree of skill can 
 give security to our manufactures, as the sale 
 prices of Indian commodities must be reduced, 
 till, to the injury both of the Company and the 
 country, a sufficient quantity is forced on the 
 European market, to produce the sum that must 
 be realized. 
 
 These short hints seem sufficient, at least to 
 create a suspicion that this measure, of transfer- 
 ring Indian debt to Europe, has been very lightly 
 considered, when it has so frequently, not to say 
 flippantly, formed a subject of applause ; indeed, 
 they seem even to justify the conclusion, that it is 
 desirable, if not necessary, to give to Indian in- 
 dustry a direction, which may secure its not en- 
 tering into competition with British industry, be.
 
 245 
 
 fore such a measure can be looked forward to 
 without extreme apprehension. 
 
 1805. 
 
 Abstract of the Accounts, shewing the amount of profit 
 and loss, and the state of the assets and debts, for the 
 year 1804 in India, and 1805 at home. 
 
 Assets. Debts. 
 
 In India, - L.17,252,399 In India, L. 25,336,263 
 At home, - 20,412,659 Athome, - 6,012,196 
 
 Total, L.37,695,058 * Total, L.31, 348,459 
 
 Profit and Loss on the Company's affairs since last Year : 
 Decrease in India, .... L. 833,26-1 
 
 Deduct gain at home, - - 50,592 
 
 Remains, L. 782,672 
 Deduct gain at St Helena, . - 443,478 
 
 Total loss, L. 339, 194- 
 
 Improrement in the Company's affairs since the year 1793 : 
 Gain, as stated in the abstract, 1804, L. 2,334,633 
 
 Deduct loss, as above, ... 339,194 
 
 L. 1,995,439 
 
 * In these abstracts, the balances, sometimes for and 
 sometimes against, at China and St Helena, hare been uni- 
 formly omitted, in stating the amount of assets and debts.
 
 246 
 
 The candour and the talent displayed in intro- 
 ducing this statement to Parliament, deservedly 
 attracted universal praise. For the first time the 
 language of truth was heard from the Board of 
 Controul, unaccompanied either with exaggerat- 
 ed representations of the effects of past manage- 
 ment, or inflated prophecies respecting the result 
 of future accumulations. 
 
 Without giving way to unmanly feelings of 
 despondency, the perilous situation of the Com- 
 pany's affairs was explained ; the necessity of 
 an early investigation into the means of alleviat- 
 ing their financial difficulties was enforced ; and 
 the intention was announced, of bringing the 
 subject before Parliament, the moment the arrival 
 of the necessary documents from India would 
 permit *. 
 
 With this statement, however, the practice, so 
 uniformly applauded, of giving to the public 
 through Parliament, an annual account of the 
 Company's affairs, seems to have terminated. 
 And here it is impossible not to observe, that 
 even then, when the accounts abroad were only 
 brought down to 1 803-4, and at home to ] 805, 
 admitting the accuracy of all these annual state- 
 
 * See Lord Morpeth's Speech, 10th July 1806.
 
 rnents, the result appeared most calamitous ; for 
 they in truth displayed a failure in every object, 
 to secure the attainment of which, the Board of 
 Controul may with justice be said to have been 
 appointed as trustees. 
 
 It was, (as the Directors of the East India 
 Company have observed,) with strong expres- 
 sions of his sense of the exertions, and of the 
 weight of responsibility it involved, that the 
 author of the system in 1801 declared, he would 
 meet the Indian debt, when it was supposed to 
 amount to fourteen millions. What then must 
 have been his feelings ? What could the public 
 fairly infer, when, in 1 805, they learned that the 
 debt in India, which, in the act 1 793, is stated at 
 seven millions, and for the reduction of which 
 to two millions Parliament had so carefully pro- 
 vided, was extended to the enormous sum of 
 twenty -five millions. 
 
 Generally speaking, the apology for extrava- 
 gant expenditure, and for a great consequent 
 debt, has been found in the attainment of some 
 object, conceived to be interesting to those who 
 were to be burdened with it ; but, unfortunately, 
 no such consolation is to be derived from these 
 statements. On the contrary, it is impossible to
 
 248 
 
 consider them with the least attention, without 
 perceiving, that the disappointment of the hopes 
 the public were taught to entertain, far from 
 being limited to the circumstance of an increase 
 of debt, was extended to every object the act 
 seemed to regard, as connected with the welfare 
 of the Company or the advantage of the country. 
 
 For, from these annual details we learn, that, 
 wtth the exception of the sum of five hundred 
 thousand pounds, (the reasons for advancing 
 which, in 1794, have been already adverted to*,) 
 the public had received no part of the projected 
 contribution in aid of our revenue, a share of 
 which, at the time of the union with Ireland, was 
 so generously imparted to our sister kingdom ; 
 whilst the fund to be accumulated, till it amount- 
 ed to twelve millions, appropriated as a security 
 to the proprietors, for the repayment of their 
 capital stock, at the rate of two hundred per cent, 
 had remained unthought of. 
 
 But what is infinitely more calamitous, it seems 
 to have been for several years avowed, that the 
 surplus revenue in the East, the vivifying prin- 
 ciple of the act 1793, had disappeared, and given 
 
 * Page 181.
 
 249 
 
 way to a large surplus of charge, annually in- 
 creased by the practice of borrowing, for the pur- 
 pose of keeping up the commercial investment, 
 to supply the Treasury at home. 
 
 In short, by these budgets, (as they were called), 
 annually printed by authority, the public were in- 
 formed, that, with the exception of the dividend 
 to the proprietors, the whole of what may be 
 called the pecuniary arrangements of the act re- 
 mained unsatisfied, and that the fund, which was 
 always considered as furnishing the only means 
 of fulfilling them, had for years disappeared. 
 
 It is true, they exhibited an ostensible gain aris- 
 ing from the Company's general concerns, be- 
 twixt the year 1793 and 1805, amounting to 
 nearly two millions ; but it is impossible for 
 any one, the least conversant with the subject, 
 not to perceive, that this appearance of a favour- 
 able balance was produced, by taking credit for a 
 claim on the public to the extent of upwards of 
 four millions, which, by a special commission, to 
 whose consideration it was referred,- had been 
 reduced to a sum little exceeding two millions. 
 Besides, the debt due to the creditors of the 
 Nabob of Arcot, and Rajah of Tanjour, which
 
 250 
 
 the Company were by treaties bound to discharge* 
 were overlooked ; and after all it was avowed, 
 that more than twice the apparent balance would 
 be disposed of, by the probable loss during the 
 two ensuing years, estimates of which formed part 
 of the last statement *. 
 
 If, however, the ostensible profit had been far 
 more considerable, and if, instead of being attend- 
 ed with an estimate of great future loss, this state- 
 ment for the year 18O5, had, like those which 
 preceded it, held forth hopes of future gain, the 
 frame of these accounts was alone sufficient to 
 create diffidence in the justice and accuracy of 
 any result they could possibly exhibit. 
 
 On the slightest examination, it is apparent, 
 that, throughout, the diminution the growing debt 
 
 * The estimated surplus charge, for 1804-5, was stated 
 at the sum of L. 1,734,184. It was however accompanied 
 with a declaration, that doubts, infinitely too well founded, 
 were entertained concerning its accuracy ; and it was infer- 
 red, from the estimate 1805-6, amounting to L. 2,651,939, 
 that it would probably be more considerable, without 
 adding any thing to it; however, upon this ground, the 
 deficiency for the two years appears to have been calcu- 
 lated to amount to L. 4,386,123.
 
 must have produced on the annual balance, was 
 uniformly counteracted by a still more rapid in- 
 crease in the supposed value of assets. It is evi- 
 dent, therefore, that a true and accurate account 
 of the Company's situation could only be ob- 
 tained by an inquiry into the real value of that 
 mass of assets, for which credit was annually 
 taken as property that could be made available. 
 
 Neither could there exist the least doubt of the 
 unfavourable result of such an inquiry, the mo- 
 ment it was known that this enormous list of 
 assets, in value amounting, in 1 805, to upwards of 
 thirty-eight millions, included stores sent abroad 
 for consumption goods in the warehouses, 
 both in India and at home, whether saleable or 
 unsaleable, and all debts without discrimination 
 for which the Company had claims *. 
 
 * In the general course of mercantile transactions, it is 
 understood, by men most practised in the consideration of 
 the probable result of the affairs of those who labour under 
 temporary embarrassments, that it is a large calculation, 
 even in narrow transactions, to suppose that the creditors 
 of those whose books exhibit a power of paying twenty 
 shillings in the pound, -will ultimately receive fifteen ; and 
 experience shows, that, in proportion as the scale of 
 dealinglis extended, the ratio of loss increases.
 
 252 
 
 Even at this period, therefore, it was apparent, 
 that the impression which would inevitably ensue 
 from a minute examination of the concern, must 
 be fatal to the system pursued, whether the Com- 
 pany was considered as a society of merchants, 
 united for the purpose of gain, or in its capacity 
 of sovereign of an extended empire. 
 
 For it would be a melancholy account of a 
 merchant's affairs, to state, that though his effects 
 exceeded the amount of his debts, yet his books 
 for a length of time showed a gradual diminution 
 of the great profits he had formerly acquired, and 
 that the balance latterly exhibited an annual loss 
 on his transactions. But if it farther appeared, 
 that his assets or effects consisted either of doubt- 
 ful debts, or of commodities that could not be 
 made available to satisfy the demand of creditors, 
 in receipt of exorbitant interest, is there any mer- 
 cantile man who would hesitate in pronouncing 
 his affairs in a ruinous state ? 
 
 On the other hand, could there be presented 
 to the eye of a financier a stronger proof of mis- 
 management, than what is displayed by a rapidly 
 increasing receipt, attended with a surplus of 
 expenditure, instead of a great surplus of revenue,
 
 253 
 
 which the Company formerly enjoyed, when its 
 income was comparatively small ? 
 
 The fatal effects of accumulated mismanage- 
 ment was, however, comparatively speaking, 
 only then beginning to display itself ; and the 
 prospect of impending calamity was easily ob- 
 scured, under cover of the veil which, in compli- 
 cated transactions, varied statements of accounts 
 can always afford. 
 
 In Parliament, the account intituled stock per 
 computation, was relied on by those who wished 
 to impress the public with a favourable view of 
 the concerns, as showing the whole state of the 
 Company's affairs, at home and abroad, and as 
 exhibiting a balance in its favour to the amount 
 of six millions, one hundred and eighty-one thou- 
 sand, two hundred and sixty-seven pounds, prov- 
 ing by this means the Company, " contrary to 
 " all unfavourable insinuations, to be solvent V 
 
 If, however, the Company's solvency was so 
 clearly and decidedly to be inferred from the 
 favourable balance this account at that time 
 exhibited, by what sophistry can those who re- 
 lied on this circumstance, now dispute that sen- 
 
 * See Mr Grant's Speech, July 15th 1806.
 
 254 
 
 tence of insolvency which their reasoning so 
 clearly justifies, when they review the following 
 state of the balances, the annual accounts of stock 
 per computation have since displayed ? 
 
 1805, Balance in favour of the Company, L. 6,181,267 
 
 1806, Do. in favour of ditto, 4,058,969 
 
 1807, Balance against the Company, . 836,276 
 
 1808, Do. against ditto, - - 4,533,153 
 
 Yet in India these were not years of war : the 
 war in which we were there engaged terminated 
 in the year 1805 ; and the public, who had been 
 told, in 18O3, that a million annually would be 
 appropriated to the reduction of the debt, not- 
 withstanding of warfare in Europe *, were flat- 
 tered that, by economical arrangements, a large 
 surplus revenue would, in the event of peace in 
 India, almost immediately become disposable. 
 We have since, however, experienced, that these 
 assertions have shared the fete of all the other 
 prophecies concerning the Company's prosperity, 
 as even last year the estimates from India, exhi- 
 bited the probable excess of charge to be greater 
 than the net territorial revenue the Company 
 possessed in 1 793. 
 
 * See Lord Castlereagh's Speech, quoted page 229.
 
 255 
 
 Of the opinion which the Directors must en- 
 tertain concerning the present situation of the 
 Company's affairs, their comparative statement, 
 at the conclusion of Mr Dundas's administration, 
 leaves little doubt. They then observed, that 
 " the differences of opinion that may arise on 
 " the question of income, in consequence of the 
 " numberless details, could not exist on the 
 " subject of debts which might be comprised 
 " within a few lines *." 
 
 If they now resort to the criterion, which they 
 then selected, what must they think of the merits 
 of that system under which the debt in India has 
 been increased to the extent of thirty-two mil- 
 lions ? 
 
 But, in truth, the general situation of the Com- 
 pany now admits only of being contrasted with 
 what it was in 1 793. Comparison implies a de- 
 gree of resemblance that can no longer be traced. 
 Their Indian commerce, which was then stated 
 to be highly profitable, is now confessed to be at- 
 tended with a lossf. Instead of a net revenue of 
 one million and fifty thousand pounds, arising 
 
 * See page 218. 
 T See note, page 168.
 
 256 
 
 from their territorial possessions, the estimate 
 18O7-8, exhibits a probable deficiency of one 
 million and fifty-nine thousand ; and the debt in 
 India has, since 1793, increased twenty-five mil- 
 lions ; for that is the difference betwixt seven mil- 
 lions, the sum recited in the act 1 793, and thirty- 
 two millions, which is nearly its present amount*. 
 To those who extend their view of the Com- 
 pany's affairs to the year 1803-4, when the 
 
 * The total failure in the prophetic appropriations of 
 the act 1793, may be stated as follows : 
 
 The debt in India was to have been redu- 
 ced to two millions. It is now thirty-two ; 
 there is therefore a disappointment to the 
 extent of - - - L. 30,000,000 
 
 The bond debt at home was to have been 
 reduced to fifteen hundred thousand pounds. 
 But the Company have obtained powers to 
 issue bonds to the extent of five millions, 
 which must, by their own statements, have 
 been issued. Difference . . 3,500,000 
 
 The public, who, at the rate of fire hund- 
 red thousand a year, would have by this 
 time received seven millions five hundred 
 thousand, have only received five hundred 
 thousand, .... . 7,000,000 
 
 Carry over L. 40,500,000
 
 257 
 
 charge first devolved on the Board of Controul, 
 the loss which, under this system of manage- 
 ment, has been sustained, must appear still more 
 extraordinary. 
 
 On the 15th November 1803, the account of 
 stock per computation, made up according to 
 the latest advices, displayed a balance in the 
 Company's favour to the extent of three millions, 
 nine hundred and sixty-eight thousand, four 
 hundred and eighty-one pounds ; the proprie- 
 tors have since paid in, of additional capital, four 
 millions, nine hundred and eighty thousand, mak- 
 
 Brought over, L. 40,500,000 
 
 The accumulated fund was to have a- 
 mounted to twelve millions, towards which 
 nothing has yet been advanced, 12,000,000 
 
 Total, L. 52,500,000 
 
 Large as this sum may appear, it does not mark the 
 full extent of the disappointment the public have sustain- 
 ed in the expectations they were taught to form ; for, by 
 the act 1793, after all these objects were accomplished, 
 the nation was to have had the benefit of the accumulated 
 fund remaining in the Exchequer, without interest ; the 
 proprietors, after it amounted to twelve millions, were to 
 h^vc had an additional dividend ; and the public were flat* 
 tered with further aid to the revenue. 
 
 *
 
 258 
 
 ing together the sum of eight millions, nine hund- 
 red and forty-eight thousand, four hundred and 
 eighty-one pounds. 
 
 To all this must be added the balance against 
 the Company, 1st March 1808, of four mil- 
 lions, five hundred and thirty-three thousand, 
 one hundred and fifty-three pounds ; so that the 
 Company, taking for granted the accuracy of the 
 accounts they have delivered to Parliament, appear 
 to have lost, under this system of management, 
 the enormous sum of thirteen millions, four 
 hundred and eighty-one thousand, six hundred 
 and thirty-four pounds * ; that is, the sum 
 of one million, two hundred and eighty-one 
 
 * Stock per computation, Nov. 15th 
 1803, balance in favour, L. 3,968,481 
 
 Received by the Company in 1798, for 
 eight hundred thousand of increased capital, 
 at 155, - - - 1,240,000 
 
 Ditto 1789, one million, at 174, - 1,740,000 
 
 Ditto 1793, one million, at 200, - 2,000,000 
 
 Stock per computation, 1st March 1808, 
 balance against, - - 4,533,153 
 
 Total loss since 15th November 1793, L. 13,481,634
 
 259 
 
 thousand, six hundred and thirty-four pounds, 
 more than four times the amount of their capital 
 stock when the Board of Controul took the 
 charge of it ; for at that time the proprietors had 
 only advanced the sum of two millions eight 
 hundred thousand pounds. 
 
 Such is the sad reverse the Company's finances 
 have experienced under the system of govern- 
 ment, which, a short time ago, it was generally 
 believed would be prematurely prolonged. 
 
 Should this intention be renewed, the person 
 who is still Secretary for the War Department 
 will, in the course of the discussions that must 
 take place, have some difficulty to make the pub- 
 lic discern, in the state of almost avowed bank- 
 ruptcy to which the Company is now reduced, the 
 solid financial prosperity which, in the year 1803, 
 he declared would ultimately form the most dis- 
 tinguished feature of Marquis Wellesley's admi- 
 
 It may be said, that many objections were advanced 
 against the account in 1783, which exhibited the balance 
 of L. 3,968,481 ; but all the reasons at that time assign, 
 ed for diminishing this balance in the Company's favour, 
 will apply more forcibly to augment the balance against 
 them in 1808.
 
 260 
 
 nistration *. And he will have still greater dif- 
 ficulty to explain, to those who read even this 
 slight sketch of the Company's transactions un- 
 der the superintendence of the Board of Con- 
 
 trOUl, how " THE WHOLE OF OUR INDIAN EM- 
 
 " PIRE, IN ITS GOVERNMENT AT HOME AND 
 <c ABROAD, FORMS A PROUD MONUMENT OF 
 " LORD MELVILLE'S OFFICIAL LABOURS |." 
 
 * See Lord Castlereagh's speech, quoted page 227. 
 f Ibid page 230. 
 
 THE END. 
 
 Printed by G. Ramsay and Co. 
 Edinburgh, 1809. 
 
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