The effect which so long continued a monopoly, followed by a preëmption, and then by partial preferences supported by power, must necessarily have in weakening the mercantile capital, and disabling the merchants from all undertakings of magnitude, is but too visible. However, a witness of understanding and credit does not believe the capitals of the natives to be yet so reduced as to disable them from partaking in the trade, if they were otherwise able to put themselves on an equal footing with Europeans.
The difficulties at the outset will, however, be considerable. For the long continuance of abuse has in some measure conformed the whole trade of the country to its false principle. To make a sudden change, therefore, might destroy the few advantages which attend any trade, without securing those which must flow from one established upon sound mercantile principles, whenever such a trade can be established. The fact is, that the forcible direction which the trade of India has had towards Europe, to the neglect, or rather to the total abandoning, of the Asiatic, has of itself tended to carry even the internal business from the native merchant. The revival of trade in the native hands is of absolute necessity; but your Committee is of opinion that it will rather be the effect of a regular progressive course of endeavors for that purpose than of any one regulation, however wisely conceived.
After this examination into the condition of the trade and traders in the principal articles provided for the investment to Europe, your Committee proceeded to take into consideration those articles the produce of which, after sale in Bengal, is to form a part of the fund for the purchase of other articles of investment, or to make a part of it in kind. These are, 1st, Opium,—2ndly, Saltpetre,—and, 3rdly, Salt. These are all monopolized.
OPIUM.
The first of the internal authorized monopolies is that of opium. This drug, extracted from a species of the poppy, is of extensive consumption in most of the Eastern markets. The best is produced in the province of Bahar: in Bengal it is of an inferior sort, though of late it has been improved. This monopoly is to be traced to the very origin of our influence in Bengal. It is stated to have begun at Patna so early as the year 1761, but it received no considerable degree of strength or consistence until the year 1765, when the acquisition of the Duanné opened a wide field for all projects of this nature. It was then adopted and owned as a resource for persons in office,—was managed chiefly by the civil servants of the Patna factory, and for their own benefit. The policy was justified on the usual principles on which monopolies are supported, and on some peculiar to the commodity, to the nature of the trade, and to the state of the country: the security against adulteration; the prevention of the excessive home consumption of a pernicious drug; the stopping an excessive competition, which by an over-proportioned supply would at length destroy the market abroad; the inability of the cultivator to proceed in an expensive and precarious culture without a large advance of capital; and, lastly, the incapacity of private merchants to supply that capital on the feeble security of wretched farmers.
These were the principal topics on which the monopoly was supported. The last topic leads to a serious consideration on the state of the country; for, in pushing it, the gentlemen argued, that, in case such private merchants should advance the necessary capital, the lower cultivators "would get money in abundance." Admitting this fact, it seems to be a part of the policy of this monopoly to prevent the cultivator from obtaining the natural fruits of his labor. Dealing with a private merchant, he could not get money in abundance, unless his commodity could produce an abundant profit. Further reasons, relative to the peace and good order of the province, were assigned for thus preventing the course of trade from the equitable distribution of the advantages of the produce, in which the first, the poorest, and the most laborious producer ought to have his first share. The cultivators, they add, would squander part of the money, and not be able to complete their engagements to the full; lawsuits, and even battles, would ensue between the factors, contending for a deficient produce; and the farmers would discourage the culture of an object which brought so much disturbance into their districts. This competition, the operation of which they endeavor to prevent, is the natural corrective of the abuse, and the best remedy which could be applied to the disorder, even supposing its probable existence.
Upon whatever reasons or pretences the monopoly of opium was supported, the real motive appears to be the profit of those who were in hopes to be concerned in it. As these profits promised to be very considerable, at length it engaged the attention of the Company; and after many discussions, and various plans of application, it was at length taken for their benefit, and the produce of the sale ordered to be employed in the purchase of goods for their investment.
In the year 1773 it had been taken out of the hands of the Council of Patna, and leased to two of the natives,—but for a year only. The contractors were to supply a certain quantity of opium at a given price. Half the value was to be paid to those contractors in advance, and the other half on the delivery.
The proceedings on this contract demonstrated the futility of all the principles on which the monopoly was founded. The Council, as a part of their plan, were obliged, by heavy duties, and by a limitation of the right of emption of foreign opium to the contractors for the home produce, to check the influx of that commodity from the territories of the Nabob of Oude and the Rajah of Benares. In these countries no monopoly existed; and yet there the commodity was of such a quality and so abundant as to bear the duty, and even with the duty in some degree to rival the monopolist even in his own market. There was no complaint in those countries of want of advances to cultivators, or of lawsuits and tumults among the factors; nor was there any appearance of the multitude of other evils which had been so much dreaded from the vivacity of competition.
On the other hand, several of the precautions inserted in this contract, and repeated in all the subsequent, strongly indicated the evils against which it is extremely difficult, if not impossible, to guard a monopoly of this nature and in that country. For in the first contract entered into with the two natives it was strictly forbidden to compel the tenants to the cultivation of this drug. Indeed, very shocking rumors had gone abroad, and they were aggravated by an opinion universally prevalent, that, even in the season immediately following that dreadful famine which swept off one third of the inhabitants of Bengal, several of the poorer farmers were compelled to plough up the fields they had sown with grain in order to plant them with poppies for the benefit of the engrossers of opium. This opinion grew into a strong presumption, when it was seen that in the next year the produce of opium (contrary to what might be naturally expected in a year following such a dearth) was nearly doubled. It is true, that, when the quantity of land necessary for the production of the largest quantity of opium is considered, it is not just to attribute that famine to these practices, nor to any that were or could be used; yet, where such practices did prevail, they must have been very oppressive to individuals, extremely insulting to the feelings of the people, and must tend to bring great and deserved discredit on the British government. The English are a people who appear in India as a conquering nation; all dealing with them is therefore, more or less, a dealing with power. It is such when they trade on a private account; and it is much more so in any authorized monopoly, where the hand of government, which ought never to appear but to protect, is felt as the instrument in every act of oppression. Abuses must exist in a trade and a revenue so constituted, and there is no effectual cure for them but to entirely cut off their cause.