One difficulty had been removed when, about the time of the grant of the dewannee, the young Nabob, Nujum-ed-Dowlah, had yielded up to the Company the whole of the revenues of the three provinces, in consideration of a fixed annuity. The question, after that, no longer regarded the Nabob, or his revenues; it was only between the Company, their servants, and the natives; and Clive believed that, by an arrangement regarding the salt trade, the interest of all could be conciliated: and it is to be recollected, that the Directors had ordered that the new plan should have a view to "the interest of the Company, and likewise of the Company's servants."[77]
It is unnecessary to enter into all the details of the plan finally adopted in September, 1765, which were chiefly arranged by Mr. Sumner. The salt trade was to be conducted solely by a society composed of all the higher officers of Government, civil and military; their capital was to consist of a certain number of shares; the civil servants, as low down as factors, the military, as low down as majors, were to hold shares; chaplains and surgeons had also their shares; the capital for carrying on the trade was to be furnished by the sharers, in their due proportions. The affairs of the Society were conducted by a committee; the salt was to be furnished to them by contractors, and was to be sold at various grand stations by agents, generally Europeans, appointed by the Committee, the purchasers from whom could carry and sell it over the country at pleasure; 35 per cent. on the price was allowed as a tax to the company[78], who had now come into the Nabob's place; the selling price, at the different remote stations, was also fixed at rates 12 or 15 per cent. below what was found to have been the average rate of the twenty years preceding.
Besides providing ample allowances to the chief of the Company's servants, the great advantage of this plan was, that it allowed them to withdraw their attention wholly from trade.[79] They were sleeping partners of a sure and profitable concern, the whole details of which, without any care on their part, was managed by a committee devoted to the business.
The profits of this Society were, as might have been expected, very great. "The capital of the salt trade," says Clive, writing to Colonel Call[80], "is 32 lacs of sicca rupees, upon which the most moderate expect to make 50 per cent., clear of all charges; others, 75 per cent.; and the most sanguine, 100 per cent. Take the lowest, and a councillor's and a colonel's profit will be 7000l. sterling per annum; a lieutenant-colonel's and junior merchant's, 3000l.; majors' and factors', 2000l. These advantages, and a free open trade, are in lieu of all presents from the natives, and all perquisites disadvantageous to the Company, and dishonourable to the servants." And in a letter[81] to Mr. Palk, the Governor of Madras, after mentioning the large allowance that the trade would give to the different sharers, he adds, "This extraordinary indulgence is in lieu of perquisites; for I intend the Governor and Council shall take a most solemn oath at the Mayor's Court, in presence of all the inhabitants, that they shall receive no perquisites whatever, or other advantages, excepting what arises from their trade; and to this shall be added a penalty-bond of a very very large sum of money. These articles, upon my arrival, were altogether in the hands of the Company's servants and free merchants, and only yielded to the Company 60,000l. per annum, and to the Nabob nothing, for they did not even pay the 2½ per cent. duties. Neither will the method we are pursuing be attended with the least disadvantage to the inhabitants: the same hands who made and worked the salt are still employed at the same rates; and the salt in general will be sold at a much lower price than formerly. Formerly the salt was sold dear or cheap, according to the demand for that article; we shall endeavour to fix upon a price for every market, and always sell it for the same."
The result of the first year's sales was very prosperous, and even exceeded expectation: insomuch that, in forming the plan for the following year, it was resolved to diminish the profits of the proprietors, and to raise those of the East India Company, the duty to whom was now fixed at 50 per cent., which, at a low valuation of the salt, was to produce about 160,000l. Clive had, however, in the course of his progress through the country, observed the inconvenience of employing European agents in the trade; and a very material improvement was introduced, by dispensing with their agency altogether, and selling the article at Calcutta, or where it was made, to the natives only, with permission to convey it wherever they pleased. In this way Europeans were totally removed from any direct interference with the natives in the interior, and the trade was as free as any monopoly can be. This second year's Society commenced in September, 1766.
Not long after it began its operations, letters from the Court of Directors reached Bengal, disapproving of the plan of the first year's Society, and commanding the trade to be thrown open, and left entirely to the natives. In coming to this resolution, they were not so much influenced by any views of the particular merits or demerits of the new plan itself, as by consideration of the mischiefs which had for several years attended the general system of internal trade carried on by the English gentlemen with a high hand, free of duties. Their orders, repeatedly sent out, to pay the legal duties to the Nabob, and to keep within the meaning of the Emperor's firman, had been totally neglected, or provokingly evaded. Repeated revolutions had been the consequence, and immense suffering to the country. "We are fully sensible," say the Court of Directors[82], "that these innovations, and illegal traffic, laid the foundation of all the bloodshed, massacres, and confusion which have happened of late years. We cannot suffer ourselves to indulge a thought towards the continuance of them, upon any conditions whatsoever. No regulations can, in our opinion, be formed, that can be effectual to prevent the like consequences which we have seen." They desire, however, that the duties, as forming part of the revenues of Bengal, should not be abolished. In a letter of the same date, to Lord Clive, the Directors, after bestowing the greatest and most merited praise on the penetration with which he had at once discerned their true interest in every branch of their concerns; the rapidity with which he had restored order, peace, and tranquillity; and the integrity which governed all his actions, proceed to give their resolutions on the inland trade. "The vast fortunes," they observe, "acquired in the inland trade have been obtained by a scene of the most tyrannic and oppressive conduct that ever was known, in any age or country. We have been uniform in our sentiments and orders on this subject, from the first knowledge we had of it; and your Lordship will not, therefore, wonder, after the fatal experience we had of the violent abuses committed in this trade, that we could not be brought to approve it, even in the limited and regulated manner with which it comes to us, in the plan laid down in the Committee's proceedings. We agree in opinion with your Lordship on the propriety of holding out such advantages to our chief servants, civil and military, as may open to them the means of honourably acquiring a competency in our service; but the difficulty of the subject, and the short time we have at present to consider it, have obliged us to defer giving our sentiments and directions thereupon, until the next despatch." The letter concludes with entreaties to him to remain for another year in India, and with holding out the prospect of some solid permanent retribution, corresponding to his most important services.
The real causes of the resolutions of public bodies do not always appear in their public acts. To deprive their servants of their principal means of subsistence, without substituting any authorised allowance in its place, was bad policy in itself, and was reducing Lord Clive, in the midst of his exertions, to a very painful dilemma. Mr. Scrafton, in a letter[83] to Lord Clive, explains their secret reasons. The Proprietors had begun to clamour for an increase of dividend, which the Directors thought unsuitable to the situation of the Company's affairs. "This," says he, "has induced the Directors to defer the consideration of the gratification of the servants on abolishing the salt trade. Such consideration could not be but for a vast sum; and if it had got wind that such gratifications were ordered, the Proprietors would be outrageous for an increase of the dividend. Though we cannot open our minds upon it, yet it appears to me an increase of dividend must take place at the Quarterly Court in June; and then the Court will be under no restraint, but will give a per centage on the revenues, in which the Governor will have a great share, in lieu of trade; the rest among the Committee, Council, colonels, and ten below Council, but no lower."—"Your Lordship may be assured it will take place; for, when the last paragraph was added to the letter to you, the Committee declared it was their meaning and intention to do it by the next ship."
The letters of the Directors, the first which Clive had received in answer to his communication on the plan which he had formed, as directed by them, for carrying on the internal trade, reached him only in December, 1766, a month before he left India. He had for some weeks been confined to his chamber by a very severe illness, from which his life was in danger. He now felt himself placed in a most painful predicament, between the Court of Directors and the immediate difficulties of his situation with the civil and military servants. He believed that, with long attention and care, he had succeeded in disarming the salt trade of most of its evils, and by its means had secured to the Company's superior servants a lawful for an unlawful income. But the commands of the Directors were positive; and, though he was of opinion that they were founded on mistake, it was his wish to conform to them. The Company, though aware of the address and spirit of command with which he had checked the machinations of their civil servants in 1765, were still ignorant, when their orders were given, of his still more difficult triumph over the mutiny of their military officers. They had, most justly and wisely, deprived their servants of their means of illicit gain; they now rashly deprived them also of what had been substituted as a lawful provision; they referred these discontented and powerful men, who had vast wealth within their reach, to a future and uncertain time, when their masters should be at leisure to pay some attention to their immediate and urgent necessities. An inferior man would have hesitated and faltered: Clive saw that decision was necessary for the crisis. He could not undo his own work of pacification and reform. The affairs of the Society were too far advanced to be discontinued all at once. He therefore confirmed the grant to the Society, but declared that it was to terminate at the conclusion of the current year, the 1st of September, 1767.[84] At the same time, the Select Committee of Calcutta, by their letter of the 26th of January, 1767, while they mentioned that the orders for discontinuing the Society had been complied with, remonstrated strongly with the Court of Directors on the occasion; calling on them to review their opinion.
Such is an outline of the history of the Society of Trade during Clive's government. He formed a society in unison, as he supposed, with the spirit of the orders of the Court of Directors, which desired him, in the new plan of trade intended to be formed, to consult the benefit of three parties—the Nabob, the Company, and its servants. The Nabob's interest had merged in the Company's. The interest of the natives, however, the most important of all, was consulted by their restoration to the benefits of the trade, from which recently they had nearly been excluded; and by the exclusion of Europeans from any participation in the details of it. How the interests of the Company's servants were to be consulted by any plan that admitted them to the profits, yet excluded them in every shape from the trade, it is not easy to imagine. Lord Clive and the Committee did, therefore, what then, and in all succeeding times, it has been found necessary to do, in India, and in every distant possession, to form and execute a plan on their own responsibility, and to leave the future approbation or disapprobation to their distant masters. Inconvenient as this may be, it is an inconvenience inseparable from distant legislation.
A few words may here be said on the future history of the salt trade. The Court of Directors, after receiving the letters of the Select Committee, still persisted in their desire of abolishing the Society, and of removing Europeans from this and all other concern with the inland trade of the country. They therefore, by their letter of the 20th of November, 1767, written eighteen months after their former letter, ordered the Society of Trade to be abolished, and the salt-pans to be sold by public auction, excluding all Europeans from being bidders or owners, directly or indirectly. Instead of the benefits resulting to the senior servants from this trade, an allotment of 2½ per cent. on the net revenue of the dewannee was assigned to them in certain shares; and a small increase of pay to captains and subalterns.[85]