Meanwhile, in Bengal, when September, 1767, arrived, these last orders having not yet been received, nor indeed written, another year was allowed by Mr. Verelst, the new Governor, and his Council, to the Society of Trade, to collect their debts, and realise their capital. It was not till September, 1768, that it ceased; and the Court of Directors having, in December, 1769[86], by a sudden and singular departure from their opinions, so strongly announced, sent out instructions to lay open the inland trade to all persons, as well natives as Europeans, a proclamation to that effect was published at Calcutta, on the 12th of December, 1770. The effect of this essential change in the Company's plans on the future prosperity of the provinces, it is no part of the present Memoir to investigate; but it is very plain, that, by admitting Europeans into the inland trade, in the state in which the country then was, they really did away with all the benefit that could in any way have been expected to arise from abolishing the monopoly.
But whether Lord Clive's opinions regarding the trade in salt were sound or not, one thing at least is evident,—he was perfectly conscientious in the advice he gave, and on the measures he adopted, on that subject. This is plain from his whole conduct, and from his correspondence, public and private, with numerous persons, while in India. Nor did his anxiety on the subject cease, even after he had reached England, when all private interest in the subject, if he can be supposed ever to have had any, must have been over. Finding accidentally, some months after his arrival, that the plan of abolishing the Salt Society continued to be entertained, he explained his views on the subject to the Committee of Treasury and Correspondence of the Directors, in a detailed and laboured letter.[87] He pointed out the advantages of the trade as then regulated, as the best fund that the Company could appropriate for the payment, without grudging or envy, of their superior servants: that it enabled them to regulate the emoluments of their servants, according to their own wishes; that by it, their servants had the appearance of being paid, not by the Company, but by the profits of their own trade,—an advantage not attending any payment by a percentage on the revenue. "If you grant a commission upon the revenue," says he, "the sum will not only be large, but known to the world; the allowance being publicly ascertained, every man's proportion will at times be the occasion of much discourse, envy, and jealousy; the great will interfere in your appointments, and noblemen will perpetually solicit you to provide for the younger branches of their families." It is evident, that his views originated not in principles of political economy, but of policy, forced upon him by the circumstances in which India was placed. His efforts were directed to insure a desirable object, in what he deemed, not certainly the best, but the only practicable mode.
In spite of this remonstrance, the Committee came to the resolution of throwing the trade open, imposing only a duty of 10 rupees on the hundred maunds of salt. Lord Clive again addressed them[88], showing that they were in reality giving up 300,000l. per annum, for a tax of only 31,500l.; and pointed out that, even on their plan, the trade would continue in some degree a monopoly, and that the servants would still be concerned in it to what extent they pleased, under their banyans and black merchants. His expressions in writing the same day to Mr. Verelst, show how sincere and deep-rooted his opinions on the subject were. Sending him a copy of his letter to the Committee, he adds, "What attention they will pay to my representations I know not: but I have such confidence in your honour and zeal for the Company's welfare, that I cannot help hoping you will take care that the Company be not deprived of 300,000l. per annum, however peremptory the orders of the Directors may be."
The letter of the 20th of November, 1767, already mentioned, was written soon after. The only effect of this remonstrance was a change by which the duty was to be advanced to a sum not exceeding 120,000l. Lord Clive points out, in several confidential letters to Mr. Verelst, the want of information of the Directors on this occasion, and the pernicious consequences likely to result from the change. That he was sincere, admits not of a doubt. His opinions on the subject he maintained uniformly to the last hour of his life, and the events seem to have justified his foresight.
The tax, as regulated by him, certainly was a monopoly, and so far was exceptionable; but he might justly maintain that the real question was, Are the evils arising from this monopoly, or from the licentiousness of the rulers of the country, if penuriously paid, most to be dreaded? and of this he had no doubt. Even from the question of the comparative merits of a monopoly and free trade, political considerations, unfortunately, could not be altogether excluded. The society of trade was abolished under pretence of being a monopoly. This was not, however, the real cause. That society excluded from the salt trade a body of powerful and wealthy Europeans, who raised a clamour, in name of the natives, but solely for their own private views. On the plan, as reformed by Lord Clive, the natives were restored to their former employment, and Europeans excluded. But when the trade was thrown open to all indiscriminately, natives and Europeans, the change, though in form the result of sound principles of government and of political economy, was really, in substance, quite the reverse. The two parties did not come into the field on equal terms; the society of trade had a direct interest that no oppression should be exercised on the natives in their dealings over the country; and being composed of the leading men of the government, had the means of affording them protection. But when the trade was reduced to a scramble between Europeans having the whole authority of the country, and natives who had none; when redress was to be sought by the natives from their very rivals and competitors; their condition became hopeless; and that fact sufficiently accounts for the melancholy nature of the history of the inland trade in succeeding years.
Two charges connected with this transaction of the salt trade were afterwards brought against Lord Clive: the first, that he obstinately persisted in disobeying the orders of the Company for its abolition; the other, that by having a share in it as Governor, he in some measure deviated from his plan of not trading, and of deriving no pecuniary benefit to himself from his voyage to India.
As to the first, we have seen that several letters were certainly received from the Court of Directors, after his arrival in Bengal, declaring their decided hostility to their servants engaging in the inland trade at all, and especially in that of salt. But a comparison of dates has shown that these letters were directed, not against any measures of Lord Clive, which were not then known, but against the grossly unjust and pernicious proceedings which took place before his arrival. To the letter of the Select Committee of Calcutta, of the 30th of September, 1765, detailing the plan for the first society of trade, an answer, dated the 17th of May, 1766, was received on the 8th of December following: and so far was Lord Clive from obstinately persisting in continuing the trade, as has been asserted, that on the 24th of the following month, while hardly yet recovered from a dangerous illness, he declared the society abolished, at the close of the season. He had fixed so limited a period as one year for its duration, because it was only experimental, and to admit of any change suggested by the Directors.
The second charge was, that, as a sharer in this society of trade, he had deviated from his intention expressed in his letter to the Company, not to improve his fortune by his voyage to India.
His share as Governor in the society of trade (a concern, the details of which were entirely confided to a committee, and the operations of which he knew only from their result) was certainly very different in its nature from private trade on his own account. To his intention not to increase his private fortune by the emoluments of his office, or by trade in any shape, he religiously adhered. Of the allowances to the Governor, the honorary presents that could not be refused without giving offence, the proceeds of the Governor's share of the society of trade, with all other emoluments annexed to his office, he caused a distinct account to be kept. Out of it were defrayed his expenses as Governor, and by the surplus he did not benefit. He had taken with him to India three gentlemen: Mr. Maskelyne, his friend and near connection; Mr. Henry Strachey, his private secretary; and Mr. Ingham, his family physician;—no large establishment for a Governor leaving his family and going abroad in the circumstances Lord Clive did. The sums in question were employed in remunerating them, and some persons of his household; and by the account kept of these and of all other sums received by him from the time he left England till his return, which was communicated to the Company, and afterwards laid before Parliament, far from having added, in any respect, to his private fortune, as this charge supposes, it has never been disputed that there was a balance of 5816l. 16s. 9d. against it. If these gentlemen were remunerated, therefore, it was not at the Company's expense, by any extraordinary charges upon them; but at the expense of the Governor, who gave up to them the allowances which he might have retained to himself.[89] The charge was really as unfounded as it was ungracious, and, it is to be observed, was brought against him by men who had shown no such pecuniary delicacy.
Of another charge, also brought some years after, against Lord Clive's administration, that of having fixed an improper rate of exchange between the gold and silver coinage of Bengal, it is not necessary to say much. In India, gold and silver coin are articles of trade even more directly than in most countries in the world, and the variation in their relative value is often extremely great. In the year 1766, a scarcity of silver existed in Bengal, from the quantity exported to China, from decreased importation, and other causes. It was known that there was much gold in the country, in various shapes; and to inexperienced political economists it seemed a very reasonable expedient to give a premium for its being brought out. A favourable rate was therefore fixed on the new gold mohur then coined. This certainly had the effect of bringing gold to the mint; but, as might have been foreseen, only increased the evil, by causing still more silver coin to be withdrawn from circulation. The bankers and shroffs of the country, who are proficients in the science of exchange, naturally paid their demands in gold, and exported or hoarded the silver. The gold coin they were unwilling to receive at its legal value, without a large batta, or exchange, in reality to compensate its inferior intrinsic value as compared with silver, the ordinary circulation of the country. This necessary measure of self-defence was regarded as a trick or fraud in trade. The proclamation of 30th June, 1766, directing the coin to be taken at certain rates, was one of those ineffectual attempts to force circumstances, formerly so usual with politicians of every class and of every country. It was, of course, ineffectual; and necessarily occasioned no small inconvenience to merchants and retail traders. Its effects were chiefly felt after Clive had left India. The Court of Directors, from their correspondence, seems to have been nearly as much puzzled as the Council of Calcutta; though the fact, that the difference of market value between the gold and the silver coin rose to 17½ per cent., ought to have afforded an easy explanation of the difficulty.[90] Yet those who recollect the discussions, in our own times, in the British parliament, on the difference of value between the guinea and the bank note, and on the bullion question in general, will not be disposed to view with much surprise a similar difficulty that occurred in a distant country, half a century before.