of the landed revenue, with the same suspicious appearance, contrary to the regulations made under Mr. Hastings's own administration.

In the mortifying dilemma to which the directors found themselves reduced, whereby the ruin of the revenues either by the freedom or the restraint of trade was evident, they considered the first as most rapid and urgent; and therefore once more revert to the system of their ancient pre-emption, and destroy that freedom, which they had so lately and with so much solemnity proclaimed, and that before it could be abused or even enjoyed. They declare that, "unwilling as we are to return to the former coercive system of providing an investment, or to abridge that freedom of commerce which has been so lately established in Bengal, yet at the same time finding it our indispensable duty to strike at the root of an evil, which has been so severely felt by the Company, and which can no longer be supported, we hereby direct, that all persons whatever in the Company's service, or under our protection, be absolutely prohibited, by public advertisement, from trading in any of those articles which compose our investment, directly or indirectly, except on account of and for the East-India Company, until their investment is completed."

As soon as this order was received in Bengal, it was construed, as indeed the words seemed directly to warrant, to exclude all natives, as well as servants, from the trade, until the Company was supplied. The Company's pre-emption was now authoritatively re-established, and some feeble and ostensible regulations were made to relieve the weavers, who might suffer by it. The directors imagined, that the reestablishment of their coercive system would remove the evil, which fraud and artifice had grafted upon one more rational and liberal. But they were mistaken; for it only varied, if it did so much as vary, the abuse. The servants might as essentially injure their interest by a direct exercise of their power, as by pretexts drawn from the freedom of the natives; but with this fatal difference, that the frauds upon the Company must be of shorter duration under a scheme of freedom. That state admitted, and indeed led to, means of discovery and correction, whereas the system of coercion was likely to be permanent. It carried force further than served

the purposes of those who authorized it; it tended to cover all frauds with obscurity, and to bury all complaint in despair. The next year therefore, that is, in the year 1776, the Company, who complained that their orders had been extended beyond their intentions, made a third revolution in the trade of Bengal. It was set free again; so far at least as regarded the native merchants; but in so imperfect a manner, as evidently to leave the roots of old abuses in the ground. The supreme court of judicature about this time (1776) also fulminated a charge against monopolies, without any exception of those authorized by the Company. But it does not appear, that anything very material was done in consequence of it.

The trade became nominally free; but the course of business, established in consequence of coercive monopoly, was not easily altered. In order to render more distinct the principles, which led to the establishment of a course and habit of business, so very difficult to change, as long as those principles exist, your committee think it will not be useless here to enter into the history of the regulations made in the first and favourite matter of the Company's investment, the trade in raw silk, from the commencement of these regulations to the Company's, perhaps, finally abandoning all share in the trade, which was their object.

RAW SILK.

THE trade in raw silk was at all times more popular in England than really advantageous to the Company. In addition to the old jealousy, which prevailed between the Company and the manufactory interest of England, they came to labour under no small odium on account of the distresses of India. The public in England perceived, and felt with a proper sympathy, the sufferings of the eastern provinces in all cases, in which they might be attributed to the abuses of power exercised under the Company's authority. But they were not equally sensible to the evils, which arose from a system of sacrificing the being of that country to the advantage of this. They entered very readily into the former, but with regard to the latter were slow and incredulous. It is not therefore extraordinary, that the Company should en

deavour to ingratiate themselves with the public by falling in with its prejudices. Thus they were led to increase the grievance in order to allay the clamour. They continued still upon a larger scale, and still more systematically, that plan of conduct, which was the principal, though not the most blamed, cause of the decay and depopulation of the country committed to their care.

With that view, and to furnish a cheap supply of materials to the manufactures of England, they formed a scheme, which tended to destroy, or at least essentially to impair, the whole manufacturing interest of Bengal. A policy of that sort could not fail of being highly popular; when the Company submitted itself as an instrument for the improvement of British manufactures, instead of being their most dangerous rival, as heretofore they had been always represented.

They accordingly notified to their presidency in Bengal, in their letter of the 17th of March, 1769, that "there was no branch of their trade they more ardently wish to extend, than that of raw silk." They disclaim, however, all desire of employing compulsory measures for that purpose, but recommended every mode of encouragement, and particularly by augmented wages, "in order to induce manufacturers of wrought silk to quit that branch, and take to the winding of raw silk."

Having thus found means to draw hands from the manufacture, and confiding in the strength of a capital drawn from the public revenues, they pursue their ideas from the purchase of their manufacture to the purchase of the material in its crudest state. "We recommend you to give an increased price, if necessary, so as to take that trade out of the hands of other merchants and rival nations." A double bounty was thus given against the manufactures, both in the labour and in the materials.

It is very remarkable in what manner their vehement pursuit of this object led the directors to a speedy oblivion of those equitable correctives, before interposed by them, in order to prevent the mischiefs, which were apparent in the scheme, if left to itself. They could venture so little to trust to the bounties given from the revenues, a trade which had a tendency to dry up their source, that, by the time they had proceeded to the 33rd paragraph of their letter, they revert

to those very compulsory means, which they had disclaimed but three paragraphs before. To prevent silk-winders from working in their private houses, where they might work for private traders, and to confine them to the Company's factories, where they could only be employed for the Company's benefit, they desire, that the newly-acquired power of government should be effectually employed: "should (say they) this practice, through inattention, have been suffered to take place again, it will be proper to put a stop to it, which may now be more effectually done by an absolute prohibition, under severe penalties, by the authority of government.'

This letter contains a perfect plan of policy, both of compulsion and encouragement, which must, in a very considerable degree, operate destructively to the manufactures of Bengal. Its effect must be (so far as it could operate without being eluded) to change the whole face of that industrious country, in order to render it a field for the produce of crude materials subservient to the manufactures of Great Britain. The manufacturing hands were to be seduced from their looms by high wages, in order to prepare a raw produce for our market; they were to be locked up in the factories; and the commodity acquired by these operations was, in this immature state, carried out of the country, whilst its looms would be left without any material but the debased refuse of a market enhanced in its price, and scanted in its supply. By the increase of the price of this and other materials, manufactures, formerly the most flourishing, gradually disappeared under the protection of Great Britain, and were seen to rise again and flourish on the opposite coast of India under the dominion of the Mahrattas.

These restraints and encouragements seem to have had the desired effect in Bengal with regard to the diversion of labour from manufacture to materials. The trade of raw silk increased rapidly. But the Company very soon felt, in the increase of price and debasement of quality of the wrought goods, a loss to themselves, which fully counterbalanced all the advantages to be derived to the nation from the increase of the raw commodity. The necessary effect on the revenue was also foretold very early. For their servants in the principal silk-factories declared, that the obstruction to the private trade in silk must in the end prove detrimental

to the revenues, and that the investment clashes with the collection of these revenues. Whatsoever, by bounties or immunities, is encouraged out of a landed revenue, has certainly some tendency to lessen the net amount of that revenue, and to forward a produce which does not yield to the gross collection, rather than one that does.

The directors declare themselves unable to understand how this could be. Perhaps it was not so difficult. But, pressed as they were by the greatness of the payments, which they were compelled to make to government in England, the cries of Bengal could not be heard among the contending claims of the general court, of the treasury, and of Spital Fields. The speculation of the directors was originally fair and plausible (so far as the mere encouragement of the commodity extended). Situated as they were, it was hardly in their power to stop themselves in the course they had begun. They were obliged to continue their resolution, at any hazard increasing the investment. "The state of our affairs (say they) requires the utmost extension of your investments. You are not to forbear sending even those sorts which are attended with loss, in case such should be necessary to supply an investment to as great an amount as you can provide from your own resources; and we have not the least doubt of your being thereby enabled to increase your consignments of this valuable branch of national commerce, even to the utmost of your wishes. But it is our positive order, that no part of such investment be provided with borrowed money, which is to be repaid by draughts upon our treasury in London; since the licence, which has already been taken in this respect, has involved us in difficulties, which we yet know not how we shall surmount."

This very instructive paragraph lays open the true origin of the internal decay of Bengal. The trade and revenues of that country were (as the then system must necessarily have been) of secondary consideration at best. Present supplies were to be obtained, and present demands in England were to be avoided, at every expense to Bengal.

The spirit of increasing the investment from revenue at any rate, and the resolution of driving all competitors, Europeans or natives, out of the market, prevailed at a period still more early, and prevailed not only in Bengal, but