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its probable decline, and that such extensive supplies could not be continued. The advances to the Board of Trade became less punctual, and many disputes arose about the time of making them. However, knowing that all their credit at home depended on the investment, or upon an opinion of its magnitude, whilst they repeat their warning of a probable deficiency, and that their “finances bore an unfavorable aspect,” in the year 1779 they rate their investment still higher. But their payments becoming less and less regular, and the war carrying away all the supplies, at length Mr. Hastings, in December, 1780, denounced sentence of approaching dissolution to this system, and tells the Directors that “he bore too high a respect for their characters to treat them with the management of a preparatory and gradual introduction to an unpleasing report: that it is the only substantial information he shall have to convey in that letter.” In confidence, therefore, of their for titude, he tells them without ceremony, “ that there will be a necessity of making a large reduction, or possibly a total suspension, of their investment;that they had already been reduced to borrow near 700,0001. This resource," says he, “cannot last; it must cease at a certain period, and that perhaps not far distant."
He was not mistaken in his prognostic. Loans now becoming the regular resource for retrieving the investment, whose ruin was inevitable, the Council enable the Board of Trade, in April, 1781, to grant certificates for government bonds at eight per cent interest for about 650,0001. The investment was fixed at 900,0001.
But now another alarming system appeared. These
new bonds overloaded the market. Those which had been formerly issued were at a discount; the Board of Trade was obliged to advance, therefore, a fourth more than usual to the contractors. This seemed to satisfy that description of dealers. But as those who bought on agency were limited to no terms of mutual advantage, and the bonds on the new issue falling from three to eight, nine, and ten per cent discount, the agents were unable to furnish at the usual prices. Accordingly a discount was settled on such terms as could be made : the lowest discount, and that at two places only, was at four per cent; which, with the interest on the bonds, made (besides the earlier advance) at the least twelve per cent additional charge upon all goods. It was evident, that, as the investment, instead of being supported by the revenues, was sunk by the fall of their credit, so the net revenues were diminished by the daily accumulation of an interest accruing on account of the investment. What was done to alleviate one complaint thus aggravating the other, and at length proving pernicious to both, this trade on bonds likewise came to its period.
Your Committee has reason to think that the bonds have since that time sunk to a discount much greater even than what is now stated. The Board of Trade justly denominates their resource for that year sinking credit of a paper currency, laboring, from the uncommon scarcity of specie, under disadvantages scarcely surmountable.” From this they value themselves on having effected an ostensible provision, at least for that investment.” For 1783 nothing appears even ostensible.
By this failure a total revolution ensued, of the most
extraordinary nature, and to which your Committee wish to call the particular attention of the House. For the Council-General, in their letter of the 8th of April, 1782, after stating that they were disappoint. ed in their expectations, (how grounded it does not appear,) “ thought that they should be able to spare a sum to the Board of Trade,” — tell the Court of Directors, “ that they had adopted a new method of keeping up the investment, by private subscribers for eighty lacs of rupees, which will find cargoes for their ships on the usual terms of privilege, at the risk of the individuals, and is to be repaid to them according to the produce of the sales in England,”—and they tell the Directors, that “a copy of the plan makes a number in their separate dispatches over land.”
It is impossible, in reporting this revolution to the House, to avoid remarking with what fidelity Mr. Hastings and his Council have adhered to the mode of transmitting their accounts which your Committee found it necessary to mark and censure in their First Report. Its pernicious tendency is there fully set forth. They were peculiarly called on for a most accurate state of their affairs, in order to explain the necessity of having recourse to such a scheme, as well as for a full and correct account of the scheme itself. But they send only the above short minute by one dispatch over land, whilst the copy of the plan itself, on which the Directors must form their judgment, is sent separately in another dispatch over land, which has never arrived. A third dispatch, which also contained the plan, was sent by a sea conveyance, and arrived late. The Directors have, for very obvious reasons, ordered, by a strict injunction, that they should send duplicates of all their dispatches by
every ship. The spirit of this rule, perhaps, ought to extend to every mode of conveyance.
In this case, so far from sending a duplicate, they do not send even one perfect account. They announce a plan by one conveyance, and they send it by another conveyance, with other delays and other risks.
At length, at nearly four months' distance, the plan has been received, and appears to be substantially that which had been announced, but developing in the particulars many new circumstances of the greatest importance. By this plan it appears that the subscription, even in idea or pretence, is not for the use of the Company, but that the subscribers are united into a sort of society for the remitting their private fortunes : the goods, indeed, are said to be shipped on the Company's account, and they are directed to be sold on the same account, and at the usual periods of sales ; but, after the payment of duties, and such other allowances as they choose to make, in the eleventh article they provide “ that the remainder of the sales shall revert to the subscribers, and be declared to be their property, and divided in proportion to their respective shares.” The compensation which they allow in this plan to their masters for their brokerage is, that, if, after deducting all the charges which they impose, “the amount of the sales should be found to exceed two shillings and twopence for the current rupee of the invoice account, it shall be taken by the Company.” For the management of this concern in Bengal they choose commissioners by their own authority. By the same authority they form them into a body, they put them under rules and regulations, and they empower them also to make regulations of their own. They remit, by the like authority, the
duties to which all private trade is subject; and they charge the whole concern with seven per cent, to be paid from the net produce of the sales in England, as a recompense to the commissioners: for this the commissioners contract to bear all the charges on the goods to the time of shipping.
The servants having formed this plan of trade, and a new commission for the conduct of it, on their private account, it is a matter of consideration to know who the commissioners are. They turn out to be the three senior servants of the Company's Board of Trade, who choose to take upon them to be the factors of others for large emoluments, whilst they receive salaries of two thousand pounds and fifteen hundred pounds a year from the Company. As the Com. pany have no other fund than the new investment from whence they are to be paid for the care of their servants' property, this commission and those salaries being to take place of their brokerage, they in effect render it very difficult, if not impossible, for them to derive advantage from their new occupation.
As to the benefit of this plan: besides preventing the loss which must happen from the Company's ships returning empty to Europe, and the stopping of all trade between India and England, the authors of it state, that it will open a new channel of remittance, and abolish the practice, by precluding the necessity, of remitting private fortunes by foreign bottoms, and that it may lead to some permanent mode for remittance of private fortunes, and of combining it with the regular provision of the Company's investment, — that it will yield some profit to the Company without risk, and the national gain will be the same as upon the regular trade.”