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A 
 
 REVIEW, 
 
 e^c, s§c, ^c. 
 
REVIEW 
 
 FINANCIAL SITUATION 
 
 OF THE 
 
 EAST. INDIA COMPANY, 
 
 IN 1824. 
 
 By HENRY ST. GEORGE TUCKER, ESQ. 
 
 i' 
 
 LONDON: 
 
 PRINTED FOR KINGSBURY, PARBURY, AND ALLEN, 
 LEADEN HALL STREET. 
 
 1825. 
 

 ...^^^ 
 
 v^^-"'" 
 
 ^^^ 
 
 LONDON: 
 PK!KTE1> J8Y COX AND UAYUS» GREAT QUKEN bXKEfiT. 
 
JJtL. 
 
 TO 
 THE RIGHT HONOURABLE 
 
 GEORGE CANNING, 
 
 ^c. Sfc. 8fc. 
 
 SIR: 
 
 As the Friend of India, and as the 
 Minister and Friend of your Country, I 
 presume to address to you the following 
 Essay ; not merely for the purpose of pay- 
 ing a just tribute of respect, but with the 
 view of calling your attention to a question, 
 which deeply affects the interests and welU 
 being of the Agricultural Population of 
 British India ; and which may, eventually, 
 affect the tranquillity and security of our 
 Possessions in the East. 
 
 If I have not mistaken your character, 
 the prospect of doing a public good, or of 
 averting an impending evil, would recom- 
 mend 
 
6 
 
 mend any question to your best attention ; 
 but, associated as you have been in the 
 Administration of India, the People of that 
 Country may be considered to have parti- 
 cular claims upon you ; and I may be 
 permitted to add, that, by exerting your 
 influence to promote the prosperity of this 
 remote, but valuable dependency, you will 
 consult the best interests of the Empire 
 at large, and thus discharge the sacred 
 duty imposed on you as a Minister of the 
 Crown. 
 
 I have the honour to be, 
 
 With great respect, 
 
 SIR, 
 
 Your obedient humble servant, 
 
 H. ST. G.TUCKER. 
 
 Upper Portland Place, 
 March 1825. 
 
ADVERTISEMENT. 
 
 The following' pages were intended to form 
 part of a larger work ; but^ as the undertaking 
 originally contemplated could not have been 
 completed for a considerable time ; and as 
 the subject which these pages embrace is of 
 more immediate interest ; I have been induced 
 to submit to the Public the present Essay^ de- 
 tached from other matter. And if I should have 
 succeeded in exhibiting a distinct Analysis of the 
 Accounts of the East- India Company, and in 
 giving a just delineation of the Financial Situation 
 of that body, I may indulge the hope that I shall 
 have performed no unacceptable service. 
 
INTRODUCTORY OBSERVATIONS. 
 
 Although Great Britain has possessed 
 for more than half a century, in the remote 
 regions of the East, a territory of vast ex- 
 tent, containing a numerous and industrious 
 population, and rich in its manufactures, 
 as well as in the productions of the soil, it 
 still remains a problem whether this posses- 
 sion is to be esteemed a treasure, or the 
 source of weakness to the mother country. 
 
 That any doubt should exist upon such a 
 question, can arise only from our ignorance 
 of those facts and circumstances upon which 
 the solution of the problem must depend. 
 We are, in truth, very imperfectly ac- 
 quainted with the state of our empire in the 
 East ; our ignorance has produced indiffe- 
 rence towards the country and its inhabi- 
 
 B tants ; 
 
% 
 
 tants ; and it would not be extraordinary 
 if, under the influence of indifference and 
 neglect, a possession, otherwise of the 
 highest value, should become worthless in 
 our hands. 
 
 On the continent of Europe the posses- 
 sion of India has hitherto been regarded 
 with very diflferent feelings : for as it has 
 long been observed, that those countries 
 which successively engrossed the commerce 
 of Asia, had all attained an extraordinary 
 degree of wealth, power, and commercial 
 prosperity, it was assumed, and with some 
 appearance of reason, that our territorial 
 dominion in the East had raised Great Bri- 
 tain from her natural level to that high and 
 pre-eminent station which she at present 
 occupies. That the possession of British 
 India has contributed mainly to augment 
 the resources of this country, and to give it 
 weight and influence among the nations of 
 Europe, is a proposition which I have not 
 now to advance for the first time ; but, on 
 the other hand, it is as much a mistake to 
 refer our commercial grandeur, our wealth, 
 and our power, exclusively to this source, 
 
 as 
 
as it would be to maintain that British 
 India has become a burthen to the mother 
 country. 
 
 Strange as it may appear, this latter pro- 
 position has now been put forth, and from 
 a quarter where, heretofore, it had been so 
 much the fashion to exaggerate the value 
 of our Eastern possessions. M. Say, one of 
 the most celebrated of the French econo- 
 mists, in an essay lately published, has grave- 
 ly maintained, that British India is a charge 
 upon this country to the extent of above 
 two millions sterling per annum ; and that 
 far from being viewed, as it long has been, 
 by Russia and France with feelings of envy 
 and jealousy, it ought rather to be regarded 
 as an excrescence which wastes and con- 
 sumes a portion of our vital strength. 
 
 If the opinions of this philosopher exer- 
 cised no influence beyond the continent of 
 Europe, we might safely leave them to pro- 
 duce their effects ; and if they tended in any 
 degree to allay the spirit of avarice and the 
 rage of ambition among our continental 
 rivals, we should have reason to congratu- 
 
 B 2 late 
 
late them and M. Say on the success of his 
 speculations. 
 
 But, unfortunately, there are persons in 
 this country who are sufficiently prone to 
 adopt the same erroneous notions ; and 
 whose errors, far from conducing to any 
 salutary end, must exert a baneful influence 
 over the destinies of India. 
 
 In all cases, erroneous opinions are liable 
 to produce erroneous measures ; and in the 
 present instance, the impression that India 
 is become a bankrupt concern, and a drain 
 upon the resources of the mother country, 
 would not only have a tendency to depre- 
 ciate the value of the large capital which is 
 invested in the Company's securities, both 
 abroad and at home, but it would also pro- 
 bably lead to a course of policy highly 
 injurious to the interests of both countries. 
 
 It is remarkable that, at the very moment 
 when M. Say declares the East-India Com- 
 pany to be in a state of bankruptcy, the 
 Marquess of Hastings should announce to 
 that body the existence of a surplus reve- 
 nue in India to the amount of four millions 
 
 sterling 
 
5 
 
 sterling per annum ; but these contradic- 
 tory statements will be found, in both in- 
 stances, to have been hazarded upon insuf- 
 ficient grounds. A net revenue of four 
 millions has never been realized by the 
 Company, in any one year since our acqui- 
 sition of territorial dominion in India ; nor 
 is it to be desired, I think, that such a 
 revenue should be drawn from the coun- 
 try : but if M. Say's deficit of two mil- 
 lions be deducted from his Lordship's sur- 
 plus of four millions, a near approximation 
 will be made to the truth. 
 
 But the contradictions and errors ob- 
 servable in the different descriptions which 
 have been given of the Company's affairs, 
 and of the condition of British India, are 
 not by any means confined to the financial 
 branch of the subject. The Government 
 has been described as a pure despotism ; 
 the ancient institutions of the country are 
 represented to have been wantonly sub- 
 verted ; the rights of the tenantry to have 
 been disregarded and invaded; while the 
 hereditary aristocracy is said to have dis- 
 appeared 
 
appeared from the face of the land ; new 
 systems, unsuitable to the character and 
 habits of the people, and abhorrent to 
 their feelings, are stated to have been in- 
 troduced by rash innovators ; the public 
 revenue is supposed to be extracted from 
 our native subjects by means of grinding 
 monopolies ; and, in short, our dominion, 
 far from being recognised as the source of 
 mutual benefit, has been represented as 
 entailing poverty upon India, without pro- 
 ducing any corresponding advantage to the 
 mother country. 
 
 These sweeping allegations would all 
 require a distinct and particular exami- 
 nation ; and he who should faithfully and 
 successfully execute the work, would per- 
 form a useful and important service. My 
 present undertaking will be confined within 
 narrower limits, and be directed to an ob- 
 ject more within my reach. I propose to 
 offer a digest of the Company's accounts, 
 for the purpose of removing misconcep- 
 tions upon matters of fact, and of exhibit- 
 ing a clear and connected view of the pre- 
 sent condition of their finances. 
 
 It 
 
It is scarcely necessary for me to point 
 out how essential it is, that those who have 
 invested their funds in the securities of the 
 Company, either abroad or at home, should 
 possess correct information with respect to 
 the state of the concern in which their 
 property has been embarked. The public 
 securities of the Indian Governments have 
 been negotiated of late at a premium of 
 near forty per cent., and East-India Stock 
 bears at present a premium of one hundred 
 and ninety per cent. ; and it is obvi- 
 ously of the last importance that the cre- 
 ditors abroad, and the proprietors at home, 
 should know whether this enhanced valua- 
 tion of their capital rests upon any solid 
 foundation. The debt of India is secured 
 on the territory ; but this territory M. Say 
 pronounces to be an unproductive posses- 
 sion. The dividends on India Stock are 
 made payable by Act of Parliament from 
 the commercial profits of the Company, 
 and, failing such profits, from the sur- 
 plus revenue of India; but M. Say de- 
 clares that there does not exist either profit 
 or surplus. This assertion I shall not find 
 
 it 
 
' 8 
 
 it difficult to controvert ; but it will not fol- 
 low as matter of course that, upon a sober 
 consideration of the Company's situation, 
 financial and political, a rational conclusion 
 can be drawn, either that the present an- 
 nuity will be guaranteed to the proprietors 
 in perpetuity, or that they will obtain ulti- 
 mately a full indemnification for the capital 
 which they may have embarked. 
 
 Moderate as are my pretensions, I may 
 have engaged in an undertaking beyond 
 my strength : but the question is one which 
 calls for professional experience, rather than 
 for the higher powers of mind ; and as I 
 shall not deviate far from the beaten path 
 which has long been familiar to me, the 
 reader will not, I hope, see occasion to 
 charge me with presumption. 
 
A 
 
 REVIEW, 
 
 CHAPTER I. 
 TERRITORIAL REVENUE OF BRITISH INDIA. 
 
 *' On est done fond^ a regarder la Compagnie Anglaise des Indes comme 
 ** une association, tout a la fois commer^ante et souveraine, qui, ne gagnant 
 ** rien ni dans sa souverainete, ni dans son commerce, est reduite a emprunter 
 ** chaque ann^e de quoi distribuer a ses actionnaires un semblant de profit." 
 '^Essai Jlistoriguey etc. Par J. B. Say. 
 
 M. SaYj in a late essay published in " la Re- 
 vue Encyclopedique/' has exhibited a statement 
 of the finances of the East-India Company, which 
 is not only unsupported by any recent documents, 
 but which is completely at variance with the 
 public accounts annually submitted to the British 
 Parliament under the sanction of the highest au- 
 thority. 
 
 This writer has too high a reputation at stake to 
 put forth a statement intended to mislead; and 
 
 c the 
 
10 
 
 the just and liberal admissions which he seems 
 disposed to make in favour of our administration of 
 India^ furnish a presumption that he is by no means 
 deficient in that spirit of candour^ which should 
 characterize the philosopher and the historian. 
 
 M. Say would apt)ear, however^ to have con- 
 sulted very old authorities, and to iiave taken as 
 the foundation of his estimates the results of a 
 year of actual war, or averages deduced from a 
 series of years, in which war very generally pre- 
 vailed. But if this be the correct mode of pro- 
 ceeding for the purpose of ascertaining the finan- 
 cial situation of a country, in what kingdom of 
 Europe shall we discover any thing beyond the 
 traces of a deplorable bankruptcy ? If an average 
 of thirty years were taken for the purpose of de- 
 termining the revenue and charge of Great Britain, 
 instead of an annual surplus of five millions ap- 
 plicable to the extinction of debt, should we not 
 be a[)palled with the re-appearance of a spectre 
 which once threatened to paralize the energies of 
 this nation ? If the process apparently adopted by 
 M. Say were applied to this country, we should 
 be found struggling still with an annual deficit 
 of twenty millions, instead of scattering, with a 
 lavish hand, our surplus capital over every part of 
 the civilized world. 
 
 In India we have had our full share of warfare 
 in common with the rest of mankind, and we 
 
 have 
 
11 
 
 have not only been engaged in wars, originating 
 in our own local and peculiar objects and inte- 
 rests^ but we have incidentally been led into 
 hostilities, whose origin could be distinctly traced 
 to the political relations of the parent state 
 in Europe. The late Sultan 9f Mysore, after 
 having been subdued and stript of half his do- 
 minions, would scarcely have dared, single- 
 handed, to provoke that power which had over- 
 thrown him in the fulness of his strength, if he 
 had not been encouraged to expect a powerful 
 auxiliary in the republican government of France. 
 The fabulous representations and extravagant 
 suggestions of an obscure French adventurer,* sti- 
 mulating the pride, the restless ambition, and 
 deep-rooted resentment of Tippoo Sultan, en- 
 gaged him to make overtures to the Governor 
 of the Isle of France, which not only manifested 
 
 a hostile 
 
 * This is an instance of the most important events being produced 
 by very mean instruments. Ripaud, the French adventurer alluded 
 to, had been tlie master of a small privateer, and was detained by 
 Tippoo Sultan at Seringapatam. To extricate himself from this state 
 of durance which had become extremely irksome to him, he repre- 
 sented to the Sultan that there were fleets and armies at the Isle of 
 France ready to obey his call, and that he had only to despatch him 
 {Ripaud) to the Island in order to obtain a force, which would 
 enable him to crush his mortal enemy, the English. The papers of 
 this Frenchman, which were found at Seringapatam after the capture 
 of that place, are extremely curious. 
 
 c 2 
 
12 
 
 a hostile spirit, but which justified the Marquess 
 of Wellesley in proceeding against that infatuated 
 despot as the ally of France and the enemy of the 
 British power. 
 
 In the same manner the ascendancy of a French 
 party at Hyderabad gave occasion to that bold 
 and masterly enterprize of Lord Wellesley's Go- 
 vernment, by which a large army, disciplined 
 and commanded by French officers, was suddenly 
 surrounded and disarmed without the loss of a 
 man. So, also, the predominance of French in- 
 fluence at the Court of Dowlut Rao Scindiah, 
 and the formidable position occupied by the nu- 
 merous forces of General Perron on our most 
 accessible frontier, furnished perhaps the best 
 justification of those extensive military operations 
 which, in 1804, terminated in the expulsion of 
 the Mahratta power from the North of Hindoos- 
 tan, and in placing the imperial city of Delhi 
 and the once august house of Timour, under the 
 protection of a company of British merchants. 
 
 The wars in which the Marquess of Hastings 
 engaged had their origin, it is true, in our local 
 politics, and may be regarded as exclusively our 
 own. We had no French interests to counteract 
 or destroy : no French Generals to displace or 
 overthrow ; and if these wars were of annual oc- 
 currence, or of continued duration, the statement 
 of M. Say, with respect to the pecuniary value 
 
 of 
 
13 
 
 Deficit in 
 Sicca Rupees. 
 
 of our Indiaa possessions,, would not be entirely 
 destitute of foundation. 
 
 Without, however, indulging in speculations, 
 either with regard to the past or the future, I will 
 proceed to exhibit the actual result of the 
 account of Indian revenue and expenditure 
 for a period of thirty years ; and as this statement 
 has been prepared from official and authentic 
 documents, it may be received with confidence. 
 
 Surplus in 
 GOVERNMENT. Sicca Rupees. 
 
 1792-3* Lord Cornwallis' . .. .1,65,57,675 
 
 1793-4* Lord Cornwallis' and 
 
 Lord Teignmouth's . .1,22,12,636 
 
 1794-5.. Lord Teignmouth's .. 94,58,486 
 
 1795-6.. Do 64,66,225 
 
 1796-7.. Do 19,70,197 
 
 1797-8.. Do 
 
 1798-9 . .Lord Wellesley's 
 
 1799-1800 Do. 
 
 1800-1 . . Do 
 
 1801-2.. Do 
 
 1802-3.. Do 96,35,832 
 
 1803-4 . . Do 98,95,346 
 
 1804-5 . . Do 2,69,69,509 
 
 32,73,982 
 75,97,009 
 14,10,455 
 89,16,178 
 4,01,211 
 
 * In the revenue of 1792-3 is included the sum of Sicca Rupees 
 16,83,514; and in that of 1793-4, the sum of Sicca Rupees 33,67,028, 
 received at Fort St. George from the late Tippoo Sultan in satisfaction 
 of the conditions of the treaty concluded with Lord Cornwallis. So, 
 also, in 1815-16, the sum of Sicca Rupees 95,68,750 was received 
 from the Nawaub of Oude for the cession of Kyraghur ; apd although 
 none of the^ sums properly constitute revenucj they augment the 
 
 . surplus, 
 
14 
 
 Deficit in 
 Sicca Rupees. 
 
 2,86,49,795 
 
 1,02,06,904 
 
 Surplus in 
 GOVERNMENT. Sicca Rupees. 
 
 1805-6* Lord W.'s and Sir G. 
 
 Barlow's . 
 
 1806-7.. Sir G. Barlow's and 
 
 Lord Minto's 
 
 1807-8 . .Lord Minto's 10,39,730 
 
 1808-9 .. Do 5,25,883 
 
 1809-10.. Do 33,16,866 
 
 1810-11.. Do 42,36,094 
 
 1811-12.. Do 1,30,47,521 
 
 1812-13.. Do 83,04,269 
 
 1813-14 . .Lord Minto's and Lord 
 
 Hastings' 1,45,33,190 
 
 1814-15 . .Lord Hastings' 1, 18,57,412 
 
 1815-16.. Do 35,77,488 
 
 1816 17.. Do 1,09,37,338 
 
 1817-18.. Do 41,70,103 
 
 1818-19.. Do 11,77,201 
 
 1819-20.. Do 16^51^241 
 
 1820-21 , . Do 1,09,68,799 
 
 1821-22t > . Do 1,76,33,616 
 
 If 
 surplus. They may be regarded as a receipt for defraying the extra- 
 ordinary war charge. 
 
 * Lord Cornwallis, on his return to India, held the Government 
 only for about three months. 
 
 f Statements of this kind are usually^thrown into an Appendix ; 
 but this is sometimes to throw them out of sight, and I am desirous 
 that the alternations of our Indian revenue, should appear in one 
 connected view in this place as a basis for my subsequent remarks. 
 The annual surplus is exhibited in the Calcutta sicca rupee ; for as 
 that currency is reduced into English money by different parties at 
 different rates of exchange, no accurate comparison could be drawn 
 between the revenue of particular years, unless one common standard 
 were assumed for the whole. 
 
15 
 
 If the revenues of India were not liable to any 
 deductions^ the foregoing statenaent would furnish 
 a most satisfactory picture of the financial re- 
 sources of British India, since, notwithstanding 
 the many expensive wars in which we have been 
 engaged, we should appear to have realized 
 within the thirty years a considerable surplus be- 
 yond the local expenditure (including the interest 
 of the public debt), after deducting the deficit 
 which occurred in particular years of the term. 
 In fact, there is this distinction between the wars 
 carried on by the States of Europe and those in 
 which our Indian Government have engaged, 
 that while the one, after inflicting mutual injuries 
 and incurring an enormous expenditure of money, 
 generally terminate in the status quo ante, the 
 other have usually been attended with an acces- 
 sion of territory and revenue, and sometimes 
 with pecuniary indemnification for the expenses 
 incurred in maintaining our political ascendancy. 
 
 But the surplus revenue realized in India can- 
 not all be considered as clear and independent 
 income, subject to no further deduction, for there 
 is a large disbursement in this country on account 
 of our Eastern possessions, which is not included 
 in the Indian accounts, but which properly con- 
 stitutes a charge upon the local revenue. This 
 disbursement was heretofore inconsiderable ; but 
 from the augmentation of our army . and other 
 
 causes, 
 
16 
 
 causes^ it has gradually increased, and it now 
 amounts to a large sum annually. No useful 
 purpose would be answered by exhibiting the 
 particulars of the home charge for a series of 
 years, nor indeed are there materials for a re- 
 trospect beyond the year 1813,* when the political 
 and commercial charges were^ for the first time, se- 
 parated and particularly distinguished ; and I shall 
 therefore confine myself in this place to a statement 
 of the disbursements in the two last years, which 
 will sufficiently shew their nature and extent. 
 
 Statement of territorial, or political charges, 
 incurred in England on account of India : 
 
 1821-22. 
 Military and Marine Stores supplied from 
 
 England £306,489 
 
 Payments on account of furlough and allow- 
 ances to retired officers 257,808 
 
 Passage-money to officers and troops 69,447 
 
 Political Freight, &c 142,944 
 
 Interest and Charges on account of the Car- 
 
 natic Debt 85,123 
 
 Disbursements on account of St. Helena 150,962 
 
 Do. on account of Bencoolen 479 
 
 Do. on account of Prince of Wales' Island 2,426 
 Political Charges General (Establishments at 
 the India-House, &c. &c.) 371,070 
 
 Total £1,386,748 
 
 * Prior to 1812-13, the home charge appears to have been estimated 
 by the Court of Directors at ^^850,000 per annum. 
 
 1822-23. 
 
17 
 
 1822-23. 
 
 Military and Marine Stores £ 348,426 
 
 Furlough and retired officers 261,071 
 
 Passage money 102,092 
 
 Political freight 106,452 
 
 Carnatic debt 96,013 
 
 St. Helena , 117,498 
 
 Bencoolen and Prince of Wales' Island .... 11,110 
 
 Political charges general 391,665 
 
 Total €1,434,327 
 
 It is not my intention to enter into an exa- 
 mination of these charges* Some of them may 
 possibly be reduced hereafter ; but in general, 
 they may be considered in a course of increase ; 
 for in consequence of the recent augmentation of 
 the Indian army, a greater number of ofhcers 
 may be expected to come upon the retired list, 
 while the late regulations for dividing the regi- 
 ments and otherwise accelerating promotion, will 
 place upon that list, at an earlier period, officers 
 entitled by their rank to higher allowances. 
 Far, indeed, am 1 from intimating the slightest 
 objection to these just and salutary concessions 
 to our Indian army : my business is to explain 
 their effects. There is, indeed, an elastic force 
 in expenditure, which makes it difficult for 
 the most prudent government to repress it ; 
 and in the instance under consideration, we must 
 be prepared for a further increase of charge. 
 
 D The 
 
18 
 
 The territorial disbursement in Eno^hmd already 
 amounts to a million and a half sterling * per 
 annum ; and it cannot safely be estimated below 
 that standard in any prospective calculation which 
 may be made to determine the surplus revenue of 
 India. 
 
 The following abstract will shew the net sur- 
 plus drawn from British India in 1821-22^ and the 
 expected surplus of 1822-23, respectively. 
 
 Surplus revenue realized in India in 1821-22, £. 
 
 deducting St. Helena \l,927,263 
 
 Deduct : 
 
 Amount of territorial charge disbursed in 
 
 England in 1821-22, exclusive of St. Helena 1,235,786 
 
 Net surplus revenue in 1821-22 . . /691,477 
 
 Indian 
 
 ♦ I have seen this charge variously stated ; but I have satisfied 
 myself completely that it amounts at present to £1,500,000 at the 
 least. It is, indeed, estimated this year at ;^1,535,288. 
 
 f The surplus of 1821-22 was stated above in Sicca Rupees at 
 1,76,33,616. The intrinsic or bullion value of the Sicca Rupee is 
 2s. 566d.y and this is also nearly its present value in exchange, although 
 the exchange has fluctuated between wide extremes, i.e. from 2s. lOd. 
 down to Is. }0d. the Sicca Rupee. la exhibiting the surplus in English 
 money, I have followed the printed statements in which the current 
 rupee is valued at two shillings. This rate exceeds both its bullion 
 value and its present value in exchange. Lord Hastings has stated 
 the sicca rupee at 2s. 6d. which makes the revenue appear higher. 
 It is proper to point out that discrepances occasionally occur in the 
 printed statements which I have not always the means of reconciling. 
 For example : in the account printed under date the 8th July 1823, 
 the Indian surplus of 1821-22 is stated at ^^2,1 11,337, or deducting 
 St. Helena at iGl, 995,033; whereas, in the account published under 
 
 date 
 
19 
 
 Indian surplus of 1822-23 per estimate .... *2,274,646 
 
 Deduct : 
 
 Territorial charge in England in 1822 23, 
 
 exclusive of St. Helena 1,316,829 
 
 Estimated net surplus in 1822-23. . . £957,817 
 
 It will be apparent from this abstract that M. 
 Say, in estimating an annual deficit of fifty-seven t 
 millions of francs, or £2,280,000 upon our Indian 
 account of revenue and charge, is completely in 
 error ; while the Marquess of Hastings, from a 
 very natural feeling, has taken too favourable a 
 view of our financial situation and prospects. 
 
 M. Say has perhaps considered that a corrobo- 
 ration of his assumption of a deficit will be found 
 in the rapid increase of the public debt of India ; 
 but it is very possible for the local debt to in- 
 crease, even during the existence of a territorial 
 surplus, since that surplus may be transferred 
 
 to 
 
 date the 13th May 1824, the surplus of the same year is stated at 
 jE 1,927,263. I have followed the latest account as likely to be the 
 most accurate. The difference seems to have arisen chiefly on the 
 adjustment of the St. Helena account, the charge for this island 
 being stated in one account at jSl 16,304, and in the other at 
 if208,038. 
 
 * I have the satisfaction to learn from private sources, that this es- 
 timate has been exceeded in the sum of about .£300,000, making the 
 surplus about £2,600,000. 
 
 f M. Say, taking the accounts of 1806 as his basis, estimates the ter- 
 ritorial deficit at 57 millions, and the commercial loss at 1 1 millions — 
 together 68 millions francs. 
 
 D 2 
 
"20 
 
 to England or to China^ for the purpose of 
 discharging debt, or for other services, or it 
 may beconne an addition to the local assets (the 
 cash balances, &c.) wliich constitute a fund ap- 
 plicable to the liquidation of debt. It will be 
 useful, however, to trace the progress of the Indian 
 debt, and with this view I have prepared two 
 statements A and B, which will be found in the 
 appendix. The one is formed from the Indian 
 accounts and correspondence, as far as they were 
 accessible to me, and exhibits the debt in Sicca 
 Rupees from the year 1793 : the other has been 
 prepared from the accounts which are printed in 
 this country for the use of Parliament, and ex- 
 hibits both the debt and assets, in English money, 
 at the end of each year, from 1814. Referring to 
 these accounts for more detailed information, it 
 appears to me essential only to state in this place 
 the amount of the debt at particular periods, and 
 I have selected the years 1793, 1798, 1805, 1814, 
 and 1821, for the purpose of shewing its periodi- 
 cal increase. 
 
 Public debt of India bearing interest : 
 
 Principal. 
 
 On the 30th April 1793, Sa. Rs. 5,33,68,683 
 
 Do 1798, .... 7,57,04,769 
 
 Do 1805, .... 19,09,71,445 
 
 Do 1814, .... 21,39,92,502 
 
 Do 1821, .... 27,92,31,000 
 
 Annual 
 Interest. 
 45,58,798 
 
 48,96,510 
 
 1,39,98,771 
 
 1,27,93,896 
 
 1,70 68,261 
 
 In 
 
21 
 
 III order that I may he enabled at the same 
 time to bring M. Say's statement of the Indian 
 debt to a decisive test^ it will be necessary for me 
 to enter into a little detail. M. Say has not spe- 
 cified the precise period to which his general re- 
 marks apply ; nor the documents from which 
 some of his inferences are drawn ; but in stating 
 the Indian debt at *640 millions of francs^ or 
 £25,600,000^ he has expressly referred to the 
 accounts of 1805. 
 
 The debt of India in that year was Sicca Ru- 
 pees 19,09,71,445, as stated above, and valuing 
 the rupee at 2s. 6d.^ the rate probably assumed 
 by M. Say, that writer's statement in the first 
 instance is not materially overcharged ; but he 
 afterwards falls into a most unaccountable mis- 
 take, and contrives to augment the Company's 
 imcumbrances in the aggregate, including the 
 
 home 
 
 * " D'apres cet expose; on sera peu surpris que la Compagnle des 
 Indes soit si prodigieusement endette, soit aux Indes, soit en Eu- 
 rope, d'autant mieux que, malgre ses pertes, elle n' a jamais cessede 
 payer a ses actionnaires un dividende de lOi pour cent. En 1805 
 elle avouait une dette en Angleterre de 150 millions et dans I'lnde 
 de 640, en tout 790 millions. Mais j'observe qu'elle n'etablit cette 
 dette, qu'apres en avoir deduit les repetitions qu'elle se croit en droit 
 de former. Or, si ces repetitions ne sont pour la plupart composees 
 que de mauvaises creances, dont il est impossible qu'elle soit jamais 
 payee, elles ne sauraient passer pour un actif qu'on puisse employer 
 a diminuer les dettes passives." — P. 289. M. Say appears to have 
 drawn some of his materials from the " History of British India," 
 vol. S. ; but if his statements had been perfectly correct, our present 
 situation is surely not to be deduced by going back to the year 1 805. 
 
22 
 
 home debt of 150 millions of francs, (or six mil- 
 lions sterling,) to the enormous sum of 1,200 
 millions of francs, or £48,000,000.* 
 
 He first alleges that the sum of £25,600,000 
 is the amount of our Indian debt, after de- 
 dvcting the amount of assets, and that in these 
 assets we have included what is technically 
 termed *^' dead stock/' or the value of forst, 
 buildings, furniture, bad debts, and the like ; 
 and he, therefore, proceeds to add the sum of 
 400 millions francs, or sixteen millions sterling, 
 to our acknowledged debt, for the purpose of 
 exhibiting, as he conceives, the real condition of 
 our finances. 
 
 But it is not true that in arriving at the sum 
 quoted by M. Say, the ''dead stock,'' or even 
 the '' quick stock," had been deducted from the 
 Indian debt, although the latter, consisting as it 
 does of cash and other available assets, must be 
 deducted in order to shew the true state of the 
 Company's affairs ; and that writer has conse- 
 quently committed a two-fold mistake, first, in 
 assuming a deduction to have been made which 
 never was made ; and next, in adding to the 
 assumed debt of £25,600,000, a sum whih, if 
 correct, ought to have been deducted from it. 
 
 But 
 
 * " Or, toutes ces mauvaises creances ne s'elevant pas k moins de 
 400 millions, lesquels ne devant pas etre deduits, ainsi que le pretend 
 la Compagnie, de sa dette avou^e de 790 millions, laissent le principal 
 de cette dette de pr^s de 1 ,*<J00 millions de notre monnaie."— P. 290. 
 
is 
 
 But without going so far back as the year 1805, 
 for the purpose of ascertaining our present con- 
 dition, I will subjoin an account of the Indian 
 debt and credits on the 30th April 1822, extracted 
 from the printed statements which were laid 
 before parliament in the last sessions, and which 
 are the latest documents at present before the 
 public. 
 
 Amount of bond, register, and otherdebts £, 
 
 bearing interest 31,623,780 
 
 Arrears and debts not bearing interest .... 6,966,877 
 
 Gross amount of territorial debt on the 30th 
 April 1822 *38,590,657 
 
 Deduct, territorial assets : £. 
 
 Cash in the public treasuries . . 10,634,459 
 
 Bills receivable 449,475 
 
 Stores 3,027,818 
 
 Debts owing to Government 6,412,023 
 Salt, opium, grain, &c. in store 1,680,929 
 
 Total amount of territorial assets 22,204,704 
 
 Net excess of territorial debts in India be- 
 yond the assets .£16,385,953 
 
 It will be seen, then, that instead of an over- 
 whelming debt in India of forty-eight millions 
 
 sterling, 
 
 * The Indian coins are converted into English money at the Com- 
 pany's established rates, to which I have generally adhered, in order 
 that my statement may be more easily verified by a reference to the 
 document from which it is taken. 
 
24 
 
 sterlin"\ with which M. Sav has alarmed our 
 imaginations, the actual incumbrance amounts 
 only to ^16,385,953, or less than a year's reve- 
 nue, without taking credit for those fortifications 
 and other immovable property, which, as he 
 justly observes, do not constitute disposable pos- 
 sessions, and which must be left to our successors, 
 whenever we may happen to be deprived of the 
 sovereignty. 
 
 Nor have I taken credit for the commercial 
 assets in India, amounting to about £3,000,000, 
 being unwilling to confound the commercial with 
 the territorial account; but had the two been, 
 embodied together, the local debt would have 
 been reduced to the sum of £13,404,998. 
 
 It may be apprehended that a portion of the 
 political assets, (such as the value of stores, debts 
 owing to the government, &c.) cannot justly be 
 regarded as a real available resource, applicable 
 to the discharge of debt. 
 
 It is certainly true that we cannot tender to our 
 creditors military and marine stores in satisfac- 
 tion of their legal claims upon us ; but it is 
 equally true that these indispensable articles have 
 been procured at a certain cost ; that they repre- 
 sent a certain determinate value ; and that this 
 value is ultimately realized, since, on being used 
 or expended, they serve to defray charge, and 
 
 prevent 
 
25 
 
 prevent the disbursement which must otherwise 
 have taken place in procuring them. 
 
 The amount of what is termed *^'dead stock*' is 
 not calculated upon by the Company to any ex- 
 tent as a set-ofF* against their debt, although 
 this property, in which M. Say considers them to 
 possess only an usufructuary interest, is kept in 
 sight with a view to some future adjnstment with 
 the crown. The " quick stock/' on the contrary, 
 should contain only genuine funds, capable of 
 being realized ; and as far as my experience ex- 
 tends, the public officers are sufficiently careful to 
 exclude from that account all items of a ques- 
 tionable character, whose introduction might tend 
 to mislead. 
 
 In order to prevent the attention from being 
 embarrassed by the accumulation of figures, I 
 have stated merely the surplus, or deficit, of India 
 in each of the last thirty years, without exhibiting 
 the account of revenue and charge from which the 
 results are deduced ; but as our information would 
 be incomplete if this account were omitted alto- 
 gether, I shall subjoin an abstract of it for five 
 years, selecting those periods which appear to me 
 best calculated to shew the progress of our Indian 
 
 revenue. 
 
 Lord 
 
 * Credit has been taken in some of the Company's statements for 
 " Dead Stock," to the amount of ^400,000 out of above ten millions. 
 
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27 
 
 The "real increase of the revenue will iialurally 
 attract attention ; but the amount of the gross 
 revenue of a country ciocis not afford a corrett 
 standard for judging of the condition of its 
 finances. If we were to apply this scale of mea- 
 surement^ Great Britain would appear to have 
 reached the utmost height of her prosperity 
 during the most calamitous periods of the late 
 war, for her income was then at the highest ; and 
 she might be considered to have since declined, 
 and to be verging now towards a state of poverty 
 and decay, because her taxes are less productive 
 than heretofore. So, too, in India, it would be 
 fallacious to draw any conclusions from (he 
 amount of the gross revenue. The increase of 
 income has, in general, arisen from the acquisi- 
 tion of new territory ; but the new territory has 
 brought with it, its own peculiar charge, which 
 in general has equalled, or nearly equalled, the 
 new resource. The Marquess of Hastings has 
 observed, '' I have uo hesitation in saying that 
 '' the increase of the current year 1822-2r^, may 
 '* be anticipated as exceeding by six millions 
 '' sterling that of IS13-H;" but his Lordsiiip 
 seems to have been aware that the increase of 
 charge, in a certain degree, kept pace with the 
 increase of resource, for he sooij after adds, 
 " After revolving every circumstance with the 
 " coolest caution, I cannot find any reason \yhy, 
 
 E 2 '' subse- 
 
28 
 
 " subsequently to tlie present year, an annual 
 '' surplus of four millions sterling' should not be 
 ^' conlidently reckoned upon. This ought natu- 
 " rally to increase, for the causes which will 
 " augment the receipt have nothing in them tend- 
 *' ing to require further charges/' 
 
 I have the utmost deference for such high 
 authority ; but following, as I have done, the 
 statements printed for the use of parliament, I 
 have already stated the Indian surplus of 1821 -22 
 at £1,927,263, (or, if St. Helena be omitted^ 
 £2,135,301,) and the surplus estimated for the 
 year 1882-23 at *£2,274,646, (or, omitting St. 
 Helena, £2,394,739.) What the revenue may 
 be hereafter it is impossible for me to predict ; but 
 I shall submit in the sequel certain considerations 
 which dispose me to believe that we have less 
 reason to anticipate an increase than we have to 
 apprehend a diminution of the territorial income 
 in future years. 
 
 If I were called upon to point out the period 
 when the Company's finances abroad were in the 
 most prosperous state, I should probably fix on 
 the year 1792-93, for we then possessed an annual 
 surplus sufficient to liquidate the territorial debt 
 
 in 
 
 * I have great satisfaction in stating, from private information re- 
 cently received, that the surplus of 1822-23 amounted to about 
 £2,600,000, the largest revenue ever realized from British India. 
 
29 
 
 in little more than three years.* The territorial 
 charge incurred in England was inconsiderable ; 
 our possessions were more compact and manage- 
 able, and more productive with reference to their 
 extent ; and the produce and manufactures of In- 
 dia being in great demand in the west, our remit- 
 tances could be effected on advantageous terms in 
 commodities, produced by the labour of an indus- 
 trious population. But it did not certainly depend 
 upon us to give permanency to our commercial 
 advantages; nor was it, perhaps, in our option 
 to continue in the same political situation : having 
 once crossed the Caramnassa, our progress suc- 
 cessively to the Jumna and Sutlege was, perhaps, 
 inevitable. We were drawn on by a sort of gra- 
 vitation, to fill that vacuum ; to occupy that 
 waste which the desolating policy of the native 
 states had produced, until we found ourselves in 
 the possession of a sovereignty, without a parallel 
 in the history of the world. 
 
 But although the Company were in a condition 
 of greater affluence about the close of Lord Corn- 
 wallis's administration than at any other period, 
 much remained to be done in the way of financial 
 arrangement ; the rates of interest were high, and 
 
 fluctuated 
 
 Purchase. 
 Debt. Surplus. Yrs. Mihs. 
 
 * 1792-3 5,33,68,683 1,65,57,675 equal to about 3 3 
 
 1813-14 21,39,92,502 1,45,33,190 14 9 
 
 1821-22 27,27,86,000 1,76,32,616 15 5 
 
30 
 
 fluctuated suddenly and between wide extremes; 
 the theory of exchanges was little understood, or 
 seldom acted upon ; the gold and silver coins, 
 which circulated indifferently, did not bear a 
 determinate value with relation to each other, and 
 the latter could not sometimes be procured, even 
 by the government itself, without a sacrifice of 5 
 or 6 per cent. ; a capital had not accumulated 
 commensurate with the agricultural and commer- 
 cial wants and resources of the country ; the 
 natives had not learnt to place confidence in our 
 public securities or to bring the limited funds 
 which they possessed into active and useful em- 
 ployment ; and, in short, what is termed '' Public 
 Credit" had scarcely been called into existence. 
 
 During the greater part of Lord Wellesley's 
 administration we were engaged in expensive 
 wars, and the utmost difficulty was experienced 
 in providing for the public expenditure. This 
 consequently was not a favourable season for 
 introducing financial improvements ; but the 
 comprehensive mind of that nobleman fully appre- 
 ciated the value of a well-regulated system of 
 finance ; and by the establishment of a public 
 bank and other salutary arrangements, a founda- 
 tion w as laid for those important operations which 
 bis successors prosecuted with such eminent suc- 
 cess ; the tree was planted in this administration ; 
 it grew under the fostering care oS Sir G. Barlow 
 
 and 
 
31 
 
 and the Earl of Minto ; and the Marquess of 
 Hastings had the nrierit (and it was no inconsider- 
 able merit) of dihgently gathering, and carefully 
 preserving the fruit : hence the noble Marquess 
 was enabled to carry on extensive military oper- 
 ations throughout the whole frontier ofNepaul; 
 in Hindoostan and the Deccan, without experi- 
 encing those* pecuniary difficulties which had so 
 much embarrassed his predecessors. It will not 
 be contended that financial resources can be gene- 
 rated in a moment to meet the emergency of par- 
 ticular occasions; they are the growth of time; 
 public credit cannot^ like a liot-house plant, be 
 forced out of season into existence ; it is the off- 
 spring of confidence ; and confidence is the result 
 of experience. 
 
 it is very far from my wish to under-rate the 
 merits of Lord Hastings* administration; but 
 
 justice 
 
 * We obtained, it is true, about 2,00,00,000 rupees (or about two 
 millions sterling) from the King of Oude, and the sum of 53,00,000 
 Sicca Rupees (more than half a million) from the estate of the Bhow 
 Begum ; and these large supplies enabled Lord Hastings to carry on 
 his wars without experiencing those pecuniary difficulties which 
 Lord Wellesley had to contend with. 
 
 1st. Loan from the King of Oude as a fund for the 
 payment of annuities to his family Sicca Rupees 1,03,82,093 
 
 2d. Loan, which was afterwards satisfied by ceding 
 to his Majesty the districts of Ky raghur, conquered from 
 the Rajah of Nepaul 95,68,750 
 
 Treasure of the late Bhow Begum, committed to our 
 custody 53,00,000 
 
32 
 
 justice is due to the memory of his predecessor ; 
 and where genuine merit exists^ it cannot be 
 tarnished or diminished^ by the proximity of 
 merit. 
 
 We owe much to the prudent and judicious 
 management of Lord Minto ; the previous wars 
 in which we had been involved had left us in a 
 state of complete* exhaustion ; but the pacific 
 policy which his Lordship pursued, gave us time 
 to recruit and improve our resources, and enabled 
 the Government of India to adopt a course of 
 measures, military and political, of the utmost 
 importance to the public welfare. 
 
 I shall only notice two circumstances which 
 more particularly distinguish his Lordship's ad- 
 ministration of the finances ; the one, the reduc- 
 tion of the rate of interest on the Indian debt from 
 8 to 6 per cent., by which a saving of charge to 
 the extent of about half a million sterling per 
 annum, was effected in perpetuity ; the other, the 
 remittance of a large supply of bullion to this 
 country, at a time when the precious metals had 
 nearly disappeared from every part of the empire, 
 
 and 
 
 * It is not my plan to enter into details further than may be 
 necessary to trace and explain our present situation. Otherwise it 
 would be easy for me to set forth the pecuniary difficulties and distress 
 produced by theMahratta wars of 1803 and 1804, and to shew what 
 extraordinary exertions were required to surmount those difficulties. 
 
33 
 
 and when they were urgently required to enable 
 Great Britain to prosecute to a successful issue 
 the most fearful struggle in \vhich she had ever 
 been engaged. 
 
 Butj in the letter addressed to the Court of 
 Directors by the Marquess of Hastings^ it is inti- 
 mated that his Lordship took charge of the Go- 
 vernment at a season of pecuniary distress ; and 
 this statement is corroborated by the tenor of the 
 correspondence from India (recently published 
 by the Court of Directors), at the period in ques- 
 tion. 
 
 The temporary distress alluded to is, however, 
 easily explained. It was, in part, that of the 
 commercial community. In a country where the 
 rate of interest is high, the merchant has a strong 
 motive for economizing his funds as much as 
 possible ; and, when unexpected demands occur, 
 he is liable to be exposed to temporary inconve- 
 nience and distress : such precisely was the case 
 in India about the period of his Lordship's arri- 
 val. An emergency had arisen among the com- 
 mercial community of Calcutta ; but the Govern- 
 ment very properly came forward to their relief; 
 and, by granting temporary loans to those who 
 required assistance, the cloud passed over without 
 producing any serious mischief. 
 
 The government treasury was, also, 1 am 
 aware, reduced to a low ebb at the period 
 
 F in 
 
34 
 
 ill question : but this proceeded entirely from our 
 overstrained* efforts to effect large remittances 
 to England. The living spring was drained for 
 the moment ; but it was not destroyed. Embar- 
 rassed as we were, in some degree, at the instant, 
 the o:overnment consio^ned to the Court of Direc- 
 tors, in the very ship which conveyed Lord Has- 
 tings to India, the sum of three hundred thousand 
 pounds in specie and bullion ; nor could it have 
 been prepared in 1815 to undertake an expensive 
 war, if at the close of 1813, the sources of our 
 prosperity had not remained unimpaired and 
 abundant. 
 
 The Marquess of Hastings unquestionably left 
 the finances of India in a most flourishing con- 
 dition. Hostilities had been carried on upon an 
 extensive scale without causing any very large ad- 
 dition 
 
 * Excess ofsupply to London, 1811-12 Sa. Rups. 3,46,40,832 
 
 Ditto 1812-13 2,71,49,075 
 
 Estimated Ditto 1813-14 1,80,00,000 
 
 Sa. Rups 7,97,98,907 
 
 Or, at 2s. 6d. per Sa. Rups £4,331,229 
 
 Ditto 3,393,634 
 
 Ditto 2,000,000 
 
 £9,724,868 
 
 (See Financial Despatch from Bengal, dated I8th December 1813.) 
 
35 
 
 ditioii to be made to the public burthens.* The 
 public treasuries contained the enormous sum of 
 ten imllions sterling ; the territorial surplus might 
 fairly be assumed at two millions sterling* per 
 annum ; a disposable fund of from three to four 
 millions sterling was ready to be applied to the 
 extinction of debt ; the government remittable 
 securities, bearing an interest of six per cent.^ 
 had risen to a premium of near forty per cent., 
 and '' public credit'' shewed every symptom of 
 health and maturity. This is a splendid picture 
 of financial prosperity ; but its merits are scarcely 
 enhanced by comparison. It will be found, I 
 think, that we possessed in 1813-14 all the ele- 
 ments of financial prosperity in as sound a con- 
 dition 
 
 * The sum of Rupees 95,68,750, received from the King of Oude, 
 for the sale of Kyraghur, reduced the military charge of 1815-16. 
 Large consignments in bullion were also received from England, re- 
 mitted from the " Surplus Fund of Commercial Profit ;*' and these 
 tended materially to prevent the increase of debt, and to facilitate all 
 the financial operations of the Government abroad. Still, it is but 
 just to Lord Hastings, to notice, that his Lordship's military expen- 
 diture, as compared with that in the preceding Mahratta war, was 
 very moderate, as was shewn by the Commissary-General. This 
 is to be ascribed, partly to the establishment of an efficient Commis- 
 sariat by Sir George Hewett, during the administration of Lord 
 Minto, partly to the extent of our pecuniary resources, which 
 enabled the Government to discharge the irregular troops the 
 moment their services were no longer wanted, and partly to the strict 
 attention paid by Lord Hastings to economy in his military dispositions 
 as Commander-in-chief. 
 
 f2 
 
36 
 
 dition as in 1822-23. Our temtorial debt and 
 the annual charge of interest were less ; our 
 surplus revenue was nearly the same ; and 
 although we did not possess the same amount 
 of specie^ it must not be forgotten that the pre- 
 sent accumulation of funds in India originates in 
 circumstances which constitute a positive evil. 
 The decrease in the exports from India^ conse- 
 (|uent to a very extraordinary revolution in the 
 course of the trade^ created the utmost difficulty 
 in effecting remittances from that country to 
 England ; and individuals were compelled to 
 purchase^ at a high premium^ the bills which 
 the government were under engagement to grant 
 to the public creditors in payment of the in- 
 terest on the territorial debt. The payment 
 being thus transferred from the Indian to the 
 home treasury^ the former was relieved from an 
 annual demand to the amount of above a million 
 and a half sterling, and a corresponding accu- 
 mulation of funds took place in the Indian trea- 
 suries in consequence. A portion, therefore, of 
 the ten millions of specie with which the local 
 treasuries are surcharged, must not be viewed as 
 capital saved from a surplus revenue. It is capi- 
 tal which has remained in India from the want 
 of means to remove it to London; and both the 
 cause and the effect are to be regarded as matter 
 of regret rather than of gratulation. 
 
 The 
 
The fall in the exchange suggested to Lord 
 Hastings^ as well as to the Court of Directors, 
 the practicability and expediency of effecting a 
 reduction in the rate of exchange, at which the 
 public creditors were entitled to a remittance for 
 the interest of the territorial debt, and a course 
 of measures was accordingly commenced by his 
 Lordship for this purpose early in 1821, with the 
 concurrence of the Honourable Court. The 
 operation succeeded completely ; the rate of ex- 
 change was reduced from 2^. 6d. to 2s. Id. the 
 sicca rupee ; and as long as the present ex- 
 changes continue, a saving to the Company will 
 probably be effected to the extent of twenty per 
 cent, on the annual interest, for which they were 
 under engagement to furnish a remittance. 
 
 I have already presumed to submit my opinion 
 on this subject to the public : and 1 should not 
 now recur to it^ if the measure did not form a dis- 
 tinguishing feature in Lord Hastings' administra- 
 tion of the finances ; and if, in passing it over 
 unnoticed, I might not be supposed to keep out 
 of view a plan of singular merit. 
 
 If the object proposed was valuable and desi- 
 rable in itself, it has been accomplished in the 
 completest manner ; if no future evil should 
 result, the Company have been relieved from an 
 apprehended inconvenience, and an immediate 
 expense ; nor will 1 urge as an objection, that 
 
 they 
 
38 
 
 they have smoothed the way for the crown to 
 uadertake the niauagemeiit of the territory. The 
 obligation to pay the interest of the debt in 
 England, opposed one great obstacle to the re- 
 sumption of the charter ; because it was hereto- 
 fore maintained that the Company constituted 
 the only safe and convenient organ of remittance. 
 That obligation has now been withdrawn in a 
 great degree ; the Company have succeeded in 
 rendering a large portion of the territorial debt 
 a local demand, the interest of which is payable 
 only in India ; and as the local revenue is quite 
 adequate to the payment,, the crown, in assuming 
 the territory, would have no inconvenient engage- 
 ments or financial difficulties to encounter. In 
 affording facilities to our successors, there may 
 be nothing exceptionable, if the measure be right 
 in itself, for the end and aim of every public 
 measure ought to be the public good, without 
 regard to partial and temporary interests. My 
 object, indeed, in recurring to past transactions, 
 has not been to discover defects. The great use 
 of a retrospect to the past is to obtain a proper 
 guide for the future. But if it be true that the 
 sudden and extreme depression of the exchange, 
 although originating in causes beyond our con- 
 troul, were an evil, as 1 conceive it to have been, 
 then would I submit that, instead of aggravating 
 it bv availin": ourselves to the utmost of a tern- 
 
39 
 
 porary advantage, our object should have been, 
 and should still be, to alleviate its effects by all 
 unobjectionable means. 
 
 From the statement given in a preceding page 
 of the result of the accounts for the last thirty 
 years, it will have appeared that, in nineteen years 
 of the term, a surplus has been realized in India; 
 and when it is recollected that the intervals of 
 peace during this period were short and inter- 
 rupted, and that the wars carried on embraced 
 objects of no ordinary magnitude, it is as much 
 matter of surprise as of satisfaction, that the 
 event should have been so favourable. 
 
 In the calm and prudent administration of 
 Lord Teignmouth, we had a Rohilla war ; a revo- 
 lution in Oude ; a formidable demonstration of 
 defensive war* against the Affghan state of Cau- 
 bul ; and, lastly, an expedition against the Phil- 
 lippine Islands, which was arrested in mid-career 
 at Penang. 
 
 Lord Wellesley's administration was alto- 
 gether of a belligerent character. We had, first, 
 a Mysore war ; and as a sort of corollary, an ac- 
 tive campaign against the fragments of the My- 
 sore force under " Dhoondiah Khan,'* with sub- 
 sequent operations against the Southern Poly- 
 gars, and the Insurgents of Malabar. Then, the 
 
 expe- 
 
 * The bloodless, but useful campaign of the late Sir James 
 Craig on our Western frontier. 
 
40 
 
 expeditions to Egypt, and the Persian Gulpli ; 
 and at short intervals, two successive Marhatta 
 wars ; and, lastly, hostilities with the Rajah of 
 Burtpore, which were not attended with our ac- 
 customed success ; and such was the expense 
 occasioned by our severe contest with the Mar- 
 hatta States, that the heavy arrear* of war 
 charge absorbed our resources for two years 
 after its termination. 
 
 In the pacific administration of SirG. Barlow 
 and Lord Minto^ we were compelled to set on 
 foot a large army to quell a refractory landholder 
 of the Doaub, (the country between the Ganges 
 and Jumna), who, encouraged by our failure at 
 Burtpore, defended for some time the petty forts 
 of " Cumouna" and '^ Girnouri/" against the 
 utmost efforts of our arms. We sent forth, at 
 a subsequent period, those expeditions which 
 achieved the conquest of Java and the French 
 
 islands ; 
 
 * The late Lord Lake entertained a large body of irregular troops 
 (Asiatic " Brabancons "), which Lord Cornwallis on his return to 
 India, ordered to be disbanded ; but we had not the means of paying 
 their arrears, and they could not, therefore, be immediately dis- 
 charged from the service. In this dilemma, they were paid off and 
 disbanded as funds could be obtained, and our regular army was 
 allowed to continue in arrear. The preference given to the irre- 
 gulars in regard to the discharge of arrears had the appearance of 
 great injustice ; but our troops, both European officers and sepoys, 
 submitted with patience under great privations, and manifested an 
 admirable temper on the occasion. 
 
41 
 
 islands; and we furnished costly subsidies* and 
 the materiel of war to our ally, the Kin^ of Per- 
 sia, to enable him to contend with our other ally, 
 the Emperor of Russia. 
 
 In Lord Hastings' government we had a Nepaul 
 War ; a Pindarry War,f and a Mahratta War ; 
 with another expedition against the pirates of the 
 Persian Gulf; and yet, notwithstanding this 
 almost uninterrupted series of military enterprizes, 
 we have come forth with renewed strength, enlarg- 
 ing the wide circle of our dominion after every 
 struggle. 
 
 In a season of peace the surplus revenue of 
 India may safely be estimated, I think, at two 
 millions sterling per annum, taking the year 
 1821-1822 as a basis for the calculation. The 
 surplus in that year amounted to £1,927,000 
 
 sterling, 
 
 * It is somewhat singular, that we were assisting the King of 
 Persia against the Emperor of Russia, at the same moment that we 
 were assisting the Emperor of Russia against the late Emperor of 
 France. This political solecism is not however chargeable to the In- 
 dian Government. 
 
 f If ever a war were justified on grounds of humanity, it was the 
 Pindarry war. These freebooters^ the bane, the scourge, and the 
 opprobrium of India, have been rooted out for the time, and I am 
 willing to hope for a very long time; and the contest, in its origin, 
 progress, and termination, must be contemplated with sentiments of 
 unmingled satisfaction. It was not less honourable than that 
 which placed the British standard on the proud heights of Himma- 
 layah. 
 
 G 
 
42 
 
 sterling, at the exchange of 2s. the current rupee, 
 and the accounts exhibit a fair specimen of the 
 ordinary revenue and charge upon a peace es- 
 tablishuient. The military establishments, it is 
 true, have since been augmented, and fluctua- 
 tions may be expected to take place in different 
 branches of the revenue ; but had peace conti- 
 nued, a reduction of interest would have been 
 effected in the present year to the amount of 
 £150,000 or £f200,C00 per annum, by the appli- 
 cation of from three to four millions to the extinc- 
 tioii of debt. For estimating a larger surplus than 
 two millions, I can perceive no safe ground what- 
 ever; and there is quite sufficient ground for just 
 exultation, that so ample a tribute should be 
 drawn from a dependent territory, without impo- 
 verishing the people. This surplus, as I have 
 before explained, is liable to a deduction to the 
 extent of a million and a half sterling, on account 
 of the territorial, or political charges incurred in 
 England; and the net territorial income of the 
 East-India Company from British India, may, 
 therefore, be stated, during the continuance of 
 peace, at the sum of five hundred thousand pounds 
 per annum. 
 
 But we are againat war. Those golden assu- 
 rances have not been realised, which promised us 
 along continuance of peace and security. How 
 many short months have passed since we were 
 
43 
 
 laught to believe that there remained no state in 
 India which could oppose the British power ; that 
 the relations of annity had been established with 
 all around us upon a firm and durable foundation ; 
 and that we were at length arrived at that happy 
 epoch when we might expect to enjoy, under our 
 vines and fig trees, the produce of all our toil^ 
 the fruits of so many victories in the field, and 
 triumphs in the cabinet ! 
 
 And are those who gave us such assurances to 
 be condemned, because this pleasing illusion has 
 been dispelled ? certainly not — appearances justi- 
 fied their hopes, and seemed to countenance all the 
 flattering anticipations which were indulged. Lord 
 Hastings observed the same policy towards the 
 Birman State of Ava, which Lord Minto had ob- 
 served towards the Goorka State of Nepaul, and 
 upon similar considerations. Our practice had 
 been^ in both instances^ to forbear and overlook 
 slight offences and aggressions, rather than involve 
 ourselves in an arduous and unprofitable contest. 
 The chain of mountains on our northern frontier, 
 and a wild impervious jungle, or wood, on our 
 eastern border, constituted a natural barrier, which 
 it was not easy to penetrate, and which it was not 
 our interest to open. A judgment may be formed 
 of the advantage which we derived fiom this sup- 
 posed barrier, from the fact, that a single regiment 
 of sepoys was found sufficient for the service of 
 
 G 2 the 
 
44. 
 
 the extensive tract of country possessed by us to 
 the east of the Ganges^ while a force, scarcely 
 more considerable, was considered adequate to 
 the protection of our northern frontier from the 
 Burrumpooter to the Gogra. Thus, nearly the 
 whole of our military strength was concentrated in 
 our western provinces, the most accessible part 
 of our territory ; and we had always a disposable 
 force which could be thrown upon any point where 
 its service might happen to be required. 
 
 This is not the fit place for inquiring into the 
 origin of the Burmese war, or for examining the 
 political bearings of an event so much to be de- 
 precated ; my present purpose is merely to notice 
 its probable effects upon our finances ; and with- 
 out pretending to furnish any accurate estimate 
 of the war charge likely to be incurred^ I may safely 
 assume, that during the continuance of hostilities, 
 not only will the surplus revenue be absorbed, but 
 we must be prepared for an expenditure exceed- 
 ing our ordinary income. The army employed 
 in the field cannot be less than 30,000 men, and 
 with the expense* of transports for the convey- 
 
 * Twenty thousand tons of shipping, or forty ships averaging 50O 
 tons, will probably be required, and their freight or hire may be 
 computed at 6000 Rupees per month each, 2,40,000 Rupees per 
 month, or per annum Rupees 28,80,000. The excess of military 
 charge in Bengal is estimated at Sicca Rupees 38,46,000 : that of 
 Madras at Rupees 42,00,000. Of Bombay I cannot speak at pre- 
 sent ; 
 
45 
 
 ance of the troops, military stores^ and supplies 
 necessary for their subsistence in a hostile coun- 
 try^ the war charge may be expected to amount 
 to from two millions to two millions and a-half 
 per annum. Should then the contest be pro- 
 longed to a second year, the extraordinary expen- 
 diture will not probably fall short of five millions 
 sterling, aitd instead of extinguishing debt in the 
 present year 1824-25 to the amount of three mil- 
 lions, as contemplated, we shall probably add to 
 the public debt of India in the course of 1825-26, 
 the sum of one million, while the territorial ac- 
 count abroad and at home, will be deteriorated in 
 the sum of four millions sterling.* 
 
 Whether any pecuniary indemnification will be 
 found in the success of our arms, is a speculation 
 in which it would be idle to indulge at present ; 
 all we can fairly look forward to is the speedy 
 
 termi- 
 
 sent ; and in fact the estimates are all likely, I think, to be exceeded, 
 for they seldom provide sufficiently for the expenditure of military 
 stores, and the various contingencies incidental to a state of war. 
 
 * Indian peace surplus for two years £4,000,000 
 
 Deduct, home charge do £3,000,000 
 
 War charge do. 5,000,000 
 
 8,000,000 
 
 Territorial deterioration 4,000,000 
 
 Deduct, surplus cash balance applicable to the discharge 
 
 of debt 3,000,000 
 
 Debt to be raised in 1 825-26 £1 ,000,000 
 
46 
 
 termination of a war which it was not our interest 
 to provoke, and which we can have no motive 
 for prolonging beyond the necessity of the case. 
 
 Although this unexpected event will, for a time, 
 derange all our calculations with respect to the 
 future, I hope that the statements and explana- 
 tions which I have furnished, will have satisfied 
 the reader that the gloomy picture drawn by M. 
 Say does not, in any of its features, represent the 
 present financial situation of the East-India Com- 
 pany in India. We are neither burthened with a 
 territorial debt of forty-eight millions, nor are we 
 consuming the vital substance of the mother 
 country by an annual deficit, which absorbs the 
 produce of its labour. 
 
 I cannot, at the same time, upon a deliberate 
 examination of the public accounts, corroborate 
 the sanguine views and anticipations of the Mar- 
 quess of Hastings. We have never had a surplus 
 of four millions in India, and I cannot discover 
 any sufficient ground for estimating such a reve- 
 nue for the time to come;* but we have lately, 
 realised a surplus of about two millions sterling, 
 and we may reasonably expect to realise it again 
 
 during 
 
 * The revenue of the new territory will probably improve, but it 
 will be seen in the sequel, that the receipts from the opkim monopoly 
 have already decreased, and are likely to fall off hereafter in a still 
 greater degree. I have, also, great doubts abgut the stability of the 
 land revenue of Fort St. George. 
 
47 
 
 during a period of peace. Even for this sum it is, 
 however^ extremely difficult to find a remittance 
 under a system of commercial regulation, which 
 i^oes far to exclude a portion of the produce and 
 manufactures of British India from the home mar- 
 ket ; and if^ under such circumstances, it were 
 in our option to extend the annual tribute to four 
 millions^ 1 should not hesitate to say that consi- 
 derations of policy^ of justice and humanity^, would 
 all alike concur to condemn the unmeasured 
 exaction. If the public revenue should unex- 
 pectedly become more productive^ it would be 
 the duty of the Government to repeal or to reduce 
 objectionable taxes ; to increase the judicial and 
 other establishments, so as to render justice more 
 accessible to the great body of the people ; to 
 endow public institutions for providing better 
 means of education, or hospitals for the care of 
 the sick and the destitute; to construct roads 
 and bridges^ reservoirs and water-courses; to 
 support caravansaries for the accommodation of 
 the traveller; and otherwise to promote those 
 objects which may conduce to the comfort, con- 
 venience and well-being of our native subjects. 
 A certain revenue is required to maintain our 
 establishments abroad, to defray the political ex- 
 penses incurred at home, and to provide a mode- 
 rate fund for the gradual extinction of debt ; but 
 whatever may be collected beyond the fund 
 
 required 
 
48 
 
 required for these several purposes^ ought to be 
 expended on the spot for the benefit of the 
 people^ whose industry supplies such ample 
 contributions. 
 
CHAPTER II. 
 
 SOURCES OF THE REVENUE OF INDIA-SALT-OPIUM 
 -CUSTOMS-ABKARRY-STAMPS, &c. 
 
 Having submitted a brief statement of the re- 
 venue of India in the ag<^regate^ 1 now propose to 
 particukirize the items, or ingredients^ of which it 
 is composed, and to consider how far our system 
 of taxation has been established and regulated 
 upon just principles, and how far we can rea- 
 sonably expect that the plenteous spring which 
 now periodically replenishes our exchequer, will 
 continue to afford the same abundant supply. 
 
 From time immemorial the land has constituted 
 the chief source of revenue in India, and for plain 
 and obvious reasons. The habits of the great 
 body of the people are simple and uniform; their 
 diet is spare, and confined generally to a few arti- 
 cles of the first necessity, rice, vegetables, fish, 
 and the smaller grains ; their clothing is scanty 
 and mean ; their habitations poor and unfurnished ; 
 what we term luxuries, are confined to the opulent 
 few. Capital is thinly distributed over the surface, 
 
 H and 
 
50 
 
 and even the advantages of a genial climate, a 
 prolific soil, and of manufacturing skill, were not 
 found sufficient to swell the stream of commerce. 
 
 In all this the keen eye of the financier could 
 see nothing to touch ; the objects were too minute 
 and worthless, or too widely dispersed to come 
 fairly within his grasp; and he was compelled to 
 have recourse to the expedient of taxing produce 
 in the aggregate. Such is the land tax, which, 
 without being applied to any individual article, 
 takes a portion of the gross produce of each par- 
 ticular portion of land. 
 
 As the land revenue of India is still our prin- 
 cipal resource, I shall reserve the observations 
 which I may have occasion to offer regarding it, 
 until I shall have noticed the other less important 
 branches of revenue, which will be more easily 
 disposed of. 
 
 The salt stands second in point of importance ; 
 and, as it has been so often stigmatized under the 
 reproachful term '' monopoly/' it will be proper 
 to bestow a little attention upon the principles on 
 which this tax has been established. 
 
 If a certain revenue be required beyond what 
 the land will produce; and if the number of opu- 
 lent consumers, in whose hands luxuries, and other 
 tangible objects of taxation, might be found, be 
 so small and so dispersed that the charge of col- 
 lection would go far to absorb the produce of the 
 
51 
 
 tax, then it would appear that a government has 
 no alternative but to have recourse to some article 
 of general consumption as the object of taxation. 
 It never can answer any useful purpose to teaze 
 and torment a country with taxes and tax-ga- 
 therers, when such taxes are unproductive, or 
 produce little more than is sufficient to maintain 
 a host of revenue officers. These officers are an 
 evil in any country ; but in India, where it is 
 almost impossible to prevent their mal-practices, 
 they are a serious evil. Such is the force of long 
 established habit under a bad government, that, 
 even now, when there is an anxiety felt by the 
 ruling power to repress abuse and to affiDrd pro- 
 tection to all, the revenue officer exacts, and the 
 people suffer his exaction, as a matter of course, 
 and almost without a complaint. 
 
 If, again, a people be constitutionally timid, or 
 unable, from whatever cause, to defend their pro- 
 perty and to resist oppression, then it would seem 
 to be a happy discovery, if, instead of subjecting 
 them by direct taxation to the screw of the Ex- 
 chequer, the government should succeed in draw- 
 ing from them the periodical contribution required, 
 by a process scarcely perceptible, in sums so 
 minute as scarcely to be felt, and by means totally 
 divested of the odious character o^ force. 
 
 I will not say that these were the considerations 
 which led to the establishment of the salt mono- 
 
 H 2 poly ; 
 
52 
 
 poly ; but they are the considerations which may 
 be urged to justify it. The government have 
 selected it as an article of general consuniption^ 
 which can be rendered productive ; and as a me- 
 dium or instrument^ for levying contributions^ by 
 a sort of voluntary process, without the interven- 
 tion of the tax-gatherer. It approaches, I own, 
 to a poll tax ; but it is a very light poll tax, which 
 is paid almost insensibly : and where, as in India, 
 the great mass of the people, with few exceptions, 
 are in nearly the same condition, there is no in- 
 justice, and little inequality in applying to them 
 one common scale of taxation, regulated by the 
 scale of their consumption. 
 
 In Bengal the manufacture of salt is a strict 
 monopoly, and the article is not allowed to be 
 imported, even from the coast of Coromandel and 
 other parts of our own territory/, except on account 
 of Government, or under ''permits" from Govern- 
 ment, requiring its delivery into the public stores 
 at a stipulated price. 
 
 The manufacture is carried on in Bengal 
 throughout the districts which skirt the Delta of 
 the Ganges, on low lands periodically overflowed 
 by the spring tides ; and as it is confined to as 
 narrow a tract as possible, smuggling may be 
 sufficiently guarded against. The zemindars, or 
 landholders, in whose estates it was found con- 
 venient to establish the manufacture, were allowed 
 
 com pen- 
 
53 
 
 compensation for the lands which were appro- 
 priated to the purpose, ('' kalary rents/' as they 
 are termed); and this compensation was generally, 
 I believe, regulated on fair and equitable terms. 
 
 But, heretofore, the manufacture was the source 
 of great misery to the inhabitants of the adjacent 
 districts, who were often forced into the service, 
 and compelled to expose themselves in the un- 
 healthy marshes of thesunderbunds, to the attacks 
 of tigers and alligators, and to all the physical 
 ills engendered by a pestilential chmate. This 
 grievance has, 1 trust, been removed ; we have 
 established courts of justice to protect all our na- 
 tive subjects, and the wretched Molungees among 
 the rest ; recourse is no longer had to compulsory 
 service ; from one of the most objectionable 
 stations the manufacture was long since with- 
 drawn ; the advance of cultivation, by gradually 
 diminishing the jungle, may be expected to ren- 
 der the country more healthy ; and as the Molun- 
 gees are generally natives of the districts in which 
 they are now employed, they are not so liable to 
 suffer from the effects of the climate. But still 
 these Molungees are, I fear, among the worst 
 conditioned of our subjects ; and the necessity 
 for employing men in situations where they may 
 become the victims of ferocious animals and dis- 
 ease, forms, in my opinion, the greatest objection 
 to the salt monopoly. This objection it would 
 
 be 
 
51 
 
 be idle to urge^ if there were no alternative^ for 
 men will have salt at whatever risk or sacrifice it 
 may be obtained ; and if the Government should 
 decline to supply the article^ it would be manu- 
 factured by private individuals ; but in point of 
 fact, there is an alternative, which is not liable to 
 the same objections : salt can be manufactured 
 in almost any quantity on the neighbouring coast 
 of Coromandel, under a warmer sun, in a drier 
 atmosphere, and with every circumstance of ad- 
 vantage ; and it appears to me that we should 
 consult both the interests of the revenue and the 
 interests of humanity, by a partial transfer at 
 least of the salt manufacture from some of our 
 Bengal districts to those of the northern sircars. 
 
 The following statement will shew the produce 
 of the salt sales in Bengal, and the cost and 
 charges of manufacture in the last fourteen years, 
 or from 1808-9. 
 
 Gross Sale. Cost and Charge. 
 
 1808-9 ... Ct. Rs. 1,82,69,505 ... Ct. Rs. 40,45,276 
 
 1809-10 1,77,14,711... 42,36,073 
 
 1810-11 1,72,27,019 41,24,303 
 
 1811-12 1,81,47,129 49,00,001 
 
 1812 13 1,67,46,642 60,76,677 
 
 1813-14 1,77,86,141 65,11,578 
 
 1814-15 1,56,86,433 42,58,169 
 
 1815-16 1,60,04,989 39,05,288 
 
 1816-17 1,71,31,682 47,61,455 
 
 1817-18 1,86,71,974 ,48,77,123 
 
 1818- 
 
55 
 
 Gross Sale. Cost and Charges. 
 
 1818-19... Ct.Rs. 1,85,03,785 ... Ct.Rs. 54,32,192 
 
 1819-20 1,90,27,939 60,23,041 
 
 1820-12 1,90,35,117 56,65,403 
 
 1821-22 2,06,07,680 59,71,710 
 
 The quantity of salt sold within the year was 
 formerly from 40 to 45,00,000 maunds, but it 
 has been gradually increased, and of late years 
 the sales have been extended to 48,00,000 maunds. 
 The selling prices varied heretofore from 320 to 
 *350 sicca rupees the 100 maunds ; but the 
 average has been higher of late, and at the March 
 and May sales of 1822 the article reached the ex- 
 orbitant price of Sicca Rupees 437. 1. 2. at the 
 former, and Sicca Rupees 593. 14. 7. at the latter 
 sale. This is much too high an average, for when 
 the article attains this price the tax is really felt 
 as a grievance by the people, whose simple diet 
 requires the addition of salt as a stimulant. When 
 
 the 
 
 * The average of 1821-22 was Sicca Rupees 358 2 6 per 100 
 maunds. When reference is made to the Bengal accounts it is ne- 
 cessary to quote the Sicca Rupee, in which those accounts are kept. 
 In the English accounts, the Current Rupee is used, and in quoting 
 from them, I think it right to give that rupee, for my statements 
 could not otherwise be verified. The Current Rupee is a nominal 
 value, used to bring the different coins of India to one common 
 standard; but I should be glad to see it altogether disused. The 
 Sicca is as 100 to 116 of the Current Rupee. The latter is easily 
 converted into English money, being valued by the Company at two 
 shillings. The pound sterling is therefore arrived at by taking one- 
 tenth. 
 
56 
 
 the average exceeds 350 rupees the 100 maunds, 
 the quantity at the public sales should be aug- 
 mented ; and by retaining a sufficient stock of the 
 article and supplying the market according to cir- 
 cumstances, it is very much in the power of the 
 Government to regulate the price to the consumer, 
 who will not complain while it does not exceed 
 350 rupees per 100 maunds. Taking the con- 
 sumption of the Bengal provinces east of Benares^ 
 in which the Bengal salt is chiefly consumed, at 
 45,00,000 maunds, and the population at thirty 
 millions, the inhabitants will consume annually, 
 on a medium, six seers per head, which at 350 
 sicca rupees per 100 maunds will cost about I2^d. 
 to each individual ; of this fourpence may be 
 considered the natural price of the article, being 
 the cost of production, and the remaining 8^d. is 
 the tax received by Government. This sum,* 
 insignificant as it may appear, would not be a 
 very trifling contribution from the lowest classes 
 of India ; but as these do not consume at the rate 
 of the general average, they do not pay quite so 
 much. The opulent few, with their families and 
 numerous retainers, consume upon a more liberal 
 
 scale 
 
 ♦ The people of Great Britain contribute in taxes at the rate of 
 about ^3. per head on a medium. The people of India at about 
 5s. per head (or 1-1 2th of that rate); but [ am disposed to think 
 that the latter are, nevertheless, more heavily assessed than the 
 former, regard being had to their respective means of paying taxes. 
 
Dl 
 
 scale of allowance ; and salt is supplied also in 
 some instances to the cattle. 
 
 But^ although I have endeavoured to justify 
 the principle of the tax^ or^ rather, the necessity 
 which exists in India for levying the public con- 
 tributions from articles of general consumption, 
 1 am very far from justifying its immoderate ex- 
 tension. Our object ought to be to draw our 
 present income from a larger quantity ; for it is 
 unquestionable that the people do not consume 
 as much salt as they desire to use, and we cer- 
 tainly have it in our power to place the article 
 more within their reach, and to afford them a 
 more liberal measure of indulgence, without any 
 sacrifice of the present revenue. 
 
 Benares, and the territory west and north of 
 that province, are supplied with rock salt, and 
 other salts from the country beyond the Jumna : 
 and soon after our acquisition of what are called 
 " the Ceded and Conquered Provinces," an at- 
 tempt was made to draw a revenue from the 
 monopoly of the salt which is imported from 
 Malwa, Lahore, and other districts lying beyond 
 our own frontier. The experiment, however, 
 failed, and was abandoned, not one moment 
 sooner than was desirable ; for it was undertaken 
 without due attention to circumstances. The 
 manufacture was not in our own hands ; and it 
 was impossible to prevent the introduction of 
 
 I the 
 
58 
 
 the article into our provinces, where the price 
 had been artificially raised far beyond its natural 
 level, without employing an army of custom- 
 house officers, who would have been a pest to 
 the country. The project was also injudicious 
 on another ground, since it tended to check a 
 barter trade between our territory and the dis- 
 tricts west of the Jumna, which was found highly 
 beneficial to both parties. 
 
 At the Presidency of Fort St. George, a reve- 
 nue is, also, drawn from salt, which, in the year 
 1821-22, amounted to current rupees 31,85,763 ; 
 but I am not aware that any useful purpose 
 would be answered by entering into further de- 
 tails on this subject. 
 
 In concluding it, 1 may observe, that the salt 
 revenue is one of the branches of our Indian 
 resources, upon whose stability and permanency 
 we can most confidently rely ; and, although I 
 do not pretend to maintain that it is free from 
 all objections, I consider it less objectionable 
 and less injurious in its effects than some other 
 taxes which we have imposed ; and while the 
 present revenue is required, the mere circum- 
 stance of its bearing an unpopular designation 
 ought not to prejudice us against it, or to induce 
 us to give it up for the purpose of substituting a 
 system of taxation, more consistent with Euro- 
 pean theory, but at the same time, much more 
 
 likely 
 
59 
 
 likely to expose our Asiatic subjects to exac- 
 tions and to personal oppression. 
 
 THE OPIUM MONOPOLY. 
 
 This branch of revenue is associated in cha- 
 racter with the salt monopoly, and naturally fol- 
 lows it, although, in other respects, it is not 
 entitled to take precedence of the customs. In 
 principle, the two monoplies bear a close resem- 
 blance; but there are circumstances which dis- 
 tinguish them. The salt is a tax levied upon 
 our own subjects ; the opium is a tax levied 
 upon the people of China and the inhabitants of 
 the Eastern Archipelago. Salt, if not an absolute 
 necessary of life, is highly conducive to comfort 
 and health. Opium, except when used as a medi- 
 cine, is an intoxicating drug ; hence, the object 
 should be in the one instance to draw the same 
 revenue from the largest possible quantity ; in 
 the other, to draw the same revenue from the 
 smallest possible quantity ; and experience has 
 shewn in the case of opium, that the amount of 
 revenue is in general inversely as the quantity 
 sold. In fact, we have found (fortunately for the 
 character of our .^morals) that 4,000 chests of 
 that article will yield a larger produce than 5,000 | 
 chests. 
 
 I 2 The 
 
 ^> 
 
60 
 
 The manufacture of opium in Bengal is a strict 
 monopoly^ and I have to vindicate this tax against 
 the same prejudices, which the very term *^ mono- 
 poly" never fails to excite ; but, although I can- 
 not, in a manner quite satisfactory to myself, get 
 over one objection to which the monopoly is lia- 
 ble, namely, that the government have been com- 
 pelled, as a means of securing it, to prohibit the 
 cultivation of the poppy in particular districts, 
 and thus to trench upon the rights of property ; 
 yet, even for this stretch of power, some excuse 
 may be found, since the general use of an intoxi- 
 cating drug is not only productive of physical 
 evil, but is, moreover, calculated to have a pre- 
 judicial effect upon the morals and good order of 
 society. 
 
 In other respects, 1 have no formidable diffi- 
 culty to surmount. When strictly examined, the 
 tax on opium will be found to resolve itself into 
 a high export duty, which is paid by the foreign 
 consumer, and which is regulated by the export- 
 ing merchant, who determines the price to be 
 paid for the article upon his own view of what 
 the foreign consumer can, or will, pay for it. 
 
 Tiie opium costs the Company in Bengal from 
 225 to 250 rupees per chest :* it is exposed to 
 public sale, periodically, under an express stipu- 
 lation 
 
 * The chest contains two factory maunds— 149] lbs. 
 
61 
 
 latioii that the article shall be exported. The 
 merchant bids for it what he pleases ; sometimes 
 more and sometimes less : there is free compe- 
 tition^ and the difference between the actual cost 
 of the article and the sale price, is evidently 
 nothing more nor less than a custom-house duty. 
 Wherein would be the difFerence, if the Govern- 
 ment disposed of the opium at prime cost, or 
 allowed others to manufacture it, and afterwards 
 imposed a duty of 100 or 1,000 per cent, on the 
 exportation of the article ? The existing system 
 is, no doubt, to be preferred, because it is better 
 calculated to prevent smuggling, and because the 
 exporting merchant is better qualified to deter- 
 mine the proper rate of duty than the Govern- 
 ment can pretend to be. 
 
 High rates of customs may have a prejudicial 
 effect in checking exportation ; but in this in- 
 stance the tax is paid 'voluntarily/, and does not 
 prevent exportation. . The Chinese are certainly 
 made to pay very high for our opium ; and they 
 in return make us pay very high for their teas : 
 but we scarcely can be said to do them an injury 
 by raising the price, so as to discourage the use 
 of a drug, which, however excellent as a medi- 
 cine, cannot be used habitually, or in excess, 
 without injury to the individual who indulges in 
 the habit. 
 
 Prior 
 
62 
 
 Prior to the administration of Lord Teign- 
 mouth, the opium revenue was of small account. 
 The article was provided by contract : the drug 
 was in general impure ; it was not held in esti- 
 mation in the foreign market ; and so late as the 
 year 1797-8^ it averaged only Sicca Rupees 414. 15. 
 per chest. In the following year 1798-9^ the 
 price rose to Sicca Rupees 775. 3. per chest : it 
 continued to rise from that time^ fluctuating, 
 however^ at particular periods, until in 1822-23 
 it averaged 3,090 Sicca Rupees per chest ;* the 
 quantity brought to sale in that year, being only 
 3,504 chests, or 1,000 chests below the quantity 
 usually disposed of by the Government. 
 
 The improvement in the revenue is, in a very 
 great degree, to be ascribed to the change in 
 the system of management introduced by Lord 
 Teign mouth. The contracts were abolished ; 
 the opium was provided by public agents, to 
 whom a liberal commission was granted on the 
 sales ; the manufacture was confined to the dis- 
 tricts most favourable to the growth of the 
 poppy; a rigid examination was established at 
 the Presidency to insure the purity of the drug ; 
 its quality was rapidly improved ; the confidence 
 of the exporting merchant and foreign consumer 
 was gradually secured ; and, in the course of a 
 
 few 
 
 * It has averaged as high as Sicca Rupees 4,001. 4. 11. per chest. 
 
63 
 
 few yearSj a chest of opium^ bearing the Com- 
 pany's nnarks, passed among the Malays and 
 Chinese like a bank-note^ unexamined and un- 
 questioned. 
 
 The quantity of the article annually brought 
 to sale in Calcutta, has been from 4/X)0 to 4^500 
 chests^ 2,500 of which were understood to be 
 consumed in China ; while about 2,000 chests 
 were distributed among the inhabitants of Java, 
 Sumatra, Borneo, Celebes, and the other islands 
 in the Eastern Seas. Four thousand five hundred 
 chests were heretofore supposed to be the largest 
 quantity which could be disposed of with advan- 
 tage ; and although the consumption has proba- 
 bly increased, and is increasing, there are strong 
 grounds for believing that we shall not consult 
 the interests of the revenue by extending the 
 sales beyond that quantity. 
 
 The following statement will shew the gross 
 produce of the sales of Bengal opium during the 
 last 14 years, or from 1808-9, with the cost 
 and charges of manufacture, viz. 
 
 Gross Receipts. Cost and Charges. 
 
 1808-9 CurrentRs. 59,56,354 Current Rs. 9,67,278 
 
 1809-10 82,23,431 8,31,275 
 
 1810-11 93,59,961 9,61,879 
 
 1811-12 92,46,775 8,77,325 
 
 1812 13. 72,99,401 8,80,528 
 
 1813-14.^. 96,40,729 10,77,638 
 
 1814 15.* 1,10,35,626 8,29,881 
 
 1815- 
 
(34 
 
 Gross Receipts. Costs and Charges. 
 
 1815-16 ...a. Rs. 1,05(12,601... CL Rs. 10,97,585 
 
 1816-17 94,16,539 11,85,490 
 
 1817-18 87,35,983 8,92,496 
 
 1818-19 83,05,846 8,89,915 
 
 1819-20 79,98,248 10,35,066 
 
 1820-21 1,43,64,321 13,57,259 
 
 1821-22 1,12,57,275 9,86,722 
 
 It willa|5pear, from this statement, that, although 
 the revenue has fluctuated from time to time, it has 
 been in a course of progressive advancement, and 
 I have been accustomed to consider the opium as 
 one of those branches of our Indian revenue upon 
 whose stability and improvement we could most 
 confidently rely. Very different views have, how- 
 ever^ been lately adopted with respect to the 
 means of encreasing this resource ; and 1 am led 
 to apprehend that the change of plan will not only 
 fail to produce the advantages expected, but that 
 it will have the effect of rendering the existing 
 revenue extremely precarious. 
 
 In the province of JVIalwa, and other districts on 
 the western side of India, opium had long been 
 produced, and had found its way, through various 
 indirect channels, into China and the other mar- 
 kets in the Indian Seas, interfering, more or less, 
 with the sale of our Bengal produce. 
 
 When this territory came into our possession 
 by the successful termination of the Mahratta 
 
65 
 
 War in 1818^ ihe government appear to have 
 adopted the notion that a field was opened for 
 extending the opium monopoly; and departing 
 at once from the maxim, heretofore acted upon, of 
 circumscribing the produce and of confining the 
 manufacture to particular districts, supposed to 
 be most favourably situated for the growth of the 
 poppy, they made large advances for its cultiva- 
 tion in Malwa, paid high prices for the drug, and 
 otherwise held out every encouragement to the 
 extension of the manufacture. Nor has this new 
 course of policy been restricted in its application 
 to the new territory. The government of Bengal 
 have more recently taken measures for increasing^ 
 the produce in the districts under that Presidency ; 
 they have even appointed the collectors of the land 
 revenue to act as deputies to the opium agent, 
 and have stimulated their exertions to favour the 
 cultivation of the poppy by granting them a com- 
 mission, or per centage, on any increase which 
 may be made to the produce. In short, without 
 entering into the reasoning, which led to the 
 change, it will be sufficient to state that it is now 
 broadly maintained that our object should be to 
 encourage production^ and to draw a revenue upon 
 a larger quantity, which, being disposed of at 
 moderate prices, may be expected to check foreign 
 competition, and not only to secure, but to en- 
 large, the markets of consumption. The article 
 
 K is 
 
66 
 
 is also supplied for our own domestic occa- 
 sions_, and there seems to be no longer any 
 intention to discouraore the use of the druo' bv our 
 native subjects ; ahhough, heretofore, the utmost 
 precaution was observed to prevent their obtain- 
 ing it, even in the smallest quantity. 
 
 in the instance of salt and tea, I concur en- 
 tirely in the position, that we should endeavour to 
 raise a moderate revenue upon a large consump- 
 tion ; but in the case of opium, a different policy 
 should, I think, be pursued. I do not mean to 
 affirm that the quantity may not be too small and 
 the prices too high ; because very high prices 
 operate as a premium, which promotes smuggling 
 and adulteration, as well as foreign* competition ; 
 but as far as it can be circumscribed without ^vo- 
 ducing such effects, it is desirable, 1 think, that it 
 should be limited. The accounts printed for 
 Parliament do not shew the number of chests 
 brought to sale annually by the government, or it 
 would, I believe^ appear that, in almost every 
 instance, the proceeds of those sales have been 
 nearly in the inverse ratio of the quantity disposed 
 of; and, with this evidence before us, it is surely 
 
 not 
 
 * The cultivation of the poppy has, I understand, been success- 
 fully introduced into the Philippine Islands, which are placed in the 
 very centre of the opium consumers ; and I am apprehensive that 
 our sales will be affected by a competition from this quarter. 
 
67 
 
 not wise or prudent to extend the manufacture 
 unnecessarily. 
 
 The following memorandum will shew the pro- 
 gress which has been made in realizing an opium 
 revenue from Malwa, in the two first years of the 
 experiment. 
 
 Gross Receipts. Advance and Charges. 
 
 Current Rupees. Current Rupees. 
 
 1820-21 3,23,347 
 
 1821-22 33,89,333 41,99,741 
 
 Per Estimate. Per Estimate. 
 1822-23 32,12,500 65,60,600 
 
 Here we have a very heavy charge in lieu of a 
 revenue; but 1 do not mean to say that this is a 
 just exhibition of the ultimate result. The large 
 advances which have been made (most improvi- 
 dently, as I conceive) have produced^ and will 
 produce^ opium, more than sufficient, probably, to 
 replace the disbursement ; but 1 have reason to 
 know that we are going on with our advances 
 upon a very large scale, and 1 see reason to 
 apprehend, not only that the proceeds of the sales 
 of Malwa opium will do little more than reimburse 
 the cost of the article, but that those sales will, in 
 a very material degree, affect the sale of our Ben- 
 gal produce. 
 
 When we advert, moreover, to the magnitude 
 of the sum advanced for the article in Malwa, in 
 1822-23, it is impossible not to feel a little startled : 
 
 K 2 it 
 
68 
 
 it is more than six times the amount paid for the 
 whole produce of Bengal (about 4,500 chests) ; and 
 we must conclude, either that we are to obtain six 
 times the quantity, or that we are to pay six 
 times the price for the Malwa opium, or that both 
 quantity and price are to be augmented. The 
 latter is the true supposition : we are to pay 
 much more than the natural price or cost of pro- 
 duction in Bengal ; and this most powerful stimu- 
 lant is to be applied to obtain an article which we 
 do not want. We place an enormous sum in the 
 hands of an agent, so far removed from the seat* 
 
 of 
 
 * This, in itself, is one among many strong reasons for establish- 
 ing a separate Government in " Central India," or in some conve- 
 nient situation west of the Jumna. Sir John Malcolm has warmly 
 recommended the measure, and I entirely concur in its expediency. 
 Our connections and interests have become so multifarious and com- 
 plicated in that quarter that they require constant and vigilant atten- 
 tion. A spark which might be extinguished at the moment by a 
 Government on the spot, may rise into a flame before a reference 
 can be made to the distant Presidency of Fort William — and sur- 
 rounded as we are by Marhattahs — Affghans — Rajapoots — Sikhs — 
 Jaats — and other tribes, having dissimilar views and interests, such 
 sparks must frequently be elicited. Seventeen years ago my colleague 
 and myself, when employed as a Board of Commissioners for the 
 settlement of the Ceded and Conquered Provinces, " urged the expe- 
 diency of a responsible and respectable administration being esta- 
 blished in that distant and valuable territory ;" but the necessity 
 for it is become much more urgent and apparent, now that we have 
 extended our frontier to the west, and that the attention of the 
 Supreme Government has unfortunately been called by a new enemy 
 to the east. See Report from Commissioners, printed in the " Reve- 
 nue Selections," pages 6 to 44. 
 
69 
 
 ofGovernment as to be beyond all efficient cou- 
 troul ; and the credit of that officer is to depend^ 
 in a great measure, upon his exertions to produce 
 an excessive quantity of a deleterious drug! If 
 the money thus expended found its way to the 
 cultivators of thesoil^ or to the village zemindars^ 
 who would return a part in the shape of rent or 
 revenue^ there would be less to regret ; but is 
 this the case ? Some of the native chiefs may 
 receive a portion of the amount ; but a portion by 
 no means inconsiderable is likely^ I fear, to be 
 engrossed by contractors,, native officers, inter- 
 mediate agents, and others, whom it cannot be 
 the interest of the Government to maintain and 
 encourage. 
 
 Two reasons may be assigned for the late pro- 
 ceeding of the Government of India : the one, 
 that they could not, with justice to the landholders, 
 suppress the cultivation of the poppy in our new 
 territory ; the other, that we could not prevent 
 the opium, which is produced in the territories of 
 the native chiefs, who enjoy a real or nominal in- 
 dependence, from finding its way through clan- 
 destine channels to the sea-coast, and from thence 
 to the markets of consumption. 
 
 The former reason is plausible, and I am no 
 advocate for interfering with the free use of pro- 
 perty ; but we ought to be consistent : we 
 peremptorily suppressed the cultivation of the 
 
 poppy 
 
70 
 
 poppy in the Bengal districts of Rungpore, Pur- 
 neah^ and Baugulpore, where it had been grown 
 for ages, and where a permanent settlement of 
 the revenue had been concluded with the land- 
 holders^ limiting the public demand, and recog- 
 nizing all the rights of property on their part ; 
 and yet we hesitate about doing the same thing 
 in places where it had not been cultivated beforCj 
 where no settlement has been made, and where, 
 consequently^ it is open to the Government to 
 make any ari-angements they may think proper 
 with the occupants of the soil. Is not this to 
 strain at the knat after having swallowed the 
 camel ? The proceeding in Bengal was arbi- 
 trary ; but some excuse may be found for it, if, in 
 addition to the desire naturally felt to preserve an 
 important branch of revenue, the Government 
 was influenced by considerations having reference 
 to objects of police. 
 
 The second reason appears to me to be quite 
 unsatisfactory and inconclusive. It is surely 
 more easy for us to prevent the illicit manufacture 
 and exportation of opium, now that nearly the 
 whole of central and westerh India is under our 
 direct authority or subject to our influence, than 
 it was when this territory was held by independent 
 and even hostile states. Malwa opium was always 
 exported to a certain extent, from the western 
 side of India, and a small quantity might still find 
 
 its 
 
n 
 
 its way to the sea through the Portuguese ports 
 of Diu and Damaun, but it would be in our 
 power to render that quantity very small, and its 
 price very high, either by the imposition of high 
 transit duties, or by declaring the article contra- 
 band. This is not an expedient perfectly satisfac- 
 tory to the mind ; but the principle and the prac- 
 tice are recognised and have been long enforced 
 by the enlightened Government of Great Britain, 
 against those fearful articles, French lace, China 
 crape, and Indian brocades. 
 
 Under these circumstances we must, J fear, 
 look for the true explanation of our measures, in 
 the desire felt by the Government to establish in 
 Malwa the same profitable monopoly which we 
 have succeeded in establishing in Bengal ; but I 
 apprehend that the expectation will be disap- 
 pointed. Whether the monopoly in itself be 
 justifiable or not in principle, it is not for me to 
 decide ; but viewed only as an instrument of tax- 
 ation, I must contend that the means which have 
 lately been pursued for its extension, are calcu- 
 lated to produce effects the very reverse of those 
 contemplated, and that far from looking to any 
 improvement, the experiment, if persevered in for 
 two or three years, will end in the destruction of 
 
 the present revenue.* 
 
 Another 
 
 * The receipts in 1822-23 and 1823-^i will, however, be very 
 large, as there was an arrear outstanding of Sicca Rupees 34,76,000, 
 
Another disadvantage has attended our opera- 
 tions in Malwa : under the very judicious arrange- 
 ments which had been for some time in operation, 
 a considerable gain by exchange had been derived 
 by the Government, on the very large supplies 
 annually furnished from Bengal in aid of the 
 limited resources of Bombay ; but in consequence 
 of the enormous sum required for the provision 
 of the Malv^a opium, the agent has been allowed 
 to negotiate bills on Calcutta and its dependen- 
 cies, to an extent exceeding what the trade could 
 supply ; his bills have come into competition with 
 those of the Bombay Government, and instead of 
 gaining, as heretofore, a difference of exchange of 
 not less than eight per cent., a loss is likely now to 
 be sustained on our remittances to the western 
 parts of India. 
 
 Every thing had been so well regulated that the 
 Government of India gained invariably upon 
 almost all its exchange transactions, and the 
 difference of exchange had become no insignifi- 
 cant source of income; butlobserve, with regret, 
 that even our rennttances to China have not of 
 
 late 
 
 on th« 30th April 1822, and the' prices continued high in 1822-23. 
 They have now fallen, and will, I fear, continue to fall. The revenue 
 of 1824-5 from the Bengal opium is not expected to exceed Sicca 
 Rupees 72,00,000 on Rupees 56,70,000 below the actual receipts of 
 1822-23; and even this reduced revenue will not be realized, if we 
 continue to encourage the production of opium in Malwa. 
 
73 
 
 late been effected with the same advantage as 
 heretofore. In the course of the last year a large 
 remittance was made from Calcutta to Canton in 
 specie ; but as it was composed of the coins of 
 Bengal (the Spanish dollar not being procurable 
 probably in sufficient quantity)^ and as those 
 coins would not answer the purposes of the supra- 
 cargoeSj the money has been sent back through a 
 private house of business^ and a loss is likely to 
 be sustained by the Company in freight^, insur- 
 ance (or risk), interest^ and the charges of 
 agency^ to the extent of not less than ten or twelve 
 per cent. The very circumstance of. the supra- 
 cargoes calling for a remittance in specie, shews 
 that the exchange had fallen, or was expected to 
 fall, and the fact is corroborated by late advices 
 from Canton. 
 
 Sayer, or Excise, including the Abkarry, or Tax 
 on Spirituous Liquors and intoxicating Drugs. 
 
 The sayer will be taken next in order, as the 
 abkarry, which constitutes the principal branch 
 of it, bears some affinity to the tax on opium in 
 one of its features. 
 
 The abkarry was established by us upon a 
 regular footing, partly with a view to objects of 
 police, and partly for the purpose of drawing a 
 revenue, at the same time that we discouraged 
 and checked the bad habits of our native subjects. 
 
 L It 
 
74 
 
 It was imagined that we should diminish the use 
 of fermented liquors and drugs, by rendering the 
 article more expensive to the consumer ; and 
 that we should, also, by licensing the shops for its 
 sale, have it in our power to maintain a more 
 effectual controul over the haunts of depredators 
 and other ill disposed persons, accustomed to 
 disturb the peace and good order of society. 
 
 In both these speculations we have, I fe^r, 
 been disappointed, and had we looked a little 
 deeper into human nature, we might, perhaps, 
 originally have come to a different conclusion. 
 The use of spirituous liquors and drugs by the 
 natives has increased, and is still increasing, and 
 with it, I apprehend, their vices. In India, habits 
 of intoxication are not regarded as they are in 
 some other countries, with indulgence and even 
 favour ; they are revolting to all the feelings of the 
 people, and to all their notions of propriety ; and 
 the Hindoo^ who once addicts himself to drinking, 
 must be content to take a very low place in the 
 scale of society : in truth, the practice prevails 
 only among the lower orders both of Hindoos and 
 Mussulmans ; and if a few individuals at the* 
 opposite extremity of the scale should addict 
 themselves to it, the gratification is indulged in 
 private, for no person, at all scrupulous about cha- 
 racter, would expose himself to the certainty of 
 forfeiting the esteem of his countrymen by pub- 
 licly 
 
75 
 
 licly manifesting a disregard of all their feelings 
 and prejudices. 
 
 In the Hindoo Zemindary of Nuddeah I have 
 heard that not a single shop existed until we 
 licensed the vend of spirituous liquors and drugs ; 
 and at present not a village in it could probably 
 be pointed out, in which such a shop wouhl not be 
 found. Men used spirits, no doubt, in former times, 
 and the lowest classes largely in some places ; but 
 while they did so in private, the evil did not ex- 
 tend so far. The license of government gave a 
 sort of public sanction to the practice, and the 
 disgrace incurred by individuals, was diminished 
 by being participated with their rulers. The in- 
 crease which has taken place in the Abkarry, is 
 not perhaps in itself sufficient to justify me in 
 asserting that habits of intoxication have become 
 more generally prevalent ; but such is the received 
 opinion, and it is quite certain that among the 
 Hindoos, such habits must have a very prejudicial 
 effect upon the morals and social condition of that 
 people. 
 
 It w^as, also, I fear, a miscalculation to assume 
 that the police could exercise a more efficient 
 superintendence over persons of bad character, in 
 consequence of our licensing '' Public Houses.'* 
 The '' Abkars/' or publicans, are themselves peo- 
 ple of very low caste and condition in India ; it 
 is their interest to have customers, and they would 
 
 L 2 not 
 
76 
 
 not long retain customers if they habitually be- 
 trayed them. Public houses are the usual resort of 
 the idle and dissolute, and a convenient rendezvous 
 for those who meditate felonious designs which 
 must be executed by the concert of numbers. 
 Drinking is often the prelude, and the incentive 
 to their crimes ; men drink that they may rob, 
 and rob that they may drink : gaming, if not a 
 kindred vice, is not unfrequently associated with 
 drinking ; and both exercise a baneful influence 
 by inflaming the passions, by lowering the tone 
 of character, and rendering the fortunes of men 
 desperate. 
 
 It was equally a miscalculation to assume that 
 the use of spirituous liquors would be diminished 
 by enhancing the price of the article by means of 
 taxation. The materials for intoxication are every- 
 where to be found in India, at so cheap a rate, 
 that the duty can produce no sensible effect. If 
 it be moderate, it will not be felt ; if it be very 
 high, it can be, and will be, evaded. 
 
 What then remains to be done ? Can we retrace 
 our steps ? I fear not, for when a habit is once 
 established among a people^ it is extremely diffi- 
 cult to eradicate it. We could not now, without 
 great violence, abolish our abkarry system ; but 
 we might have refrained from supplying (as we 
 have done lately) a large quantity of opium for 
 our domestic consumption, since this article is a 
 
 powerful 
 
77 
 
 powerful ingredient in the different preparations 
 which are made for producing intoxication. 
 
 The abkarry will probably continue to increase ; 
 but it iSj I thinkj to be regretted that it was ever 
 made an object of revenue by the British Govern- 
 ment. 
 
 1 shall only notice, and that very slightly, one 
 other branch of the sayer, or excise ; I mean the 
 duty levied on pilgrims resorting to the temples of 
 Jagurnath, Gya, and other places. 
 
 This tax does not harmonize^ 1 think, with the 
 character of a great and liberal government ; and 
 our interference in the internal management of the 
 temple at Jagurnath, can scarcely be, considered 
 judicious or respectable. It was intended, how- 
 ever, to prevent fraud and imposition, and to 
 guard the pilgrims against violence and extortion ; 
 but such interference has not been found neces- 
 sary at Gya, and, if not necessary, it is undoubt- 
 edly to be avoided : I own, at the same time, 
 that, although wishing to see the tax abolished, 
 I cannot enter into the feelings of some worthy 
 persons in this country, who regard it with as 
 much horror, as if they were the identical Hindoos 
 who are the immediate objects of it. 
 
 I may observe, generally, in this place, that an 
 excise* is not suited to the situation and habits of 
 
 the 
 
 * The sayer gungeaut, abolished by Lord Cornwallis, was a species 
 of excise to which the natives had been long familiarized, but it was 
 
78 
 
 the people of India. It requires a multiplicity of 
 officers for its collection ; these officers, receiving 
 very small allowances, cannot be depended upon ; 
 personal oppression would often be committed ; 
 thepower of visiting dwelling-houses is everywhere 
 odious: but, in India, where the female apartments 
 cannot be entered without inflicting disgrace, 
 such a power would be viewed with horror and 
 detestation, and might be exercised to effect the 
 worst purposes. Moreover, commodities which, 
 might be judged proper objects of the excise, are 
 found in such scanty quantity, or so widely dis- 
 persed, that a revenue could not be drawn from 
 them without entailing a charge quite dispropor- 
 tionate, nor without subjecting the people to 
 grievous vexations. 
 
 Tobacco is an article which promised better than 
 any other, because it is one of general consump- 
 tion ; and several projects have, at different times, 
 been entertained for subjecting it to an excise; 
 
 but 
 
 a vexatious imposition. It consisted of duties levied in gunges, 
 hauts, and bazaars (fairs, markets, &c.), on the sale of all commo- 
 dities, partly as rent and partly to defray the expense of providing 
 sheds, stalls, and other accommodations. One disadvantage attended 
 the abolition ; the gunges were neglected and fell into decay, and 
 buyers and sellers, who have an interest in meeting together, being 
 deprived of the accustomed accommodations, did not resort to those 
 places so generally as heretofore. The " rahdarry," or transit 
 duty, was very properly abolished as vexatious and injurious to 
 commerce. 
 
79 
 
 but the objections to which 1 have adverted, were 
 considered to be decisive against it, although I 
 have learnt, with regret^ that the project of taxing 
 it^ has lately been resumed. It is an article which 
 is usually grown in garden-ground, adjoining the 
 habitations of the natives; and as they can thus 
 supply themselves at their very doors^ it could not 
 be brought under an excise without a heavy ex- 
 pense, nor without subjecting the growers and 
 consumers to an inquisitorial power, which would 
 be perfectly intolerable. 
 
 Attempts have been made to introduce some 
 other taxes of an objectionable character, (the 
 house tax, shop tax, &c.) ; but as they were found 
 to be unpopular, the good sense and proper feehng 
 of the Goverment induced them to give way, and 
 to withdraw the obnoxious impost, before it pro- 
 duced, as it threatened to do, a serious ferment 
 and popular commotion. 
 
 THE STAMPS. 
 
 This is a tax of European origin, and Jittle 
 suitable to the character and habits of our native 
 subjects. It is very expensive in collection (one 
 of the tests of a bad tax) ; it is extremely vex- 
 atious, and it holds out great temptations to 
 fraud from the ease with which the stamps can be 
 
 imitated. 
 
80 
 
 imitated, and from the ignorance of the people 
 who are compelled to use them. 
 
 This immoral tendency ought especially to be 
 guarded against in fiscal legislation, for, although 
 the individual who will evade a tax, or defraud the 
 revenue with little scruple, will not always de- 
 fraud his neighbour, it is dangerous to shake the 
 moral principle, since men who begin by com- 
 mitting what they consider (however erroneously) 
 venial trespasses, are decidedly on a road which 
 may conduct them to more serious offences. A 
 tax, moreover, which can be easily evaded operates 
 injuriously towards the fair dealer ; and a tax 
 which admits of impositions upon the ignorant 
 and unwary, by throwing doubts over all contracts 
 and commercial transactions, is liable to very 
 serious objections. 
 
 The stamps, too, were superadded to other 
 taxes : the individual who had to pay customs 
 was called upon at the same time to pay for a 
 stamp ; he who had to deposit a judicial fee on 
 entering his suit, was also required to add to it 
 the price of a stamp. Now, one direct tax is 
 surely enough at a time ; and it certainly tended 
 little to the credit of our Government to send away 
 an ignorant native, several miles perhaps, in search 
 of a stamp, before he was allowed to present a 
 petition. This ground of reproach has, I believe, 
 been removed. 
 
 This 
 
81 
 
 The stamp duties made little progress for 
 several years after their institution^ but they have 
 lately advanced more rapidly ; and if we could 
 be satisfied that their increase is fairly to be 
 ascribed to the increasini^ wealth of the people, 
 and not to the imposition of higher rates, to 
 their extension to new objects, or to the 
 stricter enforcement of revenue laws, there would 
 be something to reconcile us to the conti- 
 nuance of the tax. The following is a memo- 
 randum of the receipts and charges in the last 
 three years. 
 
 BENGAL STAMP DUTIES. 
 
 Receipts. Charges. 
 
 1819-20 Ct.Rs. 14,61,280 Ct. Rs. 6,51,610 
 
 1820-21 15,08,971 6,51,446 
 
 1821-22 *15,14,992 6,16,916 
 
 Per Estimate. 
 1822-23 21,57,600 5,80,000 
 
 FORT 
 
 * In Account No. 1, page 6, of the last printed statements (bear- 
 ing date May 1824) the stamps in 1821-22 are stated at Current 
 Rupees 15,14,992 : and in Account No. 9, page 22, of the same 
 series of statements, they are stated at Sicca Rupees 18,40,843, or 
 Cur7'ent Rupees 21,35,377. This difference arises from the omission 
 of the Stamp Revenue of the " Ceded and Conquered Provinces '* 
 in Account No. 1, which is prepared in this country. It would, how* 
 ever, in my opinion, have been much better if the Bengal arrangement 
 had been adhered to: 1st. Because the whole Stamp Revenue ap- 
 pears in one sum in the Bengal account, whereas in the English 
 
 yi account 
 
82 
 
 FORT ST. GEORGE STAMP DUTIES. 
 
 Receipts. Charges. 
 
 1819-20 ... Pcigudas 1,29,797 ... Pagodas 8,909 
 
 1820-21 1,55,607..... 24,379 
 
 1821-22 1,61,859 24,801 
 
 Per Estimate. 
 1822-23 1,43,916 21,235 
 
 BOMBAY STAMP DUTIES. 
 
 1819-20 Rupees 1,59,717 ^^i 
 
 1820-21 1,42,898 ^.s I 
 
 1821-22 1,79,026 l| I 
 
 Per Estimate. ^M ^ 
 
 1822-23.... 1,65,000 g|i 
 
 It will iaimediately strike those who have given 
 attention to the principles of taxation, that the 
 high rate of charge^ which in Bengal has hitherto 
 absorbed a large portion of the collections, con- 
 stitutes a great objection to the stamp duties. It 
 is improvident in any Government to take £15 
 
 from 
 
 account we can only discover a part, the remainder being incorpo- 
 rated with the Land Revenue. 2dly. Because in the English account 
 a part of the revenue stands opposed to the whole charge, unless, 
 indeed, the charge of the stamps in " the Ceded and Conquered 
 Provinces " be also incorporated (which is not probable) with the 
 charge of the Land Revenue ; and, lastly, because the two accounts 
 ought to be made to correspond, unless there be some strong reason 
 for a deviation, which assuredly cannot be alleged in the present 
 instance. Such discrepancies produce doubt, whereas the Company's 
 accounts are entitled generally to the fullest confidence, for they are 
 prepared by men of high character and great professional knowledge. 
 
83 
 
 from the pockets of the subject, when only ^9 of 
 the amount* comes into the public exchequer ; 
 and althoutrh it would appear from the estimate of 
 1822-23^ that the disproportion of the charge to 
 the revenue is expected to be less hereafter^ I 
 cannot bring myself to regard the stamps as an 
 economical tax, nor as one which can be consi- 
 dered free from other objections. 
 
 THE CUSTOMS. 
 
 It is gratifying always when we find the cus- 
 toms prosperous and improving, because from 
 their healthful condition we may generally infer 
 that the bounteous gifts of nature, and the works 
 of human industry and skill, are freely distributed 
 among the sons of man. Their productiveness is 
 also in general an indication of wisdom and mo- 
 deration on the part of the Government, for it 
 
 rarely 
 
 * Receipts in 1821-22, say in round numbers 15,00,000 
 
 Deduct charge ditto 6,00,000 
 
 Net Revenue 9,00,000 
 
 The charge of 6,00,000 on 9,00,000 is equal to 66f per cent. But 
 I suspect (as intimated in the preceding note) that the sum of 6,00,000, 
 is the total charge n^on the total revenue o^Cnnent Rupees 21,35,377, 
 and, in this case, the rate of charge will be reduced to about 28 per 
 cent. 
 
 M 2 
 
84 
 
 rarely happens that excessive duties produce a 
 large revenue. 
 
 The great secret of finance is to promote civ- 
 culation and consumption ; for although in the 
 natural order of things production must precede 
 consumption, it is quite certain that if consumers 
 be found, and no interruptions to the circulation 
 of commodities be interposed, production will 
 take place. But what avails it to France that 
 the banks of the Seine are covered with the fruits 
 of her vineyards, if they cannot find a purchaser? 
 Her light wines, however grateful they would be 
 to the taste of our people, are nearly excluded 
 from this country by disproportionate duties, and 
 this interdiction virtually excludes from France 
 our hardware, our beautiful cottons, and other 
 articles, which would be highly appreciated by her 
 population. fVe cannot urge the plea of having 
 rival manufactures to protect, for throughout the 
 wide extent of our dominion we do not make a 
 single hogshead of wine from the juice of the 
 grape, except at the Cape of Good Hope. France 
 has cotton manufactures^ but our capital and our 
 machinery would enable us to supply a part of 
 her large consumption with advantage to both 
 parties, if we were content to receive her wines in 
 exchange. As the dawn of a more liberal policy 
 has lately appeared in our councils, we may 
 
 indulge 
 
85 
 
 indulge a hope that the experiment* will be 
 made, and that commercial interests, which are 
 always favourable to peace, will tend to check 
 hereafter those military and political feelings, 
 which have so often involved the two countries in 
 unprofitable warfare. 
 
 The manufactures of India have had to struggle 
 of late years against desperate odds, and the pow- 
 ers of machinery threaten soon to annihilate them 
 altogether. It would be idle in the people of 
 that country to complain of the introduction of 
 machinery, which must be regarded as one of the 
 great improvements of the age, and it would be 
 not less so to attempt to counteract its effects by 
 bounties and protecting duties, even if India 
 possessed the power to legislate for herself. But 
 our Indian subjects have just cause to complain 
 of being treated as aliens in our system of com- 
 mercial policy ; and if the stream of wealth which 
 has flowed into the mother country should become 
 languid, or altogether fail, it will be no more than 
 the natural result of those restrictive measures 
 which seem to say, *' you shall not produce, either 
 for our benefit or your own.'* The people of 
 India are British subjects, and they have claims 
 
 to 
 
 * Since these pages were written, the Chancellor of the Exchequer 
 has proposed a large reduction in the duties on French wines, and I 
 congratulate him and the country on the wisdom of the measur?. 
 
86 
 
 to something beyond the privilege of paying 
 twenty-two millions sterling in annual re- 
 venue. 
 
 The Government abroad has always been at- 
 tentive to the interests of commerce^ and has been 
 solicitous to promote the external trade of the 
 country. The customs^ both on imports and ex- 
 ports^ are moderate^ seldom exceeding five per 
 cent, ad valorem^ with double rates on foreign 
 bottoms, or on foreign produce. We cannot, in 
 the first instance, levy duties on the foreign trade, 
 which passes the port of Calcutta to the settle- 
 ments of Chinsurah,* Chandernagore, and Se- 
 rampore, the river being free and open to them ; 
 but, by a sort of fiction, we treat those places as 
 ports beyond sea ; and, in order that the merchants 
 frequenting them may not enjoy an exemption 
 from the customs, we levy the import duty on all 
 commodities coming from thence into our terri- 
 tory, and the export duty on goods passing from 
 our territory to the foreign settlements. Their 
 own consumption of articles imported from be- 
 yond sea, of course, escapes the tax. 
 
 At 
 
 * Chinsurah has now been ceded to us by the Dutch ; but it is 
 much to be regretted that these small settlements were restored at 
 the peace. They are the source of inconvenience to us, without 
 being the source of advantage to their possessors. The same may 
 be said of the Portuguese settlements of Diu and Damaun, and even 
 of Goa on the Malabar coast. 
 
87 
 
 At a period not very remote^ the customs were 
 levied in almost every district in our western pro- 
 vinceSj and goods proceeding from the Jumna to 
 the Presidency, paid duties repeatedly in transitu^ 
 and were repeatedly detained for examination ; 
 but this system, which caused great embarrass- 
 ment, delay, and expense to the merchant, has 
 since been corrected. Town duties are still col- 
 lected in the cities and principal towns as a means 
 of taxing the consumption of those places ; but 
 as they are generally the resort of the more opu- 
 lent, the tax is not, I think, justly liable to objec- 
 tions. 
 
 Under the circumstances in which British India 
 is now placed, with her manufactures in a state of 
 decay, and her trade to the mother country la- 
 bouring under restrictions, it would not have 
 been surprising if the customs had declined ; but 
 it will be satisfactory to find from the following 
 abstract that this is not the case. 
 
 BENGAL CUSTOMS (ancient Territory). 
 
 Receipts. Charges. 
 
 1819-20 Ct. Rs. 42,77,870 Ct.Rs. 5,81,589 
 
 1820-21 44,48,417 5,89,846 
 
 1821-22 47,90,014 7.06,651 
 
 BENGAL CUSTOMS, including the " Ceded and 
 Conquered Provinces." 
 
 1819-20 Ct.Rs. 73,82,537... Ct. Rs. 10,41,337 
 
 1820-21 82,48,810 10,77,567 
 
 1821-22 84,74,496 12,01,932 
 
 MADRAS 
 
88 
 
 MADRAS CUSTOMS (ancient Territory). 
 
 Receipts. Charges. 
 
 1819-90 ... Pagodas 4,54,282 ... Pagodas 1,27,145 
 
 182021 4,61,624 1,38,062 
 
 1821-22 5,66,101 1,74,395 
 
 The customs collected under the Madras Presi- 
 dency^ in the territory more recently acquired 
 by us^ appear also to have increased gradually^ 
 and they amounted in 1821-22 to the sum of 
 Rupees 35,37^878. The customs at the port of 
 Bombay appear to have been nearly stationary 
 for several years. 
 
 In 1816-17 they amounted to Rupees 9,82,001 
 
 And in 1821-22 to 10,28,624 
 
 There has^ however, been a considerable aug- 
 mentation of territory at Bombay, in consequence 
 of the favourable termination of the late war 
 with the Peishwa ; and the customs under this 
 Presidency niay now be stated as follow : — 
 
 Total collections in 1816-17, prior to the 
 
 late acquisitions Rupees 15,35,290 
 
 Collections in 1821-22 34,33,708 
 
 It is scarcely necessary for me to mention that, 
 in the observations which I have offered on the 
 different branches of our revenue^ I have had 
 more especially in view the Presidency of Bengal, 
 where 1 was myself employed ; but, in truth, this 
 
 is 
 
89 
 
 is the great mine of our wealth. The revenues 
 of Port St. George scarcely do more than defray 
 the charge of the civil and military establish- 
 ments^ the surplus at that Presidency^ even dur- 
 ing peace^ having rarely exceeded the sum of 
 £300,000. At Bombay there has been always 
 a considerable deficit, which was supplied from 
 the surplus resources of Bengal. In 1816-17, 
 prior to the commencement of the late war, 
 it amounted to £1,042,056; but in conse- 
 quence of our recent acquisitions, the deficit 
 has been reduced, in 1821-22, to the sum of 
 £754,154. 
 
 In addition to the branches of revenue already 
 enumerated, there are receipts at the different 
 Presidencies from various less important sources. 
 Peishcush, or tribute, from independent chiefs ; 
 mint duties ; post-office collections, &c. &c. ; 
 but these did not appear to me to call for 
 explanation. 1 have, indeed, avoided, as far as 
 possible, all unnecessary details, which would 
 only have taxed unprofitably the attention of the 
 reader. My object has been to give a slight 
 sketch of the sources of our reveime ; to exa- 
 mine, in a cursory manner, how far the dilFerent 
 branches of it are reconcileable with sound prin- 
 ciples of policy ; and to ascertain, from this exa- 
 mination, how far we may, with confidence, rely 
 upon their permanency, and upon their contain- 
 
 N ing 
 
90 
 
 ing within them the seeds of future improvement. 
 The chief branch of our revenue still remains to 
 be noticed ; and it is one which demands a dis- 
 tinct and a more deliberate consideration. 
 
CHAPTER in. 
 LAND REVENUE OF INDIA. 
 
 I HAVE already observed that the land has^ for 
 ages, constituted the chief source of revenue in 
 India^ and I have endeavoured to explain the cir- 
 cumstances which have led to the adoption of 
 this particular mode of taxation. 
 
 Prior to the administration of Lord Cornwallis, 
 the land revenue had usually been let out to farm, 
 sometimes for a single year, and sometimes for a 
 period of five years ; and occasionally whole dis- 
 tricts were leased out to a single individual. In 
 other instances, what is termed '' Khas" manage- 
 ment, was resorted to ; that is, the European col- 
 lector of a district, by means of the agency of 
 native officers, collected the rents directly from 
 the village communities, or individual occupants 
 of the soil : and in both cases the rule seems to 
 have been, to levy the utmost which the land 
 would yield, without actually compelling the pea- 
 santry to desert their fields and homes. 
 
 This vicious system, which prevented the pro- 
 gress of cultivation, which had already impove- 
 
 N 2 ' rished 
 
92 
 
 rished the country, and which threatened to reduce 
 it to a state of irretrievable poverty and ruin,* 
 soon attracted the notice of Lord Cornwallis ; 
 and after a long, patient, and able discussion, that 
 upright statesman was convinced that considera- 
 tions of justice, o[ humanity, and policy, all con- 
 curred to render a total change of plan abso- 
 lutely necessary. 
 
 The revenue system, to which the just views 
 of Lord Cornwallis disposed him to give a prefe- 
 rence, involved questions of some difficulty. We 
 were, at the time, imperfectly acquainted with the 
 state of the country ; our information with re- 
 spect to the tenures under which the lands were 
 held was incomplete ; and we had not decided 
 in whom the right of property in the land actu- 
 ally vested. The Zemindars (literally landhold- 
 ers) were generally supposed to be the proprie- 
 tors, 
 
 ♦ The following just description of the farming system is given in 
 a letter from the Court of Directors, bearing date the 29th January 
 1813. " We observe that the revenue of a considerable proportion 
 " of the lands, both in Etawah and Allighur, has been let in farm : 
 " a system which, wherever it has obtained, experience has shewn to 
 " be productive of fatal effects. It was this system which ruined 
 " the Carnatic under the late Nabobs; and we fear that all the 
 " modifications which may be applied to it under a British adminis- 
 " tration, will fail in preventing its pernicious effects, &c. &c." 
 See " Revenue Selections," page 76. I need not refer to the exag- 
 gerated description of the farming system given at the trial of Mr. 
 Hastings, but it is notorious that it was productive of the most 
 serious evils in Bengal, as well as in the Carnatic. 
 
93 
 
 tors, partly from their Persian designation, and 
 partly from their being fonnd more generally in 
 possession ; but it was maintained on the other 
 hand, that these persons were mere officers of 
 government, and that, according both to theory 
 and usage, the sovereign, as lord paramount, 
 possessed a right to a certain portion of the pro- 
 duce of every acre of land : others contended, 
 that the Malicks, or village zemindars, were the 
 rightful proprietors; and others, again, that no 
 right of property could be traced beyond the 
 ryot (or husbandman), the heads of villages, or 
 the village community^ who cultivated the land 
 in common. 
 
 It would be quite out of place were 1 to renew 
 the discussion of a question, which is only inci- 
 dentally connected with my subject, and which, 
 as far as it regards the Bengal settlement, has 
 been set at rest. I could not indeed pretend to 
 throw any new light on what has been written on 
 the landed tenures of India. The rights of the 
 zemindars were contested by persons of high 
 authority ; but Lord Cornwallis, who naturally 
 revolted at the extravagant proposition of the 
 sovereign being the universal landlord, at once 
 cut the knot, by deciding, that if landholders did 
 notexist, they ought to exist, and must be created ; 
 and as a consequence of this determination the 
 zemindars, whose connexion with the land was 
 
 more 
 
94 
 
 inore immediate and apparent^ were recognized 
 by our Government as the proprietors of the soil ; 
 a reservation bein*^ expressly made at the same 
 time in favour of the rights of any other parties, 
 who^ by virtue of prescriptive usage or otherwise, 
 might be able subsequently to establish an inte- 
 rest' in the land. 
 
 That in assigning the lands, in the first instance, 
 generally and indiscriminately to the zemindars, 
 we may have overlooked the situation of other 
 parties, having equal or superior claims, I am 
 not prepared to deny ; nor can I deny that we 
 may have attempted to reconcile things incom- 
 patible, by admitting a full right of property on 
 the part of the zemindars, while we endeavoured 
 at the same time to limit their demands for rent, 
 and to preserve the right of occupancy to their 
 ryots and under tenants. It must, moreover, be 
 conceded, that Government, in the first instance, 
 armed itself with more summary powers for col- 
 lecting its revenue, than it was willing to entrust 
 to the zemindar for collecting his rent: and the 
 consequence was that the under tenants succeed- 
 ing in some cases, by means of combination, in 
 resisting for a time the demands of the land- 
 holders, several of the larger and more unma- 
 nageable estates were brought to sale, and passed 
 away from the hereditary aristocracy of the coun- 
 try. They passed, no doubt, into the hatuls of 
 
 more 
 
96 
 
 more prudent managers, and the subdivision of 
 these principalities was favourable to the exten- 
 sion of agriculture ; but still it is to be regretted 
 that it should have taken place by any severe 
 operation of our laws ; and^ as frequently happens 
 in such cases, the anxiety to correct one evil led 
 to another in the opposite extreme. Regulation 
 VII. of 1799^ was enacted for the express purpose 
 of relieving the zemindars : but it invested them 
 with powers which are liable to be abused, and 
 which have since been supposed to sanction a great 
 degree of violence and oppression on their part. 
 
 Some minor objections may be urged against 
 the recognition of the zemindarry right, before we 
 had accurately ascertained and defined the rights 
 of the inferior Talookdars, and others, who held 
 an interest in the land under different tenures ; 
 but it was considered necessary to take some de- 
 cided step, and the Government proceeded upon 
 the assumption, that all questions relating to the 
 rights of these parties might safely be committed 
 to the courts of justice. This would have been a 
 safe and judicious course, if the laws had accurately 
 defined rights, or if usage could have been safely 
 referred to as authority, in a country where nothing 
 had been stable, where no rights had been re- 
 spected, and where, for a long series of years, 
 the weak had been more or less at the mercy of 
 the strong. 
 
 The 
 
96 
 
 The next question to be decided was, whether 
 the settlement to be made with the zemuidars 
 should be concluded for a term of years ? or whe- 
 ther the Government, limiting its demand upon 
 the land, should declare the amount to be fixed 
 in perpetuity ?* 
 
 I could not possibly,, by any abridgment, do 
 justice to the able discussion which took place 
 between Lord Cornwallis and Mr. Shore (now 
 Lord Teign mouth) on this important question ; 
 and 1 shall, therefore, merely mention, that it was 
 determined by his lordship, after mature delibera- 
 tion, that the settlement should be declared 
 permanent ; and that this determination was 
 approved and confirmed by the authorities in 
 England, in a letter from the Court of Directors, 
 bearing date the 29th August 1792,f in which 
 the principles of the settlement are reviewed with 
 a spirit of liberality, and with a statesman-like 
 comprehension, highly honourable to those from 
 whom it proceeded. 
 
 Lord 
 
 * The plan of a permanent settlement was first urged upon the 
 attention of Lord Cornwallis by Mr. Thomas Law, one of a family 
 highly distinguished in this country in the Law and the Church. 
 It was urged with characteristic ardour by one, who is an enthusiast 
 in every thing which concerns the interests of humanity. 
 
 f This admirable letter is supposed to have been written under 
 the immediate dictation of the late Lord Melville , and with the entire 
 concurrence of the ministry of the day— Mr. Pitt—Lord Grenville, 
 &c. 
 
97 
 
 Lord Wellesley, actuated by similar views of 
 an enlightened and benevolent policy, enacted cer- 
 tain regulations in the years 1803 and 1805^ for 
 the formation of a decennial settlement in the 
 '' Ceded and Conquered Provinces;''* and in these 
 regulations a formal pledge was given (subject to 
 the approval and confirmation of the Court of 
 Directors), that the settlement would be rendered 
 permanent in all cases where the cultivation of 
 the lands shotdd have been sufficiently advanced, 
 and the landholders should have punctually ful- 
 filled their eno'ao'ements with the Government 
 throughout the term of the decennial lease. 
 
 The Honourable Court is understood to have 
 recognized the promise made to the landholders 
 of the '• Ceded Provinces'' by the regulations of 
 1803 ; but no such recognition appears to have 
 been extended, otherwise than by implication, to 
 the landholders of the '' Conquered Provinces,'* 
 although, the circumstances of Jhe two cases being 
 precisely similar, the spirit of the Honourable 
 Court's instructions applied equally to both.f 
 
 Sir 
 
 * Regulations xxv, 1803, and ix, 1805. 
 
 f This question has been nlost ably examined by Mr. Edmonstone, 
 in a late minute which unfortunately is not before the public. The 
 Court of Directors, if they had disapproved of the promise made by 
 the Supreme Government to the landholders of the Ceded Provinces 
 in 1803, could scarcely have written as follows on the 28th August 
 1804: — " As the permanent settlement for these extensive districts is 
 " not to be carried into execution for ten years, from the coramence- 
 
 Q ment 
 
98 
 
 Sir George Barlow and the lale Lord Minto, 
 impressed with a deep conviction of the great 
 advantages which had resulted from the '' per- 
 manent settlement," both to the Government and 
 to the people, were solicitous to extend the 
 benefit of the measure to the '^ ceded and con- 
 quered provinces/* evenbefore the expiration of the 
 decennial leases ; and a board of commissioners 
 was deputed in 1807, to those provinces, for the 
 purpose of carrying the arrangement into imme- 
 diate effect. 
 
 Upon grounds, however/ which are fully de- 
 tailed in a report* from the commissioners, bear- 
 ing date the 13th April 1808, the expediency of 
 postponing the measure, except in two particular 
 instances, was strongly urged to the Government : 
 it was accordingly suspended for the time ; and 
 the country continuing from that period under 
 temporary settlements, an encreasef of Tevenue 
 
 has 
 
 " ment of the first triennial settlement, there will be full time, under 
 " the operation of that principle, and during the continuance of the 
 " respective periods of intermediate settlement, to ascertain their fuU 
 " value, and for enabling you to conclude a permanent settlement on 
 " such terms as shall be fair and equitable." — Mr. Edmonstone's ex- 
 cellent Minute should have put the question at rest for ever. 
 
 * See Report in " Revenue Selections," pages 6 to 44, by the 
 commissioners, Messrs. Cox and Tucker. See also Mr. H. Cole- 
 brooke's Minute in reply to this Report, pages 44 et seq. 
 
 t This encrease is to be ascribed, in a great degree, to the ablg 
 management of the late commissiouerj, Sir E. Colebrooke and Mr- 
 
 • Deane 
 
99 
 
 has been obtained^ abundantly sufficient to justify 
 the delay which had been contended for bv the 
 commissioners in the first instance. 
 
 But the pledge of the Government to grant a 
 '' permanent settlement'' on the expiration of the 
 decennial leases, remained in full force ; and if 
 in any one instance the two conditions of the 
 pledge were complied with, (and it is matter of 
 notoriety that •they were complied with in very 
 many instances^) the benefitbf the measurfe could 
 not be withheld without an absolute breach of 
 faith. For the reasons which have caused it to be 
 so long withheld, 1 must refer to the Honourable 
 
 Court's 
 
 Deane, and to the indefatigable and successful exertions of some of 
 
 the collectors under them, Mr. Trant, Mr. C. Lloyd, Mr. Ross, Mr. 
 
 Christian, &c. The following comparison will shew the encrease of 
 
 Revenue between 1808 and 1819 : — 
 
 1807-8. 1818-19. ' Encrease. 
 
 Land Sa. Rs. 2,18,78,040 3,14,9^^,570 96,14,530 
 
 Sayer 7,75,920 13,30,420 5,54,500 
 
 Customs 14,83,510 29,58,290 14,74,780 
 
 Total Sa.Rs...2,41,37,470 3,57,81,280 1,16,43,810 
 
 Mr. Trant, by a course of laborious exertion, encreased the reve- 
 nue of one district in the sum of ^6100,000 per annum, viz. 
 
 Bareilly : amount of first triennial settlement in 1 803, Rs. 22,97,588 
 Mr. Trant's settlement in 1809-10 31,65,495 
 
 Encrease Rupees 8,67,907 
 
 o 2 
 
100 
 
 Court's letter to Bengal, of the 16th March* 
 1813^ and other official correspondence on the 
 subject. It has been stated, that it would be in- 
 convenient to sanction two different kinds of 
 settlement, permanent in one place, and tempo- 
 rary in another ; but this objection is not entitled 
 to the slightest weight, even if considerations of 
 expediency could be admitted to supersede the 
 obligations of justice. Mokurrer^ and Istimrary 
 grants*(perpetual grants at a iixed assessment), 
 were made not unfrequently by our Mahomedan 
 predecessors ; and the people throughout our pro- 
 vinces were familiarized and attached to them, 
 long before they had before their eyes the '^ per- 
 manent settlement" concluded by Lord Corn- 
 wallis in the Bengal districts. If one single 
 landholder had then complied with our condi- 
 tions, his claim ought to have been admitted, 
 and we could have no plea for withholding the 
 boon, on the ground that his neighbours had not 
 performed ^AeiV engagements. By conceding /i«s 
 right, we should not only have done an act of 
 justice, but we should have encouraged others to 
 follow^ his salutary example. 
 
 It is of importance to all governments that they 
 should preserve faith with their subjects ; but 
 situated as we are in India, our dominion resting 
 in a great degree upon moral influences, it is of 
 
 peculiar 
 
 t See " Revenue Selections,^' pages 136 et seq. 
 
101 
 
 peculiar importance that we should command the 
 confidence and esteem of the people. By grant- 
 ing fixed tenures^ and limiting the public demand 
 upon the land, we give the landholders an interest 
 in the stability of our Government. This is a 
 great point gained in any part of our territory ; 
 but it is more especially desirable and essential to 
 our security, that such an interest should be ex- 
 cited in our favour in our western provinces, where 
 we have an open frontier accessible to our most 
 formidable enemies, and where we have a brave 
 and warlike population, ready at all times to ex- 
 change the ploughshare for the sword.* The 
 peasantry/ of RohWkund in 1794, boldly encoun- 
 tered, 
 
 ' * See Secret Letter fromBengal — " Revenue Selections," page 134, 
 para. 17. " It is under circumsta^jces, such as we have just stated, 
 " that we are commanded to announce to the great body of the 
 " people, that tha permanency of the Jumraa no longer exists. The 
 " assurances given to the landholders.in the years 1803 and 1805, and 
 " which for the reasons already stated, we consider to be in full 
 " force and effect, may, in some degree, alleviate the disappointment 
 " which must be experienced from the operation of the present 
 " orders. Still it is impossible to judge, a priori, of the effects with 
 " which that disappointment may be attended. It is a feeling which 
 ** is nearly allied to discontent ; and when these impressions are felt 
 " in any considerable degree, resistance to public authority is always 
 " to be apprehended. The people have furnished on affairs of com- 
 " paratively small and trivial interest, examples of a disposition to 
 " assist their wishes by tumult and outrage. A more powerful in- 
 "* citement to seek redress by combination and violence, cannot be 
 " given in any country, and cannot extend to a larger and more 
 " powerfiil class of the community than injustice supposed to be 
 " done to the great body of landed proprietors." 
 
tered, and nearly defeated, a large army of regu- 
 lars, under the personal command of a gallant and 
 experienced officer.* 
 
 The public authorities in Bengal, with scarcely 
 an exception, have all concurred in the propriety 
 of redeeming our pledge to the landholders of 
 the " Ceded and Conquered Provinces,'' both on 
 grounds of justice and of policy. We have had 
 the country under our management for twenty 
 years, and have become acquainted with its situ- 
 ation and resources ; those resources have been 
 gradually developed and improved ; and we have 
 been enabled, in consequence, to add above a 
 million sterling to our annual revenue ; and we 
 have had, at the same time, an opportunity of 
 acquiring better information with respect to the 
 nature of the tenures und other circumstances, 
 which it was necessary to ascertain, in order that 
 we might not compromise the right's of different 
 parties, whose interests might be aiiected by the 
 settlement. 
 
 The Court of Directors do not, I believe, pro- 
 fess to be solicitous to augment the ample reve- 
 nue which is, at present, derived from the '' Ceded 
 and Conquered Provinces;" and few persons will 
 iiow be found so visionary as to fancy that per- 
 fect equality in the assessment, even if it were 
 practicable in the first instance, and absolutely 
 
 essential 
 
 * Sir Robert Abercrombie, Comraander-in-Chief in India. 
 
103 
 
 essential at any time^ could long be preserved in 
 a country, where changes in the course of agri- 
 culture and of connmerce, must necessarily occa- 
 sion variations in the value of agricultural pro- 
 ductions. In a particular estate, the introduc- 
 tion of the cultivation of Indigo alone, may 
 double the value of the produce ; while in a 
 neighbouring zemindarry, originally of equal 
 value, some unfavourable change may take place 
 to reduce its natural resources. 
 
 Still, there are persons who, witnessing the 
 flourishing condition of the Bengal provinces, 
 and knowing that the rents and income of the 
 Zemindars have, in many instances, been immo- 
 derately encreased, seem disposed to impute to 
 Lord Cornwallis an improvident sacrifice of the 
 public revenue. The inference is as gratuitous, 
 as the imputation is unjust. The prosperity of 
 the country and the growing opulence of the ze- 
 mindars, are the happy effects of the '' perma- 
 nent settlement/' 
 
 Those effects would probably never have been 
 produced, if the settlement had never been made. 
 Secure to man the produce of his industry, and 
 he will be industrious. Provide for the security 
 of his property, and it will be embarked in works 
 of public utility^ advantageo.us to the individual, 
 and beneficial to the community at larrge. But 
 if the deadly hand of the tax-gatherer perpe- 
 tually 
 
104 
 
 ually hover over the land and threaten to grasp 
 that which is not yet called into existence^ its 
 benumbing- influence must be fatal, and the fruits 
 of the earth will be stifled in the very germ. 
 
 Lord Cornwallis was the benefactor* of British 
 India^ and the '' permanent settlement" is^ per- 
 hapSj '' the noblest monument of a just and 
 '•' liberal policy, which was ever erected in a 
 '' conquered country." But we must not look 
 to this great measure as the sole and exclusive 
 source of the prosperity of our Bengal provinces. 
 Lord Cornwallis did not stop here ; he introduced 
 sound principles, and a just system of revenue 
 administration. 
 
 1st. He separated the revenue and judicial 
 authorities, and thus put an end to that mono- 
 poly of power, which not only leads to abuse, 
 but which tends at the same time to secure to it 
 impunity. 
 
 2dly. He established independent courts^ to 
 
 whose 
 
 * Lord Cornwallis did almost as much for British India as General 
 Washington for America ; and, I fancy, strong points of resemblance 
 between these eminent personages : they possessed alike dignity of 
 character united with simplicity of manners and habits ; firmness of 
 purpose; undeviating rectitude ; disinterestedness; prudence; mode- 
 ration ; patriotism. The difference between them may be referred to 
 the circumstances of their birth. Had those circumstances been 
 reversed, Lord Cornwallis would probaSly have been the leader of a 
 republican army, and General Washington the pride of the British 
 peerage and a pillar of the throne. 
 
105 
 
 whose jurisdiction both the government and its 
 officers were made amenable for all official acts. 
 
 3dly. He established a code of regulations, 
 which supplied a rule of conduct to the public offi- 
 cers ; which assured personal freedom and protec- 
 tion to our native subjects; which explained in 
 every case the reason for the enactment; which 
 softened and corrected the barbarisms* of the Ma- 
 homedan law ; and which, however immature and 
 imperfect, must be regarded as a great advance 
 in the difficult science of legislation from a state 
 approaching to anarchy, and the absence of all 
 law. 
 
 Lastly, he assigned to the officers of govern- 
 ment 
 
 * For example. The punishment of mutilation was abolished, and 
 the heir of the slain was deprived of the right of making his election 
 between " D^eM^'* and " Kissaa«" — (the price of blood, or retalia- 
 tion). The government of India is often reproached for having sub- 
 verted tbe native institutions; but those who prefer the ^charge, have 
 seldom been at the pains to specify the institutions which have been 
 displaced, or superseded. Lord Cornwallis, it is true, abolished the 
 office of hereditary canoongo (an office for recording grants, titles, 
 usages, boundary lines, revenue accounts, &c.) ; and this was, I think, 
 a mistake. The office had become corrupt, and had fallen into disre- 
 pute ; but it would have been more prudent if we had endeavoured 
 to reform its abuses, instead of sweeping it away altogether. The 
 registry, which was established as a substitute for it, was found quite 
 inefficient ; and existed, indeed, only in the regulations. My colleague 
 (Mr. Cox), and myself proposed the continuance of the office in the 
 western provinces ; and, at a subsequent period, its re-establishment 
 in Bengal, in a modified shape. It has since been revived. 
 
 P 
 
lOG 
 
 ment fair and liberal allowances, which placed 
 them above temptation ; which took away every 
 plea and excuse for peculation ; and which^ by 
 rendering the service independent and respecta- 
 ble, raised its character, inspired it with a higher 
 tone of feeling, and secured our native subjects, 
 as far as this can be done by such means, against 
 official malversation. 
 
 These are among the solid benefits conferred 
 by Lord Cornwallis on the people of Bengal. It 
 is not attempted to conceal that the '' perma- 
 nent settlement " may have been open to objec- 
 tions. To the natives of India, within whose 
 narrow horizon every thing had hitherto an- 
 nounced uncertainty, and an evanescent exist- 
 ence, leases for a term of twenty or twenty-one 
 years, or for the lives of the incumbents, would, 
 probably, have been received with nearly the 
 same sentiments as a perpetuity ; and such leases 
 as preparatory to a permanent settlement would, 
 no doubt, have furnished an opportunity for cor- 
 recting gross inequalities in the assessment. It 
 might also, perhaps, have been practicable to 
 secure the proprietors of the unwieldy zemindar- 
 ries against the consequences of that improvi- 
 dence and dissipation, which their early educa- 
 tion and acquired habits were likely to produce ; 
 and if the antient families could have been pre- 
 served 
 
107 
 
 served in their possessions* by any safe and un- 
 objectionable means, the credit of the British Go- 
 vernment would certainly have been raised in 
 the eyes of the people. But with all its imperfec- 
 tions/ real or imputed, the '^permanent settle- 
 ment/' as the source of genuine good, stands 
 unrivalled among all the measures of our admi- 
 nistration in India. By limiting the demand of 
 the exchequer, the residuary produce of industry 
 became a property, and the labour of the country 
 was stimulated into active employment. A wil- 
 derness, as if by magic, was converted into a 
 garden ;f capital was created ; the surplus pro- 
 duce 
 
 * The zemindarry of Burdwan, paying an annual revenue to go- 
 vernment of ^£400,000, remains entire, I believe, to the present day. 
 The zemindarries next in extent, and equal at least in antiquity (those 
 of Rajeshahy andNuddeah), have both, I fear, been broken down, and 
 sold ; but certainly not as a consequence of over-assessment. Some 
 of the estates of more moderate extent (such as that of Tikarry in 
 Bahar), which were of little value before the assessment was fixed, 
 yield at present princely incomes to their proprietors ; and we ought 
 to rejoice at this, instead of regretting the supposed sacrifice of reve- 
 nue. There is reason, perhaps, for regret, that the estates which have 
 been sold, had not been sequestrated for a time, by which means they 
 might have been preserved to the ancient proprietors. 
 
 f The change in the state of our Bengal provinces within the last 
 thirty years, is so much matter of notoriety, that it would be quite 
 superfluous to adduce written evidence of the extraordinary improve- 
 ment which has taken place. Many of us have witnessed it with our 
 own eyes. Nor is it necessary for me to insist that the revenue is 
 now collected with ease and with scarcely the fraction of a balance; 
 whereas, heretofore, the collections were made with great severity, 
 
 P 2 and 
 
108 
 
 duce of the soil was preserved ; and the abun- 
 dance of one province^ or of one season^ supplied 
 the deficiencies of another. Famine, that scourge 
 of a numerous population, has been averted, as 
 far as it can be averted by human means ; and 
 during a period of thirty-five years, in which 
 unfavourable seasons and deficient harvests have 
 certainly been experienced, Bengal has not only 
 enjoyed plenty at home, but has assisted largely 
 in supplying the wants of other countries. 
 
 I now come to the consideration of a measure 
 of a totally different complexion. 
 
 While the plan of a permanent settlement was 
 popular in Etigland^ steps had been taken to ex- 
 tend its benefits to the territory under the govern- 
 ment of Fort St. George, and considerable pro- 
 gress had been made in introducing it into the 
 districts under that Presidency ; but at a subse- 
 quent period, an entire change of sentiment ap- 
 pears unfortunately to have taken place, both in 
 the Court of Directors and at the Board of Con- 
 trol ;* and, instead of prosecuting to a conclu- 
 sion 
 
 and the balances at the end of every year were considerable. More- 
 over, periodical settlements were the never-failing source of periodi- 
 cal corruption and abuse. 
 
 * I might also add in Parliament, if the 5th Report of a Com- 
 mittee of the House of Commons, which was drawn up by two 
 individuals, highly respectable and estimable, but altogether uncon- 
 nected with that Body, can be supposed to have expressed the sense 
 of Parliament. 
 
109 
 
 sion the undertaking which had been commenced^ 
 there was a disposition to trace back our steps,, to 
 undo what had been done^ and even to purchase 
 upon account of government, those estates in 
 which the settlement had been actually concluded 
 in perpetuity. 
 
 I am unwilling to believe that this change had 
 any connection with a design or wish to encrease 
 the public revenue; and if any such expectation 
 were cherished, it has certainly been disappointed. 
 Novel doctrines were, in fact, brought forward, 
 which impeached the principle of the settlement • 
 and a system of revenue administration was 
 recommended to a preference, on various grounds ; 
 but chiefly on an assumption that it harmonized 
 better with the habits and dispositions of our 
 native subjects, and was more in accordance with 
 the usages and institutions of the country. 
 
 This plan of management, which is now fami- 
 liarly known as the '' Rj/otwar system,'' found 
 an able, intelligent, and zealous advocate in Sir 
 Thomas Munro, the present governor of Fort St. 
 George ; and in delineating its character, I pro- 
 pose, as far as possible, to use his own words, 
 while, in offering my own free comments upon 
 the merits of the system, 1 hope not to deviate 
 from the respect which is due to such high au- 
 thority. 
 
 Sir T. Munro advances the following singular 
 
 pro- 
 
no 
 
 proposition ; and, startling as the dictum* may 
 appear, it was a necessary preliminary to clear 
 the ground for the structure intended to be 
 erected. 
 
 " But nothing can be plainer than that private 
 '' landed property has never existed in India, 
 '' excepting on the Malabar coast ; and that, 
 " therefore, in all other districts, the share of 
 '' the produce which ought to constitute the rent 
 ^' to Government, must be determined rather by 
 '' opinion than by experience/'f Again : '' In 
 '" the Ceded Districts and throughout the Dec- 
 " can, the Ryot has little or no property in land ; 
 *' he has no possessory right : he does not even 
 '^ claim it ; he is so far from asserting either a 
 '' proprietory or possessory right, that he is 
 '' always ready to relinquish his land and take 
 *' some other which he supposes is lighter as- 
 " sessed. All land is supposed to revert to Go- 
 '' vernment at the end of every year, to be dis- 
 
 "' tributed 
 
 * I find this dictum quoted, and most satisfactorily controverted 
 by a writer for whom I have the greatest respect. See History of 
 the South of India, by Col. M. Wilks, vol. 1, pages 105 et seq. 
 The whole of Chapter 5, containing a dissertation on the Landed 
 Property of India, claims particular attention. It did not occur to 
 me to look into this valuable treatise, until I had finished these 
 pages J but I have had the satisfaction to find my opinion, with 
 respect to the existence of private property in land in India, com- 
 pletely confirmed. 
 
 f See " Revenue Selections," pages 95 and 102. 
 
Ill 
 
 '' tributed as it may Ibink proper ; and land is 
 '" accordingly sometimes taken from one ryot 
 " and given to another^ who is willing to pay a 
 '' higher rent. If this power is exercised with 
 '' caution, it is not from the fear of violating 
 '' any possessory rights but of losing revenue ; 
 '' for the assessment is generally so high, that if 
 '' the ryot is dispossessed, the same rent can 
 '' seldom be got from a new one/'* 
 
 The state of things here announced can scarcely 
 be said to exist, even in the first stage of the 
 human race. The savage has a notion of pro- 
 perty, and retains possession of the hunting 
 ground which he first occupied, defending it as 
 his own, until he is ejected from it by a stronger 
 arm. 
 
 I will not appeal to the Altumga and other 
 royal grants of the Mahomedan rulers, which are 
 every where to be met with, nor to the Birmooter 
 and other religious grants of the Hindoos, which are 
 to be found in every part of the country ; because 
 these, as well as the '' Enam" or free grants, may 
 be considered as alienations of the royal domain, 
 which do not come within the precise terms of 
 the proposition ; but if I were called upon to 
 point out the country where landed property is 
 most highly appreciated and cherished, where 
 
 landed 
 
 * See " Revenue Selections." Pages 95 and 102. 
 
112 
 
 landed possessions are most tenaciously retained, 
 and where the land makes up the sum and essence 
 of all which the individual can properly call 
 his own, I should point to India. 1 do not mean 
 to aver that the people enjoy English freeholds^ 
 protected by courts of justice of a structure highly 
 artificial, and fenced round by laws and elaborate 
 forms which almost preclude the conveyance of a 
 title; but I do contend that land was held as private 
 property in India ; and that it was respected as 
 such, although often the object of extortion and 
 violence, by the ruling power.* 
 
 When a proposition is enunciated, apparently 
 at variance with all our experience and with the 
 ordinary course of human affairs, we may fairly 
 
 require 
 
 * It is impossible to read the description of " Meerds" and " Wut- 
 tmi'^ in the correspondence of the public officers at Madras, and in 
 Mr. Elphinstone's report on the Marhatta territories, without being 
 satisfied that these tenures constituted complete hereditary property. 
 The sovereign himself was compelled sometimes to purchase land 
 held under these tenures, at very high prices ; and what has effaced 
 in some places every trace of private property in land ? Nothing but 
 over-assessmenty which has compelled the people to abandon their 
 possessions. Some of the collectors observe, that " light assessment 
 creates private property in land.*^ True : just as heavy assessment 
 destroys it. " Meerds** is an Arabic word, signifying inheritance, 
 which must have been introduced by the Mahomedans ; so that we 
 see these despotic conquerors acknowledging a right, which an en- 
 lightened British government seems disposed now to question. Nume- 
 rous decisions might be cited, recognizing a right of property in the 
 land to vest in the Meerassydars of the Carnatic. 
 
113 
 
 require that it be established by precise and sa- 
 tisfactory evidence ; but in this instance we have 
 to deal with a negative proposition^ which can be 
 met and refuted only by establishing the affirma- 
 tive: still the party denying generally, has no 
 right to shelter himself in a defensive position, if 
 a single instance can be cited which contra- 
 dicts the negative averment. It might safely 
 have been affirmed a century ago, that the elec- 
 tric fluid could not be brought down from the 
 clouds by means of a string, or that flame could 
 not be made to issue out of water ; but after the 
 exhibition of a single experiment in proof of these 
 facts, we should not be entitled to insist further 
 in denying them.* 
 
 I shall content myself, therefore, with adducing 
 a single instance, for the purpose of shewing that 
 the people of Bengal, at least, not only possessed 
 land, but manfully resisted any attempt to usurp 
 or alienate it on the part of the sovereign. The 
 documentf which is given in a note below, con- 
 tains 
 
 * Sir T. Munro admits an exception from his proposition on the 
 coast of Malabar ; but if the sphere of his observation had been 
 extended, the exception would, I think, have been found to be 
 the rule. Sir T. M. had the merit of giving to landed property in 
 Canara, a real value, by lowering the oppressive rates of assessment 
 established by Hyder Ali and Tippoo Sultan in that province, and 
 Malabar. 
 
 f Inscription on a rock at Tarachandi, near Sahasram, in South 
 Bahar, from a fac simile, taken by the learned Dr. Buchanan Hamil- 
 
 Q tOM, 
 
114 
 
 tains the protest of a Hindoo landholder against 
 grant made by the rajah^ or sovereign of 
 Canouge^ in favour of certain priests,, to the pre- 
 judice of the rights of the party : it is dated in 
 1229 Sanvat, or 1173 of the Christian aera ; and 
 it is curious to observe a Hindoo boklly remon- 
 strating against the act of his liege lord^ at a 
 time when our Saxon ancestors were sufFerinof 
 
 o 
 
 grievous oppressions from their Norman con- 
 querors^ without daring to resist their violence 
 and usurpations. 
 
 The 
 
 ton, and translated by the distinguished Oriental scholar, Mr. H. Cole- 
 brooke. " Prdtdpa dhavala, wholly divine (deva), possessor of hap- 
 " pily-risen and celebrated glory, addresses his own race. In these 
 " villages contiguous to Callahaudi, that contemptible ill-copper 
 " (grant) which has been obtained by fraud and bribery from the 
 " slaves of the Sovereign of Godhinagara, by priests sprung from 
 " Sa-valuhala ; there is no ground of faith to be put therein by the 
 " people around. Not a bit of land, so much as a needle's point 
 " might pierce, is theirs.'* 
 
 « Sanvat 1229 (A. D. 1173) lyeshta vadi 3d Wednesday. The 
 " feet of the sovereign of Japela^ the great chieftain, the fortunate 
 " Prdtdpa Dhavala deva, declares the truth to his sons, grandsons, 
 " and other descendants sprung of his race. This ill-copper (grant) 
 " of the villages of Callahaudi and Bidai/pifa, obtained by fraud and 
 " bribery from the slaves of the fortunate Vijaya Chandra, the king 
 " sovereign of Canyacahja, by plundering folks : no faith is to be 
 " placed therein. Those priests are every way libertines. Not so 
 " much land as might be pierced by a needle's point, is theirs. Know- 
 " ing this, you will take the share of produce and other dues ; or " 
 
 " Signature of the great Rajaputra (king's son), the fortunate 
 " Satrughira." 
 
115 
 
 The protest shews in a very striking manner 
 the strong' feeling which existed at a remote period 
 with regard to landed property^ and the jealousy 
 with which any encroachment was viewed by 
 the landholder. In the present case, the right of 
 the prince to make grants for religious purposes,, 
 does not seem to be denied ; but it is practically 
 resisted on the ground that the grant was fraudu- 
 lently obtained, or was an imposition ; and the 
 protest, by recording the transaction, appears to 
 have been intended to keep the alienation in 
 view, that the heirs and descendants of the 
 landholder might reassert and resume their 
 rights^ whenever a favourable opportunity should 
 occur. 
 
 It may be urged, that this sturdy rajepoot was 
 some powerful feudatory, who was in a condition 
 to defy his liege lord ; some duke of Burgundy 
 resisting a king of Prance; but the pompous 
 titles which he assumes are not sufficient to war- 
 rant such a conclusion. 
 
 The mountain of " Rotas/' situated at no great 
 distance from Sahasram (Sasseram)^ is certainly 
 a strong* natural fortification, where a refractory 
 chief might, no doubt, have bade defiance to his 
 sovereign ; but Sahasram is itself situated in an 
 open country ; and the proud rajepoot who was 
 strong enough to dispute the encroachments of 
 his liege, would have been much more likely 
 
 d 2 to 
 
llf) 
 
 to make his appeal to the sword than to the 
 pen. 
 
 This single instance must be admitted as evi- 
 dence of the understanding of the people upon the 
 question of property inland; but let us ascend 
 to the source^ in order to determine whether the 
 popular feeling is in unison with the law. 
 
 I own myself incompetent to the task of disen- 
 tangling a text of Hindoo law* from the subtilties 
 of commentators^ so as to reduce it to a simple 
 elementary proposition ; but on this occasion I 
 have fortunately the authority and assistance of 
 the eminent orientalist, to whom we are indebted 
 for the translation of the digest of that law. 
 
 The Mimansa, which is the subject of a disser- 
 tation by Mr. Colebrooke, is a work of great 
 authority among the Hindoos, professedly treating 
 upon the rules of interpretation, and principles 
 of construction, applicable to the precepts of the 
 Veda, and maxims of law, religious and civil. The 
 question concerning property in the soil in India, 
 is discussed in the sixth lecture of that work, and 
 the following quotation is calculated to shew the 
 
 view 
 
 * See " Digest of Hindoo Law," vol. ii, pages 74 and 75, in which 
 the distinction between the property of the subject and the rights of 
 the sovereign, is drawn ; but all which can be safely affirmed is, that 
 property, or ownership, vests in the occupant of the soil, " founded 
 on the reason of the law and on settled usage ;" but that it is subject 
 to qualifications and restrictions in favour of the sovereign rights. 
 
117 
 
 view taken of this important question by the 
 author. 
 
 '' At certain sacrifices;, such as that which is 
 '' called Visivajit, the votary for whose benefit the 
 '' rehgious ceremony is performed^ is enjoined to 
 '' bestow all his property on the officiating priests. 
 '' It is asked whether a paramount sovereign 
 '' shall give all the land, including pasture 
 '' ground^ highways^ and the site of lakes and 
 '' ponds ? — an universal monarch the whole 
 " earth ? — and a subordinate prince the entire 
 " province over which he rules? To that ques- 
 *' tion the answer is, the monarch has not pro- 
 '' perty in the earth, nor the subordinate sovereign 
 " in the land. By conquest the kingly power is 
 '' obtained, and property in the house and field 
 '' that belonged to the enemy. The maxim of 
 '* the law, that the king is the lord of all, sacer- 
 " dotal wealth excepted, concerns his authority 
 " for correction of the wicked, and protection of 
 '' the good ; his kingly power is for the protec- 
 '' tion of the realm, and extirpation of wrong, 
 " and for that cause he receives taxes (cara) from 
 ^' husbandmen, and levies fines from ofienders, 
 '' But a right of property is not thereby vested in 
 '' him; else he would have property in house 
 " and land appertaining to the subjects abiding 
 " in his dominions. ' It belongs,' says Jaimini, 
 '' * to all alike.' Therefore, although a gift of a 
 
 '' piece 
 
118 
 
 '' piece of ground^ an individual's property, does 
 '' take place, the whole land cannot be given by 
 '' a monarch, nor a province by a subordinate 
 '' prince ; but house and field, acquired by pur- 
 '' chase, and similar means, are liable to gift." 
 
 It is not necessary for me to cite the various 
 authorities which are referred to, in support of the 
 text ; nor shall I look further for the proof of that 
 which is found to exist, in a degree more or less 
 perfect, under the most despotic and barbarous 
 governments.* The Hindoos are a people whose 
 
 law 
 
 * In addition to other authorities, I have in my possession copy 
 of a report by Major James Tod, on the state of landed property 
 in Meywar, a pure Hindoo district, little affected in its internal 
 arrangements by Mahomedan intrusion. Major Tod has not only 
 had the benefit of much practical experience, but he has made Hin- 
 doo literature and history the particular object of his study ; and 
 his opinion is decidedly in favour of the existence of private pro- 
 perty in land in India. The historian of British India considers the 
 right of property to vest in the sovereign. See vol 1, pages 179, 
 et seq, : but Mr. Mill makes, at the same time, certain admissions 
 in favour of the ryot. " By practice the possession of the ryot be- 
 " came, in this manner, a permanent possession ; a possession from 
 " which he was not removed except when he failed to pay his 
 " assessment, or rent ; a possession which he could sell during his 
 " life, or leave by inheritance, when he died. As far as rights can 
 " be established by prescription, these rights came undoubtedly to be 
 " established in the case of the ryots in India. And to take them 
 " away is one of the most flagrant violations of property which it is 
 " possible to commit," If the rights of occupancy — of sale — and of 
 bequest (to which we may add that of mortgage) be admitted, we go 
 far to establish ownership^ and the only further question in this case 
 would be, whether the object of this ownership be a thing of any 
 
 value. 
 
] 1 J 
 
 law inculcates submission to their princes and 
 their priests ; but they are a civilized people^ and 
 it is difficult to believe that they can^ at any 
 
 period 
 
 value. Despotic power may render the property in land of no value 
 —it may efface all rights — and it may set up pretensions of its own 
 in the place of those which it has obliterated; but this is plain usur- 
 pation. To say that the sovereign is universal owner of the soil, is 
 to say neither more nor less than that power may, or can, destroy all 
 rights. Of the right, however, (under sufferance of the sovereign, 
 if it must be so) to occupy — to sell — to mortgage — and to bequeathe 
 land, we have incontestible evidence in numberless authentic deeds, 
 which have been produced by parties, who are not merely ryotz. 
 The just observations of Mr. Milt, applied to the ryot, may, there- 
 fore, with equal justice be applied to these parties ; but without un- 
 dertaking to advocate the claims of any particular class of land- 
 holders, I contend that the pretensions of the sovereign to universal 
 ownership, can be admitted only upon the assumption of an unmiti- 
 gated despotism, which recognizes no rights in opposition to its un- 
 controlled will. I am aware that the Hindoo law seems to require 
 the sanction of the sovereign to all transfers of landed property; 
 but this may be explained in two ways. 1st. The sovereign having an 
 interest in the land from which he draws revenue^ would naturally 
 require all deeds of sale or mortgage to be formally registered, in order 
 to preserve regularity, and in order, perhaps, to give security to the 
 title of the purchaser. This is done in Scotland universally, at the 
 present day, and for the reason suggested. 2dly. The sovereign, on 
 failure of natural heirs, being the universal heir of his subjects, had 
 a reversionary interest in the land ; and his concurrence was required 
 as an heir of entail, just as the concurrence of the co-sharers, sons, 
 and others, holding an immediate or reversionary interest in the 
 estate, appears to have been required by the Hindoo law. Both 
 Hindoos and Mahomedans rigidly insisted upon the registry of all 
 transfers of land ; and a fee of two per cent, (sud-doee) was, I be- 
 lieve, levied by the Canoongos of Bengal, on the transfer even of 
 Lakheraje land, or land held exempt from taxation. 
 
120 
 
 period of their history, have renounced^ in favour 
 of kingly power, the idea of private property, and 
 those feelings which are common to the whole 
 human race. 
 
 I am far from undertaking to decide between 
 the claims of different descriptions of landholders 
 in India; and it would be unsafe to attach any 
 particular weight to the designations which they 
 respectively bear. The meaning of the term 
 '' zemindar " is, no doubt, landholder ; that of 
 '' rnalick," proprietor ; that of '' meerass7/dar,'* 
 heritor. But the application of these and other 
 designations, is different in different places — for 
 example : in Bengal Proper, the zemindar is the 
 principal landholder, and the talookdar the depen- 
 dent, or tenant ; whereas, in our western pro- 
 vinces, the case is reversed, and the talookdar is 
 the principal, and the village zemindar the infe- 
 rior landholder, or yeoman. 
 
 Sir T. Munro having assumed that the govern- 
 ment was lord paramount of the soil, and as such 
 free to make those arrangements which might be 
 most conducive to the public interests, proceeded, 
 with the sanction of the Madras Government, to 
 form the settlement of the country entrusted to 
 his charge, upon the following plan and principles. 
 
 " 1st. The settlement shall be ryotwarry." 
 
 '' 2d. The amount of the settlement shall 
 
 '' encrease 
 
121 
 
 '' encrease and decrease annually, according to 
 '^ the extent of the land in cultivation." 
 
 '' 3d. A reduction of twenty-five per cent, on 
 ^' all land shall be made in the survey rate of 
 '' assessment.*' 
 
 '' 4th. An additional reduction in the assess- 
 ^'' ment of eight per cent., or thirty-three per cent. 
 '' in all, shall be allowed on all lands watered by 
 ^' wells, or by water raised by machinery from 
 '^ rivers and nullahs, provided the cultivators keep 
 " the wells or embankments (dirroas) in repair 
 ^' at their own expense. A similar reduction 
 ^' shall be allowed on the lands watered by small 
 ^' tanks, whenever the cultivators agree to bear 
 ^' the expense of repairs.'' 
 
 '' 5th. Every ryot shall be at liberty, at the end 
 " of every year, either to throw up a part of his 
 " land, or to occupy more, according to his cir- 
 '' cumstances ; but whether he throw up or oc- 
 '*' cupy, shall not be permitted to select; but 
 '' shall take or reject proportional shares of the 
 '' good and bad together." 
 
 '" 6th. Every ryot, as long as he pays the rent 
 '' of his land, shall be considered as the complete 
 ^' owner of the soil, and shall be at liberty to let 
 ^' it to a tenant without any hesitation as to rent, 
 '' and to sell it as he pleases." 
 
 '' 7th. No remission shall be made on ordinary 
 *' occasions for bad crops or other accidents. 
 
 R '' Should 
 
I '22 
 
 '' Should failures occur, which cannot be made 
 " good from the property or land of the defaul- 
 '' ters, the village in which they happen shall be 
 '' liable for them, to the extent often per cent, addi- 
 '' tional on the rent of the remaining ryots ; but no 
 '' farther." 
 
 '' 8th. All unoccupied land shall remain in the 
 *' hands of Government, and the rent of whatever 
 '' part of it may be hereafter cultivated, shall be 
 " added to the public revenue." 
 
 '' 9th. All taxes on houses, shops, and profes- 
 ^' sions ; all duties, licences, &c. — shall belong; 
 '' exclusively to Govenmient. The ryot on whose 
 '' lands houses or shops may be built, sliall not 
 '' be entitled to receive a higher rent from them 
 '' than the equivalent of the survey rent of the 
 ^' ground which they occupy/' 
 
 '' 10th. The repairs of all tanks, which are not 
 '' rendered private property by an extra remis- 
 '' sion, or duswundum-enam, shall be made at the 
 *' expense of Government." 
 
 '' 11th. Tuckavy (/. e. advances to the culti- 
 '' vators) shall be gradually discontinued." 
 
 '' 12th. Potails, curnums^ and all other vil- 
 '' lage servants, shall remain^ as hertofore, under 
 '' the collector." 
 
 '' 13th. Private creditors who may distrain the 
 " property of ryots, shall discharge the rent 
 ^' which may be due from such ryots to Govern- 
 
 '' ment ; 
 
123 
 
 " ment ; and shall give security for it before they 
 *' begin to distrain."* 
 
 It would not be difficult to predicate what a 
 philosopher in his closet would think of a system^ 
 which levels every thing in a country between the 
 sovereign and the labouring peasant ; but when 
 plans come recommended from high authority^ on 
 the ground of experience, we are bound to pause 
 ere we admit the deductions of theory. Still, we 
 must not so far defer to authority as to receive, 
 without examination, propositions which seem to 
 run counter to our reason ; and 1 propose, there- 
 fore, to canvas those parts of the plan, which a 
 person of common understanding maybe supposed 
 capable of appreciating. 
 
 The basis of Sir T. Munro's settlement is an 
 actual survet/ of the land. Native officers, deno- 
 minated '*^ gomashtahs," were deputed into the 
 country '' in parties of six, but afterwards of ten^*' 
 for the purpose of measuring every field. f '' Head 
 surveyors, or inspectors," were afterwards em- 
 ployed, to examine the measurement of the sur- 
 veyors, or gomashtahs. ^' The surveyors were 
 '' followed by assessors, two of whom were 
 
 " allotted 
 
 * See Report of Sir T. Munro in " Revenue Selections," pages 
 98 and 99. 
 
 f See Sir T. Munro*s detailed instructions to the surveyors and 
 assessors, pages 121 to 131, " Revenue Selections." 
 
 11 2 
 
124 
 
 " allotted for the assessment of the land rnea- 
 " sured by each party of ten surveyors. The 
 '' assessor, on arriving in a village, went over the 
 " land with the potail, curnum, and ryots, and 
 *' arranged it in different classes according to its 
 '' quality. In all villages, the land, both wet 
 " and dry, had, from ancient custom, been divi- 
 *' ded into first, second, and third sorts, agreeably 
 " to their supposed respective produce; but these 
 '' divisions not being sufficiently minute for a 
 " permanent settlement, the classes of wet land in 
 '' a village were often encreased to five or six, and 
 '' those of dry to eight or ten."* 
 
 But as these assessors could not be entirely de- 
 pended upon, it was thought advisable, for the 
 purpose of preserving uniformity and of checking 
 abuses, to appoint five '' head assessors," selected 
 from the most intelHgent of the ordinary assessors. 
 Each head assessor had four ordinary ones under 
 him ; his business was to review their classifica- 
 tion and assessment, and to correct them when 
 wrong. 
 
 After this preparatory process, the settlement 
 
 is 
 
 * See Sir T. Munro's Letter of the 26th July 1807—" Revenue 
 Selections," pages 116^^ seq. These surveys were attended with an 
 enormous expense. That of the " Ceded Districts" cost 83,000 
 pagodas (or above £33,000) ; and, as the revenue of those districts 
 was only 16,00,000 pagodas, the charge exceeded five per cent. 
 See page 121. 
 
125 
 
 is concluded with the ryots, sometimes by the 
 European collector, but more generally by his 
 native officers ; for Sir T. Munro observes,* 
 *' The most experienced collector could hardly 
 " make the settlement of ten villages in a whole 
 '- year, and after all it would most likely be 
 '' done very indifferently. "f And, that expe- 
 rienced officer remarks in another place, " Even 
 "' where the ryots neglect to bring the grievance 
 
 *' forward 
 
 * See Sir T. Munro's Letter of the 30th November 1806—" Reve- 
 nue Selections," page 94. 
 
 f If this be the utmost which an experienced collector can accom- 
 plish, what is to be expected from an inexperienced collector, as 
 described by Mr. Thackery, one of the advocates of the " Ryotwar 
 System ?" He observes, " Over- zealous, but honourable young men, 
 " might plunder the country more completely, perhaps, than a Mar- 
 ** hatta array could have done." Now, this system, embracing as it 
 does multitudinous details, requires a greater number of collectors 
 than any other ; or (what is worse) a greater number of native officers. 
 — See, also, Mr. Thackery*s opinion of Surveys — " Revenue Selec- 
 tions," page 859. " If, indeed, tlie survey had been equal at first, 
 " and could continue so, no loss would result from this freedom {i. e. 
 " liberty to throw up over-assessed lands), because the rent being 
 " every where exactly proportioned to the value of the land, the 
 " ryot, wherever he went, and whatever extent of land he occupied, 
 " would have to pay the proportionate rent. But, no survey rate 
 " can be so nicely adjusted at first ; and, if it could, would soon 
 " change. The value and rent of land fluctuates like the value of 
 " any thing else. But, even at first, we cannot so nicely appraise 
 " earth ; and, if we could, ten thousand mistakes must find their way 
 " into a survey. Frauds cannot be prevented, and erroneous principles 
 " are frequently adopted." And yet this is to be the foundation of 
 the Ryotwar Settlement ! 
 
126 
 
 ^' forward i in media lei}' ^ they hardly ever omit to 
 '' state it when assembled for the settlement of 
 ^' the ensuing' year ; and the tehsildar, knowing 
 " that gross negligence or partiality will be at- 
 *' tended with the loss of his place, seldom ven- 
 '' tures to make an unfair settlement. There 
 '' are, however, cases in which he does so, either 
 '* from ignorance or corrupt motives ; but where 
 *' the collector is vigilant, they are not frequent. 
 '' There is, indeed, no possibility of preventing 
 '' them altogether ; for the collector, when he 
 "' makes the settlement in person, may be de- 
 " ceived occasionally by the servants of his own 
 '' cutcherry, who may be dishonest as well as the 
 '' tehsildar. The business of a collector is not 
 '' properly so much to labour through all the 
 '^ details of the settlement, as to make those do 
 " it who can do it best. The potails and cur- 
 '' nums of villages, are the persons most capable 
 '' of making the settlements correctly ; but they 
 *' cannot be trusted, because they are cultivators 
 '' themselves, and have always friends and ene- 
 " mies among the ryots. It, therefore, becomes 
 '' necessary to employ a tehsildar,* who, not 
 
 '' being 
 
 * See SirT. Munro's Letter of the 30th November 1806—" Reve- 
 nue Collections," page 93. 
 
 Then read Mr. Ravenshaw's character of a Tehsildar—" Revenue 
 Selections,'* page 113, para. 12. " Hence arises that want of energy, 
 " that deplorable negligence, shameful ignorance, and, in some cases, 
 
 corruption ; 
 
127 
 
 '' being a native of the district, is not so liable to 
 '' be influenced by partialities." 
 
 The settlement appears to be made by assem- 
 bling the ryots, or cultivators, early in the year ; 
 and " when a country/ has been surveyed,^ the 
 
 '' indi- 
 
 " corruption; for which the generality of the tehsildars and other 
 " native servants are so remarkable in this soubah (Arcot). I have 
 " met with very few who know any other village than .their cusba, 
 " who know any thing of the resources of their districts, or who can 
 " give a satisfactory answer to any question relative thereto." 
 ( Para. 16, " Such is the present indolence as well as ignorance 
 " of the generality of tehsildars, that I have little hope of their exe- 
 " cuting the orders sent them with any degree of vigour, unless they 
 " are stimulated thereto by your presence in the talooks." 
 
 Next, read Sir T. Munro*s own description of his Revenue Ser- 
 vants, in vol. ii. of Judicial Selections, page 231, Report 10th April 
 1806, para. 56. " As there is a general combination down to the 
 " lowest village servant against the collectors, it is not easy for him 
 " to learn what is going on ; and when he has made the discovery, he 
 " perhaps only removes one set of servants, to make way for another 
 " equally corrupt : and hence, in order to prevent their falling 
 " into sunilar practices, he is forced to act rather as a spy, than in the 
 " superintendance of the province committed to his charge. Of 
 " about a hundred principal division and district servants who have 
 " acted under me during the last seven years, there have not been 
 " more than five or six against whom peculation to a greater or 
 " smaller extent has not been proved." 
 
 * The following is the opinion of the Supreme Government with 
 respect to surveys: — See Letter of the 14th December 1811 — 
 " Revenue Selections," pages 17-4 and 175. " In treating of the 
 •* advantages which may be derived from actual surveys, your Honour- 
 " able Court observe, that * in the management of the Conquered 
 " and Ceded Territories which have been annexed to the two subor- 
 " dinate Presidencies, this course has been successfully pursued,' 
 
 " &c. 
 
128 
 
 " individual supersedes both the village and dis- 
 " trict settlennent, because it is then no longer 
 '' necessary to waste time in endeavouring to 
 " persuade the cultivators to accede to the as- 
 '' sessment. The rent of every field being fixed, 
 " each cultivator takes, or rejects, what he 
 '' pleases, and the rents of all the fields occupied 
 '' in the course of the year in any one village, 
 " form what is called the settlement of that vil- 
 " lage/'* But where the lands have not been 
 
 sur- 
 
 " &c. Possessing only general knowledge of the measures adopted 
 " with a view to the adjustment of the assessment in the territories 
 " dependent on the Presidencies of Fort St. George and Bombay, 
 " and of the effect of those measures, we are necessarily precluded 
 " from offering any opinion upon the expediency of the surveys made 
 " in those parts of the British dominions ; but the experience ob- 
 " tained on the subject in Bengal, would by no means warrant us in 
 " recommending that a similar course should be observed in the terri- 
 " tories dependent on this Presidency. In former times, recourse 
 " was not unfrequently had to this expedient ; but the chicanery and 
 " corruption practised by the large body of native officers necessarily 
 " employed in the performance of that duty, the exactions and injus- 
 " tice to which the zemindars were consequently exposed, and the 
 " heavy expense with which all such surveys were attended, gradually 
 " induced succeeding governments to abandon the plan of fixing the 
 " public assessment by an actual measurement and computation of 
 " the produce of the land of each individual. The practice has 
 " long been entirely discontinued, and we are satisfied that the most 
 " experienced and capable of the revenue officers would deem the 
 " revival of it an evil ; burthensome, and oppressive to the people, 
 " and unproductive of any substantial benefit to the pecuniary inte- 
 " rests of the state." , 
 
 * See Sir T. Munro's Letter, " Revenue Selections," p. 89 and 91. 
 
129 
 
 surveyed, tlie process would seem to be much 
 more elaborate and difficult ; and, as '' the cur* 
 num's accounts are always false/' it is found 
 necessary to have recourse to various indirect 
 modes of proceeding for the purpose of acqui- 
 ring the necessary information with respect to the 
 land, and tlie situation and circumstances of the 
 cultivators. 
 
 '' *The chief obstacles in the way of it, (a set- 
 ' tlement with the individual cultivators,) arise 
 ' from false accounts, from doubts concerning 
 ' the rate of assessment, and from the difficulty 
 ' of ascertaining the condition of the poorer 
 ' ryots. There is, perhaps, no curnum who in any 
 ' one year ever gives a perfectly true statement 
 ' of the cultivation of his village; and it is only 
 ' the fear of removal or suspension that can make 
 ' him give such accounts as are tolerably accu- 
 ' rate. The proper rate of assessment is found 
 ' either by reference to the accounts of former 
 ' years, or by comparison with the rent of lands 
 ' of the same quality, which have long been 
 ' nearly stationary ; and the condition of the 
 ' poorer ryots is learned from the concurring tes- 
 ' timony of their neighbours, who, at the same 
 ' time, will not exaggerate their poverty, lest the 
 
 '' re- 
 
 * See Sir T Munro's Letter, " Revenue Selections," pages 89 
 and 91. 
 
" remissions which may in consequence be grant- 
 '* ed, should fall upon themselves. A short ex- 
 " planation of what takes place in the Kulwar 
 '^ settlement of a single district or tehsildarry^ 
 " will equally apply to the whole number of dis- 
 '* tricts forming a collectorate. I shall here speak 
 '' of a district in its ordinary/ state of prosperitt/ ; 
 " not of one that has been reduced below it, by 
 " war or any other calamity." 
 
 " A district paying a revenue of fifty thousand 
 '' pagodas, usually contains about a hundred 
 " villages, differing greatly in extent and pro- 
 '* duce ; some of them not paying more than a 
 " hundred pagodas, and others as much as five 
 '" thousand, annual rent. Every village has 
 '' within itself a complete establishment of here- 
 " ditary revenue servants : a potail to direct the 
 " cultivation, realise the rent, and manage its 
 '' affairs in general ; a curnum to keep the ac- 
 " counts ; and a certain number of peons to act 
 " under the potail, in collecting the kists from 
 '' the ryots. When the ploughing season begins, 
 *' the potail ascertains what land each ryot can 
 " cultivate ; he permits those who may have met 
 " with losses, to relinquish a part of their land, 
 "^ which he distributes to others who may be wil- 
 *"^^ ling to take it ; and to such as require none 
 ''^ he continues their former land. He does not 
 '' fix their rents/ because this is done by the co^ 
 
 '' lector. 
 
131 
 
 " lector^ when the season is so far advanced that 
 "^^ a judgment can be formed of the crop ; but he 
 *' assures them that their respective rents will 
 " continue the same as last year^ only making' 
 "^ allowance for such alterations as may become 
 " unavoidable^ from the total revenue of the 
 " village being somewhat raised or lowered by 
 'r the collector : they are satisfied with this pro- 
 " mise^ receive betel from him as a confirmation 
 " of it, and yoke their ploughs. Specific written 
 " engagements cannot be made with them at this 
 " early period of the year, because, as in annual 
 '' settlements, where the failure of the crop is 
 " great, remissions must be allowed, so where 
 " the produce is uncommonly abundant, increase 
 *' must be taken to balance such failures, because 
 *' the potail having relations and friends in the 
 '' village to whom he would be partial, could not 
 '!; be safely entrusted with the power of fixing 
 *' .rents ; and because the ryots themselves will 
 •' not in this year agree to pay the same rent in 
 ^' the ensuing one, lest they should meet with 
 " losses, which would be aggravated by a rent 
 fr, which they might then be unable to bear. 
 '' The tehsildar goes round his district in the 
 *' early part of the season ; his business is chiefly 
 " to regulate cultivation in those villages where 
 '' it is mismanaged from the incapacity of the 
 '* potail, or impeded by disputes among the prin- 
 
 s 2 '' cipal 
 
f« 
 
 132 
 
 cipal ryots, and to make advances to the poorer 
 sort for the purchase of seed, ploughs, or cattle. 
 He also ascertains what land each ryot has 
 already cultivated, or engaged to cultivate, du- 
 ring the year, which he does by assembling* the 
 ryots in their respective villages, and examining 
 them in the presence of the potails and cur- 
 nums ; and accounts of the lands occupied and 
 unoccupied, are taken by his cutcherry, which 
 accompanies him. He goes round again when 
 the crops are ripening, to see their condition, 
 and to ascertain whether the quantity of land 
 actually cultivated is more or less than that 
 which the ryots had engaged to take." 
 '" The collector sets out on his circuit in Sep- 
 tember or October, when the early crops begin 
 to be reaped, and the late ones to be sown. On 
 arriving in a district, he assembles all the ryots 
 of the four or five nearest villages. The first 
 business is to learn how far the cultivation of 
 the present year is more or less than that of the 
 last; this is soon done by the help of the 
 tehsildar's and curnum's accounts, compared 
 with the reports of the potails and ryots. 
 Where there is a decrease, it is commonly owing 
 to deaths, emigration, or loss of cattle ; where 
 there is an increase, it is usually derived from 
 new settlers, or additional lands being occu- 
 pied by the old ones. In the case of decrease, 
 
 '' the 
 
\33 
 
 '' the rent of the lands thrown up is deducled 
 "" from the settlement of last year ; in that of 
 '' increase^ the rent of the land newly occupied is 
 '' added ; and in both cases, the rent of the re- 
 *' mainin^ lands remains the same as before. The 
 "' rent of the land newly occupied is determined 
 '" by the accounts of what it was in former times ; 
 '" or, if such accounts cannot be procured^ by the 
 '' opinions of the most intelligent ryots; but the 
 "" full rent of waste land is not exacted, until it 
 '' has been in cultivation from two to seven years. 
 " The number of years, and the gradational rise 
 " in each year, depend upon the nature of the 
 '' land, and the custom of the village. They 
 '' are known to all parties ; and all doubts are 
 '' removed by their being detailed in a proclama- 
 '' tion, or cowle-namah, under the collector's 
 '" seal, circulated to every village. 
 
 ''If the cultivation is the same as last year's, 
 '' and no failures occur among the ryots, the rents 
 " remain unaltered ; if the crops are bad, and it 
 '' appears that some of the poor ryots must have 
 '' a remission, the loss, or part of it, is assessed 
 '' upon the lands of the rest, where it can be done 
 '' without causing any material inconvenience. 
 
 ''^ This assessment never exceeds ten or twelve 
 '' per cent., and is much oftener relinquished 
 " than carried into effect. Jn cases where it can 
 "" be easily borne, it is frequently agreed to with- 
 
 " out 
 
134 
 
 ' out dilficuUy ; and if opposition is made, it is 
 '' generally soon got over by the mediation of the 
 ' ryots of the neighbouring villages present. 
 ' These discuss the point in question with the 
 ' ryots of the objecting village ; tell them that 
 '' it is the custom of the country ; use such other 
 '' arguments as may be applicable to the subject ; 
 '' and never fail in persuading them to accede to 
 " the demand, mdess it is really too high, iu 
 '' which event it is lowered. Whenever indivi- 
 '' duals, or villages, object to their rent, it is 
 *' always the most expeditious and satisfactory 
 '' way of settling the dispute, to refer it to the 
 '' ryots of other villages, who do more on such 
 '' occasions in half an hour, than a collector and 
 '' his cutcherry in a whole year." 
 
 My wish is not to exaggerate ; but when ^X 
 find a system requiring a multiplicity of instru- 
 ments, surveyors, and inspectors ; assessors, ordi- 
 nary and extraordinary ; potails, curnums, teh- 
 sildars, and cutcherry servants ; and when 1 read 
 the description given of these officers by the most 
 zealous advocates of the system, their periodical 
 visitations are pictured in my imagination as the 
 passage of a flight of locusts, devouring in their 
 course the fruits of the earth. For such compli- 
 cated details, the most select agency would be 
 required ; whereas the agency which we can com- 
 mand, is represented to be of the most question- 
 able 
 
135 
 
 able character. We do not merely require expe- 
 rience and honesty to execute one great under- 
 taking ; the work is ever beginning and never 
 endings and calls for a perennial stream of intel- 
 ligence and integritj/. And can it be doubted, 
 that the people are oppressed and plundered by 
 these multiform agents ? The principle of the 
 settlement is to take one-third of the gross pro- 
 duce on account of Government ; and, in order 
 to render the assessment moderate. Sir T. Munro 
 proposed to grant a considerable deduction from 
 the rates deducible from the survey reports. But 
 if it be moderate, how does it happen, that the 
 people continue in the same uniform condition 
 of labouring peasants ? Why do not the same 
 changes take place here as in other communities ? 
 One man is industrious, economical, prudent, or 
 fortunate ; another is idle, wasteful, improvident, 
 or unlucky. In the ordinary course of things, one 
 should rise and the other fall : the former should, 
 by degrees, absorb the possessions of the latter ; 
 should become rich, while his neighbour remained 
 poor ; gradations in society should take place ; 
 and, in the course of time, we might naturally 
 expect to see the landlord, the yeoman, and the 
 labourer. And what prevents this natural pro- 
 gression ? I should answer, the officers of govern- 
 ment. The fruits of industry are nipt in the bud. 
 If one man produce more than his fellows, there 
 
 i$ 
 
is a public servant at liaiid^ always ready to snatch 
 the superfluity. And^ wherefore, then, should the 
 husbandman toil that a stranger may reap the 
 produce ? 
 
 There are two other circumstances which tend 
 to perpetuate this uniform condition. The ryots 
 have no fixed possession ; they are liable to be 
 moved from field to field : this they sometimes 
 do of their own accord, for the purpose of obtain- 
 ing land, supposed to be more lightly assessed ; 
 at other times, the land is assigned by lot, with a 
 view to a more equal and impartial distribution 
 of the good and the bad, among the different cul- 
 tivators. But these evolutions tend to destroy 
 all local attachments, and are evidently calculated 
 to take away one great incentive to exertion. 
 
 The other levelling principle is to be found in 
 the rule, which requires that the ryot shall make 
 good the deficiencies of his neighbour to the ex- 
 tent of ten per cent. ; that is, to the extent, pro- 
 bably, of his whole surplus earnings. Of what 
 avail is it that the husbandman be diligent, skil- 
 ful, and successful, if he is to be mulcted for 
 his neighbour's negligence, or misfortune? A 
 must pay the debt of B. If a village be pros- 
 perous, it matters little, for the next village may 
 have been exposed to some calamity ; and, from 
 the abundance of the one, we exact wherewithal 
 
 to 
 
137 
 
 to supply the deficiency of the other.* Is it 
 possible to fancy a system better calculated to 
 baffle the efforts of the individual, to repress in- 
 dustry, to extinguish hope, and to reduce all to 
 one common state of universal pauperism ? 
 
 It may be asked, is there not a poor and la- 
 bouring^ peasantry to be seen under the zemin- 
 darry system ? Most assuredly there is. In every 
 country a large part of the population must be in 
 the condition of labourers ; but the zemindar has 
 an interest in protecting and conciliating his ryot, 
 or he will migrate to another estate. Jf a scarcity 
 unhappily occur, he has an interest in assisting 
 to preserve the existence of the peasant, and in 
 replacing the seed which his necessities may have 
 compelled him to consume, in order that the 
 deficiency of one season may not be aggravated 
 in the next ; and he probably will have the 
 means of furnishing such assistance, for he will, 
 in general, be in possession of a stock of grain, 
 the superfluity of preceding harvests. What 
 
 store 
 
 ♦ It may be said, that if one tax fail, it is usual for Governments 
 (and our own among the rest) to substitute another; but there 
 is no analogy between this case and that where an individual is 
 compelled to pay the debt of his neighbour. It is but justice to 
 the Court of Directors to mention, that their minds seem to 
 have revolted at the proposition; and the Board of Revenue at 
 Madras proposed to dispense with the rule ; but Sir T. Munro re- 
 mained firm in the opinion that it was necessary. What must that 
 system be which requires such a rule ! 
 
 T 
 
138 
 
 store can the labour! iii^ peasaiit be expected to 
 hoard up? Is he not likely to be relieved of his 
 surplus produce by the officers of Government^ 
 either on the plea of making good the failure of 
 his neighbours, or to administer to their own 
 avarice ? What capital can he accumulate ? The 
 larger proprietors may accumulate ; and they 
 have the means of bestowing, and a motive for 
 bestowing, a pittance upon their poorer depen- 
 dents. The stipendiary servants of the Govern- 
 ment have no such motive. They are liable to 
 be removed from their situations from day to day ; 
 they have no permanent interest in the prosperity 
 of the district in which they happen to be em- 
 ployed : their object is, generally, to make the 
 most of their situations during the term of their 
 precarious tenure. 
 
 1 shall only notice one other peculiarity of the 
 " Rj/otwar'* System; unfler it, say the Board of 
 Revenue, ^' the ryot was not allowed, on pay- 
 '' ment even of the high survey assessment fixed 
 '' on each field, to cultivate only those fields to 
 '' which he gave the preference ; his task was 
 " assigned to him ; he was constrained to occupy 
 '' all such fields as were allotted to him by the 
 '' revenue officers ; and, whether he cultivated 
 " them or not, he was, as Mr. Thackeray empha- 
 '* tically terms it, saddled with the rent of each. 
 " To use the words of Mr. Chaplin, the collector 
 
 of 
 
139 
 
 " of Bellary, one of the most able of Colonel 
 '' Munro's former assistants, and still one of the 
 " most strenuous advocates for the ' Ryotwar ' 
 *' system^ it was the custom under it to exert^ in 
 " a great degree, the authority which is incom- 
 " patible with the existing regulations, of com- 
 '' pelting the inhabitants to cultivate a quantity 
 " of ground proportionate to their circumstances. 
 " This he explains to have been done by ' the 
 '' poiver to confine and punish' them, exercised by 
 ^' the collector and his native revenue servants : 
 " and he expressly adds, that, if the ryot was 
 " driven by these oppressions from the fields 
 *' which he tilled, it was the established practice 
 '^ to follow the fugitive wherever he went, and, 
 " by assessing him at discretion, to deprive him 
 '^ of all advantage that he might expect to derive 
 '' from a change of residence."* 
 
 If forced residence and compulsory service be 
 essential to the success of the '' Ryotwar/' or 
 any other system of revenue administration, this 
 single fact ought to call for its unqualified con- 
 demnation. In vain shall we profess moderation, 
 justice, and humanity, or pretend to be actuated 
 by an enlightened policy, if a practice be tole- 
 rated which places our agricultural population in 
 the condition of Russian or Polish serfs in the 
 
 most 
 
 * See " Revenue Selections," p. 942. 
 T 2 
 
140 
 
 most barbarous age. I feel interested in uphold- 
 ing' the credit of our Indian administration ; but 
 no plea of necessity can justify, no pretence 
 of expediency can excuse, a species of coer- 
 cion, alike revolting to all good feeling, sub- 
 versive of personal freedom, and at variance with 
 all sound principle. Is this a '' native usage/' 
 which we are so vehemently called upon to re- 
 establish ? Is this a practice so congenial with 
 the feelings and the habits of the people, that it 
 cannot safely be dispensed with ? And is this a 
 part of the consecrated machinery which Lord 
 Cornwallis is reproached for having broken to 
 pieces ? This system is not only to be continued 
 where it already exists ; but it is understood that 
 the public authorities in this country contemplate 
 its extension to our western provinces under the 
 government of Bengal, where it will be an inno^ 
 vation, and where it must encounter the oppo- 
 sition of an irritated and warlike people.* 
 
 The 
 
 * It may be imagined that the peasantry will be well pleased to hold 
 the lands which they cultivate direct from the Government ; but the 
 alternative presented to their minds will be this : " shall we conti- 
 nue under our native chiefs, to whom we are attached, and who 
 protect us— or shall we place ourselves under revenue officers, whom 
 we detest, and who will oppress us ?" What would have been the 
 election of a Scotch Highlander a century ago, if this alternative 
 had been presented to him? In fact, the " ryotwar^* question re- 
 solves itself into this — whether a stipendiary agency (probably cor- 
 rupt) shall be employed between the Government and the peasantry — 
 £>r whether we shall interpose a proprietary between Government and 
 
 the 
 
141 
 
 The Board of Revenue at Fort St. George sum 
 up the character of the " E^otwar" system in the 
 following very forcible language :— 
 
 "' Ignorant of the true resources of the newly- 
 " acquired countries, as of the precise nature of 
 " their landed tenures, we find a small band of 
 '^ foreign conquerors no sooner obtaining pos- 
 '' session of a vast extent of territory, peopled 
 "' by various nations, differing from each other in 
 '^ language, customs and habits, than they at- 
 " tempt what would be deemed a Herculean task, 
 '" or rather a visionary project, even in the most 
 '' civilized countries of Europe, of which every 
 " statistical information is possessed, and of 
 " which the government are one with the people, 
 '' viz., to fix a land-rent, not on each province, 
 " district, or country ; not on each estate or farm ; 
 " but on everj/ separate field in their dominions. 
 *' In pursuit of this supposed improvement, we 
 " find them unintentionally dissolving the ancient 
 " ties, the ' ancient usages,' which united the 
 " republic of each Hindoo village, and by a kind 
 '' of Agrarian law, newly assessing and parcel- 
 '* ling out the lands which, from time imme- 
 "' morial, had belonged to the village commu- 
 '' munity collectively ; not only among the indi- 
 
 '' vidual 
 
 the cultivator of the soil. In Bengal, such a proprietary is found to 
 exist, and one chief object of the present publication is to call the 
 attention of the public authorities to the injustice ^ the impolicy y and 
 the danger of displacing it in our " Ceded and Conquered provinces." 
 
H2 
 
 ^ vidual members of the privileged order (the 
 ' Meerassidars and Cadeems), but even among 
 ' the inferior tenantry (the Pyacarries) : we ob- 
 ' serve them ignorantly denying, and by their 
 ' denial, abolishing, private property in the land ; 
 ' resuming what belonged to a public body (the 
 ' grama manium), and conferring, in lieu of it, 
 ' a stipend in money on one individual ; profes- 
 ' sing to limit their demand on each field, and, in 
 ' fact, by establishing for such limit an unat- 
 ' tainable maximum, assessing the ryot at dis- 
 ' cretion ; and, like the Mussulman government 
 ' which preceded them, binding the ryot by force 
 ' to the plough, compelling him to till land ac- 
 ' knowledged to be over-assessed, dragging him 
 ' back to it if he absconded, deferring their de- 
 ' mand upon him until his crop came to matu- 
 ' rity^ then taking from him all that could be 
 ' obtained, and leaving to him nothing but his 
 ' bullocks and his seed-grain ; nay, perhaps, 
 ' obliged to supply him even with these, in order 
 ' to renew his melancholy task of cultivating, 
 ' not for himself, but for them/'* 
 
 To this picture I must add the delineation given 
 of the same original by Mr. R, Fuller ton, who 
 witnessed and condemned the system, and with his 
 colleague, Mr. Hodgson, inanfully but unsuccess- 
 fully opposed its introduction at Fort St. George. 
 
 Extract 
 
 • See " Revenue Selections," pages 942 and 943. 
 
143 
 
 Extract from an unrecorded memoir by Mr. 
 Fullerton, written in 1823. 
 
 '' To convey to the mind of an English reader 
 even a slight impression of the nature, opera- 
 tion^ and results of the ryotwav system of reve- 
 nue^ connected with the judicial arrangements 
 of 1816, must be a matter of some difficulty. 
 Let him, in the first place, imagine the whole 
 ' landed interest, that is, all the landlords of 
 ' Great Britain, and even the capital farmers, at 
 ' once swept away from off the face of the earth ; 
 ' let him imagine a cess or rent fixed on every 
 ' field in the kingdom, seldom under, generally 
 ' above, its means of payment ; let him imagine 
 ' the land so assessed lotted out to the villagers, 
 ' according to the number of their cattle and 
 ' ploughs, to the extent of forty or fifty acres 
 ' each ! Let him imagine the revenue, rated as 
 ' above, leviable through the agency of a hundred 
 ' thousand revenue officers, collected or remitted 
 ' at their discretion, according to their idea of 
 ' the occupant's means of paying, whether from 
 ' the produce of his land or his separate pro- 
 ' perty. And in order to encourage every man 
 * to act as a spy on his neighbour, and report his 
 ^ means of paying, that he may eventually save 
 ' himself from extra demand, let him imagine all 
 ' the cultivators of a village liable at all times to 
 ' a separate demand, in order to make up for the 
 
 '' failure 
 
144 
 
 ' failure of one or more individuals of their 
 ' parish. Let him imagine collectors to every 
 ' county acting under the orders of a boards on 
 
 * the avowed principle of destroying all compe- 
 
 * tition for labour by a general equalization 
 
 ' of assessment ; seizing and sending back run- 
 
 ' avvays to each other. And lastly, let him 
 
 ' imaorine the collector the sole maiiistrate or 
 
 ' justice of the peace of the coimty, through the 
 
 ' medium and instrumentality of whom alone 
 
 ' any criminal complaint of personal grievance, 
 
 ^ suffered by the subject, can reach the superior 
 
 ' courts. Let him imagine at the same time 
 
 ' every subordinate officer, employed in the col- 
 
 ' lection of the land revenue, to be a police officer, 
 
 ' vested with power to fine, confine, put in the 
 
 ' stocks, and Jiog, any inhabitant within his 
 
 ' range, on any charge, without oath of the ac- 
 
 ' cuser, or sworn recorded evidence on the case. 
 
 ' If the reader can bring his mind to contemplate 
 
 '- such a course, he may then form some judg- 
 
 ' ment of the civil administration in progress of 
 
 ' re-introduction into the territories under the 
 
 ' Presidency of Madras, containing 125,000 
 
 ' square miles, and a population of twelve 
 
 ' millions.*'* 
 
 The 
 
 * I am indebted to Mr. Hodgson for the document from which 
 the above extract is taken, as well as for much useful information 
 regarding the revenue administration at Fort St. George. 
 
145 
 
 The rigours of the system were, no doubt, sof- 
 tened in many instances by the good se!!se and 
 proper feeling of the ministerial officers who were 
 employed in its execution, and Sir T. Munro 
 himself has always been an advocate for mode- 
 ration in the assessment. The judicial regula- 
 tions which were introduced into the Madras 
 territory in 1802 and 1806, were also calculated 
 to impose some salutary restraints upon the reve- 
 nue servants ; but still it is unwise to place in the 
 hands of public functionaries a dangerous instru- 
 ment, which, if not always used with prudence 
 and forbearance, must become the source of 
 mischief. 
 
 The '' ryotwar'' system seems for a time to 
 have given place in some of the Madras districts 
 to "" village settlements,'' which appear to me 
 to have had much to recommend them to a 
 preference, in those instances where a superior 
 order of landholders was not found to exist j but 
 the " ryotmav'' \vdi^ once more obtained the ascen- 
 dancy, and is become the prevailing fashion of 
 the day. 
 
 In the quotations which I have given, let it 
 not be supposed that I have selected partial ex- 
 tracts for the purpose of exhibiting an unfair and 
 unfavourable view of a particular system. I 
 could wish that every thing which has been writ- 
 
 u tea 
 
146 
 
 ten in support of it;, were submitted to the pub- 
 lic. I have studied it in the writings of its 
 warmest advocates : I have sought for an illus- 
 tration of its defects in their pages ; and to this 
 source I appeal for those facts, which^, in my judg- 
 ment, must determine its true character. I 
 have, it is true, given only a sketch of its leading 
 features. To discuss it thoroughly, much more 
 ample materials must be brought together ; but 
 this will, 1 trust, be done ; and 1 have the satis- 
 factory assurance that the work is in excellent 
 hands.* 
 
 It remains for me to notice some arrangements 
 which have been judged necessary, or expedient, 
 as auxiliary to the '* ryotwar" system : and I shall 
 then proceed to deduce its practical effects in a 
 financial point of view. 
 
 1st. The collectors of the land revenue at Fort 
 
 St. 
 
 " Mr. J. Hodgson, late member of council at Fort St. George, 
 who, with his colleague, Mr. Fullerton, so ably opposed the " ryot- 
 war " system abroad, is likely, I hope, to bring the merits of the 
 question fully and fairly before the public in this country. 1 could 
 only pretend to give an outline, without losing sight of my main 
 object; but that outline will, I trust, be completely filled up. In the 
 mean time, I beg to refer to the minute of the Board of Revenue at 
 Fort St. George, bearing date the 5th January 1818, " Revenue 
 Selections," pages 885 and 951, as containing a full exposition 
 of the " ryotwar " system, and of the revenue administration at 
 that Presidency, generally. 
 
147 
 
 St. George have been re-invested with the office 
 of magistrate in their i^espective districts. 
 
 2d. The tehsildars, or native officers employed 
 in collecting the land revenue, have been invested 
 w^ith powers to act as officers of police. 
 
 3d. These tehsildars have, by Regulation IV. 
 of 1821, been empowered to impose fines, and to 
 inflict corporal punishment. 
 
 4th. Seven or eight of the zillah, or district 
 courts, for the administration of civil justice, 
 have been abolished. 
 
 There are situations in which the union of the 
 offices of collector and magistrate may be con- 
 venient ; there are individuals in whose hands the 
 powers of the two offices may be united with 
 safety ; and it is unquestionable that the infor- 
 mation which the revenue servants possess, with 
 respect to the people and their concerns, affi)rd 
 them great facilities as judicial functionaries, 
 while their numbers are such as to constitute an 
 efficient police establishment. In the jungle dis- 
 tricts, in particular, where both the people and 
 their chiefs are in a rude, uncivilized state, our 
 institutions, to be intelligible and suitable, must 
 be very simple ; and the simplest form of admi- 
 nistration is, no doubt, that which places all 
 power in the hands of a single individual. 
 
 But it is also true that this combination of 
 power may lead to great abuse ; that it holds 
 
 u 2 out 
 
148 
 
 out a teinptatioii to abuse ; and that it secures 
 impunity to the corrupt or tyrannical oificer, who 
 deviates from the path of duty. As a system, it 
 is dangerous : and whatever may be its practical 
 usefulness in particular instances, its general ap- 
 plication cannot be justified upon any sound 
 principles. 
 
 Regulation IV. of 1821, of the Madras Govern- 
 ment, empowers the tehsildars to impose fines, and 
 to inflict corporal punishment for theft and petty 
 misdemeanours: and although the correction is 
 limited to six strokes of the rattan for each 
 offence, the power to inflict corporal punishment, 
 however slight, involves the power to inflict dis- 
 grace ; and this, in India, where the better classes 
 are extremely sensitive in all matters affecting 
 reputation, is liable to be a|3plied to the very 
 worst purposes. 
 
 it is by no means my intention to assert that 
 the authority of magistrate was given to invigo- 
 rate and uphold the '' ryotimr'' system, or to 
 strengthen the hands of the '' tehsildar*' in his 
 revenue capacity. It was honestly given with 
 very different views : but when a public officer, 
 exercising two functions, is seen armed with the 
 fasces, it requires very nice discrimination to de- 
 termine in what quality they are intended to be 
 used ; and, certainly, no prudent man would op- 
 pose the will of an officer so fatally armed, should 
 
 it 
 
I 
 
 149 
 
 it occur to him to enforce a revenue exaction by 
 the threat of a summary judicial process. That 
 the tehsildars have ample powers to do mischief^ 
 cannot be doubted, and that they will exert their 
 power for corrupt and oppressive purposes, can- 
 not be doubted by those who do not discredit the 
 description which has been given of those func- 
 tionaries. 
 
 Nor is it intended by me to affirm that the 
 abolition of the zillah, or district courts of justice, 
 had for its object to afford the revenue servants 
 freer scope for their operations ; but 1 do appre- 
 hend that such must inevitably be the conse- 
 quence of their suppression. They were abolished, 
 partly *' for the sake of public economy/' and 
 partly, because Sir T. Munro seems disposed to 
 consider those courts as the source of inconve- 
 nience, if not a positive evil. He observes, ^' but 
 "^ whatever mode of settlement may be finally 
 '^ adopted, the inhabitants, but particularly the 
 '' ryots, must suffer great inconvenience, and even 
 '' distress, from the judicial regulations, as they 
 '' now stand. The evils which they are likely 
 '' to increase rather than to diminish, are delay, 
 '' vexation, bribery, wrong decisions.* The 
 
 " delay 
 
 * A man of a dull understanding may be consistent in error. A 
 man of talents, like Sir T. Munro, is not likely to continue so, for 
 the " experimentum crucis " brings him back, sooner or later, to 
 
 the 
 
150 
 
 '' delay will necessarily arise from the forms, 
 " which not only the judge, but the native com- 
 '' missioners must adhere to in their proceedings, 
 " and from all the principal, and a great part of 
 *' even the petty suits, being brought before the 
 ** judge/'* &c. &c. 
 
 To this opinion, I must oppose one of the 
 highest authority on all questions relating to the 
 administration of justice in India — Sir Henry 
 Strachey, whose experience and attainments give 
 to his opinions a genuine value, and whose can- 
 dour and independent mind assure us that we 
 have always his unbiassed sentiments, thus ex- 
 presses himself. 
 
 '' My opinion of the judicial administration 
 " established in Bengal, and the provinces de- 
 '' pending upon it, is on the whole very favour- 
 '' able. To the system itself, the institution of 
 
 '' the 
 
 the right road. As an illustration of this remark, I will quote a 
 passage from the report of Sir T. M. and Mr. Stratton in 1818, on 
 the Zillah Courts. 
 
 " If not a single original suit were to come before them (the 
 Zillah Courts), they would still be of the most essential use to the 
 country as Courts of Appeal and Criminal Courts ; and still more, 
 perhaps, by the salutary check which they would maintain over the 
 districts and village moonsifs, by which they would compel them 
 to perform properly those subordinate judicial duties, which can by 
 no other agents be so conveniently discharged." Upon what ground, 
 I ask, are these courts to be abolished ? I understand that in one 
 instance, the native inhabitants have themselves protested against 
 the abolition— and with reason, no doubt. 
 
 * See " Revenue Selections," page 105, et seq. 
 
151 
 
 " the courts of justice^ formed as they are upon 
 *' the English model, and the rules by which they 
 " are guided^ I see no material objection." 
 
 '* If the ' ryotwar' plan can be carried on suc- 
 '' cessfully after the establishment of the judicial 
 *' authorities ; if rules can be framed^ under 
 '^ which the ryotwar collector shall act as manager 
 '' only of an estate, and the judge shall have the 
 '' usual power of redressing grievances, then I 
 " shall not condemn the plan ; but 1 protest 
 '* against, the ryotwar collector having any judi- 
 " cial power whatever. As manager of an estate 
 '' only he ought to be considered ; consequently, 
 '' we must be jealous of his power, lest he should 
 '" pervert it to purposes of extortion. Every 
 " manager of an estate has, in India, a natural 
 '' inclination or tendency towards extortion. If 
 '' any man^ whose business it is to collect rent 
 '' from the ryots, shall persuade himself that, 
 '' while so occupied, he is the fittest person in the 
 " world to defend these ryots from the oppres- 
 '' sions which he and his dependents commit, that 
 '' his occupation supersedes the necessity of all 
 '' control, that person, in my opinion, most 
 ^' grossly errs.''* 
 
 Mr. T. H. Ernst, another judicial servant of 
 great experience, writes as follows. 
 
 '' One 
 
 * See " Judicial Selections," pages 52, 64, and 65. 
 
152 
 
 " One of the most important benefits which the 
 "' natives have derived from it/' (the judicial 
 system) '' is the security which it has afforded them 
 '' in their persons. They are no longer beat and 
 ^' tortured, and imprisoned, as they used to be, 
 *' by the officers employed in the collections^ and 
 ^' by their private creditors ; and this very ma- 
 " terial change in their condition should never be 
 '' lost sight of in discussiiig the merits of the 
 " present system.'** 
 
 Mr. 
 
 * See " Judicial Selections," page 31. The following extracts ex- 
 hibit another contrast between the opinions of Sir T. Miinro and 
 Sir H. Strachey. 
 
 Extract from a Memorandum by Colonel Munro, on the Judicial 
 System : page 1 05, vol. ii, " Judicial Selections." 
 
 ** In the various plans that have been suggested for reducing the 
 public expenditure, none seem to have been thought of for lessening 
 that of the Judicial Department, though there is none in which re- 
 trenchment may be made with more advantage both to Government 
 and the inhabitants." &c. &c. 
 
 " In a civilized populous country, like India, justice can be well 
 dispensed only through the agency of the natives themselves. It is 
 absurd to suppose, that they are so corrupt as to be altogether unfit 
 to be intrusted with the discharge of this important duty," &c &c. 
 
 Extract from Sir Henry Strachey's Answer to the Questions put 
 by the Court of Directors in 1813 : page 72, vol. ii, " Judicial Se- 
 lections." 
 
 " It is, I should hope, superfluous to consider the native system : 
 
 we cannot seriously talk of reviving it in Bengal : what we have 
 
 done cannot be revoked. We have produced great changes, and, 
 
 occasionally, done some mischief, which cannot easily be repaired. 
 
 But barbarism and confusion will, I am sure, overwhelm the country, 
 
 if we give up our system now, and throw the natives suddenly upon 
 
 their own resources." 
 
 " With 
 
153 
 
 Mr. Ravenshaw, also, expresses himself in the 
 following enriphatic terms. 
 
 '' In saying thus much, 1 beg I may not be 
 " understood as deprecating the system itself, 
 ** for I have no hesitation in pronouncing, that 
 " our present Indian constitution is the proudest 
 " monument of wisdom ever erected in India ; 
 ** that the regulations, as they stand at present, 
 " are capable of rendering the system in time in a 
 '* great measure fit and efficient ; that they re- 
 ** quire only a few alterations and additions to 
 " make it as perfectly so as human institutions 
 " can be ; and that when the full benefits of it 
 *' are generally felt as well as seen, the natives 
 ** will consider it as the greatest blessing ever 
 *^ conferred on them. 
 
 " So far from thinking the expense of the pre- 
 ** sent system could with propriety be diminished, 
 *^ either by reducing the number of courts or 
 " the scale of establishment, I am decidedly of 
 " opinion that, if the expense could be borne, 
 
 '' great 
 
 ** W^ith all the abuses and want of skill that are visible in our 
 system, it displays, I firmly believe, more of intellect and rationality, 
 and consequently of substantial justice, than can be found in the 
 policy and legislation of the whole eastern world, from Constantino- 
 ple to China. It would be unpardonable to withhold these blessings, 
 which a series of astonishing events has enabled England to dis- 
 pense to Hindostan." 
 
 X 
 
154 
 
 *' great advantage would be derived from increa^- 
 *^ ing the number of courts/'* 
 
 It would not be difficult to multiply authorities, 
 for the purpose of shewing that the judicial powers 
 cannot generally be intrusted to the re\^enue ser- 
 vants with safety, and that the courts of justice, 
 although not perfectly free from objections, and 
 not yet harmonizing with the notions and habits 
 of the natives, cannot be dispensed with, without 
 exposing the people to very great oppression. 
 But, let Sir T. Munro himself describe the state of 
 a country, where the '' native institutions,'' so 
 highly vaunted, have had full scope and effect, 
 unfettered by English courts of law. 
 
 ''' A very large proportion of the talliars* are 
 '* themselves thieves; all the kawillgars* are 
 '* themselves robbers exempting them, and many 
 " of them are murderers ; and, though they are 
 ** now afraid to act openly, there is no doubt 
 ** that many of them still secretly follow their for- 
 ** mer practices. Many potails and curnums, 
 '• also, harbour thieves ; so that no traveller can 
 
 '' pass 
 
 * See " Judicial Selections/' pages 131 to 135. There is an 
 able minute on the subject, by Mr, Fullerton, from which I should 
 quote largely, if I were not unwilling to extend this Essay beyond 
 its more immediate object. I should also refer to the opinions of 
 Lord Teignmouth, of the Marquess of Wellesley, and of the Go- 
 vernment of Fort St. George, in 1812: as well as to the report of 
 the Select Committee of the House of Commons, on the merits of 
 our judicial system. 
 
1*- r^ 
 00 
 
 *' pass through the ceded districts without being 
 " robbed, who does not employ either his own 
 " servants, or those of the village, to watch at 
 " night ; and even this precaution is very often 
 " ineffectual. Many offenders . are taken, but 
 " great numbers also escape, for connivance must 
 " be expected among the kawillgars and the 
 " talliars, who are themselves thieves; and the 
 " inhabitants are often backward in giving infor- 
 '' mation_, from the fear of assassination, which 
 ^' icas formerly very common^ and sometimes hap- 
 " pens on such occasions/'* 
 
 It has been said, and very justly, I admit/ that 
 the natives of India are attached to their usages 
 and institutions ; but they are an intelHgent 
 people, and although they may be incommoded 
 by the forms and process of our courts, to which 
 they are not yet familiarized, they are fully sen- 
 sible of the value of British protection, and it is 
 impossible to believe that they can be attached to 
 the state of anarchy described in the foregoing 
 extract. 
 
 Sir T. Munro is too much of a statesman not 
 
 to 
 
 * See " Judicial Selections," pages 220, 221, et seq. The kawill- 
 gar was a head-officer of police under the native administration. 
 " The talliar acts under the potail of the village ; and the potail 
 " under the Amildar of the district ; but all these persons are, at 
 " least, as much revenue as police-officers. The talliar and potail 
 " hold their offices by inheritance." 
 
156 
 
 to be aware that no society can exist without civil 
 institutions ; and after enlargini^ upon the defects 
 and insufficiency of our judicial system, he pro- 
 ceeds to explain the native system of judicature, 
 which he consijiers us to have displaced, and 
 which it has been his object to re-establish. 
 
 Para. 24. ** It is to be feared that no complete 
 " remedy for these evils can be found ; but the 
 ** most effectual one would be to resort to the 
 " trial by jury, termed by the inhabitants * pun- 
 *' chayet/ or subba, according to their respective 
 " languages. The judicial code in civil cases 
 " authorizes trial by referees, arbitrators and 
 " munsifs ; but it says nothing of trial by ' Pun- 
 " chai/et/ It seems strange that this code, which 
 ** has been framed expressly for the benefit of the 
 " natives, should omit entirely the only mode of 
 ** trial which is general and popular among them, 
 " and regarded as fair and legal ; for there can 
 *' be no doubt that the trial by * punchayet ' is 
 '' as much the common law of India, in civil mat- 
 " ters, as that by jury in England. No native 
 " thinks that justice is done where it is not 
 ** adopted ; and in appeals of causes formerly 
 *' settled, whether under a native government, or 
 " under that of the Company, previous to the 
 '' establishment of the courts, the reason assign- 
 ** ed, in almost every instance, was, that the de- 
 " cision was not given by a 'punchayet/ but 
 
 by 
 
157 
 
 ** by a public officer, or by persons acting under 
 '' his influence, or sitting in his presence. The 
 " native who has a good cause, always applies 
 '^ for a ^ punchayet/ while he who has a bad one 
 '* seeks the decision of a collector or a judge, 
 " because he knows that it is easier to deceive 
 *' them. It may be objected that a ' pun- 
 " chayet * has no fixed constitution ; that the 
 '* number of its members may vary from five to 
 " fifty, or even more, and that its verdicts are 
 ** often capricious. But all these objections for- 
 ** merly lay against juries, and they might un- 
 " questionably be removed from ^ punchayets * 
 ** by future improvements."* 
 
 The ^^ punchayet"\ is an assembly of arbitra- 
 tors ; and, although it had fallen much into disuse 
 in most of the Bengal districts, it was never in- 
 tended by our Government to suppress it. On 
 the contrary, the judicial code expressly en- 
 couraged appeals to arbitration, and the people 
 have always been perfectly free to use the 
 *' punchayet/* whenever they were mutually dis- 
 posed to give it a preference. It was, however, 
 
 judged 
 
 * See " Revenue Selections," page 106. 
 
 \ See Appendix C, on the origin and nature of " Funchayet^^ 
 by H. T. Colebrooke, Esq., than whom there can be no higher autho- 
 rity on questions of Hindoo law and Hindoo institutions. This 
 brief Memoir should satisfy those who have been accustomed to 
 regard the " Punchayet^* as constituting the entire system of Hindoo 
 judicature, that they have been entirely in a mistake. 
 
158 
 
 judged necessary to render awards liable to be set 
 aside for corruption, and this enactment operated, 
 no doubt, to discourage individuals of respec- 
 tability from undertaking the office of arbitrator ; 
 it in consequence gradually declined in the es- 
 timation of the people, and there is reason 
 perhaps to regret that an institution of the kind 
 could not have been secured from abuse by means 
 short of those which appear to have occasioned 
 its disuse. 
 
 As an auxiliary to a regular system of judica- 
 ture, the '' punchai/et " may be found extremely 
 useful. It was in general resorted to for the 
 purpose of settling questions relating to caste, 
 professional privileges and usages, the customs 
 of merchants, and the like ; and it might be em- 
 ployed, quite as usefully, in adjusting boundary 
 disputes, questions between landlord and tenant, 
 and simple contracts generally. But as a system 
 standing alone and unsupported, its incompetency 
 must at once be apparent. How is it possible for 
 such an assembly to stand as a bulwark between 
 Government, or its officers, and the people ? How 
 could such an assembly be called upon to decide 
 an intricate question of inheritance, or any ques- 
 tion whose solution should depend upon a know- 
 ledge of the general principles of law } To 
 maintain that it is all-sufficient, and adequate to 
 all the ends of justice, would be as unreasonable 
 
 as 
 
159 
 
 as to contend that it can never be used with ad- 
 vantage.* 
 
 Sir John Malcolm^ in his " Memoir on Central 
 India/' has given a particular account of the 
 '' punchayety'' and his opinions are strongly in 
 favour of the institution. The Hon. Mountstuart 
 Elphinstone^ in his " Report f on the Territories 
 conquered from the Peishwa/' gives^ aiso^ a fair 
 and impartial description of it^ and delineates its 
 merits and defects with a clear and just discrimi- 
 nation. From these and other authorities, there 
 are satisfactory grounds for concluding that the 
 ** Punchai/et," as a court of arbitration, acting 
 iDith consent of parties, ought to be sustained and 
 countenanced by the Government wherever it is 
 found to exist ; and that, as such, it is likely to 
 prove a very useful engine in the administration 
 of justice. It is, however, an institution rather 
 suited to a rude state of society, in which friends 
 and neighbours are naturally called in to arbitrate 
 differences between individuals; but it would seem 
 to be scarcely adapted to a more advanced stage 
 of civilization, when, the concerns of the com- 
 munity becoming complex and multifarious, writ- 
 ten 
 
 * In a short Memoir which I wrote in India some fifteen years ago 
 on our judicial system, I recommended the use of the ^^ punchayeV 
 in a modified shape j so that I have no prejudices to overcome 
 on this subject. 
 
 t See Report, printed in Calcutta in 1831. 
 
160 
 
 ten laws are found necessary, and nicer distinc- 
 tions must be made in the administration of those 
 laws. 
 
 The advocates of the ^^ punchayet" may 
 perhaps be surprised to learn that their favourite 
 institution has been tried upon a large scale in 
 modern times, and that the experiment is con- 
 sidered entirely to have failed. 
 
 The first National Assembly of France, by a 
 law of the 24th August 1790, which was followed 
 by many subsequent enactments in the same 
 spirit, decreed that '* arbitration afforded the 
 " means the most reasonable for settling suits 
 " between citizens ;'* and this principle having 
 obtained high favour for the time, it was every 
 where extended, and found its way into the legis- 
 lation of the remote Cantons of Switzerland. It 
 was applied even to cases of inheritance, and 
 ** dans cpMe manie d* arbitrage,'* observes M. 
 Bellot,* ** on alia plus oin ; le mot dejwge cessa 
 " d'etre un terme legal; on ne reconnut plus que 
 " des arbitres volontaires, ou des arbitres publics, 
 " selon qu'ils etaient nommes par les parties, ou 
 *' par les assemblees electorales/' 
 
 But what was the result of this expulsion of 
 the very name of judge from the judicial code? 
 
 '' L ex- 
 
 * See " Expose des Motifs de la Loi sur la procedure Civile, 
 pour le Canton de Geneve," par P. F. Bellot. 
 
161 
 
 ** L*experience mit bientOt a decouvert les 
 ** vices (\e ce systeme ; et une voix geiierale ac- 
 " cusa rimprevoyance du legislature. 
 
 " De toutes parts on citait en France des sen- 
 " tences arbitrales^ ou les lois avaient ete im- 
 '* pudemment violees, les interets les plus sacres 
 " connpromis ; ou des arbitres ignorans^ pusil- 
 " lanimes, subornes^ n 'avaient ecoute que leurs 
 " prejuges^ la crainte, ou la faveur. Deux ans 
 ^' de re£:ne suffirent a rarbitrao:e force nour ac- 
 
 'O 
 
 pour 
 
 " cumuler plus d'abus que n'en avait presente 
 " Tordre judiciaire dans une longue suite 
 " d'annees. 
 
 '* Enfin, les tribunaux de famille et Tarbitrage 
 ** force^ furent supprimes ; et nous detruisimes, a 
 ** notre tour^ roeuvre d'une imitation servile/* 
 
 Such was the early fate of the French and the 
 Swiss '* Punchai/et ;" but let it not be supposed 
 that the learned Juris-consult of Geneva condemns 
 all arbitrations indiscriminately : on the contrary, 
 he seems to be fully sensible that voluntary/ ar- 
 bitrations may be resorted to with great advan- 
 tage, and that provision ought to be made in 
 every system of judicature forgiving proper effect 
 to this mode of arbitrament between contending 
 parties. 
 
 1 have been led into a digression upon the 
 *' Punchayet/' in consequence of observing that 
 expectations have been encouraged with respect 
 
 y to 
 
162 
 
 to it^ which are not likely, I fear, to be realized ; 
 and, in consequence of the disposition which has 
 been manifested of late, to exaggerate the merits 
 of the native institutions, and to condemn every 
 thing which is supposed (however erroneously) to 
 innovate upon them. Will the warmest advocates 
 of the ** Punchayet" pretend that it can protect 
 the people of India against the Government, or 
 its revenue officers? And will any person be 
 found to maintain that they ought not to be 
 protected ? Will it be contended that we ought 
 not to have v^'ritten laws? that we ought not to 
 have courts of justice to administer and enforce 
 those laws ? Or that the people of England 
 are so ignorant of general principles, have made 
 such slight advances in knowledge and the 
 science of legislation, as to be incapable of im- 
 proving the institutions and jurisprudence of 
 India^ in which revenue, religion, and law, all 
 take their places together with scarcely a line 
 of demarcation between them ? Simple^ suitable, 
 and sufficient as these institutions are represented 
 to be, they are not all alike entitled to our admi- 
 ration and support ; and, although they ought not 
 in any case to be hastily subverted, they must be 
 accommodated to the altered condition of the 
 people and the peculiar situation of their rulers ; 
 and it should be the study of the government^ as 
 it unquestionably is its duty, to give to our native 
 
 subjects^ 
 
163 
 
 subjects^ not only the most perfect institutions, 
 which may be compatible with the existing state 
 of society among them^ but to model those insti- 
 tutions in such manner that they may operate 
 towards improving the morale intellectual, and 
 social condition of the population of India.* 
 
 I shall 
 
 * I am induced to quote the following remarks by Mr. Fullerton 
 on the retrograde movement made at Fort St. George, towards the 
 re-introduction of the native system of administration. 
 
 " The whole reasoning and argument of the Honourable the Court 
 of Directors, introducing the late innovations, form one tissue of 
 individual opinion, and few of those individuals quoted were in a sta- 
 tion high enough to take a wide and extensive view of the subjects 
 they were discussing : their opinions were generally founded on the 
 narrow and contracted scale of personal feelings under subordinate 
 situations. No Governor, from the days of Lord Cornwallis, and no 
 member of council at any of the Presidencies, has ever questioned 
 the general policy of the judicial system ; none have ever proposed the 
 union of executive and judicial powers. In the controul and direc- 
 tion of departments, in which hundreds are employed, they have been 
 placed in a situation to observe the variations of human intellect and 
 propensities, and the results brought about by them in the adminis- 
 tration of human afiairs : when they contemplated the indolence and 
 inactivity, the no less ruinous effects of the opposite extremes, over 
 real of others, the exclusive union of pre-eminent qualities in the 
 few, the partial defects of the many, they are led to consider that 
 system the best which keeps distinct separate powers, and trusts least 
 to individual perfection. The innovations of 1816 had not their 
 origin with the Government of India, they were founded on private 
 opinions : they have been justly resisted in Bengal ; and their opera- 
 tion at Madras is certainly against the united opinion of the whole 
 experience of the civil service and civil government there." 
 
 Mr. Fullerton further remarks : — 
 
 " The institutions of one province were most erroneously supposed 
 Y 2 those 
 
164 
 
 I shall now proceed to examine the fiscal 
 effects of the '' ri/otivar*' system^ which not only 
 had the benefit of Sir T. Munio's personal ser- 
 vices on its introduction into the ceded and other 
 districts^ but which has enjoyed his fostering care 
 as head of the government of Fort St. George ; 
 a situation in which he was^ of course, enabled 
 to select for its execution and superintendence, 
 those officers who were best qualified to promote 
 its success. 
 
 1 regret that my materials are not more com- 
 plete ; but as the Court of Directors could not,, 
 consistently with their rules and practice (the 
 propriety of which I am not at all prepared to dis- 
 pute), 
 
 those of the whole territories under Madras, were reported as such 
 by the individual presiding there ; and, on the faith of that individual 
 opinion, were peremptorily ordered to be applied to all ether dis- 
 tricts, many of which were in quite a different state; the order being 
 peremptory, it became the duty of the local government to make 
 them fit, by requisite alterations, the best way they could; but it natu- 
 rally enough became the object of the first promoter of the change to 
 make good the pre-asserted grounds for innovation, rather to keep the 
 incongruity out of sight than to admit its existence, and meet it by 
 further arrangements. The remark is not confined to judicial alte- 
 rations ; the whole projected changes in the revenue department, 
 the general introduction of the ryotwar system, are founded on the 
 tenures and occupancy of land in the " Ceded Districts " alone, and 
 the absence of all landed property there ; the difference has been 
 since admitted, and it is to be hoped, the error of founding a general 
 system on local circumstances and individual opinions is now divS- 
 covered," 
 
165 
 
 pute), allow me access to their records and books 
 of account, I have not been able to ascertain 
 with certainty the exact degree in which the occa- 
 sional failures in the Land revenue of Madras 
 are to be ascribed to the '' rj/otwar*' system of 
 administration. 
 
 The Honourable Court in their letter to the 
 Bengal Government, bearing date the 14th May 
 1823, observe generally, '" that the land revenues 
 ** of Madras have fallen off considerably since 
 ** 1813-14 ;'' and it is understood that, since the 
 date of this letter, information has been received 
 that remissions will be required at that Presi- 
 dency in the past year 1823-24, to the extent of 
 from 25 to 32 per cent, on the jumma, or assess- 
 ment. 
 
 But how does it happen that the revenue 
 should be even stationary at Madras, when it has 
 advanced so rapidly in the Bengal provinces ? 
 In om^ '" Ceded and Conquered" territory, the 
 revenue has increased in the proportion of about 
 one-third in the course of fourteen years ; and in 
 the districts in which the '' permanent settle- 
 ment'' has been concluded, the rents of the land- 
 holders are supposed, in many instances, to have 
 doubled, and quadrupled. Of this fact we have 
 strong presumptive evidence in the augmented 
 value of landed property ; and Lord Cornwallis 
 may be said to have bestowed millions on the 
 
 people 
 
166 
 
 people of India^ since^ prior to the '' permanent 
 settlement/' the land had scarcely any saleable 
 value^ whereas at the present day, the rate of 
 purchase is, perhaps, higher than in most of the 
 countries of Europe.* Is this the case at Madras? 
 Can the privilege of cuUivatino* land, the rent of 
 which it is proposed to raise with the increase of 
 every blade of corn, become a valuable, or a sale- 
 able property ? 
 
 And how is the improvement in the Bengal 
 provinces to be accounted for? Partly from the 
 stimulus given to industry by the limitation of 
 the public demand on the land ; partly, from the 
 greater security of property, which has tended to 
 promote the accumulation of capital ; partly, 
 from the existence of large estates (a thing pro- 
 scribed by the '' ri/otivar" system), the proprie- 
 tors of which find it their interest to lay out capi- 
 tal in the improvement of their lands ; partly, 
 from the produce of land being in greater de- 
 mand to supply the consumption of a population 
 increasing in numbers and in wealth ; and partly, 
 from the introduction, or extension, of valuable 
 articles of agricultural produce, such as indigo, 
 cotton, sugar, and the like. 
 
 And why has not the same improvement taken 
 place in the Madras districts ? Sir T. Munro, in 
 
 his 
 
 * See Letter from Bengal ** Revenue Selections," page 166. 
 
167 
 
 his report on the " Ceded Districts/' which were 
 under his immediate charge, observes as follows : 
 " It (the statement) was made out in 1211, since 
 " which period, the proportions of some of the 
 " more valuable articles, as indigo and sugar, 
 " have greatly augmented. Indigo to the value 
 " of star pagodas 1,05,000, paid duty in 1215; 
 " and it is supposed that the export to the Car- 
 " natic, for which no duty was paid, was equal 
 *' to star pagodas 20,000. The quantity would 
 *' have been nearly doubled in 1216, had not the 
 ** crops been destroyed by the drought. The 
 " coarse sugar, or jaggery, manufactured in 1216, 
 *' was double the quantity of any preceding year. 
 " The increase of these articles is occasioned by 
 *^ the addition of an extra land-rent, amounting 
 " to twice or three times the ordinary rate; to 
 " which all land employed in their culture was 
 " subjected ; and this increase is likely to go on 
 *' progressively, as the demand for them is great. 
 " Cotton, one of the chief products of the ' Ceded 
 " Districts,' has not increased in a similar de- 
 '•' gree, because the demand for it is not greater 
 " than usual, and because from its being a com- 
 " mon article of cultivation, and never having 
 *' paid more than the ordinary land-rent, it has 
 '* obtained no advantage from the equalization 
 " of rent by the survey/'* 
 
 These 
 
 « See "Revenue Selections," page 120. 
 
168 
 
 These remarks go very far to answer my ques- 
 tion, for if an extra assessment of twice or three 
 times the ordinarj/ rate, as well as a transit duty^ 
 is to be applied whenever a promising article of 
 cultivation makes its appearance^ the most effec- 
 tual means are taken to prevent its introduction, 
 or at least its extension. Some articles may, for 
 a tim.e, succeed in spite of this discouragement ; 
 but (although the language is somewhat obscure) 
 we see that cotton, a valuable product, can 
 scarcely bear up against the ordinari/ land-rent ; 
 and in fact, if it could yield more, it is quite clear 
 that it would be immediately subjected to a 
 higher rate. 
 
 The seasons in the Peninsula may be more 
 irregular than in our Bengal provinces, and the 
 harvest may, in consequence, be more uncertain ; 
 the rivers not being navigable, are not calculated 
 to facilitate the internal commerce of the country ; 
 and there may be other local circumstances unfa- 
 vourable to the improvement of the Madras ter- 
 ritory. But who can fail to perceive, that the 
 system of revenue administration has much to do 
 in arresting the progress of improvement ? Will 
 industry be called into action when the demand 
 of the tax-gatherer keeps pace with its produce ? 
 Will capital accumulate where there is no secu- 
 rity for property, no law but that which is admi- 
 nistered under the auspices of a revenue officer ? 
 
 Will 
 
169 
 
 Will opulent consumers be found where no capi- 
 tal is allowed to accumulate ? And can any 
 country advance and become prosperous where 
 tlie land has no saleable value^ where there is no 
 motive for laying out capital in its improvement, 
 and where no order of human beings is to be 
 found between the government and the labouring 
 peasant ? Certainly not. The '' permanent settle- 
 ment" contains within it a principle of vitality/ ; 
 the '^ ri/otwar" system, a principle of decai/. 
 The one works out a remedy even for the evil 
 of over assessment ; the other, whenever the ob- 
 ject of over-assessment, must become its victim. 
 
 Let us now compare the revenue realised from 
 the ^' Ceded Districts/' which were settled by Sir 
 T. Munro, with the revenue which has been 
 realised from the '' Ceded and Conquered Pro- 
 vinces" under the Bengal Presidency. 
 Madras—" Ceded Districts." 
 
 1808-9.* 1821-22. Increase. 
 
 S:;i?Cu"sto^s,! P«S- 17,04,517 18,14,303 1,09,786 
 
 = £681,807 725,721 43,914 
 
 Bengal — ^' Ceded and Conquered Provinces :" 
 
 Do. do. C.Rups.3,01,90,334 4,28,81,803 1,26,91,469 
 
 = ^3,019,033 4,288,180 . 1,269,146 
 
 The 
 
 • That I may not be suspected of having taken an unfavourable 
 period for comparison, I subjoin a memorandum of the revenues of 
 the Madras "Ceded Districts" from 1808-9 to the latest period, 
 1821-22, for which the accounts have been printed. I am aware 
 that these districts were not under " ryotwar" management during 
 
 Z the 
 
170 
 
 The " Ceded Districts'* of Madras furnish, 1 
 believe, as favoui'able a specimen as could be 
 taken, to shew the effects of the '* ryotwar'' sys- 
 tem : they are pointed out by the Court of Di- 
 rectors as an instance to prove " that the difficul- 
 " ties attending the system may be surmounted ;" 
 they were placed under this system of manage- 
 ment soon after the period of their cession ; they 
 have enjoyed the benefit of select agency ; the 
 Government itself has countenanced and en- 
 couraged the experiment; and the officer with 
 whom it originated was allowed to model and 
 apply the system in the manner most likely to 
 insure its success ; and yet, with all these special 
 advantages, the land revenue has continued nearly 
 stationary during fourteen years, while our Ben- 
 gal provinces, enjoying only \X\q 'promise of a ^''per- 
 manent settlement^" have yielded, within the same 
 
 period, 
 
 the whole period, but if they do not furnish a complete specimen of 
 continued " ryotwar" management, they shew what is to be ex- 
 pected from the unsettled and ever-varying systems adopted from 
 time to time at Fort St. George. 
 
 1808-9 ... Pagodasl 7,04,517 1815-16... Pagodas 17,67,828 
 
 1809-10 16,57,103 1816-17 ' 17,82,463 
 
 1810-11 17,20,842 1817-18 16,05,774 
 
 1811-12 16,21,466 1818-19 18,68,184 
 
 1812-1 :$ 16,83,575 1819-20 18,10,309 
 
 1813-14 17,13,686 1820-21 16,58,753 
 
 1814-15 17,13,032 1821-22 18,14,303 
 
 If the " Ceded Districts " should not be considered a fair specimen 
 of" Ryotwar " management, let me refer the reader to Appendix D, 
 where he will find the fiscal effects of this System, exhibited in the 
 Province of ** Canara.^* 
 
171 
 
 period^ an increase of annual revenue to the 
 amount of £ 1,270,000 ! A greater contrast could 
 not well be exhibited, and it would be quite un- 
 reasonable to deny that the difference in the two 
 cases is to be referred, in a very great degree, to 
 the difference in the system of management. 
 
 Had a permanent settlement been concluded in 
 the Madras districts fourteen years ago, some spe- 
 culative financier would doubtless now be found 
 to deplore and to condemn the improvident sacri- 
 fice of revenue. Lord Cornwallis' settlement (most 
 unjustly, as I contend) has thus been arraigned ; 
 but the event has shewn, in the present instance, 
 that the assumption would have been altogether 
 gratuitous, for those Mines of Wealth which his 
 Lordship is reproached for having sacrificed, have 
 here produced nothing. If we had fixed our 
 demand on the Madras Ceded Districts, in perpe- 
 tuity, fourteen years ago, the land, it is true, might 
 not have yielded more than it does at present; but 
 the customs and the " sai/er" would have in- 
 creased, for the people would have emerged from 
 a state of pauperism ; the cultivation of the soil 
 would have been extended ; and with its ex- 
 tension, tangible articles of taxation would have 
 been found. 
 
 We should certainly have sacrificed above a 
 million of annual revenue, if we had concluded 
 the permanent settlement of our Bengal '* Ceded 
 andConqnered Provinces'' at the same period, for 
 
 z 2 some 
 
J 72 
 
 !some of the districts (Goruckpore in particular), 
 were waste, or only partially cultivated ; but we 
 have the declaration of the local officers, that 
 many parts of that territory are now arrived at a 
 high state of improvement ; and it is extremely 
 doubtful J whether a further delay in fixing the 
 assessment, will be attended with any pecuniary 
 advantage to the government.* Of one fact we 
 may be quite certain from the concurring testi- 
 mony of the local authorities, that a further delay, 
 will be attended with discredit to our name, if it 
 do not excite a spirit of disaffection throughout 
 our western territory. The landholders have re- 
 ceived, in the most authentic form, repeated assu* 
 ranees of our intention, to conclude a "perma- 
 nent settlement" with them; and whatever we 
 may pretend, they can never be made to believe 
 that, in disappointing their just expectations, we 
 have not been actuated by a sordid, rapacious 
 policy. Is it possible, indeed, for them to believe 
 
 that 
 
 * I have learnt, with regret, that, in consequence of a drought, 
 remissions of Revenue are likely to be necessary in these provinces in 
 the present year 1824-25, and I doubt whether we shall hereafter 
 obtain from them the same revenue which they would have yielded 
 if the permanent settlement had been concluded three years ago. I 
 doubt, moreover, whether the remissions now required would have 
 been called for in that case, for the Landholders, under a permanent 
 settlement, could have borne partial losses, and would have had 
 sufficient credit with the Native Bankers, to enable them to advance 
 the public Revenue, even under circumstances of temporary incon- 
 venience to themselves. 
 
173 
 
 that a government, which seems disposed to ap- 
 propriate a vast territory as universal landlord, 
 and to collect, not revenue but rent, can have 
 any other view than to extract from the people 
 the utmost fraction which they can pay ? 
 
 The Honourable Court of Directors, in their 
 letter to the supreme Government of the 16th 
 March 1813,* appear to attach great weight to 
 the opinion of the first commissioners who were 
 deputed to form the settlement of the western 
 provinces in 1807 ; but the objections of those 
 officers did not apply at all to the principle of the 
 permanent settlement ; they considered the mea- 
 sure, with reference to time and circumstances, to 
 be generally premature; but, in two particular 
 instances, they recommended its immediate intro- 
 duction, and nothing could be more remote from 
 their intentions than to countenance the project of 
 substituting the '' ryotwar*' system of manage- 
 ment in any part of our territory. 
 
 If we wish to preserve tranquillity in our wes- 
 tern provinces, if we wish to secure the ample 
 revenue which they at present yield, if we wish 
 
 to 
 
 ♦ See "Revenue Selections," page 140, et seq. I am anxious, 
 as one of the commissioners, to explain my sentiments on this im- 
 portant question, the decision of which may affect the tranquillity of 
 a valuable portion of our Indian territory. Its tranquillity will not, in 
 my opinion, be long preserved, if the project of sending out a host 
 of surveyors to measure and assess every field be carried into 
 effect, and I understand that steps have already been taken for the 
 execution of this ill-judged project. 
 
174 
 
 to attach to our government, by the strong ties of 
 interest^ that class of individuals who possess 
 the most powerful influence over the minds of the 
 people, we shall redeem ourpledge_, and fix the as- 
 sessment in perpetuity in all those estates which 
 ''may he in a sufficienth/ improved state ofctiltiva- 
 ''tion."^ In those instances where the lands have not 
 yet been extensively cultivated, it would be advis- 
 able, 1 think, to grant, (preparatory to a permanent 
 settlement, )longleases,or leases forthe incumbent's 
 life (if there be no joint proprietors) ; and in the 
 course of twenty years, we should not only have 
 the satisfaction of seeing the country in the 
 highest state of improvement, and the people 
 contented and well affected to our Government, 
 but we should also have it in our power to draw, 
 if necessary, a larger revenue from the land, with- 
 out imposing burthens disproportionate to its 
 resources. 
 
 We have not yet the means of judging, with 
 any degree of certainty, of the probable resources 
 of the country acquired by conquest from the 
 Marhattas in 1818; but as the administration of 
 our predecessors appears to have been corrupt 
 and oppressive, we may presume that much time 
 will be required to develope its natural powers, 
 and that the present revenue may admit of con- 
 siderable 
 
 * I quote the words of the Regulation, in which the promise is made 
 to the Landholders. 
 
175 
 
 siderable augmentation under a better system of 
 management. The gross receipts from the ter- 
 ritory on the Nurbuddah^ immediately dependent 
 upon the Bengal Presidency^ have been as follow^ 
 in ihe last three years^ viz. 
 
 1819-20 Current Rupees 20,55,317 
 
 1820-21 77,99,088 
 
 1821-22* 60,34,198 
 
 The gross receipts from the province of Can- 
 deish and the other districts, which were con- 
 quered from the Peishwa^ and placed under the 
 Bombay government,, amounted in 1819-20 to 
 the sum of Current Rupees 78,37,092; but, as 
 the revenue of this territory is not separately 
 stated in the accounts of the two last years, I 
 cannot ascertain exactly what progress has been 
 made in calling forth its resources. There is 
 reason, however, to believe, from the increase 
 which has taken place in the aggregate receipts 
 at Bombay, that an improvement has already 
 been effected ; and although tlie increase of 
 military and other charges will necessarily 
 absorb a large portion of the revenue, the new 
 territory is likely to prove a valuable acquisition. 
 
 Upon the whole, the land revenue of India may 
 be relied upon generally, as a firm and legitimate 
 resource; and the only doubts which I entertain 
 of its permanency and productiveness, have refe- 
 rence 
 
 * I cannot explain the cause of the decrease in this year. 
 
176 
 
 rence to the system of management which has 
 been adopted in particular quarters. 1 do not 
 pretend to decide who are, or ought to be, the 
 proprietors of the soil, whether zemindars, talook- 
 dars, or malicks, meerassydars, ryots, or the village 
 corporation*; but in every stage of my inquiry I 
 find reason to be satisfied that the government nei- 
 ther isy nor ought to be, that proprietor. I am 
 sensible that we ought not to disturb existing in- 
 stitutions without a necessity, or some strong and 
 obvious reason. 1 am aware that all changes 
 are attended with more or less inconvenience, 
 and sudden and violent changes, with more or 
 less danger ; and that the prospect of improve- 
 ment ought to be very satisfactory before we 
 determine to innovate upon long-established 
 habits and usages. But if notions and customs, 
 consecrated by their antiquity, are never to be 
 meddled with, why have we discountenanced and 
 
 sup- 
 
 * Consisting of the following personages, some of whom are, 
 however, to be considered rather as servants of the corporation than 
 the corporation itself. They constitute evidently the rudiments of a 
 society, performing those offices which are first called for when 
 men begin to form themselves into communities. 
 
 The potail, or head inhabitant, Goldsmith, 
 
 Curnum, or accountant. Potter, 
 
 Barber, The bard, 
 
 . Washerman, Currier, 
 
 Carpenter, Astrologer, or schoolmaster. 
 
 Smith, Watchman. 
 
177 
 
 suppressed the trial by ordeal ? the punishment 
 for witchcraft — the practice of infanticide, and 
 other gross superstitions ? The practice of sitting 
 dhurna* was resorted to as an expedient for 
 enforcing demands where the administration of 
 public justice was not sufficiently provided for ; 
 but such a practice ought not surely to be tole- 
 rated by a government, which is both able and 
 willing to assist its subjects in asserting their 
 rights, and in obtaining the redress of their 
 wrongs ? Is it fitting that the British Government 
 shotild regard with unconcern the state of villa- 
 nage and slavery which exists in the southern and 
 western parts of the Peninsula, merely because 
 our Hindoo and Mahomedan predecessors were 
 indifferent to the condition of those, whom their 
 anti-social institutions degraded in the scale of 
 society ? I am not the advocate of innovation ; but 
 still there are certain principles, whose operation 
 may always be depended upon : certain feelings 
 which are common to men in all situations. We 
 may be quite sure that all men desire to possess 
 property, and landed property, perhaps, in as 
 great a degree as any other ; that the more 
 moderate the demands of the government may 
 
 be 
 
 * The practice of sitting at the door of a debtor, or supposed 
 a^ressor, without taking food, until some compromise be ef- 
 fected. The ceremony was usually performed by a Bramin, whose 
 life it would have been criminal to endanger by a refusal to comply 
 with the demand. 
 
 2 A 
 
178 
 
 be upon that property, the better pleased will be 
 its proprietor : that if the demand upon the land 
 be moderate, the longer it continues to be so, 
 and the more binding and absolute the pledge for 
 its continuance, the better satisfied will be the 
 landholder : in other words, that where the as- 
 sessment is moderate, long leases will be pre- 
 ferred to a precarious tenure, and perpetuity to 
 either* We may also be sure that men do not 
 covet the visitations of '' surveyors,'* and '' public 
 inspectors," nor take delight in the presence of 
 the tax-gatherer, especially/ if he be armed with 
 judicial powers; that they are likely to work 
 when they are allowed to enjoy the fruits of 
 their labour ; that where industry is encou- 
 raged 
 
 * The following just remarks are quoted from Captain Briggs, po' 
 litical agent in Candeish. " I am disposed to think that the system 
 " adopted by Mullick Umber, of making lands over in perpetuity, is 
 " 9f g^^ot antiquity among the Hindoos, and was probably once uni- 
 " formly adopted throughout India. Whenever the Eyen Jumma ap- 
 " pears to have increased, it has been in consequence of additionaj 
 " cultivation, not of an increased rate of assessment, and nothing is 
 ** more favourable to the extension and improvement of agriculture 
 " than a moderate, but permanent tax, and an interest in the soil. 
 " The portion remaining to the cultivator should be such as to enable 
 " him to add indirectly to the wealth of the State ; he should not 
 " only have the means of improving his field and taking in more 
 ** ground, but he should have sufficient left to live in such a way as 
 " to encourage manufactures and trade, and thus become an indirect 
 " promoter of the revenue derived from the customs, as it must be 
 " evident, where there is] no opulence in the people, there can be no 
 '* source from whence revenue can be derived." 
 
179 
 
 raged and protected^ a country is likely to 
 flourish, and that its prosperity reflects back a 
 real good upon the protecting Govern nrient. The 
 mines of America may inundate us with the pre- 
 cious metalSj and the Government which has 
 fixed its demand upon the land^ may experience 
 some diminution of its effective income from a 
 fall in the value of money ; but it is also certain 
 that, in a country where agriculture and com- 
 merce flourish, and where capital is allowed to 
 accumulate, a more extensive medium of ex- 
 change becomes necessary, and a larger quantity 
 of the precious metals is likely to be absorbed ; 
 and, lastly, it may be safely affirmed that, if the 
 population of a country be contented and rich, it 
 never can be difficult for its rulers to draw from it 
 those pecuniary resources which are necessary for 
 the due administration of public affairs, and that 
 although debts may be incurred during war to an 
 inconvenient amount, a wise and just Government 
 is likely to find a prosperous and well disposed 
 people, able and willing to bear the burthen. 
 
 2 A 2 Chapter 
 
CHAPTER IV. 
 
 FINANCIAL AND COMMERCIAL SITUATION OF 
 THE EAST-INDIA COMPANY. 
 
 After the review which has been taken of the 
 resources of the East-India Company abroad^ I 
 propose to combine the territorial with the com- 
 mercial accounts^ in order to obtain^ as far as 
 may be practicable^ materials for forming a cor- 
 rect judgment with respect to the financial situa- 
 tion of the Company generalh/. 
 
 It is not easy to form an accurate estimate of 
 the commercial concerns of theCompany^ because 
 they are not required to submit to Parliament an 
 account of their profits or loss, and there is no 
 direct evidence from which we can deduce the 
 exact result of their commercial transactions. 
 The Court of Directors have, however, in their 
 financial correspondence, lately published, ac- 
 knowledged on various occasions the existence of 
 a commercial profit, and in a note subjoined to the 
 last statement of their commercial stock, it is ex- 
 pressly declared that ''the sum of £4,754,900 
 '• sterling has been advanced, or set apart, from 
 
 '' the 
 
181 
 
 '^ the surplus commercial profits in England^ 
 '' towards the liquidation of Indian territorial 
 '' debt.'^ 
 
 It is true that the Company do not estimate their 
 gains or loss v\^ith that degree of precision which 
 a private merchant would consider necessary. 
 They are their own insurers ; and as the casual- 
 ties at sea occur very irregularly^ the charge under 
 this head is never determinate or equally distri- 
 buted. Nor is interest charged on the exact 
 amount of the capital* employed in the trade^ 
 including the cost of factories^ warehouses, and 
 other buildings. Moreover, until the late separa- 
 tion of the commercial and political accounts, the 
 Customs in India, the salaries ofthe Boards of Trade, 
 and other commercial establishments, were not 
 charged on the Investment ; and there are still, 
 I have reason to believe, various outlays incidental 
 to the trade, which do not constitute a regular 
 commercial charge : for example, the advances 
 made to the manufacturers are, sometimes, irre- 
 coverable ; and although the amount, after a time, 
 is perhaps transferred to the account of '' dead 
 stock,'' as a desperate balance, the loss never 
 
 appears 
 
 * The dividends on the Company's stock, and the interest on the 
 bond debt, are charged in the commercial account j but their amount 
 is scarcely equal to an interest of five per cent, per annum on the 
 capital employed in the trade, including the " Dead Stock," and the 
 Company pay in India, at the rate of six per cent, per annum. 
 
182 
 
 appears as a direct charge upon the trade. In 
 particular seasons^ the loss occasioned by bad ba- 
 lances is very considerable, and this happens more 
 especially in the instance of the silk investment ; 
 for as the rearins: of the silk-worm is liable to be 
 affected by different natural causes, a failure not 
 unfrequently takes place ; and whenever this oc- 
 curs, the Company are the principal sufferers. 
 
 Without, however, enlarging on these and other 
 circumstances, which make it impossible for me 
 to ascertain with perfect precision the extent of 
 the Company's commercial losses or gains, I shall 
 proceed to examine those documents which may 
 enable us to arrive, by an approximation, at the 
 pecuniary results of their trade. 
 
 It is evident that, if we can obtain satisfactory 
 evidence of the Company's situation at two given 
 periods, at some distance from each other, a com- 
 parison between them will furnish a strong pre- 
 sumption with respect to the intervening events. 
 If we can shew that the Company are richer at the 
 present period than they were nine or ten years 
 ago, the inference necessarily is, that they have 
 realized a profit in the intermediate term. If they 
 have become poorer, they must, of course, have 
 sustained a loss. 
 
 Now, the statement of the Company's finances, 
 which was submitted to Parliament soon after the 
 renewal of their present charter, is very circum- 
 stantial. 
 
stantial, and contains a full, and apparently a fair, 
 exposition of their debts and assets, territorial and 
 commercial, both abroad and at home, in the year 
 1815. The account for India is made up to the 
 SOth of April, 1814 ; the home account is brought 
 down to the SOth of April, 1815; but although it 
 would, perhaps, have been more satisfactory if the 
 two accounts had been made up to the same pe- 
 riod, I am unwilling to destroy the identity of the 
 statement, by introducing corrections* of my own, 
 and 1 shall accordingly adhere to the official docu- 
 ments, preserving the same difference of a year at the 
 close, as at the commencement of the term, which 
 has been taken for the purposes of comparison. 
 
 The following abstract will shew the state of 
 the commercial concern in 1814 and 1815_, abroad 
 and at home, respectively : 
 
 Commercial assets in India, on the SOth of 
 
 April, 1814 £ 4,525,394 
 
 Ditto at home, ditto 1815 18,261,640 
 
 Total commercial assets £22,787,034 
 
 i Yr>d t Carry over £22,787,034 
 
 * The net commercial assets in India in 1815, fell short of the 
 amount in 1814, in the sum of £865,201, as follow: 
 
 Assets in 1815, after deducting debts £3,332,340 
 Ditto, 1814, ditto 4,197,541 
 
 Less in 1815 £ 865,201 
 
184 
 
 Brought over £22,787,034 
 
 Deduct 
 
 Commercial debt in India, on 
 
 theSOthof April, 1814... £ 327,853 
 
 Ditto at home, ditto 1815... 2,156,417 
 
 — 2,484,270 
 
 Commercial assets «£20,302,764 
 Deduct, also. 
 
 Amount of bond debt at home, 30th of 
 April, 1815 4,487,170 
 
 Net commercial balance in favour do. .;^15,815,594 
 
 In this account the value of the India house and 
 other buildings and dead -stock is stated at the 
 sum of £1,143,000; and although the property 
 may not be saleable for this amount, it does not 
 appear to be an exaggerated valuation. Credit 
 is also taken for advances made in England, in 
 1814-15, on account of the territory, to the amount 
 of £2,304,626 ; and as it is to be presumed that 
 the statement is correct, I shall only observe that 
 the political charge in that year (£1,844,735) ap- 
 pears to have been on a much larger scale than it 
 is represented to have been at a later period. 
 
 I shall novyr proceed to contrast this state of the 
 commercial concern at the commencement of the 
 present charter with the results which the Indian 
 accounts of 1822, and the home accounts of 1823, 
 severally exhibit. I could bring down the state- 
 ment 
 
185 
 
 ment a year later, by making use of the manuscript 
 accounts which were laid before the General Court 
 of Proprietors on the 22d of December last ; but 
 as they have not yet been printed^ and as the re- 
 sult of the comparison would not be materially 
 different, I prefer to adhere to those public docu- 
 ments which can, if necessary, be referred to for 
 the purpose of authenticating my statements. 
 
 Commercial assets in India, on the 30th of 
 
 April, 1822 £ 3,085,724 
 
 Ditto at home, ditto 1823 23,792,441 
 
 Total commercial assets £26,878,165 
 Deduct 
 
 Commercial debt in India, on 
 
 the 30th of April, 1822... £ 104,769 
 Ditto at home, ditto 1823... 2,147,538 
 
 2,252,307 
 
 Commercial assets £24,625,858 
 Deduct, also, 
 
 Amount of bond debt at home, 30th of 
 April, 1823 3,937,729 
 
 Commercial balance in favour do £20,688,129 
 
 This account, however, requires some adjust- 
 ment, as it appears from the notes subjoined to the 
 printed statements, that advances had been made 
 in India on the commercial account in 1821-22 
 
 2 B . and 
 
186 
 
 and 1822-23, to the amount of £4,600,000, which 
 should properly be deducted from the commercial 
 assets. On the other hand, it appears, that funds 
 have been advanced from '' the surplus commer- 
 '' cial profits" towards the liquidation of the ter- 
 ritorial debt, between the 1st of May 1814, and 
 the 1st of May 1823, to the amount of £3,358,060; 
 and on the present occasion, where the object is to 
 ascertain the extent of the commercial profit, this 
 sum should be added to the commercial assets, as 
 constituting a loan, or advance, made to the terri- 
 torial department. 
 
 Commercial assets as above £20,688,129 
 
 Deduct 
 Territorial advances in India 4,600,000 
 
 16,088,129 
 Add 
 
 Advance on account of territorial 
 
 debt from Commercial profit 3,358,060 
 
 Commercial balance in favour, in 18^2-23 £19,446,189 
 Ditto do. do. in 1814-15 15,815,594 
 
 Increase of commercial assets *£3,630,595 
 
 If 
 
 * Tiiis sum corresponds very nearly with the amount stated to have 
 been advanced from the surplus of commercial profit to the territorial 
 department, or £3,358,060. 
 
187 
 
 If this estimate be correct, it would appear that 
 a profit has been realized on the Company's com- 
 merce, in the course of eight years, to the amount 
 of ^3,630,595, or, on an average, at the rate of 
 ^453,824 per annum. 
 
 If the account were brought down to the 30th 
 of April last, the result would not be quite so fa- 
 vourable, as there seems to have been a decrease 
 in the commercial assets in the course of 1823-rM;* 
 
 but 
 
 * Commercial assets abroad on the 30th of April, 1823 £ 1,938,541 
 Ditto at home, ditto 1824 22,746,469 
 
 Total assets £24,685,010 
 
 Deduct 
 
 Commercial debt abroad, 30th of 
 
 April, 1823 £ 537,487 
 
 Ditto at home, ditto 1824 3,335,369 
 
 Total debts 3,872,856 
 
 Net assets £20,812,154 
 
 Deduct 
 
 Advance in India from territory, for Commercial 
 
 purposes, in 1823-24 2,450,000 
 
 £18,362,154 
 Add 
 
 Advance from the " surplus commercial profit," 
 for the liquidation of territorial debt 4,754,902 
 
 ^23,117,056 
 
 Carryover £23,117,056 
 
 2 B 2 
 
188 
 
 but I still think, upon the whole, that we may, 
 with safety, estimate the average profit on the 
 Company's trade at the sum of ^^450,000 per an- 
 num. 
 
 At this rate of profit an addition would be made 
 to the commercial assets of £4,950,000 in the 
 course of the next eleven years ; and the Company 
 at the expiration of the present charter in 1834, 
 would remain possessed of a commercial capital to 
 the amount of £24,500,000 sterling, after dis- 
 charging the whole of the bond debt in this 
 country. 
 
 This is the fund upon which the proprietors of 
 India stock have a fair and legitimate claim for 
 their indemnification ; and it is quite clear, that, 
 if the charter should not be renewed in 1834, they 
 must be considered to be entitled to a division of 
 the commercial capital, which ought to be quite 
 
 sufficient 
 
 Brought over £23,117,056 
 
 Deduct 
 
 Amount of bond debt, 30th of April, 1824 3,937,654 
 
 Commercial balance in favour of ditto ... .£19,179,402 
 
 The decrease appears to have arisen chiefly from the following 
 commercial losses, viz. : — 
 
 Cargo ofthe Prince Regent, lost at sea ^£^123,000 
 
 Value of woollens, &c. consumed by fire at Canton... 316,000 
 Bad balances written off and transferred to dead stock 200,000 
 
 £639,000 
 
189 
 
 sufficient to secure to them the value of their stock 
 at its present price (290 per 100), after making 
 ample allowance for the loss likely to be sustained 
 on the sale of the India house and other immove- 
 able property. 
 
 It should be observed^ however, that in the com- 
 mercial assets is included the sum set apart from 
 the '' surplus commercial profits/' and appro- 
 priated to the liquidation of the territorial debt ; 
 and if this advance^ amounting, according to the 
 latest statement, to ^4,754,000,* should not ulti- 
 mately be reclaimable from the territory, a corres- 
 ponding deduction must be made from the amount 
 of commercial capital. Whether it was intended 
 by the act of the 53d Geo. III. sec. 57, ch. 155, 
 that the alienation of commercial profits, by their 
 application to the fourth head of appropriation, 
 should be final, or otherwise, is a question which 
 I am not competent to decide ; but if the existing 
 charter should not be renewed, it is to be presumed 
 that the arrangement to be made with the proprie- 
 tors of India stock, will proceed upon the principle 
 
 that 
 
 * There may appear to be a contradiction in admitting a profit to 
 this amount (<£'4,754,000) when I estimate the whole commercial pro- 
 fit realized in the course of eight years at only ^63,630,595 ; but the 
 former sum probably included profit realized in 1813-14, and 
 indeed we find that the sum of ^2,304,626, is stated to have been 
 advanced to the Territory, from the Surplus of commercial Profits, 
 prior to the 20th April, 1815. A profit may also have been credited 
 in 1823-24, although it does not appear to me that any was realized, 
 after deducting the losses enumerated in a former note. 
 
190 
 
 that they are entitled to any fund vvliich can fairly 
 be shewn to have arisen out of their commercial 
 dealings. 
 
 It is also proper to explain^ that^ when the terri- 
 torial and commercial accounts, were, for the first 
 time separated in 18I3-14_, it had not been deter- 
 mined whether the bond debt in England apper- 
 tained to the territory, or the commerce; but as 
 the interest of that debt has been regularly paid 
 from the commercial funds of the Company, it is 
 to be inferred (although no adjustment appears yet 
 to have taken place) that the whole of that debt 
 is now considered to be chargeable to the com- 
 merce. In appropriating, then, the future com- 
 mercial profits to the discharge of debt, it will be 
 the interest of the proprietors of India stock that 
 these bonds should be paid off in preference ; and 
 as the Court of Directors, with the sanction of the 
 board of commissioners, may exercise a discretion, 
 under the 57th clause of the act already referred to, 
 with respect to the selection of the debt to he first 
 discharged, they will, no doubt, be attentive to the 
 interests of the proprietors, as far as these interests 
 can be consulted without prejudice to objects of 
 higher consideration. Indeed, the honourable 
 Court cannot be reproached with inattention to 
 the commercial interests of the Company, real or 
 supposed. On the contrary, a very narrow com- 
 mercial spirit was known to prevail at a former pe- 
 riod in their councils ; and it is even now more than 
 suspected that the feelings of the merchant some- 
 times 
 
191 
 
 times prevail over the views of the statesman^ and 
 that the honourable Court have not yet so com- 
 pletely entered into their political character^ as in 
 all cases to assume with dignity the station, and 
 to practise with constancy the duties^ of legisla- 
 tors and sovereigns. 
 
 In estimating, as 1 have done, the future profits 
 on the Company's trade, on the same scale as their 
 past gains, or nearly half a million sterling per 
 annum, it may be objected that their commerce is 
 very much reduced, that their exports to India and 
 China have been diminished, and that their home 
 sales have of late fallen off in a still greater de- 
 gree. The facts are certainly true ; but it does not 
 follow that the inference drawn from them, is ne- 
 cessarily correct. 
 
 The exports to India and China, never, I be- 
 lieve, produced a profit generally, or for a con- 
 tinuance. The trade was resorted to, and perse- 
 vered in, upon a variety of mixed considerations, 
 partly, to supply a remittance to the East, where, 
 until lately, we required funds for the purchase of 
 return cargoes ; partly, to supply the Chinese and 
 our Indian subjects with articles which they could 
 not obtain through other channels while the ex- 
 clusive trade was vested in the Company ; partly, 
 to occupy tonnage, which would otherwise have 
 been unproductive ; but chiefly to benefit the 
 manufacturing and other interests of this country, 
 
 by 
 
192 
 
 by introducing and circulating our Fabrics 
 and the produce of our mines throughout the 
 wide resrions of Asia which were accessible to our 
 enterprize. 
 
 But as the Company no longer require a remit- 
 tance to India^ and as the trade to that country 
 has been thrown open to the British merchant^ 
 who is not likely to be backward in supplying all 
 the demands of the foreign market, the Com- 
 pany have acted prudently and judiciously in cir- 
 cumscribing their* exports ; and it is to be hoped 
 
 • The consignments to India, have rarely been attended with ad- 
 vantage. The Out-turns of those to China, from England and India, 
 have fluctuated greatly, especially in the instance of Cotton. A profit 
 of above 50 percent, has sometimes been realized by the Company, on 
 this article; but on the other hand, severe losses have occasionally 
 been sustained on it and other articles (Long Ells, &c.). The follow- 
 ing may be taken as a specimen (although I hope an unfavourable one) 
 of the result of the consignments to China. 
 In 1815-16, there was a Loss on the Woollens and 
 
 Metals sold, of about 16^ per cent. 
 
 In 1816-17, do do lOi do. 
 
 1817-18, do do 3i do. 
 
 1818-19, there was a Profit of about 8 do. 
 
 In 1815-16, the Cotton consigned from India, produced the following 
 rates of profit, viz- 
 
 That from Bombay 66i per cent. 
 
 Do.. ..do.. .Bengal 39i do. 
 
 Do.. ..do. ..Madras 7i do. 
 
 The total supply to China, in that year, from England and India, 
 amounting to Taels 6,813,204, was attended with a loss of Taels 
 310,529, or about 4^ per cent. It may be doubted, however, whether 
 all the charges incidental to the trade (interest, insurance, &c. &c.), 
 are very accurately computed. 
 
VJ3 
 
 they will not hereafter recur to the practice of en- 
 gaging in a trade, promising only to be attended 
 with loss. T find the produce of their sales of 
 British goods in India in the last five years to have 
 been as follows : — viz. 
 
 In 1817-18 £605,706 sterling. 
 
 1818-19 7'27Mo 
 
 1819-20 623,918 
 
 182021 513,404 
 
 1821-22 677.423 
 
 With respect to China^ the case is somewhat 
 different, because that country is not directly open 
 to the enterprize of the British merchant ; and 
 while the Company retain the right to the exclu- 
 sive trade, it is certainly incumbent upon them, 
 either to supply the China market themselves, as 
 far as this can be done with the prospect of ad- 
 vantage, or to allow others to supply it, to the full 
 extent of its demand for the produce of our mines 
 and of our manufacturing industry. 
 
 It has long been matter of doubt whether the 
 Company's trade from India has been attended 
 with a profit ; but since the late improvements in 
 the manufacture of British cottons, it has become 
 apparent that one great branch of that trade must 
 soon cease altogether. The human hand cannot 
 contend against the power of machinery ; and al- 
 though some of the finer fabrics of India have never 
 been excelled, and its cotton manufactures gene- 
 
 2 c , rallj^ 
 
194 
 
 rally are more durable than those which are pro- 
 duced by machinery, the latter^ by their superior 
 cheapness, must ultimately command a preference. 
 The Company, with a laudable desire to support 
 their distressed manufacturers, and to preserve a 
 beautiful and valuable fabric, have struggled to 
 uphold a declining trade ;* and the British Legis- 
 lature ought, upon every principle of justice, to 
 seQoiid their efforts byf lowering the duties on the 
 importation of Indian calicoes into this country, 
 and its dependencies, to the rates which British 
 calicoes pay on their introduction into India ; but 
 even with this concession in their favour, there are 
 very few articles which could maintain a success- 
 ful competition with our home-manufactures in 
 any of the markets of consumption. 
 
 The following statement will shew the amount 
 of the investments purchased by the Company in 
 
 India, 
 
 * Whether this struggle can be justified by the principles of political 
 econoTtiT/ J may he {airly questioned; but the wish to support theirstarv- 
 ing manufacturers was natural and praiseworthy ; and the exertions of 
 a respectable Director (Mr. Bebb) to save them from ruin, were cha- 
 racteristic of that just and upright man. 
 
 ■ f Since these pages have been in the press, the exorbitant duties 
 on Indian Cotton Goods, have been reduced, and I hail this fair com- 
 mencement of a wise and just policy; but much remains to be done 
 to place the commerce of India upon a proper footing. The present 
 concession i.s valuable, as a pledge that more will be done hereafter ; 
 the immediate boon is not very great, as I fear that Indian Calicoes 
 cannot be imported even at the reduced duty of ten per cent, ad 
 valorem. 
 
195 
 
 India, for consignment to this country, in the last 
 ten years : — viz. 
 
 In 1812-13 £2,0J7,092 
 
 1813 14 1,686,580 
 
 1814-15 r 1,136,525 
 
 1815-16 1,234,096 
 
 1816-17 1,162,263 
 
 1817-18 1,553,733 
 
 1818 19 1,166,946 
 
 1819-20 1,477,820 
 
 1820-21 1,534,917 
 
 1821-22 1,266,046 
 
 In some instances the purchases may be said to 
 have been forced, there existing an urgent neces- 
 sity at the time for the Company to obtain a remit- 
 tance, on whatever terms, to enable them to pro- 
 vide for the payment of bills drawn from India in 
 discharge of the principal and interest of the terri- 
 torial debt. Large remittances in bullion were 
 also made at ditlerent times for the same purpose; 
 and it is to be apprehended that they may again 
 be necessary, in the ensuing year, to enable 
 the Court of Directors to provide for the payment 
 of the septennial loan of 1818, and of the bills which 
 will have been drawn by the supreme government 
 on the 30th of September last in satisfaction of a 
 portion of the loan of 1811. The honourable 
 Court very properly granted the option of a re- 
 
 2 c 2 mittance 
 
1% 
 
 mittance to the public creditors iii this country, 
 whose notes were to be paid off; and the accommo- 
 dation is not likely to be attended with loss to the 
 Company at the exchange fixed for the bills 
 (viz, 2s. the Sicca rupee). Indeed, if there be 
 any thing- to regret, it is that more liberal terms 
 were not granted to these creditors, who have suf- 
 fered severely under the operation of our financial 
 arrangements. 
 
 The aggregate produce of the Company's sales 
 in England, in the last three years, will shew a 
 very great falling off when compared with the 
 amount sales in the first two years of the present 
 charter : — viz. 
 
 Amount of sales in 1813-14 £8,452,828 
 
 1814-15 7,359,978 
 
 Sales in 1821 -22 5,262,348 
 
 1822-23 5,566,564 
 
 1823-24 5,260,680 
 
 The sales, however, in 1813-14 and 1814-15, 
 were unusually large, owing probably in a great 
 degree to the opening of the continental markets 
 on the return of peace ; and, although they are 
 now on a reduced scale, yet, as by far the larger 
 portion of the amount is the produce of the China 
 trade, which alone is supposed to have yielded a 
 regular profit, I see no reason to apprehend that 
 the commercial gain is less, at the present mo- 
 ment. 
 
19T 
 
 ineiit, than it was when the importations of the 
 Company were much more extensive. 
 
 It has been supposed that the Company derive 
 an inordinate profit from their trade in tea, and 
 a clamour has been raised against them on the 
 ground that the people of this country are heavily 
 taxed to administer to the avarice of a body of 
 insatiate monopolists. It may be useful then 
 to examine the facts of the case, in order to 
 ascertain how far there is a foundation for the 
 complaint. 
 
 If the British consumer pay, on an average, six 
 shillings per pound for his tea, let it be remem- 
 bered that a moiety of this sum (or three shil- 
 lings) goes into the public exchequer. The 
 government duty does not amount, it is true, to 
 quite a moiety of the cost lo the consumer, it 
 being levied on the wholesale prices ; but the 
 difference is not material, and my computation 
 of the Company's profit will, of course, be 
 founded upon the wholesale prices. 
 
 Now, with respect to this first element in the 
 price of tea, the question to be decided is, whether 
 the tax on that article he judicious^ or otherwise. 
 The duty is, no doubt, very high, and excessive 
 duties on this, or any other article of consumption, 
 have a tendency to encourage smuggling and to 
 produce adulteration, as well as to check con- 
 sumption. It was on this ground that the late 
 
 Mr. 
 
198 
 
 Mr. Pitt lowered the duties on tea^ and substi- 
 tuted a commutation tax ; but they have again 
 been raised, and very recently too ; and we are 
 bound, therefore, to presume that the contribution 
 of near four millions per annum, which is levied 
 from the consumers of tea, is required for national 
 objects, and that it cannot be otherwise obtained 
 by any better expedient. I do not mean to affirm 
 that the tax on tea is the best of all possible 
 taxes ; .but, 1 do maintain, that a tax which can 
 be avoided, and which does not press heavily on 
 the lower orders, is less objectionable than the 
 tax on coals, or the tax on light and air, and 
 other objects, the use of which cannot be dis- 
 pensed with by any class of the people, without 
 a deprivation of comfort, and possible injury to 
 health. For the present, then, it must be admitted, 
 that nearly half the price paid by the consumers 
 of tea finds its way to the public exchequer for 
 national purposes, and does not enter the coffers 
 of the East India Company. 
 
 The second element in the price of this article 
 is the interest on the capital etnphi/ed ; and, we 
 must not suppose that it is chargeable only 
 on the amount of the annual sale, or four 
 millions : the capital on which the charge of 
 interest is incurred, is probably not less than 
 ten millions, consisting, as it does, of the value of 
 tea held in store in this country and in China, 
 
 as 
 
199 
 
 as well as the cost of the tea in transitu, and of 
 the export cargoes, which are intended as a 
 remittance for the purchase of the article, together 
 with the value of the buildings, warehouses, and 
 other apparatus required for the trade. An 
 interest at the rate of 4 per cent, on this capital^ 
 would amount to the sum of £400,000 ;* and, in 
 point of fact, the commercial account is charged 
 annually under this head, in the shape of dividends 
 to the proprietors and interest on the bond debt, 
 to the amount of about £7^0,000, the greater 
 part of which is properly a charge on the tea 
 investment. 
 
 It may be alleged, that the private merchant 
 would carry on the trade with a much smaller 
 
 capital, 
 
 * The Company charge the tea of 1822-23 with interest to the 
 amount of £237,899 only ; but this is much below the charge actually 
 incurred. I do not know the data assumed for the calculation ; but, 
 it would be quite an error to suppose, that interest is incurred only 
 on the amount sales of one year. I should calculate it on the follow- 
 ing capital, viz. : — 
 
 Prime cost of tea brought to said annually £2,000,000 
 
 Ditto of one year's consumption in store 2,000,000 
 
 Ditto ditto in transitu from China 2,000,000 
 
 Value of outward cargoes and remittances from India 
 
 for the purchase of tea 2,000,000 
 
 Advances to merchants, cash and stock at Canton, &c. 1,000,000 
 Cash and stock in England 1,000,000 
 
 £10,000,000 
 
200 
 
 capital^ since his returns would be annual, by 
 reason of his employing- smaller ships, calculated 
 to perform the voyage out and home within the 
 year. This is partly true; but, under any circum- 
 stances, the capital employed must far exceed the 
 amount of the annual sale. A stock of tea must 
 always be held in reserve, into whatever hands 
 the trade might devolve ; and upon the whole 
 capital employed, the charge of interest is neces- 
 sarily incurred. Were no such stock maintained, 
 not only would the public be exposed to incon- 
 venience from a failure in the accustomed supply, 
 but the prices would be liable to sudden and 
 violent fluctuations ; and the consumer would 
 often have to pay, in the advance of price, much 
 more than he would save in consequence of a 
 smaller amount of interest entering into the 
 original cost of the article. Warehouses, too, 
 and all the other appurtenances of trade, would 
 be required, whether the commerce were carried 
 on by the Company, or by private individuals. 
 
 The third element in the price of tea is the 
 charge o( freight and demurrage, which, on the 
 quantity annually consumed in England, may be 
 stated at £450,000, at the rate at present paid 
 by the Company for their China tonnage. In 
 this estimate it is assumed, that the return cargo 
 is properly chargeable with the whole freight, 
 since the exports from hence, as well as the ex- 
 ports 
 
201 
 
 ports of cotton, sandal wood, and other arti- 
 cles from the Presidencies of India^ are under- 
 stood to produce no more than a saving re- 
 mittance.* 
 
 It may here, also, he objected, that the private 
 merchant, by employing a different class of ships, 
 would be able to procure tonnage on much 
 cheaper terms. f This is unquestionably true ; 
 but a preference has been given to the ships at 
 present employed, on the ground that they are 
 peculiarly well adapted to the trade. They are 
 certainly equipped and appointed in the com- 
 pletest manner : they are navigated by experi- 
 enced officers ; are capable of defence in time of 
 war ; and, although they perform only one voyage 
 in two years, which necessarily renders the freight 
 more expensive, it is to be presumed that they 
 would not command a preference, if those in 
 whom the decision of the question has been vest- 
 ed, were not satisfied that there are circumstances 
 in their favour, sufficient to outweigh the ob- 
 jections, 
 
 * See a former note on the subject. 
 
 f The freight paid by the Company last year, for their China 
 cargoes, averaged £21 : lis. Id. per ton. Smaller ships which should 
 perform the voyage within the year, could afford to sail at £12 per 
 ton, out and home ; but the port charges at Canton are somewhat 
 higher, I believe, in proportion, on smaller ships. The rate of in- 
 surance, or value of the risk, might also be somewhat higher ; but the 
 difference would not be material in either of these items. 
 
 2d 
 
202 
 
 jections, originating in the higher charge of freight. 
 
 Another item connected with the foregoing, is the 
 charge for insurance, or the value of the risk (the 
 Company being their own insurers) ; but this is of 
 small account, for in the instance of such superior 
 ships as the larger class of Indiamen, sailing as 
 they do from China almost invariably at the 
 favourable season, and bearing a light buoyant 
 cargo, the sea risk on the homeward voyage 
 is very inconsiderable. It does not probably 
 exceed 2j per cent., or about £50,000^ on the 
 value of the tea annually imported ; and I find 
 it stated accordingly in the Company's accounts 
 of IS22-23 at £59,528, say £60,000. 
 
 The commercial disbursements of the Company 
 at Canton amount to about £50,000 per annum, 
 and the charges of merchandize in this country 
 to £412,000. The whole of the former, and a 
 large portion of the latter, must be placed to the 
 account of the tea investment, the only part 
 of the trade which can bear the charge ; and I 
 should be disposed to state the aggregate at not 
 less than £325,000, or about 9 per cent, on the 
 annual sales. It is stated at only £307,006,* in 
 
 • Charges in China «^ 50,649 
 
 Do. in England 176,841 
 
 Commission and allowances to supra'^argoes, &c 79,516 
 
 je.307,006 
 
 the 
 
the printed accounts of 1822-23; but this sum 
 appears to me to be below the proportion pro- 
 perly chargeable to the tea investment. 
 
 It may be urged that, if the trade were in 
 private hands, it would be managed in a more 
 economical way; but, the private merchant 
 would have occasion to employ an agent in China, 
 to whom he must pay a Commission* on his sales 
 and purchases ; and, if the commerce were distri- 
 buted among fifty or an hundred merchants, as it 
 probably would be, on the trade being opened, the 
 aggregate of their separate establishments (count- 
 ing-houses, clerks, &c. &c.} would not probably 
 fall short of the expense at present incurred by 
 the Company. 
 
 Into the retail price paid by the consumer, 
 another ingredient necessarily enters, namely : 
 the profit of the broker, wholesale merchant, and 
 retail trader, and all the expenses incurred by 
 these parties, respectively, in supplying the con- 
 sumption from the time that the tea leaves the 
 Company's warehouse. But, without attempting 
 to estimate this item, I shall proceed to recapitu- 
 late 
 
 * A commission of 2 per cent is divided among the Company's 
 supra-cargoes and servants at Canton ; and, the usual rate of com- 
 mission, on purchases and sales in India and China, is, I believe, 2^ 
 per cent. There would, consequently, be no saving in this item by 
 the private merchant J nor does it appear to me probable, that his 
 charges of merchandize, in the aggregate, would fall short of the 
 amount incurred by the Company. 
 
 *2'd2 
 
204 
 
 late the elements which compose the wholesale 
 
 price of the article ; 
 
 1st Government duty of 100 per cent... £3,725^000 
 
 2d Prime cost oftlie tea in China 1,925,000 
 
 3d Interest on capital employed at 4 per 
 
 cent per annum ^ 400,000 
 
 4th Freight and demurrage 450,000 
 
 5th Insurance *60,000 
 
 6th Charges of merchandize in China 
 
 and England 325,000 
 
 Government duty^ and cost and charges £6,885,000 
 Gross amount sales on an average of 
 
 eleven years, including duty 7?450,00O 
 
 Estimated profit annually £565,000 
 
 equal to about 15 per cent, on the amount sales, 
 exclusive of duty, or to about 5| per cent, on the 
 capital employed, after defraying' the charge of 
 interest. This rate of profit would not be con- 
 sidered very exorbitant^ or unreasonable, if it 
 were, drawn by the private merchant as the re- 
 muneration of his personal labour ; and, it is, as 
 nearly as I can estimate it, the sum total of the 
 
 contribution 
 
 f I ought, perhaps, to charge insurance also on the outward cargo, 
 since it in reality constitutes the purchase money of the tea investment. 
 I have adopted this principle in charging the tea with the whole freight 
 of the tonnage which it occupies ; but the outward cargo ought, one 
 year with another, to furnish a saving remittance after defraying 
 charges, freight excepted. 
 
205 
 
 contribution levied by the East India Company on 
 the British consumer of tea. 
 
 The annual profit on the tea investment, de- 
 duced as above-mentioned, amounts to £565,000 ; 
 and^ as this sum exceeds the average profit which 
 1 have supposed to be realized on the ichole trade 
 (£450^000 per annum)^ it follows, either that the 
 annual gain has been under-estimated by me, 
 or that a part of the profit on the tea trade is 
 absorbed in losses sustained on other branches 
 of the Company's commerce. The latter sup- 
 position I take to be the more probable of the two. 
 
 Nbw^ it may be urged that the rate of profit 
 drawn by the Company, or about 5^ per cent., 
 exceeds the average profits of trade at the pre- 
 sent period in this country ; and that their mo- 
 nopoly consequently operates as a tax upon the 
 consumer, to the extent at least of the excess. 
 This may, or may not, be true ; but, admitting 
 the fact, in what manner are the profits of the 
 Company appropriated ? are they applied to in- 
 crease the fortunes of individuals ? to gratify the 
 avarice of the proprietors of India stock ? Cer- 
 tainly not. Those proprietors are restrained by 
 law from dividing more than 10|^ per cent, on 
 the nominal amount of their stock, or about 3^ 
 per cent, on the real value of the capital. The 
 surplus commercial profits of the Company, have 
 been appropriated to the discharge of a portion of 
 
 the 
 
206 
 
 the territorial debt ; which, sooner or later, must 
 become a national concern. The territory is 
 pledged for that debt ; and^ although the secupty 
 is ample^ the incumbrance would have been much 
 greater^ if the debt had not been reduced, or 
 kept within bounds, by the application of the 
 commercial profits to its liquidation. That ele- 
 ment, therefore, in the price of tea, which is 
 composed of the Company's profit^ may be 
 regarded very much in the same light as the 
 government duty of 100 per cent, the tax being 
 levied for public * purposes. 
 
 If the people of Great Britain are desirous of 
 drinking their tea on the same terms as the 
 people of America, it is undoubtedly in their 
 option to have it at 3s, or 2s. 6d. per pounds 
 instead of 6s. or 5s. 6d. per pound, after the 
 verj/ next session of Parliament. They have im- 
 posed upon themselves the duty of 100 per cent., 
 and it rests with them to take it off, whenever 
 they please ; but^ before they resort to such a 
 measure, it will certaiidy be proper for them to 
 consider whether any better alternative presents 
 itself; and whether, in repealing or reducing one 
 tax, they might not find it necessary to have 
 
 recourse 
 
 <* 
 
 • Unless, indeed, the whole of the profits so appropriated, should 
 hereafter be refunded to the proprietors of India Stock, who have 
 certainly a claim upon this fund. 
 
207 
 
 recourse to a substitute of a still more objection- 
 able character. 
 
 I am, at the same time, far from meaning to 
 contend that the East India Company are not 
 bound to attend to the interests, and to consult 
 the convenience and comfort of the British con- 
 sumer. Their monopoly was granted with a 
 view to great national objects ; and, in order to 
 render the prices of their teas more moderate, 
 they ought, I think, by degrees to increase their 
 annual sales, and to endeavour to draw the same 
 profits, or even a reduced profit (if the present 
 rate be unreasonably high), upon a more extend- 
 ed consumption of the article. I have observed 
 with regret, that the annual purchases in China, 
 as well as the sales in this country, have been 
 nearly stationary'^ of late years ; but, from the 
 increase which appears to have taken place in 
 the sales of the last year, it is intended, 1 hope, 
 
 gradually 
 
 
 lbs. 
 
 sterling. 
 
 ♦ Purchases of tea in China in 1819-20 28,476,231 
 
 £1,877,402 
 
 Ditto ditto 
 
 1820-21 28,545,960 
 
 1,896,476 
 
 Ditto ditto 
 
 1821-22 25,746,439 
 
 1,852,715 
 
 Ditto ditto 
 
 1822-23 27.478,813 
 
 1,924,738 
 
 Sales in England, 
 
 lbs. 
 
 
 1820 about 26,100,000 
 
 
 1821 . 
 
 .. 27,600,000 
 
 
 1822 . 
 
 .. 27,800,000 
 
 
 1823 . 
 
 .. 27,700,000 
 
 
 1824 . 
 
 .. 28,300,000 
 
 
208 
 
 gradually to extend them. Tea is not an article, 
 like opium, where it is desirable to levy the 
 largest revenue upon the smallest quantity. The 
 consumption of the latter it may be proper to 
 check, as injurious to health and morals. The 
 consumption of tea^ on the contrary, ought per- 
 haps to be encouraged, as being conducive to 
 comfort, and as tending to exclude the use of a 
 less harmless beverage. 
 
 The Court of Directors have lately adopted 
 a judicious arrangement for supplying our Ameri- 
 can colonies with tea, by a direct importation 
 from China; and it is only surprising, that a 
 measure so well calculated to accommodate the 
 colonial consumer, to encourage our own ship- 
 ping, and to put an end to a contraband trade 
 from the United States, should not have been 
 resorted to at an earlier period. 
 
 1 have now given a hasty, and, I fear, an im- 
 perfect sketch of the commercial affairs of the 
 East-India Company, and it is, I am aware, much 
 too concise to satisfy those who are accustomed 
 to look minutely into a subject. He, however, 
 who undertakes to treat of Indian topics, and to 
 draw attention to the state of our remote posses- 
 sions in the East,* sees presented to him the horns 
 
 of 
 
 * The affairs of India seem to attract more attention at present on 
 the continent than they do in this country, deeply as we are interest- 
 ed in them. M. de Sismondi has followed closely on the footsteps of 
 
209 
 
 of a dilemma : it he enter much into detail, he 
 commands few readers ; if he condense his mat- 
 ter, there is reason to apprehend that he will not 
 satisfy the understanding of those to whom he ad- 
 dresses himselr. With this difficulty before me, I 
 have confined myself to such a statement as ap- 
 peared to me likely to convey some general and 
 useful information, without being absolutely repuK 
 sive by the extent and complicacy of the details. 
 
 1 shall now proceed to combine the territorial 
 with the commercial accounts, and to place in one 
 view the general results at which we have arrived. 
 
 It has been shewn that, during a season of 
 peace, a surplus territorial revenue is likely to be 
 realized in India to the extent of two millions 
 sterling per annum, after defraying all local 
 charges, and providing for the interest of the ter- 
 ritorial debt. 
 
 2dly. That this surplus is liable to an annual 
 deduction, to the amount of one million and a half, 
 on account of territorial and political disburse- 
 ments 
 
 M. Say, vide " La Revue Encyclopedique" for December, pages 635 
 ad 656. These writers do not appear to have drawn their informa- 
 tion always from the latest or most authentic sources ; but we should 
 not disregard the remarks of intelligent spectators, who sometimes see 
 the game better than the players. I cannot admit either M. de Sis- 
 mondi's premises or deductions on several important points j but as 
 the questions which he notices are much too weighty to be disposed 
 of in a summary way, I shall not undertake to discuss them in 
 this place. 
 
 2 K 
 
210 
 
 ments made in this couiitry, leaving' a net surplus 
 revenue, derivable from our Eastern possessions, 
 of five hundred thousand pounds per annum. 
 
 3dly. That the debt of India, bearing interest, 
 amoimted, on the 30th of April 1823, to the sum 
 of ^31,623,780 sterling, entailing an annual 
 charge of £1,896,524; and the net territorial 
 debt^ abroad and at home, after deducting assets, 
 to the sum of ^16,386,953. 
 
 4thly. That the commercial assets, and credits 
 abroad and at home, after deducting the bond 
 debt and other commercial debts, amounted, in 
 1823, 24, to the sum of *£14,424,500, constituting 
 a fund, properly belonging to the proprietors of 
 India stock for the replacement of their capital. f 
 
 5thly. That a profit is drawn from the Com- 
 pany's trade, after providing for the dividends to 
 the proprietors and the interest of the bond debt, 
 and after defraying all the expenses of their esta- 
 blishment, abroad and at home, to the estimated 
 amount of £450,000 per annum. 
 
 6thly. That the net income of the Company, 
 
 terri- 
 
 * Or above nineteen millions, if the accounts between the com* 
 merce and the territory be adjusted upon the basis that the former can 
 reclaim the amount of commercial profits, which has been applied to 
 the liquidation of territorial debt. — See Appendix B. 
 
 f This capital is stated in the Company's accounts at ^67,780,000, 
 which I presume to be the sum actually received into the treasury 
 from the proprietors. It may now be considered worth between 
 ifl7,000,000 and jg 18,000,000. 
 
211 
 
 territorial and commercial^ during' a period of 
 peace^ may accordingly be assumed at about one 
 million sterling per annum, which is applicable to 
 the gradual liquidation of debt, or to the augmen- 
 tation of their commercial capital. 
 
 7thiy. That since the commencement of the 
 present charter, an improvement has taken place 
 in the financial situation of the Company, terri- 
 toricd and commercial, abroad and at home, to the 
 extent of near three millions sterling,* notwith- 
 standing our having been engaged intermediately 
 in 5«everal expensive wars. 
 
 This exposition of the Company's finances must 
 certainly be regarded as highly favourable and 
 Satisfactory, and nothing but the intervention of 
 an unfortunate war, which the authorities in this 
 country could neither foresee nor prevent, was 
 likely to have checked the prosperous course of 
 their affairs. 
 
 The proprietors of India stock will perceive 
 from this summary that they possess security for 
 their capital, if the charter of the Company 
 should be withdrawn. In that case, they would 
 
 either 
 
 ♦ Vide Appendix B. Net Deficiency in 1814-15 ... £2,611,311 
 Net Surplus in 1823-24 187,807 
 
 Amelioration ^2,799,118 
 
 2 E 2 ^ 
 
212 
 
 either be entitled to a division of the com- 
 niereial assets; or their present dividends must 
 be continued to them as perpetual annuities, 
 should the government think proper to dispose 
 otherwise of those assets. In common justice, 
 their claims to be reco^^nized, in one or other 
 character, either as the proprietors of the commer- 
 cial capital^ or as fixed annuitants, cannot well be 
 disputed ; and while there are funds upon which 
 they have so just a claim, no plea could be urged 
 for placing them in a worse condition than that of 
 other corporate bodies, who^ after the expiration 
 of the term for which they have been associated, 
 are allowed to divide their profits and their capital. 
 
 Even if the sum which has been taken from the 
 " surplus commercial profits'* (£4,754,900), for 
 the liquidation of the political debt, should not be 
 restored, and the commerce should be charged 
 with the home bond debt (£3,937,000), the com- 
 mercial capital at the expiration of the charter in 
 18^, may still be expected to amount, at the 
 computed rate of profit, to a sum sutficient to 
 indemnify the proprietors of East India stock 
 for their capital at its present valuation. 
 
 The creditors abroad have the security of a 
 territory, yielding a revenue of twenty-two mil- 
 lions sterling per annum, and a net surplus of half 
 a million ; and whenever the administration of 
 that territory shall be assumed by the Crown, it is 
 
 to 
 
213 
 
 I to be presumed that their interests and the secu- 
 rity of their property, will be effectually provided 
 for. 
 
 Whether the existing system for the administra- 
 tion of the territory and for regulating the trade, 
 be the best which can be devised, and be essen- 
 tially calculated to produce the greatest attainable 
 good, both to India and to the mother country, is 
 a question which will come before the British 
 public at no distant period. It is one of incalcu- 
 lable importance, both as it affects the interests of 
 Great Britain and the well-being of the vast po- 
 pulation which has been subjected to her domi- 
 nion ; and whenever the proper season shall 
 arrive, it will, 1 trust, be examined with un- 
 prejudiced feelings, and be disposed of, after ma- 
 ture consideration, upon those sound and just 
 views of policy, which ought to decide all ques- 
 tions of great national concern. I have contined 
 myself as much as possible to the professional sub- 
 ject which 1 undertook to discuss, and I am un- 
 willing to pass the bounds which I have prescribed 
 to myself; but without intending to encroach 
 upon the province of the statesman, it is natural to 
 ask, loith views merely financial, how has a re- 
 venue of twenty-two millions per annum been ac- 
 quired by us ? Under what wise and salutary in- 
 stitutions has it been preserved ? And what as- 
 surance 
 
214 
 
 sLiiaiice have we of its future prosperity and per- 
 manency ? 
 
 The government abroad has^ in general, been 
 ably and successfully administered,* and the great 
 body of our native subjects enjoy a degree of pro- 
 tection and security in their persons and property, 
 unknown to the subjects of the Hindoo and Ma- 
 homedan states around us. The constitution of 
 that government is, I think, well suited to the pe- 
 culiar circumstances of our situation, the charac- 
 ter of our dominion, and the disposition and habits 
 of the people with whom we are associated, either 
 in our domestic or external relations. This go- 
 vernment is not a pure despotism, as has been al- 
 leged . It is a government of laio aiul responsibilifi/, 
 acting under numerous and sahitary checks. The 
 administrators of that government exercise a de- 
 legated power; they are accountable agents, who 
 
 are 
 
 * I ain not called upon to offer an opinion on the justice and neces- 
 sity of our different wars, nor on the character of our proceedings to- 
 wards our dependent allies, the most questionable branch of our ad- 
 ministration in India. The philosopher, meditating on these events at 
 a distance from the scene of action, may, no doubt, find much to con. 
 demn and to lament; but after the recent exposure of the condi- 
 tion of the Hyderabad territory, it cannot be doubted that the public 
 authorities will see the necessity of rescuing the national character 
 from reproach by placing our connection with the dependent states 
 on a less objectionable footing. 
 
215 
 
 are amenable to the courts of law in England, io 
 the authority of the Court of Directors, the Court 
 of Proprietors, the Commissioners for Indian Af- 
 fairs, the two Houses of Parliament, the Crown, 
 and the British Public. To render this control 
 efficient, they are required to record their most mi- 
 nute transactions, and they do record, regularly 
 and faithfully, every public act, with a scrupulous 
 exactness, unprecedented in any other country. 
 They are also required, in their legislative capa- 
 city, to record, upon the face of every law, the 
 special reasons for the enactment ; and if these 
 laws are neglected and thrown upon the shelf on 
 their arrival in England, the defect lies in the 
 practice and not in the theory. 
 
 Moreover, the government, for all official acts, 
 and the public officers, in their individual capa- 
 city, are subject to the jurisdiction of the King's 
 courts, established at the three presidencies, as 
 well as to the jurisdiction of the courts of Adawlut, 
 established throughout our provinces, and acting 
 under the authority of written laws, recognised and 
 sanctioned by the British legislature. 
 
 The government of India has, it is true, been 
 entrusted with vast powers ; and they are neces- 
 sary, I think, for the preservation of our dominion ; 
 but these powers are exercised by agents, who are 
 removeable at pleasure ; and if they be grossly 
 abused, and the abuse be not visited with the 
 
 penaltieiTj 
 
216 
 
 penalties justly incurred ; if at any time acts of 
 violence and injustice obtain unmerited impunity, 
 it is not that responsibility does not attach^ but 
 that it has not been duly enforced. 
 
 The selection of the supreme Governors of In- 
 dia^ for more than half a century, has been either 
 very judicious^ or very fortunate ; and there has 
 been this remarkable felicity attending it, that the 
 individuals seem to have been peculiarly suited to 
 the particular times and circumstances in which 
 they happen to have been placed. They could 
 not, perhaps, in any one instance, have changed 
 places with advantage. The genius and enter- 
 prize of Lord Clive achieved the conquest of an 
 empire. The fertile resources of Mr. Hastings' 
 mind enabled him to preserve that empire under 
 circumstances of extraordinary difficulty. Lord 
 Cornwallis, eminent alike as a statesman and sol- 
 dier^ took charge of the government at a time when 
 the elements of our power were beginning to as- 
 sume consistency, but required to be moulded 
 into form by a powerful hand ; and the natural 
 rectitude and energy of his character disposed him 
 to introduce wholesome reforms, and to establish a 
 regular system of internal administration, founded 
 upon principles of justice, and the viev\s of a be- 
 nevolent policy. Lord Teignmouth, possessing 
 great knowledge and experience, followed in the 
 footsteps of his illustrious predecessor ; and with 
 
 scrupulous 
 
217 
 
 scrupulous good faith^ gave eftbct to plans which, 
 as a member of Lord Cornwallis' governiiieiit^ he 
 had felt it his duty to oppose.* The great talents 
 of Lord Wellesley w«re called into action at a 
 momentous crisis. France, after overpowering 
 the continent of Europe by a great convulsive 
 movement, directed her ambitious views to the 
 East, and there found powerful allies in the Ma- 
 homedan state of Mysore, and in the French 
 commanders, who, at the head of large bodies of 
 organized troops in the seivice of the Nizam and 
 of Dowlut Rao Scindiah, were prepared to dis- 
 pute with us our ascendancy in India. The mo- 
 ther-country was engaged in a struggle for exis- 
 tence, and we were left to our own resources and 
 exertions. Egypt was already occupied by the 
 French, as the first step in their adventurous ca- 
 reer; but the talents of Lord Wellesley were equal 
 to the emergency, and surmounted it ; and the 
 novel spectacle was exhibited in tliis administra- 
 tion of an Indian army co-operating with British 
 troops on the banks of the Nile. When, after sus- 
 taining successive conflicts, our strength was im- 
 paired, and repose became necessary to recruit our 
 exhausted resources, the wisdom and prudence 
 
 and 
 
 * I allude merely to the question of the " Permanent Settlement." 
 The general maxims of Lord Teignmouth's government corresponded, 
 I believe, with those which Lord Cornwallis had acted upon. 
 
218 
 
 and pacific policy of Sir George Barlow and the 
 Earl of MintOj restored the state to all its pristine 
 vigour; while the conquest of Java and the French 
 islands sufficiently attests, that^ on proper occa- 
 sionSj Lord Minto could display all the decision 
 and enterprize which usually give assurance of a 
 superior mind : and, finally, the military and po- 
 litical administration of the Marquess of Hastings, 
 full of energy and spirit, added new lustre to the 
 reputation of our arms, and gave a wider range to 
 British supremacy in the East. 
 
 But I may be told, that our success and the 
 merits of our rule are to be referred to the personal 
 qualities of the rulers, rather than to the inherent 
 merits of our institutions. This must, in part, be 
 admitted ; and in what country does it not happen 
 that the well-being of the governed is to be re- 
 ferred mainly to the qualities of the governors ? 
 It is true that there is this peculiarity in our situa- 
 tion in India : the rulers being foreigners, and as 
 such not identified with the people, they cannot 
 be displaced by the people, without the overthrow 
 of the sovereignty itself; whereas in countries in 
 which the governors and the governed have one 
 common origin, the rulers may be removed with- 
 out destroying the constitution or system of go- 
 vernment. 
 
 I fully admit that much depends upon the per- 
 sonal qualities of those who are selected to admi- 
 nister 
 
219 
 
 nister our affairs in India. The government can 
 never become a safe sinecure: it is a fatal mistake 
 to suppose that our work in that country has been 
 consummated, or ever can be consummated : it 
 requires scarcely less talent to preserve than was 
 necessary to create. Although our dominion has 
 been extended to the utmost verge which could 
 have been desired^ although our power has been 
 consolidated, and our name is respected and feared, 
 we can never with safety relax in vigilant circum- 
 spection, or entrust our aiikirs to feeble hands. 
 The transitory days of peace ought to be wel- 
 comed when they do arrive; but they ought never 
 to be regarded as a season exempt from difficulty 
 and danger. It cannot be concealed, and it ought 
 not to be concealed, that the position in which the 
 native states* of India are placed^, is not a natural 
 one^ nor one of their own choice, which they 
 submit to willingly. They are under a certain 
 pressure, enforced by superior power. He who 
 
 has 
 
 * The same may be said of some of our own once-powerful subjects 
 and dependents. For instance, the Rajahs of Hatras, Moorsan, Pritch- 
 etghur, Lundoura, &c., once feudatory chieftains, have been compressed 
 into the condition of simple landholders. In fact, although I have 
 thought it right to point out that we never can depend upon the con- 
 tinuance of peace (for even the resuscitation of the Pindarries would 
 not greatly surprise me), I do not consider our external enemies as the 
 chief source of danger to our power. Our greatest danger^ in my 
 opinion, will always be from within, 
 
 2 F 2 
 
220 
 
 has seen (the illustration is homely, I own) a bale 
 of cotton compresserl into one-fourth of its natural 
 dimensions;, may form a notion of the sort of force 
 which restrains them in their present situations. 
 The mass seems inert ; but there is an elastic 
 force within^, which is ready to expand : relax the 
 cords, and it immediately manifests itself. 
 
 And the philanthropist may say^, cut the cords^ 
 and let them be free and happy. But this is an 
 operation which involves many serious contin- 
 gencies ; not merely the subversion of our own em- 
 pirC;, but the introduction of absolute anarchy and 
 misrule throughout a large portion of Asia. Who 
 that has read in the pages of Sir John Malcolm 
 the teeming record of massacres and pillage, 
 would wish to see the population of the desolated 
 region which he describes, committed once more 
 to a Mahratta * plunderer, or an Affghan adven- 
 turer ? Who could see, without deep regret^ the 
 flourishing provinces of Bengal converted into a 
 waste, the scene of bloodshed and disorder, of 
 religious contention, unbridled violence, and law- 
 less oppression ? No ; the people of India are 
 not prepared for self government ; they are not 
 sufficiently advanced in knowledge ; they do not 
 
 properly 
 
 * The administration of Ahilya Bhye throws a gleam of sunshine 
 over Marhatta history, and Sir John has succeeded in giving a dramatic 
 interest to the character of this princess j but the other side of the 
 picture is only darkened by the contrast : it is an Oasis in the 
 desert. 
 
2^1 
 
 properly appreciate the advantages of political 
 morality ; and they are unacquainted with those 
 great principles and maxims of political wisdom^ 
 upon which all government ought to be founded. 
 Whatever may be our disqualifications as fo- 
 reignerSj we govern them better than they 
 could govern themselves ; and our dominion^ if 
 it avert no other evil than the sanguinary struggle 
 which is likely to take place whenever our au- 
 thority may be withdrawn, must be regarded 
 as eminently calculated to promote the great 
 interests of humanity. 
 
 Of the administration at home, 1 have observed, 
 that it may claim the rare merit of having made 
 a judicious selection of functionaries to conduct 
 the public affairs abroad. This is doing much 
 for India ; since, in point of fact, the great busi- 
 ness of government must be carried on abroad. 
 Measures relating to its internal administration 
 can seldom be originated here with advantage : 
 but still the system of administration at home 
 is very far from being matter of indifference. 
 Where the powers committed to the local authori- 
 ties are so extensive, and the discretion so ample, 
 the means of controlling those authorities should be 
 proportionally strong and efficient.* If they are 
 
 commissioned 
 
 * The honourable Court of Directors well observe, " It is a self- 
 " evident proposition that in proportion to the extent of power 
 
222 
 
 commissioned to make laws upon which the 
 welfare of millions may depend, we should see 
 that those laws are founded on principles of justice, 
 and are not inconsistent with those important 
 truths, which the reason and experience of an 
 enlightened age have established. 
 
 And may we fairly assume, that this great duty 
 has been adequately provided for ? Are our in- 
 stitutions at home well adapted to the ends which 
 they are intendeil to accomplish ? Those who 
 have seen the workings of the machinery, and who 
 are most friendly to the existing order of things^ 
 will scarcely venture to pronounce that it is 
 perfect. The two administrative bodies are con- 
 flicting and not cowrwrrmg authorities ; and their 
 collision is calculated to produce delay, incon- 
 gruities, and sometimes an absolute suspension 
 of the functions of government. The process by 
 which a decision on any important question is 
 arrived at, is so slow and embarrassed, that the 
 proper season of action may pass away before 
 a resolution can be carried into effect. He who 
 introduces a measure, is often obliged to leave 
 it to be executed by another ; and, perhaps, by 
 the very individual by whom it had been opposed. 
 
 He 
 
 ** vested in any individual, ought to be the strictness of responsibility 
 " for its due exercise and the checks upon its abuse."— See Letter to 
 Bengal, in Hyderabad Papers, page 390. 
 
223 
 
 He who is indolent, timid, or wavering, allows 
 the machine to remain at rest, to be propelled 
 by a more adventurous successor. The mode of 
 distributing the business among the public func- 
 tionaries may also admit of question, since it has 
 no reference to their respective qualifications and 
 previous habits ; but, on the other hand, it is 
 contended that the experience which is obtained 
 in the course of passing through the different 
 committees, has been found of great advantage 
 to those who are ultimately called upon to 
 execute the high office of chairman. To this 
 consideration 1 am disposed to allow every degree 
 of weight ; and 1 am seldom inclined to oppose 
 mere speculative opinions to the safer deductions 
 which experience supplies : yet, admitting all 
 which is contended for, I still think that pro- 
 fessional knowledge and peculiar attainments 
 might be brought to bear with better effect upon 
 the public service, under a modification of the 
 existing arrangement. 
 
 But the great defect in the system is the total 
 absence of all responsibility . By responsibility, I 
 do not mean merely the liability to penalties 
 imposed by the law : high public functionaries 
 can seldom be brought to punishment; but, if 
 the individual be identified with his acts, an opera- 
 tive principle is supplied in the honest love of 
 fame, and in the dread of public odium. Public 
 
 censure, 
 
224 
 
 censure, justly incurred, is one of the severest 
 punrshnients to which a nriind, not hardened and 
 callous^ can well be exposed. 
 
 The government of India, holding only a 
 delegated trust, can be rendered strictly account- 
 able to the superintending authorities at home, 
 to the law, and to parliament 5 and all its acts can 
 be distinctly referred to the individuals by whom 
 they have been committed : but the administra- 
 tive authorities at home are so constituted, that 
 responsibility, the best check and restraint upon 
 the exercise of power, is rio where found to attach 
 to any beneficial purpose. When divided among 
 numbers, responsibility is necessarily reduced to 
 a fraction of small value ; but the practice of 
 deciding public (|uestions by the ballot is calcu- 
 lated^ to do away even the semblance of it. 
 I am aware that the Directors are at liberty to 
 record, within fourteen days, their dissent from 
 any decision of a majority : but, although this 
 privilege is calculated to answer a useful purpose, 
 and would, if more frequently exercised, point to 
 the authors of particular measures, by shewing 
 who have not been parties to them ; yet it is rather 
 intended to exonerate from responsibility than to 
 fix it upon individuals : besides, the Court of 
 Directors, in merely originating measures, cannot 
 justly be held responsible for them, if those 
 measures be altered and perhaps reversed by a 
 
 higher 
 
22rj 
 
 higher authority — and that higher authority can- 
 not justly be made responsible for the general 
 conduct of affairs, to which it cannot give the first 
 momentum, and over which it exerts only a 
 repressive control. The good sense and good 
 feeling of the two authorities, acting under a 
 strong sense of public duty, and interchanging 
 their respective opinions in the liberal spirit which 
 is habitual to men of high intellectual endowment, 
 may prevent colHsion, and may produce measures 
 distinguished for their wisdom and propriety ; but 
 this, when it happens, is a contingent good, result- 
 ing from individual character, and we can have no 
 assurance of its continuance, when the powers of 
 government are exercised by irresponsible agents, 
 or when they are liable to be paralised or enfeebled 
 by the contentions of those agents. 
 
 If these defects were not susceptible of a re- 
 medy, it would be worse than useless to notice 
 them, and they have not been noticed in the spirit 
 of crimination ; but, every well-wisher of the 
 Company (without adverting to concerns of 
 higher interest) must be desirous of seeing its 
 administration so far improved as to be free from 
 all just reproach, and to become the object of 
 public esteem. To correct defects is the obvious 
 way to disarm adversaries, and to justify the 
 support of friends. 
 
 Whatever may be the imperfections of the 
 2 G system. 
 
226 
 
 s^ysteni, it cannot justly be arraigned on the 
 ground that it has led to an improvident ad- 
 ministration of the finances, the question which 
 more immediately concerns us at present. They 
 have, in general, been managed both abroad and 
 at home, with integrity, intelligence, and zeal. 
 Instances of profuse and even wasteful expen- 
 diture might be pointed out ; but they are not 
 numerous^ and the instances of embezzlement 
 and corruption, which have come to light, have 
 not been more frequent ; and, far from being 
 screened, on discovery, by the public authorities 
 abroad or at home, the individuals have been vi- 
 sited with merited punishment, and have met with 
 no countenance or support from a service which 
 highly estimates the value of its public character. 
 
 Nor can it be alleged that public services have 
 been rewarded with too munificent a hand : on the 
 contrary, the Court of Directors have been re- 
 proached for unseasonable parsimony ; and, they 
 have not, perhaps, always recollected that, as they 
 have no civil honors to bestow, pecuniary rewards 
 and just commendation can alone mark their sense 
 of public merit.* The liberal remuneration of 
 
 eminent 
 
 » Let it be recollected that, while the Crown has with great pro- 
 priety, justice, and policy established a graduated scale of honors to 
 be conferred as the reward of military service, the civil officers of the 
 Company, however eminent their merits and services, cannot look 
 
 forward 
 
go' 
 
 eminent services is quite consistent with the prac 
 tice of a just economy^ and may be vindicated 
 upon public principles ; but, the Court of Di- 
 rectors are the trustees of the public purse, and 
 in closing it against importunate claims they 
 can have no private feeling to gratify. 
 
 To conclude: When we reflect that an empire, 
 acquired by valour and skill, and preserved by 
 wisdom and prudence, has been governed in the 
 spirit of moderation and justice; that the countries 
 over which our sway extends, enjoy a state of 
 tranquillity and prosperity unknown in the neigh- 
 bouring territory ; and that a revenue has been 
 created in this remote dependency, exceeding the 
 income of some of the most powerful states of 
 Europe^ we must acknowledge that the system of 
 administration, whatever may be its theoretical 
 defects, must have its redeeming virtues, and 
 must have been regulated and superintended by 
 men of no ordinary capacity and merit. And 
 whatever may be the fate of the East-India Com- 
 pany, at whatever period that body shall cease to 
 
 exist, 
 
 forward to any public distinction. This is, I think, a deficiency. 
 Fortune, no doubt, gives consideration in this country ; but, wealth 
 is not the paramount good with some men, and the civil servants of 
 the Company can seldom realize large fortunes by honourable means* 
 In no country are the minds of men more exercised, and in no 
 country can a government have stronger motives for exciting its 
 servants to honorable exertion. 
 
 2 G 2 
 
228 
 
 exists it may challenge comparison with any co- 
 lonial administration^ of which we have record in 
 any age or country ; while the pages of its history, 
 fertile in instances of political wisdom and military 
 skill, of gallant enterprize and splendid success, 
 will perpetuate the memory of a brilliant and 
 eventful career, not surpassed by the proudest 
 achievements of Gallic ambition, or the noblest 
 triumphs of Roman heroism. I will not say of 
 this Company, *' Esto perpetua ;'' but ''"sen plu- 
 '* rimas tribuit Jupiter Hyemes, sive banc ulti- 
 " mam/' a heavy responsibility will rest with 
 those who subvert it without clear and satisfac- 
 tory grounds for presuming that a more perfect 
 system of administration will be substituted in its 
 place; that the well-poised constitution of this 
 country will not be affected by the change; and 
 that the people of India, albeit possessing no re- 
 presentatives in the British Parliament, will in 
 their future rulers find protectors and friends, ac- 
 quainted with their situation and wants, indulgent 
 to their feelings and prejudices, determined to 
 maintain their rights and interests, and solicitous 
 to promote their prosperity and happiness. 
 
 Appendix 
 
APPENDIX. 
 
 APPENDIX A. 
 Statement of the Territorial Debt of India, bearing 
 Interesty for a period of Thirty Years ; or from the 
 30tli April 1793 to the 30th April 1822, with the 
 Annual Interest thereon. 
 
 Principal. 
 Sicca Rupees. 
 
 On the 30th April 1793 5,33,68,683 
 
 Ditto 1794 4,77.69,240 
 
 Ditto 1795 4,77,60,064 
 
 Ditto 1796 5,03,25,644 
 
 Ditto 1797 5,71,29,008 
 
 Ditto 1798 7.57,04,769 
 
 Ditto 1799 8,49,74,559 
 
 Ditto 1800 10,11,24,828 
 
 Ditto 1801 12,39,42,360 
 
 Ditto 1802 13,63,51,420 
 
 Ditto 1803 14,45,73,061 
 
 Ditto 1804 16,18,54,265! 
 
 Ditto 1805 19,09,71,445J 
 
 Ditto 1806 21,72,71,2521 
 
 Ditto 1807 23,15,30,1251 
 
 Ditto 1808 24,48,92,828j 
 
 Ditto 1809. .... .24,33,30,220 
 
 Ditto 1810 23,82,36,344 
 
 Ditto 1811 21,41,19,640 
 
 Ditto 1812 22,11,82,349 
 
 Ditto.... 1813 22,68,48,000 
 
 Interest. 
 Sicca Rupees. 
 
 45,58,798 
 
 35,69,555 
 
 38,66,964 
 
 33,85,686 
 
 35,79,716 
 
 48,96,510 
 
 62,73,496 
 
 76,66,946 
 
 90,93,323 
 
 1,19,02,293 
 
 1,18,81,854 
 
 1,24,55,045 
 
 1,39,98,771 
 1,67,26,998 
 1,97,13,929 
 1,95,21,929 
 1,96,45,058 
 1,89,04,303 
 1,93,06,167 
 1,26,12,248 
 1,37,80,000 
 
2^0 
 
 Principal. 
 Sicca Rupees. 
 On the 30th April 1814... *21,39,92,502 
 
 Ditto 1815... 123,86,30,000 
 
 Ditto 1816 24,20,00,000 
 
 Ditto 1817 24,84,60,000 
 
 Ditto 1818 25,36,00,000 
 
 Ditto 1819 26,78,00,000 
 
 Ditto 1820... 129,14,10,000 
 
 Ditto 1821 27,92,31,000 
 
 Ditto 1822... §27,27,86,000 
 
 Interest. 
 Sicca Rupees. 
 
 1,27,93,896 
 1,43,25,000 
 1,45,24,000 
 1,49,13,000 
 1,52,63,000 
 1,60,91,600 
 1,48,50,000 
 1,70,68,261 
 1,65,45,000 
 
 The results of the first twenty years, or from 1793 to 
 1812, are taken from statements prepared by the Ac- 
 countant-General of Bengal in March 1813, and sub- 
 mitted to the Court of Directors, through the Supreme 
 Government, in a despatch bearing date the 27th of that 
 month. The results of the first twenty years of my 
 account of the surplus and deficit of India for thirty 
 years, are also taken from statements prepared by the 
 same officer ; and as these documents were formed with 
 the utmost care and attention, I have followed them in 
 preference even to the English accounts, which are, no 
 doubt, of high authority. 
 
 The amount of the debt, bearing interest, cannot 
 always be taken as decisive evidence of our financial 
 situation ; because we have also a debt, not hearing 
 
 • [ find it elsewhere stated at Sicca Rupees 21,16,90,520 ; and the 
 statement printed for parliament shews it to be £26,959,454. 
 
 f This sum includes the loan from the Vizier, Rupees 1,03,82,093. 
 
 X This includes also the sum received from the estate of the Bhow 
 Begum, Sicca Rupees 55,98,436- 
 
 § The debt of 1822 appears, from the printed statement, to have 
 been £31,623,779. 
 
231 
 
 interest, and because the proportion which the assets 
 bear to the debt varies very considerably at different 
 periods. Still the debt, bearing interest^ is what should 
 be kept always in sight, since it determines the annual 
 charge, and it ought not to increase if there be a sur- 
 plus of assets which can be applied to its liquidation. 
 
 APPENDIX B. 
 
 Statement of the Territorial and Commercial Debt and 
 Assets of the East-India Company, Abroad and at 
 Home : 
 
 remVoWtt/.— 1814 and 1815. 
 l)ebt in India, bearing interest, on the 30th 
 
 April 1814 £26,802,045 
 
 Do. not bearing interest do 3,923,948 
 
 Total, Debt in India ^^30,725,993 
 
 Debt in England due from Territory, on the 
 30th April 1815 5,001,531 
 
 Total, Territorial Debt ^35,727,524 
 
 Deduct :— Territorial Assets 17,300,619 
 
 Territorial Deficit £18,426,905 
 
 CommerciaL 
 Assets, abroad and at home, at 
 
 the two periods respectively £22,787,034 
 Debt do. do 2,484,2/0 
 
 Commercial Surplus £20,302,764 
 
 Carried forward £20,302,764 
 
232 
 
 Brought forward £20,302,764 
 
 Deduct, Home Bond Debt, 
 principal and interest, on the 
 30th April 1815 (it not hav- 
 ing been determined whether 
 it constituted, wholly, or in 
 part, a Territorial or Com- 
 mercial Debt) 4,487,170 
 
 Net Commercial Surplus 15,815,594 
 
 Net Deficit £2,611,311 
 
 Exclusive of the Capital Stock stated at £7,780,000 
 
 N.B. In the Territorial Assets above, the sum of 
 £400,000 is included, in part of the "Deadstock," 
 amounting to £12,210,896. 
 
 And in the Commercial Assets, the sum of £1,143,000 
 is included as the vahie of the India- House, and other 
 Commercial " Dead Stock." 
 
 Statement of Territorial Debt and Assets in India. 
 
 Territorial, — 1815. 
 Debt in India, bearing interest on the 30th 
 
 April 1815 £27,831,877 
 
 Do. not bearing interest do , 4,689,695 
 
 Total, Debt in India.., £32,521,572 
 
 Deduct, Assets in India on the 30th April 
 
 1815 16,401,357 
 
 Territorial Deficit in India, in 1815... £16,120,215 
 
 exclusive of Territorial Debt in Enghmd. 
 
 IWriforiiiL 
 
233 
 
 Territorial.' — 1816. 
 Debt in India^ bearing interest 30th April 
 
 1816 £28,067,964 
 
 Do. not bearing interest do 5,071,7^"^ 
 
 Total, Debt in India £33,139,, 
 
 Deduct, Assets in India 30th April 1816 16,941,813 
 
 Deficit in India in 1816 £16,197,885 
 
 Territorial — 1817. 
 Debt in India, bearing interest 30th April 
 
 1817 , £28,821,457 
 
 Do. not bearing interest do 4,866,540 
 
 Total, Debt in India £33,687,997 
 
 Deduct, Assets . 17,834,755 
 
 Deficit in 1817 £15,853,242 
 
 TerritoriaL—lSlS^ 
 
 Debt, bearing interest 30th April 1818 £29,417,578 
 
 Do. not bearing interest do 5,241,703 
 
 Total, Debt £34,659,281 
 
 Deduct, Assets 17,491,987 
 
 Deficit hi 1818 £17,167,294 
 
 TerritoriaL'-lSld. 
 Debt, bearing interest 30th April 1819...... £31,065,547 
 
 Do. not bearing interest do 6,286,723 
 
 Total, Debt £37,352,270 
 
 Deduct, Assets CO 18,492,312 
 
 Deficit in 1819 £18,859,958 
 
 2 H TerritoriaL 
 
234 
 
 Territorial.'— \S20, 
 Debt, bearing interest, 30th April 1820... £33,801,961 
 Do. not bearing interest do 6,909,374 
 
 Total, Debt 40,711,335 
 
 Deduct, Assets 19,506,302 
 
 Deficit in 1820 £21,205,033 
 
 Territoriah — 1 821 . 
 Debt, bearing interest, 30th April 1821 ...£33,427,106 
 Do. not bearing interest do 73436,344 
 
 Total, Debt £40,863,450 
 
 Deduct, Assets 22,429,312 
 
 Deficit in 1821 £18,434,138 
 
 TernVom/.— 1822. 
 Debt in India, bearing interest, 30th April 
 
 1822 £31,623,779 
 
 Do. not bearing interest do 6,967,878 
 
 Total, Debt £38,391,657 
 
 Deduct, Assets 22,204,704 
 
 Deficit in 1822 £16,386,953 
 
 Statement of Indian Debt and Assets in 1823, and 
 Home Debt and Assets in 1824, taken from MS. Ac- 
 counts. 
 
 Territorial— \S2^ and 1824. 
 
 Debt in India, bearing interest,, 30th April 
 
 1823 r £29,283,345 
 
 Carried forward £29,283,345 
 
235 
 
 Brought forward £29,283,345 
 
 Add Bill? returned to be reinvested in Loan 245,653 
 Debt not bearing interest 30th April 1823 9,796,339 
 
 ^\yr. ' *^M Total Debt in India, ditto £39,325,337 
 Territorial Debt in England, 30th April 1824, =^7,033,971 
 
 Total, Territorial Debt,Abroad and atHonie, £46,359,308 
 
 Deduct, Assets in India £27,911,946 
 
 Ditto, at Home 1,760,669 29,672,615 
 
 Territorial Deficit £1 6,686,693 
 
 Commercial, 
 Assets, Abroad, 30thApril 1823 £1,938,541 
 Ditto at Home, ditto ... 1824 22,7415,469 
 
 Total assets... £24,685,010 
 
 Deduct, Commercial 
 
 Debt in India, 1823 £537,487 
 
 Ditto, at Home, 1824 3,335,369 
 
 3,872,856 
 
 \iy% 
 
 Commercial Surplus. ..£20,812,154 
 Deduct, Bond Debt in England, 
 
 April 1824 3,937,654 
 
 Net Commercial Surplus £16,874,500 
 
 Net Surplus upon the two Accounts £187,807 
 
 NetSurplus upon the two Accounts in 1823-24 £187,807 
 Deficit upon these Accounts in 1814-15 2,611,311 
 
 Improvement in the general result 
 
 since 1814-15 £2,799,118 
 
 * Of this sum i'6,090,076 is owing by the Territory to the Com- 
 
236 
 
 N.B. — The Capital Stock is not included in 
 
 til e above, being £7,780,000 
 
 I hav^e only given the Commercial Account at the 
 commencement of the term, 1814-15, and at its close, 
 1823-24, as I could not trace it with great exactness 
 throughout the whole period, and the chief object was 
 to shew the result of the comparison between the two 
 periods. 
 
 In explanation of the great variation in the amount of 
 the Territorial Debt in the course of a single year (be- 
 tween 1820 and 1821, for instance), it is necessary to ex- 
 plain, that the statement only includes the debt in India, 
 and that nearly corresponding variations may have taken 
 place in the Account of Territorial Debts and Assets in 
 England. 
 
 I had prepared a statement of the Indian and Home 
 Debts and Assets in April 1823, in order to obviate 
 the objection which may be urged, that no certain 
 conclusion can be drawn from accounts which are* 
 brought down to two different periods; but I found 
 that I could not adjust the Debits and Credits be- 
 tween the Territory and Commerce in a manner quite 
 satisfactory to myself, or which would perhaps have 
 been satisfactory to the reader, and I have accord- 
 ingly omitted the Statement, and adhered to the Printed 
 Accounts, which are closed for India and England at 
 two different periods. The circumstance of the Company 
 having to render two distinct accounts (Commercial and 
 Territorial), and of the Indian Accounts being always a 
 year in arrear, renders it difficult to blend and adjust the 
 two, in a way to render the g/wieral results perfectly 
 clear and intelligible. 
 
237- 
 
 The above account sufficiently proves, I think, that 
 since the commencement of the present charter an im- 
 provement has taken place in the situation of the Com- 
 pany, Territorial and Commercial, abroad and at home, 
 to the amount of near three millions sterling, notwith- 
 standing our having been engaged intermediately in 
 several expensive wars. 
 
 I have prepared the figured statements given in this 
 publication with the utmost care, and 1 have referred to 
 the best authorities within my reach for the purpose of 
 discovering and correcting errors, but I shall still pro- 
 bably have occasion to claim indulgence for mistakes, 
 into which I may have fallen in the course of reducing 
 into a more compact form such numerous details. 
 
 In the body of the work, where I give the general 
 results of the accounts, I have stated the Commercial 
 Assets in 1823-24, at only £14,424,500, whereas the Net 
 Commercial Surplus is stated above at £16,874,500. 
 The difference arises from my having deducted from the 
 latter sum, £2,450,000, stated to have been advanced 
 in India, from the Territory to the Commerce in 1823-24. 
 If however we add the sum of £4,754,902, advanced to 
 the Territory from the Commercial Profits, the Commer- 
 cial Surplus will appear to be £19,170,402, on the 30th of 
 April last. 
 
238 
 APPENDIX C, 
 
 BY H. T. COLEBROOKE, ESQ. 
 
 As very incorrect notions appear to have been enter- 
 tained concerning the nature of the " Panchdt/eti^''' pre- 
 vailing from ancient times in India, it is expedient to 
 consult the writings of the Hindus themselves, who in 
 treating of the administration of justice, have occasion to 
 advert to the subject. The following is a brief summary 
 from very ample disquisitions, contained in Treatises of 
 Hindu Law. 
 
 An assembly for the administration of justice is of 
 various sorts : either stationary, being held in the town 
 or village ; or moveable, being held in field or forest ; or 
 it is a tribunal, superintended by the chief judge ap- 
 pointed by the sovereign, and entrusted with the Royal 
 Seal, to empower him to summon parties; or, it is a 
 Court held before the Sovereign in person. The two 
 first of these, are constituted at the request of parties, 
 who solicit cognizance and determination of their differ- 
 ences; they are not established by operation of law, or 
 by the act of the King, but by voluntary consent. The 
 two last are Courts of Judicature, established by the 
 Sovereign's authority : such a Court is resorted to for 
 relief, as occasions occur ; and not as the first mentioned, 
 constituted merely for the particular purpose. 
 
 To accommodate or determine a dispute between con- 
 tending parties ; the heads of the family, or the chiefs of 
 the Society, or the inhabitants of the town or village, 
 select a referee approved by both parties. 
 
 Among persons who roam the forest, an assembly for 
 terminating litigation, is to be held in the wilderness; 
 
239 
 
 among those who belong to an army, in the camp; and 
 among merchants and artisans, in their societies. 
 
 Places of resort for redress, are, 1st. The Court of the 
 Sovereign, who is assisted by learned Brahmans, as 
 Assessors. It is ambulatory, being held where the King 
 abides or sojourns. 
 
 2nd. The tribunal of the Chief Judge (" Prddvivdca,'' 
 or " Dharmadhi/acsha *') appointed by the Sovereign, 
 and sitting with three or more assessors. This is a 
 stationary Court, being held at an appointed place. 
 
 Srd. Inferior Judges, appointed by the Sovereign's 
 authority, for local jurisdictions. From their decisions, 
 an appeal lies to the Court of the Chief Judge, and thence 
 to the Raja, or King, in person. 
 
 The gradations in arbitration, are also three. 
 
 1st. Assemblies of townsmen, or meetings of persons 
 belonging to various tribes, and following different pro- 
 fessions, but inhabiting the same place. 
 
 2nd. Companies of traders or artisans : conventions of 
 persons belonging to different tribes, but subsisting by 
 the practice of the same profession. * sdo li:>jfo?? fa 
 
 3rd. Meetings of kinsmen, or assemblages of relations, 
 connected by consanguinity. 
 
 The technical terms in the Hindu, for these three 
 gradations of assemblies are, 1st, Fuga ; 2nd, Srtni ; 
 3rd, Cula, 
 
 Their decisions or awards are subject to revision : an 
 unsatisfactory determination of the '^ Cnla " or family, is 
 revised by the " Sreni " or company, as less liable to 
 suspicion of partiality, than the kindred ; and an unsatis- 
 factory decision of fellow-artisans, is revised by the 
 '' Pugcty'^ or assembly of cohabitants, who are still less 
 to be suspected of partiality. From the award of the 
 
240 
 
 " Puga^ '' or assembly, an appeal lies, according to in- 
 stitutes of Hindu Law, to the tribunal of the " Prdd- 
 vimcay' or Judge ; and, finally, to the Court of the Rciju^ 
 or Sovereign Prince. 
 
 The " Puga;' " Sr6ni;' and '' Cula,'' are different 
 degrees of" Panckdj/eti y" which, as is apparent, is not 
 in the nature either of a jury, or of a rustic tribunal ; 
 but merely a system of arbitration, subordinate to regu- 
 larly constituted tribunals, or Courts of Justice. 
 
 It was not the design of the Bengal regulations to 
 abrogate the " Panchdj/eti,'* or to discourage arbitration. 
 The judicial regulations of 1772, provided that, " in 
 all cases of disputed accounts, &c., it shall be recom- 
 mended to the parties, to submit the decision of their 
 cause to arbitration ; the award of which shall become 
 a decree of the court. Every encouragement is to be 
 afforded to persons of character and credit, to become 
 arbitrators ; but no coercive means to be employed for 
 that purpose. 
 
 This provision, in nearly the same words, of which the 
 above is an extract, occurs in the regulations passed 
 in 1780. 
 
 It is repeated in the regulations of 1781, with this ad- 
 dition, that " the judge do recommend, and as far as he 
 can, without compulsion, prevail upon the parlies to 
 submit to the arbitration of one person, to be mutually 
 agreed upon by the parties;" and, with this further pro- 
 vision, that no award of any arbitrator or arbitrators, be 
 set aside, except on full proof, made by oath, of two 
 credible witnesses, that the arbitrators had been guilty of 
 gross corruption, or partiality in the cause in which they 
 had made their award. 
 
 Here 
 
£41 
 
 Here we find the first deviation from the spirit of 
 Hindu arbitration : the regulations of 1781 were drawn 
 up by Sir E. Impey, and that deviation, which was in- 
 tended to render arbitration more effectual, has, in its 
 consequences, overset the system. Every dissatisfied 
 party, unable to impeach the award of an arbitrator 
 without proving partiality or corruption, set about,'ca- 
 lumniating.the arbitrator; and imputed corrurptt^v^i to 
 him simply, that he might obtain a revision oA'the away*^, 
 which, in the Hindu system, he mi^h^c'tiave obtained in 
 regular course of appeal, witho'^at any such imputation. 
 As the practice grew, all n espectable persons declined 
 references, lest they sho'xlld be calumniated by the discon- 
 tented litigant ; and "^Panchdi/eti " has fallen into disuse. 
 
 APPE.NDIX D. 
 
 f PROVINCE OF CAN A R A. 
 
 In th'^^i '^ Revenue Selections," page 532, a Minute, 
 
 dated "^in 1816, of Lord William Bentinck, then Go- 
 
 vernr :ir of Fort St. George, is inserted ; in which his 
 
 Lor'^fiship observes, that, "from the first transfer of Ca- 
 
 ^' ^hara to the British authority, it has continued a 
 
 '^J solitary example of tranquillity, of an easy and regular 
 
 *'^ realization of the revenue, and of general prosperity. 
 
 " The causes of such effects are, in my opinion, (observes 
 
 " his Lordship) to be found in the tenure of landed 
 
 property, peculiar to the province, and in the mode- 
 
 " ration with which the rights of the Sircar, to a propor- 
 
 " tion of the land revenue, have been exercised," &c. 
 
 His Lordship, of course, confined the remark to the 
 
 districts under his own Government ; because, in Bengal, 
 
 we had abundant instances of the same description. 
 
 2 I 
 
 (. 
 
242 
 
 The Court of Directors also observe, in noticing this 
 Minute, that the '' Ryotwar " or Field Assessment, 
 secured to them what they conceived could be secured 
 under no other system of management ; •yf;r, the eventual 
 advantage of an adequate revenue from the waste lands 
 of the country ; a source vvhich, in their opinion, under a 
 judicious and enlightened administration of their terri- 
 torial ijiterest, it was not unreasonable to expect from 
 past/xperience, would yield a considerable and annually- 
 i' ^^easing augmentation to the public resources, &c. &c. 
 Now, let us see how far this expectation has been 
 realized. The province of Canara has been under 
 " Ri/otwar " management throughout the whole period 
 of our possession of it: Lord W. Bentinck notices it as 
 the only instance of successful management ; and yet, 
 with all the anticipated benefit from the waste lands, 
 what is the present state of the revenue ? 
 
 Mr. Hodgson has favoured me with the following 
 Statejnent of the Land Revenue, collected from Canara, 
 during eighteen years: viz. 
 
 From July 1799 Star Pags. 437,923 
 
 Do 1800-1 . . 451,409 
 
 Do 1801-2 , , . 448,466 
 
 Do 1802-3 464,930 
 
 Do 1803-4 463,698 
 
 Do 1804-5 465,093 
 
 Do. . . '. . 1805-6 ^QQ,5\2 
 
 Do 1806^-7 459,102 
 
 Do 1807-8 465,170 
 
 Do lSOS-9 462,994 
 
 Do 1809-10 458,718 
 
 Do 1810-11 ,. 457,911 
 
 Do 1811-12 ...» 458,600 
 
243 
 
 From July 1812-13 Star Pags. 458,987 
 
 Do 1813-14 458,061 
 
 Do 1814-15 458,836 
 
 Do 1815-16 455,814 
 
 Do 1816-17 457,042 
 
 What are we to infer from this statement ? Undoubt- 
 edly, that the " llyolxsoar " mode of management contains 
 no principle of improvement; that, when undertaken 
 under every circumstance of advantage, it remains nearly 
 stationary ; that under it, the landholder and the peasant 
 must remain poor, while the Government can never 
 become rich. If its notorious failure to produce an 
 increase of revenue were its only demerit, I should never, 
 probably, have meddled with it ; but it is a system, in my 
 opinion, calculated to produce poverty and wretchedness, 
 wherever it exists. 
 
 We have the assurance of Lord W. Bentinck, that the 
 Assessment of Canaj'a was light in 1806 ; the Court of 
 Directors evidently looked to an increase of resource 
 from the cultivation of the waste lands ; but what, after 
 all, has been the result? The province did not, in 
 1816-17, yield a larger revenue than in 1805-6; and we 
 have the following declaration from the Board of Revenue 
 at Fort St. George in 1818, that even this stationary 
 revenue, is more than the province can pay : 
 
 60. " To the practice of loading the lowly assessed or 
 '• industrious Ryot, with the tax of his less fortunate or 
 " more improvident neighbour (condemned by the very 
 " officer who adopted it as both "impolitic and unjust "); 
 " to the assumption of a maximum standard of assess- 
 " ment (the Beriz), much beyond the capability of the 
 *• country, even at the period of its greatest prosperity, 
 ^^ to the gradual approximation made to this high stand- 
 
^44 
 
 " ard, in the actual demand on more than half the landed 
 " property in Canara ; and to the annual variation and 
 '' consequent uncertainty in the amount of the assessment 
 " on individual Ryots, as much as to any temporary re- 
 '^ duced value of produce, or the imposition of new 
 " indirect taxes, are to be ascribed the decline in airri- 
 " gulture, the poverty among the Ryots, the increased 
 " private sale of landed property by the landlords, the 
 *^ difficulty of realizing the collections, and the ne- 
 " cessity, before unknown, of disposing of defaulters' 
 " lands, in satisfaction of revenue demands ; which, 
 '* after fourteen years residence in Canara, at length 
 " constrained the late Collector to record his conviction, 
 " that the present assessment is beyond the resources of 
 " the province." ! ! !— See Minute of the Board of Re- 
 venue at Madras, dated the 5th January 1818. — " Re- 
 venue Selections," page 898. 
 
 THE END. 
 
 LON DON: 
 V&IKTKD BV COX AXD BAYLIS, QIHEAT QUEEN iTRl'Sr 
 
 ^ 
 
1 KKTUKK TO D^SS'Um WHICH BORKOWBD 
 
 This 
 
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 Rfn. cm. JUN 2 1 
 
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 (S3845L)4970 
 
 General Library . 
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