three fourths. An additional pay was allotted, to Captains of three shillings, CHAP. VII. Lieutenants two shillings, and Ensigns one shilling per day. 1769. the Directors to confine the their troops own territo Some uneasiness still continued with respect to the designs of Suja Dowla; Command of between whom and the Emperor considerable discordance prevailed. The Directors had forwarded the most positive orders for recalling the brigade from operations of Allahabad; and for confining the operations of the Company's army entirely within their within the limits of the Company's territory. The Council thought it necessary ries. to disobey; and in their letter went so far as to say that they "must express their great astonishment at such an absolute restriction, without permitting them upon the spot to judge how far, from time and circumstances, it might be detrimental to their affairs." The most important particular in the situation of the Company in Bengal was Growing scarcity of the growing scarcity of pecuniary means. In the letter from the Select Com- pecuniary mittee to the Court of Directors, dated 21st November, 1768, "You will means. perceive," they say, "by the state of your treasury, a total inability to discharge many sums which you are indebted to individuals for deposits in your cash, as well as to issue any part of the considerable advances required for the service of every public department. And you will no longer deem us reprehensible, if a decrease in the amount of your future investments, and a debasement of their quality, should prove the consequence." By a correspondence between the Presidencies of Fort William and Fort St. George, in the beginning of March, 1769, the dangerous consequences to be apprehended from the exhausted state of their treasuries, and the necessity of establishing a fund against future emergencies, were mutually explained and acknowledged. In two separate consultations, held by the President and Council at Fort William, in the months of May and August, the utility, or rather the indispensable necessity of such a fund underwent a solemn discussion; and was pronounced to be without dispute. But as the expenses of the government left no resource for the creation of it, except the diminution of the investment, or quantity of goods transmitted to the Company in England, they resolved upon that reduction, and limited to forty-five lacs the investment of the year. Even this resource was in a very short time perceived to be insufficent. On the 23d of October a deficiency of 6,63,055 rupees appeared on the balance of receipts and disbursements; and the President and Council in their Minute declared, "That however the public might have been flattered, they could not flatter themselves, with any expectations from their revenue; and that the BOOK IV. only expedient within their reach was to open their treasury doors for remittances." * 1769. India upon the home. Bills drawn by These remittances consisted chiefly of the money or fortunes of the individuals the servants in who had grown rich in the Company's service, and who were desirous of transCompany at mitting their acquisitions to Europe. Such persons were eager to pay their money to the Company's government in India, upon receiving an obligation for repayment from the Company in England; in the language of commerce, for a bill upon the Company payable in England. The money thus received, in other words borrowed, was applied to the exigencies of the service; and by augmenting their resources was always highly agreeable to the servants in India. The payment however of these loans or bills in England was apt to become exceedingly inconvenient to the Directors. The sole fund out of which the payment could be made was the sale of the investment, or the goods transmitted to them from India and China. If the quantity of these goods was less in value than afforded a surplus equal to the amount of the bills which were drawn upon them, they remained so far deficient in the ability to pay. And if the goods were sent in too exorbitant a quantity, the market was insufficient to carry them off. An opposition of interests was thus created between the governing part of the servants abroad, and the Courts of Directors and Proprietors at home. For the facility of their operations, and the success of their government, it was of great importance for the servants to preserve a full treasury in India, secured by a small investment, and the receipt of money for bills. It was the interest of the Directors to have an ample supply of money at home, which on the other hand could only be produced by a large investment, and a moderate transmission of bills. The Directors, accordingly, had given very explicit instructions on this subject; and in their letter of the 11th of November, 1768, after acknowledging the growing deficiency of the funds in India, had said; "Nevertheless, we cannot suffer ourselves to be drawn upon to an unlimited amount, the state of the Company's affairs here not yet admitting us to answer large drafts upon us from India; but should the exigency of your affairs require your receiving *The President and Council of Fort William, in their letter (dated the 21st of March, 1769) to the President and Council of Fort St. George, speak in pathetic terms of "the incontestable evidence they had transmitted to their honourable masters of the exaggerated light in which their new acquired advantages had been placed," and of the change of views which they expected them in consequence to adopt. 1769. money into your treasury, we prefer the mode of borrowing at interest to that CHAP. VII. of granting bills upon us: We therefore permit you to take up such sums on interest, for one year certain, as will answer your various demands, which are to be paid off at the expiration of that period, or as soon after as the state of your treasury will admit of. You are therefore to confine your drafts upon us, by the ships to be dispatched from your Presidency in the season of 1769, to the same amount as we allowed last year, viz. 70,0007.” * When the amount of the sums which it was the desire of individuals to send home exceeded the amount which it was permitted to the government in India to receive, in other words to draw bills for upon the Company at home, the parties who were deprived of this channel of remittance betook themselves to the French and Dutch factories, and paid the money into their treasuries for bills upon their respective companies, payable in Europe. This, from an early period of Mr. Verelst's administration, had constituted a heavy subject of complaint; as making these subordinate settlers to abound with money, while the English were oppressed with want. As he ascribed the financial difficulties of the Company's government merely to a defect of currency, not of revenue, so he ascribed the defect of currency to the remittances which were forced into the Dutch and French channels; though neither of these nations carried any specie out of India, and were only saved to a certain extent the necessity of importing bullion. To him it appeared surprising that the Dutch and French Companies should find it easy to pay the bills which were drawn upon them for money received in India; but that the English Company should find it impossible; and he ascribed the restrictions which they imposed to a timid and narrow spirit.† 66 * Eighth Report from the Committee of Secrecy, 1773, Appendix, No. i. In their letter 17th March, 1769, they so far modify their former directions as to say, Upon reconsidering the subject of remittances, we find it so connected with that of the investment, that the increase of the former must always depend on that of the latter. The produce of our sales here is the only channel of our receipts; and our flourishing situation in India would not avail us, if we were to suffer ourselves to be drawn upon to the amount of the cost of our homeward cargoes. In order therefore to unite the advantages of the Company and their servants, we do permit you to increase your remittances, by the ships dispatched from Bengal in the season of 1769, beyond the limitation in our letter of the 11th November last, so far as one half of the sum which your investment sent home in that season shall exceed the amount of sixty lacks. But if you do not send home an investment exceeding that sum, you must then confine drafts upon us agreeably to our said letter of the 11th November last." your In his letter to the Directors, dated 26th September, 1768, he says, "The extent of the Dutch and French credit exceeds all conception, and their bills are even solicited as favours. The precise sums received by them for some years I have endeavoured to ascertain, though 2 M VOL. II. 1769. Book IV. One circumstance, however, which constituted a most important difference, he was ill situated to perceive. The French and Dutch Companies were chiefly commercial; and whatever money was received in India was laid out in the purchase of goods; these goods were carried to Europe, and sold before the bills became due; the bills were paid out of the proceeds; and a great trade was thus carried on upon English capital. The English Company, on the other hand, was become a regal, as well as a commercial body; the money which was paid for remittance into their treasury in India was absorbed in the expense of the government; and so much only as could be spared was employed in the purchase of investment. This was one cause undoubtedly of the comparative inability of the English Directors to pay the bills which were drawn upon them. In the Consultation of the 23d of October, in consideration of great exigency, it was resolved, that the Board would receive all monies tendered to the Company's treasury from that day to the 1st of November, 1770; and at the option of the lenders, grant, either interest notes payable in one year; or receipts bearing interest at eight per cent. for bills to be granted at the sailing of the first ship after the 22d of November, 1770, payable, with three per cent. interest, in equal proportions on each tender, at one, two, and three years sight. And as a resource to the Directors, it was resolved to enlarge the investment by purchasing, not with ready money, but with bonds at eight per cent., and one year's credit. This was the last considerable act in which the Governor was engaged. He resigned his office on the 24th of December, and was succeeded Mr. Verelst resigns the office of President, and is, succeeded by Mr. Cartier. year from hitherto without success; but if we only form our idea from the bills drawn this by Mr. Cartier. A new treaty had been concluded with Suja Dowla, which CHAP. VII. allayed whatever suspicions the ambiguous conduct of that Governor had raised, and Mr. Verelst left the three provinces in profound tranquillity.* 1769. * The principal materials, before the public, for the history of Verelst's administration, are found in the Reports of the Two Committees of 1772, and in the Appendix to his own View of Bengal. Information, but demanding to be cautiously gleaned, is obtained from the numerous Tracts of the day. |