Affairs of the East India Company: Minutes of evidence, 28 May 1830

Pages 1094-1098

Journal of the House of Lords: Volume 62, 1830. Originally published by His Majesty's Stationery Office, London, [n.d.].

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Die Veneris, 28 Maii 1830.


The Lord President in the Chair.

Robert Rickards Esquire is called in, and further examined as follows:

Will you turn to No. 2. of the Account of Finances of India which has been laid before this Committee, Page 14; what is that Account?

It is an Account of the Total Annual Amount of the Revenues and Charges of the several Presidencies in India from the Year 1809-10 down to the Year 1826-27.

What appears upon that Account to be the Surplus Revenue and Surplus Charge for those Years?

The Two last Columns of this Account, entitled "General Result," contain, the one the Surplus Revenue, and the other the Surplus Charge. I have cast them up; and the Surplus Revenue appears to be £4,036,928, and the Surplus Charge £20,181,493; therefore leaving a Surplus Charge on the whole Account of £16,144,565, according to an Analysis which I beg leave to submit to your Lordships Inspection. (fn. 1)

This Account is entirely confined to the Territorial Charges? Entirely.

It professes to comprise all the Territorial Charges, both at Home and in India?

In the Year 1813, similar Accounts that were then laid before the Select Committee of the House of Commons professed to contain, under the Head of "Charges," every Political Expence incurred Abroad, including the increased Expenditure occasioned by the Mysore, Mahratta and other Wars, the Egyptian Expedition, and the Equipments for the Reduction of our European Enemies in the Indian Seas; in the Words of the Committee, "every Charge incurred in the Defence of their Possessions in India;" I therefore presume that this Account No. 2. is drawn out on the same Principles, and therefore contains, not only all the Charges and Expences of a Period of Warfare in India, but the whole of the Territorial Charges paid in England.

In your Opinion, is the Amount of Surplus Charge above Revenue during those Years correctly stated?


I have always been of Opinion, since the Year 1813, that these Accounts exhibited on the Face of them a large Surplus Revenue; Official Documents, as well as authentic Writings, now extant, confirm the Fact, that there has been a large Surplus Revenue from our Territories in India ever since we got Possession of the Dewanny in Bengal. It is so stated in Publications by Mr. Verelst and Mr. Hastings, former Governors General of Bengal. From these Publications we learn that large Sums of Money from the Revenues were annually supplied for Purchases of Investments for Europe and for China. On some Occasions the Court of Directors were so anxious to procure Investments from Abroad, that they directed their Governments in Bengal, not only to purchase to a large Amount, but to send Home, Goods, even though those Goods might be attended, upon the Sale of them in this Country, with actual Loss. Ever since the Year 1793, regular Accounts have been laid before Parliament similar to the one I have now under Examination; and in the Year 1813 I published a small Work containing an Analysis of those Accounts, in which it appeared to me to be made out unanswerably, that the Excess of Charges from 1793 to 1808-9 would in no degree account for the Increase of the Indian Debt. It therefore followed that if the Principal of the Indian Debt was not incurred on a Political Account, the Interest on the Debt ought not to be inserted as a Territorial Charge. The Sum of Interest paid on Debts for that Period was £20,083,569, whilst the Net Increase of Debt for the same Period was £20,905,194; it therefore took the whole Sum of borrowed Money or Principal to pay the Interest alone during the Period in question. The Way in which the Debt has occurred is simply this: the Governments Abroad, in execution of the Instructions they received for the Purchase of Investments for Europe and China, send Orders upon the Revenue Treasuries of different Parts of the Country in favour of the Commercial Residents, to the Amount of several Lacs of Rupees, to be applied as required in the Purchase of Goods; this Revenue being abstracted from the Territorial Funds, when Wars occur in India there is a Deficiency for the Expences of those Wars, and then Loans are recurred to to supply that Deficiency; but the Deficiency having occurred in consequence of previous Advances being made to the Commercial Department, it is clear that the Commercial Department ought to bear the Burden of that Loan, and not the Territorial. If therefore the Principal of the Debt does not appertain to the Territorial Head, it is quite clear that the Interest on those Debts ought to be similarly excluded from this Account; and if the Sum Total of that Column be deducted from No. 2. it will leave an actual Surplus on this Account of £16,743,410, besides other Items.

Putting the Debt entirely out of the Question, during a long Series of Years, does it, upon the Accounts of The East India Company themselves, appear throughout that the Revenue has exceeded the Charge, notwithstanding the Expence attendant upon Wars?

If the Debt is excluded from this Account, it is quite clear that there has been a Surplus, after paying all the Territorial Charges in England, from the Year 1809-10 to 1827-28, of the Sum I have just mentioned, together with other Items, which in the Way of Adjustment would also attach to this Account. As regards the former Period, I have also shewn in another Place that a large Surplus existed. (fn. 2)

In your Opinion, is the Debt solely or principally incurred by Losses upon Remittances?

The only Inference to be drawn from this Fact is, that the whole Debt must be Commercial, and therefore partly incurred from the Manner in which Remittances to this Country are made.

In your Opinion, is a Loss upon a Remittance by Investment rather than by Bill, to be charged upon Commerce and not on Territory?

Certainly, upon the Commerce, in as far as the Advance is made for Commercial Purposes.

Could the Territorial Charges incurred at Home be remitted without Loss in any other Manner?

I conceive there can be no Difficulty at any Time in making a Remittance in Bills, and more especially if the whole Trade were in the Hands of Private Merchants.

Have there not been Periods in which the Loss upon Remittance by Bills would have been very great?


On the contrary, the Remittance to this Country up to the Year 1817 or 1818 has been very favourable; since that the Exchange has fallen to Rates bordering upon the real Par, and is now regulated by the same Rules and Laws which govern Exchanges with every other Part of the World where Commerce is free.

Have you endeavoured to form an Opinion as to what the Exchanges would have been if the Remittance of those large Sums had throughout taken place by Bills?

If the Trade had been as free as it is now throughout the whole Period here adverted to, there can be no doubt that the Exchange would have been regulated upon the same Principles which now operate upon it.

You are aware that in the Year 1813, by the Act of Parliament establishing the present Charter, a Separation was established between the Commercial and the Territorial Accounts of the Company?

I have understood that it was so. I have read the Act of Parliament; but I understand there was a Paper prepared and printed, containing the Principles upon which the Separation was ordered to take place; that Paper I have not seen; it has never fallen into my Hands.

Are you not aware that previous to the Year 1813 the Commercial and Territorial Accounts were confounded, and that subsequently to that Period they have been separated, under the Act of Parliament?

The Act of Parliament requires Separation of the Territorial and Commercial Account ever since the Year 1813, but there has been no such thing as a satisfactory Commercial Account laid before the Public from that Time down to the present.

Are you not aware that by the Act of Parliament the Company can only take from the Territory Sums in Repayment of Sums paid by the Commerce for the Territory in this Country?

The Act of Parliament requires Advances to be made in India sufficient to cover Territorial Payments in England; but it does not, as I conceive, restrict Advances absolutely to that Limit, and they would accordingly appear to have considerably exceeded it.

Do you mean that the Advances in India have been larger than the Advances for the Territorial Purpose in England?

Yes; and here is an Account before me which shews it.

Are you not aware, that if that has been the Case both the Directors of The East India Company and the Board of Controul must have violated the Act of Parliament?

That is not for me to answer; as a Matter of Opinion, I should say not; but in allusion to the Fact itself, here is an Account, No. 13. of the Papers relating to the Finances of India and the Trade of India and China, in which it is stated that the Total Amount of Advances made to the several Presidencies and Settlements in India, for the Purposes of Commerce, in so far as regards the Purchase of Investments to Europe, amount to £30,545,069 from 1814-15 to 1826-27, of which £24,338,050 were Sums in Repayment of Territorial Charges defrayed in England; whereas in the Account No. 2. the Territorial Charges paid in England amount only to £18,833,065, leaving therefore an Excess of Advance to the Amount of £5,504,985.

Are you aware that the Interest of the Indian Debt is first charged in the Indian Accounts as a Debt incurred in India, and that Sums are set apart in India, in the Account, to the Payment of that Interest; but that a very large Portion of that Interest being in fact paid in England, the Funds for the Repayment to the Company of that Interest in England are remitted in addition to such Funds as are necessary for the Repayment of those Charges which appear as Territorial Charges in this Account?

That beyond doubt is the State of the Case as the Accounts are now arranged; but if the whole Revenues of India really yield a Surplus over and above the actual Charges, it appears to be of little Consequence, as regards that Surplus, whether those Charges be wholly paid in India or partly in England; whilst, as to Interest on Debt, that should only be paid, in my Opinion, out of that Fund to which the Principal fairly belongs.


That is on the Supposition that you are correct in considering that Debt as a Commercial, not a Territorial Debt?

Of course.

You have stated that the Sums issued in India for Investments being issued for general Purposes, and the issuing of those Sums making such a Deduction from the Revenues of India as occasions an Increase of Debt for the paying of current Expences, particularly in Times of War, that Debt so incurred should be considered as a Commercial, not a Territorial Charge, inasmuch as it is incurred for making good the Deficiency occasioned by Investments for Commercial Purposes?

I conceive that to be the Case; on the Supposition, always, that there is that real Surplus Revenue which these Accounts appear to exhibit.

If however this Opinion of yours be correct, that those Investments in India are made for Commercial Purposes, still, would not an Excess of Debt incurred in a Number of Years, beyond the Sums issued for Investment, be still chargeable to the Territorial Revenues? For instance, if Two Millions were issued in any one Year for Commercial Investment, and a Debt of Four Millions be incurred, would not Two Millions of that Four be charged to Territory, and the other Two, being required to make good the Defalcation of Revenue, in consequence of the Commercial Investments, be also charged to Territory?

The Question I presume supposes that a Loan of Four Millions was necessary for the Purposes of the State; Two Millions to meet local Expences, and Two to cover Territorial Charges in England by Investment in Goods. But on the Presumption of there having been a Surplus Revenue throughout the whole of the Period here adverted to, there would have been a Sufficiency of Territorial Funds to have answered the whole Expenditure of Four Millions, without the Necessity of a Loan; it therefore follows that all borrowing in such a Case is or ought to be considered purely Commercial.

In that Answer you first suppose that there has been a Territorial Surplus, at which Supposition you only arrive by striking out the whole Interest of the Debt from the Charge on the Territory of India; then you say, that there having been this Surplus, at which you only arrive in that Manner, all Debt incurred must have been for Commercial Purposes?

I think I have clearly proved, in the Publication before referred to, that there was a Surplus Revenue in India to a very large Amount between the Years 1793 and 1808-9. If then that Surplus Revenue really existed, what I contend for is, that there could have been no Occasion for borrowing Money for Political Purposes; and consequently, that if the Principal of the Loans in India does not attach to the Territorial Department, neither can the Interest upon those Loans; and these are the Grounds which induce me to think the Interest on Debts should also be excluded from the Statement No. 2. now before me.

You have been asked whether you are not aware that previous to 1813 the Commercial and Territorial Accounts were confounded, and that therefore it was extremely difficult to discover what was the actual Surplus of Territorial Revenue, what Portion of the Investment proceeded from the Application of Commercial Funds, and what Portion from the Application of Territorial Funds, in Repayment of Territorial Advances?


As the Accounts now stand, there is some Difficulty in separating the Territorial from the Commercial Departments; but the Territorial Accounts, being the simplest, are more capable of being analysed than the Commercial; and according to the View which I have taken of the Revenue Accounts, particularly of this Account, No. 2, which is in fact a Cash Account of Receipts and Disbursements, the Surplus which I have contended for clearly exists. It might be shewn or corroborated by other Statements prepared also from these Accounts. I hold one in my Hand, a Statement taken from the Accounts contained in this Collection, which strongly corroborates my View of the Account No. 2, but it is not sufficiently precise to be considered as a perfectly accurate Statement, inasmuch as it admits of various Adjustments, but it will serve to shew, as a general Result, that there has been throughout the whole of the Period adverted to from 1793 to 1827-8, inclusive, an Increase of Debt far beyond what can be accounted for by the Excess of Political Charges. In this Statement I take the Accounts as they are exhibited in this Collection, and without making any Deduction on account of the Interest on Debts; and it stands as follows:

On the 30th of April 1793, the Indian Debt is stated, in Appendix No. 7. to the Second Report of Select Committee, to have been £ 7,971,665
Ditto - 1809 - Ditto - as per Ditto - 30,876,788
Net Increase - - 22,905,123
Whilst the Excess of Political Charge, as per No. 6. of Appendix to the same Report, and No. 11. of the Third Report for the same Period, was only - - £5,078,015
And the Political Charges paid in England, as per No. 46. of Appendix to Third Report, (the Committee however doubting whether the whole were properly chargeable to the Territorial Head,) - - - - 6,138,448
Difference to be accounted for - -£11,688,660

So that 'the Amount of Loans had exceeded the Total Amount of Surplus Charges during that Period in no less a Sum than £11,688,660. This is the Result of the Official Documents referred to, without a single Deduction on account of Interest, or of any other Charge contained in the Official Documents. Again-

On 30th April 1827, the Indian Debt is stated, in No. 4. of Papers relating to the Finances of India, &c. February 1830, to be - - £42,870,876
Making therefore the Increase of Debt since 1793 £34,899,211
Now, as the Surplus Charge from 1809-10 to 1826-27, as per No. 2. of the same Papers, &c., is only £13,589,894
And the Surplus Charge of the former Period, as above 11,216,463
There is still a Difference to be accounted for of £10,092,854

That is the Difference by which the Increase of the Debt in India has exceeded all the Political Charges included in these Official Documents.

That is taken from the Accounts of The East India Company?

It is.

Your own View, and your own Statement goes much beyond that?

It does; for this is a Surplus after paying the whole Interest, together with every other Charge claimed to be Political; whereas if the Column of Interest were excluded from the Account the Surplus would be much greater. (fn. 3)

You are aware that when the Territorial and the Commercial Accounts were separated, it was understood by the Board of Controul that the Debt of India was a Charge upon the Territory; but it never was determined, nor has been to this Day, whether the Bond Debt in England is a Commercial or a Territorial Debt, or in what Proportions to be divided between those Two Accounts, the Company declaring that the Loss is chargeable to the Territory, it having been held by the Board that if not the Whole certainly a Portion is chargeable to Commerce?


I am aware that it is so stated in Memoranda appended to Accounts, but the Interest on Bond Debt is nevertheless included in the Company's Accounts under the Head of "Commercial Payments;" and if my View of the Company's Accounts be correct, and there be that Surplus Revenue which appears to me to be the Case on a careful Examination of these Documents, then the whole of the Debt both at Home and Abroad must be Commercial, and can be nothing else.

You only arrive at that Surplus Revenue by taking it for granted that the whole Debt is a Commercial Debt?

I do not exactly take it for granted, because I think I have proved in the Publication before referred to, and in the Analysis which I hold in my Hand, as well of the Account No. 2. as of the former Period, that there has been a large Surplus Revenue exhibited by the public Accounts since 1793 to the present Time.

Are you aware that it has been stated to this Committee that the Average Out-turn of the Rupee remitted in Goods, deducting Interest, since the Commencement of this Charter, has been 2s. 2d. 69/100; and that the Rupee, if it had been remitted in Bills at a Mercantile Rate of Exchange, drawn from Calcutta, deducting Twelve Months Interest, included in the Rate, would have been 2s. 1d. 69/100; that the Difference therefore in favour of Remittance in Goods is 1d. the Rupee; and that the Advantage derived by the Company since the Commencement of the Charter from remitting in Goods rather than Merchants Bills is £800,660?

I am aware that a Difference has been calculated in reference to the Exchange, but I cannot say, from Recollection what that Difference amounts to, upon the whole of the Company's Remittances from India.

Have you yourself looked at the Rates of Exchange which have prevailed since the Commencement of the Charter, and formed any Statement of the Average Rate which has prevailed since that Period?

I know what the Average Rates of Exchange have been since the Commencement of the present Charter; and from examining such of the Company's Accounts as are in Print, I perceive the Rates of Exchange at which the Indian Currency is therein converted into Sterling Money; I am fully aware that those Rates exceed the established or ordinary Rates of Exchange between India and England in the latter Years, or from the Year 1817 or 1818.

Are you not aware that when in Evidence the Out-turn of the Rupee is spoken of in Goods, no reference whatever is made to the Rate of Exchange?

I have always understood that the Company represent themselves as having sustained a considerable Loss in consequence of the Rates of Exchange they are compelled to adopt.

The Loss the Company sustain by means of what is called the Board Rate of Exchange is in the Repayment in India to them, for their Advances for Territorial Purposes in this Country, of a smaller Quantity of Money than they would receive if they were repaid at the Mercantile Rate of Exchange at the present Time; but that has no reference to the Profit or Loss in the Remittance of their Revenue so received by them in India to England in Goods; when the Out-turn of that Rupee is stated, the real Result of the Mercantile Adventure is stated by which that Rupee is remitted to this Country in Goods?

Then the Profit or Loss sustained on that Adventure must be taken into account. The Remittance, when made in Goods, must be profitable to yield them a better Rate of Exchange than the ordinary Rate; but I have no Knowledge of this being the Case.


When the Out-turn of the Rupee is spoken of as remitted in Goods, no reference is made to the Rate of Exchange; it is considered to be One Transaction - the Remittance of the Rupee to England in Goods; and when the Company speak of the general Effect of their Operations, as Persons advancing here from Commercial Funds to the Territory, and receiving Repayment in India at a fixed Rate of Exchange below the Mercantile Rate of Exchange;-in looking at the whole of their Transaction, beginning in this Country with the Advance to Territory, and ending in the Repayment in England according to what may be the Out-turn of the Rupee, in that respect the Rate of Exchange is undoubtedly taken into Calculation?

I do not exactly understand the Difference, or how the Company in this respect arrange their Accounts.

Are you aware that there are Two Transactions before the Company receive Payment in this Country of what they advance from Commercial Funds in this Country for Territorial Purposes? That the first Transaction is the Advance in this Country of its Funds, and the Repayment in India of those Funds by the Territory at a fixed Rate of Exchange; that at present upon that first Transaction there is considerable Loss, the Board Rate of Exchange being much more unfavourable than the Mercantile Rate of Exchange? Then the second Transaction consists in the Remittance to England in Goods or in Bills of the Sums received by the Company in India from the Territory, in Repayment of those Advances made on the Territorial Account in England. On that second Transaction there may be a Loss, or there may be a Profit; but in considering the Result of that Transaction it is not necessary to look at the first Transaction, which terminates in the Repayment in England of the Sums advanced here for the Territory; but that the Company, when they look at the whole Result of the Account, beginning with the Advance in this Country of the Funds for Territorial Purposes, and ending by the Repayment in this Country of the Sums so advanced, must undoubtedly place against whatever Profit they may make by Remittance to England, and repaying Goods, whatever Loss they may sustain by the unfavourable Rate of Exchange in the first Transaction; or, if there be Loss in the second Transaction, to that Loss they must add the Loss sustained in the first?

In the Way in which the Accounts are now stated to be kept, the Loss on the first Transaction adverted to in the Question would appear to be sustained; but according to my View of the Case the Advances for Territorial Charges in this Country are made in the first instance out of the Revenues of India, and remitted in the Shape of Goods to this Country; as to which Mode of Remittance there has been sustained a considerable Loss also, as certified in No., of "Accounts and Papers, March 1830." I should however consider the whole as One Transaction, for which Commerce receives Advances in India at certain Rates of Exchange; and if the Company have chosen throughout the whole of the Period of their last Charter to make their Remittances in Goods, notwithstanding the obvious Losses which they have sustained in each Year, as well in Exchange as by the Sale of Goods in this Country, they must be content to bear that Loss, more especially as the Law leaves the Mode of Remittance optional with themselves. It cannot, in my Opinion, at all attach to the Territorial Account, where I know it is wished to affix it.

Are not those Funds, which are produced in this Country by the Remittance of Goods purchased by Payments in India by the Territory in Repayment of Advances made by the Commerce in this Country for Territorial Purposes, properly Commercial Funds?

The Accounts are so stated, I am fully aware; but my Belief is, that those Funds are not the Result of actual Commercial Capital, but wholly supplied from the Revenues of India in the first instance; in other Words, that the Revenue supplies the Commerce with the Means of carrying on all its Commercial Transactions.

That is by Repayments?

For every Purpose, including the Charges incurred in this Country.

Do you suppose that the Company never made an Advance for Territory from Commercial Funds?

It really does not appear from these Accounts that they have; that is, from Funds arising out of a real circulating Commercial Capital.

In what Manner must their Advances for Territorial Purposes have been originally made, when, being a Commercial Body, they assumed the Character of a Power in India?


There are several authentic Publications extant to prove that the Company's Trade was most amply if not entirely supplied with Funds from the Revenue ever since their Acquisition of Power in India, or from the first of the Dewanny Grant in Bengal. I conceive therefore that the whole of their original Commercial Capital is now either dissipated or fixed in Buildings and other Articles of Dead Stock; and that the whole of the active Capital for Commercial Purposes is from Year to Year supplied by the Revenues of India, and the Revenues alone.

Are you of Opinion that the Indian Trade, previous to 1813, was an unprofitable Trade?

Quite so.

That the China Trade was equally so?

The whole Trade taken together I believe to be unprofitable. I have an Account before me for the Year 1828-29, lately printed, which clearly shews it.

That those Two Trades have been constantly unprofitable?

Yes; and the Fact may be further inferred from The East India Company having never furnished yet to the Public such an Account as I think the Public has a Right to expect of the Out-turn of their Commercial Operations. There is in fact no Commercial Account of the Company's before the Public that can satisfy a Merchant of the Result they contend for, or the Realization of actual Commercial Profit.

If that be the Case, how do you arrive at the Conclusion you do upon the Subject?

I speak of the Commercial Accounts as being in so obscure a State that no satisfactory Result can be drawn from them; but from the Revenue or Territorial Accounts I think a more satisfactory Result can be drawn; and the Result which appears to me to be the only One deducible from the printed Revenue Accounts is the One which I have this Day given to the Committee.

If previous to the Year 1813 the Commercial Accounts of the Company were unintelligible, and were at the same Time mixed up with the Territorial Accounts, before the Separation of the Two Accounts under the Act of 1813, must not the whole Account be unintelligible, and must it not be impossible to come to any correct Conclusion upon those Accounts?

This Account, No. 2, is a clear Account as far as it goes; it is a Cash Account of actual Receipts and Disbursements; and all I should say with regard to this Account is, that it does not contain all the Receipts which it ought to contain for the Purpose of this Inquiry, and therefore does not exhibit so large a Surplus as might be deduced from it under certain Adjustments. I should make the same Remark in respect to a similar Account which was laid before the Select Committee of the House of Commons of 1810, extending from the Year 1793 to the Year 1808-9, inclusive. That Account, as well as the One now before me, was an actual Cash Account of Receipts and Disbursements, and the Result of it was precisely that which I have already explained.

What Receipts are there which in your Opinion ought to have been entered into this Account which are not here?


In the Account No. 2. there is a Note referring to the Year 1822-23, stating, "in this Year the Balance of the Loan of £2,500,000 obtained from the Public in 1812 was discharged, which amounted to £557,335." Now it appears from an Act which I hold in my Hand, the Act of 3d George the 4th, Chapter 93, that this was a Loan made to The East India Company in the Year 1812, and that in 1822-23 this Loan was reduced by sundry Payments to £1,857,322, and that it was discharged partly by a Claim on the Part of the Company against the Government to the Amount of £1,300,000 for sundry Expences incurred by them on account of His Majesty's Government in India and at St. Helena, when the Balance, or £557,335, was paid in Cash, and therefore included, as well as the former Sum, under the Head of the Charges of this Account. If then the whole of that Loan was liquidated, as would thus seem to be the Case, by Charges contained in this Account, it is but fair that the Account should also have Credit for the Sum borrowed; whence, if this £2,500,000 be added to the Receipts, it would make the Surplus so much larger.

Does it appear that this Account contains in any one Year a Statement of the Sum raised by Loan either in India or in England?

That is precisely the Defect. I think it ought to contain the Receipt of that £2,500,000 in 1812, since the Liquidation of that

Loan appears to be contained in these Charges, or else that Portion of the Charges should be deducted.

Will you refer to No. 20. of the Accounts, and state whether the Receipt of that Sum of £2,500,000 does not appear as a Loan from the Public in the Year 1822-23, as one of the Receipts?

It appears in that Account as a Loan in 1812; it is also continued in the Accounts Nos. 21. and 23. throughout the Years 1815 to 1822 inclusive, when it appears to have been finally discharged in the Way I have just mentioned; but the Discharge of it being included in the Political Charges of the Account No. 2, it appears to me that the original Sum ought similarly to be included in the Receipts.

Do you not find, on referring to No. 2, that that is a Statement of Revenues and Charges of the several Presidencies of India, and that the Account No. 20. is a general Statement, shewing the Amount of the Proceeds of the Sales of Goods and Merchandize of The East India Company in Great Britain, and of their Commercial and other Receipts, Charges and Payments in Great Britain?

Yes; those are the Headings of the Accounts. (fn. 4)

If the Receipt could not have appeared under both those Accounts, the one referring to European and the other to Indian Receipts, the Payment appearing in the Indian Payments, inasmuch as it must have been a Remittance from India to discharge a Debt incurred in England, yet if the Receipt could not appear under Receipts in No. 2, ought the Charge, in your Opinion, to be included in No. 2?

I think the Charge should not be included; or, if it is, that the Receipt should also be included.

Does it appear to you that there are any Items of actual Receipt not from Loan which are not brought into this Account?

I was going to explain Two other Items, which may be said to have been omitted, or rather which may fairly be added in the Way of Adjustment, in this Account No. 2; the one is referred to in the following Note; referred to from the Year 1823-24: "If the Sum paid to The Nizam in this Year for the Redemption of the Peshcush were excluded, there would be shewn a Surplus Revenue in 1823-24 of £473,722." This Peshcush or Tribute, payable annually to The Nizam, was bought up in the Year 1823-24 for a Sum of Money equal to Sixteen Years Purchase, or £1,201,201, as exhibited in the Account No. 2. B. It would be perhaps more correct to spread this Sum of £1,201,201 over the Sixteen Years, instead of placing it all into One Year at the End of the Account No. 2, so as thereby to magnify these Charges; I admit nevertheless that it was a Cash Payment made in that Year, and therefore I would not contend for any Sum on this Account being absolutely added to the Surplus; but if it were so spread over the Sixteen Years to which I refer, there would then only be a Portion of it chargeable to this Account No. 2, whilst £840,841 would remain to be placed to the Account of subsequent Years; this therefore may be either omitted or included; I merely remark upon it here, to explain the Memorandum, and the Nature of this particular Item of Charge; but there is another Sum adverted to in these Accounts, which is a Loan from The Nabob of Oude in 1815-16 of £1,109,975.


Where does that appear?

That will be found to be more particularly explained in No. 1. A. This Sum, as stated in the Note to the Account to No. 1. A, "was commuted for Territory by the Treaty of 1st of May 1816; the Amount may therefore be considered as a Deduction from the Charges of the War against Nepaul, from which State the Territory was conquered, and as increasing the Bengal Surplus Revenue to £3,051,442," instead of £1,941,467, given as the Surplus of that Year. Now as that Sum of £1,109,975, or the Equivalent thereof, is obviously included in these Charges also, inasmuch as it constitutes a Portion of the Expences of the Nepaul War, so I think ought the Sum itself to be included in the Receipts. These are Items which present themselves on the Face of the Accounts before me; there may be others which would admit of being added to this Account in the Way of Adjustment, but of which I have no Knowledge from Official Documents; but according to the Analysis which I have just given in of this Account, the total actual Surplus for the Nineteen Years included in it would amount to £21,194,226, if the whole Adjustments be admitted, or to £17,853,385, if Nos. 1. and 2. be excluded.

You have stated that the Commercial Accounts of The East India Company are so kept as to give no intelligible Results; could you give the Committee the Form of an Account which, if filled up from the Documents in the India House, would give that intelligible Result?

I could not do that here; it would require some Time to consider the Form and Matter of an Account of such complicated Commercial Transactions as those of the Company appear to be; but if the Books at the India House are kept as the Accounts of Mercantile Establishments generally are, there can be no Difficulty in making out such an Account.

When I was last before the Committee, having urged in my Statement respecting the Revenue System of India the great Importance of particular Attention, as well to its Principles as to its Effects, I could wish, with Permission, to say a few Words in addition to my former Evidence on this Subject.


The Matters requiring most Attention, as regards the Revenue Systems, may be classed under the following Heads:-First, Our Revenue Systems owe their Origin to Laws and Principles peculiar to our Predecessors the Mussulmans, according to which the Ruling Power assumes the Right of being acknowledged sole Proprietor of all the Lands in his Dominions: Secondly, As a merciful Consideration for saving the Lives and granting Freedom to conquered Subjects, the Mussulmans also enacted, that One Half the Gross Produce of the Soil should be the Share of the Sovereign; in the Enforcement of which Rent and Revenue came to be confounded, and the whole Class of Landed Proprietors, properly so called, annihilated, or reduced to Beggary, or to become cultivating Tenants, or Labourers, on their own Estates: Thirdly, That the Company's Government adopted these Principles on succeeding to the Dewanny in Bengal in 1765, as well as in other Provinces of India which have since submitted to our Arms, without, however, attaching to them the Condition of either Loss of Life or of Personal Freedom: Fourthly, That Half the Gross Produce of the Soil of extensive Dominions being utterly incapable of Ascertainment, the Imposition of such a Rate as a Land Tax could never be otherwise than unequal in the extreme, and the Collection of it arbitrary and vexatious: Fifthly, That the extreme Pressure of this exorbitant Revenue has for Ages kept down, and still keeps down, the great Mass of the Native Inhabitants in the lowest Stages of Poverty and Ignorance: Sixthly, That Hosts of Native Servants in subordinate Situations, and with low Salaries, are necessarily employed to collect this most oppressive and unequal Tax, whose Acts no Vigilance on the Part of Collectors or Judges has hitherto been able to controul, and whose Extortions on Private Account, in addition to the Public Revenue, add irremediably to the Wretchedness and Poverty of the People: Seventhly, That besides the excessive Pressure of this Tax, Government, in the Exercise of its Sovereign Proprietary Right, has transferred, by free Grant in some Instances, and by Sale in others, vast Tracts of Country from its ancient Hereditary Possessors to Persons named Zemindars, i. e. Collectors, and to absolute Strangers, which the ousted lawful Proprietors consider, in their present State of habitual Poverty, to be a greater Calamity even than the Tax itself.

Of these Facts abundant Proofs are now extant in various authentic Writings, and more especially in Four Folio Volumes of Revenue and Judicial Selections from Indian Records, printed by the Court of Directors, and liberally circulated for the Use of their Servants Abroad; and were I to quote what these Volumes contain in Evidence on the Subjects adverted to, it would only be to fill another. I shall therefore confine myself to a short Remark on the last Head, as connected with other Parts of my former Examination. When the Zemindarry Settlement was introduced into Bengal, the Lands were made over in full Proprietary Right to Zemindars, Hereditary Collectors under the Mussulman Administration, from our being then ignorant that actual Proprietors existed, called in Bengal Village Zemindars, Cultivating Zemindars, Village Proprietors, &c. Subsequent Inquiries, however, have brought to Light that these Proprietors had managed to preserve a Record or undisputed Tradition of their Rights throughout all the Rigour of Eight Centuries of Mohamedan Sway; but from the degraded State to which these Proprietors under the Operation of the Revenue System were reduced in 1793, they were overlooked, and their Lands transferred in Perpetuity to others. My Lord Hastings, then Lord Moira, on a Tour of Inspection through the Inner Provinces, expresses himself on this Head in the following Terms: "Within the Circle of the Perpetual Settlements the Situation of this unfortunate Class is yet more desperate; and though their Cries for Redress may have been stifled in many Districts by their perceiving that uniform Indisposition to attempt relieving them which results from the Difficulty of the Operation, their Sufferings have not on that Account been the less acute. In Burdwan, in Behar, in Cawnpore, and indeed wherever there may have existed extensive Landed Property at the Mercy of Individuals (whether in Farm or Jaghire, or Talook or Zemindarry,) of the higher Class, Complaints of the Village Zemindars have crowded in upon me without Number; and I had only the Mortification of finding that the existing System established by the Legislature left me without the Mans of pointing out to the Complainants any Mode in which they might hope to obtain Redress. In all these Tenures, from what I could observe, the Class of Village Proprietors appeared to be in a Train of Annihilation, and unless a Remedy is speedily applied the Class will be soon extinct. Indeed I fear that any Remedy that could be proposed would even now come too late to be of any Effect in the Estates of Bengal; for the Licence of Twenty Years which has been left to the Zemindars of that Province will have given them the Power, and they have never wanted the Inclination, to extinguish the Rights of this Class, so that no Remnants of them will be soon discoverable." In like Manner, the Commissioners of the Ceded and Conquered Provinces, speaking of those Persons, remark, "The whole of this valuable Class of Landholders may be considered to be extinct in the Lower Provinces, in consequence of the Interpretation put on the Title of General Zemindar, who was considered, by the Terms of the Permanent Settlement, as the universal Proprietor of the Soil, and the Fountain from which alone any other Person could derive a Property. "-Beng. Rev. Sel. vol. 1. p. 361-371.


It is no doubt known to several Noble Lords of this Committee, that Village Communities and other Associations exist among the Natives, to which particular Rights and Privileges attach. Among others, the Lands belonging to Villages are either a joint Property or divided into separate Estates. These Proprietors in the Upper Provinces of Bengal are called Malguzars. In the Settlements for the Revenue the Head Man of the Village, or Sudder Malguzar, is treated with and made responsible for the whole Amount. These joint or Village Properties, have consequently been treated in many Instances as one Estate, and in the event of the Sudder Malguzar, failing in his Payment, the whole Village is sold to make good Arrears; all the joint or minor Proprietors, the innocent and the Defaulters, suffer together; their ancient Hereditary Properties are lost to them, and made over, for a Price, generally to a Stranger, by whom the real Landlords are then considered in no better Light than mere Tenants at Will. Now, my Lords, it is impossible that Acts of this kind could have occurred, and they have unhappily been but too frequent, had we been better acquainted with Native Usages, Institutions, and Rights-had our Intercourse with the Natives been more intimate-or had Natives of Respectability and Character occupied Situations to enable them, either by conveying Information, or in the Exercise of their Official Functions, to check such Proceedings. But these Matters, with many others of a like Import, have strongly impressed on my Mind the Necessity of Native Co-operation and Aid, if we really mean to improve the State of India and the Condition of its People. At all events, the Experiment may be worth trying, since all other Means devised by the ablest of our European Public Servants have hitherto proved unsuccessful.

I was also asked whether I could suggest any Remedy for the Evils complained of in the Revenue Administration. On which Head I could not but feel diffident, as I still do, to offer Suggestions, where so many abler Persons have decidedly failed. One of the great Objections to our Revenue Systems, as I then observed, is the extreme Inequality with which an almost intolerable Tax presses on the great Body of the Community. There are Instances on Record of large Fortunes having been made by Dewans, Serishtadars, &c. in consequence of fraudulent and partial Assessments; the many are thus overloaded with Taxation to favour the Frauds and Corruptions of a few; and the Continuance of these Practices is not a little promoted by the utter Despondency into which the Ryots are thereby plunged. Its Effects cannot be better described than in the Words of the late Sir Thomas Munro:- "It is," he says, "well known that the great Body of the Ryots will submit to extra Assessments as long as they can pay them, rather than seek Redress from the Courts. There cannot be a stronger Proof in support of this Observation than the Occurrences in Coimbatoor for some Years past; where, though at least 30,000 Ryots have paid extra Assessments, and Numbers have been compelled to part with their Sheep and Cattle without Compensation, very few of all this Number, probably not Twenty, have ever sought Redress from the Zillah Court, though the Judge is acknowledged to be a most active and zealous Public Servant. It is therefore impossible to resist the Conclusion, that our Institutions are inefficient, and that the same Abuses, to a greater or less Extent, must prevail in every Province under this Government." All I would venture to add on this Subject is, that through the Medium of Village Communities and other local Associations, and with the Co-operation and Aid of respectable Natives, employed and controuled as before suggested, it is hoped that some Equalization of the Assessment, as well as some Mitigation at least of the other Evils of our Revenue System, may be effected; but I must at the same Time confess that I should be apprehensive neither this or any other Series of Measures will succeed, unless Confidence can at the same Time be generally inspired that the Land Tax or Aggregate Amount of Land Revenue will never be raised on the Inhabitants, but, on the contrary, gradually reduced.

Have any Circumstances lately come to your Knowledge which induce you to think that a more extended Residence of Europeans in India would be agreeable to the well-informed Natives, and be considered by them of Advantage to the Country?


There have, since I was examined on a former Day. The Circumstances I allude to are Facts which Two Natives of Rank and Intelligence are reported to have attested as the Result of their own personal Observation; and as Facts are of more Importance than Reasoning, I would beg leave to submit them, as a better Answer to the Question than any Opinions of mine. They may perhaps be the more deserving of your Lordships Attention, from the very uncommon Circumstance of their having been detailed in elegant English Speeches delivered by the Natives in question at a Public Meeting of the Inhabitants of Calcutta, on the Question of petitioning Parliament with reference to the Discussions pending in this House. One of then, Dwarkanauth Tagore, said, "With reference to the Subject more immediately before the Meeting, I beg to state that I have several Zemindarries in various Districts, and that I have found the Cultivation of Indigo and Residence of Europeans have considerably benefited the Country and the Community at large; the Zemindars becoming wealthy and prosperous; the Ryots materially improved in their Condition, and possessing many more Comforts than the Generality of my Countrymen where Indigo Cultivation and Manufacture is not carried on; the Value of Land in the Vicinity to be considerably enhanced, and Cultivation rapidly progressing. I do not make these Statements merely from Hearsay, but from personal Observation and Experience, as I have visited the Places referred to repeatedly, and in consequence am well acquainted with the Character and Manners of the Indigo Planters. There may be a few Exceptions as regards the general Conduct of Indigo Planters, but they are extremely limited, and comparatively speaking of the most trifling Importance. I may be permitted to mention an Instance in Support of this Statement. Some Years ago, when Indigo was not so generally manufactured, One of my Estates where there was no Cultivation of Indigo did not yield a sufficient Income to pay the Government Assessment; but within a few Years, by the Introduction of Indigo, there is now not a Bega on the Estate untilled, and it gives me a handsome Profit. Several of my Relations and Friends, whose Affairs I am well acquainted with, have in like Manner improved their Property, and are receiving a large Income from their Estates. If such beneficial Effects as these I have enumerated have accrued from the bestowing of European Skill on One Article of Production alone, what further Advantages may not be anticipated from the unrestricted Application of British Skill, Capital and Industry to the very many Articles which this Country is capable of producing, to as great an Extent and of as excellent a Quality as any other in the World, and which of course cannot be expected to be produced without the free Recourse of Europeans."

The other was an Individual whose Name is well known in this Country; the celebrated Rammohun Roy. He is reported to have said, "From Personal Experience, I am impressed with the Conviction, that the greater our Intercourse with European Gentlemen the greater will be our Improvement in Literary, Social and Political Affairs; a fact which can be easily proved by comparing the Condition of those of my Countrymen who have enjoyed this Advantage, with that of those who unfortunately have not had that Opportunity; and a Fact which I could to the best of my Belief declare on solemn Oath before any Assembly. I fully agree with Dwarkanauth Tagore in the Purport of the Resolution just read. As to the Indigo Planters, I beg to observe, that I have travelled through several Districts in Bengal and Behar, and I found the Natives residing in the Neighbourhood of Indigo Plantations evidently better clothed and better conditioned than those who lived at a Distance from such Stations. There may be some partial Injury done by the Indigo Planters; but on the whole they have performed more good to the Generality of the Natives of this Country than any other Class of Europeans, whether in or out of the Service."


The Facts contained in these Addresses completely verify what I ventured to predict in 1813, as to the Effect which the opening of the Trade to India would have in lightening the Pressure of the Zemindarry Tax. The Speeches may also be taken as a Specimen of what the Natives are capable, and received in Connection with the Recommendation I have taken the Liberty to offer, for a more extended Employment of them in high and responsible Offices. In forming my Opinions on this Head, I have not disregarded those of an opposite Tendency by distinguished Public Servants in India, whose Experience has led them to think differently of Native Probity and Efficiency; but whatever Faults or Defects may be observed in them now, from long-continued Habits, arising out of the Nature of the Government by which they have been ruled, I am persuaded, that when our Intercourse with the Natives is more intimate- when high Offices are opened to their Ambition, and Seminaries for their Improvement-when enviable Distinctions are found to be the Reward of Talent and Integrity, and Shame or Punishment to be the End of vicious Conduct-Character will become of greater Value among themselves; neither can I perceive any just Grounds for apprehending why the same Causes, the same Hopes and Fears, which generate high Principles in other more enlightened Societies, should fail, under like Circumstances, equally to influence the Conduct of Native Indians.

The Witness is directed to withdraw.

Ordered, That this Committee be adjourned to Friday next, One o'Clock.


  • 1. See-post, p. 504, Paper A.
  • 2. See post, page 505, Paper B.
  • 3. See post, page 505, Paper C.
  • 4. See post, p. 507, Paper D.