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 Marlis, 23 Februarii 1830.
The Lord President in the Chair.
Thomas Gore Lloyd Esquire, Accountant General of The East India Company, and James Cosmo Melvill Esquire, Auditor General of The East India Company, are called in and examined as follows:
(To Mr. Melvill.) Can you state the aggregate Result of the Financial Administration of the Territorial Branch of Revenue since the Commencement of the present Charter?
During the Fourteen Years of which the Accounts have been made out the Territorial Gross Revenue has aggregated £284,804,085; the Gross Charge incurred for the same Period, including Charges omitted in the Statements lately printed, has amounted to £304,188,859. The Aggregate Deficit, therefore, in that Period, has been £19,384,774. Of this Amount the Charge incurred in India was £278,911,469; whereof the Proportion of Civil Charges was £117,606,336; of Military Charges, £137,253,467; and of Interest of Debt, £24,051,666. The Expences of St. Helena amount to £1,362,256. The remaining Sum was the Charge incurred in England, and amounted to £23,915,134, which includes £1,300,000 paid in discharge of the Loan, from the Public to the Company, of 1812, and some other Items omitted in the printed Statements.
Can you distinguish the Charge incurred in England from that which has been paid in England?
The whole of this has been paid in England; but there has also been paid in England something more, which is comprised in the Charges incurred in India. The Total Amount defrayed in England, including what is absolute Charge, and what is already comprised in the Indian Accounts, is on the Average Three Millions Sterling annually.
What is the Nature of those Charges already stated in the Indian Accounts?
Interest upon the Indian Debt. Some of the Capital of that Debt has been paid off in England; but that Payment does not enter into the Revenue and Charge Accounts of India, being a Debt Transaction.
In what Manner have Funds been provided for that Amount of Deficiency which you have stated?
By Money borrowed in India, and by Surplus Profits of the Company's Trade.
At what Rate of Exchange have you converted, in this Account, the Money of India into Sterling Money?
The Bengal Accounts are kept in India in Sicca Rupees. The Sicca Rupee is converted in those Accounts into the current Rupee; the current Rupee being considered Sixteen per Cent. less valuable than the Sicca; and then the current Rupee is taken in these Accounts as worth 2s. The Value affixed to the Sicca Rupee by that Mode of Conversion is 2s. 3 84/100d. per Sicca Rupee.
Is that Valuation beyond the intrinsic Value of the Coin?
In calculating the Total Deficiency of the Revenue of India since the present Charter, have you made any Allowance for the Benefit the Territory may have derived from the Rate of Exchange adopted in the Transactions between the Territorial and Commercial Branches?
No, I have not.
Can you state to the Committee the Amount of Benefit which has been received by the Territory from that Rate of Exchange?
A Calculation has been made, which will shew the Amount of Profit to be more than Seven Millions Sterling.
Have you that Calculation with you?
(Mr. Lloyd.) The Benefit that the Territory has derived by using those Rates, as compared with the Mercantile Rate of Exchange, in all the Transactions hitherto settled, I estimate at £5,154,135; added to which, as the Territory has been short charged to that Amount, there is a further Charge of Interest of £941,880 as between the Two Branches; a still further Profit of £1,091,163 would arise by extending the Calculation to the Amount that still remains unsettled; making the Total Benefit to the Territory, by reason of using the Board's Rates in contradistinction to the Mercantile Exchange Rates, of £7,187,178.
By the Account unsettled, do you mean the Debt due in this Country from Territory to Commerce?
Are you prepared to state, at this Moment, the Sum which has been disbursed from the Surplus Profits of the Company for the Payment of Indian Debt?
The Surplus Profit actually applied to Territorial Purposes has been £4,923,020.
Then the total Benefit which the Finances of the Territory of India have derived directly or indirectly from the Commercial Funds of the Company, since the Commencement of the present Charter, amounts to £12,110,198?
During what Period has the large Deficiency of Territorial Revenue principally arisen?
(Mr. Melvill.) Two Thirds of that Deficit have accrued within the last Four Years.
Can you state what Circumstances have produced so great a Deficiency during the last Four Years?
The Total Increase of Charge which arose in the last Four Years, as compared with the Year 1823-4, is £4,529,494 annually, whereof the Part incurred in India is £3,827,158, and the Part incurred in England is £702,336. Of the Part incurred in India, £1,108,251 is for an Increase of Civil Charge; £2,695,749 is for an Increase of Military Charge; and £23,158 is for the increased Interest on Debt. The Average Increase of Receipt in the same Period has been £803,483 per Annum, so that the Net Increase of Charge in the last Four Years, as compared with 1823-4, is on an Average £3,726,011 annually. The Increase in the Civil Charges has arisen in Bengal and at Bombay, not at all at Madras, and principally in Bengal; and appears chiefly in the following Heads of Account;-Embassies and Missions, including the Mission to Persia, and the Payment of some Arrears of Subsidy; Provincial Battalions; the Ecclesiastical Establishment; in the Contributions to Civil and Annuity Funds; to Schools and Charitable Institutions; and in the Revenue and Judicial Establishments generally. The Augmentation of Military Charge has been caused by the Burmese War, the Operations against Bhurtpoor, and by an Increase in the Number of King and Company's Regiments in India. The Augmentation of the Charge incurred at Home has been caused by an Increase of the Sums issued for Officers Pay on Furlough and Retirement; by increased Expence for King's Troops serving in India; and by an Increase in the Quantity of Territorial Stores supplied to India.
Can you state what Proportion of that increased Charge is apparently of a permanent, and what of a temporary Character?
An Estimate has been prepared of the Territorial Revenues and Charges of India for 1828-9, and that Estimate indicates a Deficit in 1828-9 of only £644,186. This, however, is arrived at, after crediting certain Sums expected to be received in that Year, which, I conceive, cannot be regarded as affording Ground to expect the same Amount of Receipts in future Years. I allude to Arrears payable by the Government of Ava, under Treaty, and to the Balance payable by the Gwalier State, which are applicable to that particular Year. If we consider the Average Receipt of the Three last actual Years as that upon which to depend hereafter, then the Receipt in future Years will be £834,018 less than that shewn in this Estimate for 1828-9; and in that Case, supposing the Charges in future Years to remain at the same Amount as the Estimate shews, then the Deficiency in future Years would be £1,478,205, which can only be met by a Reduction of Charge.
In forming that Calculation, do you use the Rate of Exchange fixed by the Board of Controul?
Yes, I do.
Are you prepared to state what would be the Amount of Deficiency if the Territory were to repay to the Company what is advanced by Commerce in this Country at the ordinary Mercantile Rate of Exchange instead of the Board Rate?
The Proportion of the India Revenues expended in England on the Territorial Account amounts, as already stated, on the Average, to £3,000,000 Sterling annually. This Sum is issued by the Company out of their Commercial Funds, and the Amount so issued is repaid to the Commercial Branch in India at the Rates of Exchange fixed by the Board of Controul. By this Method the Territory exchanges 2.58.62.069 Rupees in India for £3,000,000 Sterling in London. If the Territorial Branch had to provide this Remittance by Means of Bills purchased in the Indian Markets, it would require, according to the Rate of Exchange prevalent by the last Advices from India, 3.13.04.349 Rupees to produce £3,000,000 Sterling in London; which, moreover, would not be paid until Twelve Months after the Money had been issued in India; and the Interest for Twelve Months would increase the Cost to India to 18.104.22.1686 Rupees; which exceeds the Sum now spent by 70.07.497 Rupees, or, at the Rates of Exchange observed in the Parliamentary Accounts, £812,169 annually.
What is the Rate of Exchange used in these Computations?
1s. 11d. the Sicca Rupee; that being the Mercantile Rate.
What then, at the Mercantile Rate of Exchange, would at present be the total prospective Deficiency of the Territorial Revenue?
It would be about £1,877,000 annually.
When you speak of the Rate fixed by the Board of Controul, and the Parliamentary Rate of Exchange, you mean the same Thing, do you not?
The Rate the Board fixed was the same as that used in the Parliamentary Accounts.
Do you look forward to any Diminution of the Territorial Charge defrayed in this Country?
I apprehend that in One or Two Items there may possibly be a Reduction; in the Item of Stores for Example; but in other Items there will probably be an Increase. The Military Pay and Retirement are increasing, and seem likely still further to increase. The Payments in this Country, on account of Allowances and Annuities to Civil Servants, seem likely to increase. The Demand in England for Payment of Interest on the Debt is likely rather to increase than diminish; but there is an Option possessed by the Holders of a Portion of the Company's Paper of receiving their Interest in England or in India, which Option the Home Authorities have the Power, at Pleasure, of withdrawing.
Have the Sums demanded as Interest of Indian Debt under that optional Arrangement increased of late Years?
To any considerable Extent?
(Mr. Lloyd.) They now amount to £450,000.
Is that a considerable Increase on the former Payment?
A considerable Increase.
What Proportion of the Company's Paper is subject to that Option, and what Proportion is not?
The Total Interest of the Company's Paper subject to that Option is £927,000, of which £450,000 has actually been demanded in England.
Can you state to the Committee what Sum was demanded as Interest of those optional Loans in the Year 1827?
So far as I can recollect, about £300,000.
In proportion as the Sums payable in England on Territorial Account increase, the Pressure upon the Territorial Finances for Remittance to England must increase likewise?
Can you look forward to any considerable Reduction of those Charges paid in England which originate here?
I conceive not.
Can you state the Nature of those Charges?
(Mr. Melvill.) Pay to Officers on Furlough and Retirement, and their Off-reckonings; this Item amounted to £388,072 in the last Year. Passage of Military, and Supplies to them on the Voyage, £72,730. Political Freight and Demurrage, £106,663. Political Charges included in Charges General, £366,532. PayOffice Demands, being the Expences incurred in England for His Majesty's Troops serving in India, £354,801. Retiring Pay and Pensions to His Majesty's Troops, £60,000. Absentee Allowance to Civil Servants, £36,369. Territorial Stores consigned to India, £453,588.
From what Fund have the Advances to Territory in this Country been made by the Company?
(Mr. Lloyd.) The Sale Proceeds of the Company's Goods; the Charges and Profits on Private Trade; Interest on the Annuities due from the Public; small Remittances from the Agent at the Cape of Good Hope; Almshouses at Poplar; the Fee Fund for the House and Warehouses; the Widows Fund; Dividends on Three per Cent. Stock; Remittance from the North American Colonies; Sale Proceeds of Private Trade Goods; Customs and Freight on those Goods; and the Tea Duties.
Can you state what Sum under those different Heads has passed through the Hands of the Company since the Commencement of the present Charter?
The Total Commercial Receipts of the Company in the Fifteen Years has been £193,299,826, including the Tea Duty.
It has been from those large Commercial Funds passing through their Hands, that they have been enabled to make the large Advances to the Territory in those several Years since the Charter?
To what have those Advances amounted in any one Year?
In the Year 1823-24 we paid £5,291,586.
What is the Sum now due by Territory to Commerce in consequence of those Advances, exclusive of Interest?
Will you state the several Modes in which the Territory has remitted Funds from India in Repayment of those Advances?
Remittances have been made sometimes in Bullion, sometimes by Bills of Exchange upon the Departments of His Majesty's Government, but principally by Means of Consignments of Merchandize either through China or direct from India.
Can you state the Sums remitted under those several Heads?
We have received in Net Produce of Bullion, £3,566,927; we have received for Bills for Supplies to the Public Service in India, £2,169,277; we have received for the Produce of Spices sold for Government, £609,692. The Advances on account of the Indian Investments for Europe have been £20,069,928, which is without taking in the Year 1827-8, of which the Books are not yet in this Country. The Advances to China, in Repayment of Territorial Charges defrayed, is £4,268,122.
Can you state what Portion of the Remittance from India has been made by Means of Merchants Bills?
We have not made use of that Mode of Remittance at all.
Have any Attempts been made by the Company to obtain Remittances by Merchants Bills?
The Company have issued Advertisements inviting Tenders for Bills on the several Presidencies in India and on their Factory at Canton; the whole Amount tendered did not exceed £50,000, at the Average Rate, per Sicca Rupee, of 1s. 8 985/1000d.
Are you enabled to state at what Average Rate the Sicca Rupee has been remitted by the Company from India in Goods since the Commencement of the Charter?
The Average Out-turn per Rupee, remitted in Goods, deducting Interest, has been 2s. 2 69/100d.
Can you state what would have been the Average Out-turn of the Rupee during this Period, if remitted in Bills at the Mercantile Rate of Exchange?
By Bills drawn from Calcutta, deducting the Twelve Months Interest included in the Rate, it is 2s. 1 69/100d.
The Difference, therefore, in favor of the Remittance in Goods, appears to be 1d. the Rupee?
Can you state what Advantage the Company has derived since the Commencement of the Charter, from remitting in Goods rather than in Merchants Bills?
Can you distinguish the Portion of the Remittance from India through China which has been remitted in Bills upon India, from the Portion obtained by Proceeds of Goods sent to Canton?
The Amount remitted to Canton by Bills on India has been £5,099,767; the Proceeds of Goods from India to China has been £4,538,743.
Can you state the Average Out-turn of the Rupee remitted from India through China?
The Rate of Remittance per Sicca Rupee, through China, without Interest included in that Rate, has been 3s. 7 57/100d.
Will you state the Out-turn of the Rupee, remitted from India through China, in the last Year of which you have the Account?
3s. 4 48/100d.
Will you state the Out-turn of the Rupee, remitted direct from India, according to the last Account?
It is 1s. 9 70/100d. that is in Merchandize.
For that Rupee producing 1s. 9 70/100d. in Merchandize, the Company have reimbursed 2s. 3d., have they not?
Nearly 2s. 4d.; 2s. 3 84/100d.
Are you enabled to state the Total Amount of the Commercial Capital of The East India Company appropriated to Territorial Purposes under the Act of the 53d George 3d?
The Total Commercial Capital of the Company Abroad and at Home on the 1st of May 1828, (England,) and the 1st of May 1827, (India,) was £21,731,869.
That is exclusive of any Claim they may bring forward to any Property in the Territory previous to the Year 1814?
What is the Sum received by the Proprietors of East India Stock in Annual Dividends?
£630,000 a Year.
What Interest does that Sum give on the Total Amount of their Commercial Capital, as you have stated it?
Less than Three per Cent.
What is the present Valuation by the Company of their several Claims on the Territory?
The Total Amount is estimated to be £12,044,934, exclusive of Territory acquired by Grant, Cession or Purchase previously to the Grant of the Deccannie.
Will you state the Items?
Up to the Year 1780 it was computed, in a Petition presented to Parliament by the Company, that the Charge incurred by the Company in the Wars, which led to the Acquisition of the Territory, in Excess of the Sums afterwards derived by them from the Revenues, amounted, exclusive of any Charge for Interest, to £3,616,000. An Estimate has been recently made of the Balance of Supplies between India and England, from the Year 1780 to the Year 1793, from which it appears, that India returned to England short of the Funds sent thither and the Amount of Payments made at Home on the Territorial Account, this Result being also exclusive of the Charge for Interest, £6,829,557. An Estimate upon a similar Principle, continued from the Year 1793 to the 1st of May 1814, and principally drawn from Statements exhibited to the Committees of both Houses of Parliament in 1813, shews a further short Return from India, being, as in the Two previous Instances, exclusive of Interest, of £1,599,377.
Has any Application been made by the Company to Parliament for pecuniary Assistance since the Commencement of the present Charter?
The whole Disbursements made here and in India on Territorial Accounts have been made from the Territorial and Commercial Funds the Company possess?
All the Advances have been made from their own Funds.
Will you state the Capital of the Indian Debt; has it increased since 1814?
(Mr. Melvill.) It has. The Principal of the Debt amounted on the 1st of May 1814 to £27,002,439; and on the 1st of May 1827 to £34,796,836.
What was the Annual Amount for Interest on the Debt at the former and at the latter Period?
On the 1st of May 1814, £1,502,217; and on the 1st of May 1827, £1,749,068.
What is the present Charge of the Interest of that Debt, so far as you can estimate it?
It was £1,912,725 on the 1st of May 1828; the Increase being caused by the Augmentation of the Debt in the last Year.
What has been the Variation in the Rate of Interest during that Period?
The Average Rate of Interest was Six per Cent. in 1814, and Five per Cent. in 1828.
What was the Amount of Interest payable in India on the Indian Debt previous to the Commencement of the Burmese War?
In 1822-3 it was £1,694,731, and in 1824-5 it was £1,460,433.
When you estimate the present Amount of Interest on the Indian Debt, to what Period do you estimate it?
To the 30th of April 1828.
What do you apprehend to be the present Interest payable on that Debt?
At what Period did the Reduction of Interest from Six to Five per Cent. take place?
Will you state the Surplus of Revenue, both in India and in England, in the last Year of Lord Hastings's Administration?
The Surplus in 1822-3 was £1,363,479, omitting the extraordinary Payment in that Year of £1,300,000, in discharge of the Loan from the Public.
What was the Surplus in the previous Year?
Between that Period and the present the Total Revenue of India has increased; has it not?
In the Year 1826-7 there was an Increase; and the Estimate for 1827-8 indicates a further Increase.
To what Extent?
The Revenue in 1826-7 was £23,327,753, whereas in 1821-2 it was £21,753,271; and in 1822-3, £23,120,934.
Has that Increase of Revenue you have stated proceeded chiefly from the Imposition of new Duties, or from the increased Produce of Duties previously existing?
Chiefly from Duties previously existing. There has been an Extension of the Stamp Duties to Calcutta, which has caused it in part; but it is chiefly from Increases from old Sources of Revenue.
Is there not an apparent rather than a real Increase in the Receipts from the Salt and Opium, in consequence of the greater Extent of Advances made now?
I think not in the Years since 1823-4; but in the whole of the Period since the Charter, a large Increase, in consequence of the Malwa Opium Arrangements, which is in a great measure nominal.
Can you account for the Charges on the Subsidies collected from the Native Princes being so high as Thirty per Cent. on the Net Receipts?
I apprehend that the Charges include the Payments we are bound by Treaty to make to those Native Princes. The Company collects the whole of the Revenue in gross, and accounts to the Native Prince for his Portion of it, fixed by Treaty.
Can an Account be prepared in this Country, giving the Particulars of those Charges?
What was the Rate of Commercial Exchange at the Time of the Renewal of the Charter?
(Mr. Lloyd.) The Rate of Commercial Exchange in the Year 1814-15 was, for Bills drawn from Calcutta on London, 2s. 6 5/100d.
In the Estimate of the Advantage gained by the Territorial Account as compared with the Commercial, have you from Year to Year compared the actual Mercantile Exchange with the Exchange settled by the Board of Controul, or is the Comparison made on the Aggregate of the whole Transaction during the whole Term of the Charter?
From Year to Year.
Can you state what is the greatest Difference that has at any Time occurred between the Commercial and the Parliamentary Rate of Exchange?
In the Year 1824-5 the Difference was 5 9/10d.
Have you any Account which would shew the Out-turn of the Rupee remitted from India in the several Years since the Charter, in Bullion, by the Merchants, by the Company, and in Bills of Exchange at the Mercantile Rate?
We have such an Account; I can furnish that Account; I have it not with me.
You mentioned that the Excess of Expenditure above the Revenue, which has arisen chiefly during the last Three or Four Years, was occasioned by some Charges which would only be of a temporary Nature; could a Return be made from the India House, distinguishing those which would be of a permanent Nature from those which are but temporary?
(Mr. Melvill.) Not further than is indicated by the Estimate, the Particulars of which have been explained to the Committee.
You mentioned likewise, that it was an Advantage to make Returns from the East rather in Merchandize than in Bills; is that Advantage equally applicable to the China as to the Indian Trade?
(Mr. Lloyd.) Clearly so, in a greater Ratio.
The Witnesses are directed to withdraw.
Ordered, That this Committee be adjourned to Thursday next, Twelve o'Clock.