This arrangement, such as it was, afforded but a feeble redress to Meer Cossim: but the Council, themselves the principal traders, were indignant, even at this moderate deduction from their commercial gains, and disavowed the act of the Governor. The consequence was what we have seen: Meer Cossim, seeing his subjects deprived of their trade, and himself of his revenues, proclaimed a general exemption from customs and duties for two years, to his subjects and to all others.

The rage of the Council of Calcutta at this step, rendered necessary by their own conduct, led to a bloody war, the massacre of Patna, the deposition of Meer Cossim, and the restoration of Meer Jaffier. It was not without reason that the Court of Directors regarded "the inland trade as the foundation of all the bloodshed, massacres, and confusion which have happened of late years in Bengal."

By the treaty[72] with the restored prince, the English got a right of trading by their own dustuck, free of all taxes, duties, and impositions, excepting one of two and a half per cent. on salt. This was, in effect, giving them a monopoly of that profitable trade; and it appears that even this duty, trifling as it was, was never levied. The arrangement threw the whole inland trade of the country into the hands of the English and their agents, whose violence totally paralysed the native Government.

These proceedings, and their fatal consequences, were viewed by the Court of Directors with indignation and alarm. The new assumptions had not even the air of being for their benefit, but were exclusively for the advantage of their servants. They therefore, in order to repress the evil, on the 8th of February, 1764, sent out an order to put an end to the inland trade in salt, betle-nut, and tobacco, and all other articles produced and consumed in the country.

It was soon after this order was resolved upon that, the news of the massacre of Patna, the war with Meer Cossim, and other events, having reached England, and diffused the greatest consternation every where, and especially at the India House, Lord Clive was solicited once more to return to Bengal, to restore peace and stability to the empire of which he was the founder. In his letter to the Court of Directors[73], accepting of the government, fully aware of one great source of misrule, he recommended an entire abolition of the inland trade in salt, betle-nut, and tobacco, as having, with other circumstances, concurred to hasten and bring on the late troubles.

But, soon after the date of this letter, the Court of Proprietors, among whom were numbers favourable to the claims of the servants, and who saw with alarm a stop likely to be put to a trade which, in the short space of four years, had already sent many large fortunes to England, had come to a resolution[74] to recommend "to the Court of Directors to reconsider the orders sent to Bengal relative to the trade of the Company's servants in salt, betle-nut, and tobacco; and that they do give such directions for regulating the same, agreeably to the interest of the Company and the Subah, as to them may appear most prudent; either by settling here at home the restrictions under which this trade ought to be carried on, or by referring it to the Governor and Council of Fort William to regulate this important point in such a manner as may prevent all future disputes betwixt the Subah and the Company."

The orders of the 8th of February had been dispatched previously to the arrival of the news of the new treaty with Meer Jaffier; "the terms of which, however," the Directors justly observe, "appear to be so very injurious to the Nabob, and to the natives, that they cannot, in the very nature of them, tend to any thing but the producing general heart-burnings and dissatisfaction;" it is therefore directed, that the orders of the 8th of February remain in force, till a more equitable plan can be formed; the Governor and Council being directed to consult the Nabob as to the manner of carrying on the inland trade of salt, and other articles produced and consumed in the country, which may be most to his satisfaction and advantage, the interest of the Company, and likewise of the Company's servants, and to form and transmit home an equitable plan, to enable the Court to give directions. It is to be remembered, therefore, that in this view there was a threefold interest to be considered; that of the Nabob, of the Company, and of the Company's servants.

This letter was carried out to India in the ship which conveyed Lord Clive; though a copy, sent by another vessel, arrived some time before him.

When Lord Clive reached India, one of the first objects that engaged his attention was the manner in which the public servants were to be remunerated.

At that period, their direct salaries were very trifling; that of councillor being only 350l., and the others small in proportion. The Company was originally strictly a trading Company, and its clerks and servants were paid chiefly by being allowed to trade on their own account. When the Company found it necessary to have troops for the defence of their factories, their military officers were paid in the same way. All were merchants and traders, from the governor, the commandant, and the chaplain, down to the youngest writer and ensign.

Now that they were princes with a large territory, and a formidable army, the steps by which they reached that eminence had been so sudden, and the consequences so unforeseen, that their servants still continued to be civil, military, and ecclesiastical traders: the old system remained unchanged.

But a change of circumstances necessarily called for a change of regulations. The relative situation of the English and natives was no longer the same: for instance, the receiving of presents from native princes, or men of rank, had quite altered its nature. While the Company were mere traders, there could be no good reason for hindering their servants and the natives from mutually receiving and bestowing presents. The parties were on a level, bound to each other by common interest, and presents were nothing more than a mark of the good-will that subsisted between them; the consequence of their friendship or relations in trade, exhibited according to the usage and fashion of the country, of which the giving and receiving of presents formed a part.

In the altered situation of the Company, when their servants concluded treaties, influenced the fate of provinces, and made and unmade princes, things were essentially changed. Presents were now liable to become, not the sign and consequence of good-will, but the motive, and sometimes the guilty motive, of public acts; and great sums might be thus extorted, to the injury both of the natives and of the Company: and, indeed, this natural effect did ensue. The paramount influence of the English authority was abused, for purposes of private interest and selfish rapacity. Great fortunes were made in this way during the five years that Lord Clive was absent in England, and these benevolences became a most heavy burden on the men of rank and wealth in India.

To check this evil, the Court of Directors, as we have seen, ordered covenants against receiving presents to be entered into by all their servants.

The orders issued regarding the inland trade nearly shut up another great source of gain. During the five years in which the public servants had carried it on with such amazing profit, the export trade, as an inferior branch, had been left chiefly to free merchants and free mariners. The orders excluding the Company's servants from the inland trade now drove them back, once more, to foreign and general trade, but in more unfavourable circumstances.

They complained to the Directors that, by the course of events, which had done so much for the Company, they were placed in a worse situation than ever, and engaged in an unfavourable competition even with the free traders: that, instead of benefiting, they suffered by being in the Company's service, as they were confined to one spot by the Company's concerns, while the others could run over the country, and had nothing to engage them but their own interests. In this representation there was much truth; though the conclusion might have reached farther than either the Company or their servants would have been willing to allow.

Men who had been accustomed to look to great and immediate returns for their capital, or for the mere use of their name, looked upon the restrictions under which they were now placed as the height of tyranny. The habits of indulgence and expense which they had acquired from the rapid influx of wealth, and the golden prospects which their situation had seemed to hold out to them, were bad preparations for returning to, or for acquiring, the patient, sober, and steady habits of business which general commerce requires. Lord Clive found the settlement in a ferment; and all ranks of the Company's servants resolved to throw every obstacle in the way of executing the Company's orders.

How he triumphed over the civil, as well as military, combinations which threatened ruin to the British ascendency in India, we have already seen: but if he triumphed, it was not by firmness alone; it was equally by the justice, the consideration, the policy, which guided all his measures.

He had all the powers of mind necessary for his new situation; but his instruments were very imperfect. He saw that a grand crisis had arrived in the Company's affairs; that their servants were brought into contact with men possessed of the greatest wealth and power, and whose fate they really held in their hands. "Without proposing a reasonable prospect of independent fortunes," says one of his friends[75], "it was ridiculous to hope that common virtue could withstand the allurements of daily temptation; or that men armed with power would abstain from the spoils of a prostrate nation."

Clive was particularly desirous, as we have seen, that the chief men in the administration of affairs, but especially the Governor, should be withdrawn from trade, and from whatever could warp the freedom of their opinions: it is a subject to which he often reverts in his private correspondence.

But to expect that the Directors would directly sanction large salaries to their servants from the profits of the Company's trade, or from their territorial revenues, was vain. It was quite at variance with the old maxims by which they were accustomed to regulate their concerns.

There seemed to be no alternative, therefore, but either to let things proceed in the ruinous course in which they now were, to enforce the covenants, and enter, unaided, on a hopeless struggle between private interest and public duty; or to find means, from such resources of the country as were not yet claimed by the Company, to pay the superior servants in an adequate and ample manner; and this last he resolved to attempt.

"It was not expedient," says Clive himself, in his speech in the House of Commons[76], "to draw the reins too tight. It was not expedient that the Company's servants should pass from affluence to beggary. It was necessary that some emoluments should accrue to the servants in general, and more especially to those in superior stations, who were to assist in carrying on the measures of Government. The salary of a councillor is, I think, scarcely 300l. per annum; and it is well known that he cannot live in that country for less than 3000l. The same proportion holds among the other servants. It was requisite, therefore, that an establishment should take place; and the Select Committee, after the most mature deliberation, judged that the trade in salt, betle-nut, and tobacco, under proper regulations, might effectually answer the purpose."

One difficulty had been removed when, about the time of the grant of the dewannee, the young Nabob, Nujum-ed-Dowlah, had yielded up to the Company the whole of the revenues of the three provinces, in consideration of a fixed annuity. The question, after that, no longer regarded the Nabob, or his revenues; it was only between the Company, their servants, and the natives; and Clive believed that, by an arrangement regarding the salt trade, the interest of all could be conciliated: and it is to be recollected, that the Directors had ordered that the new plan should have a view to "the interest of the Company, and likewise of the Company's servants."[77]

It is unnecessary to enter into all the details of the plan finally adopted in September, 1765, which were chiefly arranged by Mr. Sumner. The salt trade was to be conducted solely by a society composed of all the higher officers of Government, civil and military; their capital was to consist of a certain number of shares; the civil servants, as low down as factors, the military, as low down as majors, were to hold shares; chaplains and surgeons had also their shares; the capital for carrying on the trade was to be furnished by the sharers, in their due proportions. The affairs of the Society were conducted by a committee; the salt was to be furnished to them by contractors, and was to be sold at various grand stations by agents, generally Europeans, appointed by the Committee, the purchasers from whom could carry and sell it over the country at pleasure; 35 per cent. on the price was allowed as a tax to the company[78], who had now come into the Nabob's place; the selling price, at the different remote stations, was also fixed at rates 12 or 15 per cent. below what was found to have been the average rate of the twenty years preceding.

Besides providing ample allowances to the chief of the Company's servants, the great advantage of this plan was, that it allowed them to withdraw their attention wholly from trade.[79] They were sleeping partners of a sure and profitable concern, the whole details of which, without any care on their part, was managed by a committee devoted to the business.

The profits of this Society were, as might have been expected, very great. "The capital of the salt trade," says Clive, writing to Colonel Call[80], "is 32 lacs of sicca rupees, upon which the most moderate expect to make 50 per cent., clear of all charges; others, 75 per cent.; and the most sanguine, 100 per cent. Take the lowest, and a councillor's and a colonel's profit will be 7000l. sterling per annum; a lieutenant-colonel's and junior merchant's, 3000l.; majors' and factors', 2000l. These advantages, and a free open trade, are in lieu of all presents from the natives, and all perquisites disadvantageous to the Company, and dishonourable to the servants." And in a letter[81] to Mr. Palk, the Governor of Madras, after mentioning the large allowance that the trade would give to the different sharers, he adds, "This extraordinary indulgence is in lieu of perquisites; for I intend the Governor and Council shall take a most solemn oath at the Mayor's Court, in presence of all the inhabitants, that they shall receive no perquisites whatever, or other advantages, excepting what arises from their trade; and to this shall be added a penalty-bond of a very very large sum of money. These articles, upon my arrival, were altogether in the hands of the Company's servants and free merchants, and only yielded to the Company 60,000l. per annum, and to the Nabob nothing, for they did not even pay the 2½ per cent. duties. Neither will the method we are pursuing be attended with the least disadvantage to the inhabitants: the same hands who made and worked the salt are still employed at the same rates; and the salt in general will be sold at a much lower price than formerly. Formerly the salt was sold dear or cheap, according to the demand for that article; we shall endeavour to fix upon a price for every market, and always sell it for the same."

The result of the first year's sales was very prosperous, and even exceeded expectation: insomuch that, in forming the plan for the following year, it was resolved to diminish the profits of the proprietors, and to raise those of the East India Company, the duty to whom was now fixed at 50 per cent., which, at a low valuation of the salt, was to produce about 160,000l. Clive had, however, in the course of his progress through the country, observed the inconvenience of employing European agents in the trade; and a very material improvement was introduced, by dispensing with their agency altogether, and selling the article at Calcutta, or where it was made, to the natives only, with permission to convey it wherever they pleased. In this way Europeans were totally removed from any direct interference with the natives in the interior, and the trade was as free as any monopoly can be. This second year's Society commenced in September, 1766.

Not long after it began its operations, letters from the Court of Directors reached Bengal, disapproving of the plan of the first year's Society, and commanding the trade to be thrown open, and left entirely to the natives. In coming to this resolution, they were not so much influenced by any views of the particular merits or demerits of the new plan itself, as by consideration of the mischiefs which had for several years attended the general system of internal trade carried on by the English gentlemen with a high hand, free of duties. Their orders, repeatedly sent out, to pay the legal duties to the Nabob, and to keep within the meaning of the Emperor's firman, had been totally neglected, or provokingly evaded. Repeated revolutions had been the consequence, and immense suffering to the country. "We are fully sensible," say the Court of Directors[82], "that these innovations, and illegal traffic, laid the foundation of all the bloodshed, massacres, and confusion which have happened of late years. We cannot suffer ourselves to indulge a thought towards the continuance of them, upon any conditions whatsoever. No regulations can, in our opinion, be formed, that can be effectual to prevent the like consequences which we have seen." They desire, however, that the duties, as forming part of the revenues of Bengal, should not be abolished. In a letter of the same date, to Lord Clive, the Directors, after bestowing the greatest and most merited praise on the penetration with which he had at once discerned their true interest in every branch of their concerns; the rapidity with which he had restored order, peace, and tranquillity; and the integrity which governed all his actions, proceed to give their resolutions on the inland trade. "The vast fortunes," they observe, "acquired in the inland trade have been obtained by a scene of the most tyrannic and oppressive conduct that ever was known, in any age or country. We have been uniform in our sentiments and orders on this subject, from the first knowledge we had of it; and your Lordship will not, therefore, wonder, after the fatal experience we had of the violent abuses committed in this trade, that we could not be brought to approve it, even in the limited and regulated manner with which it comes to us, in the plan laid down in the Committee's proceedings. We agree in opinion with your Lordship on the propriety of holding out such advantages to our chief servants, civil and military, as may open to them the means of honourably acquiring a competency in our service; but the difficulty of the subject, and the short time we have at present to consider it, have obliged us to defer giving our sentiments and directions thereupon, until the next despatch." The letter concludes with entreaties to him to remain for another year in India, and with holding out the prospect of some solid permanent retribution, corresponding to his most important services.

The real causes of the resolutions of public bodies do not always appear in their public acts. To deprive their servants of their principal means of subsistence, without substituting any authorised allowance in its place, was bad policy in itself, and was reducing Lord Clive, in the midst of his exertions, to a very painful dilemma. Mr. Scrafton, in a letter[83] to Lord Clive, explains their secret reasons. The Proprietors had begun to clamour for an increase of dividend, which the Directors thought unsuitable to the situation of the Company's affairs. "This," says he, "has induced the Directors to defer the consideration of the gratification of the servants on abolishing the salt trade. Such consideration could not be but for a vast sum; and if it had got wind that such gratifications were ordered, the Proprietors would be outrageous for an increase of the dividend. Though we cannot open our minds upon it, yet it appears to me an increase of dividend must take place at the Quarterly Court in June; and then the Court will be under no restraint, but will give a per centage on the revenues, in which the Governor will have a great share, in lieu of trade; the rest among the Committee, Council, colonels, and ten below Council, but no lower."—"Your Lordship may be assured it will take place; for, when the last paragraph was added to the letter to you, the Committee declared it was their meaning and intention to do it by the next ship."

The letters of the Directors, the first which Clive had received in answer to his communication on the plan which he had formed, as directed by them, for carrying on the internal trade, reached him only in December, 1766, a month before he left India. He had for some weeks been confined to his chamber by a very severe illness, from which his life was in danger. He now felt himself placed in a most painful predicament, between the Court of Directors and the immediate difficulties of his situation with the civil and military servants. He believed that, with long attention and care, he had succeeded in disarming the salt trade of most of its evils, and by its means had secured to the Company's superior servants a lawful for an unlawful income. But the commands of the Directors were positive; and, though he was of opinion that they were founded on mistake, it was his wish to conform to them. The Company, though aware of the address and spirit of command with which he had checked the machinations of their civil servants in 1765, were still ignorant, when their orders were given, of his still more difficult triumph over the mutiny of their military officers. They had, most justly and wisely, deprived their servants of their means of illicit gain; they now rashly deprived them also of what had been substituted as a lawful provision; they referred these discontented and powerful men, who had vast wealth within their reach, to a future and uncertain time, when their masters should be at leisure to pay some attention to their immediate and urgent necessities. An inferior man would have hesitated and faltered: Clive saw that decision was necessary for the crisis. He could not undo his own work of pacification and reform. The affairs of the Society were too far advanced to be discontinued all at once. He therefore confirmed the grant to the Society, but declared that it was to terminate at the conclusion of the current year, the 1st of September, 1767.[84] At the same time, the Select Committee of Calcutta, by their letter of the 26th of January, 1767, while they mentioned that the orders for discontinuing the Society had been complied with, remonstrated strongly with the Court of Directors on the occasion; calling on them to review their opinion.

Such is an outline of the history of the Society of Trade during Clive's government. He formed a society in unison, as he supposed, with the spirit of the orders of the Court of Directors, which desired him, in the new plan of trade intended to be formed, to consult the benefit of three parties—the Nabob, the Company, and its servants. The Nabob's interest had merged in the Company's. The interest of the natives, however, the most important of all, was consulted by their restoration to the benefits of the trade, from which recently they had nearly been excluded; and by the exclusion of Europeans from any participation in the details of it. How the interests of the Company's servants were to be consulted by any plan that admitted them to the profits, yet excluded them in every shape from the trade, it is not easy to imagine. Lord Clive and the Committee did, therefore, what then, and in all succeeding times, it has been found necessary to do, in India, and in every distant possession, to form and execute a plan on their own responsibility, and to leave the future approbation or disapprobation to their distant masters. Inconvenient as this may be, it is an inconvenience inseparable from distant legislation.

A few words may here be said on the future history of the salt trade. The Court of Directors, after receiving the letters of the Select Committee, still persisted in their desire of abolishing the Society, and of removing Europeans from this and all other concern with the inland trade of the country. They therefore, by their letter of the 20th of November, 1767, written eighteen months after their former letter, ordered the Society of Trade to be abolished, and the salt-pans to be sold by public auction, excluding all Europeans from being bidders or owners, directly or indirectly. Instead of the benefits resulting to the senior servants from this trade, an allotment of 2½ per cent. on the net revenue of the dewannee was assigned to them in certain shares; and a small increase of pay to captains and subalterns.[85]

Meanwhile, in Bengal, when September, 1767, arrived, these last orders having not yet been received, nor indeed written, another year was allowed by Mr. Verelst, the new Governor, and his Council, to the Society of Trade, to collect their debts, and realise their capital. It was not till September, 1768, that it ceased; and the Court of Directors having, in December, 1769[86], by a sudden and singular departure from their opinions, so strongly announced, sent out instructions to lay open the inland trade to all persons, as well natives as Europeans, a proclamation to that effect was published at Calcutta, on the 12th of December, 1770. The effect of this essential change in the Company's plans on the future prosperity of the provinces, it is no part of the present Memoir to investigate; but it is very plain, that, by admitting Europeans into the inland trade, in the state in which the country then was, they really did away with all the benefit that could in any way have been expected to arise from abolishing the monopoly.

But whether Lord Clive's opinions regarding the trade in salt were sound or not, one thing at least is evident,—he was perfectly conscientious in the advice he gave, and on the measures he adopted, on that subject. This is plain from his whole conduct, and from his correspondence, public and private, with numerous persons, while in India. Nor did his anxiety on the subject cease, even after he had reached England, when all private interest in the subject, if he can be supposed ever to have had any, must have been over. Finding accidentally, some months after his arrival, that the plan of abolishing the Salt Society continued to be entertained, he explained his views on the subject to the Committee of Treasury and Correspondence of the Directors, in a detailed and laboured letter.[87] He pointed out the advantages of the trade as then regulated, as the best fund that the Company could appropriate for the payment, without grudging or envy, of their superior servants: that it enabled them to regulate the emoluments of their servants, according to their own wishes; that by it, their servants had the appearance of being paid, not by the Company, but by the profits of their own trade,—an advantage not attending any payment by a percentage on the revenue. "If you grant a commission upon the revenue," says he, "the sum will not only be large, but known to the world; the allowance being publicly ascertained, every man's proportion will at times be the occasion of much discourse, envy, and jealousy; the great will interfere in your appointments, and noblemen will perpetually solicit you to provide for the younger branches of their families." It is evident, that his views originated not in principles of political economy, but of policy, forced upon him by the circumstances in which India was placed. His efforts were directed to insure a desirable object, in what he deemed, not certainly the best, but the only practicable mode.

In spite of this remonstrance, the Committee came to the resolution of throwing the trade open, imposing only a duty of 10 rupees on the hundred maunds of salt. Lord Clive again addressed them[88], showing that they were in reality giving up 300,000l. per annum, for a tax of only 31,500l.; and pointed out that, even on their plan, the trade would continue in some degree a monopoly, and that the servants would still be concerned in it to what extent they pleased, under their banyans and black merchants. His expressions in writing the same day to Mr. Verelst, show how sincere and deep-rooted his opinions on the subject were. Sending him a copy of his letter to the Committee, he adds, "What attention they will pay to my representations I know not: but I have such confidence in your honour and zeal for the Company's welfare, that I cannot help hoping you will take care that the Company be not deprived of 300,000l. per annum, however peremptory the orders of the Directors may be."

The letter of the 20th of November, 1767, already mentioned, was written soon after. The only effect of this remonstrance was a change by which the duty was to be advanced to a sum not exceeding 120,000l. Lord Clive points out, in several confidential letters to Mr. Verelst, the want of information of the Directors on this occasion, and the pernicious consequences likely to result from the change. That he was sincere, admits not of a doubt. His opinions on the subject he maintained uniformly to the last hour of his life, and the events seem to have justified his foresight.

The tax, as regulated by him, certainly was a monopoly, and so far was exceptionable; but he might justly maintain that the real question was, Are the evils arising from this monopoly, or from the licentiousness of the rulers of the country, if penuriously paid, most to be dreaded? and of this he had no doubt. Even from the question of the comparative merits of a monopoly and free trade, political considerations, unfortunately, could not be altogether excluded. The society of trade was abolished under pretence of being a monopoly. This was not, however, the real cause. That society excluded from the salt trade a body of powerful and wealthy Europeans, who raised a clamour, in name of the natives, but solely for their own private views. On the plan, as reformed by Lord Clive, the natives were restored to their former employment, and Europeans excluded. But when the trade was thrown open to all indiscriminately, natives and Europeans, the change, though in form the result of sound principles of government and of political economy, was really, in substance, quite the reverse. The two parties did not come into the field on equal terms; the society of trade had a direct interest that no oppression should be exercised on the natives in their dealings over the country; and being composed of the leading men of the government, had the means of affording them protection. But when the trade was reduced to a scramble between Europeans having the whole authority of the country, and natives who had none; when redress was to be sought by the natives from their very rivals and competitors; their condition became hopeless; and that fact sufficiently accounts for the melancholy nature of the history of the inland trade in succeeding years.

Two charges connected with this transaction of the salt trade were afterwards brought against Lord Clive: the first, that he obstinately persisted in disobeying the orders of the Company for its abolition; the other, that by having a share in it as Governor, he in some measure deviated from his plan of not trading, and of deriving no pecuniary benefit to himself from his voyage to India.

As to the first, we have seen that several letters were certainly received from the Court of Directors, after his arrival in Bengal, declaring their decided hostility to their servants engaging in the inland trade at all, and especially in that of salt. But a comparison of dates has shown that these letters were directed, not against any measures of Lord Clive, which were not then known, but against the grossly unjust and pernicious proceedings which took place before his arrival. To the letter of the Select Committee of Calcutta, of the 30th of September, 1765, detailing the plan for the first society of trade, an answer, dated the 17th of May, 1766, was received on the 8th of December following: and so far was Lord Clive from obstinately persisting in continuing the trade, as has been asserted, that on the 24th of the following month, while hardly yet recovered from a dangerous illness, he declared the society abolished, at the close of the season. He had fixed so limited a period as one year for its duration, because it was only experimental, and to admit of any change suggested by the Directors.

The second charge was, that, as a sharer in this society of trade, he had deviated from his intention expressed in his letter to the Company, not to improve his fortune by his voyage to India.

His share as Governor in the society of trade (a concern, the details of which were entirely confided to a committee, and the operations of which he knew only from their result) was certainly very different in its nature from private trade on his own account. To his intention not to increase his private fortune by the emoluments of his office, or by trade in any shape, he religiously adhered. Of the allowances to the Governor, the honorary presents that could not be refused without giving offence, the proceeds of the Governor's share of the society of trade, with all other emoluments annexed to his office, he caused a distinct account to be kept. Out of it were defrayed his expenses as Governor, and by the surplus he did not benefit. He had taken with him to India three gentlemen: Mr. Maskelyne, his friend and near connection; Mr. Henry Strachey, his private secretary; and Mr. Ingham, his family physician;—no large establishment for a Governor leaving his family and going abroad in the circumstances Lord Clive did. The sums in question were employed in remunerating them, and some persons of his household; and by the account kept of these and of all other sums received by him from the time he left England till his return, which was communicated to the Company, and afterwards laid before Parliament, far from having added, in any respect, to his private fortune, as this charge supposes, it has never been disputed that there was a balance of 5816l. 16s. 9d. against it. If these gentlemen were remunerated, therefore, it was not at the Company's expense, by any extraordinary charges upon them; but at the expense of the Governor, who gave up to them the allowances which he might have retained to himself.[89] The charge was really as unfounded as it was ungracious, and, it is to be observed, was brought against him by men who had shown no such pecuniary delicacy.

Of another charge, also brought some years after, against Lord Clive's administration, that of having fixed an improper rate of exchange between the gold and silver coinage of Bengal, it is not necessary to say much. In India, gold and silver coin are articles of trade even more directly than in most countries in the world, and the variation in their relative value is often extremely great. In the year 1766, a scarcity of silver existed in Bengal, from the quantity exported to China, from decreased importation, and other causes. It was known that there was much gold in the country, in various shapes; and to inexperienced political economists it seemed a very reasonable expedient to give a premium for its being brought out. A favourable rate was therefore fixed on the new gold mohur then coined. This certainly had the effect of bringing gold to the mint; but, as might have been foreseen, only increased the evil, by causing still more silver coin to be withdrawn from circulation. The bankers and shroffs of the country, who are proficients in the science of exchange, naturally paid their demands in gold, and exported or hoarded the silver. The gold coin they were unwilling to receive at its legal value, without a large batta, or exchange, in reality to compensate its inferior intrinsic value as compared with silver, the ordinary circulation of the country. This necessary measure of self-defence was regarded as a trick or fraud in trade. The proclamation of 30th June, 1766, directing the coin to be taken at certain rates, was one of those ineffectual attempts to force circumstances, formerly so usual with politicians of every class and of every country. It was, of course, ineffectual; and necessarily occasioned no small inconvenience to merchants and retail traders. Its effects were chiefly felt after Clive had left India. The Court of Directors, from their correspondence, seems to have been nearly as much puzzled as the Council of Calcutta; though the fact, that the difference of market value between the gold and the silver coin rose to 17½ per cent., ought to have afforded an easy explanation of the difficulty.[90] Yet those who recollect the discussions, in our own times, in the British parliament, on the difference of value between the guinea and the bank note, and on the bullion question in general, will not be disposed to view with much surprise a similar difficulty that occurred in a distant country, half a century before.

Though these charges were brought against Lord Clive long afterwards, yet, as they all relate to India, it has been judged best to state them at this period of his career, when he was still engaged in his active services in that country.

Our attention has hitherto been too exclusively directed to Lord Clive's civil and military reforms, to admit of any connected view of the very important treaties which he negotiated with the native powers, and which really changed the face of India. We have seen that one of his first objects, after his arrival in Bengal, was to conclude a peace with Sujah-u-Dowlah, the Vizier, Nabob of Oude, and to make some arrangement with our ally, the King. The war, though successful, had long been carried on at an expense ruinous to the Company's finances. With these objects he resolved to combine a settlement with the young Nabob of Bengal (whose finances were in disorder), so as to place his and the Company's affairs on a definite and solid basis. Clive had left Calcutta on the afternoon of the 25th of June, 1765, and on the 9th of July writes to the Select Committee, that the business of Nujm-u-Dowlah's durbar was perfectly finished. By the arrangement then entered into, provision was made for the management of public affairs at the Nabob's court, and in the three provinces, the immediate administration of which was committed to Mahommed Reza Khan, Doolubram, and Jugget Seit, and regulations were signed by them and the Nabob for that purpose. A barrier was thus provided against the shifting policy and intrigues of a corrupt court, and a weak and ignorant prince. At the same time Lord Clive procured from the Nabob a sunnud for the reversion in perpetuity of his jaghire to the Company. But he now plainly saw that things could not stop where they were. The truth is, that it was now clear enough, that two independent governments could not exist in the country at the same time. The one must swallow up the other; and the Company having the sword in their hand, and not being disposed to recede, it was necessary to reduce the Nabob to a cipher. Two days afterwards[91] Clive writes to the Select Committee;—"We have often lamented that the gentlemen of the Council, by precipitating the late treaty, had lost the most glorious opportunity that could ever happen of settling matters upon that solid and advantageous footing for the Company, which no temporary invasion could endanger. The true and only security for our commerce and territorial possessions in this country is, in a manner, always to have it in our power to overawe the very Nabob we are bound by treaty to support. A maxim contrary to this has of late been much adopted; and from that fundamental error, as I may call it, have sprung the innumerable evils, or at least deficiencies, in our government, which, I have now the pleasure to inform you, are in a fair way of being perfectly removed.

"The Nabob, upon my representation of the great expense of such an army as will be necessary to support him in his government, the large sums due for restitution, and to the navy, together with an annual tribute, which he will be under a necessity of paying to the King, hath consented, and I have agreed, provided it should obtain your approbation, that all the revenues of the country shall be appropriated to those purposes, 50 lacs of rupees excepted. Out of this sum is to be defrayed all his expenses of every nature and denomination. Mahommed Reza Khan, however, being of a disposition extremely timorous, is desirous of having the payment of the cavalry and sepoys pass through his hands, though included in the said 50 lacs. This, I think, will be complied with.

"I am of opinion also, that certain stipends, out of the above mentioned sum, should be fixed for the Begum, for the Chuta Nabob, and for the rest of the Nabob's brothers and nephews, Miriam's son included; or else we must be subject to frequent complaints from those quarters; for I am persuaded that the dependents and parasites of the present Nabob will always keep him in distress, be his income what it may. Although the sum proposed to be stipulated for the Nabob, considering the present great expenses and demands, may appear large, yet, by what I now learn, his expense exceeds the sum to be allowed; and although it is certain that neither his education nor abilities will enable him to appear to any advantage at the head of these great and rich provinces, yet, I think, we are bound in honour to support the dignity of his station, so far as is consistent with the true interest of the Company.

"The particulars of this matter may be farther adjusted in my absence by Mr. Sykes, to whom I have communicated my ideas, if the plan be approved of by the Select Committee; and the whole may be finally concluded to our satisfaction, upon the Company's being appointed the King's Duan, who will be empowered, by the nature of their office, as well as by the King's consent, to settle every point."

Writing the same day to Mr. Verelst, Lord Clive sufficiently characterises the Nabob by a single trait. "He received the proposal of having a sum of money for himself and household at his will with infinite pleasure; and the only reflection he made, upon leaving me, was, 'Thank God! I shall now have as many dancing girls as I please.'"

It is not to be supposed that the Select Committee would object to a plan which threw the greater part of the revenue of Bengal into the hands of the Company, and the treaty was finally concluded in the course of the same month. The allowance made to the Nabob was raised to something more than 53 lacs of rupees.

Lord Clive, proceeding up the river, met the Vizier, as has been mentioned, at Benares. The fortune of war had been against him; his armies had been repeatedly defeated, and his capital, Lucknow, taken. He had given himself up to General Carnac, and was eager for peace. So early as the 2d of August, Lord Clive had an interview with him, and intimated his intention of restoring all his dominions, except Allahabad, worth 10 lacs yearly, and perhaps Corah, valued at 18. "His expressions of joy and gratitude upon this occasion," say Lord Clive and General Carnac, in a joint letter to the Select Committee[92], "were many and warm. Such an instance of generosity in a victorious enemy, exceeded his most sanguine expectations, and we doubt not will be the best foundation of that union and amity which we so earnestly wish to secure. He consents to pay to the Company 50 lacs for indemnification. These terms we think moderate and equitable, both for him and the Company."

This matter being arranged, Lord Clive hastened on to Allahabad, to meet the King: the first visit took place on the 9th of August. The King's demands were numerous, but Clive was steady to his purpose. The demand on the Nabob of Bengal for 32 lacs of rupees as arrears, and of 5½ lacs annually of jaghires, were refused, with several others. It was finally settled, on the 11th, that the King should receive annually, as revenue from Bengal, the sum of 26 lacs, with the countries of Allahabad and Corah, yielding a farther revenue of 28 lacs, from Sujah-u-Dowlah, as a royal demesne for supporting his dignity. "This last cession," says Lord Clive and General Carnac, writing to the Select Committee[93], "we very readily consented to, as Sujah-u-Dowlah made not the least objection, well knowing that, after our departure, he could easily settle this matter with the King, to the satisfaction of both parties." Lord Clive had, it seems, wished to restore Corah to the Vizier, making over Allahabad only to the King.

"We then presented the King with two arzies (petitions), desiring he would grant to Nujm-u-Dowlah the Nizamut of Bengal, Bahar, and Orissa, and to the Company, the Dewanny of the same provinces; to both of which His Majesty has signed his fiat, and the proper instruments for both are now drawing out."

The King, at the same time, granted firmans confirming to the Company for ever all the lands round Madras and elsewhere assigned to them by the Nabob of Arcot; as well as a free gift of the five northern Circars. This was the first formal grant or confirmation by the King to the Company, of these territories. The grant of Lord Clive's jaghire, to the Company, was likewise confirmed.

The King was eager to induce Clive to march to Delhi and replace him on the throne. But this was steadily refused. Clive's policy was to interpose a friendly native power between our territories and the Afghans, and as far as possible the Mahrattas. He saw that the King, from his weak character and large pretensions was quite unfit for such a purpose; and that none was so proper, both from character and power, as Sujah-u-Dowlah. This was one cause why he was anxious to have strengthened him, by restoring Corah. He wished to induce the King to reside quietly in the Company's territories; but finding this impracticable, gave him to understand that the Company could not join him as a party in any of his ambitious enterprises, beyond the limits of their own territories.

Such was the conclusion of these important negotiations, by which the English East India Company became the real sovereigns of Bengal, Bahar, Orissa, and other extensive territories. In these provinces they now stood in the place of the Nabobs, and had gained a right to levy and dispose of the whole revenues under some very moderate burthens. They were no longer dependent on the regularity of native princes for the payment of their troops, or support of their establishments. The Nabob of Bengal was become a puppet in their hands, of little use, but as a cover to their dealings with European powers. Clive estimates the annual clear gain to the Company, including their former possessions of Burdwan, &c., and after paying the King, the Nabob, and all other expenses, as not short of 122 lacs, or 1,650,000l.[94]

Clive had received from the King, in 1758, a sunnud appointing him to the high rank of a munsubdar of six thousand foot, and of five thousand horse, with the title of Zubdit-al-mulk, Nazir-ed-Dowla, Sabat Jung, Behader.[95] The title of Sabat Jung he had originally, as already mentioned, received from the Nabob of Arcot, for his gallant exploits in that prince's service, and by that title he always continued to be known in Bengal. He now received some augmentation of sounding titles, but what they were does not appear.

While Clive was engaged in these public duties he did not intermit in the regularity of his correspondence with his friends in England. Some extracts from his letters will show the light in which he considered his own situation and transactions.

[96][The following letter[97] to Mr. Salvadore, whom he employed as a man of business, merits to be preserved as a proof of Clive's disinterested conduct during this his last period of service in India:—

"I return you many thanks for your obliging letter, and for the very favourable opinion you are pleased to entertain of my abilities, as well as disposition to do my duty to the Company. It must be my own fault if I do not answer the expectations of all the real and disinterested proprietors; as for the occasional ones, and those who act from resentment and selfish principles, I hold them in too much contempt to cast away one thought about them.

"If I was to dwell upon the situation of the Company's affairs in Bengal, both civil and military, a volume would not be sufficient. However, I have the satisfaction of informing you, that I have already made a great progress towards reforming those enormous abuses of power, which cry aloud for redress. The inhabitants have been laid under contribution by both civil and military, their goods taken from them at an under price, and presents of money have either been extorted from them, or given for interfering in the affairs of government by insisting on men of high employments being turned out, and others appointed in their room. The gentlemen having the revenues of the country, amounting to upwards of 3,000,000l. per annum at their command, were making such hasty strides towards independency, that in two years' time I am persuaded the Company would not have had one servant upon this establishment above the rank of a writer. In short, if the Directors do not behave with spirit and integrity, and the Proprietors lay aside their animosities, they will become answerable to the nation and to Parliament, for being the cause of losing the greatest advantages which ever have happened to England since it has been a nation.

"As for myself, although tempted on all sides by offers of riches without bounds, I have refused every thing; and I am the greatest villain upon earth, if either I or any one dependent upon or belonging to me, with my knowledge, either directly or indirectly, benefit ourselves the value of one farthing, except what shall be specified in an account current which I intend laying before the Directors, upon my arrival in England. Indeed, if I suffered myself to be corrupted, I could not with any face undertake (in conjunction with the Committee who have heartily and unanimously joined me) the reformations which are essentially necessary for the Company's welfare.

"The King has granted to the Company for ever, with the approbation and consent of the Nabob, all the revenues which shall remain after paying him a certain tribute, and allowing a sum sufficient for the dignity and support of the Nabob. The Company's income exceeds 2,000,000l. sterling per annum, and their civil and military expenses in future never shall exceed 700,000l. per annum, in time of peace, and 1,000,000l. in time of war. For further particulars, let me refer you to Mr. Walsh. With regard to the French forces, I shall put those of the Company upon so respectable a footing, that all the powers of Europe can have no chance of succeeding, without first landing, and being supported by the powers of the country; and that appears very impracticable, since I have lately acquired a grant from the King of five northern provinces, those the French formerly possessed."

Clive's correspondence with his historian Orme appears at this period to have revived, and he evidently looks to him as the transmitter of his fame to posterity[98]:—

"I have wrote so many letters, and gone through such a scene of public business, that I cannot attempt describing to you any part of our proceedings in this part of the world. Scrafton, Walsh, and Colonel Smith will furnish you with abundant matter of surprize and astonishment. Let it suffice to say, that fortune seems determined to accompany me to the last; every object, every sanguine wish, is upon the point of being completely fulfilled, and I am arrived at the pinnacle of all I covet, by affirming the Company shall, in spite of all envy, malice, faction, and resentment, acknowledge they are become the most opulent company in the world, by the battle of Plassey; and Sir Hannibal Hotpot shall acknowledge the same.

"I am preparing plans in abundance for you. You shall have very exact charts of Bengal, Bahar, and Orissa, and of the Mogul empire as far as Delhi at least. A map of the Ganges likewise, and all the other rivers of consequence."

The following letters to his cousin Harry and to his father are pleasing proofs that his important occupations never cooled his mind from his duties and feelings as a relation or a friend:—

"I have received[99] your letter of 22d of November, 1764, by which I find you are all in health, though not so happy as when I was among you. I make no doubt of once more contributing towards that happiness, though not quite so soon as I expected, when in England, owing to the length of our passage. I have pitched upon the beginning of December, 1766, for resigning this government; and nothing but my death shall prevent it. General Carnac, myself, and the rest of our family, propose coming most of the way overland; and shall, in all probability, be in London some time in April, 1767.

"I have been seven hundred miles up the country, and have established a firm and lasting peace, I hope, with the Great Mogul and his vizier, Shuja Dowlah. I have seen much of his Majesty, and he has appointed me one of his first omrahs, or nobles, of his empire, with an immense title, not worth sixpence in England. Touching all these matters, I must refer you to Mr. Walsh.

"I am glad you have put a stop to Stycke expenses: they became enormous, and it will be time enough to go on with them upon my arrival in England; but I approve greatly of your repairing Walcot, and making it fit for Lady Clive's reception. The only concern I feel arises from a conviction of what she must suffer from so long an absence.

"With regard to myself, I have full employment, and enjoy my health rather better than in England, though I find I cannot bear the heat so well as formerly, which makes me determined to quit the country as soon as possible."

"I rejoice," he writes[100] to his father, "to hear from others, though not from yourself, that, notwithstanding the accident which has happened to one of your eyes, you retain both your spirits, appetite, and health. It is impossible, without a miracle, to enjoy the blessings of life in that perfection in our latter days as in the days of youth; but I really think your temperance and the goodness of your constitution will carry you through life with ease and satisfaction to yourself to an age nearly equal to that of your aunt Judy.

"Although I enjoy better health than in England, India is by no means agreeable to me, separated as I am from my wife, children, and dearest relations. The length of our passage will make my absence one year more than I intended, but this you may be assured of, that nothing shall detain me in Bengal beyond the beginning of December, 1766; and I hope to see you all in good health and spirits, some time in April, 1767.

"I have been seven hundred miles up the country, and have been very conversant with His Majesty, the Great Mogul. He has made me one of the first omrahs, or nobles, of his empire. I have concluded a peace for the Company, which I hope will last, and obtained from the King a grant of a revenue of 2,000,000l. sterling per annum for them for ever; and, what is more, I have put them on a way of securing this immense revenue, in such a manner that it is almost impossible to deprive the Company of it, at least for some years to come.

"With regard to myself, I have not benefited, or added to my fortune one farthing, nor shall I; though I might, by this time, have received 500,000l. sterling. What trifling emoluments I cannot avoid receiving shall be bestowed on Maskelyne, Ingham, and Strachey, as a reward for their services and constant attention upon my person. I am much obliged to the Doctor for his care of my health: he is worth about 2000l. already. This ship, sent express, will bring the Company the most important news they ever received; and, if they are not satisfied with mine and the Committee's conduct, I will pronounce there is not one grain of honour or integrity remaining in England. The reformation I am making, in both the civil and military branches, will render the acquisition of fortunes not so sudden, or certain, as formerly. This, added to the shortness of my stay in India, induces me to think Captain Sempill had better stay in England, where we may serve him by our interest at home. Remember me in the most affectionate manner to my mother. She has acted a great part in life. The uniformity of her conduct with regard to her children must, at the same time it affords her the most pleasing reflections, influence them to entertain the highest respect and veneration for so deserving a parent. I will most certainly write to her, and to my brothers and sisters, who have my most affectionate wishes."

In numerous other private letters he dwells upon the same subject.][101]

Much of Clive's time was devoted to examining and improving the details and management of different branches of the public service. The increasing expense of the military establishment had been called to his notice by the Directors, before he went to Bengal; and he entered with great activity into the task of devising plans for reducing its expenditure. Besides the heavy charge for double batta, he found the charges for buildings and fortifications exhorbitantly high, and the work never completed. Of the surgeons' accounts, too, he repeatedly complains as enormous; and mentions that, on investigation, it was found that men had been charged for, as being in the hospital, months after they were dead. These abuses he attempted firmly and assiduously to correct; and his known experience in military matters, joined with the particular knowledge of commissariat concerns acquired while he served in that department, enabled him to place the whole on a better footing.

Though less conversant with revenue matters, he applied his powerful mind to that subject also. It was his uniform practice to promote the most intelligent and active men to the head of each line; and in the revenue department he seems to have been fortunate in having the co-operation of Mr. Verelst and Mr. Sykes. His plan, in revenue concerns was, to innovate as little as possible; to avoid all impositions burdensome to the cultivator, however productive; and to support the respectability and usefulness of the upper classes of natives, by maintaining them in as easy and opulent circumstances as was practicable. He saw the mischief of the frequent changes in the demands made upon the ryots, and proposed to introduce the system of leases for their protection. The revenue seems to have been very flourishing; and the ryots in easier circumstances in his time than they were some years afterwards. Writing to Mr. Verelst[102], he says, "The 20th of this month we hold the punah; and, by what I can learn, the kistabundy for next year will amount to 172 lacs, which is 12 lacs more than this year; to which, if you add 12 lacs of rupees which Mahommed Reza Cawn proposes cutting off from the Nabob's allowance, being for useless horse, elephants, buffaloes, camels, &c. the increase will be 24 lacs. If we mean to avoid giving umbrage to the European powers, and to keep up the appearance of the present form of government, we ought not to exact one farthing of revenue more from the province. For my own part, I think, after we have made this year's experiment, and, by the regular payment of the rents, find we have not over-rated the countries, that if Bengal was let out for five, six, or seven years, it would be for the advantage of the Company, of individuals, and add stability to our possessions by inspiring the inhabitants with just ideas of our justice and moderation." Writing, a few days after[103], to Mr. Palk, he touches on the same subject:—"Abundance of business, and a good deal of bad health arising from the heat of the weather, hath prevented me from being so punctual a correspondent as I promised to be when I took my leave of you at Madras. However, I will now acknowledge the receipt, as well as return you thanks for your last letters of the 24th March and 4th April. We have been already near a month at this place, in order to ascertain the revenues of Bengal for next year. Upon the whole, what with cutting off useless expenses and unnecessary kistabundy, the Company will receive an increase for Bengal only of 24 lacs. Here, in my opinion, we should hold our hands. To attempt farther increase will be drawing the knot too tight. It will neither be to the honour or advantage of the Company. In the end, it would be impolitic: individuals who are of good families, who have been used to live in state, and who have been intrusted with power, must have wherewithal to support some part of that dignity which has always been kept up in this country." In the course of the same year, in answering the letter of a public servant who had proposed a plan for increasing a particular branch of the revenue, he writes[104], "The Company's revenues are already immense; nor can I think of increasing them by the least oppressive mode. If, however, the abuses you mention be real, and can be remedied without distressing the ryots, they shall not escape unnoticed." He was decidedly hostile to the plan, which had been already introduced, of letting lands by auction; and was anxious that the ryot should labour in his fields at ease, free from the apprehension of change.[105]

It is quite unnecessary, as it would be painful, to enter into particulars regarding the corruption which prevailed at this time in every rank of the service: the fact is sufficiently known. Clive's efforts to check it made him many and powerful enemies. In a letter to Mr. Verelst, he mentions a member of council who, he found, had conditioned to receive 150,000 rupees from the Rajah of Burdwan: he desires that gentleman to ascertain the facts. "It may be necessary to have such anecdotes," says he[106], "to frighten people into their duty to the Company, if no other use be made of them. I hear a certain gentleman employs spies to watch all our actions, yours and Sykes's in particular; but we may serve him as Scipio did those sent by Hannibal, lead them at noonday through every department in which we are concerned, and then dismiss them, telling them they may go and tell their masters all they know." Writing, on another occasion[107], to Verelst and Sykes, when thwarted, from corrupt motives, by a man at the very head of affairs:—"If you think," says he, "that I am endeavouring to stem this torrent of corruption which threatens to overwhelm the whole settlement, and if you feel within your own breasts that pleasing satisfaction which I enjoy from a consciousness that I am acting upon principles of honour and integrity, I am persuaded you will support the measures we have so zealously adopted; and we shall at last triumph over bad hearts and bad heads."—"Our disinterested conduct," says he to another correspondent, when concluding the treaties with the King and Vizier[108], "must be admired and applauded by all virtuous and good men; and if there be men base enough to disapprove of what we are about, we may all retire to live happy, and upon the testimony of a good conscience." He frequently, in the midst of the opposition and annoyances to which he was exposed, seeks for consolation in this manly and honourable strain of thinking.

No man knew the sepoy force of India better, or employed it more successfully, than Clive; and it is interesting to ascertain his ideas, both on its composition, and the dangers that might be supposed eventually to attend its use. "You mention the number of sepoys as an alarming circumstance," says he, writing, after his return to England[109], to one of the committees of Directors, "and I allow that the Company's chief danger arises from thence, and from the discipline. But I am of opinion, that so long as they are regularly paid, treated with humanity, and not flattered with promises never meant to be performed, no danger is to be apprehended. Sepoys are the most faithful and attached people in the universe; and being also men of reason, they are thoroughly convinced, that they are upon a much better footing with us than they can be with any of the natives, be their rank what it may. Their attachment, as I have observed, is strong; but they know no other than to those who feed and clothe them. Much of the supposed danger is avoided by our having separated and divided our sepoys into three brigades, so that they can never make a revolution general, nor can they hold cabals of an alarming nature. The best additional security I can think of, is to have each battalion composed of an equal number of Gentoos and Mussulmen, and to encourage a rivalship of discipline between them."—"There is one step[110]," says he, on another occasion, "to be taken with regard to the sepoys, which, I think, will bring them to the greatest perfection sepoys can be brought to; viz. the officers commanding the sepoys to run in that corps only; by which means, all the officers will understand the language, without which it is impossible to bring the sepoys to that pitch of discipline which will make them truly formidable." It will be recollected that at this early period of the service, regiments were but recently formed and brigaded; and the officers were taken for the sepoy corps from the European infantry, and were not yet attached permanently to the former.