In the mortifying dilemma to which the Directors found themselves reduced, whereby the ruin of the revenues either by the freedom or the restraint of trade was evident, they considered the first as most rapid and urgent, and therefore once more revert to the system of their ancient preemption, and destroy that freedom which they had so lately and with so much solemnity proclaimed, and that before it could be abused or even enjoyed.  They declare, that, “unwilling as we are to return to the former coercive system of providing an investment, or to abridge that freedom of commerce which has been so lately established in Bengal, yet at the same time finding it our indispensable duty to strike at the root of an evil which has been so severely felt by the Company, and which can no longer be supported, we hereby direct that all persons whatever in the Company’s service, or under our protection, be absolutely prohibited, by public advertisement, from trading in any of those articles which compose our investment, directly or indirectly, except on account of and for the East India Company, until their investment is completed.”

As soon as this order was received in Bengal, it was construed, as indeed the words seemed directly to warrant, to exclude all natives as well as servants from the trade, until the Company was supplied.  The Company’s preemption was now authoritatively reestablished, and some feeble and ostensible regulations were made to relieve the weavers who might suffer by it.  The Directors imagined that the reestablishment of their coercive system would remove the evil which fraud and artifice had grafted upon one more rational and liberal.  But they were mistaken; for it only varied, if it did so much as vary, the abuse.  The servants might as essentially injure their interest by a direct exercise of their power as by pretexts drawn from the freedom of the natives,—­but with this fatal difference, that the frauds upon the Company must be of shorter duration under a scheme of freedom.  That state admitted, and indeed led to, means of discovery and correction; whereas the system of coercion was likely to be permanent.  It carried force further than served the purposes of those who authorized it:  it tended to cover all frauds with obscurity, and to bury all complaint in despair.  The next year, therefore, that is, in the year 1776, the Company, who complained that their orders had been extended beyond their intentions, made a third revolution in the trade of Bengal.  It was set free again,—­so far, at least, as regarded the native merchants,—­but in so imperfect a manner as evidently to leave the roots of old abuses in the ground.  The Supreme Court of Judicature about this time (1776) also fulminated a charge against monopolies, without any exception of those authorized by the Company:  but it does not appear that anything very material was done in consequence of it.