The trade became nominally free; but the course of business established in consequence of coercive monopoly was not easily altered.  In order to render more distinct the principles which led to the establishment of a course and habit of business so very difficult to change as long as those principles exist, your Committee think it will not be useless here to enter into the history of the regulations made in the first and favorite matter of the Company’s investment, the trade in raw silk, from the commencement of these regulations to the Company’s perhaps finally abandoning all share in the trade which was their object.

RAW SILK

The trade in raw silk was at all times more popular in England than really advantageous to the Company.  In addition to the old jealousy which prevailed between the Company and the manufactory interest of England, they came to labor under no small odium on account of the distresses of India.  The public in England perceived, and felt with a proper sympathy, the sufferings of the Eastern provinces in all cases in which they might be attributed to the abuses of power exercised under the Company’s authority.  But they were not equally sensible to the evils which arose from a system of sacrificing the being of that country to the advantage of this.  They entered very readily into the former, but with regard to the latter were slow and incredulous.  It is not, therefore, extraordinary that the Company should endeavor to ingratiate themselves with the public by falling in with its prejudices.  Thus they were led to increase the grievance in order to allay the clamor.  They continued still, upon a larger scale, and still more systematically, that plan of conduct which was the principal, though not the most blamed, cause of the decay and depopulation of the country committed to their care.

With that view, and to furnish a cheap supply of materials to the manufactures of England, they formed a scheme which tended to destroy, or at least essentially to impair, the whole manufacturing interest of Bengal.  A policy of that sort could not fail of being highly popular, when the Company submitted itself as an instrument for the improvement of British manufactures, instead of being their most dangerous rival, as heretofore they had been always represented.

They accordingly notified to their Presidency in Bengal, in their letter of the 17th of March, 1769, that “there was no branch of their trade they more ardently wish to extend than that of raw silk.”  They disclaim, however, all desire of employing compulsory measures for that purpose, but recommended every mode of encouragement, and particularly by augmented wages, “in order to induce manufacturers of wrought silk to quit that branch and take to the winding of raw silk.”

Having thus found means to draw hands from the manufacture, and confiding in the strength of a capital drawn from the public revenues, they pursue their ideas from the purchase of their manufacture to the purchase of the material in its crudest state.  “We recommend you to give an increased price, if necessary, so as to take that trade out of the hands of other merchants and rival nations.”  A double bounty was thus given against the manufactures, both in the labor and in the materials.