The Directors declare themselves unable to understand how this could be.  Perhaps it was not so difficult.  But, pressed as they were by the greatness of the payments which they were compelled to make to government in England, the cries of Bengal could not be heard among the contending claims of the General Court, of the Treasury, and of Spitalfields.  The speculation of the Directors was originally fair and plausible,—­so far as the mere encouragement of the commodity extended.  Situated as they were, it was hardly in their power to stop themselves in the course they had begun.  They were obliged to continue their resolution, at any hazard, increasing the investment.  “The state of our affairs,” say they, “requires the utmost extension of your investments.  You are not to forbear sending even those sorts which are attended with loss, in case such should be necessary to supply an investment to as great an amount as you can provide from your own resources; and we have not the least doubt of your being thereby enabled to increase your consignments of this valuable branch of national commerce, even to the utmost of your wishes.  But it is our positive order that no part of such investment be provided with borrowed money which is to be repaid by drafts upon our treasury in London; since the license which has already been taken in this respect has involved us in difficulties which we yet know not how we shall surmount.”

This very instructive paragraph lays open the true origin of the internal decay of Bengal.  The trade and revenues of that country were (as the then system must necessarily have been) of secondary consideration at best.  Present supplies were to be obtained, and present demands in England were to be avoided, at every expense to Bengal.

The spirit of increasing the investment from revenue at any rate, and the resolution of driving all competitors, Europeans or natives, out of the market, prevailed at a period still more early, and prevailed not only in Bengal, but seems, more or less, to have diffused itself through the whole sphere of the Company’s influence.  In 1768 they gave to the Presidency of Madras the following memorable instruction, strongly declaratory of their general system of policy.

“We shall depend upon your prudence,” say they, “to discourage foreigners; and being intent, as you have been repeatedly acquainted, on bringing home as great a part of the revenues as possible in your manufactures, the outbidding them in those parts where they interfere with you would certainly prove an effectual step for answering that end.  We therefore recommend it to you to offer such increase of price as you shall deem may be consistently given,—­that, by beating them out of the market, the quantities by you to be provided may be proportionally enlarged; and if you take this method, it is to be so cautiously practised as not to enhance the prices in the places immediately under your control.  On this subject we must not omit the approval of your prohibiting the weavers of Cuddalore from making up any cloth of the same sortments that are provided for us; and if such prohibition is not now, it should by all means be in future, made general, and strictly maintained.”