This system must have an immediate tendency towards disordering the trade of India, and must finally end in great detriment to the Company itself.  The effect of the restrictive system on the weaver is evident.  The authority given to the servants to buy at an advanced price did of necessity furnish means and excuses for every sort of fraud in their purchases.  The instant the servant of a merchant is admitted on his own judgment to overbid the market, or to send goods to his master which shall sell at loss, there is no longer any standard upon which his unfair practices can be estimated, or any effectual means by which they can be restrained.  The hope entertained by the Directors, of confining this destructive practice of giving an enhanced price to a particular spot, must ever be found totally delusive.  Speculations will be affected by this artificial price in every quarter in which markets can have the least communication with each other.

In a very few years the Court of Directors began to feel, even in Leadenhall Street, the effects of trading to loss upon the revenues, especially on those of Bengal.  In the letter of February, 1774, they observe, that, “looking back to their accounts for the four preceding years, on several of the descriptions of silk there has been an increasing loss, instead of any alteration for the better in the last year’s productions.  This,” they say, “threatens the destruction of that valuable branch of national commerce.”  And then they recommend such regulations (as if regulations in that state of things could be of any service) as may obtain “a profit in future, instead of so considerable a loss, which we can no longer sustain.”

Your Committee thought it necessary to inquire into the losses which had actually been suffered by this unnatural forced trade, and find the loss so early as the season of 1776 to be 77,650_l._, that in the year 1777 it arose to 168,205_l._ This was so great that worse could hardly be apprehended:  however, in the season of 1778 it amounted to 255,070_l._ In 1779 it was not so ruinously great, because the whole import was not so considerable; but it still stood enormously high,—­so high as 141,800_l._ In the whole four years it came to 642,725_l._ The observations of the Directors were found to be fully verified.  It is remarkable that the same article in the China trade produced a considerable and uniform profit.  On this circumstance little observation is necessary.

During the time of their struggles for enlarging this losing trade, which they considered as a national object,—­what in one point of view it was, and, if it had not been grossly mismanaged, might have been in more than one,—­in this part it is impossible to refuse to the Directors a very great share of merit.  No degree of thought, of trouble, or of reasonable expense was spared by them for the improvement of the commodity.  They framed with diligence, and apparently on very good information,