MR. DUNDAS'S PLAN FOR THE LIQUIDATION OF THe debt of the Letter from the Right Hon. HENRY Clarges-freet, 30th June 1801. GENTLEMEN, In the explanation of the affairs of the Eaft India Company, which I lately stated to the Houfe of Commons, I gave it as my opinion, that within a very few years after the return of peace, the Indian debt might be reduced within proper limits, by a due combination of the revenues and commerce of the Eaft India Company; that before the expiration of their charter, the fum neceffary for the guaranty of their capital will be accumulated; that the additional dividend may be allowed to the proprietors, as provided for by the act renewing their charter; and that a due attention will, at the fame time, be paid to the claims of the public for participation, according to the terms of agreement at the time the charter of the Company was renewed; and the more clearly to elucidate my ideas, I exhibited them in the form of an account, founded on the data pointed out, and ftating the conclufions refulting from those data. the affairs, during the continuance of Although it was my intention, as ufual, to publish the detailed explanations I have been accustomed to ftate in the committee of the Houfe of Commons, on the day generally appropriated for what is called the India Budget, I have been induced to give this feparate tatement, becaufe it has been fuggeted to me, that a publication of this nature, not complicated with It is fcarcely neceffary for me to explain why there is a peculiar propriety in my addreffing the following fheets to you. Independent of the refpect and attention I owe to the directors and proprietors of the Eaft India Company, and of the deep intereft I must at all times take in their concerns, it is obvious, that if my plans are fit to be adopted, or are likely to be attended with the wifhed-for fuccefs, the exertions for that purpose must originate with the East India Company, and thofe exertions must be continued with a steady and unremitting attention. The account to which I have juft referred is No. I. in the Appendix. The refult of the account depends only on its arithmetical accuracy, if the data on which it proceeds are not liable to fome fundamental error; it is therefore my first wish to direct your attention to an examina tion of the leading features of the plan, They are, 1. An arrangement abroad, fo that a full million from the furplus of the revenues fhall, at the commencement, be applicable to the purchase of investments. 24. That the investments from India and China fhall amount, at prime-coft, to four millions an nually, in equal proportions. 3d. That during the first four years from this time, the Company thall avail themfelves of the power they already have, under the act, for augmenting their capital flock to the extent of two millions, at the rate of half a million annually, which it is fuppofed will realize one million minute details, but embracing a 4th. 4th. That the additional money fo raifed fhall be applied, exclufive. ly, to the liquidation of the prefent Indian debt at intereft, either by increafing remittances in bullion or export to India to that amount, or by defraying additional bills drawn from India for the fame purpose. 5th. That the extinction of this debt, now calculated to amount to fourteen millions fterling, fhall be carried on at the rate of one million annually, till the part of it called the decennial loan fhall become pay. able, which is expected to tal e place on or about the 1807-8; and that the fum then payable on account of Indian debt, which is ftated at 35,000/. fhall be difcharged in that year on which fuppofitions the debts at intereft abroad will then be reduced to 4,500,000l. I fhall be under the neceffity of troubling you with fome explanation on each of thefe points. The first requifite is, " an ar"rangement abroad, fo that a full "million from the furplus of the "revenues fhall, at the commence"ment, be applicable to the pur"chafe of investments." The neceffity of this requifite being accomplished, will appear from the account I have already referred to, in which, in the fecond year, credit is taken for the fupplying 4,000,000. prime.coft of inveft. ment, with a charge on that account on the treasury at home of only 3,000,000. This, of courfe, proceeds on the fuppofition of the remaining 1,000,000l. being, in that year, fupplied from the revenues in India. In the fubfequent years, the charge at home for inveftment is fuppofed gradually to be decreafed below 3,000,000l. in proportion as the applicable furplus of revenue in India is increafed by favings of the intereft of debt difcharged; and the progrefs of this latter operation is pointed out in the two accounts, No. II. and III. in the Appendix. I am well aware of the difficulty which occurs in the outfet of this whole operation, from the prefent burthened state of your finances in India, and the very large amount of the revenues which are abforbed in the difcharge of intereft at fo high a rate; but this very circum ftance is fo decifive as to the fuccefs of the measure, when once fet in motion, that no difficulty is fo great that it ought not to be fur mounted. The estimates of the revenues and charges, which I stated to the House of Commons, were drawn up from thofe tranfinitted by your governments in India; but in order that I might proceed with as much certainty as poffible on this important article of the plan, in addition to the exertions of the accountant of the Board of Commiffioners for the Affairs of India, I requested the affistance of your very accurate and able officer, Mr. Wright, in order that they might jointly examine and correct the estimates tranfmitted from abroad, fo as to enable me to form the beft opinion poffible, to what amount you might rely on a furplus in India, as available to the purpofes of investment. The estimate, No. IV. in the Appendix, will exhibit the refult of the investigation. It is prepared with great care, and certainly abun dant caution; but it is the fafelt fide on which to err: and it would be imprudent, in a matter of fo much importance, to build on any furplus that does not appear to be clearly warranted. The amount is taken at 800,000/ which is deficient for the object in view to the amount of 200,000l.: but, in truth, this deficiency ought not to be ftated at fo fmall a fum as 200,000l.; for when you confider that that part of the commercial charges home we to enforce. ture, may, without risk, be poft... poned, till it is finally afcertained that they can be defrayed, without interfering with the fum requifitef or investment, according to the plan detailed in the fubjoined accounts, No. I, II, and III. In this obfervation I particularly allude to your military eftablishments, as laft revifed. In the orders you sent out fome months ago, confiderable reductions were made in your military expenditure; and I obferve, in the corrected estimate, No. IV. that the faving in confequence is computed at 270,000/. Thefe reductions were ordered upon a very accurate examination, and, to the best of my judgment, it would not be proper, in a future permanent arrangement, to make them to a greater extent: but when fo great an object is at stake, I fhould be cleariy of opinion, for confidering how far any parts of the propofed establishment might be poftponed. In the notandum fubjoined to the corrected eftimate, No. IV. Mr. Wright obferves, that if the addition to the artillery could be postponed, it would fave 54,000l.; but I confider the addition ordered to your artillery establishment to be of fuch deep importance to the fecurity of your extended Indian empire, that I do not think the faving fuggefted ought to be adopted. But I think differently with regard to the other notandum; and when fo great a faving can be made as 153,000l. by keeping the native regiments at 1400 privates, in place of 1600 or 1800, I cannot doubt in advising you to make that reduc tion. In truth, there is no risk; for, in the cafe of emergency, the native troops could be recruited with the utmoft expedition, to the ultimate propofed establishment, or indeed to any amount. In the fecond place, it is not impoffible that fome of thofe expences, which are, with great propriety, intended to be of a permanent na In thefe obfervations you will obferve, obferve, that I have confined myfelf folely to the confideration of military retrenchments. I have done fo, because I am convinced that any attempt to make any confiderable reduction in your civil establishments would be productive of all the inconveniences attending inadequate allowances to your civil fervants. Such a fyftem would lead to all the fatal confequences refulting from the exaction of private unwarranted allowances, which it has been the great object of the prefent fyftem of Indian adminiftration to annihilate. At the fame time, this is no reason why even your civil expences may not merit your attention, to the effect of inftructing your governments to refrain from any expenditure of a contingent nature, which would lead to any confiderable expence, and refpecting which there is no immediate urgency, why it fhould be executed at the prefent rather than any future moment. Although, at this diftance, I cannot take it upon me to fpecify all the particular items of expenditure, on which retrenchments may be made, I cannot permit myself to entertain any unreasonable diffidence on the fubject, when I look to the ftate of your expences in India at a former period. I do not carry that reference to an early period, because I am aware that, within thefe very few years, a large permanent expence was most properly incurred, by the arrangement which took place for rendering the condition of your military fervants more comfortable, in a variety of refpects. I refer, however, to the charges of all kinds, as they ftood in the year 1797-8, and the amount of them was 7,650,6541. a fum far inferior to that contained in the estimate now exhibited by your auditor, amounting to 8,851,2007. It is true, that fince that period great additions have been made to your territorial poffeffions, and very con fiderable additions to your military expenditure are created, in confequence of the very beneficial alliances you have formed with the native powers in India. These confiderations, however, do not operate against the probability of what I am endeavouring to establish; for as to addition of territories, it cannot escape obfervation, that the events which produced those additions have at the fame time tended to increase the fecurity of your own poffeffions, by narrowing their frontier, and annihilating your most powerful and inveterate enemy; and wherever you are obliged to increase your military establishments in confequence of alliances, you have received a fubfidy fully adequate to the expence of thofe fubfidiary engage. ments. It is proper here to remind you, that, in the obfervations I have made, to eftablish the probability of the requifite aid to be derived from a furplus revenue in India, I have taken no credit for the expectations I am entitled to entertain from the increafing profperity, cultivation, and confequent population, of our Indian territories. Our revenues, for fome years, have been in a state of progreffive increase, and the fame caufe muft continue to operate in producing the fame effects. I fhall not indulge myfelf, at prefent, in difquifitions of that nature, as it would lead me far beyond the bounds I have prefcribed to myself in this addrefs. I ftate the circumftance, without meaning to draw any other conclufion than what must occur to every body, viz. that the happy change which recent events have produced on our affairs in India, muft ftrengthen and invigorate every hope and expectation founded on their prefent ftate. Every fyftem of beneficial finance, commerce, and economical administration, can now be adopted and pursued, with more fteadiness and certainty of fuccefs, than it could be under circumftances of precarious fecurity and unremitting anxiety. вроп Having now ftated to you a faving upon your estimates to an amount producing near a million furplus in India, and having like wife ftated the profpect of a larger furplus, both from the probability of further retrenchments, and from the almoft certainty of a progreffive increafing revenue, I might fafely leave this part of the propofition, what I have already obferved: but, to remove all ambiguity on the fubject, I think it proper to re mind you, that in the end of the year 1803, or beginning of the year 1804, the debt due to the confolidated creditors of the late Nabob of Arcot will be liquidated, fo as to fet free a fun of not less than 6,2 1,000 pagodas, amounting, in pounds fterling, to the fum of 248,4007. This fum will, of courfe, be applicable to the discharge of fuch further debts of the late and prefent Na. bob as are not included in the former arrangement. The Eaft-India Company itself is a creditor to a large amount, and, according to the arrangement fuggefted by Marquis Wellefley, in his letter to the Nabob, of 24th of April 1799, there can be no doubt that at least one half of the fum fo fet free will be appropriated to the extinction of the debt due to the Company, and will, of course, to that amount, add to the furplus of the revenues applicable to investment. But this is not all; for, according to the letter I have wrote to you this day, on the fubject of the private unconfoli dated debts of the late and prefent My letter, with its en- As I confider this laft head to be of the utmost importance to the whole fuccefs of the propofition in question, and as fo many mifapprehenfions have appeared, and fo many mifreprefentations have been held out refpecting it, I have thought it my duty to itate my ideas upon it at greater length than I at firit in. tended; |