AND ··~ri-rE:··: F'IFTI:l R·EPORT; ~ i '<~ F. D. -ASCOLI, M.A. 01' THE INDIAN. CIVIL SERVICE • FORMERLY SCHOLAR OF EXETER COLLEGE, OXFOR.JJ ; - . OXFORD AT THE.CLARENDON PRESS rgq 0 ;:, £ ~ c ~- 5 ~ ·11 2 i ~ .c. cc STOCK TAKING. 2011 OXFORD UNIVERSITY PRESS LONDON Ele[~BURGH' GLASGOW NEW YORK TORONTO MELBOURNE CAPE TOWN BOMBAY fUBLlSHER TO THE UNIVERSITY (!943) ·PREFACE Tins book wa~_~gesred by a cours~· four lectures,"" which J gave ~t; .·th~- Dacca College :it the request of . _,. . . Mr. R. B. Ramsbotham, of the Indian Educational Servic.e. The lectures attempted to analyse and condense the more important facts, contained in the body and appehdi~es . of Jh~ Fifth Report, so far as the:f deal• with the ·revenue ·- . administration of Bengal, in order to make intelligible the period immediately preceding the Permanent Settlement. This book attempts nothing more, and its publication is merely due to the fact that, in Mr. Ramsb~tham's opinion, it will be . . . of assistance to students of the administrq,tion and revenue system of Bengal during tlie eighteenth century .. One of the most important appendixes of the Fifth Report, viz. the Analysis of the Finances of Bengal,- by James Grant, commonly known as Grant's Analysis, contains much valuable matter, obviously collected with a great deal of trouble and research ; but the matter is sometimes inconsistent, often contaminated with error, and· always composed in a confused and laborious style. I have attempted to explain the main •facts contained in the Analysis in Chapters II and V. I must apologize for drawing the majority of actual examples from the Dacp District. My excuse lies in the fact that I have enjoyed opportunities of studying its revenue history in detail; my justification I draw from Grant's own • .. _ A 2 EA)\l~Y -~vENUE .'fiiSTORY '>, t :1at in P.is time Dacca continued to be 'the largest .u most valuable province of thP. country'. · I am indebted to Mr. Raw_; :.:_--tham for ma~y valuable suggestion~ the arrangement of the book, and for pointing out where explanations were required from the historian's point of view. To Mr. V. A. Smith I must express my gratitude, not only for his valued advi~ut also for under- ,; taking the than~s task of seeing the rms through the press owing to my absence in India. The imperfections of the . . book may, perhaps, be partly ascribed to the busy life of an Indian official. .. • • F. D. ASCOLI. DACCA, July 3, 1916 • • .. CHAPTER INTRODUCTION I, BENGAL A~ROVINCE OF THE MUGHAL EMPIRf- AND TH .. ~ dGIN OF THE BRITis..-JOMINION • II. THE MUGHAL REVENUE ADMINISTRATION • III. BRITISH REVENUE ADMINISTRATION UP TO 1786 IV. • REVENUE ADMINISTRATION FROM I 786-1790 , ,. v. VI. VII. VIII. THE GRANT-SHORE (ONTROVERSY._ GRANT'S CAsE • • THE GRANT-SHORE CONTROVERSY. SHORE'S CAs:E THE SHORE-CORNWALLIS CONTROVERSY THE EFFECTS OF THE PERMANENT SETTLEMENT SYNOPSIS OF EVENTS IN THE DEVELOPMENT oF THE BRITISH REVENUE ADMINISTRATION Iff BENGAL, IlEHAR, .AND ORISSA • THE FIFTH REPORT (Reprinted from the official octavo text of 1812) GLOSSARY INDEX PAGE 7 10 ~ 22 30 38 42 54 63 71 • 268 INTRODUCTION ON March I I, rS~.; Mr. Dundas, President of the Board of Control, 1 moved id-lli';; House of Common"~he appointment • of a Select Committee to inquire into the present st!lte of affairs of the East India Company. The Committee a~ointed continued to sit for four years, and in the course of this period issued five Reports ; of these the first and second de~t with the financial position of the Company; 'Wd were printed by order of the House of Commons on May I!, I8Io; the third and fourth Reports were of little permanent interest. The Fifth Report was issued in I812, the year when the renewal of the Company's charter, due to expire in the following year, was under discussion in the House of Commons. The Report was printed by order of the' House of Commons on July 2i; I 8 I 2. - It deals with the revenue and jud~ial administration of both the Bengal and Fort St. George Presidencies,; this book, however, is only concerned with the Report, so far as it deals with the revenue administration of Bengal. .. This work is divided into two parts : the first part deals with the problems •raised and discussed in the Report, at1d its appendixes ; the second part contains a reprint of the Report, so far as it relates to the Bengal Presidency, with brief ex· planatory notes. All references to the Report are to the original folio edition, published in r8rz. The Evidence attached to the Report. The Bengttl portion of the Report is supported by several important docu" ments, printed as appendixes, but not now reprinted, the most important being : 1 Robert Dundas, became the second Viscount Melville in I8I1· 8 EARLY REVENUE.HISTORY Appendix L1 • Minute of Mr. Shore, dated June r8, • 2. Appendix IV.2 - (a) Analysis of the Finances of Bengal, by lames Grant, • dated April 27, 1786. (b) View of the Revenues of Bengal, by James Grant, dated February 28, q88. 3· Appendix V.3 (a) Mi~ of Mr. Shore, dated September r8, 1789. (b) Minute of Lord Cornwallis, dated September r8, • I 789. (c) Second minute of Mr. Shore, dated September r8, I78g. • (d) Minute of Mr. Shore, dated December 21, 1789. (e) Minut~ •of Lord Cornwallis, dated February ro, qgo. The Problems. These appendixes deal very fully with the contemporary views on the main revenue problem of the time, namely, the Permanent Settlement of l:len_gal-a policy which originated in the Regulating Act of 1784.4 The problem may be divided into two heads: r. Appendix I ~nd IV, the controversy between Grant and Shore, the former maintaining that Bengal was under-assessed, the latter that the revenue was probably as high as the country could at that time stand. 2. Appendix V, the controversy between Shore and Cornwallis, the former maintaining that the administrative knowledge was insufficient, and the revenue demand too unequal in its distribution, to justify a permanent settlement of the land revenue, the latter holding that sufficient experience had already been acquired, and that the reform was essential • for the administrative development of the country .. The Subject-matter. Apart from the two main con­ troversies, Appendix IV contains ar1 account of the early 1 Fifth Report, pp. 169-238. • Ibid., pp. 451-98. 2 Ibid., pp. 245-450. 4 24 Geo, III, cap. 25. .. , INTRODUCTION t 9 revenue history of Bengal from the time of the Emperor Akbar; this account is partially criticized in Append'l"x I. The main~, body of the Report, before discussing the nature and 'effect of the reforms. of Cornwallis, ·sketches briefly the Bri~sh revenue administration from 1765 until the arrival of CornwaUis in India. The second part of this book consists of the main body of the Report, with brief critical and explanatory notes. The first part deals with the revenue history of Bengal on the historical method. Chapter I is introduct~, and narrates briefly the rise and importance of Bengal as an administrative unit, a knowledge of which is essential to the student.of the development of the British power; Chapter II explains the development of the Mughal system of revenue administration up to the year I76s, and is largely a critical comment on Appendix IV of the Report; Chapter -:iii describes the development of the British revenue administration up to I 786, and explains Part I of the Report ; 1 Part II of the Report, so far as it narrates the revenue system introduced into Bengal by Cornwallis,2 is covered by Chapters IV, V, VI, and VII, the latter three chapters dealing specifically with the arguments advance<\ in Appendixes IV and V of the Report ; Ch.ftpter VIIi of this book deals with the imn~diate effects of the Permanent Settlement of Bengal, the subject covered by Part III of the Report, 8 though no attempt is made to enter into the modern economic and political discussions regarding the ultimate effects of that measure. [Note. The Fifth Report was drafted by· James Cumming, Senior Clerk of the Board of Control. It was reprinted by Higginbotham, Madras, i11 1866 and 1883. The latter edition, in two large volumes, well printed and arranged, gives. the Appendixes, the Glossary by Wilkins, and other docu­ ments.-V. A. S.] 1 Fiftk Report, pp. 4-12. 3 Ibid., pp. 54-62 and 76. 2 Ibid;, pp. I 2-2 2 and 2 5-30. CHAPTER I BENGAL AS A PROVINCE OF THE MUC!HAL EMPI~ AND THE ORIGIN OF THE BRI'l'ISH DOMINION • Necessity for an historical introduction. It is im- possible to understand the subject-matter of the Fifth ]teport witho;t a knowledge of the administration of the Provinces or Siibas of Bengal,.J!ehar, and Oiissa, and the means by which the British dominion commenced. The official terminology is almost as confused as the administration itself was in the first half of the eighteenth century, and can only be explained by ?. 'ie\ffices. In I 7 I 2 Azrm-ush shan, the nominal Nazim, fell in one of the fights for the throne that had now become habitual, leaving vacant the post of Nazim of the three provinces. 'In I 7 r 3, on the accession of Farrukh Siyar as Emperor, Murshrd Quli Khan gained for himself the appointment to the combined posts of Nazim and Dewan of the three provinces,! a position which .he had de facto held since I 704. This appointment finally abolished the con­ stitutional check of the Dewan on the Nazim. The head­ quarters of the Nazim were ?OW defin,itely located at• Murshrdabad, and accordingly a fresh distribution of the Deputy Governorships was found necessary. Murshrd Quli Khan personally exercised the powers of Nazim and Dewan in Behar, 1 It is not clear whether he was appointed Nazim and Dewan'of Behar at this date or only in 1718. · 0 l94a B 1313 "• 'l ~.~ f~'i ~ '-""·~ G r.. r t ·'- ; .... . ·-· ..~ 18 EARLY REVENUE HIStORY Orissa, and the lY"estern Districts of Bengal with a Naib Nazim • • in Orissa, while the Eastern Districts were placed under the charge of Mirza Lutf-ullah as-Naib Nazim and Sarfaraz Khan as Naib Dewan with head-quarters at Dacca. This arrange­ ment endured in principle until the whole administration was taken over by the British. In 1717 the British had obtained the authority of the EIDperor to purchase thirty-eight more villages near Calcutta at an annual revenue of Rs. 8,r2r. 8, but Murshid Quli Khan proved his power by successfully preventing the completion of the purchase. In 1725 Murshid Quli Khan, probably the greatest of the viceroys, died ; the following list will show the succession of the later officials, and it is only necessary to note that from this date the appointment of a s~ccessor lay entirely in the Nazim's own hands, and not in the gift of the d~bilitated Emperor : Shujii-uddin Khiin. Nazim 1725-1739; son-in-law of Mur­ shid Quli Khan ; he appointed his son Sarfaraz Khan as his Dewan. Mirza Lutf-ullah remained as Naib Nazim at Dacca with Mir Habib as his Naib Dewan ; when these latter t_wo were transferred to Orissa, Sarfaraz Khan was nominally appointed Naib Nazim of Dacca in addition to his duties as Dewan, but Ghal'ib Ali Khan acted for him at Dacca with J aswant ·Rai as Naib Dewan of Dacca. Saifariiz Khiin. Nazim 1739-1740; son of Shuja-uddin. The office of Dewan was conducted by a council con­ sisting of Haji Ahmad and Jagat Set. Aliverdi Khan. Nazim 1740-1756; Nawazish Muhammad Khan was appointed Dewan of the Provinces and Naib Nazim of Dacca, with permission to rule in Dacca by his deputy Husain-uddin Khan, and, on his assassination in • 1 7 54, by Raja Raj Ballabh. Siriiiud daulii. Nazim i756-1757; grandson of Aliverdi Khan; he appointed Mohan Lal as his Dewan. Jasrat Khan was Naib Nazim of Dacca (rom 1756 till q8r. The Governorships of Kasim Ali Khan and Mir Jafar are z:!atters of general history, and in I 765 Najm-ud daula, the son BENGAL AND THE BRITISH DOMINION rg • of Lhe latter, succeeded his father, but on acco~nt of his incom­ petence Muhammad Reza Khal}. was selected to act as his •, deputy. This latter person is the centre of the discussion on the revenue problems subsequent to 1765. · The expansion of British influence. It has been noted that in I 7 r 7 the East India Company obtained certain rights from the Emperor Farrukh Siyar, which were largely nullified by the Naziin, Murshid Quli Khan. During the Governorship of his two successors, the trade of the Company was allowed without let or hindrance. Aliverdi Khan was too busy with the Mahratta invaders, and the East India Company wirh the Carnatic, to bicker about the trade of Bengal. With the accession of Siraj-ud daula, however, a man noted for his hostility to the. English, the tension between the native Government and the English intruders rea~hed the breaking­ point. The events that followed are well-~nown history. In I 7 s6 the Nazim captured Calcutta; in the following year the town was recaptured by the British. On February g, I7 57, Siraj-ud daula, partly in awe, partly to gain time, concluded a treaty with the British, confirming the trade rights of the• Company in Bengal and surrendering the thirty-eight villages, promis~d by the Emperor Farrukh Siyar in qi7, ·but withheld by Murshid Quli Khan. At the beginning of June, when renewed hostilities were inevitable, a treaty was signed by the Company with Mir J~far, ~ndertakirig to appoint Mir Jafar as Nazim in return for the fulfilment of the terms of the treaty of February 9· There followed in quick succession the battle of Plassey, the death of Siraj-ud daula, and the installation of Mir Jafar as Nazim of Bengal, B'ehar, and Orissa on June 29. On December 20 a further treaty was concluded with Mir Jafar, confirming that of February 9, and extending the area granted • to the Company ·over a tract of 882 square miles, known as the Twenty-four Parganas.1 This grant,' which was con- 1 The Twenty-four Parganas still constitute an administrative district in Bengal; the term implies that the tract consisted of twenty~four parganas or fiscal units; the parganii is explained in Chapter II. · . B 2 ~ - 20 EARLY REVENUE HIS'l'ORY firmed by a Sa?Jfd (grant) of the Dewan in I 7 s8, gave the , • Company the right of a zemindar over this tract on the payment of an annual revenue of Rs. 2,22,958 to the Nazim; this constitutes the first important territorial acquisition of the Company in Bengal. The grant gave no sovereign powers, . and placed the Company under the Nazim as a landholder ; the sovereignty rested de iure with the Emperor, in a minor degree with the Nazim, but de facto the Company was now the sovereign power in Bengal. The revenue of the Twenty-four Parganas, it is interesting to note, was assigned on July 13, ·q 59 ,•to Clive as a jiii'glr in return for services rendered to the Emperor; on June "'23, 1765, this grant was confirmed for \ a perJod of ten years, after which the rights would lapse to the v Company, free of all revenue charges due to the Emperor. The removal of Mir }afar in favour of Kasim Ali Khan as Nazim in q6o resulted in the cession, by a treaty dated September 27, 176o, of a large tract to the Company free of all revenue, nominally to meet the expenses of the army, but being in reality the price paid by Kasim Ali Khan for his elevation . • This tract covered the districts of Burdwan, Midnapur, and Chittagong, an area of 8,r6r square miles. This grant was renewed by Mir }afar on his restoration on July 6, 1763, and was finally confirmed by the Emperor on August 12, 1765. The grants of Calcutta (in 1698), the Twenty-four Parganas (in 1757), Burdwan, Midnapur, and Chittagong (in q6o) constitute the ceded lands as distinguished from the Dewani lands of the Fifth Report. The distinction is very important ; in the former the Company had acquired the full right to the revenue; in the latter they were required to pay revenue to the Emperor on behalf of the Nazim, and to meet all the expenses • of the Nazim. In the former the Company, from the dates of acquisition, collected the revenues and. administered the districts through its own agency; in the latter, to which alone the whole of Chapter III properly applies, the Company for many years collected its revenues and administered the provinces by native or experimental agencies . . BENGAL AN.D THE BRITISH DOMINION 2 I In I 764 the victory of Major Hector Munro over the N awab - . of Oudh and Shah Alam at Buxar left the British supreme in • Bengal. On the death of the Nazim in January, 1765, the Company recognized his son Najm-ud daula on the condition that the administration was entrusted to a Naib Nazim or Subah to be selected by the-Company; the selection fell upon Muhammad Reza Khan. On August I2, I76s, the Company was appointed Dewan of the provinces of Bengal, Behar, and Orissa by the Emperor. This gave to the Company the duty of collecting the revenues of the three provinces on payment of twenty-six la.khs of rupees to the Emperor and of all the expenses of the Nazim's establishment. On September 30 the Nazim recognized the grant of the Dewani-the first apf?oint­ ment made by the Emperor to that office since I 701, the appointment in the intervening period haviT:tg been in the-gift of the Nazim. Muhammad Reza Khan was appointed by the Company to perform their Dewani duties as Naib Dewan. It is from this date that the actual British revenue administra­ tion originates. - The Company was now in much the same position as M urshrd Quli Khan had been on the death o" Aurangzeb. Both of them held the de iure position of Dewan ; both of them held, owing' to the incompetence of the respective Nazims, the de facto powers of the Nazim; to neither was the suzerainty of the Emperor more than a name. The permanent success of the British administration as compared with the tem orary brilliance of Murs -d uli Khan's n~ ime was large due to the natural advantages of a corporate body over an individual, and to the decline of those corruptive influences which play so important a part in the court of an Eastern potentate. . . CHAPTER II THE MUGHAL REVENUE ADMINISTRATION Scope. This chapter is largely a resume of Grant's Anal~is. It is merely descriptive, any criticism of the figures being left for the discussion of the Grant-Shore controversy. Grant's figures in different parts of the Analysis are incon­ ~istent, but inconsistencies have been disregarded in order to keep the account !s clear as possible. The First Mughal 'Settlement'. The first Mughal revenue ' settlement' was made in the reign of the Emperor Akbar by Raja Todar Mal in the year A.D. rs82. It is not clear whether or not the figures represent with any degree of reliability the JlCtual land revenue; they are derived from Abu! Fazl's Ain-i­ Akbari, a contemporary authority; but in many cases figures were, without doubt, included, whith show the revenue assessed without any expectation of realization. The settlement, how­ ever, was made after local investigations primarily for a period of ten years, though it appears to have remained in force for seventy-six. The revenue assessment was based on a propor­ tion of the produce of the soil. Bengal proper consisted of nineteen large administrative divisions called Sarkars. These were again divided into 682 fiscal and administrative units called parganas. The Sarkar probably was an innovation of .Raja Todar Mal; the pargana unit can be traced back to early Hindu times; each parganii was. administered by a Chaudhari or Zemindiir; the distinction between these two at this period is indefinite and unimpQrtant. His duties were largely administrative, in addition to the collection of the :evenue. To control the zemindars in their fiscal capacity . THE MUGHAL REVENUE ADMINISTRATION 23 . a Kiinimgo was appointed for each parganii; he was responsible for the parganii accounts ; he kept the ra~s of assessment,. controlled the survey of the pargana, and generally maintained the rights of the cultivators. Similarly in each village a pat~ wiiri, or village accountant, was appointed, whose· functions in the village resembled those of the Kanungo in the par,ganii. " These latter two officials are iinportant, and the position Of the Kiiniingo largely conditioned the development of revenue administration during the early British Period. The revenue roll is termed by Grant the Asl Tumiir-i Jamii Piidshiihi or Original Royal Revenue Roll, and 111ay be summarized as follows : Khalsa lands jalgir lands Total revenue of Bengal . Rs. 63,44,260 . Rs. 43,48;892 • Rs. r,o6,93,152 1 Khiilsii lands represent territories paying revenue direct into the royal treasury (khiilsii or khiilsii serishtii); fiiiglr 2 lands, territorie~ the revenue of which was assigned for special purposes without passing througb the royal exchequer ; a li~t of such assignments is given in the description of the third settlement of Bengal. Jiitglr. and khiilsii lands were much interspersed, and· as the revenue system developed, -it fre­ quently became impossible for the zemindar to distinguish between hisjiitgzr and khiilsii lands. ·In some cases, however, payment of revenue for jiiigir lands was made not in cash but­ in troops, elephants, or arm~d boats; the jiizgir is practically a feudal tenure. The Sec.ond Mughal 'Settlement'. "The second revenue settlement was made in the year r6sS byShah Shuja or Sultan Shuja, the Viceroy of Bengal in the year of the Empero• Aurangzeb's accession.3 From the original 682 parganiis, 361 additional ones were formed ·or recognized; 'the parganii 1 Fiftlt Report, pp. 255-9. 8 .Fifth Report, pp. 259-fJI •. . . . . ~ e. g. C!ive~s iamousjaigir of 1759· . . 24 EARLY REVENUE HISTORY • has never been a stable unit, and it is probable that the new .parganiis had be~n in process of formation from the time of the original settlement. This 'settlement' resulted in an increase of Rs. 9,87,162 on the previous revenue of the original nineteen Sarkars, being an increase of 15-! per cent. in a period of seventy-six years. This increase had probably been in ~ progres~ throJlghout the period. In addition to the above, six Sarkars, comprising thirty-eight parganiis, were transferred from the Suba of Orissa; five Sarkars, comprising 256 parganiis, I were created out of annexations in Assam; two Sarkars, com- prising.six parganiis, were added for Tippera, annexed on the east, and the Sundar bans/ developed in the south; the tribute from the Bishnupur chiefs on the south-west frontier of the Suba of Bengal was reckoned as one Sarkar and five parganiis; the profits from t~ royal mint were reckoned as one Sarkiir and two parganiis. The total number of Sarkars and parganiis thus amounted to thirty-four and 1,350 respectively. It is interesting to note that the last two Sarkars are not land revenue, and are the first extensive indication of other sources of revenue, later denominated siiir.2 There was no increase (njiiigir lands; this points to misappropriation by the jiiigzr­ diirs of any increase there may httve been in the revenue of these lands-probably about I 5-! per cent. on the analogy of the increase in revenue from the khiilsii lands. The follow­ ing shows the state of the revenue roll at this period, known as the 'Improved Jama Tumari '. 1 The Sundarbans is a low-lying tract of jungle intersected by numerous rivers and streams in the delta of the Ganges, abutting on the Bay of Bengal. From Mughal times it has always been considered as the property of the State, and the first subsequent attempt to bring it under cultivation to,ooo against 19!- lakhs in 1722 and thirty-eight lakhs (according to Grant's figures) in 1765; 1 but the arrears averaged over.eight lakbs per annum ; in one parganii the proprietor to retain his property bid up toRs. 1,34,I09, but within two years his arrears exceeded the annual revenue due from him.2 The result was even at the time attributed to over-asse~ment. The first effort of the Company to manage its revenue affairs had resulted in the complete extinction of a skilled, though corrupt, collecting agency and the substitution of an untrained and foreign agency, appointed to collect a revenue that must be, by the very manner of its assessment, excessive. . ,. Period II, 1773-1781.. Centralization. The Council was bound by the terms of• settlement for a period of five years, but it soon realized that the collecting agency would not work ; as the event proved, it was not in fact the agency so much as the amount to be collected that was wrong. However, it was decided to centralize the whole system by the creation of a Controlling Committee of Revenue at Cal­ cutta, with six Provincial Councils subordinate to it, at Calcutta, Murshidabad, Patna, Dacca, Burdwan, and Dinajpur. Col­ lectors were abolished, and a body of native iimz'ls 3 was appointed to attempt to extract the revenue as fixed in the • 1 Fifth Report, p. 371· · · 2 This information is derived from the proceedings of the Dacca Provincial Council of Revenue. 3 Ami/literally means agent, and in this context implies an agent for the collection of the revenue. The office must be distinguished from the iimil of the chaklii (Chapter II). · 1UI3 c .. 34 EARLY REVENUE HISTORY previous year. The result, financially at least, was no better. The Council no~ realized that the fault lay not so much with the administrative machinery as with the method of assess­ ment. The Council became prophetic ; it realized that short term settlements would never succeed administratively or financially. On March 2 8, I 7 7 5, Barwell recommended that, as a matter of favour, settlement should be made with the zemindars for one or two generations. On January 22 of the following year Francis in a powerful minute advocated a settlement with the zemindars, as of right, in perpetuity.1 W arr.:n Hastings himself agreeing with the claims of the zemindars, in preference to farmers, advised in a minute dated May 29, 1776, the creation of a. Court of Provincial ~ouncil to ascertain in detail the resources of the country before the term ol' settlement should be fixed. The claim of the zemindiir at this period was the right to hold his estate in perpetuity, subject to his agreement to pay the revenue fixed by the Company from time to time ; in case of his refusal to agree to the revenue as fixed at any time, he ,considered himself entitled to a maintenance allowance known as maliluinii or mushiihara (moshairii) from the farmer who accepted settlement. His right -rested on one of two facts­ either he was a permanent official with an hereditary right to collect the revenue of the estate, or he possessed a pro­ prietary right in the soil. The farming theory rested on the assumptions, that the proprietary right vested in the State, that the zemindar was not a permanent hereditary official, and that the Company possessed the right in its capacity as Dewan, to let out estates on lease (farm or ijiirii) temporarily to any person selected by the Company. The problem is discussed • in the Grant-Shore controversy. On December 24, 1776, just before the term of the quinquennial settlement expired, the Court of Directors replied to the discussion of the Council : 1 Francis's Plan of Settlement of tke Revenues, 1776; see Fiftk Report, p. 33 7· .· REVENUE ADMINISTRATION. UP TO q86 35 • ' Having considered the different circumsta~ces of settling your lands on leases for lives or in perpetuity, we do not for many weighty reasons think it at present advisable to adopt either of these modes; but in the meanwhile we direct that the lands be let . for the succeeding year on the most advantageous terms, and that none be in future let by public auction'. There is no doubt that at this date the reply of the Directors was correct. Their orders were carried out in the spirit of Warren Hastings's minute, advising inquiry into the resources of the country. A si)ecial committee was appointed under whose superintendence native amins. were deputed in I 7 7 7 to all districts to inquire into the resources of each estate. On this basis annual settlements were made, ordinarily with the zemindars, for 1777 and. the three suc­ ceeding years. This period closes with an elperimental agency at work inquiring into revenue affairs, practically reducing t,he Provincial Councils to figure-heads. The revenue demand had shown a big decline &ince 1777, and despite this fact arrears continued to accrue. :Period III, 1781-1786. Completion of Centralization.,. Drastic reforms were now instituted. The Council, imagining that they had now gained st:l'fficient local knowledge, decided on the course of complete centralization at Calcutta. The Committee of Revenue was placed in full control aided by a Dewan. Provincial Councils were abolished on February 9, q8r, and Collectors were appointed over the various districts. The reappointment of Collectors appears to suggest an idea of decentralization. This, however, was not the case. The Collector was denied any interference with the new settlenient of the revenue ; special officers w~re deputed by the Co~­ mittee of Revenue for the purpose, arid it is interesting to note • that Shore himself was deputed for the settlement of Dacca. Even as the collecting agency the local Collectors were not trusted, and zemindars were encouraged to pay their revenue direct into the Khalsa or Exchequer at Calcutta. Mufassal kam1ngos were reappointed· to assist the Collectors, but they c 2 EARLY REVENUE HISTORY • were placed under the control of the Sadar kanungos/ who themselves bm~ed down at the feet of the Committee of Revenue. The new Collectors were mere figure-heads, and the distrust which the Council showed in their appointment could lead to nothing but discouragement. The settlement of I 78r was made principally with the zemindars for varying periods, not exceeding three years, in different districts ; it showed a large increase on the previous annual settlements, amounting in Dacca to Rs. 4,7o,s86, but arrears continued to accrue. Annual settlements were concluded for the years r 784.-1786 by special officers deputed by the Committee, showing a gradual increase on the figures of I 781. The I defects of this new system were immediately apparent, and in q82 Shore stated,his opinion: 'The real state of the districts is now le!s known, and the revenues less understood, than in r 7 7 4; . . . the system is fundamentally wrong, and inapplicable to any good purpose '. Recapitulatory. From q6s-q86 the policy of the Council had continued to fluctuate. At the outset they had .,put their trust in a time-worn, effete, and corrupt system, bequeathed by the decadent Mughal power. Even in the reforms of 178r, the only hope -of success lay in the obsolete kam1ngos, reappointed to aid the local administration ; no attempt had been made to reorganize the kanungos, or inquire into their value as then constituted. The efforts at gaining local knowledge, first by European Supervisors, and then by native amzns-both efforts being failures-had led the Council to abandon any effort in that direction, and to hope that a central authority, aloof from the corruption of the country, would be able, almost unaided, to control an unknown and • antiquated system. Just as the Court of Directors abused its officials in India, so the Council abused and distrusted its 1 Sadar is the contrary of mzifassal and is used for officers and objects at head-quarters. REVENUE ADMINISTRATION UP TO q86 37 .. local agents.1 A combination of ignorance and distrust has never proved to be an administrative success. • () 1 The locus classicus for the treatment of its officials in India by the Court of Directors is contained in Long's Se!ectt'ons, No. 402. This famous dispatch was written in December, 1759, and signed by a number of the Company's. servants as a protest against the constant habit of the Court of abusing their officials. The Court of Directors replied by dismissing a number of the signatories, including Richard Becher, one of the most remarkable of the Company's officials, a member of the famous Select Committee. He was ultimately pardoned and reinstated, only to be dismissed again in 1770 for championing the cause of the Select Committee against the Council. At the time of his second dismissal, he had been nominated as Governor of Bengal. CHAPTER IV REVENUE ADMINISTRATION FROM q86-179o PERIOD IV, DECENTRALIZATION Origin of the Permanent Settlement. In the year 1784, the Act for the ' Better Regulation and Management of the Affairs of the East India Company' was passed by the Houses of Parliament (24 Geo. III, c. 2 5 ), 'to settle and establish ... the permanent rutes by which the tributes, rents, and services of the rajas, zemindars, polygars,1 talukdars,2 and other native 'if landholders should be in future rendered and paid'. Lord Cornwallis was sent to carry into effect the provisions of the new Act, but the Act had already taken effect before his arrival. In 1786 a new system of admini~tration was evolved, ~e plan of which appears to have been worked out or, at least, developed by Shore. The great reforms of 1786. The scheme aimed at com­ plete decentralization ; it involved the division of the whole of the provinces into small distri~ts, each under the control of the Collector ; the Collector himself made the settlement, and collected. all the revenue of his district ; the Committee of Revenue merely retained a general power of sanction and con­ trol ; the native dewans were abolished, and the kanungo was revived after a thorough reorganization. The scheme of these reforms was published on April 7, 1786, on which date James · Grant was appointed Serishtadar with the special object of reconstituting the kanungos' department and thus preparing 1 Polygiir, a military chieftain, in Southern India, not found in Bengal. 2 Talukda1·, in Bengal, Behar, and Orissa, a petty proprietor; in Oudh the term is used for big proprietors, corresponding to the zemindar in llengal. REVENUE ADMINISTRATION FROM r786--qgo 39 • the way for the great revival of the zemindars-a paradox, con- sidering Grant's views on the status of the• zemindar; the office of Serishtadar at that time corresponded to a· Keeper of the Records-an office of great importance at a time when old records, which were essential for the un.derstanding of old institutions, were little known, and in a state of utter confusion. The formation of Districts. The division of the province into districts is the backbone of the whole system of reforms. The Supervisors, the Provincial Councils, and~ the earlier Collectors had exercised their doubtful authority over a.series of fiscal divisions, parganfi~, zemindaries, &~ These had become disintegrated and scattered in the process of_ their development, and tpe Murshidabad Collector of the earlier eighties is found exercising control over cePtain estates in the heart of Dace;, a distance of 2 7 8 miles by river at that date.1 The new districts were territorial units, thirty-five in number, the revenue of each of which amounted approximately to eight lakhs of rupees. In accordance, however, with a minute of Shore dated March 13, I 787, these districts were reduced ~ twenty-three in number. The process of rendering the districts more compact continued until I 793, but the system evolved by Shore, based on a series of compact districts, each controlled directly by a Collector, who was responsible for the whole administration, subject only to the general control of the Bo:lrd of Revenue, has formed the basis of all subsequent administration. • The creation of districts as territorial units was in fact a revival of Akbar's system of Sarkars. The Collector and his Agencies. The administrator of each district, the Collector, was now in a position of trust. To him the zemindar had to look for a fair assessment of revenue;, to him the Committee of Revenue had to look for a full 1 The distance is given in Major Rennell's famous Bengal Atlas (edition of 1781). • It is interesting to note that Collectors were also given powers as judge and magistrate. This was modified in 1790, when the judicial system was reformed. EARLY REVENUE HISTORY collection of the revenue assessed. A strong local administra­ tion had at last been created ; the Council had realized that the revenue affairs of Bengal, Behar, and Orissa formed too large a problem to allow of the details being attended to by one small central body. Still further, it was admitted that the abolition of the kam1ngo as a mujassal or district agent in 1772 had been an error; and the office was now reconstituted with a view to keeping it clear from zemindari interference, and maintaining it as an office of information and registry for the Collector. The subsequent history and the ultimate failure of th~ kanungo are a different story. The Board of Revenue. On June rz, q86, the Com­ mittee of Revenue was dissolved, and recreated as the Board of Revenue. Shorn of all its previous ,unending duties of suspicion and intt!rference, it was now constituted as a Board of general control; the duty of making settlements of revenue was taken away and replaced by the duty of sanctioning, subject to a certain extent to the control of the Council, the settlements made by the Collectors . ..,The Value of the Reforms. The reforms of q86 laid the foundations on which the Permanent Settlement subsequently rested, and it is the revenue syst-em then adopted, that led to any success that may have attended the Permanent Settlement. These reforms were evolved by Shore, and it will be interesting to note, when discussing the Shore-Cornwallis controversy, that beyond the question of permanence, the actual details of the Decennial and Permanent Settlements are based on Shore's minutes. Instructions of the Court of Directors. On September 1 2, r 786, Lord Cornwallis landed in Calcutta bearing the instruc­ tions, dated April rz, q86, of the Court of Directors, who considered that the spirit of the Regulating Act of 1784 would be best observed by fixing a permanent revenue on a review of the assessment and actual collections of former years. The settlement should be initially concluded for a period of ten years 'as the idea of some definite term would be more REVENUE ADMINISTRATION FROM q86-179o 41 pleasing than a dubious perpetuity'. The ~ourt appeared to be uQder the impression that the investigations that had been made subsequently to 1765 would form a sufficient basis for the new settlement, but Cornwallis soon realized the falsity of this impression, and immediately adopted the Shore machinery for commencing further investigations. During the years 1787 and q88 annual settlements of the revenue were made by the Collectors, who were at the same time engaged in investiga­ tions prescribed by the Governor-General. At the close of the year 1789 and the beginning of the year 179o, regulations were issued for the Decennial Settlements of Behf!r and Bengal respectively. The discussions which led to those regulations will form the subject of the succeeding chapters. Resumptions.1 In discussing the development of the revenue machinery, no mention has been ~ade of three sub­ jects, the resumption of revenue free lands, the resumption of hiits,2 biiziirs, and ganjes, and the resumption of siiir, corre­ sponding to excise, octroi, and trade duties. The subject of revenue free lands is of much importance, but as the problem · continued until the middle of the nineteenth century, ~ adequate discussion is possible ; the other two resumptions were completed by 1790, but as they are merely ancillary to the subject as a whole, the subjects have been omitted, in order to avoid confusion in the account of the development of the revenue administration. The Remainder of the Problem. The subject-matter so far has been dealt with chronologically. To realize what occurred between the years r 789 and r 793, it is necessary to deal with the important discussions, which originated in the problem of the position of the zemindiir, and culminated in the declaration of the Permanent Settlement in I793·. For , this purpose it is necessary to revert to the year q84. 1 The word 'resumption' is used in a technical sense to denote either the assessment to revenue of lands, &c., hitherto exempt from the payment of revenue, or the transfer of revenue, devoted to some special object, to the general exchequer. 2 Ha!s, biiziirs, and gmzjes are markets of different kinds. CHAPTER V THE GRANT-SHORE CONTROVERSY. GRANT'S CASE ThEJ Preliminary Controversy. Before proceeding to the great controversy, it is necessary to allude to an ~-:portant discm:;ion, the !::nbject of which is contained in Grant's Political Survey of the Northern Circars, publishP.d on Pecember 20, q8l (Appendix XIII of the Fifth Report). In the course of this treatise Grant attempted to show that the zemindar was merely a temporary officia!, and that the right of property in land vested absolutely in the State. This inter­ pretation was adopted by the Committee of Revenue in 1786, ~n after the passing of the Regulating Act of 1784; the status of the zemindar was described as a conditional office ; and the Committee issued instructions to refrain from selling 'lands, which in our opinion belong to Government', 1 for arrears of revenue. Later, however, in the same year the new Board of Revenue revoked the policy of the defunct Com­ mittee,2 and in a minute written on April 2, q88, Shore ·attacked Grant's view vigorously. 'The rents', he wrote, 'belong to the sovereign; the land to the zemindar.' The real issue. There is no doubt that in origin Grant's theory was correct ; the laws of Manu and the Ain-i-Akbarz both support the view that the land belonged to the sovereign. In fact, even as late as the year r865, seventy-two years ·after the Permanent Settlement had extended and fixed the rights of the zemindars, despite the wording of the Permanent Settle- 1 Letter issued by Committee of Revenue on March 30, 1786, 2 Letter issued by Board of Revenue on July 18, 1786. GRANT'S CASE 43 • ment Reglilation (Reg. I of 1793), 'actual 1;roprietors of the soil', the majority of the judges of a Full Bench of the Calcutta High Court denied the absolute right of the zemindar to the soil (The Great Rent Case). The discussion of the point, however, is immaterial and purely academical. Grant wished to show that the zemindar had no permanent right, whether as proprietor of the soil or as an official who collected and paid the rent ; for proof he might point to the policy of Murshid Quli !{,han and the Quinquennial Settlement. In this he was clearly wrong; during the Mughal period aU offices had tended to become hereditary, and accordingly permanent, a111d the history of zemindari development in Bengal clearly shows that the zemindar was removable only by force or fraud. Even the office of kanilngo had become hereditary in course of time. I have examined a sanad of the year A.n.•rzz8, shortly after the death of Murshrd Quli Khan, when the tide of_ilie zemindars' fortunes was still at a lOJLeb.b,_irL.w.hich_th.e_-t:ight of the dispossessed zemindar to receive an allowance from his estate is distinctly recogmzed. This clearly implies an interest greater than that of a temporary official, removable at wiij. Shore, on the other hand, appears to be wrong historically in maintaining that the proprietary right in the land belonged to the zemindar. There is nothing in the earlier history of the land revenue of Bengal, there is nothing in the old books of Hindu or Muhammadan Law to suggest that the sovereign had ever divested himself, or been divested of the right to the soil. Even in the grant of the thirty-eight villages to the East India ' Company-a grant which conferred a full zemindari right-it is specifically stated tnat the Company should merely 'have the renting of the towns petitioned for ',1 The terminology implies the retention of the proprietary right by the Emperor. The :Basis of the Controversy. This original discussion between Grant and Shore cleared the path considerably for the scheme of settlement. The experience of the Quinquennial 1 East India Recorrls. J~ook No. 59;1. 44 GRANT -SHORE CONTROVERSY Settlement (r772.-1777) had finally condemned the farming system; Barwell, Francis, and Warren Hastings had, each in a different manner, learned to favour a zemindari settlement, and their views had been so far confirmed by the orders of the Court of Directors of December 24, 1776. The only alterna­ tive was that Government should deal directly with the riiiyat or cultivator, but this, as will be shown, was not, at the close of the eighteenth century, within the bounds of practical politics. It must then be realized that, when Grant wrote his two famous treatises, a settlement with the zemindars had alread1 been decided on, that as Serishtadar-the office to which he was appointed on April 7, q86-his main function was to ensure the success of the zemindari system, and that the main object of his tre3.tises must have been to ensure that the system adopte"d should be in every way advantageous to the interests of the Company. It is true that passages are found which can only be interpreted as condemnatory of the zemindari system j but they are, I take it, written as warnings against laxity in the regulations with a view to the amelioration 'the well-known evils of the system, and their force is largely due to the clumsiness of Grant's pen-a clumsiness which is brought into great prominence by comparison with Shore's clear style and power of concise argument. Grant's main object was to prove that Bengal was greatly under-assessed, while Shore attempted to show that the assessment was as high as, in the circumstances, it could be. Grant's Treatises. In the Analysis of the Finances of Bengal, issued on April 27, q86, Grant gives the history of the revenue de~elopment of Bengal from the time of Akbar-a history that has been incorporated in the second chapter of this book. The Historical and Comparative View of the Revenues of Bengal, issued on February 28, I 788, attempts to supply detailed and accurate figures of the assess­ ment of every fiscal division of Bengal, subdivided into the smaller fiscal units that existed from time to time. The main argument of the latter treatise is to prove that great defalca- GRANT'S CASE, 45 tions had occurred in the Company's revenue since the com­ 'mencement of the control of Muhammad Reza Khan; the main argument of the former treatise is to justify the amount, if not the principles, of the assessment in the last half­ century of Mughal control. . The arguments in the two treatises overlap considerably and are accordingly dealt with together. Grant's Arguments. Grant opens with a violent attack on the revenue policy that had been pursued since 1765; the administration had been a failure owing to the chicanery that had been practised in order to keep the officers of the- Com­ pany in a state of complete ignorance.1 It has already been shown, that between ....!.1§.5 and I 7&Q... the Company had pur sued several different policies, but Grant does not attempt to deal with the problem in detail. His if'hplication is, that while the full assessment of Mughal days was being realized,., ~y a small IJ.Ortion of it wa§ being_paid to the cr~cliL of t~pany. In the twenty years subsequent to 1765, he asserts that the defalcations amounted to ten crores of rupees 2 (£ro,ooo,ooo),8 or·an average of fifty lakhs (£soo,ooo) ~ annum. He bases this charge on three suppositions : (a) That the figures collected by him with reference to the Mughal assessments were correct. (b) That the Mughal assessment and realization of revenue corresponded. (c) That the revenue as assessed in the days of Mughal control was actually realized during the British administration, despite su~s~quent lower assessments. These suppositions form the groundwork of Grant's arguments. The Mughal Assessments. Grant states that his figures are based on twenty volumes of Persian accounts 'procured ... 1 Fiftlz Repo1·t, pp. 247-50. 2 Ibid., pp. 414-16 give the details of his calculation, 8 The value of the rupee has been taken as two shillings, but as a matter of fact its value at this period was considerably higher. 46 GRANT-SHORE CONTROVERSY • through the influence of a light and private purse '.1 He admits that these papers were not included in the public records, but states emphatically that they were copies of the revenue accounts from the year 1722, that were reputed to have been lost or destroyed in the time of Kasim Ali Khan.' He further asserts that these actual papers had been previously handed over to 'an English gentleman high in office' (by whom he presumably refers to Philip Francis) in r776 by the • - agents of the Sadar Kanungos." It is not improbable that some such copies did exist at the time; it is highly improbable thaL th~ maze of intricate figures, so ably analysed by Grant for even the smallest fiscal divisions of the province, could . have been collated from anythi,;g except detailed accounts. On the other hand, it is strange that Grant did not produce , these discredited 1\ooks of account to justify his figures, ever1 ~f the public purse had been requisitioned for the purpose; the mystery with which references are made to the papers also inclines to throw suspicion on their authenticity. Whether they were authentic or not, the fact remains that Grant had, by •e means or other, gained access to papers which showed the details of previous Mughal assessments, and the fact that the figures appeared high. to Shore and to modern critics tends to confirm their correctness; it is very improbable that at a time when the revenue . demand w_a~ver _!e3ding_ to increase, papers should have been fabricated by a native . agency, provi~_"f1Jgtier assess~~n! in~ the )?ast. it is further improbable that, had the fi~~s_bee~ _ _!he inven!io_n_ of Grant, they would h~ve _!:>een §O __ bu!~P.~