Page:The opium revenue.djvu/9

, or in all Rs. 493, to which must be added a certain margin as cost of transmission, insurance, profit of speculation, &c. "Since that time there has not been any reduction in the cultivation of Malwa opium. On the contrary, the cultivation, it is well known, has gone on largely increasing, and as the selling price at Bombay has also largely increased, the inference would appear plain that immense profits must have been realized before the drug has reached the exporter."

10. Then as to the effect of raising the duty, it was shown that while there had been little expansion prior to 1847, the year in which the duty was raised from Rs. 300 to 400, the export rose in the following ten years from 20,000 to 30,000 chests; "thus showing that it is not to the amount of duty alone that we must look, but rather to the combined effect of duty and selling price for the extent of cultivation."

11. Instead of the trade being, as alleged by Bombay, precarious and uncertain, the figures seemed to the Government of India "to afford evidence of a highly prospering trade," which flourished even when Bengal supplied its 46,000 chests a year, and the profits of which must therefore, on the provision from Bengal declining, have been enormous. "If with prices at about Rs. 1000 per chest, the trade flourished and expanded under a duty of Rs. 400, there is surely no reason to apprehend that with prices at Rs. 1350 and 1400, a duty of Rs. 600, or even 700, is likely to have the effect of causing a considerable diminution of the trade, far less the entire stoppage of it &hellip; It is certain that at present a duty of Rs. 600 bears a lower relation to the selling price in Bombay than the duty of Rs. 400 did in 1854 and 1855.

12. The justice of the principles laid down in the above despatch is borne out remarkably by the subsequent history of the trade. For Malwa opium has maintained its ground at the enhanced rate, notwithstanding the unnatural expansion of the provision from Bengal which soon followed, and the consequent lowering of prices, although, no doubt, heavy losses were incurred by individual firms in Malwa and Bombay from the derangement and oscillations of the trade caused by the arbitrary glutting of the Calcutta market.

13. In 1864 the house of Sassoon and Co. petitioned that the duty might be reduced from Rs. 600 to 400; and alleged that the cost of the chest at Bombay was between Rs. 1500 and 1600, while the market price in China had never exceeded Rs. 1575, and had often fallen below Rs. 1500. The Government of Bombay in forwarding the appeal submitted that so long as the monopoly in Bengal was maintained, "the average price obtained for Patna opium at the auction sales was the best test for judging whether the rate of duty on Malwa opium was too high or too low." The cost in Malwa (Rs. 493) added to the cost of conveyance and insurance (say Rs. 100), together with the difference, plus or minus, of the price of Malwa opium in China, were the three items which,