Circular N. 4142 of the Territorial Department Revenue from the Officiating Secretary to the Government at Bombay Castle, Charles Edward Fraser Tytler, to the Resident in the Persian Gulf [‎20r] (29/44)

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Boml»ay, at an average cost of Rs. 1,246. In the same year the Collector of Broach obtained
ten ciiests from Bombay, at an average cost of Rs. 1,365 per chest.
33. In 1843 a discussion occurred in the Revenue Department respecting the mode in
which the Sural Coliectorate was supplied with opium. This originated in certain remarks
contained in the Collector's annual report for 1842, to the effect that opium was illicitly
imported into his districts to a large extent, and stating (letter from the Collector of Surat
to the Revenue Commissioner, dated the 6th November 1843) that this was owing " to the
great difference in the price at which it was sold to the licensed venders from the Govern
ment depot, and that.subsisting in the neighbouring foreign States." To check this, the
only remedy which occurred to him was to reduce the priee of the Government opium. The
price is not uniform, but depends on the cost at which it is delivered into the depot, to which
is added Rs. 2 per Surat seer,* equal to Rs. 4-5-10 per Indian seer. In other words, to the cost
* at the place from whence the opium is obtained, the expense of transit to Surat is added, so
that if it is supplied from Ahmedabad, as sometimes occurs, it would be sold at the price
there and the expense of carriage to Surat, even though it had originally been obtained from
Bombay. Thus the cost of transit is frequently doubled.
34. It must be obvious that opium sold under these contingencies could never compete
with opium imported direct from Malwa. The Collector suggested (letter dated the 6th
^November 1843) that this erroneous system should be abandoned, and that for the future it
should either be obtained by indent from the Opium Agent in Malwa, which would ensure
that it should be of good quality, or that (and in his opinion this was the preferable course)
the retail venders might be permitted to contract for a supply with persons engaged in the
export trade to China; the opium being conveyed underpasses to be issued by the Opium
Agent in Malwa, and to be delivered free of duty into the Government stores, after having
been examined by a local committee. Under this plan, the Collector thought Government
might expect to realize the prime cost, with a small advance to cover wastage.
35. But as has been observed by Mr. Pringle, "it is the price in the Guicowar's districts,
and not the price in Malwa, that must ultimately determine what may be imposed here, con
sistently with the exclusion of illicit supplies, even though by the adoption of such a plan we
should incur a loss. The anomalous effect of the present mode of fixing the price is apparent.
It is not determined either by the iwtural value of the article, or the natural cost of pro
duction, but at an advance on the cost incurred on it, up to the time of its reaching the Col
lector's stores, and which may be enhanced by circumstances, by Government regulations,
and by arrangements, so as to make the relative price of different consignments quite dispro
portionate, and possibly in the inverse ratio of their respective intrinsic values. The Reve
nue Commissioner illustrates this by the fact that at the time he wrote (December 1843)
opium was sold from the Government depot at Surat at eight different prices, varying from
Rs. 9-5-10 to Rs. 22-4-11 per seer, and, for aught that depended on the principle by which
the price is fixed, the cheapest may be the best: as long as the cheap kind lasts, the dearest
remains (as it has done for ten years) subject to deterioration and wastage, and occasionally
the price so fixed may be below the market price. By this process the artificial price is not
only disproportionate to the value of the article, and a bar to its disposal when the natural
price is low, but tends to its disposal on disadvantageous terms, in the possible though more
rare case of that price being comparatively high.
36. The Revenue"Commissioner, with the view of putting a stop to this anomalous state
of things, recommended the abandonment of the monopoly, and the reduction of the sale
price to the venders, to a standard little if at all exceeding that in the adjacent territories,
though he at the same time intimates his doubts whether under this plan Government
would derive any advantage from retaining the supply for retail in its own hands; and under
* This is the duty levied according to the suggestion of the Government of India in 1817. I find that the Col-
i lector of Kaira suggested that it should be added to the prime cost when retailed, and that Government sanctioned
it.—Vide Collector's letter dated 31st August, and Government reply dated the 30th September 1820.