The working of this new monopoly did not differ in essentials from the old form. The opium was collected from the cultivators by a contractor, but instead of its being handed over to the Patna Council, it was taken to Calcutta, where the bulk of it was sold by auction to the highest bidder. The balance was divided between the Dutch, French, and the commercial side of the British East Indies Companies at average auction prices.
The revised conditions under which this new State monopoly worked ensured the best opium coming into the Company’s hands. It also did away with “middle-men,” and all the profits which would have gone to cultivators if they had been allowed free trade. It is not unnatural, therefore, that some one should conceive the idea of securing the profits made by the sea-traders as well. In 1775, the revenue officers of Patna estimated that if the Dutch and French were kept out of the trade, 33,000 chests of Bengal and Bihar opium would be available for export, and suggested that the Company should export this to China, where it could be sold at an immense profit. The letter was considered in Council, but the suggestion was dropped by common consent without discussion. Warren Hastings, however, suggested an alternative of direct official agency, to the exclusion of the contractor, but this motion was lost by a majority, and the matter was closed. But in 1781 a state of affairs arose in which the Company found itself sadly short of money. We were at war with the French, Dutch, and Spaniards, at sea, and with Hyder Ali and the Maharattas on land. In consequence our ports were closed to foreign trade, the seas were not safe for ships flying the British flag, and all available merchant ships were employed in carrying grain and other supplies to Madras. Opium was unsaleable at Calcutta. It was under such conditions that it was decided to export opium to China, and, accordingly, the ‘_Nonsuch_’ with 2,000 chests, was sent to the supercargoes at Canton, and the ‘_Betsey_’ with 1,450 chests to the Straits of Malacca. A loan of 10 lakhs of rupees was raised on the cargo of the ‘_Betsey_,’ to be repaid by bills of exchange on the Company from the Canton supercargoes. Another loan of 10 lakhs was raised from the public on the cargo of the ‘_Nonsuch_’ on similar terms. The ‘_Betsey_,’ after disposing of part of her cargo to advantage, was captured by the French and Dutch. The cargo of the ‘_Nonsuch_’ was disposed of at a loss after much difficulty on account of the prohibition of the import of opium by the Chinese, and on account of the “immense quantities” of opium brought to Macao by Portuguese ships before the arrival of the ‘_Nonsuch_.’ The loss on this venture was 69,973 dollars.