The East India Company
Such exclusive companies, therefore, are nuisances in every respect; always more or less inconvenient to the countries in which they are established, and destructive to those which have the misfortune to fall under their government.
—Adam Smith, THE WEALTH OF NATIONS 1776
The East India Company was launched in 1600 but it conducted its 1st century in relatively desultory fashion, coastal forts; engaging in trade; forming alliances; contesting the Portuguese, the Dutch, and the French; and at times attempting to take on the Mughals themselves. Fortunes were made, battles were fought, trade was expanded, and territories were claimed, but the seeds of empire were slow in germinating. Fraud was the crucible in which both imperial & capitalist expansion was forged.
When the East India Company’s charter was technically forfeited in 1693, Company shares were used to influence parliamentary support for charter renewal. In 1695 the report of the parliamentary investigation into the developing disgrace over quick fortunes made through bribery and insider trading led to the dismissal of the speaker of the House of Commons, the impeachment of the lord president of the council, and the imprisonment of the Governor of the East India Company. If the Company did in the end secure its renewal, the experience left a bad taste, suggesting to many that the only choice was between a licensed monopoly and a free-for-all in which pirate vessels could vie with the East Indiamen for control over a new global marketplace, as well as new territories. Nevertheless, the Company survived into the new century, it soon also became a steady source of wealth for parliamentarian and investor alike.
Ever since the days of Akbar the European trading companies had been petitioning the Mughal emperors for farmans, imperial directives. Within a decade of the East India Company receiving its first royal charter in 1600, a captain William Hawkins had journeyed from Surat to Agra to petition Jahangir for just such a farman. A procession of hopefuls followed including Sir Thomas Roe, the first official ambassador from the court of St James who dismissed India in much the same terms as Babar. But the farman had not been forthcoming, and garrisons and wars had followed. Madras had been acquired from the local nayak in 1640 and its foreshore immediately graced with the four-square Fort St George. Bombay had passed to Charles II in 1661 as part of the dowry of his Portugese bride, Catherine of Braganza. It had been leased to the Company, whose employees came to appreciate its greater security when Shivaji and his successors began their raid on Surat. Calcutta had been founded twenty years later.
With the accession of Farrukhshiyar the company’s hopes soared again. The new emperor had been brought up in Bengal, where his father had been governor after Shaista Khan. He was known to some of the English in Calcutta, and the company had supplied his nursery with toys. Evidently the toys had been appreciated, for news of some forty tons of adult exotica now awaited the emperor’s orders brought an interim confirmation of the Company’s existing privileges plus a request that the mission proceed to Delhi forthwith. In 1715, headed by the unexciting John Surman and guarded by some 600 troops, a caravan consisting of 160 bullock carts, 1200 porters and a choice assortment of carriages, cannons and camels headed west across the Gangetic plain. ‘Considering the great pomp and state of the kings of Hindustan, we was very well received’, wrote Surman on arrival in Delhi. He relished the impressive ceremonial and was soon dispensing lavish bribes. Meanwhile the mission’s doctor successfully treated some swelling in the imperial groin. He was handsomely rewarded, but as to the farman Farrukhshiyar remained infuriatingly indifferent. Only when threatened with the withdrawal of the Company from Surat and its other establishments in Gujarat did he relent. Losing the Company’s bullion and trade for the price of paper was unthinkable! On New Year’s Eve 1716, more than a century since captain William Hawkins had first applied for it, the farman received the imperial signature. Explicit as to the territorial and commercial rights enjoyed by the Company throughout India, the farman did indeed ‘indicate such favour as has never before been granted to any European nation’. In Calcutta, Madras and Bombay celebrations were held, toasts were drunk, and salutes fired as the document was paraded through the streets and proclaimed at cities’ gates. The farman inducted the Company into the political hierarchy of Mughal India through a direct relationship with the emperor which comparison with that enjoyed by imperial office-holders. And in that it legitimized action against anyone supposedly infringing in terms, it offered great scope for future intervention. Thirty years later it would be on the strength of Farrukhshiyar’s farman that Robert Clive would justify his advance to Plassey and the overthrow of Bengal’s nawab.
But if the farman could be used to provide a legal basis for British interference, and if the lively market in commercial, fiscal and military opportunities encouraged such intervention, it was the Anglo-French wars which precipitated it. They furnished the pretext, demonstrated the method and inspired the confidence for the first British moves towards Indian dominion.
Bengal’s comparative prosperity, as also its autonomy, dated from the turn of the century and appointment of a man later known as Murshid Quli Khan. Born a Brahman in the Deccan, the much-renamed Murshid Quli Khan had been purchased, converted, adopted, and then inducted into Mughal service by one of Aurangzeb’s amirs in the Deccan. Exceptional ability won him the diwani, or chancellorship, of Hyderabad and from there in 1701 he had been sent to boost the revenues of Bengal. Murshid Quli Khan was the first Nawab of Bengal. The good government followed continued under Nawab Alivardi Khan.
British Calcutta during that period prospered with the concessionary tariffs and other favourable trading terms conferred by the farman. It prompted rapid and unplanned growth within the Company’s Calcutta enclave. The anchorage and settlement of 1690 had by 1750 become the busiest port-city in Bengal with a population of 120,000. To Alvardi Khan as Nawab of Bengal Calcutta’s prosperity was both irritating and tempting. but wisely preferring the golden eggs to the big white geese which laid them, he dealt fairly with the British as with his other nesting colonies of French and Dutch merchants. His successor and grandson, Siraj-ud-Daula, proved less of a conservationist, indeed imprudent to the highest degree. Within a year he had alienated his grandfather’s officials, his greatest zamindars, his major bankers and all the Eurpoean trading companies. Siraj demanded from the British surrender of certain dissidents, who had taken refuge in Calcutta, the demolition of unauthorised fortifications and the withdrawal of trading concessions not clearly specified in the farman. The British were dangerously complacent. The city itself had long since engulfed the walls of Fort william and was probably indefensible. When Siraj appeared on the other side of the Maratha Ditch with a large army, British confusion positively invited attack. Although the fighting lasted for five days, no serious attempt was made to open the negotiation which might still have saved Calcutta. Successive British withdrawals culminated in a panic-striken dash to the ships, and Siraj suddenly found himself master of the city.
When seven months later Robert Clive and Admiral Watson fought their way back up the Hooghly river and easily retook the city, it was Clive who, against strong resistance from his colleagues, insisted on continuing the war. Peace on demanding terms were offered to Siraj only for long as it took the British to defeat the French at Chandannagore. With the risk of French attack removed, Clive resumed hostilities against the Nawab and proceeded upriver towards Murshidabad. Siraj’s army took up a defensive position at Plassey. The numerical odds, at the battle of Plassey, at perhaps 50,000 to 3000, were heavily in Siraj’s favour, so was the disposition of of his troops, and despite the superiority of the company’s guns, the initial artillary exchanges proved indecisive. Clive himself seems quickly to have despaired of straight victory and to have rested his hopes entirely on the treachery of Mir Jafar and other dignitaries amongst the Nawab’s commanders with whom he had already signed a secret pact. When, after some delay, Mir Jafar opted to honour this pledge and duly made his hostile sentiments clear to Siraj, the Nawab had little choice but to flee. Deserted by well over half his army, he was indeed as much victim of a revolution as a rout. Robert clive personally handed Mir Jafar, a relative of Siraj, to the throne. The battle of Plassey in 1757 had been the occasion both for the establishment of the first stages of imperial rule in eastern India and for massive private enrichment of Company servants. The select committee of the House of Commons that sat in 1772-1773 estimated the ‘presents’ worth over two million pounds had been distributed in Bengal between 1757 and 1765. A growing number of company servants were amassing extraordinary fortunes simply by taking bribes from successful contenders in the internecine quarrels of state.
(It is said that the origins of Calcutta’s most famous public festival – the Durga Puja can be traced to the victory of the British in Plassey. Raja Naba Kissen Deb, a financial backer of the Company, threw a party in honor of Robert Clive during the occasion of Durga Puja). Later Mir Jafar was replaced by in a bloodless coup by his son-in-law, Mir Qasim by the British. But he became too effective for the British & they deposed him. Mir Jafar was again placed on the throne. In 1764 the deposed Mir Qasim was back in Bihar, this time in a hostile alliance with the now-Mughal Emperor and his formidable ally, the Nawab of Awadh. The war that ensued, and in particular the battle of Buxar, marked more convincingly than Plassey the true beginning of British dominion in India.
Despite 5000 veteran Afgan cavalry from Abdali’s army, despite Mir Qasim’s disciplined forces, the Mughals’ prestige and the Awadh army of perhaps 30,000, it was Major Hector Munro’s force of 7500 largely Indian sepoys which gained a hard fought and decisive victory. At Buxar all that still remained of Mughal power in northern India was shattered. It was perhaps the most important battle the British ever fought in south Asia. Later Mysore was tamed and the Marathas managed…The East India Company ruled supreme. Clive told the House in 1769 that he had been solely responsible for the transformation of Company rule from its origins as a minor and inconsequential trading operation to a great sovereign power. For now, he claimed, ” The East India Company are…sovereigns of a rich, populous, fruitful country in extent beyond France and Spain united; they are in possession of the labour, industry, and manufactures of 20 million subjects; they are in actual receipt between 5 and 6 million a year. They have an army of 50,000 men. The revenues of Bengal are little short of 4 million sterling a year.” Imperial corruption crested during during Robert Clive’s years of greatest influence–from 1750s through the 1770s.
Robert Clive, by all accounts an impetuous man who was judged a bully by his contemporaries, had become a ‘writer’ for the East India Company at the tender age of 17, and begun his Indian career at Madras. Later he was given the primary responsibility of relieving Bengal in 1756. He was later impeached on charges of taking bribes. Clive in defence said that his acceptance of presents as well as his jaghir (land grant)–were in the larger scheme of things small beer. On the one hand he explained that it was customary in India to give and receive presents. On the other hand, having compared himself to the nawab at the same time he charged all of his Company colleagues with corruption, he claimed his own relative virtue. As he went on to say when concluding his defence in 1772: “A great prince was dependent on my pleasure, an opulent city lay at my mercy, its richest bankers bid against each other for my smiles; I walked through the vaults which were thrown open to me alone, piled on either hand with gold and jewels! Mr. Chairman, at this moment I stand astonished at my own moderation.” Although he was vindicated, his self-defence led to many more questions, both about his own actions and about the character of the Company rule in India, leaving a taint on the origin story of empire for many years to come. Clive himself chastised Parliament both for insufficiently appreciating his contributions and for not acting boldly enough to consolidate Company gains. “It was natural to suppose”, he argued, that such glorious imperial conquest “would have merited the most serious attention of administration, that in concert with the Court of Directors, they would have considered the nature of the Company’s charter and adopted a plan adequate to such possessions. No they did not. They treated it rather as a South Sea Bubble, than as anything solid and substantial. He was allowed to retire with his fortune intact, the select committee recommended a different kind of intervention than that argued for by Cilve. Indeed, Clive correctly understood the consequent Regulating Act of 1773 as a personal rebuke. He committed suicide–though in part for reasons of ill-health–the next year.
Warren Hastings was elected governor of Bengal in 1772, and elevated to the position of governor-general in 1773. Hastings first act was to take direct control of the financial administration of Bengal. He also took direct responsibility for the administration of justice in Bengal, establishing a supreme court in Calcutta and implementing his own plan to draft new codes of civil law for Hindus and Muslims. With a hefty annual salary of 25,000 pounds, he was supposed not only be above corruption but also root it out across the range of Company activities. Hasting’s most prosaic accomplishment was to devise, a rule of property; a system of agricultural tax collection based on the presumed right of the state to collect “rent”. His most praised accomplishment was the establishment of a rule of law based on Islamic and Hindu texts. These accomplishments were obscured by the continuing confusion over sovereignty. Yet Hastings worked to establish a revenue administration later canonized by Cornwallis in the “permanent settlement” of 1793. But Hastings was an ambitious man. In early 1773 he advocated that the “sovereignty of this country (India) be wholly and absolutely vested in the Company”, and that he be the sole “instrument” of this sovereignty.
In 1786 Hastings too like Clive had to face an impeachment trial. Charged with accepting ‘presents’ in India Hastings defend himself well. “I will not pretend to deny, I never did deny, that I accepted the usual entertainments which were then usually given to the visitor, by the visited…It was usual in the country, and it is impossible for any person to read any oriental history without knowing that the custom has prevailed over the East, from the most ancient times to the present. My predecessors, as I was informed, had received the same, and it was never held criminal in them.“ Hastings took credit for transforming the administration of land revenue in Bengal, for instituting courts of civil and criminal justice, for establishing a new form of government in Benares, and for cementing the Company’s subsidiary alliance with the great province of Awadh. He created the conditions for Company trade in opium and salt, and held of famine even when it crept to the borders of Company rule. Finally, he had raised the Company’s annual revenue from 3 to 5 million pounds. “I gave you all, and you have rewarded me with confiscation, disgrace, and a life of impeachment.” During the last stages of the trial, Lord Cornwallis came in to testify, having finished his stint as governor-general of India. He defended Hasting’s reputaion and legacy. Hastings was certainly no Clive, and when he returned to England he knew he had to depend on a handsome Company pension rather than his own ill-gotten gains to support his admittedly aristocratic tastes. Unlike Clive, he accepted that he had made errors, but steadfastly denied that he did so with any intent to defraud the government for his private gain. “I did harbour such a thought for an instant,” he remarked, adding quickly, to put things into perspective once again, that he had in any case been “too intent upon the means to be employed for preserving India to Great Britain, from the hour in which I was informed that France meant to strain every nerve to dispute that empire with us, to bestow a thought upon myself, or my own private fortune.” Over 9 years the trial continued. Closure was only reached on April 23, 1795, before a packed house. Warren Hastings was acquitted by large majorities of all the charges against him. It was not until well after his death, however, that Warren Hasting’s historical vindication was complete. He was hailed as the guardian of the British Empire.
The contradiction of sovereignty and Company trade was slowly dissolving. On the one side, the sovereignty of the Mughal was seen as a mere rhetorical convenience. On the other, the Company was now seen as performing the work of both Crown and Parliament (even if it did so with great financial cost). Formally speaking, it was not until the “Great Rebellion” of 1857, and the final deposing of the Mughal King, the sovereignty in India was clarified. In one full swoop, both the Mughal and the Comapny were dethroned, and the British Crown became paramount.
Their prey is lodged in England; and the cries of India are given to sea and winds….In India, all the vices operated by which sudden fortune is acquired; in England are often displayed, by the same persons, the virtues which dispense hereditary wealth. Arrived in England, the destroyers of thr nobility and gentry of a whole kingdom will find the best company in this nation, at a board of elegance and hospitality. Here the manufacturer and the husbandman will bless the just and punctual hand, that in India has torn the cloth from the loom, or wrested the scanty portion of rice and salt from the peasants of Bengal, or wrung from him the very opium in which he forgot his oppression and his oppressor…..Our Indian government is in its best state of grievance.
—–Edmund Burke, “SPEECHES ON MR. FOX’S EAST INDIA BILL”., 1783
In 1857, the seopy mutiny ( The Great Rebellion) eventually led to the royal proclamation of 1858. It announced a decision of the British Parliament that all rights previously enjoyed by the East India Company in india were being resumed by the British Crown.
Victoria thereby became Queen of India as well as of the United Kingdom, and India’s Governor General became her viceroy as well as the British government’s chief executive in India. The fiction of company rule was thus ended. The Queen announced to the British Parliament that, satisfied that her Indian subjects were ‘happy under My rule and loyal to My throne’, she deemed the moment appropriate for her to assume a new ‘Royal Style and Titles’. The style it was later revealed was to be imperial and the titles, in English, “Empress of India’ & ‘Kaiser-i-Hind’.
In January 1877, in a vast tented city around the Ridge whence the British forces had recaptured Delhi twenty years earlier, the new imperium was solemnised at an Imperial Assemblage. The official attendance of eighty 84,000 included nearly all of India’s sixty-three ruling princes 300 titular chiefs and native gentlemen. Lord Lytton, the presiding viceroy whose arrangements would provide a blueprint for all future imperail durbars, took some delight in listing those present. Here were the princes of Arcot and Tanjore form the deep south, the pricipal ‘Talukdars from Oudh’, ‘Alor Chiefs of Sindh’, Sikh Sardars, Rajputs and Marhathas, ‘Arabs from Peshawar’, ‘Biluch Tommduis from Dera Ghazi Khan’, and envoys from Chitral and Yassin in the Hindu Kush etc.
The British apparently disclaiming plans for the rapid tranformation of Indian society, the initiative now slowly passed from these hereditary representatives of the old dynastic order to a new elite. English-educated and city-based.
Ironically East India Company (Brand Name) is now at the hands of an Indian, Sanjiv Mehta, who has lived in UK for 20 years. The company’s Indian headquarters were in Calcutta and the UK one in Leaden hall Street in the City. This is now the site of the Lloyds Building. CEO Sanjiv Mehta acquired the entire business in 2005, affording him the opportunity to reinvigorate the brand for the modern consumer. With $15-million investments to date and the company now in Indian hands, the vision is to restore the East India Company to its former glory. Despite being over 400 years old, the East India Company is one of the most recognized brands in the world: over two billion people know of its history. It once employed a third of the British workforce and was responsible for 50 per cent of global trade. Mehta said: “I will begin with fine foods — tea, coffee, chocolate, marmalade — mainly sourced in the UK, apart from tea, which will come from India, but inspired by the East India Company. But I will add linen, chintz, other fabric, furniture and books and open other stores in the UK, Japan, the Middle East and the Continent.”