1757- East of the Cape of Good Hope

by Narendra Mehra

  Copyright © 2012 Narendra K. Mehra

  All rights reserved.

  ISBN: 1478384107

  ISBN 13: 9781478384106

  eBook ISBN: 978-1-62346-030-3

  Copy Right Registration #TXu 1-814-771 dt

  June 12, 2012.

  Map: British assault Regions, Mid 19th Century

  TABLE OF CONTENT

  Chapter One: Introduction

  Chapter Two: Trade

  Chapter Three: No Plassey, No Empire

  Chapter Four: Merchant Bankers & Aristocrats

  Chapter Five: Predatory Wars

  Chapter Six: Century of Miracles

  Chapter Seven: Industrial Revolution in England

  Chapter Eighth: Empire

  Chapter Ninth: Disastrous End

  CHAPTER ONE:

  INTRODUCTION

  Time marches on, people move on, so do nations and life goes on. But once in a while, a catastrophic event occurs which changes the course of human history. It was common for nations to rise to defend their honor or to honor their treaties and people have arisen to seek justice or to avenge defeat. Morally speaking, that was the nobler part of history. Unfortunately, there have been occasions, when predatory wars have been fought for economic gains or for the subjugation of others in pursuit of political ideology. There have also been clashes of culture or religion and the world history has been in constant flux. One such catastrophic event as is well known, was the clash of East and West resulting in the assassination of Archduke Franz Ferdinand of Austria by a Serbian nationalist which led to the First World War and its ramifications have been felt ever since.

  Another East West Conflict with far more profound consequences took place in India on the afternoon of June 23, 1757, which changed the course of British fortunes and the world history for the foreseeable future. That event is shrouded in mystery, its details very successfully suppressed and it helped Britain, an impoverished Island nation, become suddenly a banker to the World. That event gave birth to predatory capitalism and the resulting chain of events made Britain an Imperial power and gave birth to British Aristocracy. It also uplifted her people socially and economically from abject misery and drudgery. It was a transforming event for Britain and her people, it was a transforming event for the world, but little is known of that event because very successfully Britain was able to keep it a secret. That historical story is both compelling and fascinating and lifts the veil of secrecy which had remained hidden for such a long time.

  Britain was an impoverished nation and was left behind in the European race for money and power. Britain was competing with other European powers for building an Empire but it did not have the resources to match her ambition. In their efforts to colonize the North American colony, Britain over reached itself during the Seven Year War with France and for lack of funds, in fact, it became a war of survival. The Seven-year war was different from the other wars between England and France, until then, Anglo-French wars were fought in Europe principally on religious grounds. Those wars were unpopular in England because of the expense and the monarchy had difficulty raising the necessary money from the Parliament. The Seven-Year War was fought both in Europe as well as in America. As never before, Britain spent a very large amount of money to safeguard its American colony, the money that they did not have. It was a war for the Empire; it was a war for Britain as an imperial power. It was the war of supremacy between France and England. That war did not go very well for Britain, initially.

  Besides, the British were mired in all kind of financial problems at home and they needed the money. After the death of Emperor Charles VI (1740), England got embroiled in succession of wars, first against Spain and France during the War of European Succession, which lasted until 1748. In North America, Britain was fighting many wars as a prelude to the American War of Independence. It had also stationed a large standing army to fight the American Indians. Britain needed a lot of money to just stay afloat and they were relying upon commerce to make that money. Chinese tea was a money maker but they had no money to pay for the Chinese tea and the British merchants stationed in India, had to continuously hoodwink the merchants for opium to pay for the Chinese tea. The Dutch had taught the Chinese to smoke opium and the British began to capitalize on that addiction by the opium route. But the opium route had its limits as Britain did not want to part with silver to pay for the opium and Britain needed a huge amount of money to just survive.

  The British Navy was ill equipped and also needed urgent funds for expansion to block the French in the Atlantic but Britain did not have the tax base of France nor could it raise money internally. There were no banks as are known today, the Bank of England was not even born and other than private holdings or penny saving banks, there was no place for Britain to go and borrow money. For a while, Britain issued undated paper at a very high interest rate, but that had its limits and Britain found itself fighting for its life.

  Britain was already deep in debt, its national debt continued to burgeon and the borrowings ballooned and Britain was struggling to survive as a free nation. By some estimates, the debt exploded and yet they continued to borrow and continued to issue Navy bills and ordinance debentures with unknown and undated maturities. The resources of the banks were small and the framework of the government was based on personal and private contributions from individuals rather than institutions. There thus ensued a national crises, Britain could have pulled in its horns and go back home from the American colony but it had a heritage of pillage and plunder, piracy and loot and it decided to do what it did best in the past.

  Britain changed its government and William Pitt became the Prime Minister in its grave hour of need and he decided to use Britain’s core competency, pillage, piracy and buccaneering, to loot the money. Britain credits Pitt as a visionary and far sighted and sure indeed he earned that reputation for what he did. Pitt knew that there was only one place where money was available in plenty and Britain could raid it. Here starts the story of two diverse cultures, which had nothing in common, except that one was highly advanced, rich and a breadbasket of Asia and an industrial workshop of the civilized World and the other an Island nation, impoverished and depended on it, half the world away for trade and commerce. India was a very wealthy country and in Babur –Nama, the Memoirs of Babur, (the First Mughal Emperor) stated that “Hindustan was a large country and has masses of gold and silver. Its air in the rains is very fine not to be surpassed in healthiness and charm”. Britain came to India seeking trading opportunities much later than other European nations who were engaged in brisk business but for lack of sea faring skills, Britain was left behind. After a century of effort, Britain was finally able to reach the Indian shores and at the time of the Seven Year war, Britain had been in Bengal, an eastern Province of India, for about a century where they had set up the British East India Company.

  At the time of our story, there was power vacuum in Bengal and it was facing political crises and having well over forty million British pounds in its Treasury, all in gold and the specie. In today’s money, the gold in the Murshidabad Treasury was in excess of one hundred billion pounds considering the wage differential between then and now. The Bengal Treasury was the Treasury of the Mughal Emperors where gold had piled up because of the political crises after the death of Emperor Aurangzeb, the Sixth Mughal Emperor. That gold was the talk of the European Traders and was well known to the British. Pitt the visionary, decided to raid the Murshidabad Treasury as a Hail Mary Pass and he successfully set in motion the world transforming events, with which the world is wrestling even today. Pitt expanded the Royal Navy after successfully looting the Indian treasure that by 1759 had so decimate
d the French fleet that France was unable to supply its army across the Atlantic. Britain was able to expand the Navy and had a victory over France for control of the North American colony.

  Soon after the successful raid of the Mughal Treasury, Britain was able to pay all the borrowed money, the Navy undated paper was all refunded and the charter of the Bank of England was revised and the Bank of England became the Banker’s Bank and declared that it could pay its notes on demand in gold. Well, the Tooth Fairy did not suddenly leave all that gold in Britain.

  The Mughal treasury was the plum, but there was a lot of low hanging fruit and the British freebooters went after the easy money with all the power of despotism. The Princely Treasuries, Jag at Seths, the Court Financiers of Mughal Emperors, the inland internal trade and the private holdings of the Zamindars (land owners) were the next to fall victim to the British freebooters in an unprecedented scramble for wealth. That phase was the unregulated plunder and lasted till the end of the eighteenth century when great fortunes suddenly descended upon Britain. That sudden availability of money gave rise to many public sector projects in Britain without any help from the State and resulted in the creation of the many insurance and banking enterprises. The British Society saw the emergence of a new class of people, the merchant bankers who participated in that untrammeled scramble for wealth and they provided the money, which was the sinews, for all public sector jobs. The money in the hands of those ‘British Nabobs’ was so huge that they started lending beyond the limits of any prudence and they were the ones who funded the reparation loans after the Napoleonic wars.

  The Indian gold became the gateway to British finance. India of those days was the magnet for world bullion and the sink hole for the world’s bullion supplies and the two hundred years of the British rule denuded those reserves from all over the country. Before the Indian loot, there was only the King and his men but the Merchant Bankers who were deeply involved in denuding the colony developed a symbiotic relationship between the government and the merchants. The famous Baring Bros. & Co. started humbly in Exeter, England as a small German immigrant doing business in English woolens with a small capital base of five thousand pounds, became a leading financial institution by following the money like most other people of influence in Britain. Thomas Baring, the grandson of the founder spent nine years in Calcutta during those halcyon days of the unregulated plunder, where he was helped by Cupid and married also the daughter of his countryman. So did the famous Scottish firm of Coutts & Co, a grain dealer or a country shopkeeper with a capital base of four thousand pounds. Those merchant bankers started receiving the patronage of the British Monarch King George III and those merchant bankers became the friends and advisor to the British Prime Minister William Pitt. There is a five hundred page book on Baring Bros. & Co. where it is very unashamedly stated that the source of their money was unknown.

  This historical story is based on that episode and the aftermath of that invasion. Little is mentioned of that invasion in the recorded history because there was no one to tell that tale and Britain decided to hide it. The political and economic story of British rule in India has remained obscure possibly by tactical decision by the British to hide its tyranny in an alien culture. The British have always cloaked its rule in simple stereotypes and characterized their rule as something borne out of courage and self-sacrifice and based totally on altruistic reasons. It was a perverse interpretation and this story may shine some light as we chase the flow of that money from India to Britain.

  The British operated in a unipolar world, the history books were written by the British historians and the vanquished do not write. Instead, Britain decided to look Imperial and an Aristocrat with all the flush of money and started imposing her will on others. A story was invented to justify that invasion, a story very benign in nature that it escaped the attention of the world. The British had to justify the invasion as a legitimate act of war so they staged a mock invasion in a mangrove by the side of the Mughal Treasury at Murshidabad and they needed a villain too. Thus was born the British story of the “Battle of Plassey’, they Anglicized the local name ‘Palashi’ to invent the word Plassey and that was how the world came to learn the British story of the Battle of ‘Plassey’ and Sirraj-ud-Daula, the villain. But there was more to the story, there always is, and the British chose to pursue a path to riches feigning that they earned that money. The British set out to make money for their country and increase the national wealth with fanatical zeal and they hoarded the loot and invested it wisely for their posterity. This historical story puts the pieces of the puzzle together and provides a rare glimpse about the source of the British wealth, detailing an epic authentic story of trickery and treachery, greed and deception, plunder and despotism and another cultural clash of East & West.

  To understand it all, it will be necessary to scan the time moving forward and backward for fuller understanding of the British motives and what brought them there. They had nothing in common with India socially, economically, politically, culturally or racially and they were half the world away with a huge set of problems of their own. Furthermore, there was a big money divide, cultural divide and people divide and there was nothing in common for any enduring relation between the two. Worst of all, money was the nerve center of the British in all their dealings, which was fueled and driven by overweening greed and beastly passions. The British society was molded on the lines of serfdom and feudal relations and there was a huge divide between the people, the haves and the have notes and they had nothing on the horizon to change their lives. The cultural and economic history of England of those times tells us that they had land pirates and sea pirates and a great floating population of vagabonds, beggars, various varieties of thieves and swindlers, not necessarily in that order and they lived on charity, extortion or violence. The life was held cheap if it was any measure of their culture and public hangings were common. Fetter Lane in London had gallows at either end of the street. Such was the composition of the people who came to India for the loot. Even for initial commerce, they had no money and depended on the generosity of the merchants, manufacturers and traders of Surat and Bengal. Surat was the port city on the west coast of India where the British first arrived with little funds and they were helped by the merchant community financially even for starting the initial commerce.

  Britain never had much of a tax base in those times and they lived on borrowed money. As late as the later part of the seventeenth century, Charles II placed a moratorium on govt. debt as they had no money to meet its debt obligations. The British East India Company was well anchored by that time and it gave Charles II a voluntary contribution of over three hundred thousand British pounds. The financial affairs of the country were always weak; the loans were raised at exorbitant rates of interest. With that kind of historical poverty, Britain was always looking for ways to pay for its keep and India was a God sent opportunity.

  The East India Company therefore became a lifeline for the British people. There was nothing else going for them. They lived by supporting each other, like smithy, baking, cleaning and laundering and the other age old professions and the wages were ridiculously low, as low as three or four shillings a month and it was no wonder that they did not have anything other than Penny Savings banks. The British East India Company (EIC) bought goods in Bengal, like cotton piece goods, silk, tea, peppers, and opium and sold it in Europe to make money, so much so, that they even banned the consumption of cottons at home as it cut into their profits. Money concerns weighed heavily on those people and it dictated the conduct of their lives. Though the EIC got its charter in 1601, it did not become fully operational until about 1625 and it was a money making enterprise when it helped their Monarch Charles II in the later part of the seventeenth century. EIC also started getting new ideas, predatory ideas, about that time to lay the groundwork to establish a foothold in India for all time to come.

  When William Pitt decided to raid the Treasury of the Mughal Emperors, it was not a Eur
eka moment, the British had been working at it for quite some time, well over half a century and they had laid a considerable amount of ground work to establish a dominion in India. The coastline of India is huge; on the western side is the Arabian Sea, on the Eastern side the Bay of Bengal and the two coastlines make a low hanging necklace. The British surreptitiously started setting up trading posts (mini fortresses), which they also called factories, all along the Indian coast. All told some twenty three forts, starting from Surat on the west coast to Fort William in Calcutta on the East Coast were set up fortified with European weapons and guns and they recruited a large Indian army (they called them sepoys- Hindi word for a policeman) with the pretext of security needs. They did not have any significant business anywhere other than Bengal but they continued to sign leases and fortified their positions all along the Indian coast. Around the year 1700, they aroused the alarm and suspicion of the Emperor and Aurangzeb himself took them on and shut them down after a significant military action. Those mini fortresses later proved very strategic to the British, as fallback positions, during their expansion drive in the sub-continent.

  They also set up espionage cells in various princely states with the pretext of gaining royal trust and they started pandering to the needs of the royal households to win favors. The British assigned people as friends of the Court and they were mostly spies and the British engaged in political sabotage and espionage. Those espionage cells proved very effective many a times and their usefulness were valueless. On many occasions, at the very critical juncture, the Indian rulers suddenly died tipping the scale in the British favor; otherwise the history of their stay might have been very brief. They hobnobbed with the various Nabobs, signed up self-serving Agreements and Treaties and sowed the seeds of insurrection upon which they capitalized. The raid on the Mughal Treasury was not possible without the internal insurrection.