1757- East of the Cape of Good Hope

by Narendra Mehra

  The other Europeans in the region were a threat to the British plans particularly the Dutch and the French. In their pursuit of money, they increasingly found the Dutch, who had superior skills, an obstacle in their way. Britain had fought and lost three wars with the Dutch between 1652- 1674 and Britain was driven out of Indonesian outposts and the British merchants could not take those monetary reverses any more. The British had to find a way to overcome the Dutch, so in 1688, they staged a coup against their own monarch. James II, who was ousted, fled to France, and they invited the Dutch Prince, William of Orange to take the throne. After the Dutch Prince took the throne of England, the British and the Dutch interests merged and Britain could operate freely in the East.

  In the meantime, Britain was also locking horns with the French in India and the French were serious competitors of Britain. As never before, both France and Great Britain were devoting considerable energy to the Indian commerce. With the appointment of Dupleix in 1732, the French trading Posts in Bengal at Balasore and Cossimbazar, were doing brisk business, but the French government, in order to avoid war with the British, and uninformed of Dupleix’s grandiose schemes in India, recalled him in 1754. The French did not get tempted to lay their hand on the Mughal treasury either, in their conflict with Britain for Imperial supremacy. It was hard to say whether the French action was borne out of social justice as dictated by their catholic faith or they were not prepared for a war with Britain half the world away.

  The second half of the eighteenth century ushered in the dawn of a ‘Golden Age’ for Britain, after they paid off the burgeoning debts. From the various accounts, it was fair to assume that the British debts had climbed up to about one hundred fifty to two hundred million pounds until the start of the Seven Year War, an unassailable position and beyond the capacity of Britain to pay. The Mughal money not only helped Britain pay off all their debts in gold, but the British also modernized the Navy and the private British Traders remitted huge sums to their own private accounts using the French and Dutch remitting channels. The employees of EIC were allowed to trade on their own account with all the powers that despotism brings. The exclusive rights to internal trade were monopolized by those employees and there occurred an untrammeled scramble for wealth and an orgy of greed which produced instantaneous millionaires and it gave birth to the western capitalism. The birth of the British banking and borrowing system was a natural corollary to the capitalistic society, and gave birth to the British aristocracy. The covenanted servants of the company became fabulously wealthy. Some of them amassed huge personal wealth and left behind imposing stately homes in England. Clive’s at Claremont, Hasting’s at Daylesford, Pitt’s at Swllowfield and the two hundred fifty two servants of the British East India Company became alchemists, they produced gold out of nothing, they used collusive and fraudulent contracts and they used political power to restrict freedom of trade and enriched themselves.

  The American War of independence put extraordinary demand of money for Britain, particularly when the Dutch were pulling money out of the market. Their trading activities suffered a serious setback after the British rose to power in India. To get money for the war, the British dispatched Charles Cornwallis (1786-1793), to continue the plunder of India. He was an army man, who saw action in the Seven-Year War in Europe and later fought against the British rebels in the War of independence in the American colony. Cornwallis lost against the forces of George Washington. During his term, revenue collection became the company’s most essential administrative function; his permanent land revenue policy was revised to maximize the revenue collection. His revenue system was so regressive that the zamindars (equivalent to British landed gentry) became tenants -at-will and their lands were auctioned and they were put in jail for inability to pay. Britain was never short of ideas to loot the Indian colony; they also focused on the Anglo-American Trade. The British merchants imported wines from France, silk and Tea from China, and many other items of luxury both for home consumption as well as for export, but sent the bills drawn on London to India for payment.

  The general attitude of the British towards India was that India was at their mercy and they could do anything what they wanted. They established Chokis (tollbooths) and custom outposts and duties were levied at 3-½ % which was a frightful augmentation of the revenue collection. The attitude of the British was best expressed by Boughton Rous: “Let them (natives) walk quietly in the paths of their forefathers and they rejoice to be slaves of your wealth and prosperity.” Rous’s ancestor, Charles William, a clerical employee of EIC in Bengal returned to England in 1778 with accumulated wealth. Rous inherited the family estate in Worcestershire owning lands in Hillsborough and elsewhere and property in London.

  During the twenty five years, from the time of the invasion in 1757 to the end of the American Revolution, Britain extracted unprecedented amount of wealth out of India, The British have kept meticulous accounts of various debts and money used to modernize the Navy and build the various Public Sector Projects and it would be fair to assume that the total money that reached England after breach of the Mughal Treasury, could easily be in the range of four to five hundred million pounds. In today’s money this would be close to half a trillion pounds considering a thousand time differential in the wages between then and now. Thus was born the imperial Britain and the British capitalist society. The British capitalism originated from the pathology of greed and the orthodoxy of plunder and its roots lay in the bestial passions of those people.

  The American Revolution was a wakeup call for Britain. The British essentially were after money, they wanted to increase their national wealth and so was their goal in India. The various coercive Acts, the Sugar Act (1764), Stamp Act (1765) and Tea Act (1773) was an attempt by the English Crown to raise revenue from the American colony. The Tea Act led to the famous ‘Boston tea Party’. The British victory in the American colony did not last very long, the victory over France symbolized by the Treaty of Paris, was celebrated as a great victory for the British Empire but in just twelve years, the American colony fired the first shots for independence from the coercive Acts passed by the British Government. Unwittingly, the British started the resistance to their rule on account of their overweening greed. They however invented a new mode, they invested at least half the money they took out of India in North America and they continue to reap huge amounts of money from those investments.

  In a bizarre twist of fate, the American war of independence and the colonization of India got intertwined after the British lost the American colony. After the loss of the American colony, Britain was left only with sugar plantations in Jamaica, a handful of Caribbean islands and a foothold in Bengal, India. That was then the extent of the British Empire. They found India an easy target and determined that they could build up their empire in India as the new default position. India’s long coastline proved its bane.

  At the onset of the nineteenth century, Britain already had reached the pinnacle of economic might, unimaginable only five decades before. It was only the start, Britain had realized that they had really hit upon a very big gold mine and they let loose forces which would totally decimate the Indian nation and catapult the British nation to unimaginable prosperity. Britain called the 19th century, the century of miracles. Yes, indeed, look at the statistics. The balance sheet of their colonial effort thus far was driven by the loot of Mughal and princely treasuries, annexation by force or otherwise of the farms, and complete monopoly of the native trade, banking and some of the tropical industries. Britain was a nickel and dime country, a particularly calculating and miserly economy, loath to part with its national wealth; instead they were focused on piling up ever increasing amounts of gold in Thread Needle Street, their Bank of England, and Leaden Hall Street Treasuries. They invested the looted funds wisely and they had become the banker to the world.

  Britain then decided to go after India’s crown jewels; the tropical agricultural produce that made India the richest economy in the ci
vilized world. It was the agricultural surpluses and the multiple annual crops that made India the magnet and the sink hole of the world’s bullion supplies and the target of the foreign raiders. India’s history was painful reminder of foreign raiders like Mohammed Gazni, Nadir Shah and Afghan Abdalis who came just for loot and plunder. They were birds of passage, they came, they took what they could and they left. Britain was on a different path, they did not want to milk the cow, and they wanted to run away with the cow. Britain quickly realized the wealth potential of those tropical cash crops and set in motion the forces that destroyed what was left of that rich economy.

  Britain passed the Charter Act and allowed her natural born subjects to go to India to make profit. They were not allowed to take any money from the national Treasury. The British Revenue Secretary Holt McKenzie advised his countrymen that he was sanguine about any direct remittance, instead the people travelling to India should be men of industry and of certain character and very soon they would become capitalists. Money to the British people was a blood sport and the lure of money attracted the attention of the British government and they hastened to modify the revenue and custom policies, increased native assessments and tilted the scale towards the British entering the colony. It pushed the landowners in the clutches of the money lenders. The custom policies were modified by levying heavy import duties so that the natives were unable to start modern industries. The British targeted Tea, Cotton, and Jute, Indigo, Silk, Opium cash crops and started setting up Plantation industries. They targeted the mines and mineral wealth; they targeted coal and coal mines, Mica, Iron Ore and Bauxite. The British followed monopoly practices and destroyed any local control for maximum gain.

  The real game was the money game and profits. London became the Tea Market of Europe and elsewhere. Two times every week, Tea was auctioned at Mincing Lane London and the British Managing Agency Houses controlled the production and distribution of Tea. The Tea Plantations in Assam and Darjeeling were completely monopolized by the British. Initially, the British Administration gave the Plantations to the British retired Army and government officials and in many cases the identity of those proprietary concerns was kept secret. In all they started with three hundred Estates which ultimately grew to about a million acres and they produced on the average three to four hundred million pounds of Tea a year. The Assam Tea Company which was the oldest company was registered in London, never in India and they never published the profit picture. The British were involved with the Tea Business of Assam and Bengal for three quarters of the century and a very conservative estimate of the profits could easily be a trillion pounds.

  In those days, the survival of the British nation depended on cotton. At least one fifth of the total population depended upon the cotton textile industry. The cotton consumption was about one billion pounds a year imported from India. Some cotton also came from Georgia and Alabama but the American Civil War dried up that source. Cotton from Bombay was also attractive because India was an occupied economy and the British had a foot on their jugular vein. Britain imported over half a million bales from Bombay before the American Civil War but paid little, less than one third compared to imports from America. The imports jumped to one to two million bales of four hundred pounds after the year 1861 and in those maddest times of cotton shortages in Liverpool, the lure of money in Bombay attracted the British Buccaneers and they came pouring in and started scores of companies for pressing, spinning and shipping and the total volume of trade jumped in excess of thirty million pounds but to every one’s surprise there suddenly developed a severe shortage of circulating medium, that was silver. Every two weeks, India received the silver for its cotton and every two weeks when the mail came from Britain, the same silver left India in the same boat. The buyers of Cotton were the British and the banking and trading companies were the British and a great game was played. In the very vortex of the flow of money, in the maddest time in the history of the cotton trade in Bombay, silver copiously poured in its lap and yet Bombay suffered from lack of circulating medium; whatever silver was brought in to buy the cotton, it left by the next boat.

  The story of Indigo was a story of deceit, fraud, extortion and black mail. The British earned well over three million pounds annually of those times, which was a colossal amount and the industry remained under British control throughout their long rule. There was no indigo dye without the indigo plant and to have control over the plant, the British used thug gee and gangsters. They made claims against the cultivator and the claim was never settled and the families, the children and the children’s children remained under that phony debt, it went on for generations. The British Administration supported and abetted the claims and the extortions continued. Eventually, the market forces came to the rescue of those helpless cultivators who had no recourse to any kind of justice under the British administration. With the discovery of Aniline dyes, a coal tar based synthetic product, the use of indigo based dye became extinct but not until the British Freebooters raked in about half a trillion pounds in today’s money during the course of a century.

  The British were particularly brutal in the countryside of Bengal in their attempts to take over the family Indigo Farms. They viewed everything in terms of pounds and shillings, the pathology of greed was so deeply ingrained in their DNA that it made no difference to them whether they were shipping out slaves from the Dungeons of Cape Coast Castle in Ghana or the Indigo pallets or the chests of Tea to Boston Harbor, they viewed everything alike in terms of money, in terms of gold and in terms of wealth in their National Treasury. They were patriotic up to a point, as long as it did not affect their own pockets. During the many piracy raids that their Monarch staged in an earlier century, the sailors and seamen always lined their own pockets first, so much so that Queen Elizabeth made sure that the sailors and seamen wore overalls without pockets.

  Possibly because of the historical poverty, the Scots were the worst in their brutality and more so in an alien culture as the English people were unable to adjust to people who were different. Their behaviors displayed inhumanity towards others and lacked any sort of piety. In their own country too, they tortured people at the rack or drew and quartered the convicts even before they were dead at the gallows. A lot of Scots descended on India after the Crimean War after the supply of Russian Hemp dried up. Jute was a very profitable business, several million acres were under Jute cultivation and the Jute exports were of the order of eight to ten million bales a year. It was a very big business, many times more than the total gross products of Scotland and the Scots really hit the jackpot. George Iceland was the pioneer; he came from Scotland with a handloom and started competing with the native sack weavers. That happy situation lasted very briefly, then came George Anderson with power spinning and weaving equipment and pretty soon after that, they monopolized the business entirely by the custom policies of the British authorities and shut down the native businesses. The jute monopoly earned the British or Scotts in excess of half a trillion pounds in today’s money but that was not all. They were mean and they left their labor as victims of wage fraud and they stripped the labor of their dignity. They were loath to spend any money on mechanization where a human labor could be used. Instead of providing carts to haul four hundred pound bales, they made three men to lift the bale and to walk a strange walk like a six legged horse.

  Both railroad and steamship became essential for the survival of the British Empire in the middle of the nineteenth century. Both those technologies were dependent on the abundant supply of coal and Cardiff coal was a long way off from the Indian shores for fueling their steamships. Fortunately for Britain, India was blessed with abundant supply of coal, strategically located only a hundred miles from the Bengal Presidency of the British East India Company. The Jharia coalfields estimated to contain about sixty billion tons became another British monopoly. India had no industry and used no coal but many mines were private properties and the British used political power to lease or take over those propert
ies. The British Managing Agency Houses controlled the production and sale of coal and they exported over twenty million tons of coal a year with a three hundred percent spread over the price of coal at the mine head. The profits they earned over the course of the century are mind boggling. Those profits were in billions with no risk or investments of any kind.

  The raids and accumulation of capital thus became the main business activity of Britain in India and it ultimately became a phenomenon. It picked up speed and it went on autopilot. The British merchants and the British Civil Service were singularly focused on raking in as much money as they could and they overlooked nothing. They realized that they had not yet exploited the human capital, English speaking; educated natives and they started using them to loot the adjoining territories. The British set up tropical industries in Kenya, cultivated Tea and Sisal Plantations and sent Indians to Kenya to run their local administration, as the British did not have enough manpower of their own. After the abolition of slavery, the British also shipped a few million Indian coolies to West Indies to man their plantations as it became very expensive to hire the Negro labor. The British started expanding the Indian Army and attacked adjoining territories. Burma was attacked for their Teakwood, essential for shipbuilding. Punjab was attacked for Treasures, reparation, revenue and territories.

  Britain then focused on their ever accumulating wealth and they started investing the surplus funds to make more money. They started lending money to sovereign governments, as that was the safest investment. Nations do not declare bankruptcy like individuals and the loans stay on their books until paid. The problems of Greece however may change that paradigm. The British invested money in public utilities where the returns were assured and they invested in insurance and banking where the risk to their capital was minimum. With that deliberate policy of caution and astute investments, Britain has preserved the looted capital and they continue to be major force in the financial world. The enormous revenue stream from India gave Britain a new confidence and Britain wanted to preserve the status quo, they began to indulge in British feudalism, a ‘Merrier England’ revolving around the colonial loot, aristocracy, hubris and the Empire. To preserve the status quo, they came up with a plan to produce a special class of people in India who would be more loyal to them than to their own country. It involved converting and in doctoring the natives with Christian faith, which proved explosive.