1757- East of the Cape of Good Hope

by Narendra Mehra

  After the famine, Hastings wrote to the Court of Directors in London “the loss of inhabitants reckoned at a third and in many places near one half of the whole”. About ten million people perished but the revenue was violently kept up to its former standard. Additional burden was put on those who did not perish. Land revenue in diwani lands in 1768-69 was about sixteen to twenty million Rupees, whereas the Revenue Collectors in those painful days collected over four times that amount, in the neighborhood of nearly seventy million rupees. The Court of Directors however continued to demand ever increasing amounts of revenue; death of one third of the population and no additional resources was not any of their concern. The British Empire builders were locked up in a bitter feud with the French in the American Colony and needed limitless flow of money out of India to satisfy their colonial ambition. The zamindars were not given any remission but were asked to enter into bonds at twelve per cent per annum for the amount of the shortfall. What ever grain was available; the employees of the East India Company hoarded for profit and the peasants were forced to sell even the seed for the next harvest.

  In those chaotic days, greed, oppression and fraud became rampant for personal gain and the British Bureaucracy got entrenched in the country’s revenue system and had a field day. The farmers and zamindars were pushed into impoverishment by the land revenue policy. The EIC and its employees enriched themselves beyond measure. The famine affected people who mattered most to England. The mortality among weavers, boatmen, silk winders, cocoon growers, saltpeter manufacturers and other workers was very high and led to scarcities and price increases. There was land available for cultivation but there were no tenants to till the land. The specter of land taxes loomed at the horizon. The zamindars threw up their land holdings and left.

  They say it pours when it rains in days of adversity and indeed another famine followed in 1783-84 and killed close to another one quarter of the population. EIC could not rely on military might to fill their coffers. Next decade was characterized by scarcities; EIC could not milk the cash cow and had to reduce its dividend to shareholders in England. There was a limit to the scalping. It was a total reign of terror. The orgy of agreed did not end there. The smell of money attracted the East India Company and its employees to the weavers, spinners, the cocoon growers and the indigo farmers. Their produce was in demand; the Europeans were paying top prices, there were fewer hands left for those skilled jobs. The British had no desire to match the Europeans prices; they used force, they used collusive and fraudulent contracts and they used enslavement. Political power was used to restrict the freedom of trade and forced arbitrary reduction in prices and denied the existence of scarcity on account of the famine. The British conveniently forgot their own theories of supply and demand. The price of cotton thread increased from Rs 4-6 to Rs 6-4 per seer (a seer is close to a kg) due to the death of cotton cultivators and spinners and yet the price of cloth paid to the weavers remained the same or was reduced by abusive practices. The weavers were habitually cheated and it was not difficult to do so as there was fraudulent mustering and ‘ferreting’ of different assortments. Here was born the dark side of the British capitalistic society, the ugliness of capitalism is fueled by greed, a greed which can be perpetrated on hapless victims without impunity. No wonder the Capitalists always demand ‘no regulation’, they do not want any cops on the beat to carry out their nefarious activities.

  To understand the tyranny, it is necessary to understand the type of products those craftsmen produced. The weavers of Bengal produced many different varieties of cloth; mulmul (thin plain muslin), buddun khas fine muslin, sarkar Ali (manufactured for use in Nawab’s court), jamdanee (flowered muslin, some were woven for Rs. 450 per piece). There were calicoes, chintz (coarse printed cloth). One of the best varieties was described as jungle khasa. The pellucid muslin was described as evening dew. When spread on grass, it could not be distinguished from the dew on it. The fine muslins were always made to order. The fine looms could furnish a piece of cloth in two months. Of some assortments only nine pieces could be produced in a year. It was a handicraft industry, developed and perfected over the centuries and the skills were transferred from father to son generationally and the British wanted all that on the cheap so that they could make more money. The British traders and the EIC exploited the political control on the lives of ordinary people who earned their living by hard work and virtually stole their goods without adequately compensating for their service. A class of gurrah 36x 2 ¼ was priced at Rs 3-9 per piece; at the London sale it fetched 45s.6d or 91 rupees, (2 English shillings to the rupee). In London, the British were making thirty times the amount they paid to the weavers in Bengal, and they forced the weavers under duress to sell below cost.

  This type of behavior became the normal way of dealing with local labor and EIC left behind many victims of wage and price fraud. It was typical for the British Traders to short change the local producers and deny them fair prices. They arbitrarily set the price, based on what profit they wanted to make regardless of the cost of production and forced the handicraft industry to bear the loss. Typically, if a piece of middling mulmul cost six rupees for the cotton thread and the labor content was three rupees, the British merchants will pay only Six Rupees and ask the weaver to swallow the labor portion of the cost. The producer was essentially forced to sell the merchandise below cost. EIC was embezzling the labor charges. On an average one rupee per month was necessary those days, for the upkeep of an adult. The weavers appealed for an increase in price for their goods. The workers even on compassionate grounds asked for an increase, so that they could feed their families, but those pleadings fell on deaf ears.

  The EIC exported about one hundred thousand cotton piece goods out of Bengal, and each piece during the Mughal regime fetched about Two Hundred Rupees. It was not even close to it, what the British merchants were willing to pay. The workers refused to work for a dishonest company and the EIC panicked that they might not be able to procure the supply. So they resorted to force and enacted various regulations, and stationed security men at the place of work of the artisans. The workers were illegally confined so that they could not produce goods for other free merchants. One Bostam Das, died while in confinement of Mr. McCullum’s bungalow. The weavers fled from their trade and gave up their centuries old craft. The British committed crimes, but they were the cops on the beat and they got away with murder.

  This type of predatory behavior continued in other industries too. The profits in indigo exports were huge and those profits attracted the British buccaneers and gangsters in the countryside. The British traders spread out in the countryside of Bengal and invaded the indigo cultivator’s lands, destroyed the standing crops, grabbed the land unlawfully and cultivated indigo for profit. From Court Records, it is easy to find many instances of plunder and loot. Some people filed complaints in the Courts, but the Courts were run by the British and all they did was to white wash the crimes and no one was able to claim any damages. Here are the stories of two cultivators whose land was forcibly invaded and occupied by the British buccaneers and their stories were typical.

  One widow Durga Beiwa complained one Mr. Hunter forcibly took possession of her twenty Bighas of land (Bigha is 1/3 acre). The widow fled for her safety and stayed with her labor and peasant. The indigo gentleman cultivated her land for indigo production and kept the produce she wanted relief from this oppression.

  Another story was of Mr. Coats, an indigo manufacturer, who forcibly ploughed ups a half-grown crop and in its place he sowed indigo. The Plaintiff even had to pay the assessed revenue. Coats carried away by force the bamboo, toddy trees and the straw for roofing as fodder for his bullocks. If any person opposed him, he got beaten and for two years he did not allow any grain to be sowed. These are excellent stories of British capitalist enterprise while the capitalism was in its infancy, but it was a different culture where force was used while Britain was adding to its national wealth.

  From the Board of T
rade documents it appears that indigo trade was a huge money maker for Britain. In 1789, England imported 1,700,000 lbs. of indigo out of Bengal. There were huge profits in indigo trade and the British monopoly earned about three million £. The indigo business flourished and continued well in to the early decades of the nineteenth century.

  Hastings worked as the governor for twelve years and various charges of corruption, defiance of public law and morality were brought against him both in Bengal as well as in Britain. One Nun commar brought charges against Hastings and referred the matter to the Supreme Court. Hastings was found guilty and ordered to refund the money involved. At the same time, Nun comar was thrown into prison on charges of forgery, tried before the same Supreme Court and found guilty by jury of all Englishmen. He was hanged. And Hastings was exonerated, never paid a penny in restitution. And, yes indeed it was a warning to the natives to suffer silently and do not rock the boat or else they will be hanged by the British Kangaroo Courts. In England, similar charade was staged with all the trappings of the stage. Hastings was accused by a twenty three year old Burke, a Member of Parliament, and a delegate to the British House of Commons. The senior members of the Commons were aware of the prosperity Hastings brought to his country and seven years and 145 sittings of Parliament later; Hastings was acquitted of all charges. After all, it was Hastings who made the raid on the Murshidabad Treasury possible. It was told that Hastings brought only 80,000 pound from India. It was not much. Barwell on the other hand brought 800,000 pounds. In terms of today’s money, Hastings accumulation amounted to 80 million pounds and Barwell’s 800 million pounds. No wonder India became a backwater of the third world after its wealth was plundered by the British tugs.

  After the departure of Hastings from the Indian colony, England sent Cornwallis to finish the job. He instituted a new permanent land revenue system to maximize the revenues for his Homeland. The indigenous system of land revenue administration was destroyed so that EIC could maximize the revenue and the Zamindari was destroyed in the process. But the rates were so high that the zamindars became tenant – at –will and their lands were auctioned. The zamindars gave up their land holdings and left. England was embroiled in the wars in Europe with Napoleon and they had lost the North American colony; so Cornwallis was looking for ways to milk the Indian cow for more funds. He invented new sources of revenue. In 1790 Cornwallis wrote, “By reserving the collection of the internal duties on commerce, government may at all time appropriate to itself a share of the accumulating wealth of the subjects, without them being sensible of it.” The plan was given effect to in 1801. Government established Chokis (toll booths) and custom outposts and duties were levied at 3-½ %. A frightful augmentation of revenue collection was started.

  In 1810, various separate duties were consolidated. In Mughal times, it was tolls and not duties. There was an endless multiplication of inland custom tariff on 235 articles. By Charter Act of 1813 the British imported cotton goods paid 2-½%, but no corresponding reduction was made on inland duties. Indian piece goods still paid 17 ½%. By manipulating the duties on Indian goods and preferentially lower duties on British made goods entering India, the British government destroyed the centuries old Indian handicraft industry.

  The British attitude 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.”

  What is written above is the story of unparalleled loot in the history of mankind. The British have written a lot about the glamour and drama of their political conquests in India, but little about the economic consequences. India is a very ancient land, an ancient civilization that dates back five thousand years and the story of its civilization was written in stone etchings and cave paintings. It is a vast land, from Himalayas in the north to Cape Camorin in the south and a seat of the Indus valley civilization. Inspite of many invasions, India boasted an uninterrupted culture. Indian masses were inspired by the teachings of the Vedas, upanishads and the Gita and there were Indian philosphers and a legal and social system long before Socrates was born. Inspite of the great diversity of food, languages and life styles there was a solid bond and cultural unity and people affectionately called their motherland, ‘sonnai ki chirya’, golden sparrow on account of its opulence, wealth and enormous gold reserves. The British invasion and the loot by the British thugs dealt a mortal blow to India and killed the golden sparrow.

  CHAPTER FOUR:

  MERCHANT BANKERS

  &

  ARISTOCRATS

  The Indian trade and the loot of the Mughal Treasury at Murshidabad was the gateway to the British Finance. That was the beginning of the British Empire and the emancipation of the British people and its economy, which hitherto had depended mostly upon borrowed money. As the British tightened its grip on the Indian Territory, they soon discovered that they have stumbled upon a gold mine, literally speaking, and they pursued that looting pattern all over India. India became the British hunting pot and the honey pot at the same time. They started funneling home a steady stream of vast amounts of money. Their capitalist society and their banking and borrowing system was built with those looted funds as described in this narrative. The hunting part however, continuously evolved, as they discovered the opportunities during their long rule of two hundred years. Principally, they built their Empire by exploiting those opportunities and the Empire was built under the banner of rapine and blood, Indian treasure and the Indian blood. The calendar for the loot started immediately after Plassey in 1757, and it picked up steam after the Battle of Bauxar in October 1764, which gave the British the rights to the Diwani (governorship) of Bengal, Bihar and Orissa Provinces, with annual revenue of over five million pounds. Besides the land taxes and the crop levies, there was an additional revenue stream of similar amount from duties on all articles and fees for Farmans, (Royal orders) and custom duties, in all totaling about ten million pound sterling a year. Britain started funneling home this huge amount of ten million pounds a year. Technically, Britain was collecting those funds on behalf of the Mughal Emperor at Delhi and the remittances to Britain were not legal. The EIC’s Bengal Counsel, in his memo to home office in 1769, put it bluntly “your trade from hence may be considered more as a channel for conveying your revenues to Britain”.

  Another revenue stream originated from the exclusive rights to internal trade and the monopoly practices. The revised trade pattern indicated that the EIC and its private traders were raking in another about £8.0 million after they monopolized the native industries with all the powers that despotism brings. In those three provinces of India, Bengal, Bihar and Orissa, complete anarchy prevailed, no one was in charge and that vast territory, a territory rich in industry, raw materials, skilled labor and vast amount of treasure in native hands, fell prey to the British freebooters. All told, Britain was funneling home about £18 million a year and they had to find market for that huge amount of cash.

  In the narrative below, is given a sordid story of unparalleled loot in the annals of human history. The British gave glowing tributes to the architects of that loot and top of that list was their Prime Minister, William Pitt, who it appears was the master mind behind the cold blooded attack on India in 1757. That attack is easy to understand and articulate if you take the simple case of a man needing a personal loan from a bank, instead, chooses to rob the bank at gunpoint. The British needed the money to fight the Seven Year War with France; they could have approached the Indian Jagat Seths (Royal bankers of Mughal Emperors) for a loan. The British were indebted to Jagat Seths and the Dadni merchants for their trade, the British had been in India for over a hundred years, they had local contacts and survived and thrived with the help they were getting from India and they were regular borrowers any way, but chose to bribe the guardians of the Mughal treasury at Murshidabad and ran away with some £40 million. The British call Pitt visionary and far sighted, the man who saved Britain and built the Empire, but in terms of hum
an morality, it was hard to find a parallel other than comparing him to a common criminal. In fairness to Pitt, he had inherited the British legacy of pillage and piracy and that was probably what occurred to him naturally instead of falling upon diplomacy to solve a dire problem in a dark period of his nation’s history.

  Without India’s loot, the British would never have been able to build the Empire because they were too petty to risk their own money for empire building. They used Indian soldiers and Indian money for empire building, without that there would have been no Empire. National economy of Britain expanded because of those predatory and imperial wars. The benefits of the wars went to Britain; the losses went to India because Britain understood the costs and benefits very well. That part of the story is described in another chapter under the heading of ‘Predatory Wars’. The British were fanatically attached to money, suffered from overweening greed and were very narrow in their vision because of their pathetic attachment to money. Any money, in other words gold, that reached that country, went straight to the gold vaults at the Thread needle Street London, the site of their Bank of England and come hell or high water, they would never let that money leave the vault. They did not even meet their own obligations. Any Note that fell due, they rarely honored and instead offered to exchange with Exchequer bills. They offered barter arrangements or asked others to pay on their behalf and such gimmicks. That was the experience of those Dadni merchants who used their own money to order British purchases and in the end refused to do business with them. It was therefore not hard to imagine that William Pitt chose to raid the Indian treasury because he had the same mind set and was a prisoner of the pathological lust for money. The French, the Dutch and other Europeans were doing similar business in India and none had Eureka moment to raid the Indian treasury, nor did the French in particular, who were fighting the British in India as a mirror image of their wars in Europe.