Merchant Kings

by Stephen R. Bown

  When Cromwell died the following year, the charter was again thrown into limbo. But with the restoration of the monarchy two years later, the new king, Charles ii, issued a new royal charter to the company, giving it extraordinary powers it had never possessed before—empowering it to wage war, administer justice, engage in diplomacy with foreign princes, acquire territories, raise and command armies and capture and plunder ships violating its monopoly. Like the voc, the English East India Company had now acquired many of the powers of a state. Its mandate, however, was to deploy these new powers in the service of the shareholders rather than of the state. Though only a fraction of the voc’s size, the English company was now effectively a state within a state—at least, it could operate this way outside Europe.

  The company prudently decided against pursuing a new private commercial war against the voc in the Spice Islands and instead refocused on India, where it had enjoyed modest success. Spices would no longer be the primary goal of the enterprise— access to cheap spices direct from the source was controlled by the voc, whereas India offered new and valuable commodities such as silks, indigo dye, cotton textiles and saltpetre, the vital ingredient in gunpowder that was in perpetual short supply in Europe and would drive the company’s fortunes for over a century. Surat officially became the company’s new headquarters, and the few remaining personnel in Bantam were transferred to Surat. Not that conflict between England and the Dutch Republic had ceased—only a few years later, in 1664 , Richard Nicolls commanded Pieter Stuyvesant and the Dutch West India Company to hand over the city and port of New Amsterdam to English troops.

  Throughout the remainder of the seventeenth century, the English company’s trade and profits were modest but steady, and they increased with its time in India. By the early eighteenth century, the company had established three distinct “presidencies” in the Indian subcontinent: at Surat along the northwest coast, Madras along the central east coast and Calcutta in the northeast. The voc had a strong presence in India, but the subcontinent was enormous and the Dutch company had no capacity to monopolize the commerce or even to war against its rivals. Although the two companies were engaged in some intrigue and squabbling over access to saltpetre, this was not direct warfare, as had occurred over spices.

  Saltpetre—crystals formed in the earth from bacterial action on animal dung and urine, with the assistance of heat— formed with particular vigour in the sewage-sodden soils of the agricultural heartland of Bengal, around Calcutta, where the extraordinary heat and prolonged dry season produced great quantities of the highest quality. “East India,” according to one seventeenth-century merchant, “gloryeth as much in this [saltpetre] as in its spices.” By the end of the seventeenth century India was the primary source of supply for almost all of Europe, and by the eighteenth century many European companies had agents, warehouses and social or commercial relationships with the various saltpetre producers in India. Because of its heavy weight, saltpetre was used as ballast before ships set sail, and their other valuable cargo was piled on top.

  Indian saltpetre to a large extent fuelled most of the European wars from the mid-seventeenth century through the eighteenth century. In Rival Empires of Trade in the Orient, 1600– 1800, Holden Furber writes that throughout the second half of the seventeenth century and into the eighteenth century the English East India Company’s “sales, with their steadily rising receipts from Bengal saltpetre, reflected an ever more warlike Europe.” The historian Jagadish Narayan Sarkar comments in the Indian Historical Quarterly that “saltpetre was so much in demand in England that there was a standing order from the Company’s authorities there for an annual supply.” In spite of the wild price fluctuations for saltpetre (depending on the state of war), the English and Dutch companies reaped vast profits from their mercantile activities and paid huge dividends to their shareholders and taxes to their respective governments.

  Competition intensified in the early eighteenth century. In addition to the Dutch and English East India companies, there were French, Danish, Swedish and Austrian companies vying for Indian saltpetre. Although they could never exclude the others as they had in Indonesia, for most of this time the Dutch dominated the industry. They had the largest warehouses, the most experienced people and the most efficient barge transport system (saltpetre was too heavy for overland transport). English factors, or company agents, recorded their predicament in the early days with a touch of jealousy: “The Dutch manage things better,” wrote one wistful factor, while another claimed that “the Dutch are insolent and feare not to break all contracts.”

  Soon, however, another rival company for the India trade began operations in France. La Compagnie des Indes Orientales, chartered in 1664 , had grown to prominence in southern India. By the early 1700s the French company had become entrenched in Chandernagore in west Bengal and Pondicherry along the Coromandel Coast, near the English company’s outpost in Madras. The French, English and Dutch companies began challenging each other as the Mughal Empire’s central authority waned. Their intrigues with Indian princes brought them to the edge of outright war. The crumbling of the Mughal Empire did, however, bring great opportunities for the European traders.

  2

  YOUNG ROBERT CLIVE WAS NOT A GOOD STUDENT, AND his parents despaired for his future. A long line of modest landowners in Shropshire, the Clive family possessed an enormous, ancient manor house in need of repair, and Robert’s father practised law to augment the estate’s income. The family had high expectations for Robert, their oldest child. Born in 1725 , he had five younger sisters and one younger brother.

  But their big brother proved to be an intractable prankster and was expelled from several prominent schools. A natural leader, audacious and brash, he dreamed up schemes to amuse himself and was drawn to the moral grey zone of society. On one occasion he organized a group of youths into a gangster-style protection scheme to extort money from shopkeepers.

  Shrewd, self-satisfied and wry, Clive had a talent for sensing weakness in others and the confidence to act on his intuition, even when the odds seemed against him or the penalty for failure was extreme. He also possessed a strong sense of duty and loyalty to his comrades: for example, when the directors of the East India Company voted him a valuable ceremonial sword for his bravery, he refused to accept the gift unless his commanding officer was likewise honoured. Extremely generous and free with his money, he was a man to whom the normal rules of society did not seem to apply. He followed his own conscience and dealt with the consequences later. It would have been difficult to imagine that this impetuous and carefree youth, careless about the consequences of his actions and prone to questionable adventures, would one day establish the English East India Company’s military and political supremacy over large parts of the Indian subcontinent and lay the foundation for the British Raj. The official portraits of Clive show him, in later years, decked out in the ceremonial regalia of a fabulously wealthy lord, weighted down with the responsibility of maintaining social standing. These portraits do not hint at the spark of unpredictable energy that animated his youthful exploits and won an empire for his employers.

  At the age of seventeen, Clive was enlisted by his parents in the English East India Company to serve as a clerk overseas. It was well known that fortunes could be made in this way, not by serving as a clerk, but by the many more shady or semi-official opportunities that lay outside the narrowly defined role of a clerk. Survival was the wild card. Shipwreck, disease, misadventure were very real threats—while the chance of going to an early grave was less than it had been in the company’s early days, it was still considerable. Clive departed England in a small fleet of company ships with a naval escort to sail past the coasts of France and Spain, and witnessed one of his sister ships on the convoy smash to pieces on the rocks near the Cape Verde Islands. Only a small contingent of survivors were hauled from the surf. Not long afterward, his own ship ran aground along the coast of Brazil. The damage was severe but no lives were lost, and the sh
ip had to be repaired from keel to masts during a nine-month delay. Clive, gaining focus as he got older, did not waste this time in idle diversions. He devoted himself to learning Portuguese, and was quite fluent by the time he arrived in Madras on June 1, 174 4 , nearly a year and a half after leaving home.

  By the time of Clive’s arrival, the English East India Company had thrived such that it had surpassed the Portuguese and was soon to eclipse the Dutch East India Company as well. The political situation in India was tense, partly as a result of tensions in Europe. The second half of the seventeenth century and the early eighteenth century saw a continuous series of conflicts in Europe involving Sweden, Denmark, France, the Netherlands, Spain, Portugal, the Holy Roman Empire, Russia, Poland and the Ottoman Empire in an endlessly shifting round of alliances. Scarcely a handful of years passed when a war was not being fought somewhere on the continent. The Dutch Republic and France had been at war from 1672 to 1713, and French commerce had taken a beating. But with the recent peace between Holland and France, commercial activity expanded, as did commercial jealousy, animosity and competition.

  In 1705 , after ruling for almost half a century, the Mughal emperor Aurangzeb died at the age of eighty-eight. The Mughal dynasty was descended from the Mongols, an invading force that had swept into India from Central Asia in the sixteenth century. Throughout that century, the Mughal armies marched and conquered, slowly extending their rule over most of what is now India, Pakistan and parts of Afghanistan. When Aurangzeb died, his empire began to disintegrate as local rulers who had chafed under his heavy-handed rule seized the opportunity to assert their independence. Central authority waned, and the imperial government was increasingly unable to maintain the peace. Travel and trade became more and more subject to the whims of local lords and bandits, and corruption ballooned as the hierarchy disintegrated. “In the absence of a strong government,” writes Stephen R. Bown in A Most Damnable Invention:

  Dynamite, Nitrates and the Making of the Modern World, “the companies began to arm themselves and maintain small professional standing armies that they hired out to local rulers to settle regional power struggles.”

  After years of increasingly acrimonious squabbling, the French company, then headed by Joseph François Dupleix, sought to control India by building on the ruined foundation of the Mughal Empire. The historian Henry Dodwell writes, in Dupleix and Clive: The Beginning of Empire, “in Europe they [the companies] were mere private corporations; in India they were political entities . . . The real question at issue was whether or not to embark on a struggle which would determine the possession of India, but no one perceived this.” The scene was set for epic change, from the chaos of a crumbling central power to the superior military technology of the company troops. There were always problems. In order to secure regular shipments of saltpetre, silk and cotton, company agents had become knowledgeable about and involved in the politics of the region: how to pay or avoid taxes, whom to bribe and to whom to address complaints. After decades of having a business presence, the traders had deep political and social connections within both the government and the leading merchant families. The European companies were lured into local politics to protect the trade and give some stability to their business activities. They also earned some income leasing their corporate troops out to local rulers to keep the peace, which inevitably drew them even deeper into struggles with local princes, and also with each other.

  Trade and international politics were too linked to remain disconnected for long. The French company in particular was almost an arm of the state. It was founded by the state, funded by the state, and its dividends were guaranteed by the state. The king and his senior ministers freely meddled in company affairs and felt no compunction about using it to further their foreign-policy goals. The French company was much less a trading monopoly than either the Dutch or English companies, which still existed principally to make money for the shareholders, however peculiarly and ruthlessly they went about that goal. One of the English company’s obligations to maintain its monopoly was that it supply the English Crown with five hundred tons of saltpetre annually, at favourable rates, or it would face crushing export duties on silver bullion, the currency of the Eastern trade. Thus it was buying its monopoly with an annual gift of cheap saltpetre to the English state. But the English East India Company was content to quietly profit from its enviable monopoly position and to avoid further entanglement with international politics. It was not directly under any government control and faced no pressure to assist in foreign wars—until the 1740s, when the company’s directors asked the government for a favour: would it agree to send warships to clear French shipping from the Indian coast?

  It was into this world, just as events began to heat up, that young Clive arrived, never imagining his own epoch-altering role in the coming struggle. Though apparently a hard-working lad, Clive was already disillusioned with his role as a desk-bound clerk in these early years. In one letter home he wrote, “The world seems vastly debas’d of late, and Interest carries it entirely before Merit, especially in this service . . . I should think myself very undeserving of any favour, were I only to build my foundation on the strength of the Former. I don’t doubt but you’ll make use of all possible means for my advancement.” While urging his parents to work for his advancement, Clive himself eventually chose a far more active role in securing his future. A slight, sickly young man who occasionally suffered from depression and seizures, he nevertheless adjusted readily to his new role as man of action.

  3

  THE UNEASY NEUTR ALITY BETWEEN THE FRENCH AND English companies in southern India ended abruptly at the outbreak of the War of the Austrian Succession in 174 4 . The English government readily acceded to the English company’s request for military help from the Royal Navy; after all, the French company was really an arm of the state and therefore had to be attacked along with all the other targets. Royal Navy ships arrived in India in 1745, attacking and capturing several French company ships. A French national fleet arrived soon thereafter and, following a series of tit-for-tat attacks (the English and French companies’ main commercial centres almost rubbed shoulders—Pondicherry was only 130 kilometres from Madras), the commander of the English fleet ordered his ships north to Bengal to refit. This left the company outpost at Madras undefended. In fact, the settlement never had real defences because their construction costs would have been payable out of company profits and thus had been neglected. Dupleix, the French governor general at Pondicherry, was pleased when the French fleet sailed north along the coast and began to attack Madras on September 7, 1746. A crafty man of about fifty, he had lost most of his personal fortune in the Royal Navy’s earlier attack and was eager for revenge.

  Not only was the English East India Company outpost at Madras poorly defended, it was also poorly manned. Only about three hundred company men were stationed in the town. This was less than a quarter of the number of French troops, and most had no military background or experience. The local ruler, or nawab, had forbidden Dupleix to attack the English but had no forces ready to enforce his commands. After two days the fort surrendered; apparently the liquor stores had been blasted and the men, after guzzling the spirits, refused to fight—for which one can hardly blame them, poorly paid and vastly outnumbered as they were. In the confusion of the surrender negotiations, however, the young clerk, Robert Clive, “in the habit of a Dubash [local interpreter] and blackened,” made a daring escape with several other Englishmen. They travelled by foot about 150 kilometres south, to the English company’s last remaining outpost along the coast, Fort St. David. When the French attacked Fort St. David, they had a surprise: they were challenged by nearly ten thousand troops, the forces of the nawab. The much smaller French company forces nonetheless routed them, and the fort was saved only by the timely arrival of the Royal Navy fleet returning from Bengal.

  There were only a few other insignificant skirmishes before the war ended in 1748. Madras was returned to the English
company as part of the peace settlement, but the taste of excitement provided by the brief conflict changed Clive’s career—no longer would he succumb to the tedium, boredom and predictable routine of a clerk. He requested a change in his posting.

  “Mr. Robert Clive, Writer in the Service,” reported his governor at Fort St. David, “being of a martial disposition, and having acted as a volunteer in our late engagements, we have granted him an Ensign’s Commission upon his application for the same.” Clive, ever his own cheerleader, ingratiated himself with his superiors, writing to the company directors in London to brag of his “great courage and bravery” and to request a promotion. He was given the position of steward, a potentially lucrative post that gave him a commission on the sale of all provisions and victuals for the company’s employees in the region and offered some opportunity for private trade. It was a good position for someone so young and inexperienced.