Honourable Company: A History of The English East India Company

by John Keay

  Caillaud, who had succeeded as Commander-in-Chief in Bengal, bitterly protested at his failure to offer wholehearted resistance to the invasions of Bihar by the Moghul Shahzada (Crown Prince). Going further, Holwell concluded that the moment was ripe for the British to by-pass the Nawab altogether and negotiate direct with the Shahzada with a view to the Company itself assuming the Nawabship. But Vansittart, mindful of the arrangement made with Mohammed Ali in the Carnatic and deferring to Clive’s legacy of non-interference in the Moghul hierarchy, preferred to strengthen the Nawab’s authority. Wrongly, as it appears, he found fault with the man rather than the system. To buttress the Nawab’s rule and end his vacillation he proposed installing his son-in-law, the more able and energetic Mir Kasim, as regent. Mir Jafar objected and in October 1760, with his palace ringed by Company troops, he resigned. Mir Kasim was installed in his place. To safeguard revenue expectations three more districts, Midnapur, Burdwan and Chittagong, were ceded to the Company. The old Nawab retired with his sixty wives and accumulated trappings to a pension in Calcutta; the new Nawab graciously showered Vansittart, Holwell and the rest of the Select Committee with handsome rewards for services rendered. Once again Christmas had come early in Bengal.

  ‘A man of understanding, of uncommon talent, and great application and perseverance, joined to a thriftiness…most essentially necessary to restore an impoverished state.’ Such was the verdict on the new Nawab voiced by Warren Hastings who now joined Vansittart’s Council. Hastings had reservations about Mir Kasim’s military qualities but had admitted that such natural timidity effectually safeguarded the Company against any resistance. Or, at least, it would have done but for extraordinary provocation. In the event ‘a spirit superior to that of a worm when trodden upon’ must have bridled at ‘the many daily affronts which he was exposed to’.

  If Mir Jafar had been so ineffectual that he could only be a puppet, Mir Kasim was so adroit that he resented the puppeteer’s every tug and would not rest until the strings were snipped. Agreeable to expectations he duly reformed his finances, reorganized and rearmed his troops, and stamped his authority on the province. Perhaps a Clive would have been able to manage him. But Vansittart was not Clive and his ‘revolution’, unlike Clive’s, never enjoyed the Bengal Council’s full support. Thus the ‘daily affronts’ came above all from the disaffected councillors. They went out of their way to discredit Mir Kasim, they toasted ‘Mir Jafar for ever’, they accused the Select Committee of having arranged the revolution for the personal advantage of its members, and they reopened the question of negotiating with the Shahzada (now Emperor as Shah Alam II) for the Company’s elevation to the Nawabship. In Bihar, where Company troops continued to be deployed, a permanent state of insubordination followed on the dismissal of Clive’s protégé, the Governor Ram Narayan. Successive commanders-in-chief openly insulted the Nawab. So did William Ellis, the chief of the Patna factory who, anticipating events, actually sent troops against the royal palace on the suspicion that it might contain some Company deserters.

  Worst of all, though, was the furore over internal trade. Enough has already been said on the subject of dastak; and anyway, by now the legality or otherwise of private British trade enjoying customs exemption within Bengal was irrelevant. It was simply common practice. The booming internal trade, which had once made a useful contribution to the Murshidabad exchequer, now passed through the province duty-free under British colours. Indeed by selling dastak to Indian merchants, the Company’s servants had effectually transferred this revenue to their own pockets. Naturally, as a good businessman, Mir Kasim resented this situation. But attempts to collect even the little that might still be due on dastak-less shipments proved disastrous. A bona fide consignment would have to be defended against the Nawab’s officials; they in turn had to ambush their legitimate prey. From both sides the complaints rained down on Calcutta. Trade, not to mention revenue collection, was being conducted at the point of a gun. Hastings, who travelled up to the Nawab’s new capital of Monghyr in 1762, was appalled at what he saw. Native agents were terrorizing the countryside with the approval of their British principals, who in turn were openly defying the agents of the supposedly sovereign Nawab. The only solution was a redefinition of the whole status of private trade.

  Acting on this suggestion the well-intentioned Vansittart negotiated an arrangement with the Nawab whereby all inland trade conducted by the Company’s servants would again pay duty but at a rate far below the normal. The concession occasioned an uproar within the Bengal Council. Vansittart’s position had just been greatly undermined by London’s dismissal of several of his supporters. (They were the men who, with Clive, had put their names to that letter of defiance back in 1759.) The Council was now overwhelmingly hostile and, though under no illusions as to the disastrous effect on relations with Mir Kasim, it unhesitatingly repudiated the agreement.

  It was this news of dissension within the Bengal Council in early 1763 which, reaching London a year later, confounded Sulivan’s prospects as he entered the ring for a second trial of strength with Clive and his supporters. The directors drafted a letter to Calcutta dismissing four of the rebellious councillors and naming a Bombay man to succeed Vansittart whose term of office was coming to an end. Clive and his following saw this as further evidence of Sulivan’s victimizing the Bengal establishment; from friends of the dismissed councillors they drew additional support and votes. But before the letter could actually be sent, more news from India revealed an even worse situation.

  Mir Kasim, it seemed, had responded to the Council’s repudiation of the new terms for inland trade by abolishing all customs duties, thus neatly negating the advantages of dastak. Overruling Vansittart, the Bengal Council condemned this move as provocative and outside the Nawab’s powers. Hastings realized that it might be the former but could not possibly be the latter. He urged calm and compromise; but it was too late. Anticipating hostilities the Nawab seized a shipment of arms; a deputation from Calcutta was detained in his capital; and when Ellis, the Company’s hot-headed chief in Bihar, stormed Patna he was quickly overpowered and captured by the Nawab’s troops. In June 1763 war was formally declared. Five thousand troops were sent north towards Monghyr while in a rewind of the 1760 revolution, Mir Kasim was declared unfit to rule and Mir Jafar reinstated amidst the usual handout of five-figure gratuities. Needless to say, high on the restored Nawab’s agenda was the reinstatement of the Company’s dastak – or rather the reimposition of normal dues. Vansittart and Hastings were in despair. Powerless to control the Council or to halt the collapse of their plans, both men indicated that they would resign as soon as the war was over.

  But if Vansittart felt powerless, how much more so Sulivan and his fellow directors in embattled Leadenhall Street? With Clive increasingly confident of getting his revenge, with the most stalwart amongst the proprietors expressing deep anxiety over affairs in India, and with the Ministry openly critical, Sulivan’s position was fragile. Add to this a war in India which promised to be – and indeed was – the longest and bloodiest ever fought by the Company in Bengal, plus the dangers implicit in its being conducted by a deeply divided and rebellious Council, and the wonder must be that his defeat was not more decisive.

  This time everything hinged on who should succeed Vansittart. With that, on average, twelve-month sea-lag between an Indian crisis and the receipt of news of it in London, the directors were somewhat in the position of astronomers monitoring galactic developments which, for all their immediacy, were in fact occurring in some previous era. There was no point agonizing over instructions which, if not irrelevant at the time they were issued, would certainly be of no more than historical interest by the time they reached India. All they could do was to lay down general principles – which their servants would inevitably read as so much sermonizing – and send out men whom they trusted. Patronage, as well as being their most prized asset at home, was also their most effective means of influencing policy abroad.

 
Before the depth of the Bengal crisis had become apparent, Sulivan and his fellow directors had committed themselves to John Spencer, a Bombay man like Sulivan himself, as President in Calcutta. After the now usual ‘splitting’, an attempt to reverse this appointment in the General Court failed; but by then, ‘as if by inspiration’, an anonymous shareholder leapt to his feet and proposed the name of Clive. The Court roared its approval. Who better for such a crisis than My Lord Plassey himself? In a speech so carefully phrased that it rather undermined the supposed spontaneity of the proposal, Clive rose to explain that, though indifferent to office, he recognized the obligations of duty. He would consider the matter; naturally his acceptance would depend on the directors being as supportive as the shareholders.

  It seemed a reasonable stipulation. But as transpired in two subsequent votes, it actually meant the removal of Sulivan from the Directorate and the reinstatement of Clive’s right to his beloved jagir money. Both demands were met, but only after tumultuous debate and by the narrowest of margins. With a fine sense of irony the session which approved the payment of the jagir also approved a motion forbidding the acceptance of any presents without the consent of the directors. A month later, in June 1764, Clive sailed for India for the third and last time. Besides rescuing the Company from the political complications that had arisen from his first Bengal ‘settlement’, he was expected to suppress those abuses – like extortionate present-taking, privileged private trade, and open defiance of authority – in which he had himself set the example.

  As was usual with a June sailing, the voyage proved a long one, indeed nearly as long as his sojourn in Bengal. Stormbound in Brazil he happily wrote of how he would think himself ‘deserving of everlasting infamy’ if with a single battalion he failed to force the surrender of Rio de Janeiro inside twenty-four hours. It was October and almost to the day, but on the other side of the world, a real battle of greater consequence than any Clive had fought was deciding the fate of northern India and establishing that lasting British supremacy with which he himself is so often credited.

  Pushing up from Calcutta Major John Adams had already inflicted four successive defeats on Mir Kasim’s troops. Two at least were desperate affairs more hotly contested than Plassey; ‘the campaign was one of the most successful ever fought by the English in India and was more responsible than Plassey for establishing them as the real masters of Bengal’ (Sir Penderel Moon). For what the enemy lacked, compared with Siraj-ud-Daula, in numbers they more than made up for by having been trained by Europeans and armed by the Company itself. Yet such is the unease with which imperial historians have viewed this ‘shameful decade’ that both Adams and his battles have been consigned to obscurity. Not so, of course, Mir Kasim’s ‘atrocities’. To stay the advance he threatened the lives of his British captives. The advance continued; the prisoners were massacred. They included three Bengal councillors, the fiery Ellis amongst them.

  By the end of 1763 Adams had reached Bengal’s easternmost border in Bihar and Mir Kasim had escaped across it into the neighbouring province of Oudh (roughly today’s Uttar Pradesh). There he was soon conspiring with the Oudh Nawab, Shuja-ud-Daula, and their mutual overlord, Shah Alam II, for a combined invasion of Bengal. Meanwhile Adams had died, mainly from exhaustion, and his troops had become restive. Four hundred miles from the fleshpots of Calcutta, desperately short of supplies, and deeply resentful of the non-payment of prize money due on the reinstallation of Mir Jafar, some deserted and others remained in a semi-mutinous state which neither part-payment nor courts martial subdued. In April 1764 Mir Kasim and his new confederates re-entered Bihar. In some confusion the British troops withdrew to Patna.

  Only the sternest measures restored order. Major Hector Munro, dispatched from Bombay to replace Adams, had twenty-five mutineers blown from guns and one of the sepoy battalions ignominiously ‘broken’. He then advanced on the confederates’ army encamped at Baksar on the Oudh-Bihar border. It was the subsequent battle of Baksar, far and away the mightiest engagement yet fought by the Company in India, which coincided with Clive’s stopover in Brazil and which proved so decisive. At least 2000 of the enemy perished and Munro lost nearly half as many. But as usual the British forces emerged victorious and had thus, at one fell swoop, disposed of the three main scions of Moghul power in Upper India. Mir Kasim disappeared into an impoverished obscurity, Shah Alam realigned himself with the British, and Shah Shuja fled west hotly pursued by the victors. The whole Ganges valley lay at the Company’s mercy; Shah Shuja eventually surrendered; henceforth Company troops became the power-brokers throughout Oudh as well as Bihar; there was even talk of an advance on Delhi.

  As if by way of a postscript, five months later, and just over a year after being handed to the throne for a second time, Mir Jafar died. The installation of his half-witted son, Najm-ud-Daula, provided the perfect excuse for reducing the Nawab to little more than a Company cipher. Henceforth his ministers were chosen by the Bengal Council which also regulated his relations with the Emperor. The Council made some further attempt to reform the operation of inland trade; but as soon as it became known that Clive himself was on his way, reforms were put in abeyance and the councillors contented themselves with securing the maximum personal advantage from what was the fourth change of Nawab in eight years.

  Clive expressed indignation at such changes having been made in advance of his imminent arrival. But the importance he attached to Baksar and to the demotion of the Nawab is well shown by an excited and somewhat contradictory letter which he immediately addressed to Thomas Rous, the man who had replaced Sulivan as Chairman. Clive had expected to find a situation similar to that of 1756 with the Company’s very existence in Bengal under threat. Instead he found it stronger and more flourishing than ever. Indeed ‘that critical conjuncture which I have long foreseen’ had arrived. ‘The whole Moghul Empire is in our hands…we must indeed become the Nabobs [Nawabs] ourselves in fact, if not in name…we must go forward, to retract is impossible. As usual he wanted more troops and more guns. For ‘if riches and stability are the objects of the Company this is the method, the only method, we now have for attaining and securing them’.

  Yet, selecting further extracts from the same letter, a precisely opposite construction can be placed upon it. ‘I mean absolutely to bound our possessions, assistance and conquests to Bengal, never shall the going to Delhi be a plan adopted…by me.’ His priority would be to reform the administration, cleanse what he called ‘the Augean stable’, and stamp out ‘rapacity and luxury’ regardless of how unpopular it might make him. ‘I am determined to return to England without having acquired one farthing addition to my fortune.’

  The letter was written from Madras where, during a brief stopover, Clive first caught up with events in India. It was accompanied by another letter, written in code and addressed to John Walsh, his agent in London, which gave instructions for ‘whatever money I may have in public funds or anywhere else and as much as can be borrowed in my name’ to be invested in Company stock. The transaction was to be carried out ‘without loss of a minute’ and in complete secrecy. What he had in mind is unclear. His biographers like to think that he was simply acquiring the wherewithal to create more votes amongst the Company’s shareholders, his critics that he wished to ensure for himself a further share of Bengal’s revenues (which he was about to claim in toto for the Company). Either way there can be no question that the transaction was prompted by the news that he gathered at Madras and that he used this news for personal advantage. It throws grave doubt over the much-acclaimed disinterest that supposedly informed his second term of government in Bengal. And, more significantly, it started a period of intense speculation in Company stock as an exciting financial investment. This new development was to have consequences every bit as dire as his earlier innovation of using Company stock to fabricate votes. Indeed there was a direct relationship between the two. With enough support among shareholders, and enough stock to influence the market, there would be
a grave temptation to force the Company into paying dividends which its finances could not justify.

  Reaching Calcutta in May 1765 Clive immediately set about reimposing his considerable authority and cleansing ‘the Augean stable’. By way of a broom he employed the Select Committee, staffed by four of his followers and to which the directors had given supremacy over the large and unruly Bengal Council. Anticipating that their new Governor might face a crisis like that he had found at Fulta in 1756, the directors had envisaged the Committee acting as a war cabinet. Clive, while stressing the critical nature of the times as a justification for invoking this powerful weapon, in fact used it as a Star Chamber. Individual councillors were summoned to appear before it and explain their gains; some resigned or were suspended; all were obliged to sign a covenant against accepting future presents.

  Such ferocious tactics would go down well with posterity; but they also provoked the hostility of the councillors, many of whom had powerful friends amongst the Bengal Squad, Clive’s natural allies in London. ‘The brotherhood of exploitation, the freemasonry of graft, had been violated’, explains Professor Spear, one of Clive’s more recent biographers. The victims ‘sharpened their mental knives of revenge on the grindstone of hate while dipping their quills of complaint in the ink of defamation’. Give himself used even richer language, likening Calcutta to a Gomorrah of corruption, ‘rapacious and luxurious beyond conception’ and confessing himself unable to restrain ‘the tribute of a few tears to the departed and lost fame of the British nation’. It was not that he condemned presents outright. How could he when, as John Johnstone, the most outspoken of the disgraced councillors reminded him, ‘the approved example of the President, Lord Clive himself’ had been their guide? What he objected to was that presents had been showered on men ‘of inferior pretensions and even in inferior stations’. As he reminded Johnstone, his own jagir had been ‘a reward for real services rendered to the Nabob at a very dangerous crisis’. He could see no parallel with the untried youths and incompetents who had enjoyed the munificence of subsequent nawabs.