Honourable Company: A History of The English East India Company (36 page)

That the two Companies should work towards a merger had been a stipulation of the Royal assent to that stay of execution granted to the Old Company in early 1700. Little, however, was immediately done to achieve it. The New Company still placed great store by Norris’s embassy to the Moghul and still had high expectations of Waite,
Catchpole and its other Consular Agents. Meanwhile the Old, celebrating its reprieve, was sending out more treasure and ships than for a decade. At the end of 1700 the King renewed his enquiries about the merger talks and both Companies agreed to set up a consultative committee. But again progress was slow, each Company manoeuvring to absorb the other rather than merge with it. The issue dominated the election of 1701 and threatened to dominate the deliberations of the new Parliament.

But outside of Westminster, Leadenhall Street and Dowgate, there was growing resentment against both Companies and their manipulation of the political system. Old arguments that the East India trade was ruining the country’s manufacturing capacity resurfaced and resulted in a ban on the wearing of Eastern silk. Henceforth only raw silk was worth importing; it was a bitter blow to the Persian trade which, more even than Bengal or China, relied on silk.

Meanwhile the King was more anxious about events in Europe. A war over the Spanish succession looked inevitable; the French, as in Siam, were already showing a lively interest in Eastern trade; and with the two English Companies so bitterly divided, each would be an easy prey. It would also be difficult, they were told, for the Royal Navy to afford protection twice over. Here was a threat from the throne and the Companies recognized it as such. In April 1702, a week before the declaration of war, both finally accepted the Instrument of Union.

In effect the Instrument set up a third East India Company, ‘The United Company of Merchants of England Trading to the East Indies’, in which the other two Companies were to have an equal interest. Balancing their stock and assets was an extremely complex undertaking not finally completed until the arbitration known as Godolphin’s Award in 1708. And although the United Company began operations immediately, seven years were allowed for the Old and New Companies to continue trading while they wound up their affairs and collected their debts. Thus, for a time, there were three companies in operation, the only difference being that they were no longer competing.

Such at least was the theory; but enforcing the new accommodation amongst sworn enemies on the other side of the world was never going to be easy. On the west coast of India Sir John Gayer was made Governor of Bombay with his old rival Sir Nicholas Waite relegated to the subordinate command of Surat. But Gayer was still a prisoner and Waite determined he should stay so. Instead of informing the Moghul official
of the new hierarchy, Waite simply bribed him to keep Gayer under lock and key and assumed the Governorship himself. Bengal tried to get round this problem of precedence by instituting a peculiar system of diarchy in which representatives of the New and Old Companies took it in turns to preside over the United Company. Had the rotation been on, say, a yearly basis it might have worked, but in fact they changed chairs every week. It was a recipe for total confusion.

Only in Madras was the merger achieved without serious friction. Seemingly nothing could shake the firm rule of Governor Pitt. While the Instrument of Union was being drawn up in London Pitt had faced his sternest challenge as Daud Khan, the Moghul Nawab of the Carnatic, closed in on Madras. The Nawab’s orders, framed in the aftermath of the Norris embassy, were to stop all trade, seize the town and the Company’s assets, and hold its officials. To this end the Moghul army had established its headquarters outside San Thomé, three miles down the beach, and began stopping all supplies to the Fort. Pitt reacted with customary vigour. He put the town on full alert and militias were raised to supplement the two companies of regular troops. But simultaneously he opened negotiations with the Nawab.

The town’s fortifications were undoubtedly vulnerable but it had not escaped Pitt’s attention that the enemy was without cannon and, as he pointed out to the Nawab, the fort contained ‘sufficient for our people for two years, besides the sea open to us’. He could only construe the stopping of provisions as an act of war but to sweeten the Nawab he sent him a crate of oranges from Aceh. A fortnight later he sent more oranges, this time from China, and received a cordial response suggesting an accommodation whereby the Company should make submission to the Emperor and a large donation to his Treasury. Pitt rejected this but sent more oranges. In March 1702, the third month of the siege, came news that in Surat the English had agreed to pay a very substantial indemnity for the piracies of Kidd. In view of this the Nawab was now willing to settle their differences and lift the siege for a not unreasonable 30,000 rupees. Pitt expostulated – and sent yet more oranges, this time from Burma. The Nawab returned them with a hint that they were not appropriate to someone of his station. But Pitt had made his point: Madras was not even short of luxury produce; and the Nawab was now clearly angling for a bribe. In the end 20,000 rupees for the Moghul and 5000 for the Nawab, half payable only after restitution of all seized goods, was enough to end the crisis.

After years spent in the twilight zone of the interloper, Pitt was convinced that every man had his price and every policy its pay-off point. His correspondence repeatedly harps on the need to employ men of both honesty and ability ‘but if I was under a necessity to take on a servant that wanted either of ‘em, it should be the former. For I could call him to account and oblige him to satisfaction; but fools that want ability can give none.’

For my particular affairs I employ the cursedest villain that ever was in the world, and see him cheat me before my face, but then he is the most dextrous indefatigable fellow in business that makes me such amends that I can afford to bear with it. ‘Tis very true what I formerly wrote you, that the Old Company lost ten times as much by employing fools as they did by knaves…

It would be unjust to suggest that Pitt himself was more able than honest but his reputation as the shrewdest merchant of his day certainly applied as much to his personal trade, especially with China, as to that of the Company. And to those same bargaining skills which stood him in such good stead in buying off Nawab Daud Khan he owed his own sensational fortune. Indeed, even as the Moghul army lay about his gates, Pitt was engaged in the most delicate of commercial transactions.

Given the Company’s embargo on shipping trade goods to England for any but its own account, the commonest way of remitting home the profits of personal trade was in the form of diamonds. The Company itself encouraged this since diamonds took up none of their precious hold space. And with the main diamond mines located in nearby Golconda, Madras became the Indian Hatton Garden where fortunes from all over the East were converted into gems. Pitt, with more profits than most to invest, dealt heavily in this market and in 1701 received word of a gigantic stone, over 400 carats in weight and undoubtedly ‘the finest jewell in the world and worth an immense sum’. He determined to possess it and would invest the major part of his latest Indian fortune in doing so. Henceforth he always refers to it as ‘the grand affair’, ‘my great concern’, ‘my all’.

Wild rumours would later circulate about the provenance of the ‘Pitt Diamond’, how it was snatched from the eye socket of a Hindu deity or smuggled from the mines by a slave who hid it in a self-inflicted gash in his thigh. Pitt’s deposition, given on oath, is less colourful but quite in character. He was offered ‘the great stone’ by a dealer with whom he was
familiar. It was the size of an egg and of the first water but the asking price of 200,000 pagodas (equivalent to £100,000 at the time) was out of the question and ‘too great an amount to be ventured home in one bottom [i.e. ship]’. The dealer halved his price but still Pitt refused. In March 1702, when Daud Khan’s siege was at its height, negotiations over the diamond resumed. The price fell to 55,000, then 50,000, pagodas. Pitt would not go above 45,000, then settled at 48,000 (£24,000). Fifteen years later, cut and polished, he would sell it to the Regent of France for £135,000. The feasting and festivities held to mark the retreat of the Moghul army were, not surprisingly, lavish.

No sooner had Daud Khan withdrawn his army and Pitt’s son sailed for London with the diamond than news of the union of the Companies began to reach Madras. Governor Pitt had been as dismissive of the New Company’s pretensions as any of Leadenhall Street’s stalwarts. Against his opposite number on The Coast, the New Company’s Agent and Consul-General at Masulipatnam, he had waged a war of words vicious even by the standards of the day. It made no difference that the unfortunate incumbent was in fact his cousin and erstwhile protégé. Or rather it made the man’s betrayal still more dastardly and his pretensions still more insufferable. He was, quite simply, ‘the haughtiest, proudest, ungratefullest wretch that ever was born’; and Pitt told him so, repeatedly.

On the other hand Governor Pitt, the ex-interloper, cannot but have felt some sympathy for the New Company. Josiah Child had remained his bitter enemy until death (1699) and had strongly opposed his appointment – ‘such a roughling and immoral man’, according to Child. Had Child not been discredited by 1698, Pitt would never have been appointed to Madras. Additionally, many of the New Company’s more respected adventurers, like Douglas and Catchpole, were his friends and associates of old. Indeed it had probably been with the idea that Pitt could be weaned from his new allegiance that his cousin had been sent to Masulipatnam.

But above all, friends and enemies, both in the New Company and the Old, deferred to his talents. No one knew the business better than Pitt and all, except Child, would prefer to have him with them than against them. There was little debate about who should have precedence on The Coast. Thomas Pitt was confirmed as Governor for the United Company, his cousin was relegated and died soon after of ‘an appoplecticall fitt’. ‘He’s dead and there’s an end’, snorted the Governor not without
another swipe at his memory. But towards the New Company’s London directors he was far more conciliatory. “Twas my fate and not my choice’, he wrote to them, quoting King William at the Peace of Ryswick, ‘that made me your enemy, and since you and my masters are united, it shall be my utmost endeavour to purchase your good opinon and deserve your friendship.’

He was as good as his word. For another seven years, nearly twelve years in all, he continued to preside over the affairs of Madras. ‘All matters here are very quiet and I doubt not to keep them so’, he reported in 1705 in words almost identical to those once used of Bantam affairs by David Middleton. He saw the Company through the traumas that followed the death of Aurangzeb in 1707 and of the several claimants to the throne he backed the right one in Shah Alam. At his behest new walls were constructed to embrace Madras’s Black Town and as a result of his excellent relations with the Moghul’s officials further villages were added to the settlement. Future Governors were instructed simply to follow Pitt’s example ‘which is now so much the easier for the path is well-trodden’. What has been called ‘The Golden Age of Madras’ was Pitt’s creation.

Wandering through the City of London sometime in the 1690s the poet-publican Ned Ward spied, atop an otherwise unremarkable Elizabethan building, an enormous and elaborate superstructure. It was both an architectural extension of the façade and a hoarding, for it framed a bright and colourful seascape complete with ships and choppy waves. Fat and fanciful fish, identified as dolphins, flanked the picture and a larger than life cut-out figure, evidently a sailor, stood defiantly hands on hips at its apex. But for its location so far from the river in Leadenhall Street, one might have mistaken the place for a chandler’s. Ned Ward’s companion knew otherwise. ‘’Twas the house belonging to the East India Company which’, he explained, ‘are a corporation of men with long heads and deep purposes.’

For an association of merchants intent simply on driving ‘a quiett trade’ the Company’s long-headed directors had somehow contrived a wonderfully eventful first century quite in keeping with their jaunty hoarding. But as their eighteenth-century equivalents disappeared into the labyrinth of offices and warehouses that now radiated from this unlikely frontage they longed for the obscurity of commerce rather than the celebrity of history. Wars were bad for business and so was dissension. They had long since ceased to notice that garish seascape and when, in 1726, they decided that the existing timbered building was too great a fire risk, they opted for a more sober and anonymous frontage, all grey stone and iron railings. It was high time for the swashbuckling alarms and excursions to make way for profitable trade and peaceful traffic, high time for a few fallow decades, devoid of drama, when nothing much
happened except that the warehouses filled, ships sailed, dividends steadied, and fortunes accrued.

By common consent the first forty years of the eighteenth century would be just such a period. Out of the chaos of the 1690s when interlopers, pirates, the rival Company, and the Moghul emperor all conspired to distract the Company from its ‘deep purposes’, there emerged an era of comparative peace. Secure in the knowledge of its charter, the United Company got down to business. Sir Josiah Child’s adventurism had been totally discredited and the Company was now content to exploit the commercial potential of China and Bengal and to consolidate its existing holdings in India.

By 1710 it was regularly sending to the East ten to fifteen ships a year, each of around 300 tons. Five or six commonly made for The Coast and the Bay (Madras and Bengal), two or three for China, two or three for Surat and Bombay, and one each for Mocha (Red Sea), Persia, and perhaps Benkulen (Sumatra) and St Helena. Thirty years later the number of sailings had risen steadily, but not sensationally, to around twenty, each ship being usually of 490 tons. (Over 500 tons and the ship’s company had to include a chaplain.) From an annual average of £400,000, imports had risen to £700,000 while London sales remained reasonably constant at about
£2
million. Naturally prices and profits fluctuated but there was none of the erratic boom and bust so typical of the previous century. Shareholders came to expect their annual eight per cent dividend and when in 1732 it was proposed to reduce it to six per cent there was such an outcry that the directors had to think again. India stock had become the eighteenth-century equivalent of a gilt-edged security, much sought after by trustees, charities and foreign investors.