Honourable Company: A History of The English East India Company (61 page)

The troubles may be said to have started with the return from Bengal in 1760 of a sick but vengeful Clive determined to employ fame and fortune in acquiring in England the eminence he had recently enjoyed in Bengal. At first he stood aloof from Company politics just as in Calcutta he had considered himself above the squabbles of the Bengal Council. But he had not forgotten the directors’ carping criticism of his administration; nor had the directors, although probably ignorant of his secret correspondence with Pitt, forgotten that scathing response, signed by Clive, in which the Bengal councillors accused them of listening to knaves and dwelling on ‘mere inadvertencies and casual neglects’. For such unheard-of defiance all the other signatories were now dismissed. But many, like Clive, were already heading home with fortunes made and grievances festering. It was they who would make the running while Clive waited in the wings, convalescing and accumulating influence including an Irish peerage, a seat in the Commons, and a modest parliamentary following.

With good reason to fear an inquisition into the source of their instant wealth, the returnees – soon known as the ‘Bengal Club’ and then the ‘Bengal Squad’ – were fortunate to find in Leadenhall Street a Company which behind its sober new frontage was already in some disarray. Entering the labyrinth now commonly known as ‘India House’, the Bengal Squad therefore made straight for the source of this disturbance by wheeling right for the double doors and doubtful acoustics of the General Court Room. Here, in the largest of the building’s public rooms, the twenty-four directors (previously ‘committees’) seated in line behind
the bar confronted their shareholders, now known as ‘proprietors’, who packed the opposing tiers of benches.

Since the formation of the United Company (following the amalgamation of the New and Old Companies) the General Court, or Court of Proprietors, met quarterly, its function being to rubber-stamp policy decisions, approve the dividend, and elect the directors from a previously agreed list. Anyone with more than £500 of Company stock was currently entitled to vote and, although many of the proprietors represented particular ‘interests’, or syndicates (concerned with shipping, finance, etc), the directors could expect to control them thanks to their monopoly of patronage. In other words they ‘managed’ the General Court just as the government of the day ‘managed’ Parliament – by the judicious distribution of perquisites and offices. But in 1758 this cosy equilibrium had broken down with a split amongst the directors, an appeal from the disappointed minority to the proprietors, and a hotly contested election.

The victor was the formidable if unexciting Lawrence Sulivan, a one-time Bombay councillor described by H. H. Dodwell as ‘a man without an idea in advance of the low level of his time’. This is true only in so far as Sulivan, by resisting Clive and betraying no sympathy with the idea of a Crown dominion in India, would find few champions amongst the historians of British India. On the other hand his integrity was unimpeachable, which in the ‘low level of his time’ is more than can be said for most. He understood the Company’s business thoroughly, respected its traditions, and for the next twenty years would aggressively champion its traditional role as an independent mercantile enterprise.

Of the gold-digging Bengal servants he ever disapproved and the 1758 controversy had in fact arisen over who should succeed Clive as President Governor in Bengal. Its bitterness was a clear indication of the enormous value that now attached to Indian patronage. In Bengal, and to a lesser extent in the Carnatic, the Company was seen to have in its gift a dazzling new array of appointments by means of which aspirants, whether civilian or military and regardless of age, experience or ability, could expect to acquire such wealth as would sustain the comforts of opulence and the fruits of influence for several generations to come. Calcutta had become a veritable Klondike; the stampede was on. In Burke’s emotive phrasing of twenty years later, ‘animated with all the avarice of age, and all the impetuosity of youth, they roll in [to Bengal] one after another; wave upon wave; and there is nothing before the eyes of the
natives but an endless, hopeless, prospect of new flights of birds of prey and passage, with appetites continually renewing for a food that is continually wasting…’

Such rampant profiteering was taking its toll of the Company as well as India. Already the directors, who met round a handsome horseshoe table in a chamber adjacent to the General Court Room, had shown their disapproval of the vast presents being dispensed by the Nawab and of the misuse of
dastak,
both of which diverted specie from the Bengal treasury into English pockets. They had also protested against the deluge of bills of exchange reaching London whereby their servants remitted home this same specie, in effect lending money to the Company in India against repayment, with interest, in London. With the Bengal land revenues foreseen by Clive proving hard to collect and being readily absorbed by military costs, this source of Indian finance helped to pay for the Company’s commercial purchases in India without the need to export silver. But silver was needed more than ever for the China trade, and whatever saving was being made in respect of Bengal was offset by the need to meet those bills of exchange in London. Thus the Company was experiencing severe and worsening financial embarrassment at the very moment when its erstwhile servants of the Bengal Squad were to be seen purchasing estates and influence – and, worse still, mobilizing their wealth to undermine the direction of the Company.

The first clash came in 1763 when, supported by the Bengal Squad, the parliamentary Opposition questioned the Government’s and Sulivan’s handling of the Indian arrangements contained in the Treaty of Paris which ended the Seven Years War. Clive, who was only too aware that his infamous
jagir,
far and away the most valuable asset acquired by any individual, was also the most vulnerable, had thus far held his fire. But he did join in this protest and, when it was duly defeated, he issued a direct challenge by serving notice that he would raise the matter in Leadenhall Street and would contest the forthcoming election of directors in the Court of Proprietors.

Once again Sulivan would triumph. But the important feature of the 1763 election is that Clive and his colleagues introduced tactics which, familiar enough to any city tycoon today, were unprecedented in the Company’s history and would have won the grudging regard even of that arch ‘manager’, Sir Josiah Child. Indeed, in what many have seen as a personal vendetta between Clive and Sulivan there are frequent echoes of that earlier tussle betwen Child and Papillon. But whereas Child had
confined himself to manipulating stock and bribing shareholders, Clive and his supporters hit on the idea of actually creating shareholders. This was done by forming an elaborate consortium of brokers, jobbers and banking houses to buy up and then split large shareholdings into £500 lots which were then distributed to their followers for the duration of the contest. In this way something like 100 new votes were created within the General Court of Proprietors.

Initially funded by wealth acquired in the Company’s service, this system of ‘splitting’ was, in the words of Dame Lucy Sutherland, its tenacious analyst, ‘to prove a veritable Frankenstein’s monster to its creators’. For it ‘called into action a number of forces in no way directly concerned with the welfare of the Company’, notable among which were His Majesty’s Government and then the Opposition. To offset Clive’s ‘splitting’ tactics Sulivan called to his aid the Ministry of the day. Public funds were thus deployed to match Bengal fortunes and more stock was split. The parliamentary Opposition responded in kind by ‘splitting’ further holdings on behalf of Clive. His tally rose to 220 newly created votes while Sulivan’s rose to 163, most of which were provided by the Government’s influence. The General Court’s debate over the terms of the Treaty of Paris, which rivalled that in Parliament and attracted enormous public interest, went in favour of Clive’s party; but in the even better attended elections for the Directorate, Clive and his nominees were routed. Two weeks later Sulivan took his expected revenge by ordering that the payment of Clive’s
jagir
be stopped pending investigation.

To Clive the £23,000 a year was everything. It was unprecedented recognition for unprecedented services; in the Moghul hierarchy it placed him where he ever yearned to be, above the Company and its wretched sermonizing; and it guaranteed his political prospects in England. ‘My future power,’ he wrote, ‘my future grandeur, all depend upon the receipt of the Jaghire money.’ To regain it became an obsession, first dictating an appeal to his old friends in the parliamentary Opposition and, when this failed, an appeal to the new Ministry of Lord Grenville. Grenville also advised that no redress would be likely at Westminster; but, in return for the support of Clive’s parliamentary following, he agreed to pressurize the Company. When this too failed, another trial of strength in the General Court of Proprietors was inevitable. Much the same frantic lobbying and ‘splitting’ preceded it. The difference was that this time the Ministry was on the side of Clive and his colleagues and the Opposition was for Sulivan and the majority in the Court of Directors. It
would still have been a close-fought contest had there not arrived from India in early 1764 news so dismal that it spelt doom to Sulivan and glorious vindication to Clive.

While the Company in London was entering its stormiest decade, something equally disruptive and ominous had been brewing in Bengal. There Clive had been briefly succeeded by Holwell, the unctuous ‘hero’ of the Black Hole, and then by Henry Vansittart, a young star from Madras. Vansittart enjoyed the support of both Clive and Sulivan. It boded well for firm leadership and, as if to display it, Vansittart’s first move had been to implement a scheme, hatched by Holwell, for replacing the Nawab.

Mir Jafar, though lulled by Clive’s promises that the English never deserted an ally, had always refrained from open defiance. He had simply failed to play the quite impossible role assigned to him. Clive and the Bengal Council had assured him that they would not interfere with his administration so long as he discharged his financial and military obligations. But such were their expectations of his generosity, such the demands of their trade, the expense of their troops, and the burden of compensation due to the Company, that the Nawab’s treasury was permanently empty and his troops permanently mutinous. However anxious to please, there was no way that he could discharge such obligations.

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.