Honourable Company: A History of The English East India Company (75 page)

The inevitable came courtesy of Arthur Wellesley’s triumph at Waterloo. Java and Malacca were handed back and Raffles’s hopes were dashed. By way of consolation he was appointed Lieutenant-Governor of Benkulen, the Sumatra factory which had evidently changed little since Collet’s day. It was, declared Raffles, ‘the most wretched place I ever beheld’. But ‘they say that I am a spirit that will never allow the East to be quiet’, he wrote, ‘and that this second Elba in which I am placed is not secure enough’. So it proved.

First he tried to extend the Company’s territories in Sumatra with, among others, a claim to the island’s southernmost tip which would have given command of the Sunda Straits (between Sumatra and Java). When this move was disowned, he turned again to the Malacca Straits. Although the Dutch had been allowed to resume Malacca itself, it was not intended that they should use it to preclude British shipping from the archipelago nor to interfere with the vital China trade. Yet so predatory was Raffles’s conduct that the Dutch were speedily provoked into
taking exactly the sort of action which could be so construed. As one by one the islands and harbours of the Straits were persuaded to sign exclusive treaties with the Dutch, Raffles’s arguments for a British counter-move gained weight. To match the Dutch at treaty-making William Farquhar was sent to the west coast of Borneo and among the islands at the entrance to the Straits. ‘Mynheer’ had beaten him to both. There remained only Raffles’s most drastic solution – to seize, occupy, and promote a new British settlement, then argue about the rights of the matter later.

In the long search for an eastern entrepôt it is as if the Company had all along been steadily narrowing its focus. From places as far apart as Pulo Condore, Tourane, Balambangan and Penang, the search had become concentrated on the Malacca Strait. Now, as Raffles and Farquhar sailed down it with the orders, troops, and bricks necessary for the final solution, the focus narrowed still further to the island clusters at the very tip of the Malay peninsula.

According to reports reaching Penang, the Rhio group had just been snapped up by the Dutch. They also held the Lingga archipelago while the Carimons, though favoured by Farquhar, were quickly rejected by Raffles. That left in effect only one place, an island hard against the shore of Johore, covered like all the rest with dense jungle, inhabited by a few Malay fishermen, and of no current commercial consequence whatsoever. It was called Singhapura. On 28 January 1819 Raffles’s little fleet anchored at the mouth of the Singapore river. Next day he went ashore with Farquhar and one sepoy. The local chief welcomed them into his rattan house and served them with rambutans and other fruit. When, in return for a substantial allowance, he agreed to authorize a British factory, the troops were immediately disembarked. But the arrangement was subject to the approval of the ruler of Johore and, as Raffles fully appreciated, that depended on who actually was the rightful ruler of Johore. Since the Dutch supported the
de facto
ruler, Raffles hunted out his elder brother. Though cordially disliked by the British party, he was immediately acknowledged as Sultan. On the following day he presided with Raffles at a ceremonial signing complete with red carpet laid across the sand, guard of honour, and numerous artillery salutes.

The military nature of the occupation was important. The Dutch were to understand that any attempt to evict the British would be met with force. Raffles gambled on their opting for a diplomatic offensive which, however effective, would give his settlement the few months necessary
to establish its utility. So it did. Within a matter of weeks over 2000 Malays and Chinese had decamped from Malacca to set up shop in Singapore. By the summer, when news of the acquisition reached London, the population already exceeded 5000 and included representatives of several of the main agency houses. Whatever the rights and wrongs of Raffles’s conduct, and whatever the legality of the cession, there could be no going back. ‘Our object is not territory but trade,’ wrote Raffles, ‘a great commercial emporium and fulcrum whence we may extend our influence politically as circumstances may hereafter require…One free port in these seas must eventually destroy the spell of Dutch monopoly; and what Malta is in the West, that may Singapore become in the East…’

The vision, the energy, and the effrontery, which made Singapore the success which Balambangan and Penang had never been, were Raffles’s. But it is not at all certain that the idea was his. Farquhar had certainly suggested Singapore; so had Captain Ross, the chief surveyor with the expedition. Raffles had supposedly adopted it as a result of his studies into Malay history. He declared Singhapura ‘classical ground’ since it had been a place of some consequence in the fourteenth-century Srivijayan empire; a historical pedigree lent dignity and substance to his creation.

The name is so impressively Sanskrit (Singha-Pura – Lion-City) that the wonder is that every passing Indophil had not noted the place. Yet the first mention of it seems to have been not by an etymologist or an empire builder but by the meticulous commander of the Company’s Seventh Voyage, Peter Floris, on his return from Patani to Masulipatnam. A century later that ever outspoken apostle of private trade, Captain Alexander Hamilton, he who fell foul of John Child, briefly commanded the Bombay Marine at Karwar, and had strong objections to eating Cantonese duck, also noticed it.

In anno 1703 I called at Johore on my way to China [writes the Captain] and he [the prince of Johore] treated me very kindly and made me a present of the island of Singapore; but I told him that it could be of no use to a private person, though a proper place for a Company to settle a colony on, lying in the centre of trade…’

In an exhaustive study of
Trade in the Eastern Seas
around the year 1800 Professor C. N. Parkinson neatly summarizes the peculiar changes which had overtaken the Company. Since it was still officially ‘The United Company of Merchants of England trading to the East Indies’, ‘there would be nothing manifestly reckless’, writes Parkinson, ‘in concluding that India House sheltered a body of English merchants trading with India’.

Nevertheless, such a conclusion would be wrong: the men within were not merchants, and they were not trading with India. One might add, a little unkindly, that they were not always united, and that they were not all Englishmen.

Indeed they were not. With India itself awash with Campbells, MacLeods, MacPhersons and Mackenzies, and with both Malacca and the Moluccas under Farquhar rule, it was as if Hastings and Raffles were the only Englishmen around. What Lord Rosebery called ‘the Scoticisation of India’ was being directly attributed to Henry Dundas, soon to be ennobled as Viscount Melville of Melville and Baron Dunira of Dunira in the County of Perth. So much for the theory that the Board of Control left the Company’s patronage intact.

How was the East India Company controlled [continues Parkinson]? By the Government. What was its object? To collect taxes [i.e. revenue]. How was its object attained? By means of a large standing army. What were its employees? Soldiers, mostly; the rest, Civil Servants. Where did it trade to? China. What did it
export from England? Courage. And what did it import from China? Tea.

For ‘courage’ one might substitute ‘men and guns’. Otherwise the summary may stand. For as of 1813 all that remained of the Company as a self-governing commercial enterprise was its partial monopoly of the China trade.

In 1800 Dundas had proposed that ships built in India and operated by country traders should be admitted to the London-India trade. This looked more like a direct attack on the Company’s monopoly than an extension of the 1793 concession (allowing some cargo space to country traders in Indiamen operating this sector). Led by the Company’s shipping interest – an immensely powerful group of ships’ captains and agents who had acquired hereditary rights in the construction, supply and command of the Company’s fleet – the directors had successfully stalled. But in 1813 the Company’s charter again came up for renewal and this time the monopoly of the London-India trade was finally broken.

The challenge came not from the country traders but from that other prong of the free trade lobby, Britain’s manufacturing industries. Giving the Company’s monopoly a stern drubbing in the process, Adam Smith’s
The Wealth of Nations
had first urged the logic of free trade back in the 1770s. But it was not until the turn of the century that British manufacturers, and in particular the cotton kings of Lancashire, were sufficiently confident of their products’ quality and price structure to adopt the cause of deregulation. Until then their attacks on the Company had focused on restricting the quantity and quality of Indian piece goods entering Britain and so posing an ‘unfair’ competition for the domestic product. Now, thanks to greater mechanization and better supply arrangements for raw cotton, the Manchester Chamber of Commerce welcomed competition as eagerly as the country traders.

Throughout the new industrial heartlands of England and Scotland petitions were drawn up and Members of Parliament were lobbied. Since the Company was signally failing to sell British manufactured goods in the largest markets known to man, it was only common sense to let others try. Other ports, went the argument, must be free to compete for the trade with London and other shippers free to compete with the Company. British jobs depended on it; and so, more decisively, did votes. Once the movement had gathered momentum there was no stopping it. However eloquent the Company’s defence of its loyal Indian artisans,
there was no political mileage in protecting Bengali weavers from being overwhelmed by a continuous roll of mass-produced, duty-free prints. Against the need for full employment in Manchester, Midnapur stood not a chance. After all, what was the use of subject territories if they did not afford a market for the imperial manufacturer? Especially when their only other promised return, revenue, was being so readily absorbed in maintenance costs.

The Company’s directors, bitterly divided amongst themselves and in the process of negotiating a new £2.5 million loan from the Government, were in no position to resist. Nor could they have resisted. Whereas once they were answerable only to the General Court of Proprietors, now they were subject to the control and direction of an elected government whose political priorities were paramount. After 213 years that cherished monopoly of Eastern trade, so resented by the interlopers and so hotly defended by the Company’s servants, must finally end. But two exceptions of great importance were made. By mutual consent China, now far and away the largest market, and tea, now far and away the most profitable commodity, were reserved to the Company. Although this residual commerce was destined to stay with the Company for only twenty years, the part it played in transforming Indian revenues into British wealth was a crucial factor in the development of empire.

‘India does entirely depend upon the profits of the China trade, declared the Company’s auditor in 1830. By then it was not simply a question of individuals remitting home their savings and of the Company recovering the wherewithal to meet its home charges (i.e. dividends, salaries, the purchase of military stores, etc). For now duties on tea – which had steadily increased almost to their pre-Commutation Act levels – were providing the British Exchequer with over £3 million per year, almost one-tenth of its total revenue receipts from the whole of England. At £30 million a year, tea imports represented the largest single item in the country’s trading account.

The Company had faced no greater commercial challenge than the China market and it was therefore fitting that in its dotage it should enjoy the tea trade to the full. More to the point, it was generally felt that the xenophobic nature of the Chinese and the delicate character of commercial dealings in Canton argued against the admission of new competitors. It was hard enough to exercise an effective control over the existing country traders. In spite of its dependence on them, twice during the 1780s the Company had tried to remove these often unruly colleagues
from their Canton factory only to find them reappearing under foreign colours. Thus Meares’s associate, Daniel Beale, resurfaced as Consul for the King of Prussia while his partner, Henry Cox, returned under Swedish colours. Like the interlopers of old, country traders were none too particular about national loyalties. Instead of Anglo-Ostenders, Canton now swarmed with Anglo-Poles, Anglo-Portuguese, Anglo-Genoese, and even Anglo-Sardinians. Joining this cosmopolitan set in 1827 James Matheson, successor to the Cox and Beale partnership, boasted Danish nationality.

It was also hard to avoid the impression that the Company was actually handling the China trade rather effectively. The export to Canton of raw Indian cotton was about to decline, but that of English products, especially woollens, steadily increased while that of Indian opium had grown so dramatically that it had redressed that adverse trade balance at Canton. In 1804 the value of British and Indian exports to China for the first time exceeded the value of its imports from China. At last the flow of bullion could be reversed and, as this favourable trade surplus grew, so did the flow of silver back to British India, there to be employed in the purchase of British manufactures.

Where an existing monopoly was proving so beneficial, and where the consequences of its abolition could so materially affect the nation’s prosperity, deregulation was not an issue. Like the Lancashire cotton kings, the Government only invoked free-trade principles when confident of not losing by them.

It was the same with Raffles in Singapore. Singapore’s remarkable growth is rightly attributed to Raffles’s insistence that it be constituted a free port, open to all nations and charging no duties. As such it became the model for Britain’s ‘Free Trade (or Informal) Empire’ of the mid-nineteenth century. It was, of course, ironical that this design originated with a servant of the Honourable Company; and it was also fortuitous. For until then Raffles had shown no sympathy with free trade. In Java he had actually championed what he called ‘the extension of our liberal and national principles of monopoly’ in relation to the spice trade, to the opium trade, and to the import of Indian cottons. Similarly at Benkulen in agriculturally backward Sumatra, he promoted colonization and a plantation economy in which the Company would remain as the purchasing agency. It was not
The Wealth of Nations
but the ideas of Dalrymple and the example of Penang, where for the first decade or so no duties had been charged, which inspired Singapore’s free-port status.