Chapter II: Inland Trade of Bengal (1757-1765)

CHAPTER II

INLAND TRADE OF BENGAL (1757-1765)

In the eighteenth century, the transit of goods by roads and navigable rivers was subject to inland duties in India, as in other parts of the world. The East India Company had, however, obtained a Firman, or royal order, exempting their export and import trade from these payments. The goods which the Company imported from Europe, and those which they purchased in India for export to Europe, were thus permitted to pass through the country without duties. A Dustuck, or certificate, signed by the English President or by chiefs of English factories, was shown at the tollhouses, and protected the Company’s merchandise from all duties.

The victory of Plassey in 1757 raised the prestige of the British nation in Bengal; and the servants of the East India Company, engaged in the inland trade of Bengal on their own account, now claimed as private traders that exemption from duties which had been granted only for the import and export trade of the Company. It is necessary to understand this point clearly, because it underlies the economic, commercial, and political history of Bengal during the succeeding years.

The Nawabs of Bengal recognised the right granted to the Company to carry on the Company’s import and export trade duty-free; but the servants of the Company, who had taken to private trade on their own account, conveyed goods from one part of Bengal to another, and claimed exemption from duties for this private inland trade.

After the battle of Plassy, Clive had made Mir Jafar Nawab of Bengal in 1757. Mir Jafar made an incompetent ruler, and was unable to fulfil his engagements to the British. He was accordingly set aside in 1760, and Mir Kasim was set up as Nawab. The new Nawab agreed to assign the revenues of three districts – Burdwan, Midnapur, and Chittagong—to the East India Company; and he also agreed to pay the balance which Mir Jafar had left unpaid, and to make a present of five lakhs of Rupees (£50,000) as a contribution towards the Company’s wars in Southern India. Mir Kasim faithfully fulfilled these engagements, and in less than two years discharged all his pecuniary obligations to the British.

But the difficulty about the inland trade increased from year to year. The Company’s servants conveyed their goods from place to place duty-free, while the goods of the country merchants were heavily taxed in the transit. The country traders were ruined; the Nawab’s revenues declined; and the servants of the Company monopolised the trade and reared colossal fortunes.

Henry Vansittart, who succeeded Clive as Governor in 1760, marked the growing evil and described its causes.

“With respect to trade, no new privileges were asked of Meer Jaffier; none indeed were wanted by the Company, who were contented with the terms granted them in 1716, and only wished to be relieved from the impositions to which they had been exposed from the arbitrary power of the Nabob. However, our influence over the country was no sooner felt than many innovations were practised by some of the Company’s servants, or the people employed under their authority. They began to trade in the articles which were before prohibited, and to interfere in the affairs of the country.“¹

Mr. Verelst, who afterwards succeeded as Governor, also wrote to the same effect.

“A trade was carried on without payment of duties, in the prosecution of which infinite oppressions were committed. English agents or Gomastahs, not contented with injuring the people, trampled on the authority of government, binding and punishing the Nabob’s officers whenever they presumed to interfere. This was the immediate cause of the war with Meer Cossim.“²

The Nawab Mir Kasim himself presented a strong remonstrance to the English Governor against the oppressions of the Company’s servants.

“From the factory of Calcutta to Cossim Bazar, Patna, and Dacca, all the English chiefs, with their Gomastahs, officers, and agents, in every district of the government, act as Collectors, Renters, Zemindars, and Taalookdars, and setting up the Company’s colours, allow no power to my officers. And besides this, the Gomastahs and other servants in every district, in every Gunge, Perganah, and Village, carry on a trade in oil, fish, straw, bamboos, rice, paddy, betel-nut, and other things; and every man with a Company’s Dustuck in his hand regards himself as not less than the Company.“³

Mir Kasim’s complaints were not unfounded; and Ellis, the Company’s agent at Patna, made himself specially obnoxious to the Nawab by his hostile attitude. An Armenian merchant had been accused of purchasing a small quantity of saltpetre for the use of the Nawab; this was deemed an infringement of the Company’s rights, and Ellis had him seized and sent in irons to Calcutta. Two deserters from the British army were supposed to have taken shelter in the Nawab’s fort of Monghyr. Ellis sent his soldiers to search the fort, but no deserters were found. Warren Hastings, then a member of the Governor’s Council, felt the impropriety of such defiance of the Nawab’s authority, and foresaw an open rupture.

“With regard to Mr. Ellis, I am at a loss to act; his behaviour, in my opinion, has been so imprudent and his disaffection to the Nabob so manifestly inveterate, that a proper representation of it cannot fail to draw upon it the severest resentment of the Company…. The world, judging only from facts, sees the Nabob’s authority publicly insulted, his officers imprisoned, Sepoys sent against his forts, and is told that the Chief of the English in these parts disavows the Nabob’s right to the Subahship. The obvious end of such symptoms is an open rapture.“¹

It is to the credit of Warren Hastings that he consistently protested against the claims of the Company’s servants to carry on their private trade duty-free, and deplored the ruin which was thus caused to the trade of the people of Bengal. His eyes were not blinded by self-interest, and his natural leaning towards his own countrymen did not prevent him from condemning in the strongest terms the injustice done to the people of Bengal.

“I beg leave to lay before you a grievance which loudly calls for redress, and will, unless duly attended to, render ineffectual any endeavours to create a firm and lasting harmony between the Nabob and the Company. I mean the oppression committed under the sanction of the English name…. I have been surprised to meet with several English flags flying in places which I have passed, and on the river I do not believe I passed a boat without one. By whatever title they have been assumed (for I could trust to the information of my eyes without stopping to ask questions), I am sure their frequency can bode no good to the Nabob’s revenues, the quiet of the country, or the honour of our nation, but evidently tends to lessen each of them. A party of Sepoys who were on the march before us afforded sufficient proofs of the rapacious and insolent spirit of those people where they are left to their own discretion. Many complaints against them were made me on the road, and most of the petty towns and Serais were deserted at our approach and the shops shut up from the apprehensions of the same treatment from us. You are sensible, sir, that it is from such little irregularities, too trivial perhaps for public complaint and continually repeated, that the country people are habituated to entertain the most unfavourable notions of our government.” ¹

Hastings had been long in India, and was not mistaken in speaking of the unfavourable opinion entertained by the people of the administration of the Company’s servants. The writer of the well-known chronicle known as Siyar Mutakharin, while admiring the conduct of the British troops on the field of battle, gives us a lamentable picture of their civil administration.

" They [the English] join the most resolute courage to the most cautious prudence; nor have they their equals in the art of ranging themselves in battle array and in fighting order. If to so many military qualifications they knew how to join the arts of government; if they showed a concern for the circumstances of the husbandman and the gentleman, and exerted as much ingenuity and solicitude in the relieving and easing the people of God as they do in whatever concerns their military affairs, no nation in the world would be preferable to them, or prove worthier of command. But such is the little regard which they show to the people of these kingdoms, and such their apathy and indifference for their welfare, that the people under their dominion groan everywhere, and are reduced to poverty and distress. O God! come to the assistance of thine afflicted servants, and deliver them from the oppressions they suffer.” ¹

The Nawab of Bengal continued to make just but futile complaints to the English Governor.

“In every Perganah, every village, and every factory, they [the Company’s Gomastahs] buy and sell salt, betel-nut, ghee, rice, straw, bamboos, fish, gunnies, ginger, sugar, tobacco, opium, and many other things, more than I can write, and which I think it needless to mention. They forcibly take away the goods and commodities of the Reiats, merchants, &c., for a fourth part of their value; and by ways of violence and oppressions they oblige the Reiats, &c., to give five rupees for goods which are worth but one rupee. . . . The officers of every district have desisted from the exercise of their functions; so that by means of these oppressions, and my being deprived of my duties, I suffer a yearly loss of nearly twenty-five lakhs of Rupees. . . . By the grace of God, I neither have transgressed, nor do, nor will transgress the treaty and agreement which I have made; why then do the chiefs of the Englishmen render my government contemptible and employ themselves in bringing a loss upon me?” ²

A still more detailed account of the doings of the Company’s Gomastahs is to be found in the letter of Sergeant Brego.

“A gentleman sends a Gomastah here to buy or sell; he immediately looks upon himself as sufficient to force every inhabitant either to buy his goods or sell him theirs; and on refusal (in case of non-capacity) a flogging or confinement immediately ensues. This is not sufficient even when willing, but a second force is made use of, which is to engross the different branches of trade to themselves, and not to suffer any person to buy or sell the articles they trade in; and if the country people do it, then a repetition of their authority is put in practice; and again, what things they purchase, they think the least they can do is to take them for a considerable deal less than another merchant, and oftentimes refuse paying that; and my interfering occasions an immediate complaint. These, and many other oppressions more than can be related, which are daily used by the Bengal Gomastahs, is the reason that this place [Backerjunj, a prosperous Bengal district] is growing destitute of inhabitants; every day numbers leave the town to seek a residence more safe, and the very markets, which before afforded plenty, do hardly now produce anything of use, their peons being allowed to force poor people; and if the Zemindar offers to prevent it, he is threatened to be used in the same manner. Before, justice was given in the public Catcheree, but now every Gomastah is become a judge, and every one’s house a Catcheree; they even pass sentences on the Zemindars themselves, and draw money from them by pretended injuries, such as a quarrel with some of the peons, or their having, as they assert, stole something, which is more likely to have been taken by their own people.“¹

A similar detailed account is given in the letter of Mahomed Ali, Collector of Dacca, to the English Governor at Calcutta.

“In the first place, a number of merchants have made interest with the people of the factory, hoist English colours on their boats, and carry away their goods under the pretence of their being English property, by which means the Shahbunder and other customs are greatly determined. Secondly, the Gomastahs of Luckypoor and Dacca factories oblige the merchants, &c. to take tobacco, cotton, iron, and sundry other things, at a price exceeding that of the bazaar, and then extort the money from them by force; besides which they take diet money for the peons, and make them pay a fine for breaking their agreement. By these proceedings the Aurungs and other places are ruined. Thirdly, the Gomastahs of Luckypoor factory have taken the Talookdars’ talooks [the farmers’ farms] from the Tahsildar by force for their own use, and will not pay the rent. At the instigation of some people, they, on a matter of complaint, send Europeans and Sepoys, with a Dustuck, into the country, and there create disturbances. They station chowkeys [toll-houses] at different places, and whatever they find in poor people’s houses they cause to be sold, and take the money. By these disturbances the country is ruined, and the Reiats cannot stay in their own houses, nor pay the malguzaree [rents]. In many places Mr. Chevalier has, by force, established new markets and new factories, and has made false Sepoys on his own part, and they seize whom they want and fine them. By his forcible proceedings many hants, gauts, and perganas [markets, landing-places, and fiscal divisions] have been ruined.“¹

While the entire inland trade of Bengal was thus disorganised by the Company’s servants and their agents in every important district, the methods by which they secured the manufactures to themselves were equally oppressive. These are fully described by William Bolts, an English merchant who saw things with his own eyes.

“It may with truth be now said that the whole inland trade of the country, as at present conducted, and that of the Company’s investment for Europe in a more peculiar degree, has been one continued scene of oppression; the baneful effects of which are severely felt by every weaver and manufacturer in the country, every article produced being made a monopoly; in which the English, with their Banyans and black Gomastahs, arbitrarily decide what quantities of goods each manufacturer shall deliver, and the prices he shall receive for them. . . . Upon the Gomastah’s arrival at the Aurung, or manufacturing town, he fixes upon a habitation which he calls his Catcherry; to which, by his peons and hircarahs, he summons the brokers, called dallals and pykars, together with the weavers, whom, after receipt of the money despatched by his masters, he makes to sign a bond for the delivery of a certain quantity of goods, at a certain time and price, and pays them a certain part of the money in advance. The assent of the poor weaver is in general not deemed necessary; for the Gomastahs, when employed on the Company’s investment, frequently make them sign what they please; and upon the weavers refusing to take the money offered, it has been known they have had it tied in their girdles, and they have been sent away with a flogging. . . . A number of these weavers are generally also registered in the books of the Company’s Gomastahs, and not permitted to work for any others, being transferred from one to another as so many slaves, subject to the tyranny and roguery of each succeeding Gomastah. . . . The roguery practised in this department is beyond imagination; but all terminates in the defrauding of the poor weaver; for the prices which the Company’s Gomastahs, and in confederacy with them the Jachendars [examiners of fabrics] fix upon the goods, are in all places at least 15 per cent., and some even 40 per cent. less than the goods so manufactured would sell in the public bazaar or market upon free sale. . . . Weavers, also, upon their inability to perform such agreements as have been forced upon them by the Company’s agents, universally known in Bengal by the name of Mutchulcahs, have had their goods seized and sold on the spot to make good the deficiency; and the winders of raw silk, called Nagoads, have been treated also with such injustice, that instances have been known of their cutting off their thumbs to prevent their being forced to wind silk.“¹

Not the industries alone, but agriculture also declined in Bengal under this system; for the manufacturers of the country were largely peasants as well.

“For the Ryots, who are generally both landholders and manufacturers, by the oppressions of Gomastahs in harassing them for goods are frequently rendered incapable of improving their lands, and even of paying their rents; for which, on the other hand, they are again chastised by the officers of the revenue, and not unfrequently have by those harpies been necessitated to sell their children in order to pay their rents, or otherwise obliged to fly the country.“²

These extracts are enough. They have been made from different sources, from the letters and writings of an English Governor, an English Member of Council, and an English merchant, as well as from the complaints of the Nawab himself, the report of a Mahomedan collector, and the chronicles of a Mahomedan historian. And all these records tell the same melancholy tale. The people of Bengal had been used to tyranny, but had never lived under an oppression so far reaching in its effects, extending to every village market and every manufacturer’s loom. They had been used to arbitrary acts from men in power, but had never suffered from a system which touched their trades, their occupations, their lives so closely. The springs of their industry were stopped, the sources of their wealth were dried up.

There were two Englishmen in Bengal who endeavoured to put a stop to this state of things; they were Henry Vansittart and Warren Hastings. They came to Monghyr to see the Nawab Mir Kasim, and to settle matters amicably. Mir Kasim was a despot, but he was clear-sighted. He had proved himself strong and self-willed, but he knew himself powerless against the Company, and he felt that Vansittart and Hastings were his only friends. He made concessions where concessions were demanded, and the three came to an agreement.

The terms of the agreement were recorded under nine heads¹ the first three being most important. They were that—

(1) For all trade, import or export, by shipping, the Company’s Dustuck should be granted, and it should pass unmolested and free of the customs.

(2) For all trade from one place within the country to another, in commodities produced in the country, the Company’s Dustuck should be granted.

(3) That duties should be paid on such commodities according to rates which shall be particularly settled and annexed to the agreement.

Nothing could be more equitable than this agreement, but it aroused an outburst of indignation in Calcutta. Amyatt, Hay, and Watts recorded on the 17th January 1763, “that the regulations proposed by him [Vansittart] are dishonourable to us as Englishmen, and tend to the ruin of all public and private trade.” The General Council met on the 15th February. A solemn consultation was held on the 1st March. It was determined (Vansittart and Hastings dissenting) that the Company’s servants had the right to carry on the internal trade duty-free; and that, as an acknowledgment to the Nawab, a duty of 2½ per cent. would be paid on salt alone, instead of 9 per cent. on all articles, to which Vansittart had agreed.

This was the decision of selfish men fighting for their selfish interests. The dissentient opinion of Warren Hastings was that of a just man pleading for justice. One passage from Hastings’ long statement should be quoted and remembered.

“As I have formerly lived among the country people, in a very inferior station, and at a time when we were subject to the most slavish dependence in the Government, and met with the greatest indulgence, and even respect, from the Zemindars and officers of the Government, I can with the greatest confidence deny the justice of this opinion; and add further, from repeated experience, that if our people, instead of erecting themselves into lords and oppressors of the country, confine themselves to an honest and fair trade, and submit themselves to the lawful authority of the Government, they will be everywhere courted and respected, and the English name, instead of becoming a reproach, will be universally revered; the country will reap a benefit from our commerce; and the power of the English, instead of being made a bugbear to frighten the poor inhabitants into submission to injury and oppression, will be regarded by them as the greatest blessing and protection.“¹

Nawab Mir Kasim heard of the rejection of the Agreement by the Calcutta Council, and of the resistance offered to his officers in the execution of his orders in accordance with the Agreement. In his noble indignation, Mir Kasim did one of the best and most benevolent acts which have ever been done by any king or ruler in the East. He sacrificed his revenues and abolished all inland duties, so that his subjects might at least trade on equal terms with the servants of the East India Company.

It is scarcely possible to believe, but it is nevertheless the fact, that the Calcutta Council, with the exception of Vansittart and Hastings, protested against this repeal of all duties as a breach of faith towards the English nation! “The conduct of the Company’s servants upon this occasion,” says James Mill in his History of British India, “furnishes one of the most remarkable instances upon record of the power of interest to extinguish all sense of justice, and even of shame.” “There can be no difference of opinion,” adds H. H. Wilson in his note, “on the proceedings. The narrow-sighted selfishness of commercial cupidity had rendered all Members of the Council, with the two honourable exceptions of Vansittart and Hastings, obstinately inaccessible to the plainest dictates of reason, justice, and policy.”

The dissentients, Vansittart and Hastings, recorded their opinion pointedly, and argued that “although it may be for our interests to determine that we will have all the trade in our hands, that we will employ all our own people to make salt, take every article of produce of the country off the ground … yet it is not to be expected that the Nabob will join us in endeavouring to deprive every merchant of the country of the means of carrying on their business.” This puts before us clearly the issues which were involved. The Company’s servants, in order to make private fortunes for themselves, desired to deprive the population of a rich and civilised country of those sources of wealth which they had hitherto enjoyed under good and bad government alike, and those rights of free production and free barter which belong to all civilised communities on earth. The Company’s servants desired not for a monopoly in one or two commodities, but for a distinction between their trade and the trade of the country merchants in all commodities, such as would eventually deprive the people of Bengal of one of the commonest rights of all human societies. History, perhaps, does not record another instance of foreign merchants asserting such far-reaching claims by the force of arms, in order to divert into their own hands virtually the entire trade of a great and populous country. Nawab Mir Kasim resisted the claims, and the result was war.

Henry Vansittart, who was Governor in Calcutta from 1760 to 1765, covering the entire period of Mir Kasim’s administration of Bengal, thus sums up his opinion of that administration:

“He [Mir Kasim] discharged the Company’s debt and the heavy arrears of his army, retrenched the expenses of his court, which had consumed the income of his predecessors, and secured his own authority over the country by reducing the power of the Zemindars, who were before continual disturbers of the peace of the province. All this I saw with pleasure, well knowing that the less need he had of our assistance, the less would be the Company’s expenses, and the better able they would be to attend to the care of their own possessions; at the same time that we might depend upon him as a sure and useful ally against any common enemy. I was convinced that whilst we did not encroach upon the Nabob’s rights or disturb his government he would never wish to quarrel with us; and, in effect, so cautious was he of giving occasion for dispute, that not one instance can be produced of his sending a man into any of the lands ceded to us, or molesting us in a single article of our commerce, till the contention which he was drawn into by the usurpation of our Gomastahs and our new claims with respect to our private trade, and even to the breaking out of the war during the height of our disputes, the Company’s business, in every part, went on without the least interruption, excepting one or two aggravated complaints of Mr. Ellis’s concerning the saltpetre business. How different was the conduct of the gentlemen who had formed themselves into a party against him! From the time of his advancement to the Subahship, scarce a day passed but occasion was taken from the most trifling pretences to trample on his government, to seize his officers, and to insult them with threats and invectives. I need not point out instances of this, they will be seen in every page of this narrative.“¹

It is not the purpose of the present work to narrate the military transactions of the East India Company. The issue of the war with Mir Kasim in 1763 was never doubtful for a moment. Mir Kasim fought better than any Indian prince or army had ever fought in Bengal against the English, but was beaten at Gheria and then at Uday-Nala. In a fit of fury he caused the English prisoners at Patna to be massacred, and then left his dominions for ever. Old Mir Jafar, who had been set aside in 1760, was now set up again as Nawab. But he died shortly after; and his illegitimate son, Najim-ud-Daula, was hastily created Nawab in 1765.

Every occasion for setting up a new Nawab was considered a suitable opportunity for shaking the proverbial pagodatree of the East. When Mir Jafar was first made Nawab after the battle of Plassy in 1757, the British officers and troops had received a bonus of £1,238,575, out of which Clive himself had taken £31,500 besides a rich jaigir or estate in Bengal. When Mir Kasim was made Nawab in 1760, the presents to the British officers came to £200,269, out of which Vansittart had taken £58,333. When Mir Jafar was made Nawab a second time in 1763, the presents amounted to £500,165. And now, when Najim-ud-Daula was set up in 1765, further presents came in to the extent of £230,356. Besides these sums received in presents, amounting within eight years to £2,169,665, further sums were claimed and obtained as restitution within this period amounting to £3,770,833.¹

The receipt of these sums was proved or acknowledged before the House of Commons Committee which inquired into the condition of the East India Company in 1772-73. Clive justified his own conduct.

“I never sought to conceal it, but declared publicly in my letters to the Secret Committee of the India Directors that the Nabob’s generosity had made my fortune easy, and that the Company’s welfare was now my only motive for staying in India. … What pretence could the Company have to expect, that I, after having risked my life so often in their service, should deny myself the only opportunity ever offered of acquiring a fortune without prejudice to them, who it is evident would not have had more for my having had less?” ²

It never struck Clive that the treasure belonged neither to the Company nor to him, but to the country, and should have been devoted to the good of the people.

It is due, however, to the East India Company to state that they set their face against these exactions recovered under the name of presents, and condemned also the internal trade carried on by their servants in Bengal. In 1765 they sent out orders against the receipt of presents, and despatched Clive once more to put a stop to the internal trade of their servants, which they had already prohibited. The orders had arrived in Bengal, and the covenants to be signed by the Company’s servants were shortly expected. There was no time to lose, so the Calcutta Council hastily set up Najim-ud-Daula, and reaped their last harvest of presents.

Footnotes

¹ A Narrative of the Transactions in Bengal, vol. i. p. 24. ² View of Bengal, p. 48. ³ Mir Kasim’s Letter, dated 26th March 1762.

¹ Letters of Hastings to the Governor, dated 13th and 26th May 1762.