Chapter III: Lord Clive and His Successors in Bengal (1765-1772)

CHAPTER III

LORD CLIVE AND HIS SUCCESSORS IN BENGAL

(1765-1772)

THE year 1765 marks a new epoch in the history of British India.

Lord Clive returned to India in that year for the third and last time, and obtained from the Great Moghal a charter making the East India Company the DEWAN or the administrators of Bengal. Though the Great Moghal had no real power, he was still the titular sovereign of India, and his charter gave the East India Company a legal status in the country.

Lord Clive had an arduous duty to perform. The Company’s affairs were in a bad way; their servants were corrupt; their subjects were oppressed. It was Clive’s endeavour to rectify all this within the brief period of his stay in India, and his letter to the Court of Directors from Calcutta, dated 30th September 1765, is one of the most memorable documents contained in the published volumes on Indian affairs. In this letter Lord Clive described the state of affairs as he found them on his last arrival in India, and also the measures he adopted to put things into order. It is necessary to describe Clive’s work in Clive’s own words.

“2. Upon my arrival, I am sorry to say, I found your affairs in a condition so nearly desperate as would have alarmed any set of men whose sense of honour and duty to their employers had not been estranged by the too eager pursuit of their own advantage. The sudden, and, among many, the unwarrantable acquisition of riches, had introduced luxury in every shape and in the most pernicious excess. These two enormous evils went hand in hand together through the whole Presidency, infecting almost every member of each Department; every inferior seemed to have grasped at wealth that he might be able to assume that spirit of profusion which was now the only distinction between him and his superior…. It is no wonder that the lust of riches should readily embrace the proffered means of its gratification, or that the instruments of your power should avail themselves of their authority, and proceed even to extortion in those cases where simple corruption could not keep pace with their rapacity. Examples of this sort, set by superiors, could not fail of being followed in proportionable degree by inferiors; the evil was contagious, and spread among the civil and military, down to the writer, the ensign, and the free merchant….

“9. Two paths were evidently open to me; the smooth one, and strewed with abundance of rich advantages that might be easily picked up; the other untrodden, and every step opposed with obstacles. I might have taken charge of the government upon the same footing on which I found it; that is, I might have enjoyed the name of Governor, and have suffered the honour, importance, and dignity of the post to continue in their state of annihilation…. An honourable alternative, however, lay before me; I had the power within my own breast to fulfil the duty of my station, by remaining incorruptible in the midst of numberless temptations artfully thrown in my way; by exposing my character to every attack which malice or resentment are apt to invent against any man who attempts reformation; and by encountering, of course, the odium of the settlement. I hesitated not a moment which choice to make; I took upon my shoulders a burden which requires resolution, perseverance, and constitution to support. Having chosen my part, I was determined to exert myself in the attempt, happy in the reflexion that the honour of the nation, and the very being of the Company would be maintained by the success. . . .

“ 12. The sources of tyranny and oppression, which have been opened by the European agents acting under the authority of the Company’s servants, and the numberless black agents and sub-agents acting also under them, will, I fear, be a lasting reproach to the English name in this country. . . . I have at last, however, the happiness to see the completion of an event, which, in this respect as well as in many others, must be productive of advantages hitherto unknown, and at the same time prevent abuses that have hitherto had no remedy: I mean the Dewanee, which is the superintendency of all the lands and the collection of all the revenues of the Provinces of Bengal, Behar, and Orissa. The assistance which the Great Moghal had received from our arms and treasury made him readily bestow this grant upon the Company; and it is done in the most effectual manner you can desire. The allowance for the support of the Nabob’s dignity and power, and the tribute to His Majesty [the Great Moghal] must be regularly paid ; the remainder belongs to the Company. . . .

“ 13. Your revenues, by means of this acquisition, will, as near as I can judge, not fall far short for the ensuing year of 250 lacks of Sicca Rupees, including your former possessions of Burdwan, &c. Hereafter they will at least amount to twenty or thirty lacks more. Your civil and military expenses in time of peace can never exceed sixty lacks of Rupees; the Nabob’s allowances are already reduced to forty-two lacks, and the tribute to the King [the Great Moghal] at twenty-six; so that there will be remaining a clear gain to the Company of 122 lack of Sicca Rupees, or £1,650,900 sterling. . . .

“ 16. A competency ought to be allowed to all your servants from the time of their arrival in India, and advantages should gradually increase to each in proportion to his station. . . . This certainty would arise from the freight-ships, from the privileges of trade (the advantages of which you are not unacquainted with), and also upon the profits upon salt, betel, and tobacco, agreeable to the new regulation which we have made in order to rectify the abuses that have been so long committed. . . .

“ 19. Having now fully submitted to you my sentiments on the Civil Department, permit me to trouble you with a few observations on the Military. . . . The evil I mean to apprise you is of the encroachment of the military upon the civil jurisdiction, and an attempt to be independent of their authority. . . . The whole Army should in like manner be subordinate to the Civil Power. If at any time they should struggle for superiority, the Governor and Council must strenuously exert themselves, ever mindful that they are the trustees of the Company in this settlement, and the guardians of public property under a civil institution. . . .

“ 26. Permit me now to remind you that I have a large family who stand in need of a father’s protection, that I sacrifice my health and hazard my fortune with my life by continuing in this climate. . . . I now only wait to be informed whether my conduct thus far be approved of, and whether the whole or part of the regulations I have had the honour to lay before you are conformable to your ideas of the reformation necessary to be established. If they meet with your approbation, I doubt not you will immediately empower me, in conjunction with the Select Committee, to finish the business so successfully begun, which may easily be effected before the end of the ensuing year; when I am determined to return to Europe, and hope to acquaint you in person with the accomplishment of every wish you can form for the prosperity of your affairs in Bengal.“¹

We have here in Clive’s own language an account of a transaction which marks an important step in the rise of British power in India. Hitherto the British had appeared only as traders in India, and though they had virtually been the masters of Bengal since the battle of Plassy in 1757, nevertheless it was the concession of the Dewani by the titular Emperor of Delhi in 1765 which gave the East India Company a legal status in India, and formally imposed upon them the duties of the administration of Bengal. How Lord Clive proposed to perform those duties has been described in his own words. His endeavours to introduce reforms both in the civil and military administration deserve all the praise that has been bestowed upon them by historians; but when we examine the essential features of his scheme, we find that it was framed—as so many schemes have since been framed in India—mainly in the interests of the British rulers, and not in the interests of the people. The whole of Bengal was considered as an estate, a source of profit to the East India Company.

The taxes raised from thirty millions of people were, after deduction of expenses and allowances, not to be spent in the country and for the benefit of the country, but to be sent to England as profits of the Company. An annual remittance of over a million and a half sterling was to be made from a subject country to the shareholders in England. A stream of gold was to flow perennially from the revenues of a poor nation to add to the wealth of the richest nation on the face of the earth.

We thus find that the very first scheme which was framed by British rulers for the administration of India involved that fatal Economic Drain which has now swelled to an annual remittance of many millions sterling. The victory of British arms in India, the organised rule introduced into that country by the British, the maintenance of peace, the dispensation of justice, and the spread of western education, deserve all the praise which has been bestowed upon them. But the financial relations between India and England have always from the very commencement been unfair; and India, with her vast resources, her fertile soil, and her industrious population, is now the poorest country on earth after a century and a half of British rule.

Not content with securing an annual profit of over a million and a half for the Company, Lord Clive insisted on keeping up the inland trade of Bengal for the profit of the Company’s servants. He devised measures to do away with the oppression incident to this private trade; but the trade itself had been lucrative to Englishmen in Bengal, and Lord Clive would not give it up. Indeed, so determined was Lord Clive to continue the inland trade in salt, betel-nut, and tobacco, in spite of the known opposition of his masters, the East India Company, that on the 18th September 1765 he executed an indenture, jointly with other servants of the Company, to carry on the trade regardless of the orders of the Company. The following passage from the indenture is significant:

“Provided any order should issue or be made by the said Court of Directors in England, thereby ordering and directing the said joint trade and merchandise to be dissolved or put to an end, or that may hinder and stop the carrying on of the same, or any part thereof, or contain anything contrary to the covenants, clauses, grants, articles, or agreements in the said hereinbefore recited deed mentioned and contained, or any of them, so that the same may thereby become void and of no effect; then, and in that case, they, the said Robert Lord Clive, as President, William Brightwell Sumner, &c., as Council of Fort-William aforesaid, shall and will, well and truly save harmless and keep indemnified, them, the said William Brightwell Sumner, Harry Verelst, Ralph Leycester, and George Grey, and all the proprietors entitled, or to be entitled, to the said exclusive joint trade, and their successors, their executors, and administrators; and shall and will, notwithstanding any order or direction to be issued to the contrary as aforesaid, keep up, continue, and enforce, or cause to be kept up, continued, and enforced, the said exclusive joint trade for the term of one year.” ¹

On receipt of Lord Clive’s important letter of the 30th September, the Court of Directors sent a reply to the Calcutta Committee, dated the 17th May 1766, and also a separate letter to Lord Clive, bearing the same date. The Directors thanked Lord Clive in warm terms for the great services rendered by him, and intimated their acceptance of the Dewani, or the administration of Bengal, Behar, and Orissa. But it is greatly to the credit of the Directors that they declined to approve of that scheme of inland trade which had been drawn up by Clive.

" Our letter to the Select Committee expresses our sentiments of what has been obtained by way of donations ; and to that we must add, that we think vast fortunes acquired in the inland trade have been obtained by a scene of the most tyrannic and oppressive conduct that was ever known in any age or country. We have been uniform in our sentiments and orders on this subject, from the first knowledge we had of it ; and your Lordship will not therefore wonder that, after the fatal experience we had of the violent abuses committed in this trade, that we could not be brought to approve of it, even in the limited and regulated manner with which it comes to us in the plan laid down in the Committee’s proceedings.“¹

The Directors had never spoken ambiguously on the subject of the inland trade carried on by the Company’s servants. In their letter of the 8th February 1764 they had prohibited such inland trade; and in their letter of the 15th February 1765 they had repeated their prohibition in the strongest manner; but their orders had been disregarded by their servants in India. Now, in their letter of 17th May 1766, they refused to sanction Clive’s scheme for continuing the trade under the regulations framed by him. But this order too was disregarded, and under the pretence of contracts formed and advances made, the inland trade was continued for two years more.

Lord Clive left India in 1767, and was succeeded as Governor by Verelst, who ruled until 1770; and he was succeeded by Cartier, who was Governor until 1772. The five years’ administration of Verelst and Cartier was a continuation of the misgovernment from which Bengal had suffered during the preceding years. The scheme of administration introduced by Clive was a sort of dual government. The collection of revenues was still made for the Nawab’s exchequer; justice was still administered by the Nawab’s officers; and all transactions were covered by the mask of the Nawab’s authority. But the East India Company, the real masters of the country, derived all the profits; and the Company’s servants practised unbounded tyranny for their own gain, overawing the Nawab’s servants, and converting his tribunals of justice into instruments for the prosecution of their own purposes. The English Governor saw this and condemned it, but was unable to remedy the state of affairs.

" We insensibly broke down the barrier betwixt us and Government, and the native grew uncertain where his obedience was due. Such a divided and complicated authority gave rise to oppressions and intrigues unknown at any other period; the Officers of Government caught the infection, and being removed from any immediate control, proceeded with still greater audacity.” ¹

Agriculture had always been the main source of the subsistence of the people of Bengal ; but it declined under the new system of land settlements introduced by the Company’s servants. From very ancient times the soil of Bengal was held by Zemindars or hereditary landlords, armed with quasi-feudal powers, paying revenues and rendering military service to the Nawab in times of need, and virtually ruling the people within their own estates. They were recognised as Rajas by their subjects and tenants; they maintained order, settled disputes, and punished crimes; they encouraged religion and rewarded piety; they fostered arts and learning, and were the patrons of letters. Arbitrary Nawabs, like Murshed Kuli in the seventeenth century and Mir Kasim in the eighteenth century, had “squeezed” the Zemindars with an iron hand, but had seldom ousted them from the estates which were considered hereditary by custom. The Company’s servants, however, introduced a new system in Burdwan and Midnapur soon after they had acquired those districts from Mir Kasim in 1760; they disregarded the customary rights of the Zemindars, and sold their estates by public auction to increase the revenue, with the most lamentable results.

" In the provinces of Burwan and Midnapur, of which both the property and jurisdiction were ceded to the Company by Mir Kasim in the year 1760, those evils which necessarily flowed from the bad policy of the Moorish Government had in no sort decreased. On the contrary, a plan was adopted in 1762 productive of certain ruin to the province. The lands were let by public auction for the short term of three years. Men without fortune or character became bidders at the sale; and while some of the former farmers, unwilling to relinquish their habitations, exceeded perhaps the real value in their offers, those who had nothing to lose advanced yet further, wishing at all events to obtain an immediate possession. Thus numberless harpies were let loose to plunder, whom the spoil of a miserable people enabled to complete their first year’s payment.”

We shall see farther on that this new and oppressive system was subsequently extended all over Bengal by Warren Hastings, and caused the greatest discontent, disorder, and suffering. Throughout the administration of Verelst and Cartier the land revenue was exacted with the utmost rigour in order to meet the East India Company’s demands.

“It was therefore to be wished,” wrote Governor Verelst to the Court of Directors, “and was more than once proposed, that when their lands came under our management, we had lowered for a time the stated rents of most districts, as an incitement to cultivation and improvement, rather than have made the smallest attempt to increase. . . . Permit me to give you my most serious opinion, founded on almost nineteen years’ experience in the various branches of your revenues, and in various districts of your possessions, that it is totally beyond the power of your administration to make any material addition to your rents.”

Trade and manufacture declined under a system of monopoly and coercion. The Directors of the East India Company had tried to check their servants, but they themselves now perpetrated a greater offence. British weavers had begun to be jealous of the Bengal weavers, whose silk fabrics were imported into England, and a deliberate endeavour was now made to use the political power obtained by the Company to discourage the manufactures of Bengal in order to promote the manufactures of England. In their general letter to Bengal, dated 17th March 1769, the Company desired that the manufacture of raw silk should be encouraged in Bengal, and that of manufactured silk fabrics should be discouraged. And they also recommended that the silk-winders should be forced to work in the Company’s factories, and prohibited from working in their own homes.

“This regulation seems to have been productive of very good effects, particularly in bringing over the winders, who were formerly so employed, to work in the factories. Should this practice [the winders working in their own homes] through inattention have been suffered to take place again, it will be proper to put a stop to it, which may now be more effectually done, by an absolute prohibition under severe penalties, by the authority of the Government.” [1]

“This letter,” as the Select Committee justly remarked, “contains a perfect plan of policy, both of compulsion and encouragement, which must in a very considerable degree operate destructively to the manufactures of Bengal. Its effects must be (so far as it could operate without being eluded) to change the whole face of that industrial country, in order to render it a field of the produce of crude materials subservient to the manufactures of Great Britain.” [2]

We shall see, as we proceed farther, that this continued to be the settled policy of England towards India for fifty years and more; that it was openly avowed before the House of Commons and vigorously pursued till 1833 and later; and that it effectually stamped out many of the national industries of India for the benefit of English manufactures.

But perhaps the greatest evil from which the country suffered was the continuous Economic Drain from Bengal, which went on year after year for the profit of the Company, or for their expenses in other parts of the world. A statement of the revenues and expenses of Bengal during the first six years after the grant of the Dewani to the East India Company is given in the Fourth Report of the House of Commons, 1773, from which the following figures are compiled:¹

These figures show that nearly one-third of the nett revenues of Bengal was annually remitted out of the country. But the actual drain from the country was much larger. A large portion of the civil and military expenses consisted in the pay of European officials who sent all their savings out of India. And the vast fortunes reared by those who had excluded the country merchants from their legitimate trades and industries were annually sent out of India. The actual drain from Bengal is perhaps more correctly represented in the figures for imports and exports for the years 1766, 1767, and 1768, compiled by Governor Harry Verelst.¹

Table

In other words, the country sent out about ten times what it imported. Mr. Verelst himself saw the magnitude of the evil, and was never tired of describing its lamentable consequences on the material condition of the people of Bengal.

“Whatever sums had formerly been remitted to Delhi were amply reimbursed by the returns made to the immense commerce of Bengal. . . . How widely different from these are the present circumstances of the Nabob’s dominions! . . . Each of the European Companies, by means of money taken up in the country, have greatly enlarged their annual Investments, without adding a rupee to the riches of the province.” ²

“The great demands which have been made on this Presidency for supplies of money from every quarter have reduced your treasury to a very low state, and alarm us for the consequences which must inevitably attend such a vast exportation from this country.” ³

“It will hardly be asserted that any country, how-ever opulent, could long maintain itself, much less flourish, when it received no material supplies, and when a balance against it, of above one-third of its whole yearly value, was yearly incurred. But besides this, there are other concomitant circumstances, which have contributed to diminish the riches of the country, and must, if not remedied, soon exhaust them. I have observed that one great advantage the country formerly reaped was the diffusion of its revenues by large grants to different families, and by the expensive luxury of its governors. But now the whole amount of the lands is swallowed up in one gulf—your treasury; nor does any part of it return into the circulation, except the sum issued from our Investment and necessary expenses.” $^1$

What the Investment was, was fully explained by the Select Committee of the House of Commons in their Ninth Report of 1783.

“A certain portion of the revenues of Bengal has been, for many years, set apart in the purchase of goods for exportation to England, and this is called the Investment. The greatness of this Investment has been the standard by which the merit of the Company’s principal servants has been too generally estimated; and this main cause of the impoverishment of India has been generally taken as a measure of its wealth and prosperity. Numerous fleets of large ships, loaded with the most valuable commodities of the East, annually arriving in England in a constant and increasing succession, imposed upon the public eye, and naturally gave rise to an opinion of the happy condition and growing opulence of a country whose surplus productions occupied so vast a space in the commercial world. This export from India seemed to imply also a reciprocal supply, by which the trading capital employed in those productions was continually strengthened and enlarged. But the payment of a tribute, and not a beneficial commerce, to that country, wore this specious and delusive appearance.” ¹

The evils of a perpetual Economic Drain from India, pointed out so clearly by Governor Verelst and by the Select Committee of the House of Commons, was also condemned by the greatest political philosopher of England in words which will be read as long as the English tongue is understood. In his speech on Fox’s East India Bill, made in 1783, Edmund Burke described the desolating effects of the perpetual drain from India; and it is doubtful if even that great orator ever spoke anything more forcible, more eloquent, and more true, within the whole course of his brilliant parliamentary career.

“The Asiatic conquerors very soon abated of their ferocity, because they made the conquered country their own. They rose or fell with the rise and fall of the territory they lived in. Fathers there deposited the hopes of their posterity; the children there beheld the monuments of their fathers. Here their lot was finally cast; and it is the normal wish of all that their lot should not be cast in bad land. Poverty, sterility, and desolation are not a recreating prospect to the eye of man, and there are very few who can bear to grow old among the curses of a whole people. If their passion or avarice drove the Tartar lords to acts of rapacity or tyranny, there was time enough, even in the short life of man, to bring round the ill effects of the abuse of power upon the power itself. If hoards were made by violence and tyranny, they were still domestic hoards, and domestic profusion, or the rapine of a more powerful and prodigal hand, restored them to the people. With many disorders, and with few political checks upon power, nature had still fair play, the sources of acquisition were not dried up, and therefore the trade, the manufactures, and the commerce of the country flourished. Even avarice and usury itself operated both for the preservation and the employment of national wealth. The husbandman and manufacturer paid heavy interest, but then they augmented the fund from whence they were again to borrow. Their resources were dearly bought, but they were sure, and the general stock of the community grew by the general effect.

“ But under the English Government all this order is reversed. The Tartar invasion was mischievous, but it is our protection that destroys India. It was their enmity, but it is our friendship. Our conquest there, after twenty years, is as crude as it was the first day. The natives scarcely know what it is to see the grey head of an Englishman; young men, boys almost, govern there, without society, and without sympathy with the natives. They have no more social habits with the people than if they still resided in England; nor, indeed, any species of intercourse but that which is necessary to making a sudden fortune, with a view to a remote settlement. Animated with all the avarice of age, and all the impetuosity of youth, they roll in one after another; wave after 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. Every rupee of profit made by an Englishman is lost for ever to India.”

The administration of India has vastly improved since the days of Governor Verelst and Edmund Burke. The whole continent of India has enjoyed unbroken peace for half a century, such as was unknown in the eighteenth century. Trade and commerce have been freed from invidious and prohibitive duties.

The administration of justice and the protection of life and property have been more complete. And the spread of education has awakened a new life among the people, and befitted them for higher work and greater responsibilities. But nevertheless the evil of a perpetual Economic Drain from India, of which Verelst and Burke complained in their day, continues to this day in an ever-swelling current, and makes India a land of poverty and of famines.

Famines in India are directly due to a deficiency in the annual rainfall; but the intensity of such famines and the loss of lives caused by them are largely due to the chronic poverty of the people. If the people were generally in a prosperous condition, they could make up for local failure of crops by purchases from neighbouring provinces, and there would be no loss of life. But when the people are absolutely resourceless, they cannot buy from surrounding tracts, and they perish in hundreds of thousands, or in millions, whenever there is a local failure of crops.

Early in 1769 high prices gave an indication of an approaching famine, but the land-tax was more rigorously collected than ever. “The revenues were never so closely collected before.”¹ Late in the year the periodical rains ceased prematurely, and the Calcutta Council in their letter of the 23rd November to the Court of Directors anticipated a falling off of the revenues, but specified no relief measures to be undertaken. On the 9th May 1770 they wrote: “The famine which has ensued, the mortality, the beggary, exceed all description. Above one-third of the inhabitants have perished in the once plentiful province of Purneah, and in other parts the misery is equal.” On the 11th September they wrote: “It is scarcely possible that any description could be an exaggeration of the misery the inhabitants … have encountered with. It is not then to be wondered that this calamity has had its influence on the collections; but we are happy to remark they have fallen less short than we supposed they would.” On the 12th February 1771 they wrote: “Notwithstanding the great severity of the late famine and the great reduction of people thereby, some increase has been made in the settlements both of the Bengal and the Behar provinces for the present year.” On the 10th January 1772 they wrote: “The collections in each department of revenue are as successfully carried on for the present year as we could have wished.“¹

It is painful to read of this rigorous collection of the land-tax during years of human sufferings and deaths perhaps unexampled in the history of mankind. It was officially estimated by the members of the Council, after they had made a circuit through the country to ascertain the effects of the famine, that about one-third of the population of Bengal, or about ten millions of people, had died of this famine. And while no systematic measures were undertaken for the relief of the sufferers perishing in every village, roadside, and bazaar, the mortality was heightened by the action of the Company’s servants. Their Gomashtas not only monopolised the grain in order to make high profits from the distress of the people, but they compelled the cultivators to sell even the seed requisite for the next harvest. The Court of Directors were indignant on receiving this information, and hoped that “the most exemplary punishment had been inflicted upon all offenders who could dare to counteract the benevolence of the Company and entertain a thought of profiting by the universal distress.” ²

But the “benevolence of the Company” was less conspicuous when their own interests were touched, and we find no indication of an abatement of the land-tax of Bengal after a third of its population had been swept away and a third of the lands had returned to waste. Warren Hastings wrote thus to the Court of Directors on the 3rd November 1772:

“Notwithstanding the loss of at least one-third of the inhabitants of the province, and the consequent decrease of the cultivation, the nett collections of the year 1771 exceeded even those of 1768. . . It was naturally to be expected that the diminution of the revenue should have kept an equal pace with the other consequences of so great a calamity. That it did not was owing to its being violently kept up to its former standard.”¹

In the language of modern Indian administration this violently keeping up the land revenue would be described as the Recuperative Power of India!

Footnotes

¹ House of Commons Committee’s Third Report, 1773, Appendix, pp. 391-398.

¹ House of Commons Committee’s Third Report, 1773, Appendix, p. 400.

$^1$ Letter, dated 5th April 1769.