Practical Lessons From History, For Today
Practical Lessons From History, For Today
Such authority lay dormant for almost a century until, in the 1680s, a new Director of EIC in India decided to militarily force the Mughals to accept his dominance. He arranged for English warships and soldiers to sail to Bengal for that purpose. However, the Mughal war machine swept them away, captured and closed many EIC factories and expelled the East India Company from Bengal. After several years, in 1690, the Mughal emperor allowed EIC to return.
Corruption in the service of Company interests had by then become standard practice. By 1693, in London, the East India Company was routinely buying members of Parliament, ministers, the Solicitor General and the Attorney General. Investigation found “EIC guilty of bribery and insider trading and led to the impeachment of the Lord President of the Council and the Imprisonment of the Company’s Governor.”
In 1700, the East India Company began to enforce its will arbitrarily in India. By 1701, a Mughal governor was complaining EIC had rendered “no account of their administration … nor had they accounted for the revenues from tobacco, betel, wine et cetera.” EIC responded that if the governor was harsh and overtaxed them, they would move EIC operations elsewhere.
Nine years later they took up arms.
In Bengal, Murshid Quli Khan had also become disgusted by the rudeness and bullying of … (EIC) officials in Calcutta and wrote to Delhi …
“When they first came to this country they petitioned … in a humble manner for the liberty to purchase a spot of ground to build a factory house upon, which was no sooner granted but they ran up a strong fort … They rob and plunder and carry a great number of the king’s subjects of both sexes into slavery.”
In 1743, at the age of 18, Robert Clive was sent to Madras in the service of the East India Company.
Clive arrived at Madras in 1744. The next year, during the War of the Austrian Succession, he was trained to fight and became lieutenant of a Company of infantry. When the war ended in 1749, continuing French harassment led EIC Directors in London to give orders “to make yourselves as secure as you can against the French or any other European Enemy.”
In 1751 a Mughal French ally besieged his British-connected rival in the fortress of Trichinopoly and effectively isolated Madras. Clive had by then been promoted to Captain and given charge of two hundred English soldiers and three hundred sepoys. They attacked the Mughal camp by surprise, slaughtered many, dispersed the rest and returned to quarters. But Clive knew the victory was temporary. To relieve the siege he attacked Arcot, the capital of the Carnatic. The battle of Arcot continued for months. By November, Clive and his sepoys won. Madras was secure.
Soon after, Clive married and returned to England as a hero. He had accumulated a small fortune while commissary to the British troops.1 However, he blew most of the money on high living. He even bought a seat in Parliament, but political opposition prevented his keeping it.
In 1755, Clive rejoined the East India Company, which appointed him governor of Fort St. David in India. Also, the King commissioned him lieutenant-colonel in the British Army, and he sailed for Madras.
In 1756 the Mughal nawab of Bengal captured EIC’s fort at Calcutta; news of Calcutta’s capture reached Madras in August. With 900 English and 1,500 Indian sepoys, Clive sailed with Admiral Charles Watson to Bengal and retook Calcutta on January 2, 1757.
By February 5th Clive and Watson had defeated Siraj ud-Daula. The Treaty of Alinigar signed on February 9 restored all the Company’s privileges, paid compensation, allowed EIC to re-fortify Calcutta and establish a mint.
1 Such commissaries functioned as middlemen, buying supplies and reselling them to the military/navy, usually at grossly-inflated prices.
Clive and Watson were eager to return to Madras, but news of the new ‘Seven Years War’ in Europe had reached Watson. He was ordered to attack French interests, so the two forces remained in Bengal. They attacked a French trading colony north of Calcutta and ousted the French.
Soon after, Clive was asked by Mīr Jaʿfar, a general in the Nawab of Bengal’s regime, for Company aid in a coup against the Nawab. He “offered the Company the vast sum of 2.5 crore” (£812.5 million, today). The planned coup was, in reality, a conspiracy of Bengal bankers and merchants and parts of the Nawab’s military. EIC forces would defeat the Nawab and install the general as the new Nawab of Bengal.
This is a crucial point. In as far as the EIC, in the shape of its directors, officers and most shareholders, had a corporate will at all, it was for trade yielding maximum profits and a large and steady dividend for themselves and their investors … the investors consistently abhorred ambitious plans of conquest … the great schemes of conquest of the EIC in India very rarely originated in Leadenhall Street (EIC’s headquarters). Instead, what conquering, looting and plundering took place was almost always initiated by senior Company officials on the spot, who were effectively outside metropolitan control.
It worked. Clive defeated the Nawab on June 23 at the Battle of Plassey. He placed the general on the throne. Clive was appointed British (EIC) Governor of Bengal.
In compensation for losses to EIC and Calcutta citizens, the conspirators paid Clive – “in modern terms, around £232 million, of which £22 million was reserved for Clive.” The new Nawab also gave Clive £234,000 in cash, a Mughal title of nobility, and an estate paying annual rental of about £30,000. A flood of corruption thus began.
Clive returned to England in 1760 as a hero. He was made Baron Clive of Plassey in 1762 and was knighted in 1764. He became a member of Parliament, purchased an estate, and tried (unsuccessfully) to carve out a political career.
But Clive was not universally popular at India House, East India Company’s London headquarters. One of the EIC directors “remembered with bitterness the audacity with which (Clive) had repeatedly set at nought the authority of the distant Directors of the Company.” So, the Directors moved to confiscate the grant of rent from Mīr Jaʿfar, Clive was forced to take them to court. Meanwhile,
East India Company again turned to Clive, appointing him Governor and commander in chief of Bengal. Arriving in Calcutta on May 3, 1765, he found that the whole Bengal administration was in chaos.