The Company

31 Dec 1600

A charter

On 31 December 1600 Queen Elizabeth granted a charter to a body of London merchants. It made them “one body corporate and politick,” the Governor and Company of Merchants of London trading into the East Indies, with the exclusive Indian trade for fifteen years. W. W. Hunter, who tells it, adds that they were run by a governor and twenty-four committeemen. This was a company chartered by the Crown, and not the Crown itself.

1757

Plassey

In June 1756 the Nawab of Bengal, Siraj-ad-Daulah, took the Company’s fortress at Calcutta, and a force under Colonel Clive came up from Madras. At Plassey in 1757 A. C. Lyall counts the Nawab’s army at about fifteen thousand horse, thirty thousand foot and forty guns; Clive’s despatch gave the Company’s loss as twenty-two killed and fifty wounded. Mir Jafar, a commander who had made a compact with the English, “merely hovered about the flanks of the engagement,” Lyall writes, and afterwards put Siraj-ad-Daulah to death. It was, Lyall adds, the first important occasion on which the Company’s troops fought as principals.

1757

The reward

Mir Jafar was installed as Nawab. Macaulay, writing in 1840, says £800,000 in coined silver went down the river to Fort William and that Clive “accepted between two and three hundred thousand pounds.” Omichund, a merchant who had demanded £300,000 as the price of his silence, was deceived with a second treaty, and Macaulay writes that Clive “forged Admiral Watson’s name” on it and “resolutely said that he was not ashamed” of such arts.

£800,000Silver sent down the river from Murshidabad to Fort William after Plassey, as Macaulay tells it in 1840

1773

What the Commons did

In 1772 and 1773 the House of Commons examined Clive. Macaulay reports that he described “great princes dependent on his pleasure” and “vaults piled with gold and jewels thrown open to him alone,” and said: “at this moment I stand astonished at my own moderation.” The House resolved that gains won by the State’s arms belong to the State and had been “systematically violated,” and that Clive had obtained large sums from Mir Jafar by his power as commander. It let the motion that he had abused his powers fall by the previous question, then voted without a division that he had “rendered great and meritorious services.”

1765

The purse and the sword

Before 1765, Lyall writes, the Company pressed an “utterly unjust and extravagant claim for special exemption from all duties upon the internal commerce of Bengal.” In September 1764 its troops beat the Vizier of Oudh at Baxar, and “The success of the English brought the emperor into their camp.” In 1765 Clive, under a grant from that emperor, took over the revenue of Bengal, Bihar and Orissa, which Lyall says gave the Company the power of the purse as well as of the sword. For some years the collecting stayed with Indian officers: Hunter writes that the local administration “continued in the hands of the former native officers.”

1770

1770: the people

W. W. Hunter, in 1868, drew on the Company’s papers and on petitions from Indian officers, among them Mahomed Ala Khan, Foujdar of Purneah, and Ujaggar Mull, Amil of Jessore. He writes that the husbandmen sold their cattle and tools and ate their seed-grain, that they “sold their sons and daughters, till at length no buyer of children could be found,” and that in June the Company’s Resident at the Durbar affirmed “the living were feeding on the dead.” Before the end of May, he adds, one-third of the population was “officially” reckoned to have disappeared. Adam Smith later wrote that some improper regulations by the Company’s servants on the rice trade “contributed, perhaps, to turn that dearth into a famine.”

1770

1770: the Company

Hunter lists what the Council did. It laid an embargo on exports of grain, and gave relief on a scale he calls “painfully inadequate”: districts where men were dying at twenty thousand a month got allotments of a hundred and fifty rupees. In a year when, he writes, “thirty-five per cent, of the whole population and fifty per cent, of the cultivators perished,” “not five per cent, of the land-tax was remitted, and ten per cent, was added to it for the ensuing year.” He adds that the whole administration “was accused of dealing in grain for its private advantage” and that no inquiry settled it, and he offers this defence of the Council: “no human efforts can avail much after a famine has once set in.”

under 5%Share of the land-tax remitted in the famine year, by W. W. Hunter’s account; 10% was added for the next year

3 Nov 1772

The books

John Cartier handed Bengal to Warren Hastings on 13 April 1772. On 3 November Hastings and his Council told the Court of Directors about collections that began before him: net collections of 15.25 million sicca rupees in 1768-69, 13.15 million in 1769-70 and 15.33 million in 1771-72, a rise of about half of one percent, despite “the loss of at least one-third of the Inhabitants of the Province.” They had expected the revenue to fall, they wrote: “That it did not, was owing to its being violently kept up to its former Standard.” Hunter later wrote that this was done “by means, as he confesses, of cruel severity.”

3 Nov 1772

The survivors

The same letter says how the money was raised. A tax called Najay was laid on the living inhabitants “to make up for the Loss sustained in the Rents of their neighbours who are either dead or have fled the Country.” It “fell heaviest upon the wretched Survivors of those Villages which had suffered the greatest Depopulation,” and the letter itself calls it an “insupportable Burthen,” though it says Najay “had not the sanction of Government” and rested on old usage. Hastings also complained that published descriptions of the famine were meant “to excite Indignation against your Servants.”

1770

How many

Nobody counted. Hunter writes that before the end of May 1770 “one-third of the population was officially” reckoned to have disappeared, and he puts the loss at “thirty-five per cent, of the whole population,” or ten millions, set against a population he gives as 24 to 30 million twenty years later. The letter of 1772 repeated “at least one-third.” In 1776 Adam Smith wrote of “three or four hundred thousand people” dying of hunger “in one year” in a Bengal he describes in the present tense, which is a figure about his own day. Tim Dyson, in a chapter of which we read only the abstract, writes that the number of deaths “has almost certainly been overstated”; the abstract gives no figure. This story offers none of its own.

10 millionW. W. Hunter’s 1868 figure for the dead, worked from the “one-third.” Tim Dyson, 2018: the number “has almost certainly been overstated”

1776

A verdict on merchants

In 1776 Adam Smith wrote that the Company’s Indian government was “a very singular government in which every member of the administration wishes to get out of the country”. He added that he meant no “odious imputation” on the general character of the Company’s servants: it was the system he blamed. His verdict on the system: “Such exclusive companies, therefore, are nuisances in every respect.”

16 Dec 1773

Parliament steps in

In 1773, Macaulay writes, Lord North’s ministry brought in the Regulating Act, under which the chief of the presidency of Bengal “should be styled Governor-General.” In May Parliament passed the Tea Act; the Massachusetts Historical Society says it was “Eager to prop up the debt-ridden company,” which had amassed 17 million pounds of tea. On the night of 16 December three cargoes were emptied into the sea at Boston. John Adams wrote that it was “but an Attack upon Property”, and went on: “Another similar Exertion of popular Power, may produce the destruction of Lives.”

15 Feb 1788

The charges

In 1786 Burke laid charges before the Commons against Hastings, and the House impeached him in 1787. Article XII, on opium, says the Directors had told the Governor-General to give up the trade because of “the hardship imposed on the native owners and cultivators of the lands,” who were “compelled to sell the produce of their labor to a single monopolist.” It charges that Hastings gave a contract for opium to the son of the Chairman of the Court of Directors “without advertising for proposals,” and that he engaged in “another scheme for exporting two thousand chests of opium directly to China on the Company’s account,” though the Chinese government forbade the import and burnt what it seized. Opening the case before the Lords, Burke called him “a captain-general of iniquity.” These are the accusers’ words.

1795

Acquitted

The charges on which the vote below turned concerned the Raja of Benares, fined by Hastings, and money taken from the Begums of Oudh, about which Lyall wrote that “it is more than questionable whether the Governor-General should have used such means.” Macaulay says the result “ceased to be matter of doubt” once the Lords resolved to follow the rules of evidence of the ordinary courts. In the spring of 1795 only twenty-nine peers voted; six found Hastings guilty on those charges, and on some he was unanimously absolved. The sources read here do not give the vote on the opium article. Hastings said himself that the arraignment came before one generation and the judgment from another.

6 of 29Peers who found Hastings guilty on the Cheyte Sing and Begums charges, 1795, by Macaulay’s count

1793

We possess all things

In 1793 George III’s embassy asked the Chinese emperor for trade privileges and an accredited representative. The East India Company took part: Henrietta Harrison writes that for the Company the gifts were “a speculation on the potential profits of the embassy,” though the cannon were “provided by the government rather than paid for by the East India Company.” Qianlong refused: “we possess all things,” he wrote, and the request was “contrary to all usage of my dynasty.” Yet because “tea, silk and porcelain” were “absolute necessities to European nations,” he let foreign merchant firms stay at Canton.

1832

The Company’s own words

In 1840 Sir James Graham read the Commons a Company despatch of 13 January 1832, as the Hansard record has it. The directors, he said, were convinced “a pacific course was best to be pursued” with the Chinese. They warned their agents at Canton that they might “set the government of China at defiance” for a moment, but China would take the first chance to deprive them of some advantage. Graham had moved to censure the ministers, and read it as part of his case against them.

9 Apr 1840

Who sold it

A member told the Commons in 1840 of “the opium monopoly enjoyed by the East-India Company”; another member read a Company despatch saying it would make the price “as high as possible,” and charged that the trade was “directly encouraged first by the East India Company, and then in Canton by the supercargoes.” The Commons committee of 1832, a speaker recalled, judged that Bengal’s opium “produced 981,283l.” and that it was “not desirable, in the existing state of the revenue of India, to put an end to it.” Replying in the debate, Sir John Hobhouse said that of the 42,000 chests produced in all countries, 20,000 came from British India and most of the rest was Malwa’s, under a stamp duty that yielded £200,000 a year. The China trade itself had been taken from the Company in 1833.

20,000 of 42,000Chests of opium from British India, of all the opium produced, as Sir John Hobhouse told the Commons in 1840; world production, not China’s imports

1839

Two accounts

Lin wrote to Queen Victoria that in 1839 the foreign merchants repented, took 20,283 chests of opium from their store-ships and “petitioned that they might be delivered up to us,” after which the opium was destroyed. He named Bengal, Patna, Malwa and Benares among the places “where the very hills are covered with the opium plant.”

1839

The British account

The British account is in the treaty of 1842: the Queen’s Superintendent and subjects “had been imprisoned and threatened with death by the Chinese High Officers,” and a member of the Commons spoke of men held “under the threat of their being suffered to die by starvation.” The government’s own despatch, read to the Commons, said it “cannot interfere for the purpose of enabling British subjects to violate the laws of the country to which they trade.” Its next sentence said any loss “must be borne by the parties who have brought that loss on themselves by their own acts.”

8 Apr 1840

Gladstone

In April 1840 the Commons debated a motion from Sir James Graham that blamed the ministers’ “want of foresight and precaution” in China, above all for not giving the superintendent at Canton powers against the opium traffic. Gladstone, a member, spoke against the war: “a war more unjust in its origin,” he said, “a war more calculated in its progress to cover this country with permanent disgrace.” The motion was defeated by 271 votes to 262.

29 Aug 1842

Nanking

The treaty of 29 August 1842 opened “Canton, Amoy, Foochow-fu, Ningpo, and Shanghai” to British residents, ended the monopoly of the Hong merchants, and ceded the island of Hong Kong “in perpetuity.” The Emperor was to pay 21 million dollars: six million for the opium, three for the Hong merchants’ debts and twelve for the expedition’s expenses, less any “Ransom for Cities and Towns in China” the British forces had received. The Queen’s plenipotentiary, Henry Pottinger, was a Major General in the Company’s service.

21 million dollarsWhat the Emperor agreed to pay under the Treaty of Nanking: 6 million for the opium, 3 million for merchants’ debts, 12 million for expenses

8 Nov 1858

Contraband no more

The Treaty of Tientsin of 26 June 1858 does not name opium; it mentions “the Canton question,” and its Article XXVI called for a revision of the tariff. Rule 5 of the rules of trade agreed that November was headed “Regarding certain Commodities Heretofore Contraband,” and said the restrictions on opium “are relaxed.” Opium would pay thirty taels a picul, be sold only at the port, and be carried inland by Chinese alone and as Chinese property. A drug whose import China had forbidden would now pay a duty fixed in a treaty with Britain. The sources saved for this story do not narrate the fighting of those years.

1857

1857

Lord Dalhousie had incorporated Oudh in 1856. In 1857, Lyall writes, “the native army, which for a hundred years had shared all our triumphs and reverses in war, rose against us, and was overpowered after a desperate struggle,” and “In Oudh the great landholders set up the standard of rebellion.” Sayyid Ahmad Khan, an Indian writer, said in 1858 that men of all classes thought the Company “had acted in defiance of its treaties”; he did not make Oudh the cause, but named the exclusion of Indians from the Legislative Council, and said some regiments had declared “they would never allow the use of the new cartridges.” British writers call it the Mutiny; he called his book the Revolt. The sources read here give no death toll and no account of the reprisals.

2 Aug 1858

The end of the Company

Lyall describes a century in which “the English had been occupied in subduing rivals for power,” and the Company’s territories were held under earlier Acts “in trust for Her Majesty.” After 1857 Parliament passed the Act of 2 August 1858, under which the Company’s powers of government “shall cease” and its territories “shall become vested in Her Majesty.” Lyall notes the Queen’s Proclamation announcing that the administration had passed from the Company to the Crown. An Act of 1873 provided for “the Dissolution of the East India Company.”

2018

The ledger

Whether, and how much, India lost is disputed. The argument was “first articulated” by Dadabhai Naoroji, a Member of the British parliament, in 1901, Pierre van der Eng writes. Utsa Patnaik, quoted in Mint: “the drain amounted to 9.2 trillion pounds ($45 trillion), taking India’s export surplus earnings as the measure, and compounding it at a 5 per cent rate of interest.” Tirthankar Roy answered in an opinion essay in 2022: “Her claim continues to be based on dreadfully bad economics and is still untestable.” He adds that K. N. Chaudhuri “did a careful assessment of the claim in 1968 and rejected it,” and that “Agency for any misdeed was shared.” Her years, 1765 to 1938, cover Company rule and Crown rule alike; we found no published reply by Patnaik to Roy.

$45 trillionUtsa Patnaik’s estimate of the drain from India, 1765 to 1938, export surplus compounded at 5%, as quoted in Mint. Tirthankar Roy: “dreadfully bad economics”