'What is England now? A sink of Indian wealth, filled by nabobs'
Horace Walpole, 1773 (1717–1797)
Horace Walpole, 1773 (1717–1797)
Standing on Leadenhall Street facing the site of East India House, it is difficult to appreciate the raw energy, envy and horror that the Company generated in 18th-century England. Today, Richard Rogers' sleek Lloyds insurance building stands on the site, but on auction days in the 18th century, the noise of 'howling and yelling' from the Sale Room could be heard through the stone walls on the street outside.
For 30 years after Robert Clive's victory at Plassey, East India House lay at the heart of both the economy and governance of Britain, a monstrous combination of trader, banker, conqueror and power broker. It was from here that the 24 Directors guided the Company's commercial and increasingly political affairs, always with an eye to the share price; when Clive captured the French outpost of Chandernagore in Bengal in 1757, stocks rose by 12%. The share price moved higher still in the 1760s as investors fed hungrily on news of the apparently endless source of wealth that Bengal would provide. The Company was rapidly extending its reach from trade to the governance of whole provinces, using the taxes raised to pay for the imports of cloth and tea back to England.
In the wake of Enron and other scandals of the dot.com 1990s, the malpractice of many of the Company's key executives is sadly familiar: embedded corruption, insider trading and appalling corporate governance. In the process, a new class of 'nabobs' was created (a corruption of the Hindi word nawab). Clive obtained almost a quarter of a million pounds in the wake of Plassey, and told a House of Commons enquiry into suspected corruption that he was 'astounded' at his own moderation at not taking more. Thomas Pitt, Governor of Madras earlier in the century, used his fortune to sustain the political careers of his grandson and great-grandson, both of whom became Prime Minister. By the 1780s, about a tenth of the seats in Parliament were held by 'nabobs'. They inspired deep bitterness among aristocrats angry at the way they bought their way into high society. A few lone voices – such as the Quaker William Tuke – also pointed to the humanitarian disaster that the Company had wrought in India.
All these forces converged to create a new movement to regulate the Company's affairs. But so powerful was the Company's grip on British politics that attempts to control its affairs could bring down governments. In the early 1780s, a Whig alliance of Charles James Fox and Edmund Burke sought to place the Company's Indian possessions under Parliamentary rule. But their efforts were crushed by an unholy pact of Crown and Company. George III first dismissed the government and then forced a general election, which the Company funded to the hilt, securing a compliant Parliament.
Yet the case for reform was overwhelming, and the new Prime Minister, William Pitt the Younger – that beneficiary of his great-grandfather's time in Madras – pushed through the landmark India Act of 1784. This transferred executive management of the Company's Indian affairs to a Board of Control, answerable to Parliament. In the final 70 years of its life, the Company would become less and less an independent commercial venture and more a sub-contracted administrator for the British state, a Georgian example of a 'public–private partnership'
Even in good times the Company's exactions proved ruinous. The Company became feared for its brutal enforcement of its monopoly interests, particularly in the textile trade. Savage reprisals would be exacted against any weavers found selling cloth to other traders, and the Company was infamous for cutting off their thumbs to prevent them ever working again. In rural areas, almost two-thirds of a peasant's income would be devoured by land tax under the Company – compared with some 40% under the Mughals. In addition, punitive rates of tax were levied on essentials such as salt, cutting consumption in Bengal by half. The health impacts were cruel, increasing vulnerability to heat exhaustion and lowered resistance to cholera and other diseases, particularly amongst the poorest sections.
The Company's monopoly control over the production of opium had equally devastating consequences. Grown under Company eyes in Bengal, the opium was auctioned and then privately smuggled into China in increasing volumes. By 1828, opium sales in China were enough to pay for the entire purchase of tea, but at the cost of mass addiction, ruining millions of lives. When the Chinese tried to enforce its import ban, the British sent in the gunboats.
The Company's monopoly control over the production of opium had equally devastating consequences. Grown under Company eyes in Bengal, the opium was auctioned and then privately smuggled into China in increasing volumes. By 1828, opium sales in China were enough to pay for the entire purchase of tea, but at the cost of mass addiction, ruining millions of lives. When the Chinese tried to enforce its import ban, the British sent in the gunboats.
Taken from opendemocracy.net
