03-28-2005, 12:45 AM
Source: "The people of India"
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>SHAKING THE PAGODA-TREE </b>
IN THE early days of their trade the British merchants were obliged to pay the Indian manufacturers in gold or silver, since Britain produced nothing of use to the Indians. But accumulation of precious metals was the hallmark of wealth, and it was painful for the British traders to take money out of the country. Hence, from the beginning they hunted for some other means of obtaining the money needed to pay for Indian goods. An important source was the auxiliary trade in slaves from Africa.
No money was needed to capture the Africans; it was done by the judicious use of alcoholic beverages and by rounding them up by force. The slaves were then sold to the Spaniards in South America to be made to work for nothing in the silver mines. A portion of the silver thus obtained by the sale of Negro slaves went to pay the Indian manufacturers for their goods. Economically, the three continents of Asia, Africa and America were thus linked long before the airplane.
The rivalry for power following the death of Aurangzeb gave the Company an opportunity to collect money in India itself by lending its support to various rival groups. The gradual acquisition of limited territorial rights increased its income. Piracy on the high seas also helped swell its coffers. By 1750, before the conquest of Bengal, the East India Company had grown wealthy enough to have loaned or given no less than £4,200,000 to the British Treasury.
But real, systematic exploitation of the Indian people started with the Battle of Plassey in 1757. Already the potentialities of India to increase the wealth of England had been recognized by the coining of the celebrated compound word "pagoda-tree," derived from a South-Indian currency known as "pagoda." From the time of the conquest of Bengal, shaking the pagoda-tree became almost literally the national sport of England.
1
The Directors of the Company in England had a fantastic conception of the wealth of Bengal, and unbelievable demands were made upon it. In Madras and Bombay the English were constantly involved in intrigue and wars of conquest; Bengal paid the cost of them. If there was a deficit from these parts of India due to mismanagement, misappropriation of funds and the greed of individual employees of the Company, Bengal was expected to make up for it. The revenue from Bengal had also to pay for the purchase of commodities to be sold by the Company in Europe! Bengal became an Aladdin's lamp in the hands of the Company. Wild rapine and misery inevitably followed.
2
When Mir Jafar was made the puppet nawab of Bengal in 1757, not only did "presents" flow into the pockets of Clive and other members of the Company, but the floodgates were opened to the internal trade of the three provinces of Bengal, Bihar and Orissa. Employees of the Company were not content with arbitrarily assuming the right to trade duty free; in the mad quest for profit they perpetrated incredible horrors on the workers and artisans.
The following letter gives a vivid picture of the first fruits of the Company's rise to power. In May, 1762, Mir Qasim wrote to the Company:
"In every Perganah (fiscal district), every village, and every factory, they (the Company's agents) buy and sell salt, betel-nut, ghee (clarified butter), rice, straw, bamboos, fish, gunnies, ginger, sugar, tobacco, opium, and many other things. . . . They forcibly take away the goods and commodities of the Reiats (peasants), 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."
Sergeant Brego wrote a letter on May 26, 1762 from Backergunz, a prosperous Bengal district:
"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 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 . . . this place is growing destitute of inhabitants; every day numbers leave the town to seek a residence more safe, and the markets, which before afforded plenty, do hardly now produce anything of use."
In October 1762, Mahomed Ali, the Moslem collector of revenues in the city of Dacca, wrote:
". . . 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 (market), and then extort the money from them by force."
William Bolts, an English merchant, wrote in his "Considerations on Indian Affairs," published in 1772:
"It may with truth be now said that the whole inland trade of the country, as at present conducted. . . . has been one continued scene of oppression . . . every article being 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. . . . The assent of the poor weaver is in general not necessary. . . . 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 in 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 . . . have had their goods seized and sold on the spot to make good the deficiency. . . ."
The British were thus practically looting the countryside as well as underselling the Indian traders, forcing them to the wall.
3
The thin line of demarcation between trade and plunder reached almost to the vanishing point by 1765, when Clive secured from the nominal emperor of India the right of collecting revenue and of civil administration as well, in the three provinces of Bengal, Bihar and Orissa.
Clive was asked by the Directors of the Company to stabilize their possessions in India. And stabilization to Clive meant finding ways and means by which India could be made even more systematically profitable to England. In his letter of September 30, 1765, to the Directors, Clive wrote:
"Your revenues, by means of this acquisition, will, as near as I can judge, not fall far short for the ensuing year of 250 lakhs of Sieca Rupees [a lakh is a hundred thousand, and eight rupees were equivalent to a pound then. K.G.], including your former possession of Burdwan, &c. Hereafter they will at least amount to 20 or 30 lakhs more. Your civil and military expenses in time of peace can never exceed 60 lakhs of Rupees; the Nabob's allowances are already reduced to 42 lakhs, and the tribute to the King (the Moghul emperor) at 26; so that there will be remaining a clear gain to the Company of 122 lakhs of, Sicca Rupees, or £1,650,000 sterling."
This was the benefit Bengal derived from being brought under the direct administration of the Company. One-quarter of the total annual revenue was considered sufficient for the purposes of government; one-quarter was still found necessary to be used as an opiate for dispossessed rulers; and the rest, nearly half the revenue, more than one and a half million pounds sterling, was sent out of India for the shareholders of the Company.
In the Fourth Report of the House of Commons, 1773, the following figures are given about the revenues and expenses of Bengal for the six years ending 1770-71: The total net revenue was £13,066,761; the total expenditure was £9,027,609; and "clear gain," sent to England, amounted to £4,037,152, or nearly one-third of the total.
Could a businessman ask for more? He could--and did. And got it. Clive did nothing to combat the illegal trade carried on by individual employees of the Company. On the contrary, he took precautions to protect this trade in case the Directors themselves took steps to stop it. On the 18th of September, 1765, he executed a mutual contract with other employees of the Company to carry on private trade regardless of what the Company might or might not do. This indenture stated in part:
"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, . . . then, in that case, they, the said Robert Lord Clive, as President, William Brightwell Sumner, &c., as Council of Fort William [in Calcutta, Bengal. K.G.] aforesaid, shall and will, well and truly save harmless and keep indemnified, then, 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.
Private trading, already monopolized by the Company's employees, flourished as never before. Clive stated that fortunes of £100,000 were made in two years. He himself went home with more than a quarter of a million pounds, in addittion to an estate bringing in £27,000 a year.
No longer did the Company have to worry about taking money out of England; even by 1763, there was exultation over this fact. "These glorious successes," wrote L. Scrafton, a member of the Company's Council in 1763, "have brought near three millions of money to the nation; for, properly speaking, almost the whole of the immense sums received from the Soubah ( Bengal) finally centers in England. So great a proportion of it fell into the Company's hands . . . that they have been enabled to carry on the whole trade of India ( China excepted) for three years together, without sending one ounce of bullion."
These examples naturally had a profound effect in England. From every strata of English society hands were stretched out to be dipped into the seemingly inexhaustible bowl of riches from Bengal. In 1767, Parliament ordered the Company to pay 1400,000 annually to the British Treasury; the payments were kept up until 1773. The Proprietors of the Company clamored for higher dividends.
Jobbery and nepotism became unrestrained. "Directors and Directors' relatives," write Thompson and Garratt, "peers, even the Royal Family, saw no reason why they should not push a young friend or dependent into service which within an incredibly brief period would bring him back enormously enriched." 15 Boys in their teens went out to India to become employees of the Company, collectors of revenue, or any other position they could get, with one thought only, that of returning home as a Nabob in the shortest possible time.
In the Company's possessions in other parts of India conditions were even worse. From their headquarters in Madras the Company's representatives carried on constant intrigue and plunder. On the pretext of having loaned money to various Indian princes--these loans being sometimes authentic, sometimes fraudulent--individual employees of the Company secured the rights to the revenues of villages and towns of various sizes, where they mercilessly squeezed the inhabitants. In case of refusal or militant resistance by the people, the employees resorted to the Company's armed forces for collection. The Indian money-lender had found a more ruthless competitor in the British money-lender.
Before the Select Committee of the House of Commons in 1782, this revealing testimony was given:
" George Smith, Esquire, attending according to order, was asked how long he resided in India, where, and in what capacity? He said he arrived in India in the year 1764; he resided in Madras from 1767 to October 1779. Being asked what was the state of trade at Madras at the time when he first knew it, he said it was in a flourishing condition, and Madras one of the first marts in India. Being asked in what condition did he leave it with respect to trade, he replied at the time of leaving it, there was little or no trade, and but one ship belonging to the place. Being asked in what state the interior country of the Karnatic was with regard to commerce and cultivation when he first knew it, he said at that period he understood the Karnatic to be in a well-cultivated and populous condition, and as such consuming a great many articles of merchandise and trade. Being asked in what condition it was when he left Madras with respect to cultivation, population, and internal commerce, he said in respect to cultivation, greatly on the decline, and also in respect of population; and as to commerce, exceedingly circumscribed."
The covetous eyes of the Directors in England had developed telescopic powers of locating lucrative territories in India which the Company did not yet possess. If by some chance local representatives had failed to notice them, the Directors pointed them out.
There was, for example, the principality of Tanjore. Its rajah had been precariously holding his own by nimbly sidestepping controversial issues being settled by the sword and gun all around him. "It appears most unreasonable to us," pointed out the eagle-eyed Directors in their letter of March 17, 1769, "that the Rajah of Tanjore should hold possession of the most fruitful part of the country, which can alone supply an army with subsistence, and not contribute to the defense of the Karnatic." The Company, therefore, was advised to find excuses for remedying this unprofitable situation. They did, with what result can be seen from the following evidence given before the Committee of Secrecy, 1782:
"Not many years ago," said Mr. Petrie, "that province (Tanjore) was considered as one of the most flourishing, best cultivated, populous districts in Hindustan. Tanjore was formerly a place of great foreign and inland trade; it imported cotton from Bombay and Surat, raw and worked silks from Bengal, sugar, spices, &c. . . . gold, horses, elephants and timbers from Pegu, and various articles of trade from China. . . . The exports of Tanjore were muslins, chintz, handkerchiefs, ginghams, various sorts of long-cloths . . . it possesses a rich and fertile soil, singularly well supplied with water from the two great rivers Cavery and Coleroon, which, by means of reservoirs, sluices, and canals, are made to disperse their waters through almost every field in the country. . . . Such was Tanjore not many years ago, but its decline has been so rapid, that in many districts it would be difficult to trace the remains of its former opulence."
By 1773, trade, manufacture and agriculture were ruined, and the inhabitants left Tanjore by the thousands in quest of a more secure abode.
As has been said before, much of the cost of wars in other parts of India was borne by Bengal. This, together with the ceaseless demands for more and yet more profits resulted in the most reckless raising of the land revenue demands of Bengal. For inability to meet the land tax peasant properties, including even bullocks and seed corn, were confiscated. If that did not suffice, land was ruthlessly taken away from the people and sold to the highest bidder.
Bengal, too, began to appear as desolated as Madras and Tanjore. From the once prosperous city of Murshidabad, in Bengal, the Company's representative, Becher, wrote in 1769: "It must give pain to an Englishman to have reason to think that since the accession of the Company to the Dewani (civil administration) the condition of the people of this country has been worse than it was before, and yet I am afraid the fact is undoubted. . . . I well remember this country when Trade was free and the flourishing State it was then in; with Concern I now see its present ruinous Condition, which I am convinced is greatly owing to the Monopoly that has been made of late years in the Company's Name of almost all the Manufactures in the Country."
To climax all this, there was a famine in Bengal in 1770. Added to the shortage of foodstuff, whatever was available was bought up by the Company's servants, who refused to sell it except at exorbitant prices. One-third of the population-nearly ten million--perished as a result. Yet the land revenue was rigorously collected; it even showed an increase, for ten per cent was added to the revenue, by which the living had to make up the loss thoughtlessly inflicted by the dead.
On November 3, 1772, Warren Hastings, in charge of the Company's affairs in Calcutta, reported:
"Notwithstanding the loss of at least one-third of the inhabitants of the province, and the consequent decrease of the cultivation, the net collections of the year 1771 exceeded even those of 1768 . . . owing to its being violently kept up to its former standard."
The following figures speak for themselves: Under the last nawab of Bengal, the land revenue realized in 1764-65 was £817,000; in the first year of the Company's administration of Bengal, 1765-66, it rose to £1,470,000; in 1771-72 it was £2,341,000; in 1775-76, it was £2,818,000; and in 1793, it was fixed at £3,400,000.
While Clive was eloquently telling the Directors in England that they "had acquired an empire more extensive than any kingdom in Europe, France and Russia excepted" and "a revenue of four millions sterling, and a trade in proportion," the people of this empire were being bled white to keep up the flow of tribute to England. And, looking at all this, the popular poet of the time wondered as he sang to the MotherGoddess:
"Mother, to some you have given wealth, horses, elephants, charioteers, conquest. And the lot of others is field labor, with rice and vegetables. Some live in palaces, as I myself would like to do. O Mother, are these fortunate folk your grandfathers--and I no relation at all? . . . Some ride in palkis (palanquins), while I have the privilege of carrying the shoulder-pole."
4
By 1773, though much wealth had flowed into England, the Company's affairs in India were in an unbelievable mess. In the quest for territory and profit, they had made promises and indiscriminately signed bewildering and often contradictory treaties with the various contending princes. Civil administration was totally ineffective. In their misery, vast numbers of people had turned to robbery, which added to the chaos. Parliament set up an inquiry, which resulted in the Regulating Act of 1773.
This Act brought the Company's domain under the partial supervision of the British Government. It set up a GovernorGeneral at Calcutta, and a Council of four advisers. A Supreme Court was also established in Calcutta.
Warren Hastings, who bad already been in the employ of the Company for many years, was appointed first GovernorGeneral. He appointed English collectors of revenues to the provinces. A civil and a criminal court were established in. each district, presided over by the Collectors.
The Collectors proved just as greedy as their predecessors, and were replaced with Provincial Councils. Various experiments were made with the land-tax, always with an eye to increasing the revenue.
There was no cessation of warfare, only a change in tactics. Hastings made an effort to streamline everything. He cut down some of the allowances paid to the dispossessed nawabs and princes, and totally eliminated others.
But nothing was done to relieve the burden on the people. Hastings has been praised by many historians for bringing "the unique gift of peace" to the province of Bengal. Yet it is certainly open to question if peace at any price is the most desirable of all goals.
In fact, all was not as serene in Bengal as has been made out by many writers. It was during this period that peasant revolts, spontaneous and unorganized, broke out in many parts of India under the Company, including Bengal. According to Mr. Goodland, the Company's representative in the rebellious area, the Bengal peasant revolt was the most serious one which ever happened in that province; it was suppressed with a cruelty equally unexampled.
In Bengal, also, a guerilla band, with a mixture of religious and patriotic zeal, carried on lightning attacks on the Company's transports and distributed their loot to the poor people. The tradition of guerilla warfare is an old one in India; the Sanyasis (wandering monks), as the Bengal guerillas were known, developed such an effective technique that it took many years to finally crush them. It may be of interest to note that in the latter part of the nineteenth century, a play dealing with the exploits of the Sanyasis was forbidden production by the British Government.
5
Hastings' administration, though it had expanded the territorial possessions of the Company, had simultaneously increased the number of sufferers from the exploitation of the Company and its employees. Graft, plunder and nepotism flourished as before, and over a more extended area. There was a famine in Madras, in which the people went through unspeakable suffering, although the revenue showed a surplus.
The British Parliament set up another inquiry, as a result of which it passed Pitt's India Bill on the 13th of August, 1784. It placed the administration of the Company's possessions under the Crown. Six Commissioners were appointed to supervise the civil, military, and revenue affairs of the Company. Lord Cornwallis was appointed Governor-General with enlarged powers.
Between 1784 and 1813, various administrative schemes were improvised, but none were for the people's benefit. Being both trader and administrator, the East India Company was in an anomalous position. In everything it did, it instinctively looked to the enhancement of its financial returns. It was primarily interested in raising an increasing amount of revenue from the Indian possessions. Even when its intentions were of the best--which was not often--there was inevitably a conflict between its own interests and those of the people it governed.
As administrators, the Company's main source of revenue was from land. Many experiments were made to secure the maximum amount of revenue the land would yield. The oppressed peasantry either left their land or rebelled. In industrially advanced Bengal the Indian merchants and bankers were wiped out by trade monopoly of the country systematically passing into the hands of the Company's employees.
Bengal was the milch cow of the Company, and here the discontent of all classes was most acute. Lord Cornwallis' first job was to put Bengal in order. He eventually hit upon a scheme, which was put into effect in 1793. This was the famous Permanent Settlement of land.
By the Permanent Settlement, Indians who had been collectors of revenue from a number of villages were made landlords of these villages, subject to a payment to the Government. The amount of the rent was fixed in perpetuity, and it was raised as high as was possible at the time, amounting to ten-elevenths of the total payments the cultivators were currently making.
The consequences of the Permanent Settlement were manifold. Since the rent was fixed very high, many of the previous collectors failed to meet them; they were dispossessed and their land was put up for auction, and some of the Indian merchants and bankers bought them as investments. To keep up the payments, these new Zemindars, or landlords, rack-rented the peasantry. At one stroke the discontent of a few Indian capitalists were for the time being pacified by giving them an outlet for their investment, and the resentment of the peasantry was diverted away from the Company and toward the Zemindars.
In order to continue exploiting the peasantry, however, the Zemindars had eventually to depend upon the armed might of the Company to back them up. Thus these newly created Zemindars formed a group of powerful supporters of the status quo. On November 8, 1829, Lord William Bentinck, then Governor-General, said:
"If security was wanting against extensive popular tumult or revolution, I should say that the Permanent Settlement, though a failure in many other respects and in its most important essentials, has this great advantage at least, of having created a vast body of rich landed proprietors deeply interested in the continuance of the British Dominion and having complete Command over the mass of the people." 16
The failure "in its most important essentials," of which Bentinck spoke, was in relation to financial returns. By methods of extreme harshness the Zemindars gradually increased their share of the spoils, while the Company's share, fixed permanently, became proportionately less. In 1940, for example, the total rents in Bengal under the Permanent Settlement amounted to about £12,000,000, and the Government's share was about £3,000,000, at which it had been fixed long ago.
Permanent Settlement was utilized only where it was needed to solidify the Company's position; in the rest of the Company's possessions in India, arrangements were later made either with Zemindars on a temporary basis, or with individual farmers to pay rent direct to the Government, subject to periodic reassessment of their land.
And land was always assessed upward. The increase in the revenue of Bengal has already been noted. After sufficient territory had been conquered to turn Bombay into a province, the land revenue collected in the first year, 1817-18, was £868,047; in 1820-21 it had risen to £1,818,314, and it was to continue rising for many decades. The land revenue of Punjab in 1847-48 was £820,000. In 1849 Punjab came under the direct control of the British, and in three years the revenue increased to £1,060,989. The identical pattern was followed with each new acquisition of territory.
6
India's economic relations with England had undergone a fundamental change by the turn of the nineteenth century. For the Industrial Revolution had come in England.
What did the Industrial Revolution mean? It meant that England had developed methods by which commodities could be manufactured in mass quantities in large factories. To build large factories required extensive capital, mass production machinery, and people who would be willing to work in these factories at wages that would allow a profit to be made by the investors of capital. Thus three things were needed for the Industrial Revolution: capital, machinery and unemployed labor. How did these three happen to be present simultaneously in England in the 18th century?
Up to the year 1760, machines used in cotton manufacture were as simple as those of India. Manufacture of woolen goods was the only industry, and woolen goods and grain were the chief exports.
Trade had increased greatly. Export of wheat, for example, rose from 1,160,000 qrs. in 1697-1705 to 9,515,000 in 1746-65. This helped increase the accumulation of capital in England.
Trade in commodities from India and other colonial possessions, in which the British had a monopoly, helped swell this accumulation. And to this was added the sudden flood of wealth which flowed from India, especially after the Battle of Plassey in 1757.
The growth of the woolen industry had resulted in many farms being turned into sheep pasture, thereby throwing thousands of peasants out of work. Increasing demand for farm products had necessitated improved methods of agriculture. Farms had grown larger in size and more compact, which could be run with less hands. Peasants who lost their livelihood through this improvement, also swelled the ranks of the unemployed.
There were other indications that the time was ripe for the Industrial Revolution. The eighteenth century wars were large-scale and lasted many years. They were waged by professional armies who were in constant need of certain particular kinds of goods. "Armies now wore regular uniforms," writes A. L. Morton, "and needed thousands of yards of cloth of a specified colour and quality, needed boots and buttons, needed muskets all capable of firing bullets of a definite calibre and bayonets all made to fix exactly on to these muskets. Not only the British armies had to be fed, clothed and equipped, but many of the armies of Britain's allies, who depended equally upon her subsidies and her industry to keep them in the field.
"It was this demand for ever-increasing quantities of standard goods, and not the genius of this or that inventor, which was the basic cause of the Industrial Revolution."
This growing demand for standardized goods forced men to search and experiment for mass production methods, which was the only way they could be produced. But even this search would have been fruitless if the necessary capital and labor power were not available. In the latter half of the eighteenth century, however, all of these requirements--incentive, tremendous capital accumulation and unemployed labor-power-were simultaneously present.
It is generally thought that the Industrial Revolution was the result of a series of inventions; that James Watt almost singlehandedly brought it into being. As a matter of fact, there were similar inventions in existence before, but they were neglected because the conditions necessary for their profitable use were absent at the time. "In 1733 Kay patented his flyshuttle," writes G. H. Perris, "and in 1738 Wyatt patented his roller-spinning machine worked by water-power; but neither of these inventions seems to have come into use."Â After the conquest of Bengal by the East India Company, a great series of inventions coincided with the tremendous flow of wealth from India.
"The influx of the Indian treasure," writes Brooks Adams, "by adding considerably to the nation's cash capital, not only increased its stock of energy, but added much to its flexibility and the rapidity of its movement. Very soon after Plassey, the Bengal plunder began to arrive in London, and the effect appears to have been instantaneous; for all the authorities agree that the 'industrial revolution,' the event which has divided the nineteenth century from all antecedent time, began with the year 1760. Prior to 1760, according to Baines, the machinery used for spinning cotton in Lancashire was almost as simple as in India; while about 1750 the English iron industry was in full decline because of the destruction of the forests for fuel. At that time four-fifths of the iron used in the kingdom came from Sweden.
"Plassey was fought in 1757, and probably nothing has ever equalled the rapidity of the change which followed. In 1760 the flying shuttle appeared, and coal began to replace wood in smelting. In 1764 Hargreaves invented the spinning jenny, in 1776 Crompton contrived the mule, in 1785 Cartwright patented the power loom, and, chief of all, in 1768 Watt matured the steam engine, the most perfect of all vents of centralising energy. But, though these machines served as outlets for the accelerating movement of the time, they did not cause that acceleration. In themselves inventions are passive, many of the most important having lain dormant for centuries, waiting for a sufficient store of force to have accumulated to set them working. That store must always
take the shape of money, and money not hoarded, but in motion. Before the influx of the Indian treasure, and the expansion of credit which followed, no force sufficient for this purpose existed; and had Watt lived fifty years earlier, he and his invention must have perished together. Possibly since the world began, no investment has ever yielded the profit reaped from the Indian plunder, because for nearly fifty years Great Britain stood without a competitor. From 1694 to Plassey ( 1757) the growth had been relatively slow. Between 1760 and 1815 the growth was very rapid and prodigious."
Thus the wealth drained from India was a major contributing factor in the industrialization of England. Some of the ingredients that went into the building of modern England were the "blood, sweat and tears" of the Indian peasantry and artisans.
7
The Industrial Revolution brought mass production methods to the manufacture of goods; it was soon necessary to find a market outside England to absorb the surplus. Rapidly increasing volume of production also required a greater supply of certain raw materials which England either produced in limited quantities, or did not produce at all.
Manufacturers of English goods began to cast longing eyes upon India. Here was a vast territory whose people, if they could be turned into customers, would provide an immense outlet for a constant flow of goods made in England. India also was rich in raw materials the English manufacturers needed. Where India had been looked upon as an inexhaustible source of wealth in terms of goods salable in Europe and just plain plunder, now she was to be transformed into an equally inexhaustible source of wealth as a consumer of English goods and supplier of raw material. The process was reversed, but the Aladdin's lamp attitude toward India remained the same.
This gave rise to serious internal conflicts in England. If India were to be used as a producer of raw materials and a consumer of English goods, obviously it would put the East India Company traders out of business. The Company was still economically powerful enough, however, to fight hard for survival. So the attack made upon it by the rising industrialists and their spokesmen took on a moral tone, washing in public all the dirty linen in the closet of the Company.
This was the period when, before a Parliamentary Committee, witness after witness testified to the appalling condition of the people of India under the rule of the Company. Incredible stories of graft, greed, fraud, extortion and peculation, of territorial conquest by means of intrigue, forgery and bribery, were bared to the Committee. "Were we to be driven out of India this day, nothing would remain to tell that it had been possessed, during this inglorious period of our dominion, by anything better than the ourangoutang or the tiger," thundered Edmund Burke in England. And from India Governor-General Lord Cornwallis soon reported: "I may safely assert that one third of the Company's territory in Hindustan is now a jungle inhabited only by wild beasts."
However, it was not so much through invective nor through exposure of corruption that the East India Company's monopoly trade in Indian goods was ended; it was the result of the forces of the new economy. The rising English industrialists were economically stronger and, since they stood for an advanced mode of production, represented a more progressive social force. They were also helped by other merchants who resented the monopoly of the Company. And the new economic Messiah, Adam Smith, was championing "free trade."
The onslaught on the East India Company began in the latter part of the eighteenth century, but was interrupted by the world-shaking French Revolution. Afterwards it was renewed; in 1813, the monopoly of the East India Company in trade with India was ended by Parliament, and in 1833, they were forbidden trade altogether.
8
The growing British industries had demanded and received protection from the competition of Indian goods even before 1813. To protect the British cotton industry, a duty of 78 per cent had been imposed on Indian calicoes. "The cotton and silk goods of India up to the period ( 1813)," wrote H. H. Wilson, "could be sold for a profit in the British market at a price from 50% to 60% lower than those fabricated in England. It consequently became necessary to protect the latter by duties of 70% and 80% on their value, or by positive prohibition. Had this not been the case, had not such prohibitory duties and decrees existed, the mills of Paisley and Manchester would have stopped in their outset, and could scarcely have been again set in motion, even by the power of steam. They were created by the sacrifice of the Indian manufacture."Â
British industries not only had the advantage of a superior technology, but the State itself assisted their growth by building protective fences around them. Even in the early nineteenth century British cotton and silk goods entering India paid a duty of 3½ per cent and woolen goods 2 per cent, while Indian cotton goods imported into Britain paid 10 per cent, silk goods 20 per cent, and woolen goods 30 per cent. It took the combined strength of modern machinery and State power to destroy the Indian manufacturing industries and open up the Indian market for British goods.
Between 1814 and 1835 the number of Indian cotton piecegoods imported into Britain fell from 1,250,000 pieces to 306,000 pieces; by 1844 the number had dwindled to 63,000 pieces. During the same period British cotton manufactures exported to India rose from less than 1,000,000 yards to over 51,000,000 yards. The value of Indian cotton goods exported between 1815 and 1832 fell from 11.3 million to below £100,000, whereas the value of English cotton goods imported into India rose from £26,000 to £400,000. India had for centuries exported cotton goods to the whole world; her fine fabrics were
used four thousand years ago by Egyptians to wrap their mummies and were prized by the Greeks under the name of "gangetica"; but by 1850 she was importing one-fourth of all British cotton exports.
Other British products poured into India alongside of cotton goods. Between 1818 and 1836 the export of cotton twist from England expanded 5,200 times. Silks, woolens, ironwork, pottery, glass and paper were sent to India in ever increasing quantities. Indian steel had been well-known throughout the world. The famous Damascus blades were forged from steel imported from Hyderabad in India. In a previous chapter mention has been made of the superb iron column in Delhi. "In India steel was used for weapons, for decorative purposes and for tools," writes D. H. Buchanan, "and remarkably high grade articles were produced. . . . Remains of old smelting furnaces found throughout India are essentially like those in Europe prior to modern times. . . .
"The Agarias, or iron smelting caste, were widely dispersed, and the name lohara (from "loha," iron) is applied to a great many districts producing iron ore. But the introduction of cheaply made European iron has taken away nearly all their trade, and most Agarias have turned to unskilled labor."
The policy of discouraging the development of industries in the colonies was applied to the American colonies as well. For example, when the smelting of iron had reached some importance in New England in the eighteenth century, the manufacture of iron and steel goods there was prohibited, and the raw iron had to be shipped across the Atlantic to England, from where the Americans had to import manufactured iron goods for their own use.
The Indian spinners, weavers, and other artisans and handicraftsmen, lacking modern machinery and without State protection, were completely ruined. In England, too, hand-looms had been displaced by modern machinery; but the unemployed handicraft workers had been sponged up by the factories springing up everywhere. But in India there was no compensating development of industries, nor was such development permitted.
Within a short time the prosperous, old, populous manufacturing towns of India were in ruins. Dacca, Murshidabad, Surat, Tanjore, and other places were as desolate as though a pestilence had swept over them. "The population of the town of Dacca has fallen from 150,000 to 30,000 or 40,000," testified Sir Charles Trevelyan at the Parliamentary enquiry in 1840, "and the jungle and malaria are fast encroaching upon the town . . . Dacca, which was the Manchester of India, has fallen off from a very flourishing town to a very poor and small one; the distress there has been great indeed." "The decay and destruction," declared the historian Montgomery Martin at the same enquiry, "of Surat, of Dacca, of Murshidabad and other places where native manufactures have been carried on, is too painful a fact to dwell upon. I do not consider that it has been in the fair course of trade; I think it has been the power of the stronger exercized over the weaker." And in 1890 Sir Henry Cotton wrote: "Less than a hundred years ago the whole commerce of Dacca was estimated at one crore (ten million) of rupees, and its population 200,000 souls. In 1787 the exports of Dacca muslin to England amounted to 30 lakhs (3 million) of rupees; in 1817 they had ceased altogether. The arts of spinning and weaving, which for ages afforded employment to a numerous and industrial population, have now become extinct. Families which were formerly in a state of affluence have been driven to desert the towns and betake themselves to the villages for a livelihood . . . This decadence has occurred not in Dacca only, but in all districts. Not a year passes in which the Commissioners and District officers do not bring to the notice of Government that the manufacturing classes in all parts of the country are becoming impoverished."
Millions of dispossessed and disinherited artisans and craftsmen, spinners, weavers, potters, tanners, smelters, smiths, and others were leaving the towns. But where could they go? Ironically enough, connection with the first industrialized country in the world brought a retrogression in the economy of India; where the unemployed British handicraft workers had flocked to the rising industrial metropolises, the Indians were forced to return to the villages and fall back on agriculture. This was the beginning of the terrible overpressure on land which to this day remains one of the most pressing problems of Indian economy.
India was not only to be exploited as a market for British goods, but as a producer of raw material as well. Thomas Bazley, President of the Manchester Chamber of Commerce, declared before the 1840 Parliamentary Committee: "In India there is an immense extent of territory, and the population of it would consume British manufactures to a most enormous extent. The whole question with respect to our Indian trade is whether they can pay us, by the products of their soil, for what we are prepared to send out as manufactures."
This was simple and clearcut enough. Even before Bazley spoke, in 1833, Englishmen were given permission to acquire land and set up as planters in India. Slavery had been abolished the same year in the West Indies; but the plantation system which developed in India merely skirted the laws against slavery. In fact, there was a rush from America and the West Indies of planters experienced in handling slaves, who brought their own ideas and practices with them. An example of how they operated is furnished by the Indigo Commission of 1860, which was set up as a result of violent outbreaks in the indigo plantations. It was found that the planters treated the workers as slaves, cheated them in the measure of the land and of the weed, put them in stocks, flogged and otherwise oppressed them. Dinabandhu Mitra, the great dramatist of Bengal, exposed the condition of indigo workers in a brilliant play, Nil Darpan (The Mirror of Indigo). The play was proscribed, and Rev. James Long, a missionary, was fined and imprisoned by the High Court of Calcutta for translating this play into English. European indigo planters were curbed after 1859.
Conditions were no better in tea plantations. Simple peasant men and women were bound down by penal clauses, upon their signing a contract, to work in "tea gardens" (sic) under appalling conditions. The contract signed by the plantation workers was aptly termed by Indians "the Slave Law," and workers received no relief until the twentieth century.
The export of raw material from India increased rapidly, especially after 1833. In 1813, India exported 9 million pounds of raw cotton; in 1833 it was 32 million; in 1844 it was 88 million, and in 1914 it had risen to 963 million pounds.
Export of sheep's wool rose from 3.7 thousand pounds in 1833 to 2.7 million in 1844; linseed from 2,100 bushels in 1833 to 237,000 bushels in 1844.
There were similar rises in jute and other raw materials. The rise in the export of food grain was equally steep. In 1849 it was valued at £858,000; in 1858 it rose to £3.8 million; in 1877 it was £7.9 million; in 1901 it had grown to £9.3 million; and by 1914 it bad reached the sum of £19.3 million.
India thus became an agricultural colony of British capitalism.
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<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>SHAKING THE PAGODA-TREE </b>
IN THE early days of their trade the British merchants were obliged to pay the Indian manufacturers in gold or silver, since Britain produced nothing of use to the Indians. But accumulation of precious metals was the hallmark of wealth, and it was painful for the British traders to take money out of the country. Hence, from the beginning they hunted for some other means of obtaining the money needed to pay for Indian goods. An important source was the auxiliary trade in slaves from Africa.
No money was needed to capture the Africans; it was done by the judicious use of alcoholic beverages and by rounding them up by force. The slaves were then sold to the Spaniards in South America to be made to work for nothing in the silver mines. A portion of the silver thus obtained by the sale of Negro slaves went to pay the Indian manufacturers for their goods. Economically, the three continents of Asia, Africa and America were thus linked long before the airplane.
The rivalry for power following the death of Aurangzeb gave the Company an opportunity to collect money in India itself by lending its support to various rival groups. The gradual acquisition of limited territorial rights increased its income. Piracy on the high seas also helped swell its coffers. By 1750, before the conquest of Bengal, the East India Company had grown wealthy enough to have loaned or given no less than £4,200,000 to the British Treasury.
But real, systematic exploitation of the Indian people started with the Battle of Plassey in 1757. Already the potentialities of India to increase the wealth of England had been recognized by the coining of the celebrated compound word "pagoda-tree," derived from a South-Indian currency known as "pagoda." From the time of the conquest of Bengal, shaking the pagoda-tree became almost literally the national sport of England.
1
The Directors of the Company in England had a fantastic conception of the wealth of Bengal, and unbelievable demands were made upon it. In Madras and Bombay the English were constantly involved in intrigue and wars of conquest; Bengal paid the cost of them. If there was a deficit from these parts of India due to mismanagement, misappropriation of funds and the greed of individual employees of the Company, Bengal was expected to make up for it. The revenue from Bengal had also to pay for the purchase of commodities to be sold by the Company in Europe! Bengal became an Aladdin's lamp in the hands of the Company. Wild rapine and misery inevitably followed.
2
When Mir Jafar was made the puppet nawab of Bengal in 1757, not only did "presents" flow into the pockets of Clive and other members of the Company, but the floodgates were opened to the internal trade of the three provinces of Bengal, Bihar and Orissa. Employees of the Company were not content with arbitrarily assuming the right to trade duty free; in the mad quest for profit they perpetrated incredible horrors on the workers and artisans.
The following letter gives a vivid picture of the first fruits of the Company's rise to power. In May, 1762, Mir Qasim wrote to the Company:
"In every Perganah (fiscal district), every village, and every factory, they (the Company's agents) buy and sell salt, betel-nut, ghee (clarified butter), rice, straw, bamboos, fish, gunnies, ginger, sugar, tobacco, opium, and many other things. . . . They forcibly take away the goods and commodities of the Reiats (peasants), 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."
Sergeant Brego wrote a letter on May 26, 1762 from Backergunz, a prosperous Bengal district:
"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 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 . . . this place is growing destitute of inhabitants; every day numbers leave the town to seek a residence more safe, and the markets, which before afforded plenty, do hardly now produce anything of use."
In October 1762, Mahomed Ali, the Moslem collector of revenues in the city of Dacca, wrote:
". . . 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 (market), and then extort the money from them by force."
William Bolts, an English merchant, wrote in his "Considerations on Indian Affairs," published in 1772:
"It may with truth be now said that the whole inland trade of the country, as at present conducted. . . . has been one continued scene of oppression . . . every article being 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. . . . The assent of the poor weaver is in general not necessary. . . . 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 in 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 . . . have had their goods seized and sold on the spot to make good the deficiency. . . ."
The British were thus practically looting the countryside as well as underselling the Indian traders, forcing them to the wall.
3
The thin line of demarcation between trade and plunder reached almost to the vanishing point by 1765, when Clive secured from the nominal emperor of India the right of collecting revenue and of civil administration as well, in the three provinces of Bengal, Bihar and Orissa.
Clive was asked by the Directors of the Company to stabilize their possessions in India. And stabilization to Clive meant finding ways and means by which India could be made even more systematically profitable to England. In his letter of September 30, 1765, to the Directors, Clive wrote:
"Your revenues, by means of this acquisition, will, as near as I can judge, not fall far short for the ensuing year of 250 lakhs of Sieca Rupees [a lakh is a hundred thousand, and eight rupees were equivalent to a pound then. K.G.], including your former possession of Burdwan, &c. Hereafter they will at least amount to 20 or 30 lakhs more. Your civil and military expenses in time of peace can never exceed 60 lakhs of Rupees; the Nabob's allowances are already reduced to 42 lakhs, and the tribute to the King (the Moghul emperor) at 26; so that there will be remaining a clear gain to the Company of 122 lakhs of, Sicca Rupees, or £1,650,000 sterling."
This was the benefit Bengal derived from being brought under the direct administration of the Company. One-quarter of the total annual revenue was considered sufficient for the purposes of government; one-quarter was still found necessary to be used as an opiate for dispossessed rulers; and the rest, nearly half the revenue, more than one and a half million pounds sterling, was sent out of India for the shareholders of the Company.
In the Fourth Report of the House of Commons, 1773, the following figures are given about the revenues and expenses of Bengal for the six years ending 1770-71: The total net revenue was £13,066,761; the total expenditure was £9,027,609; and "clear gain," sent to England, amounted to £4,037,152, or nearly one-third of the total.
Could a businessman ask for more? He could--and did. And got it. Clive did nothing to combat the illegal trade carried on by individual employees of the Company. On the contrary, he took precautions to protect this trade in case the Directors themselves took steps to stop it. On the 18th of September, 1765, he executed a mutual contract with other employees of the Company to carry on private trade regardless of what the Company might or might not do. This indenture stated in part:
"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, . . . then, in that case, they, the said Robert Lord Clive, as President, William Brightwell Sumner, &c., as Council of Fort William [in Calcutta, Bengal. K.G.] aforesaid, shall and will, well and truly save harmless and keep indemnified, then, 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.
Private trading, already monopolized by the Company's employees, flourished as never before. Clive stated that fortunes of £100,000 were made in two years. He himself went home with more than a quarter of a million pounds, in addittion to an estate bringing in £27,000 a year.
No longer did the Company have to worry about taking money out of England; even by 1763, there was exultation over this fact. "These glorious successes," wrote L. Scrafton, a member of the Company's Council in 1763, "have brought near three millions of money to the nation; for, properly speaking, almost the whole of the immense sums received from the Soubah ( Bengal) finally centers in England. So great a proportion of it fell into the Company's hands . . . that they have been enabled to carry on the whole trade of India ( China excepted) for three years together, without sending one ounce of bullion."
These examples naturally had a profound effect in England. From every strata of English society hands were stretched out to be dipped into the seemingly inexhaustible bowl of riches from Bengal. In 1767, Parliament ordered the Company to pay 1400,000 annually to the British Treasury; the payments were kept up until 1773. The Proprietors of the Company clamored for higher dividends.
Jobbery and nepotism became unrestrained. "Directors and Directors' relatives," write Thompson and Garratt, "peers, even the Royal Family, saw no reason why they should not push a young friend or dependent into service which within an incredibly brief period would bring him back enormously enriched." 15 Boys in their teens went out to India to become employees of the Company, collectors of revenue, or any other position they could get, with one thought only, that of returning home as a Nabob in the shortest possible time.
In the Company's possessions in other parts of India conditions were even worse. From their headquarters in Madras the Company's representatives carried on constant intrigue and plunder. On the pretext of having loaned money to various Indian princes--these loans being sometimes authentic, sometimes fraudulent--individual employees of the Company secured the rights to the revenues of villages and towns of various sizes, where they mercilessly squeezed the inhabitants. In case of refusal or militant resistance by the people, the employees resorted to the Company's armed forces for collection. The Indian money-lender had found a more ruthless competitor in the British money-lender.
Before the Select Committee of the House of Commons in 1782, this revealing testimony was given:
" George Smith, Esquire, attending according to order, was asked how long he resided in India, where, and in what capacity? He said he arrived in India in the year 1764; he resided in Madras from 1767 to October 1779. Being asked what was the state of trade at Madras at the time when he first knew it, he said it was in a flourishing condition, and Madras one of the first marts in India. Being asked in what condition did he leave it with respect to trade, he replied at the time of leaving it, there was little or no trade, and but one ship belonging to the place. Being asked in what state the interior country of the Karnatic was with regard to commerce and cultivation when he first knew it, he said at that period he understood the Karnatic to be in a well-cultivated and populous condition, and as such consuming a great many articles of merchandise and trade. Being asked in what condition it was when he left Madras with respect to cultivation, population, and internal commerce, he said in respect to cultivation, greatly on the decline, and also in respect of population; and as to commerce, exceedingly circumscribed."
The covetous eyes of the Directors in England had developed telescopic powers of locating lucrative territories in India which the Company did not yet possess. If by some chance local representatives had failed to notice them, the Directors pointed them out.
There was, for example, the principality of Tanjore. Its rajah had been precariously holding his own by nimbly sidestepping controversial issues being settled by the sword and gun all around him. "It appears most unreasonable to us," pointed out the eagle-eyed Directors in their letter of March 17, 1769, "that the Rajah of Tanjore should hold possession of the most fruitful part of the country, which can alone supply an army with subsistence, and not contribute to the defense of the Karnatic." The Company, therefore, was advised to find excuses for remedying this unprofitable situation. They did, with what result can be seen from the following evidence given before the Committee of Secrecy, 1782:
"Not many years ago," said Mr. Petrie, "that province (Tanjore) was considered as one of the most flourishing, best cultivated, populous districts in Hindustan. Tanjore was formerly a place of great foreign and inland trade; it imported cotton from Bombay and Surat, raw and worked silks from Bengal, sugar, spices, &c. . . . gold, horses, elephants and timbers from Pegu, and various articles of trade from China. . . . The exports of Tanjore were muslins, chintz, handkerchiefs, ginghams, various sorts of long-cloths . . . it possesses a rich and fertile soil, singularly well supplied with water from the two great rivers Cavery and Coleroon, which, by means of reservoirs, sluices, and canals, are made to disperse their waters through almost every field in the country. . . . Such was Tanjore not many years ago, but its decline has been so rapid, that in many districts it would be difficult to trace the remains of its former opulence."
By 1773, trade, manufacture and agriculture were ruined, and the inhabitants left Tanjore by the thousands in quest of a more secure abode.
As has been said before, much of the cost of wars in other parts of India was borne by Bengal. This, together with the ceaseless demands for more and yet more profits resulted in the most reckless raising of the land revenue demands of Bengal. For inability to meet the land tax peasant properties, including even bullocks and seed corn, were confiscated. If that did not suffice, land was ruthlessly taken away from the people and sold to the highest bidder.
Bengal, too, began to appear as desolated as Madras and Tanjore. From the once prosperous city of Murshidabad, in Bengal, the Company's representative, Becher, wrote in 1769: "It must give pain to an Englishman to have reason to think that since the accession of the Company to the Dewani (civil administration) the condition of the people of this country has been worse than it was before, and yet I am afraid the fact is undoubted. . . . I well remember this country when Trade was free and the flourishing State it was then in; with Concern I now see its present ruinous Condition, which I am convinced is greatly owing to the Monopoly that has been made of late years in the Company's Name of almost all the Manufactures in the Country."
To climax all this, there was a famine in Bengal in 1770. Added to the shortage of foodstuff, whatever was available was bought up by the Company's servants, who refused to sell it except at exorbitant prices. One-third of the population-nearly ten million--perished as a result. Yet the land revenue was rigorously collected; it even showed an increase, for ten per cent was added to the revenue, by which the living had to make up the loss thoughtlessly inflicted by the dead.
On November 3, 1772, Warren Hastings, in charge of the Company's affairs in Calcutta, reported:
"Notwithstanding the loss of at least one-third of the inhabitants of the province, and the consequent decrease of the cultivation, the net collections of the year 1771 exceeded even those of 1768 . . . owing to its being violently kept up to its former standard."
The following figures speak for themselves: Under the last nawab of Bengal, the land revenue realized in 1764-65 was £817,000; in the first year of the Company's administration of Bengal, 1765-66, it rose to £1,470,000; in 1771-72 it was £2,341,000; in 1775-76, it was £2,818,000; and in 1793, it was fixed at £3,400,000.
While Clive was eloquently telling the Directors in England that they "had acquired an empire more extensive than any kingdom in Europe, France and Russia excepted" and "a revenue of four millions sterling, and a trade in proportion," the people of this empire were being bled white to keep up the flow of tribute to England. And, looking at all this, the popular poet of the time wondered as he sang to the MotherGoddess:
"Mother, to some you have given wealth, horses, elephants, charioteers, conquest. And the lot of others is field labor, with rice and vegetables. Some live in palaces, as I myself would like to do. O Mother, are these fortunate folk your grandfathers--and I no relation at all? . . . Some ride in palkis (palanquins), while I have the privilege of carrying the shoulder-pole."
4
By 1773, though much wealth had flowed into England, the Company's affairs in India were in an unbelievable mess. In the quest for territory and profit, they had made promises and indiscriminately signed bewildering and often contradictory treaties with the various contending princes. Civil administration was totally ineffective. In their misery, vast numbers of people had turned to robbery, which added to the chaos. Parliament set up an inquiry, which resulted in the Regulating Act of 1773.
This Act brought the Company's domain under the partial supervision of the British Government. It set up a GovernorGeneral at Calcutta, and a Council of four advisers. A Supreme Court was also established in Calcutta.
Warren Hastings, who bad already been in the employ of the Company for many years, was appointed first GovernorGeneral. He appointed English collectors of revenues to the provinces. A civil and a criminal court were established in. each district, presided over by the Collectors.
The Collectors proved just as greedy as their predecessors, and were replaced with Provincial Councils. Various experiments were made with the land-tax, always with an eye to increasing the revenue.
There was no cessation of warfare, only a change in tactics. Hastings made an effort to streamline everything. He cut down some of the allowances paid to the dispossessed nawabs and princes, and totally eliminated others.
But nothing was done to relieve the burden on the people. Hastings has been praised by many historians for bringing "the unique gift of peace" to the province of Bengal. Yet it is certainly open to question if peace at any price is the most desirable of all goals.
In fact, all was not as serene in Bengal as has been made out by many writers. It was during this period that peasant revolts, spontaneous and unorganized, broke out in many parts of India under the Company, including Bengal. According to Mr. Goodland, the Company's representative in the rebellious area, the Bengal peasant revolt was the most serious one which ever happened in that province; it was suppressed with a cruelty equally unexampled.
In Bengal, also, a guerilla band, with a mixture of religious and patriotic zeal, carried on lightning attacks on the Company's transports and distributed their loot to the poor people. The tradition of guerilla warfare is an old one in India; the Sanyasis (wandering monks), as the Bengal guerillas were known, developed such an effective technique that it took many years to finally crush them. It may be of interest to note that in the latter part of the nineteenth century, a play dealing with the exploits of the Sanyasis was forbidden production by the British Government.
5
Hastings' administration, though it had expanded the territorial possessions of the Company, had simultaneously increased the number of sufferers from the exploitation of the Company and its employees. Graft, plunder and nepotism flourished as before, and over a more extended area. There was a famine in Madras, in which the people went through unspeakable suffering, although the revenue showed a surplus.
The British Parliament set up another inquiry, as a result of which it passed Pitt's India Bill on the 13th of August, 1784. It placed the administration of the Company's possessions under the Crown. Six Commissioners were appointed to supervise the civil, military, and revenue affairs of the Company. Lord Cornwallis was appointed Governor-General with enlarged powers.
Between 1784 and 1813, various administrative schemes were improvised, but none were for the people's benefit. Being both trader and administrator, the East India Company was in an anomalous position. In everything it did, it instinctively looked to the enhancement of its financial returns. It was primarily interested in raising an increasing amount of revenue from the Indian possessions. Even when its intentions were of the best--which was not often--there was inevitably a conflict between its own interests and those of the people it governed.
As administrators, the Company's main source of revenue was from land. Many experiments were made to secure the maximum amount of revenue the land would yield. The oppressed peasantry either left their land or rebelled. In industrially advanced Bengal the Indian merchants and bankers were wiped out by trade monopoly of the country systematically passing into the hands of the Company's employees.
Bengal was the milch cow of the Company, and here the discontent of all classes was most acute. Lord Cornwallis' first job was to put Bengal in order. He eventually hit upon a scheme, which was put into effect in 1793. This was the famous Permanent Settlement of land.
By the Permanent Settlement, Indians who had been collectors of revenue from a number of villages were made landlords of these villages, subject to a payment to the Government. The amount of the rent was fixed in perpetuity, and it was raised as high as was possible at the time, amounting to ten-elevenths of the total payments the cultivators were currently making.
The consequences of the Permanent Settlement were manifold. Since the rent was fixed very high, many of the previous collectors failed to meet them; they were dispossessed and their land was put up for auction, and some of the Indian merchants and bankers bought them as investments. To keep up the payments, these new Zemindars, or landlords, rack-rented the peasantry. At one stroke the discontent of a few Indian capitalists were for the time being pacified by giving them an outlet for their investment, and the resentment of the peasantry was diverted away from the Company and toward the Zemindars.
In order to continue exploiting the peasantry, however, the Zemindars had eventually to depend upon the armed might of the Company to back them up. Thus these newly created Zemindars formed a group of powerful supporters of the status quo. On November 8, 1829, Lord William Bentinck, then Governor-General, said:
"If security was wanting against extensive popular tumult or revolution, I should say that the Permanent Settlement, though a failure in many other respects and in its most important essentials, has this great advantage at least, of having created a vast body of rich landed proprietors deeply interested in the continuance of the British Dominion and having complete Command over the mass of the people." 16
The failure "in its most important essentials," of which Bentinck spoke, was in relation to financial returns. By methods of extreme harshness the Zemindars gradually increased their share of the spoils, while the Company's share, fixed permanently, became proportionately less. In 1940, for example, the total rents in Bengal under the Permanent Settlement amounted to about £12,000,000, and the Government's share was about £3,000,000, at which it had been fixed long ago.
Permanent Settlement was utilized only where it was needed to solidify the Company's position; in the rest of the Company's possessions in India, arrangements were later made either with Zemindars on a temporary basis, or with individual farmers to pay rent direct to the Government, subject to periodic reassessment of their land.
And land was always assessed upward. The increase in the revenue of Bengal has already been noted. After sufficient territory had been conquered to turn Bombay into a province, the land revenue collected in the first year, 1817-18, was £868,047; in 1820-21 it had risen to £1,818,314, and it was to continue rising for many decades. The land revenue of Punjab in 1847-48 was £820,000. In 1849 Punjab came under the direct control of the British, and in three years the revenue increased to £1,060,989. The identical pattern was followed with each new acquisition of territory.
6
India's economic relations with England had undergone a fundamental change by the turn of the nineteenth century. For the Industrial Revolution had come in England.
What did the Industrial Revolution mean? It meant that England had developed methods by which commodities could be manufactured in mass quantities in large factories. To build large factories required extensive capital, mass production machinery, and people who would be willing to work in these factories at wages that would allow a profit to be made by the investors of capital. Thus three things were needed for the Industrial Revolution: capital, machinery and unemployed labor. How did these three happen to be present simultaneously in England in the 18th century?
Up to the year 1760, machines used in cotton manufacture were as simple as those of India. Manufacture of woolen goods was the only industry, and woolen goods and grain were the chief exports.
Trade had increased greatly. Export of wheat, for example, rose from 1,160,000 qrs. in 1697-1705 to 9,515,000 in 1746-65. This helped increase the accumulation of capital in England.
Trade in commodities from India and other colonial possessions, in which the British had a monopoly, helped swell this accumulation. And to this was added the sudden flood of wealth which flowed from India, especially after the Battle of Plassey in 1757.
The growth of the woolen industry had resulted in many farms being turned into sheep pasture, thereby throwing thousands of peasants out of work. Increasing demand for farm products had necessitated improved methods of agriculture. Farms had grown larger in size and more compact, which could be run with less hands. Peasants who lost their livelihood through this improvement, also swelled the ranks of the unemployed.
There were other indications that the time was ripe for the Industrial Revolution. The eighteenth century wars were large-scale and lasted many years. They were waged by professional armies who were in constant need of certain particular kinds of goods. "Armies now wore regular uniforms," writes A. L. Morton, "and needed thousands of yards of cloth of a specified colour and quality, needed boots and buttons, needed muskets all capable of firing bullets of a definite calibre and bayonets all made to fix exactly on to these muskets. Not only the British armies had to be fed, clothed and equipped, but many of the armies of Britain's allies, who depended equally upon her subsidies and her industry to keep them in the field.
"It was this demand for ever-increasing quantities of standard goods, and not the genius of this or that inventor, which was the basic cause of the Industrial Revolution."
This growing demand for standardized goods forced men to search and experiment for mass production methods, which was the only way they could be produced. But even this search would have been fruitless if the necessary capital and labor power were not available. In the latter half of the eighteenth century, however, all of these requirements--incentive, tremendous capital accumulation and unemployed labor-power-were simultaneously present.
It is generally thought that the Industrial Revolution was the result of a series of inventions; that James Watt almost singlehandedly brought it into being. As a matter of fact, there were similar inventions in existence before, but they were neglected because the conditions necessary for their profitable use were absent at the time. "In 1733 Kay patented his flyshuttle," writes G. H. Perris, "and in 1738 Wyatt patented his roller-spinning machine worked by water-power; but neither of these inventions seems to have come into use."Â After the conquest of Bengal by the East India Company, a great series of inventions coincided with the tremendous flow of wealth from India.
"The influx of the Indian treasure," writes Brooks Adams, "by adding considerably to the nation's cash capital, not only increased its stock of energy, but added much to its flexibility and the rapidity of its movement. Very soon after Plassey, the Bengal plunder began to arrive in London, and the effect appears to have been instantaneous; for all the authorities agree that the 'industrial revolution,' the event which has divided the nineteenth century from all antecedent time, began with the year 1760. Prior to 1760, according to Baines, the machinery used for spinning cotton in Lancashire was almost as simple as in India; while about 1750 the English iron industry was in full decline because of the destruction of the forests for fuel. At that time four-fifths of the iron used in the kingdom came from Sweden.
"Plassey was fought in 1757, and probably nothing has ever equalled the rapidity of the change which followed. In 1760 the flying shuttle appeared, and coal began to replace wood in smelting. In 1764 Hargreaves invented the spinning jenny, in 1776 Crompton contrived the mule, in 1785 Cartwright patented the power loom, and, chief of all, in 1768 Watt matured the steam engine, the most perfect of all vents of centralising energy. But, though these machines served as outlets for the accelerating movement of the time, they did not cause that acceleration. In themselves inventions are passive, many of the most important having lain dormant for centuries, waiting for a sufficient store of force to have accumulated to set them working. That store must always
take the shape of money, and money not hoarded, but in motion. Before the influx of the Indian treasure, and the expansion of credit which followed, no force sufficient for this purpose existed; and had Watt lived fifty years earlier, he and his invention must have perished together. Possibly since the world began, no investment has ever yielded the profit reaped from the Indian plunder, because for nearly fifty years Great Britain stood without a competitor. From 1694 to Plassey ( 1757) the growth had been relatively slow. Between 1760 and 1815 the growth was very rapid and prodigious."
Thus the wealth drained from India was a major contributing factor in the industrialization of England. Some of the ingredients that went into the building of modern England were the "blood, sweat and tears" of the Indian peasantry and artisans.
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The Industrial Revolution brought mass production methods to the manufacture of goods; it was soon necessary to find a market outside England to absorb the surplus. Rapidly increasing volume of production also required a greater supply of certain raw materials which England either produced in limited quantities, or did not produce at all.
Manufacturers of English goods began to cast longing eyes upon India. Here was a vast territory whose people, if they could be turned into customers, would provide an immense outlet for a constant flow of goods made in England. India also was rich in raw materials the English manufacturers needed. Where India had been looked upon as an inexhaustible source of wealth in terms of goods salable in Europe and just plain plunder, now she was to be transformed into an equally inexhaustible source of wealth as a consumer of English goods and supplier of raw material. The process was reversed, but the Aladdin's lamp attitude toward India remained the same.
This gave rise to serious internal conflicts in England. If India were to be used as a producer of raw materials and a consumer of English goods, obviously it would put the East India Company traders out of business. The Company was still economically powerful enough, however, to fight hard for survival. So the attack made upon it by the rising industrialists and their spokesmen took on a moral tone, washing in public all the dirty linen in the closet of the Company.
This was the period when, before a Parliamentary Committee, witness after witness testified to the appalling condition of the people of India under the rule of the Company. Incredible stories of graft, greed, fraud, extortion and peculation, of territorial conquest by means of intrigue, forgery and bribery, were bared to the Committee. "Were we to be driven out of India this day, nothing would remain to tell that it had been possessed, during this inglorious period of our dominion, by anything better than the ourangoutang or the tiger," thundered Edmund Burke in England. And from India Governor-General Lord Cornwallis soon reported: "I may safely assert that one third of the Company's territory in Hindustan is now a jungle inhabited only by wild beasts."
However, it was not so much through invective nor through exposure of corruption that the East India Company's monopoly trade in Indian goods was ended; it was the result of the forces of the new economy. The rising English industrialists were economically stronger and, since they stood for an advanced mode of production, represented a more progressive social force. They were also helped by other merchants who resented the monopoly of the Company. And the new economic Messiah, Adam Smith, was championing "free trade."
The onslaught on the East India Company began in the latter part of the eighteenth century, but was interrupted by the world-shaking French Revolution. Afterwards it was renewed; in 1813, the monopoly of the East India Company in trade with India was ended by Parliament, and in 1833, they were forbidden trade altogether.
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The growing British industries had demanded and received protection from the competition of Indian goods even before 1813. To protect the British cotton industry, a duty of 78 per cent had been imposed on Indian calicoes. "The cotton and silk goods of India up to the period ( 1813)," wrote H. H. Wilson, "could be sold for a profit in the British market at a price from 50% to 60% lower than those fabricated in England. It consequently became necessary to protect the latter by duties of 70% and 80% on their value, or by positive prohibition. Had this not been the case, had not such prohibitory duties and decrees existed, the mills of Paisley and Manchester would have stopped in their outset, and could scarcely have been again set in motion, even by the power of steam. They were created by the sacrifice of the Indian manufacture."Â
British industries not only had the advantage of a superior technology, but the State itself assisted their growth by building protective fences around them. Even in the early nineteenth century British cotton and silk goods entering India paid a duty of 3½ per cent and woolen goods 2 per cent, while Indian cotton goods imported into Britain paid 10 per cent, silk goods 20 per cent, and woolen goods 30 per cent. It took the combined strength of modern machinery and State power to destroy the Indian manufacturing industries and open up the Indian market for British goods.
Between 1814 and 1835 the number of Indian cotton piecegoods imported into Britain fell from 1,250,000 pieces to 306,000 pieces; by 1844 the number had dwindled to 63,000 pieces. During the same period British cotton manufactures exported to India rose from less than 1,000,000 yards to over 51,000,000 yards. The value of Indian cotton goods exported between 1815 and 1832 fell from 11.3 million to below £100,000, whereas the value of English cotton goods imported into India rose from £26,000 to £400,000. India had for centuries exported cotton goods to the whole world; her fine fabrics were
used four thousand years ago by Egyptians to wrap their mummies and were prized by the Greeks under the name of "gangetica"; but by 1850 she was importing one-fourth of all British cotton exports.
Other British products poured into India alongside of cotton goods. Between 1818 and 1836 the export of cotton twist from England expanded 5,200 times. Silks, woolens, ironwork, pottery, glass and paper were sent to India in ever increasing quantities. Indian steel had been well-known throughout the world. The famous Damascus blades were forged from steel imported from Hyderabad in India. In a previous chapter mention has been made of the superb iron column in Delhi. "In India steel was used for weapons, for decorative purposes and for tools," writes D. H. Buchanan, "and remarkably high grade articles were produced. . . . Remains of old smelting furnaces found throughout India are essentially like those in Europe prior to modern times. . . .
"The Agarias, or iron smelting caste, were widely dispersed, and the name lohara (from "loha," iron) is applied to a great many districts producing iron ore. But the introduction of cheaply made European iron has taken away nearly all their trade, and most Agarias have turned to unskilled labor."
The policy of discouraging the development of industries in the colonies was applied to the American colonies as well. For example, when the smelting of iron had reached some importance in New England in the eighteenth century, the manufacture of iron and steel goods there was prohibited, and the raw iron had to be shipped across the Atlantic to England, from where the Americans had to import manufactured iron goods for their own use.
The Indian spinners, weavers, and other artisans and handicraftsmen, lacking modern machinery and without State protection, were completely ruined. In England, too, hand-looms had been displaced by modern machinery; but the unemployed handicraft workers had been sponged up by the factories springing up everywhere. But in India there was no compensating development of industries, nor was such development permitted.
Within a short time the prosperous, old, populous manufacturing towns of India were in ruins. Dacca, Murshidabad, Surat, Tanjore, and other places were as desolate as though a pestilence had swept over them. "The population of the town of Dacca has fallen from 150,000 to 30,000 or 40,000," testified Sir Charles Trevelyan at the Parliamentary enquiry in 1840, "and the jungle and malaria are fast encroaching upon the town . . . Dacca, which was the Manchester of India, has fallen off from a very flourishing town to a very poor and small one; the distress there has been great indeed." "The decay and destruction," declared the historian Montgomery Martin at the same enquiry, "of Surat, of Dacca, of Murshidabad and other places where native manufactures have been carried on, is too painful a fact to dwell upon. I do not consider that it has been in the fair course of trade; I think it has been the power of the stronger exercized over the weaker." And in 1890 Sir Henry Cotton wrote: "Less than a hundred years ago the whole commerce of Dacca was estimated at one crore (ten million) of rupees, and its population 200,000 souls. In 1787 the exports of Dacca muslin to England amounted to 30 lakhs (3 million) of rupees; in 1817 they had ceased altogether. The arts of spinning and weaving, which for ages afforded employment to a numerous and industrial population, have now become extinct. Families which were formerly in a state of affluence have been driven to desert the towns and betake themselves to the villages for a livelihood . . . This decadence has occurred not in Dacca only, but in all districts. Not a year passes in which the Commissioners and District officers do not bring to the notice of Government that the manufacturing classes in all parts of the country are becoming impoverished."
Millions of dispossessed and disinherited artisans and craftsmen, spinners, weavers, potters, tanners, smelters, smiths, and others were leaving the towns. But where could they go? Ironically enough, connection with the first industrialized country in the world brought a retrogression in the economy of India; where the unemployed British handicraft workers had flocked to the rising industrial metropolises, the Indians were forced to return to the villages and fall back on agriculture. This was the beginning of the terrible overpressure on land which to this day remains one of the most pressing problems of Indian economy.
India was not only to be exploited as a market for British goods, but as a producer of raw material as well. Thomas Bazley, President of the Manchester Chamber of Commerce, declared before the 1840 Parliamentary Committee: "In India there is an immense extent of territory, and the population of it would consume British manufactures to a most enormous extent. The whole question with respect to our Indian trade is whether they can pay us, by the products of their soil, for what we are prepared to send out as manufactures."
This was simple and clearcut enough. Even before Bazley spoke, in 1833, Englishmen were given permission to acquire land and set up as planters in India. Slavery had been abolished the same year in the West Indies; but the plantation system which developed in India merely skirted the laws against slavery. In fact, there was a rush from America and the West Indies of planters experienced in handling slaves, who brought their own ideas and practices with them. An example of how they operated is furnished by the Indigo Commission of 1860, which was set up as a result of violent outbreaks in the indigo plantations. It was found that the planters treated the workers as slaves, cheated them in the measure of the land and of the weed, put them in stocks, flogged and otherwise oppressed them. Dinabandhu Mitra, the great dramatist of Bengal, exposed the condition of indigo workers in a brilliant play, Nil Darpan (The Mirror of Indigo). The play was proscribed, and Rev. James Long, a missionary, was fined and imprisoned by the High Court of Calcutta for translating this play into English. European indigo planters were curbed after 1859.
Conditions were no better in tea plantations. Simple peasant men and women were bound down by penal clauses, upon their signing a contract, to work in "tea gardens" (sic) under appalling conditions. The contract signed by the plantation workers was aptly termed by Indians "the Slave Law," and workers received no relief until the twentieth century.
The export of raw material from India increased rapidly, especially after 1833. In 1813, India exported 9 million pounds of raw cotton; in 1833 it was 32 million; in 1844 it was 88 million, and in 1914 it had risen to 963 million pounds.
Export of sheep's wool rose from 3.7 thousand pounds in 1833 to 2.7 million in 1844; linseed from 2,100 bushels in 1833 to 237,000 bushels in 1844.
There were similar rises in jute and other raw materials. The rise in the export of food grain was equally steep. In 1849 it was valued at £858,000; in 1858 it rose to £3.8 million; in 1877 it was £7.9 million; in 1901 it had grown to £9.3 million; and by 1914 it bad reached the sum of £19.3 million.
India thus became an agricultural colony of British capitalism.
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