Honourable Company: A History of The English East India Company (39 page)

Under such circumstances it should come as no surprise that for the next two decades the story of English activities in India, and especially in Bengal, is largely one of abortive endeavours to enforce the terms of the
farman
and of bitter quarrels over their precise meaning. Technically there were in fact three
farman,
one of which was addressed to the Moghul governors and officials in Bengal, another to those of Hyderabad (within which province fell Madras and the Company’s other
settlements on The Coast), and the third to Ahmadabad (i.e. Gujarat including Surat). Each included a number of directives concerning the privileges to which the Company was entitled; some of these directives appeared in all three
farman,
others dealt with specific local concessions.

In the case of Bengal, the question (which had so exercised Agent Hedges) of commuting the
ad valorem
customs dues in favour of an annual lump sum payment of 3000 rupees (considerably less than the cost of those
farman
celebrations) was conceded. Similarly the grant of the three villages which comprised Calcutta was confirmed. Additionally a further thirty-eight villages, including some like Howrah on the other side of the Hughli river, were to be made available to the Company. There were two currency directives, one of which gave to rupees coined by the Company in Madras parity with those minted by the Bengal government, while the other entitled the Company to use the Bengal mint to turn its bullion into coin. Additionally there were two extra-territorial directives obliging the Bengal administration to apprehend and hand over any stolen goods, thieves, or debtors on whom the Company had a claim. Finally, besides a number of minor provisions, there was an important clause exempting all goods carried under a pass
(dastak)
issued by the Company’s chief factors from being stopped, examined, or taxed anywhere within Bengal.

In a later age and another land these terms might have been called capitulations. But if the Moghul had capitulated, his increasingly independent nawabs, diwans and subahdars in the provinces certainly had not. Of all these directives not one was conceded without argument and not a few were never conceded at all.

The thirty-eight villages, for instance, were firmly withheld on orders from the Nawab. In Madras, as will be seen, similar prevarication in respect of villages granted under the
farman
led to open hostilities. But in Bengal the Company had to content itself with trying to arrange for the villages in question to be acquired by its Indian dependants. This was only partially successful and may help to explain why Fort William proved so vulnerable when it came to the great trial of strength in 1756.

If Calcutta could not immediately secure the adjacent villages (or
zamindari)
it could to some extent neutralize them by a strict exercise of its new rights to extra-territorial jurisdiction. A test case arose as early as 1719 when a Hindu who had speculated in Calcutta real estate absconded owing unspecified rents to the Company. He was tracked down in a neighbouring
zamindari
but when the Company’s
barquandaz
(described
as ‘country gunmen’ but evidently a rural militia) came in hot pursuit they were attacked and repulsed. The Company thereupon seized hostages from the defiant
zamindar
and he in turn apprehended some of the Company’s tenants and plundered one of its agents. ‘Such insolent treatment’ could not be allowed to go unpunished. With a force of ninety foot and horse Captain Row was immediately ordered to the scene of the trouble. The
zamindar
again followed suit by raising a force of his own; it was put at over a thousand. But, in a series of skirmishes heavy with portent, the untrained, ill-armed levies of the
zamindar
were easily routed. ‘We destroyed a great number of their people’, reported Row, ‘and burnt their villages which has at length obliged them to beg for peace on any terms.’ The original debtor was surrendered, the hostages exchanged, and the
zamindar’s
force disbanded. ‘We make no doubt’, recorded the Calcutta Council, ‘that this good effect will be a warning to other
zamindars
not only to refuse protection to any of our tenants, but also to deliver them up to us when demanded…’

Of course it was one thing to try strong-arm tactics with a neighbouring landlord, quite another to challenge the Nawab. Disregard of the
farman’s
currency concessions furnished ample provocation from this direction, but as yet the Company always chose to pay up rather than square up. No headway was made on the abolition of the unfavourable exchange rate for rupees minted in Madras. In fact in 1736 the
batta,
or discount, charged on them was nearly doubled. Squeals of protest from Calcutta eventually won a reduction but the disparity remained. Its object was clear enough – to encourage the Company to import the silver used to pay for its Bengal trade investment in the form of bullion rather than coin. And such an arrangement would also have suited the Company had it ever managed to secure that access to the Bengal mint which had been promised in the
farman.
But this too was consistently withheld. A cosy monopoly consisting of the Nawab and his Hindu bankers controlled the mint in an exclusive arrangement which they found both profitable and politic. By occasionally refusing to accept bullion they could quickly bring a European trading company to heel or, more often, to a lucrative accommodation. And should such a company try to hold out by borrowing money for its current investment, it would invariably find that the only loan available was from the same monopoly.

Thus did the Bengal treasury maintain a tight hold on the province’s money supply, and all foreigners, not excepting the privileged English, did well to remember it. It was an important check, for in all other
aspects the economy of Bengal was becoming increasingly – indeed decisively – dependent on the foreign companies. The English Company’s trade in Bengal was already equal to that of all other foreign trading companies together and during the period 1717-27 it more than doubled; from contributing forty per cent of the Honourable Company’s total imports, Bengal’s share now rose to seventy per cent; and there can be no doubt that these dramatic improvements were all down to the greater security and improved trading terms associated with
the farman.

But such statistics tell only half the tale. The other half, more difficult to quantify, is the undoubted increase in the volume and value of the ‘country trade’ conducted by the English. Almost every European in the East, be he ensign or ambassador, prelate or president, engaged in some branch of trade on his own account. The salaries paid its employees by the English Company were still miserly – £200 per annum for a president, £
5
per annum for a writer. Even with generous allowances for subsistence and servants it was impossible to live in comfort, let alone make a fortune, without speculating in trade. And this was, of course, even truer of those ‘private traders’ who were not in the employ of any company. But the term ‘private trade’ had by this time become misleading. It could denote anything from the modest cargo space allowed by the Company to its factors and ships’ captains on voyages to and from Europe to the entire evil-smelling contents of a Hughli barge that would never leave the river, or a part share in a many-decked Surat galleon sailing for the Red Sea.

‘Country trade’ was slightly more specific in that it denoted any trading activity that began and ended east of the Cape of Good Hope (so excluding St Helena and all European ports). This was the vast trading world, extending from Mocha to Manila, which the Company now accepted as being as legitimate a sphere of activity for its own servants as for those private traders, both European and native, who were outside its employ. All such traders and all such ventures were supposed to be registered in the Company’s books and from them it derived a considerable income in the form of customs duties. Additionally, from 1718 a consulage fee of two per cent was levied on all exports from Calcutta.

Nevertheless, it is almost impossible to distinguish private trade or even country trade from that of the Company. An examination of the shipping records for Madras suggests that the number of Company ships calling there was greatly exceeded by the number of ships that did not belong to the Company. Of the latter some are described as Indian,
Armenian or Burmese but this did not preclude their officers being European or their cargoes being all or partly the ventures of European syndicates. Similarly even Company vessels often carried private cargoes since they were commonly leased out pending the favourable season for sailing home. From an examination of the detailed records kept by the Dutch at their Cochin factory, one writer has concluded that the tonnage of ‘English country-shipping’ more than doubled in the period 1724-42. And this leads him to an interesting conclusion: it was not the Company’s ‘out and back’ trade but ‘the steadily increasing participation in the maritime trade of Asia by Europeans in partnership – voluntary and involuntary – with local traders and seamen [which] was the foundation upon which the imperialism of more recent times was built’ (H. Furber).

The country trade, then, offered Europeans a lucrative field of speculation that was both legitimate and of some commercial and political significance. Such activity only became reprehensible when someone who engaged in it abused his official position as an employee of, say, the Honourable Company to gain unfair advantage. Typical of such abuses was the use of the Company’s money to finance a private investment, or the purchase by Company employees of goods supplied by these same employees as private traders. All those detected in such practices could expect to be dismissed from the Company’s service. But there were other areas in which the Company’s men enjoyed considerable advantage and where the modalities were far less clear.

For instance, the clause in Farrukhsiyar’s
farman
which meant most to the Bengal factors was that endorsing the Company’s right to issue
dastak,
or passes. Throughout Bengal, trade was regulated by a system of inland customs dues which applied to virtually everything and which made a considerable contribution to the government’s revenue. Confirmation that all goods covered by a
dastak
from the Company should be exempt was therefore a valuable privilege. But the
farman
failed to specify exactly which goods were covered. According to the Nawab and his officials it was only those items, like silk, saltpetre, muslin and broadcloth, which the Company had traditionally imported or exported. According to the Company’s men, though, it was any goods they cared to invest in, whether on the Company’s behalf or their own and whether for export/import or for internal resale. Further widening of this loophole led to the inclusion of goods belonging to the Company’s Indian agents, and there were soon instances of
dastak
coverage being sold to complete outsiders.

This was clearly contrary to the intention of the
farman
and elicited strong protests from the Bengal government. Fines were imposed for the abuse of
dastak
and quite legitimate consignments became liable to summary stoppage and examination. The Company, out of whose funds the fines were invariably paid, made several efforts to discipline its factors; but since those entrusted with enforcement of such orders were also those who stood to gain most by ignoring them, the abuses continued. From this period dates the heavy involvement of the English in the internal trade of Bengal. From Dhaka came complaints that English private trade now exceeded that of the Company, while in Patna it was said that it was more than double that of the Company.

The commodities involved included tobacco, betel, sugar and rice but it was over the river traffic in sea-salt that matters habitually came to a head. Abundantly available in the coastal regions of Bengal and Orissa, salt (sodium chloride) went upriver to Patna where it was eagerly purchased by traders from all over salt-starved upper India. The Company’s trade with Patna, on the other hand, was in saltpetre (potassium nitrate) which was extracted in Bihar and shipped downriver. For this purpose the Company annually despatched from Calcutta a large fleet of river boats complete with military escort. What more natural than that for the upriver journey they should load the mostly empty boats with table salt? And what more responsible? Instead of selling guns for gold here was a European trading company buying gunpowder for condiments.

But under the Moghul Empire – as under the British 200 years later – salt duties were an important element in the revenue system. The Nawab took strong objection to the Company using its
dastak
to evade them and rightly guessed that the main culprits were acting in a private capacity. In 1727 government officers seized a huge consignment of salt
en route
to Patna and demanded 10,000 rupees for its release. Hoping to make their point, the Company’s men refused and threatened to blockade the Hughli river by sinking any Moghul shipping that tried to pass Calcutta. The Nawab responded with an embargo on all English trade and began arresting the Company’s representatives.

The quarrel eventually spread to other areas of contention and was not resolved till 1731 when the English made an ignominious submission. ‘To prevent all misdemeanours and encroachments which we have made in our trade’, John Stackhouse on behalf of the Company agreed ‘not to trade in any goods but what are proper for Europe’. But this undertaking was never ratified by the President and Council in Calcutta.
And although orders were repeatedly issued by the Company against its servants engaging in the salt trade, the practice evidently continued, for in 1734 the escort for the Patna fleet are recorded as having mutinied rather than comply. For the time being the vigilance of the Nawab’s government and the vulnerability of the Company’s trade meant that abuses could not be allowed to get out of hand. Private trade, both within Bengal and beyond, nevertheless prospered and as the cancer at the heart of the Moghul Empire spread outwards, the private trader found new ways to assuage and circumvent the Nawab’s officials.