Honourable Company: A History of The English East India Company (65 page)

The year 1781 ended with the surrender at Yorktown; it was followed, three months later, by the resignation of the North Government. In a crisis atmosphere of recrimination and disillusionment, plus a growing demand for reform of the domestic administration, four coalition ministries succeeded one another in two years. This instability in government gave to a Parliament no longer stifled by ‘management’ the chance to make itself heard. It did so by turning, as if by way of consolation for the loss of the American colonies, increasingly towards India; and at last the train of events, set in motion back in the 1760s, moved rapidly towards a conclusion.

As in the run-up to the Regulating Act, two parliamentary committees took the lead. The first, a Select Committee staffed mainly by opponents of the North administration, was supposedly investigating complaints against the Supreme Court set up in Calcutta under the Regulating Act. But fired by the high-minded rhetoric of Edmund Burke and fuelled by the revelations and animosities of Philip Francis, it, like its predecessor, was soon engaged in an impassioned and wide-ranging attack on the Company’s misgovernment, on its servants’ transgressions, and in particular on the character and conduct of Warren Hastings. Meanwhile a
Secret Committee had been necessitated by another Indian crisis – Hyder Ali was again rampaging through the Carnatic – and another looming financial crisis. Organized by North’s Government and staffed by his Indian specialists including Robinson and the highly ambitious Henry Dundas, the Secret Committee also extended its deliberations way beyond its ostensible remit (the causes of the Carnatic war) and became in effect a policy-making body.

Between them these two committees issued eighteen lengthy reports whose cumulative effect was to convince even the Court of Proprietors that some radical change was unavoidable. While the sensational and impassioned revelations of Burke’s Select Committee ‘made some sweeping reforms inevitable’, it was the more dogged and pragmatic deliberations of Dundas’s Secret Committee which ‘laid down the nature of those reforms’ (L. Sutherland). In this eighteenth-century transfer of power in India, the high-minded Burke, albeit by rhetoric rather than example, played the Gandhi role and the affable Dundas the Nehru.

First in the field, Dundas moved again for the recall of Hastings. Parliament approved the motion and the Court of Directors seconded it; but again the Court of Proprietors rejected it, twice. Without the proprietors’ approval the directors were powerless to act. Six months later Dundas responded by introducing his own bill for a root-and-branch reform. It included the right of the Crown to appoint and recall the Governor-General and since it also greatly strengthened the position of the Governor-General
vis-à-vis
his Council and the subsidiary Governors of Madras and Bombay, it in effect by-passed the authority of Leadenhall Street. But a change of government meant that Dundas was now in opposition and his bill, awarding such important powers to the Crown, never stood a chance in a House profoundly suspicious of royal patronage. Its proponent and many of its provisions were, however, incorporated in Pitt’s final solution.

Next, though, it was the turn of the Select Committee in the person of Charles James Fox, who had just formed an unpopular minority government in coalition with the discredited North. Fox’s India Bill, actually two bills, is now thought to have been inspired and partly drafted by Burke himself whose profound horror of the Company and all its servants it vividly reflected. Yet, compared to Dundas’s bill, it concentrated more on arrangements in London than in India, proposing, instead of a surgical by-pass of India House, a veritable heart transplant. If, as Burke was wont to declaim, the Company had really broken every treaty it had
ever made and sold every title it had ever dispensed, then it had forfeited its sacred charter, not to mention its assets, and must be cast out. In its place the bill allowed for seven Commissioners, nominated by Parliament, to replace the Court of Directors at the helm of Indian affairs plus another nine Assistant Commissioners to manage the Company’s trade and fix its dividend. ‘It will be a vigorous and a hazardous measure’, Fox had predicted. He made it all the more so by nominating to those seven all-powerful Commissionerships seven all-loyal Foxites.

This was too much for the Company which alerted every other chartered body in the country to such an ‘unconstitutional and unprecedented’ seizure. It was also too much for the Opposition, who foresaw that an administration with the patronage of India in its gift might be able to hold the reins of government indefinitely; too much, too, for old Sir William James who died of a fit of apoplexy brought on by what he must have regarded as depredations more piratical than Angrey’s; and too much for George III whose detestation of both the Ministry and its bill led him to advise the peers of the realm that any Lord who voted for it was ‘not only not his friend but his enemy’. Thus, though the bill passed in the Commons, it was defeated in the Lords and the Government was promptly dismissed.

Enter the twenty-five-year-old William Pitt (the Younger). As the great-grandson of Thomas Pitt, interloper and Governor of Madras, and as the scion of a family which owed its prominence to an Indian fortune acquired before such things became reprehensible, Pitt was in a happily ambiguous position. More to the point, the alarm caused by Fox’s bill meant that almost any alternative now stood a fair chance of favourable consideration even by the likes of Sulivan in Leadenhall Street. Indeed, Pitt had already secured the support of the most knowledgeable and able of the India managers, especially Dundas and Robinson. He narrowly failed to win over Sulivan but could nevertheless claim that his India bill had the support in principle of the majority of the directors. A majority in the House of Commons as yet eluded him. His first India Bill was defeated in January 1784 and it was not until the following July, after Pitt had won the general election handsomely, that the India Act was finally passed.

Pitt’s India Act combined elements of both Dundas’s and Fox’s bills. Like the former it made the Governor-General in India a royal appointment while his authority over his Council and over the subsidiary Presidencies was somewhat enhanced. But like the latter it set up in
London a body of Commissioners, six in number and known as the Board of Control, who would henceforth ‘superintend, direct and controul
[sic]’
the government of the Company’s possessions. An objection was raised to the word ‘direct’ but it was not removed. The Board was to work through the Company, ‘directing’ the directors by an elaborate system of scrutiny and consultation which soon left Leadenhall Street with no greater powers of initiation and revision than any other branch of the civil service.

The members of the Board included a Secretary of State and the Chancellor of the Exchequer, both government appointments, but to avoid the obvious criticism it was emphasized that all Indian patronage was to remain with the Company. The Company was also to continue to manage its purely commercial activities without government interference. If respected, these were important concessions and went a long way towards reconciling Leadenhall Street to an Act which, in the words of the late Professor Roberts, ‘converted the Company into a quasi-state department’ and rendered its final abolition in 1858 merely ‘a formal and explicit recognition of facts already existing’.

One other concession is also of relevance. After the failure of Pitt’s first bill but immediately before the passage of the second, a so-called Commutation Act had been passed. This imposed a tax on windows by way of making good the loss of government revenue resulting from a dramatic reduction in the duties charged on tea; they were slashed from a variable rate of between 79 per cent and 127 per cent to just 121/2 per cent. It is not possible that the Company was unaware of the effect this concession would have on the most lucrative branch of its trade. In return for surrendering administrative independence in India the Company was rewarded with the most important commercial opportunity in its history. What was lost in terms of Indian revenue was to be made up on the China trade.

Concluding a history of the East India Company poses the sort of problems faced by the biographer of a long-lived celebrity. After a suitably paced narrative covering the subject’s active life, the question arises of how to present the empty decades of disengagement and retirement when, with failing faculties and supported gait, the public
persona
fades into the obscurity of an irrelevant old age. One solution is to fill this blank by anticipating the later progress of the ideas and institutions spawned by the subject. But in the case of the Company this would mean charting the history of the British Empire in the East, a daunting task which has not been neglected by others.

Alternatively the declining years can be simply condensed into a short and serene graveside epilogue. Again, though, the Company does not lend itself to this treatment. To reach the graveside means leaping six decades and alighting amid the far from serene scenes of the ‘Indian Mutiny’. For these the Company and its erstwhile overlord, the Moghul Emperor, would be made scapegoats; the latter was exiled, the former dissolved. Both institutions were by then, however, long moribund as anything other than constitutional conveniences. The Company no more resembled ‘the Grandest Society of Merchants in the Universe’ than did Bahadur Shah, ‘the little old man of Delhi’, his illustrious predecessors on the Peacock Throne.

Even after its final dissolution in 1858 the Company, though divested of its fictive powers, would obstinately refuse to die. With its operational expenses pared down to a few hundred pounds per annum, and with no fixed abode after the demolition of India House in 1862, it wandered, doddery and destitute as an Indian
sannyasi,
from one temporary
address to another. Not till 1873 was it finally wound up and not till 1884, exactly a century after Pitt’s India Act, was the last cheque to be drawn on the East India Stock Dividend Account honoured by the Bank of England.

It is, then, difficult to fix a precise date for the demise of the Company. If by demise is meant its supersession by the state, any number of dates could be suggested ranging from the infiltration of the Directorate in the 1760s to the 1773 Regulating Act, the 1784 India Act, the 1813 Charter Act (which finally claimed for the Crown the sovereignty of all the Company’s possessions), or the 1858 dissolution.

A similar calendar, beginning with Plassey or Baksar and ending with the reforms of Cornwallis and Shore, could be constructed for the transformation of the Company from commercial enterprise into administrative service. But here an added complication arises in that while the state was successfully challenging the Company’s political independence and while reforms were transforming it into a more effective branch of government, its commercial privileges were being upheld. When they too were eventually challenged it was on quite different grounds and accorded with yet another calendar. It was not until 1813 that the Company’s trade with India was thrown open to competitors and not until 1833 that the same happened with the China trade.

This suggests, though, a possible line of retreat. The Company’s exclusive trading rights had always been its most prized possession. The essence of Queen Elizabeth’s founding charter, its privileged monopoly of eastern trade, had been confirmed in every subsequent charter and without it the Company ceased to be a recognizable society of merchants. On the other hand, so long as it possessed all or part of that monopoly, so long as Company ships loaded pepper at Benkulen and tea at Canton, so long as the directors erupted over the slightest deviation in the quality of a Dhaka muslin, and so long as their servants saw in every desert island another off-shore entrepôt, talk of the Company’s demise was premature. Nor in these days of growing political responsibilities was trade a purely marginal activity. ‘For financial reasons’, writes Louis Dermigny, ‘control of India necessitated control of the tea trade.’ Arguably and ironically it would be the Company’s sensational commercial success in China as a result of the 1784 Commutation Act that made possible the creation of British India.

First, though, something remains to be said of the extent to which this Indian dominion was the product of Company, as opposed to
Government, policy. After Pitt’s India Act the direction of Indian affairs would rest with the Government’s new Board of Control which, under the forceful Dundas, would soon infringe the few discretionary powers supposedly left to Leadenhall Street. But before this, during the twilight years of debate and defiance which intervened between the Acts of North and Pitt, the Company in India had weathered its stormiest decade to emerge with a profile almost unrecognizable from that of 1770. Then Clive had just left Bengal after his final brief administration. He had been succeeded, after a couple of years and a couple of governors, by Warren Hastings who as Governor of Bengal and then, under the Regulating Act, as Governor-General, controlled the Company’s destinies in India for thirteen years. Subsequent governors-general would owe their appointments more to Whitehall than India House and would almost invariably be chosen from outside the Company. Hastings was therefore the only governor-general of any stature to emerge from the Company’s ranks. The first governor-general, he was also the last of the Company’s proconsuls; and, arguably, he was the greatest.

No other governor-general or viceroy would last anything like as long as Hastings and no other would approach his profound understanding of India or his affection for its peoples. ‘The Great Moghul’, as Hastings was called in Calcutta’s first newspaper, stood alone, a sad and self-righteous Caesar, embattled but unbowed, solicitous but ruthless, fastidious but careless, lofty yet devious – a man, in short, crying out to be misunderstood. Contemporaries duly obliged; so has posterity. For acting in what he believed to be the best interests of his employers he was impeached by Parliament. Though he was honourably acquitted, the next generation arraigned him for failings that were moderate by contemporary standards and for sympathies which now seem wonderfully enlightened. When eventually the Raj did claim him for its own it was on the basis of those policies which were not of his choosing. And even today his reputation rests on the two seemingly irreconcilable assertions that he was both the architect of British India and the one ruler of British India to whom the creation of such an entity was anathema.