The East India Company: The World's Most Powerful Corporation (The Story of Indian Business) (7 page)

At the time of Aungier’s death, the charge of the Company’s fleet and army was with Richard Keigwin, a sea captain who had distinguished himself in the defence of St Helena during the Anglo-Dutch Wars of 1672. Bombay continued to be a potential target of a Maratha attack and the buildup of a Maratha navy had been a source of worry to the English settlement for some time. Keigwin favoured armed defensive action rather than negotiating with the Marathas. When the Maratha attack did occur in October 1679, Keigwin was well prepared, and he successfully defended Bombay. However, already before this battle, the Company had issued an order to have him removed as commandant, alarmed at the military expenditure that he was incurring. Keigwin defended his case so well that two years later he was back with the rank of captain-lieutenant. There followed another curious period of struggle over expenses, which ended with Keigwin declaring Bombay a Crown territory of which he was the head.

Not surprisingly, he received wide popular support
from within the town’s population. Two issues were working in favour of the group that the Company called ‘mutineers’. One was the fear of Maratha invasion. Another was the enthusiastic support of interlopers. Thanks to this combination, the administration of Bombay continued in the hands of the mutineers until 1684. In that year the new head of Surat, John Child, arrived off Bombay and started a peace settlement. Child received half-hearted support from London. When Keigwin finally decided to quit and go back to England, he won a royal pardon and was appointed captain of a frigate bound for the West Indies.

Full fifty years after Ralph Fitch had set foot there the Company set its sights upon Bengal. Bengal had many advantages for the kind of business the Company did. Its cotton cloth came in huge variety and low prices. Bengal was well served with rivers, which were convenient for moving cargo. The region already had established trade contact with Arakan, Burma and Southeast Asia. Food was cheap in the deltaic part of the region, thanks to high land yield, plentiful water and cheap transportation. The cost of maintaining a factory would be relatively low here.

The first major Bengal mission in 1633 had ended on the Orissa coast when the English set up a barely functional factory at Balasore. The entry into Bengal proper had to wait until 1656, and was made possible by the diplomatic initiative of Gabriel Boughton, an officer and surgeon in the employ of the Mughal court since 1645. The story goes that princess Jahanara, then thirty years old and unofficially the first lady of the court, was returning from her father’s apartment to her own when her perfumed muslin garment caught fire from a candle. The ladies-in-waiting tried to save her, only to have their own clothes catch fire. Two of them died, but the princess survived, if just. In the next few months, Jahanara lay on what looked to be her deathbed, with a grief-stricken Shah Jahan constantly at her side. It remains a mystery how Jahanara was nursed back to health. In one version, Shah Jahan’s prayers did the job. In another, Boughton’s skills as a doctor worked. When offered a reward, Boughton sought a factory for the English in Bengal. Although this story and Bouhgton’s medical acumen have been disputed, he probably did play a part in the negotiations that led to a factory. For Shah Jahan it was expedient to be well disposed to the English since he distrusted the Portuguese. He needed the former to fill in the vacuum left by the expulsion of the latter from Hooghly in 1632. The first factory of the
Company in Hooghly was followed by expansion of the Balasore factory and establishment of new factories at Kasimbazar and Patna.

Between 1660 and 1680, the Bengal enterprise grew, thanks to the interest the Company had developed in Dhaka muslins and Bihar saltpetre. But it was an uneasy growth. The problem was that Bengal was a different political entity from Coromandel or Surat. In Coromandel, Mughal authority was absent, and in Surat it had become precarious. But Bengal was an imperial province and governed firmly by a nobleman appointed by the imperial court. This the English realized at some cost in 1657, the year Shah Jahan died. Mir Jumla, the governor of Bengal and himself owner of trading vessels, was upset and made his displeasure known when the Company officers attempted to confiscate an Indian ship on account of an unpaid debt. Nothing untoward came out of this, as Mir Jumla was called away to deal with rebellions. But the Company learnt a lesson.

A new threat emerged in the 1670s. The reputation of Bengal as a promising commercial frontier and its proximity to the heart of the Mughal empire had drawn a large number of European private traders to settle down at the Ganges ports Kasimbazar and Hooghly. The very existence of a strong government encouraged these merchants to approach the Mughal viceroy Shaista
Khan, and his customs officer Balchandra Das, to seek trading rights, while offering in return duties at a higher rate than what the Company had negotiated with the emperor. Successful in negotiating with the local administration, the private traders moved around in Bengal in open defiance of the Company’s authority. One Captain Ally travelled between Dhaka and Hooghly in a decorated and well-armed fleet, himself ‘habited in scarlet richly laced’, and developed ‘great friendship’ with Balchandra Das, much to the mortification of the Company.

Matters came to a head in 1682. In that year, the Company sent William Hedges as the governor in Bengal. Hedges’ main commissions were to suppress private trade and to negotiate trade terms with Shaista Khan. The trade licenses that the Company received stated a percentage of customs to be collected on goods in transit both for import and for export. The standard rate was 3½ per cent of the value of the goods. But the European companies never willingly paid customs, nor made any commitments on this account. There were two reasons for the reluctance. First, the taxation rate was subject to uncertainty depending on wars, rebellions, or, simply, opportunism. Second, whereas on an investment of the Company in Bengal amounting to £600,000, the customs would come to £42,000, for ‘half
of which charge’, the instructions from London told Hedges, it should be possible to arrive at a settlement with the king.

In short, the instructions asked the chief to bribe the nobility to keep the private traders out. But bribing was a game that the Company’s rivals were willing to play to the hilt. Shaista Khan, then almost eighty years old and soon to retire from a glorious career, was not only well aware of the dilemma that the Company faced, but also took a mischievous delight in promising the Company concessions while secretly negotiating with its rivals. In the end, from ‘the old doting Nawab’, as Hedges angrily called him, the Company got nothing more than empty promises.

Not surprisingly, Hedges did not last long in his post. Though declared by the directors ‘one of our own’, his ego outstripped his understanding of Bengal politics. The most experienced Company officer in Bengal at the time was Job Charnock (1630–93). Charnock had served the Company in India for thirty years. He started his career in Hajipur and Patna, where he procured saltpetre, needed in England as raw material for gunpowder. In Patna, Charnock married an Indian widow said to have been rescued from burning herself on her husband’s funeral pyre and had three children by her. While in Patna, he began to dress in Indian costumes,
a habit that lasted lifelong, and learnt to speak fluent Persian and Hindustani. In 1669, he moved to the Bengal establishment in Hooghly where he was the fifth in the hierarchy of factors. In 1685, he became the second in command in Bengal.

Charnock had independent views and was effectively in charge of the Hooghly establishment by virtue of his personality and experience. He also had close links with the English private merchants of Kasimbazar. Therefore, he did not care for Hedges’s leadership in the ongoing disputes over private trade and the Nawab. The directors dealt with the situation by removing Hedges, but blundered nevertheless. Believing that an agreement with the Mughal emperor held good in Bengal, they refused to negotiate with Shaista Khan, precipitating an open conflict. Although it was the last thing Charnock wanted, an armed conflict was forced on his small and inexperienced army by the belligerence of the London merchants.

In 1686, the Company in London, anticipating an outbreak of war in Bengal, sent a fleet to Hooghly. Additional troops were expected to come from Madras. The few hundred men who did join the Bengal troops were hardly a deterrent to the 40,000-strong Mughal forces. While the fleet was on its way, a series of skirmishes made Charnock worry for the safety of the
people and the merchandise in Hooghly. He loaded the material and as many people as possible on country boats and sailed down the river. The party reached Sutanuti, where the Mughal forces caught up with them. Mughal heavy artillery, combined with the effects of disease and starvation, reduced numbers and morale on the English side. When all seemed lost, a Rajput noble Puran Mal (Baramal or Boremal in the sources) intervened to save the Company. The Mughal commander, moreover, was misinformed of the strength of the enemy forces and quickly accepted an offer of a truce. Charnock, in the negotiations that followed, made only one demand—the permission to build a fort in Bengal.

His dream came true three years later. These three years were turbulent for the Company’s Bengal enterprise. A dispute over pirate attack upon pilgrim ships off the coast of Surat drew a severe reprisal from Aurangzeb, almost ending English presence in India in 1689–90. As peace was declared after an abject apology from the English, Aurangzeb sent a letter to the viceroy of Bengal, Ibrahim Khan, that the English, ‘not being in their former greatness’, may be pardoned and allowed to carry on in their small way in Bengal. Charnock’s moment had finally arrived. In 1690, he returned to Sutanuti from exile in Madras to start the process of a
zamindari sale. At the end of the negotiations, the Company became the zamindar of three villages, Sutanuti, Gobindapur and Dihi-Kalkutta, which right they purchased from the zamindars of the area, the Mazumdars, for Rs 1300.

Throughout this conflict, London wanted Bengal to be subordinated to the safer station at Madras. Charnock did not think that Madras could be relied on for armed relief to Bengal, nor considered Madras as a partner, for the two settlements, after all, competed for the same trade. Like Francis Day, he decided to go alone and build a fort with his own resources. Soon after Calcutta started, London, as usual, endorsed the decision and declared Charnock the governor of Bengal. Charnock enjoyed this dubious glory for three more years before he died. But years of stress had already taken a toll on his mind. He turned moody and disagreeable, withdrew from public affairs, let the management of the town go to seed, and lived in fear of being chased by Madras lawyers. He beat his servants and took great pleasure in encouraging intrigues and quarrels amongst his European staff. In this disorderly state of mind, one point of constancy was the memory of his dead Indian wife. He never failed to perform rituals, Indian style, on her grave on her death anniversary.

Historical evidence is unclear on the point of what
existed on the spot where Calcutta came up. Old Bengali accounts suggest that in the seventeenth century, the two banks of the river (Betor and Sutanuti) had textile markets that operated in certain seasons of the year. These fairgrounds were part sponsored by the Portuguese traders and may have grown as merchant settlements after the decline of Saptagram, the principal port of medieval Bengal. But it is very unlikely that these markets had a commercial future before the Company came in. No matter the prehistory, Calcutta quickly became a popular destination for Bengali merchants, and especially the textile merchants whom the Company and English private traders regularly dealt with. Many of them settled down in the new establishment or near it. The river had more water here than at Hooghly, even though it was also more treacherous in this spot. And Calcutta was easier for movement of troops from the sea if necessary.

With hindsight, it would be easy to credit Charnock with prescience unusual among Company officials in this time. Charnock was no visionary, however. He was only a merchant caught up in a complicated political scenario without enough military power, strategic resources, or the blessings of his superiors necessary to deal with the situation. He was one of many agents who had to fend for themselves. His decisions were taken on
the spur of the moment and turned out to be right only after luck intervened in his favour. He was, however, special in one respect. In a world where working lives were quite short and most merchants and mariners chose not to spend many years in India, Charnock had adopted India as his home. Later biographers had difficulty piecing together his early life in London, which suggests that he had few ties with London and few reasons to return to England for. Surely he was not entirely exceptional in having lived the greater part of his life in India. There were other Englishmen who did too. But Charnock met a particular need. The political conditions of Bengal demanded a man who saw himself as a local rather than as the agent of a foreign firm. Charnock was such a man. It was his roots in Bengal that led him to ignore decrees issued by London and Madras.

The three new ports broke away from the Indian commercial mainstream in that they came up in new territories, away from the old ports that belonged to the Indian rulers. On the Coromandel, the new town came up in Madras rather than Masulipatnam, on the western coast in Bombay instead of Surat, and in Bengal the fort
was erected in Calcutta rather than Hooghly or Kasimbazar, where the English already had a presence. This physical distance from the regimes in India was to prove far-reaching when the regimes became unstable in the eighteenth century.

The three towns also revealed a growing weakness within the Company. By the close of the seventeenth century, Bombay, Madras and Calcutta had a trading station and a fort each. The last one to come up was the Fort William in Calcutta. In every case, the construction of a fort was in defiance of orders from London. The directors based in the City did not comprehend India like the local administrators, who had a more practical understanding of the ground realities. The road for agents to become principals, if it had been open in 1600, was effectively blocked in 1690. There was, therefore, an unbridgeable mental distance between these two sets of people. The distrust arose not only from poor information about India in London, but also from a lack of appreciation of the local imperatives that decided the actions of the agents. Unable to control or reform the situation, the Company alternately praised and persecuted the most able of its factors abroad.