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LEDGER AND SWORD

The Honourable Company of

Merchants of England Trading

to the East Indies

(1599.1874)

BECKLES WILLSON

WITH FRONTISPIECE IN PHOTOGRAVURE BY MAURICE
QREIFFENHAQEN, AND OTHER ILLUSTRATIONS

IN TWO VOLUMES
Vol. II.

LONGMANS, GREEN, AND CO.

39 PATERNOSTER ROW, LONDON

NEW YORK AND BOMBAY

1903

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CONTENTS.

CHAPTBK

I. The Wbldino op the Two Companies
II. The Upgrowth op Trade in the East

III. The French Flourish the Torch

IV. Saunders sets Clive a Task
V. Plassby and a New Era ....

VI. Lawrence Sulivan at the Helm.
VII. The Company receives the Dbwani .
VIII. King George and the Company .
IX. Warren Hastings to the Rescue
X. Parliament Regulates the Company .
XI. The Governor-General Fights — The Company Pays
XII. Manchester Attacks the Monopoly .

XIII. The Doom op the Ledger ....

XIV. The Victorian Epilogue ....
XV. The Muse in Leadenhall Street

I
40

137
178
208
349
285
310

344
368

39a

417

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LIST OF ILLUSTRATIONS.

Granting the Dewani to the Company (1765).
Photogravure afUt a Drawing by Maurice
Greiffenhagcn Frontispiece

Thomas Pitt, Governor op Madras.

From the Picture by Kneller belonging to Ear!

Stanhope to face page 42

East India House „ 137

Lord Pigot „ 190

Warren Hastings, Governor - General op
Bengal.
From a Portrait by Sir Joshua Reynolds . . „ 249

Lord Nelson's Letter to the Company's

Chairman {facsimile) „ 318

Sir Stampord Rapples.

From the Painting by G. F. Joseph, A.R.A., in

the National Portrait Gallery ... „ 349

William Astbll, Chairman op the East India

Company „ 370

James Mill.

From a Drawing „ 427

MAP showing Factories of the Company . . at end of hook

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CHAPTER I.
The Welding of the Two Companies.

The Company had dexterously gained its ends. For
the moment the Company's promise to the King
was overlooked, and all movement towards a union
with its rival of Dowgate rested in abeyance. On
the very day following the Royal Sanction to the
Act of 1700, prolonging their corporate existence,
the directors wrote to Fort St. George that the bill
** secured their foundation," as they were established
by an Act of Parliament ; that they would exert
a new vigour now that they were delivered from
all embarrassments and could ** call their estate
their own ". It was triumphantly added ** that the
Company's stock, which had fallen as low as 70 per
cent., had now risen to 140 and was rising".

It is to be borne in mind that the rivalry of the
two bodies did not represent all the domestic com-
petition in the Indian trade. There were still those
proprietors of the General Society (with a capital
of some ;^20,ooo) who had refrained from joining
the New Company, but were protected by its licence.
But the New Company adventurers, having got
their charter, plainly intimated to all private traders
that if any should attempt trading within their char-
tered limits minus a licence his ship or ships would

VOL. 11. I

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2 LEDGER AND SWORD [1700

be seized and himself treated as an interloper.
Thus they adopted the historic policy of their pre-
decessors, the Old Company.

A large fleet of ships, loaded with bullion and
merchandise, was in the spring of 1 700 sent out by
the Old Company to India. The instructions to its
factors breathe a spirit of jubilation and defiance
mingled with a proper measure of the old prudence.
Recognising the fact that Sir William Norris, al-
though paid by the New Company, had been sent
out as the King's ambassador, the Company directed
that " every willingness to show respect to the
Mogul might be manifested," but, on the other
hand, "opposition made to the arbitrary exactions
of the local officers," i,e.^ ** delays in complying with
their demands, and endeavours to conciliate them by
presents, which, it was hoped, would be a more
effectual means than the employment of force".
Bribery was at least safe enough in India. Never-
theless, it were as well to strengthen the fortifica-
tions here and there, and some " long guns " were
sent out for this purpose, " that by the range of the
shot the insurgents in future might be prevented
from approaching too near the place'*.

A new Presidency was at this time established
at Calcutta, the fort, in compliment to His Majesty,
to be called henceforward Fort William.

The instructions to the ** General " or Govemor-
in-chief. Sir John Gayer, at Bombay, explained
that the Company's reason for appointing Thomas
Pitt for one year to independent power at Fort St.
George was **that the state of affairs at the Presi-

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i699] DAVENANT'S MISSION SUPERFLUOUS 3

dency required a person of a decided character to
prevent those quarrels which had continued by
appeals being left open to the GeneraF*. Indeed
the rivalry between the new and the old traders
was here, as elsewhere, very bitter at this time.
Although at home overtures were being made for
an amalgamation of interests between Dowgate and
Leadenhall Street, in the East we can discern but
litde indication of approaching harmony.

The New Company, when it received its charter,
had actually cherished hopes of getting possession
of Bombay and St. Helena, which the Old Company
held in fee simple. Nay, it was even hoped that
the innovation of Kings consulships would entitle
its servants to rank above all and any of the Eng-
lish residents in the East. In this the Dowgate
merchants were speedily undeceived ; they found all
their pretensions rejected as illegal soon after the
Old Company obtained the boon from Parliament
and the King of prolonged corporate life.

So persisftently and volubly had the New Com-
pany insisted on superior powers and privileges that
the Old had proposed to raise up a Roland as an
effectual offset to the Dowgate Oliver; in other
words, to send out the able Dr. Charles Davenant,
M.P., to attempt the removal of impressions in
India unfavourable to its character. But it was
soon seen by the reports from the East how un-
necessary it was to make any particular exertion to
checkmate Sir William Norris ; that task was being
so successfully performed by Norris himself, aided
by his misguided friends.

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4 LEDGER AND SWORD [1699

In India generally at this juncture the trade of
any European nation needed all its strength in ser-
vants and capital to be successful. For the Mogul
Empire was growing weaker daily : its minions
more tyrannous. The conduct of the governor of
Surat was reprehensible. He utterly refused to
pay the sum promised for the Company's armed
convoy to the native Mocha fleet, and as the months
rolled by and no English ships arrived to clear the
Indian seas of European pirates, he conceived him-
self to have been tricked, snarling publicly at the
Company's men. They were, in his opinion, "as
despicable as the Portuguese in India and as odious
as the Jews in Spain". He obtained an imperial
mandate obliging the Europeans at Surat to furnish
security for all damage done by the pirates. Whereat
the Dutch prudently struck their flag and retired
from their factory to Batavia. It had been better
had the English done likewise ; for the obnoxious
official dying just then, he was succeeded by another
who, having sustained a loss of two lakhs of rupees
in one of Captain Kidd's piracies, was deter-
mined to hold the Company accountable. While
the new governor was considering the best manner
of extorting restitution, an interloper arrived at Surat
with news that the Company had been dissolved by
the English King "for committing piracies in India".
This was enough for the Mogul functionary ; he gave
instant orders for President Colt and his Council to
be confined in their factory, the local merchants
were flogged until they revealed what bullion they
had received from the Company, and measures

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1701] Sir JOHN GAYER SEIZED i

were taken to confiscate the whole of the Company's
property.

In the midst of these proceedings Sir Nicholas
Waite, the New Company's President for Surat,
arrived off Bombay. Finding all pompous demands
for supremacy by virtue of his consulship flouted by
Sir John Gayer, he sailed for Surat. Here, after
some parleying, he landed two ship captains and
forty men, and hauled down the Old Company's flag.
Such an act of violence had an opposite effect to
that intended : it was resented by the governor as
an insult to the Mogul ; the flag was ordered to be
rehoisted, and thereupon Waite and Colt plunged
into a lively warfare of words and recriminations, in
which the latter was supported by his chief at
Bombay, Sir John Gayer.

Gayer, ever a brave man, resolved to go to Surat
in person to settle matters between the rival adven-
turers. But before he could set foot in the town
Mogul officers at Swally seized him and Lady Gayer,
carried them into Surat and incarcerated them with
Colt and the other servants in the Company's factory.
Hejre they were destined to remain, not months, but
years, to abide Waite's insolence, to wait patiently
for the tide of fortune to turn, not unprepared for
further indignities, and even for a cruel death.

Elsewhere the same contest for supremacy was
waged. Like Waite, John Pitt at Masulipatam
and Littleton in Bengal claimed that their rank
of King's consul gave them precedence and authority
over all the English in India. The Old Company's
men held that even if such royal authority came into

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6 LEDGER And SWORt) ti6gg

effect at all, it could not possibly come into effect
before Michaelmas, 1701. In the meantime they
derided their opponents' ** bugbear powers ". ** You
may," wrote Thomas Pitt to his namesake of the
New Company at Madras, " lock up your consul's
commission till my masters' time has expired."

In Bengal Sir Edward Littleton's attempts to
browbeat the loyal John Beard were occasionally
entertaining, but never very effectual. He told the
Company's servants that their Old Company was
as good as a dead Company, all sovereignty and
political authority having passed from it to his re-
doubtable masters in Dowgate. ** Nothing more
remains to you of that nature," he wrote, **than
what properly belongs to masters or heads of
families, being purely ceconomical." This was a
favourite term with the pompous and shallow-pated
Littleton, who had probably picked it up from his
prodigious brother, Sir John Littleton, then Speaker
of the House of Commons. Once, in one of his por-
tentous epistles, he spelt it ** oecumenical," which
doubtless meant to him as much as the other, where-
upon Beard gravely set him right — " a task easier,"
he added, dryly, " as to words than as to matters ".

In brief, if the Dowgate men expected to step at
once into the shoes of their rivals in India, they com-
mitted a profound error and met with a perpetual
disappointment. The local rajahs and governors,
the local merchants and middlemen, were almost
universally on the side of the Old Company. Lit-
tleton's threats to prosecute Beard for treason only
provoked the latter's smile ; when John Pitt flaunted

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!^] NORklS'S LANDlNCi ;

his powers and authority in Thomas Pitt's face he
was good-humouredly told to go and study that
fable of iEsop which exhibited the danger of new-
found pride and much boasting. ** There shall be
but one Governor when I am here. . . . When
the Moors have hanged and stripped you of what
you have, upon your submission and begging par-
don for what you have done, I may chance to
protect you."

In the meantime the Ambassador of the King
and the New Company, Sir William Norris, who
conceived himself to be the historic successor of Sir
Thomas Roe, had landed at Masulipatam. His
landing took place on 25th September, 1699, ex-
actly eighty-four years since the famous Jacobean
pioneer and emissary had set foot on the shores of
India at Surat.

Any pleasant augury, however, which might have
been drawn from the circumstance was more than
neutralised by the unfortunate choice of Masulipatam
instead of Surat as a landing place. The entire
breadth of the Deccan lay between this part of the
peninsula and that wherein the aged Aufangzeb was,
in person, conducting a fierce campaign of carnage
and flame against the Mahrattas. To penetrate
nearly a thousand miles into so turbulent a territory
as the Deccan then was might well have given
pause to even the genius of a Clive at the head
of a strong army. Yet Norris, filled with conceit
and vainglory, was quite ready to set forth com-
placently on his foolhardy mission, confident that
all difficulties " would vanish like clouds before the

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8 LEDGER AND SWoRD [1700

sun when I come to make my appearance ". He
only waited for an escort and supplies from the
boastful John Pitt, and, in the meantime, lingered
at Masulipatam.

Weeks grew into months ; neither supplies nor
escort came ; he consumed the New Company's sub-
stance in idleness and luxury, and then came urgent
letters from Sir Nicholas Waite at Surat, pointing
out to Norris his grievous blunder in yielding to
Pitt's representations and condemning the latter un-
reservedly. The King's ambassador finally re-
solved to repair to Surat, but nearly a year passed
before he could get a ship, and, not until loth
December did he finally land at Swally. Here he
insisted on a triumphal entry — he had always boasted
that he would travel " in a greater state than ever
any European Ambassador yet appeared in India "
— and this insistence cost him bagfuls of mohurs in
bribes to the native authorities. But, at length,
after six weeks at Surat, Norris set forth gloriously
for Panalla, many hundred miles away. In his train
were sixty Europeans and 300 natives, the latter
bearing costly presents, including the brass artillery
we have already heard of, as a present to the Mogul
from the merchant adventurers in Dowgate. It is
needless to describe the slow and painful course
along vile roads of this egregious embassy. Norris
would on no occasion abate anything of his am-
bassadorial pomp and dignity ; he refused an
audience with the Imperial Grand Vizier, whom
he met on the way, because he was not permitted
to approach with beating drums and sounding

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i^bO

AMBASSADORIAL PoUP

trumpets. N orris found Aurangzeb and his army
drawn up before the Mahratta stronghold of Panalla.^

^ The order of the procession, on the 28th April, 1701, deserves
to be given as an example of English Ambassadorial state in India
in the hundredth year of the East India Compan/s existence. It was
as follows : —

Mr. Cristor, Commander of his Excellency's artillery on horse-
back.

Twelve carts, wherein were carried the twelve brass guns for
presents.

Five hackeries, with the cloth etc. for presents.

One hundred cohurs and messures, carrying the glass-ware and
looking-glasses, for presents.

Two fine Arabian horses, richly caparisoned, for presents.

Two ditto without caparisons, for presents.

Four English soldiers, on horseback, guarding the presents.

The Union flag.

The Red White and Blue flags.

Seven state horses, richly caparisoned, two with English furni-
ture and five with Indian.

The King's and his Excellenc/s crests.

One state palanquin, with English furniture, of silver tissue
brocaded.

Two other crests.

The music, with rich liveries on horseback.

Mr. Basset, Lieutenant of his Excellency's Foot-guards on
horseback.

Ten servants, in rich liveries on horseback.

The King's and my Lord's Arms.

One kettledrum in livery on horseback.

Three trumpetts in liveries on horseback.

Captain Symons, Commander of his Excellency's guard.

Twelve troopers every way armed and accoutred after the
English mode.

Mr. Beverly, Lieutenant of his Excellency's Horse-guards.

The King's and my Lord's Arms richly gilt and very large ; the
first being borne by sixteen men.

Mr. John Mill and Mr. Whittaker on horseback, in rich lace coats.

Mr. Hale, Master of the Horse, richly drest, carrying the Sword
of State, pointed up.

His Excellency in a rich palanquin, Indian embroidered furniture.

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io Ledger aMd sWord [i;ot

The Emperor, engrossed in war, was little disposed
for negotiations of this character, but, perhaps edi-
fied by the spectacle and the gifts, he unbent
sufficiently to hear what the envoy of the English
merchants had to say. By-and-bye his concessions
resolved themselves into firmans for trade in the
three " Presidencies,'' provided that piracies in the
Western Seas were suppressed. Sir Nicholas Waite
had, indeed, already offered to perform this sup-
pression, but in ignorance of the magnitude of such
a task. It was one which might well have sufficed
for all three of the trading powers, Dutch, French and
English ; but to shift the entire burden on to the
New Company alone was pure madness. Norris was
obliged to decline the stipulation. In vain he offered
a lakh of rupees in its stead ; Aurangzeb continued
firm. Just at that juncture, a rumour, industriously
spread by the Old Company's servants, came into
camp, that the English Parliament intended to con-
tinue the Old Company's rights and privileges. A
little later the rumour was confirmed, and Norris
was dumfounded. " The laboured explanations of
the baffled Ambassador must have seemed to the
Mogul officers the shufflings of a detected pre-
tender," and poor Norris must have recognised in
this last stroke of fate the death- knell of any yet

Pour pages, two on each side of his Excellency's palanquin
richly drest.

Edward Norris Esq., Secretary to the Embassy, in a rich palan-
quin, canning His Majest3r's letter to the Emperor, on each side, Mr.
Wingate and Mr. Shettleworth, in rich laced coats on horseback.

Mr. Harlewyn, Treasurer, wearing a gold key\ . ,

Mr. Adiel Mill, Secretary to his Excellency /

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i702] NORRIS'S FAILURE ii

lingering hope of success.^ Aurangzeb told the
haughty Norris he had an alternative : he " knew
the same way back to England that he came ". In
high dudgeon, the Ambassador instantly took the
hint, and after an exciting detention by the Grand
Vizier at Burhanpur, got back humiliated and de-
spondent to Surat on 12th March, 1702. The
embassy had been a miserable failure, partly owing
to Sir William Norris's temper and ignorance of the
Oriental character, partly through his repudiation
of advice, and partly also to the inherent difficulties
of the mission*

Waite did not long restrain his indignant taunts.
The money squandered uselessly had been enormous
— between six and seven hundred thousand rupees.
Norris had scarcely strength or spirit enough left to
reply to the animadversions of the Surat President ;
his heart was broken, and his one desire was to get
back to England. Yet even this was not easily
arranged ; there were no ships available ; and when
a private trader's ship was found his return was
destined not to be. Norris died before the Scipto
reached St Helena, loth October, 1702, his pen
busy to the last with an exhaustive defence of his
luckless mission.

The fruits of Waite's ill-considered offer to ex-
terminate the pirates were now to show themselves
in every part of India. Thomas Pitt at Madras had
to sustain a three months' siege against the Nawab
of the Carnatic ; Gayer and his Council continued

» p. E. Roberts, Hunter's British India.

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ti Ledger and SWokD [lyoa

prisoners at Surat. As for the governor of Fort
St. George he was resolved to stand on the defen-
sive, and to stake all on the hope of the invulnera-
bility of his fort. Thus boldly did Pitt write to the
threatening Nawab Daud Khan : —

** Your Excellency said to the Moollah that you
care not to fight us, but are resolved if possible to
starve us by stopping all provisions. We can put
no other construction on this than declaring a war
with all European nations, and accordingly we shall
act."

Again, after he had placed all in a position of
defence, Pitt wrote boldly to the Nawab : —

**We have lived in this country nearly one
hundred years and never had any ill designs nor can
your Excellency or any one else charge us with any ;
and it is very hard that such unreasonable orders
should be issued out against us only, when they relate
to all Europeans, none excepted as I can perceive,
and whether it be for the good of your kingdom to
put such orders in execution, your Excellency is the
best judge.

** We are upon the defensive part and so shall
continue, remembering the unspeakable damages
you^have not only done us in our estates, but also in
our reputation, which is far more valuable to us, and
will be most resented by the King of our nation.'*

The upshot of the siege was the payment of
18,000 rupees by the Company's Governor, the re-
tirement of the hostile native force, and a grant of
liberty to trade, copies of which "perwannas" were
** directed to all Foujdars, Killadars, Corrodees,

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I700] COMPANY AND SHAH 13

Deshais, Destramokys, Poligars and inhabitants of
all places whereto they trade, to be carried by our
Chobdars".^

As far as Bengal was concerned, Littleton himself
confessed that the stock of the Old Company there
exceeded that of the New in the proportion of five
to two, while the difference in the equipments bore
a still greater proportion, the first having five ships
whilst its rival had only one.

The only touch of sunshine which lightened the
Company's horizon came from Persia. The firman
granted by Shah Husein, amongst its various pro-
visions for commercial intercourse between English
and Persians, declared that the former need not be
at the pains of abjuring their religion, "it being
God's business to turn men s hearts," a remarkable
instance of religious toleration and enlightened
common-sense two centuries ago, were it even in
Europe and in King William's reign.

For these favours the Company was not un-
grateful, and accordingly we find it sending the Shah
a valuable present as a mark of its gratitude, con-
sisting of optical glasses of all descriptions and a
collection of costly sword-blades. At the same time
a regret was expressed in Leadenhall Street that the
right of exporting raw silk had not been demanded.
For raw silk was the only sort which could now
enter English ports, owing to the successful agitation
of the English silk weavers.

In the following year we find agent Owen (whose

* Wheeler, Early Records,

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14 LEDGER AND SWORD [1699

jealousy of his fellow-servant Bruce of Ispahan
figures constantly in his correspondence) suggesting
to the directors that if in future it should become
necessary for the Company to employ force for the
preservation of its privileges and trade in Persia, it
would be expedient to take possession of the island
of Barrein near Bussorah, **a station which would
not only afford a proportion of Persian produce
but enable the Company's cruisers to overawe the
trade".

But both Persian agents at present had little
cause for complaint, except that they were weary of
dealing in looking-glasses and woollen cloths — the
only vendible articles in the Persian market — and
that they had been obliged to bestow fifty tomands
as a gift to the Shahbunder in return for his making
restitution of nearly i,ooo tomands.

The competition of the Dutch had frustrated
most of the benefits expected under the new firmans,
and affairs were gradually growing more unfavour-
able when an unexpected visit by the Shah of
Persia to the Company's factory at Ispahan again
turned the scale in the opposite direction. It
appears that the Shah, on passing the factory, was
struck by its external appearance, and, curious as to
its contents, he expressed a desire to visit it ** if con-
sistent with his dignity". A messenger was hurriedly
sent to Bruce, poring dismally over the fateful ledgers
within. Bruce found means to stimulate the royal
zeal in an auspicious precedent : it was recorded in
the factory's register that Shah Abbas the Great
had visited the Company's factory at the time of the

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i699] THE SHAH'S VISIT 15

taking of Ormuz. This sufficed to confirm the
Shah's resolve, and the ** king of kings " sent word
that he would honour the premises in person on the
following morning. The delighted agent wasted no
hours in sleep ; the rest of the day and ensuing night
were consumed in elaborate preparation for the royal
visit Persian officers were called in for consulta-
tion : the •* great room " was fitted up, a throne
erected with suitable magnificence, the passages and
garden walks were covered with rich carpets. A
use was even found for quantities of the English
cloth which the Armenians had failed to sell ; it
decked the soil wherever the carpet did not extend
and was trodden by the feet of the Shah and his
numerous retinue. A collation of fruits and rich
wines was prepared ; after which, posting native
women at the doors, with proper instructions to
receive solemnly and reverendy the Shah and the
ladies of his harem, one other thing the agent did
before withdrawing from the scene. He committed
to the keeping of the women three petitions in the
Persian character. In one of these he apologised
for the inadequate fashion in which he and his
fellow- Englishmen could receive so illustrious a
personage ; in a second he prayed that " directions
might be given to the eunuchs to prevent persons
from attempting, * by means of the holes in the
building, to look at the King and his attendants '* ;
a third — and by far the most important message —
asked that as, on so honourable an occasion, his
Majesty could not possibly be disturbed by the
impertinent solicitations of trading infidels, the

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i6 LEDGER AND SWORD [1699

Shah of Shahs would be graciously pleased to order
the Grand Vizier to receive them.

The Shah duly came ; he was highly gratified
by his reception ; he found the fruits and wines
choice and appetising; indeed so pleased was he
that he threw out hints of a second visit. Happily,
as the execution of his threat would have bankrupted
the factory, he did not again honour the factory with
his presence. The reception having cost the agent
;^ 1 2,000 sterling, he was in hopes that it ** might
be attended with consequences which would amply
repay the Company by placing their trade and privi-
leges on a more certain basis than on any which
they had hitherto rested ". What he asked for was
payment of the arrears of Customs, exemption from
certain duties, commission to export sequins and
silver, and an order to the Shahbunder at Gombroon
forbidding him from molesting the Company's ser-
vants or obstructing their trade. To all of the fore-
going the Vizier inclined a most gracious ear.

Such unforeseen and extraordinary favour towards
their rivals could not but excite the astonishment and
envy of the Dutch. Vainly did they resort to every
device to induce the Shah to honour them likewise
with a visit, and as a crowning effort represented the
English in the character of vassals to the Dutch,
explaining that their Stadtholder was actually King
of England.

The Shah was not deceived by such misrepre-
sentation ; he declined brusquely to visit the factory
of traders who owed allegiance to no crowned sove-
reign, and to add to the Dutch mortification sent to

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1700] FAILURE IN PERSIA 17

agent Bruce the ** Khelaut " or vest of honour,
together with a superb sword and a horse richly
caparisoned.

But notwithstanding these marks of royal favour
the Persian trade grew less. Some writers have
ascribed its decline to the imprisonment at Surat of
Sir John Gayer, appointed emissary to Persia, and
partly to the death, only three months after his ar-
rival in August, 1705, of the leading agent, Prescott,
who bore Queen Anne's letter and gifts to the Shah.

But were the East India Company in Persia
served as ably and as zealously as human nature is
capable of, had it had at its command fivefold the
capital, it is doubtful if the Persian trade would have
wholly recovered from the Act of Parliament of
1700, which forbade all silks to enter the ports of
England. That trade lingered feebly on ; but the
looms of Spitalfields already sang a requiem over
the Company's quondam commerce at Ispahan.

China had in turn attracted the New Company ;
for in August, 1699, a large galley with bullion to
the amount of £39,136 was despatched to Macao,
Canton and Amoy direct. A few months later it
was decided to make China a Presidency,^ and a
factor named Catchpoole was appointed President
and King's consul. Three ships were therefore sent
out, and a settlement ordered to be made at either
Ningpo or Canton. The general object was to pro-
mote the sale of woollens and to collect an investment

^ The limits of the President's jurisdiction, as Bruce remarks,
were sufficiently extensive, comprising *' the whole Empire of China
and the adjacent islands *'.

VOL. II. 2

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i8 LEDGER AND SWORD [1700

of raw silks, damasks and teas.^ The Company's
servants were licensed to trade from port to port and
to be allowed to send gold home, which the Com-
pany would exchange for silver. By way of re-
joinder, Leadenhall Street hit upon the scheme of a
direct trade between England and China without the
mediumship of Madras or any of its factories. Three
ships, the NorthuinJ)erland^ the Loyal Cooke, and the
Dashwoody therefore, were engaged for the direct
China trade, to be managed by supercargoes. The
latter were instructed to proceed direct to Canton
and Amoy to observe the directions given for pack-
ing the teas and for procuring other China goods on
the best terms, but not to scruple to undersell the
New Company. With the last-named vessel went
Gabriel Roberts, one of the Company's directors,
in the capacity of supercargo.^

In China the New Company's agent, Catchpoole,
after a few months' troublous experience, found that
it was impossible to obtain produce without making
a ruinous advance of money to the native growers
and dealers, and even then there was no security
that the article contracted for would be delivered.
He therefore advised his directors to allow him to
form a settlement on the island of Pulo Kondor,
south of Cambodia Such a settlement, properly
fortified, would form a "check on the Chinese
Government should they seize the Company's pro-
perty, detain their servants, or refuse to pay the
debts due to them". From this vantage-ground

^ A duty of 5s. a lb. had been laid on tea about 1690.
^ Letter 'hook, February, 1701. He was, later, Governor of Fort
St. David.

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I70S] MASSACRE AT PULO KONDOR 19

they could, with two or three armed vessels, inflict
considerable and damaging reprisals on all the
Chinese junks sailing those waters.

Although Catchpoole made several further at-
tempts to send home vessels loaded with Chinese
produce, his endeavours were continuously frustrated
by the duplicity of the native merchants and man-
darins, especially at Chusan, where he had fixed a
factory. At length he made up his mind that the
so-called grants and treaties of the Chinese local
authorities were only pretexts for extortion, and that
the true mode of proceeding was to negotiate at
Peking through the Jesuit missionaries, whose in-
fluence was superior to that of the local mandarins.
In return for certain services which P^re Fontanez,
a French Jesuit, had rendered, Catchpoole gave
him a free passage to Europe in one of the New
Company's ships, and advised that a communica-
tion ought in future to be kept up with Peking,
through the agency of the famous Jesuit there, P^re
Gerbillon.

In 1706 the New Company learnt that its gar-
rison on the island of Pulo Kondor, founded by
Catchpoole, had been massacred by Malays, and so
that promising station was lost. An insurrection
among the native soldiery took place on 2nd March,
1705. The mutineers, having first set fire to the
Company's warehouses, murdered President Catch-
poole and most of the English in the island. It
was believed that this treachery was instigated by
the Cochin Chinese in order to get possession of
the Company's treasure. The only factor who sur-

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20 LEDGER AND SWORD [1700

vived was one Baldwin, who, with many adventures,
escaped to Banjermassin ten months later.

Well was it for English trade in India that the
fierce and damaging rivalry which existed between
1698 and 1702 between the two Companies did not
take place during the continuance of Portuguese
power or Dutch prosperity on the Asian seaboard.
Had it been so during the halcyon days of Philip
III., or in the age of the masterful Coen, the arma-
ments of the one and the funds and tactics of the
other would have utterly annihilated both competing
English factions. They were saved from ruin by
there being no longer any powerful European rivals
in the field, and by the relaxed administration of
Aurangzeb, whose empire was fast slipping from his
aged hands.

Even as it was, the situation was so desperate
for one of the Companies, and so ruinous for the
other, it was manifest it could not continue.^ The
nation and the nation's rulers saw that the Indian
trade must he reorganised ; one or other of the
parties must give way ; a coalition on some terms
must ensue. The New Company had actually
pushed its pretensions so far as to attempt to
seize and confiscate whatever property might reach
England belonging to individuals in the Old Com-

^ Anderson gives the bullion exported from England to the East
Indies between 1698 and 1703 (inclusive) :—

Silver ;f3,i7i,404

Gold 128,229

Total £^,299fiss

Or an average of ^f 549,938.

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I700] A COALITION DESIRED 21

pany's ships. Captain William Heath, the hot-
tempered commander who had done his best to
injure Charnock in Bengal, subsequently became
one of the directors at East India House. At the
last election he lost his seat, and out of revenge
transferred his services to the New Company.
Heath, who was part-owner of the Neptune, a ship
employed on the Old Company's service, persuaded
the captain and purser to give him information, on
the ship's arrival, of what private goods were on
board not bearing the Company's mark. These,
he ascertained, included a parcel of diamonds and
other valuables, which were seized by the King's
officers as illicit imports, contrary to the New
Company's charter. The. Old Company sued for
restitution, and the decision of the Exchequer Court
was in its favour. "It was," the Judges declared,
** no trading within the meaning of the Act for es-
tablishing the English Company, for any of the
London Company's servants in India at any time
to bring home their estates acquired there." ^

This adverse decision naturally depressed the
Dowgate merchants still further, and made them
even more anxious to effect a coalition.

At this juncture the King, through his Secretary,
Vernon, intervened. He reminded the Old Com-
pany of its promise to do its best for a union, and
inquired what measures it had taken to this end.

^ Yet the Old Company thought it as well to despatch a private
vessel to St. Helena with private instructions to the Governor (to
be conveyed to the captain of each ship as it arrived) to place the
Company's mark on all private goods on board, and so save a repeti-
tion of such claims in future.

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22 LEDGER AND SWORD [1701

In consequence of this notice the merchant adven-
turers foregathered in Leadenhall Street on 23rd
December, 1700, and resolved **that this Company,
as they have always been, so are they still ready
to embrace every opportunity by which they may
manifest their duties to his Majestie and zeal for the
public good, and that they are desirous to contribute
their utmost endeavours for the preservation of the
East India trade to this kingdom, and are willing
to agree with the New Company upon reasonable
terms ".

The foregoing was communicated by Vernon to
the New Company, who promptly met at Skinners
Hall, to consider what would constitute ** reasonable
terms ". After a stormy meeting the Dowgate ad-
venturers gave out that they would be willing to
unite if both Companies brought home immediately
all their effects, paid all their debts, divided the surplus
and wound up their business. Then the ;^3 15,000
subscribed by the Old to the New Company should
be added to the latter's stock, the former should
subscribe ;^344,ooo more, should pay half the ex-
penses of N orris s abortive embassy, sell its dead
stock (such as forts and factories) at a sacrifice and,
finally, in return for its complete absorption, be en-
titled to a one-third part in the English Company
trading in the East Indies!

This preposterous proposal was received in
Leadenhall Street with shouts of derision. But
the formal answer of the Old Company — which,
in fact, was far more than its rival in a position to
dictate terms — was mild enough. It proposed a

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I70I] FIREBRACE REAPPEA^IS 23

conference of delegates to meet and discuss terms
of union.

Meanwhile, Parliament had been prorogued and
a general election raged. Not the least of the issues
fought out on the hustings was that of the Indian
trade. Contemporary pamphleteers dilate on the
electoral battle between the partisans of the New
Company and the Old.

When Parliament met, and before the Com-
mittee's could come to any agreement, the Old
Company made one more bold bid for para-
mountcy. It offered to pay off the stock of the
New Company and the separate traders, that is to
say, to take over the ;^2,ooo,ooo, at 5 per cent.
But although this handsome offer coincided with
the fall of the great Whig chief, Montague, the New
Company's chief patron and defender, yet the House
rejected it.

This was the signal for a change of scene :
Enter Sir Basil Firebrace. We have already had
a glimpse of this worthy on the occasion of the
bribes so lavishly administered by Sir Josiah Child
in 1693, ^^^ th^ subsequent exposure two years
later. Firebrace seems to have rejoiced in an
especial gift for intrigue and intervention. His ability
as a go-between had already received the practical
approval of Charles II., of James, of Leeds, and the
East India Company. The present offered a signal
opportunity for the exercise of his talents. Thus,
when the committees of seven, appointed by either
Company, failed to come to any understanding,
Firebrace appeared with an offer to produce, for

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24 LEDGER AND SWORD [1701

an adequate consideration, an agreement between
the two parties. His offer was accepted. As a
recompense if he effected a union, Sir Basil was
promised ;^ 150,000 worth of the stock of the Com-
pany at 80 per cent, of its value, ue., " a reward of
20 per cent on this sum as a compensation for his
services ".

But the task was apparently beyond Sir Basil
Firebrace*s powers ; committees wrangled, their
dissidence bred obstinacy ; the weeks and months
dragged along, and still there came no union. The
situation was critical enough for the Companies ; it
needed all their combined strength to counteract the
growing opposition, not merely to the disoi^nisa-
tion of the Indian trade, but to that trade itself, now
manifesting itself in the nation. The London silk-
mercers and silk-weavers again rose up angrily,
petitioning Parliament to restrain all importation of
Indian silks,^ and Parliament was not deaf to their
prayer. Two Acts were passed prohibiting the wear
of Indian-wrought silks after 29th September, 1701,
and when the hope of their being refused the Royal
assent vanished, the Old Company dared no longer
hold out. The tide had turned and its stock had
fallen on the Exchange to less than 85, while that
of the New Company stood at 130. The fact is,
the news of its successes over its rivals in the
East, and the failure of Sir William Norris's em-
bassy, had not yet reached England, and so there

* " Both the Companies,** wrote one pamphleteer in 1700, "are
striving hard which shall ride on the fore horse, but both agreed to
drive on to our ruin,**

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I702] DEATH OF WILLIAM III. 25

was nothing to neutralise the depression it suf-
fered in popular and mercantile opinion in England.
Besides, a war with France and Spain was on
the eve of eruption, and the danger to the Indian
commerce from the French fleet was both grave
and imminent

The death of William III. on the 8th March,
1702, produced no change in England's domestic
policy. Seven weeks after this event, and a week
before the declaration of European war, the instru-
ment of union was ratified by both East India
Companies. By its terms a court of twenty-four
"managers" was chosen, twelve from each Com-
pany, to exercise thereafter control over the active
trade and settlements. Each Company was to con-
tribute one half of what the Court of Managers
should see fit to export, but all business entered
into before the union was to be managed and wound
up by the factors of each Company in the course of
the ensuing seven years. At the expiration of that
time one great Joint Stock Company was to be
established, the Old Company would convey the
islands of Bombay and St. Helena to the New,
and resign its charter in favour of that of the New
Company, which should serve thereafter for both.
On the 22nd July, 1702, a Tripartite Indenture,
or " Charter of Union," was entered into between
Queen Anne and the two Companies, which em-
bodied the foregoing and formulated other pro-
visions. The Old Company agreed to purchase
as much of the stock of the New Company as
would bring its share of the joint capital up to

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26 LEDGER AND SWORD [1702

;^2,ooo,ocx).^ The dead stock, otherwise the fac-
tories, forts, and dwellings of the Old Company, as
distinguished from money, ships and merchandise,
was valued at ;^330,ooo, and that of the New
Company at ;^7o,ooo, wherefore the latter were to
pay in ;^ 130,000 to make up their share of the
;^400,ooo, which was the price fixed for the pro-
perties. Measures were taken for trade government
and defence in the interval, and at the end of the
covenanted period both parties were to emerge as
" The United Company of Merchants of England
trading to the East Indies ".

But to arrange all this programme pacifically at
home, although not unattended with discord and
delay, was a simple matter compared with the truly
gigantic task of reconciling all hostile interests be-
tween the two clashing factions in the East The
masters might agree to shake hands and be friends,
but it was not easy for the servants to abandon at a
signal all those rivalries and jealousies, animosities
and hatreds which had been so carefully fostered

^The interests of the London and English Companies and
separate traders were as follows :—

The London (or Old) Company's subscription - ;f3 15,000

„ English (or New) „ „ - 1,662,000

Separate traders' subscription .... 23,000

;fa,ooo,ooo
Under the agreement the interests were re-adjusted thus : —
Purchase of ^£'673,000 stock by the Old Company

in addition to its former holdings - - ^988,500

New Company's proportion ... - 988,500

Separate traders* „ . . - " . 23,000

;^2,000,000

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I702] TENTATIVE UNION 27

by both Dowgate and Leadenhall Street during the
past few years.

Especially was it hard when we find the New or
English Company, while publicly acquiescing in the
new orders of the Court of Managers, continuing
to send private messages to its servants abroad
authorising them to keep alive the old opposition
and encouraging them in their attitude of obstinacy
and faction. All this could have only one effect : to
retard the general winding up of its own affairs and
so postpone the final union which had been agreed
upon to take place in seven years.

Publicly, with solemnity and impressiveness, it
was enjoined upon all to ** lay aside opposition and
to forward the reciprocal views of the two Companies
for lowering the prices of Indian commodities and
disposing without rivalship of the European goods
remaining in the warehouses ". But could Sir John
Gayer forget Sir Nicholas Waite's tyranny, could
John Pitt forgive Thomas Pitt's insults, could
Littleton and Beard become reconciled?

When the Court of Managers were finally in-
formed of Sir John Gayer s imprisonment at Surat,
it was provided that should he remain a prisoner
Waite should act provisionally as Governor-General
and meanwhile employ his utmost efforts for Gayer's
release and for recovering the security bonds ex-
torted formerly from President Annesley. This
was throwing too strong a temptation in Waite's
path, a •* person whose violence and ambition they
already knew had contributed to the failure of Sir
William Norris's embassy'*.

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28 LEDGER AND SWORD [1702

The first accounts of the bargain of the two
Companies in England reached Madras through
some of the crew of the New Company's ship, the
Norris, who had been saved from the wreck of that
vessel when she blew up in Masulipatam Roads, on
the 2nd of August, 1702. Thomas Pitt was not the
man to waste time when diplomatic action was re-
quired. He hastened to make friends with the
merchant adventurers in Dowgate, and his over-
tures were not rejected ; by his thus taking Time
by the forelock did he possess their goodwill in
later years.

" My gratitude as an Englishman,*' he wrote to
the New Company's directors, deploring the King's
death and congratulating them on the accession of
Queen Anne, " obliges me to pay all deference to
the blessed memory of King William and to re-
member that great saying of his to the French
King s plenipotentiary at Ryswick, upon concluding
the peace, * 'Twas my fate and nott my choice that
made mee your enemy * ; and since you and my
masters are united itt shall be my utmost endeavour
to purchase your good opinion and deserve your
friendship." ^

With the minor servants, each looked surlily,
even vindictively, at the other for some seasons to
come, and brawls and high words were not infre-
quent, and, indeed, a clashing of interests that was
highly unremunerative to their masters. In some
leading instances jealousies were fomented by the

* Letter dated the 3rd October, 1702,

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I703] THOMAS PITT SUPREME 29

instructions and appointments of the new rigime.
At Madras, however, was soon cut short all chance
of trouble. It was Thomas Pitt and not his cousin
John who became unanimously appointed President
and Governor of Madras, his merit as an adminis-
trator and not less as a forceful antagonist being
so clear. Nevertheless, the directors explained to
him that they had been obliged to consent for
reasons of policy that John Pitt should be appointed
Governor of Fort St. David with an independent
power in civil and military affairs and eventually to
succeed him. In view of the deep-seated animosity
between the two men such an arrangement would
have been unworkable. Thomas wrote afterwards
with engaging candour that "*twas impossible we
could ever be reconciled ; I think him the ungrate-
fullest wretch that ever was born ". John Pitt died
in May, 1703. The news came as a relief to his
unbending rival, who was now left supreme on the
Coromandel Coast — ** he is dead,*' he wrote briefly,
" and there's an end ".

Two years later witnessed the death also of the
Company's ** faithful John Beard". Littleton's in-
competency ought to have been perceived from
the beginning, but was not, any more than Beard's
honesty and loyalty were rewarded. Once Beard
was out of the way Littleton knew no check for
his incompetence and embezzlement, and when he
died in October, 1 707, was some 80,000 rupees short
in his accounts, a fact, albeit, not discovered until
the following year.

But the most lamentable instance of irreconcilia-

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30 LEDGER AND SWORD [1703

tion and maladministration cKcurred on the West
Coast. Sir John Gayer, officially known as the
" General in India," was appointed by the joint board
or Court of Managers to be Governor of Bombay.
His rival, Sir Nicholas Waite, received the lesser
appointment of President of Surat. At this time,
both places were in a state of insecurity, owing to
the attitude of the natives — Moguls and Mahrattas.
Poor Gayer, though no longer actually imprisoned,
was under the strict surveillance of the Governor
of Surat ; trade was under an embargo. When the
first accounts arrived of the union at home Waite
intimated the event in a formal manner to Gayer,
who, as formally, acknowledged the message. Each
professed readiness to adopt measures for mutual in-
terest ; each secredy distrusted the other. In fact,
Waite was wholly against the union and a sworn
enemy to Gayer and the other Old Company's
servants. He found means to instigate the native
governor against his rival, whose detention meant
his own continuance in the honours and emoluments
of the General's office. Early in 1703 the Mahrattas
fell upon Surat ; after they had retired the Mogul
considerately removed the embargo upon European
commerce. But as Waite had no intention of per-
mitting himself to be superseded, in consideration
of a heavy bribe (27,000 rupees) he induced the
Mogul Governor to continue Gayer in restraint.
Under such circumstances trade at Bombay stood
still, and the ships of both Companies were pre-
vented from taking investments on board or pro-
ceeding to Europe.

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I703] WAITE AT BOMBAY 31

This diversity of temper and opinion naturally
characterised their reports home until it was diffi-
cult for the Court of Managers to know whom to
believe. The Old Company's servants stated gener-
ally that there would be funds enough to discharge
their debts, while those of the New Company re-
presented the former to be indebted to a greater
amount in Bengal, for instance, than its stock could
dischai^e. But one thing was soon apparent : there
was gross mismanagement on the part of Waite
and Littleton, and the sooner these worthies were
recalled the better for the United Company's in-
terests. Although the full extent of the former s
duplicity was not known at the beginning of 1705,
yet we find the Court's letters full of sympathy and
approbation for his rival, Sir John Gayer, to whom
all orders are addressed. To him, in his confinement
at Surat, these instructions must often have had a
rude irony, but in general the Court recognised his
helplessness and their own. The war in Europe,
they explained, alone prevented the Company's ob-
taining men-of-war to clear the Indian Seas of
pirates, but ** they would employ every effort when
peace should be restored not only to render that
garrison respectable, but to equip armed ships to
clear the seas and to root out that nest of pirates,
the Muscat Arabs".*

The crafty Waite meanwhile took possession of
Bombay, which he represented as being in a shock-
ing state of disrepair and exposure, and therefore

^ Letter from the Court of the London Company, 12th January,
1705.

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32 LEDGER AND SWORD [1706

required large sums to restore. He proceeded to
extort and squander the Company's funds reck-
lessly. His private conduct was execrable ; he
formed a marital alliance with his own niece, al-
though his wife was still living in England. The
usurping Govemor-Generars example was not lost
upon his followers, and a base disorder spread through
all grades of the service at Bombay. In vain the
Court of Managers expostulated. Waite treated
their rebukes with contemptuous disregard. But
before the final and formal order of expulsion came
in 1708 his own Council had compelled his resig-
nation.

Meanwhile, the French at Pondicherry were
continually receiving reinforcements from Europe,
although Madras was inadequately defended, and
often received only three or four recruits in a season.
President Pitt pressed on the Company the need of
a large supply of European soldiers, not merely to
defend its property against any possible attack on
the part of the French, but also to preserve order
amongst a rapidly increasing population. Pitt him-
self, worn out with long service and exertions and
the master of vast wealth, resolved in 1 705 to resign
his post to Gabriel Roberts unless he heard of the
death of Aurangzeb — who was **a most uncon-
scionable time a-dying" — in which case he would
reconsider his decision.

We have heard but little of late from the Com-
pany's records of the Island of St. Helena, now
governed by fixed regulations. In June, 1706, two
of the Company's ships, the Queen and the Dover,

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I707] AURANGZEB'S DEATH 33

were captured there by a couple of French men-of-
war. This calamity, wrote Governor Poirier, was
occasioned by the captains not having brought their
vessels sufficiently under the protection of the guns
of the fort, and consequently he wrote for instruc-
tions to the commanders in future to moor their ships
within range, which instructions the Court of Man-
agers issued as amongst their last acts before the
final union of the Companies.

Aurangzeb*s demise at length took place, 20th
February, 1707, at his camp near Aurangabad, in
the Deccan. It was first communicated to Leaden-
hall Street by Sir John Gayer, who found means
to despatch the tidings to Europe. One of the
Emperors last acts had been to issue orders for the
stoppage of the trade of all Hatmen {i.e., Europeans)
in his dominions, an order not easily, from the cupidity
of his Governors and the political dissensions through-
out his Empire, carried into effect. Indeed, the
Mogul guards were at this time withdrawn from the
Old Company's factory at Surat, although neither
French nor English were permitted to pass the
gates, and Gayer was still to be detained for three
more weary years.

In announcing the passing of the Great Mogul,

Gayer felt it prudent to resort to allegorical language

for fear of his letter falling into the hands of the natives

(or of his English enemies), amongst whom it was

considered treason to speak of the death of so high

and mighty a potentate. " The Sun," therefore

wrote he, ** the Sun of this Hemisphere has set and

the Star of the Second magnitude being under his
VOL. II. 3

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34 LEDGER AND SWORD [1707

meridian, had taken his place ; but it is feared that
the Star of the First magnitude, though under a
remoter meridian, would struggle to exalt itself."
This, in fine, represented the situation, for by his
will Aurangzeb had divided the Empire amongst
his three sons. Shah Alum, Azim and Buksh.
These three instantly proceeded to march through
bloodshed to undivided authority. A great battle
was fought near Agra in June 1707, in which
nearly 100,000 men fell on both sides. Azim
was slain, and his elder brother's career of conquest
opened auspiciously.

In Bengal, so far as the Company's affairs were
concerned, Aurangzeb's death had hardly any effect
except to induce Pitt, who ruled the settlements
from Madras, to strengthen Fort William. The
town of Calcutta was now regularly built and the
inhabitants and revenues increasing. The garrison
consisted of 125 soldiers, of whom forty-six were
Europeans, exclusive of the squad of artillery.

In the meantime the Company had got a solid
footing in Borneo at Banjermassin, which it had
fortified. The factory staff already consisted of
a chief agent and four members of Council,
one factor, three writers, one officer, twenty-five
English, three Dutch, and ten Macassar soldiers,
thirty Japanese carpenters, five Chinese carpenters,
two Chinese bricklayers, seventy labourers, thirty
slaves and nine European seamen. More Euro-
pean artisans were demanded, especially bricklayers
and carpenters, to complete the fortifications, as
well as a large supply of military stores. Trade

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I707] QUEEN ANNE'S MINISTRY 35

here seemed very promising, and the Court of
Managers were congratulating themselves when
there reached them news of a catastrophe, in the
shape of a native attack, which drove the English,
from Banjermassin. Cunningham, one of the
N"ew Company's servants, who had escaped the
massacre at Pulo Kondor and had for some time
been a prisoner in Cochin China, ascribed the
sudden attack of the '* Banjareens " to the instiga-
tion of the Chinese, who, jealous of the pepper trade
which the English were building up and of the forti-
fications, had bribed the natives in June, 1707, to
surprise the settlement. Though they were at
first repulsed, yet so many, including the Com-
pany's agent, were killed that a retreat was with
difficulty made to the ships. The factory was
abandoned at a loss of 50,003 dollars, although
the chief treasure, being on board ship, was saved.
This put a stop to the establishment of inter-
mediate stations to facilitate the China-European
trade.

By this time both Companies at home had
grown sick of the tentative situation. The pseudo-
alliance had not spelt prosperity. The demand was
now for complete union or final severance. The
selfish spirit, prompted by a lingering hope of better
terms or of securing a preponderating influence, was
still far from being crushed. But an event now oc-
curred to precipitate a firm and indissoluble union.
Queen Anne's Government, engaged in a general
war in Europe, was in need of funds. Loans were
demanded from every corporation in the realm,

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36 LEDGER AND SWORD [1708

and amongst these from the Joint Companies. The
Earl of Godolphin, then Lord High Treasurer and
chief minister of finance, proposed to borrow from
them the sum of ;^i, 200,003. The demand thus
presented caused the two bodies to show a united
front ; it called for immediate corporate action. It
would have been suicidal to refuse ; the remem-
brance of what had happened in 1698 induced both
parties to lay aside their separate interests. Were
the Court of Managers to hesitate about the money,
it was by no means improbable that Parliament
would terminate the Company's privileges in favour
of a new body of mercantile speculators.

Such reflection demolished all hesitation. The
final welding of the rival Companies which would
follow such a loan was foreseen and concurred in.
A bill was forthwith drafted by the Government,
ostensibly for raising the sum of ;^ 1,200, 000 for the
public service. But the true function and virtue of
the measure lay in the appeal it comprehended to
Lord Godolphin, to submit all outstanding differences
and disputes for his final decision. The bill was
quickly passed through both Houses of Parliament
and received the Queen's assent on 20th March,
1708. The Companies now stood pledged to pay
to the Exchequer the sum above mentioned, which
carried no interest, but added to the 8 per cent, loan
of 1698, made up a total of ;^3, 200,000 yielding
5 per cent, interest. The United Company ** should
cease and determine on three years* notice after the
29th September, 1711, and on repayment of their
capital stock of two millions/' and from that date

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t7o8] GODOLPHIN'S AWARD 37

should continue till 25th March, 1726, and then
should cease on three years' notice and the repay-
ment of their capital of ;^3, 200,000.

The separate adventurers (or the General
Society) were to be bought out after 1 7 1 1 at three
years' notice. Lord Godolphin's award in the
matters demanding arbitration was to be delivered
on or before 29th September, 1708, after which date
the London Company was to surrender its charters
and become merged with the English Company in
the United Company.^

The result of the arbitration was duly an-
nounced. It was found that as the liabilities of the
Old Company were in excess of its assets, largely
through the infamous behaviour of the New Com-
pany men, Waite and Littleton, its shareholders
should pay to the United Company the sum of
;^96,6i5. As, on the other hand, the debts of the

* I cannot agree even with Sir George Birdwood that the New
Company swallowed up the Old, or even accept the latter's adop-
tion of the foimer's coat-of-arms as a proof of deglutition. " The
English Company," says Mr. William Fidler, in his Memorandum on
the East India Company, " in spite of their high pretensions, found
themselves worsted by the superior intelligence and capacity for
business of the Court of Directors ; so that in July, 1699, when the
London Company's ;£'ioo stock stood at ;£'i40, theirs (£g^ paid up)
was at jf7a In 1701, too, they signally failed to procure a firman
from the Mogul." At the time of the amalgamation nothing was
more natural than that the Old Company should attach a superior
value to the coat-of-arms which had just been granted to its rivals
by King William, and which it regarded as amongst the New
Company's assets. In any case, to have insisted on the retention
of its old Tudor arms, in view of the attitude towards it of the
Whigs, to say nothing of the trouble and expense the United Company
had been put to in procuring the new and more elaborate device,
would have been for the senior body the sheerest unwisdom.

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38 L£D(JER AN£) SWORt) (tyoS

New Company were found to be less than its assets,
jC66yO05 was to be distributed amongst the share-
holders. Furthermore, it was ascertained that the
Old Company was indebted to a large amount in
Great Britain, to discharge which debts it was
necessary to call upon its proprietors for ;^200,ooo
at two specified periods, and such further sum as
would be necessary. But one-third of these several
amounts was to be repaid by the United Company
adventurers in consideration of the sum advanced by
the London Company at the time of the union of
1 702 to equalise the stock of the two Companies.

It is unnecessary further to dwell on the details
of the fiscal adjustment which took place in 1708.
It was not really unfair to the original body, whose
assets were made to appear so small. It was an ad-
justment which made few, if any, poorer, and few, if
any, richer. Whatever article of it seemed unduly
to favour the New Company at the expense^ of the
Old will appear delusive when it is borne in mind
that the two Companies had merged not merely
economically but individually. The personnel was
almost identical. The leading spirits of both old
and new bodies were the leading spirits of the United
Company. A rich adventurer found that he owed
himself so many pounds sterling ; he simply changed
his funds from his right pocket to his left No great
and leading mind perhaps since Child's death now
stood out on either side ; yet the greatest and richest
amongst the leaders were Old Company men. The
Old Company may seem to have been swamped by
the New ; in theory perhaps it was so ; but in fact

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t703] NEW COMPANY'S TACTICS 30

and historically the continuity of the ancient body
was maintained.

For it cannot be denied that all the projects of the
New Company, both in India and China, had ended
in loss and disaster. The conduct of its Presidents,
Waite, John Pitt and Littleton, and most of the ser-
vants had been uniformly bad, as was to be expected
from the fact of their being dismissed servants of the
Old Company guilty of breaches of trust The abor-
tive and costly mission of Sir William Norris was
another instance of ill-advice and ill-management.

And the tactics of the New Company are
characteristic to the end. In Borneo, instead of
ordering its investments to be sent on board the
ships of the United Company, it ordered them to
be loaded into the vessel of one of the separate
traders (belonging to the small outstanding property
of the General Society) and consigned the whole
dishonestly to the Bengal Council, of which the re-
creant Littleton had lately been at the head.^

^ The following is a list of the factories of the Old Company at
the time of the union : —

Factories dependent on the Presidency of Bombay : Surat,
Swally, Broach, Ahmedabad, Agra and Lucknow ; on the Malabar
coast : Carwar, Tellicherry, Anjengo and Calicut. In Persia : Gom-
broon, Shiraz and Ispahan.

Dependent on the Presidency of Fort St George : Madras, Fort
St David, Cuddalore, Portonovo, Pettipolee, Masulipatam, Mada-
pollam and Vizagapatam ; and also the Sumatra settlements : York
Fort, Bencoolen, Indrapore, Tryamong, Sillabar and also the fac-
tory of Tonquin in Cochin China.

On Fort William : Chuttanuttee, Ballasore, Cossimbuzar, Decca,
Hugh, Molda, Rajahmahl and Patna, and recently Bantam.

The New Company's factories were those of Surat, Masulipatam,
Madapollam, on the islands of Borneo and Pulo Kondor.

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CHAPTER II.

The Upgrowth of Trade in the East

Whichever set of merchant adventurers might
have survived, had the contest for supremacy in
India continued, it is idle to determine. The point
is that both Companies by their union now rested
on a firmer basis than either had ever enjoyed,
because that basis was the State itself. Having
unpinned its faith from the King, no longer could
either be in daily terror of having rights and privi-
leges taken away arbitrarily because of cabals,
public clamour or upon false pretexts. There-
after any Ministry would hesitate at a project that
involved not merely the payment of the loan, but
a full compensation from the national exchequer
for the dead-stock in India and for the charges of
acquiring and preserving the Company's territorial
acquisitions. Thereafter the interests of Company
and State were welded together indissolubly for a
century. Thereafter higher ideals were present to
men's minds both at East India House and in the
East Indies. Trade was to be sought and fostered
as diligendy as ever, but it was trade combined with
*' warfare, fortification, military prudence, and poli-
tical government ".^ The break-up of the Mogul

^ It is worth noting that in the year 1701 a new and more
orderly plan in the correspondence between the Old Company and its

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t7o8] CLAMOUR AGAINST CHARTER 4^

Empire was in sight ; the tumultuous conditions fol-
lowing on the death of Aurangzeb not only made a
new policy necessary, but offered vast opportunities
for the trader who was both soldier and politician.

** It is almost needless to remark," says Anderson,
" that much clamour was raised against this renewal
of the exclusive privileges of trading to India, as it
was naturally to be expected, and had always before
happened on every such renewal. Many pamphlets
were published for inducing the legislature to lay
that trade open ; or at least, to let Bristol, Liver-
pool, Hull and other great trading towns into a pro-
portionable share of the trade."

It was pointed out as a reason why London alone
should not engross the entire Indian trade, that the
Dutch Company's charter of 1602 comprehended
six Dutch towns, instead of confining all to Amster-
dam. By way of reply it was shown that the two
cases differed, because the English Company stock
being transferable any person in the three kingdoms
might freely buy shares. But clamour against mono-
polies is human, and that directed against the Com-

servants was adopted. Hitherto their correspondence had been
without arrangement, and the letters from the various factories
mixed and indistinct. In future, it was decided that the subjects in
each letter from its agent should be arranged under six heads : —

1. Shipping and goods sent from England.

2. Investments in India.

3. Trade in general.

4. Revenues and fortifications.

5. Factors, writers, officers and soldiers.

6. Matters relating to the New Company.

The foregoing method (excepting the last clause) was afterwards
followed with little modification by the United Company. Letter-
book, February, 1701. — Bruce's Annals,

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4i LEDGER AND SWORD [1708

pany broke out at intervals for the next century and
a half, or as often as it applied to the nation for a
renewal of its privileges.

Thomas Pitt, the Company's Governor of Mad-
ras, had already succeeded in establishing friendly
relations with the Mogul Court at Delhi under pe-
culiar circumstances. Shortly after Bahadur Shah's
victory at Agra it was feared that his younger
brother would take refuge in Madras, and from
thence make his escape to Persia. To foil such an
attempt the Minister, Zendi Khan, made friendly
overtures to Pitt. The Company's Governor re-
sponded by asking for a firman confirming all the
privileges which Aurangzeb had granted. The re-
quest was promptly acceded to, and Pitt had especial
reasons to congratulate himself, for soon after this
episode the prince in question perished on the
battlefield.

Madras being considered a part of the Mogul
province of Arcot, the English paid a yearly rent
of twelve hundred pagodas to the Nawab of the
Carnatic.^ This ruler was himself subordinate to the
Nizam of the Deccan, to whom he also paid an annual
tribute. The result of those obligations and of this
vicarious government was that the district was badly
governed, and many thousand of acres lay unculti-
vated for want of the irrigation which it had formerly
enjoyed. It also meant that upon the Company's
government there devolved more and more responsi-

^The Nawab is also known as the Nawab of Arcot. The Nizam
of the Deccan is known in the present day as the Nizam of
Hyderabad. The Camatic extends from the Kistna to Cape Comorin.

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THOMAS PITT,
GOVERNOR OF MAPRAS.

From the Picture by Kneller belonging to Earl Stanhope-

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t7o8] PITT'S MEASURES 43

bility and authority, and for this reason it came to
exercise greater influence with the natives.

Pitt had the very clearest perception of a grow-
ing Anglo-Indian problem, as is evinced by his
letters to the Company.

" When the Europeans," he wrote in 1708, " first
settled in India, they were mightily admired by the
natives, believing they were as innocent as them-
selves ; but since by their example they are grown
very crafty and cautious and no people better under-
stand their own interest so that it was easier to effect
that in one year which you shan't do now in a century ;
and the more obliging your management, the more
jealous they are of you."

It took, therefore, all Pitt's ability to encourage
native industry and to procure the products of that
industry for the Company. He advocated strongly
the acquisition, at whatever cost, of Portuguese St
Thom6, " to remove neighbours ready to take advan-
tage of the prejudices or the interests of the natives ".

At this time Madras was inhabited by Hindus,
Mohammedans, Armenians and Portuguese, there
being temples and churches for each religion. Hav-
ing some apprehensions that this part of the city,
known as Black Town, might be plundered by Nawab
Daud Khan, the inhabitants were ordered to erect
a wall along the landward side. Both divisions, i.e.y
Black Town and White Town, were ruled absolutely
by the Governor ; all other affairs of the Company
were managed by Pitt in conjunction with his Coun-
cil. The Company had here its mint, with schools
for each nation, and the English church, the latter

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44 Ledger And sword [1709

being well endowed and maintaining a number of
poor gentlewomen " in good housewifery, good
clothes, and palanquins".

In 1708, too, when native pirates and native
military raiders abounded, the resources of Madras
were affected by the large payment required from
the United Company to liquidate the claims of the
Old and New Companies. The payments were
for a time delayed by the ignorance and obstinacy of
certain members of his Council, until Pitt dismissed
two and wrote home for some suitable men in their
place, " for," said he, ** though there were two chairs
then vacant in Council, they were just as useful as
the persons who lately filled them '*.

In 1709 Pitt finally returned to England, leaving
his son Robert (father of the great Earl of Chatham)
and a young cousin, afterwards a Governor of
Madras, in the service. Thomas Pitt had been one
of the ablest servants of the Company, as he had for-
merly been one of the most intrepid and unscrupulous
of interlopers. But even his loyalty to the Company
did not altogether preclude him from striking an
advantageous private bargain when the opportunity
offered. Once a dealer in gems, named Jamchund,
brought to Fort St. George a Kistna diamond of
great size for sale. Pitt's eyes must have glistened
at the . splendour of the jewel, for which the gem
merchant asked no less a sum than ;^30,ooo. The
Governor, resolved to become its possessor, at length
agreed to pay ;^20,4oo, and the dealer departed,
doubtless rejoicing in having made so good a bargain.
But Pitt more than surmised its true value : he had

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1709] THE PITT DIAMOND 45

the stone home-cut in England and then sold it to
the Regent of France for ;^i 35,000. But huge as
this price was, it was far less than the Pitt diamond
was worth. When duly set in the Royal Crown of
France, it was found to weigh 136 carats (only a
third of its original weight) and was appraised at
;^48o,ooo.^

Pitt was succeeded at Madras by Gulstone
Addison, a brother of the famous essayist. But
Addison was in very feeble health, and died a
month later, after having attended scarce half a
dozen Council meetings.* As he was childless, all
his money went to his celebrated brother, whose
marriage with the Countess of Warwick took place
shortly afterwards. Gulstone Addison had been
instrumental in procuring an appointment for the
only grandson of the poet Milton, Caleb Clarke, who
held the post of clerk of the parish church of Madras.

William Aislabie, the new Governor of Bombay,
had long served the Old Company, and on intimating
to him his appointment the United Company desired
that all former animosities in this part of its territory
might be laid aside. It informed him of Sir
Nicholas Waite's dismissal and urged him to exert
every effort to procure Sir John Gayer s release.

^Governor Pitt lived, as might have been expected from his
great wealth, in no niggardly fashion. When he retired the Com-
pany bought his plate for the use of the public table at the fort,
and paid for it ;£'765. It comprised, amongst other articles, sixty-six
silver plates and twelve dishes.

'Another brother, Lancelot Addison, Fellow of Magdalen Col-
lege, Oxford, had come out on a visit to Madras. He was taken ill
there, and died in the following year (1710).

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46 LEDGER AND SWORD [1710

But not till 1 7 10 did Sir John Gayer finally
obtain his freedom, and a few months later set sail
for home. Early in the following April, soon
after the ship had left the Peninsula, four French
men-of-war appeared and ordered the Company's
captain to surrender. A fierce resistance was
offered, in which Gayer was mortally wounded while
urging his fellow-servants to battle. The ship and
crew were captured, and the brave but luckless
Gayer expired a prisoner in the hands of the enemy.

The scheme of a rotation Government in Bengal
had, after trial, proved a failure, and in 1709 the
Company resolved to abolish it and replace the
management of its affairs in the hands of a single
President. The difficulty lay in the choice of a
proper man. Four candidates were in the field,
three of whom, Ralph Sheldon, Jonathan Winder
and Robert Hedges, were old and tried servants.
The fourth was Anthony Weltden, a sea captain
and privateer of doubtful antecedents. Neverthe-
less, Weltden had a powerful recommendation ; he
had no experience of Bengal, and was quite free
from all connection with the late acrimonious dis-
putes between the servants of the New and Old
Companies. He had made a fortune in private
trading and had considerable influence in Leadenhall
Street Weltden left Portsmouth for India early in
1 710 and duly took up his duties as Governor. His
term of office proved to be very brief, but, says
Hamilton, "he took as short a way to be enriched
by it by harassing people to fill his coffers ". In
less than a year the Company sent out a letter to

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171 1] CROMWELL'S GRANDSON 47

Calcutta revoking Weltden's commission and ap-
pointing Sheldon President, with John Russell second,
and Hedges third. But Sheldon was dead, and so
John Russell, grandson of Oliver Cromwell through
the Lord Protectors daughter, Frances,^ became
Governor of Fort William and President in Bengal.

The grandson of the mighty Oliver had his
hands full, as had William Harrison at Madras and
Aislabie at Bombay, in steering a middle course
between the rival powers then battling for the
throne of Delhi.* At first Russell earned the
Company's entire approbation, the latter holding
that it was good policy " to carry it fair to both
parties when it can be done so as not to be dis-
covered : to make them apprehend that you are
always ready to do them service when in your
power".* Such opportunism seems to have been

1 Russell furnishes an example of the more aristocratic t3rpe of
men in the Company's service during and since Child's administra-
tion. His grandfather, Sir Francis Russell, third baronet, was the
eldest son and heir of William Russell, of Chippenham, Cambridge-
shire, his father, the fourth baronet, marrying Cromwell's youngest
and favourite daughter, Frances, to whom John Russell was bom in
1670. In 1693 he was elected a factor for the East India Company,
and reached Bengal in December of the following year. Three years
later he married a sister of Governor Eyre, by whom he had several
children. On his return to England he again married in 171 5, and
became master of Chequers Court, Bucks. He died in 1735, after
twenty years spent in seclusion.

'** Russell's attitude towards the contending powers,'* says Mr.
C. R. Wilson in his English in Bengal, " was one of sheer oppor-
tunism. It mattered nothing to him whether Tweedledum or
Tweedledee sat on the throne as long as he could purchase piece
goods at reasonable rates and convey saltpetre from Patna to
Calcutta in safety."

^ Court Letter-book, X3th January, 1714.

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48 LEDGER AND SWORD [171 1

most acceptable to Leadenhall Street at this time,
for we find it also bestowing encomiums upon the
conduct of Sir Charles Eyre (Russell's brother-in-
law), who during his administration "did his busi-
ness by good words and good correspondence and
rarely paid a penny for it ".^

As Calcutta developed in size and importance the
expense of the Company's establishment increased
proportionately. In the early years of the rotation
government the " charges general " were estimated
at from 52,000 to 93,000 rupees a year. In 1709-10
they rose to 109,700 rupees, and in the following
year, the first of Russell's government, the ex-
penses rose at a bound to 196,800 rupees. Such
an "amazing increase" was of course "in no way
to be approved of" by the Court of Directors, who
warmly protested against the extravagant practice
of advancing large sums of money to the pay-
masters, who, in one recent case at least, had been
tempted to misappropriate. Russell was forthwith
ordered to consider how expenses could be re-
trenched. Yet it was plain that an increase was
inevitable, only the Company desired that it should
be offset by a corresponding increase in the revenue
of the town, and the Court of Directors never lost
an opportunity to impress this point. "We have
often told you," they write in 171 1, "nothing but
revenues has made the Dutch interest in India
formidable. The like reason holds for our nation
too ; we must of necessity be at a constant charge
when our several servants manage all with the utmost

* Court Letter-hook^ 5th January, 171 1.

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I7I3] IMPROVING CALCUTTA 49

fidelity and frugality : not only in the charge attend-
ing our trade, but in what is requisite for our defence
to preserve our estate from sudden irruption and
surprise of the natives, who will never want some
pretence or other if they see us unguarded and in-
secure. Therefore, for the sake of posterity we
must have such a plantation of revenues as will
by good and constant cultivation produce a certain
supply towards defraying this certain expense, hav-
ing regard not to make the inhabitants uneasy by
oppressing them. You write you can't suddenly
lay any particular duty that will be sufficient to
defray the present charge. But granting that,
should not the inference then be, though you can't
do all, you will do what you can towards it, and
if you did so much as you could we should not
find fault. But we have evident proof that instead
of this there are some even amongst yourselves
who secretly and rather than not obtain their
point, have openly opposed the increase of our
revenues." ^

Yet the Company often suggested large schemes
for the improvement of Calcutta, such as the digging
of a ditch round the town, the building of a new
dock and a large warehouse for general use.* But
Russell appears to have had little taste for enter-
prises of this kind, and Calcutta had for the ensuing
half-century to be content with a fort which was
only nominally a fort, making **a very pompous
show by the water side by high turrets of lofty

* Court to Bengal, 28th December, 171 1.
^ Court Letter-book, 2nd February, 1713.
VOL. II. 4

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50 LEDGER AND SWORD [1716

buildings, but without any real strength or power of
defence ".

This question of extra taxation went on being
discussed for several years. The Company argued
for a grain duty : its servants opposed it as being
opposed to local feeling and likely to provoke the
Mogul's interference. The Company would not
credit these to be real reasons, alleging that its
servants, being concerned in the grain trade, wished
to escape all taxation. Although the grain duty was
imposed in 17 16, the revenues of Calcutta seem to
have been slightly bettered. What was really needed
was just administration, the enforcement of public
health ordinances, and then, by a natural law, the
revenues would increase with the population.

It cannot be said, with all their adherence to the
principle of a grain tax, that the directors were blind
to this, for in many of their letters we find them
declaring that, after all, "righteousness is at the
root of our prosperity ". " Let your ears be open
to complaints," they write, "and let no voice of
oppression be heard in your streets. Take care that
neither the broker, nor those under him, nor your
own servants, use their patron's authority to hurt and
injure the people. Go into different quarters of the
town and do and see justice done without charge or
delay to all the inhabitants. This is the best method
to enlarge our towns and increase our revenues."

Noble counsel, truly! — ^and for the next half-
century it was, on the whole, faithfully followed.

We have seen that at a very early period the
Company had paid considerable attention to the

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i7o8] COMPANY AND CHRISTIANITY 51

establishing of schools and chapels in its factories,
and to the means of diffusing the doctrines of
Christianity among its native servants and among
other natives living in the neighbourhood of its
setdements. By the charter of 1698 the New
Company was bound to maintain a minister and
schoolmaster in every garrison and superior factory,
and to set apart a decent place for the performance
of divine worship. It was also required to have a
chaplain to every ship of 500 tons or upwards,
whose salary was to commence from the ship sailing
outward. Such ministers were to be approved by
the Archbishop of Canterbury or the Bishop of
London, and were to be at all times entertained with
proper respect. Resident ministers in India were to
learn the Portuguese and Hindu languages, ** to
enable them to instruct the Gentoos and others in
the Christian religion".^

The United Company's charter had enjoined
that a chaplain should be maintained in every garri-
son and superior factory and that all ministers sent to
reside in India should be obliged to learn Portuguese
and apply themselves to learn the native language of
the country where they resided, " the better to instruct,
the Gentoos that shall be servants or slaves of the
Company and of their agents in the Protestant
religion ". In the event of death of any minister his
place was to be supplied by one of the chaplains of
the next ship arriving at or near his station ; and

^On the union of the two Companies in 1708, it was declared
by the charter that the chaplain should have precedence next after
the fifth member of Council at his factory.

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52 LEDGER AND SWORD [1710

besides a minister the Company was also directed
to supply schoolmasters in all its garrisons and
superior factories when considered requisite.

Nevertheless, the Company does not appear to
have supplied Calcutta with a schoolmaster until
many years had elapsed, and even left the settle-
ment without a chaplain for lengthy intervals. When
in August, 171 1, William Anderson died, his place
was taken by James Williamson, a member of the
Council, who donned a "customary suit of black
and read prayers and a sermon every Sunday".

In the matter of a church, Calcutta was
far better off than Bombay, to which it had even
sent 800 rupees towards the building of a new
edifice.

One of the Company's parsons remarked, in
1715, that "a man cannot lodge and board here
tolerably well under forty rupees a month, that is
;^5," from which it may be gathered that his salary
of ;^ I GO a year, with forty rupees a month for diet,
must have proved ample enough for a bachelor.
Yet this same chaplain, although not without Chris-
tian zeal, actually incurred the reproof of the Com-
pany for engaging in private trade.

In the meantime, at home the War of the Spanish
Succession had entered on its final stage. The
Whigs collapsed in October, 17 10, and at the end
of the following year the great Marlborough was
ignominiously dismissed from his office of Captain-
General. The aim of the new Tory Government
was to bring about a cessation of the war, but for
the present their efforts did not meet with complete

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I7I2] GREAT LOSSES AT SEA 53

success. In 171 1 a rumour spread through Calcutta
that the French were in the bay ; but, although the
rumour was true, the French did not dare attack the
Company's shipping in the Hugli, and ultimately
retired. Elsewhere, however, the French captured
the DtichesSy off Bombay, and the JanSy at Rio de
Janeiro. This latter was commanded by one John
Austin, and had on board John Collett, the Deputy-
Governor of the Company's settlement at Bencoolen.^
Her captain put in at Rio, ** on pretence of want of
provision and to refresh her men," but really for the
sake of private trade. Here he lingered for a month,
until M. de Guay's fleet approached and sacked the
town, when he shamefully surrendered his ship and
took passage home on the French squadron. Collett,
failing to purchase another vessel, found he could
redeem the Jane and her cargo for ;^3,500, which
he paid forthwith, and reached Madras in May, 1712.

Another ship, the Sherborne^ carrying back ex-
Governor Weltden, was not so fortunate. She was
captured by the enemy, in 17 12, off the Cape of
Good Hope, and carried a prize to France.*

It cannot be said on the whole that the war with
the French occasioned much disturbance or dread
in India on the part of the Company's servants. It

^ She also carried a large literary contribution made by the
Company to the missionary cause in the East: 1,500 copies of St.
Matthew's Gospel in Portuguese, catechetical and practical books
for the missionaries at Tranquebar and the chaplains at Madras,
Calcutta and Bombay, a printing press, types and paper, and a
printer, Jonas Pinck.

' The Company made great efforts to redeem her cargo, but as
what it had cost in India was only ;£'42,ooo, and as the same was
valued in Prance at ;^i,5oo,ooo, the negotiations were fruitless.

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54 LEDGER AND SWORD [1713

has been truly said that they were ''far more jealous
of their Dutch allies than of their French enemies ".
Besides, the English, in Bengal at least, were more
interested in the quarrels and contests which took
place on land between the different native princes
and governors.^

By this time formal negotiations for peace had
been opened at Utrecht. Before news of the
cessation of arms could reach India the Company's
shipping was repeatedly threatened by the French,
occasionally making narrow escapes, as in the case
of the Marlborough, The Company presented the
captain of the Marlborough with a medal for his
exploit. On the nth April, 171 3, the peace of
Utrecht was signed, and on the 24th the Court of
Directors despatched the news '*by a Dutch con-
veyance " to India. Henceforward there for thirty
years the English and French were at peace, save
for occasional bickerings about salutes, or with
perhaps an occasional alarm of a fresh war between
the two nations in Europe. In 17 14 Russell was
replaced at Calcutta by Robert Hedges, a nephew
of the first governor in Bengal, Sir William Hedges,
whom we have seen quarrelling with that indomitable
pioneer, Job Char nock, the founder of Calcutta.

At the time of the Union the two great business
corporations of the kingdom were the East India
Company and the Bank of England. In 171 1 it
was found prudent to pass a law, owing to the re-
lations subsisting between these two great creditors

^ English in Bengal

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I7I2] PARLIAMENTARY ENACTMENTS 55

and the nation, to forbid any person to be at one
and the same time a director of the Bank and of the
East India Company. By this Act was the former
" enabled and obliged " to exchange all Exchequer
bills for ready money on demand. But none had
ever been governor, deputy-governor, or director
simultaneously of both corporations. Again, when
the Earl of Oxford brought in his famous South Sea
Scheme, it was decreed in the Act of Charter that
" neither the governors nor directors of this Com-
pany shall be capable of being such in the Bank nor
in the East India Company at the same time".^

In 171 2 Parliament passed an Act **for continu-
ing the trade and corporate capacity of the United
East India Company, although their fund should be
redeemed''. This modified the stipulation of the
Godolphin award, that when the Company had re-
ceived from the nation the ;^3, 200,000 it had lent,
''upon three years' notice, after Ladyday, 1726," its
exclusive privileges should cease and determine.

But after four years' experience the Company's
prophetic eye saw that such an abrupt termination
went ill with a policy of permanence in India. It
found itself more than ever called upon to spend
vast sums on establishments that were not for a year
or a decade, but for a series of decades, during which
time they would return no profit "In order to

' In November, 171 1, we find the prices of the public stocks were
as follows : —

East India Company .... jfi24^

Bank of England iii^

South Sea Company ... - 77^

Royal African Company ... 4^

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56 LEDGER AND SWORD [1712

make lasting settlements for the support and main-
tenance thereof for the benefit of the British nation,"
Parliament was therefore petitioned to continue the
trade and corporate capacity of the Company, al-
though its fund should be redeemed. The Tory
Ministry, thinking the request a reasonable one,
gave it their support, and an Act was passed re-
pealing the " redemption and determination " clauses
of the Whig Act of 1 708. But at any time, upon
three years notice after Ladyday, 1733, the Govern-
ment might, if it saw fit, repay this loan, in which
case the interest as well as the special duties levied
on salt, stamps, and East India goods for the purpose
of meeting it would cease.

Certainly, after this, the Company had some
reason to believe it had been endowed with perma-
nent commercial privileges, even with the redemp-
tion of the fund which had first secured them,
especially as in another statute of the same session
the South Sea Company's continuous privileges,
after redemption of its loan to Government, were
even more clearly outlined verbally, in case ** some
doubts may arise concerning the power of redemp-
tion intended by the said Act and Charter which
might tend to discourage the said Company in
expending of such large sums of money as are
necessary for new settlements, etc."

Nevertheless, whatever self-gratulation the Com-
pany may have indulged in, as we will see in due
course, all notion of conferring perpetual trade upon
it was disclaimed when Parliament was again peti-
tioned a generation later.

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I7I3] NAWAB'S EXTORTION 57

During this same year of Harley and Boling-
brokes ascendency and Marlborough's flight, the
Company besought the House of Commons not to
lay additional duties on calicoes, muslins, cottons,
tea, coffee and drugs, because by doing so they
would be penalising a commerce which was bene-
ficial to the nation. The Company, it took occasion
to remind Parliament, ** did annually export to the
East Indies about ;^ 150,000 value in woollen goods
and other English products".

Turning our eyes to the Company's settlements
in the East, we see that in Bengal for some years
past the Nawab's chief ambition has been to squeeze
as much revenue as possible out of his people and
remit a large surplus to his master at Delhi. ^ While
encouraging the foreign merchants, Murshed Kuli
Khan was too keen not to perceive that the forty-
five factories of the English gave them a certain
independence which the Mohammedan merchants
did not enjoy, and also that they possessed a great
advantage by reason of the firmans and nishans
obtained, he said, by means of bribery and corrup-
tion, which permitted the Company's men to trade
either duty free or for the paltry consideration of
3,000 rupees annually. These favours he resolved,
whenever a proper moment arrived, to annul. The
opportunity came in 17 13, the year following the
death of Aurangzeb's successor, Bahadur Shah, and

* On Aurangzeb's death in 1707 Azim-u-Shan, the young Viceroy
of Bengal, in departing for the West to participate in the war for
the succession, left Murshsd Kuli Khan (after whom Murshedabad
is named) to act both as Nawab and Dewan, t.e., finance adminis-
trator.

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S8 LEDGER AND SWORD [1714

of the peace of Utrecht. The former privileges of
the English were declared to be no longer in force,
and they were ordered in future to consider them-
selves liable to the same duties and exactions as the
Hindu merchants paid. This move evoked the
protest of Hedges, who sent at once a catalogue
of grievances to Leadenhall Street, soliciting per-
mission to send an embassy to Delhi to complain to
the new Emperor Farrukh of the Nawab's conduct.
The Company endorsed the proposition, and de-
spatched orders to Madras and Bombay to unite their
grievances in the same petition with those of Bengal.
In consequence of this, early in 17 14 an order
arrived from Aurangzeb's successor forbidding the
Nawab to meddle with the English, who were to
enjoy all their former favours and privileges. This
welcome sunnud was greeted with rejoicings. A
feu de joie was fired by the garrison, and the Com-
pany's servants drank the health of Queen Anne
and of ** King Farrukh," with fifty-one guns to each
health. ** After which," they wrote home to the
Court, **we drank prosperity to the Honourable
Company, with thirty-one guns, and success to their
trade, with twenty-one guns more, and all the ships
in the road fired at every health ; after this at night
we ordered a large bonfire to be made and gave our
Soldiers a tub of Punch to cheer their harts, we also
ordered our Merchaunts to write to their correspon-
dents everywhere of this Husbull Hookum, and how
greatly we honour and esteem the King's Gracious
favour and what Rejoycings we made out of it." ^

^Bengal Consultation Book, 4th January, 1714.

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I7IS] WILLIAM HAMILTON 59

But something more than a sunnud was desired ;
an embassy to the Mogful had long been mooted
to solicit a " royall Phirmaund ". The present
seemed a favourable moment to set it afoot

To Robert Hedges, as Governor of Bengal, was
left the nomination of the ambassadors. Two in-
telligent factors, John Surman and Edward Stephen-
son, were selected, together with Khoja Sherhaud,
a rich Armenian merchant familiar with both the
English and Persian tongues. Accompanying the
embassy went one William Hamilton, a surgeon,
who, although no suspicion of such an eventuality
could have entered the minds of any member of
the party, was destined to play by far the most
important part in the mission.^

Bearing with them costly presents, which rumour
vastly magnified, the embassy reached Delhi on the
8th of July, 1 7 1 5, after a three months' march. Here
they came into the midst of intrigues, in which the
Vizier, the chief Amir and other Court officers were
playing a leading part. At first the ambassadors
had to be content with interviews with these officials,
for the Emperor Farrukh was taken seriously ill

* Hamilton, described as a " runaway Scotch doctor," related to
the noble family of the Hamiltons of Dalzell,had arrived at Calcutta
in December, 171 1. In the India Office Records is an entry under
date I2th of November, 1709, showing Hamilton to have signed a
receipt for ;f 7, being two months' wages paid him in advance for his
services as surgeon of the frigate Sherborne, From this vessel, owing
to trouble between captain and crew, Hamilton deserted and fled.
" In the ledger of the Sherborne" says Mr. C. R. Wilson, Early Annals,
" the account of William Hamilton, * Chyrurgion,' is closed with the
scornful word * run,* and his life's entry might well have closed there,
were it not that the Divine Accountant is more long-suffering than
man." At Calcutta the Council appointed him second surgeon.

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6o LEDGER AND SWORD [1716

and could not be seen. In this extremity Hamilton
proffered his services to the Court. They were
accepted, for the fame of European surgery had run
before. Although it was now October the embassy
could do nothing but sit down and patiently await the
issue. There was another and especial reason of
state why the Mogul's recovery was most anxiously
desired by the Court ; a marriage had been arranged
between his invalid Majesty and the daughter of the
Rajah of Jodhpur. Hamilton exerted all his surgical
skill and his efforts a few weeks later were crowned
with complete success. The Mogul's gratitude knew
no bounds ; he showed Hamilton and his companions
publicly marks of his favour. In the presence of the
whole Court he pressed his acceptance of **a vest,
a culgee set with precious stones, two diamond
rings, an elephant, horse and 5,000 rupees ; besides
ordering at the same time all his small instruments
to be made in gold, with gold buttons for his coat
and waistcoat and brushes set with jewels **.

In the midst of so much rejoicing the Company's
ambassadors were fated to wait till Farrukh's mar-
riage with the Rajah's daughter should give them
an opportunity for an audience. Meantime, they
put their business in the hands of one Duraun Khan,
who promised to broach it to the Mogul at the
first opportunity. But in spite of this promise delay
succeeded delay ; their stay at Delhi had lasted
eleven months when suddenly the news came that
the Company's men at Surat had removed to Bom-
bay in order to escape from the oppression of the
Nawab of Surat, Alarm lest the English should

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1717] FIRMAN GRANTED 6i

again make war on the Mogul's ships stirred the
Court at last to action. The embassy was received,
the required firman granted, and late in May the
Company's envoys attended Court to make their
farewell obeisance. As they passed in succession
before the royal presence to receive their " serpaws "
or vests of dismissal, the Emperor made a sign and
an attendant whispered in Hamilton's ear that he
alone of the four was detained. The audience then
broke up, leaving the surgeon in a pitiable state of
perplexity. His concern was hardly diminished
when he was told that he was taken into the
Great Mogul's service. The surgeon appealed to
his companions not to desert him. " We were,"
writes Surman, "assured of his firm aversion to
accepting the service, even with all its charms of
vast pay, honour, etc." Hamilton had a wife and
children, from whom he would be parted for ever ;
he would certainly endeavour to escape from his
enforced detention, and such an exploit would in-
volve an embarrassment for the Company. The
trio, therefore, resolved to petition the Mogul
that Hamilton should accompany them back to
Bengal, but at first it was not easy to gain access
to the royal ear.^ The Vizier finally took up their

^ ** To free our honourable masters from any damage that might
accrue to them from the passionate temper of the King, our patron
Khan Duraun, was applied to for leave twice or thrice ; but he posi-
tively denied to speak or even have a hand in this business till our
friend Sayid Sallabut Khan had an opportunity to lay the case open
to him, when he ordered us to speak to the Vizier, and if by any
means we could gain him to intercede, that he would back it." —
Letter from the Envoys to John Hedges, 7th June, 17 17.

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62 LEDGER AND SWORD [1719

cause, and, backing their appeal with one of his
own, prevailed on Farrukh to grant their request.
** Since," said the monarch, " he is privy to my
disease, and perfectly understands his business, I
would very fain have kept him and given him
whatsoever he should have asked. But since he
cannot be brought on any terms to be content, I
agree to it ; and on condition that after he has gone
to Europe and procured such medicines as are not to
be got here and seen his wife and children, he re-
turned to visit the Court once more, I let him go."
And so, after two years at the Mogul capital, the
three Englishmen and their Armenian companion set
out on their return journey to Calcutta, thanking God
that at last " the troublesome business is over ".

Albeit, poor Hamilton was never destined to see
again his wife and children. With all his gifts and
honours — royal testimony to his surgical skill — thick
upon him, he died soon after his return. The news
of his death was forwarded to the Emperor Farrukh
at Delhi, who received it so incredulously that he sent
an officer of rank to Calcutta to verify it. Hamilton's
tomb may yet be seen in the British capital of
India. The stone bears an English epitaph, and a
Persian inscription to the memory of this celebrated
" physician in the service of the English Company ".

In 1 7 19, less than three years after the departure
of the Company's embassy from Delhi, the plotters
brought about the downfall of the luckless Farrukh.
A riot and massacre was precipitated in the city ; a
band of Afghans forced their way into the harem at
night, dragging out the Emperor, amidst the screams

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1717] FACTORY AT COSSIMBAZAR 63

of the women, and thrusting him into a dungeon.
" A hot iron was drawn across his eyes ; henceforth
he was unfit to reign. A child was taken out of the
State prison and placed upon the throne. The
kettledrums were sounded at the palace gate. The
cannon boomed through the morning air. All men
knew that Farrukh Siyar had ceased to reign ; that
another Emperor was reigning in his stead. Delhi
was tranquil." Two months later Farrukh was slain
in his dungeon and his remains were buried in the
famous tomb of Humayun.^

Meanwhile, Hedges had resettled a factory at
Cossimbazar, but the Nawab would not permit the
purchase of any villages or the use of his mint.
For the right of free trade he and his officers de-
manded 25,000 rupees, and although the Court of
Directors believed him to be merely corrupt and
avaricious, and deprecated the payment of any large
sum, yet Hedges and his emissary Feake in 17 17
closed with the demand. The Company was on the
whole satisfied with what Hedges had done, yet
seems to have considered that a greater display of
firmness would have saved 15,000 rupees. After-
wards of Hedges it wrote that " in the last stage of
his life he seemed to flag". He died in 171 7, his
" only epitaph " being found in a brief paragraph of
a letter from the Company to the Calcutta Council : —

" We are concerned for Mr. Hedges* death, and
were in hopes he would have lived to return to Eng-
land, that we might have told him how well we

* Wheeler, Early Records; Scotfs History of the Successors of
Aurangxeb.

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64 LEDGER AND SWORD [1717

accepted his services in retrieving many of the evils
which befel our affairs during the indolent and supine
administration of his predecessors." ^

In the meantime the question of private trade for
the Company's servants began to take on a renewed
importance. The Company recognised that the
salaries it paid its servants were merely nominal,^
and allowed them to "improve their fortunes" by
private trade. But as this private trade, although
limited to India, or in the case of Europe to a few
articles such as precious stones, involved the use of
shipping, the amount of shipping required for the
private trade began seriously to interfere with the
Company's business. Thus it was the recognised
ordinary business of the Company to employ large
ships of 300 or 400 tons burden and send them to
India at the beginning of each year, with cargoes of
cloth, hardware and bullion. On arriving in Bengal
in July or August these cargoes were discharged into
the Calcutta warehouses, and taken on board the
annual investment in piece goods, silk and saltpetre
sailed for home at the beginning of the ensuing year.

On the other hand, the coast trade had gradually
come into the possession of the Company's servants,
who were sole or part owners of a number of 100-
ton ships, trading from the Bay to Surat and Persia.
As this local traffic grew, the servants began to cast
longing glances at such ships of their masters as
lingered in enforced idleness in harbour. The Com-

> Wilson, The English in Bengal.

* As they continued to be in spite of dive's and Hastings' re-
commendations until after the passing of Pitt's bill in 1784.

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1717] BENGAL SERVANTS REMONSTRATE 6$

pany soon found it profitable to rent these out,
claiming and receiving a share in the benefit of the
freight voyages on their return. In 1710 a new
plan was adopted ; the Company became persuaded
that it was more advantageous to conduct a regular
freight business for the coast traders, charging ready
money on a regular scale The result of this plan
was that all the large ships were suddenly employed
in carrying freight at low rates. The factors saw
their private business seriously interfered with, and
were naturally reluctant to obey orders from home
with regard to letting out the ships from Europe on
freight voyages. The Company grew suspicious,
then indignant, then angry. For example, in 17 12
it was ordered that notification should be given of
the Lofubfis proceeding on a voyage to Surat, and
the directors confidently looked forward to a full
cargo. But the London was effectually delayed for
months, while its servants* ships were loaded ; and
the Company showed by its remonstrance that it
was not unaware of the true reason for the delay.

The agitation continued, and in 17 17 we find the
Company's servants in Bengal addressing the follow-
ing remonstrance to their masters : " The Honour-
able Company, our Masters, are pleased to indulge
their Covenant Servants and such persons as are
licensed to reside in India by them with the liberty
to trade without restraint, provided it does not in
anywise interfere or prejudice their Affairs and We
cannot see that having the Trade free and open to
Surat or Persia can be of any pernicious Conse-
quences to them or to their affairs in the article of

VOL. II. 5

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66 LEDGER AND SWORD [1720

Freight, since it is a Standing Order not to be broke
through that when one of their ships is set up for
any freight Voyage she must have the preference
in all respects before any other Ships can agree for
a Bale ; and in case any Clandestine proceedings are
made contrary thereto the Company have given full
instructions how they are to be dealt with who are
the Agressors ; therefore we cannot see any reason
for such fear, seeing no one is ignorant of the
Penalty : but after she is full freighted we cannot
see any Damage can accrue to our Honourable
Masters by setting up a ship."*

Although this remonstrance was not very
effectual, yet private trade on the part of the servants
continued to increase. So did the export of Indian
cottons and muslins, and the Company was content.

In its Indian settlements between 1720 and 1740
the Company's affairs were not marked by any
event of especial prominence. It was during these
years of moderate trade and moderate profits that
the French were effecting a firm foothold in the
peninsula, an object for which they had long striven.
This was observed with considerable jealousy by the
Company's servants, who, as Englishmen, had often
had reason to appraise highly, and dread in like
measure, the ambition, the passionate zeal and the
intriguing capacities of their new rivals, who were to
step into the shoes vacated by the Dutch, who in
turn had succeeded to the power of the Portuguese*

* Thi? Remonstrance is dfttcd 12th December, 1717.

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CHAPTER III.

The French Flourish the Torch^

In 17 i6 green tea first began to be used in England,
before which period Bohea was used in polite circles.*
But whatever the variety of the leaf, the growing
popularity of ** the cup that cheers but not inebriates"
could only enrich the Company's coffers.

Early in the eighteenth century the Company's
trade with China was not secure at any one port :
a ship was sent to Ningfpo or Chusan, or if not to
Chusan, to Amoy or Canton. Another was sent to
Pulo Kondor and Amoy or to Canton vid Surat ;
another to Pulo Kondor, Amoy and Macao.* But
by the year 1715 regular trade was established with
Canton. At stated seasons ships, each having its
own supercargoes, were despatched thither for the
purpose of selling the outward cargoes and investing
the proceeds in tea, silks and other products of China.
When the trade was still in its infancy at the prin-
cipal port of Canton an attempt was made by the
Chinese authorities to carry on the entire commerce
there through the " Emperor's merchant," a native

^ Oh, had I rather unadmired remained
In some lone Isle or distant northern land ;
Where the gilt chariot never marks the way,
Where none learn ombre, none e'er taste Bohea !

—Pope, 1713.
'Auber.
5* 67

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68 LEDGER AND SWORD [1720

who paid a large sum of money for the exclusive
privilege of trading with all Europeans. This was
largely protested against by the other merchants
and the local authorities at Canton. The so-called
" Emperor's merchant " was wholly unfitted for trade,
he had literally no goods ; and the others were de-
barred selling on account of his patent. The English
determining to advance no money, the Emperor's
merchant finally allowed others to trade, upon pay-
ment to him of something like 5,000 taels per ship.

The origin of the 4 per cent duty which fol-
lowed is thus described in a letter from the chief
factor at Canton to the Company: —

" This 4 per cent is an imposition lately crept
upon us by the submission of our predecessors the
two preceding seasons. One per cent, of the four
is what has been usually given by the Chinese
merchants to the linguist upon all contracts, and the
linguist was used to gratify the Hoppo out of this
sum for his employment. The other three were first
squeezed from the China merchant, as a gratuity for
upholding some particular man in monopolising all
the business, and this used to be given in a lump, so
that by undervaluing the goods and concealing some
part they used to save half the charge ; but to show
how soon an ill precedent will be improved in China
to our disadvantage, the succeeding Hoppos, instead
of the persuasive arguments such as their prede-
cessors used, are come to demand it as an established
duty."

At a little later date (1720) we arrive at the
foundation of the famous Hong Society. The native

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1722] Chii^eSe impositions 69

merchants, with whom the supercargoes transacted
business, then resolved to form a body for the purpose
of agreeing upon the prices of the goods sold to them.

In 1722 the Court of Directors stated in their
orders to the supercargoes concerning liberty of
trade : —

** This article is likely to be more necessary and
strenuously to be insisted on now than ever, for our
last return supercargoes have brought us a draft of the
combination which the Chinese were forming to set
their own prices on the goods to be sold, Europeans
thereby to have their proportions of the real profit on
the said goods whoever appeared to be the seller."

The continued impositions attempted by the local
authorities at Canton induced the supercargoes in 1 727
to address a letter to the head merchants, stating that
additional hardships were being brought to bear upon
them every year by the mandarins, and that if per-
sisted in they would carry off their trade to Amoy.^

1 A characteristic incident is recorded about this time, exhibiting
the constant suspicion to which the Company's servants were subject,
and a sample of outrages constantly recurring until the close of the
Company's connection with China in 1833 • —

The Hoppo's officer near Whampo, nearly fourteen miles from
Canton, met with an accidental death. Whereupon two of the mates
of the Cadogan were seized and four of their inferior officers while
walking near the factory at Canton, while Chinese soldiers were on
the lookout for any of the supercargoes. These latter were advised to
keep within the factory, but they thought it time to complain to the
Hoppo, and so their representatives stated that unless redress was
made immediately they should recommend the Company to transfer
its commerce from Canton to some other port. This produced the
desired result, and the mandarin who was guilty of the affront was
taken from office and a promise was given that he should not again
enter the Emperor's service.— Letter from Canton, 1721.

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96 LEDGER AND SWORD [1726

The matter was settled by the Hoppo s agreeing
that no more duties should be paid, ** either for ships
measurage or goods inwards, than what was set down
in the Emperor's book".

In 1728 an additional duty of 10 per cent was
laid on all goods by the authorities at Canton, and in
the following year the supercargoes resolved to have
a personal interview of remonstrance with the Vice-
roy. The Madras, Bombay and French traders at
Canton joined them. They made every effort to
see the Viceroy in person, but without success.
Special appeals to the authorities from time to time
were rewarded with partial relief, but the system of
imposition was carried on.

On another occasion, when attempting an inter-
view with the Viceroy, the Company's servants were
met by a considerable mandarin whom the Viceroy
had ordered to attend and hear them. He affected
to be annoyed at their troubling him with so trifling
an affair, instead of applying to the merchants for a
hearing. Ultimately he agreed to make what abate-
ment was reasonable on certain silks, but bade them
never to trouble him again on any such frivolous occa-
sion.

For some years we see the Company's super-
cargoes persevering in their appeal to the Court of
Peking to obtain a remission of the unfair and
tyrannous 10 per cent, duty, but without avail.

Meanwhile, all England was in a vortex of finance.
The South Sea Company in 171 7 had advanced to
Government ;^5,ooo,ooo, at 6 per cent. Three years
later it offered to take over the entire national debt :

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1726] (iEORCiE l.'S CHARTfeR ^t

Parliament accepted the offer ; stock in this Company
became grossly inflated and half the nation turned
gamblers. At last the bubble burst and thousands
found themselves ruined. In December, 1720, the
Prime Minister, Walpole, laid a proposal before the
House of Commons ** to restore public credit,"
namely, by the simple device of engrafting ;^9,ooo, 000
of South Sea stock into the Bank of England and
the like into the East India Company. Thereupon
a committee was appointed to receive proposals from
both Companies. But the proposals were not enter-
tained.

About the same time, the interference of the
Ostend East India Company, and **many other
difficulties did at this time oblige the Company to
reduce their half-yearly dividend from 5 to 4 per
cent." Not until nine years afterwards was this
terrible bugbear of a Belgian Company, chiefly
served by Englishmen,^ abolished by the fifth article
of the Treaty of Vienna.

In 1726 King George I., upon the petition of
the Company, granted it a new charter of confirma-
tion, with ample powers for it to erect corporations
at Madras, Bombay and Calcutta, with a common
seal, power to make bye-laws, and to try civil and
criminal cases.

In the year following, the Mayor's Court, which
had for some time been in abeyance at Madras,
was re-established, the occasion being marked with

^ In 1721 George I. assented to an Act for further preventing
his subjects from trading illicitly to the East Indies under foreign
commissions.

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>i LlEEKiER And sword fi73d

a ceremony, which once again shows the place
possessed all the rudiments of a sovereign com-
munity in India.^

In 1730, the term for the redemption of the Com-
pany's capital and of its exclusive trade drawing
near to the date mentioned in the Act of 17 12, a
certain band of capitalists thought the occasion
opportune to raise a clamour against a renewal, and
at the same time to forestall the Company in a
petition to Parliament* Accordingly, in February
we find them presenting proposals in the House of
Commons for a new East India corporation. They
offered to advance ;^3, 200,000 sterling for the
purpose of redeeming the fund of the Company, by
five several payments, ending at Lady Day, 1733,
provided that they '• might be incorporated, and in

1 Thus we read that —

All the gentlemen appeared on horseback on the parade, moving
in the following procession to the Company*s garden-house : —

Major John Roach on horseback at the head of a Company of
Port Soldiers, with Kettledrum, Trumpet, and other music.

Tbe Dancing Girls with the Country music.

The Pedda Naik on horseback at the head of his Peons.

The Marshall with his staff on horseback.

The Court Attorneys on horseback.

The Registrar carrying the old Charter on horseback.

The Sergeants with their Maces on horseback.

The old Mayor on the right hand and the new on the left

The Aldermen two and two, all on horseback. Six halber-
diers.

The Company's chief Peon on horseback with his Peons.

The Sheriff with a White Wand on horseback.

The Chief Gentry in the Town on horseback.

' Anderson, ParUamentaty History.

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\73o] KeW company Mooted 73

all respects vested with the exclusive privileges and
trade of that Company ".

Yet they did not seek to trade solely on the
joint stock system, but desired the India trade
should be thrown open to all His Majesty's subjects
who were prepared to pay one per cent on the
value of their exports, after taking out a licence
from the new Company. A list of benefits which
the nation would enjoy from such a revolution in
the manner of conducting its Indian commerce was
set forth, both in and out of Parliament. But their
l<^c and eloquence, with that of their army of paid
pamphleteers, was wasted ; at Walpole's instance the
House of Commons rejected the petition.^

This rejection did not altogether silence the oppo-
sition. ** They therefore," says Cox, in his Lt/e of
Walpole^ •* resolved to introduce the business again,
and employed the intervening time in publishing
anonymous letters, essays in periodical papers and
pamphlets, against exclusive companies in general
and particularly against the East India Company.
... The Ministers and the East India Com-
pany were not on their part silent; they likewise
defended, with no less skill, the advantages of an
united Company, vested with exclusive privileges

* The causes of rejection were : (i) The risk of turning the East
India trade into a new channel ; (2) the uncertainty whether the
proposed subscription would duly appear ; and (3) the doubt whether
by the new method of a regulated trade, the nation's general com-
merce to India might not be damaged. ^ For who can foresee all
the advantages which other European nations trading to India would
be able to gain over us by this alteration, or the hurt our trade might
receive firom the Indian princes." — Anderson, History of Commerce,

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^4 LEDGER AiiD ^WokD [173^

and bound by peculiar regulations, under the
control of the legislature." The petition, when
again presented on 9th April, was rejected without
a division.

The juncture was now favourable for a bill to
prolong the Company's monopoly, and this was.
accordingly brought forward by the Prime Minister.
It was duly enacted that the Company's *' present
yearly fund of ;^i 60,000 be reduced to ;^i 28,000,
t.e.f that the nation's payment of interest to the
Company should be reduced from 5 to 4 per
cent." And in addition the Company should pay
a lump sum of ;^ 200,000, "by which bargain the
nation was benefitted to the amount of at least a
million." In return the charter was prolonged
to Lady Day, 1766, three years then to be given
before the exclusive privileges of trade should
terminate.^

The Company had been obliged to pay heavily
as usual for its continued monopoly, and in conse-
quence of this inroad upon its funds we find it again
reducing its half-yearly dividend from 4 to 3^ per
cent, at Christmas, 1732. Yet its trade was still
flourishing, and seventeen ships sailed from India
during a single year.

^Anderson remarks that there was in this Act only a single
clause of any importance which had not figured in any former
statute relating to the Company, " arising from a doubt maliciously
and unaccountably started by the Company's enemies, whether the
three years' notice should be fully expired before they lose their
exclusive privileges'*. The clause in question therefore enacted,
*^ That upon the expiration of the said three years, and repayment
etc., their exclusive right shall cease *\

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1^33] PERVERSITY OF I^ROPRIETORS ^5

To illustrate the manner in which upon occasion
the Court of Directors were overborne by the pro-
prietors of stock we may cite the matter of the divi-
dend of 1733. It will be recalled that the Court,
owing to the large sum paid to Government and
the abatement of interest on account of its charter,
decided to reduce its dividend by i per cent It
now decided upon another and further reduction of
I per cent Nevertheless, such at this time was
the perversity of the Court of Proprietors, that
although their directors reacquainted them of their
remaining firm in their former opinion, that not above
3 per cent, could be prudendy divided for the then
current half-year, the ballot determined it by above
two to one for 3 J per cent, even though they were
then likewise told that the secrecy "proper to be
observed by great trading societies can very seldom,
if ever, admit of particular calculations to be laid
before such popular assemblies as general courts;
and although they well knew that their directors
were at least as much interested as most other pro-
prietors in keeping up the dividends on their stock ".

It was as if a Chancellor of the Exchequer were
forced to cancel his Budget, even though it had
the approbation of the Cabinet, at the behest of
an unenlightened House of Commons. Already it
showed a beginning of that ignorant exercise of
power on the part of the proprietors which, in the
course of a generation or so, was to cause much and
grave trouble to the Company.

Meanwhile, as to the annual dividend, we may
note that it was not until 1755 that the loss of

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^6 LEDGER AND SWORD [ifii

Madras and other events rendered necessary a re-
duction from 8 per cent to 6 per cent

Amongst other important domestic matters early
in George II.'s reign, the Company was deeply con-
cerned in what became known as the Great Naish
Case, implicating its servant, James Naish, chief
supercargo in China.

Naish was accused of having imported 2,000
pieces of gold, amounting to j^ 100,000, without pay-
ing a duty of five per cent for the same. This he
denied, and insisted that no such duty was due by
law. The jury found that Naish had imported 365
pieces of gold, value ;^26,864, and the question of
law was left to the decision of the Court, which was
of the opinion that no such duty was due.

In November, 1735, ^^^ case was again in Court,
and the question to be decided was whether a ^20,000
deposit made to the Company by Mrs. Naish in her
husband's absence should be returned or not The
Lord Chief- Justice and Justice Carter were for re-
turning it, Comyns and Thomson were against it,
and thought the Company should keep the money in
its hands until the lawsuit was settled. Sir Robert
Walpole was with these latter, and declared his
opinion in favour of the Company.

Not until 1739 was the lawsuit against Naish
concluded. It was agreed that the East India Com-
pany should pay him ;^2 8,000, from which he was
to allow ;^500 for law expenses and to give a bond
of ;^ 1 0,000 not to trade to the East Indies either in
the British or foreign service for seven years.

We have seen that the trading establishments of

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1742] NATION AGAIN BORROWS 77

Continental nations had earlier in the century occa-
sioned some anxiety in the breasts of the English,
but the capital of the French East India Company
was too small for it ever to have extricated itself
alone from its embarrassments. But in 1737 the
new Minister of Finance, M. de Fulvy, took the
company under his protection, increased its capital
and doubled its returns, so that at the public sales in
1742 twenty-four millions of livres (j^ 1,000, 000) was
produced, and the first ships that arrived in the fol-
lowing year brought home a still richer and more
valuable cargo. This sudden and singular change
in the French Company's affairs "alarmed and
amazed all Europe," but especially did it alarm the
directors in Leadenhall Street, who " saw with in-
finite concern, a company that but a few years be-
fore was looked upon as entirely sunk and destroyed
now rising into high credit ". But while they were
thus regarding the French, war was declared between
France and Great Britain. Louis needed all his
ships and money : and M. Orry notified the French
Company that they must ''stand now upon their
own bottom ". Lacking the royal support, the
French Company's shares fell instantly 20 per cent
and dividends ceased.

It was at this time that the British Government,
much pressed for money to prosecute the war which
was setting all Europe aflame, turned to the Com-
pany. They found it willing to bargain for a con-
tinuation for fourteen years longer of its present
monopoly (e>., from 1769 to 1783). It agreed to lend
;^ 1, 000,000 sterling to the Government at 3 per cent..

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78 LEDGER AND SWORD [1739

to be paid out of the excise. To make this advance
the Company was given power to borrow money on
its common seal and a million of new bonds was duly
created. The entire debt now due from the nation
to this Company was ;^4, 200,000 redeemable upon
one year's notice after Lady Day, 1 745. Yet, not-
withstanding such redemption, their monopoly should
extend to three years' notice after 1780, when its
exclusive rights, but not its existence as a Company,
should cease. Doubly secure of its interests within
the kingdom, the Company now prepared to attend
to its interests abroad.

The French Company, deprived of the royal
fleets and trembling for the safety of Pondicherry
and the other French factories, came forward with
a proposal for neutrality between the traders in
India. At first Leadenhall Street was not indisposed
to listen to this suggestion ; but at length, realising
its strength abroad if backed by the Government,
rejected it. The business of commerce at the
factories was thus in consequence quickly to g^ve
way to the business of war.

War could hardly in any case have long been
delayed. Almost every province in India at this
period was ripe for a bloody revolution After
Farrukh's tragic death the Mogul Empire was felt
to be travelling swifdy to its end. His successors
abandoned themselves to concubines and buffoons,
leaving the Government to be administered by
corrupt and unscrupulous Ministers. In 1739 the
Empire of Akbar and Aurangzeb, which was only
held together by the prestige of their names, re-

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1744] INDIA AFLAME 79

ceived a mortal blow. Nadir Shah of Persia ad-
vanced with a great army upon Delhi. He was
opposed only by mobs and by the bribes of
Ministers. To one of these, who offered him
;^2,ooo,ooo sterling, the Persian monarch listened,
and turned his face back again towards Teheran,
until another, out of spite, hinted to him of the con-
tents of the vast treasure house of Delhi. The
capture and sack of the Mogul capital was the
signal for the Empire's downfall. The provincial
governors asserted their independence and discon-
tinued their remittance of the revenues, Mahrattas
took to plundering the Deccan and the Camatic,
spreading their depredations to Orissa and Bengal.
The Nawab of Bengal was overthrown in 1742 in a
revolution and slain, and was succeeded by his rival,
Aliverdi Khan. These events caused the markets
generally to be deserted ; the lands were untilled
and the whole country lay in ruin.

At Calcutta, in 1 744, came the news of the out-
break of the war between France and England.
Peace between the English* and French in Bengal
was only secured by the stem prohibition of the
Nawab. But, if war was postponed in Bengal
through the strength of Aliverdi Khan, the Madras
Presidency was less fortunate.

The potentate of the Deccan or of Hyderabad,
whose full title was Nizam-ul-Mulk, or " Regulator
of the State," was an able man who had served in
the armies of Aurangzeb. The new Nawab of the
Carnatic had duly succeeded his father, without pay-
ing any regard to the Nizam's claim to make the

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8o LEDGER AND SWORD [1744

appointment as over-lord of the Carnatic. His
kinsman, Chunda Sahib, who had seized on the
Hindu kingdom of Trichinopoly, was abandoned to
the MahrattaSy who captured the capital of that
province and carried off Chunda Sahib a prisoner.
Although the Mahrattas left the Nawab of the
Carnatic in sore straits for men and money he never-
theless continued his defiance of his sovereign lord,
the Nizam, who now threatened to dethrone him if the
tribute demanded were not forthcoming. Driven thus
to extremities, the Nawab prepared for his defence ;
he repaired to the stronghold of Vellore and sent on
his harem and treasure to Madras. Scarce had he
accomplished this and begun himself to levy taxes
for the war when he was murdered by a kinsman,
Mortiz Ali, who instantly proclaimed himself Nawab.
But the murder outraged public feeling : Arcot, the
capital of the Carnatic, refused to acknowledge him ;
the Mahrattas at Trichinopoly declared against him,
and the Company's servants at Madras declined to
surrender into his hands the women and the treasure
of the murdered Nawab. Dozens of candidates! for
the throne now sprang up in every part of the
Carnatic, but disregarding all these claims, the
Nizam, advancing at the head of a mighty army of
80,000 horse and 200,000 foot, nominated one of
his own generals. But the people wanted the
young son of the late Nawab, and promptly poisoned
the Nizam's choice. The Nizam was thereupon
prevailed upon to yield to the popular clamours ;
he acknowledged Sayid Mohammed as Nawab of
the Carnatic, and appointed Anwar-ul-din as his

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^744] JOSEPH DUPLEIX 8i

guardian. The new Nawab's reign was brief. In
June, 1744, during the progress of some wedding
festivities at Arcot, a band of mutinous Afghans^
probably instigated by the scoundrelly Mortiz All,
aad perhaps also by the royal guardian, found
means to enter the palace, where their leader
stabbed the young Nawab, the last of his dynasty,
to the heart For this the murderer was in-
stantly cut to pieces, the suspected Mortiz Alt fled,
and Anwar-ul-din became the new Nawab of the
Camatic

Following these bloody transactions tidings that
an English fleet had appeared ofl* Madras were
borne both to the new Nawab and to the French
at Pondicherry, a hundred miles to the south of
Madras. In charge of the French settlement at
Pondicherry was a man of immense ability, ambition
and ingenuity, Joseph Dupleix, the son of one of
the directors of the French Company, and then in
the forty-sixth year of his age. Dupleix saw in
this English fleet the destruction of Pondicherry
if he did not obtain the assistance of the Nawab
or receive reinforcements from home. He there-
fore induced Anwar-ul-din to follow Aliverdi Khan's
example and to prohibit hostilities between Euro-
peans in his territory, in consequence of which the
English were restricted to a few petty captures at
sea, and then sailed away. But the very next
year it was the French themselves who set the
Nawab's mandate at defiance. A fleet arrived
from France with 3,600 men, under command of
La Bourdonnais, and lost litde time in bombarding

VOL. II. 6

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82 LEDGER AND SWORD [1746

Madras/ which then held only about 300 English.
The fleet which had been sent out from England
to protect the Company s forts did not appear.
Madras was doomed.

It was during this siege of Madras by La Bour-
donnais that the first sepoys on the Coromandel
Coast were trained for the Company's service. The
French at Pondicherry had some time before this
raised several corps of European-drilled natives, and
the system was first introduced into the Company's
territory here by Lieutenant Haliburton, who had
abandoned the civil for the military employment.^

After sustaining a five days' bombardment Fort
St. George capitulated on loth September, 1746,

^ The capture of Madras was a foregone conclusion. Hamilton,
writing in 1727, observed: "It is a colony and city belonging to
the English East India Company, situated in one of the most
incommodious places I ever saw. It fronts the sea, which con-
tinually rolls impetuously on its shore more here than in any
other place on the coast of Coromandel. The foundation is in sand,
with a salt water river on its back side, which obstructs all springs
of fresh water from coming near the town."

It was in vain that the project of strengthening its defences
had been repeatedly mooted both in India and Leadenhall Street ;
Fort St. George was the sure prey of well-directed artillery.

*In 1748 Haliburton was shot by a fanatical recruit, but so
great was the devotion of the others to their officer that the
murderer was instantly cut to pieces. Haliburton's name was
long cherished by the Madras sepoys. The latter were first actively
employed with Clive at Arcot; the Bengal Native Infantry being
formed in 1757. These Indian recruits were at the outset chiefly
commanded by native officers, one of whom, Mohammed Esof,
greatly distinguished himself in the early campaigns. The rank
and file were either Mohammedans or high-caste Hindus, chiefly
Rajputs. These native troops were not, however, the first in the
Company's service, as such had previously been employed at Bombay
and elsewhere.

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1746] LA BOURDONNAIS' PLEDGE 83

La Bourdonnais pledging himself to restore Madras
to the Company on payment of a fixed ransom of
;^440,ooo. Immediately on his entry he took the
persons, houses and property under his protection,
and possessed himself of the magazines and ware-
houses of the Company. But this mild proceeding
was by no means to the taste or temper of Dupleix.

While giving the Nawab to understand that
Madras should be made over to him, he insisted
that La Bourdonnais should violate the conditions of
the treaty of capitulation and retain Madras perman-
ently. But La Bourdonnais shrank from conduct in-
volving such a breach of faith and honour; a quarrel
ensued, and the French admiral sailed for home to
answer the misrepresentations made by his enemy
to the King. On the way he was taken prisoner by
a British man-of-war and landed in England. His
upright behaviour had won him many friends ; his
reception was favourable, and a director of the Com-
pany offered to be security for him with his person
and property. But the Government, with politeness
and magnanimity, demanded no other security than
the word of La Bourdonnais, and he was allowed to
return to France, where his enemies caused him to
be flung into the Bastille. The unhappy French-
man perished miserably three years later.

The Nawab, rendered angry by Dupleix's over-
bearing conduct, sent an army to drive the French
out of Madras ; but this army was no match for the
French guns, and took to its heels. Dupleix gave
orders to his officers at Madras to lay hold of every

article of property, public or private, native or Eng-

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84 LEDGER AND SWORD [1748

lish, save clothes and ftirniture, and the '^jewels and
trinkets of the women *\ He was obeyed, and the
Company's Governor and many of the leading ser-
vants were carried prisoners to Pondicherry and
there exhibited to the natives in triumph. This
exploit naturally made such an impres8k>n on the
Nawab as to induce him to change ^es and assist
the French to capture Fort St. David. But three
efforts ended only in feiilure, and the arrival in
March, 1747, of an English squadron, caused
Dupleix to fear for the safety of Pondicherry.

In this year the Court of Directors resolved to
appoint a capable commander of its rapidly augment-
ing forces of English suid natives in India. Major
Stringer Lawrence was the officer so selected. In
January, 1748, Lawrence arrived at Fort St. David,
with a commission to command the whole of the Com^
pany's forces in India! Besides a large addition to
the land forces, some 4,000 men, nine further fight-
ing ships under Admiral Boscawen arrived. Pondi-
cherry was besieged, but after a month the siege was
abandoned.

In the midst of these operations came news from
Europe of the signing of peace at Arx-la-Chapelle
Reluctandy, lander the terms of the treaty, Dupleix was
forced to give back Madtas to the Company. But
though strife in Europe was thus for a brief term
brought to a close, in India the struggle for supre-
macy between the two great nations had just begun.
The country, rent by internal tumult, was tottering
to its fall. The Mogul autiiority, which may be said*
to have received its death-blow by the sack of Delhi,

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1748] BLOODY RIVALRY BEGUN 85

in 1744, by Nadir Shah, had already expired in the
principalities of Tanjore, Madura and Mysore, which
were held by Mahratta rulers, and was virtually
extinct in the provinces held by the Nizam of
Hyderabad and Subahdar of the Deccan. To the
latter prince the Nawab of the Carnatic was re-
garded as feudatory, in the same manner as the
Company nominally held its factories at Madras and
Fort St David of the Nawab Anwar-ul-din.

Now rises the curtain on the fierce and bloody
rivadry between French and English for the posses-
sion of India. But had there been no Frenchmen
in this quarter c^ the world, it was inevitable that
the Company should be drawn into the disputes of
the native powers. Had there even been no such
disputes, its possession of trained soldiers and arms
would have constituted a sore temptation to resist
any despotic measures on the part of the natives.
When the Court of Directors, alarmed at the French
Company's encroachment and aggression, and think-
ing to stop it further, sent out Lawrence and a
raiment to India, they more surely laid the founda-
tion for a dominion of the sword than they had done
in 1688. After this, we will see that for nearly a
century a policy of peace in India would have
meant British extinction ; either the Company's rule
falling before the turbulent natives, or its replace-
ment by the authority of the French.

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CHAPTER IV.

Saunders sets Young Clive a Task*

" The servants of the East India Company,"
observes an eighteenth century writer, " had not
yet extended their ambition to the renown attain-
able by feats of arms. Confined within the circle
of a few miles of sandy beach round Madras, the
Presidency neither created jealousy nor commanded
respect. Though they had been indulged with the
privilege of fortifying themselves, they had neglected
that first of all duties, self-defence. They had
works, but such as seemed rather built by chance
than by design. They had bastions, but they were
placed contrary to all rule ; and the curtain was
no better than a long unflanked garden wall.'*^

But the lesson of the fall of Fort St. George was
not lost upon the Company. During the French
occupation the Governor, Nicholas Morse, was
called to England by the directors, and plans drawn
up for new fortifications when Madras should revert
to them, as they hoped it would do at the end of
the war. Meanwhile Fort St. David at Cuddalore
was regarded by Governor Floyer as well - nigh

^ The History and Management of the East India Company — an
attack on that body instigated by Mohammed Ali, Nawab of the
Carnatic, and written by James (*' Ossian ") Macpherson, anony-
mously, in 1778-9.

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1749] SUHAjrS OFFER 87

impregnable, since so many attempts directed against
it had failed. The news of the treaty of peace,
as well as the presence of Admiral Boscawen and
a British squadron, seems to have inspired Floyer
and his Council with a considerable sense of power,
as well as security. Add to this the return of Major
Stringer Lawrence and his English troops ii; the
pay of the Company to a life of idleness at Fon^St.
David, and we are in a position to understand why
the Council, of which Lawrence was a member, was
not altogether proof against the temptations to a
profitable military and political activity which such a
situation offered.

In February, 1749, while all was outwardly
peace in the Carnatic, Suhaji, a member of the
reigning family of the principality of Tanjore,
who had been expelled from the succession by his
illegitimate brother, Pertab Singh, applied to the
representatives of both the English Company and
the English King for aid in recovering his throne.
The Presidency had previously supported Pertab
Singh, but the offer which his rival made, through his
over-lord, the Nawab, appealed irresistibly to Floyer
and Lawrence, and fully as much to the King's
officer, Boscawen.^ The offer was that in return

^ ^ Since you have employed your troops in assisting Governor
Morse at Madras, and sent your son, Mahommed Ali Cawn, with a
well-appointed army to the assistance of Governor John Hind, and
preserved Fort St. David from destruction, and during the siege of
Pondicherry supplied the English army with provisions, etc., etc., . . .
it is our duty to render every service to your Excellency. Pertab
Singh is an usurper of the country of Tanjore and your subject ; as
Tanjore is dependent on the Carnatic. At your request we will send

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88 LEDGER AND SWORD [1749

for being placed on the throne, Suhaji would cede
to the Company the fort and surrounding territory
of Devi Cottah, near the mouth of the Kolrun river,
and in a most advantageous commercial situation.

Fired with enthusiasm at the prospect, the
Council closed with the offer, and, accordingly, in
April, a small English and sepoy force marched
frortl Fort St. Davia into Tanjore and attacked
Devi Cottah. The first attempt failed, but another
expedition was quickly fitted out, and after consider-
able hard fighting, Pertab Singh came out and
offered terms. He said he was willing to yield the
town, fort and harbour to the Company, together
with the adjacent territory, of his own free will and
accord, provided the English, on their part, would
renounce the alliance and support of Suhaji, and
also deliver up his person. This was certainly a
singular proposition, and Floyer and his Council hesi-
tated. But the advantages of possessing such a
station as Devi Cottah outweighed their scruples,
and the terms of the Rajah of Tanjore were complied
with. Thus the affair ended in the cession of Devi
Cottah to the Company by Pertab Singh, with as
much land adjoining as would yield an annual income
of 36,000 rupees. Moreover, the Rajah agreed to

our army with you to reduce Tanjore under your government, or, if
you think proper, to appoint Gattcar, descended from a good family,
to be your representative there. Pertab Singh has not the shadow
of right to that country, and if you will be pleased to make over Devi
Cottah to the Company, they will with gratitude accept it. I will
despatch two ships with warlike stores to that place, and Governor
Floyer will despatch an armament by land." — Boscawen to Anwar-
ul-din.

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1749] ROBERT CLIVE 89

pay the expenses of the war, and to grant Suhaji
an annual stipend of 4,000 rupees, on condition that
the English ^ould be responsible for his person
and behaviour.^

It was at the siege of Devi Cottah that a young
writer of the Company's service, Robert Clive, first
attracted attention. This youth of twenty-four, whose
name was destined to be handed down to posterity
as one of the chief builders of our Indian Empire,
was bom in 1725 in a small parish in Shropshire. At
eighteen Clive was appointed to a writership in the
Company's service at Madras, where he, a bom soldier,
found the duties of servant to a purely trading com-
pany most uncongenial, so much so diat, on one occa-
sion, a prey to melancholy, he sought escape in suicide.
But in the new sphere of the Company's operations

1 " The President having receiyed a letter firom Major Lawrence
at Devi Cottah, in answer to the proposals sent to him on the 28th
inst to make to the ambassadors towards forwarding a peace, which
were rejected by them ; that Hiey were highly incensed at the article
of allowing a maintenance for the support of Suhaji Rajah, and
insisted strongly upon his being delivered up to them ; but that after
a long conference they had offered the following proposals, which
Major Lawrence writes the President he believes to be the best
terms they can be brought to : —

" To pay one lakh of rupees on account of the expenses of the
expedition.

** To give a grant of the fort of Devi Cottah to the Company for
ever, with lands about it, to the yearly value of 9,000 pagodas.

" Upon the receipt of the above letter, he laid the same before
General Boscawen and Mr. Prince; and Major Lawrence writes
that it is his opinion no better terms could be obtained, and those
made being very advantageous to the Honourable Company, it was
agreed upon by them to accept the same, and a letter was wrote to
that purpose to Major Lawrence last night" — Fort SL David Consulta-
tion Bookf 30th June, 1749.

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90 LEDGER AND SWORD [1749

he soon perceived the wider possibilities of the
situation. Clive threw down the clerk s pen to take
up the sword. Officers being sadly wanted, he was
granted a temporary commission as ensign during
the siege of Pondicherry. The siege proving a
failure, Clive was again employed at the ledger ; but
his bearing had already won him the approval of
Major Stringer Lawrence, the new commander of
the Company's forces at Madras, and in the second
expedition against Devi Cottah he was given the rank
of lieutenant, and behaved with signal bravery.

Questionable as were the means by which Devi
Cottah was acquired by the Company, of the great
advantages to be derived from it there seemed no
doubt. Such advantages were not possessed by any
other port along the coast from Masulipatam to Cape
Comorin, in addition to which the neighbouring
territory was fertile and healthy. It constituted the
first example and the first fruits of the Company's
wars which were to end in the conquest of India.
The Presidency had got the promise from Pertab
Singh of a pension of some ;^400 a year for Suhaji.
Pertab Singh had insisted on Suhaji's surrender
into his hands. Floyer hesitated to comply with
such a request ; Admiral Boscawen refused it. As
it was deemed unwise to offend the ruler de facto
of Tanjore, a secret article was inserted in the
treaty that the Company " should prevent the Pre-
tender from giving any further molestation to
Pertab Singh, to insure which it was necessary to
secure his person". Luckily for himself Suhaji
escaped, and lived to enjoy his pension ; but his

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1749] COMPANY'S NAWAB SLAIN 91

uncle, Gatika, who also possessed aspirations to the
throne, it was thought prudent to detain for some
years under surveillance at Fort St David.

Madras, now restored to Lawrence, was filled
with English soldiers; Pondicherry was filled with
French. The officers on both sides only waited for a
signal to display their skill and courage. As a method
of evading the treaty of Aix-la-Chapelle they re-
solved to fight, not as partisans of the two nations,
but as auxiliaries and supporters of the rival native
princes. Neither had long to wait. A double op-
portunity for his consuming ambition had already
revealed itself to Dupleix. In 1748 Nizam-ul-Mulk,
the last really great ruler of the Deccan, died at
Hyderabad at the great age of 104, and his death
was immediately followed by a war for the succes-
sion, between his son Nazir Jung and his grandson
Muzafir Jung.

At the same time, in the Camatic, the unpopu-
larity of the Nawab, Anwar-ul-din, had induced one
Chunda Sahib, son-in-law of the former Nawab, to
contest his right to the throne. The two pretenders
met and entered into negotiations ; Dupleix, grasping
the situation, offered the services of the French, as
an alternative to calling in the help of the Mahrattas.
An alliance was forthwith agreed upon, and espousing
Chunda Sahib s cause first, Dupleix sent 400 French-
men and 2,000 of his trained sepoys into battle at
Ambur on the 3rd August, 1749. The troops, at
first commanded by M. de Auteuil, were, on his being
wounded, led by the able Bussy. Victory crowned
his arms, Anwar-ul-din was slain, his troops fled in

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92 LEDGER AND SWORD [1749

confusion, and the conquerors marched to the capital
city of Arcot, which surrendered in a panic. Here
Muzafir Jung proclaimed himself Nizam of Hyder-
abad and Chunda Sahib Nawab of the Carnatic. In
the battle one of the late Nawab's sons was taken
prisoner, while the other, Mohammed Ali, of whom
we shall hear much hereafter, fled for his life to the
fortress of Trichinopoly, from whence he addressed
an earnest appeal to Charles Floyer, the Company's
Governor at Fort St. David, to come to his rescue.

The two monarchs whom Dupleix had assisted
to establish now proceeded to Pondicherry, whore
Muzafir Jung conferred on the French the lordship
of eighty-one villages adjoining the French territory,
in imitation of the grant the Rajah of Tanjore had,
as we have seen, just bestowed upon the English.
It was arranged that a march should be made upon
Trichinopoly, from whence Mohammed Ali, the
rightful Nawab of the Carnatic, was sending re-
peated appeals to the Company's Council for succour.
During a delay which occurred Dupleix, incensed
against Pertab Singh for having yielded Devi Cottah
to the English, despatched his new Nawab, Chunda
Sahib, who was himself eager for plunder, with a
French force to. Tanjore. Hostilities were averted,
but in the end it cost the ruler of that principality
a huge indemnity to get rid of the invadera

Dupleix, having succeeded in making a French
Nawab of the Carnatic, was hopir^ for an oppor-
tunity to place a French Nizam on the throne of
Hyderabad. Meanwhile Floyer and his Council
hesitated about complying with Mohammed Ali's

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irso] MADRAS A MILITARY DEPOT 93

request before they had received orders from the
Court of Directors. At this juncture there came a
sudden change in the posture of affairs.

In the war for the overlordship of the Deccan
the succession was disputed between the late
Nizam's son, Nazir Jung, and his grandson, Muza-
fir Jung. Thinking the latter's chances more
favourable, Dupleix had resolved to support him.
News now came that Nazir Jung had established
himself on the throne of Hyderabad, and that his
nephew was being carried about in his train tn irons.
The new Nizam and Mohammed Ali, their forces
united, were marching into the Camadc at the head
of an immense army. Moreover, Nazir Jung, joined
by all the rajahs and petty princes of the Camatic,
found natural allies in the English, to whom an
opportunity was presented of foiling the schemes of
Dupleix. As the army approached, Chunda Sahib
and his French allies retreated hastily to Pondicherry,
where Dupleix, summoning his whole European
and native strength, prepared to defend himself to
the last gasp.

The problem presented to Lawrence and the
Company's servants during these disturbances was
a difficult one. It fully accounts for their initial
hesitation. Trade was almost completely over-
borne ; but the Company's Governors still retained
their authority, although events were daily reducing
it to nominal proportions. At Madras everything
was disorganised ; the civil community was dis-
persed and the place had become a mere military
depdt and hospital. Lawrence, although beset by a

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94 LEDGER AND SWORD [1750

doubt whether he was justified in fighting the
French without orders from King George, yet felt
that the time was ripe for action if British prestige
was to be maintained. With about 600 Company's
soldiers drawn from Trichinopoly,^ Lawrence ad-
vanced to join Nazir's army, which had now passed
Arcot with 300,000 horse and foot, 800 guns, and
1,300 elephants.

Even without the mutiny of French officers
which now occurred, the cause upon which Dupleix
had set his heart seemed hopeless. His ally,
Muzafir Jung, was forced to surrender, the English
Nawab, Mohammed AH, was placed upon the
throne of the Carnatic, while the deposed Chunda
Sahib fled to Pondicherry. For the moment the
star of the Company appeared in the ascendant.

But it was only for a moment ; the triumph of
the allies of the Company was short-lived ; Dupleix's
genius was superior to his misfortunes. He opened
a secret correspondence with the disaffected Patan
troops in the Nizam's service, he instilled a new
spirit into his officers, and his efforts brought a speedy
change in the aspect of affairs. What occurred was
not, as Wheeler remarks, " a revolution, such as
might have occurred in a European Court ; it was
an entire transformation, like a new scene in a

^It was charged a little later by contemporary pamphleteers
that had the Presidency not recalled the British troops from the aid
of the Nawab, the French could not have obtained the victory at
Trivadi ; which enabled them to give a Subahdar to the Deccan and a
Nawab to the Carnatic. " But it would appear that Major Lawrence
suffered his own gallant spirit to be cramped and confined by the
narrow councils of a commercial Board.*' — Jambs Macphbrson.

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I75I] SUCCESS OF THE FRENCH 95

pantomime". The new Nizam, who had been ar-
ranging a pacificatory treaty with the French, was
assassinated by a trio of Patan traitors instigated
by Dupleix ; Muzafir Jung was released from his
chains and established on the throne of Hyderabad.
By way of reward the French were handed over a
large quantity of the slain Nizam's treasures, and
Dupleix was nominated Governor of all the Mogul
dominions on the Coromandel Coast, from the river
Kistna to Cape Comorin. Chunda Sahib also was
restored to the government of Arcot. Both con-
spirators, " wild with joy, embraced one another like
men escaped from shipwreck ". In December, 1750,
Muzafir Jung arrived at Pondicherry ; in January
he returned to the Deccan, accompanied by a
French force under Bussy. But it appeared that
the unruly and treacherous Patans were not yet
sufficiently placated ; they broke out in renewed in-
surrection on the road to Hyderabad, and although
the French fought their way through with artillery
and grape-shot, the luckless Muzafir Jung was sent
to account with a javelin through his brain. The
situation was an acute one ; but the resourceful
French commander, Bussy, instantly created a new
Subahdar out of a prisoner, one Salabut Jung, then
languishing in confinement in camp. He then con-
tinued his march on to Hyderabad.

The extraordinary fortune of the French, com-
bined with the vacillation of the civil authorities at
Fort St. George and Fort St David, rendered the
situation of the Company in this part of India, if not
indeed in the whole Indian peninsula, a most pre-

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96 LEDGER AND SWORD [1751

cairious one. Mohammed Alt, without money and
without an army, shut up in the fortiress of Trichin-
opoly, began to despair of recovering his province.
He even offered to make terms with Chunda Sahib
and the French ; Lawrence was absent in England ;
Governor Floyer seems actually to have consented
to such an arrangement in the hope of quieting
matters. Happily for the future of the Company,
these overtures were hai^htily rejected by the
victorious French.

At home, Floyer s despatches announcing the
Devi Cottah transaction filled the Court of Direc-
tors with alarm, and on the 6th of July he received
his dismissal. But Thomas Saunders, who suc-
ceeded him, was no more than Floyer able to bring
peace to the Camatic or to refrain from mingling in
military afiairs. The Company honestly believed
that when the treaty of peace was signed at Aix-
larChapelle hostilities between French and English
in all quarters of the world were at an end. But, as
a matter of fact which history shows, they were just
beginning both in North America and in India,
where alike the political paramountcy was at stake
during the next few years.

Fortunately for the real interests of the Company,
the overtures of the beleaguered Nawab to Dupleix
were rejected ; fortunately, also, Thomas Saunders,
of firmer fibre than his predecessor, resolved to do
his duty. In Lawrence's absence he twice sent a
strong detachment to the relief of the beleaguered
Nawalx But these were in each case ill commanded,
one sustaining a disgraceful defeat at Valkonda.

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175 1] YOUNG CLIVE'S STRATAGEM 97

Chunda Sahib and his French allies were now press-
ing with all their might upon Trichinopoly. Young
Clive, now permanently transferred to the military
service, with the rank of captain, was sent for the
third time to Trichinopoly in charge of another
small reinforcement. He had previously expressed
to Saunders his opinion that if Trichinopoly were to
be relieved it must be done by creating a diversion
in an unexpected quarter, and suggested the capture
of Arcot, the capital of the Carnatic. His third visit
confirmed him in this opinion ; on his return he con-
vinced Saunders that he was a fit person to execute
the plan. Arcot was accordingly surprised on the
first of September by a force of 200 English and
300 sepoys. Clive*s officers numbered only eight,
half of whom were very young writers, who, fired
by the example of Clive, had just quitted their desks
in the Company's service. This little force entered
Arcot and occupied the fort. The ruse perfectly
succeeded ; on hearing the news the enemy sent an
army of 10,000 men from Trichinopoly to re-
cover Arcot. Against this formidable body Clive,
cooped up within the walls of a half-ruined fortress,
held out valiantly. Every breach the enemy made
in the wall was instantly repaired ; every assault was
repelled with spirit His nocturnal sallies kept the
foe in constant alarm and commanded the admira-
tion of the native chieftains, who had hitherto a
somewhat unfavourable opinion of British military
capacity.

In the meantime the Company's chiefs, Saun-
ders, at Fort St David, and Richard Prince, at Fort

VOL. II. 7

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98 LEDGER AND SWORD [1752

St George, had despatched 100 English soldiers and
2cx> sepoys to Clive s succour, but, intercepted on
the road by an overwhelming force of natives
and some French artillery, this litde reinforce-
ment was driven back with loss to Madras.
Amongst those who had been watching the defence
of Arcot was a body of 6,000 Mahrattas. Appealed
to now by Clive these Mahrattas, who had been
only nominally in alliance with Mohammed Ali,
resolved to go to his aid. Thoroughly alarmed, the
commander of the besieging force delivered his final
assault on the 14th November. When day broke
on the following day it was found that the whole
army had abandoned Arcot in haste and confusion,
leaving the place in possession of the Company's
servants after a siege of fifty days.

This achievement has been called **the turning
point in the Eastern career of the English ".

A detachment now arriving from Madras to re-
lieve the garrison, Clive set out instantly to pursue
the enemy, gained a splendid victory and the loyal
adhesion of a body of the French sepoys, and then
returned to Fort St George to report upon the
campaign to the Company's Deputy Governor there.
But the enemy quickly reassembled, and some 5,000
natives and Frenchmen with artillery began to rav-
age the Company's territory in the immediate vicinity
of Madras. In February, 1752, Clive went out to
meet them with a small body of English and sepoys.
He defeated them after a hard-fought battle, Chunda
Sahib's troops flying in all directions, and the
French making a rush for the protecting walls of

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1752] NAWAB'S SECRET TREATY 99

Pondicherry. The young conqueror was advancing
to Arcot when he was recalled by President Saun-
ders at Fort St David, to command an expedition
against Trichinopoly, still beleaguered by Chunda
Sahib's troops. Not to lose an opportunity of
damaging the prestige of the French on the march
back he razed to the earth a town which the vanity
of Dupleix had induced him to christen after himself,
together with a monument which he had set up to
commemorate French victories.

Clive was not destined to head the force for the
rescue of Trichinopoly. Two days before the ap-
pointed date Major Lawrence arrived from England
and took command as superior officer. But Law-
rence, wholly destitute of professional jealousy, and
warmly admiring the self-taught captain's talents,
insisted on his accompanying him. In the end
Chunda Sahib's forces broke up in dismay, the
French were compelled to surrender, and their ally's
head was despatched by some of his native enemies
to Mohammed Ali as a trophy of victory.

The tragic death of the French Nawab, far from
putting an end to the disturbances in the Carnatic,
only sowed the seeds of a new war. It appears that
Mohammed Ali, when but feebly assisted by the
servants of the Company, had made a secret treaty
with the Rajah of Mysore for his assistance, by
which, for his aid in regaining possession of the
Carnatic against Chunda Sahib, the Rajah was
to receive Trichinopoly and its dependencies. The
Rajah now insisted upon a fulfilment of this bargain.
Mohammed Ali refused on the ground that he was

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loo LEDGER AND SWORD [1752

still surrounded by his enemies, and that if he gave
up Trichinopoly he would be virtually giving up all
his dominions. Thereupon the ruler of Mysore ab-
ruptly broke his alliance with the restored Nawab
and with the Company and went over to the French.
These dissensions were, of course, actively fomented
by Dupleix. A renewal of hostilities ensued. The
civil authorities at Madras held a conclave, and re-
solved, in spite of the opposition of Lawrence, to
attack the strong fort of Ginji, in the South Arcot
district. The Company's force was repulsed with
loss, and the French now advanced to within two
miles of Fort St. David. In this action neither
Lawrence nor Clive had taken part owing to illness,
so that Saunders was grievously handicapped, and
the sepoys, raised and vigorously trained by his
orders, lacked a proper commander. Two other
battles followed with better results, Lawrence de-
feating the French in the field, taking prisoner
Dupleix's nephew, who was in command, and Clive
capturing two strongholds held by the French near
Madras after a brief siege. Upon this achievement,
Clive, with greatly impaired health, proceeded to
England by the first ship.

By the simple expedient of forging sunnuds from
Delhi, Dupleix now invested himself with the go-
vernments of all the territory south of the Kistna.
In this self-appointed rdle of Subah he created
Mortiz AH (hereditary governor of Vellore) Nawab
of the Carnatic, and succeeded in turning against
Mohammed Ali the power of the Mahrattas and
Mysoreans. The French once more laid siege to

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17S3J PItOl)UCTI6^f OF ^Et^OVS loi

Trichinopoly ; Lawrence was sent thither in May,
1753, and after a gallant and persistent effort cut up
the French and dispersed the horde of besiegers.
All this was not accomplished without anxiety and
industry on the part of the Company s agents at
Madras, whither the seat of the Presidency had been
removed, 5th April, 1752. It is customary for his-
torians to speak of all these achievements as if purely
conceived and conducted by the military authorities,
to attribute the failure of operations to the ill-advice
or opposition of the Presidency. There is no doubt
that the counsels of men acting in a civil capacity,
taking their orders from the Company at home,
which did not yet understand the situation, and was
perhaps unduly anxious to replace matters on their old
footing of trade, were not fully favourable to bold
and dashing initiative. But there were men in the
Council who knew as much of the theory and art of
war as Clive, who had better acquaintance with the
natives than Lawrence, and were not far behind
either of these commanders in energy and zeal.
Hinde and Haliburton had seen the need of drilling
the natives in European military practice, and Saun-
ders was indefatigable in the production of sepoys
for the defence of the Company's property and repu-
tation. The difficulties the civil government had to
face in negotiating and reconciling native interests
were enormous. They seem to have been always fear-
ful that the Company's military contingent, anxious
for renown, would plunge them into some irre-
trievable disaster. All the work of correspondence
and treaty making fell on Saunders and his Council.

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toi LfebGER And sword [i/si

They were obliged to scour the country for stores
and provisions for Lawrence's army. When the
latter had, in the following year, repeatedly found
the Rajah of Tanjore intractable, it was Robert
Palk, an ex-chaplain, who induced Pertab Singh to
listen to reason, as it fell to his successor, George
Pigot, to bring Mohammed AH to terms.

In fact, as Clive himself told Parliament twenty
yeirs later, although the " officers of the navy and
army have had great share in the execution, the
Company's servants were the cabinet council, who
had planned everything ; and to them also may be
ascribed some part of the merit of our great acquisi-
tion".

Meanwhile the French, for favours rendered to
Salabut Jung, had obtained the cession of the five
important provinces of Ellore, Rajahmundry, Cica-
cole, Condapilly and Guntore, otherwise known as
the Northern Circars, which rendered them masters
of the sea-coast of Coromandel and Orissa for an un-
interrupted line of 600 milea Besides yielding them
a huge revenue, this territory furnished them facili-
ties for receiving reinforcements of men and stores
from Pondicherry and Mauritius. Bussy, who had
accomplished this, repaired to Golconda, where he
resumed his control over the Deccan in full Oriental
pomp and splendour. Far otherwise was it with his
chief, Dupleix. His ambitious schemes had failed to
dazzle either Versailles or the French India Com-
pany. They saw no permanence in his conquests ;
they grew jealous and fearful of the expense in men
and money. In England our Company duly com-

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1^54] DEPARTURE OF DLfPLElX toj

plained of Dupleix s conduct to the British Ministry,
which did not fail to lodge remonstrances with the
Court of France against the irregular hostilities
being maintained between subjects of two friendly
European nations on the Coromandel coast. To
add weight to these remonstrances, a British naval
squadron together with an infantry regiment were
ordered to proceed to Madras. These preparations
were not lost upon the statesmen at Versailles.
Dupleix was instructed to negotiate an immediate
peace with the English and their allies in India.
Saunders joyfully welcomed the chance of ending an
unsatisfactory state of affairs. He nominated two de-
puties, Robert Palk and Henry Vansittart, to meet a
French deputation at Madras. Dupleix had claimed
to have a letter from the Mogul authorising him to
settle all the questions in dispute. At an early stage
of the negotiations it was discovered that this autho-
rity had been forged by Dupleix, and the proceedings
therefore came to an abrupt termination. Saunders
wrote home to the Company declaring that a settle-
ment could not be made by the parties in India, and
requesting its direct intervention. As a consequence
Dupleix was recalled, and Godehieu, one of the direc-
tors of the French East India Company, sent out to
Pondicherry in his stead.

" With the departure of Dupleix," says a writer
of the last century, " the grand schemes of French
empire and dominion in the East seemed to vanish
into thin air. On his arrival in Europe this ambitious
and able man foimd himself obliged to dispute the
miserable remains of his once splendid fortune with

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164 Ledger Aiiii SwoRb ti^^w

the French East India Company, to dance humble
attendance on Ministers and their satellites, and to
solicit audiences in the antechambers of his judges.
He suffered as much as La Bourdonnais had suffered
through his means ; and he was soon dead and soon
forgotten in France, though not in India."*

His successor, Godehieu, quickly evinced a more
amiable policy. He opened a friendly correspon-
dence with Saunders, the Company's Governor at
Madras, returning thither a company of Swiss mer-
cenaries whom Dupleix had made prisoners, and
otherwise displaying an eagerness for peace. A
suspension of arms was agreed to, and on the 26th
December, 1754, a provisional treaty establishing
peace was signed by Saunders and Godehieu. By
the articles of this treaty neither nation was to build
forts, although places already fortified might be
repaired The French agreed to withdraw their
troops from the Camatic and to interfere no more in
the affairs of its native princes. Moreover, the ter-
ritorial acquisitions of both nations were to be settled
and defined on the principle of equality, a conces-
sion which virtually robbed the French of all that
Dupleix's wars and intrigues had acquired. Accord-
ing to Saunders' view, which the Company at the
time chose to adopt, the English settled on the coast
were the subjects of the Mogul empire. The French

^Macfarlane, British India. Joseph Dupleix died in 1763 in
reduced circumstances in Paris. He was beyond question a man of
genius, a powerful schemer ; but there is nothing to show that he
possessed either valour or probity. Had any but Madame de Pompa-
dour then ruled Prance, he would never have ended his days so
ingloriously.

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i?S4] COMPANY'S FkE^H ARMY 165

being on precisely the same footing as regarded the
empire were certainly rebels in that they opposed
the rights and authority of Mohammed AH, the
lawful representative of the Mogul in the Carnatic.
The war, therefore, which finally resulted in the
expulsion of the French, was the Nawab's war, and
the Company's servants in lending Mohammed Ali
their assistance were merely performing their duty
to their suzerain. ^

There was something unsound and hypocritical
about such a declaration, and events were looming
up in the north to demonstrate its exact worth as a
political creed.

Meanwhile, in spite of the treaty, French influ-
ence, guided by the redoubtable Bussy, still remained
strong enough in the Deccan to give the Company
and its servants some apprehensions for the future.
In fact, not knowing what arrangement might be
come to in India, the Company in 1754 resolved to
send a fresh force into the Deccan for the purpose
of undermining this influence in co-operation with
the head of the Mahratta confederacy.

Clive, baffled in his desire to enter Parliament
on his return, applied to the Court of Directors for
re-employment in India He was promptly ap-

^ Though the hostilities between the English and French Com-
panies had become a part of the war between the two nations, as
each was assisted by its respective sovereign, they were both, strictly
speaking, but auxiliaries to the rivals for the Nawabship of the
Carnatic. The English, at least, considered themselves as only
contending for the legal government, under which they had so long
flourished against usurpers, either created or supported by the in-
trigues and arms of the French.— Governor Saunders' letter to the
French deputies, 15th February, 1754.

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io6 L^DGEk And sword ii7Si

pointed Governor of Fort St. David and instructed
to assist in the execution of the military operations
in the Deccan. He had been preceded by a British
officer, Colonel Scott, whose services had been
pressed upon the Company by the Duke of Cum-
berland, to lead the English auxiliaries who were to
act with the Peishwa of the Mahrattas. About the
same time a British squadron under Admiral Watson,
conveying the 39th Foot to India, arrived in Madras.
On the conclusion of his treaty Saunders sailed
for England and was succeeded in the presidency by
George Pigot/ a man of ability and courage who
had long served the Company. To Pigot fell the
duty of informing Admiral Watson that the troubles
in the Carnatic were for the present over, and ar-
ranging for his employment elsewhere. It was
decided that the piratical raids to which, as we have
seen in the earlier portion of the present narra-
tive, Bombay had been subjected should at last
be repressed. The famous Mahratta chief, Sivaji,
who had given so much trouble to the Company
in Aungier's time, had been followed by marine free-
booters not less rapacious and insolent, whose attacks
on English, French and Dutch vessels had greatly

^ " This gentleman," says Macpherson, ** though bred to trade,
was possessed of personal resolution ; and he had once seen the foce
of an enemy, about seven years before." The fact alluded to oc-
curred in July, 175 1, when, lacking officers, Saunders ordered Pigot,
then a member of the Council, to conduct a convoy of stores to
Verdechellum, a fort north of the Kolerun river. This he performed
without loss. On his return he was attacked by the troops of a
Polygar, armed with matchlock guns, but escaped without injury
owing to the speed of his horse.

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i>S6] BOMBAY PIRATES tojr

damaged the trade between Bombay and Europe,
Before Watson s arrival an expedition sent out
by the Bombay government, under Commodore
James, had captured one of the two forts the pirates
boasted on the island of Suvarndrug, and it was now
proposed to demolish the other and disperse the
entire buccaneering force.

Towards the close of October, 1755, Clive, for
whom the Company had obtained a commission as
Lieutenant-Colonel in the King's army, arrived at
Bombay from England. He found Colonel Scott
dead and the Deccan expedition abandoned. It
was therefore arranged that Clive should accompany
Watson on his expedition against the Mahratta-
pirates, who, though nominally acknowledging the
authority of the Peishwa or supreme head of the
Mahrattas, yet in practice so constantly defied his
authority that he was as anxious as the English for
their suppression. The hero of Arcot had brought
with him to India three companies of artillery and
300 infantry. On the nth February the joint
expedition arrived off Gheriah, the piratical strong-
hold on the mainland, while a Mahratta army
approached on the land side. But it was soon
brought to the ears of the Company's commanders
that the treacherous Mahrattas had an understanding
with the pirate chief, who promised to surrender his
fort to the Peishwa's troops and not to the English.
Clive promptly landed his little force and interposed
it between them and the walls of the town. The
pirates capitulated after two days' bombardment, and
booty valued at about ten lakhs of rupees was divided

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to8 LED(iER AND SWORD [1756

between the Royal Navy and the Company's soldiers.
This division was not, however, made without a dis-
pute which foreshadowed others between the two
services in the campaign soon to open in Bengal.
The victorious officers Clive and Watson now pro-
ceeded to Fort St David, where the former took up
his government on the 20th June. It was on this
very day that Calcutta was captured by the Nawab
of Bengal and there occurred the terrible tragedy of
the Black Hole. To this part of India the drama of
the Company's rule now shifts.

Whilst the scene is changing we may take occa-
sion to remark that the late bloody events had not
•wholly undermined the Company's piety, for which
it had been famous in the early day&

The Society for Promoting Christian Knowledge,
foimded at the beginning of the eighteenth century,
had early directed its attention towards India. In
the year 1744, and again in 1752, we find the Com-
pany giving hearty assistance to this religious society.
It was ordered that the missionaries sent out by the
society should have the use of a church at Cuddalore,
and of another at Madras. " And," wrote the Com-
pany to its agents, "as a further encouragement to
the said missionaries to exert themselves in propagat-
ing the Protestant religion, we do hereby empower
you to give them, at such times as you shall think
proper, in our name, any sum of money, not exceed-
ing 500 pagodas, to be laid out in such manner, and
appropriated to such uses, as you shall approve of ;
and you are hereby directed to give us, from time to
time, an account of the progress made by them in

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1752] RELIGION AND EDUCATION 109

educating children and increasing the Protestant
religion, together with your opinion on their conduct
in general, and what further encouragement they
deserve." In the same year in which this was written
to Madras (1752) the Court wrote to Bombay : ** As
it will be greatly for the interest of the Company to
have as many of the soldiery, and others our depen-
dents in the Presidency of Bombay, instructed in the
principles of the Protestant religion, we have thought
proper to add two more chaplains to your establish-
ment, who are to reside at Tellicherry and Anjengo,
or wherever else you shall think proper to station
them, so as will best answer our intentions ; and that
we may have the advantage of a rising generation
instructed in the same principles, we recommend it
to you, to form a plan for the setting up and estab-
lishing charity schools, wherein the children of our
soldiers, mariners and topases, and others, may be
educated as well as the subordinates at Bombay.
When you can reduce your plan to practice you may
depend upon our giving an assistance becoming the
Company ; and we most earnestly recommend it to
every one of our servants and others, who are in
good circumstances, to contribute freely to an under-
taking of such utility to the Presidency in general.

"When schools are erected in consequence of
this recommendation, our chaplains are frequently to
visit them, to see what improvement the children
make, and to give their utmost assistance in in-
structing and confirming them in the principles and
profession of the Protestant religion." ^

' p. Auber, Rise and Progress.

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CHAPTER V.

Plassey and a New Era*

By this time, after all these stirring events, affairs

in Leadenhall Street had reached a crucial stage.

The Court of Directors were rent by faction ; they

seemed in danger of losing their heads completely.

With the arrival of every bundle of despatches

the confusion grew worse. The proprietors, chiefly

hereditary owners of stock, long accustomed to the

steady receipt of a comfortable dividend, annually

grew more alarmed at these stories of battles and

sieges, of political and military movements. They

complained bitterly to the directors, who, shifting

the blame, complained as bitterly of their servants

in India. In 1752 a general court met to discuss

the debt incurred at Madras ; after an acrimonious

debate it was decided to pay off the whole, amounting

to ;^ 1 40,000. New liabilities were formed, and in

1755 it was found necessary to reduce the dividend

from 8 to 6 per cent A cry went up for the good

old times : the new policy of territorial conquests,

of fleets and armies, was roundly denounced by the

several hundred old women — spinsters, widows,

clergymen and half- pay officers — into whose hands

the stock had fallen. In 1 753, when King George II.

granted a fresh charter establishing courts of justice

and a military force in India, as well as mayors and

1x0

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1756] BENGAL ABLAZE in

aldermen for Madras, Bombay and Calcutta, there
were several who questioned the advantages of such
a charter. "Our interests in Hindustan," said one
member in prophetic strain, "are passing out of our
hands into those of the people we employ to serve
us, and the gentlemen of the Court will discover
soon, if they are not careful, that they are being
laughed at by a company of captains with blunder-
busses and pistols, to say nothing of King's judges
and aldermen."

What added to the anxiety of the Court was that
about this period nearly all the nations of Europe
were making a fresh bid for the Indian trade.
German, Russian, Portuguese, Spanish, Swedish
and Danish companies were started, with much
blazoning of capital, which, happily, proved in the
result more visionary than real. But the most terrible
blow the Company had yet received came when it
learnt that Bengal was at last ablaze, that its most
profitable setdement of Calcutta had been attacked
and fallen an easy prey to the native powers.

At the time of the Persian invasion of Hindustan
in 1739 the grandson of Murshed Kuli Khan was
Nawab of Bengal, Behar and Orissa. The Govern-
ment was sunk in iniquity, the people were oppressed,
and there was no longer any hope of redress from
Delhi, the ostensible centre of the Mogul Empire.
A conspiracy arose to depose die Nawab, and Ali-
verdi Khan, the Deputy Nawab of Behar, was placed
at the head of it. An army was mustered, the Na-
wab appointed by the Imperial Court was soon killed,
and Aliverdi Khan usurped the throne of Bengal.

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112 LEDGER AND SWORD [1756

About this time the Mahratta invasions began, and
were continued almost annually from 1742 to 1750,
plunging the land in bloodshed, causing the people
to flee from their homes and completely disorganising
trade and industry.^ The Nawab was strong enough
to compel the English at Calcutta and the French at
Chandemagore not to follow the example of Madras
and Pondicherry in the war which broke out be-
tween the two European nations in 1744. During
the whole period that the agents of the two East
India Companies were battling for supremacy and
territory in the south, the English Company's settle-
ment at Calcutta '' was like an oasis of European
civilisation in a desert of Hinduism and Islamism '\
"The English factory," says Wheeler, "with its
warehouses, workshops, offices and outlying houses
covered about a hundred acres on the banks of the
Hugli. The native town consisted of three or four
large villages, more or less remote from the English
factory and from each other. . . . There were
pagodas, mosques, tanks and two or three churches.
But Calcutta was not a metropolis. The English
factory was only the emporium of the English trade
in Bengal. Native villages near the factory were
growing into a city under the stimulus of manu-
facture and trade." At this time Roger Drake, the
Governor, presided over a Council of nine members,
some of whom were serving as chiefs of inland

^ " The inhabitants of Calcutta, dreading a repetition of the cala-
mities, obtained permission to dig a ditch round the city to the
extent of seven miles (the Compan3^8 bounds), which was called the
Mahratta ditch.**— Auber, British Power in India.

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1756] TRADE AT CALCUTTA 113

factories at Dacca, Cossimbazar and Patna, while
those who were stationed in Calcutta formed the
Council for all practical purposes.

The appearance and system of life at the Com-
pany's Bengal headquarters, the life and habits of its
servants, now divided into the four grades of writers,
factors, junior merchants and senior merchants,
differed but little from that described as appertaining
to Madras or Surat a century before. The chief
imports were woollens, cutlery, iron, copper and
quicksilver; while the exports were cotton piece-
goods, fine muslins, silks, indigo, spices and Indian
rarities, all of which commanded a widespread sale
throughout the British isles, where Manchester and
its cotton mills had not yet arisen in competition.
Within the limits of the settlement which had been
granted to them the Company's Governor and
Council reigned supreme. ** At one time the Mogul
authorities outside would have liked to interfere in
matters of revenue ; they never cared much about
the administration of justice. As far as the natives
were concerned, the English were free to exercise
the powers of life and death. They had nothing to
fear from Hugli, Murshedebad or Delhi ; and the
time had not come for them to have anything to fear
from Westminster Hall." *

Prior to 1753 it had been the general custom to
obtain piece goods and similar native manufactures
by contract through native channels. Chief amongst
the Hindu traders so employed was Omichund.

1 Wheeler, Early Records of British India.
VOL. II. 8

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114 LEDGER AND SWORD [1756

This person, by his great wealth, influence and con-
nections, proved to be on many occasions a valuable
middleman between the Company's Council and
the Court at Murshedabad. But it was observed
in Leadenhall Street that the system had its draw-
backs ; for one thing there was a great falling off in
quality, accompanied by an increase in price. For
this reason the Company made up its mind to cease
dealing with native merchants and employ its own
agents instead, gamastas, as they were called, who
would seek investments at the different cloth markets
in the provinces.^

While, then, the Company's servants at Calcutta
and in the three adjacent stations were living in
peaceful security, in April, 1756, the just and able
Aliverdi Khan died, and was succeeded by his
grandson, Suraj-ud-Daulah, a youth under twenty
years of age. The early training of the new Nawab
had fostered in him a spirit of cruelty and oppression.
One of his ruling passions was a jealous hatred of
the English, and he had been scarce two months on
the throne when he foimd a pretext for indulging his
passioa War was again looming up between French
and English, and Suraj-ud-Daulah peremptorily
charged the latter with strengthening their fortifi-
cations at Calcutta in order to fight the French at
Chandemagore. On the 4th Jime he seized the
factory at Cossimbazar, plundered it of all its money
and goods, and threw the Company's servants into

^ The factors also had large transactions with the native bankers.
In 1755 the Company owed the seits, or native bankers, of Murshed-
abad no less than ;f 1,225,000 sterling.

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1756] THE BLACK HOLE 115

prison. A week later Drake and his Council were
staggered by a report that the young Nawab with
an army of 50,000 men and a train of artillery
were marching on Calcutta. To oppose this vast
force was a little handful of English, less than 500,
including mixed races, in the entire settlement The
actual garrison consisted of 170 European raw
recruits. On Wednesday, the 1 5th June, the Nawab
attacked ; on Saturday the women and children in
the fort were removed on board the ships, and were
basely followed by Governor Drake and Captain Min-
chin, the military commandant. On Sunday after-
noon John Zephaniah Holwell, a leading member of
the Council, who had taken charge of the defence
after Drake s flight, was forced to surrender.

The terrible story of what followed has long been
known in all its details wherever the language is
spoken* It has grown to be regarded, even in the
nursery, as a classic instance of cruelty and suffering.
The whole of the prisoners, to the number of 146,
were, in HolwelFs own words, "ordered to go into
the room at the southernmost end of the barracks,
commonly called the Black Hole prison ; whilst
others from the Court of Guard, with clubs and drawn
scimitars, pressed upon those of us next to them.
This stroke was so sudden, so unexpected, and the
throng and pressure so great upon us next the door
of the Black Hole prison, there was no resisting it ;
but like one agitated wave impelling another, we
were obliged to give way and enter ; the rest followed
like a torrent, few amongst us, the soldiers excepted,

having the least idea of the dimensions or nature of

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ii6 LEDGER AND SWORD [1756

a place we had never seen ; for if we had, we should
at all events have rushed upon the guard, and been,
as the lesser evil, by our own choice cut to pieces."
In this room, twenty feet square, notwithstanding
their bribes and entreaties, their agonies of thirst and
suffocation, the Company's servants were confined
during that fearful night, while Suraj-ud-Daulah
slept off a debauch. In the morning, when the
bloody tyrant rose from his perfumed couch, he
finally listened to the intercession of Aliverdi Khan's
widow, and ordered the door to be opened ; it was
found blocked by the dead. Out of the 146 who
had entered, only twenty-three ghastly figures were
dragged forth alive. ^

Among these was Holwell, who, with the others,
was summoned before the Nawab, and ordered to
surrender the Company's treasure, being threatened
with further severities if the demands were not
instantly complied with. On Holwell's replying that
he knew of no such hidden treasure, he was violently
insulted and reproached, his wasted frame bound in
fetters, and he was thrown into a shed to feed with
his comrades upon uncooked grain and water. The
Company's warehouses and dwelling houses were
plundered, and the name of Calcutta ordered to be
changed into Alinagore, or the Port of God. After
this, with colours and banners fiying and trumpets
screaming, Suraj-ud-Daulah proceeded up the river
to further conquests, leaving three thousand troops
behind in the town. In his train were dragged his

^The Black Hole building was demolished in 1818 to make way
for some extensive warehouses of the Company.

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1756] APPEAL TO MADRAS 117

unhappy English prisoners, manacled ; their bodies
covered with boils.

An incident which occurred on the march before
Murshedabad was reached deserves to be mentioned
as an instance of the amenities not always absent
between the rival French and English and Dutch
traders. On the 7 th July Hoi well came in sight of
the French factory at Cossimbazar ; he prevailed on
his guard to pause there while he sent word to Law,
the French factor, of his sad plight. " On the re-
ceipt of my letter, M. Law, with much politeness
and humanity, came down to the waterside and re-
mained near an hour with us. He gave the g^uard a
genteel present for his civilities, and offered him a
considerable reward and security if he would permit
us to land for an hour's refreshment ; but he replied
his head would pay for the indulgence. After M.
Law had given us a supply of clothes, linen, pro-
visions, liquors and cash we left his factory with
grateful thanks and compliments." The Dutch
factors at the capital, both before and after Hol-
well's release in the middle of July, also evinced
'* real joy and humanity " towards him and his com-
rades — far different behaviour from that of their pre-
decessors of the seventeenth century at Amboyna,
Surat and Gombroon.

It was not until the i6th August that Pigot and
his Council at Madras received an urgent appeal
from Calcutta for troops to assist for help against
the aggressions of the young Nawab. The story of
the outrage inflamed all who heard it; Fort St.
David and distant Bombay responded with cries of

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ii8 LEDGER AND SWORD [1757

vengeance. It was at once resolved to send a force
of 900 English soldiers, 1,200 sepoys and some artil-
lery under Clive to retake Calcutta Pigot, in spite
of the obstinacy of Watson, who wished to see the
recreant Drake restored in the Bengal government,
and the jealousy of Colonel Aldercom, who com-
manded the 39th Foot, appointed Clive commander-
in-chief of the expedition. Owing to disgraceful
bickerings a delay ensued, and it was not until the
2nd January, 1757, that the English fleet reached
Calcutta. The Nawab's governor fled in a panic,
and after scarcely any fighting or resistance the
English flag was hoisted over Fort William.

Contrary to the orders investing Clive with mili-
tary and political control in Bengal, Admiral Watson
took it upon himself to appoint Captain Eyre Coote
Governor of the fort. Clive was naturally indignant,
threatening Coote with arrest if he did not at once
yield up the command to himself as the Company's
officer. Watson, on his part, went so far as to
promise to fire upon the fort if Clive persisted.
In the end this miserable dispute between the Com-
pany's and the King's officers — only a sample of
what had been going on since the incident of the
prize money at Bombay — ^was compromised by the
fort being surrendered to the King's authority on the
stipulation that it should forthwith be handed over
to the Company's chief agent

Little wonder that Clive should write thus to
Governor Pigot : " I cannot help regretting that I
ever undertook this expedition. The mortifications I
have received from Mr, Watson and the gentlemen

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1757] CLIVE AT CALCUTTA 119

of the squadron, in point of prerogative, are such
that nothing but the good of the service could induce
me to submit to them. The morning the enemy
quitted Calcutta a party of our sepoys entered the
fort at the same time with a detachment from the
ships, and were ignominiously thrust out. Upon
coming near the fort myself I was informed that
there were orders that none of the Company's
officers or troops should have entrance. This, I
own, enraged me to such a degree that I was re-
solved to enter if possible, which I did, though not
in the manner maliciously reported by forcing the
sentries, for they suffered me to pass very patiently
on being informed who I was. At my entrance
Captain Coote presented me with a commission from
Admiral Watson appointing him Governor of Fort
William, which I knew not a syllable of before ; and
it seems this dirty underhand contrivance was carried
on in the most secret manner, under pretence that I
pretended the same thing, which I declare never
entered my thoughts. The affair was compromised
by the Admiral consenting that I should be Governor,
and that the Company's troops should remain in the
fort. The next day the Admiral delivered up the
fort to the Company's representatives in the King's
name." *

On the loth Clive attacked the fortress and town
of Hugli, and quickly captured it These pro-
ceedings naturally aroused Suraj-ud-Daulah, who
promptly began to march down to Calcutta with an

^Watson died on i6th August following of jungle fever.

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I20 LEDGER AND SWORD [1757

army of 40,ocx) men. His mock professions of friend-
ship and redress were met by a stem demand to with-
draw his army from the neighbourhood of Calcutta.
On a refusal, he was attacked and compelled to re-
treat. Much as Clive would have liked to follow up
this retreat and inflict summary vengeance on the
young Nawab, he believed that he was best consult-
ing the Company's interests by seeking rather to
make peace at a most critical juncture. For a fresh
war between England and France was momentarily
expected : if the Nawab of Bengal joined forces
with the agents of the French Company, Calcutta
might find itself in serious danger. To prevent such
a step and restore the Company's settlement to its
old basis, it would be wiser to dismiss for the pre-
sent all idea of vengeance on Suraj-ud-Daulah and
negotiate with him for safety and restitution. By no
means was this policy to the taste of Admiral Wat-
son and his friends of the King s service ; they
wished to pursue the Nawab and chastise him.
Nevertheless, the latter showing great willingness to
make terms, a treaty was soon concluded. All the
privileges formerly granted to the Company by
Aliverdi Khan were renewed ; all trade covered by
the Company's passes was freed, and all its pro-
perty or that of its servants or tenants which had
suffered pillage was to be restored. Permission was
given to fortify Calcutta and to coin money at dis-
cretion. Moreover an alliance, offensive and defen-
sive, was entered upon with the Nawab before his
return to Murshedabad. The value of such alliance
was rendered all the more patent by the tidings

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1757] PRESIDENTIAL JEALOUSIES 121

which now arrived that England and France were
again openly at war.

Besides the significant quarrels between the re-
presentatives of King and Company, the Company's
Council at Calcutta, a feeble body, showed them-
selves very jealous of the powers which Pigot and
the Madras Council had bestowed upon Clive. ** At
that early period," remarks Sir Alexander Arbuthnot/
'* those presidential jealousies which have so often
interfered with the administration of Indian affairs,
and even now are not entirely extinguished, appear
to have existed in full force." No sooner was Clive
in possession of Calcutta than the Select Committee,
as the Governor's Council was called, requested him
to surrender his independent powers and subordinate
himself to them. He abruptly and emphatically re-
fused. '* I do not intend," he answered them, " to
make use of my powers by acting separately from
you without you reduce me to the necessity of so
doing ; but as far as concerns the means of executing
these powers, you will excuse me, gentlemen, if I
refuse to give them up. I cannot do it without for-
feiting the trust reposed in me by the Select Com-
mittee of Fort St. Geoi^e." In fact, Clive seems to
have as wholly mistrusted the Company's chief ser-
vants at Calcutta as he trusted those at Madras.

While these incidents were happening in Ben-
gal, the Madras Select Committee was growing most
uneasy. Godehieu's successor at Pondicherry, Count
Lally, an impetuous, hot-brained Irishman, was al-

^ Life 0/ Lord Clive.

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122 LEDGER AND SWORD [1757

ready planning a renewal of hostilities. The ar-
rival of a French fleet was daily apprehended, and
Clive was therefore summoned to return as soon as
possible to Madras. But the young Governor felt
that the annihilation of French power in Bengal
claimed his first consideration, and, in addition, he
had reason to believe that were he to withdraw with
his soldiers from Calcutta, a repetition of outrages
from the Nawab was to be apprehended. The Cal-
cutta Council, left to themselves, were no match for
such a situation They were a divided body, full of
petty jealousies and individual interests, lacking a
strong head. Pigot and his military adviser, Law-
rence, at Madras, on the other hand, were capable
and trustworthy administrators and could be de-
pended upon to give a good account of themselves
in a crisis. Clive, then, chose to disregard their sum-
mons and the Company's wishes, and remain for the
present in the north.

Under the circumstances of war between France
and England there could be no permanent security
in Bengal while the French were left in possession
of their factory at Chandemagore. Clive accord-
ingly, with the Nawab's reluctant permission, be-
sieged and captured this fort, but before the garrison
had marched out the Company's commander had
made up his mind that Suraj-ud-Daulah, so far from
assisting, was already attempting secretly to form new
leagues against the English. At the same time re-
ports were received that Bussy had been summoned
by the Nawab to aid him in expelling the English
from Bengal. William Watts, who had been sent as

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1757] PLASSEY 123

the Company's agent to Murshedabad, called upon
the Nawab to expel any Frenchmen remaining in his
territory. The Nawab dallied and shuffled; his
treachery and his general unpopularity became daily
manifest Clive felt that his deeds and his character
made his further reign intolerable. At this juncture
he heard with pleasure that a conspiracy to dethrone
the Nawab was already on foot in his own Court and
camp.

The particulars which the Company's agent at
Murshedabad supplied to Clive showed that some of
the leading persons at Suraj-ud-Daulah's Court, led
by Mir Jafir, son of the late Nawab, Aliverdi Khan,
were implicated in the plot. Amongst others in-
volved in it was the Hindu merchant Omichund, whose
acquaintance we have already made. He chiefly
conducted the negotiations, but was, nevertheless,
prepared to divulge everything to the Nawab unless
the conspirators agreed, under their signatures, to
gratify him with the huge sum of thirty lakhs of
rupees. Although satisfactory overtures had been
received from Mir Jafir, who commanded the
Nawab's army, offering to aid the English if he
were raised to the succession ; although he swore
solemnly on the Koran to keep his engagement,
yet, fearing Omichund's treachery, Clive hesitated.
It was then that there occurred the oft-told dis-
graceful episode of the red and white papers and the
false signature which reassured the Hindu capitalist
Having thus made terms with the conspirators, Clive
moved forward to attack the Nawab. Watts made
his escape from Cossimbazar and Suraj-ud-Daulah

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124 LEDGER AND SWORD [1757

marched all his forces southward to Plassey, where
the two opposing armies met, just one year after the
loss of Calcutta.

Although Mir Jafir had promised solemnly to
go to Clivers assistance, he only looked on and did
nothing. The result, despite its celebrity, was in
itself less a great battle than a great rout The loss
to the Company's force was absurdly small, con-
sidering that 50,000 men were opposed to their
3,500. Disheartened by the death of his leading
general, and yielding to the treacherous advice of
his suite, Suraj-ud-Daulah quitted the field a helpless
fugitive. He subsequently fell into the hands of
his enemies and was ignominiously put to death by
Mir Jafir s son.

Yet, although so easily won, the results of Plassey
were vast and widespread, and of the greatest
political significance. Mir Jafir, in spite of his
dereliction, was duly placed on the throne of Mur-
shedabad. The ruler of the richest provinces in
India became subject to the power of the East India
Company, or, more strictly speaking, of the Com-
pany's military servants in Bengal.

The treasuresof Suraj-ud-Daulah had been greatly
over-estimated. It was found that the sum did not
exceed a million and a half sterling, and Clive had
to be content at receiving in hand one half of the
stipulated sum, while the remainder was to be paid
in three annual payments. ^ The luckless Omichund

^ It was actually found necessary to procure a charter from King
George to entitle the Company to a moiety of the plunder taken from
the Nawab of Bengal.

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1757] PLUNDER FROM CALCUTTA 125

was informed of the discreditable ruse which had been
played upon him. Luke Scrafton, another of the
Company's servants who accompanied Watts, said,
** Omichund, you are to have nothing ". According
to the account given by Orme these words ** over-
powered him like a blast of sulphur. He sank back
fainting," and died about a year and a half later in a
state of Imbecility. But Mill's annotator, Hayman
Wilson, casts doubt on this account, and Clive, sub-
sequently writing to the Company, describes the
Hindu merchant **as a person capable of rendering
you great services, therefore not wholly to be dis-
carded ".

Thus Clive and the Calcutta Council, on the 6th
July, received payment in coined silver 7,271,666
rupees, worth in English money ;^8c)0,ooo. Be-
sides this, Clive had accepted from the new Nawab
as his private reward about ;^200,ooo. The money
filled 700 chests, embarked in 100 boats, which pro-
ceeded under the care of a military escort to Nudea.
Here it was met by the boats and escorted to Fort
William by the English squadron. During August,
the Company received 3,255,095 rupees in gold,
jewels and cash. The Company also gained from
the new Nawab **a right to establish a mint of their
own at Calcutta, the entire expulsion of the French
for ever, and the delivery to the Company of their
factories and effects, the entire property of all lands
within the Mahratta ditch at Calcutta ; also 600
yards all round beyond the said ditch ; the cession
of all the land in the neighbourhood of Calcutta that
lay between the river, the lake, the Culpee, the

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126 LEDGER AND SWORD [1757

Company paying the usual rent to the Nabob, and
full freedom of trade throughout the provinces of
Bengal, Behar and Orissa except the old prohibition
against their trading in salt, betel and a few other
commodities." The coining of rupees was begun by
the Company by the 19th of August

Following upon the capture of Chandemagore,
the French Company's agent, Law, had taken to
the field with a small force of Frenchmen. He had
been in correspondence with Suraj-ud-Daulah, but on
learning of the capture and tragic death of that
Nawab, the Frenchman retreated hastily into Behar
with the intention of offering his services to the vice-
Nawab. Clive sent Eyre Coote to dislodge this
dangerous little band of Frenchmen, but it could not
be overtaken. The end was gained, however, by
striking terror into the heart of the native princes
en routCj each of whom duly tendered his oath of
obedience to Mir Jafir, the new Nawab.

Clive took a firm course with the officers of the
royal army and navy, who foolishly sought to over-
ride him in the matter of sharing the spoils after Mir
Jafir's accession. ** Gentlemen," he wrote to the
malcontents, ** it pains me to remind you that what
you are to receive is entirely owing to the care I
took of your interests. Had I not interfered greatly
in it you had been left to the Company's generosity,
who perhaps would have thought you sufficiently
rewarded in receiving a present of six months' pay."
He told them that their disrespectful and ungrateful
behaviour had had ** the worst consequences to the
cause of the nation and the Company ".

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1757] MAHRATTA IRRUPTION 127

While Clive was thus busy pulling down and set-
ting up princes and driving the French out of Bengal,
Pigot and Lawrence were working hard at the forti-
fications of Madras, in momentary expectation of a
French attack. The Mogul Empire was fast hasten-
ing to its end. After a reign of seven years the
feeble Ahmed Shah was deposed and deprived of
sight in 1754 ; and his successor was as little able
as he to stem the tide of dismemberment and decay.
Virtually all the provinces, save those which lay
between Delhi and Lahore, were alienated from the
empire, even though a nominal allegiance still con-
tinued to be paid. Most of them were involved in
the horrors of a civil war. The French Nizam,
Salabut Jung, still reigned in the Deccan, although
the Mahrattas, whose growing power threatened the
whole empire, had robbed him of several provinces,
and his masters, the French, had extorted from him
four maritime provinces, the Northern Circars yield-
ing more than half a million sterling annually, and
the greatest dominion yet possessed in India by
Europeans.

After the declaration of war between the French
and English there was a term of intermittent fighting
on the Coromandel Coast. The Company lost its
factory of Vizagapatam and the enemy lost Madura.
The independent horde of fighting Mahrattas burst
into the country, and demanded choulO or tribute
from the Company's Nawab, Mohammed Ali. ** The
English," remarks Orme, " had no alternative but to

1 Literally, 9, fourth.

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128 LEDGER AND SWORD [1758

pay or fight." As they lacked an army and their
treasury was depleted, the credit of the Company
had to be pledged. This credit was famed, we are
told, even in the camp of the wild Mahrattas, and
when the English consented to pay for the Nawab,
they agreed to take part of the amount of the money
in rupees and part in bills. In April, 1758, occurred
a severe sea fight between English and French
frigates, off Fort St. David, in which the latter were
worsted. Before it began, Lally led a body of French
troops from Pondicherry to the rear of the fort, and
drove in some of the Company's outposts. More
troops from the French ships were landed, and the
factory of Cuddalore attacked and captured. Fort
St. David was, at that time, garrisoned by 619
Europeans and about 1,600 natives. After a weak
defence it was made to capitulate on the 2nd June,
when all its fortifications were razed to the ground.^
Lally proceeded in his triumphant career by the
unresisted seizure of Devi Cottah, and then returned
to Pondicherry, where a pompous Te Deunt was cele-
brated for his victories. Lacking funds to proceed
to the conquest of Fort St. George, whose fall would
have completed the expulsion of the English from
the Coromandel Coast, Lally resolved, for this pur-
pose, to plunder the Rajah of Tanjore. To ensure
his success he also determined to raise up a pretender
to the throne of Tanjore.

^ Hunter states that it had been named after St. David " by its
Welsh governor,'* Elihu Yale. Albeit, Yale was born in America.
The fort was afterwards sufficiently restored by the French to with-
stand General Stuart's attack in 1783. The ruins may still be seen.

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1758] MADRAS THREATENED 129

The miserable tool his ingenious fancy hit upon
was the uncle of that Suhaji whose cause the Com-
pany's servants had originally espoused in the Devi
Cottah transaction. This relative, Gatika ^ by name,
had since languished in their charge at Fort St.
David, from whence he was now dragged forth by
the French on the capture of that place.

These schemes of Lally soon reached the ear of
Pertab Singh, the ruler of Tanjore, who at once
solicited the aid of the Nawab and the protection
of the Company. Pertab Singh had certainly not
behaved very well to the Company in former trans-
actions, but policy demanded that he should be
supported at this juncture against the French. But
the Madras Government could only spare a few
hundred sepoys for the defence of Tanjore. Lally
attacked impetuously, but after five days his powder
gave out, and the French were compelled to beat
a disastrous retreat. Eventually he got peaceful
possession of Arcot, but the merchants and all the
wealthier classes had abandoned it, and there was
nothing to do but to curse his ill fortune and to
retire again to Pondicherry. Here he held a con-
ference with Bussy, whom he had recalled from the
Deccan, and it was finally decided, with their joint
force of 2,700 Europeans and 4,000 natives, although
without money, without credit and with scant pro-
visions, boldly to attack Madras.

Lawrence, who commanded the garrison, and
Pigot, to whom, "though bred to trade," the "de-

^ Gattcar, as he is called by Admiral Boscawen in his letter
to the Nawab, see p. 88.

VOL. II. 9

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I30 LEDGER AND SWORD [1758

fence of the siege" was committed by a vote of
the Council, awaited the French onslaught. Pigot
for some time past had been strengthening the fort,
so that practically a new one was erected, enclosing
the old one. Within the walls was a total force of
1,758 Europeans, 2,220 sepoys and 200 of Moham-
med Ali*s cavalry, the Nawab himself for a time
taking refuge in the fort On the 14th December
the French entered and took possession of Black
Town ; a bloody sortie was made by the Company's
servants, numbers were killed and wounded on
both sides, Count d'Estaing being among Pigot's
prisoners. All through the subsequent siege we are
told that Pigot, a worthy successor to Oxenden,
Aungier and Charnock, "exhibited resolution and
activity. He visited the works every day, en-
couraged the garrison and rewarded their services
with money. But the most commendable part of
his conduct was his attention to the provisions, which
were plenty and good in their kind."

Outside Madras, both before and subsequent to
the siege, the utmost efforts were made to induce
the recalcitrant Rajah of Tanjore to aid the English
and his sovereign lord, the Nawab of the Carnatic.
But the crafty Pertab Singh only exhibited a shame-
less and shuffling policy, promising assistance one
day and retracting the next Believing the credit of
the Company to be broken — it certainly was at a
low ebb in Madras — he demanded money. Major
Calliaud, who had been entrusted by Pigot with the
mission to the Rajah, was at his wits' end ; Norris, a
jnejjiber of jlj^ Madras Council, passing through

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1759] LALLY DECAMPS 131

Tanjore on his way to Trichinopoly, advanced
10,000 pagodas, but not until the Company's agent
abruptly quitted Tanjore did the treacherous Pertab
Singh consent — too late — to order a band of some
400 cavalry to march. Meanwhile, on the 20th
December, the Nawab had been prevailed upon, for
greater safety for himself and convenience to the
garrison, to leave Fort St George by water, and
landing at the Dutch factory of Negapatam, proceed
thence to Trichinopoly. When passing through
Tanjore only the earnest exhortations of the Com-
pany's agent induced the disaffected Rajah to visit
his superior in the customary manner. This was
but the beginning of a dispute between the Nawab
and the Rajah of Tanjore, which needed all Pigot's
diplomacy and fortitude to setde, and for which
settlement he was to be unjustly assailed both in
Leadenhall Street and in India.

Lally's condition before Madras was soon ren-
dered desperate. Six of the Company's ships and
two King's frigates arrived in February with re-
inforcements for the fort. This was a deadly blow
to the hopes of the besiegers. On the night of the
17th Lally, with his troops in a mutinous state,
silently decamped. Lawrence followed him, until at
the end of May hostilities were suspended for the
rainy season. Throughout this summer of 1759
the squadrons were busy along the coast, but all
Pocock's manoeuvring could not prevent the French
admiral, D'Ache, from reaching Pondicherry with
some men and money, which were so sorely needed.
The empty coffers there were replenished by some

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132 LEDGER AND SWORD [1759

jCi6yOCX) sterling and a quantity of diamonds valued
at ;^i7,(XX), which had been captured from the
GranthafH, one of the Company's ships.

The reinforcements which the Company had
sent to India rendered the English soldiery equal
to the French on the Coromandel Coast But the
lack of cattle, coolies and supplies retarded their
taking the field until the first week in March. They
were to have been led by Lawrence, but that gallant
officer, " worn out by the infirmities of age and by
disease." was compelled to retire from the Company's
service. He was succeeded by Major Calliaud. The
commander of the King's troops, Colonel Draper,
was about the same time also obliged to relinquish
his post from similar causes to Major Brereton.

A lull ensued ; during that lull, in another quarter
of the world where the English and French were
opposed, a brilliant young soldier, James Wolfe,
bad landed in Canada, stormed the heights of
Abraham and taken Quebec. By the time Eyre
Coote arrived at Madras to take command of the
Company's army, the last vestiges of French power
on the North American Continent were seen to be
departing.

The absence of Bussy in the Deccan induced the
English to open negotiations with the native chiefs
to induce them to embrace the Company's rising
fortunes. Colonel Forde was sent to the Northern
Circars, where he inflicted a crushing defeat upon
the French, who retired to Masulipatam. Before
Salabut Jung could send troops to their assistance,
the Company's troops were again victorious and

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i;6o] NORTHERN CIRCARS GRANTED 133

MasuHpatam re-ceded to the English. These events
made their due impression upon Salabut Jung, who
now received Forde in his camp, not as a foe, but as
a friend and ally. He even entered into a new
treaty with the Company by which, after handing
over a considerable territory about MasuUpatam, he
promised not to permit any French setdement in his
dominions, and also to oblige the French force col-
lected at Rajahmundry to retire across the Kistna
within fifteen days. The whole territory granted to
the Company comprised ten districts, with jurisdic-
tion over the territory of Nizampatam, extending
eighty miles along the coast and twenty inland. The
revenue was estimated at 400,000 rupees annually,
without fine or military service. Moreover, Forde
was offered, on his own private account, a further
considerable district if he would help Salabut Jung
to vanquish his rebellious younger brother, Nizam
AH. This offer Forde met by a request, which the
Subahdar sullenly declined, that he should join in
an immediate expedition against his former bene-
factors, the French. On the Nizam's departure
Forde remained on the coast to aid in the re-
establishment of the Company's factories which the
French had destroyed during the war.

At first the Company had judged it expedient to
govern the Northern Circars through natives it could
trust, rather than at once intrude its authority. But
in 1760 this plan was discontinued, the factories of
MasuHpatam and Vizs^patam were each endowed
with Councils, presided over by provincial chiefs,
and the rule of the four Circars of Condapilly, Ra-

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134 LEDGER AND SWORD [1758

jahmundry, EUore and Cicacole turned over to them.
Moreover, the factory of Gangam, which had been
discontinued, was newly established, and a chief and
council appointed to administer aflTairs in that part of
the Company's territory.

In Bengal Clive quickly discovered that his new
Nawab, Mir Jafir, was incapable of ensuring tran-
quillity or of resisting invasion of his dominions It
is extremely likely that an empty treasury was at the
bottom of Mir Jafir s troubles. At the same time
he was threatened by the Nawab of Oude with in-
vasion. Added to these political cares Clive found
the Company's civil service required remodelling, for
besides Watts and the latter's successor at the court
of Murshedabad, he complained that there were no
really able men in Bengal.

The threatened invasion by the Nawab of Oude
was duly foiled, but soon afterwards that ruler was
urged by the eldest son of the Mogul Emperor at
Delhi, commonly known as the Shahzada, to join
him in an incursion into Behar. Mir Jafir grew
terrified ; he implored the English, through Warren
Hastings, the resident agent at Murshedabad, to
rescue him from these impending perils. Hastings
had by this time his own opinion of the confusion
and imbecility of the Nawab's Court. He constantly
wrote to Clive that all classes looked to him, and
none other in the distracted province. If he with-
drew his intervention the whole fabric of govern-
ment would fall to pieces ; Orissa and Behar would
be severed from Bengal, even before the Shahzada
and his mercenary Rohillas could reach the province.

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I7S9] INVITATION TO DELHI 13^

The Shahzada heralded his approach in high-sound-
ing phrases and the offer of bribes to the English.
Clive, determined to uphold Mir Jafir, went to meet
the invader in March, 1759; the Shahzada's army
melted in affright before the ** Daring in War " and
•' Protector of the Great," and Clive entered Patna
** in reality the lord and master of all that part of
India ". The fugitive prince, repudiated by the
Nawab of Oude and deserted by his friends, was
at length obliged to appeal to Clive's generosity, who
thereupon sent him ;^ 1,000 to enable him to escape
into a safer country. After reducing some dis-
affected Rajput and hill chiefs to submission Clive
returned to Calcutta, So deeply was his interven-
tion appreciated by Mir Jafir that he did not hesitate
to show his gratitude by conferring upon his valiant
benefactor a jaghire or estate, consisting of the quit-
rent of about ;^30,ooo sterling per annum, which the
Company was bound to pay to the Nawab for the
extensive lands held by it to the south of Calcutta.
This grant partook of an objectionable character for
several reasona For one thing, it made the Com-
pany the tenant of its subordinate, Robert Clive, an
arrangement hardly satisfactory ; but the jaghire was
afterwards publicly attacked in England on other
grounds. Besides this proof of Mir Jafir's gratitude,
the Vizier of the feeble Mogul Emperor, who had
previously bestowed an imperial title upon the con-
queror, wrote to Clive giving the Company permis-
sion to establish a factory in the royal city of Delhi,
which, although practically quite worthless, was held
to be a supreme mark of favour.

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136 LEDGER AND SWORD [1759

But never, as Clive said, was the gratitude of an
Indian prince enduring or steady. Already Mir
Jafir, bitterly reflecting upon his condition of almost
abject dependence, had been looking about for some
force which would help him to throw off the shackles
of the conqueror. It was idle to appeal to any
native prince ; he would have courted the French,
only that power, extirpated in Bengal, was fast
dwindling away elsewhere in India. The Portu-
guese, once so strong on the peninsula, were now
grown feeble enough. Scarce less so were the
Dutch, in spite of their power and prosperity in the
islands of the East. Yet Mir Jafir was foolish
enough to enter into secret negotiations with the
Dutch factory at Chinsura, and to inspire in the
Dutch Governor at Batavia hopes of repeating the
military and political glories of the English on the
Indian peninsula.

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GQ §

6
o

•3

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CHAPTER VI.

Laurence Sulivan at the Helnu

In 1758, wearied by incessant complaints, disputes
and recriminations, most of the old directors in
Leadenhall Street resigned office. They saw it
was impossible both to please the proprietors and
at the same time listen to the advice tendered them
by the best of their servants in India. A new board
was elected, hardly stronger, but at least ready to
be guided amidst the rocks and breakers by which
the Company was now imperilled. A guide was
ready to hand in one of their number. Laurence
Sulivan, a masterful man, the only one who had
been in India, was personally familiar with the exact
nature of the Company's tenure there. He under-
stood fully the necessity for strenuous action.

The capture of Fort William was, as a recent
writer observes, chiefly remarkable in that "the
behaviour of the Nawab forced the Honourable
East India Company to reconsider the whole ques-
tion of its relations with the native Government of
Bengal. Up to the outbreak of war the servants of
the Company had been satisfied to pose as foreign
traders, practically unarmed, and not presuming in
Bengal, whatever they had done in southern India,
to take any active share in the political arrangements
of the country. Suraj-ud-Daulah by his violent action

137

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138 LEDGER AND SWORD [1758

convinced the Company that its merchants must be no
longer looked upon as mere foreigners, but as lords
of the country in which they resided for purposes of
trade. It took nearly ten years to realise this fact and
perhaps still longer to acknowledge it, but the recap-
ture of Calcutta is the starting point of the new idea."^
Soon after Sulivan had taken the chair there
came news of the victory of Plassey. At once were
''dissipated all those gloomy apprehensions which
the impending ruin of the Company might have
created ". Plassey assuredly altered the whole face
of affairs in Bengal. It marked the close of the
mercantile period "when the English in Bengal
were traders and nothing but traders". In those
days, it is true, "stories were told of fights with
petty Rajahs about tolls and transit duties ; but the
ambition of merchants was to make good bargains
and push their trading interests in Bengal. They
made municipal laws and administered justice within
their little zemindary ; but they took no heed of what
was going on outside the Company's bounds unless
it affected trade." ^ With Plassey the plodding
servants may almost be said to have risen to wealth
and power " at a single bound ". Both they and
their masters in London were bewildered by the
rapidity of events. " Before one revolution was
accomplished it was upset by another. One nawab
was deposed because he was too weak ; his successor
was deposed because he was too strong."

^List of Europeans in the English factories in Bengal, 1756. S. C.
Hill, B.A., of the Calcutta Record Office, 1902.
> Wheeler, Early Records.

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1758] LAURENCE SULIVAN 139

Laurence Sulivan was assuredly of the mould
of the old seventeenth century governors ; but the
time, if not the need, for these was past. His man-
dates provoked surprise and anger in the East ; his
rebukes and commentaries were received with all
the more indignation, because they betrayed what
the recent letters emanating from the department of
correspondence had never betrayed, a reasonable
knowledge of men and motives in India. Sulivan
proceeded to establish a secret war committee, com-
prising only himself and a handful of his most trusted
friends, which was a step in the right direction, be-
cause it tended towards coherency and continuity of
action, qualities the Court had long lacked. His
opponents, at a later day, charged that he issued
orders signed only by this little cabal " against the
laws of the Company, which gave validity to no
orders but what are signed by thirteen directors".
But during his triumphant regime the proprietors
were ready to forgave him much greater infractions
of l^al procedure. Moreover, as a still bolder bid
for paramountcy, Sulivan commenced a widespread
private correspondence with the chief servants in
India, loftily distributing his personal praise and
blame like ribands and medals; often furnishing also
more substantial proofs of the power he possessed at
East India House. He might be for the next few
years courted or hated or feared, but at least he
made it known throughout the service that once
more there was a man at the head of afi^rs at
home.

Before the news of the recapture of Fort William

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t40 LEDGER AMD SWORD [17S8

had reached London, the Court of Directors wrote
appointing a Council for Calcutta, consisting of five
members, of which Clive was to be President. A
little later in the year, when the Company had not
heard of Plassey, they wrote again nominating a
Council of ten, and ordering that the office of Presi-
dent should be held by the four senior members in
rotation for three months. Clive was, of course, then
supposed to be back at bis post at Fort St. David,
and his name was therefore not mentioned, but the
nominated members, led by Watts, perceiving the
absurdity of the proposed arrangement, felt that
they could not carry on the government without him.
He was accordingly pressed to undertake the Presi-
dency of the Council pending further orders from
home. ** Clive, naturally much affronted by the
slight put upon him by the Court of Directors, hesi-
tated at first to undertake the office ; but the general
feeling in favour of his being placed at the head of
the government was so strong that he yielded and
assumed the office of President ".^ It is absurd to
suppose, with some writers, that Clive's exclusion
" was due to jealousy at the East India House of
his commanding powers ". The Company wanted
strong and capable men ; it admired Clive, whom
Pitt had called a ** heaven-born general," and in-
stantly on receiving news of the turn events had
taken in Bengal, wrote appointing him President
and Governor in Bengal.

At this eventful period, while there was no war

1 Sir J. A. Arbuthnot's Lord Clive.

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1759] DUTCH INTRIGUES 141

between England and Holland, the Dutch were
watching with envy and alarm their ancient rivals
gradually build up an empire in India ; the moment
seemed to them favourable for curbing the English
Company's power. A force was got together at
Batavia of seven armed vessels, bearing 800 Euro-
peans and 700 Malay troops, and in August, 1759,
the first of these men-of-war arrived in the Hugli,
The wily Mir Jafir pretended to be in an agony of
alarm, but although Clive obtained his order that
the Ehitch troops, cannon and stores should not be
landed, no attention was paid to the order, and the
English Governor was obliged to stop the landing
by force in spite of the protests of the Dutch factory
at Chinsura. In October Mir Jafir himself came to
pay a visit to Calcutta. A day or two later six
more Dutch ships were reported in the Hugli.
** Now," reported Clive, " the Dutch mask fell off,
and the Nawab (conscious of having given his as-
sent to their coming) was greatly confused and dis-
concerted." Albeit he affected to make light of the
matter, and a little later coolly informed Clive that he
had ** thought proper to grant the Dutch some in-
dulgence in the way of trade," and that they on their
part had promised to retire with their ships and
troopa

The Dutch themselves gave the lie to this by
moving on up the river towards Calcutta ; Dutch
agents began enlisting recruits at Chinsura, Cossim-
bazar and Patna, and the Nawab's son was known
to be closely implicated. Whereupon Clive lost
patience ; he resolved at all hazards to put an end

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142 LEDGER AND SWORD [1759

to this underhanded business. Forde, with a force
of 300 Europeans, 800 sepoys and 150 native
cavalry, was sent to block the way to Chinsura,
while three of the Company's cruisers were ordered
to intercept the Dutch fleet. Forde obeyed his in-
structions, but hesitated to fight a foe against whom
no hostilities had formally been declared. In this
quandary he sent a message to Clive. The latter
had no such qualms ; he regarded the Company,
whether rightly or wrongly, as a sovereign power,
whose authority to make war and peace in this
corner of the world was not dependent upon Euro-
pean kings and cabinets. That authority was
delegated to him. He was deep in a rubber of
whist at the fort when Forde's note arrived ; he
paused a moment merely to write in pencil on a slip
torn from the note : ** Dear Forde — Fight 'em im-
mediately, and ril send an order of Council to-
morrow ". Accordingly the Dutch were promptly
fought ; the engs^ement was brief, bloody and de-
cisive ; 500 were killed and wounded, and 350
Dutch and 200 Malays were taken prisoners. In
the Hugli six out of the seven Dutch vessels were
captured. The factory at Chinsura now implored a
cessation of hostilities ; they frankly acknowledged
their error, apologised and offered to pay all costs and
damages. They also agreed never to maintain more
than 125 European soldiers in Bengal. On this
humble submission the captive ships were restored,
and Meeran, the Nawabs rascally son, who had
been hovering near in the hopes of plundering
whichever should prove to be the vanquished party,

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1766] COMPANY'S SUDDEN RISE 143

was forced to fly. The crestfallen Dutch and their
intended ally, the Nawab, could now reflect upon
the failure of their plot at their leisure.

This proved to be Governor Clive's last public
act during his first Bengal administration. Early
in June, 1760, accompanied by the gallant Colonel
Forde, whom he had vainly pressed the Company
to appoint commander of its army,^ he embarked for
England. In an investigation into the affair, which
was subsequently held in Europe by Dutch and
English commissioners. Clive was exonerated from
all blame ; indeed, high approval of his conduct was
expressed both by the Company and the Govern-
ment. His disinterestedness is sufHciently attested
by the fact that while it was occurring ;^ 180,000
of his private fortune lay in the hands of the Dutch
Company, who might easily have kept the money in
revenge and as compensation for the losses occa-
sioned by their misguided ambition.

The stirring events in India which have been
described could hardly fail to make a deep im-
pression on the public mind in England. It began
to be perceived by the wiser statesmen of the time
that the Company's sudden rise to power and terri-
torial sovereignty on so large a scale rendered its
constitutional relations with the authorities at home,
in the absence of any formal working arrangement,
a matter of some perplexity, if not positive danger.

Moreover, of late years, the possibility of the

Mn succession to Lawrence, on whose return to England the
Company granted him (1760) £500 a year M life. Clive addeci
noother £5oa

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144 LEDGER AND SWORD [1759

conquest, not merely of Bengal and the Camatic,
but of the whole Mogul Empire, had become familiar
to advanced European cabinets. As far back as
1746 a certain Colonel James Mill, who had lived
twenty years in India, drew up a project of conquest
which he submitted to the German Imperial Court.
"The Mogul Empire," he wrote, "is overflowing
with gold and silver ; she has always been feeble and
defenceless. It is a miracle that no European prince
with a maritime power has ever attempted the con-
quest of Bengal. By a single stroke infinite wealth
might be acquired, which would counterbalance the
mines of Brazil and Peru. . . . The British nation
would co-operate for the sake of the plunder and the
promotion of their trade. The East India Company
should be left alone ; no Company can keep a secret." *

The opponents and detractors of the Company
argued that, as the recent conquests had been effected
chiefly with the aid of the King s ships and troops,
the authority of a mere body of traders should be
swept aside, and the rewards and responsibilities of
civil and military administration in Hindustan should
unhesitatingly under the circumstances be assumed
by the Crown.

Chief among those who held these views, it soon
began to be publicly known, was the Company's
most distinguished servant, Robert Clive himself.
From Calcutta, on the 7th January, 1759, he had
addressed a letter to Pitt, the Prime Minister, ex-

^ This important memorandum is not to be found in any of the
Indian histories. See Bolt's Affairs in Bengal^ Appendix ; Wheeler's
Early Records,

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1759] CLIVE'S THEORIES 145

pressing somewhat guardedly his opinion of the
expediency of transferring the supreme control of
the management of Indian affairs to the Crown.
This letter is of such interest and importance, as
coming from Clive and as being a full century in
advance of the period when the policy he suggested
was actually and fully adopted, that it would be well
for us to note carefully its leading passages,

" The great revolution that has been effected
here," he wrote, *'by the success of the English
arms and the vast advantages gained to the Com-
pany by a treaty concluded in consequence thereof
have, I observe, in some measure engaged the public
attention ; but much more may yet in time be done
if the Company will yet exert themselves in the
manner the importance of their present possession
and future prospects deserves. I have represented
to them in the strongest terms the expediency of
sending out and keeping up constantly such a force
as will enable them to embrace the first opportunity
of further aggrandizing themselves ; and I dare pro-
nounce from a thorough knowledge of this country's
government and of the genius of the people acquired
by two years' application and experience that such
an opportunity will soon offer. The reigning Subah,
whom the victory at Plassey invested with the sover-
eignty of these provinces, still it is true retains
his attachment to us, and probably while he has
no other support will continue to do so ; but
Mussulmans are so little influenced by g^titude
that should he ever think it his interest to break

with us, the obligations he owes us would prove no
VOL. II. 10

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146 LEDGER AND SWORD [i7S9

restraint ;. and this is very evident from his having
lately r^emoved his Prime Minister and cut off two
or three principal officers all attached to our interest
and who had a share in his elevation. Moreover,
he is advanced in years, and his son is so cruel and
worthless a young fellow and so apparently an enemy
to the English, that it will be almost unsafe trusting
him with the succession. So small a body as 2,000
Europeans will secure us from any apprehensions
from either the one or the other ; and in case of
their daring to be troublesome, enable the Company
to»take the sovereignty upon themselves.

"There will be the less difficulty iji bringing
about such an event, as the natives themselves have
no attachment whatever to particular princes ; and
under the present Government they have no security
for their lives or properties, they would rejoice in so
happy an exchange as that of a mild for a despotic
government ; and there is litde room to doubt our
easily obtaining the Mogul's sunnud (or grant) in
confirmation thereof provided we agree to pay him
the stipulated allotment out of the revenues, uiz.y
fifty lakhs annually^

'* This has of late years been very ill-paid, owing
to. the distractions in the heart of the Mogul Em-
pire, which have disabled that Court from attending
to their conceros in the distant provinces ; and the
Vizier has actually wrote to me, desiring I would
engage the Nawab to make the payments agreeable
tQ the. former usage ; nay, further, application has
been made to me from the Court of Delhi to take
charge of collecting this payment, the person en-

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1759] "ABSOLUTE POSSESSION" 147

tcusted with which is styled the King's Dewan, and
is the next person both in dignity and power to the
Subah. But this high office I have been obliged to
decline for the present, as I am unwilling to occasion
any jealousy on the part of the Subah ; especially as
I see no likelihood, of the Company's providing us
with a sufficient force to support properiy so con-
siderable an employ, and which would open a way
to secure the Subahship for ourselves^ That this
would be agreeable to the Mogul can hardly be
questioned, as it would be so much to his interest to
have these countries under the dominion of a nation
famed for their good faith, rather than in the hands
of people who, a long experience has convinced him,
never will, pay him his proportion of the revenues
unless awed into it by the fear of the Imperial army
marching to force them thereto.

" But so large a sovereignty may possibly be an
object too extensive for a mercantile company ; and
it is to be feared they are not of themselves able,
without the nation s assistance, to maintain so wide
a dominion. I have therefore presumed, sir, to re-
present this matter to you and submit it to your
consideration, whether the execution of a design that
may hereafter be still carried to greater lengths, be
worthy of the Government's taking it. into hand. I
flatter myself I have made it pretty clear to you,
that there will be little or no difficulty in obtaining
the aisolute possession of these rich kingdoms ; and
that with the Mogul's own consent, on condition of
payii^ him less than a fifth of the revenues thereof.
Now I leave you to judge whether an income yearly

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148 LEDGER AND SWORD [1759

of upwards of two millions sterling, with the possession
of three provinces abounding in the most valuable pro-
ductions of nature and of art, be an object deserving
the public attention : and whether it be worth the
nation's while to take the proper measures to secure
such an acquisition ; an acquisition which, under the
management of so able and disinterested a Minister,
would prove a source of immense wealth to the king-
dom, and might, in time, be appropriated in part as
a fund towards diminishing the heavy load of debt
imder which we at present labour. Add to these
advantages the influence we shall thereby acquire
over the several European nations engaged in the
commerce here, which these could no longer carry
on but through our indulgence and under such limita-
tions as we should think fit to prescribe. It is well
worthy consideration that this project may be brought
about without draining the mother country, as has
been too much the case with our possessions in
America. A small force from home will be sufficient,
as we always make sure of any number we please of
black troops, who, being both much better paid and
treated by us than by the country powers, will very
readily enter into our service. Mr. Walsh, who will
have the honour of delivering to you this, having been
my secretary during the late fortunate expedition, is a
thorough master of the subject, and will be able to
explain to you the whole design, and the facility with
which it may be executed, much more to your satis-
faction and with greater perspicuity than can possibly
be done in a letter. I shall, therefore, only further
remark that I have communicated it to no other

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1759] THE COMPANY'S POSITION 149

person but yourself ; nor should I have troubled you,
sir, but from a conviction that you will give a favour-
able reception to any proposal intended for the
public good."

Clives mind had been disturbed by the con-
stant quarrels between the officers of the King and
those of the Company, owing to the absence of
a definite understanding, and also by resentment
towards the Company because the directors would
not supinely comply with all his demands. The
truth is, Clive was proud, obstinate and opinionated ;
he was very difficult to hold in check. Vixere fortes
ante Agamemnona. The East India Company had
done great things before Clive ; it had had capable
and gallant servants before Clive, and it was by no
means ready to put itself utterly under the yoke of
a master. With all its faults and shortcomings its
Court of Directors could still boast some men of
ability and influence. Sulivan, for example, how-
ever friendly to Clive, by no means intended that
the seat of authority should be transferred from
Leadenhall Street to Fort William. If, as was
vehemently proclaimed, the Company had employed
King's soldiers, it had also paid them well ; it had
given them their share of prize money, it had housed,
fed and equipped them far more bountifully than th?
British Government did its German mercenaries.
If the King's soldiers on their part had helped to
win the Company's battles, the campaigns had been
directed by the Company's servants acting under its
orders, and upon it fell the expense and the re-
sponsibility. Clive did far less than justice to his

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ISO LEDGER AND SWORD [1759

real knowledge : he continually forgot that he was
a subordinate in the employ of a sovereign power.
He took a tone in answering their very moderately
reproving despatches — nay, more, he incited others
of his Council to do so — ^which he never would have
adopted in addressing a Minister of State. At length,
his pride in his conquests pushed him too far. To
a despatch addressed to the President and members
of the Council of Bengal shortly before his departure
he composed a reply which concluded in the following
language — "language," says his latest and in some
respects his best biographer, ** seldom used by sub-
ordinate officials, however high in rank, when ad-
dressing their official superiors " : —

" Having fully spoken to every branch of your
affairs in this Presidency, under their established
heads, we cannot, consistent with the real anxiety
we feel for the future welfare of that respectable
body from whom you and we are in trust, close this
address without expostulating with freedom on the
unprovoked and general asperity of your letter per
Prince Henry packet Our sentiments on this head
will, we doubt not, acquire additional we^ht from
the consideration of their being subscribed by a
majority of your Coimcil, who are at this very period
quitting your service, and consequently independent
and disinterested. Permit us to say that the diction
of your letter is most unworthy yourselves and us,
in whatever relation considered, either as masters to
servants or gentlemen to gentlemen. Mere inad-
vertences and casual neglects arising from an
unavoidable and most complicated confusion in the

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1759] AN IMPERTINENT LETTER 151

state of your affairs^ have been treated in such
language and sentiments as nothing but the most
glaring and premeditated faults could warrant.
Groundless informations have without further scrutiny
borne with you the ^tamp of truth, though proceeding
from those who had therein obviously their own
purpose to serve, no matter at whose expense.
These have received from you such countenance
and encouragement as must most assuredly tend to
cool the warmest zeal of your servants here and
everywhere else : as they will appear to have been
only the source of general reflections thrown out at
random against your faithful servants of this ^Pre-
sidency in various parts of your letter now before
us — faithful to little purpose if the breath of scandal
joined to private pique or private or personal attach-
ments, have power to blow away in one hour the
merits of many years* services, and deprive them of
that rank and those rising benefits which are justly
a spur to their integrity and application. The little
attention shown to these considerations in the in-
discriminate favours heaped on some individuals and
undeserved censures on others, will, we apprehend,
lessen that spirit of zeal so very essential to the well-
being of your affairs, and consequently in the end, if
continued, prove the destruction of them. Private
views may, it is much to be feared, take the lead
here from examples at home ; and no gentlemen
hold your service longer, nor exert themselves
further in it than their own exigencies require. This
being the real present state of your service it becomes
strictly our duty to represent it in the strongest light,

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152 LEDGER AND SWORD [1760

or we should with little truth and less propriety sub-
scribe ourselves, may it please your honours, your
most faithful servants."

This unusual communication from a servant to a
master was signed by Clive, Holwell, W. B. Sum-
ner and W. M'Guire. The result was what might
have been expected. The three last-named were
promptly dismissed from the Company's service,
although Holwell was then actually in possession
of the governorship, pending the arrival of Henry
Vansittart from Madras.

Yet, while the Company could not but feel a
natural displeasure at the behaviour of Clive in his
capacity of official subordinate, it had nothing but
admiration for his great abilities and achievements
in India. It welcomed the soldier and administrator
on his return in the autumn of 1 760 with enthusiasm.
It voted a statue of him to be set up in the East
India House, and had struck a medal in his
honour. It rejoiced when the young King, then
newly ascended upon the throne, came to bestow
upon its late servant an Irish peerage. On the
other hand it did not lose its jealousy of Clive's
influence in opposition to its policy, or its apprehen-
sion that he might damage its sovereign interests.
It could, when it learned the fact, hardly forgive
Clive's letter to Pitt, which assuredly should not
have been written while Clive was in the Company's
service.

The ablest and most popular member of the
Court of Directors had been amongst the earliest
admirers and patrons of Clive at East India House.

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i;^] SULIVAN AND CLIVE 153

To Sulivan's judgment Clive himself had paid
tribute.

In spite of Sulivan s admiration of Clive and his
indebtedness to him, he soon began to perceive in
him a dangerous rival. He sought to repress Clive's
ambition regarding Indian affairs, and for a period
met with success. In one of Clivers private letters
to Mr. Pybus at Madras he writes as follows : —

" The Court of Directors seem to be much in the
same situation as when you left England. Sulivan
is the reigning director, and he follows the same
plan of keeping every one out of the direction who
is endowed with more knowledge or would be likely
to have more weight and influence than himself.
This kind of political behaviour has exasperated
most of the gentlemen who are lately come from
India, particularly those from Bengal. They are
surprised I do not join in their resentments ; and I
should think it very surprising if I did, considering I
have such an immense stake in India. My future
power, my future grandeur, all depend upon the re-
ceipt of the jaghire money. I should be a madman
to set at defiance those who at present show no in-
clination to hurt me. I have so far fallen into this
way of thinking as to preside at a general meeting
of a club of East Indians, once a fortnight, and this
has all the effect I could wish of keeping Sulivan in
awe, and of convincing him that, though I do not
mean to hurt him, I can do such a thing if he at-
tempts to hurt me. Indeed, I am so strongly sup-
ported by the Government and by Parliament that I
should not be afraid of an attack from the whole

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154 LEDGER AND SWORD [1760

body united ; but there is no necessity of wantonly
exciting them to attempts against my interest." ^

Sulivan, as we have had occasion to remark,
took the interests of the Company strongly to heart,
and was fully convinced in his own mind of the way
in which its affairs should be conducted ; he was
not one easily to be overborne in his opinions. He
strongly resented Clive's interference; and in this
he carried most of his fellow-members of the Court
of Directors with him. When he formed the acquain-
tance of Colonel Eyre Coote he was so impressed
with that officer's ability that he determined to pro-
cure Coote's appointment as commander of the
Company's army in Bengal. The rest of the direc-
tors in this, also, shared his views. In vain Clive
pressed the claims of Forde upon them : he had, it
appeared, virtually promised the succession to his
friend ; Coote, notwithstanding, was appointed, and
Clive's resentment knew no bounds. Yet, surely
the Company had a right to select its own servants ;
and, in this case, its choice proved an excellent one.

It soon began to appear that Clive was bent upon
urging reforms in the Company's service without
due regard to the opinions of Sulivan and his fellow-
directors. Soon after his return he entered Parlia-
ment as member for Shrewsbury on the side of Pitt.

In a private note to the Chairman of the Direc-
tors Clive relates an important interview he had
with the Minister on the subject of the support and
welfare of the Company. * * Mr. Pitt seems thoroughly

^ Malcolm, Memoirs of Lord Clive,

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i76o] INDIA HOUSE POLITICS 155

convinced of the infinite consequence of the trade of
the East India Company to the nation ; he made no
scruple to me of giving it the preference to our con-
cerns in America. Indeed, a man of Mr. Pitts
influence and way of thinking is necessary to oppose
to the influence of Lord Anson, who certainly is no
friend to our Company. " Such sentiments expressed
to the Company, it will be thought, hardly tally with
those of Clive's previous letter to Pitt But it might
also be an indication that Clive's opinions, now that
he had returned home, were undergoing a salutary
change. His own stake in the Company was great,
and was, as we shall see, increasing.

Clive's popularity with the King and nation had
the effect of increasing Sulivan's jealousy and of
causing him serious alarm. No overt act occurred,
however, at the time, but before the next general
election Clive made up his mind to oppose the
"autocrat of the India House".

Clrve delivered himself of an honest expression
of his feelings in a letter to Henry Vansittart. He
says : ** There is a terrible storm brewing against
the next general election. Sulivan, who is out of
the direction this year, is strongly opposed by Rous
and his party, and by part, if not all, of the East
Indians (particularly the Bengalees) and matters are
carried to such lengths that either Sulivan or Rous
must give way. ... I must acknowledge that in
my heart I am a well-wisher for the cause of Rous,
although, considering the great stake I have in India,
it is probable I shall remain neuter. Sulivan might
have attached me to his interest if he had pleased.

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156 LEDGER AND SWORD [1761

but he could never forgive the Bengal letter, and
never has reposed that confidence in me which my
services to the East India Company entitled me to.
The consequence has been that we have all along
behaved to one another like shy cocks, at times out-
wardly expressing great regard and friendship for
each other."

Sulivan and Clive were, as Sir John Malcolm
says, so widely apart in their politics and in their
personal views and connections, that only prudential
considerations now prevented a rupture.

Pitt went out of office in October, 1761, and
Clive joined the party of Grenville. Bute, Pitt's
successor, counted Sulivan amongst his adherents,
and the two men, he who had done the most for the
Company in India and the one who held the most
power in it at home, added to their hostility over
the Company's affairs by becoming fierce political
enemies. But the conqueror of Plassey, with his
vast wealth and desires concerning India adminis-
tration, had no intention that Sulivan should con-
tinue to possess the most power at home. Each
;^500 of stock gave a vote at the Court of Pro-
prietors, and ;^2,ooo qualified for a directorship.
Determined to acquire votes for friends who would
support his projects of reform, Clive set about spend-
ing ;^ 1 00,000 in their acquisition. Sulivan, on his
part, announced that the question of Clive's title to
the jaghire, which Mir Jafir had conferred upon him,
was under consideration by the Company. This
threat caused Clive to pause, but it was too late to
draw back now ; the election was duly fought and

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i76i] SULIVAN'S ASCENDENCY 157

Sulivan was chosen chairman of the Court. One
of his first acts was to sign orders from the Company
to Governor Vansittart at Calcutta, prohibiting any
further payments to Clive on account of the jaghire.
Clive's reply was to file a bill in Chancery against
the Company, and to notify Vansittart and his
Council that if the annual payment to him of the
amount, ;^27,ooo to ;^30,ooo, were discontinued, he
would enforce his claim at law in Calcutta, where he
knew he should be heard.

Although Sulivan's ascendency in the Court of
Directors was complete, his opponents among the
proprietors became numerous and bitter. The most
prominent among these were servants who had been
in Bengal, and who did not approve of the ascend-
ency the servants of Madras and Bombay had fre-
quently exercised over those of Bengal They
accused Sulivan of being more attached to Bom-
bay.

Naturally, thosie who had been disgraced in India
came home full of resentment, and " freely in their
discourse imputed the injuries they had received to
one man only" — and that man Sulivan. He was
called the Governor and the " Great Director " ; with
a body of adherents at his back, he proceeded to
make and unmake fortunes. He wrote to Vansittart
that "he was his earthly creator," ''he thought he
had pretty well subdued the spirit of Bengal ". When
he took a journey to interview Pitt, it was a standing
jest at Bath that "the India Company was come
amongst them ". He alone planned the Company's
leading ventures, including the Manila expedition.

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' 158 LEDGER AND SWORD [1761

\ But Time was rapidly bringing in its new triumphs

for Clive. Events were even at that very moment
happening in India which were to give him once
more an ascendency in the Company's affairs. In
Bengal the calm which appeared to prevail through-
out the province on his departure was, as he expected
it to be, of brief duration. But, before the storm
broke here, French power in the Carnatic, and,
indeed, in all India, had been levelled in the dust

' In December, 1759, the French, led by Lallyand

' Bussy, were beaten by Eyre Coote at Wandewash

with heavy loss. Lally retreated with the remnants
of his army to Pondicherry. Gradually the French

I flag was struck at every place where it had lately

floated so triumphantly; their whole territory was

1 laid waste by fire and sword. Pondicherry held out

until the 4th January, 1761, when the starved garri-
son surrendered to Coote, and the impetuous and
misguided Lally went back to France to die a
shameful death. The Company sent out orders that
the town and fortifications of Pondicherry should be
levelled to the ground, and this was accordingly done.
By April the French had not a single military post

i in all India.

It was little likely when Madras was pressed for
money that the Company's Council would hesitate to
squeeze the Nawab. When it was found that twenty-
eight lakhs were insufficient to meet expenses, fifty
were boldly demanded. Already he was deeply in
debt, yet the sum was forthcoming. Mohammed
Ali had formerly agreed to pay for the cost of the
defence of Madras, " because it was the residence of

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1760] PIGOT'S NEGOTIATIONS IS9

his friends". He was now asked to pay for the
siege of Pondicherry on the ground that this was the
residence of his enemies. He agreed, but on con-
dition of having the stores turned over to him when
Pondicherry fell When this event happened the
Nawab was credited with the value of the stores in
the Madras books. But on learning of the trans-
action the Court of Directors sent orders to cancel
the sum thus credited.

Pigot might exchange fair words with the Nawab,
but when it came to a question of cash the Company
made as light of the Nawab's suzerainty " rights and
property " as ever, in later times, did Warren Hast-
ings of the authority the Mogul.

On the 13th June, 1760, the Nawab wrote a
letter to Pigot proposing that twenty-eight lakhs of
rupees, charged upon the gross revenues of the
Camatic, should be paid annually to the Company,
until his debt should be extinguished, and that, in
addition, the Nawab should advance annually three
lakhs of rupees to the paymaster at Trichinopoly
** for defraying the expense of the Company's people
in that garrison". But, "should Pondicherry be
reduced, the whole money due to the Company,
should be paid in one year, provided the English
should add a proper force to the troops of the
Nawab, to bring to account such vassals of the
Carnatic as had withheld their tribute and allegiance
during the late troubles" In return, the Nawab of
the Camatic named certain demands. He asked
that the Company should not countenance the re-
fractoriness of any of his dependents ; also that the

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i6o LEDGER AND SWORD [1760

Nawab's flag should be hoisted in the diflerent
country forts in lieu of the English, and that the
alliance between him and the Company should be
continued to his successor. To all this Pigot did
not hesitate to agree : what mattered the semblance
of power when the Company possessed the sub-
stance ?

** By the blessing of God," wrote the President,
"the Company will never fail to give proofs of their
friendship and sincerity to you and your family, and
will be firm in supporting you and your posterity in
the Subahdary of the Camatic/'^

In Bengal, Clive's temporary successor, Holwell,
had made up his mind to displace Mir Jafir, whom
he had long disliked and distrusted. He imparted
his plans to Vansittart on the latter s arrival, who fell
in with Hoi well's views. The necessity for a more
capable Nawab was soon rendered all the greater
in that the Mogul had just been murdered by his
Vizier at Delhi, and the Shahzada, assuming the state
and title of emperor, again threatened Bengal. He
collected a large army, and that very Nawab of Oude
who had shown him such scant hospitality the year
before he created his Vizier. Forthwith Shah Alum
and the Nawab Vizier attacked Patna ; a course of
anarchy and bloodshed seemed imminent. Vansit-

^The Compan/s servants in India had all along known the
value attached to forms of expression. In a private letter to the
Nawab's wife, dated ist July, 1760, Pigot says, ''The Company has,
with great pleasure, agreed to all his Excellency's business, agreeable
to his desire ; and they most cordially wish prosperity to his affairs,
being obedient to him." This was written immediately after he had
squeezed his *' master " to the tune of fifty lakhs.

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I76i] VANSITTARTS DEMANDS i6i

tart, therefore, without more ado, removed Mir Jafir
from the Nawabship of Bengal and conferred the post
upon his son-in-law, Mir Cossim, on condition that
the districts of Burdwan, Midnapur and Chittagong
should be made over to the Company. The mem-
bers of the Council themselves expected to receive
;^20o,ooo, of which Vansittart's share was to be
;^28,ooo. The deposed Nawab was given an asylum
in Calcutta.

In January, 1 76 1 , the Company's troops advanced
against Shah Alum and roundly defeated him and
his allies. The Mogul retired towards Delhi, then
the centre of the most fearful anarchy and confusion,
whence he soon afterwards sent Mir Cossim letters
of investiture in his Nawabship. In return, Mir
Cossim, hoping thereby to be independent of the
English, secretly promised to pay an annual tribute
of twenty-four lakhs or ;^240,ooo sterling into the
Imperial Exchequer.

The new Nawab soon evinced himself to be a
man of capacity and firmness, bent on emancipating
himself from the English. He moved his capital
from Murshedabad to Monghyr, 200 miles further
from Calcutta, where he could train and discipline
an army without any embarrassing surveillance.

Governor Vansittart had no sooner learnt of Mir
Cossim's receipt of sunnuds from the Great Mogul
(alas, no longer great !) than he himself determined
to apply for similar ones on the Company's account
He asked to be confirmed in the jaghire lands
granted by Mir Jafir and in the three districts
latterly ceded. H e demanded also sunnuds investing

VOL. II. II

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i62 LEDGER AND SWORD [1761

Mohammed AH with the govermn^nt of the Carnatic
Shah Alum refused to accede unless the imperial
share of the revenues of the Carnatic, in addition
to that of the three Bengal districts, were forwarded
to him annually. This refusal seems to have sur-
prised and offended both Vansittart and the Company.
Nevertheless, the Governor was advised at the same
time that the Mogul ** had offered to confer on the
Company the Dewani of Bengal on condition to our
being answerable for the royal revenues ; but as we
were sensible that our accepting of this post would
cause jealousy and ill-will between us and the Nawab
we thought it more prudent to decline it".^

This was not, however, the first time the Dewani
had been offered to the Company ; the proposal had
already been made and had been refused by Clive,
who was four years later to accept it.

Mir Cossims impatience at restraint from Cal-
cutta daily increased. In order to replenish his
treasury, which had been depleted by their per-
petual demands, he was shamefully permitted by
Vansittart to fall upon the able Hindu governor of
Patna, Ram Narain, who was believed to possess
great wealth. This unfortunate man was thrown
into prison, his house plundered and his friends and
servants tortured to exact a confession of hidden
treasure. Little of this was found, and the Nawab
was with difficulty restrained from putting Ram Nar-
rain to death. As it happened, the execution was
only deferred. This action, to which Vansittart was

1 Letter frpro Bengal Council to Company, lath November, 1761.

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I76i] SERVANTS' PRIVATE TRADE 163

a party, occasioned a storm of protest from many of
the Company's servants. It was certainly a terrible
blunder on the part of the Governor ; it was taken
by the native chiefs as an indication of the Nawab s
power, and caused them to go over to his side. It
gave birth also to a spirit of opposition in the council
chamber and in the factories, which needed all Van-
sittart's strength to allay sufficiently to carry on the
Company's business. While the discord was at its
highest pitch the letter from the Court of Directors
previously mentioned, dismissing the three members
of the Council upon whom the Governor chiefly re-
lied at this crisis, was received at Calcutta. The
triumphant faction now proceeded to the appointment
of Ellis, a bitter enemy of both Vansittart and the
Nawab, to be chief factor at Patna. This person
was violent and arbitrary ; his intemperate conduct
soon foreshadowed overt enmity between the English
and Mir Cossim.

By virtue of a privilege years before granted
to the Company, its servants were exempt from
inland duties on all goods intended for exportation,
which were specified in a passport signed by the
president This privilege had lately been grossly
abused. Every private trader, and even every
native connected with the Company boldly asserted
his right to conduct a trade free of all duty ; while,
on the other hand, the less fortunate subjects of the
Nawab were everywhere taxed 40 per cent, on each
article of merchandise. Naturally, the native mer-
chants loudly complained of such injustice to the

Nawab, who remonstrated with the Council. Van-

II*

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i64 LEDGER AND SWORD [1761

sittart was prepared to come to some equitable
arrangement, but his fellow-members, intent on
filling their pockets, overruled the plan he had
drawn up. In retaliation, Mir Cossim published an
edict abolishing all duties throughout Bengal. The
Council promptly characterised this edict as an act
of hostility against the Company, and demanded its
instant repeal. But Mir Cossim paid the scantiest
attention to this demand. Both sides made ready
for the argument of the sword.

In the meantime, in the Camatic, by the fall of
Pondicherry and the continued subservience of the
Nawab, Mohammed Ali, the Company enjoyed a
power and prestige which a few years before would
have exceeded its most sanguine dreams. Its posi-
tion was almost that of a sovereign, while the real
sovereign whom it had raised to the throne, here as
elsewhere, appeared little more than a lay figure.
Besides large demands on his exchequer, a jaghire
was solicited similar to that granted by the Nawab
of Bengal. Mohammed Ali did his best to comply,
and Pigot, at the head of the Madras Council, lent
him troops for his campaigns. Mohammed Ali espe-
cially wished to vanquish and annex Tanjore, but the
Company steadily refused to countenance this plan,
which would upset the balance of power. This dis-
pute between the two princes Pigot and his Council
undertook to settle by arbitration. As a matter of
fact, the quarrel was not between two independent
states, the Rajah of Tanjore being a tributary vassal
of the Mogul Empire, and the Nawab the Mogul's
deputy in the Carnatic, to whom the Rajah was

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1762] COMPANY'S SOVEREIGN POWER 165

accountable. But these distinctions were lost in the
general confusion ; and Pigot, by appointing himself
mediator, was forcing acceptance of the Company
as a sovereign power, whose sovereignty was based
on actual power.

On 30th January, 1762, he wrote to Pertab Singh,
"It will always give me very great concern to be
obliged to spill human blood, or forcibly dispossess
any prince of his country ; but rebels must be
punished, if they will not hear reason ". In a letter
to the Nawab, dated 31st May, the Company's Pre-
sident wrote : " The settling all affairs in this part of
the country has been left entirely to you. The pre-
sent case is different I consider the King of Tanjore
as a sovereign prince. . . . It is a custom when two
States disagree to call in a third to judge between
them. I offered myself as such and therefore the
treaty must be conducted by me. I act as mediator,
the affair cannot, according to custom, be discussed
in your durbar."

Truly, this was high language from "the chief
agent of a mercantile factory " ! But Pigot possessed
all the power he boasted, and a treaty was concluded
by which Tanjore was obliged to contribute twenty-
two lakhs of rupees as arrears of tribute and an annual
contribution of four lakhs. This was really less than
his predecessors had paid. Four lakhs further were
given as a present to the Nawab, i.e.^ to the Com-
pany.^

' The entire sum was transferred to the Company's treasury and
the Nawab credited with it in the Compan3r's books. As to the pre-
sent of four lakhs the Company, in its letter of 30th December, 1763,

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i66 LEDGER AND SWORD [1763

Mohammed Ali might wriggle as he chose : the
treaty dictated by Governor Pigot was concluded ;
and when the Nawab refused to subscribe, Pigot
seized his chop and with his own hand in the Nawab's
presence affixed the stamp to the deed.

By the Treaty of Paris, which in 1762 put an
end to the war in Europe between the French
and English, the latter were confirmed in their
conquests in India. Mohammed Ali was acknow-
ledged lawful Nawab of Arcot, the first Indian
prince, together with the Nizam, ever mentioned
as an ally in a solemn treaty between European
Powers. Before resigning the Governorship of
Madras in October, 1763, Pigot induced the Nawab
to issue unconditional sunnuds to the Company,
granting it territory worth annually fourteen lakhs
of rupees.

Pigot s dealings with the Nawab were somewhat
high-handed, it must be confessed. He first merely
asked of the Nawab some villages round Madras, and
these only after a discharge of his debt to the Com-
pany. Later, he increased his demands, and wanted
Conjeveram and other three districts. The Nawab
reminded him of his having ** ceded at different times
St. Thom6, Luxudaporum, together with the fort
and territory of Runamallan," and that, besides, he
had relinquished the peishcush for Madras, which

said : *' Now, if this last-named sum was given as a present it seems as
if the Company ought to have it for their interposition and guarantee
of the treaty. We shall be glad to have this affair explained to us,
that we may know the real state of the case with respect to that
donation." The affair was explained and the Company pocketed
the cash.

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1763] THE COMPANY'S ** BOUNTY" 167

the Company was bound to pay, by the tenure by
which it held that place.

Pigot declared that if the four districts were ceded
"the Company would be extremely pleased and
obliged to the Nawab, and would ever after assist
him and his children with a proper force of Euro-
peans, without desiring anything further. That till
the Nawab had cleared off his debt to the Company,
the revenues of those districts after defraying the
expenses of the soldiers, should be placed to the
credit of his account."^ Mohammed Ali asked
humbly that this should be put in writing. Pigot
expressed extreme indignation at such a request It
did not become a man, he said, who owed the whole
country to the Company to ask any conditions for a
part of it. ** The Company," he added significandy,
" do not take anything from you ; but they are the
givers and you are a receiver."

Before leaving for Europe Pigot, with his great
wealth, including the priceless " Pigot diamond," con-
descended to become the Nawab's agent in England,
at an annual salary of 1 2,000 pagodas.

It is now time to return to Bengal. In the midst
of all the disturbances, political and military, which
we have described, it is not easy to present a picture
of the disgrace and disorganisation which character-
ised the Company's internal administration through-

^ But a war which about this time broke out against a recusant
chief, Mohammed Issuf, in which the Nawab and the Company took
part, soon emptied the joint exchequer. The rebel was not subdued
until October, 1764, when more than a million sterling and the lives
of many English as well as native soldiers had been expended.

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i68 LEDGER AND SWORD [1763

out this and the sister provinces. Never before nor
since, not even in the palmy days of the interlopers,
or the confusion occasioned by the fierce rivalry
between the two Companies at the end of the
seventeenth century, was to be witnessed such a
spectacle of gross neglect and corruption. While
the Company's officials enriched themselves by the
unconscionable plunder of the native chiefs and
subjects, the Company's annual investment steadily
decreased. In vain did the Court of Directors write
for explanation and redress. They ordered that an
end should be put to a situation which threatened it
with bankruptcy. The Company's servants were too
greatly intent upon filling their own purses and pro-
fiting by the successive revolutions to pay much
attention to orders from Leadenhall Street. ** The
servants of the Company obtained, not for their
employers, but for themselves, a monopoly of almost
the whole internal trade. They forced the natives
to buy dear and sell cheap. They insulted with
impunity the tribunals, the police and the fiscal
authorities of the country. They covered with their
protection a set of native dependents who ranged
through the provinces spreading desolation and
terror wherever they appeared. Every servant of a
British factor was armed with all the power of his
master, and his master was armed with all the power
of the Company. Enormous fortunes were thus
accumulated at Calcutta, while 30,000,000 of human
beings were reduced to the extremity of wretched-

ness."

In one of its later letters the Company declares

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1763J VENALITY IN BENGAL 169

that the picture which their servants presented to
them after reform had been commenced was that of
a Nawab "disarmed, with a revenue of almost two
millions sterling, for so muck seems to have been
left, exclusive of our demands upon him, at the mercy
of our servants who had adopted an unheard of ruin-
ous principle of an interest distinct from the Com-
pany. This principle showed itself in laying hands
upon everything they did not deem the Company's
property.

*' In the province of Burdwan the Resident and
his Council took an annual stipend of near ;^8o,ooo
per annum from the Rajah, in addition to the Com-
pany's salary. This stands on the Burdwan accounts,
and we fear was not the whole, for we apprehend it
went further, and that they carried this pernicious
principle even to the sharing with the Rajah of all
he collected beyond the stipulated malguzari or land
revenue, overlooking the point of duty to the Com-
pany, to whom properly belonged that was not
necessary to the Rajah's support It has been the
principle, too, on which our servants have falsely en-
deavoured to gloss over the crime of their proceed-
ings on the accession of the present Subah, and we
fear would have soon extended to the grasping of the
greatest share of the Nawab's revenue which was not
allotted to the Company. In short, this principle was
directly undermining the whole fabric; for whilst the
Company were sinking under the burden of the war,
our servants were enriching themselves from those
very funds that ought to have supported the war."

At Merchant Taylors' Hall, in 1763, was held

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170 LEDGER AND SWORD [1763

the fullest Court of Proprietors in the Company's
history. It was presided over by Thomas Rous ; Clive
was not only present, but was also one of the principal
speakers. The prevailing topic was the late peace
and the Company's position in consequence. Rous
was roundly assailed for not procuring better terms
and preventing a restitution to the French of the
forts in India in the treaty. He narrowly escaped a
vote of censure. It appeared during the debates
that the Company's income amounted then to be-
tween ;^6oo,ooo and ;^7oo,ooo per annum. Yet
the expenses had grown so large that before the close
of the year it was decided to reduce the dividends on
the Company's bonds from 5 to 4 per cent., beginning
with the following January.

Small wonder that the Court of Directors and
the generality at home became a prey to serious
alarm. Each vessel arriving from Calcutta brought
only the same tale of misgovemment and extortion.^
The Court of Directors " had long acted as mere
spectators of the proceedings of their servants," and
now " began to feel that the moment had arrived
when some interference on their part was necessary".
Endless recriminations had been poured in upon
them, the parties mutually accusing one another of
insubordination and disaffection, while the intelli-
gence that war with Mir Cossim was inevitable, and
that a number of their functionaries had been slain,

^ Among other losses reported in this unlucky year, 1763, was
that of the Company's ship Elizabeth^ which took fire in the Canton
river, and the captain, two mates and forty men perished in the ex-
plosion of her powder-hold.

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1764] SULIVAN REJECTED tyt

added strength to the alarm which such a state of
things excited. Ignorant of the sequel to the poli-
tical troubles, a demand arose for the reappointment
of Lord Clive as the only man to save the situation.
This demand was very naturally opposed by Sulivan
and his fellow-directors, who believed matters were
adjusting themselves, and that Spencer, who had
been nominated to succeed Vansittart, could be
trusted to effect the needed reforms in the adminis-
tration. But the Court of Proprietors, panic-stricken
at the jeopardy to their dividends, met at South Sea
House and decided by an enormous majority of votes
that Clive should be invited to return to Calcutta,
not merely as Governor of Bengal but as Governor-
General of all the Company's settlements in India.
As to the jaghire, about which there was then dis-
pute, they consented that it should be immediately
restored to Clive for a period of ten years. Clive
was satisfied, but made a further stipulation ; he ex-
acted that his enemy, Sulivan, should forthwith be
removed from the chairmanship of the Company.
This was a proposition most obnoxious to the Court
of Directors, and it was further opposed by Lord
Bute, who argued to the generality that Sulivan s
services made it unjust But the proprietors could
think of nobody but Clive. The election of di-
rectors occurred in the April of 1764. Clive,
while tentatively accepting the appointment, would
not consent to take his departure until he learnt that
Sulivan had been rejected. The Company's ship
was ready, but he declined to sail. On the evening
of the 25 th it was known that out of the twenty-four

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172 LEDGER AND SWORD [1764

directors one half were supporters of Clive and one-
half of Sulivan. The votes of the new chairman and
deputy-chairman, however, gave Clive the prepon-
derance. But it was not sufficiently great for Clive
to impress his will in all matters upon the Company,
yet he managed to procure for the most part his own
nominees to the Indian administration. He applied
for authority to overrule the Council on his own re-
sponsibility whenever he deemed such a course
necessary. But this bold form of dictatorship the
Company was not yet prepared to concede ; yet
wishing to propitiate Clive they hit upon the idea of
a Select Committee, nominated by and including
him, which might act on such occasions independent
of the Council.

The Chinese trade of the Company calls for little
notice since the period last adverted to. The im-
portation of tea from Canton continued on a huge
and profitable scale, although it was subjected from
tihie to time to much exasperating native interfer-
ence and huge duties in England, which, however,
the public cheerfully paid. From time to time we
hear of disputes running high between the Company
and the English tea dealers. "These gentlemen
loudly called out for what they termed a redress of
grievance, insisting on the Company's altering a new
method they began at sale of putting up a single
chest of tea in a lot, and that, to prevent some people
from being customers, the lots should be as large as
formerly. They presented a memorial to the Court
of Directors, which was taken into consideration and
deputies admitted to speak in support of it. After

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1759] TROUBLE IN CHINA 173

which the Court declared, they would proceed in
this sale on the plan before concerted and they
would have another sale in November next, and
immediately continued the sale without interruption." ^

In the year 1751 the Court authorised the super-
cargoes in China to expend what sum was necessary
to obtain for the trade relief from exactions, and the
following year unsuccessful attempts were again made
towards the remission of the 1,950 taels and other
port charges. The Company being anxious to re-
open a trade at Ning^, one Flint, linguist to the
factory at Canton, was ordered to accompany the
mission thither. In 1753 we find that two young
men were sent out to Canton by the Court to study
the language at the Company's expense. In 1757
the Emperor decided to restrict the foreign traders
to Canton; in order to keep Europeans from fre-
quenting Chusan, Ningpo or Amoy, he imposed
double duty at each place, enforcing the landing of
guns, arms, ammunition and sails. The local officers
at Canton, having experienced the advantages de-
rived from the increase of foreign trade, were naturally
anxious to further this scheme.

Flint's mission to Ningpo proved, in 1759, a
complete failure. He could not so much as get a
supply of the common necessaries, still less carry on
any trade. On the 6th of December he was ordered
before the Viceroy at Canton, where, after base hu-
miliations had been offered to the supercargoes who
accompanied him, Flint was shown an edict, which,

^ GcntUman^s Magazine^ 1748.

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i;4 LEDGER AND SWORD [1766

the Viceroy said, was the Emperor's for his banish-
ment to Macao for three years, after which he was
to return to England and nevermore visit China.
The unfortunate Company's servant was kept in
confinement for nearly three years, and no letters
were allowed to pass between him and the super-
cargoes The incident created a considerable stir
in England at the time, and evinced the penalties
attending the Company's China trade. In 1760 a
special mission was sent out by the Company to
settle the differences between the Chinese and the
supercargoes, who, since their attempt to trade with
Ningpo, could not with decency themselves present
any address from their masters to the authorities
at Canton.

Captain Skottown, commander of the Royal
George, was chosen for the mission, charged with a
letter from the Court of Directors to the Viceroy,
desiring the liberation of Mr. Flint and relief from
existing grievances and exactions ; but these repre-
sentations were without avail.

Not until 1770 did the Court of Directors resolve
that the supercargoes should reside permanently in
China, and this practice was continued until the end
of the Company's rSgime in trade.

In 1766 four of the Company's ships had ar-
rived from China with no less than i,707,cxx) lb.
weight of tea, the duty on which at 4s. per lb.
amounted to £i^\,QOO sterling. Anderson estim-
ates that one-third of this tea was exported, and,
therefore, involved Customs drawbacks, but there
would still remain a net duty of ;^2 27,600. ** What

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i;S9] SURRENDER IN PERSIA 175

an immense sum is this/' he exclaims, '* to be paid
to the public for one single commodity ! *' What
is still more surprising is that there was anybody
in England to consume tea with a duty upon that
article of 4& a lb. !

In the summer of 1755 the Company's agent at
Gombroon reported that **one M. Padree had ar-
rived at Bussora, to remain there in quality of
French resident ". This seemed ominous, and the
Company's resident at Bussora was instructed to
keep a keen eye upon the Frenchman's movements,
and to lose no opportunity of acquainting his masters
of anything which tended to confirm their suspicions
of his being a political and military spy. But, al-
though war with France was duly declared, nothing
of an overt nature happened until several years later.
On the 1 2th October, 1759, a French fleet of four
vessels, under Comte d'Estaing, flying Dutch colours,
arrived off" Gombroon. The next day they landed
with two mortars and four pieces of cannon, and in
conjunction with the ships began an attack on the
Company's factory. Any protracted defence of such
a position was useless ; the chief and Council there-
fore capitulated, the factory and its contents (includ-
ing over a million shahees in specie) being handed
over forthwith to the French.^ The Company's
servants then retired to the Dutch factory, where
soon afterwards they witnessed the complete de-

' A few months later Fort Marlborough in Sumatra was shame-
fully surrendered by the servants stationed there, and the Company's
ship, the Denham, burnt, so as to prevent her falling into the hands
pf the French.

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i;6 LEDGER AND SWORD [1763

struction of their late property by means of explo-
sives, the ruins being subsequently pillaged by
swarms of natives. The Company's ship Speed-
well was also burnt. In vain, after the retirement
of the enemy, the Company's agent rented new pre-
mises, and endeavoured to resume trade ; business
was at a standstill owing to the unsettled condition
of the country, and the agent was directed to seek
elsewhere for a place for a chief factory. He hit
upon Bushire, as the only port between Gombroon
and Bussora where apy trade was carried on. But,
although the local governor was favourably enough
disposed and ready to grant exemption from Customs,
yet the Court of Directors could not at first make up
their mind to abandon Gombroon, where the Com-
pany had been established so long. They hoped
matters would improve, but instead they only
worsened. For a long time past, too, the Com-
pany had had so little business in Carmania that
only a linguist was maintained there ; at last, at the
close of 1 76 1, he was forced to give up, and joined
the rest in idleness at Gombroon. " Not a merchant
came to the place, whilst the servants of the factory
were daily oppressed and forced into the service of
the local Governor." The Company was finally con-
vinced, and so in March, 1763, the factors were
ordered to remove to Bussora, and during the same
year a factory at Bushire was established. The
Bussora factory was itself not recognised by the
Sublime Porte until August, 1 764, when the British
Ambassador at Constantinople obtained, with great
difficulty, a consulary permit, which, in effect, pro-

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176s] ARAB DEPREDATIONS 17;

tected the Company's commerce and property there.
Nevertheless, Bushire was destined to become the
Company's chief station in this part of the world
until the close of its commercial career.

In 1765, as if the Company's Persian trade were
not exposed to enough perils and impediments, the
Chaub Arabs began their depredations, even to bold
attacks on the Company's ships. The Directors
promptly ordered an expedition to be sent against
the marauders, who had entrenched themselves in
several islands in the Gulf. The squadron left Bu-
shire on the 7th November, but a week later one of
the four vessels blew up, killing the commodore and
most of those on board. This caused a delay of
several months, and when at length the Arabs were
attacked on the island of Karrack, the Company's
force was repulsed. An attack on Ormuz was also
abandoned, and the Arabs bade fair to drive, the
English traders out of the Gulf. To protect its
trade the Company was forced to maintain a naval
force constantly in those waters, no vessel being safe
without a convoy.

VOL. II. 1 2

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CHAPTER VII.

The Company Receives the Dewani«

A WEEK after Sulivan's overthrow, Clive made a
formal statement to the Company of his opinions
concerning the situation in India as he then believed
it to be. " The princes of the country," he declared,
" must in a great measure be dependent on us or we
totally so on them/' The action or non-action of
the Bei^al Council in allowing Mir Cossim s removal
from Murshedabad to Monghyr, out of their im-
mediate control, he emphatically condemned, "inas-
much as it is impossible to rely upon the moderation
or justice of Mussulmans". He gave it as his con-
viction that all the Company's Indian possessions
should be under one head, and furthermore, ** if ever
the appointment of such an officer as Governor-
General should become necessary, he ought to be
established in Bengal, as the greatest weight of your
civil, commercial, political and military affairs will
always be in that province ".

Thus eastward the star of Empire was taking its
way. In the days of Surat's actual hegemony
Bombay had seemed to Sir Josiah Child the Com-
pany's natural capital : then it had crept round the
peninsula to Madras: now it was Calcutta.

Clive sailed from Portsmouth early in June, 1764,

but the voyage was exceptionally prolonged and

178

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1763] WAR ON MIR COSSIM 179

he did not reach Madras, where he heard of the
death of Mir Jafir, until the 19th April, 1765. In
the interval great events had happened. We left
Mir Cossim and the Bengal Council on the verge of
war. Two of the Company's boats carrying 500
muskets for the Company's troops stationed at
Patna were seized by the Nawab's orders. Pre-
parations were at the same time made for securing
Patna and driving out the Company's force at the
Patna fa(:tory outside the town. To anticipate this
design, a majority of the Council, contrary to the
advice of Warren Hastings and other members,
despatched a summons to Ellis to lay hold upon the
citadel at Patna. Ellis, as may be supposed from
his character, lost no time in complying : the citadel
was surprised and captured on the night of the 24th
June, 1763. At this exploit the Nawab broke forth
in fierce rage, denouncing the treachery of the Com-
pany. Peter Amyatt, the late chief at Patna, on his
way back to Calcutta was intercepted and slain, as
were two Hindu bankers at Monghyr known to be
attached to the English interests. At Patna Ellis's
triumph was brief. His troops had been imprudently
permitted to scatter through the town on plunder bent.
In this disgraceful occupation the Nawab's army
surprised them, drove them to their factory and from
thence to the open country. They were finally
captured and sent, with other English, in like plight,
from the Cossimbazar factory, prisoners to Monghyr.
Despite this violence, Vansittart, supported by
Hastings, held it not too late to compromise with

Mir Cossim. But both were over-ruled ; the Coun-

12*

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i8o LEDGER AND SWORD [1764

cil dragged forth the aged ex-Nawab, Mir Jafir,
from his obscurity and again set him on the musnud.
He readily assented to their every condition and
forthwith took the field with a body of the Com-
pany's troops under Major Adams. Three battles
were fought, one near Katwa, near Plassey, and the
others at Gheriah and Andhwanala. The last-named
two were severe, proving Mir Cossim s sepoys to
have been trained to excellent effect ; the skill and
bravery of Adams alone prevented an English defeat
at Gheriah. The deposed Nawab subsequently fled
to the camp of the Nawab Vizier of Oudh, giving
orders that all his prisoners, including Ellis, cap-
tured after the Patna affair, should be massacred.
Ram Narrain, who had been abandoned by the
Company to Mir Cossim's cupidity, was brutally mur-
dered With the Nawab Vizier the deposed Nawab
of Bengal joined forces at Allahabad, where the
Mogul was in the midst of a campaign. Sub-
sequently the allies entered Behar, and after a
fruitless battle under the walls of Patna, the Nawab
Vizier, convinced of the hopelessness of the enter-
prise, showed a disposition to negotiate with the
English, Just before this incident, in May, 1764,
the first mutiny of the Company's sepoys took place
and was promptly suppressed by the masterful Hector
Munro, who blew twenty-four of the mutineers from
the cannon's mouth. In October followed the battle
of Buxar, which may be said to have placed the
whole of Oudh and the North- Western districts
under the control of the Calcutta Council.

It destroyed forever the power of the Nawab of

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1765] NAWABSHIP OFFERED i8i

Oudh by placing the Mogul under the protection
of the Company, which was itself thereby elevated
to the chief power among the sovereigns of India.
The Mogul, rejoicing at being free of his importun-
ate Vizier, proposed to enter into negotiation with
Munro, as the representative of the Company.
After writing for and receiving instructions from
Calcutta, a definitive treaty was drawn up and rati-
fied by both parties. It secured the possession of
Gazipur and the other territories of the Rajah of
Benares to the Company, who, on its part, agreed
through its Calcutta servants to wrest from Suraj-ud-
Daulah Allahabad and his other dominions for the
Mogul, who would subsequently pay the expenses of
the war out of his imperial revenues. The orders
were given to the troops, but the whole scheme was
upset by news of a fresh revolution in Bengal. Poor
Mir Jafir, perpetually harassed by the Calcutta
Council for money, and seeing his country going
to ruin, sank into a decline, and died in January,

1765.

The Calcutta Council now had the option of re-
storing to the Mogul the sovereign authority over
Bengal, Behar and Orissa ; in acquiescing in his
appointment — the legitimate privilege of the Mogul
emperors — of a Nawab ; they might again flout this
traditional right and set up a Nawab of their own
choice, or they might themselves assume the Subah-
dary or Nawabship on behalf of the Company. This
had been previously offered to them, and the offer
had been lately renewed by Shah Alum in his nego-
tiations with Major Munro, When this choice pre-

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i82 LEDGER AND SWORD [1765

sented itself to the Council, Vansittart had resig^ned
and been succeeded by Spencer, the next in rotation.
Spencer lost little time in declaring for a plan by
which he and his colleagues ** could retain the sub-
stance of power, while they entrusted the shadow
and the labour to another". But the chief reason
why the Council shrunk from sovereignty seems
to have been the exoectation of a rich harvest of
gifts individually to themselves, and this, notwith-
standing that a fortnight before Mir Jafir's death
they had received a despatch from the Company
positively forbidding them to accept presents from
the natives, and requiring them to execute covenants
framed to secure obedience to this order.^

Two candidates appeared for the Nawabship —
Mir Jafir's natural son, Nazim-ud-Daulah, a lad of
eighteen, and a grandson by Miran, aged six. As
tidings of Clive's impending arrival came to hand,
no time was to be lost ; the first named was raised
to the throne. " Nazim-ud-Dowlah," observes Mill
shortly, ''could give presents ; the infant son of Miran,
whose revenues must be accounted for to the Com-
pany, could not." The value of the presents thus
exacted were subsequently ascertained to amount to
;^ 1 40,000.

Altogether unaware of the action of Spencer and
the Calcutta Council concerning the successor in the

' ** The members of the Council read the despatches and cast
them aside as waste paper, while they excused themselves by care-
lessly observing that the Honourable Court could not possibly be
aware when the letters were written of the mighty changes which
had of late occurred in the state of the country." — Gleig*s BrUish

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1765] THE DEWANI OBTAINED 183

Nawabship, Clive determined, as soon as he got to
Bengal from Madras, to appoint the infant grandson
of Mir Jafir to the throne. But he found his plans
overturned when, a fortnight later, he learnt the facts
of the situation from Spencer's own lips at Calcutta.
He was very angry at Spencer's conduct, declaring
he had degraded the Governorship, which **had been
hunted down, stripped of its dignity and then divided
into sixteen shares," the number comprising the
Council, He quickly declared the Council dissolved
and proceeded with his work of reforms. His Select
Committee was appointed to procure the immediate
execution of the covenants which had been treated
with such scant courtesy by the Council. Every
servant was compelled to sign an agreement not to
receive any presents from the natives in the future.
General Carnac in the West prudently delayed
appending his signature, it is said, until he had
accepted a gift of two lakhs of rupees from the
Mogul.

On 25th June Clive left Calcutta to transact a
new arrangement with the Nawab, Nazim-ud-
Daulah, for the government of the provinces, and
to seek a treaty of peace with the Nawab Vizier of
Oudh. It needed but little pressure to induce the
feeble Nawab whom the Council had set up to
consent to surrender into the Company's hands his
entire revenues, together with the administration
of the provinces, in return for an annual pension of
fifty-three lakhs of rupees, subject to the control of
three agents, one an Englishman, nominated by the
Company.

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i84 LEDGER AND SWORD [i;6s

This surrender of the Dewani, or the collection
and administration of the revenue, is justly held to
mark the culmination of a most momentous period
in the Company's career. Ratification by the
Mogul rendered the chartered body of merchants
in Leadenhall Street, London, in title as well as in
fact, a ruler in Bengal, and the process thus begun in
Bengal was to continue until all India would acknow-
ledge the Company's government. Clive reported
to the Company that the Nawab had ''abundant
reason to be well satisfied with the conditions of
this agreement whereby a fund is secured to him
without trouble or danger, adequate to all the pur-
poses of such grandeur and happiness as a man of
his sentiments has any conception of enjoying.
More would serve only to disturb his quiet, endanger
his Government, and sap the foundations of that
solid structure of power and wealth which at length
is happily reared and completed by the Company
after a vast expense of blood and treasure.^

** By the acquisition of the Dewani, your posses-
sions and influence are rendered permanent and
secure, since no future Nabob will either have power
or riches sufficient to attempt your overthrow, by
means either of force or corruption. All revolutions
must henceforth be at an end, as there will be no
fund for secret services, for donations or for restitu-
tions. The Nabob cannot answer the expectations

^ The prince is related to have accepted with alacrity the pro-
posal that the Company should assume the administration, exclaim-
ing : " Praise be to Allah, I shall now be able to have as many
dancing girls as I please".

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1765] AGREEMENT RATIFIED 185

of the venal and mercenary, nor will the Company
comply with demands injurious to themselves out of
their own revenues. The experience of years has
convinced us that a division of power is impossible
without generating discontent and hazarding the
whole. All must belong either to the Company or
to the Nabob. We leave you to judge which alter-
native is the most desirable and the most expedient
in the present circumstances of affairs. As to our-
selves, we know of no other system we could adopt
that would less affect the Nabob's dignity and at the
same time secure the Company against the fatal effect
of future revolutions than this of the Dewani. The
power is now lodged where it can only be lodged
with safety to us, so that we may pronounce with
some degree of confidence that the worst which will
happen in future to the Company will proceed from
temporary ravages only, which can never become so
general as to prevent your revenues from yielding a
sufficient fund to defray your civil and military charges
and furnish your investments."

The ratification was made at Allahabad, whither
Clive proceeded. He bound the Company to pay
to the Mogul an annual tribute of twenty-six lakhs
of rupees. With the Nawab Vizier also, who ac-
companied him thither, Clive came to an under-
standing, by which his dominions in Oudh were
restored to him on condition of an alliance between
him and the Company. He gladly agreed to pay
;^6oo,ooo as compensation for the war expenses
incurred by the Company. Allahabad and Corah
were secured to the Mogul, whose empire, apart

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i86 LEDGER AND SWORD [1765

from these districts, was now reduced to merely
nominal limits.^

Clive had gained his heart's desire. He did not
wish the Company, nor did the Company itself wish,
to appear openly in the eyes of European Powers as
the ruler of Bengal ; he preferred the " pageant of a
Nawab". The army was under the Company,
"through whom any encroachments attempted by
foreign Powers could be effectually crushed," the
treasury and taxes were under the Company, while
the administration of justice was left to the Nawab.
He deprecated " any act by an exertion of the Eng-
lish power which can equally be done by the Nawab
at our instance, as that would be throwing off the
mask, and would be declaring the Company Subah
of the Provinces". Moreover, Clive thought the
Company should be satisfied with the present limits
of its territory, and should studiously maintain
peace, "the groundwork of our prosperity". He
assured his fellow-members of the Company that any
aggressive act, such as a march to Delhi, " would be
not only a vain and fruitless project, but attended
with destruction to our own army, and perhaps put a
period to the very being of the Company in Bengal ".

In vain, then, the young Mogul urged Clive to
recover his ancient capital, then in the possession of
the Mahrattas ; but besides having little confidence
in the good faith of Shah Alum, Clive felt that the
Company's servants had already sufficient to employ
their time and talents for a long period to come.

* The Imperial firman granting, or rather ratifying, Nazim*8 gift
of the Dewani is dated 12th August, 1765.

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1764] PRIVATE TRADE AGAIN 187

Indeed, to check the frittering away of the energies
of the officials and the demoralisation of an unregu-
lated private trade, the Company had resolved to
place both public and private trade in Bengal under
control of the Council. Men could not work for
themselves and for the Company with an equal zeal.
The root of the late evils in administration lay in the
inadequate salaries paid to its servants by the Com-
pany, which may be gauged from the fact that a
member of Council only received ;^300 a year.

In 1762 the Court of Directors had forbidden
the Company's servants in the strongest terms from
carrying on any inland trade whatever, although
these servants had long claimed the privilege of
conducting such trade duty free. Nevertheless, the
commerce was too well grounded not to be carried
on, even in defiance of orders, and two years later
the Court of Proprietors came to the conclusion that
the Company's servants might be indulged in it under
certain restrictions and regulations. On the i8th of
May, 1764, they came to the following resolution:
*• Resolved that it be recommended to the Court of
Directors to reconsider the orders sent to Bengal
relative to the trade of the Company's servants in
the articles of salt, betel-nut and tobacco ; and that
they do give such directions for regulating the same,
agreeable to the interest of the Company and Subah,
as to them may appear most prudent, either by set-
tling here at home the restrictions under which this
trade ought to be carried on, or by referring it to the
Governor and Council of Fort William to regulate
this important point in such a manner as may pre-

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i88 LEDGER AND SWORD [1765

vent all future disputes betwixt the Subah and the
Company." The Court at this time observed that
it appeared to them "very extraordinary that in a
trade so extremely lucrative to the individuals the
interest of the Company should not have been at all
attended to or considered ".

Salt, betel-nut and tobacco forming the three
great articles of the internal commerce of Bengal at
this time, it was resolved by the Select Committee
that a monopoly should be granted, and the trade in
these articles conducted for the exclusive benefit of
the senior servants of the Company, after a fixed duty
of ;^ 1 00,000 a year was deducted. The profits were
divided into fifty-four shares, which were subdivided
into three classes. Of these the first, of thirty-five
shares, was assigned to the Governor, the commander-
in-chief, the members of Council and two colonels, the
Governor receiving five shares as his portion. The
young writers in the service were not regarded, it
being contended that the junior servants should be
prevented from earning more than a competency,
otherwise they would be tempted to quit India in
middle life. It only remains to add that the scheme
after two years' trial was disallowed by the Com-
pany, and matters returned to their former state.

Mention of the junior servants suggests a griev-
ance which a large body of them who had been en-
trusted with posts of responsibility addressed to the
Company about this time. The massacre at Patna
had removed many of the senior civilians, and to fill
their places many •* young gentlemen of the settle-
ment" **just broke loose from the hands of their

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1767] CLIVE'S MEASURES 189

schoolmasters" had been appointed. Clive refused
further to follow the rule of seniority, and to promote
to vacancies in the Council any more of these inex-
perienced striplings, but drew from the Madras
establishment four civil servants to fill the vacant
seats. The slighted juniors in Bengal threatened
mutiny, which Clive put down with a firm hand, as
he did with the graver difficulty concerning batta
amongst the military officers.

For two generations the Company's officers at
Madras, Bombay and Calcutta had been in the
habit of drawing when in the field an additional
rate of pay which was called batta. Subsequently,
in order that they should share in the general
scramble for personal profit which followed Plas-
sey, they were permitted to draw a further sum
known as double batta. But the Company having
taken over the fiscal administration of the province,
it ordered the double batta to cease. The conse-
quence was a mutiny of the officers. Clive caused
the leaders, including Sir Robert Fletcher, second
in command, to be arrested ; they were found guilty
and dismissed the service. The others soon made
their peace, and were reinstated. Before leaving for
England Clive fulfilled the Company's mandates with
regard to certain changes in the army, particularly the
regimenting of sepoys under Englishmen, and sailed
at the end of January, 1767, turning over the govern-
ment to the senior member of Council, Henry Verelst.^

^Verelst was one of the very ablest of all the Company's
servants. His character and administration have been obscured by
the political complications of the time.

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190 LEDGER AND SWORD [i;r6s

At Madras Pigot was succeeded by Robert Palk,
who, on the close of one native war by the capture
of Madura, found himself early in 1765 face to face
with another, caused by the invasion of the Carnatic
by Nizam AH, who had recently murdered his
brother, the French prot6g6, Salabut Jung.

It was suggested by Clive during his brief halt
at Madras that it would be advisable to obtain from
the Mogul a grant of the Northern Circars for the
purpose of connecting the Company's possessions
on the coast. The firman was duly secured and a
force led by Major Calliaud proceeded to assert the
Company's title. But opposition came from Nizam
Ali, who regarded the territory as a portion of the
Deccan, and, denying the Mogul's right to dispose of
it, was mortally offended. Although then engaged
in battling with the Mahrattas, he broke oflF hostil-
ities in order to invade the Carnatic Palk and his
Council grew alarmed and sought a humiliating
accommodation with the Nizam. They actually pro-
mised to pay him tribute for their holding, and also
to assist him with troops whenever called upon.
Nothing could have been more imprudent. Such a
treaty almost immediately involved the Company in
war with a daring and successful usurper.

Haider Ali, son of a distinguished freebooter, had
early been received into the service of the Rajah of
Mysore. Here he acquired such influence by his
talents and reckless character that he was able suc-
cessfully to wage war with his benefactor, overthrow
him and rule his dominions. From Mysore he led
his band of plundering freebooters through the

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LORD PIGOT.

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1^6$] HAIDER ALI 191

surrounding country, capturing immense booty. But
the ruler of the Deccan and the Peishwa of the
terrible Mahrattas now resolved to check his en-
croachments. This was the league to which the
Council at Madras had added the Company. The
Mahrattas duly invaded Mysore and Colonel Smith
was despatched with a small English corps to aid
the Nizam. But before Smith could arrive the
Mahratta chieftain had been bribed by Haider Ali
basely to break off his engagement with the Nizam
and the Company. This duplicity was followed by a
treaty between the Nizam and the Mysorean usurper
to join forces and together expel the Company from
the Carnatic and the entire coast. Smith, made
aware of this perfidious design, instantly beat a
retreat, closely followed by the Mahrattaa

Madras was soon threatened by a force of 5,000
Mysorean horse, led by Haider's son, Tippoo.
The whole neighbourhood was laid waste and the
Black Town, warehouses and villas destroyed,
Tippoo retiring with great booty. Haider himself,
however, together with his treacherous ally, the
Nizam, was attacked and defeated by the Com-
pany's troops, as were also the Mahrattas ; and the
Nizam first brought to realise the serious political
error he had committed He began to make over-
tures to the Company's representatives to be
reinstated in their favour.

The Madras Council, from which the pacific Palk
had retired to be succeeded by Charles Bourchier,
were not long in deciding to pursue Haider Ali into
his own country ; but their mismanagement of the

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192 LEDGER AND SWORD [1766

campaign cost them several disasters, and early in
1769 the bellicose Mysorean was joined by a
number of French officers from Pondicherry. Several
of the Company's posts were surprised and numerous
prisoners captured and sent to Seringapatam. After
another attack upon Madras, the Presidency, on
Governor Bourchier's initiative, felt that the time
had come to negotiate a treaty with the redoubtable
Haider AH. On condition that a mutual restitution
of conquests should take place and that the contract-
ing parties should co-operate in all defensive wars,
this destructive campaign came to an end in April,
1769. The Mysorean returned to his country, but
in a few weeks wrote begging the Company's sup-
port against a Mahratta invasion.

The news of Clive s acquisition of the Dewani
was read out at a General Court of the Proprietors,
held on the i8th June, 1766. The effect was
electrical : the depressed spirits of the members rose
at a bound. But the zeal of the ignorant outran dis-
cretion. It was proposed that the Government be
approached for an extension of the duration of the
Company's charter, on consideration of the Crown
being admitted to participate in the benefits of the
Company's new acquisition. "Those with whom
the proposal originated," says Thornton, "indeed
manifested an exuberance of sanguine expectation
worthy of the burning clime on whose wealth and
fertility it was based. In consideration of an ex-
tension of the Company's charter for thirty-seven
years, they generously proposed to assign to the
State all that should remain of the territorial revenues

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1766] COMPANY'S DESPATCHES 193

after the civil and military expenses of the settlements
should be paid and after payment of a dividend to
the Company at the rate of 15 per cent., to be
guaranteed for ten years. During that period the
profits of the Company's trade were to accumulate
as additional capital. At its expiration the Company
were again to derive their dividends from the profits
of their trade ; but if these should be insufficient to
pay 15 per cent, the difference was to be made up
from the territorial revenues."

Such were the extravagant conceptions formed
of the Company's prospects in Bengal ! It is enough
to remark that a majority of the proprietors had the
good sense to reject the proposal.

The letter from the Court of Directors approving
of Clive s arrangement is notew^orthy. It lays down
with much precision what were to be the relations
between the Nawab, Nazim, and the English Presi-
dent and Council. It shows that at this period there
were strong objections to any interference in the ac-
tive administration. An English Resident was con-
tinued at Murshedabad ; he was to take over the
monthly payments from the Nawab s officers ; his
chief duty was to protect the native administration
from the encroachments of the Company's servants.
The following extracts are historical : —

** We come now to consider the great and im-
portant affairs of the Dewanny, on which we shall
give you our sentiments, with every objection that
occurs to us.

**When we consider that the barrier of the

country government was entirely broken down and
VOL. II. 13

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194 LEDGER AND SWORD [1766

every Englishman throughout the country armed
with an authority that owned no superior, and exer-
cising his power to the oppression of the helpless
native, who knew not whom to obey ; at such a crisis
we cannot hesitate to approve your obtaining the
Dewanny for the Company.

*' We observe the account you give of the office
and power of the King's Dewan, which in former
times was ' the collecting of all the revenues, and
after defraying the expenses of the army and allow-
ing a sufficient fund for the support of the Nizamat,
to remit the remainder to Delhi '. This description
of it is not the office we wish to execute ; the ex-
perience we already have had in the province of
Burdwan convinces us how unfit an Englishman is
to conduct the collecting of revenues and follow the
subtle native through all his arts to conceal the real
value of his country, and to perplex and elude the
payments. We therefore entirely approve of your
preserving the ancient form of government in the
upholding of the dignity of the Subah.

** We conceive the office of Dewan should be ex-
ercised only in superintending the collection and dis-
posal of the revenues ; which, though vested in the
Company, should officially be executed by our
Resident at the Durbar, under the control of the
Governor and the Select Committee. The ordinary
bounds of which control should extend to nothing
beyond the superintending the collection of the reve-
nues, and the receiving the money from the Nawab's
treasury to that of the Dewanny, or the Company,
and this we conceive to be neither difficult nor com-

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1766] FUNCTIONS OF DEWAN 195

plicated ; for at the annual Poonah the government
settles with each Zemindar his monthly payments for
the Ensuing year ; as the monthly payments of the
whole from the Nawab's Dewan, is but the total of
the monthly payments of each Zemindar ; which
must be strictly kept up, and if deficient, the Com-
pany must trace what particular province, Rajah, or
Zemindar has fallen short of his monthly payments ;
or, if it is necessary to extend the power farther, let
the annual Poonah, by which we mean the time when
every landholder makes his agreement for the ensu-
ing year, be made with the consent of the Dewan or
Company. This we conceive to be the whole office
of the Dewanny. The administration of justice, the
appointment of officers, Zemindarries — in short, what-
ever comes under the denomination of civil adminis-
tration — we understand is to remain in the hands of
the Nawab or his Ministers.

** The resident at the Durbar being constantly on
the spot, cannot be long a stranger to any abuses in
the government, and is always armed with power to
remedy them. It will be his duty to stand between
the administration and the encroachments always to
be apprehended from the agents of the Company's
servants, which must first be known to him ; and we
rely on his fidelity to the Company, to check all such
encroachments, and to prevent the oppression of the
natives."

Although the chief direction of their affairs was
in the hands of able men and trained merchants, yet
the proprietors jealously withheld their confidence.
Their sight dazzled and their judgment bewildered

13*

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196 LEDGER AND SWORD [1767

by the turn events had recently taken, they foolishly
accepted the guidance of politicians, who knew
nothing of trade or of India. Thus Ministers, peers,
men of rank and influence exercised a weight in the
administration of the Company by no means propor-
tioned to their possession of stock.

The General Courts seem at this time to have
been often of a lively and heated description, in which
recriminations and contumely abounded. Making
every allowance for the exaggeration of current re-
ports, it can hardly be questioned that there were
amongst the proprietors men who joined to much
bitterness and ignorance of India, little eloquence or
even knowledge of grammar, I f sometimes even the
ordinary Court meetings were marked by tumult and
discord, in the larger assemblages ignorance and
passion roamed in a wider field.

In 1767 was published a curious satire, entitled
Debates in the Asiatic Assembly^ with the motto
from Ovid, "rudis indigestaque moles". The
author s subject and dramatis persotue are but
scantily veiled, and the Chairman and leading Direc-
tors of the East India Company are made to storm
and gabble through forty pages of a debate on the
grant of the jaghire to Lord Clive. We see interest
in India, though centred in Leadenhall Street, fast
spreading throughout the country to a degree Eng-
land had never felt before. It was no longer a
question of trade and vast profits : the honour of
the English name abroad was said to be concerned.
Although Clive could still command a bare majority
in the Court of Directors, many of them already

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1766] A NATIONAL SUBSIDY 197

chafed at Clive's influence, which they thought
tended to circumscribe their action. When the
proprietors clamoured for an increase in the Com-
pany's dividend from 10 to 1 2 J per cent Clive thought
it well to embrace their view. The Company had
acquired the Dewani, its financial position in Bengal
had greatly improved, and so, in spite of the wiser
counsels of the Court of Directors, the Court of Pro-
prietors had its way and the proposal was carried.
The wholesale dispersal of the stock carried with it
the evils inseparable from a multitude of counsellors.
But from that moment the interference of the
generality was doomed : a few more years and the
dangerous suffrage of the Court of Proprietors would
be curtailed. The Directors were well aware that
if Bengal bore a semblance of prosperity, affairs in
Madras, as we have seen, offered a totally different
aspect. The war, no less than the dangerous peace
with Haider Ali, promised to more than counter-
balance the profits which fell upon the peace in Ben-
gal, However, in this case, although the dividend
was raised by means of a loan borrowed at exorbit-
ant interest, the Government interposed by an Act
compelling the Company to pay an annual subsidy to
the nation of ;^400,ooo. In vain Clive condemned
this as an unreasonable extortion ; Parliament was
determined to profit by the territorial acquisitions in
the East, and the Company's dividend was in con-
sequence practically restricted to 10 per cent.^

^ For some time the dividends remained nominally at 12 per cent.
In March, 1772, they were raised to 12^ per cent Then came the
great pressure, and in February, 1773, the Court of Directors and
Court of Proprietors themselves reduced the dividends to 6 per cent.

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198 LEDGER AND SWORD [1766

Although by this Act the right of Parliament to
interfere at will with the Company's affairs was
established, the question of its sovereignty in India
had not been pressed to a settlement. The Com-
pany had as yet no inkling of what the Government
intended to do. The Chairman, George Dudley,
writing to Lord Clive, said : " We have been, and
still are, studying the wants of the administration,
for they themselves will not open their mouths to
utter one syllable ". Yet that the Crown felt that it
had the whip hand of the Company at home and
meant to profit by its profits was certain. One
representative of the popular party in the City
declared openly in Parliament that ** the rich spoils
of the Company in the East would be made the
means of relieving the English people of some of
their burdens ".

Clive, as we have seen in his letter to Chatham,
had long before suggested the withdrawal of its
Indian dominions from the Company, but he had
since come to a different opinion. Nevertheless, the
seed had been sown in Chatham's mind, and now
he communicated to Lord Shelburne a plan for
diverting to the public treasury the territorial as
distinguished from the mercantile revenues of the
Company. "Chatham," observes Mr. Lecky, "at-
tached very much importance to the project, but
a Parliamentary inquiry into the affairs of the Com-
pany was the only step of importance that was taken
before Chatham was incapacitated by illness. It
was moved in the Commons in November, 1766,
and it was characteristic of Chatham that he en-

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1767] AN ANOMALOUS POSITION 199

trusted the motion, not to any of the responsible
Ministers of the Crown, but to Beckford,^ one of the
vainest and most hot-headed of the City politicians."

When the inquiry was ordered Charles Town-
send, although supporting the motion, yet openly
declared that " he believed the Company had a right
to territorial revenue," a sentiment hardly shared
by his official chief. ** India," wrote the latter,
** teems with iniquities so rank as to smell to earth
and heaven. . . . The putting under circumscription
and control the high and dangerous prerogative of
war and alliances, so abused in India, I cannot but
approve, as it shuts the door against such insatiable
rapine and detestable enormities, as have on some
occasions stained the English name and disgraced
human nature."

But, although by the expedient of handing over
;^400,ooo the Company had been tided over three
sessions, it was inevitable that its anomalous position
towards the King's Government must continue to
excite attention and discussion. Had a body of
British merchants any lawful right to conquer and
acquire foreign territory except for the Crown?

As Macaulay said more than sixty years later :
" The existence of such a body as this gigantic
corporation — this political monster of two natures —
subject in one hemisphere, sovereign in another —
had never been contemplated by the legislators or
judges of former ages". No wonder Crown and
Parliament and Bench were in a quandary 1

» The father of the author of Vaihek.

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200 LEDGER AND SWORD [1769

For a time prior to February, 1 769, it appeared
as if the Company's chartered privileges were in
jeopardy ; but in April another bill was passed,
securing to the Company a further enjoyment of
its revenues on condition of the regular annual con-
tribution to the nation of ;^400,ooo, and the export
of at least ;^300,ooo worth of British manufactures.
This seemed a high price to pay for at best a doubt-
ful prosperity. It was as if the legislature had said,
**You shall enjoy all that you now have, but every
farthing of improved revenue after this period shall
go into the pocket of the State ".^

" Nevertheless, it is better," said the chairman,
" to make no alterations. It is the ultimatum of the
Treasury. There, gentlemen, take it or go into
Parliament, and God knows the consequences!"^

Whatever the future might have in store on
account of its increased powers and privileges and
dominion, at present the outlook for the Company
seemed only one of increased responsibility and debt.

^ These words actually form a hypothesis of Sydney Smith con-
cerning the Parliament of Henry VIII. and the revenues of the
Church. — Letter to Archdeacon Singleton.

* Chairman's Speech, 2nd February, 1769. "The revenue of the
^£'1,700,000 annually paid by this Company," wrote one member of the
Company in 1769, ** is too considerable for government not to be
very circumspect how they adopt a speculative plan."

It was openly asserted in 1769 that "the Company would be
worth just twenty-two millions at the expiration of its charter*' (An
Old Proprietor's Letter), It was reckoned that the total value of all
stock and effects in England and India was about fourteen or fifteen
millions, with a debt of eight millions. The capital was nominally
;£'3,200,ooo but was in reality £2,800,000, and the profits averaged
about £1,250,000 a year. The business at thirteen years purchase
would thus fetch £16,250,000.

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1769] SULIVAN RE-ELECTED 201

** Amidst all our success," wrote one of the carp-
ing proprietors, " should we acquire the dominion of
the whole Mogul Empire it would not be good policy
to maintain it ; I know nothing we want but a
maritime trade ; this was the original plan we acted
on, and to support the trade properly would bring
all the wealth to this nation that could be desired or
expected." *

It had constant difficulty in meeting its liabilities,
although its luckier servants were constantly return-
ing from India laden with huge wealth, to swell the
phalanx of so-called " Nabobs " in Parliament.

On the 14th of June, Sulivan and several of his
friends were re-elected to the Court of Directors.
Sir George Colebrooke being in the chair, it was re-
solved to despatch to India a commission to inquire
upon the spot why the Company's hopes of wealth
had been foiled, and to reform the Indian administra-
tion. It was even proposed to send out Vansittart
once more as Governor of Bengal, with authority over
all the Company's Indian settlements ; but this pro-
ject was defeated by Clive. Vansittart was named
instead as one of the three commissioners ; Clive s
friends, Scrafton and Forde, being the other two.
At this juncture the Government again interposed.
It asserted, to the Company's astonishment, that it
possessed no right to effect any change whatever in
the government of the three provinces. If such
were intended, Chatham added, it rested with him
to order it and to co-operate in the arrangement.

^ A Letter to a late Popular Director [Laurence Sulivan], 1769.

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202 LEDGER AND SWORD [1769

Although this untenable position was, upon re-
flection, abandoned, yet the British Government,
while shirking any settlement of the status of
Leadenhall Street in India, resolved surreptitiously
to intervene in Indian affairs. It appeared that for
some time past the Nawab, Mohammed AH, had
been conducting a secret correspondence with the
Cabinet. ** His agents had represented him as a
high-born potentate, cruelly robbed of his authority
by a body of English merchants ; and they so
wrought upon the misdirected feelings of the
Minister that he was persuaded to adopt the absurd
statements as truths." We have seen that the
Nawab had been mentioned as an ally of Great
Britain in the Treaty of Paris ; King George was now
resolved to ignore the sovereignty of the Company
and to take Mohammed Ali under his own protect-
ing aegis. The Company knew nothing of this
intention ; it rested under the belief that the " claims
originally set up of interference in the internal man-
agement of India had been abandoned".

That the servants of the Company took, as has
been charged, the greatest pains to conceal the pas-
sage in the Treaty of Paris relating to his ** entire
possession of the Carnatic " from the Nawab is
hardly questionable.^

* ** The managers of the affairs of the Company at home, as well
as their servants abroad, had industriously concealed from that
prince the nature and import of that article for several years. The
success with which this secret was preserved furnishes an irrefrag-
able proof that every individual thought it his own interest to keep
the Nawab in a state of ignorance of his rights. Though that prince
had obtained, at length, some knowledge of the nature of the

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1769] ROYAL INTERFERENCE 203

It is certainly not likely, as the Company had
long successfully resisted any right of the Crown to
interfere in Indian administration, that it would
foolishly lend any colour to that pretended right by
conveying to any of its allies or dependents in India,
what practically constituted an assertion of its ad-
ministrative inferiority to the Crown.

The King had duly learnt of this reticence through
the Nawab's industrious agent He conceived the
occasion to be a favourable one to settle the vexed
question of the Crown's prerogative. When, there-
fore, the Company applied for the assistance of a
squadron of the King's ships, it was stipulated that
the commander, Sir John Lindsay, should be vested
with full powers of acting as the King's representative
in all transactions between the Company and the
native princes.

The Company declared that it deeply lamented
that so unusual a commission had been granted.
Though it was not thought prudent at the moment
to deny the King s right to send representatives to
His Majesty's so-called allies, yet it did not fail to
insinuate that "the rights and privileges of the
Company rested upon as high authority as the King's
commission to Sir John Lindsay ".

George's letter entrusted to Lindsay was in his
own hand, countersigned by Chatham. It assured

guarantee, which secured to him the possession of the Carnatic,
he had found it almost impossible to avail himself of that knowledge.
The authors of his grievances were the only channels through which
he could convey his complaints; and self-preservation effectually
prevented them from becoming their own accusers." — Macpherson,
1779.

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204 LEDGER AND SWORD [1769

Mohammed Ali that it was his own firm design to
adhere to all the promises made by his late royal
grandfather, to continue firm to all his allies in all
parts of the world. He was, he said, determined to
support the Nawab in his rule of the Carnatic ; and,
if it should appear, upon examination, that the dis-
tressed situation of the affairs of that country had
been caused by the intrigues of any of his trading
subjects, the Nawab could depend upon the royal
protection and friendly assistance. He went on to
say that in order to vindicate his justice and good
faith to the whole world, he had given his commands
to the plenipotentiary to demand a full account of
the Nawab's transactions with the Company since
the Treaty of Paris ; he hoped that a thorough under-
standing of all the affairs might enable him not only
to redress past evils, but to avoid future oppressions.

In a ship of the squadron commanded by Lindsay
sailed away the Company's three commissioners
who were to reform the administration of Bengal,
and were never heard of again. The commodore
had been granted a Company's commission to act
in the Persian Gulf: clandestinely he had been
invested by the King with the character of British
ambassador to the Court of Arcot. He arrived at
Madras at the moment when the harassed Presi-
dent Du Pr6 was doing his best to support the
credit of the Company in the difficult business of
treating with the recalcitrant Pertab Singh, Rajah
of Tanjore.

Orders had already been received from Leaden-
hall Street calling this prince to account.

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1769] THE TANJORE EMBROGLIO 205

** We observe with great dissatisfaction," wrote
the Company to Madras, " the conduct of the Rajah
of Tanjore, who forbore so long to join you with
his horse, and when they did join you they seem
to have been no manner of use. It is very extra-
ordinary that when the safety of the Camatic was
in danger, he should have acted so dubious or so
pusillanimous a part. When we consider the pro-
tection we have given that Rajah, and the long
and uninterrupted tranquillity his country has en-
joyed by it, we cannot but feel the strongest
resentment at his conduct"^

The Company went on to direct that the
" Tanjore Rajah *' should be forced to assist in
paying the expenses of the war, supposed to be
still raging, against Haider Ali. **It appears most
unreasonable to us that the Rajah of Tanjore should
hold possession of the most fruitful part of the
country which can alone supply our army with sub-
sistence and not contribute to the defence of the
Camatic."

These positive orders reached Madras in the
autumn of 1 769. But various reasons prevented the
Presidency from carrying the commands of their
masters into execution, although they declared that
" the Rajah certainly deserved chastisement ; and
not only for the supply of money and provisions
with which he had furnished the enemy, instead of
assisting the Nawab and the English, but for since
delaying the payment of the peishcush, settled by

^ Letter to Governor and Council of Madras, 17th March, 1769.

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2o6 LEDGER AND SWORD [1769

the treaty of 1762, which had become due in July,

1769".

On Lindsay's arrival he pompously announced that
he was the bearer of letters and presents from King
George III. of England to Mohammed Ali, the
Nawab of the Camatic, and invited the Council to
escort him to Arcot. The Council angrily declined,
and then ensued a heated correspondence. For some
time Lindsay continued his interference and machin-
ations in the rdle of King*s plenipotentiary. The
Nawab, an interested spectator in the warfare then
in progress between Haider Ali and the Mahrattas,
was delighted at winning over Sir John Lindsay to
oppose Haider Ali, whom the Council were doing
their best to propitiate.

The Nawab informed Lindsay that he was highly
grateful for such distinguished marks of King
George's friendship, but he could not conceal from
him that he was still afraid to avail himself of the
protection of the Crown of England against men
who might continue to possess that power under the
rigour of which he had already so much suffered.
Knowing the fate, he said, of other princes who
had fallen victims to the displeasure of the Com-
pany, he dreaded to excite a resentment which
might cost him his throne, as had been threatened
two years before by its servants. The dreadful ex-
ample of the Nawabs of Bengal was before his eyes,
and it behoved him to walk warily if he would avoid
their fate. Although he was induced by the Ambas-
sador to throw himself upon the protection of the
Crown of Great Britain, Mohammed Ali was not

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1769] MOHAMMED ALI'S RISKS 207

blind to the risks he ran ; and the evils which he
dreaded came to pass. The truth is, the King of
England had acted hastily and injudiciously, pro-
mising more than lay in his power constitutionally
to perform.^

1 See Thornton's BrUish Empire in India for an interesting version
of the Lindsay and Harland episodes, as well as the intrigues of the
Nawab's agent, Macpherson. Albeit, this author seems to shrink
from giving due credit to King George for his diplomacy.

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CHAPTER VIII.

King George and the Company*

The apparent contradiction between word and
intent pervaded not merely the correspondence of
the Company's servants in India, but the despatches
which issued from Leadenhall Street concerning
Mohammed AH. Thus in the instructions issued to
the three commissioners, dated the 1 5th September,
1769, they are enjoined "to provide effectually for
the honour and security of their faithful ally,
Mohammed Ali, Nawab of Arcot ". The Presidency
is blamed for its injustice to that prince and its con-
duct stigmatised as a ** flagrant breach of repeated
orders". "When we reflect," continues the Court,
" on the long experience we have had of Mohammed
Ali's faithful attachment to the English Company,
we are surprised at the idea entertained by the
Governor and Council, in their letters of the 8th
March and 21st June, 1768, to reduce him to a mere
nominal Nawab. The sanction of the Treaty of
Paris, by which treaty public faith became the
guarantee of the Nawab's title, will be of little use
to him if notorious infringements of the rights and
powers usually inherent in and dependent on such
title, should be by us countenanced and permitted to
take place. More especially as, perhaps, we might

thereby involve ourselves in the very disagreeable

208

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1769] MADRAS COUNCIL CONDEMNED 2(50

necessity of answering at some future period, for the
infraction of a public treaty of the consequences
thereof."^

When news of the peace with Haider AH
reached England, the Company deprecated it. Such
a treaty, exclaimed the chairman, could only be
justified by extreme necessity. In their subsequent
despatches, the Court of Directors severely repri-
manded the Madras Council for their attitude
towards Mohammed AH. They had "pompously
appointed him Phousdar of Mysore," and then
accused him, because he had accepted that nuga-
tory gift, "of an insatiable desire of extending his
dominions ". By following their advice the poor
Nawab "found himself reduced, disappointed and
almost despised ". Leadenhall Street did not spare
its reproaches. It went on to accuse the Madras
Council "of irresolution as men, disability as
negociators, weakness and deficiency as politicians ".
It affirmed that though they had " rashly dared to
rouse the jealousy of the country powers, they had
not discovered on trying occasions the becoming
firmness necessary to support the dignity of the
English name : and that by their feeble conduct in
war, and their pusillanimity in submitting to a treaty
dictated by an enemy, they had laid a foundation for
the natives of Hindostan to think they may insult
the Company at pleasure, with impunity."

The faction then in power dwelt with particular
severity on the article in the treaty with Haider.

^ Instructions to the Oommissioners, 15th September, 1769.
VOL. II. 14

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510 LEDGER AND SWORD [1769

*' Had you, indeed, obtained/* it wrote, ** from
the Rajah of Tanjore the horse and assistance you
solicited : had he thereby drawn upon himself the
resentment of the enemy : had it been difficult, on
the Rajah's account, to have appeased Haider,
there might have been some merit in procuring the
Rajah safe terms. But we do not conceive that
Haider has discovered so much want of penetration,
in his transactions with you, as to warrant a supposi-
tion that he could himself be imposed upon by such
an artifice : and his warm attachment to the Rajah
of Tanjore, manifested by strenuously insisting he
should be included in the treaty, could scarcely be
unknown to that prince. What their sentiments
must be of persons whom they had reduced to the
necessity of practising arts of this nature, it is not
difficult to determine. . . . We cannot discern any
advantage gained by this extraordinary effort of
your skill in negotiation, which you make matter of
so much merit. The plain fact is, that the Rajah
of Tanjore, who, as tributary to the Nawab, ought
to have furnished his quota towards carrying on
the war, which he has not done, is still styled by
you a friend to the Camatic ; and by Haider's
adherence to him for refusing to assist you, he is,
as we conceive, effectually sheltered by the faith
of a treaty, from being compellable to contribute
a single rupee towards defraying the expense of
the war. Ouf former orders, therefore, in this
respect relative to the Rajah of Tanjore must be
suspended, because they are by your conduct ren-
dered utterly impossible to be carried into execution

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1769] INDIA HOUSE POLICY 211

without committing a breach of the treaty you have
concluded."

But all this lofty language, all these high-flown
expressions concerning treaties and public faith and
princely titles, cease to surprise us when we consider
the circumstances under which they were penned.
The King of England had taken the side of the
Nawab of the Carnatic, and the Company (at
least, the faction in power) naturally felt it would
be most impolitic not to deprecate the royal dis-
favour when fair words to its Indian dependent
was the only cost. A copy of the foregoing in-
structions was shown to the King ; it clearly
attested the Company's reasonableness : it com-
pletely undermined the charge that its attitude was
unjust or unfair to the Nawab. But the under-
standing with the Commissioners was of different
import ; the very character of the men sent out was
a sufficient guarantee that there would be no con-
siderable recession from the Company's policy.
Mohammed Ali, in the Carnatic, was no more to
Sulivan than Muharek-al-Daulah in Bengal ; the
rule of both depended upon the Company's plea-
sure; but the fact that the former Nawab was a man
of considerable character and not without powerful
friends in England made the ostensible considera-
tion accorded to him far greater. If the Company
had really intended that its servants should actually
undo what Pigot had done, and set up a real instead
of a nominal Nawab, it would have repeated its orders
at a later day, when it was known that the three

Commissioners had perished. But Vansittart, Scraf-

14*

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212 LEDGER AND SWORD [1769

ton and Forde were at the bottom of the sea,* and
the Company's mock philippics were soon no longer
required.

The truth is that, in spite of occasional haltings
and retrocessions, the Company was true to its tradi-
tional policy as foreshadowed by Sir Josiah Child.
Corporations and newspapers, it has been observed,
have identities which not even the individuals com-
posing them can altogether suppress. The Com-
pany's attitude towards the native powers had been
consistent, although its language was characterised
by an Oriental extravagance.* A decade before,
Pigot had written to Mohammed Ali : —

'* It is my sincere wish that your highness shall
be firmly established in the seat of government, with
every honour and advantage possessed by your an-
cestors, and that you may enjoy the whole Carnatic,
and that the Company may carry on their business
under your highnesses protection as they did under
that of former Subahdars."

Such an avowal seems, if taken literally, to dis-
pose at once of any of the Company's claims to
sovereignty and independence. But it cannot be
taken literally ; neither Saunders nor Pigot had any

^The Auroraf which carried them, foundered at sea between the
Cape and Calcutta and they were never heard of again.

*I do not know upon what truthful authority it is said that
Governor Russell, of Bengal, in 1712, thus petitioned the Emperor : —

" The supplication of John Russell, whose forehead is the top of
the footstool of the absolute monarch and prop of the universe. We
Englishmen, having traded hitherto in Bengal, Orissa and Behar,
custom free, are your majesty's most obedient slaves." And so on
in this strain. Sir Monier Williams and others quote this, but I
know nothing to verify it but Captain Hamilton's statement.

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I770] INCONSISTENCIES EXPLAINED 213

orders from Leadenhall Street thus to make
obeisance to Mohammed AH as their sovereign
lord, much less to acknowledge the right of the
feeble emperor at Delhi to interfere with their
affairs. It was the language of the East ; this re-
lationship of sovereign and subject was a mere fic-
tion which it was the Company's policy to maintain
as long as it held together. Any unfriendly act, by
virtue of this pretended authority, would have been
instantly resented, and, if persisted in, would have
led to war. This is not the attitude of a subject
towards his sovereign.

Perhaps it is worth while to explain this dual
position at length, inasmuch as several writers would
lead one to infer a complete lack of consistency in
the Company's policy. That the inconsistency was
more apparent than real needs not further labour to
prove, save to quote the following passage in a
letter of the Company, dated loth April, 1770, follow-
ing immediately on the heels, be it noted, of its pre-
tended indignation against the Madras Council : —

** As to what relates to the Nawab and the con-
duct which you are to hold in the present parts of
India, a great deal must be left to your decision on
the spot. You have certainly more knowledge than
we of coming at the true knowledge of the causes,
the origin and the tendency of disputes, as on a sud-
den arise among the powers of India, as of relations
of interest in which we stand to them."

On the whole, this is a notable avowal, and be-
sides disposing of the present matter may almost be
held to mark the beginning of less intimate, but

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214 LEDGER AND SWORD [1767

firmer and more confident relations between the
Company and its servants in India.

Soon after the Company's acquisition of the
Dewani it found itself confronted by a very grave
fiscal question in Bengal. - Out of the money col-
lected it paid twenty-six lakhs to the Mogul and
fifty-three lakhs to the Nawab. The yearly pay-
ments were thus something less than ;^ 1,000,000
sterling. The yearly receipts, however, were esti-
mated at ;^3,ooo,ooo or ;^4,ooo,ooo. Out of the
surplus they provided for the defence of the country
and maintenance of the public peace. The balance
was so large that the Company appropriated it to
the purchase of goods and manufactures in India
and China. The result was that within a few years
the three Bengal provinces were literally drained of
rupees.

During three years the exports of bullion from
Bengal exceeded ;^5, 000,000 sterling, whilst the
imports of bullion were little more than ;^500,ooo.
Meantime the rupee rose to an exchange value of
2S. 6d.

Such a drain of silver naturally produced the most
amentable results, and the following passage from
Verelst's letter to the Company will throw some
light on the subject : —

"We have frequently expressed to you our
apprehension lest the annual exportation of treasure
to China would produce a scarcity of money in the
country. This subject becomes every day more
serious, as we already feel, in a very sensible manner,
the effects of the considerable drain made from the

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1770 HARLAND'S MISSION 215

silver currency. Experience will ever yield stronger
conviction than the most abstract and refined rea-
soning."

How scarce money could become Warren Hast-
ings was to show within the decade. The discovery
knocked the bottom out of the popular conception of
India as a land of unbounded riches and prosperity.

In 1770, when it seemed not improbable that a
war was imminent with France, the Company, dread-
ing that hostilities might extend to India, applied to
Lord North for a strong squadron of ships to protect
its forts and territories. Yet though the dispute be-
tween the two nations was healed, it was decided
that the squadron should sail, which it did in March,
1 77 1. To its commander, Sir Robert Harland, the
King entrusted the same plenipotentiary powers to
the princes of India which two years previously he
had given to Sir John Lindsay. A pretext must, of
course, be found for Harland s commission. He was
therefore solemnly instructed to ** inquire how far
the eleventh article of the definitive treaty of peace
and friendship between the King of Great Britain,
the most Christian King, and the King of Spain,
concluded at Paris, the loth of February, 1763, had
been complied with by the parties concerned : as
also to treat with any of the princes or powers in
India, to whom the eleventh article might relate,
with regard to the most effectual means of having
the stipulations therein contained punctually ob-
served and carried into execution". His Majesty
at the same time promised " that he would approve,
ratify and confirm what should be agreed and con-

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2i6 LEDGER AND SWORD [1771

eluded, in relation to the premises, between the
princes and the powers aforesaid, or such person or
persons as they should depute or appoint for that
purpose and the said Sir Robert Harland ".

The King, in his second letter to the Nawab, was
pleased to express his " confidence in the Company,
and his desire to connect them inseparably with that
prince ; and Sir Robert Harland, whom His Majesty
has appointed to succeed to the commission of Sir
John Lindsay, besides the particular orders given
him to promote, as far as possible, a strict union
between the Nabob and his servants of the Com-
pany, and to remove every suspicion of the Com-
pany's lying under the King's displeasure, received
instructions to make the support of their importance
and honour in the eyes of all the powers of India a
principal point of his attention ".

Harland arrived on the 2nd September, 1771,
and on the 13th he communicated to the Presidency
this further from the King : —

" You will represent in the freest manner, to the
Governor and Council of Madras, any complaints
which in your judgment shall be well founded, that
may be made by the Nabob of Arcot, and transmit
to us the earliest intelligence thereof, with your
sentiments thereon." This strengthened the confi-
dence of the Nawab, who, while depending upon the
protection of the sovereign, naturally became more
careless about the favour of mere trading subjects.

The Madras Council in writing home dwelt upon
the injury which this royal interference did to the
Company's affairs.

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1772] KING GEORGE'S LETTER 217

**To give you," observed the Council, in writing
to the Court, ** a clear representation of the dangerous
embarrassments through which we have been strug-
gling, to carry on your affairs since the arrival of His
Majesty's powers in this country, is a task far beyond
our abilities ; they are daily more and more oppres-
sive to us. It has always been our opinion, that with
your authority, we had that of our sovereign and
nation delegated to us through you, for managing
the important concerns of our country under this
Presidency, It is upon the prevalence of this
opinion in India that our influence and your in-
terests are vitally founded It was in the con-
fidence of this opinion that your servants, exerting
all their vigour, acquired such power and wealth for'
their country."

The Nawab at Harland's instance duly wrote to
the King of England, and in the course of time again
was a much-prized reply placed in his hands. Thus
it ran in the royal holograph : —

" George the Third, etc., etc.. To Nabob Wallajah,
etc., Nabob of Arcot and the Carnatic

** We received with pleasure your letter, in which
you express to us your gratitude for the additional
naval force which we have sent for your security,
as well as that of our East India Company, and
your confidence that we shall tread in the steps of
our royal grandfather, by granting protection to you
and your family. We have given our commander in
chief and plenipotentiary, Sir Robert Harland, our
instructions for that purpose, and we flatter ourselves

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2i8 LEDGER AND SWORD [1772

that we will reconcile the differences which have
arisen between you and the Company's servants
against your mutual interest It gave us satisfac-
tion to hear that the Governor and Council of
Madras had sent the Company's troops with yours
to reduce your tributary, the Rajah of Tanjore, to
obedience, in which we hope, by the blessing of
God, they will be successful ; and so we bid you
farewell, wishing health and prosperity to you and
your family.

" Given at our Court at St. James's the 7th day
of April, 1772, in the 12th year of our reign.
" Your affectionate friend,

''George R."

Some of Harland's attempts to terrify the Com-
pany's servants are amusing. When he pompously
demanded from the Madras Presidency an account
of their transactions with the country powers they
very properly replied that they '* could not, consis-
tently with their trust, render an account of their
conduct to him, or to any but a constitutional power ".
Whereupon Harland flew into a dreadful passion.
**Your charge seems to me," he wrote, **to be
directly pointed at the royal authority and the un-
doubted rights of the Crown. When you take upon
you to censure a measure, which is the sacred privi-
lege of majesty and the constitutional right of our
sovereign, let me tell you it is very unbecoming,
it is presumptuous, it is arrogant." These miserable
traders of Madras were rendering themselves liable
to prosecution for treason and sedition. These aban-

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1767] HARLAND RECALLED 219

doned wretches, sprung "from the lowest of the
people," actually dared "to look Government in
the face with that assurance that has taught them
to think that money may decide anything".

But these low persons were not terrified ; they
replied with firmness and courtesy to Sir Robert
Harland*s passionate outbursts, conscious that their
master, the Company, was in the right, and the King
was constitutionally in the wrong.*

At length, in response to the Company's protests,
the King's ambassador was recalled, and (in the
language of James Macpherson) the unhappy Nawab
** was delivered into their hands, to be punished for
his credulity in the support of government, as well
as his defection from the authority of the Company ".

But in truth Mohammed Ali had really gained
his ends. A few months more and we will see
the Madras Council hastening to comply with the
Nawab's views concerning the Rajah of Tanjore.

Meanwhile, the Calcutta Council had attempted
to regelate what had been denounced as illicit
trade, and thereby a large profit was established for
the Company. But the Court of Directors disap-
proved of these proceedings without substituting any
other plan in their place until in November, 1767,
when the Court decided to allow the Company's
servants 2 J per cent, upon the revenues in lieu of

^'^The Commons,^ it was declared in 1772, ''stand upon a preci-
pice from which, if they resign into the hands of the Crown, the
Sovereignty and territorial revenues of Bengal, they plunge them-
selves into the gulph of corruption and infamy and us into the abyss
of perdition and wretchedness. Let us unite as one man against
making our king the despot of Bengal I " — LctUr to the Proprietors,

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220 LEDGER AND SWORD [1768

higher salaries. A duty upon salt was arranged for,
which would produce to the Company ;^3 1,000 a
year. At this time Clive was in England. The
matter came to his ears and he expostulated with
the directors, telling them that they were doing the
most manifest injury to the Company ; that if those
advantages which the Select Committee had proposed
for the servants were disapproved of, they ought to
be enjoyed by the Company ; that those advantages
and the duties together would amount to ;^30o,ooo per
annum, which he thought no inconsiderable object.
He further represented to them that although they
should give the servants 2^ per cent, on the revenues
in lieu of the salt trade, the servants might still
trade in that article under the names of their banians
or black agents to what extent they pleased. To
these representations no other attention was paid
than that of altering the proposed duty from ;^3 1,000
to ;^ 120,000 per annum. The result was as Clive
had foreseen. The servants received their 2^ per
cent, on the revenues ; they traded illicitly in salt as
much as before and the Company received nothing.
In the course of five years the sacrifice amounted to
some ;^ 1, 500,000 "which the Company ought to
have received if the emoluments taken from the
servants had been added to the duty proposed by
the Select Committee ". This was exclusive of the
2^ per cent, commission granted out of the Com-
pany's revenue, and also the minor profits which
accrued from the betel-nut monopoly.

Yet it was this inland trade upon which depended
** almost totally the happiness and prosperity of the

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1771] WARREN HASTINGS 221

people. Indeed, the true cause of the distress in
Bengal, as far as it relates to the inland trade, is
this: the Company's servants and their agents
have taken into their own hands the whole of that
trade, which they have carried on in a capacity
before unknown ; for they have traded not only as
merchants but as sovereigns, and by grasping at the
whole of the inland trade, have taken the bread out
of the mouths of thousands and thousands of mer-
chants who used formerly to carry on that trade, and
who are now reduced to beggary."

Pending the expected arrival of the ill-fated
Commissioners, Verelst had given way to John
Cartier at the close of 1770. It was now resolved
to appoint Warren Hastings to the government of
Bengal whenever Cartier should retire. '* The last
Parliamentary inquiry," wrote Clive to Hastings in
August, 1 771, **has thrown the whole state of India
before the public, and every man sees clearly that,
as matters are now conducted abroad, the Company
will not long be able to pay the ;^400,ooo to Govern-
ment. The late dreadful famine or a war with
Sujah Daulah or the Mahrattas will plunge us
into still deeper distress. A discontented nation
and disappointed Ministers will then call to account
a weak and pusillanimous Court of Directors, who
will turn the blow from themselves upon their agents
abroad and the consequences must be ruin both to
the Company and their servants. In this situation
you see the necessity of exerting yourself in time,
provided the directors give you proper powers, with-
out which, I confess, you can do nothing ; for self-

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222 LEDGER AND SWORD [1772

interest or ignorance will obstruct every plan you
can form for the public good.

"The expenses of the Company," continued
Clive, "are hardly to be supported. Great savings,
I am certain, may be made. Bills for fortifications,
cantonments, contracts, etc., must be abolished, to-
gether with every extravagant charge for travelling,
diet, parade and pomp of subordinates. In short,
by economy alone the Company may yet preserve
its credit and influence." ^

In the following year Clive wrote to the chair-
man : "It is certain that our affairs in Bengal are
in a very deplorable condition, and that the nation
cannot receive their ;^400,ocx) and the proprietors
their ;^20o,ooo increase of dividend much longer if
something be not done. . . . Upon the receipt of
the revenues depend the ;^4oo,chdo a year to Govern-
ment and the ;^ 200,000 a year additional dividend
to the proprietors : and upon the Company's or
public trade depends the coming home of the
revenues." But before the new system by which
the Company proposed to regulate its affairs in India
could be put into operation, there had arisen a crisis
both in its own and Clive s affairs at home,

Hastings began his administration at Calcutta

*The Company's net profits during Lord Clive's Government
had been as follows : —

1765-6 jf47i,o67

1766-7 i»353»50i

The net profits during Harry Verelst's Government were : —

1767-8 jf87i,622

1768-9 829,062

1769-70 - - - - 336,812

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1770] THE DEWANI IN PRACTICE 223

under numerous disadvantages. A dreadful famine
occurred in 1770, under the government of Cartier,
and only a few months before Hastings succeeded
to the Presidency. The periodical rains had failed,
the earth became parched up, the tanks for irrigation
became empty, the rivers ceased to flow and the rice
and other crops failed. As the Hindus, on religious
grounds, make little or no use of animal food, they
perished by thousands. It is said that from one-
fourth to one-third of the teeming population of
Bengal was swept away.

Previous to this Syef-al-Daulah, the son and suc-
cessor of Mir Jafir, died of the small-pox, and his
brother, Muharek-al-Daulah, a mere boy, had been
appointed to the musund. The Court of Directors
ordered Hastings during the non-age of the Nawab to
reduce his annual stipend to sixteen lakhs of rupees.

Although the Company was now practically and
officially the Dewan or collector for the Mogul, yet
it was not at first thought prudent to take the actual
work of collection out of the hands of the natives
and put it into the hands of its English servants.
The Company contented itself with stationing a
resident at the Nawab's Court to exercise a general
control over the conduct of the chief receiver of taxes,
and another at Patna to inspect and check the ac-
counts of his deputy. But in August, 1769, the
receipts continuing to fall far below the general
expectations of the Company, it was decided to
appoint supervisors in different parts of the provinces
to control the native officials. These supervisors
were instructed to make a summary history of the

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224 LEDGER AND SWORD [1772

provinces, to inquire into the state, produce and
capacity of the lands, ascertain the amount of the
taxes, the condition of the cultivators, the com-
mercial regulations and the system of administering
justice. The report submitted by these supervisors
revealed the melancholy fact that "the revenue
system was throughout utterly corrupt," that the
ryots were plundered generally, and that justice
existed only in name. Accordingly, without con-
sidering the dangerous consequences of such a grave
step, the Company, in a letter dated 28th August,
1 77 1, declared boldly that it was resolved ** to stand
forth as Dewan, and by the agency of its own ser-
vants, to take upon itself the entire care and man-
agement of the revenue ".

"Never," writes one Indian historian, "was so
gigantic a change in the arrangements of any portion
of human society brought about with such a total
absence of care and consideration. It was imagined
in Leadenhall Street that the determination here ex-
pressed would merely supersede one set of revenue
officers by another ; whereas it led to an innovation
by which the whole property of the country, and
along with it the administration of justice, was placed
upon a new foundation."

The office of Naib Dewan was abolished on the
14th May, 1772, and a Board of Revenue, consisting
of the President and Council, an accountant-general
with assistants, established at Calcutta. The native
treasury and exchequer at Murshedabad, with its
whole staff of native officers, were ordered to be re-
moved to the new British capital. Having investi-

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1774] NATIVE SUPERVISORS 225

gated the various imposts borne by the ryots, the
most oppressive were abolished, and, more daring
still, it was decided to revolutionise the whole ancient
land system. The lands of the provinces were to be
let to the highest bidders, and leases granted to the
ryots for five years. The measure which was put
into operation may not have been ** arbitrary and
cruel," as has been alleged, but it was soon proved
unworkable ; and while the labours of its servants
were doubled, the revenues of the Company were
not improved. In less than a year and a half the
office of Naib Dewan was restored, and the seat of
justice returned to Murshedabad. In 1774 the Eng-
lish supervisors or collectors were recalled and their
places again given to natives.

When the Dewani had been removed thither,
Hastings clearly foresaw the high destinies of Cal-
cutta. ** By the translation of the treasury," he wrote
to a friend, " by the exercise of the Dewani without an
immediate agent, by the present superintendency of
the Nabob's household, and by the establishment of
the new courts of justice under the control of our own
government the authority of the Company is fixed in
this country without any possibility of a competition
and beyond the power of any but themselves to shake
it. The Nabob is a mere name, and seat of govern-
ment effectually and visibly transferred from Mur-
shedabad to Calcutta, which I do not despair of
seeing the first city in Asia, if I live and am sup-
ported but a few years longer." ^

^ Letter to Mr. Sykes in Gleig's Lift of Hastings.

VOL. n. 15

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226 LEDGER AND SWORD [1774

But in all this work of reform, which had been
ordered by the Company, Hastings complained that
he had received a dangerous mark of distinction in
being alone entrusted with its execution, saying
that the effect was, his hand was against every man,
and every man's against his. ** Like Clive, he was
sowing the seeds of hatred and vengeance — the
bitter fruit of which he was to taste hereafter," Be-
sides all these laborious and trying occupations, con-
stant anxieties arose out of the Company's connections
with the Nawab of Oudh and Shah Alum, and the en-
croachment of the Mahrattas, who occupied or over-
run for uncertain seasons the whole of the interior of
India, from Delhi to the frontiers of Oudh, from the
Ghauts of the Camatic to the Ghauts behind Bom-
bay.

The evacuation of Delhi by Abdallah Shah and
the peace following on the Rohilla occupation caused
Shah Alum to desire the Company's assistance to
enable him to return to his capital. But the Com-
pany had steadily been against granting troops for
this purpose, and the Mogul Emperor was thus
thrown into the hands of the Mahrattas, who con-
ducted him into Delhi in triumph. The Rohillas
subsequently gave great uneasiness to the Nawab of
Oudh, who involved the Company in the quarrel.
It was Sujah Daulah's wish to annex to Oudh a
large tract of the Rohilla territory. Hastings, see-
ing that the Mogul's authority was the merest
shadow, agreed to support the project, on condition
that the Nawab would defray all military expenses,
and also pay forty lakhs of rupees into the Company's

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1772] COMPANY'S NEW ORDEAL 227

treasury. The result was the subjugation of Rohil-
cund, and the transference of Allahabad and Corah,
which had previously been allotted to the Mogul, to
the Nawab Vizier in consideration of the Company's
being paid fifty lakhs of rupees.

About this time, it having been rendered evident
that twenty-six lakhs of rupees per annum was too
great a price to pay to Shah Alum for the merely
ceremonial investiture of the Company in the
Dewani of Bengal, over which neither he, as Mogul,
nor his immediate predecessors had any control,
Hastings notified the Emperor that this tribute
would cease to be paid in future. No wonder the
Company's treasury, lately empty, now grew re-
plenished, or that Hastings could write that "when
I took charge of Bengal in April, 1772, I found it
loaded with a debt at interest at nearly the same
amount as at present ; in less than two years I saw
the debt completely discharged, and a sum in ready
cash to the same amount in the public treasuries ".
Is it any wonder, also, that the Company, while con-
demning the use which he had made of its troops
in the reduction of the unfortunate Rohillas, should
frankly laud Hastings for his enterprise and zeal?
But before the welcome sound of this cataract of
rupees pouring into the Company's coffers in Bengal
could reach its ears, that body in London itself had
passed through the fiery ordeal of Parliament and
emerged not unscathed.

The session of Parliament in January of 1772
opened with a speech from the throne recommending
new laws for the British possessions in India, some

IS*

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228 LEDGER AND SWORD [1772

of which were ** so peculiarly liable to abuses and
exposed to danger, that the interposition of the
legislature for their protection may become neces-
sary ". Meantime the enemies of Lord Clive in the
Court of Directors and the Company's Bengal service
had been busy in preparing an attack upon him in
Parliament, the one in return for his unfriendly
attitude towards them — Sulivan and his friends —
and for the advice which it was known he was then
tendering the Government hostile to their plans, and
the other for his treatment of them while in power in
Calcutta. It will hardly be necessary to describe
again a drama which has engaged so many pens.
Enough to say, that two months later Sulivan in his
place in the House of Commons gave notice of a Bill
** for the better regulation of the affairs of the East
India Company and of their servants in India, and
for the administration of justice in Bengal ". In his
speech Sulivan claimed that the Company was free
from blame in the matter of Indian maladministra-
tion, which was laid at the feet of its servants, who
had persistently disobeyed its orders. Sulivan clearly
implicated Clive himself, whose enemies had pre-
viously openly charged him in print with being the
fountainhead of all the mischief. Clive replied in a
lengthy and passionate speech, in which he denied
that he had ever '* in a single instance lost sight of
what he thought the honour and true interest of my
country and the Company ".

One passage in this speech was especially signi-
ficant of the change which had now come over so
many of the Company's servants — of the new posi-

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1772] CLIVE'S DIAGNOSIS 229

tion of the Company itself : ** Trade," he said, " was
not my profession — my line has been military and
political. I owe all I have in the world to my having
b^en at the head of an army. As to cotton, I know
no more about it than the Pope of Rome ! "

He did not hesitate to attribute **the present
bad situation of affairs to four causes : a relaxation of
government in my successors ; great neglect on the
part of administration ; notorious misconduct on the
part of the directors ; and the violent and outrageous
proceedings of general courts." All this was aggra-
vated by the system of annual elections at Leaden-
hall Street ; the directors thus elected were too
dependent on the proprietors of Indian stock, who
returned them ; he declared that one half of the
year was employed by the directors in discharg-
ing obligations contracted by their last election,
and the second half of the year spent in incurring
new obligations for securing their election the
next year by clandestine bargains with the stock-
holders and others. The result was that the
directors had not proper time for the despatch of
the Company's business, and the orders sent out to
India were so fluctuating, and frequently so unin-
telligible, that the servants in the country had, in
many instances, followed their own opinions rather
than their orders."

While there was doubtless much truth in this,
yet the great fact which both directors and pro-
prietors saw was that, in spite of all the vast wealth
obtained by its servants in the Company's name, the
Company itself did not participate in the spoils to

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230 LEDGER AND SWORD [1772

an extent sufficient to free it from grave pecuniary
difficulties.*

In April, 1772, the House of Commons agreed
to the appointment of a Select Committee of in-
quiry, comprising thirty-one members. This com-
mittee had made but little progress when the session
ended. On the 8th of July the books were audited.
It was discovered that there was a deficiency be-
tween assets and liabilities of no less than £ i ,293,000.
To add to its financial troubles, the Company had
been making an attempt, by means of an indemnity
upon tea, to destroy the foreign East India Com-
panies. This did not meet with all the success it
deserved, and caused the Company a loss of close
upon a million. The directors were obliged to apply
to the Bank of England for a loan of ;^400,ooo to
meet the payments falling due. This was on the
15 th of the month ; on the 29th they begged an ad-
ditional loan of ;^300,ooo, but the Bank would only
advance two-thirds of that sum. A fortnight later.
Sir George Colebrooke, the chairman, and Sulivan,
then deputy chairman, waited upon Lord North, the
Prime Minister, to tell him that unless the Company
were allowed to negotiate a loan of a million it was
confronted by ruin.

The Ministry were ready to relieve the Com-
pany's embarrassments by a loan, but at the same

1 The directors seem to have had rather a thankless task. In
January, 1776, a General Court was actually held to consider an
increase in the directors' salaries, which had remained unaltered since
the Revolution. This was not accomplished at this time, one hundred
being against it and only sixty-five for it.

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i;73] COMMITTEES OF ENQUIRY 231

time the occasion was not one to be lost for making
terms of their own choosing. At the opening of the
Pariiamentary session of 1773, recognising the real
motives of the Select Committee, they appointed a
Secret Committee of thirteen members, with powers
to inspect the Company's books and accounts, in spite
of a violent opposition from the directors. Colonel
Burgoyne, chairman of the Select Committee (and an
enemy of Clive), vindicated the proceedings of the
Select Committee, ** declaring that its inquiries, if
allowed to proceed, would disclose such a scene of
iniquity, rapine and cruelty as had never been dis-
covered until then". The King and Lord North felt
obliged to agree that the Select Committee should be
continued ; and thus two committees of inquiry pro-
ceeded with their investigations at the same time.
The sum of their inquiry was soon known — ^it was
that the government of the Company was too weak,
divided and distant to exercise any real control over
the multitude of its officials in India. These officials
bent all their energies to extort money from the
natives in order that they might return to England
rich men. *' At every turn of the wheel, at every
change in the system or the personality of the
government, vast sums were drawn from the native
treasury, and most steps of promotion were pur-
chased by gifts to the English." ^ A great propor-
tion of these gifts, going to minor servants for
procuring minor promotions, were never disclosed.
Yet so vast were they that the detailed account of

* Lecky.

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232 LEDGER AND SWORD [1773

the certain sums published by the Select Committee
of 1773 showed that, omitting the grant to Clive
after Plassey, ;^5,940,498 had been distributed by
the Bengal princes between 1757 and 1766!

On the loth of May Burgoyne moved the fol-
lowing resolutions : —

" ist That all acquisitions made under the in-
fluence of a military force, or by treaty with foreign
princes, do of right belong to the State.

** 2nd. That to appropriate acquisitions so made
to the private emolument of persons entrusted with
any civil or military power of the State is illegal.

" 3rd. That very great sums of money, and other
valuable property, have been acquired in Bengal
from princes and others of that country by persons
entrusted with the civil and military powers of the
State, by means of such powers ; which sums of
money and valuable property have been appropriated
to the private use of such persons."

When these had been carried, a further resolution
was moved accusing Clive of receiving moneys
rightfully belonging to the Company, amounting to
;^234,ooo, thereby abusing his powers and setting
an evil example to the servants of the public. A
long debate followed ; Clive was virtually upon his
trial : but the attack failed and Clive was, if not
" triumphantly acquitted," yet sufficiently exonerated.
The terms of a further resolution declared that
" Robert Lord Clive did at the same time render
great and meritorious services to his country ".

Though thus relieved from anxiety concerning
his fortune, the excitement of the protracted inquiry

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1773] HARSH MINISTERIAL TERMS 233

unquestionably affected Clive's mind, and a few
months later, in November, the Company's great
servant died by his own hand at his house in
Berkeley Square.

If the Select Committee, championing perhaps
misguidedly the Company's interests, had thus de-
generated into a group of Clive s personal assailants
and had so failed, the Committee of Secrecy ap-
pointed by the Crown, to examine the affairs of
the Company and to state whether it should be
allowed to carry out its own reform proposal of
sending out six supervisors to superintend the
Government of India, was to achieve a more practical
and abiding result.

Still unable to obtain money, the Court of
Directors of the Company had no resource but
Parliament On the 9th of March following they
humbly petitioned the Commons for a loan of
;^ 1 1 500,000 for four years at 4 per cent. In reply,
the Ministry offered to lend the Company ;^ 1,400,000
and to give up the claim of ;^400,ooo a year which
the Company had been paying from its territorial
revenues till this debt should be discharged, on the
strict condition that it should not raise its dividends
above 6 per cent until the liquidation of the debt.
By complying with these and some other conditions
and restrictions, the Company was to remain in
possession of all the territories it had acquired
for six years to come, when its charter would
expire. To no purpose did the Company petition
against these terms as " harsh, arbitrary and illegal " :
it could not do without the money ; the Ministry

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^34 LEDGfiR AND SWORD [1773

were determined to allow it to be raised only on
such terms, and the proposal was carried in the
House by a large majority.

Clive had not repeatedly been consulted by the
King and his Prime Minister without impressing
upon them his own views of reform. He had frankly
advised that "the constitution of the East India
House ought to be undemocratised ; that thfe Court
of Proprietors was a bear-garden, ever full of noise,
intrigue, confusion and anarchy ; and that its direct
influence and action on the Court of Directors was
an obstacle to all good management and consistent
government ". On 3rd May Lord North introduced
a series of proposals tending to a change in that
constitution which may thus be summarised: ist
That the Court of Directors should in future, instead
of being chosen annually, be elected for four years; six
members annually, but none to hold seats for longer
than four years. 2nd. That the qualification stock
should be ;^ 1,000 instead of ;^500; that ;^3,ooo
should give two votes, and ;^6,ooo three votes ; 3rd.
That in lieu of the Mayor's Court at Calcutta, the
jurisdiction of which was limited to small mercantile
causes, a supreme court of judicature, consisting of
a Chief Justice and three puisne judges, should be
appointed by the Crown, with great and extended
powers of cognisance over the civil and criminal
jurisdiction of the subjects of England, their servants
and dependents, residing within the Company's
territories in Bengal ; 4th. That a Governor-General
with four councillors should be appointed to Fort
William, and vested with full powers over the Pre-

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1773] RADICAL CHANGES ijs

sidencies. This board was to transmit regular
reports of its proceedings to the Court of Directors,
who were, within fourteen days of the receipt of
their despatches, to furnish copies of them to one of
His Majesty's secretaries of state, to whom they were
also to send copies of any rules and ordinations they
themselves might make ; and these were, if dis-
approved by His Majesty, to become null and void.
The nomination of the first Governor-General and
members of Council was vested in Parliament and was
to continue for five years, after which term those high
offices were to be filled up by the Court of Directors,
but still subject to the approbation of the Crown.
Lastly, it was to be enacted that no person in India,
in the service either of the King or the Com-
pany, should henceforth be allowed to receive any
presents from the native Nawabs, Rajahs, Ministers,
agents or others; and that the governor-general,
members of council and judges should be excluded
from all commercial pursuits and profits.

A bill founded on the foregoing resolutions was
duly passed, and eventually came into operation in
England on the ist October, 1773, and in India on
the I St August, 1774. By far the chief title of this
measure to renown is that it marked a radical change,
not only merely in the constitution of the East India
Company, but in the relations of the Company to the
Crown. The anomaly which had so long existed
between the British Government and Company,
whose ratification had been shirked by successive
Ministers, now gave way to a working arrangement
between the two parties in which the authority

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236 LEDGER AND SWORD [1773

passed to the monarch and his ministers in Parlia-
ment, constituting the central administration. From
this time forth **the Company must be regarded as
almost entirely in the hands of the Ministers of the
Crown, and only so far responsible to Parliament as
were the Ministers themselves".^ It was the first
measure adopted by the British Parliament to estab-
lish efficient government amongst the native races of
Hindustan. It was naturally exposed to the fiercest,
and perhaps the justest criticism. Indeed, its defects
were in practice soon made manifest, and the Regu-
lating Act of 1773 underwent, in all essential points,
a wide modification. But it likewise contained some
features as praiseworthy as they were destined to be
permanent, and the abolition of annual elections and
the raising of the qualification for a vote were not the
least of these.

It is a notable circumstance that Burke, who
afterwards became such a violent opponent of the
Company, in 1773 passionately denounced Lord
North's bill as " a violation of the charter of the
Company, and a spoliation of private individuals '\
He altogether denied that the Government had
any right to territorial revenues acquired by the
efforts of a private corporation, and scouted the
notion that to exchange the Crown's rule for the
Company's would ameliorate the condition of the
natives of India. "If," declared Burke, ** Indian
patronage were to pass into the hands of the
British Government it would be a beginning of

1 The Early Chartered Companies^ p. 141.

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1773] AMERICAN TEA TAX 237

such a scene of frauds, impositions and Treasury
jobbing of all sorts, both here and in India, as
would soon destroy all the little honesty and public
spirit we have left." ^

In making choice of the first Governor-General
in India under the ** Regulating Act," one candidate
stood forth conspicuous for his fitness. Long experi-
ence in India, proved capacity, and indefatigable
industry, all pointed to Warren Hastings, who was
accordingly named by the new parliamentary autho-
rity. The four members of Council appointed with
Hastings, and, unhappily, each with powers nearly
co-extensive with his own, were General Clavering,
Colonel Monson, Harwell and Philip Francis, the
author of the ** Junius" letters.

We now turn to an affair in which the Company
was closely concerned which was happening not in
the East, but in the West. In 1769 the British
Government had imposed a duty on all tea entering
the ports of the American Colonies. There was no
logical reason why this tax should not have been
imposed ; a tax was necessary, tea was a luxury,
and the money was intended to support the adminis-
tration of the Colonies, then becoming a burden on
the mother country. But perhaps owing to the
manner in which the measure was passed and applJW
the tea duty became obnoxious, and the Americans
only waited for an opportunity of forcibly displaying
their repugnance.

In 1773 some 17,000,000 lb. of tea lay unsold in

' Burke's Correspondence^ vol. i., p. 390.

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238 LEDGER AND SWORD [1773

the Company's warehouses.* Money, as we have
seen, was urgently needed to rescue the Company
from extreme embarrassment bordering on bank-
ruptcy, and the happy plan was adopted of securing
a licence from the Treasury to export this tea to
America on the Company's own account, instead of
having, as formerly, to dispose of it to middlemen.
The Company, therefore, selected its own agents
in the different Colonies as consignees, the latter
being persons friendly to the British connection.

If the tea could be once landed it would, owing
to its low price — ^lower than in England (the export
duty having been withdrawn) — doubtless find pur-
chasers, in spite of the resolve of the more rampant
colonists not to receive any tea whatsoever until the
duty was repealed. In the meantime they consumed
tea smuggled by their own compatriots, who were
amassing large fortunes in this business. Fearing
that the Company would be able to undersell them,
these smugglers entered warmly into a conspiracy
to prevent the landing of the tea, or, if they were
defeated in this, to boycott all those concerned in its
handling and sale. In 1773 three ships freighted
with tea reached Boston Harbour ; on the i6th
December some half-hundred of the so-called ** Sons
of Liberty," in the guise of Mohawk Indians, led by
Samuel Adams, Hancock (whose uncle was a wealthy

' A report was made in December, 177a, to the effect that the
Company had in their warehouses in London 16,000,000 lb. of tea.
At the same time the Company's home assets were valued by a sur-
veyor, when it was estimated that their India House and warehouses
were worth £'2X4,ooa

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1772] RAJAH OF TANJORE 239

tea smuggler) and other malcontents, boarded the
vessels and flung the entire cargo of 342 chests into
the sea. The lawless mob then retired with im-
punity, the King's Government being unable to cope
with the growing spirit of insurrection. The ship
which arrived at Charleston landed her cargo, but
the persecuted consignee disappeared, and the tea
was abandoned to perish. Elsewhere, at New York
and Philadelphia, the patriots compelled the Com-
pany's ships to sail back with their tea to England.*
This incident is commonly spoken of as being one
of the chief brands which kindled the American
Revolution.

At Madras, when the Company's Council refused
to comply with Haider Ali's request for guns and
sepoys to help him to fight the Mahrattas on the
ground that this was not a defensive war, they had
received similar overtures from the Peishwa of the
Mahrattas, which they also declined. Upon these two
native powers ceasing fighting in 1772, Mohammed
Ali, the nominal lord of the Camatic, thirsty for con-
quests, prevailed upon Governor Josias Du Pr6 to
help him to subjugate the Marawars, which really
owed allegiance to the Rajah of Tanjore. The
unfortunate Marawars were duly chastised, and thus
was the first step taken by the Madras authorities
towards destroying the power of the Rajah of
Tanjore.

The Company, in its letter to the Nawab, 25th
March, 1772, had acknowledged that the rashness

^ Lecky, History of the Seventeenth Century.

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240 LEDGER AND SWORD [1773

of the Rajah of Tanjore in taking up arms against
the Marawar and Nalcooty would at all events have
urged it to unsheathe the sword in order to chastise
him had the Nawab ensured the necessary re-
sources. Mohammed Ali now offered ten lakhs
of pagodas for the purpose of removing Tulja-ji,
and himself assuming the nominal government of
Tanjore. Wynch, who replaced Du Pr6* at the
head of the Madras Council, therefore closed
with the Nawab's offer, and wrote home to the
Company that the ** political existence of the Rajah
of Tanjore was incompatible with their own safety ;
that it was dangerous to have such a separate inde-
pendent power in the heart of the Carnatic ; that the
Rajah, in case of war breaking out in Europe, would
be sure to join the French ; and, finally, that the
propriety and expediency of embracing the present
opportunity of reducing him entirely before such an
event took place were evident ".

It is impossible, even if it were useful to any but
close students of Indian history, to ascertain in detail
all the facts, motives and considerations underlying
this transaction. It will be found fully, if not quite
convincingly from one standpoint, dealt with by Mill,
who, while disentangling the threads of Arcot, Tan-
jore, Trichinopoly and the Mara wars, takes occasion
to deduce the moral that ** there is no constitution in

> On Governor Du Pr6*8 return home the chairman, on behalf of
the Company, complimented him in laudatory terms for his wise and
upright management of its affairs in the Carnatic, and for his ex-
emplary conduct towards the Nawab, and in particular for his
invariable regard to their orders in all cases. — MinuteSj i8th August,
1773.

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1774] COMPANY'S ORDERS OBEYED 241

India but the law of the strongest The fact," he
adds, ** is important, and has often been mistaken by
the inaccurate minds, which hitherto have contem-
plated Indian affairs." It is dread of falling into this
category that leads the present writer to omit the
brain-racking discussion of the rights and wrongs of
the action of the Madras Council in dispossessing
the Rajah of Tanjore. Enough to say that, in our
opinion, Wynch and his colleagues were not ani-
mated by personal greed, but believed, with reason,
that they were fulfilling the wishes of the Company,
which, in turn, uninfluenced by European codes and
customs, was attempting to carry out a strong, con-
sistent policy in India.

On the 1 6th September, 1773, the stronghold of
Tanjore was taken by assault, and the Rajah and his
family were made prisoners.

On the 26th March, 1774, the news of the de-
position reached England.^ It is not necessary to
seek reasons for the alleged " silence " of the Court
of Directors with regard to the deposition of the
Rajah of Tanjore. It is not even necessary to
urge in their defence that " the situation of affairs

^ It was inevitable that the episode should be transformed into a
tragedy. It was said that the Rajah of Tanjore, Tulja-ji, was closely
confined in a dungeon in his capital ; iron fetters were spoken of.
*' Some tender-hearted persons at the India House," it was said,
'* believed that Tulja-ji was their miserable victim. Some feeling
clerks in office dissolved into tears upon hearing the melancholy
tale, and even a few directors at the weekly feast at the London
Tavern were observed to abstain from the delicacies of the Com-
pany's table when they heard the sad reverse of fallen majesty." —
Macpherson. See also Rous, The Restoration of the King of Tanjore^
1777.

VOL. II. 16

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54^ LEDGER AND SWORD [177S

in England lessened the attention of the directors to
political concerns in India," or that in the very month
when the Madras despatches arrived they were only
just in receipt of the Parliamentary instructions to
the members appointed to the Bengal Council. As
a matter of fact, the Company was noi silent ; as
Hay man Wilson has shown, it apprehended that the
matter was one which would call for investigation, and
it set about, immediately on receipt of the Madras
consultations, the preparation of exhaustive papers,
which were ready for the hands of Lord North at
the close of the year 1774 or the beginning of 1775.
As to the much-vexed question whether the
Company approved or disapproved of the action of
the Madras Council, there is little doubt of its being
answered in the affirmative. The Court of Direc-
tors had long held opinions on this very matter of
the Rajah of Tanjore's conduct and position, and
these were decidedly adverse to the Rajah. If the
Court had ever vacillated on this point, it was clearly
owing to the pressure exercised from without by
unenlightened public opinion or by persons who were
actuated by ulterior motives. Chief amongst these
persons was George Pigot, now raised to an Irish
barony. Pigot hoped to become the arbiter of the
fate of the Carnatic, as his friend Clive had been of
Bengal. His attitude towards the Madras Council
and Mohammed AH was antagonistic.^

1 The enterprising Nawab, not content with writing to and re-
ceiving letters from King George, had long been intriguing with the
Government through his London agents. He even proposed to
advance ;£'700yOoo at two per cent, to the nation in return for assist-
ance, at a time when he was ail but bankrupt at Arcot.

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1775] PIGOrS AMBITION 243

The Court of Directors having, by a small ma-
jority, nominated Thomas Rumbold as Governor of
Madras early in 1775, their choice was overruled by
the Court of Proprietors, who wished Lord Pigot
appointed. Pigot, whatever his former greatness,
had outlived his prime. But his faction amongst the
proprietors was strong and persistent, and they suc-
ceeded in procuring his appointment. Their success
only demonstrated the unworkableness of the exist-
ing constitution ; it made the necessity for a still
more trenchant abridgement of the power of the
generality clearer than ever. It would have been far
better for Lord Pigot if his ambition had perished
with his youth ; his heedless followers in the Court
of Proprietors were hurrying him to his grave.
Pigot was not now of the stuff to become the arbi-
ter of the fate of the Camatic.

Pigot soon succeeded in effecting a change of
front amongst the Court of Directors. The orders
which he desired to bear out to Madras were, accord-
ing to James Macpherson, "penned by a ready scribe,
a clerk in the India House, under the inspection of
Lord Pigot. But notwithstanding they lay a fort-
night on the table before a legal number of signatures
could be obtained. The fate of a kingdom hung at
last on the point of a moment. Lord Pigot threatened
to resign ; Mr. Harrison was just retiring to Bath on
account of his health ; Mr. Wheeler himself became
indifferent about the promised seat in the Supreme
Council at Bengal. The infectious sorrow spread
itself to the very clerks in office. Mr. Wilks ceased

to pore upon despatches and records ; and one solitary

16*

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244 LEDGER AND SWORD [1775

tear was observed to wander upon the cheek of Mr.
Holt. To brighten up the face of the India House
some of the opposing directors thought it expedient
to relent. The orders were accordingly signed on
the 1 2th April, 1775, on the very day of the annual
election, when the Court of Proprietors were met to
choose new directors and had consequently suspended
the authority of the old."

The substance of these contradictory and un-
fortunate orders was contained in a sentence :
" We have determined to replace the King of Tan-
jore on the throne of his ancestors, upon certain
terms and conditions, for the mutual benefit of him-
self and the Company, without infringing the rights
of Mohammed Ali Khan, Nawab of the Carnatic ". ^
But at the same time the Company insisted that he
should admit a garrison of its troops into his capital ;
that he should assign revenues sufficient for their
maintenance and for military stores, that all fortifica-
tions should be carried out at the Rajah's expense,
that the Company should supervise his external
relations and fix the number of bodyguards in his
service.

Lord Pigot arrived at Fort St. George on the

1 << Lord Pigot himself, transferring all his friendship for Pretaupa
(Pertab Singh) to the unfortunate Tulja-ji, resolved to pass im-
mediately to Asia, to save the life of the devoted Rajah from the
dagger of Mohammed Ali. That hardened prince, it had been found
by experience, was capable of any injustice. Though he had ap-
pointed Lord Pigot his agent in England, much of the salary attached
to the office remained unpaid. . . . The Nabob, it seems, had been
unpardonably negligent in his remittances." — Macpherson, 1779.
Pigot's resolve to subvert the Company's policy may not wholly have
been uninfluenced by such considerations.

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1776] PIGOT'S ARREST 245

nth December, 1775. Pigot's intentions were pre-
cise, and he proceeded to execute them, in spite of
the opposition and disgust of the Council. He un-
did all that Wynch's Council had done ; the English
garrison of Tanjore was reinforced and the Rajah
liberated and re-proclaimed in April, 1776. To no
purpose did Mohammed Ali complain of " the policy
adopted by the Company, of doing one thing by
its servants in India, and the very reverse by its
directors in England^' and declared that "he was
unable to understand it in this double capacity".
All in vain the Nawab argued and "pathetically
appealed to the services which he had rendered to
the Company and to his own declining years and
urged the assurances of the King of Great Britain,
conveyed to him by Sir John Lindsay ". The step
was taken and it was followed by others which
proved fatal to Pigot. Grievous dissensions broke
out in Council, not dissimilar to those which were
going on in Bengal. The end was that the Governor
was arrested by his opponents and placed in confine-
ment. Those who had supported him in his measures
were suspended. The King's admiral, Hughes, to
whom the Governor appealed, refused to do more
than make a formal requisition for his person, to
which the acting Council replied that "they had
no proof that the Crown empowered its officers
to require the removal of any servant of the Com-
pany, in such a situation as that of Lord Pigot, from
under the authority of the Company's government" *

' Thornton, British Empire in India.

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246 LEDGER AND SWORD [1777

Pigot was an old man; his constitution had
already been tried severely ; his incarceration preyed
upon his mind and body, and in eight months he
was dead. The Supreme Council at Calcutta though
called upon did nothing : the simple reason being, so.
far as it is possible to divine it, that neither Hastings
nor the rest believed in Pigot's policy and hesitated
to make trouble elsewhere when they had, as we
shall see, such a deal of their own on their hands.

When the news reached home the Company in
a general court, held 26th March, 1777, nioved " that
it be recommended to the Court of Directors to take
such measures as shall appear to them most effectual
for restoring Lord Pigot to the full exercise of the
powers vested in him by the commission from the
Company, as Governor and President of the settle-
ment of Madras, and for inquiring into the conduct
of the principal actors in imprisoning his lordship
and dispossessing him of the exercise of the legal
powers wherewith he was invested ". Already the
an ti- Pigot faction in Madras had its supporters in
England, 140 voting against the motion to 382 in
its favour. In the Court of Directors a proposal to
send out a commission of inquiry was defeated, but
subsequently a motion to restore the Governor and
suspend his gaolers was carried by a bare majority.
When the Company was attacked for its conduct
of affairs in the Carnatic, it undertook its defence
convinced of its own integrity and the rectitude of
its measures. In a public advertisement, the Court
of Directors assured their constituents and the nation
at large ** that from the materials before them, they

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1777] RUMBOLD APPOINTED 247

had not the least doubt of refuting the heavy charges
brought against them, which could they be proved
would not only render them unfit to conduct the
affairs of the Company, but utterly unworthy of
every degree of public trust and confidence". A
voluminous defence was published, containing its
own and its servants' despatches, and convinced all
reasonable persons of the Company's probity. A
return to the old policy was inevitable. The annual
election supervened, a new set of directors appeared
on the scene. The chairman, Wombwell, was no
friend to Pigot, and succeeded in carrying resolutions
condemning his conduct, as having exceeded his
authority and reproaching him for having received
any presents from the Nawab of the Camatic,
although these had been pressed upon him and were
of trifling value. A general court resolved both on his
lordship s recall and on that of the rest of the Council,
but before the Company could actually send the
order it was known that its distinguished, but perverse,
servant was beyond the reach of either assistance or
rebuke. Nevertheless, Pigot s enemies were not alto-
gether to escape. In 1779 four of them had returned
home with great wealth ; one of them, Stratton, be-
came a member of Parliament. A Crown prosecution
was set on foot at the instance of Admiral Pigot,
the late Governor's brother ; the accused parties
were found guilty and sentenced to pay the moderate
fine of ;^ 1,000 each.

The head of the new Council which the Company
had sent out to Madras, as a temporary governor,
pending an inquiry, was Sir Thomas Rumbold, a

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248 LEDGER AND SWORD [i777

member of the Court of Directors, whose appoint-
ment, it will be remembered, the proprietors had
blocked in 1775.^ It would have been far better
for Rumbold's fame, also, if he had declined this ap-
pointment. He was going out to great difficulties
and strong temptations, and he would return to pass
the rest of his days under much unmerited obloquy.

^ Rumbold was born in January, 1736, at Leytonstone in Essex.
He was the youngest son of William Rumbold of the East India
Company's naval service, whose father had also been in the service
of the East India Company. When sixteen, Thomas Rumbold was
appointed a writer to Fort St. George. He soon changed civil
service for military, and was present at the siege of Trichinopoly
and at the retaking of Calcutta in 1756, where Lord Clive promoted
him to a captaincy in recognition of an act of bravery. At Plassey
he acted as Lord dive's aide-de-camp, but was seriously wounded
and was obliged to resume his civil duties again. In 1769 he returned
to England with a handsome fortune, but with broken down health.
He interested himself in the India House, and was named as a suc-
cessor of Hastings. — Vindication of Sir Thomas Rumbold, by Elizabeth
Anne Rumbold, 1868.

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WARREN HASTINGS,
GOVERNOR -GENERAL OF BENGAL*

From a Portrait by Sir Joshua Reynolds*

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CHAPTER IX.

Warren Hastings to the Rescue*

One marked effect of the Regulating Bill was that
it lent a far greater cohesion to the governing
powers of John Company/ enabling it the better to
resist the attacks of the envious and malignant, and
also to escape the surveillance of a curious public.
To this public, assiduously fed by the pamphleteers,
the East India Company was a compound of ignor-
ance and venality. The one thing it did not know
anything about was India. The directors rarely or
never rose above a purely commercial level. " Can
it be supposed," it was asked, "that such an extent

^Jehan Company or Kompani Bahadar. The origin of the
term is obscure ; but the contention that it was borrowed from the
Dutch " Jan Companie *' need not be pressed upon us unduly. It was
a Hindu custom to personify all unseen powers. When the arrival of
a British traveller (Lord Valent^a) was announced to the Nawab of
Gudh in 1803 it was in these words : ^ Lord Saheb Ka Changa, Com-
pany Ki Nawasa teshrif laia," which the noble author thus 'trans-
lates, ** The Lord (Wellesley) sister's son and the grandson of Mrs.
Company is arrived". ''These titles originated from a belief of the
natives, that the India Company is an old woman, and that the
Governors-General are her children."— Lord Valentia's Voyages and
Travels^ 1809. In that entertaining book, The Adventures of Hajji
Babay first published in 1824, ^^ hero of the tale is commanded by
his master *' to bring positive intelligence of who and what the Coom-
pant was, of whom so much was said — how connected with England
— whether an old woman, as sometimes reported, or whether it con-
sisted of many old women ; and whether the account, which was
credited, of its never dying, like the lama of Thibet, were not a fable ",

249L

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250 LEDGER AND SWORD [1774

of empire as that from Persia to the Ganges will
receive laws from and be beggared by a handful of
Europeans ? "

" To support the appearance of authority," we
are told by a contemporary antagonist of the Com-
pany, ** some ignorant clerk, who thought insolence
a mark of dignity, penned their despatches and as-
sumed the manner and diction of despotic power;
but their orders were only obeyed when they suited
the views of those to whom they were addressed."

We have more than one glimpse afforded us of
the Court of Directors as they appeared to outsiders
in the days of Clive and Hastings.

" Unimportant," observes one malicious scribe,
** as the condition of the common herd of directors
might appear to have been at home, it became an
object of ambition to their servants when they re-
turned from abroad. The latter, together with the
spoils, having acquired the manners of the East,
frequently took arms against the authority to which
they owed their power ; till by force, by negotiations
or compromise they obtained seats at the Board.
The first use they made of their power was to cover
the retreat of their own fortunes from India ; and to
support in some friend, favourite or partner in plun-
der the same system of venality and corruption which
had enriched themselves. Their local knowledge
being blended with local prejudices, instead of en-
lightening the ignorance of other directors, perverted
their judgment. Inflamed by disappointments, but
forgetful of favours, they seldom failed to suggest
such measures as might contribute to distress those

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1774] THE COMPANY'S PROBITY 251

who had failed to extend their liberality to the
utmost limits of their avarice. Thus the injustice
and oppression committed by the servants of the
Company in India, instead of being checked by
the authority of the directors, were too frequently
encouraged by their approbation. These general
observations are not intended as a general censure ;
for in the conduct of the Court we sometimes meet
with some commendable deviations from the lines
we have above described and stigmatised."^

Such a picture is, as we know, as utterly false and
misleading as it is malicious. It is sufficiently dis-
proved by the Court's despatches and by what has
come down to us of its proceedings, which exhibit
a body of men sincerely animated by a desire to
know the situation at all points and to direct their
servants prudently. We know that a huge map of
Hindustan hung in the directors* room, that there
were bookshelves filled with Asiatic literature and
reports, and that both were so patiently and sedu-
lously studied by nearly the whole of those who had
never been in India, with the sole object of forming
a detached and impartial opinion of current events,
that the twenty-four directors, so far from being
ignorant and venal, were the only just and en-
lightened Indian authorities of their day. We know
also from the minutes and from both public and
private correspondence how seriously these maligned
directors of the Company took their duties, what
a weight of responsibility they felt to lie upon their

I'^Ossian" Macpherson, writing from his relative (Sir) John
Macpher8on*s notes.

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252 LEDGER AND SWORD [1774

shoulders. If we seek for a credible instance of
combined levity and venality we shall far more
surely find it in the larger committees of either
House of Parliament than in the Court of Directors
at East India House.

In Bengal, Hastings, conscious of what he had
done for the Company in his two years of office,
may pardonably have felt some anxiety as to the
new arrangement which Parliament had imposed
upon his masters. It is said that he received his
colleagues from England coldly. The three new
members who were to control that government of
which he was nominally the head, General Clavering,
Monson and Philip Francis, arrived at Calcutta on
the 19th day of October, 1774. Harwell, the fourth
member, had been in India long before. On the
following day the existing government was dissolved
by proclamation, and the new Council and Hastings
(with the rank of Governor-General of Bengal) took
possession of their powers.

The general letter of the Court of Directors,
which was read at the first meeting of the new
Council, recommended above all things unanimity
and concord among those to whom the powers of
government were delegated ; it required them
to do their utmost in order to preserve peace in
India. But unanimity and concord were incompa-
tible with a body so constituted, with views and
natures differing so radically.

It was soon manifest that three of the council-
lors had come out " to detect and reform abuses,
which the long knowledge of Hastings and Barwell

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1774] HASTINGS' CONDUCT ATTACKED 253

viewed in a different light, or with a better acquaint-
ance as to the primary causes of them, and the
difficulty of any sudden changes ". Hastings, too,
conscious of his own superior knowledge of Indian
affairs and the Indian character, and accustomed for
some time to an almost undivided authority, was
little likely to descend cheerfully from a whole to
be only a fifth, or to entertain an implicit deference
to the opinions of men who had passed their lives
in such a totally different sphere. Clive had always
counselled that a governor should, at least in his
political negotiations, assume a high and almost
single authority. This counsel, so perfectly adap-
ted to India, he never lost sight of. The members
of the new body began their open quarrel upon
the transactions in Oudh and the Rohilla war. They
asserted, by implication, that Hastings had embarked
in that war for private and sordid motives, and that
his connection with Sujah Daulah was similarly
inspired. This was not true. He had acted solely
for the Company's benefit, and principally at the
Company's express command. He was "above,
and constitutionally indifferent to, money for him-
self," and in reality a poorer man than when he had
quitted the Council at Madras.

Hastings' reply to their charges was commend-
ably moderate. He declared that, although a
majority had been designedly formed against him,
he would not quit his ground: he "appealed to a
large portion of his life passed in the Company's
service, and rested his cause solely on the measures
which had drawn him into his present vindication,

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254 LEDGER AND SWORD [1775

measures adopted solely for the Company's benefit
and the national honour". But his three uncon-
genial colleagues, led by the vindictive and inde-
fatigable Francis, soon reduced Hastings, with his
adherent Barwell, to a cipher. They recalled
Middleton from Oudh ; they displaced other able
servants who had been trained under Clive and
his great successor ; they proceeded to undo nearly
all that Hastings had done ; they virtually converted
government into anarchy, and spread amazement and
consternation among the natives. They frightened
the Nawab Vizier, Sujah Daulah, to death. That
prince died early in 1775, dictating in his last
moments a letter to Hastings to implore his pro-
tection to his son, AsofF-ul- Daulah, who succeeded
without opposition to Oudh and its dependencies,
including Rohilcund. But the new Council accorded
him not a moment of tranquillity, stipulating for
fresh advantages for the Company in return for its
continued alliance. In spite of Hastings' indignant
opposition they forced the young Nawab to cede to
the Company, in return for its guarantee of the
possession of Corah and Allahabad, the territory of
Cheyte Singh, Rajah of Benares, although, strictly
speaking, this was not his to cede, having been
guaranteed to the Rajah by Hastings. The revenue
of the territory thus alienated was estimated at
22,000,000 rupees ; but as this robbed the young
Nawab of Oudh of nothing, he was bound in the
same treaty to discharge all his father's debts and
engagements whatsoever with the Company, and to
raise greatly the allowance to the Company's troops.

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1775] AFFAIRS AT BOMBAY 255

This arrangement was so ingeniously explained that
it met with the approbation of the Court of Direc-
tors, to whom money was at this moment a weighty
consideration, and who were not particularly con-
cerned about the ** rights " of native powers founded
upon conquest, and maintained, for the most part,
with so little regard to political honour or the good
of their subjects. If the Company was to sun^ive
as a power in India, it must be by removing all pos-
sible sources of danger to its authority.^

Among the first acts of the Company's deputy
rulers in India under the Regelating Act of 1773 was
to notify from Bengal the Presidencies of Madras
and Bombay the new scope of their powers, and to
demand from each a full report of its actual political,
financial and military condition.

Bombay had long been quiet and removed from
the struggles of war. Elsewhere in India the Com-
pany's territorial limits were constantly expanding,
but its western coast settlements were but little
changed from Sir John Gayer's day. Surat, once
the leading factory in this quarter and the head-
quarters of the Anglo-Indian Persian trade, had long
sunk to a mere dependency upon Bombay. Since
the invasion of the Afghans of that country in 1722,
Europeans had had but little trade with Persia,

^ *' Upon the principle of self-preservation the directors confirm
this treaty of Benares, and direct that no further remittance
should be made to the King. . . . The Vizier's territory forms a
barrier to the Company's possessions. . . . The directors view the
treaty of Allahabad as compelling the Government to aid the Vizier
in defending his dominions, but not in the prosecution of new con-
quests or any warlike enterprises." — Letter to Bengal, March, 1775.

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256 LEDGER AND SWORD [1773

whose internal affairs long continued in a deplorable
state. Ispahan had early been ruined; its condition
** between sword and famine " at the time the Com-
pany's factory there was abandoned was (wrote the
agent) "horrible". The luckless Shah Husain sur-
rendered his throne to his Afghan conqueror, and
nearly forty years elapsed before trade to any extent
with Persia was revived. In 1759 the Company's
factory at Gombroon had been taken by the French,
and subsequent native oppression and extortion
had induced the Court of Directors to order the
factory to be given up. It was subsequently fixed at
Bushire, " where," says Malcolm, " it continued sub-
ject to all the vicissitudes of the changing and un-
settled government within the dominions of which
it was established".*

Although the commerce of Bombay had grown,
the Presidency had made neither an extension of
territory nor of political influence. The town of Bas-
sein and the island of Salsette, commanding an en-
trance to Bombay harbour, continued in the hands
of the Portuguese until 1750, when they were con-
quered by the rising power of the Mahrattas. The
Company had long desired to possess Salsette, and
believed that the service which Watson and Clive had
rendered in the matter of the pirates in 1756 should
render negotiations easy. But the Mahrattas were
obstinate, although the Company's resident at Poonah
continued to urge the matter at the Peishwa's Court.

In 1773, after various other attempts had failed,

* History of Pfirsia, Danvers' Report,

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1775] FRANCIS MAKES TROUBLE 257

advantage was taken of the confusion and civil war
which ensued on the assassination of Narrain Rao,
and the election of a new Peishwa. A force sent
against Salsette stormed the principal fort and then
took quiet possession of the island. To secure this
conquest and to obtain some territory in the neigh-
bourhood of Surat, the Bombay Presidency con-
cluded a treaty with Ragoba, one of the aspirants to
the musnud. Ragoba made the desired grants, and
received his price in Company's troops and sepoys
to oppose his competitors. The Presidency sent
Colonel Keating, with 500 European infantry, 80
European artillery, 1,400 sepoys, and 160 Lascars,
with a field-train and some heavier pieces, to assist
Ragoba, who had himself a large army of horse.
On the 1 8th of May, 1775, Keating on the plain of
Arras repulsed the attack of one of the Mahratta
confederacies, but he lost a considerable number of
men and officers, and found his movements im-
peded by a mutiny in Ragoba's camp. That chief,
however, got together some money, paid his troops,
and bought over many of his enemies, and in the
month of July the road to Poonah, the Mahratta
capital, seemed open to him and his English allies.

All this was duly reported to Calcutta, where
the first Bombay advices telling of the alliance with
Ragoba arrived in March, 1775. The Supreme
Council, moved by Francis, promptly interfered.
They ordered the Bombay Presidency instantly to
recall their troops, and, in a moment of imbecility,
sent a Colonel Upton to Poonah. They censured all

the negotiations and operations of the Presidency,
VOL. II. 17

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258 LEDGER AND SWORD [1775

determining, at the same time, that Salsette and the
other territories which had been acquired by them
were to be kept for the Company. Upton's instruc-
tions were to treat with such of the Mahratta chiefs
as the Supreme Council believed the stronger, but
he was likewise provided with a letter to Ragoba
in case he and his party prevailed. Both parties
naturally assumed that the Company sought peace
at any price, and took such a haughty tone that the
same Calcutta Council, which had recently declaimed
against war, soon threatened to bring into the field
the whole of the Company's troops in India.

The Mahrattas were eventually induced to con-
sent to a treaty which reduced Ragoba to seek an
asylum at Surat, and although giving the Company
possession of Salsette and the petty islands adjacent,
divested it of Bassein and the conquests the Bombay
Presidency had just made in Guzerat.

On the other hand, Leadenhall Street upheld
the Presidency against the Supreme Council. On
learning from Bombay of the treaty then pend-
ing it had expressed its approval. " We approve,"
it wrote, " under every circumstance, of the keeping
of all the territories and possessions ceded to the
Company by the treaty concluded with Ragoba, and
direct that you forthwith adopt such measures as
may be necessary for their preservation and defence."
This was amply sufficient authority for Hornby and
his fellow-members of the Bombay Council.

While rumours of the plans and coalitions of
other hosts of Mahrattas for conquest and plunder
were reaching Calcutta, the feud amongst the mem-

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I77S] ENGLISH LAW APPLIED 259

bers of the Supreme Council had attained a height
which threatened to impede and perhaps ruin the
Company's government in Bengal The new-
comers, Francis, Clavering and Monson appeared
bent on the ruin of Hastings. ** They calumniated
him, they raked up information against him out of
the dirt of Calcutta, and they encouraged the greatest
villains of the province to stand forward as his
accusers." He was charged with receiving private
bribes. They brought forward the notorious
Rajah Nuncomar — ** avowed by all parties to be
the greatest villain in all India" — to charge the
Governor-General with this offence. The Regu-
lating Act had framed a Supreme Court of Justice
as well as a Council, and among the judges who
had arrived with the members of this new Council,
Sir Elijah Impey, the senior in rank, was an old
school-fellow of Hastings at Westminster. But
Nuncomar came within the scope of English law,
which the Regulating Act had now established in
the country ; he was tried by a respectable jury,
who found him guilty of an old forgery, and by
English law he was condemned to be hanged. The
trio who had incited him exerted little attempt to
save him ; on the contrary, they kept back a peti-
tion which the Rajah had addressed to the Supreme
Court. As the law then stood, Nuncomar, the
accuser of Hastings, was justly executed.^

But English law was a terrible mistake at this
time. Chief Justice Impey and his associates had

^ Macfarlane*8 British India,

17 •

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26o LEDGER AND SWORD [1775

gone out pledged " to promote by every means in
their power the honour and interests of the Com-
pany". But while perhaps animated by the best
intentions, the nature of the powers assigned to
them was too indefinite, or they were too careless,
and the result was the erection of two independent
and rival powers in India, the Supreme Council and
the Supreme Court. The latter insisted on the strict
imposition of English law ; all fiscal relations became
affected and business was plunged into disorder, and
the payment of revenue became irregular in conse-
quence. The King s judges went further ; from
fiscal and civil interference they proceeded to uproot
the system by which criminal justice was adminis-
tered. The Company, although exercising fully the
authority of Dewan, had been very particular about
appearances. Penal justice was still administered in
the name of the Nawab. The newly-arrived justices
chose to ridicule this useful fiction. The Nawab was
openly laughed at. " With regard to this phantom,"
said one judge, " this man of straw, Maborusk ud
Daulah, it is an insult on the understanding of the
Court to have made the question of his sovereignty."
The encroachments into the Company's rights
and prerogatives continued. The judges assumed
that they " were placed in their present situation for
the express purpose of shielding the natives from the
tyranny of the Company's servants," and " received
with a greedy ear every complaint which was lodged ".
Disgraceful acts of conflict, almost constituting an-
archy, took place. The Company protested against
the usurpation of its government in India by the

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1775] COMPANY PROTESTS 261

Kings judges. It complained that the Supreme
Court had assumed a jurisdiction over persons to
whom the legislature never designed it to extend.
It asserted that the Zemindars in the provinces were
not only dragged to Calcutta without any plea of
right on the part of the court, but that they suffered
" every distress and oppression with which the attor-
neys of the court could contrive to distress and inti-
midate them ". They represented that the Supreme
Court interfered in a very mischievous manner " with
the ordering, management and government of the
territorial revenues," including the powers which that
ordering and government required ; and that the legal
courts, from the highest to the lowest, were paralysed
from an apprehension that their powers might be dis-
puted and their decrees annulled.

On the heels of the disgraceful and tragic episode
of Nuncomar (of which the last was not to be heard
in England for many years to come), the warring
Council turned its attention to the leasing system,
which was found to have failed. Hastings proposed
that each member should draw up a plan and send it
home to the Company for its approval. His own
advised the letting the lands on leases of one or two
lives, giving merely a preference to the Zemindars ;
Francis boldly declared the Zemindars the true pro-
prietors of the soil, and that as recognised free-
holders an adjustment ought to be made with them.
The Company duly condemned both projects, and
ordered that settlements should be made only from
year to year on the basis of an average of the collec-
tion realised for the three years preceding.

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262 LEDGER AND SWORD [1776

By this time Hastings' patience had been tried
to the utmost, and he entrusted to a friend a confi-
dential letter, handing in his resignation to the Com-
pany. This, after some hesitation, was accepted, and
despatches were forwarded, naming Wheeler as the
new Governor, and directing General Clavering, as
senior member, to act until Wheeler s arrival. But,
on the 25th of September, 1776, the majority in
Council had been reduced to an equality by the
death of Colonel Monson. There thus remained
only two on either side, but the casting vote of
the Governor-General gave him the superiority.
Hastings, in consequence, refused to resign, declar-
ing that his friend had exceeded his powers in hand-
ing in the letter of resignation at that time. An
extraordinary scene followed upon Wheeler's arrival ;
but the death of Clavering, which soon happened,
left Hastings in full power.

Hastings and the Company naturally did not
always agree in the course of his subsequent rule,
but to this disagreement it is probable his enemies
chiefly contributed. For the future of British India
it was fortunate that Hastings was now predominant.
The Mahratta chiefs who had been parties to the
treaty with Colonel Upton were weary of their
bargain. When war, as we shall see, again broke out
with France, a French ship had put into one of the
Mahratta ports, and a French agent was living at
Poonah and exercising great influence in that capital.
The Presidency of Bombay wrote alarming letters
to Calcutta, recommending a new alliance with
Ragoba in order to anticipate the designs of the

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1779] HASTINGS' RESOURCES 263

French and the Mahratta chiefs. Hastings had
long been convinced that the greatest danger to
India would proceed from a union of the French
with the Mahrattas, and at once decided on an
appeal to arms in the cause of the abandoned
Ragoba. An army should be sent from Calcutta
to Bombay. Francis and Wheeler protested; but
protested in vain. Ten lakhs of rupees were
forwarded to Bombay by bills, and on the 23rd
February orders were issued for assembling the
forces at Culpee. If the army went by sea they
would have to go round nearly the whole of the
immense peninsula of India, and it was not the
proper season for such a voyage. Nor were there
transports to carry the troops or ships of war to
. give them convoy. " Let the army march by land,"
said Hastings. This bold idea had not yet presented
itself to the mind of any Anglo-Indian soldier or
statesman. ** Francis and Wheeler, and many others,
said the Governor-General was mad. But Hastings
had studied the capabilities of the native troops, and
had high reliance on their steadiness and powers of
endurance ; and he had long wished for an oppor-
tunity to show the might of the Company to some
of the princes and potentates of the interior, who,
from the remoteness of their situation, had hitherto
remained strangers to it" The force consisted of
six battalions of sepoys, one company of artillery,
with a corps of cavalry, under command of Colonel
Leslie. The Bombay force, with which a juncture
was to be effected, comprised 4,500 men under
Colonel Egerton, accompanied by two civilian col-

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264 LEDGER AND SWORD [1779

leagues. The result was a succession of delays and
disasters. Leslie died and was replaced by Goddard.
Egerton's force was followed by the Mahrattas, who
cut to pieces nearly 400 men, and carried off the
greater part of their baggage and provisions. The
two commissioners fell into a state of helplessness
and despair, and even Colonel Egerton declared it
to be impossible to carry back the army to Bombay.
A deputation was sent to the enemy to know upon
what terms they would condescend to permit the
quiet march of the English back to the coast. The
Mahratta chiefs demanded that Ragoba should be
delivered up to them. With this demand Colonel
Egerton and the commissioners complied, excusing
the breach of honour and hospitality by alleging that
Ragoba had opened up a correspondence with the
enemy. When the Mahrattas had got Ragoba into
their hands, they asked another price for permitting
the retreat, and this was nothing less than a new
treaty, by which the English should agree to give
up all the acquisitions they had made in that part
of India since the year 1756, and send orders to
Colonel Goddard to return peaceably to Bengal.
Egerton and the commissioners did as they were
commanded, and signed a treaty to this effect. On
these humiliating terms was the Company's army
permitted to retire to Bombay. Goddard, a soldier
of different metal, disregarded both threats and
treaty, and by a forced march reached Surat in good
order. His achievement naturally brought him
the command of all the Company's forces, and the
Supreme Council having decided to ignore Eger-

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i78o] COMPANY'S NEW TERRITORY 265

ton's convention, Goddard again took the field on
the 2nd January, 1780. After a brief campaign he
reduced the fortress of Dubhoy, carried by storm
the important city of Ahmedabad, the ancient capital
of Guzerat, and surprised and put to flight a Mah-
ratta army 40,000 strong under the two great chiefs,
Scindia and Holkar.

This victory made the Company undisputed mas-
ters of the surrounding territory and the sea-coast,
About the same time the veteran, Sir Eyre Coote.
who had arrived from England to succeed General
Clavering, readily gave his support to Hastings'
scheme of repelling the Mahrattas from the territories
of the Rajah of Gohud. In the course of a brilliant
campaign Popham, who was given the command, took
by escalade the fortress of Gwalior, one of the very
strongest in all India, built upon a lofty and almost
perpendicular rock, and at that time defended by a
numerous garrison. Upon the fall of Gwalior, the
Mahrattas fled from all that part of the country.

But, although the Mahrattas were thus for a time
reduced to keep the peace, it was far otherwise with
Haider Ali and his Mysoreans, who now threatened
to overthrow the whole of the Company's power on
the Coromandel Coast.

Sir Thomas Rumbold had reached Madras in
February, 1778. We have seen that in Bengal,
in 1769, the Company had appointed supervisors to
travel through the country and ascertain by close
observation and inquiry the precise extent and sources
of the revenue, the manner in which it was collected
and the state of the administration of justice. In

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266 LEDGER AND SWORD [1778

1777 the Court of Directors, disappointed in their
pecuniary expectations from the new territorial pos-
sessions, resolved to carry out a similar plan from
Madras. A Committee of Circuit was appointed
to investigate the administration of the Northern
Circars, with special reference to the condition and
treatment of the Zemindars, what was the military
force of each of these petty princes, his military and
household expenses and his means of defraying them.
The Company stated it was its intention to let the
lands, when their leases had expired, for a term of
years, the same as in Bengal. It was not its intention,
however, to deprive the hereditary Zemindars of this
income, but to allow them to choose between taking
the lands, under an equitable valuation, or retiring
upon a pension. At the same time the Court de-
signed to take the military power into its own hands,
and to prevent the Zemindars from maintaining those
bodies of troops which would enable them to en-
danger the State.

This Committee of Circuit had been appointed
and had made some progress in their inquiry when
Sir Thomas Rumbold arrived at Madras. The
recent troubles in the Council had occasioned a
suspension of members, and the new Governor gave
it as his opinion that the travelling Committee was
too costly, that its members were needed in the
Council at Madras. Everything they wished to
accomplish might be done as effectually, and much
time saved, by sending for the Zemindars to repair
to the seat of government and there interrogating
them. The Committee was in consequence sus-

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1778] TRIBUTE OF THE ZEMINDARS 267

pended and the thirty-one Zemindars summoned to
Madras. Against this step the Provincial Councils
appealed in vain. They urged that the Zemindars
were really poor men, ** hardly able to support their
families with any appearance of dignity ; that many
of them were altogether unable to defray the ex-
penses of a distant journey, and of a residence for
any considerable time at the seat of government ;
that the greater part of them were in debt, and in
arrears to the Company ; that they must borrow
money, to enable them to undertake the journey, and
still further incapacitate themselves for fulfilling their
ci^gagements ; that their absence would greatly
augment the confusions of the country, obstructing
both the collection of the revenue and the prepara-
tion of the investment; and that some of them
laboured under the weight of so many years, and so
many bodily infirmities as to render the journey
wholly impracticable ".

Nevertheless, Rumbold and his Council were ob-
durate, and eighteen Zemindars duly appeared at
Madras to wait upon the Governor to have their
holdings appraised and the amount of their tribute
to the Company fixed. A great deal of contumely
has been heaped upon Sir Thomas Rumbold for his
alleged ill-treatment and robbery of the Zemindars,
instigated largely by those members of the Provin-
cial Councils who thought themselves being de-
frauded of their share of the plunder. As Hayman
Wilson points out : " The exactions at the Presi-
dency were probably more moderate than those of
the Province. The settlements made with them

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268 LEDGER AND SWORD [1778

were not unreasonable or injudicious." Especially
was much noise in England made by the episode
of Vizeram Raz, the Rajah of Vizanagaram. He
was the most important Zemindar in the Northern
Circars, his territory was equal to a considerable
kingdom, and his ** power had hitherto," according
to Mill, ** held the Company in awe ". This Rajah
had a brother, Sitaram Raz, and a cousin, Jagannath
Raz, who were both competitors for the control of
the principality and the handling of the revenue.
The former had succeeded in ousting the latter from
office, and in spite of the Rajah's complaints, ob-
taining for himself from the Madras Presidency the
appointment of Dewani or financial administrator.
"We are convinced," observed Rumbold to Vizeram
Raz, ** that it is a measure which your own welfare
and the interest of the Company render indispens-
ably necessary. But should you continue obstin-
ately to withstand the pressing instances that have
repeatedly been made to you by the Board, con-
junctively as well as separately, we shall be under
the necessity of taking such resolutions as will in all
probability be extremely painful to you, but which,
being once passed, can never be recalled." To
this Vizeram Raz replied : ** I shall consider myself
henceforward as divested of all power and conse-
quence whatever, seeing that the Board urge me to
do that which is contrary to my fixed determination,
and that the result of it is to be the losing of my
country."

Yet it was considered necessary by the Presi-
dent to have a man of ability to keep order in the

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1779] THE COMPANY AND RUMBOLD 269

country and to ensure the revenues. In a letter
from the Court of Directors to the Presidency of
Madras, dated loth January, 1781, they say : "Our
surprise and concern were great on observing the
very injurious treatment which the ancient Rajah of
Vizianagaram received at the Presidency ; when,
deaf to his representations and interests, you, in the
most arbitrary and unwarrantable manner, appointed
his ambitious and intriguing brother, Sitaram Raz,
Dewan of the Circar, and thereby put him in posses-
sion of the revenues of his elder brother, who had
just informed him that he sought his ruin ; for how-
ever necessary it might be to adopt measures for
securing payment of the Company's tribute, no cir-
cumstances, except actual and avowed resistance of
the Company's authority, could warrant such treat-
ment of the Rajah ".^

As a matter of fact, and on the testimony of the
most trustworthy witnesses, no friends to Rumbold,
the arrangement was a most excellent one ; it worked
well in practice ; the two brothers lived in harmony ;
the revenues were regularly paid. But the Com-
pany was convinced that Rumbold and the Council

1 It was declared in a resolution, moved in the House of Com-
mons by Mr. Dundas, afterwards Lord Melville, " That the Governor
and majority of the Council of Port St. George did, by menaces and
harsh treatment, compel Vizeram Raz, the Rajah of Vizianagarum,
to employ Sitaram Raz, as the Dewan or manager of his Zemindary,
in the room of Jaggernaut, a man of probity and good character ;
that the compulsive menaces made use of towards the Rajah, and
the gross ill-treatment which he received at the Presidency, were
humiliating, unjust and cruel in themselves, and highly derogatory
to the interests of the Bast India Company, and to the honour of the
British nation **.

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270 LEDGER AND SWORD [1778

had been guilty of corruption, that there had been
double-deaJing between them and Sitaram, to the
Company's disadvantage. " The report of the
Committee of Circuit," it wrote in the same letter,
" and the positive evidence of Sitaram Raz, warrants
us in asserting that more than double the amount of
the tribute for which you have agreed, might and
ought to have been obtained for the Company."
Charges soon reached them of vast sums of money
changing hands, of which no official account was
rendered to Leadenhall Street. There also appeared
one significant fact, tending to Rumbold's condemna-
tion. " According to one of the checks devised by
the Company upon the corruption of their servants,
if Sir Thomas Rumbold possessed in India any
money on loan, or merchandise on hand, at the
time of entering upon his office, he was by his
covenant bound, before he proceeded to recover his
money, or dispose of the goods, to deliver to the
Board a particular account of such property upon
oath : that upon an accurate examination of the
records of the Council during the whole of Sir
Thomas Rumbold's administration no proceedings
to that effect could be found : that Sir Thomas
Rumbold, nevertheless, had remitted to Europe,
between the 8th of February, the day of his arrival
at Madras, and the beginning of August in the
same year, the sum of ;^45,ooo, and during the two
subsequent years a further sum of ;^ 119,000, the
whole amounting to ;^i 64,000, although the annual
amount of his salary and emoluments did not exceed
;^ 20,000."

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1778] GOMBROON GIVEN UP 271

But this by no means made out a clear case of
corruption against Sir Thomas Rumbold, for he
rendered evidence, certainly plausible, if not con-
vincing, that he had sufficient property in India at
the time of his return in 1775 to account for the
remittances he had since made. This property was
proved to amount in 1772 to ;^i 11,000, bearing
interest at from 8 to 10 per cent. No addition to
Rumbold's fortune had been made in England since
1 769, so the inference was that no remittances had
been made. There is, it is true, a discrepancy to be
accounted for, but the evidence tends to show that
if Sir Thomas Rumbold had been corrupt, he had
been corrupt in 1772 at Calcutta, and not in 1778
at Madras.*

The Company in 1778 ordered an entire removal
of its servants and effects from Bussora, and Bushire
became the head station for the Company's Persian
trade. Yet in view of an impending war with
France it was thought prudent to retain a single
servant at the former place as resident. Previously,
an effort had been made to revive the factory at Gom-
broon as a residency under orders from Bombay, " its
position being better both for procuring supplies of
raw silk and of Caramania wool than Bushire ". But
Leadenhall Street was heartily sick of Gombroon,
and countermanded the order, so that during this

^ Sir Thomas died on nth November, 1791, at the not advanced
age of fifty-five, broken by long service in India and still more by the
cruel usage he had experienced at home. See The Real Facts Concern^
ing Sir Thomas Rumbold, a pamphlet in which the absurd legends
ponceming his origin and career are effectually disposed of.

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272 LEDGER AND SWORD [1778

period the spectacle we see in this part of the world
is that of harassed factors travelling up and down
the Persian Gulf, setting up and pulling down
factories, bargaining and quarrelling with Khans
and governors, fighting Arabs and the plague, and
expecting daily new dangers in the shape of French,
Turk or Persian. The latter had conquered Bussora,
but in 1779 a revolution occurred which resulted in
the place again falling into the hands of the Turks.
Bushire was at the same time invaded by banditti
who plundered the town and forced the traders to
pay some 40,000 rupees. It was soon after this that
the Sultan prohibited all Christian vessels from trad-
ing to Suez, an order which had the effect of in-
creasing the importance of Bussora, as the only
port from whence goods could be sent from the
East to Aleppo and Constantinople. After this
both Bussora and Bushire were presided over by
residents independent of one another, but both
subordinate to the Government of Bombay.

In July, 1778, news reached India that war had
again broken out between France and England.
The French factories at Chandernagore, Masulipatam
and Carical promptly surrendered on demand, and
the fortifications at Pondicherry, after a short siege,
were blown up and the garrison made prisoners.
When the Company's force proceeded to attack
Mah6, Haider Ali protested, declaring all foreigners
on the Malabar coast were under his protection.
Moreover, there was another body of Frenchmen
who, although they had for years threatened trouble,
the Madras Council had been unable to dislodge.

Digitized by VjOOQ IC

1779] FRENCH THREATEN TROUBLE ^73

In order to explain their presence there, it is need-
ful to go back a few years.

When the Nizam had granted the Company the
Northern Circars, he had stipulated that one of them,
Guntoor, should be granted in jaghire to his brother,
Bazalut Jung, for life, or upon good behaviour.
With death or misconduct, the territory's revenue
would revert to the Company. In the autumn of
1774 President Wynch was informed by the Com-
pany's chief agent at Masulipatam that a body of
French troops under the command of Lally were
retained in the service of this same Bazalut Jung.
Surprised and alarmed, Wynch instantly wrote to
the Supreme Council of Bengal, who empowered
him and his Council to take measures to have the
French expelled from Bazalut Jung's service, on the
threat of withdrawing from him the revenues of
Guntoor. The Madras Council thereupon opened
up a correspondence with the Nizam, which was
protracted to the opening of the year 1776. On
the arrival of Rumbold, the French were still known
to be in Bazalut Jung's territory, but nothing decisive
was done until July, 1778, when, recognising a
source of possible danger, it was resolved to abandon
negotiations with the Nizam, and commence others
with the offending prince himself. Apprehensive
of the designs of Haider Ali, Bazalut Jung was
advised to come to terms with the English. He
agreed, in January, 1779, to cede Guntoor for a
certain annual payment, to dismiss the obnoxious
Frenchmen, and to accept an offer of Company's
troops for the defence of his country.

VOL. II. 18

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i74 LEDGER AND SWORD [1780

But when the Nizam was apprised of this trans-
action by an agent sent to Hyderabad, together with
the Madras Councirs decision not to pay further
any tribute or peishcush for its holding of the five
Northern Circars, he angrily declared that the treaty
of 1 768 had been violated. Although he had been
hitherto neutral in the contest with the Mahrattas,
in spite of his predilections for the latter, he now
declared that he should make ready for war.

In due course the Calcutta Council was apprised
of these proceedings. It unhesitatingly condemned
the action of Madras. A letter was written to the
Nizam assuring him of the pacific intentions of the
Company, in spite of what Rumbold and his Council
had said and done. At the same time they wrote
to Madras, where their interference was received
with the utmost resentment. Rumbold and his
colleagues utterly denied the right of the Supreme
Council to interpose their authority during inter-
mediate negotiations between a Presidency and a
native power ; and also took occasion to arraign the
whole policy and conduct of the Calcutta Council in
the business of the Mahratta war. And truly the
reproaches of Calcutta at this moment came ill from
the lips and pens of men who had so little considera-
tion for the Moguls and Nawabs who figured in
their own transactions.

For years Haider Ali had been concerting schemes
with the French at Pondicherry, improving and in-
creasing his army and plundering his neighbours. In
the summer of 1780 he quitted Seringapatam and
poured through the Ghauts with 15,000 drilled in-

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i78o] HAIDER ALI MAKES WAR 275

fantry, 40,cxx) peons, 28,cxx) cavalry, 2,cxx) artillery
and rocket-men, and 400 French and other European
adventurers. There was a complete staff of French
officers to guide the operations, and the artillery
exceeded 100 pieces of all calibres.

All Haider's preparations, as well as his hos-
tile intentions, ought to have been perfectly well
known to Rumbold and his Council at Madras. Yet
so late as February, 1780, the Court of Directors
received from Rumbold a letter declaring that there
was "every prospect of tranquillity," ^ and acting as if
Madras and the Company's interests were free from
the possibility of attack in this quarter. On the 6th
April Rumbold, having resigned office on account
of ill-health, set sail for England.

The presidency of Madras had an empty ex-
chequer, a divided Council, an army of 6,000 men,
mostly sepoys ; and these troops, wholly unprepared,
were scattered over a wide tract of country. As for
the forces of Mohammed Ali, there was no reliance
to be put in them ; they ran away, or they deserted
to Haider so soon as his army defiled through the
Ghauts. The Mysoreans captured and plundered
Porto Novo on the coast and Conjeveram, close to
Trichinopoly, and kindled fires that were seen by
night from the top of Mount St. Thomas, close to
Madras. Rumbold's successor sent to Calcutta to
implore help and then proceeded to issue the most

' Yet it must also be said that Hastings had likewise written the
previous month, '* I am convinced from Hyder's conduct and dis-
position that he will never molest us while we preserve a good
understanding with him ".

18*

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276 LEDGER AND SWORD [1780

contradictory orders to the officers commanding the
Company's scattered army, whose commanders were
without concert or good understanding. Colonel
Baillie allowed himself to be surrounded near Con-
jeveram by Haider's main body. His weak bat-
talions defended themselves most gallantly for many
hours until Baillie went forward, waving his white
handkerchief to ask for quarter, and ordered his men
to lay down their arms. Then ensued a cowardly
butchery of one-half of the English who had survived
the carnage of the battle, and captivity to the rest.

All this time Sir Hector Monro, with another
division of the Madras army, was within a short
march of Haider's rear. Had he advanced the
Mahrattas must have been defeated ; but it was
pleaded that his rice-bags were empty, and his
troops half starved. The money which Hastings
was collecting in Bengal had not yet arrived.
After the catastrophe to Baillie, Sir Hector aban-
doned his tents and baggage, threw his heavier
guns into a tank, and fled to Madras. A great
part of the country was again laid waste, and within
a few weeks Wandewash, Chingliput, Vellore and
Arcot were either captured or closely besieged.

All depended now on Hastings, if the Company
was not to lose the Carnatic and the Northern
Circars. He despatched fifteen lakhs of rupees to
Madras as a present supply for the army, with a
promise that more should be forthcoming. "His
missives and agents were sent flying through the
country to procure it — at Murshedabad, at Patna,
at Benares, at Lucknow, in every place where the

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I78i] COMPANY'S SEVERE CENSURE 277

Governor-General had a claim, or could invent one
— for all considerations gave way in his mind to the
paramount duty of preserving the British Empire in
the East." Rumbold's successor, Whitehill, was re-
called, and Sir Eyre Coote invited to take the com-
mand. A French fleet arrived to aid Haider AH,
but, as there was no convenient landing place, and
dreading a superior British squadron, departed for
Mauritius early in 1781. On the ist July Coote
gave the Mysorean a sound beating, which was
repeated twice during the summer. Haider was
routed with terrible loss, and the Company's fortress
of Vellore, one of the keys of the Camatic, was
relieved and saved. The rains, the monsoon floods,
and the rising of the rivers, put an end to the cam-
paign ; but before Coote retired into cantonments,
Chittore, Palipet, and other places were regained.

But the Company was already deeply dissatisfied
with the Madras Council for reasons already detailed.
On receiving the despatches from Calcutta, the Com-
pany, on the loth January, 1781, took stern measures.
In a letter of the Court of Directors of that date,
after passing the severest censure upon the abolition
of the Committee of Circuit and the proceedings with
the Zemindars of the four Northern Circars, on the
treaty with the Bazalut Jung, the transactions with
the Nizam and the lease of Guntoor to the Nawab,
they dismissed from their service Sir Thomas Rum-
bold,^ President, John Hill and Peter Perring, Es-
quires, members of their Council at Fort St George ;

^ Rumbold had returned to England some months.

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278 LEDGER AND SWORD [1781

deprived of their seat in Council Mr. Smith and Mr.
Johnson, and expressed their strongest dissatisfaction
with the commander of the Company's forces, Sir
Hector Munro.

In June, Lord Macartney arrived at Madras as
Governor of that Presidency, bringing intelligence of
the declaration of war between England and Holland.
He proceeded to gain possession of all the Dutch
factories or settlements on that coast Sadras and
Pulicat surrendered without fighting. The prize at
Negapatam in arms, warlike stores and merchandise
was considerable, and afforded opportune aid to the
Company's .fleet and army. There was nothing
further here to take from the Dutch. But in Ceylon,
which the Dutch had most jealously guarded for
more than a hundred years, they held the town and
port of Trincomalee. On the nth of the same
month the English were masters of the town and
port — one of the most important harbours in all
India.

The Company's hereditary trading rivals, the
Dutch, were thus expelled from every station ** with-
in the limits of the Indian seas ". But the Carnatic
was exhausted. The Nawab, called upon for funds
to carry on the war, made profuse excuses but pro-
duced no rupees. Macartney had no alternative
but to propose that the Nawab should imitate his
brother of Bengal and make over to the Company
all authority over his revenues and become a pen-
sioner on its bounty. Mohammed AH coolly replied
that he had already arranged for such a contingency
with Macartney's superiors. The Madras Governor

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I78i] MANCEUVRES AT SEA 279

pocketed his humiliation and at once nominated col-
lectors to superintend the Dewani, and after deduct-
ing one-sixth of the revenue for the Nawab's share,
transferred the balance to the treasury at Madras.

While these financial negotiations were in pro-
gress, the French Government had sent out the
valiant Bussy with numerous troops and a squad-
ron under Admiral Suffren to India. Near the
Cape de Verde Islands the French encountered the
squadron of Commodore Johnstone, who, after an
indecisive battle, followed him as far as the Cape of
Good Hope, but preferred capturing five rich Dutch
East Indiamen in Saldanha Bay. Johnstone re-
turned home with his prizes ; but a part of his
squadron, with transports having on board British
troops, followed in the track of Admiral Suffren for
India.

Severe fighting took place on the Malabar side
of Haider Ali's dominions early in 1781. On the
opposite coast of the Peninsula the British admiral,
Hughes, leaving a small garrison at the Company's
new possession, Trincomalee, returned to Madras,
where he soon sighted the French fleet But
although a naval battle took place, Bussy was able
to land his troops, artillery and stores, and join
Tippoo, the son of Haider Ali. From Cuddalore
they marched upon Wandewash. Sir Eyre Coote,
though now worn out by age, and suffering from a
recent apoplectic attack, advanced rapidly to the
relief of that place, and on the 24th of April en-
camped on the very spot where he had defeated
Lally and Bussy twenty- two years before. He had

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28o LEDGER AND SWORD [1781

been reinforced by some of the fresh British troops
which had been landed in February. Instead of
accepting the battle, Bussy and Tippoo beat a
retreat. It seemed as if the issue on land would
have to be decided at sea. On the 3rd of July
another drawn battle was fought between the
French and English, after which the former went
to anchor at Cuddalore and the English at Madras.
Afterwards the French admiral made again for
Ceylon, and, being joined on that coast by two
more ships of the line fresh from Europe, and
with land troops on board, captured Trincomalee
before Hughes could return. Another battle far
more desperate than any of the others followed, in
which the French suffered severely, but retired to
Trincomalee.

Coote, about to attack the French at Cuddalore,
pressed Hughes to remain to co-operate at Madras,
but the latter declined, and narrowly escaped the
monsoon in October. According to one writer : —

** In the course of that night the well-known roar
of the coming monsoon was heard at Madras, and
surf began to shake the coast ; and by the next
morning the strand was covered with wrecks or
fragments of merchant ships that had stayed behind
when Hughes took his departure. With these ships
had perished all the rice and other provisions of
Coote's army. There had been scarcity before, but
now there was famine. Thousands of the poor
natives of the Carnatic, who had fled from Haider
to seek refuge in Madras, were the first to feel the
horrors; calling upon the English for help, which the

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1782] PEACE WITH THE MAHRATTAS 281

English had not the means of giving, they died by
hundreds." It was stated that 10,000 died before
the Company's Governor could obtain a supply of
rice from Bengal, while 500,000 perished throughout
the Camatic.

Coote, already dying, resigned his post to
General Stuart and departed for Calcutta. Else-
where in India the Company's forces under General
Goddard had been continuing a weary campaign
against the Mahrattas. The Court of Directors,
as well as Hastings, were heartily sick of this war,
and instructed its servants to do their utmost to
bring it to a conclusion. A treaty was finally brought
about at Salbye, 17th May, 1782, by the Company's
agent, David Anderson, and the agent of the Peishwa.
The Company was to have all it had conquered since
1775; Ragoba Rao was to enjoy a pension of 25,000
rupees ; and free trade was to be allowed. By the
time the Company received this treaty its powers as
a free agent had practically passed to the British
Government.

In reviewing this huge and disastrous conflict
whose sole end was to crush the Company's power
and restore the native ascendency, only that it
should inevitably pass in turn to the French, it is
impossible not to be struck by the fact that while
general incompetency distinguished so many of the
British leaders, the trader and civilian comes out of
the ordeal far better than the King's officer. In
every part of India is Hastings' eagle eye and
directing finger seen. He is training and despatch-
ing sepoys here, raising rupees by extraordinary

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282 LEDGER AND SWORD [1782

means there ; bargaining at Benares, from which
place he is at one moment seen flying for his life ;
afterwards threatening and cajoling at Lucknow and
sending his agents and couriers to every part of
India bearing messages of encouragement to the
Company's friends, intimidation to its dependents
and defiance to its enemies.

Sometimes his interference with the local author-
ities of the Company was as bitterly resented as the
" King s servants " resented the directions of the
Company's governors. But Hastings seems to have
felt that the salvation of India depended upon his
individual exertions and chiefly upon his ability to
raise money at a time when the embarrassed Com-
pany at home had none to send and the Presidencies
at Madras and Bombay were bankrupt. That he
resorted to strange and doubtful methods seems
undeniable, but as one of his admirers has said :
" For these great ends, such were the intenseness
of purpose and the enthusiasm of the man, Hastings
would have coined his own body and soul into rupees,
had such a process been practicable, at the moment
of crisis, when the Mahrattas, Haider Ali and the
French had their talons on the Camatic ".

One of the acts of Hastings which is familiar to
all readers of Anglo-Indian history was his conduct
towards Cheyte Singh, the Rajah of Benares, from
whom he first demanded a huge tribute, then arrested
in his own capital and finally put to flight. A suc-
cessor was appointed ; the tribute to the Company
was raised to forty lakhs of rupees and the Governor-
General took the entire jurisdiction and management

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1782] DEATH OF HAIDER ALI 283

of the city and country into his own hands. The
last vestige of sovereignty, the mint, was taken from
this boy Rajah and put under the control of the
Company's resident at Benares. By this revolution
an addition of about ;^200,ooo a year was made
ultimately to the revenues of the Company. An-
other incident was his plunder of hidden treasure of
the two Begums, which two ladies had provoked an
insurrection in Oudh and encouraged Cheyte Singh's
followers after the massacre of the Company's sepoys
and officers in Benares. This extortion, only justi-
fied by the Company's severe straits, evoked at the
celebrated trial of Warren Hastings in Westminster
Hall the scorn and indignation of the Parliamentary
orators. It is enough to say that the stories of the
extortion and of the torture of the two eunuchs were
grossly exaggerated In 1803, more than twenty
years after the imprisonments and alleged tortures,
Lord Valentia found at Lucknow, "well, fat and
enormously rich," Alivas Ali Khan, on whose suffer-
ings Burke had been so indignant and so pathetic.
After all the cruel plunderings he was said to have
undergone, this eunuch was reputed to be worth
half a million sterling. He was upwards of eighty
years of age, six feet high, and stout in proportion ;
he had been an active and intriguing courtier, and a
rigorous tax-collector; he was now almost in his
dotage and the Nawab was eagerly looking for his
inheritance. The younger of the two Begums, whose
sad fate had caused so many tears to be shed in
England, was also alive, hearty, and very rich !
The death of Haider Ali, ** the greatest and most

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284 LEDGER AND SWORD [1784

formidable enemy to whom the English have ever
been opposed in the East," occurred on 7th Decem-
ber, 1 782. Tippoo hastened to ascend the throne of
Mysore, and in his absence Governor Macartney,
for the Company, urged General Stuart to attack the
enemy's troops temporarily deprived of their leader.
The General's answer betrayed the weakness of the
whole present system of British management in India.
He took the same haughty tone Coote had taken ;
he *' questioned the right of any Company's servant
to dictate how it behoved the leader of the King's
troops to act ". Eventually, but not until 5th Febru-
ary, he took the field. The immense Mysorean army,
now again headed by Tippoo, retired before the Eng-
lish, who soon afterwards, in the midst of fighting on
land and sea, received news of peace between France
and England.

Bussy was ready to agree to a cessation of hos-
tilities, and wished Tippoo to join him in arranging
for peace. But that chief was in no hurry, and con-
tinued to besiege Mangalore, which, through the
wretched misunderstandings and incapacity of the
authorities without, was compelled to capitulate.
This brought the war to an end, and on nth
March, 1784, a treaty of peace was signed, to the
universal relief.

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CHAPTER X.

Parliament Regulates the Company.

While, alas for the Company's exchequer ! a general
war in India was raging, and its servants were bend-
ing every energy to quench it, at home the Com-
pany was beginning to be concerned about its
expiring charter, which, as we have seen, was to
terminate after three years' notice from 25th of
March, 1780.

In 1779 it managed to repay the public loan of
;^ 1, 400,000, and reduce its home debt to ;^ 1,500,000
sterling. On these conditions its dividends were per-
mitted by Act of Parliament to advance to 8 per cent,
for one year, a permission repeated in 1 780.

Many examples had been furnished from time
to time of the absolute impracticability of a system
which failed to ensure what Parliament desired —
a thorough co-operation between King and Company
in India. One such will suffice : —

As soon as the truce was concluded with Bussy,
the Governor and Council of Madras unanimously
resolved that General Stuart should be de-
prived of the command. Stuart insisted that the
Company could dispose only of the command of its
sepoys, and that he, as an officer in His Majesty's
service, had a right to retain the command of the
King's troops. He spoke loudly of using force

285

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286 LEDGER AND SWORD [1781

against force. Decisive steps were necessary, and
Lord Macartney took them. He despatched his
private secretary and the town adjutant, with a party
of sepoys, to capture the general in his villa near
Madras. Stuart was carried to the fort, and in a
day or two shipped off for England.

But this conflict of authority between civil and
military was hardly less than the conflict between
the civil and judicial authority which had, as we
have seen, early appeared in Bengal.

In 1780 the Company came forward with two
petitions to Parliament, one from the principal British
inhabitants in Bengal, and the other from the
Governor-General and members of the Supreme
Council. These were immediately referred to a
Select Committee, before which the counter-state-
ments of the Chief Justice were likewise laid. Mean-
while, in Calcutta, Hastings had discovered an
expedient for putting an end to the worst features
of the system, by dividing the business of the pro-
vincial courts and establishing a separate appeal
court, to which Impey was appointed, with a large
salary. This arrangement was finally adopted, and
the Chief Justice was no sooner put at the head of
the Company's civil judicature than the feud was,
as if by magic, healed between the rival authorities.
But, however efficacious the plan was, it pleased
neither Company nor Parliament. It was roundly
denounced as illegal ; Impey was recalled ; the use-
ful innovations were banned, and an Act came to be
passed in 1781 to regulate the Supreme Court, and
by restricting its jurisdiction to Calcutta, to deprive

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i78i] COMPANY AND LORD NORTH 287

it of all excuse for interference in the general ad-
ministration of the country.

Both parties, Parliament and Company, were
now face to face for a final struggle. Lord North,
asserting the right of the Crown to all territory
acquired by British subjects,, wished to claim the
whole of the Company's conquests. The Company,
not unprofitably witnessing the decline of the royal
authority in another part of the world, boldly affirmed
its title to all that its own arms and treasure had
won. A great contention of its opponents was not
only that it had been guilty of great crimes, but that
it had failed commercially. The cotton products of
the Manchester looms were driving Indian calicoes
from the market. Yet the Company was still
the first mercantile corporation in the world. Its
assets were treble the value of its liabilities. It
had not merely overborne all rival companies in
Great Britain, but in Europe. Its dividend
amounted to ;^2 50,000 a year ; it brought the
nation a revenue of ;^ 1,300,000; how, then, could
it have been said to have failed?

As the negotiations were set on foot the Com-
pany's enemies in the nation arose in a phalanx.
Its chief servant, Warren Hastings, was accused of
high crimes and misdemeanours. The public mind
was excited : America was all but lost to the Em-
pire ; India would follow America. The Ministry of
Lord North, which was responsible for the one dis-
aster, seemed too feeble to grapple with the problem
presented of what to do with the Company and its
unwieldy burden in the East Yet it behoved the

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288 LEDGER AND SWORD [1781

Ministers to make an attempt now that the question
of the Company's charter was before Parliament

The Ministry did not " intend," Lord North said,*
" to state any specific proposition relative to the future
management of the Company's affairs. Still he held
it to be his duty to state to the House some points that
would be very proper for them to consider before
they should proceed to vote. First, the propriety of
making the Company account with the public for
three-fourths of all the net profits above 8 per
cent, for dividend ; secondly, of granting a renewal
of the charter for an exclusive trade for a short rather
than a long term ; thirdly, of giving a greater de-
gree of power than had been hitherto enjoyed to the
Governor of Bengal, that in future among the mem-
bers of the Council, he might be something more
than K primus inter pares, equal, with the name of
chief; fourthly, of establishing a tribunal in England
for jurisdiction in affairs relating to India and punish-
ing those servants of the Company who should be
convicted of having abused their power ; fifthly, the
propriety, as all the despatches received from India
by the directors were by agreement shown to His
Majesty's Secretary of State, of making all despatches
to India be shown to him before they were sent, lest
the directors might at some time or other precipitate
this kingdom into a war, without necessity, with the
princes of that country ; sixthly, he said, it would
be the business of the House to determine upon what
terms, and whether with or without the territorial re-

* Speech of 9th April, 1781. — Parliamentary History,

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i78i] COMPANY'S CHARTER RENEWED 289

venues, the charter should be renewed ; seventhly,
whether, if Government should retain the territories,
it might not compel the Company to bring home the
revenue for Government ; and eighthly, whether any
and what regulations ought to be made with respect
to the Supreme Court of Judicature,"

** Of these propositions," it has been said, ** the
third, the fourth and the fifth are remarkable as the
archetype, from which were afterwards copied three
of the principal provisions in Mr. Pitt's celebrated
East India Bill." '

The Company did not petition for a renewal of
its charter until the 26th June, 1781. In the mean-
time the House of Commons had listened to peti-
tions from the Company, from the Governor-General
and Council of Bengal and a number of British sub-
jects in that province, against the proceedings of
the Supreme Court, and the matter after debate had
been referred to a Special Committee, of which
Edmund Burke and others of the Opposition were
members. When the news of Haider Ali's inva-
sion of the Carnatic arrived, the Minister appointed
another and Secret Committee. Both duly presented
numerous reports ; and we have already seen the
partial results of the one so far as the Supreme
Courts were concerned. On the Company's petition
for a renewal of its charter, a bill was agreed to con-
tinuing its privileges for ten years, or until ist March,
1 79 1, on condition that ;^400,ooo was paid to the
Government in consideration of their having received

' Mill.
VOL. II. 19

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290 LEDGER AND SWORD [1781

nothing from the Company since the latter liquidated
its loan in 1778 ;^ that thereafter the Company pay
out of its clear profits a dividend of 8 per cent, on
its capital and out of what remained three-fourths
was to go to the nation. As to the claims regarding
territorial ownership, a decision on that point was
again postponed.

Only one other point was insisted upon in this
Act, but it was an important one. It virtually took
out of the hands of the Company the privileges of
initiative and control. Parliament had previously
reviewed and readjusted the Company's executive
Acts ; it now took a hand in their formulation. All
despatches sent to India with respect to revenue or
civil or military affairs were ordered to be laid before
the Ministry, in all matters of war and peace, or
treaty, the Company ** should be governed by direc-
tions which Ministers might prescribe ".

It need hardly be added that there turned out to
be many loopholes of evasion in practice : but that
was the formal understanding in 1781. The Com-
pany, at least, could it pull through the present
financial troubles, seemed safe for another decade.
Readers who have followed this history cannot fail
to remark upon the number of such trials and
acquittals, of petitions and investigations, ordeals
and escapes, to which the Company had already
been subject. It had been at the mercy of King,
it had been at the mercy of Parliament, it had been

^ Yet the Company had been most munificent towards the Royal
Navy by granting bounties in 1779 to raise 6,000 seamen, and by
building three 74-gun ships.

Digitized by VjOOQ IC

1782] LORD NORTH RESIGNS 291

at the mercy of the mercantile interests of the realm :
its privileges were always being questioned : its
monopoly was forever being attacked. There was
always some party clamouring for its downfall.
Formerly they had been jealous of its prosperity: now
when it was supposed to be growing indigent it was
execrated for its misdeeds. The body of the nation
began to look upon it as a disappointed buccaneer,
which had fallen upon and plundered innocent people
fruitlessly. They charged it with attempting to
wreck the British Empire in India. They forgot that
that Empire was the slow creation of a body which
with its ambitious projects would long ago have
perished of neglect had it been left to the tender
mercies of either Crown or Parliament or the British
people.

Lord North resigned in March 1782, and was
succeeded by the Marquis of Rockingham. On the
ninth of the following month, the chairman of the
Secret Committee, in moving his report, spoke for
three hours on **the causes and extent of the
national calamities in the East '*. He charged the
Company and its servants with shameful misconduct :
the one, in India, for having ** plunged the nation into
wars for the sake of conquest, condemned and violated
the agreement of treaties, and plundered and op-
pressed the people of India," the other, at home, for
having "blamed misconduct only when it was un-
attended with profit, but exercised a very constant
forbearance towards the greatest delinquency as
often as it was productive of extemporary gain ".

Sir Thomas Rumbold was selected as a convenient

19*

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292 LEDGER AND SWORD [1782

victim : a bill of pains and penalties was drawn up
and read twice, but the Ministry was too feeble and
the business dropped. The action to procure the
recall of Hastings, which had been agreed to by the
Court of Directors, shared a similar fate, the Court
of Proprietors by an overwhelming vote refusing to
agree to Hastings' recall.^ Sulivan, the Company's
chairman, escaped with the formal censure of the
House.

On Rockingham's death Lord Shelburne became
Prime Minister in July 1782. On the 5th March
following, the Company petitioned Parliament, openly
confessing the fact that by reason of the late troubles
in India it was unable to comply with the terms
lately exacted from it by the Crown. It had paid
jiCsoo.ooo of the required ;^400,ooo for the public
benefit.

It stated that the advances which the public
had made ** were made under mistaken ideas of the
petitioners' pecuniary abilities " ; that the aid neces-
sary up to the 1st of March, 1784, would not be less
than ;^900,ooo; they prayed either for reimburse-
ment or that they be allowed to increase their bond
debt without diminishing their dividend, which would
affect their credit ; that they be not required to share
anything with the public till the increase thus made
of their bond debts be again wholly reduced ; that

^ The vote of the Court of Proprietors, in opposition to the recall
of Mr. Hastings, was severely reprobated by Mr. Dundas, at the
beginning of the next session of Pariiament, when he moved that all
the proceedings in relation to it should be laid before the House ;
and pronounced it an act both dangerous in principle and insulting
to the authority of Pariiament. — Mill.

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1783] CHARLES FOX IN POWER 293

the term of their exclusive privileges, a short term
being injurious to their credit, should be enlarged ;
and that the petitioners be relieved from that share
of the expense attending the armies of the King s
troops and navy which according to the late Act they
were bound to afford. Two Acts were passed for the
Company's relief : the first allowed more time for the
payment of the taxes for which it was in arrear and
enabled it to borrow money on its bond to the
amount of ;^500,ooo ; the second Act accommodated
it with a loan from the public to the amount of
;^300,ooo; both Acts permitting it to continue a
dividend of 8 per cent., though after paying neces-
sary expenses its receipts fell short of that large
dividend by a sum of ;^255,8i3. In this way it
endeavoured, while gratifying the proprietors, to
keep out of debt.

A month later the King had given up all hopes
of keeping America, and the North-Fox coalition
Ministry came into power. Dundas, now in opposi-
tion, was given leave to bring in a bill (14th April,
1783) giving the Crown power of recall over the
Company's chief servants and restoring the Rajah
of Tanjore in his possessions. But again nothing
was done ; Fox had reserved to himself the pleasure
of remodelling the Company. In November a new
Parliament met ; treaties of peace were announced
with France, Spain, Holland and America. Pondi-
cherry, Carical, Mah6, the settlements in Bengal
and Orissa, and the right of settling in Surat were
restored to France. Trincomalee was given back
to the Dutch, although Negapatam was retained.

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294 LEDGER AND SWORD [1783

Close upon the heels of this, in the same month,
Fox brought in his famous East India Bill. The
cat was out of the bag at last. All power, commer-
cial as well as political, was to be taken from the
Company and handed over to two boards, one of
seven persons to hold office for a term of years,
under whose control the whole of the Indian Govern-
ment was to be placed ; the other, a larger body,
called Assistants, were to manage the commercial
business. Members of the first were to be appointed
by the Ministry ; of the second, by the owners of
East India stock. The patronage of the Company
was thus to be placed in the hands of the Ministers
of the Crown — that is, in the hands of any Govern-
ment that could command Parliamentary majorities ;
and such vast patronage would have given the
means of swelling majorities. Had the bill passed,
the Coalition Ministry of that day, unpopular as it
was, and objectionable to the King, might have re-
tained power almost indefinitely. The bill avowedly
abrogated the Company's charter. ** Away with
their chartered rights ! " cried Burke, ** you are not
bound to observe them ! " But the Company was
not wholly without friends, who retorted upon this
assertion convincingly.

** Charters, sir,'' declared one able member, **are
not like other laws, repealable at will, at the will
of the legislature ; they are compacts and cannot
justly be cancelled without the consent of both con-
tracting parties." This bill, it was remarked further,
was levelled at sacred rights of property, in order
that a ministry might aggrandise itself. One

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1783] BURKE'S CHARGES 295

youthful member, none other than William Pitt,
characterised Fox's measure as ** the boldest, most
unprecedented, most desperate and alarming at-
tempt at the exercise of tyranny, that ever disgraced
the annals of this or any other country ". ** Was,"
he demanded hotly, " the relief to be administered
in Asia to be grounded oh violence and injustice in
Europe? "

Others denounced the bill as " aiming at a
confiscation of the property and a disenfranchise-
ment of the members of the East India Company,
seeing that they required the directors to deliver up
all lands, tenements, houses, books, records, charters,
instruments, vessels, money, securities and property
of every description, and all this was to be done
without any trial or conviction whatsoever on the
charges urged against the Company ".^

On the other hand, Burke in its support repre-
sented the rapacity of the Company for the exten-
sion both of power and dominion to be unbounded.
He asserted that of the States with whom the
Company had come into contact, there was not one
which it had not sold, nor was there a single
treaty that it had not broken. The Mogul, the de-
scendant of Tamerlane, he described as "a person-
age as high as human veneration could look at ;
amiable, pious and accomplished, in whose name
money was coined and justice administered, and
for whom prayers were offered up throughout the
countries we possessed ; but he had been sold! The

1 Thi Early Chartered Companies, p. 147.

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296 LEDGER AND SWORD [1783

Rohillas, the Nawab of Bengal, the Polygars, the
Mahrattas, the Pretender to that empire, Ragoba,
and the Subah of the Deccan had been sold!''

The natives were declared to have been for ages
civilised and cultivated by all the arts of polished
life whilst we were in the woods ; and, if the passions
or avarice of their Tartar lords had driven them
to acts of rapacity or tyranny, there had been time
enough in the short life of man to repair the desola-
tions of war by the arts of magnificence and peace ;
but under the English government all this order
had been reversed. As for Warren Hastings,
Burke described him as having been loaded for
years with the execrations of the natives and the
censures of the directors, and although struck and
blasted with resolutions of that House, he still main-
tained the worst despotic power ever known in
India. The conduct of the Company as merchants
was ridiculed and declared to be not a whit better
or more judicious than their course as statesmen.
Such eloquence was not to be withstood. Although
the Company was heard at the bar of the House,
the bill passed the Commons, and seemed likely to
pass through the Lords.

At this moment Earl Temple quietly let fall that
he had had a talk with the King, and that His
Majesty was not friendly to the bill. The effect
acted like magic amongst the peers ; the bill was
lost by a majority of nineteen. This defeat sealed
the fate of the Ministry ; indeed George already
wanted a change. At midnight, on the nth De-
cember, a royal messenger delivered to Lord North

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1784] PITT FAVOURS THE COMPANY 297

and Mr. Fox an order from the King **that they
should deliver up the seals of their offices and send
them by their under-secretaries, Mr. Fraser and
Mr. Nepean, as a personal interview would be
disagreeable to him".

Thus a new Ministry entered upon the scene.
At its head was young William Pitt, the great-
grandson of the President of Madras, then not
twenty-four years of age. Some settlement of the
India question being imperative, on the 14th of
January, 1784, Pitt moved for leave to bring in a
bill " For the better Government and Management
of the affairs of the East India Company ". At its
second reading, this bill also was lost On the 25th
March, Pitt, thoroughly supported by the King,
dissolved Parliament. The general election greatly
favoured the young Minister, who found himself at
the head of a substantial majority when Parliament
met on the i8th of May.

Naturally, Pitt s success at the hustings had been
gready assisted by the Company, which had poured
out the vials of its wrath upon Charles Fox openly
and secretly throughout the kingdom. Pitt for this
was not ungrateful. The Company still enjoyed a
monopoly of the importation of tea. But a huge
duty of 50 per cent., added to wholesale smuggling,
sadly interfered with its profits. Indeed, in March
a writ was issued against the Company for the sum
of ;^ 1 80,000 on account of duties to the Govern-
ment. The officer who levied claimed a fee of
IS. 6d. in the pound — this amounting to ;^ 13,000.
A conference was formed composed of the Lord

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298 LEDGER AND SWORD [1784

Mayor, the Sheriffs and a Court of Aldermen, and
it was decided the execution was not strictly regular.
The execution was therefore withdrawn by consent
of the Ministry. The directors at East India House
were now notified by Pitt that he intended lowering
the duties to 12^ per cent. On the 21st June he
moved a resolution to this end in the House, and
this was followed by what became known as the
Commutation Act. The loss to the revenue was
put at no less than ;^6oo,ooo. To offset this loss
an additional window tax was imposed. Nor was
this all. The Company had applied for leave to
borrow ;^8oo,ooo, and for a remission of the duties
imposed upon it by the North Ministry. In its
pecuniary distress it applied to Pitt, and he passed a
bill granting the required relief. On the 19th May,
1784, the new Parliament met. In the King's speech
there occurred the following passage : —

** Whilst the affairs of the East India Company
form an object of deliberation deeply connected with
the general interests of the nation, whilst you feel
a just anxiety to provide for the good government
of our possessions in that part of the world, you will,
I trust, never lose sight of the effect which any
measures to be adopted for the purpose may have
on our constitution, and on our dearest interests
at home."

Two months later, Pitt's India Bill was again
brought forward with the certain hope of its passing
into law. The Company could at least congratulate
itself that its affairs had been made a party question,
and that its destinies had been entrusted to Pitt

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1784] PITTS BILL 299

rather than to Fox, who would have mutilated the
now venerable body beyond recognitioa As it was,
the change was less of constitution than of character
and attributes.

In introducing his bill, Pitt had observed that the
rise or downfall of the Company was an event inti-
mately coimected with the vigour or decline of the
British constitution, although even he admitted that
no charter ought to stand in the way of a reform for
the general good and safety of its country. From
the extreme distance, which enhanced the difficulty
of governing India, he suggested that the accession
of authority should rather be in that country where
its executive power must be lodged than here ; that
the power to possess it should be active and on the
spot, but still so constituted as to secure obedience
to the measures dictated from home, and capable at
the same time of preventing extortion abroad, and of
frustrating all improper views of ambition or des-
potism ; the patronage being separated from the
executive or Ministerial influence, and kept free
from the hands of any political body of men what-
ever.

The powers of the King or Parliament, in so far
as Indian affairs were concerned, hitherto ** had re-
mained a dead letter from other high and important
duties " which the English Cabinet had to fulfil at
home. Another department of the Government was
therefore created under the name of the Board of
Commissioners, or, as it afterwards became known,
the Board of Control, which, while leaving the Courts
of Directors and Proprietors to continue their func-

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300 LEDGER AND SWORD [1784

tions as before, would exercise purely political, mili-
tary and revenue " superintendence and control over
all the British territorial possessions in India and
over the affairs of the Company in England ". The
members of this Board were to be Privy Councillors,
nominated not by the House of Commons, as Fox
had arranged for, but by the Crown. Moreover,
they were to have no power of appointing to office,
nor any patronage, and consequently without motive
to deviate from public duty. The President of the
Board of Control was essentially a new Secretary of
State for the Indian Department.

Henceforward the approbation of the Board was
requisite to give effect to measures originating with
the Court of Directors. At the same time, the
power of the Court was greatly condensed. In order
to provide for circumstances where secrecy might be
required, there was created a Secret Committee,
which was to absorb nearly the whole of the re-
duced, but still considerable, power that was left to
the directors.

Briefly then, and in practice, it may be said that,
so far as the Indian Government was concerned, the
Court of Directors was reduced to three members,
who could transmit secret orders abroad without
submitting them to their colleagues. But this is
practically what in the seventeenth century Sir
Josiah Child had done, and what Laurence Sulivan^
had done in the eighteenth. The Regulating Bill
destroyed the power to interfere in matters of im-

^ This great leader in the affairs of the Company lived to see the
change in operation, and died in 1786.

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1784] THE BOARD OF CONTROL 301

portance of the Court of Proprietors, who, owing to
the great increase of shareholders, had for a long
time swollen the Company into unwieldy propor-
tions. From the few dozen merchant adventurers
of Elizabeth's reign they had grown to be above
2,000.

The bill further enacted that every individual
who had held any office of trust in India should, on
his return home, disclose the amount of the fortune
he brought with him,^ and it provided a new tribunal
for the trial and punishment of offences liable to be
committed in India, or "for the prosecuting and
bringing to speedy and condign punishment British
subjects guilty of extortion and other misdemeanours
while holding offices in the service of the King or
Company in India *'.

The Board of Control, which virtually meant
the President of the Board, were not to interfere in
commercial matters, but in all other matters their
power was most extensive. The directors were
obliged to lay before them all papers relative to the
management of their possessions, and to obey all
orders which they received from them on points
connected with their civil or military government,
or the revenues of their territories. The commis-
sioners were obliged to return the copies of papers
which they received from the directors, in fourteen
days, with their approbation, or to state at large their
reasons for disapproving of them ; and their de-

^ This clause, owing to the petitions which poured in against it,
soon became a dead letter. It was repealed two years later in the
amended bill

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302 LEDGER AND SWORD [1784

spatches, so approved or amended, were to be sent
to India, unless the commissioners should attend to
any representations of the Court of Directors re-
specting further alterations in them.

Henceforward the Company could send no orders
regarding its civil or military government without
the sanction of the Board of Control ; on the other
hand, the latter might (if the directors neglected to
send true copies of their intended despatches, upon
any subject, within fourteen days) send by them-
selves orders and instructions relative to the civil or
military concerns of the Company, to any of the Pre-
sidencies of India ; and these instructions the Court
of Directors were, in such case, bound to forward.
If the Board forwarded any orders to the Court of
Directors on points not relating to the civil or mili-
tary government, or to the revenues of the territorial
possessions of the Company, the directors might
appeal to the King in Council. In all cases of
secrecy, and particularly such as related to war or
peace with the native powers of India, the Board
had the power of sending their orders to the local
government of India, through the secret committee
of the Court of Directors, which committee was con-
sidered as the vehicle of the instructions to the local
authorities of India.

In India the chief control was given to a
Governor-General and a Council of three, of whom
the Commander-in-Chief of the forces for the time
being was to be one, and to have a voice and pre-
cedence next after the Governor-General ; but the
Commander-in-Chief was not to succeed as Governor-

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1784] GOVERNOR-GENERAL'S POWERS 303

General, in the event of a death or vacancy, unless
by a special appointment of the Court of Directors.
The subordinate Presidencies of Madras and
Bombay were now first established as governments
the same as at Bengal, and at both the Governor
had, like the Governor-General, a casting vote in
Council. But they were placed completely under
the rule of the Governor-General in Council on all
points connected with their relations or negotiations
with the country powers, peace or war, and the
application of their revenues and military forces.
These subordinate Presidencies were strictly pro-
hibited from making war or peace without orders
from the Governor-General at Calcutta, or from the
Court of Directors, or the secret committee at
home, except only in cases of sudden emergency
or imminent danger, when it would be ruinous or
unsafe to postpone such hostilities or treaties. The
supreme government of Calcutta was to be en-
trusted with the power of suspending the Governors
of Madras and Bombay, in case of any disobedience
of orders ; but the power of war and peace was now
to be retained at Calcutta, it being declared by this
Act that, as the pursuit of schemes of conquest was
repugnant to the wish, to the honour and the policy of
the British nation, it was not lawful for the Governor-
General in Council, without the express authority of
the Court of Directors, or of the secret committee,
to commence hostilities, or to enter into any treaty
for making war against any of the native princes or
states in India, or into any treaty guaranteeing the
(dominions of such princes or states, except when hos-

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304 LEDGER AND SWORD [1784

tilities had been commenced or preparations actually
made for the attack of the British nation in India, or
some of the states and princes whose dominions the
British nation was engaged in subsisting treaties to
protect and defend. But we will shortly see how
little this provision altered political or military pro-
cedure in India.

Another provision of the bill created a new
tribunal for the trial of Indian delinquents and the
formation of new modes of procedure against such
criminals. The sections dealing with this extraor-
dinary court were subsequently amended, but all to
no purpose : this part of the Act was still-born ; the
court was a court in name only ; not a single criminal
was ever arraigned at its bar.

The patronage of India by this bill was left to
the Company with one exception ; the King was
to name the Commander-in-Chief, who was always to
be second in Council. The Governor-General, the
Governors of Bombay and Madras, and the mem-
bers of all the three Councils were subject to the
approbation of the King, who was to have the
power of recalling any British subject holding ofifice
in India,^

In conclusion it must not be supposed that the
Company had no voice in the composition of the
Regulating Bill ; it was from the first supplied by the

^ If the Court of Directors did not within two months nominate
to vacancies which might occur in any of the principal charges or
employment, such as Governor-General, Governor, or Commander-
in-Chief, or member of Council, then the Crown became possessed of
the right to make such nomination.

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1784] FUNCTIONS OF COMMITTEES 305

Minister with a draft, and many of its suggestions
and objections were incorporated in the Act

After all the changes had been made, the Com-
pany had been but little altered in its constitution ;
at most it merely went back to the earlier day. The
Court of Directors consisted as heretofore of twenty-
four members, six of whom were to be elected
annually in the room of six who, having served four
years, retired and became ineligible to re-election
until they had been one year out of office. The
Court henceforward divided itself into Committees,
regulated by seniority rather than by the fitness or
qualifications of the members : with a view to each
committee undertaking a separate portion of public
business. From among the senior members of the
body, for example, the chairman and deputy-chair-
man were chosen, who with the directors next in
point of seniority themselves constituted the Com-
mittee of Secrecy. The Committee of Correspond-
ence, the most important perhaps of the whole, con-
sisted of eleven of the senior directors, the chairman
being officially included : with this committee almost
every measure of real importance originated, the rest
devoting their time, as they had long done, to the
details of commerce and to the matters arising out
of them.

Much speculation was rife as to how the new
system would work. No long time passed before its
weak points were made manifest In theory, the
authority of the Board of Control was paramount,
because while the Court of Directors actually com-
piled the despatches, they could not be forwarded
VOL. II. 20

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3o6 Ledger And sword [1784

without the scrutiny and revision — sometimes so
severe as to amount to re-writing — of the Board.
But in practice the President and his Commissioners
soon found that their power was less than they
were commonly credited with. In the first place
they had not the special knowledge and special con-
nections to enable them to overrule the Company,
and in the second place they were responsible to
Parliament, and every act of which the Company
might complain was open to its investigation. The
public were treated to a contest for supremacy before
Pitts bill was two months old. It concerned the
right of recall, which was at first awarded solely to
the Board. In October, 1784, the directors ap-
pointed Mr. HoUond, an old servant, who had long
been at Madras and was reputed to have ability,
integrity and an extensive knowledge of the country,
to succeed Lord Macartney in the government of
that Presidency in case of his lordship's resignation,
death or removal. The Board of Control objected
to the choice. The Court of Directors persisted in
their appointment, and intimated that the Board of
Control were meddling in a matter that did not
belong to them, inasmuch as by the new Act the
power of appointing to such places rested with the
directors. Hereupon the Board of Control said :
•' If the reasons which we have adduced do not satisfy
the Court of Directors, we have certainly no right to
control their opinion ". But at the same time they
informed Hollond that if he accepted the appoint-
ment and went to India he would be recalled the
moment he got there. This settled the dispute;

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1786] AFFAIR OF BENFIELD 307

and Dundas was allowed to nominate Sir Archibald
Campbell, " who whatever were his other qualifica-
tions had the merit of being Dundas's friend ".

Much of this friction was due to the affairs of the
Nawab of the Carnatic and his political and pecuniary
rights and wrongs, which formed one of the burning
questions of the day. An inquiry had been ordered
by the terms of the Act of 1784. The Company
therefore framed a despatch to Madras requiring the
investigation to be proceeded with. Dundas, now
at the head of the Board of Control, thought the step
unnecessary, and proceeded to divide the alleged
debts of the Nawab, amongst which were the sums
said to be owing to certain English adventurers, into
three classes, and to announce that a portion of the
Carnatic revenues should be allocated for their liqui-
datioa A chief creditor was the notorious Paul
Benfield, who had together with several of his friends
returned to England, got elected to Parliament, and
now supported the Ministry. The Ministry in re-
turn did nothing to cause any reflection to be thrown
upon Benfield s honour or the Nawab's debts. The
inquiry demanded was refused, and the new Board
of Control was commonly believed to have perpe-
trated a '*foul political job".

It is to Pitt's credit that he did not wait too long
in seeking to make the rough places smooth. In
1786 several amendments to his Act were made.
One repealed the order that the Commander-in-
Chief in India should be second in Council, and left
it at the option of the Company to appoint him to
such office. It empowered the Court of Directors,

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3o8 LEDGER AND SWORD [1784

should they see fit, to unite in one person the offices
of Governor- General and Commander-in-Chief. Two
other Acts were passed declaring the King's appro-
bation was not necessary to the appointment by the
Court of Directors of Governor-General, Governors
and members of Council, and amending the pro-
visions of the Act of 1784 for appointing a dis-
tinct Court of Judicature, to be chosen in each ses-
sion of Parliament, for the trial of persons accused
of offences committed in India. A clause was also
inserted declaring that offences against the Com-
pany's exclusive right of trade, which could only be
tried at Westminster, might be tried in the East
Indies. Persons whose licences of residence had
expired were to be subject to the same penalties
as unlicensed persons, and power was vested in the
governments to seize unlicensed persons and ships.

The statute of 1784 may be said to have palsied
the right arm of the Company, already weakened by
the Regulating Act of 1773. With its sinister limb
it could still indite despatches, it could still regulate
its household and its commerce in India, China and
the East ; but the privilege of initiative and the free
power of the sword were gone. In military and
political matters it was no longer a free agent ; it
had lost its sovereignty and its independence : here-
after we behold it, mighty indeed, but chained to an
unrelenting suzerain, the British Government.

It were unprofitable, therefore, to deal at length
in this narrative with the subsequent wars in India,
or those measures undertaken there of a military,
judicial, or administrative character which were not

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1786] GOVERNMENTAL POWER 309

planned or directed by the Court. Henceforward
the responsibility lies with the Governor-General
and the Ministry. The Company at length realised
the situation : " The control and direction of Indian
affairs is not with.the Company ; unless, indeed, it be
argued that the small share of patronage left to them
constitutes power and influence. All the great wheels
of the machine are moved by the Government at
home, who direct and control the Company in all
their principal operations in India." ^

^ Reply to the Arguments against the Company^s Claim. — East India
House, 19th January, 1805.

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CHAPTER XI.

The Govcmor^General Fights — The Company

Pays.

While Fox and Burke had been thundering against
the Company in Parliament, Hastings and Francis
had fought a duel with pistols in Calcutta. Two
days before the fall of Fox the defeated duellist,
Francis, sailed for home, with a large fortune in his
hands and vengeance in his heart Hastings had
long before asked the Company to name his suc-
cessor. But the Company were naturally reluctant
to part with its great and loyal servant; and so
Hastings, weary and seeking repose, himself handed
over the keys of office on the 8th February, 1785,
to John Macpherson, the senior member of Council,
who thus became Governor-General.^

Warren Hastings was the last and greatest of
the Company's great servants in the lineal succession
of Aldworth and Methwold, Aungier and Oxenden,
Child and Charnock, and Thomas Pitt Great men
may have come after him as rulers in India, but they

^ Macpherson's rise had been extraordinarily rapid. He was
originally the secret agent of the Nawab of Arcot, had subsequently
entered the Company's service, and by reason of home influence
found himself in a few years with a seat in the Calcutta Council
The profits under his administration showed an increase : —

1785-6 £1,038,987

1786-7 i,66o>868

310

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178s] COMMERCIAL IDEALS 311

were not Company's men, trained in its service and
loyal to the Company. Most of his successors were
soldiers, and the civilians were not traders. Shore
was a true product of the Company — so was Barlow ;
but neither Shore nor Barlow was great The
former was appointed by the Company, but he
served the Crown, and until the revival, a genera-
tion later, of part of the old loyalty to the rich, time-
honoured spirit of East India House, there seemed
nothing else to serve. The military servants were
always complaining of their "inferiority" to the men
in the King's service.^

Hastings, then, was all but the last of the great
merchant adventurers. It may not be a high ideal,
that of money-getting, but the British people must
not be ashamed of its tools, and it is this spirit which
has led to the expansion not only of this, but perhaps
of all Empires. Much has been written to prove that
Hastings had a fine disregard for wealth, to belittle
and explain away the fortune of ;^ 130,000 which he
carried away from India. Even so, was it not
Hastings who was " ready to coin his body into
rupees to serve the Company"? This only shows
his loyalty and his grand adhesion to the gliding
principle of the body he served. One of our great
modern Imperialists avers that we conquered India
in a fit of absent-mindedness. In this conquest our
" object was trade, and in this we were not particu-
larly successful until after the Company's monopoly
had been revoked". But is not this confusing the

1 More than once we find them petitioning for higher rank, longer
furloughs and more privileges.

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312 LEDGER AND SWORD [1785

East India Company with the English nation? If
our narrative has taught us anything it is how little
the two were identical. And, although the nation
at large may not have derived great benefit from
the Indian trade, the Company was successful. It
paid huge sums to the Government, it divided huge
sums amongst its members, during a space of nearly
two centuries. And its servants conquered India
because the Company's eye was fixed on profit, and
sometimes lacked inconvenient scruples, which a
King's Minister, with an eye to foreign chancellories,
might have, but not inappropriate to a body of per-
sons " merely bred to trade ''}

Warren Hastings landed at Plymouth in June,
and posted up to London and to Court. The King
received him and his wife graciously. The Court
of Directors greeted him in a solemn sitting, and the
chairman read a vote of thanks for his great achieve-
ments, which had been passed with no dissenting
voice. In a letter, two or three months after his
arrival in England, Hastings wrote : " I find myself

^ The Company's net profits under Hastings had been : —

i77«-3 ;f 567,866

1773-4 1,031,806

1774-5 i|625»336

1775-6 1,871,021

1776-7 i»767,49i

1777-8 1,200,623

1778-9 1,040,437

1779-80 ... - 377,677

1780-1 354,454

1781-2 275,782

1782-3 1,029,622

1783-4 1,163,224

1784-5 1,128,612

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1785] CORNWALLIS SENT OUT 313

everywhere and universally treated with evidences,
apparent even to my own observation, that I possess
the good opinion of my country ".

But Francis, ever since his return from the East,
had been devoting his pen and voice and talents for
intrigue to the task of blackening Hastings* Indian
administration. He had succeeded in completely
gaining the ear of Burke, who wept copious tears
over the fate of the pious Nuncomar. In the course
of the next session the Commons resolved to im-
peach both Hastings and Sir Elijah Impey, the Chief
Justice, who had returned to England as far back as
the month of June, 1784, and who had not hitherto
been molested. In January, 1788, Impey was heard
and acquitted, but it was not until after a weary term
of nine years and a grand trial in Westminster Hall
that on the 17th of April, 1795, Warren Hastings
was pronounced not guilty upon every charge.

When the great change in the government of
India had been settled upon it became necessary
to cast about for some one to succeed Hastings as
Governor-General in India, a post which Sir John
Macpherson held temporarily. The choice fell upon
Lord Cornwallis, who, in spite of his disastrous
American military experience, had years before
been mentioned by Dundas for the post. Corn-
wallis waited upon the directors in Leadenhall
Street and received such instructions as under the
new order could scarce be more than supplementary
to those his lordship had already received from the
Board of Control.

There would still be wars — and even bloody

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314 LEDGER AND SWORD [1786

wars — in India, but the general situation of affairs
would never become so difficult and perplexing as
it had been ; Hastings had broken the only Euro-
pean power capable of contending with the English,
and by consolidating the Empire which the Company
had founded, rendered comparatively easy the task
of his successors. ** The French star in India had
declined, and in spite of some feeble efforts to re-
erect the system of M. Bussy and to revive the
struggle in Hindustan, they never again became
formidable in that part of the world." Their great
Revolution supervened, and their energy and ambi-
tion were employed in channels nearer home.^

Pitt's India Bill was improved and strengthened
by the three amending Acts passed in 1786,^ and
by the Declaratory Bill of 1788. The powers of the
Governor-General were at once enlarged and better
defined. He was vested with a discretionary right
of acting, in extraordinary cases, without the con-
currence of the Supreme Council at Calcutta, being
held solely and personally responsible for any con-
sequences which might ensue from the measures
adopted under such circumstances. This tended to
remove that divided authority and that perpetual col-
lision between the Governor-General and his Council
which had maddened Hastings, and occasionally even

* The net profits of the Company under the first three years of
Cornwallis's government were . —

1787-8 ;f2,23a,943

1788-9 2,767,369

1789.90 - . - - «,8o7,444
'In this year Parliament also passed an Act enabling the Com-
pany to raise money by the sale of annuities.

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1786] COMPANY'S YOUNG SERVANTS 315

jeopardised British dominion in India. Some reduc-
tions were made in the civil service, which had be-
come overcrowded with writers and young men, who
had little to do, and in many cases were inefficient.

The great Clive had shortly before his death
painted such a picture of the life and temptations of
the younger servants as could not fail to exert a
powerful effect upon the Company and the nation at
large. He had conjured up the youthful writer
newly arrived in Bengal, and not worth a groat. "As
soon as he lands, a banian, worth perhaps ;^ 100,000,
desires he may have the honour of serving this young
gentleman at 4s. 6d. per month. The Company has
provided chambers for him, but they are not good
enough : the banian finds better. The young man
takes a walk about the town : he observes that other
writers, arrived only a year before him, live in
splendid apartments or have houses of their own,
ride upon fine prancing Arabian horses, and in
palanquins and chaises ; that they keep seraglios,
make entertainments, and treat with champagne and
claret. When he returns, he tells the banian what
he has observed. The banian assures him he may
soon arrive at the same good fortune ; he furnishes
him with money; he is then at his mercy. The
advantages of the banian advance with the rank of
his master, who in acquiring one fortune generally
spends three. But this is not the worst of it : he is
in a state of dependence under the banian, who
commits such acts of violence and oppression as his
interest prompts him to, under the pretended sanction
and authority of the Company's servant"

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3i6 LEDGER AND SWORD [1786

To alter such conditions and to remove such
temptations, it was, during Lord Cornwallis's regime,
decided to institute a regular scale of salaries more
adequate to the servant s position and the labour
performed. Those to whom the prospect of pro-
motion and a generous stipend was no attraction
were gradually weeded out of the service.

Before 1 784 there does not seem to have been any
limit of age for candidates for the Company's service.
But by a resolution on the i6th July, the Court
decided **That no writer nor cadet should be sent
to India under fifteen or above eighteen years of
age, except such persons as cadets who shall have
actually been one whole year in His Majesty's service,
and then not to exceed the age of twenty-five years ".^
A few years later the Company resolved "that in
the future no foreigner shall be admitted into the
Company's service as a writer or cadet".

It having been found that the practice of the
British subjects lending money to the native princes
and chiefs was productive of much mischief, and
that the Company could not effectually prevent it,
the Company procured in 1787 an Act of Parliament
rendering any British subject " who, directly or in-
directly, lends money to a native prince without the
consent of the Court of Directors, the Governor-
General or the Governor of a Presidency, liable to
a prosecution for misdemeanour ".

Long before, the Company's attention was drawn

to the evils caused by the debts which had arisen

•

* F. C. Danvers, Memorials of Old Haikybury College.

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1786] SUPPRESSION OF DUELLING 317

from private persons lending money at a high rate of
interest to the Chinese. The Emperor of China
had even issued an edict ordering the debts to be
paid and prohibiting debts being incurred by his
subjects for the future. Certain mandarins were
appointed through whom alone future dealings were
to be carried on. As a result, combinations were
formed amongst the Hong merchants, who, to
cover themselves, laid higher prices on the teas and
lower prices on the Company's imports. This had
an injurious effect upon the Company's trade, and the
loss was considerable.

One of the Company's earliest acts after the in-
stitution of the Board of Control was directed against
duelling. Within recent years there had been a
great number of duels fought in India between
officers and civil servants of the Company. These
duels were not confined to. young men, or to the
inferior ranks of the two services : Hastings had
fought Francis ; Lord Macartney, Governor of
Madras, had fought with Mr. Sadleir, a member of
Council, and had been wounded by him ; ^ Mac-
pherson, who had been acting as Governor-General,
was challenged by Major Brown, on the Bengal
establishment, for some offence taken at Mac-
phersons proceedings in his station as Govemor-

^ On his return to England, Lord Macartney had to fight another
duel. This was with General Stuart, whose conduct in the Carnatic,
and especially at Cuddalore, had been very severely, and it would
appear, very justly criticised. His lordship was again wounded;
but this wound, inflicted in a field near Kingston, in Surrey, did not
prove that Stuart had done his duty as a soldier and commanding
officer at Cuddalore, in the East Indies. — Macfarlane.

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3i8 LEDGER AND SWORD [1786

General. The Court of Directors now passed a
unanimous resolution " reprobating the practice, and
determining to dismiss from the Company's service
every party who should presume to challenge a
member of the government, or any other officer, on
account of matters arising out of the discharge of
official duties ".

Tea being the Company's great staple, from
tea coming its chief profit, with China and the
East trade was pushed vigorously. The need of a
port where British ships might meet the Eastern
merchants, and the necessity of a windward station
for refreshment and the repair of the King's ships,
as well as those of the Company, brought about the
annexation of Prince of Wales' Island in the Straits
of Malacca. In its Chinese trade for some time past
the Company had suffered from an invasion of its
privileges by other Europeans, In 1780, one Smith,
an English private trader, refused to recognise the
power of the Court of Directors, who took the advice
of the Company's standing counsel, and ordered the
delinquent to be sent home to England, which soon
settled the matter.

It was not until 1 786 that all doubts as to the Com-
pany's authority over British subjects and ships were
removed by the Act of Parliament which enacted that
all the powers and authorities in any Acts gfiven,
granted or provided for taking, arresting, seizing,
remitting, sending or bringing to England **any
person or persons being in the East Indies or other
places mentioned in the Act, contrary to law ; and
for seizing any ships, vessels, goods, or effects liable

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e .

^wmX;, ^ V^^v,^^ w\Ai. Wa>< It^^ ^

l^^^v.K.^>wu^^ iVv^X/wo. J^jH^i^WJk bos^w:

\h Mrs. V-W^cAc^vCtMlL Uo^lfr W^ vl^ UL i/U

c/^«YVo.:*^A;A!W^ifWi:A TV-o^at^ crwUj"M^ V^rwot t/^^j^

FAC-SIMILE OF LORD NELSON's LETTER TO THE

company's chairman.

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1789] EMBASSY TO CHINA 319

to seizure by any law in force, shall and may be
enforced and put in execution by or by the order and
authority of the Company's Council of Supercargoes
for the time being, at the town or factory of Canton
within the said town or factory, or upon the river of
Canton".^

Yet the Company, exerting all its strength to fill
the mercantile field of the East, was not indisposed
to deal liberally with its servants. For example,
we find that in 1789 the Court passed resolutions
" to increase the Company's exports to the utmost
extent in their power," directing an augmentation
of the investment for this season of above 2,500
tons. At the same time it resolved " to allow the
commanders and officers of their ships to fill, freight
free, all such outward tonnage as might be unoccupied
by the Company. To allow the Company's ser-
vants and merchants residing under the Company's
protection in India, to fill up such homeward ton-
nage, as might be unoccupied by the Company, at
a reasonable freight."

In January, 1792, the chairman and deputy-
chairman waited on Henry Dundas (afterwards Lord
Melville), when they met Mr. Pitt, by whom they
were informed that His Majesty's Ministers contem-
plated sending an embassy to China, for the purpose
of placing British intercourse with that nation on a
more firm and extended footing. The official heads

^ The Order in Council of the 9th December, 1833, vested the
same powers in the superintendents appointed by the King for the
conduct of the British trade at Canton as were possessed by the
supercargoes of the East India Company.

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320 LEDGER AND SWORD [1792

of the Company expressed great doubts as to the
probability of any substantial and permanent advan-
tage being derived by the Company or the nation at
large from the measure ; but as contrary opinions
had been adopted by some of the highest authorities,
and as the nobleman proposed for the mission was
considered to be particularly well qualified for the pur-
pose, the Company thought, if the experiment must
be tried, the opportunity was not to be neglected.
The subject having been considered by the Court of
Directors, they agreed to the proposition and passed
a vote of credit to the chairman and deputy-chairman,
to whom the duty was devolved of arranging the
material points of the embassy with His Majesty's
Ministers.

Hitherto the Company had been obliged to
pursue the trade with China under circumstances
the most discouraging, hazardous to its agents em-
ployed in conducting it, and precarious to the various
interests involved. The only place where it had
the privilege of a factory was Canton. The fair
competition of the market was thus destroyed by
associations of the Chinese. The supercargoes were
denied access to the tribunals of the country and
to the equal execution of its laws, and were kept
altogether in a most arbitrary state of depression,
ill-suited to the importance of the concerns entrusted
to their care, and scarcely compatible with the
regulations of civilised society.

It therefore became important to ascertain
whether these evils had arisen from any settled
policy of the Chinese government, or from an

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1794] LORD MACARTNEY'S FAILURE 321

ill-founded jealousy of our national influence, or
whether they were created merely by the corruption
and abuses of a distant provincial administration,
to endeavour to obtain a remedy for them.^

Sanguine expectations appear to have been
created in the mind of Lord Macartney as to the
probable opening in the northern ports for British
staples, ** especially woollens " ; much was antici-
pated from the apparent disposition of the new
viceroy of Canton to encourage foreign commerce.
But Lord Macartney ought soon to have been dis-
abused of this notion. The terms of the letter from
the Emperor to the King of England were calculated
to defeat all hopes of any real benefit arising from
the mission.

The ambassador himself attributed his failure
to a misunderstanding ; he thought more " might
have accrued from a more perfect knowledge of
the Chinese language ". He added in a letter dated
at Canton the 7th January, 1794, "that there is
a likelihood of a permanent, as well as a complete
redress of every grievance, whenever a familiar
access to the Viceroy shall be established, and the
difficulty overcome of communicating freely with
him in the Chinese language ".

The letter to King Geoi^e from the Emperor
stated that the proposals of the ambassador went
to change the whole system of European commerce
so long established at Canton. This could not be
allowed, and his consent could by no means be

^ Auber's China,
VOL. II. 21

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322 LEDGER AND SWORD [1794

given for resort to Ningpo, Chusan, Tientsin or any
southern ports, nor could he allow of a British
resident at Peking. He observed that the Russians
now only traded to Kiatchu, and had not for many
years come to Peking, neither could he consent to
any other place of residence for Europeans near
Canton but Macao, adding, " your merchants must
conform to the usual rate for right of anchorage
at Canton," and in conclusion his Chinese majesty
stated that, " as the requests made by your ambas-
sador militate against the laws and usages of this,
our empire, and are at the same time wholly useless
to the end proposed, I cannot acquiesce in them.

** I again admonish you, O King, to act conform-
ably to my intentions that we may preserve peace
and unity on each side, and thereby contribute to
our reciprocal happiness. After this, my solemn
warning, should your Majesty in pursuance of your
ambassador's demands, fit out ships in order to
attempt to trade either at Ningpo, Tehu San, Tien
Sing or other places, as our laws are exceedingly
severe, in such case I shall be under the necessity
of directing my mandarins to force your ships to
quit these ports, and thus the increased trouble and
exertions of your merchants would at once be frus-
trated. You will not then, however, be able to
complain that I had not clearly forewarned you.
Let us therefore live in peace and friendship, and
do not make light of my words. For this reason I
have so repeatedly and earnestly written to you upon
this subject"

Tbu§ terminated Lord Macartney's embassy,

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1795] MANCHESTER'S PERSISTENCE 323

from which so much was expected. It has been
justly observed that the ambassador " was received
with the utmost politeness, treated with the utmost
hospitality, watched with the utmost vigilance, and
dismissed with the utmost civility ".

The Company had long sounded the Chinese
trade ; its traders had touched bottom ; they knew
that it meant only tea and opium in exchange for
dollars, and tea and opium it continued to be until
our own day. But Manchester and Sheffield were
still unconvinced. In consequence of various sug-
gestions growing out of the embassy, an attempt was
made in the early part of 1795 to introduce sundry
articles of British manufacture to Peking, consisting
of samples of linen, cloth, sword blades and speci-
mens of wove paper, the latter having been much
admired by the mandarins at the capital, who were
only accustomed to the coarse paper imported from
Korea.

Great caution was used in forwarding the articles
to Peking, and the sanction of the Viceroy at Canton
was obtained before the sword blades were landed.
Letters were sent from the King to the Emperor of
China, and from Mr. Secretary Dundas, the Earl
of Macartney, Sir George Staunton and from the
chairman and deputy to the Viceroy. Presents
accompanied the letters. A gracious reception was
given to the supercargoes by the Viceroy, who had
promised the ambassador previous to his departure
from China ** that he would ever attend to the re-
presentations " of the supercargoes. But no trad^

followed : and all ended as before in civilities.

21 ♦

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324 LEDGER AND SWORD [1793

The year 1793 witnessed a renewal of the Com-
pany's charter for twenty years under circumstances
far different from any of the renewals which had
gone before. In April it was put before the House
of Commons by Mr. Dundas that the East India
Company employed at that time 81,000 tons of
shipping and 7,000 seamen, and imported from India
;^7oo,ooo worth of raw materials annually. As a
consequence, a committee was formed in the House
to consider the renewal of its charter according to
its petition. It was authorised to raise a sum of
;^ 200, 000 as capital, while it defrayed debts amount-
ing to ;^500,ooo sterling, and was obliged to hand
over another ;^500,ooo to the Government. There
was a demand that trade to India should be thrown
open to the nation, but while this was refused by
Pitt, yet a step towards it was made by allowing
private individuals to employ 3,000 tons of shipping
annually in the Eastern trade. The Crown was
also granted the power of appointing to the Board
of Control persons not members of the Privy Coun-
cil. Otherwise there were few alterations which
rendered the new bill different from Pitt's original
measure.

While all the public corporations of the land
were voting money and addresses to the King on
the occasion of the outbreak of war with France, the
East India Company was, as may be supposed, not
behindhand. From first to last the Company took
the deepest interest in the terrible struggle. In
September, 1794, it passed a resolution evincing
"its determination to support the Government of

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1793] COMPANY'S HOME ACCOUNTS 325

the country in the prosecution of the present just
and necessary war". In October, at a General
Court convened for the purpose, it expressed a wish
to the Government to raise and equip three fencible
regiments at its own expense to serve at home,
recommending that the Company's own military
officers might be employed to command them.

A few years later the Company resolved to thank
Lord Nelson " for his very great and important
services rendered to the Company," and to beg his
acceptance of ;^ 10,000. The Chairman, Sir Stephen
Lushington, conveyed the substance of the resolu-
tion to Nelson, who replied in a letter penned on
board the Foudroyant^ which is reproduced else-
where in these pages.

How closely the Company's home accounts and
the general state of its receipts and payments were
involved with its political concerns in India was
generally seen at this time. The expenses of raising
recruits in Great Britain and Ireland, the payment to
the King's Indian regiments, the half-pay to returned
officers, and other expenses at home, were incurred
on account of the territorial possessions. On the
other hand, the amount realised by the Company
from the Indian revenue was derived from the
excess of goods received from India above the total
of the value of the exports from Great Britain and
of the amount of bills drawn from thence and of
the charges incurred at home. These receipts and
charges at home belonged to the Company as pos-
sessions of the British provinces in India. Its other
receipts and payments were of a commercial nature,

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326 LEDGER AND SWORD [1793

as were all of the assets of the Company at home ex-
cept certain old claims on government for expenses
defrayed in the war which ended in 1763.^

The assets met with a considerable reduction in
the year of the renewal of the charter, for in July
a very destructive fire attacked the warehouses of
the Company, second only to the memorable fire
of 1666. Twenty thousand bags of saltpetre were
burnt and 630 houses in the hamlet of Radcliffe
were destroyed. As if by way of recompense, in
September of the same year nine East Indiamen
arrived in England with cargoes estimated at
;^8,ooo,ooo sterling.

In 1793, too, that year of bloody horrors across
the Channel, the Company had the gratification
of seeing one of its old civil servants raised to the
Governor-Generalship. We have already spoken of
Sir John Shore, afterwards Lord Teignmouth. He
was of the old school of Company's men — the last
of the trading Governors-General. He had passed
through nearly every grade of civil rank ; he well
understood the policy of peace, the doctrine of divi-
dends. Burke had urged the Company to postpone
the appointment. The chairman and deputy-chair-
man replied that Sir John Shore had been selected
for his high honour and probity and his peculiar fit-
ness ; the Court had appointed him on these grounds

* These we learn from the accounts were "for subsistence to
French prisoners, expenses of an expedition to Manilla, and hospital
expenses of His Majesty's troops ''. The total is £422^011^ but is
reckoned of a " doubtful nature " in the report of the Committee of
Proprietors in 1782. The sums are, however, retained in the account
of assets in 1793.

Digitized by VjOOQ IC

1794] SHORE'S ADMINISTRATION 327

to the arduous and responsible office, and to that
appointment they adhered. Major-General Sir
Robert Abercromby assumed the office of Com-
mander-in-Chief, under the Court's appointment of
September, 1 792. Shore being no soldier a separa-
tion of the two offices became necessary.

The great feat of Shores administration was
his dethronement of one Nawab of Oudh and the
setting up of Saadut Ali in his place. By this
arrangement the annual subsidy to the Company
was raised from fifty-six lakhs to seventy lakhs of
rupees. It was also agreed among other political
and military concessions, which have no place here,
that the new ruler should pay the sum of twelve
lakhs of rupees to the Company as a reimbursement
for the trouble and expense incurred in placing him
upon the throne. The pecuniary gain to the Com-
pany promised to be very considerable, and Sir John
Shore received the thanks of the Company, as well
as those of the Board of Control, who already began
to appreciate the advantages of a full exchequer in
India.

Unluckily, this arrangement of Shores did not
fulfil its early promise. Five years later Saadut
had allowed his payments to the Company to fall
into arrears, and was owing more than eighteen
lakhs of rupees when Lord Mornington first as-
sumed the government of India. The Court of
Directors became clamorous for payment. Zemaun
Shah, the King of Cabul, and the deposed Vizier
Ali were preparing for invasion. It was expected
that the Afghans would be soon on the frontiers

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328 LEDGER AND SWORD [1796

of Oudh, and the cost of troops and armaments for de-
fence was enormous. Another arrangement became
necessary, and in 1801 territories were forthwith
formally annexed in Oudh, which under the Com-
pany's management soon produced some ;^2,ooo,ooo.

In 1795, when the great Hastings trial was
concluded at Westminster Hall, Hastings, although
acquitted, was ruined by the costs. Pitt had spoken
in the House of Commons about a proper indem-
nification by the nation if the charges should not be
made good. But the Company itself came forward,
and on the 7th March, 1796, it was announced at
a General Court in the East India House that the
Board of Control and the Court of Directors had
agreed to grant Hastings an annuity of ;^4,ooo for
twenty-eight years and a half. In order to relieve
him from his embarrassments a sum of ;^50,ooo
was lent to him by the Company without interest.^
Other relief measures were subsequently awarded.

We have premised that it is not our purpose
to dwell hereafter upon the conquests and annexa-

^ Hastings survived his acquittal twenty-four years, and, in his
last years, honours and distinctions were showered upon him. The
University of Oxford conferred the honorary degree of Doctor of
Laws ; the Prince Regent added his name to the list of Privy Coun-
cillors, and in that same year (1814), the allied sovereigns being in
England, the Prince presented Mr. Hastings to the Emperor of
Russia and to the King of Prussia as one of the greatest men of this
country. In his eighty-second year, however, he was again in pecu-
niary difficulties, having outlived the period for which his annuity had
been re-adjusted in 1804. The nation which had wrested the Com-
pany's Indian conquests from its hands would do nothing for the man
who had preserved those conquests. Hastings again came before the
Company, and it agreed to continue its handsome annuity for life.
Hastings died on the ^^nd of August, 1818, in his eighty-sixth year.

Digitized by VjOOQ IC

1799] TIPPOO'S TREASURE 329

tions in India, except in so far as these were dictated
or opposed by or directly affected the Company in
Leadenhall Street Partaking of such a character
was an interesting event in 1795, which connects
the earlier with the later portion of this narrative,
and recalls the early rivalry of the Dutch East India
Company.

As a result of the war with Holland, in her miser-
able character of forced ally of revolutionary France,
several important conquests were effected over her
Eastern settlements by expeditions fitted out from
Madras. All the old Dutch settlements in Ceylon
and Malacca were reduced, and Cochin and the
famous Dutch islands of Banda and Amboyna cap-
tured. Until 1 80 1 they were allowed to form an
appendage to the Madras Presidency, and the Com-
pany considered that it was to derive the same ad-
vantages in Ceylon as it enjoyed in India. But Pitt
placed the Ceylon settlements under the direct ad-
ministration of the Crown, and appointed a governor
who was to be altogether independent of the authority
of the Company. The Dutch islands were restored
to the Dutch by the Treaty of Amiens in 1802, but
we shall have again occasion to record their capture
by the Company's servants

In India the long and bloody conflict with the
Mysoreans ended in the capture of Seringapatam
and the death of Tippoo Sahib in May, 1799.
Treasure to the value of a million sterling in specie
and jewels was seized, but the Company got none of
it By Lord Mornington's order, the whole was dis-
tributed to the army.

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330 LEDGER AND SWORD [1798

The dominion founded by Haider Ali was now
at the feet of the English ; of course, the Company
would have taken it : the Governor-General wished
to annex it. But Parliament and the Board of Con-
trol had strictly ordered that there should be no wars
0/ conquest. There was nothing to do therefore but
to dismember the territory and divide it for a con-
sideration in each case between the Nizam of the
Deccan, the Peishwa of the Mahrattas and the
ancient Rajah of Mysore, leaving certain seaboard
districts to the Company's domaia The whole ter-
ritory conquered from Tippoo was over 20,000 square
miles. The revenue immediately obtained by the
Company was very large, and under good govern-
ment could be made far larger. But what was re-
venue when it was all spent in civil administration ?

In the upshot, however, the Governor-General had
his way. The Mahratta chief, despite of his master
the Peishwa, haughtily declined to receive any gift
from the English, and in the following year it was
found advisable to make the Deccan more dependent
upon the Company, and so check rapacity and mis-
rule. In 1800 the Nizam of the Deccan ceded to
the English all the territory he had acquired by Lord
Comwallis's pacification in 1792 and by the arrange-
ments of 1 799. He received in exchange a discharge
from the payment of his monthly subsidies and a
liberal assurance of protection.

In 1798 the Court of Directors appointed Har-
ford Jones to be " Resident at the Court of the Pasha
of Bagdad," with the view, amongst other objects, of
facilitating the transmission of news to and from

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1799] COMPANY'S GIFT TO NELSON 331

India and of watching the proceedings of French
emissaries who were occasionally proceeding to and
from India, through the Bagdad Pashalic. These
were believed to be spies busily engaged in com-
municating intelligence to General Bonaparte, then
supposed to be planning an invasion of India vid
Egypt and the Red Sea. Had the French con-
querors Egyptian schemes not miscarried, owing to
the destruction of his fleet by Nelson, there is little
doubt that India would have received a visitation
and the combined forces of Bonaparte and ** Citizen "
Tippoo's successor have undone all — or most — of
what the Company's servants had done for English
supremacy in the East. No wonder the delight
and gratitude of the Company knew no bounds, or
that it should enthusiastically have voted the im-
mortal hero of the Nile the sum of ;^ 10,000 as a
token of its gratitude.^

Although thus deprived of his fleet, which was
to storm Bombay, Madras and Calcutta, together
with 5,000 of his seamen, and cut off from com-
munication with France, yet Bonaparte's genius
conceived another plan, by which the same end
might be attained. It was nothing less than the
conquest of Syria, creating an army out of its war-
like mountaineers, crossing the Syrian desert,
Mesopotamia and Persia and so on to India as
Alexander had done before him. With this view
Bonaparte despatched emissaries and letters to
various Eastern rajahs and governors, enemies of

» See p. 335.

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332 LEDGER AND SWORD [1800

the Company. But the defence of Acre by the
Turks and English again foiled his hopes and Bona-
parte returned to France. It is worth mentioning
that one of his letters was addressed to the Imaum
of Muscat, Syud Sultan, with whom the Company's
agent had just then entered into a friendly treaty
antagonistic to the French. On the i8th January,
1 800, this was extended by Captain (afterwards Sir)
John Malcolm so as to amount to an offensive and
defensive alliance with the English against the
French and Dutch, and provided also for the estab-
lishment of an English agency at Muscat. In the
following year Malcolm was sent to Persia ''as an
envoy of the Governor-General," and concluded two
treaties, one political and the other commercial, with
the Shah. By the commercial treaty all the old
factories were restored, several more were granted,
and the duties to be collected from purchasers of
staples were reduced to i per cent

In the ensuing years we see the Company greatly
suffering from time to time from pirates in the Persian
Gulf, necessitating repeated expeditions against them,
and more than offsetting any commercial profits, up
to the period when the Persian trade was thrown open
to the nation.

It was too much to expect that the Company,
supported by the Board of Control, would long
continue to acquiesce in the system which allowed
its weak vassals and mock rulers in India to have
the handling of the revenues. Divided rule might
obtain in England ; but it was disastrous in India.
In 1800 treaties were effected with the Rajah of

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i8oo] NAWAB OF SURAT DEPOSED 333

Tanjore and various native princes, all having
for their object the removal of political power
from the hands of the weak, effeminate or incom-
petent, into the hands of the Company. In these
states the entire administration of government and
revenue was now vested in the Company. In Surat,
a flimsy and almost fictitious government was pulled
down. The Nawab of Surat had long owed his
political existence to the Presidency of Bombay,
which had garrisoned the castle of Surat, and had, by
money and by other means, sustained and defended
him. His arrears of debt were so great that before
Lord Mornington assumed the supreme government
in India the Court of Directors had impatiently
called for a settlement. The Nawab died, and there
arose a disputed succession, and almost a civil war.
On the loth of March, 1800, the chief claimant was
set aside, with a liberal allowance, and the govern-
ment and revenues of Surat assumed by the Company.
The change was generally welcomed by the people.
In the Camatic the Company continued to derive
so little advantage from its government that it could
scarce pay its servants. The Nawab, Omdut-ul-
Omrah, was ruining the province in order to obtain
money for his own lavish expenses, and wherewith
to pay his rapacious creditors and mortgagees the
enormous interests upon the loans they had made to
him. The Nawab was shown to have exhibited
treachery to the English during the siege of Seringa-
patam ; he had, besides, long maintained a secret
correspondence in cipher with Tippoo Sultan. Lord
Clive, the son of the great soldier, now Governor of

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334 LEDGER AND SWORD [1802

Madras, was authorised by the Governor-General to
institute a searching inquiry. The result of this was
a decided conviction that Omdut-ul-Omrah ought to
be deposed.

The Board of Control was as eager as the Board
of Directors for this step to be made, and the Nawab's
death alone intervened to prevent his deposition.
But a successor was set up who agreed to all the
conditions required by the Company, and on the
25th July, 1 80 1, by treaty, all the powers of govern-
ment were delivered over in perpetuity to the Com-
pany and were totally and for ever renounced by the
Nawab. He was allowed a large sum, amounting to
nearly one-fifth of the revenues of the Carnatic, be-
sides being relieved from the crushing weight of
debt created by his predecessors, a debt which had
encumbered the revenues of the country and was
rapidly ruining the people. The Company engaged
to liquidate by degrees all such portions of this great
debt as should be proved to be just. As for the
Nawab, he was limited to "that sort of life for
which alone Nawabs were fit — a life of form, cere-
mony and silver maces ; of indolence, show and
parade" — and divided rule in the Carnatic thus
came to an end.

War with the Mahrattas broke out in 1802.
The Peishwa, rebelling against the tyranny of his
subject Scindiah, joined the Englisih, agreeing to
cede in return for its help territories worth annually
twenty-six lakhs of rupees to the Company. General
Wellesley was sent against the enemy, and after a
long campaign beat them soundly at the famous

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i8o4] GEORGE DANCE'S EXPLOIT 335

battle of Assaye, captured their stronghold of Cut-
tack, and so cut the Mahrattas off from the sea.
But the Mahrattas were not exterminated, as we
shall perceive later.

After futile attempts elsewhere, in Borneo the
Company had, as far back as 1774, succeeded in
forming a settlement at Balabangan, a small island
lying off the northern extremity of Borneo. In
the following year it was attacked by the Sooloos
and abandoned. In 1803 it was re-established, but
the efforts to make it profitable were seen to be
wasted, and in a few months it was definitely relin-
quished. Thus was the connection of the Company
with Borneo, as landowners in that island, begun in
1700, at last terminated.^

An incident in the war between England and
France, renewed at the same time, must not pass
unmentioned in these pages. It was a victory by the
Company's men — exclusively sailors and traders —
and vividly recalls the old adventures of the Middle-
tons, Best, Downton and the rest, nearly two cen-
turies before. The French admiral, Linois, had just
fallen upon the Company's factory at Bencoolen,
when on the 14th February, 1804, he met at the en-
trance of the Straits of Malacca a rich fleet of East
Indiamen and country ships on the way from China.
The French admiral boasted a first-class man-of-war,

^ From a passage in a work entitled KeppePs Expedition to Borneo^
it would seem that a formal cession of the northern part of the
island was made to the Company by the Sultan of Sooloo in 1793.
No information on this point is traceable in the records of Govern-
ment, nor does it appear that the rights were ever realised or for-
mally resigned. — Fidler*8 Memorandum,

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336 LEDGER AND SWORD [1804

three frigates and a brig, and with this force, having
made sure that the Company's ships had no armed
convoy, he foresaw an easy prey and huge booty.
The commodore of the trading fleet thought other-
wise. Captain George Dance was a capable and
gallant mariner. The Company had caused its ships
to be well armed and officered, and the sight of the
Frenchman by no means struck them with dismay.
Though the odds were so great Dance resolved to
meet the enemy's attack valiantly. Towards even-
ing the onset was expected ; it was deferred until
the following day. The battle lasted an hour, and
so gallantly did the merchantmen behave that the
French perceived that their job was none of the
easiest. It was not too late to rectify their error,
and Linois withdrew under full sail. The plucky
Dance signalled to follow, and for two hours gave
chase, but owing to the immense property at stake
the chase was then abandoned. Thus was saved
from capture by boldness and decision a valuable
merchant fleet. It was afterwards said that the
" slightest indecision in him or them would have
encouraged the French admiral to persevere in
his attack ; and had he done so no efforts, however
gallant and judicious, could have prevented a part
of the fleet at least from falling int9 his hands".
Such a deed was not likely to go unrewarded;
Commodore Dance and his brave associates down
to the least member of the crews received a liberal
recompense from the Company. The leader was
knighted by the King and everywhere received
with an honour which could not fail to excite emu-

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i8o53 STAUNTON'S EMBASSY 337

lation amongst the other marine servants of the
Company.^

Nothing baffled by the ill-success of the last em-
bassy, the China trade continued to attract the atten-
tion of Parliament.

In May, 1804, the Company was apprised of
His Majesty's intention to address a letter to the
Emperor of China, accompanied by presents. It was
therefore determined that a letter should be sent from
the chairman of the Company to the Viceroy and
Hoppo, also with gifts; and as it had been intimated
to the Court that the embassy in 1 792 would probably
have been more successful had the Prime Minister
at Pekin been "conciliated to the British interests,"
a letter was addressed to him by Lord Casdereagh.

The embassy duly set forth and arrived at Can-
ton, The 23rd of January, 1805, was fixed for
the reception of King George's letter, which, with
Chinese versions of the letters for the Prime Minister,
Viceroy and Hoppo, had been prepared with the
assistance of Sir George Staunton. The Viceroy
was also informed that there were letters awaiting
him from Lord Castlereagh and the Company ; but
these latter were politely declined on the plea that
the general laws of the country prevented any officer
of government from receiving letters or presents
from the ministers or mandarins of foreign nations.
The King's letter, however, was most formally
received, and the supercargoes and Sir George

^ Among the sums of money voted to him was one of ;£'5,ooo by the
Bombay Insurance Company. Other sums were given to him and to
the officers and crews by the Committee of the " Patriotic Fund ".
VOL. n. 22

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338 LEDGER AND SWORD [1804

Staunton treated with marked civility. But once
again the whole venture inspired by Manchester and
Sheffield ended as the leading members of the Com-
pany had predicted — as did Amherst's embassy later.

While this futile mission to China was proceed-
ing, it seemed to Pitt and to the Company as if
there had been already enough fighting and to spare
in India against the Mahrattas. The English vic-
tory at Assaye had been in everybody's mouth the
year before, and it was supposed that Mahratta power
was destroyed. The disillusion quickly came. This
time the offending chief was Holkar, who in 1804
besieged Delhi, where the unhappy Mogul was en-
sconced. General Lake appeared with an army and
drove away the besieger, took Chandore, and, disre-
garding all orders and opinions from home, fought
on until he was compelled to make peace in Decem-
ber, 1805. That this peace was a mistake was quickly
proven ; it was dictated at home by dread of the
expense. The fact is, the treble government, that
of the Company, the Crown and the Governor-
General, was incompatible not merely with a " for-
ward policy,*' but with the stability and security of
what the Company's servants had won.

Both Parliament and the Company had recom-
mended that no more wars should be undertaken for
extension of territory, and that leagues and alliances
with native powers should be avoided. But neither
Parliament nor the Company adequately realised the
situation. The only ones who really understood it
were the Company's servants in India, and after
these the imperial authorities painfully lagged. It

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i8os] COMPANY REBUKES WELLESLEY 339

has been said of this time that ** the British Legisla-
ture had but slowly followed the progress of the
power of the Company in India. It had legislated
for factories when the Company was in possession
of provinces ; and by the time the laws were com-
pleted to govern provinces, the Company had ac-
quired kingdoms. At no time was there a system
formed fully calculated to the greatness of the em-
pire.^ Too frequently both the King's Government
and the Directorial Government were disposed to
apply the old tiny factory scale to the vast em-
pire, or to pretend that the laws laid down for
merchants and traders ought to regulate the con-
duct of statesmen, soldiers and conquerors. Cam-
paigns were examined like " debtor and creditor ac-
counts". Yet that **war was a necessity inherent in
our position " neither Crown nor Company at home
was prepared to acknowledge. In spite of this policy
of the supreme authorities, wars were destined to go
on — to arise out of circumstances — until in a final
convulsion the Company's light was to go out and
its torch be handed over to the British Crown.

In 1805 the Company, jealous of its prerogatives,
drew up a despatch severely criticising Wellesley's

^ Sir John Malcolm*8 Political History of India. It was complained
at the time by Lord Wellesley's partisans that his " great scheme of
strengthening and enlarging British India was spoilt by the policy
dictated to his successors by the home Government. During the
latter years of his administration, when his difficulties were greatest,
he was not cordially supported in England by any party whatever ;
and his plans were severely criticised by men who did not compre-
hend them, and who could not see that present expenditure would be
attended by immense future savings." Ever the same plaint I

22 *

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340 LEDGER AND SWORD [1805

whole administration. He was accused of a desire
to be ** master in India," of " simple despotism," and
his huge expenditure was not to be borne. " These
wars and all the political powers of government con-
nected with them have been directed by the personal
authority of the Governor-General ; and, in a word,
his sole will and his sole power have instituted all
the most important measures, internal and external,
originating abroad during the latter years of his
government" In brief, it appeared to be Wellesley s
** intention to concentrate all the political powers
of British India in the person of the Governor-
General ".^ Which was insupportable !

The Company went on to charge the Governor-
General with raising salaries and making appoint-
ments without any reference to the Court of Directors.
It particularly resented his establishment of the
College of Fort William, which it ordered to be
dissolved. It is not difficult to understand the Com-
pany's position. Whatever glory accrued — accrued
to the Crown and British nation, no longer to itself.
It was the case that ** The Governor-General fights
— the Company pays ". Its despatch proceeds : —

" Before we quit this unpleasant subject, we wish
to impress upon the minds of our superior servants
in India that, when they venture to deviate from
orders which they may receive from home, without
being able to assign the most substantial reasons for
so doing, it is not merely the authority of the Court
that is contemned, but His Majesty, since no orders

^ Copy of a proposed despatch rejected by the Board of Control,
dated 3rd April, 1805.

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i8o6] WELLESLEY'S DISOBEDIENCE 341

can be issued by the Court to their Indian govern-
ments that have not previously received the appro-
bation of the Board. A wanton disobedience of
orders whose dangerous consequences the Court
could not contemplate without experiencing a con-
siderable degree of emotion."

Lord Wellesley came home just in time to see
his friend Pitt die. He had certainly flouted the
Company, but he had also laboured diligently for
the extension of the commerce and commercial in-
tercourse of India, and had begun those important
financial reforms which in the course of a few years
doubled the revenues of the Company, with advan-
tage to British commerce and without injustice or
oppression to the natives. He saw that the employ-
ment of cheap India-built ships in the trade with
Europe would be of equal advantage to England
and to India, and so set to work to employ them and
give encouragement to the builders of country ships.
The Company rightly held him ** an expensive and
a high-handed Governor," but it appreciated publicly
and substantially his great merits.*

The death of Lord Cornwallis having occurred
soon after his lordship reached India on a second
term, in the appointment of his successor an illustra-
tion was again shown of the possibilities for discord
between the Crown and the Company under Pitt s
arrangement.

The senior member of Council at Calcutta was
Sir George Barlow, who was esteemed as a capable

^ It had voted him in 1801 a grant of j£'5,ooo a year for the
term of twenty years.

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342 LEDGER AND SWORD [1806

civil administrator. By Act and charter the powers
of government fell provisionally into Sir George's
hands by Comwallis's death. The Court of Direc-
tors wanted him confirmed in the office of Governor-
General, and the Board of Control signified its
approval but only as a temporary arrangement. At
this juncture Pitt died, and Fox and his Whig
friends were naturally anxious to nominate a
Governor-General of their owa The Court of
Directors pleaded their right to nominate the
Governor-General and named Sir George Barlow.
The consequence was seen in an angry collision at
home between the King's Government and the
Company, which inevitably communicated itself to
India and there occasioned no small confusion and
obstruction in the conduct of affairs.

The upshot was a singular compromise. Fox and
his Whig friends gave up Lord Lauderdale, whom
they had wished to force on the Company, and the
latter gave up Sir George Barlow whom it had
wished to retain, whereupon and by mutual consent
Lord Minto, President of the Board of Control, was
named Governor-General in July, 1806.

From one point of view Barlow was an excel-
lent servant for the Company. His passion for
economy and retrenchment could hardly fail to com-
mend itself to those who looked to East India House
for dividends. But he carried his passion too far
and therefore fatally. His brief administration as
Governor-General was signalised by the mutiny and
massacre at Vellore, occasioned by certain foolish re-
forms directed against the Madras sepoys. As soon

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i8o6] SIR GEORGE BARLOW 343

as the news of the tragedy became known in Eng-
land, the Court of Directors instantly recalled Lord
William Bentinck and General Sir John Cradock,
the authorities at Madras. On Lord Minto's arrival
at Calcutta, Sir George Barlow condescended to ac-
cept the Governorship of Madras, and here his talents
for retrenchment aided in the precipitation of a serious
mutiny amongst the officers, who had a far stronger
case than those who had made a bold stand against
the first Lord Clive. The fact that Barlow had re-
fused to give Cradock's successor. General Mac-
dowell, a seat in the Madras Council angered the
insurgents. The Company backed up Barlow. The
Board of Control desired Macdowell's inclusion in
the Council. In the end the mutiny was quelled and
the dispute at home settled by the Company agree-
ing to give a voice in the Council to Macdowell's
successor. Barlow was warmly supported by Per-
ceval's Cabinet and by the majority of the Court of
Directors, "who declared that he had come out man-
fully from a desperate contest with the military, who
had long been disorderly at Madras, and who had
aimed at nothing short of erecting their own power
as supreme over the civil power ".^ Thus we see
how jealous the Company was grown of the military
power of the Crown.

^ Sydney Smith dealt at length with this revolt in the Edinburgh
Review at the time ; but not, I think, quite fairly to Barlow.

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CHAPTER XII.

Manchester Attacks the Monopoly*

The perpetual intrigues of France in Persia necessi-
tated again strengthening the diplomatic bonds be-
tween England and Persia. This had so impressed
itself upon the Company that it decided to send Sir
John Malcolm as Envoy Extraordinary to the Shah
of Persia and Pasha of Bagdad. He was also vested
with extensive control over the Company's affairs
in Persia and Turkish Arabia. And now we are to
behold another result of the division of power and
authority in England. For the British Government
had likewise conceived the same idea, and ordered
Sir Harford Jones, formerly in the Company's
service at Bagdad, on precisely the same mission on
behalf of the Crown. Malcolm and Jones met in
Persia, one representing the Company, the other
the Crown. In the old days of the Company's
prerogatives, Jones would have had to give way.
At most, his case would have been that of Lindsay
and Harland at Madras forty years before. The
absurd anomaly of the situation struck even the
Persians. At length Malcolm retired, and Sir
Harford Jones set out for Teheran, where at
length a treaty was negotiated stronger than those
which had gone before.

But all this is on the eve of the extinction of the

344

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i8ii] END OF PERSIAN TRADE 345

Company's Persian trade. In 181 1, two years after
the Bagdad and Bussora Residencies were consoli-
dated, the Governor of Bombay wrote to the Com-
pany suggesting the expediency of withdrawing the
factories at Bussora and Bushire, as trade was all
but dead so far as the Company was concerned, and
accordingly in the following year we find the Com-
pany's commercial business in the realms of the Shah
and in the Persian Gulf brought practically to an end.
Residents and native agents duly replaced ** factors",
and *' brokers," and the Company's stations in Persia
became a purely political charge, trade being thrown
open to all, the several agents, however, being pro-
hibited from engaging in trade on their own account
or for others.

Such a change necessitates us here to take brief
but special cognisance of an important fact apper-
taining to the larger and more important theatre of
the Company's government. Full long have we
reviewed the Company's acts as trader and soldier.
Let us now glance at it in its nineteenth century role
of civil administrator. Civil administration is the
third act of the long drama of the East India
Company's rule. It is a great landowner, the
greatest in India. The collection of its revenues
and the management of affairs involves the labour
of thousands of Englishmen. Far different is the
employment of these officials now than when the
youthful Robert Clive painfully copied invoices in
the warehouse at Madras.

Lord Wellesley's own words, written when he
first proposed to found a training college for the

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346 LEDGER AND SWORD [1811

Company's servants,^ will here serve our turn best.
** The denominations of writer, factor and merchant,"
he wrote, " by which the several classes of the Civil
Service are still distinguished, are now utterly in-
applicable to the nature and extent of the duties dis-
charged and of the occupations pursued by the civil
servants of the Company. To dispense justice to
millions of people of various languages, manners,
usages and religions ; to administer a vast and com-
plicated system of revenue through districts equal in
extent to some of the most considerable kingdoms in
Europe ; to maintain civil order in one of the most
populous and litigious regions in the world ; these
are now the duties of the larger portion of the civil
servants of the Company. The senior merchants,
composing the Courts of Circuits and Appeal under
the Presidency of Bengal, exercised in each of these
Courts a jurisdiction of greater local extent, applic-
able to a larger population, and occupied in the de-
termination of causes infinitely more intricate and
numerous, than that of any regularly constituted
court of justice in any part of Europe. The senior
or junior merchant employed in the several magis-
tracies and zillah courts, the writers or factors filling
the stations of registrars and assistants to the several
courts and magistrates, exercise, in different degrees,
functions of a nature either purely judicial, or inti-
mately connected with the administration of the
police, and with the maintenance of the peace and
the good order of their respective districts. . . .

^ Minute reUUive to the College of Fort IVilliam.

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i8ii] ALTERED CIVIL SERVICE 347

Those civil servants who are invested with powers
of magistracy, or attached to the judicial department
in any ministerial capacity, although bearing the de-
nomination of merchants, factors or writers, are
bound by law, and by the solemn obligation of an
oath, to abstain from every commercial and mercan-
tile pursuit ; the mercantile title which they bear not
only affords no description of their duty but is en-
tirely at variance with it. . . . The civil servants of
the East India Company, therefore, can no longer be
considered as the agents of a commercial concern ;
they are, in fact, the ministers and officers of a
powerful sovereign. . . . They are required to dis-
charge the functions of magistrates, judges, ambas-
sadors and governors of provinces . . . Their duties
are those of statesmen in every other part of the
world, with no other characteristic differences than
the obstacles opposed by an unfavourable climate, a
foreign language, the peculiar usages and laws of
India, and the manners of its inhabitants."

This was perhaps ignoring trade too completely ;.
shutting out utterly China and the far East, but it
still was largely true. At this college, then, it was
intended to employ professors of ethics, jurispru-
dence, the law of nations, English law, classical lite-
rature, the modern languages of Europe, history,
geography and the physical sciences. A good
beginning was made with some able teachers of
Oriental languages and laws; but the Company
thought the plan too expensive, and the College
of Fort William was reduced to little more than a
seminary for the instruction of the Bengal civil ser-

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348 LEDGER AND SWORD [1810

vants in the languages used in that Presidency. It
was not long afterwards that the Company's East
India College was begun in England at Haileybury.^

To Lord Wellesley*s description of the Com-
pany's administration in India nothing need be, or
can be, added. Enough to say that it was now there
chiefly a great governing landlord ; it managed its
estates and administered to the affairs of its tenants
and dependents. Its monopoly of trade was fast
slipping from its hands in India. It could not hope
to hold it much longer. Yet to China and the tea
trade it was to cling passionately for another genera-
tion. It has even been said, but with infinite ex-
aggeration, that the corner-stone of the Company's
first greatness was tea. Certainly it was now freely
admitted that tea was the financial prop of the Com-
pany.

But the Company's service and servants had not
everywhere changed to a new and less strenuous or
interesting type. Even in India there were chances
for the adventurous ; there were many more such
chances in the far East.

Amboyna, which had been given back to Hol-
land, or rather to Holland's master, Napoleon, by
the treaty of Amiens, came again to figure in the
Company's ledgers in 1810. In that year a small
flotilla of the Company's armed vessels and a small
military force from the Company's Madras Euro-

1 Reverend T. R. Malthus, Statement respecting the East India
College^ etc. Marquis Wellesley, Minute relative to the College of Fort
William, Thomas Roebuck, captain in the Madras N.I., Annals
of the College of Fort William, etc., Calcutta, 1819.

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SIR STAMFORD RAFFLES.
From the Painting by G. F. Joseph, A.R.A., in the National Portrait Gallery.

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i8io] SPICE ISLANDS AGAIN 349

pean regiment on the i6th February stormed the
principal batteries, which on the following day sur-
rendered to the British, although defended by 1 3,000
men and much artillery. In the course of the month
the whole of the group called the Banda Isles, so
productive in nutmegs and associated with the ear-
liest expeditions of the Company, in Elizabeth s and
James s reigns, submitted to the English.

The old Spice Island conquests and conquerors
were still further recalled in some of the achieve-
ments of the Company's decline, particularly the
reduction of Java and the Dutch settlements in
Sumatra. The honour of suggesting and directing
the great project belongs not to any British soldier
or statesman, but to Stamford Raffles, one of the
last of that fast-dwindling band of daring traders
produced by the East India Company. Lord Minto
himself accompanied the expedition. When his
naval and military officers were in doubt how to
proceed, Raffles showed the way, *' staking his
reputation on the success which would attend it '*.
Batavia, the capital, to which the Dutch had given
the proud title of " Queen of the East," was sur-
rendered on the 8th of August by the burghers,
the garrison having retreated to Weltevreeden.
Bloody battles followed, but the Dutch were routed
and Java was taken. Thus wrote Lord Minto trium-
phantly to the Company : " An empire, which for
two centuries has contributed greatly to the power,
prosperity and grandeur of one of the principal and
most respected states in Europe, has been thus
wrested from the short usurpation of the French

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350 LEDGER AND SWORD [1813

Government, has been added to the dominion of the
British Crown, and converted from a seat of hostile
machination and commercial competition into an
augmentation of British power and prosperity ". "It
is, in fact," declared Raffles, ** the other India."
Under the title of Lieutenant-Governor of Java and
its dependencies, Raffles was appointed to preside
over this new empire, "as an acknowledgment of
the services he had rendered and in consideration of
his peculiar fitness for the office ".^

But the daring merchant adventurer could little
dream how brief was to be the British occupation ;
that a complaisant British Government was soon to
hand back these splendid conquests to the Com-
pany's hereditary trade rivals, the Dutch. Here
also the reader may detect a parallel to the Crown
proceedings in the old days.

A recent immunity from wars in India and the
consequent prosperity of the Company, the rich con-
quests in the Spice Islands, these compared with the
stagnation and disorganisation at home, joined to the
prospect of war with America, made the mercantile in-
terests of the kingdom turn all the more eagerly to the
hope of sharing in the trade of the East. Each time
the Company had applied to Parliament for a renewal
of its charter there had been heard the same jealous
outcry against a continuance of its monopoly. As
the twenty-year period again drew to a close, the
outcry was more than usually ominous. The Minis-
try could hardly hope to resist it. On the 22nd

* Memoir of the Life and Public Services of Sir Thomas Stamford
Rafflesy by his widow.

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I8i3] LORD LIVERPOOL'S ACTION 351

February, 18 13, the Company presented a petition
to Parliament declaring that without its commercial
privileges it could not maintain its political privileges
or territorial possessions ; that its commercial mono-
poly was ** but an instrument for political purposes ".
But Lord Liverpool had already resolved on a
modification of the Company's privileges. Before
the session closed, a bill was carried through both
Houses. The trade with India (but not with China)
was thrown open in ships of a given tonnage, under
licence from the Court of Directors, on whose refusal
to grant such licence an appeal lay to the Board of
Control. The resort of individuals to India for com-
mercial or other purposes was put under similar re-
gulations. It was enacted that the Company's ac-
counts should be kept under the two separate heads
of '* territory" and " commerce". A general author-
ity was given to government, through the Board of
Control, over the appropriation of the territorial re-
venues and the surplus commercial profits which
might remain, after a strict observance of the appro-
priation clauses and the claims of the Company's
creditors Henceforward no Governor-General, Go-
vernor or Commander-in-Chief was to be appointed
to the Company without the approval of the Crown ;
and no suspended or dismissed servant of the Com-
pany was to be restored without the consent of the
Board of Control. The bounty of the Court of
Directors was also restricted, it being laid down that
in the bestowal of any sum exceeding ;^6oo the con-
currence of the Board of Control was indispensable.
Moreover, the Board of Control was to hold and

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352 LEDGER AND SWORD [1S13

exercise authority over the Company's college and
seminary in England

The effect of such regulation was manifest, and
thus we behold the Company entering upon a new
period of divided authority. As it had already
shared its political power with the Crown, so it now
parted with a share of authority over its commerce,
expenditure and general profits.

Naturally, during the debates in Parliament on
the new charter, the great question of the propaga-
tion of Christianity in India figured prominently.
The appointment of missionaries to be salaried by
the State was one of the matters upon which the
Company and the nation seriously differed. The
Company was against such a proceeding, and in
spite of the numerous petitions which p)oured in
upon Parliament, its views and those of nearly
the whole of its servants in India were respected.
But at this time an Anglican hierarchy was set up
for the increasing numbers of English in India,
headed by a Bishop of Calcutta and three arch-
deacons to superintend the chaplains of the Presiden-
cies and the other settlements. This was certainly
a far better plan than for a handful of imprudent
missionaries to be scattered over the country, prone to
occasion as much and even greater harm than they
have succeeded in wreaking upon European interests
in China. It was pointed out by a Scotch member
that, although the majority of British residents in
Hindustan were Scotchmen and Presbyterians, no
provision had been made for their public wyship
as such. He therefore proposed a clause ** ffr the

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i8i6] WINDFALLS FOR THE COMPANY 353

appointment of three superior Scotch clergymen, one
at each Presidency, with a salary of ;^ 1,000 each ".
The proposition was rejected. At a later discussion,
however, it was announced that that "godless cor-
poration," the East India Company had arranged
to maintain certain ministers of the Scottish Kirk
at its awn expense.

In India the Marquis of Hastings now entered
upon the long Nepaul war, which gave considerable
trepidation to the Company, as it could not quite
perceive how the funds for such a campaign were to
be raised without further damaging its revenues. In
his need for funds the Governor-General adopted
Warren Hastings* plan. The Nawab of Oudh died
in 1814 : two of his sons claimed the musnud, one of
whom was ready to pay over to the Company's ac-
count two crores of rupees, or above ;^2,ooo,ooo
sterling. His bid was successful ; he ascended
the throne, and the money went to vanquish the
Nepaulese.

Nor was this the only piece of good fortune which
befell Lord Hastings and the Company. When
money was urgently required in 18 16 to defend the
frontiers of the Company against the Pindarrees,
and to provide for the contingency of a fresh war
with the Mahrattas, at that juncture the celebrated
old Fyzabad Begum, whom Warren Hastings had
** squeezed," and over whom so many tears had
been shed in England, died worth fifty-six lakhs of
rupees. " As she could not take her beloved money
with her, she bequeathed it to the Honourable Com-
pany, on the condition of its providing annuities for
VOL. II. 23

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354 LEDGER AND SWORD [1820

her friends and dependents equivalent to the interest
at the rate of 6 per cent, per annum." The rate
was then a moderate one, the annuitants would die,
and meanwhile the Company had its fifty odd lakhs
of rupees.

By political despatch to Madras, dated 20th
November, 1816, the Court of Directors confirmed
the instrument, dated 23rd July, 18 16, conferring
special privileges on the firm of Palmer, bankers
of Hyderabad. Finding that this firm were engag-
ing in pecuniary transactions with the Nizam, the
Court, by political despatch to India, dated 24th
May, 1820, cancelled the concession. When the firm
afterwards appealed to Leadenhall Street to obtain
payment of sums due to them by the Nizam, the
Company directed the Resident "to submit to the
Nizam the justice and propriety of fulfilling his
obligations, but they would not depart from their
rule never to allow interference in pecuniary trans-
actions between Europeans and native princes ".

The limited encroachment made in 181 3 by
the Government on the Company's commercial
monopoly was far from satisfying the country. The
disbandment following Waterloo found England in
a fearful state of mercantile and industrial disor-
ganisation. The advocates of free trade were tire-
less ; they declared that the Company's monopoly of
the China trade was injurious to British commerce.
In 1820 Committees of Parliament were nominated
to inquire into the foreign trade of the nation, and
to deliberate on the means of extending it. In
May of that year Canning, President of the Board

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i82i] CONCESSIONS TO FREE TRADERS 355

of Control, suggested to the Company the estab-
lishment of an entrepSt in the Eastern archipelago,
where British ships might take in tea for foreign
Europe ; and he pointed out the expediency of the
Company's allotting a portion of their tonnage to
China to the free use of the British public. The
Court of Directors replied, that without the mono-
poly of the China trade the Company could neither
preserve its territories in India nor pay its dividends
in England. It declined being party to any change
in the China trade.

The Committee of the Commons, in their report
of July, 1 82 1, while stating "that they could not
concur in all apprehensions entertained by the Com-
pany of the consequences of even a partial relaxation
of their monopoly," at the same time " acknowledged
that the Chinese monopoly was of the utmost im-
portance to the prosperity of the Company, and of
all connected with it ".

Yet concessions to the outcry of the free traders
and political economists were inevitable. In the
following year British ships were permitted to carry
on trade between all parts within the limits of the
charter, and all ports, whether in Europe or else-
where, belonging to countries in amity with Great
Britain. The Company also consented to relinquish
the restriction as to the tonnage of ships engaged in
the India trade. The China trade still continued a
monopoly, for there was a general impression that it
would be ** difficult for any body of men, less
organised and experienced than the Company, to
carry on a trade with so strange a people as the

23*

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356 LEDGER AND SWORD [1822

Chinese, without constantly being involved in
quarrels ". Nevertheless, for the next few years the
Company's trading privileges in Great Britain were
a constant topic in and out of Parliament, and the
result was even then clearly foreshadowed.

At the same time we must observe that the fric-
tion between the Company and the Crown, or rather
the Ministry, had tended yearly to diminish. A
proof of this was offered when in 181 8 the office
of Governor of Bombay became vacant by the re-
signation of Sir Evan Nepean. George Canning
courteously intimated to the Court of Directors his
readiness to confirm the selection of one of those
eminent servants of the Company who had so
highly distinguished themselves. The Directors
appreciated this mark of confidence and made choice
of the Hon. Mountstuart Elphinstone, who was
nominated Governor of Bombay in October, 1818.^

More amenities followed. When the time came
for the Court of Directors to choose a successor
to the Marquis of Hastings in March, 1822, the
post was graciously offered to George Canning.
That statesman accepted it, but the tragic end of
the Marquess of Londonderry threw the Ministry
into disorder. Canning became Foreign Secretary
and was obliged to return the flattering appoint-
ment of the Company. Lord Amherst was then
chosen.

It was while Canning was at the Board of Con-
trol that the nominal barrier which separated King's

1 Auber, Rise and Progress of the British Power in India.

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i823] STRAIN ON FINANCES 357

from Company's troops was further broken down.
Prior to 1 818 military officers holding the Com-
pany's commission had been excluded from the chief
honours of their profession. This had long been
regarded as unfair : in the previous year the Prince
Regent decided to enlarge the Order of the Bath,
and was pleased to direct that fifteen of the most
distinguished officers of the Company's service might
be raised to the dignity of Knights Commanders of
the Bath, and that certain other officers of the Com-
pany should be eligible to be Knights Companions.

After the Mahratta war Sir David Ochterlony
was selected for the honour of Knight Grand Cross
of the Bath ; Lord Hastings himself performed the
ceremony in camp, at Terwah, on the 20th March,
181 8. "Sir David Ochterlony," said he to the
recipient, " you have obliterated a distinction painful
for the officers of the Honourable Company, and you
have opened the doors for your brothers in arms to
a reward which their recent display of exalted spirit
and invincible intrepidity proves could not be more
deservedly extended to the officers of any army on
earth." The Company's had long been the best
paid service in the world.

During Lord Amherst's rigime occurred the first
Burmese war, which caused a great strain upon the
Company's finances. To show how little the Com-
pany or even the British Government had now to
do with wars in India, we may remark that, although
both had been ardent for peace, nearly the whole of
Amherst's administration had been signalised by
wars, the effective fighting force in India was kept

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358 LEDGER AND SWORD [1827

up to the enormous number of 274,000 men, and
the registered debt of India reached ;^ 13,000,000
sterling.

On the 17th March, 1824, a treaty was con-
cluded with the Netherlands Government by which ,
the island of Sumatra was ceded to Holland, and
Malacca, etc., to England ; the contracting parties
further agreed to repress piracy and to place their
respective subjects in the Eastern Archipelago,
India and Ceylon on the footing of " the most
favoured nation ". Two years later Arraran and
Zenasserim were ceded to the Company by treaty
dated 24th February, 1826.

In 1827, during Lord Amherst's visit to Delhi, it
was reported to the Company that an understanding
had been arrived at concerning the future relations
of the British Government in India and the fallen
majesty of the great Moguls. The days of the
fiction that our Governor-General was but the
vassal of the King of Delhi now terminated, and
by an open assertion of sovereignty an end was thus
put to an embarrassing anomaly. There was little
prestige to be derived from the name or authority of
so discredited a prince, and one so weak in intellect
as the Mogul, who as joyfully as the Nawab of Ben-
gal had resigned the Dewani in 1765 now resigned
a shadowy suzerainty in return for substantial cash.

True, when the additional cash was not forth-
coming the descendant of Aurangzeb angrily sent
an ambassador to King George IV. of England.
This ambassador or agent, Rammohun Roy, was
courteously received by the Company, but as his

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i828] BENTINCK'S STRICT ORDERS 359

mission had not been communicated to the Gover-
nor-General, his character was unrecognised by the
British Government and his mission ended in failure.
Rammohun himself fell ill and died at Bristol in

1833.

Ever since the abrogation of its trading monopoly
in 18 1 3, the Company had resolved to put its
Indian establishment on a more economical footing.
But the subsequent wars and unrest had induced the
Governors-General continually to postpone putting
the Company's injunction on this head into practice.
At last a debt of ;^ 13,000,000 alarmed the Com-
pany, and when Lord William Bentinck set out for
India in 1828 his understanding with the authorities
at the India House was that this time their orders
were to be obeyed. It could hardly fail to be a
thankless task, and to render the Company more
unpopular than ever with its military servants, but
nevertheless its system of economy was forthwith
introduced in the various Departments of Govern-
ment. The sundry allowances made to the army
under the head of batta and half-batta were
abolished. Whether the saving in rupees was
worth the loss in morale was then freely discussed,
but those who opposed it on the ground that *'the
Company and the British Empire in India were not
to be saved by means of petty savings " wholly mis-
understood the essential nature of the Company's
tenure. The Company was a corporation manag-
ing India, as it had formerly traded with India,
for a profit. Aurangzeb and his successors had all
managed India for a profit : their profit had been

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360 LEDGER AND SWORD [1829

great and India had been ill-managed. It had gone
to decay and been dismembered. If the British
name was "tarnished" by the Company's practice of
economy, then it was high time the efficient Com-
pany was shouldered aside for an inefficient and
extravagant — and valorous — British Government.

In 1829 the naval force of the East Indies,
which was constituted under royal charter in the
reigns of Charles II. and James II., and designated
the " Bombay Marine/' was styled the *' Indian
Navy". It was called by that name till in Novem-
ber, 1862, it was abolished as a war service and
reverted to its ancient name of the " Bombay
Marine". Up to the date of its abolition, the
service — a popular and well paid one — was sup-
ported entirely by the Company. Afterwards India
contributed ;^7o,ooo per annum towards the cost of
the Royal Navy vessels of the Indian squadron,
three of which were always in the Persian Gulf and
three in the Bay of Bengal, and elsewhere.

The Company's charter was to expire in 1834.
We have already seen that its commercial monopoly
of India had been abrogated since 1 8 1 3, and although
it still traded on a limited scale in silk and saltpetre,
the total value of its exports to India was so slight
as to be scarce worth the reckoning. As a merchant
in India therefore the Company had now all but
dropped out of the bidding — "the trade," we are
told, **had fallen entirely into the hands of the
manufacturers and merchants of Great Britain, who
now looked with confidence to a like transfer of the
traffic with China to free mercantile competition ".

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1827] CHARGE AND COUNTER-CHARGE 361

It may be said to have mattered little to the
Company whether its profits came from territorial
revenues or from trade. Its huge capital expendi-
ture, its historic and strenuous connection with the
country which it had added to the Empire merited
reward, and this had taken the shape as of prescription
of an annual dividend of 10 J per cent. The British
nation was not enlightened as to the source of the
pecuniary well-spring : one party did not hesitate to
allege that it was the very life-blood of India, that
the Company's commerce was a failure. The Com-
pany was itself but ill-informed as to the exactitude
of its own joint accounts of land and commerce, but
it stoutly denied such a preposterous charge. It held
that its Chinese commercial monopoly was India's
great boon, inasmuch as the profits on tea and
opium paid the cost of the Indian administration.

The prime issues between the nation and the
Company at the beginning of the second quarter of
the nineteenth century were narrowed down to two
only : " the continuance or the cessation of the
Company's exclusive trade with China — the contin-
uance or cessation of the Company's administration
of the government of India". The popular view
which found expression at Liverpool and Manchester,
Birmingham and Sheffield, was that it was quite in-
conceivable that China, considering its wealth, its
huge size and population and its inferior manufac-
tures should offer such a poor market for their pro-
duce. No other country seemed then to present to
Europe such a field as the vast and opulent Empire
of China. The attack upon the Company's exclusive

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362 LEDGER AND SWORD [1830

privileges went steadily on until in May, 1827, when
Canning was at the Treasury, Mr. Whitmore moved
in the Commons for the appointment of a Select
Committee to inquire into the trade between Great
Britain and the East. Whitmore did not hesitate to
recommend the entire dissolution of the "China
monopoly ". Canning was to a great extent a free-
trader; a large section of his present supporters
were declared antagonists to monopolies and re-
strictions of all kinds; and his colonial secretary,
Huskisson, was a leader and oracle of the free-
traders and political economists. Yet Whitmore s
motion was firmly opposed, on the ground that the
proper time was approaching for reconsidering the
whole of the Company's charter and system of
trade. Canning died in the month of August ; the
Goderich Cabinet fell to pieces in a very few months ;
Huskisson and his friends of the free-trade school
resigned; and in January, 1828, the Duke of
Wellington became Prime Minister.

On the 1 2th May, 1829, Huskisson, in presenting
a petition from the Liverpool merchants, prayed for
the removal of all restrictions of the trade with India
and China, stating '* that it was humiliating to pride
and good sense that the English should be excluded
in traffic with China ".

In February, 1830, Lord Ellenborough moved
for the appointment of a Select Committee of the
House of Lords to inquire into the present state of
the affairs of the East India Company, and the trade
between Great Britain, the East Indies and China.
His lordship said that the Company had afforded

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i83o] SIR ROBERT PEEL'S MOTION 363

all the aid in its power to increase the facilities given
to the external and internal trade of India ; that the
most important questions for Parliament now to
decide were : ist. Whether it would be possible to
conduct the Government of India, directly or in-
directly, without the assistance of the Company?
2nd. Whether the assistance of the Company should
be afforded in the manner in which it had hitherto
been afforded or in some other way ?

On the same day Sir Robert Peel moved in the
Commons for a Committee for the same purpose,
stating that he proposed its appointment with the
plain and honest view of having a full and un-
reserved investigation of the affairs of the Company,
and not for the purpose of ratifying any charter or
engagement previously existing between the Govern-
ment and the Company. Committees were therefore
appointed by both Houses, and the Company duly
tendered its evidence.

But the reports were little favourable to the mer-
chant adventurers of Leadenhall Street. That from
the Commons stated that it had been rendered im-
possible for the Committee to separate questions so
interwoven in the Company's system as those of trade
and finance. The opponents of the Company knew
that if they could succeed in proving that the alleged
advantages derived from the China trade were with-
out foundation, not only all plea for a continuance of
the exclusive privilege could be set aside, but that
the pecuniary claims advanced by the Company
would also be rendered untenable. They accord-
ingly contended that, so far from the profits of the

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364 LEDGER AND SWORD [1830

Company's trade having paid the dividend on its
capital stock and the interest on the bond debt and
likewise afforded aid to the Indian finances, all
deficiency had been supplied from the territorial
revenue ; they roundly asserted that the Company
had, in point of fact, no commercial capital whatever.
In support of these views it was also attempted to
be shown that the Company had acted illegally in
fixing the upset price of tea at its sales, and thereby
forfeited its exclusive privilege and rendered itself
liable to penalties for a breach of the law.

The evidence adduced by the Company on these
points proved beyond doubt that in regard to the
upset price of tea it had acted in strict accordance
with the law ; that the calculations in support of an
opposite view were utterly fallacious ; and that the
assertion of the Company's commerce having de-
rived aid from the territorial revenue was not only
at direct variance with the opinion of the Committee
of the House of Commons on the Foreign Trade in
1 82 1, but was likewise diametrically opposed to the
results of all the accounts laid before Parliament since
1 814, by which it was clearly shown that the Indian
revenues had fallen short of the territorial charges.

Certainly, the Company's trade with China had
been established under many difficulties and at con-
siderable cost. It was the care and influence of the
Company that secured for Britain the benefits of
the tea trade, and the establishment in behalf of
the Company with the native Government of an
influence paramount to that of any other nation in
the world. Many instances of the Company's bounty

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i83o] FIRST ANGLO-CHINESE PRESS 365

in connection with this trade might be furnished ;
one will suffice. The celebrated Dr. Morrison
spent the greater part of five years in compiling and
presenting to the Company a Chinese and English
dictionary, hoping it would promote the acquisition
of the native language among the Company's re-
presentatives, and establish a better acquaintance
between the English and the Chinese. Sir George
Staunton undertook at the instance of the Select
Committee at the Canton factory to superintend
the work. But in spite of different manoeuvres
adopted in order not to give offence, the suspicions
of the Chinese were awakened, and the progress of
the work interrupted for a time. In 181 6 the first
part reached England, the second part in 181 7, and
the whole was not completed until 1824, at a cost to
the Company of upwards of ;^9,ooo. The Court
permitted the press to remain at Macao, where it
had been first set up, and translations and other
works were printed. Great care was taken that this
first Anglo-Chinese press was never used for political
purposes. To the merits of Dr. Morrison during
his residence at Canton was thus given the strongest
testimony by the Company.

The average annual profits on the China trade
between 181 5 and 1829, a period of fifteen years,
were over ;^ 1,000,000 a year, the total being
;^ 1 5,414,000. Yet the profits of the China trade
were insufficient to defray the interest on the home-
bonded debt and annual dividends. It was after-
wards ascertained by Mr. Pennington, the accountant
employed to revise the Company's accounts, that the

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366 LEDGER AND SWORD [1830

profit accruing to its entire commercial transactions
in the fifteen years was ;^20,488,ooo.

By the Company's calculation its total assets on
the I St May, 1829, exceeded ;^2 1,000,000 sterling.^

The value of the property in India had been
estimated by the Indian Minister in 1793 at
;^2 50,000 per annum, which, at twenty years pur-
chase, was equivalent to ;^5,ooo,ooo, the Company's
right to which property had been distincdy recog-
nised and reserved in the several Acts by which the
term of the Company's privileges had been renewed.*

Thus from a total worth of ;^68,373 in 1600, the
Company had persisted through good and evil
times, until now, in the times most evil of all for
monopolies, it stood forth as the owner of above

» Viz. ;—
Cash at home and abroad and property in the public

funds ;£'2,i86,ooo

Property afloat and freight 3»532>ooo

Debts due to the Company at home and abroad - 2,227,000

Goods and merchandise at home and abroad - - 7,384,000

Buildings and dead stock --.-.- 1,468,000

East India annuities 1,208,000

Due from territory 4,632,000

;f 22,637.000
Deduct debts 1,534,000

;f2I,IO3,O0O

Deduct as questionable : —

Due by territory 4,632,000

Bond debts 3»796,ooo

;f8,428,ooo

Net assets jf 12,675,000

• Letter of the Court, 27th February, 1833.

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i830] VALUE: TWENTY MILLIONS 367

twenty millions. True, much of this would be
challenged ; but of the indisputable balance of the
net assets (;^ 12,675,000) above ;^i 1,000,000 were
realised and applied between 1834-5 and 1839-40 to
the general expenses of the Indian territory.

We speak now in fiscal phrase : the twenty
millions represented only the Ledger aspect. The
Company's conquest of, its sovereignty over **a
territory larger and more populous than France,
Spain, Italy and Germany put together," was not
in any way to be represented by pounds sterling.

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CHAPTER XIII.

The Doom of the Ledger*

On the 26th of June, 1830, George IV. died. A
month later Parliament was prorogued and subse-
quently dissolved. Before the new Parliament could
assemble, the Duke of Wellington, as Prime Minis-
ter, recognising that legislative action in the affairs
of the Company had now been rendered a matter of
political necessity, resolved to have a personal con-
ference at Apsley House with the leaders of the
merchant adventurers of Leadenhall Street.

On the 1 2th of October the chairman and deputy-
chairman were received by the Duke, who was in
company of Lord Ellenborough. There was some-
thing in this conference to suggest that which had
happened a century and a quarter before between
the official heads of the Company and William III.,
just at the opposite extremity of the vast expanse
of the Park of Hyde. The Iron Duke now, as the
Dutch King then, lost little time in formalities.
He acquainted his visitors that the period for notice
to the Company of the termination of its exclusive
privileges had arrived. He had sent for them in
order to ascertain what the Company's views would
be should His Majesty's Ministers decide upon
continuing the Company in its Indian administration,

but depriving it of its Chinese commercial monopoly.

368

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i83o] ASTELL AND THE DUKE 369

The office of Sir Thomas Cooke in 1700 had
passed in 1830 to William Astell.^ Addressing the
Duke informally, the Company's chairman said he
and his colleague were satisfied that the Company
had no views with respect to the governments of
India beyond that of being a useful instrument in the
execution of an important national trust, and that
it would not be indisposed to continue its ser-
vices to the public provided the requisite means
were ensured to it, by which it might be able to
administer the government consistently with its
own character and for the benefit of this country
and of India. That, financially speaking, there was
a large annual deficit, which was met principally
through the China trade. There was the question
also of remittance. Under the existing system
the Indian territory had access to all the commercial
capital of the Company, which assistance the Com-
pany had been willing to afford so long as this trade
had yielded a dividend of lo^ per cent Under
any contemplated change the Court of Directors
would feel it their duty to secure the interests and
property of their constituents, who, it could hardly
be expected, would consent to any portion of their
capital remaining at hazard without ample guarantee
and security.

In reply, both the Duke and Lord EUenborough
bluntly revealed their official sentiments. These
sentiments were not only held by the Government,

' Astell was an old and distinguished director. He first became
a member in 1807: he figures as deputy in 1809, as chairman in
1810, and again in 1824, i8a8 and 1830. He died in 1847.
VOL. II. 24

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370 LEDGER AND SWORD [1830

but seemed to have been general throughout the
nation at the time. In effect, the chairman and
deputy-chairman were told that the Company had
full security for its capital stock and for the prevail-
ing dividend in the commercial assets and in the
value of a fixed property in India, which might be
judged to appertain to the Company in its commer-
cial capacity.

The duke and his visitors separated, the latter
promising to confer with the Secret Committee of
Directors. A week later this committee wrote to
the Prime Minister that they were far from offering
any objection to an early and a full consideration of the
general question, but they had not anticipated being
called upon within fourteen days of the meeting of
Parliament for an opinion upon a supposed plan ;
nor did the committee see the necessity of connect-
ing the notice by Parliament with any mention of the
King s speech at the opening of the session, when
such notice was to be given. In 1792 only a few
months elapsed between its being noticed from the
throne and the renewal; in 181 3 only one year,
although the negotiations had commenced in 1808.
They then expressed sentiments in full accordance
with those stated by the chairman at Apsley House,
and their readiness to enter fully into the question
whenever His Majesty's Ministers should see fit to
submit any specific proposition for a future arrange-
ment between the public and the Company. The
new Parliament met on the 26th of October ; on
the 15th of November the Ministry was broken up,
and on the 22 nd Earl Grey was gazetted as Prime

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WILLIAM ASTELL,
CHAIRMAN OP THE EAST INDIA COMPANY.

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i83i] COMPANY DECLINE TO PETITION 371

Minister. The Right Honourable Charles Grant
(Lord Glenelg) succeeded Lord EUenborough as head
of the Board of Control. This gendeman and his
family had been closely connected with the Company,
and had owed much to the Indian service ; but these
considerations did not prevent the newly appointed
President of the Board of Control from going along
with his official colleagues. As President of the
Board of Control, he moved, on the 4th of February,
1 83 1, for the re-appointment of the committee on
East India affairs. This committee, however, was
scarcely appointed ere Parliament was dissolved.
The new Parliament assembled on the 14th of June,
and, losing no time, Mr. Grant, on the 28th, moved
again for the renewal of the committee.

At the same time, the Company's conduct in not
having petitioned for a renewal of its charter was a
subject for criticism. But the Court of Directors
were convinced that their most prudent course was to
abstain from petitioning Parliament, leaving it to the
Company's opponents to make out their case, which
when so made out they might duly meet and con-
trovert. At the same time they afforded every
facility for the investigators into the conduct of the
Company. Far from opposing those who professed
themselves desirous to elicit the truth, the Court of
Directors " had invariably expressed a desire to
afford the most ample information, both oral and
documentary " ; at the same time, apprehending evil
from delay, they strongly urged the necessity of
having the views of His Majesty's Government made
known to them at the earliest possible moment

24*

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372 LEDGER AND SWORD [1831

One fact was now obvious. The Company's
adversaries had promised to prove that its revenues
and not its commerce had yielded the means of
paying the dividends and commercial charges, and
that it was in a conspiracy to advance arbitrarily the
price of tea so that it became a grievous tax upon
the nation. They had signally failed to redeem this
promise. In the meantime the table of the House
of Commons had been loaded with petitions, from
merchants and others, s^inst the renewal of the
Company's charter upon its former terms. Thomas
Langton, a merchant of Liverpool, decidedly im-
pugned the general integrity of the Company's
accounts. ** This," adds an official of the Court of
Directors, " was, in fact, the only remaining point ;
and had it been proved vulnerable, the public might
have proposed their own terms, and have placed the
Company at the entire mercy of Parliament, without
any apparent plea of justice to rest upon in support
of the interests of the proprietors." This gentleman
professed to have gone into the accounts, and as a
consequence of his labours he made to the Committee
the following startling statement : —

That the whole debt in India at the close of 1780,
as well that owing before the acquisition of the
territory as that taken from the revenues beyond the
amount of disposable surplus replaced by loan, must
be considered as a commercial debt : and if, from
that time to the close of 1828, India had been
relieved from the payment of the interest on that
debt, all other receipts and payments remaining the
same, the country would have been upwards of

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i83i] "IGNORANCE OR BAD FAITH" 373

;^52,cxx3,ooo Hcher, that it would not have a shilling
of debt, and would have had ;^ 10,000,000 more in
its coffers !

As to the Company's accounts, Langton did not
hesitate to say that to him they were so unintelligible
and contradictory that in preparing them the Com-
pany had been guilty of " either ignorance or bad
faith".

The Company met the charge calmly. In the
first place the attempt to prove the Indian debt as a
debt created for commercial purposes was altogether
contrary to the repeated declarations in Parliament in
1 793» 1 8 1 i-i 8 1 2, 1 8 1 3. Parliamentary committees
had previously gone into the matter and formerly
recorded their opinion, which Langton had not con-
sulted. He had besides utterly ignored the various
political causes which had originated and increased
the political debt in India. Langton failed in con-
vincing the House that he had made out his case.
The session terminated on the 20th of October.
On the 27th of January, 1832, the President of the
Board of Control, still the Right Honourable Charles
Grant, moved for the re-appointment of the Select
Committee.

A general committee on the affairs of the East
India Company being appointed, it was divided into
six sub-committees : i. Public; 2. Finance, Accounts
and Trade ; 3. Revenue ; 4. Judicial ; 5. Military ;
6. Political. Their labours terminated in August,
1832, when the several reports were all laid down
before the House and ordered to be printed.

The Liverpool gentleman's insinuations concern-

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374 ' LEDGER AND SWORD [1832

ing the financial account of the Company had borne
fruit An independent professional accountant was
engaged. He knew nothing of Indian accounts.
He spent seven months in a close scrutiny at the
East India House. His report was that territory
had gained since 1793, ^^ ^ result of the gradual
accumulation of commercial profit, several millions
sterling, together with the increase of subscribed
capital at that time authorised.

In the report of the Parliamentary Committee
regarding the financial operations of the Company
they stated : —

"The finances of India have derived advantage
from their existing connection with the commerce
of the Company : through the direct application of
surplus commercial profit, and by the rates of ex-
change at which the Board of Control decided that
the territorial advances from commerce in England
should be repaid to commerce in India."

It was now high time for the Company to open
negotiations with His Majesty's Government re-
specting the charter. The Court of Director's sent
their chairman and deputy-chairman to confer with
Earl Grey and Mr. Grant A long interview took
place relating to a paper containing twenty-nine
propositions which was read out by the Prime
Minister s colleague on this occasion. These pro-
positions, which were to be the basis of a bill, were
duly submitted to the Court. Briefly, it may be
said that the first eight related to the cessation of
trade, the surrender to the Crown of all the Com-
pany's assets, commercial and territorial, with all its

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1832] BASIS OF THE BILL 375

rights and possessions, for an annuity of ;^630,ooo,
which was to be paid to them as a joint stock
company. The next eleven concerned patronage
and the continuance of the East India College. The
free resort of British subjects to India and the future
powers of the Board of Control formed the sub-
jects of the remainder. By the measure which the
Government was resolved to introduce the East
India Company would cease to trade, and there-
after devote its undivided attention to the arduous
duties of governing in conjunction with the Board
of Control our Empire in the East. With respect
to the competency of India to answer all just de-
mands on her exchequer, Mr. Grant said that no
rational doubt could exist. A revenue which had
been steadily progressing during the last twenty
years, which had now reached the annual amount of
;^2 2,000,000 sterling, and which promised still to
increase ; a territory almost unlimited in extent ; a
soil, rich and fertile, and suited to every kind of
produce ; great resources not yet explored ; a
people, generally speaking, patient, laborious, im-
proving, and evincing both the desire and capacity
of further improvement ; these, Mr. Grant thought,
**were sufficient pledges that our treasury in the
East, under wise management, would be more than
adequate to meet the current expenditure ".^ True,
such a proposition ** involved a surrender, but it

* Peter Auber, Rise and Progress of the British Power in India.
The contemporary reports filled more than 8,000 pages of close print.
These with the matter previously given to Parliament made an
aggregate of about 14,000 closely printed pages.

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376 LEDGER AND SWORD [1832

also involved an equivalent ". The Ministry were
perfectly frank in the matter. The Company could
accept or reject its terms, but if they were rejected
a detailed and injurious inquiry would certainly
follow. In the interval the charter would expire, the
China monopoly would terminate and the Company
would find itself in a quandary. The Company saw
nothing for it but compromise, however little it pro-
fessed to dread the keenest scrutiny into its accounts.
At the outset, therefore, it contended for some
guarantee or some collateral security for the pay-
ment of the dividends, and ultimately (if necessary)
for the capital, to the holders of East India shares.
The Duke of Wellington and Lord EUenborough
had told the chairman of the Court, in 1830, that
the proprietors had full security for their dividends
and capital in the commercial assets and in the fixed
property in India, which might be deemed to apper-
tain to the Company in its trading capacity. Now
Mr. Grant assured the Court that His Majesty's
Government was willing and anxious to fortify the
interests of the proprietors by a collateral security in
the shape of a sinking fund, formed by the invest-
ment of a portion of the commercial assets in the
national stocks. The minister proposed, as a suffi-
cient sum, ;^ 1, 200,000.

Nevertheless, the Court asked for further expla-
nations, to which, they said, the Company as a body
thought it was entitled.

Here we are, said the directors, called upon to
surrender everything we possess as a corporation,
our capital computed at more than ;^ 2 1,000,000

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i833] COMPANY MAKES A PROTEST 377

sterling, every item of which was commercial in its
origin and present character; our right to trade,
most valuable when considered in connection with
that capital, and with the position which the Com-
pany had established here and abroad, and which
right, if we chose to exercise it, would greatly inter-
fere with, if not altogether prevent, the advantages
which private merchants expected to reap from a
free trade with China ; our pecuniary claims, some
sanctioned by a committee of Parliament both in
principle and amount, and all recognised either by
Parliament, or in Parliament by Ministerial state-
ments; our lands, forts and factories in India, for
which we contended they had as good a title as that
by which any property is held ; and, finally, our
claims in respect to the territory at large, which
Parliament has always reserved.

They went on to say that the right of the Com-
pany had been questioned, but that the Court was
satisfied as to the validity of its claims, although by
no means unaware of the difficulty of realising and
possessing them, were the King's Government
antagonistic to the Company. They demanded that
the sinking fund, or guarantee fund, should be at
least ;^2,ooo,ooo sterling. The Court of Directors
could not give their assent to the plan of Ministers
without the sanction of the Court of Proprietors.
" Two or three years earlier," as was justly said,
''such a sanction could scarcely have been hoped
for, and the motion for it would have called together
all the proprietors that were not bedridden or out of
the country."

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378 LEDGER AND SWORD [1833

But the public opinion and the voice of the
Ministers had spoken only too plainly. It was
futile to make an outcry against extortion, tyranny
and monstrous injustice. The merchant spoke as
loudly and as eloquently for his rights in 1833 as the
soldier had done in 1784, but in vain. Earl Grey
was as obdurate now as Pitt was then. No fewer
than nine stormy meetings were held to discuss a
resolution submitted by Sir John Malcolm, in which
it was observed that ** on reviewing the intimate con-
nection which has so long subsisted between India and
the Company, this Court desire to record their con-
viction that the Comp)any can have no other object
in undertaking to administer the territorial govern-
ment for a further term than the advancement of the
happiness and prosperity of our native subjects ; and
that if Parliament in its wisdom should consider, as
His Majesty's Ministers have declared, that that
great object may be best promoted by continuing
the administration in the hands of the Company,
having, through the Court of Directors, suggested,
as it was their duty to do, the difficulties and dangers,
political as well as financial, which beset the dissolu-
tion of the connection between the territorial and the
commercial branches of their affairs, they will not
shrink from the undertaking, even at the sacrifices
required, provided that powers be reserved to enable
the Company efficiently to administer the govern-
ment, and that their pecuniary rights and claims be
adjusted upon the principle of fair and liberal com-
promise ".

On the 3rd of May, 1833, it was decided in a

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1833] PROPRIETORS' SUBMISSION 379

General Court by 477 votes, against a minority of
52, that, provided the guarantee fund were raised to
;^2,ooo,ooo and some other money conditions com-
plied with, the plan of Ministers should be accepted,
and the Company cease to be a trading company.

Thus was this great question involving com-
mercial property of over twenty millions, together
with territorial possessions, forts and factories, an-
swered by the generality, barely a fourth part of the
proprietors voting, and, adds the Company's secre-
tary, ** little beyond a third part of the number who
voted in favour of a candidate for the direction ! "

On the 27th of May Mr. Grant expressed the
satisfaction with which His Majesty's Government
had learned the termination of the appeal to the
ballot in Leadenhall Street He stated it to be
the anxious wish of Ministers to accommodate them-
sielves, as far as possible, to the views and feelings
of the Company, and he agreed to increase the
guarantee fund to ;^2,ooo,ooo. The Company,
moreover, was to administer the government of
India for a defined period of five years, exercising
the same powers that it had possessed under its
charter. The fears of the Court of Directors that
the Government, through the Board of Control, in-
tended to claim and exercise a veto on the recall of
Governors-General, proved to be ill-grounded.

It was observed that if the power of recall, which
had been rarely exercised, should be withdrawn, the
public functionaries abroad might set at nought the
authority of the Court and hold it in contempt. A
Governor might be lavish in public expenditure ;

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380 LEDGER AND SWORD [1833

might think only of providing for his own depen-
dents or those of the Ministry ; might be indolent
and inactive, or arbitrary and capricious in the exer-
cise of his powers ; and notwithstanding these and
other defects of character and conduct he would
retain firm possession of his station as long as hq
should succeed in propitiating the Minister of the
day, who might be interested in his continuance in
office, and even derive influence and advantage from
his maladministration.

The power of recall, Mr. Grant assured them,
was left undisturbed in the hands of the Company.
Nevertheless, while acknowledging with satisfaction
the concessions which had been made, a number of
the directors, led by the chairman and deputy-chair-
man, pressed two other points on the Government :
one that the guarantee fund should be increased to
;^3,ooo,ooo and the other causing Parliament to
be informed whenever a difference occurred between
the Board of Control and the Court of Directors,
subsequent to the despatch of orders to India. The
Company had asserted, with some show of reason,
that its weight and influence at home had been
chiefly derived from its commercial character, and
the loss of its commerce would certainly diminish its
prestige with the public and its authority with the
Government. To such a degree would feebleness
ensue that it would descend to being simply a con-
venient tool for carrying out the orders of the leader
of the Board of Control, " whose sway would be
almost absolute and neither subject to the check
of the Company or the vigilance of Parliament ".

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i833] COMPANY AND NAWAB'S DEBTS 381

For this reason it was urged upon the Government
that whenever a difference of opinion occurred be-
tween the Board and the Court an appeal should
be had to Parliament

The need for creating some provision for pub-
licity in such differences of opinion between the
Company and the Crown was not without much
testimony about this period. Among other cases
was a claim put forward on behalf of two native
bankers, Manohur Das and Sital Buboo, who had
establishments in the chief Indian cities. They
declared that the Nawab of Oudh owed them a large
sum of money for debts contracted by Asof-ad-
Daulah in 1 796. The Company absolutely declined
to recognise such a debt, and after going fully into
the subject the Board of Control supported the
refusal. But a new Board had taken an altogether
different view. It was shown that Lord Hastings,
believing the demand was just in its origin, had
virtually recommended the Nawab to settle the claim
of the bankers. The Nawab positively refused and
the government of the country did not therefore feel
itself justified in any further attempts to compromise
the matter. The Nawab of Oudh was wholly in-
dependent of control, and in this frame of mind the
Company continued when, in 1832, it was called
upon by the Board to adopt the draft of a despatch
instructing the Council of Bengal to urge the Nawab
to liquidate Asof-ad-Daulahs alleged debts. It
twice declined to accede to this request, and so forced
the President of the Board to adopt his favourite
expedient of a writ of mandamus. But the change

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383 LEDGER AND SWORD [1833

in the Company's home affairs caused the matter to
be eventually abandoned Another case, cited at
length by Mill, is that of the Hodges claim, where a
member of the Council of Masulipatam unwarrant-
ably became the creditor of a native official in 1775.
The Company annexed the securities before the debt
was paid. It was afterwards made liable for the
supposed debt, but the claim was held to be invalid
and nothing more was heard of it until half a century
later, when his grandson brought it before the House
of Commons. A bill was passed through both
Houses sanctioning the payment, and the Company
was in consequence " compelled by the legislature to
pay at the expense of the people of India a consider-
able sum, the claim for which originated at the
distance of more than half a century in transactions
of a highly questionable description ". ^

But in this point of an appeal to Parliament the
leaders of the Company were not supported by the
majority, nor by the Court of Proprietors, which met
again on the loth June.

But the end was not yet. Three days later Mr.
Grant, in a committee of the whole House, brought
before Parliament the subject of the Company's
charter, and explained the proposed changes. The
whole of the transaction was to be entirely free from

^ There was the case, too, of Hutchinson v, the Rajah of Travan-
core. Hutchinson was in the Civil Service of the Company, and
charged by them with the duty of purchasing investments of pepper
and cloth from the Rajah. In this capacity he carried on private
relations with the Rajah, lending him money at a high rate of
interest, and selling and buying various articles which it was his
business to provide for the Company's investments.

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i833] MACAULAY'S SPEECH 383

the finances of England. It was proposed to estab-
lish a fourth government in the Western Provinces
of India ; to extend considerably the powers of the
Governor-General ; to appoint a Supreme Council
of Legislature, with power to make laws and draw
up a code for India; to define the jurisdiction of
the Supreme Court ; to render the Presidencies
of Madras and Bombay still more subordinate to
the Governor-General, and to reduce the Councils
of those two Presidencies. On the 29th June a
printed copy of the bill was submitted to the Court
of Directors, who acquiesced generally, but offered
some particular objections. They complained that
the bill "placed the whole control in the Supreme
Government, thereby not only interfering with the
control exercised by the home authorities, but in-
vesting the Governor-General with a sway almost
absolute, and rendering it scarcely possible always
to select a fit person to be entrusted with authority
of such magnitude ".

*' Three things," said Macaulay, in the course of
a great speech in the House, " I take as proved —
that the Crown must have a certain authority over
India, that there must be an efficient check on the
authority of the Crown, and that the House of Com-
mons is not an efficient check. We must then find
some other body to perform that important office.
We have such a body — the Company. Shall we
discard it?" He went on: —

" It is true that the power of the Company is an
anomaly in politics. It is strange, very strange,
that a joint stock society of traders ; a society, the

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384 LEDGER AND SWORD [1833

shares of which are daily passed from hand to hand ;
a society, the component parts of which are perpe-
tually changing ; a society which, judging d priori
from its constitution, we should have said was as
little fitted for imperial functions as the Merchant
Taylors' Company or the New River Company,
should be entrusted with the sovereignty of a larger
population, the disposal of a larger clear revenue, the
command of a larger army than are under the direct
management of the Executive Government of the
United Kingdom. But what constitution can we give
to our Indian Empire which shall not be strange —
which shall not be anomalous ? That Empire is
itself the strangest of all political anomalies.

** That a handful of adventurers from an island
in the Atlantic should have subjugated a vast coun-
try divided from the place of their birth by half the
globe; a country which at no very distant period
was merely the subject of fable to the nations of
Europe ; a country never before violated by the
most renowned of Western conquerors ; a country
which Trajan never entered ; a country lying beyond
the point where the phalanx of Alexander refused
to proceed : that we should govern a territory 10,000
miles from us, a territory larger and more populous
than France, Spain, Italy and Germany put together;
a territory the present clear revenue of which ex-
ceeds the present clear revenue of any State in the
world, France excepted; a territory inhabited by
men differing from us in race, colour, language,
manners, morals, religion : these are prodigies to
which the world has seen nothing similar. Reason

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1833] A SUBSTITUTE SUGGESTED 385

is confounded. We interrogate the past in vain.
General rules are almost useless when the whole is
one vast exception. The Company is an anomaly :
but it is part of a system where everything is
anomaly. It is the strangest of all Governments,
but it is designed for the strangest of all Empires."

In Macaulay s opinion the whole question re-
solved itself into this : ** If we discard the Company
we must find a substitute," and that substitute not
Crown and Parliament.

The Company held that there was no necessity
for incurring the charge of a fourth Presidency ; that
the Councils of Madras and Bombay ought not to
be reduced ; and that it would be very unwise to
deprive the commanders-in-chief of the armies of
those two Presidencies of the seats in Council which
had been usually allotted to them. The directors
expressed their satisfaction that the bill reserved to
them the necessary powers regarding the laws which
the Supreme Council might enact affecting the
natives and likewise the provincial courts, which laws
were also to be subject to the King's approbation.

Lord Lansdowne brought the resolutions for-
ward in the House of Lords on 5th July. He
warmly deprecated, as Grant had done in the Com-
mons, the habitual inattention of his hearers to a
subject which had seldom found in them a willing
audience, namely, the government of India,^

^ Nothing in British political life is stranger than the apathy of
Parliament towards Indian and Imperial matters, incredible, one
would say, of a "great Imperial people " — if the British Empire were
not such an anomaly and had it a less peculiar Qri§in«

VOL. II. 25

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386 LEDGER AND SWORD [1833

Lord EUenborough prophesied an unfavourable
change in the future composition of the Courts of
Proprietors and Directors, which, instead of being
made up of ** eminent English merchants and in-
fluential members of Society," would probably come
to consist exclusively of persons connected with
India who, owing to their prejudices, would be little
calculated to promote the happiness of the people of
both countries. The prophecy, however, was not
fulfilled ; the personnel of the Company continued
down to its dissolution to be in character about the
same as one hundred years previously.

Lord EUenborough applauded the achievements
of the Company's servants both in peace and in war,
and doubted whether there was anything in the new
rdgtnt-e which would produce such men or such
deeds. After the Earl of Ripon had defended the
ministerial plan the Duke of Wellington spoke. It
was no longer necessary for him, as Prime Minister,
to dissemble his sentiments towards the historic
body. During his long residence in the country,
and from what he had seen since in other countries,
he believed that the government of India was one of
the best and most purely administered governments
that ever existed, and one which had provided most
effectually for the happiness of the people over which
it was placed. After saying that he would not follow
the Marquis of Lansdowne into the question whether
a chartered company were or were not the best
means whereby to carry on the government or
the trade of a great Empire like India, the Duke
add^d ; ** JBut whenever I hear a discussion like this.

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1833] THE "IRON DUKE'S" TRIBUTE 387

I recall to my memory what I have seen in that
country. I recall to my memory the history of
British India for the last fifty or sixty years. I
remember its days of misfortune and its days of
glory, and call to my mind the proud situation in
which it now stands ! I remember that the Indian
government has conducted the affairs of — I will not
pretend to say how many millions of people, for they
have been variously calculated at seventy, eighty,
ninety and even one hundred millions, but certainly
of an immense population — a population returning
an annual revenue of ;^22,ooo,ooo sterling ; and that,
notwithstanding all the wars in which that Empire
has been engaged, its debt at this moment amounts
only to ;^40,ooo,ooo, being not more than two years'
revenue. I do not say that such a debt is desirable,
but I do contend that it is a delusion on the people
of this country to tell them it is a body unfit for
government and unfit for trade which has admini-
stered the affairs of India with so much success for so
many years ! " After urging the necessity of support-
ing the power and influence of the Company, the Duke
said : ** Depend upon it, my lords, that upon the basis
of their authority rests the good government of India ".
The Duke concluded by expressing his regret that
the advice of the late Sir John Malcolm had not been
followed, instituting an independent body in London
to represent the interests of India.

The chairman and deputy-chairman had in their
dissent from their resolution passed by the Court
of Directors on the 12 th August prophesied that

the Company ** would be converted into little else

25*

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388 LEDGER AND SWORD [1833

than a mere instrument for giving effect to acts
of the Controlling Board ". They declared that it
would be far better if the Crown were openly and
avowedly to assume the government of India instead
of attempting *'to maintain an intermediate body in
deference to those constitutional principles which led
to its original formation under parliamentary regula-
tion, but which was deprived by the present measure
of its authority, and rendered inefficient and converted
into a mere useless charge upon the revenues of
India".

As the historian of British India puts it, "if the
commercial interests of the Empire demanded the
discontinuance of the Company's mercantile char-
acter, those of India equally required the complete
and final severance of the incongruous functions of
sovereign and of merchant . • . To most persons,"
he goes on to say, " it would have seemed to be the
simpler and the honester process to have suffered
the Company to realise and divide their capital, as
far as their means extended, any surplus being applied
as legally applicable to the discharge of the territorial
debt."

But the ministry had recognised the great value
of the Company's pecuniary interest in India. With-
out some such link, they said, there could be no
greater propriety in entrusting the administration
of India to the Company than to any other incor-
porated association. But there were other reasons
of which the ministry might have taken cogpnisance.
Its historic character, its prestige among the natives
and its greater adaptability, in spite of the loose and

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i833] "KOMPANI BAHADUR'S" PRESTIGE 389

ignorant charges of its unfitness, than any other
body of Englishmen in England to direct the affairs
of India. It would have been difficult for its
detractors to have named another body of men
who, in spite of the ignorant and narrow-minded
amongst them, knew more of and cared more for
the affairs of India, or had a greater stake in that
country. Of this aspect of the matter then in
dispute it is hardly now necessary to speak. One
cannot, however, help wondering why the enormous
and deeply rooted authority in India of " Kompani
Bahadur" did not occupy a more prominent place
in the written and spoken arguments of the Com-
pany's defenders in 1833,^

But after lodging these objections the leaders of
the Company at length on 12 th August came to the
resolution that they could not do otherwise than
recommend the proprietors to defer to the wishes
expressed by both Houses of Parliament, and to
consent to place their right to trade for their own
profit in abeyance, in order that they might continue
to exercise the government of India for the further
term of twenty years, upon the conditions and under

* " Whatever might be thought of the unfitness of the East
India Company, that of the supreme legislature had been most
unequivocally exhibited in the course of the discussions upon the
renewal of the Compan/s charter. It was not merely indifference
with which the subject was treated in both Houses of Parliament ;
but feelings of impatience and disgust were unmistakably mani-
fested upon almost every occasion in which the members were called
upon to pronounce a decision essential to the well-being of the
people of India, and to the most important interests, not of India
alone, but in connection with India of the United Kingdom." —
Professor Hay man Wilson's continuation of MilVs British India.

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390 LEDGER AND SWORD [1833

the arrangements embodied in the bill. On the
16th August the proprietors met "They cannot,"
ran the words of their resolution, " contemplate with-
out apprehension and alarm the great and important
change about to be introduced in the system which
has been so long and so advantageously acted
upon."

But having thus recorded their sentiments with
regard to the bill, the generality desired *'to assure
His Majesty's Government and the country that
they will to the utmost extent of the functions with
which they are about to be invested, contribute to
give effect to the bill when it shall become law, and
promote, to the best of their ability, the happiness
of India and the honour and prosperity of the East
India Company ".

It was resolved that the bill ought to be accepted,
which had passed through the House of Commons
on the 26th July, and read a third time in the
House of Lords on the very day of the meeting of
the General Court of Proprietors. On the 28th
August it became law, the Royal assent being given
to it by commission. We are told that the ** rapidity
with which it was carried through Parliament was
thought as extraordinary as the change which it
effected in the character of the Company was
extensive". The commercial accounts which had
opened with the purchase of the good ship Susan
and her cargo of tin, broadcloth and kersies, in
September, 1600, were now to be closed for ever.

But it was agreed that if at the expiration of
twenty years, or at any subsequent period, the Com-

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1 833] END OF COMMERCE 391

pany should be deprived of the political government
of India, the proprietors should have the option, at
three years' notice, of being paid off at the rate of
;^ioo for every ;^5 5s. of annuity, and that they
should then be at liberty to apply that capital or any
portion of it to the resumption of their right to trade,
if they thought fit to do so.^

iMill.

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CHAPTER XIV.

The Victorian Epilogue*

Ledger and sword were now both abandoned. If
we are to seek for a new symbol to express the
function of the Company — no longer merchants of
England trading to the East Indies — we should find
it perhaps in the staff or keys of office. In the
East India Company reposed the responsibility of
the civil administration in India. It was the great
overseer of the affairs of India ; the great landlord,
the great tax collector, acting through its deputy, the
Governor-General, who was also — and chiefly — the
deputy of the British nation, the King's Viceroy
and Commander-in-Chief of the British army in
India. Thus, year by year, the lineaments of ''John
Company" became more and more assimilated to
those of John Bull.

Old India House ceased in 1833 to be a great
mart for foreign trade, but for a quarter of a century
further it continued to be the place where the stu-
pendous machinery of the Indian Government was
regulated.

The Court of Proprietors as well as their executive
representatives had been continued in the enjoyment
of their political power. Scarcely had the arrange-
ment of 1833 been made, than the Board of Control,
seeking still further to increase its own power at the

392

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1 837] COMPANY'S BOUNTY 393

expense of the Court of Directors, found out its error.
The attempt was speedily foiled, and the Company
showed its intention to hold firmly to the rights which
remained to it by charter. All expenditure con-
tinued as before to originate with the Court of
Directors, subject, save in details of the home
establishment, to the control of the Board.

•* If," wrote an Indian chronicler, " we sum up
the amount of our literary and scientific obligations
to the Company and the many able men employed
in traversing the countries of the East in connection
with the affairs of India, the total will be found ex-
ceedingly large."

The Company's bounty had never been, and was
not now, strictly limited to its real or trading terri-
tories. We are given a new illustration of this in the
case of Major-General Chesney s famous Euphrates
expedition of 1 836-37. The House of Commons had
voted ;^20,ooo ; it was found that this sum was in-
sufficient, but they voted ;^8,ooo more, and the
Company then came forward, giving a similar sum.
The total cost of the expedition was 4^29,637 los.
3^., after deducting ;^io,36o 12s. 9d., the value of
steamers, arms, ammunition, instruments and stores
which were taken over by the Company.

In his declining years the Marquess Wellesley
published his Indian despatches. The Company
could now afford to view the former Governor-
General's rigime more indulgently, and at its expense
the libraries of all the Presidencies were supplied
with copies of the work. In an address to his lord-
ship, which they voted in 1837, the directors said : —

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394 LEDGER AND SWORD [1843

''To the eventful period of your lordship's govern-
ment, the Court look back with feelings common to
their countrymen ; and, anxious that the minds of
their servants should be enlai^ed by the instruction
to be derived from the accumulated experience of
eminent statesmen, they felt it a duty to diffuse
widely the means of consulting a work unfolding
the principles upon which the supremacy of Britain
in India was successfully manifested and enlarged,
under a combination of circumstances in the highest
degree critical and difficult"

Only briefly can we refer to the events of the
Company's career during the ensuing quarter of a
century. How different it all was from Elizabeth's
day ! The movements towards expansion of British
power in India were the work of the Governors-
General ; although done in the Company's name,
they can hardly be claimed for the Company.
Rajahs and Nawabs were deposed and their terri-
tories annexed ; their stipends were reduced, and
the natives everywhere still whispered of the might
and majesty of Kompani Bahadur. But little by
little the fiction was dropped by the military, and
although civilians, with more reverence for the
ancient Company, educated at its college at Hailey-
bury — grateful, perhaps, for the patronage which
had procured them employment — still clung loyally
to the idea of a great and beneficent body apart
from the Crown, yet Ei^lishmen came less and less
to speak of the Company and more and more to
think of the British nation. Thus, when Sir Charles
Napier, in 1843, captured Sind, he issued this pro-

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1 844] CONSTITUTIONAL PREROGATIVES 39S

clamation : ' * I nhabitants of Sind. The Talpoors have
been conquered by the British nation and are de-
throned. Sind belongs to them no longer. All re-
venues, as they have hitherto been paid to the Amirs,
are now to be paid to the English'' * No mention
here of the East India Company — the great and
potent Kompani Bahadur !

Yet the anomaly was bound to obtrude itself;
for although the Governor-General might really be
stronger in India and be able to flout the four-and-
twenty directors in England, the Company had still
its legal prerogatives of sovereignty, just as a King
of England has, under the Constitution, however
long they lie dormant Thus, in 1844, Lord Ellen-
borough, although immensely popular with the army
in India, was very unpopular with the civil servants
and took a high hand with the Company. The
offended Company promptly recalled his lordship.
It was by no means necessary to take the advice or
have the consent of Crown or Parliament Both
Crown and Parliament might storm as they liked,
but the Company's course was strictly constitutional,
under its charter. Lord Brougham observed in the
House of Lords that it was inconceivable how such
an anomalous law should be allowed to continue in
force ; that it was incomprehensible how the Board
of Control — ^part and parcel of the Imperial govern-
ment — should have the power of controlling every
other act of the Court of Directors in their adminis-
tration of Indian affairs, and yet that the most

^ Bombay Government Gaxette Bxtraordtnaryj 5th April, 1843.

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396 LEDGER AND SWORD [1844

important of all acts — that upon which the safety of
our Indian Empire might depend — the continuance
or the removal of the Governor-General, should be
left solely to the Court of Directors.

Yet, so stood the Company's charter, and the
recall remained legal and good. The displeasure of
the Duke of Wellington — a friend of the Company,
but first of all a soldier — the discontent of many at
home, and of the entire army in India, were, how-
ever, moderated by the appointment of Sir Henry
Hardinge, generally regarded as the most fitting
person to fill the high station so suddenly vacated,
and who subsequently justified the regard.

To pay dividends to the proprietors of Indian
stock, it was imperatively necessary that the ad-
ministration should be run smoothly and economic-
ally, and that there should be no wars or as few as
possible. Governors-General who thought only of
British military renown and the "honour of the
British name " — meaning, of course, military honour
— could not fail to clash with the Company. But
the worst of it was that, with so much political dis-
location and upheaval, peace had almost grown
impossible in India. Hardinge would gladly have
made peace his constant motto, but he had been only
a few months at his post when he saw that he could
no more carry out a purely pacific policy than his
predecessors.

Not that the Company was craven enough to
wish peace at any price. The Court of Directors,
while lauding peace, had told the Governor-General
that our dependents and allies must be protected;

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1834] ST. HELENA SURRENDERED 397

that the native states which still retained independ-
ence must be covered by the shield of British pro-
tection ; that the supremacy of our power must be
maintained by force of arms. Shame, impeachment,
utter ruin would fall upon any Governor-General
of India who failed to repel a hostile attack upon
the territory of the Company. And so followed the
Sikh war; and so followed all the wars up to the
time of the Mutiny — and after.

While the British Governors-General of India
were enlarging the sphere of British rule in India,
the nominal possessions of the Company were being
added to in quite another way. First, however, it
had lost St. Helena. When its commercial mono-
poly expired it had been obliged to give up that
famous island, which it had held since 1651, and
where, by an arrangement with the British Govern-
ment, the great Napoleon * had passed his last miser-
able years, to the Crown. At the same time it
ransomed the 614 slaves on the island for ;^2 8,062.

By way of compensation, an engagement was, in
1845, concluded with the King of Denmark, by which,
in consideration of a sum of twelve lakhs and 50,000
Company's rupees (;^ 125,000), His Majesty ceded
all the Danish possessions in India to the East India
Company. Two years later the Sultan of Borneo
ceded Labuan to the Company, the Sultan binding
himself never to make any cession of territory to a
foreign Power without previously consulting England.

* See Letter-book, July-September, 1815. There is very little
correspondence relating to Napoleon. It was almost wholly con-
ducted by the Secretary of State.

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398 LEDGER AND SWORD [1852

On the 29th March, 1849, a treaty, ratified on
the 5 th April of that year, was concluded with the
Maharajah Dhuleep Sing, the reputed son of Runjeet
Sing, by which a pension of not less than four, or
more than five, lakhs of rupees (;^40,ooo or ;^50,ooo)
was assigned him for life for the support of himself
and his family in return for the cession of the Koh-
i-noor diamond, etc., and the whole of the Punjab
in perpetuity. In 1849 Dhuleep Sings personal
allowance was ;^i 2,000, and in 1856 ;^i 5,000; in
1859, when he attained his majority, ;^2 5,000.^

In 1 85 1 and 1852 a curious correspondence took
place between the India House, the Board of Con-
trol and the Foreign Office, as to the expediency of
cancelling the privilege possessed by the Portuguese
at Surat under the firman of 17 14. Lord Granville,
however, was of opinion that it was useless to broach
the subject, unless an equivalent were offered to the
Portuguese Government*

From this time onward, in spite of the Com-
pany's futile attempts to clutch at the skirts of
parting power, the authority of the Board of Control

^ In 1869, by letter dated 8th October, 1869, No. 1,252, the pro-
vision for his family after his death was raised to ;Ci5»ooo a year.
The Government of India, in India Foreign Letter, dated 20th May,
1870, objected to these augmentations of allowance having been
made in England without consulting them on the subject. — Pidler
and Crauford's Memorandum,

'The matter then remained in abeyance till 1872, when it was
reopened by the Governments of Bombay and India, principally on
the ground of the altered aspect of affairs caused by the opening of
the Suez Canal, and the privilege was stopped pending discussion.
The Foreign Office, in writing to the Portuguese Government, re*
ceived an indignant protest from them.

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I8S3] CHARTER RENEWED 399

constantly increased, while that of the Court of
Directors as constantly diminished. The debt of
India was swollen, but there was as yet no compen-
sation derived from the vast territorial acquisitions
made by Lord Dalhousie. The Company in 1853
had become a mere shadow of its former self, linger-
ing superfluous on the stage ; but ** owing to the
inherent difficulties of abolishing it, it continued to
subsist — indeed, it might have subsisted to this day
if the Mutiny had not dispelled all the old ideas ".^

It was in 1853 that the term of the charter,
renewed in 1833 for twenty years, expired. That
much-tinkered instrument was again renewed, but
with a fresh difference. According to the new
system, the number of directors chosen by the
proprietors was reduced to twelve, in addition
to whom six were appointed by the Crown, who
must have resided at least ten years in India.
The civil patronage of the Company was at the
same time taken from it, and nominations to the
Indian Civil Service thrown open to competition.
The College of Fort William was at once abolished,
and notice given for the abolition of the college at
Haileybury. The local government of Bengal
was also committed to the hands of a Lieutenant-
Governor, and the Legislative Council separated
from the Supreme Council, with advantage to
both.

We now discern the lowering of the curtain on
the long drama of the Company. The last act of

* The TimeSj i8th April, 1873.

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400 LEDGER AND SWORD [1856

Lord Dalhousie's administration was to annex in
1856 Oudh to the British Empire in India, granting
the Nawab ;^ 120,000 a year and an estate in the
suburbs of Calcutta, Railways were being built, the
people seemed contented and happy, commerce was
on a sound footing.

In February, 1856, Lord Canning entered upon
the government of India with fairer prospects than
any Governor-General since the first conquest of
that country. Then came the war with Persia, at
close of which the British troops were recalled to
India. When they arrived the upheaval which
was to cause the sudden and ignominious retirement
of the Company from India had already begun.
There were many causes contributing to this up-
heaval. One alone would suffice : the spell was
broken. For ages the natives had been over-
whelmingly impressed with the greatness of " Kom-
pani Bahadur,*' and their superstitious reverence
lasted till now. Then all at once it passed away.

Every Englishman in India was aware that the
Mohammedans of Upper India chafed at their loss
of dignity and independence, " that their idle and
sensual habits rendered them insolent and fractious ".
Further embittered was their discontent by the de-
cision arrived at by the Company with regard to the
titular dignity of the King of Delhi. The Court of
Directors had authorised Lord Dalhousie, on the
death of the heir-apparent in 1849, to "terminate
the dynasty of Timour whenever the reigning king
should die ". But these instructions had been issued
with great reluctance, and the Governor-General

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18S7] THE INDIAN MUTINY 40I

felt himself privileged to resort to a compromise.
He agreed to recognise the King's grandson as
heir-apparent, on condition that he quitted the for-
tress of Delhi for the royal palace at the Kootub.
No choice remained to the royal family but to
submit; but "the humiliation to which they were
about to be subjected rankled in their bosoms".
The Delhi Mohammedans at large were offended.

In the early part of the year 1857 a rumour
sped among the native troops of the Bengal army
that John Company's power was broken, that the
English Government had measures on foot to over-
throw Hinduism and to Christianise India. This,
although not wholly believed, was yet sufficiently
alarming to cause revolt and to arouse their sus-
picions. When cartridges were served out to
them^ some ingenious fakir declared that beef and
pork fat were mixed with them, rendering them
unclean and harmful both to Hindus and Moham-
medans. This lit the torch. The outbreak at
Berhampore occurred on the 26th February, 1857,
and from then onward through many long months
stalked a bloody procession of events, including the
terrible massacre of Cawnpore, known to history as
the great Indian Mutiny. With the details of that
grim story we have here no concern. It marks the
downfall of the Company as titular ruler, as land
and fort owner, as actual administrator and overseer
in India.

On the 1 8th February, 1858, a bill for the
abolition of the East India Company was brought
forward by Lord Palmerston, but before any pro-

VOL. II. 26

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46^ LEDGER AND SWORD [1858

gress could be made, his lordship was defeated on
the famous Conspiracy to Murder Bill, and resigned
office.

On the 26th March, Mr. Disraeli, as Premier,
brought forward a new bill. On its introduction it
was strenuously opposed by Lord John (afterwards
Earl) Russell, who held many serious objections and
proposed the introduction of a series of resolutions
in Committee of the whole House, on which a satis-
factory measure could be founded. Mr. Disraeli
agreed to this and undertook to prepare a series of
resolutions transferring the Company's power to the
Crown, which he did on the 30th April.

The nation expected the Company to speak. It
looked for some feeble expression of protest on the
part of the old and honourable corporation, which
had survived a dozen English monarchs and fifty
Parliaments. Surely the Court of Directors would
raise their voice against their destroyers. It was
right ; the Company would not be silent. But few
in the House were prepared for a petition so elo-
quent and so forcible. It evoked outspoken praise
even on the part of the Company's bitterest enemies.

The ancient Company solemnly called the nation
to witness that it had at its own expense and by the
agency of its own civil and military servants origin-
ally acquired for Britain her magnificent Empire in
the East. "The foundations of this Empire," it
said, " were laid by your petitioners at that time
neither aided nor controlled by Parliament, at the
same period at which a succession of administra-
tions under the control of Parliament were losing to

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I8S8] COMPANY'S LAST PETITION 403

the Crown of Great Britain another great Empire
on the opposite side of the Atlantic

** During that period of about a century which has
since elapsed, the Indian possessions of this country
have been governed and defended, from the resour-
ces of those possessions, without the smallest cost to
the British Exchequer, which, to the best of your
Petitioners* knowledge and belief, cannot be said of
any other of the numerous foreign dependencies of
the Crown."

The Company then went on to say that, " it being
manifestly improper that the administration of any
British possession should be independent of the
general government of the Empire, Parliament pro-
vided in 1783, that a department of the Imperial
Government should have full cognisance of, and
power to control over, the acts of your petitioners in
the administration of India; since which time the
home branch of the Indian Government has been
conducted by the joint counsels, and on the joint
responsibility, of your petitioners and of a Minister
of the Crown.

" That your Petitioners have not been informed
of the reasons which have induced Her Majesty's
Ministers, without any previous inquiry, to come to
the resolution of putting an end to a system of ad-
ministration, which Parliament after inquiry, deliber-
ately confirmed and sanctioned less than five years
ago, and which, in its modified form, has not been
in operation quite four years, and cannot be con-
sidered to have undergone a sufficient trial during
that short period.

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404 LEDGER AND SWORD [1858

"That your Petitioners challenge the most
searching investigation into the mutiny of the Bengal
army, and the causes, whether remote or immediate,
which produced that mutiny. They have instructed
the Government of India to appoint a commission
for conducting such an inquiry on the spot. And it
is their most anxious wish that a similar inquiry may
be instituted in this country by your (Lordships)
Honourable House : in order that it may be ascer-
tained whether anything either in the constitution of
the Home Government of India, or in the conduct
of those by whom it has been administered, has had
any share in producing the mutiny, or has it in any
way impeded the measures for its suppression ; and
whether the mutiny itself, or any circumstance con-
nected with it, affords any evidence of the failure of
the arrangements under which India is at present
administered.

" The duty imposed upon the Court of Directors
is to originate measures and frame drafts of instruc-
tions. Even had they been remiss in this duty, their
remissness, however discreditable to themselves,
could in no way absolve the responsibility of Her
Majesty's Government, since the Minister for India
possesses and has frequently exercised the power of
requiring that the Court of Directors should take
any subject into consideration, and prepare a draft
despatch for his approval.

**That, under these circumstances, if the ad-
ministration of India had been a failure, it would,
your Petitioners submit, have been somewhat un-
reasonable to expect that a remedy would be found

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1858] THE "VERDICT OF HISTORY" 405

in annihilating the branch of the ruling authority
which could not be the one principally in fault, and
might be altogether blameless, in order to concentrate
all powers in the branch which had necessarily the
decisive share in every error, real or supposed. To
believe that the administration of India would have
been more free from error had it been conducted by
a Minister of the Crown, without the aid of a Court
of Directors, would be to believe that the Minister,
with full powers to govern India as he pleased, has
governed ill because he has had the assistance of
experienced and responsible advisers.

" That if the character of the East India Com-
pany were alone concerned, your Petitioners might
be willing to await the verdict of history. They are
satisfied that posterity will do them justice. And
they are confident that even now justice is done to
them in the minds, not only of Her Majesty's
Ministers, but of all who have any claim to be
competent judges of the subject But though your
Petitioners could afford to wait for the reversal of
the verdict of condemnation which will be believed
throughout the world to have been passed on them
and their government by the British nation, your
Petitioners cannot look without the deepest uneasi-
ness at the effect likely to be produced on the minds
of the people of India. The measure, introduced
simultaneously with the influx of an overwhelming
British force, will be coincident with a general
outcry, in itself most alarming to their fears, from
most of the organs of opinion in this country as well
as of English opinion in India, denouncing the past

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4o6 LEDGER AND SWORD [1858

policy of the Government on the express ground
that it has been too forbearing and too considerate
towards the natives. The people of India will at
first feel no certainty that the new Government, or
the Government under a new name, which it is
proposed to introduce, will hold itself bound by the
pledges of its predecessors.

" That it would be vain to expect that a new
Council could have as much moral influence and
power of asserting its opinion with effect as the
Court of Directors. A new body can no more
succeed to the feelings and authority which their
antiquity and their historical antecedents give to the
East India Company, than a legislature under a new
name, sitting in Westminster, would have the moral
ascendency of the Houses of Lords and Commons.
One of the most important elements of usefulness will
thus be necessarily wanting in any newly constituted
Indian Council as compared with the present"

Thus the Company was not to quit the stage
without a protest couched in language glowing with
the consciousness of its own illustrious past. It can
subtract nothing from this petition as an expression
of the opinions of directors and proprietors of the
historic body, that it was, word for word, the lan-
guage of a single one of its servants. With the
voice of John Stuart Mill the East India Company
spoke to the nation.

But no petition, however strong, could now be
effectual. On the loth of May the Court of Direc-
tors recorded a resolution expressive of their con-
tinued confidence in Lord Canning, On this same

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1858] QUEEN VICTORIA PROCLAIMED 407

day was communicated to the Court Lord Ellen-
borough's famous Secret despatch dated 19th of April,
1858. On the following day Lord EUenborough re-
signed office as President of the Board of Control,
and was succeeded by Lord Stanley, the last to fill
the office. He came in time, it was said, to conduct
the obsequies.

On the 24th June the Government of India Bill,
as it was called, was read a second time by Lord
Stanley. On the following day the House went
into Committee upon the bill, and on its third read-
ing, on the 8th July, it passed the Hpuse of Commons.

The bill was read for the first time in the House
of Lords on the 9th of July. The Earl of Derby,
Lord Stanley's father, moved the second reading on
the 15th. This was carried, and the bill passed on
the 23rd of July.

On the 27th July the bill was sent back to the
House of Commons for the consideration of the
Lords' amendments. Colonel Sykes moved that the
amendments be considered that day three months,
which motion, however, he subsequently withdrew,
and the amendments were generally adopted. The
bill was finally assented to on the 30th July, and re-
ceived Queen Victoria's sanction on the 2nd August,
1858. This Act, transferring the power from the
hands of the East India Company to the Crown,
took effect on the expiration of thirty days from
the passing thereof, on ist September, 1858. Two
months later Queen Victoria was proclaimed through-
out India, with Lord Canning for her first Viceroy.

This, then, would appear to be the very end of

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4o8 LEDGER AND SWORD [1858

the drama. We are accustomed to hear from his-
torians, from commentators, from the newspapers,
that the Company was now abolished. But it was
not so. The curtain had lowered — ^aye, but it had
not wholly fallen. In the interval between the cur-
tain and the stage, we still may glimpse, for the next
decade and a half, in dim obscurity, the figures of
the actors, moving perturbedly to and fro, like very
ghosts upon the scene.

Since October, 1859, the East India Company,
represented by a chairman, five directors, a secretary
and a single clerk, continued to hold their Courts of
Directors, General Courts of Proprietors, Bye- Law
Committees, etc., first at No. i Moorgate Street,
and later at No. 1 1 Pancras Lane. During nearly
the whole of this ghostly period Colonel W. H.
Sykes, M.P., served as chairman. On his death,
1 6th June, 1872, aged 83, Mr. John Harvey Astell
was chosen to be his successor. The directors com-
prised Field-Marshal Sir George Pollock, Bart.,
G.C.S.I., K.C.B., Professor Ousely, and Messrs. W.
H. C. Plowden, Eric Smith, William Dent and
Lestock Reid. Mr. Clifford Crauford was secretary
up to his death, 7th December, 1870, after which
Major W. H. Sykes, a son of the chairman, assumed
the shadowy office. The sum of ;^8oo per annum
was set apart by the Secretary of State for the Com-
pany's expenses — the blind, decrepit Samson, who
had disbursed millions upon millions in England,
crores upon crores in India. The salary of the
chairman was ;^i50 a year, the other directors re-
ceived ;^ioo each and the secretary ;^I20. Thus

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1862] INDIA HOUSE PULLED DOWN 409

was the Company to go out of the world with pre-
cisely the modesty, frugality and homeliness of its
early meetings at Governor Smythe's house in Phil-
pot Lane two and a half centuries and more ago,
when the hearts of the merchant adventurers beat so
high with hope — a hope destined to a fulfilment so
much more romantic and marvellous than they could
at that time foresee.

Old India House was pulled down in 1862 and
all the archives transferred to Whitehall, even to
that first ledger with the quaint entr>' : " The names
of suche persons as have written with there owne
hands to venter in the pretended voiage to the East
Indias (the whiche it maie please the Lorde to
prosper) and the somes that they will adventure ;
the xxij September, 1599".

By an Act passed in 1873, entitled "The East
India Stock Dividend Redemption Act," regula-
tions were laid down for the redemption or com-
mutation of the dividend on the capital stock of the
East India Company ; for the transfer by the com-
missioners for the reduction of the National Debt
of the Security Fund of the Company at the Bank
of England to the Secretary of State for India in
Council ; and for the dissolution of the Company.
On the 30th April, 1874, in compliance with the
provisions of Act 3 and 4 William III., sec. 12, cap.
85, all proprietors who were not disposed to com-
mute their India stock for any stocks, funds, or
securities the Secretary of State had power to dis-
pose of, received, as the surrender value of their
stock, ;^2C)0 sterling for every ;^ioo stock they held

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4IO LEDGER AND SWORD [1874

in full acquittal of all claims. The applications for
commutation were far in excess of what the Secre-
tary of State could comply with. All stock on which
the dividends had been unclaimed for the last ten
years were assigned, with the lapsed dividend, to
the Secretary of State in Council, and all unclaimed
dividends for a less period were paid by the Com-
pany into an account opened at the Bank of England
styled the East India Stock Dividend Account ; if
claimed within ten years from the time the last
dividend was paid, they were to be made over, after
compliance with certain restrictions, to the legal
claimant, if not, they would, in common with other
unclaimed dividends, be retained by the Secretary of
State, and would form part of the revenues of India.
Upon, or as soon as conveniently after, the 30th
April, 1874, all books and documents relating to the
Company's stock were made over to the Secretary
of State in Council. On the ist June, 1874, the
Secretary of State having then complied with all the
provisions of the Act, the powers of the East India
Company ceased, and the Company was dissolved.
This bill was brought before the House of Commons
by Mr. M. E. Grant- Duff, Under-Secretary of State
for India. The Company presented a petition against
it, but it passed the third reading in the House of
Commons, and on the 22nd April, 1873, was agreed
to by the Lords.*

We have finished. Our narrative has been

^ Memorandum on the East India Company, Fidler and Craufurd,
1875.

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1874] HISTORY RECAPITULATED 411

brought at last to a close. As it appears in these
pages, to the best of our ability and belief, such was
the Company of Merchant Adventurers of England
trading to the East Indies, such were its beginnings,
its struggles against enemies abroad and at home, its
triumphs as well as its failures. The mighty power
it wielded contrasts strangely with its ignoble end.

All the old historians and essayists dealing with
British India totally misread the character of the
early history of the Company. The war of 1744
was indeed the commencement of a new era, be-
cause India then became the scene of an inter-
national contest, because of the popular interest at
home in Indian affairs. Yet it had been the one and
had evoked the other before in the Company's time.
The truth is, the Company's long, patient rule of a
century and a half is ignored by these annalists.
Men like Day, Aungier, Oxenden, Chamock, Master,
Child, Pitt, Gayer, Saunders and the rest are dis-
missed as "unobserved factors and agents of a
trading company, whose obscurity left them without
an incentive to virtue or a dread of shame ".* Did
Clive and Coote inaugurate efficiency ?

'* It is a mistake to suppose," Macaulay told Par-
liament in 1833, "that the Company was a merely
commercial body till the middle of the last century.
Commerce was its object ; but in order to enable it
to pursue that object, it had been like the other
Indian Companies which were its rivals, like the
Dutch India Company, like the French India Com-

' Sir J. Malcolm, Political History of India^ p. 34.

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412 LEDGER AND SWORD [1874

pany, invested from a very early period with poli-
tical functions. More than 1 20 years ago it was in
miniature precisely what it now is. It was entrusted
with the very highest prerogatives of sovereignty ;
it had its forts and its white captains and its black
sepoys ; it had its civil and criminal tribunals ; it
was authorised to proclaim martial law ; it sent
ambassadors to the native Governments and con-
cluded treaties with them ; it was Zemindar of several
districts, and within these districts, like other Zem-
indars of the first class, it exercised the powers of a
sovereign, even to the infliction of capital punish-
ment on the Hindus within its jurisdiction. It is
incorrect, therefore, to say that the Company was
at first a mere trader, and has since become a
sovereign. It was at first a great trader and a petty
prince. Its political functions at first attracted little
notice, because they were merely auxiliary to its
commercial functions. Soon, however, they became
more and more important. The Zemindar became
a great Nabob, became sovereign of all India ; the
200 sepoys became 200,000."

Sir John Malcolm said that the early history of
the Company in its dealings with India proved the
"urgent necessity ... for the strict and constant
interference of the legislature of the country to
check excesses by which the national character of
England was so exposed to injury". How unjust
this is when applied generally to the Company's rule
prior to 1 744, let those who have followed our nar-
rative judge for themselves. He goes on to observe
that **the Company, or rather the individuals of the

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i874] SINGULAR MISINTERPRETATION 413

direction by whom the corporation was governed,
were in a great degree dead, as ... to those feel-
ings which urge the mind to good and great actions.
They, in fact, recognised no motive, but a desire to
enrich themselves, their relatives and dependents.
Their strength as a community, which was the
natural consequence of this system, increased with
their means of corruption and oppression ; and such
was the venality of the times, that it appears that
hardly any, however high their station, escaped the
contamination." ^

Such a charge as this could have much more
fittingly been brought against the British Govern-
ment or any other body of men whatsoever. It
was certainly true of Walpole ; it had been true of
Marlborough ; it was true of most of the Courts of
Europe. Let any one recall the venality or the
inefficiency of the ministries of James I., of the
two Charles's, of James, and even of Anne and the
first George, and then examine impartially the
tenour of the Company's despatches for a century
and a half, the minutes of the Court of Directors
from whom these despatches proceeded, the Com-
pany's administrative ability, its concern for the
natives, the care it took of its dependents, and
then calmly agree that it was a corporation ** dead
to those feelings which urge the mind to good and
great actions," recognising '* no motive but a desire
to enrich themselves," he must indeed have a marked
faculty for misinterpretation.

^ Sketch of the Political History of India^ p. 35.

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414 LEDGER AND SWORD [1874

Again, according to a recent writer on India, ^
the Company was early in the nineteenth century
time "criminally ig^norant of the real condition of
India. . . . They preferred to remain merchants,
dwelling on sufferance on the coasts of the Arabian
Sea and the Bay of Bengal, to building up a vast
Empire by expensive military operations." What
a singular misconception of the situation ! It is like
saying that the worthy Mr. Whiteley criminally
prefers to remain a merchant in Westboume
Grove and conduct his business in an orthodox and
honourable manner, to the glory of colonising the
Canadian North-West whence he receives his flour,
or to redeeming the West Indies whence he pro-
cures his sugar ! And so, for preferring to remain
merchants, cry the historians, " the Company stands
condemned at the bar of history ".

" In early times," writes one eighteenth century
annalist, attacking the Company, "their circumscribed
commerce had confined the management of their
affairs to mean and unskilful hands. Their directors
at home were no more than low and rapacious trades-
men ; and their servants abroad were chiefly drawn
from hospitals, appointed by charity for rearing
indigent and deserted boys."* Should thus be
characterised all those brave and stalwart spirits who
served the Company in the seventeenth century,
whose deeds have been recounted in this book ?
But, pursues our authority, even when matters grew
less disgraceful and persons of " a better education

1 E. C. Cox, A Short History of the Bombay Presidency^ 1887.
" The History and Management of the East India Company , 1779.

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i874] CONCLUSION 415

and more enlarged minds " figured in the Company's
service at home and abroad, " even these were not
able to resist that sordid principle of avarice which
is inherent in every mercantile institution, to which
the almost equally obdurate passion of ambition was
annexed, when they acquired a control over princes
and the management of provinces and kingdoms ".

Again, "these are men," wrote Sir Robert Har-
land to Lord North in 1773, ** who are now become
governors and viceroys of kingdoms larger, if we
take our possessions from Surat to Bengal, than
made half the Roman Empire ; and these are the
men who .by the rapid and immense riches they
acquire, from amongst the lowest of the people, who
are to be expected to look government in the face,
with that assurance that has taught them to think,
that money may decide anything. Nor will they
easily submit to part with power, however they come
by it, they have so long been allowed to exercise :
and that has brought them such an immoderate
degree of wealth, without violent opposition to
everything and every man, employed to prevent it."

But history will yet do justice to the Company.
We have quoted these as samples of slander, as
illustrations of injustice. The perusal of its annals
by an unbiassed posterity will dispel all the false
notions created by the Company's contemporaries of
its character and its rule. It had the faults of all
great corporations ; but from the very first it had
also sturdy virtues of its own. In any case, as a
recent writer remarks, " the once firmly rooted con-
viction that our real history in India began about

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4i6 LEDGER AND SWORD

1746 is dying hard". Did not the Company
charge its servants as far back as 1687 to '' establish
such a Politie of civill and military power, and create
and secure such a large Revenue as may bee the
foundation of a large well-grounded, sure English
Dominion in India for all time to come"?

** I have," once said the great Burke, " known
merchants with the sentiments and abilities of
great statesmen ; and I have seen persons in the
rank of statesmen with the conceptions and char-
acters of pedlars."

In Sir Alfred Lyalls opinion all history displays
no better record of good government- than was shown
by the Company's period of administration of nearly
a century, from 1773 ^^ 1857. "The East India
Company has left its mark on the world." ^ Surely
never existed any government, based solely upon
conquest, which ruled '* so ably, so humanely and
yet so firmly for an equal space of time ".

" Now when it passes away," was written on the
eve of the Company's death, ** with the solemnities
of Parliamentary sepulture, out of the land of the
living, it is just as well, as becoming, to record that
it accomplished a work such as in the whole history
of the human race no other trading company ever
attempted and such as none surely is likely to at-
tempt in the years to come." ^

> speech at dinner of old Haileyburians, 20th May, 1890.
■ The Times, i8th April, 1873.

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CHAPTER XV.
The Muse in LeadenhaU Street*

I may wander
From east to Occident, cry out for service,
Try many, all good, serve truly, never
Find such another master.

CymbeUnty IV., scene 2.

Thanks to the researches of many pious chroni-
clers, eager to let nothing escape which might
illustrate the phenomenon of English conquest, we
are to-day conversant not only with the smallest
official acts and military achievements of the Presi-
dents, agents, captains and factors in the East, but
with their correspondence from the earliest times.
We know that these merchant adventurers, each **half
bagman, half buccaneer," who deftly handled the pen
as well as the cash and the cutlass, were masters of
the quaint epistolary style of their century, often lit
with a sententious humour. Mr. Noel Sainsbury,
indeed, in his Calendar of State Papers relating to the
East Indies, has culled from the earliest epistles a
garland of epigrams of which not the greatest of
Jacobean phrasemongers need be ashamed.

But of the doings, sayings and writings of John
Company's servants at home, during its first two
centuries of existence, how little is known! For
them the opportunities for distinction out of official

VOL. II. — 27 417

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4i8 LEDGER AND SWORD [1755

hours were indeed limited — narrowed down perhaps
solely to letters Withal what practice they had, these
writers who were, officially speaking, not Writers at
all ! One need not hesitate to say that many of them
— whose names we can scarce even guess — would in
that sphere easily have made their mark. For what
incisiveness, what clarity, what mother-wit mark
hundreds of the despatches emanating from Leaden-
hall Street to the East we only know who have
handled and read them.

The official letter-writers must always have been
men of education and talent, even at those periods
when the Company's correspondence was dominated
by some unusually capable member of the Com-
mittee of Correspondence. Yet their identity is
most uncertain ; only in two instances may we safely
attribute the authorship of any considerable part of
the Company's despatches to two members of the
Committee, Sir Josiah Child (1630- 1699) and Lau-
rence Sulivan (i 716-1786), of whom the former
alone was distinguished as a writer outside the pale
of India House. All the home servants continue
obscure until, about the middle of the eighteenth
century, the unmistakable literary talents of John
Hoole became noised about town.

In one of Dr. Johnsons letters to Warren
Hastings we learn that "Mr. Hoole, a gentleman
long known and long esteemed at the India House,
after having translated Tdsso, has undertaken
Ariosto. How well he is qualified for his under-
taking he has already shown. It is a new thing,"
adds the sage, ** for a clerk of the India House to

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1772] JOHN HOOLE 419

translate poets ; it is new for a governor of Bengal
to patronise learning/'

When this letter was written Hoole had been
over thirty years in the Company's service. He
was born in 1727, the son of a watchmaker and
machinist to Covent Garden theatre. An early
predilection for the stage — he once succeeded in
playing the Ghost in Hamlet — was nipped in the
bud by a friend's procuring him a junior clerkship
in Leadenhall Street, in the accountant's office. The
young man spent his days in checking up the profits
of the factories at Bombay, Madras and Calcutta,
and passed his nights in mastering French and Latin,
Greek and Italian, the latter with a view to reading
the fascinating Ariosto in the original. His income
as a clerk being very small, Hoole set about
increasing it by translating documents relating to
the French operations in India during the Seven
Years' War, and so earned the commendation of the
Company's chairman, Laurence Sulivan. He had,
at the same time, formed the friendship of Robert
Oldmixon, the Company's auditor (and the son of
a well-known author), by whom he was encouraged
in his outside literary pursuits. Side by side with
his Italian tragedy of Cyrus, he penned in 1772
The State of East Indian Affairs for the Com-
pany, the latter of which, although a purely official
work, attracted more attention from the public than
the former. When Hoole succeeded Oldmixon as
principal auditor at India House, he was greatly
celebrated in literary circles as a poet and playwright,

enjoying the particular favour and friendship of Dr.

27 •

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420 LEDGER AND SWORD [1792

Johnson. He was the author of many of the Com-
pany's ablest despatches. He resigned his post in
1785 and died eighteen years later.

Contemporary with Hoole at India House was
James Cobb, also a dramatist Cobb, who was
bom in 1756, entered the secretary's office in 1771
and eight years later produced his first dramatic
piece, **The Female Captain," which was acted at
the Haymarket This was followed by numerous
plays, notably "The Humourist" (1785), which was
produced by Sheridan at Drury Lane, through the
influence of Edmund Burke. Altogether Cobb wrote
twenty-four pieces before his death in 1818. Some
of the most important despatches of John Company
are ascribed to his pen.

Seven years after Hoole's resignation, a certain
Blue-coat boy, Charles Lamb by name, humbly
petitioned the East India Company for a junior
clerkship. The Court Minutes record that on 5th
April, 1792, Charles Lamb, then in his seventeenth
year, was appointed a clerk in the accountant's
office on the usual terms, i.e., a gratuity, not a salary,
of £^0 a year. With the lapse of a few years,
we find this same ''Charles Lamb of the India
House " becoming famous as a poet and essayist, on
intimate terms with the leading wits of the day.
But despite his unmatched literary flights out of
office hours, the real works of Elia, as he himself has
said, were on the shelves in Leadenhall Street
"filling some hundred folios". Thirty-three years
saw him at his desk there, labouring for the Com-
pany, yet — never a Company's man was Lamb.

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i824] CHARLES LAMB 421

Commerce and politics went against his grain.
Once in an extravagant outburst he wrote: —

'' Confusion blast all mercantile transactions, all
traffic, exchange of commodities, intercourse between
nations, all the consequent civilisation and wealth
and amity and links of society and getting rid of
prejudices and getting a knowledge of the face of
the globe, and rotting the very firs of the forest
that look so romantic alive and die into desks.
Vale.r'

Nor was Lamb very serious in office hours. One
of his fellow-clerks, a Mr. Ogilvy, thus wrote long
after Lamb's death : —

•* When I first entered India House and was
ntroduced to him he seized my hand and exclaimed
with an air, * O, Lord Oglesby ! Welcome, Lord
Oglesby. Glad to see you. Proud of the honour.'
And he never called me anything else and that got
to be my name among the clerks and is yet, when I
meet any of the few that are left" Indeed "jokes
and jests, great and small, were his constant pastime
and every one around him came in for a share". ** His
popularity with his fellow clerks was unbounded.
He allowed the same familiarity that he practised,
and they all called him ' Charley *."

When the hundredth folio of his " real works "
was completed, Lamb began to think seriously of
retiring from the service of the Company, or, as he
put it, from the firm of Boldero, Merryweather,
Bosanquet and Lacy, after the chairman and the
leading directors. In that delightful piece, The
Superannuated Man^ he describes the interview with

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422 LEDGER AND SWORD [1824

the Court of Directors which resulted in his retire-
ment, on the most generous terms : —

" On the evening of the 1 2th of April, just as I
was about quitting my desk to go home (it might be
about eight o'clock) I received an awful summons to
attend the presence of the whole assembled firm in
the formidable back parlour. I thought now my time
was surely come. I have done for myself. I am
going to be told they have no longer occasion for
me. Lacey, I could see, smiled at the terror I was
in, which was a little relief to me — when to my utter
astonishment Bosanquet, the oldest partner, began a
formal harangue to me on the length of my services,
my very meritorious conduct during the whole of the
time (the deuce, thought I, how did he find that out ?
I protest I never had the confidence to think as
much.) He went on to descant on the expediency
of retiring at a certain time of life (how my heart
panted !) and asking me a few questions as to the
amount of my own property, of which I have a litde,
ended with a proposal to which his three partners
nodded a grave assent, that I should accept from
the house, which I had served so well, a pension for
life, to the amount of two-thirds of my accustomed
salary — a magnificent offer."

" Stammering out a bow," Lamb " went home for-
ever," overwhelmed with gratitude for ** the kindness
of the most munificent firm in the world ". For the
Company had not only promised him a handsome
pension, but also to continue it to his sister after his
death. That unfortunate lady survived him nearly
fourteen years. Lamb himself, " the most loveable

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i8i9] JAMES MILL 423

of all our English authors," survived his retirement
ten years, dying in 1834,

** There is," says Sir George Birdwood,^ "a
strong memory of Charles Lamb among the de-
scendants of his contemporaries at the India House,
some of whom are still in active service of the
Secretary of State. The father of one of the latter
officials received from Lamb the present of a copy
of a volume of Tables of Interest, inscribed on the
fly-leaf in the donor s handwriting : ' In this book,
unlike most others, the further you progress, the
more the interest increases '. There is in the Office
also, a speaking full-length profile portrait of Lamb,
* scratched on copper by his friend [and fellow-clerk]
Brook Pulham*. . . . This etching bears the date
of 1825. Lamb's beer mug was for many years
most affectionately preserved at the *01d India
House,* and when some time ago I thought that I
had recovered it, the interest excited in quite unex-
pected quarters was most gratifying. Lamb seems
indeed to have endeared himself to every one about
him at the India House : with such tenderness, and
so widely, is his name regarded at the India Office."

While Lamb was still at India House he used to
occasionally encounter at the portals, in the corri-
dors or on the stairs, an austere looking gendeman,
some dozen years his junior, who had recently en-
tered the office. His name was James Mill, not yet
very famous, although he had already written and
published a monumental history of India. Mill,

^Journal of India Art, July, 1890.

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424 LEDGER AND SWORD [i8i8

hampered by a growing family, had set out in the
year 1806 to live by literature. He had begun by
planning the history, which he thought to complete in
three years, in addition to other work. His calcula-
tions utterly failed, and Mill was doomed for twelve
years to struggle on with a wretched pittance from
his writings of ;^ 150 a year. It may be mentioned
that during the process Mill was by no means a friend
of the East India Company. More than once did
he let fly his inky shafts at the great power which
had won and. then governed India for England.
At a time when Manchester and Liverpool were
pelting the Company for its alleged shortcomings
and misdemeanours. Mill joined in the attack, contri-
buting to the Edinburgh Review for April, 1810, a
slashing onslaught, for which he afterwards suffici-
ently expressed contrition. In this article he re-
futed all the pretences for granting the Company
any trade monopoly ; he reviewed in minute detail
all the ** vices " of its government. Mill, by the
bye, had ready to hand a remedy of his own for
gubernatorial mismanagement ; he threw it out as a
hint, not as a prophecy. " Instead of sending out a
Governor-General to be recalled in a few years, why
should we not constitute one of our royal family Em-
peror of Hindustan, with hereditary succession ?"

The famous history had barely seen the light in
181 8, when certain of Mill's friends among the direc-
tors at India House resolved that such a man, with
his talent for work and his knowledge of Indian
matters and historic Indian policy, should have a
post in the Company's service. ** Accept of any-

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i83i] JAMES MILL'S LABOURS 425

thing, however small, in the first instance/' they ad-
vised ; •* if once in, we shall be able to push you
on." In a few months, after ** great exertions " by
Hume and Ricardo, Mill was appointed an assistant
examiner of India correspondence at a salary of
;^8oo per annum, Edward Strachey being his im-
mediate superior. Mill's work was to draft all the
despatches of the revenue department. When he
took up his duties he found the correspondence
many months in arrear. Fortunately for Mill, the
working hours in Leadenhall Street were confined
to from ten to four, otherwise his zeal might have
led him to adopt his private system in the Company's
service. We are told that when at work on his his-
tory he had not unfrequently toiled till midnight, ris-
ing the following morning at four to begin anew. In
eleven years Mill became Examiner with a salary of
;^i,900 a year.

It was at this time that the great conflict between
Parliament and the Company came on, the Company
struggling not merely for its privileges, but for its
very existence. On one side was ranged the Duke
of Wellington, Earl Grey, Macaulay, Charles Grant
and the body of the nation ; on the other were a
couple of dozen semi-inarticulate directors, represent-
ing a few hundreds of inarticulate proprietors, and
two or three able civil servants. Chief of these was
James Mill. For the time being Mill was almost in
himself the Company. Between 1831 and 1834 he
was repeatedly examined by Parliamentary Commit-
tees through numerous weary sittings. His replies
to questions concerning the Company's revenue

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426 LEDGER AND SWORD [1833.

might easily have furnished forth an admirable State
paper. Whatever he had been in his more youthful
days, it is clear that Mill was now a Company's man —
that he saw Indian policy with the Company's eyes^
from the Company's standpoint. " Petitions sent
from India," he remarked, "do not represent the
general language of the country." He found him-
self indicted upon the old charge of not knowing
India, a charge repeatedly brought against his mas-
ter, the Company, since its foundation. " I am far
from pretending," he replied quietly, " to a perfect
knowledge of the people of India." Yet his know-
ledge was founded upon the history of many cen-
turies, and was far more likely to prove effective
than that of the most observant functionary who had
spent three-quarters of his lifetime on the banks of
the Ganges. All the lengthy correspondence which
virtually shaped the bill of 1834 fell to him. This
was the eighth crisis in the Company's history of
234 years, and Mill conducted its defence with an
ability at least equal to Sir Josiah Child's in its third
ordeal in 1690. Little wonder that one of the lead-
ing directors characterised the Company*s letters to
the Government as ''distinguished for their ability,
for their clearness, their candour and truth, their con-
ciliatory tone and spirit and statesmanlike views, as
well as for their successful refutation of that specious
and imposing, but unsatisfactory reasoning, which

characterises the letters of" the Government!

It is really not at all strange that Mill, " whose views
on trade were of the most advanced school," should
yet be moving heaven and earth to overcome the

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JAMES MILL.
From a Drawing.

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i834] MILL'S DEATH "IN HARNESS" 427

designs of the free traders. He could still claim to
be consistent. His verbal evidence clearly shows
his reasons. *' The mercantile interest could not see
in the light of an official, the very stagnant condition
of the native population in India, and profess to be-
lieve that, but for the obstruction of the Company's
government, there would be a great and sudden de-
velopment of industry — exports and imports — to the
benefit of the home producer. " Such members of the
mercantile interest were destined soon to be disabused.

It is worth recalling that Mill strongly advised
the appointment of Macaulay, his old enemy, to the
one membership of the Supreme Council at Calcutta
not held by a Company's servant, as provided for
by the Act of 1834. It was no light task to over-
come the opposition of many of the directors, but
Mill, convinced of the young statesman's fitness,
finally succeeded.

Mill died in harness at last Letters from the
Governor-General, Macaulay and Cameron lay on
his desk. As he passed away at his house in
Kensington, his great pupil, Grote, was delivering
his speech in Westminster on the Ballot, the result of
which Mill had hoped to hear. His interests were
diffuse and diverse. Amongst his literary remains
was a scrap of paper which sheds an effulgent light
upon his life work : —

Memorandum.

I have spoken to the Chainnan respecting Major Elwood's
case. He will make up his mind next week.

Fletcher and I have gone carefully through the last revenue
draft (Madras) and made a few immaterial alterations. When

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428 LEDGER AND SWORD [1822

Mr. M'CuUoch has seen it, I purpose giving it to the Chairman.
The other Madras draft will probably go to the Committee on
Wednesday next.

There are no fresh arrivals in Revenue Department. Lord
Hastings is in Paris. Buckingham has been sent home.

J.M.

On the other side of the slip appears a closely
written dissertation, entitled Reasons to show thai
the Christian religion was not intended to guide or
influence the actions or happiness of this life ; that
its sole object is the future life.

Such was the intellectual transition from John
Company's servant to philosopher and theologian
when the hands of the great clock at India House
pointed to the hour of four !

How strange it is to reflect that not merely
James Mill's post and functions, but his very rdle
of Company's defender against Government should
come to be filled by his still more celebrated son,
John Stuart Mill ! The father had been only four
years in the Company's service when a junior
clerkship was procured in the same office for
the son, then but eighteen years of age. Young
as he was John Mill was already a prodigy of
learning and of intellectual capacity. Able as his
fellow-clerks were, they were mere pigmies to
him ; he passed over their heads rapidly. In 1823
we find his salary (or gratuity) to have been but
;^30 a year. Seven years later he stood fifth
in the Examiner's Office, and in 1836, the year
of his father s death, further promotion brought
his salary to j^ 1,200 a year, with only Thomas

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i84o] JOHN STUART MILL 429

Love Peacock and David Hill between him and
the Examinership.

" I have a vivid recollection," writes Mr. Bain,
his friend and literary executor, " of the great front,
the pillared portal of the Company's dingy, capacious
and venerable building in Leadenhall Street" He
recalls the line of passages leading to Mill's room
from which he never had any occasion to deviate.
'* On entering we passed the porter in his official
uniform, including cocked hat, and walked straight
forward by a long passage . . . then up two pair of
very unpretentious flights of stairs. At the landing
was a door bearing at the top lintel the inscription
* Examiner's Office '. We entered a little room
occupied by the messengers, where they could make
tea for the officials (Mill had his breakfast provided
in this way on arriving at ten o'clock, tea, bread and
butter and a boiled egg). . . . There was an outside
green baize door, always lashed back to the wall,
reminding us that the officials were servants of the
Secret Committee and might have to hold very con-
fidential interviews. The room itself was very
spacious — about thirty feet long and about eighteen
wide ; it was lighted by three large windows. From
the fire at one end to the book press at the other,
the whole length was free from furniture and was
Mill's promenade with papers in his hand. While
reading he was generally always on foot. At the
angle between the fire and the nearest window, in a
recess, was his standing desk, and near it his office
table, which was covered with papers and provided
with drawers, but was not used according to his

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430 LEDGER AND SWORD [1856

intention ; he wrote at the tall desk, either standing
or sitting on a high stooL The chair for visitors
was next the blank wall, beside a large table, on
which the India despatches used to lie in high piles."

Mill's friend gave a vivid picture of his appear-
ance on their first meeting at India House. Mill
was standing by his desk with his face turned to the
door.

** His tall, slim figure, the youthful face and bald
head, fair hair and ruddy complexion, and the
twitching of his eyebrow when he spoke, first
arrested the attention ; then the vivacity of his
manner, his thin voice, approaching to sharpness,
his comely features and sweet expression would
have all remained in my memory though I had
never seen him again."

In 1856 Mill became Examiner at ;^2,ooo a
year, and all the despatches emanating from Leaden-
hall Street to India or to the Board of Control fell
to his charge. In the year following this promotion
he was called upon by the Company, in its ninth and
last crisis, to draft that celebrated petition to Parlia-
ment against extinction, which Earl Grey pronounced
to be "the ablest State paper he had ever read".
But in vain all Mill's arguments and all his eloquence
— the Company's charter was revoked and its powers
assumed by the British Crown. Mill was offered a
seat in the new India Council, but he preferred to
go out with the old Company, and declined the
offer. He left India House with regret, telling his
friend Grote that ** but for the Company's dissolution
he would have continued in the service until he was

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j858] the two mills 431

sixty ". He chose to retire on a handsome pension
from all official labour, which, however, he enjoyed
but a few years. Mill, the younger, has every claim
to be considered among the very greatest of the
Company's servants.

Sir George Birdwood remarks, however :
** James Mill, and his gifted son John Stuart Mill,
would appear to have moved no enduring sym-
pathies among their contemporary associates. The
son, even when in conversation with others, would
seem to have been pre-occupied with his own
thoughts, all the time moving restlessly to and fro,
' like a hyena,' as described to me. When particu-
larly inspired, before sitting down to his desk, he
used not only to strip himself of his coat and waist-
coat but of his trousers : and so set to work,
alternately striding up and down the room, and
writing at great speed. He wrote an unformed,
awkward, sprawling hand, which gave great trouble
in copying to the clerks, who used despitefuUy to
say he could not spell correctly. This is not true,
and when what he had written had been fairly
copied, it was found to be faultlessly expressed.
Still they literally detested copying his manuscript,
and appear to have even disliked him personally for
its illegibility : for a clerk who worked under him,
and who still lives, looking one day utterly miserable
and distracted at his desk, and being asked if he was
ill, replied angrily : ' Oh, no ! it's only that I'm trying

to unriddle some more of that d d old fool's

'. And this was the clerical estimate of

the author of the Lo^ and the Political Economy ;

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432 LEDGER AND SWORD [1819

those who were led to it by their circumscribed
although intimate observation little witting of the
almost femininely feeling heart that lay oppressed
and despairing, like a g^ant in armour too tight for
him, in the coils of the deadly Stoical doctrines
imposed on the younger Mill, with such little
discrimination, by his self-willed and strenuously
pedantic father."

Mill's official superior for a long term of
years was neither a metaphysician, a logician nor a
political economist. Thomas Love Peacock was a
poet and romancer, and not less famous for his
intimacy with Shelley. He owed his connection
with the Company to his friend and patron, Peter
Auber, for nearly forty years in the Company's
service, and who retired as its secretary* Auber
himself was the author of The Rise and Progress of
British Power in India and other works. He
recognised the advantages of a clear and brilliant
style in the conduct of the Company's correspond-
ence, and admiring the g^fts of the author of
Palmyra^ induced him to petition for employment
in 1819. Peacock's ability was signally shown in
the drafting of many official papers. In 1829,
greatly struck with the advantages of steam navi-
gation, he drew up a valuable memorandum for
General Chesney's Euphrates expedition, which
earned the praise of both Chesney and Lord Ellen-
borough. Peacock's appearances before Parliament-
ary Committees were frequent, and upon him fell
the burden, in 1834, of resisting the claim of James
Silk Buckingham for compensation for his expulsion

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1856] THOMAS LOVE PEACOCK 433

from the East Indies ; and again, two years later,
he defeated the attack of the Liverpool merchants
and Cheshire manufacturers upon the Indian salt
monopoly. Indeed, it was remarked at the time
that if the Company had clever writers enough they
could successfully put down all opposition to their in-
terests, and a hint was thrown out that the directors
would do well to secure the services of Messrs.
Hood, Lemon, Boz, Thackeray, Jerrold and Leigh
Hunt, and so render themselves invulnerable at all
points !

Peacock's character and figure might almost have
stood for the Company itself incarnate. A little
obstinate and pugnacious towards modern innova-
tion he certainly was, but he was genial and gener-
ous, too ; and, as Dr. Gamett has observed, ** the
vigour of his mind is abundantly proved by his suc-
cessful transaction of the uncongenial commercial
and financial business of the East India Company ;
and his novels, their quaint prejudices apart, are
almost as remarkable for their good sense as for
their wit".^

Another once fahious follower of the Muse in
Leadenhall Street was Moffat James Home, author
of the Adventures of Naufragus. This most enter-
taining work was written in the first quarter of the
last century, and well deserves popularity for its very

^ '* Thomas Love Peacock is remembered only by the educated
of his surviving contemporaries, and by them not so much as an
author of genius as a teller of ' good stories '. Wherever he went
he kept his auditors in roars of laughter, and he was an immense
favourite with all the directors.'" — Birdwood.

VOL. IL 28

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434 LEDGER AND SWORD [1826

graphic descriptions of Eastern life and scenery.
Home obtained a clerkship at East India House
soon after Charles Lamb's retirement, or that
humorous observer of men and manners would not
fail to have been vastly impressed by the spectacle
of Home's lady, who was wont to wait for her lord
in Leadenhall Street of a summer afternoon ; a
beautiful half-caste whom he had met, wooed and
wedded during his romantic tour through the
Eastern seas.

The End.

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^oo

gle

ThtLond/fiLGtograptuatliistUut*

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APPENDIX.

The following interesting authenticated docu-
ment, bearing the signatures of the Company's
general accomptant and his deputy, not merely
furnishes a useful illustration of the award of 1708,
but is also interesting as a contemporary financial
statement of debit and credit : —

2« • 435

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436 APPENDIX

THE GOVERNOR AND COMPANY OF MERCHANTS

THEIR ACCOUNT

Dr.

•' To money at int* owing to sundry on the

Compy'seal £i»osSM^ 9 3

'* To 6 months' int* thereon due this day - 31,063 9 i

'' To int^ for several bonds y^ may have 12 or

18 "«• due 3,000 o o

** To int^ on bonds owing more than the 70

per cent, will pay, from this date to the

!•* March next 6,425 i6 7

" To Almshouse at Poplar, owing to them - 2,700 o o

** To customs and to freight, and to several

persons for goods sold in private trade - 9,7 ^^ 10 9

*^ To customs and freight due to the United

Company 16,312 5 3

" To money owing several for int* on their

stock, not demanded - - - - 6,918185

"To a moiety of Factors' sallarys payable

here and money p** into the Comp'*^'^

cash in India, to be repaid here - - 25,000 o o

" To charges from this day to the 25^** March 10,000 o o

" To balance of the Indian accompt as by

the Lord Treasurer's award - - - 96,615 4 9

*' To difference on ^^28,000 stock in contra,

with the present market price 85 per

cent. 6,429 3 5

** To difference on the ;^i,ioo los. in contra 165 10 o

" ;^i,a49»^07 7 6

<* London, agth September, 1708.

(Signed) " SAM. WATERS, Acco* Generall.
"J. FLETCHER, Deputy."

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APPENDIX 437

OF LONDON TRADING TO THE EAST INDIES.
CURRENT.

" By 70 per cent, on ;^988,5ooo, due fr*

United Comply ----- ^^69 1,950 o o
" By int* thereon, due this day - - - 20,758 10 o

'* By six months' int^ on the fund, due at

Christmas - 39»54o o o

''By the 8 and 12 quarterly payment on

^^315,000 subscribed to the fund - - 12,600 o o

" By a moiety of 5 per cent, p* by y« Separate

Traders to y« United Company - - 8,328 15 8

•' By disbursements for y« United Company - 17,000 o o

" By j^28,ooo stock in the names of Charles

Du Bois and T. W. in trust, and int^

thereon to the i*^ March next - - 30,229 3 5

'* By j^i,ioo I OS. in the name of Rob^ Black-
bom in trust - - - -
** By goods remaining in the warehouses
" By good debts in England
" By cash remaining this day

" By Ballance

1,100

1,000

3»ooo

24,504

"^850,011

399»79S

•*j^i ,249,807 7 6

TUK ABBXDBBN UNITBaSITY PKBSS LUCITBO

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A HISTORY OF BRITISH INDIA.

By sir WILLIAM WILSON HUNTER, K.C.S.I.

Vol. L, with 4 Maps. 8vo, x8^.

TO THE OVERTHROW OF THE ENGUSH IN THE SPICE

ARCHIPELAGO. 1633.

Vol. IL 8¥o. 16s.

TO THE UNION OF THE OLD AND NEW COMPANIES UNDER

THE EARL OF GODOLPHIN'S AWARD. 1708.

T/AfES.-^** No one in our time or in the post has done so much as Sir
William Hunter for the history of India. . . . Every page of the volume speaks of
diligent research. Everywhere presides a sober, calm judgment."

SPECTA TOR,--** No man in these islands was nearly so well fitted for the
task as Sir William Hunter. . . . We may assert, without fear of contradiction^
that he knows more of these facts than any one who has ever lived."

THE INDIA OF THE QUEEN.
AND OTHER ESSAYS.

By SIR WILLIAM WILSON HUNTER, K.C.S.I.

Edited by LADY HUNTER. With an Introduction by FRANCIS
HENRY SKRINE, Indian Civil Service (Retired).

8vo. 9^. net

The India op the Queen. A River op Ruined Capitals.

Popular Movements in India. Our Missionaries.

The Ruin op Aurangzeb. A Forgotten Oxpord Movement.

England's Work in India. A Pilgrim Scholar.

TIMES.—** Above all, this volume exhibits the wonderful versatUity of
Hunter's style, equally successful in grappling with and giving meaning to masses
of statistics, or in tracing the causes and effects of political anid social movements,
or in sketching with exquisite pathos some personal romantic narrative, whether
of a Mogul Elmperor or of a Baptist missionary, or of that poor Hungarian scholar
who gave his life to an impossible quest for the original home of his race."

EAST AND THE WEST {Bombay).—** We cordially welcome this volume
of collected essays by one who has done more to elucidate the history of India than
any one who has ever lived. The dedication of the volume bv Lady Hunter is :
' To the dear memory of their author, who loved the races of India, and ever strove
to reveal their needs and aspirations to his countrymen.' "

LIFE OF SIR WM. WILSON HUNTER.

By FRANCIS HENRY SKRINE, F.S.S.

LATB H.M. INDIAN CIVIL SERVICE.

With 6 Portraits (2 Photogravures) and 4 other Illustrations.
8vo. idr. net

WESTMINSTER GAZETTE,—** A striking picture of a remarkable
career."

MORNING POST.—** Early in life it was Sir W. W. Hunter's ambition, in
his own words, ' to obtain a hearing for India in Europe '. Mr. Skrine in th3s
volume describes his success."

LONGMANS, GREEN, AND CO.

LONDON, NEW YORK, AND BOMBAY.

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A SELECT LIST OF BOOKS
ON INDIA.

HISTORY OF THE INDIAN MUTINY. 1857-1858. By Sir
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A STUDENT'S MANUAL OF THE HISTORY OF INDIA.
By Colonel Meadows Taylor, C.S.I., etc. Crown 8vo, js. 6d.

THE HISTORY OF INDIA: By Sri. Hemlota Devi (Mrs.
Sarkar). Translated by M. S. Knight. With 41 Illnstrations and Maps (z8
in Colours). Crown 8vo, ar.

THREE FRENCHMEN IN BENGAL; or, The Loss of the French
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the Government of India. With 4 Maps. 8vo. ys, 6d. neL

LEDGER AND SWORD; or, The Honourable Company of Mer-
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WiLLSON. With Portraits and Illastiation& 2 vols. 8va

INDIAN POLITY. A View of the System of Administration in
India. By General Sir George Chesnet, K.CB. With Map showing all
the Administrative Divisions of British India. 8vo, au.

THE FORWARD POLICY AND ITS RESULTS; or, Thirty-five
Years' Woric amongst the Tribes on our North-Western Frontier of India. By
Richard Isaac Bruce, CLE. With a8 niostrations and a Map. 8vo, 151. net

GENERAL SIR RICHARD MEADE AND THE FEUDATORY
STATES OF CENTRAL AND SOUTHERN INDIA. By Thomas
Henrt Thornton. With Portrait, Map, and Illustration. 8vo, zor. 6d. net

OCCASIONAL ESSAYS ON NATIVE SOUTH INDIAN LIFE.
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THE GREAT FAMINE AND ITS CAUSES. By Vaughan
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India showing the Famine Area. Crown 8vo, 6s.

THE STORY OF THE MALAKAND FIELD FORCE, 1897. By
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MEMOIRS OF SIR HENRY HAVELOCK, K.C.B. By John
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THE ORIENTAL CLUB, AND HANOVER SQUARE. By
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Works by the latb Professor MAX MULLER.

INDIA : What can it Teach Us ?
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RAMAKRISHNA: his Life and
SayingSw Crown 8vo, y.

THE SIX SYSTEMS OF IN-
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THE ORIGIN AND GROWTH
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THREE LECTURES ON THE
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LONGMANS, GREEN, AND CO.

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