No More Learning

It is more likely that Holwell
yielded to the material arguments of Mir Kasim than to the reasons
which Caillaud and others had produced against the establishment
of the Company as subahdar. 1. After prolonged discussions Mir
Kasim was invited down to Calcutta. The negotiations with him were
confided to Holwell in person; and on 27 September an agreement
was reached by which Mir Kasim was to receive the office of deputy
subahdar, with a guarantee of succession to the subahdari, while the
English were to receive the three districts of Burdwan, Midnapur,
and Chittagong for the maintenance of their troops. Mir Kasim also
agreed to pay off the outstanding debts of Mir Ja'far to the Company -
He then returned to Murshidabad. Vansittart and Caillaud
reached the same place in order to carry the agreement into effect
on 14 October. But they then found that Mir Ja'far refused absolutely
to place his person and government in the hands of his kinsman.
After five days' discussion, Caillaud was ordered to occupy the palace
of Motijhil, where the nawab was. In the face of superior force, the
latter at last decided to resign his office, on which Mir Kasim was
immediately seated on the masnad, and the revolution of 1760 was
completed. Mir Ja'far went down to reside at Calcutta under an
English guard which he demanded, and Mir Kasim grudgingly agreed
to allow him 15,000 rupees a month. 3
Thus the matter ended by pulling down one nawab only to set up
another. Nothing was done to reconcile the essentially opposed inte-
rests of the nawab and the English. Nor was the agreement with
Mir Kasim so full and explicit as to exclude future causes of mis-
understanding. In that respect the settlement was most unsatisfactory,
and Vansittart merits the severest criticism for having adopted it. It
was also followed by the grant of presents which cast a sordid air over
1 Dodwell, Dupleix and Clive; p. 205.
2 Bengal Select Committee, 11, 15, 16 and 27 September, 1760.
3 Calendar of Persian Correspondence, 1, 43, 130, 135, 138 and 140.


## p. 169 (#197) ############################################

SHAH ALAM
169
the whole business; but except in the case of Holwell, these do not
seem to have been stipulated beforehand, as had been the case with
the presents that were bestowed after Plassey; nor is it likely that they
formed an element in the motives of Vansittart and his followers.
There were, as Grant said, “many easier avenues to irregular emolu-
ment than the troublesome, hazardous, and public road of a
general revolution". 1
The unstable nature of the settlement quickly manifested itseif
in three principal affairs—the question of the shahzada, the question
of Ramnarayan, and the question of the internal trade. The shahzada,
whose father the emperor 'Alamgir II had been murdered in the
previous year, was still in Bihar, while the nawab's troops in that
region were mutinous for want of pay. In spite of this, Carnac, who
had just arrived as commander of the Company's troops in Bengai,
de ted him (15 January, 1761) on the Son, taking Law and mosi
of the other Frenchmen with him, and on 6 February the shahzada,
who had assumed the title of Shah 'Alam II, was induced to confer
with Carnac at Gaya, and then to accompany him to Patna. Before
Mir Kasim had become subahdar, he and the Select Committee had
agreed on a project to make peace with and assist the shahzada in
marching to Delhi and establishing himself as emperor. ? The design
proves the political imbecility of Vansittart. It mattered nothing to
the English who called himself emperor, and it would have been the
height of folly to dissipate their unconsolidated power in interfering
in the affairs of Upper India. In fact, however, the project came to
,
nothing, because when Mir Kasim had been safely installed, he
offered a persistent, though half-concealed, opposition to the design.
He was clearly obsessed with the fear that the English would obtain
from Shah 'Alam a grant for the provinces on their own account, as
Holwell had at first intended and as Rai Durlabh, who had been
consulted, had advised. There had, indeed, been from the first a
party strongly opposed to Vansittart and therefore to any policy
which he advocated; and the substitution of Carnac for Caillaud had
strengthened this party. When in April Coote arrived from Madras,
and took over the command from Carnac, the change emphasised the
opposition, for Coote entertained as his diwan Nandakumar, whom
Mir Kasim regarded as pledged to the restoration of Mir Ja'far. }
When Mir Kasim went up to Patna, more than one misunderstanding
arose between him and the military commander; Mir Kasim refused
to proclaim Shah 'Alam as emperor till after his departure, and even
then was only brought to do so by Coote's threat of doing it himself
3
1 Grant, Sketch, p. 187.
2 Letter to McGwire and Carnac, ap. Bengal Select Committee, 13 February,
1761; letter to Mir Kasim, 2 February, 1761 (Calendar of Persian Correspond-
ence, I, 63).
3 Vansittart to Mir Kasim, 27 October, 1761 (Calendar of. Persian Cor-
respondence, I, 130).


## p. 170 (#198) ############################################

170
BENGAL, 1760-72
1
2
if Mir Kasim delayed any longer. When the emperor departed in
June, the nawab evidently felt that he had narrowly escaped seeing
power transferred over his head to the English by Shah 'Alam.
Although there was not a shred of truth in the nawab's suspicions,
Vansittart's policy was already beginning to break down under the
stress of circumstances and lack of union among the English.
Ramnarayan's case was to demonstrate this even more clearly. In
Mir Ja'far's time the English had steadily protected him from the
nawab, and his conduct had justified their protection. He had resc-
lutely and at times skilfully resisted the inroads of the shahzada; and
the new governor was resolved to continue the protection which
Clive had given. Coote's instructions, when he was proceeding to
Patna in April, contained a clause directing him to secure Ramnarayan
from injustice and at all events to maintain him in his government. ?
However, the tone of the Calcutta government gradually cooled. On
18 June the committee agreed to Ramnarayan's suspension and
Vansittart wrote to Mir Kasim that he could do what he liked about
the deputy. Coote and Carnac were recalled from Patna. In August
Vansittart approved of the appointment of a new deputy, and in
September he ordered Ramnarayan to be delivered into the nawab's
hands. 3 When as much money as possible had been extracted from
him, he was put to death. In this matter Vansittart had acted in
plain opposition to the policy of Clive. The latter had desired above
everything to strengthen the English position; Vansittart desired to
strengthen that of the nawab. The first had therefore made a point
of protecting the principal Hindu ministers; the second deliberately
desisted from protecting them. He failed to see how far his policy
would lead him and how strong a reaction it would provoke. *
Having succeeded in getting rid of the emperor and in getting the
chief English protégé into his hands, Mir Kasim now proceeded to
raise the third question, that of the internal trade of the province.
This was a matter which neither Clive nor Vansittart had ever fairly
faced. Its history goes back to the days before the battle of Plassey,
when the imperial farmans conferred on the English complete liberty
of trade exempt from the imperial transit dues. The Company's
servants had always interpreted this as authorising them to trade in
articles such as salt, betel and tobacco, without paying the tolls
imposed on those articles. The nawab had always insisted on their
doing nothing of the sort. The Company, having no interest in this
matter, had prohibited its servants from following the internal trade,
for fear of their provoking troubles with the nawab on that account.
The Company's servants felt that they had been kept out of their
1 Coote's Journal, Orme MSS, India, VIII.
2 Bengal Select Committee, 21. April, 1761.
3 Vansittart to Mir Kasim, 18 June and 21 September, 1761 (Calendar of
Persian Correspondence, I, 108 and 122).
ttart's Narrative, p. 32.
4 Cf. Scrafton, Observations on Mr Vansittar


## p. 171 (#199) ############################################

INTERNAL TRADE QUESTION
171
rights by the strong hand; and when the strong hand was at last on
their side they resolved to exercise their supposed rights to the full.
Clive in 1757 was instructed to procure an express authorisation from
Mir Ja'far for their participation in the internal trade free of duties.
No such article appears in the treaty; but the parwanas issued by the
nawab in execution of the treaty were phrased in such wide terms
and included such definite instructions as show that Clive carried out
this part of his orders.
Whatever goods the Company's gumastahs may bring or carry to or from their
factories, the aurungs or other places, by land or by water, with a dustuck from
any of the chiefs of their factories, you shall neither ask nor receive any sum,
however trifing for the same. Know they have full power to buy and sell;
you are by no means to oppose it. Whoever acts contrary to these orders,
the English have full power to punish them. 1
As the Company's servants had always been thought entitled to enjoy
the same privileges as the Company itself, they proceeded to take
advantage of their new freedom from control to trade in the articles
so long prohibited. Clive on the whole seems to have set his face
against this practical extension of English privileges; but it seems
clear that under his government it went on, though perhaps not in
any great volume, and that at the end of his government Mir Ja'far
complained of it. On that occasion, Clive, who was on the eve of his
departure, refused to give any decided answer, but the council seems
to have decided in favour of the fullest interpretation of English
rights; the practice grew; and when Vansittart arrived at Calcutta it
was in full swing. In the discussions which preceded Mir Ja'far's
removal, the matter never seems to have been mentioned. Indeed, had
Mir Kasim proposed its abolition, he would almost certainly have
received not a shred of English support. But he was too wise to raise
such a thorny matter at a time when the favour of the English meant
everything to him. He therefore waited till the emperor had departed,
till Ramnarayan had been delivered over to him, and the Hindus
could no ionger look to the English for countenance and support, and
then, in Deceraber, 1781, came the first complaints that the nawab's
officers were obstructing the trade of the Company and its depend-
ents. In May, 1762, came the first recorded complaint from the other
side, Mir Kasim alleging misconduct on the part of the English
traders' Indian agents. 3 Vansittart still thought the nawab was making
himself uneasy about smail matters, and that the whole question
could be cleared up by a personal interview; but in fact complaints
doubled and redoubled. The officers of the nawab obstructed English
trade; the English “did themselves justice”; the nawab claimed the
1
Dodwell, op. cit. pp. 214 sqq.
2 Vansittart to Mir Kasim, 18 and 19 December, and tu Mir Sher 'AU, 19
Decemwer, 1761 (Calendar of Persian Correspondence, I, 137).
3 Idem, I, 161.


## p. 172 (#200) ############################################

172
BENGAL, 1760-72
right of himself administering justice. Such different persons as
Scrafton and Hastings both accord in testifying not only that the
words of the nawab's parwana quoted above had been steadily acted
upon, but also that such privilege was necessary. It had constantly
been exercised during the government of Mir Ja'far; it had not been
mentioned when Mir Kasim succeeded his father-in-law, any more
than had been the question of the internal trade; but now he suddenly
discovered that these practices were incompatible with the proper
exercise of his powers and complained of them as new and unbearable
usurpations. It is, indeed, clear that they were incompatible with
Vansittart's policy of strengthening the nawab; but no engagements
seem to have been sought or given in 1760; and, indeed, Vansittart,
had probably not realised what a difficulty they offered.
Out of them sprang the war of 1763 and the restoration of Mir
Ja'far as nawab. At the close of 1762 Vansittart visited the nawab
at Mongir, where he had established his capital, and made a treaty
with him on the subject of the internal trade: In future English
merchants were to pay 9 per cent. , whereas Indian merchants paid
40 on salt carried up to Patna, but, as against this, disputes were to
be heard and determined by the nawab's officers. This agreement
was not to have been announced until Vansittart had procured the
assent of the council; but Mir Kasim published it at once. It is
doubtful whether the council would in any case have accepted it;
but the news of the abandonment of the right of "doing themselves
justice”, received as it was through the nawab's officers, excited a
blaze of anger. This was exaggerated by various other news that
came in about the same time. One was that Vansittart had been
imprudent enough to accept seven lakhs from the nawab, in part as.
a refund of advances he had made, but in part as a present, and of
course everyone declared that the money was the price of abandoning
English rights; it is curious that Mir Kasim had instructed his deputy
at Dacca to show special favour to Vansittart's agents;2 perhaps he
expected to strengthen his position by setting the English quarrelling;
if so, the event must have disappointed him. Ellis, the chief at Patna,
had been in constant disputes with the nawab's servants, who had
neglected to visit him on his arrival as chief; many of the council
were deeply suspicious of Mir Kasim, who had recently entered into
relations of an unknown character with the nawab of Oudh. All
these things combined to produce a revolt against the authority of
Vansittart and the policy with which he was associated. His agree-
ment was rejected; all the absent members of council were called
down to Calcutta; and it was resolved that in future the English
should trade duty-free except for 21/2 per cent. on their salt, and that
1 Scrafton, op. cit. p. 34; Hastings to Holwell, 19 February, 1760 (Brit: Mus.
Add. MSS, 29096, f. 223 verso).
2 Mir Kasim to the Naib of Dacca, n. d. (Select Committee Report, 1772, I,
(2), App. 34).


## p. 173 (#201) ############################################

FALL OF MIR KASIM
173
English agents should be subject to none but English control. When
the nawab resolved to abolish the duties, the council refused to assent
and deputed Amyatt and Hay, two of their members, to insist on
large preferential terms for the English trade. These Mir Kasim
refused to concede. At the same time affairs at Patna had greatly
exasperated feelings on both sides. Ellis, the chief, a man of violent
temper, and a bitter enemy of Vansittart, had insisted on the English
privileges without any heed to appearances; while Mir Kasim had
begun to prepare against those events which evidently drew nearer
every day. He closed and stockaded the Patna gate close to the
English factory; he assembled troops in Patna; and in June he sent
emissaries to seduce the Company's European and sepoy troops
stationed there. On 21 June he sent a fresh body of troops from
Mongir towards Patna; and on this news Ellis attempted to seize the
city; after a temporary success he failed to retain it; his garrison
was destroyed; and the war had begun.
Blameworthy as were individuals, it was a war of circumstances
rather than intentions. Vansittart had failed to realise that a strong
nawab would inevitably desire to reduce the extraordinary privileges
which the English claimed, and he had made no allowance for the
fact that the English councillors would become uncontrollable if their
material interests were attacked. In short he lacked the insight and
vigour which his position demanded. The councillors with the ex-
ception of Hastings allowed their material interests to colour and
distort their policy. Mir Kasim had displayed great political dexterity
but little wisdom. But the dominating fact of the situation was that
the interests of the English and of the nawab were irreconcilable.
There could be no stability in affairs so long as the nawab fancied
himself an independent governor and the English claimed privileges
wholly inconsistent with that independence.
The war which thus began in 1763 was destined to end this un-
certain position. On 10 June Major Adams, an officer of Coote's,
took the field at the head of 1100 Europeans and 4000 sepoys against
Mir Kasim's army of 15,000 to 20,000 men. Between that date and
5 September he won four considerable victories in the course of his
advance upon the nawab's capital of Mongir. Mir Kasim had now
lost all confidence in his troops and their leaders. He fled to Patna,
where he put to death all the English who had fallen into his hands;
and he had already murdered his commander-in-chief, who had been
guiltless of any crime but that of failure, and the Seths, who had been
guiltless of any crime at all. He was, indeed, displaying that same
weak violence which the English councillors had already displayed,
though in a less bloody fashion. He then fled into Oudh, where he
hoped to find assistance with which to recover the provinces from
the English. The nawab of Oudh, Shuja-ud-daula, agreed to assist
him, and the emperor Shah 'Alam joined the confederates. But at
this point the war came to a pause. On the one side the Oudh troops


## p. 174 (#202) ############################################

174
BENGAL, 1760-72
were not ready for attack; on the other, the English commander,
Adams, retired to Calcutta to die; he was succeeded by Carnac who
was hampered, not only by lack of conspicuous military talent in
himself, but also by mutiny among his men, by disputes with the
council, . and by counteraction on the part of the restored nawab,
Mir Ja'far, who had been sent back from Calcutta to reign once more
at Murshidabad. After a series of very inconclusive events on the
borders of Oudh and Bihar, which occupied the first half of 1754,
Major Hector Munro, of the 89th, arrived and took command of the
army. He spent August and September in restoring the discipline of
the army. After executing twenty-five mutineers by blowing them
from his guns, and breaking one sepoy battalion with all possible
ignominy, he invaded Oudh, and on 22 October, after a stubborn
contest, completely defeated the enemy at Baksar. There was no more
resistance. Oudh was overrun by Fletcher, who succeeded Munro
in the command. Shah 'Alam joined the English camp once more;
Shuja-ud-daula fled into the Rohilla . country; while Mir Kasim,
stripped of his treasure and deserted by his followers, escaped into
obscure poverty.
Meanwhile the old nawab had been restored. On 10 July, 1763,
was signed a new treaty, by which he agreed to limit the forces he
kept up, to receive a permanent resident at the durbar, and to levy
no more than 212 per cent. on the English trade in salt. Advantage
was also taken to secure a promise of compensation for all losses,
public and private, caused by the war wich Mir Kasimn. These
stipulations regarding private interests were severely criticised by
the Company. Nor even were the other provisions found to concede
all that was required. The nawab, appointed Nandakumar as his
chief minister; and in the course of the war the latter was believed to
have betrayed the English plans, and in various ways to have obstruc-
ted their operations. Accordingly when Mir Ja'far died early in 1763
his son Najm-ud-daula was only recognised on condition of his
appointing a minister nominated by the English, and agreeing not
to displace him without their approval. The minister held the title
of deputy subahdar, and was to have under the nawa't the chief
management of all affairs. By this agreement the long struggle
?
between the English and the nawab was brought to an end. The
nawab survived as a figurehead, in whose name administration was
conducted by a nominee of the English, but who of himself could do
nothing. Clive, whose appointment as governor of Fort William had
already been announced, was very indignant with the council in thus
determining an affair of importance before his arrival; but, venal as
1 Besides the proceedings of the Bengal Select Committee, see also Cham-
pion's Journal, ap. India Office Home Miscellaneous, no. 198.
2 Munry's reports, ap. Bengal Select Committee, 24 September, 1761.
8 Bengal Select Committee, 14 and 28 February, and 16 March, 1765.


## p. 175 (#203) ############################################

STRUGGLES IN ENGLAND
175
the council were, in this case their action from the point of view of
policy was irreproachable. It would have been very unwise to have
left the matter of the succession hanging over until Clive's arrival,
and still more so to have invested the new nawab with powers which
it afterwards would have been found expedient to diminish. Unfor-
tunately the council marred their conduct by making this settlement
the occasion of taking large presents in defiance of the orders of the
Company which had already been received.
Clive's victories in Bengal had transformed not only the position
of the English in India but also the proceedings of the Company in
England. Violent political discussions succeeded to the dull and
decorous statements of the course of the trade in the East. Control
of the Company and of its policy became a thing worth paying for.
Clive on the one side and Laurence Sulivan on the other, entered
into a series of campaigns to secure a dominant interest, buying up
stock, and subdividing it so as to create if possible a majority of
secure votes. The right to Clive's jagir had been the great bone of
contention, and the preservation of that valuable property had cost
Clive great sums of money. Sulivan, the great friend of Warren
Hastings, was a man without an idea in advance of the low level of
his time. He almost ruined himself in his struggle with Clive, while
his friend Vansittart did so completely; and he then took advantage
of his position and following at the East India House to seek to retrieve
his position by procuring lucrative posts for his son and relatives in
the East. In 1764 Clive succeeded for the time being in obtaining
the control of the Company; and the fact was marked by his accept-
ance for a second time of the office of governor of Fort William. He
went out in order to set right the errors that had evidently been
committed by his successors. The revolution of 1760 had been bitterly
attacked in England, and so had the war which followed with the
new nawab. It was generally felt that unless the Company set its
house in order, it would be impossible to prevent he ministry from
interfering in Indian affairs, and perhaps abolishing the Company
itself.
Clive reached Calcutta in May, 1765, and found two problems
awaiting his solution-one political, the future relations of the
English with the emperor, the nawab of Oudh, and the nawab of
Bengal; and the other administrative, the reform of the swollen profits
from illicit or quasi-illicit sources, and the re-establishment of order
and subordination, which had disappeared in the revolt of the council
against Vansittart. On his arrival the new governor found that Van-
sittart had promised Oudh to the emperor. It seemed to Clive a
a
foolish step. There was no ground for thinking that Shah 'Alam
would be able to maintain himself there without English help, so that
1 Palk MSS, pp. 91, 126 and 188; Sulivan to Hastings, 6 June, 1781 (Brit.
Mus. Add. MSS. 29149, f. 244).


## p. 176 (#204) ############################################

176
BENGAL, 1760-72
1
1
the setlement contained within itself all the elements of future com-
plications. Clive therefore sent up Carnac to reopen negotiations
until he himself should be able to visit Oudh in person. Carnac soon
found himself in communication with the fugitive Shuja-ud-daula,
with whom Clive decided to come to terms, restoring to him his old
dominions with the exception of Allahabad, on condition of a payment
of fifty lakhs of rupees. Allahabad with the surrounding districts
was bestowed on the emperor.
The settlement has been attacked on
both sides—as a breach of faith with the emperor in taking away
from him what had been promised, and as bestowing territory on one
who would not be able to protect it. As regards the first no formal
treaty had as yet been arranged, so that Clive's hands were still free;
as regards the second, some sort of provision had to be made for the
emperor, and the one which Clive adopted cost the Company nothing,
and committed it to nothing. Indeed the grant of Allahabad marks
the end of those foolish dreams which had been cherished by almost
everyone in Bengal, of restoring the empire to its legitimate holder.
Any such attempt would have strained the Company's resources
beyond their power. It would have united the princes of India against
the English. At the same time the restoration of the nawab of Oudh
placed on the frontiers an ally who at the moment was too grateful
to attack them, and who afterwards was much too severely threatened
by other powers to think of doing so. Clive's settlement was a middle
course, which afforded more advantage and threatened fewer dangers
than any other that could have been adopted at the time. In Bengal
itself Clive decided on a long step forward towards the assumption
of ostensible power. He demanded from the emperor as the price of
Allahabad and its districts a farman granting the diwanni of Bengal
to the Company. That involved the complete control of the finances
of the province, and carried to its completion that process of the
extrusion of the nawab's power which had been almost secured by
the arrangement of February, 1765. The disadvantages of this plan
are obvious enough; but they were such as counted for less in those
days than they would now. Power was separated from responsibility.
But no one at the moment thought of undertaking the administration
of large tracts of India, and the fact of bad and corrupt administration
appeared one of those natural and inevitable evils which are beyond
possibility of reform. As against this the plan offered certain imme-
diate advantages. It secured that control over the nawab which was
regarded as the most pressing need of the time; it also promised some
protection against the complaints of foreign powers and the demands
of the home goverrment. Clive still remembered how the too-osten-
sible assumption of power contributed to produce the unyielding
opposition of the English to the schemes of Dupleix; and farmans of
the emperor or parwanas of the nawab, though valueless without the
support of English power, could not be fully discounted at Paris or
the Hague without a serious breach of diplomatic etiquette. It was


## p. 177 (#205) ############################################

CLIVE'S REFORMS
177
thought too that something short of the assumption of full dominion
would be less likely to excite, legal difficulties in England or provoke
the interference of parliament. In short the grant of the diwanni was
designed to secure the full control of Bengal affairs so far as the
Company's interests went without incurring the inconvenience of
formal and avowed dominion.
The administrative questions that demanded settlement were much
more difficult than these political questions. First there were the
Company's covenanted servants. They had been demoralised by the
conditions under which they had been working and the facility with
which wealth could be acquired through the English privileges in
the internal trade of Bengal; while a tradition had arisen that each
change of nawab should be the occasion of large presents, open or
concealed. The accession of Najm-ud-daula had been a particularly
bad case, because the succession was normal, and because the pre-
cedent of presents from the nawab had been extended to the minister
as well. Further, this extension of a bad practice had been made in
the face of specific orders from the Company prohibiting the accept-
ance of presents and requiring its servants to sign covenants agreeing
not to accept such in future. Instead of announcing their orders the
councillors had quietly left them over for Clive to deal with on his
arrival. Indeed they seem to have thought that his previous practice
and present influence would have led him to procure the abrogation
of the orders before he came out again as governor. But they were
mistaken in their man. Clive feared nothing, not even his own past;
and he was as fully bent on enforcing the orders of the Company as
if he himself had never made a rupee by the revolution of 1757 or
were not still in enjoyment of a jagir of £30,000 a year. One of his
earliest acts on his arrival at Calcutta was to require the covenants
to be signed by civil and military servants alike. That was done, but
Champion, and probably many others as well, did so with the idea
that this reforming zeal could not last and that their signature was
a mere matter of form. 1
Clive, however, saw as clearly as did Cornwallis twenty years
later that if illicit gains were to be abolished, considerable regular
advantages had to be provided. On his arrival he found that there
was a great lack of senior servants. Since everyone had been held
entitled to passes for the internal trade, it had been possible for even
junior servants to make fortunes by selling their passes to the Indian
merchants of Calcutta. The result was that Clive found the secretary's
department in charge of a writer of three years' standing, the ac-
countant was a writer yet younger than the secretary, while the
paymaster of the army, with balances of twenty lakhs in his hands
for months together, had also been a writer. 2 Clive resolved therefore
1 Champion's Journal, 6 August, 1765.
2 Bengal Select Committee to the Company, 24. March, 1766.
12


## p. 178 (#206) ############################################

178
BENGAL, 1760-72
to reorganise the internal trade, to place it on a wholly new basis,
and to employ the profits so as to secure handsome salaries for the
senior servants of the Company; and meanwhile to call up from
Madras a small number of covenanted servants to fill the immediate
vacancies in council. This last measure produced the sort of uproar
that was to be expected. An association was 'formed; Clive's enter-
tainments were boycotted; memorials were framed. But when the
malcontents found that they were promptly deprived of every lucra-
tive office, refused passes, and sent hither and thither very much
against their liking, they concluded at last that they had better put
up with Clive's tyranny, and the opposition died down. Meanwhile
Clive went on with his salt scheme. That had always been a govern-
ment monopoly, and as such Clive decided to administer it and employ
the profits arising out of it in the payment of allowances to the
principal civil and military servants. He did so under the form of a
trading company, under the close control of the council, and the
allowances took the form of shares in the company. This was contrary
to the orders of the Company; but Clive considered that those orders
had been issued before he had taken over the revenue administration
of the provinces, that his new plan could not possibly rouse difficulties
with the nawab, and that consequently the main objections of the
Company did not apply to his present proposals. In this respect he
was guilty of a miscalculation. When the news of what he had
done reached England, the Company at once ordered the internal
trade to be entirely abandoned; these orders were again suspended,
and Clive hoped to procure their reversal on his return to England;
but the directors insisted on their views being carried out; and so at
last the trading company was wound up. In this matter Clive has
been unduly blamed. His proposals amounted in reality to the
continuation of the monopoly which had been customary and the
assignment of the revenues so raised to the payment of establishment.
Although in form his plan seemed to continue the vices of the Van-
sittart régime, in essence it was wholly different and amounted to
just that measure of reform for which Cornwallis has received such
high praise. The mistake which Clive made was apparently one of
tactics. He thought the Company would be less likely to oppose the
scheme so long as the payment of the extra allowances did not appear
to come out of its own revenues. He forgot that the apparent simila- .
rity between his plan and the abuses of the past might lead to its
condemnation.
With the military officers Clive had even more trouble than with
the civilians. This was natural, because in the latter. case he had had
only to deal with illicit gains whereas in the former he was required
to cut down regular and acknowledged allowances. For some years
the Company had been endeavouring to cut down the batta or field-
allowances of the Bengal officers. These allowances were designed to
make good the extra cost of living in the field as compared with


## p. 179 (#207) ############################################

THE BATTA QUESTION
179
living in garrison. They originated in the Carnatic, where both
Chanda Sahib and Muhammad 'Ali had paid batta to the French
and English officers respectively in their service; and difficulties had
arisen when Muhammad 'Ali had transferred lands to the English
Company in lieu of this batta, and the question of its regulation had
arisen between the officers and the Company. Affairs had followed
the same course in Bengal, where batta had at first been paid by the
nawab and then became a charge upon the Company, who desired
to reduce it to the more moderate level paid at Madras. Orders to
this effect had reached Bengal when the war with Mir Kasim had
been on the point of breaking out; their immediate execution had
thus been impossible. But when they were repeated, in 1764, they
met with the same fate as those other unpleasant orders prohibiting
presents, and obedience was deferred until Clive's arrival. He ac-
cordingly prepared regulations on the subject. Officers in canton-
ments at Mongir or Patna were to draw half batta, as did officers at
Trichinopoly; when they took the field they would draw batta while
within the limits of Bengal and Bihar, but if they crossed into Oudh
they would then become entitled to double batta. For a captain
these rates amounted to three, six, and twelve rupees a day. These
orders led to a combination among the officers, just as the appoint-
ment of covenanted servants from Madras had led to a combination
among the civilians. It was agreed that they should simultaneously
resign their commissions. In this step they seem to have been
encouraged by the commander of one of the brigades, Sir Rober
Fletcher, who was not only the friend of Clive's opponents in England,
but also thought himself injured by decisions of Clive regarding
pecuniary claims which he had put forward. The agitation coincidec
in time with the trouble with the civilians, and there was talk of a
subscription for the benefit of those who should suffer through Clive's
conduct. In this matter as in the other Clive overbore all opposition
with a bold front. Every resignation was to be accepted; supplies of
officers were requested from Madras; everyone displaying the least
inclination to mutiny was to be sent down at once to Calcutta. Clive
visited the headquarters of the three brigades in person, to assure
himself that the men were under control; and the officers gradually
fell out among themselves. Those who had already made their for-
tunes were careless of what might come out of the affair, but those
who still had their fortunes to make were more timid, and, when it
came to the point, were reluctant to forgo their prospects. In these
circumstances the mutiny broke down. Those who were considered the
least guilty were allowed to return to duty on condition of signing
a three years' agreement, which under the East India Mutiny Act
would bring within the penalty of death any who so conducted them-
selves in future. Of the rest Fletcher and six more were cashiered.
1 Dodwell, Dupleix and Clive, p. 266.
1


## p. 180 (#208) ############################################

180
BENGAL, 1760-72
At the same time Clive resolved to apply to the use of the Com-
pany's officers a sum of five lakhs which Mir Ja'far was alleged to
have desired on his deathbed to be delivered to him. One of the great
lacks of the service was some provision for those who were compelled
to retire from the service by wounds or ill-health while their circum-
stances were still embarrassed. Being a legacy the sum was deemed
not to come within the Company's prohibition; it was therefore
accepted, vested in trustees, and under the name of Lord Clive's Fund
did much to bridge over the interval until the Company adopted the
practice of pensioning its servants.
Clive quitted India for the last time in February, 1767. It is not
necessary to dilate upon the greatness of his character or the results
of his work. He had a supreme faculty for seeing into the heart of a
situation, undistracted by side-issues, for compelling the obedience of
others, and for finding an immediate expedient for the needs of the
moment. His principal defect was a certain bluntness of moral
feeling which enabled him to perform and defend actions which
did not coñmend themselves even to his own age. But there was
nothing small or petty about him. Though he made an enormous
fortune, he was not mercenary; though he tricked Omichand, he was
trusted implicitly by Indians of every class. His unfaltering will and
uncompromising vigour took the fullest advantage of a peculiarly
happy concourse of events firmly to establish the Company's power
in the wealthiest province of India.
Between him and Warren Hastings come two governors who were
hardly more than stop-gaps. Verelst succeeded Clive, and at the end
of 1769 Cartier succeeded Verelst. But their combined five years of
rule were little more than an introduction to the period of Hastings.
The stage was being set for new performers. The Marathas, recovering
from their overthrow at Panipat, were beginning once more to inter-
fere in Northern India; the emperor quitted Allahabad, where Clive
had settled him, and went off to Delhi under their protection; mis-
understandings arose with Shuja-ud-daula, but they did not break
the alliance which Clive had established; the English in Bengal began
to take a share in the administration which they had so long regarded
with suspicion; attempts were made to enter into communication
with the Himalayan states and to come to terms with our Maratha
neighbours on the south. But in all these ways the time was prepa-
ratory only for the time of growth and formation which Hastings
was to inaugurate.


## p. 181 (#209) ############################################

CHAPTER X
THE EAST INDIA COMPANY AND THE STATE.
1772-86
THE period 1772-86 is the formative epoch of British Indian
History. During these years three important questions had to be
dealt with : firstly, the relation of the East India Company to the
state; secondly, the relation of the home to the Indian administration
of the Company; and thirdly, the relation of the supreme government
in Bengal to the subordinate presidencies. In this chapter we are
concerned with the first of these questions, and it may be pointed out
that the fourteen years of our period witnessed all the great statutes
which definitely subjected the Company to the control of the crown
and parliament, and converted it into a quasi-state department.
Between 1786 and 1858 we feel that the constitutional changes are
not really fundamental. Even the taking over of the Company's
powers by the crown in 1858 was less a revolution than a formal and
explicit recognition of facts already existing. Again, this was the
period which saw the Company subjected to minute and severe
inspection at the hands of parliamentary commissions, the Select and
Secret Committees of 1772, and the Select and Secret Committees of
1781. Each occasion was followed by a great statute and an attack
upon a great individual. In 1772 we have the attack upon Clive,
followed by the Regulating Act of 1773. After 1781 we have Pitt's
Act of 1784, followed by the impeachment of Warren Hastings.
Lastly, as a result of these inspections a reformation of the civil
service was carried through, partly by Hastings himself, and in fuller
measure by Lord Cornwallis.
At no time was the question of British dominion in India so
closely interwoven with political and party history at home. In Cob-
bett's Parliamentary History a very large space from 1767 to the end
of the century is devoted to Indian debates. "The affairs of the East
India Company", wrote the editor in 1768, "were now become as much
an object of annual consideration, as the raising of the supplies. ” ?
The Indian question was entangled with a serious constitutional crisis
and with the personal rivalry and political ambitions of the two
greatest statesmen of the time. It caused the fall of the notorious
Coalition Government of Fox and North, gave George III the oppor-
tunity to effect a daring coup d'état, doomed Fox to almost a lifetime
of opposition and put Pitt in power practically for the rest of his
life. From 1772 to 1795 Indian affairs were constantly before
parliament in both its legislative and its judicial aspect.
1 Parliamentary History of England, XVI, 402.


## p. 182 (#210) ############################################

182
THE COMPANY AND THE STATE, 1772-86
»
Now all this was inevitable and, when everything is taken into
consideration, not to be regretted. It is easy to paint the interference
of parliament as mischievous and misinformed, and to complain that
India was made a pawn in the party game; but there was—as some
of the most clear-sighted of contemporary statesmen saw-a serious
risk of a great empire being created and ruled by Englishmen outside
the sphere and control of the British cabinet. “The East India
Company”, as Burke said, "did not seem to be merely a Company
formed for the extension of the British commerce, but in reality a
delegation of the whole power and sovereignty of this kingdom sent
into the East. ” 1 No national government could be expected, 0%
indeed ought, to tolerate such a dangerous shifting of the centre of
political gravity. Some action on the part of the state was necessary;
the question had to be tackled even at the cost of strife, dislocation,
and possibly some injustice to individuals. "In delegating great
power to the India Company", wrote Burke, "this kingdom has not
released its sovereignty. On the contrary, its responsibility is increa-
sed by the greatness and sacredness of the power given. " 2
This bringing into relation of the Company and the state was
from the nature of the case a very difficult problem. It had to be
worked out experimentally, for there were no precedents. We can-
not be surprised that many mistakes were made.
“The British legislature", says Malcolm, “has hitherto but slowly followed
the progress of the power of the Company, in India. It had legislated for
factories on a foreign shore, when that Company was in the possession of pro-
vinces; and when the laws were completed to govern these, it had obtained
kingdoms. "
This was entirely true, but it was inevitable. The rapid developments
in the East out-distanced the efforts of parliament to comprehend
and to deal with them. According as men visualised the position
from the eastern or the western point of view, authority in the East
seemed dangerously circumscribed or perilously unhampered. Hastings
describes the sphere of his administration as "a dominion held by
a delegated and fettered power over a region exceeding the dimen-
sions of the parent state, and removed from it a distance equal in
its cricuit to two-thirds of the earth's circumference”. 4 Its remoteness
postulated the necessity of semi-independence, “distant as it is from
the reach of more than general instruction from the source of its autho-
rity, and liable to daily contingencies, which require both instant
decision, and a consistency of system”. 5 Burke, on the other hand,
from the home aspect, declares, “It is difficult for the most wise and
" 3
1
Speeches. . . in the trial of Warren Hastings (Ed. Bond), I, 15.
2 Idem, p. 13.
3 Malcolm, The Political History of India, I, 8.
+ Selcctions from the State Papers of the Governors-General of Indiu.
Warren Hastings. Ed. by (Sir) G. W. Forrest, 11, 92.
- Idem, p. 93.


## p. 183 (#211) ############################################

POSITION OF THE COMPANY
183
2
upright government to correct the abuses of remote, delegated power,
productive of unmeasured wealth, and protected by the boldness and
strength of the same ill-got riches”;1 and he puts his finger on the
crux of the whole matter, though no doubt he here inculcates a
counsel of perfection, when he says, "I think I can trace all the cala-
mities of this country to the single source of our not having had
steadily before our eyes a general, comprehensive, well-connected and
well-proportioned view of the whole of our dominions, and a just
sense of their true bearings and relations". The question then hefore
the statesmen of the eighteenth century was : How was the Company's
quasi-sovereignty in the East to be reconciled with the necessary
subordination to the imperial parliament? There were three possi-
bilities. The first was that the Company's privileges and powers
should remain untouched, with the hope that some practical modus
vivendi would in time be worked out. But this was felt by the majority
of the nation and even by the more far-sighted of the Company's
own servants to be no longer feasible. Both Clive and Warren Hastings
suggested tentatively to the prime ministers of their time that it
might be advisable for the state to take over the Company's powers.
There seemed a danger not only that misgovernment in India might
tarnish the name of Great Britain as an imperial state, but that the
Indian interest in England, supported by huge revenues and corrupt
parliamentary influence, might gain a preponderating and improper
power in home affairs.
The second possibility was that the state should take over in full
sovereignty the territorial possessions in India and convert the
Company's servants into a civil service of the crown. But this was
felt to be too great and drastic a change. “It was opposed to all
eighteenth-century notions of the sacredness of property, and the
problem was complicated by all kinds of delicate legal and political
questions. It might even be plausibly contended that the Company
had no considerable territorial possessions at all. It administered
Bengal, Bihar and Orissa merely as the diwan of the Moghul emperor.
That was a tenable position for a private corporation; it was not a
tenable position for the government of Great Britain. If the "territo-
rial” possessions were annexed by the crown, the act might be
represented as sheer usurpation against the Moghul Empire, and
Great Britain might be embroiled with the representatives of other
European nations in the East.
It remained that the state should take the Company into partner-
ship, assuming the position of controlling and predominant partner
in all matters relating to the higher branches of government, but
leaving to the Company the monopoly of the trade, the disposal of
its valuable patronage under crown sanction, and the details of the
1 Works of Edmund Burke, m, 193-4.
2 Idem, p. 125.


## p. 184 (#212) ############################################

184
THE COMPANY AND THE STATE, 1772-86
administration. What we see going on during the period 1772-86 is
the gradual realisation of this conception. It must be remembered
that some attempts in this direction had already been made before
1772. . A little band of members of parliament, prominent among
whom were Beckford, Barré and General Burgoyne, had long been
urging that conquests in India should pass to the crown. Their
persistent efforts met with some success in 1767 when five separate
acts were passed. These measures amongst other things interfered
in the regulations for voting in the General Courts of the Company,
regulated the amount of dividends to be paid and the manner of
paying them, and, most important, obliged the Company to pay the
exchequer an annual sum of £400,000 for two years from February,
1767, for the privilege of retaining their territorial acquisitions (the
payment was afterwards extended to 1772). "Thus”, says Sir
.
Courtenay Ilbert, "the state claimed its share of the Indian spoil,
and asserted its rights to control the sovereignty of Indian territories. ”i
These changes were only carried in the teeth of a strong opposition. .
The protests of the dissentients in the House of Lords showed how
strong as yet were the barriers of the rights of property, and the
sanctity of contract.
A legislative interposition controlling the dividend of a trading Company,
legally voted and declared by those to whom the power of doing it is entrusted
is altogether without example.
The solution, it may be admitted, was not particularly logical. It
was on the face of it absurd that a British chartered company should
pay the crown of England an annual sum of money for permission
to hold certain lands and revenues of an eastern potentate, and the
friends of the Company did not hesitate to describe the payment as
mere political blackmail.
But for five years at any rate the attack against the Company was
stayed. Then again in 1772 troubles gathered round it, arising from
the following circumstances. In March, 1772, a dividend at the rate
of 1242 per cent. was declared. In the same month the Company,
obviously endeavouring to forestall a drastic reformation from outside,
attempted through Sulivan their deputy-chairman to introduce a bill
for the better regulation of their affairs. Lord Clive, being assailed,
defended himself by taking the offensive and roundly attacked the
Company. In the debate some interesting points were raised as to
the relations between the Company and the state. Clive had in 1759
proposed to Chatham that the crown should take over the Company's
dominions. Chatham, probably because he had no leisure to face the
practical and exceedingly thorny difficulties, contented himself with
an oracular answer that the scheme was of a very nice nature and,
1 Ilbert, The Government of India, p. 39.
? Parliamentary History, XVI, 356:


## p. 185 (#213) ############################################

DEBATES OF 1772
186
as Clive's agent reported, "spoke this matter a little darkly". 1 Clive
had resented this treatment and now with an imprudence amazing
in a man, around whom his enemies were closing, struck out in all
directions as though his one aim was not to leave himself a single
partisan. With a magnificent recklessness he included the govern-
ment, the directors, the proprietors and the servants in the East in
one comprehensive condemnation :
“I attribute the present situation of our affairs”, he said, "to four causes : a
relaxation of government in my successors; great neglect on the part of admi.