The Anarchy: The East India Company, Corporate Violence, and the Pillage of an Empire

by William Dalrymple

Bengal was now plundered more thoroughly and brutally than ever before, and the youthful Bengal Nawab was left little more than a powerless, ritualised figurehead:

Clive took great care to distance the EIC from the humdrum affairs of daily administration: even the existing methods of revenue collection were maintained, run out of Murshidabad offices that were still entirely staffed with Mughal officials. But frock-coated and periwigged British officials were now everywhere at the apex of the administrative pyramid, making all the decisions and taking all the revenues.

From now on, the land revenues of those portions of India under the Company corporate control were to be conceived simply as gross profits for the EIC which would, as Clive wrote, ‘defray all the expenses of the investment [the goods bought for export to London], furnish the whole of the China treasure [the money used to buy tea from China] and answer all the demands of all your other settlements in India, and still leave a considerable balance in your treasury besides’.

now the Company no longer had to ship anything from Britain in order to pay for the textiles, spices and saltpetre it wished to buy and export: Indian tax revenues were now being used to provide the finance for all such purchases. India would henceforth be treated as if it were a vast plantation to be milked and exploited, with all its profits shipped overseas to London.

for the people of Bengal, the granting of the Diwani was an unmitigated catastrophe. The Nawab was no longer able to provide even a modicum of protection for his people: tax collectors and farmers of revenue plundered the peasantry to raise funds from the land, and no one felt in the least bit responsible for the wellbeing of the ordinary cultivator. Merchants and weavers were forced to work for the Company at far below market rates; they also seized by force textiles made for their French and Dutch rivals.

The economic indicators were all bad, he wrote, and growing daily worse: land revenues had been declining since the Diwani was handed over, coin was short and Bengal’s internal trade was shrinking.

Firstly, it signified the effective extinction of his entire social class. The Mughal nobility, whose power had ultimately rested on their expertise as cavalrymen, were now effectively unemployed as the Company replaced them with infantrymen they recruited largely from rural Hindu Rajput and Brahmin backgrounds.

He estimated that these changes would throw between 40,000 and 50,000 troopers out of employment across Bengal and Bihar, besides dispersing ‘the thousands and thousands of merchants’ who followed ‘that numerous cavalry’.

‘The even more numerous artisans whom the noblemen had always kept busy, sometimes in their own houses’ found their patrons no longer capable of sustaining them or their in-house kar-khanas.

Moreover, wrote Ghulam Hussain Khan, the Company’s conquests represented an entirely different form of imperial exploitation from anything India had previously experienced. He articulated, long before any other Indian, both what being a subject colony entailed, and how different this strange and utterly alien form of corporate colonialism was to Mughal rule.

It soon became common ‘to see every year five or six Englishmen, or even more, who repair to their homes with large fortunes. Lakhs upon lakhs have therefore been drained from this country.’

In contrast, he wrote, the British felt nothing for the country, not even for their closest allies and servants. This was why those Indians who initially welcomed the British quickly changed their minds because ‘these new rulers pay no regard to the concerns of Hindustanis, and suffered them to be mercilessly plundered, fleeced, oppressed and tormented by those officers of their appointing’.

As Macaulay later put it, the Company looked on Bengal ‘merely as a Buccaneer would look on a galleon’.

The monsoon of 1768 brought only the lightest of rains to north-east India. Then the following summer, 1769, no rain fell at all. Instead, the intense heat continued unabated, the rivers dwindled, the tanks dried and the pukhurs – the fish ponds at the centre of every Bengali village – turned first to sticky mud, then to dry earth, then to dust.

The price of rice rose steadily, week by week, until it had multiplied five times. By October, as drought began to turn to famine, ‘great dearth and scarcity’ was reported at Murshidabad.2 By November, the farmers were stated ‘to be totally incapacitated to cultivate the valuable crops of Cotton and Mulberries … which usually succeed the rich rice harvest’.

The first to go hungry were the landless ‘labourers, the workmen, the manufacturers and people employed in the river [boatmen]’ as they ‘were without the same means of laying by stores of grain as the husbandmen’.

By February 1770, when around 70 per cent of the usual rice crop had been lost, and the price of rice was ten times its normal rate, the hunger started to become much more widespread.

By June 1770, the devastation was unfolding across the entire province. Five hundred a day were now dying of starvation in the streets of Murshidabad.8 Rice was scarce even in Calcutta, where 76,000 died on its streets between July and September.

The total numbers are disputed, but in all perhaps 1.2 million – one in five Bengalis – starved to death that year in what became one of the greatest tragedies of the province’s history.

The famine did not touch the entire province, and in eastern Bihar the situation was slightly better; but in the worst affected districts, fully one-third of all the peasants died, and two-thirds of the old Mughal aristocracy were ruined. Half of all the rural artisans perished. The Hughli was full of swollen bodies, floating slowly downstream to the sea, its banks littered with corpses where ‘dogs, jackals, vultures and every bird and beast of prey grew fat and unwieldy on the flesh of man’.

By July 1770, when it was clear that the rains had disappointed for a third year, Mohammad Reza Khan was writing to his masters in Calcutta not only of the vast numbers of dead and dying, but also of the fires sweeping through the tinder of the empty granaries. Disease killed many others, including an outbreak of smallpox which carried away the young Nawab, Saif ud-Daula:

In reality, there were other remedies to hand which did not require divine intervention. Famines had been a baleful feature of Indian history from time immemorial, whenever the rains failed. But for centuries, and certainly by the time of the Mughals, elaborate systems of grain stores, public works and famine relief measures had been developed to blunt the worst effect of the drought.

A few Company officials did their best to help the starving. In several places, the hoarding and export of rice was successfully prevented.

The Governor of Calcutta, John Cartier, also worked hard to alleviate the distress in the Company’s capital: he maintained ‘a magazine of grain with which they fed fifteen thousand every day for some months, and yet even this could not prevent many thousands dying of want. The streets were crowded with the most miserable objects, and there were 150 dead bodies picked up in a day, and thrown into the river.’

But in many of the worst affected areas, Company efforts to alleviate the famine were contemptible. In Rangpur, the senior EIC officer, John Grose, could only bring himself daily to distribute Rs5* of rice to the poor, even though ‘half the labouring and working people’ had died by June 1770 and the entire area was being reduced to ‘graveyard silence’.

the Company administration as a whole did not engage in any famine relief works. Nor did it make seed or credit available to the vulnerable, or assist cultivators with materials to begin planting their next harvest, even though the government had ample cash reserves to do so. Instead, anxious to maintain their revenues at a time of low production and high military expenditure, the Company, in one of the greatest failures of corporate responsibility in history, rigorously enforced tax collection and in some cases even increased revenue assessments by 10 per cent.

Jesus H. CHRIST

Even starving families were expected to pay up; there were no remissions authorised on humanitarian grounds. Richard Becher in Murshidabad was appalled by what he saw and wrote to Calcutta for instructions: ‘Am I really quietly to stand by and see them commit the vilest acts of oppression, without being able to render the aggrieved redress?’

As a result of such heartless methods of revenue collection, the famine initially made no impression on Company ledgers, as tax collections were, in the words of Warren Hastings, ‘violently kept up to their former standards’.

‘notwithstanding the great severity of the late famine, and the great reduction of people thereby,

This person's grave should be a toilet.

They therefore authorised 44 per cent of their £22 million annual budget* to be spent on the army and on the building of fortifications, so rapidly increasing the size of their sepoy regiments to 26,000 sepoys.23 The only rice they stockpiled was for the use of the sepoys of their own army; there was no question of cuts to the military budget, even as a fifth of Bengal was starving to death.

in 1770–71, at the height of the Bengal famine, an astounding £1,086,255 was transferred to London by Company executives – perhaps £100 million in modern currency.27

At this time we could not touch fish, the river was too full of carcasses, and of those who did eat it, many died suddenly. Pork, ducks and geese also lived mostly on carcasses, so that our only meat was mutton, when we could get it, which was very dear, and from the dryness of the season so poor, that a quarter would not weigh a pound and a half.

Boo hoo shithead

As Bengal lay racked by famine, ‘with the greatest part of the land now entirely uncultivated … owing to the scarcity of the inhabitants’, in London, Company shareholders, relieved to see tax revenues maintained at normal levels, and aware that the share price was now higher than it had ever been – more than double its pre-Diwani rate – celebrated by voting themselves an unprecedented 12.5 per cent dividend.

Word was spreading about the Company’s inhumanity in Bengal: the number of dead and dying was simply too vast to hide.

his father, ‘Diamond Pitt’, brought back from his governorship of Madras the fortune that had made possible Pitt’s career. Pitt did not, however, like to be reminded of this, and now raised the alarm that the EIC was bringing its corrupt practices back from India and into the very benches of the Mother of Parliaments.

As the year progressed, and as more and more articles, pamphlets and books were published revealing the catastrophic death tolls in Bengal, India became ‘part of the daily newspaper diet’ of London, and public opinion swung increasingly against the Company, its returned Nabobs in general, and Clive, their most prominent and conspicuous exemplar, in particular.

There was already in print a brilliant satire attacking the directors of the EIC – Debates in the Asiatic Assembly. Among its characters were Sir Janus Blubber, Shylock Buffalo, Jaundice Braywell, Sir Judas Venom, Donald Machaggies, Caliban Clodpate, Skeleton Scarecrow and the villainous Lord Vulture, a character clearly modelled on Clive.

Then, in June 1772, the Haymarket Theatre, just off Piccadilly Circus, mounted a play, The Nabob, newly written by the Haymarket’s proprietor, Samuel Foote. In this bawdy satire, Sir Matthew Mite is an obnoxious India-returned parvenu ‘Nabob’ hoping to use his Bengal loot to marry into an ancient family and corruptly buy election to Parliament for the constituency of Bribe ’em.

Many raised the valid point that a private corporation enjoying a government trading monopoly ought not to be running an overseas empire:

Humane, informed and well argued, Dow’s attack was the product of one individual’s appalled anger at the incompetence and barbarism of the Company’s tenure of Bengal and is an invaluable eyewitness account by an intelligent insider:

Want of foresight became more fatal than innate barbarism;

A barbarous enemy may slay a prostrate foe, but a civilised conqueror can ruin nations without the sword.

Bolts, who was of Anglo-Dutch origins, had actually been one of the Company’s most unscrupulous operators, an associate of William Ellis of Patna, who had been involved in the Company’s brutal transactions during the reign of Mir Qasim. But having fallen out with Clive and been expelled forcibly from Bengal for illegal trading, he vowed to bring down the former Governor.

Bolts’ most thought-provoking idea was that the Company’s claim to have obtained the Diwani by the Treaty of Allahabad was in fact a legal nonsense, invented by Clive to mask the reality of his military conquests. The Company, he wrote, ‘are become sovereigns of extensive, rich and populous Kingdoms, with a standing army of above 60,000 men at their command’.

The book was full of embittered half-truths and false accusations; and many of the worst abuses enumerated were actually the work of Bolts himself, along with his friend Ellis. But Considerations was nonetheless hugely influential.

On 8 June 1772, a Scottish banker named Alexander Fordyce disappeared from his office, leaving debts of £550,000.* His bank, Neal, James, Fordyce and Down, imploded soon after and declared bankruptcy. Another institution with large investments in Company stock, Douglas, Heron & Company, otherwise known as the Ayr Bank, closed its doors the following week, so initiating a financial crisis that quickly spread across Britain into Europe.

Ten more banks folded across Europe within a fortnight, twenty more within the month: thirty banks going down like dominoes in less than three weeks.48 This had global repercussions, ranging from suicides in Virginia to, closer to home, the bankruptcy of Sir George Colebrooke, the chairman of the East India Company, which did little to restore confidence in his management. The Bank of England had to intervene, but the Bank itself was under threat.

A month later, on 10 July 1772, a packet of bills worth the enormous sum of £747,195, remittances from India sent by Company officials returning home, arrived at India House in Leadenhall Street. There were now real anxieties about the state of EIC finances, as remittances sent for cashing in London between 1771 and 1772 looked to be heading towards the £1.5 million mark.

At the same time, the famine was finally leading to Bengal land revenues falling. Meanwhile, overpriced EIC tea was lying unsold in vast quantities in its London warehouses: unsold stock had risen from around £1 million in 1762 to more than £3 million in 1772. This coincided with military expenses doubling from 1764 to 1770, while the cost of the 12.5 per cent dividend had added nearly £1 million a year* to the EIC expenses. The books were now very far from balancing.

On 15 July 1772, the directors of the Company applied to the Bank of England for a loan of £400,000. A fortnight later, they returned, asking for an additional £300,000. The Bank could raise only £200,000. There were unpaid bills of £1.6 million and obligations of over £9 million, while the Company’s assets were worth less than £5 million.