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

by William Dalrymple

1765 was really the moment that the East India Company ceased to be anything even distantly resembling a conventional trading corporation, dealing in silks and spices, and became something altogether much more unusual. Within a few months, 250 company clerks, backed by the military force of 20,000 locally recruited Indian soldiers, had become the effective rulers of the richest Mughal provinces. An international corporation was in the process of transforming itself into an aggressive colonial power. By 1803, when its private army had grown to nearly 200,000 men, it had swiftly subdued or directly seized an entire subcontinent.

India’s transition to colonialism took place under a for-profit corporation, which existed entirely for the purpose of enriching its investors.

Sir Thomas Roe, the ambassador sent by James I to the Mughal court, is shown before the Emperor Jahangir in 1614 – at a time when the Mughal empire was still at its richest and most powerful. Jahangir inherited from his father Akbar one of the two wealthiest polities in the world, rivalled only by Ming China. His lands stretched through most of India, all of what is now Pakistan and Bangladesh, and most of Afghanistan. He ruled over five times the population commanded by the Ottomans – roughly 100 million people – and his subjects produced around a quarter of all global manufactures.

Smythe and his associates had decided that, because of the huge expenses and high risks involved, ‘a trade so far remote cannot be managed but by a joint and united stock’.21 Costs were, after all, astronomically high. The commodities they wished to buy were extremely expensive and they were carried in huge and costly ships that needed to be manned by large crews and protected by artillery masters and professional musket-men. Moreover, even if everything went according to plan, there would be no return on investment for several years.

In comparison, England then had just 5 per cent of India’s population and was producing just under 3 per cent of the world’s manufactured goods.

Yet for all this, Siraj had a strange hold on his grandfather. The old man had had no sons of his own, only three daughters, and after the death from smallpox of his only other grandson, Siraj’s elder brother, all his hopes rested on the survivor. The two men could not be more different: Aliverdi Khan was wise and disciplined, while his grandson was an ignorant debauchee; yet still Aliverdi’s love knew no bounds.

Piety is most to be feared when it is carried to excess.

Don’t waste your time in the mosque and the Ka’ba, oh Mullah, Go and search for the footprints of the divine beloved everywhere.

Whatever the accurate figures, the event generated howls of righteous indignation for several generations among the British in India and 150 years later was still being taught in British schools as demonstrative of the essential barbarity of Indians and illustrative of why British rule was supposedly both necessary and justified. But at the time, the Black Hole was barely remarked upon in contemporary sources,

This was something quite new in Indian history: a group of Indian financiers plotting with an international trading corporation to use its own private security force to overthrow a regime they saw threatening the income they earned from trade.

What the people of England did understand very clearly was the unprecedented amount of money – or to use the newly Anglicised word, loot – that Clive was bringing back with him. Not since Cortés had Europe seen an adventurer return with so much treasure from distant conquests.

Buxar was a short and confused battle, but a bloody one: Company forces lost 850 killed, wounded or missing, of the 7,000 men they brought to the field – more than an eighth of their total; Mughal losses were many times higher, perhaps as many as 5,000 dead. For a long time the day’s outcome was uncertain. But for all this, it was still, ultimately, one of the most decisive battles in Indian history, even more so than the more famous Battle of Plassey seven years earlier.

Up to now, gold bullion had represented 75 per cent of the EIC’s imports to Bengal, and was the source for much of the ‘prodigious ancient riches of the province’. But 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.

The Prime Minister, Lord North, may have lost one battle, but he was still determined to bring the EIC to heel. Shortly after Burgoyne’s bill of censure had been defeated, he declared, ‘I think, sir, it is allowed that Parliament have a right over the East India Company … Such continual excesses, such frauds at home, oppressions abroad, that all the world may cry out, let it go to the Crown.’63 His aim was to take all the EIC’s Indian territories, and the 20 million Indians who lived there, under the authority of the state. As one MP put it, the House must ‘make some attempt to rescue so many unhappy, industrious natives of the country from the yoke of this government they now live under’.64 But in this, too, North ultimately failed. The Company enjoyed chartered privileges, guaranteed by the Crown, and its shareholders were tenacious in their defence of them. Moreover, too many MPs owned EIC stock, and the EIC’s taxes contributed too much to the economy – customs duties alone generated £886,922* annually – for it to be possible for any government to even consider letting the Company sink. Ultimately, it was saved by its size: the Company now came close to generating nearly half of Britain’s trade and was, genuinely, too big to fail.

Far more than any of his contemporaries, Hastings was conscious of the many flaws in the Company’s regime, and wrote about them tellingly: ‘To hold vast possessions, and yet to act on the level of mere merchants, making immediate gain our first principle; to receive an immense revenue without possessing protective power over the people who pay it … [these] are paradoxes not to be reconciled, highly injurious to our national character … and bordering on inhumanity.’

Moreover, Hastings’ interest in the Gita was not just antiquarian: aspects of its philosophy came to guide him in his personal life and he took as his own maxim the sloka [verse], ‘Your entitlement is to the deed alone, never to its results. Do not make the results of an action your motive. Do not be attached to inaction. Having renounced rewards resulting from actions, wise men endowed with discrimination are freed from the bondage of birth and go to the Regions of Eternal Happiness.’

In America, the Patriots had turned on the King, partly as a result of government’s attempts to sell the stockpiles of East India Company tea, onto which was slapped British taxes: the Boston Tea Party, an event that built support for what would become the American War of Independence by dumping 90,000 pounds of EIC tea, worth £9,659 (over £1 million today), in Boston harbour, was in part provoked by fears that the Company might now be let loose on the thirteen colonies, much as it had been in Bengal.

Homosexual relations were fairly acceptable between superiors and inferiors at this time and were not in themselves considered unusual or fodder for smutty jokes.

Mirza Najaf Khan died on 6 April 1782, aged only forty-six. For ten years he had worked against all the odds, and usually without thanks, to restore to Shah Alam the empire of his ancestors. Thereafter, as one historian put it, ‘The rays of hope for the recovery of the Mughal glory that had begun to shine were dissipated in the growing cloud of anarchy.’87 Najaf Khan was remembered as the last really powerful nobleman of the Mughal rule in India and was given the honorific title of Zul-Fiqaru’d-Daula (the Ultimate Discriminator of the Kingdom).88 He was buried in a modest tomb in a garden a short distance from that of Safdar Jung.* Like much of his life’s work, it was never completed.

Warren Hastings, a man who, by virtue of his position, was certainly the symbol of an entire system of mercantile oppression in India, but who had personally done much to begin the process of regulating and reforming the Company, and who had probably done more than any other Company official to rein in the worst excesses of its rule.

Forty years earlier, in 1750, the Company had been a trading corporation with a small security force and a few crumbling forts; by 1790 it had effectively transformed its Indian holdings into a tightly run fiscal-military state guarded by the most powerful army in Asia.

In many ways 1792 was the major turning point for the East India Company in India: before this, the Company was often on the defensive and always insecure. After this year, the Company appeared increasingly dominant. Up to this point, too, the EIC was still, in terms of land, a relatively small Indian power, controlling only 388,500 out of 4.17 million square kilometres – about 9.3 per cent of the Indian land mass, almost all in the north and east.60 But with the great chunks of land it had just seized from Tipu in the south, the Company Raj was now on its way to becoming a major territorial, as well as a military and economic, power.

The reforms Cornwallis initiated on his return to Calcutta further consolidated this position. In America, Britain had lost its colonies not to Native Americans, but to the descendants of European settlers. Cornwallis was determined to make sure that a settled colonial class never emerged in India to undermine British rule as it had done, to his own humiliation, in America.

The Company’s ever-growing Indian empire could not have been achieved without the political and economic support of regional power groups and local communities. The edifice of the East India Company was sustained by the delicate balance that the Company was able to maintain with merchants and mercenaries, its allied nawabs and rajas, and above all, its tame bankers.66 In the end it was this access to unlimited reserves of credit, partly through stable flows of land revenues, and partly through the collaboration of Indian moneylenders and financiers, that in this period finally gave the Company its edge over their Indian rivals. It was no longer superior European military technology, nor powers of administration that made the difference. It was the ability to mobilise and transfer massive financial resources that enabled the Company to put the largest and best-trained army in the eastern world into the field.

Today most of Tipu’s capital is grazing land, and very little remains as witness of the former splendour of the kingdom of the Tiger of Mysore, the single Indian ruler who did more than any other to resist the onslaught of the Company.

This was only the first in a whole series of surprises in a battle that Arthur Wellesley would later remember as one of the hardest he had ever fought, and altogether tougher than his later confrontation with Napoleon at Waterloo. ‘Their infantry is the best I have ever seen in India, excepting our own,’ he wrote afterwards to his friend John Malcolm. ‘I assure you that their fire was so heavy that I doubted at one time if I should be able to induce our troops to advance. All agree that the battle was the fiercest that has ever been seen in India. Our troops behaved admirably; the sepoys astonished me.’

In 1833, Parliament finally took action. They passed the East India Company Charter Bill, which removed the East India Company’s right to trade and so turned it into a sort of governing corporation. The Company, which had once presided over a vast empire of business – and which even at this stage was annually making £1 millionn from the tea trade alone – entered its final phase devoted exclusively to the business of Empire.179 Finally, on 10 May 1857, the EIC’s own private army rose up in revolt against its employer. On crushing the rebellion, after nine uncertain months, the Company distinguished itself for a final time by hanging and murdering many tens of thousands of suspected rebels in the bazaar towns that lined the Ganges, probably the bloodiest episode in the entire history of British colonialism.

Corporate influence, with its fatal blend of power, money and unaccountability, is particularly potent and dangerous in frail states where corporations are insufficiently or ineffectually regulated, and where the purchasing power of a large company can outbid or overwhelm an underfunded government.