18th Century India

Europe and India to 1760

In the 18th century the population of Europe was in the region of 180 million, and the population of India was in the region of 200 million. 

In the early part of the 18th century the Moghul Empire in India was splitting into its constituent parts.  There were wars in India between Muslim and Hindu states, as there were wars in Europe between Protestant and Catholic states.   There were wars between  Muslim states in India as there were wars between Protestant states like Holland and Britain in Europe.  There were poor Indian states and there were very rich Indian states.  There was probably as much sense of "Indianness" as there was of "Europeanness"--meaning not much of either.  In the interstices between states and cities,  life was dangerous in both subcontinents.   

The richest Indian states were richer than the richest European sates.  The poorest Indian states were probably on a par with the poorest European states.  The peasants of rich states in India were probably better off than the peasants of rich states in Europe  

In other words there were similarities between the sub continent of India and the sub continent of Europe.  There were however critical differences between European "states" and Indian "states"

For the previous two hundred years, despite intra family squabbling, the Moghul Empire had maintained most of India in relative peace.  Akbar's strategy of including all religions in his government and not interfering with the internal affairs of subject Hindu states like the Rajputs and the Maharttas, was followed reasonably well by his heirs until Aurangzeb in the late 17th century. 

Revenue generation in the Moghul system was based on land taxes and on excise taxes--taxes on goods moving across certain boundaries.  The tax to be paid on land was assessed as a percentage of the crops generated, and was generally paid in specie--often in silver.  Taxes paid by the peasants generally were less than a third of the crop value.  The amount of taxation varied according to the state of the harvest with taxes decreasing in times of famine.  Assessment and collection was done by "zamindars" people who were appointed at the pleasure of the Emperor. These zamindars were not land owners--all land belonged to the Emperor--but they were extremely powerful and had other responsibilities like raising soldiers in time of war.   As long as the taxes were paid the central government in Delhi did not interfere with local customs.  Hindus had their own laws and court system, and Muslims had their separate law and court system.

The Moghul system could be loosely compared to a  Federal system of self governing states where responsibility for external affairs like war, were handled by a weak central government.  The system worked well for the generation of wealth in a stable rural system.  For most of the villages of India this was precisely the situation in the 16th, and 17th centuries, and had been thus for much of the subcontinent's history.  The system did not lead to militarily strong individual states.

For the states of Europe, however the situation was exactly the reverse.  Since the breakdown of the Holy Roman Empire and most particularly since the Reformation in the 15th century, Europe had been involved in a "European civil war".  At the end of the 17th century the winners of these wars were clearly France and Britain with Spain and Portugal beginning to lag behind.  The first three of these states had developed strong central governments.  The revenue generated by their colonies in the Americas gave them the luxury of developing bleeding edge military technology--particularly naval and gunnery systems with which to attack each other and to subdue their colonies in the Americas. 

In the middle of the 18th century a prosperous, relatively self sufficient group of militarily weak states on the subcontinent of India faced the two most militarily powerful and acquisitive states in the world--Britain and France.  In the succeeding 150 years the entire subcontinent of India would be conquered by Britain using mainly Indian forces

In 1756 the "Black Hole of Calcutta" incident ocurred when the young and inexperienced Nawab of Bengal, Siraj ud Daula, attacked the HEIC post in Calcutta.

The incident caused a paroyxsm  of mass patriotism in Britain, and Robert Clive was despatched from South India  to Bengal to avenge the slight.

The rival claimants to the Bengal "throne"--Mir Jaffar and Siraj ud Daulah were backed by Britain and France respectively.  The British prevailed in 1757, at the battle of Plassey, with the help of Hindu bankers (the Seths) who bribed the allies of Siraj not to fight. Plassey and the later battle at Buxar  were the defining events in the shift of effective power from Moghul Bengali Nawabs to HEIC. 


Britain and India after 1760

India in 1800 showing British acquisition dates.  Note Ajmer is shown

At the Peace of Paris (1763) that ended the Seven Years' War, the Anglo French conflicts in Europe, America and Asia were ended. So far as India was concerned, the following terms were agreed:

  1. the French agreed to use their stations at Pondicherry, Mahé and Chandernagore only as trading posts and not to maintain troops there
  2. the French recognised the British-supported rulers in the Carnatic and the Deccan
  3. the British East India Company controlled the provinces of the Carnatic (with its capital at Madras) and Bengal (capital, Calcutta).

In 1764 the native princes of Bengal and Oudh combined to try to eject the British but their revolt was crushed by Clive; the Company extended its influence over the province of Oudh. 

The year 1765 marks the real beginning of the British Empire in India as a territorial dominion. HEIC had overwhelmingly defeated Indian forces struggling for independence of European control. The company had become a government as well as a trader. However, the Company clung to the idea that it was still only a trading company and refused to admit that it had territorial responsibilities. Huge areas of India were acquired by the Company, not by the British government. Company officials were trained to buy and sell, to run warehouses and offices and to deal with book-keeping. They were not trained to govern. The British government gradually took over from the Company the right to govern vast provinces of India.

In 1767, Parliament passed laws in which

  • the British government regulated the amount of dividends the Company could pay to 10%
  •  the Company was required to pay £400,000 for two years to the Treasury
  •  if the dividend fell below 6% the Company was not obliged to pay the annual subsidy to the government 
  • it had to export a fixed amount of British goods to India.
  • the Company was allowed to keep its possessions.

Although the Company paid lucrative dividends, and its servants (the so-called "nabobs") took fortunes from India, its finances generally were unsound. The military and administrative costs, plus the debt to the Treasury imposed heavy burdens which a private company was unable to carry.

Between 1770 and 1772 famine devastated Eastern India due to the depredations of HEIC employees. In the region of 5 -10 million Indians died, and as a result the territorial revenues accruing to the company declined by £400,000. At the same time its military costs rose by over £160,000. This period also saw  economic stagnation and trade depression in Europe. These factors combined to bring the HEIC to near bankruptcy.  The Company's directors appealed to parliament for financial aid which led to the passing of the Tea Act in 1773. Although this was intended to assist the HEIC, it led to the Boston Tea Party and the start of the American War of Independence.

Parliament passed the Regulating Act for India (1773). This was the first step along the road to government control of India. A system was established whereby the government supervised the work of the HEIC but did not take power for itself. 

Warren Hastings

Hastings was the first Governor-General to be appointed after the 1773 Act. He had lived in India for most of his life and had worked for the HEIC from boyhood. He knew more about Indian life, culture and government than virtually anyone else in the Company.  He sent a British army across India to Bombay to fight the first Mahratta War (1775-82) against the Hindus of central India. The French had persuaded the Marathas that Britain would be unable to take firm action against them because of her involvement in the American War of Independence.

In 1780, Hastings sent a British army to fight Hyder Ali in South India.  In 1781 Ali was defeated, thus saving Madras and the Carnatic for the British. 

Parliament was suffering from the effects of the deteriorating situation in America and did nothing about India. The Regulating Act did not work well because the burden of responsibility between government and Company was obscure. Also there was a general suspicion that the immense patronage of the Company was twisted to serve the political ends of the government.

Hastings was the last Governor who believed that India was best governed by Indian rules.  His successor, Lord Cornwallis was convinced that India and Indians were corrupt and incompetent and that the only way to a successful government was to make India laws into a replica of English laws.

1783 India Bill

The 1783 Bill proposed a total separation of powers. The government would govern and the HEIC would deal with trade.  The proposals alienated the City and the "nabobs" who had returned to England.  A great political scandal ensued with accusations of political rigging.

The India Bill was used by the King (Mad George III) to bring down the Government. However, it was agreed by all that some regulation of the HEIC was essential.

Pitt the Younger was appointed as Prime Minister in December 1783 (the grandson of Diamond Pitt the one time Governor of Madras) and quickly introduced another India Bill.  HEIC co-operated with Pitt in putting forward a control scheme which only a year before they would have regarded as outrageous.

Pitts 1784 India Act took the British government another step along the road to control India. This system of dual control between Company and Crown was used for the next 75 years, until the Indian Mutiny (1857). After that, Parliament took over complete responsibility for India.

During the in fighting in London, Warren Hastings in Calcutta created a number of enemies in Parliament.  The chaos created by Clive's earlier behavior in Bengal gave everyone in London the chance to cry "foul".  Clive committed suicide, Warren Hastings resigned,  was impeached, and after a trial lasting 7 (!) years, was exonerated.  His treatment convinced many of the old line HEIC managers that the old days of British Indian  camaraderie were over.  Within 20 years all the experienced senior HEIC managers had been replaced by young men in the mold of Lord Wellesley.  Trading and commerce was dirty.  Military conquest was the order of the day.  By about 1820 the British were in full cry expanding their empire throughout Asia and Africa.  Empire was the siren song of the 19th Century.   

The first Governor-General under the new Act was Lord Cornwallis (the same Cornwallis who had surrendered at Yorktown in 1781). He held office between 1786 and 1793 representing the British government and answerable to the Board of Control. He was succeeded by the Marquis of Wellesley who was Governor General between 1797 and 1805.  Cornwallis and Wellesley although very different people, put in place the laws, practices and philosophies which were to set up the British in India as a "race apart".  After that, the post was held by Lord Minto (1807-13). 

In 1813, the  Marquis of Hastings (the Earl of Moira) was appointed Governor-General in 1813 and continued Wellesley's work of extending British power. He completed the destruction of the Mahrattas in the third Mahratta War (1817-19), annexed Poona and forced the Hindu chiefs to submit.  Nepal was more troublesome. It took an 18-month campaign (1814-16) in the Nepal mountains to force the Gurkhas to abandon their claims to "British" territory. Most of Nepal was left as an independent state and the Gurkhas have remained friendly to Britain ever since. By 1830 almost all India except for the Punjab and the "Northwest" was directly or indirectly under British control. 

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