Depth Study || Clive and the East India Company

Question 1

When was the East India Company founded?

Answer 1

1600

Question 2

What rights were granted to the company by King James I?

Answer 2

In 1609, he gave the company permanent rights to ship goods from the Indies into Europe

Question 3

What further freedoms were given to the company by King Charles II?

Answer 3

He gave the company greater independence, with the right to print money, create its own laws and to create an arm to protect its interests

Question 4

What difficulties did the East India company initially face?

Answer 4

• Other merchants who were keen to claim a part of the profitable trade attacked the company’s monopoly
• To escape the English monopoly, a Scottish trading company in India was established, however this company was short lived
• Additionally, those who opposed the monopoly privileges held by the EIC set up a new trading company, however the leaders of the old trading company were able to force the union of the old and new trading companies to form a ‘United Company of Merchants of England trading to the East Indies’

Question 5

What did the majority of the East India Company’s trade consist of?

Answer 5

The shipping of tea, silk, spices, cotton, opium and dyes

Question 6

Figures that demonstrate the success of the EIC

Answer 6

• By 1720, 15% of England’s imports came from India
• By 1763 the Company’s annual income exceeded one million pounds

Question 7

What were the three main privileges enjoyed by the EIC from the very beginning?

Answer 7

• It was allowed to take bullion out the country despite this going against the beliefs of mercantilism, which was vital in securing the success of the company as the goods produced in Britain at this time were not popular on the subcontinent
• The company’s administrative organisation was laid down in its charter and proved to be one of its strengths, it had 24 directors who monitored the day-to-day running of the company and therefore were in a position to make informed decisions rapidly, which was vital for a company intending to trade on a global scale
• The record-keeping hat this system entailed was also important to the success of the company as it allowed them to keep a record of successes and failures to build an understanding of its markets

Question 8

Key points regarding those working for the company

Answer 8

• Merchants working for the company were paid relatively low wages
• They were permitted to trade privately to increase their income as well as carrying out company business
• the control that could be exercised over the men overseas was also very limited, as communication could travel no faster than the ships that carried it

Question 9

What were the three main trading pots that the EIC had a presence in?

Answer 9

Bombay, Calcutta and Madras

Question 10

What three things were vital to the EIC to ensure that trade could be carried out?

Answer 10

A stable currency, courts and a militia to protect the bases

Question 11

How large were the company’s holdings during this time?

Answer 11

They were not very extensive, for instance in the mid 1750s, Madras was home to only 70 EIC men and 300 soldiers, however these bases were the beginning of territorial holdings in India

Question 12

What is a ‘firmum’?

Answer 12

The permission acquired by European traders from the Mogul Emperors to trade within Mogul imperial lands, traders also needed a firmum to establish trading bases and factories
The firmum also integrated the British into the social and financial systems of india, giving them additional legitimacy, as they became a recognised part of the economic fabric of India

Question 13

How did the Dutch provide an obstacle to the English in gaining the right to trade in India?

Answer 13

Dutch traders were more established in the region and had found favour with the Moguls, however these issues were solved after the Glorious Revolution, whereby a deal was struck which effectively gave Indonesia and the spice trade to the Dutch, leaving the English to develop the indian textile trade

Question 14

What internal problems was India facing from 1707?

Answer 14

• In 1707, the Mughal Emperor Aurangzeb died, since his death there was a general decline in central control over the empire
• Power was slipping into the hands of feudal vassals like the rulers of Hyderabad and of Bengal
• Despite this, the vassals were still loyal to their fellow Muslim Emperor and he was likely more concerned about the threat of Persian invasion, like the one in 1739 which had led to Delhi being captured
• To the Emperor, European traders were no problem

Question 15

What was the French presence in India like?

Answer 15

• In 1664, the French had set up their own EIC with its base at Pondicherry (not far from the British settlement of Madras)
• The French company posed a relatively modest threat to the British, the French company was under firm control from the government and so was run by french aristocrats who cared little for trade but focused on politics
• This was very different to the Dutch threat, the Dutch wanted a share of the market whereas the French wanted territory

Question 16

When was the First Carnatic War?

Answer 16

1746-1748

Question 17

Causes of the First Carnatic War

Answer 17

• In the 1740s the French and British in India would have been satisfied to ignore the war in Europe (Wars of Austrian Succession) and remain neutral
• However, ships of the British and French navies sailed into the Indian Ocean so neutrality was impossible

Question 18

Key Events of the First Carnatic War

Answer 18

• The British squadron withdrew to Calcutta to refit and in 1746 the french took their opportunity capturing Madras from the British
• During the war, the french showed how effective an Indian army under the control of European officers could be
• In 1746 a huge army sent by the Nawab of Carnatic was repelled by a small French force at Mylapore
• This showed both the French and British how useful European trained armies would be in the rivalries between the Indian princes

Question 19

Consequences of the First Carnatic War

Answer 19

In 1748 a peace settlement, treaty of Ai-La-Chapelle, was signed where Madras was returned in exchange for Louisbourg (Canada), however the French had shown their superiority in India

Question 20

Causes of the Second Carnatic War

Answer 20

• In 1749 the French governor in Pondicherry, Dupleix, made a bid for supremacy in southern India, gathering support from the Nawab of Hyderabad and supporting Chanda Sahib in his claim to become Nawab of the Carnatic
• The East India Company supported a rival claimant, Muhammed Ali, however only had around 3000 men in India in 1749
• It should be noted that the French and British governments disapproved of the companies fighting whilst the two nations were at peace, however they could not stop the fighting due to the 10-12 month journey between them

Question 21

Key events during the Second Carnatic War

Answer 21

• The French were able to drive Ali back to Trichinopoly and besiege him there
• The best the EIC could do was to send a 25 year old clerk (Robert Clive) and a force of 500 men to Arcot
• Clive was able to take Arcot by surprise but also to hang onto the city during a 50 day siege in which he beat off a series of attacks
• In 1750, Ali took the throne of the Carnatic and Dupleix was sent home to France were he died in poverty

Question 22

Consequences of the Second Carnatic War

Answer 22

• Ended 1754
• The EIC had shown that it could play an effective role in the rougher sort of Indian politics
• Clive returned to England but spent the money he had made, mainly trying to become an MP
• He returned to India serving on what was to become the military side of the Company
• Dupleix failed because he was operating in a region where profits were so small that the heavy military expenditure could not be justified

Question 23

Causes of the Third Carnatic War

Answer 23

• Bengal was the real source of wealth in India (through the cloth trade) and Calcutta was the centre of its export trade
• When the Nawab of Bengal died in 1756, he was succeeded by his grandson Siraj-ud-Daulah
• Within a couple of months he had seized and plundered Calcutta, allowing the small number of British survivors to be locked up in a prison which would become known as the black hole of Calcutta (the room was 5m x 4m, temperature 40C), decades later this was considered to be an atrocity by the English, 123 of the 146 captured, died
• The company sent Clive to Calcutta who negotiated with the Nawab, the Nawab withdrew and paid the Company compensation for its losses
• Clive then went far beyond just defending the trading post of Calcutta, going on to attack and defeat the French at one of their bases in Chandernagore (1757)

Question 24

Key events during the Third Carnatic War

Answer 24

• While the British were involved in these events, they realised that Siraj-ud-Daulah had lost the confidence of Hindu merchants and bankers and of the Muslims who ran the Bengal army, leading clive to join a conspiracy against him, and led his army of 3000 against the Bengal army of 60,000 at the Battle of Plassey in 1757
• Clive targeted the elephants that Siraj’s generals sat on and found that most of the Nawes infantry had taken opium, these factors, along with the fact that his gunpowder was damo, meant that Siraj-ud-Daulah’s army disintegrated in the face of the determination of the Company’s men
• The French, who had supported Siraj-ud-Daulah were further defeated at Wandiwash in 1760 and finally surrendered in 1761, their ambitions in India were essentially over
• The Moghul emperors were in no position to do anything about the rise of British power because a few months before the Battle of Plassey, an Afghan army had marched south east and plundered Delhi again

Question 25

Consequences of the Battle of Plassey and the Third Carnatic War

Answer 25

• A new ruler was placed on the throne in bengal, Mir jafar
• Clive’s estimate was that the Company and private individuals made 3 million pounds out of the change in rulers, he had been prosperous after Arcot, after Plassey, Mir Jafar gave him 234,000 pounds in cash and the rights to land rents of 27,000 pounds
• The EIC suddenly found itself more involved in the affairs of Bengal than had previously been the case
• Clive was awarded a rank, Jagir, which effectively made him part of the Bengal ruling structure
• The British did not gain official control of Bengal, but the new ruler owed his position to British military intervention
• Although it could be argued that through this move, Clive secured trade, the results were not entirely favourable, with the company being drawn into local politics, requiring a larger expenditure on part of the EIC
• From 375,000 in 1756, expenditure had risen to 885,000 by 1766
• Clive’s rewards from this endeavour promoted privateering on a grand scale
• In 1766, clive suggested to William Pitt (PM) that Britain should take control of Bengal, but Pitt would have nothing of Clive’s suggestions, so power was left in the hands of the Naweb
• Many EIC employees returned to England, wealthy due to tax loopholes, known as ‘nabobs’, considered coarse and vulgar as they drove up the price for a seat in the House of Commons

Question 26

Reasons for French failure in India

Answer 26

• Superiority of the British naval power, this enabled the English to bring soldiers from Europe and to send the supplies from Bengal, but the french were unable to replenish their resources from the outside
• English EIC was a private company and it showed greater enterprise in business, but the French Company was dependant on the government and lacked the spirit of bold, individual and corporate effort, neither the French government, nor the share holders took any active interests in the fortunes of the company
• The British had three important bases in India, Calcutta, Madras and Bombay, if any of these were threatened by the French, resources could still be obtained form other centres and the war could be continued from other bases whereas the French only had one strong base at Pondicherry
• The British company was lucky to have many capable men like Clive in its service, whereas besides Dupleix, the French had no really able men to serve it
• The victory at Plassey gave the English Company large resources of a rich area

Question 27

What was the Battle of Buxar?

Answer 27

• In Bengal, the Nawab, Mir Kasim (succeeded Mir Jafar after his death) became increasingly unhappy with EIC’s trading advantage
• Made alliance with King of Oudh and Mogul Emperor to drive the Company out
• Allied Indian armies outnumbered the Company 40,000 to 7000, however they were defeated by the Company at Buxar in 1764, which provided even more wealth for the men of the Company
• Despite this, the victory did not improve the Company’s finances as shareholders saw little increase in their dividend, however the Company had defeated the 3 main pillars of Moghul power in the north

Question 28

What was the Treaty of Allahabad?

Answer 28

• Followed Battle of Buxar in 1765
• Placed British power on much more formal footing, as through it the Mughal emperor acknowledged formally the dominance of the British in the area
• Company was given the right to collect taxes in Bengal and Orissa as well as decide civil cases

Question 29

What else came as a result of the previous battles and Treaty of Allahabad?

Answer 29

• Clive was able reassert himself and win support of the shareholders with a programme for ending corruption and indiscipline in India
• In 1665-1667, he was able to clarify the political position by giving the Nawab a pension of £400,000 whilst the Company ran Bengal
• The Mogul Emperor was to be given an annual payment of £300,000
• General problem of private trading was not overcome because the Company would not pay its employees large enough salaries to let them live comfortably
• By the time Clive returned to England, the Company Directors agreed to pay the government £400,000 per year

Question 30

First Mysore War

Answer 30

• 1767-9
• Haidar Ali, the Sultan of Mysore, began a series of wars against the British position in Madras, which put a strain on the Company’s profits

Question 31

Bengal Famine

Answer 31

• Effects of the First Mysore War were compounded by the famine in 1768-70 in Bengal which caused an estimated 10 million deaths
• The Company had increased the tax on agricultural produce from 10% to 50% and had encouraged farmers to grow opium and indigo instead of the stable curios
• This further weakened the Company’s position, the government got very little from the Company and in fact the EIC had to borrow £1.4 million from the government to pay for the war with Ali

Question 32

What was the overall role of the Company in India?

Answer 32

• Company deviated from its original form as a trading body and had developed a state-like administration to deal with its new territory
• 1767, Company Secretary Robert James declared to the House of Commons that “We don’t want conquest and power, it is commercial interest only we look for”
• This was later to become a highly contentious issue, as the debate over whether traders could exercise sovereign powers became the debate over who was rightful owner of the income paid by the Indian lands under British control - key issue in the development of formal British Empire

Question 33

What was the Regulating Act?

Answer 33

• In 1773, the government felt that the Company employees were the main source of loss of profit through corruption and illegal trading
• Introduced the Regulating Act whereby a Governor-General would be appointed by the government and controlled by a government appointed council in which he was one of five voting members

Question 34

Who was Warren Hastings?

Answer 34

• Last governor of Bengal appointed by the Company, became the first Governor-General of all British territory in India
• Hastings was a reformer and wanted to improve education in Bengal and encourage Company employees to find out more about Indian life
• Was able to lay a unified defence policy which had not been previously possible
• Hastings concentrated on the Bengal base and made treaties with local Indian princes, which made the area reasonably safe during the period

Question 35

Robert Clive overview

Answer 35

• Misbehaved as a child, was sent to become a clerk in the East India Company at 18
• 1746, Madras was captured by the French, Clive and several others escaped to Fort George 20 miles away, here he joined the EIC private army
• Quickly began to build a reputation for courage and skill in battle, was then given command of an expedition to seize Arcot (capital of the Carnatic) and hold it, dividing enemy forces
• Force of just 200 Europeans and 300 native soldiers, Clive held the citadel for 50 days until a final assault spearheaded by armoured elephants was driven off and the enemy withdrew
• Returned home in 1753, only to go back to India in 1756 in the midst of crisis, during Black Hole of Calcutta
• Clive quickly re-took city and then inflicted decisive defeat on Siraj ud Daula at the Battle of Plassey - Clive’s army of 3000 men (650 British) defeated the Nawab’s 68,000 strong, French supported army
• Mir Jafar rewarded Clive massively
• Later returned home, and although his reputation was minority called into question due to him accepting payments from Indian leaders, it was acknowledged that he had done “huge service to his country”, returned as an MP for Shrewsbury in 1774

Question 36

Clive’s legacy

Answer 36

• Legacy was immense, he had almost single handedly secured the beginning of the British Empire and brought amount the unique mix between British and Indian cultures that still exists today
• It was Clive who was responsible for forcing the French out of India, cementing British control
• He paved the way for Britain to develop the financial resources necessary for the Industrial Revolution and to become the major world power for more than 150 years