The Plassey ‘Revolution:’ Bengal in 1757 and the transition to Colonial Rule Early history of European companies

The Plassey ‘Revolution:’ Bengal in 1757 and the transition to Colonial Rule

Early history of European companies

• Most company charters dated back to Mughal times—the EIC received theirs from Jahangir, due to Portuguese pressures

• Several “companies” scattered throughout South Asia, most were simple trading posts

• Intense competition in the trade of textiles, saltpeter, sugar, and indigo by 18th C

Structures of Company different

• The Portuguese and French were “Crown” companies funded through their governments

• The Dutch VOC and English EIC were joint stock companies, although the EIC had substantial links to the crown

• Dutch more heavily focused on SE Asia, while the EIC had denser links in S. Asia

Changing Structures

• War of Austrian Succession (1744-48) and Seven Years War (1756-1763) increase political tensions b/w companies

• Leads to more government oversight of company’s political role and aid in protecting commercial interests.

• With crown aid, the EIC is able to sharply reduce French influence in S. Asia

Context for the Battle of Plassey

• The French and English had already begun to engage in Proxy wars by the 1740s

• Both drawn to local conflicts in which each company aided different contenders

• Nawab of Carnatic/Hyderabad
• Nawab of Bengal on Ali Wardi Khan’s death

Bengal in 1750s

• Tax Farming more common

• Government more streamlined with fewer local contacts

• Merchants and Financiers have larger role in Government

• Both French and English companies fortify and arm their companies at Chandranagore and Ft. St. William in violation of original treaties

House of Jagat Seth

• Bid on 2/3rd of Revenue at 10% 1,060,000

• Int. loans from Zamindars 1,350,000

• Re-coining 5m. At 7% 350,000

• 37.5% Int. of 4m. Loaned (misc)1,500,000

• Int. on currency exchanges 700,000

• ___________________________________

• Total 4,960,000

• * From Sushil Chaudhury, Prelude to Empire, p. 73.

The “Black Hole”

• After the ignored warning, Siraj-ud Daulah sends army to raid Calcutta and destroy the fortifications

• Most officers flee in boats, those left behind are put in the Company’s prison, where due to overcrowding some die of heat exhaustion: the legend of the Black Hole of Calcutta is born

• The Company’s governors in Madras order Robert Clive to negotiate another treaty with the Nawab and bargain for the restoration of Calcutta.

Internal problems of the EIC

• Most English traders in Bengal for a little while to make their fortune before returning to England

• Disgruntled with terms of service, they quickly engage in ‘private trade’

• To do this successfully form alliances with Indigenous traders, agents, and financiers

• Clive had contacts with these groups

Robert Clive

The Plassey Conspiracy

• Clive enters into an agreement with the Nawab’s uncle, Mir Jafar to enact a coup.

• Lacking funds they negotiate with the family of Jagat Seth and Omichand, leading financiers offering them a payout from the treasury and exclusive trading monopolies

• Clive himself secures the promise of a Jagir from Mir Jafar and payments to the EIC—in a second secret treaty these two agree to cut out the merchants

Battle of Plassey, 1757

• The funds from the merchants make it possible for large parts of the Bengal army under Mir Jafar to be bribed to not fight during the English-led coup

• When negotiations with the Nawab fail, Clive and the Bengal army clash at the Battle of Plassey in 1757

• After much of the army does not fight, Siraj ud Daulah is unable to win and flees. Later he is captured and killed.

Aftermath of Plassey

• Once on the throne Mir Jafar had to make good on his promises:

• Rs. 10,000,000 to EIC for Calcutta (comp)
• Rs. 4 million to Navy (costs of war)
• Rs. 1.2 million to select comm. (inc. clive)
• Rs.1.6 million to Clive for ‘service’ plus a jagir of Rs. 300,000 a year

• No money or agreements were provided either to Jagat Seth or Omichand

Problems with agreement

• Only 85, 000 pounds in treasury

• Nawab faces heavy indemnity and has to borrow or raise taxes

• Clive already decided to leave EIC career to return to England, repatriating his money to fund his career in Parliament

• The Jagir is a substantial chunk of the actual payment made, the rest is postponed

Government in Bengal

• Mir Jafar’s resistance to paying the full sum leads to his removal from the throne in 1763

• The new nawab, Mir Kasim last for only 3 more years and proves less pliable

• He is also removed and Mir Jafar re-installed in 1765

• The same year the company expands westwards

Battle of Buxar, 1765

• On Bengal’s eastern frontier, the Nawab of Awadh is confronted with a larger army

• By this time Awadh is also a home for the Mughal Emperor, Shah Alam, who had been driven from Delhi by Maratha and afghan incursions

• EIC receives grant of Diwani of Bengal after Battle of Buxar