KS3 History: The East India Company - From greed to famine

Just over 400 years ago, a group of London merchants arrived here on the Indian coast hoping to do some peaceful trading. Those early pioneers dreamt of making huge profits.

Over 200 years, the Company they formed grew, into a commercial titan. Its wealth rivalled that of the British State.

It had its own army. And eventually ruled over 400 million people.

Its trade was vital to Britain’s commercial success and it revolutionised the British lifestyle.

Dr Andrea Major:
The East India Company changed the way we dress… Um it changed the way we eat - it changed the way we socialise.

Dan:
And, by accident, created one of the most powerful empires in history.

But the company’s rise was followed by a dramatic descent into profiteering and corruption.

And eventually a chilling story of unchecked greed with devastating consequences.

In the mid 18th century - the East India company took control of India’s richest province. Led by Robert Clive, the Company defeated the ruler of Bengal, and installed a replacement of their choosing.

They were given the right to manage the revenue and Civil Administration of Bengal, called the Diwani.

The Diwani was a license to print money. After the costs of administering Bengal had been met, the Company’s profit marginwas 49%.

The commercial flood gates had opened.

In 1766, news of the Diwani reached London.

The prospect of massive financial gains in Bengal pushed the Company’s share price through the roof, now this is partly fuelled by Clive who wrote to his friends from India, advising them to buy stock and he wrote to his own attorneys as well telling them to make huge purchases on his behalf. Not surprisingly other British and foreign investors followed suit.

Robert Clive returned home a national hero, with a personal fortune equivalent to 38 million pounds today – and a generous income from landholdings in Bengal. He went on a spending spree.

He bought a raft of properties including his childhood home, Styche Hall which he renovated for his father and then he bought this place, Walcot Hall for the princely sum of 90,000 pounds.

Not bad for 6,000 acres. Clive began transforming his new home into a lavish palazzo with one of the finest gardens in England.

After ruling a state four times bigger than Britain, Clive was determined to forge a political career back in the old country.

His new Shropshire pile came with an added bonus.

Walcot Hall had traditionally been owned by the powerful Walcot family and they’d been able to nominate the area’s MPs. When they fell badly into debt Clive saw his chance, he bought the estate and with it came control of the local parliamentary borough.

That allowed him to basically appoint his cousin as the MP. For the next 50 years Clive’s money ensured that his family continue to live in style and they continued to control the politics of the local area.

Clive added half-a-dozen seats in Shropshire and further estates in Devon, Monmouth and Surrey to a bulging property empire.

He was just one of a number of Company men who had had grown fabulously wealthy in Bengal and then had returned home to improve their status in life.

They bought their way into the aristocracy. They bought influence and power.

They became known as ‘nabobs’, a term synonymous with vanity and absurd pretention.

Margot Finn:
They’re perceived to be too rich for their own good, to wear their diamonds too ostentatiously, to wear textiles from India; concerns about so-called oriental despotism that they may have brought back from the Mogul Empire in India with them. All of those are great concerns for people.

Dan:
The nabobs represented the East India Company at its most venal and corrupt – a direct threat to the social and political order.

By the 1780’s, they had become a powerful minority, with one-tenth of the seats in Parliament.

But their good fortune would soon end.

A natural calamity was about to throw the Honourable Company into the biggest crisis in its history.

Famine had long been a part of life in Bengal, but the one that began in the late 1760’s was turned into a full blown humanitarian disaster by the East India Company. It’s hard to come to terms with even after all these years, but while the nabobs were back in Britain buying stately homes, throwing parties, filling them with silver wine and art, the people of Bengal who were paying for all that were experiencing some of the most appalling conditions imaginable.

A prolonged drought and a poor harvest caused a famine that continued for three long years – the worst in living memory.

The East India Company watched and recorded everything.

Did the East India Company help or did they make things worse?

Bob:
They made things worse. They raise the taxes on agricultural produce, they banned the hoarding of rice and grain, which was traditionally used to tide over the population through periods of scarcity.

They ripped up some of the food crops to plant much more profitable indigo and even more profitable opium. And finally, some of their junior servants started to speculate and profiteer from the sale of, of a rice and er grain selling it out of the province at grossly inflated prices.

The company was more interested in protecting its profits than in relieving the suffering of the Bengali People, its estimated that between two million and ten million people died, a valuable lesson on the dangerous of unchecked corporate power.

Andrea:
Nobody was ultimately brought to account for it but there was certainly a sense that the, the nature of East India Company government at the time had exacerbated the famine, that it, it had made things worse, if it hadn’t actually caused it.

Dan:
The famine was a human tragedy and a financial disaster. The Bengal economy collapsed. The Company’s income plummeted. Its share price crashed and all dividend payments were suspended.

The bubble was burst. People wanted to know why, how could this have happened? Parliament set up its own enquiry and a scapegoat was lined up: Robert Clive, Britain’s richest man.

Nick Robins:
He became seen as the sort of the, the Leader of the Nabobs and was nicknamed “Lord Vulture”.

Dan:
Denounced for enriching himself with Indian loot, Clive was hauled before parliament.

He asked his accusers to remember the situation that he’d been in. An opulent city had lain at his mercy. He’d been shown through vaults full of treasure, gold and precious stones on every side. He finished by saying “By God, Mr Chairman, I stand astonished at my own moderation”. Well, if Clive was greedy or corrupt, he certainly wasn’t the only one in The House of Commons… He was acquitted in fact, he was even thanked for services to his country.

But his life ended in tragedy.

In November 1774, Clive was found dead at his London home.

He’d suffered from depression for much of his life, and he’d become an opium addict. It’s very likely that he‘d committed suicide. Dr Samuel Johnson wrote that his crimes had driven him to slit his own throat. It was a scandalous and pitiful end to a life of extraordinary if controversial achievement.

Robert Clive’s Victory in Bengal proved to be a major turning point for the East India Company - but not in the way he had hoped for the mis management of the province, the devastating famine and the companies plummeting fortunes led to a crisis point - which could only be solved by government intervention.