20. The East India Company was responsible for collecting taxes from Indian subjects
Beginning in about 1765, Robert Clive delegated the collection of taxes from Indian subjects to Indian deputies, who were paid by taking a commission based on the total amount collected. It was a system which was obviously ripe for corruption. After Clive left India for the final time, taking a vast amount of personal wealth with him, Warren Hastings was made governor-general for all of the company’s holdings in India, and Indian collection of taxes was eliminated, with the responsibility for revenue collection in the hands of company employees.
Some of the company employees hired by Hastings were from the native population, a practice he observed in the company armies and applied to its civilian employees as a means of assuring loyalty. Hastings was accused of corruption and his seven-year investigation and trial in England resulted in his being acquitted. He was awarded a 4,000 pounds annual payment by the company for the rest of his life. Under his administration of India, he unwittingly allowed the caste system to be solidified by employing high-caste scholars to advise the British in the writing of the body of law. He was followed as governor-general by Charles Cornwallis, who dismissed the Indians in the company’s service.
21. Charles Cornwallis instituted reforms which benefited the company and institutionalized racism
Charles Cornwallis (who surrendered the British Army at Yorktown during the American Revolutionary War) arrived as governor-general of India and initiated reforms which affected company operations both in trade and in administration. He removed the Indians in the company’s employ, and had the Hindu and Muslim laws translated into English. In 1793 he imposed the Cornwallis Code, which established the British as the top of the imposed class structure which recognized both caste and religious hierarchies. He also changed the means of tax collection on property through a reform called the Permanent Settlement. Landowners were taxed based on the value of the land, whereas previously taxes were based on the income the land produced.
Cornwallis believed the changes would benefit the tenant landholders as much as the land owners, because improvements made by tenants would enhance the value held by the owner. Instead the Permanent Settlement did the opposite, the landowners were left free to abuse the tenants by claiming for themselves as much of the crops from the land as they wished, since the produce of the land was no longer subject to taxation. Cornwallis led the EIC troops in the Third Anglo-Mysore War (1790-1792) which further expanded the holdings of the EIC through conquest, and for which Cornwallis was elevated in the British peerage to a Marquess for his success.
22. Ships were built in India for the China trade, and banned from British ports
The EIC used Indian labor and design under the supervision of British officers to build many of the ships used for the China trade. The vessels were built and crewed by Indian sailors, out of mostly teak hulls and decks. The trade between India and China was dominated by such ships for the century between the mid-17 and mid-18th. The ships were built to be fast while carrying large cargoes, and sturdy enough to mount guns for protection against pirates. It was in these vessels that the opium smuggling into China began, and the vessels returned bearing Chinese silks, tea, and other commodities for trade.
The great tea clippers which had their heyday in the first half of the 19th century were built to support the tea trade, when speed was of the essence. Clippers were built by all maritime nations, but their hulls, designed for speed, were unable to carry enough cargo to make them profitable, other than in the tea and spices trades. The EIC built ships to carry its goods in India and Great Britain, though the vessels built in India were banned from entering British and European ports, limiting their use to the Indian Oceans and the South Pacific.
23. The modern Indian Navy has its roots in the East India Company
India has a long naval tradition, which existed before the arrival of the English, French, and Dutch, but the modern Indian Navy’s roots can be traced to the East India Company in the 1600s. In 1612 the EIC built a port facility at Suvali, a small village near Surat, to support a navy to protect commerce from piracy. The naval force was formalized as the Honourable East India Company’s Marine in September, 1612. The small navy was kept busy dealing with pirates along the coast and in river estuaries, and during its patrols its officers, who were British employees of the EIC, charted much of the Indian and Chinese coasts.
In 1686 the navy had outgrown the port of Suvali, and the force’s headquarters was moved to Bombay and renamed the Bombay Marine. From 1824 – 1826 the Bombay Marine fought in the First Anglo-Burmese War, a conflict between the EIC and Burma, which ended in a victory for the EIC and territorial expansion in Burma. At the end of the war, which was not the end of EIC territorial expansion, the British East India Company – a private company – had its own army, its own navy, had conquered territory in its own name, and controlled half of the world’s trade, from an office building in London.
24. The Great Rebellion of 1857 brought the company to its end
In 1857 troops of the EIC throughout India rose in rebellion against their British masters. The troops – known as Sepoys – gave the rebellion its most widely used name of the Sepoy Mutiny. In India it is known as the First War of Independence. At the time of the rebellion, more than 300,000 Sepoys were in the EIC armies, which were divided into three separate entities, the Bombay Army, Madras Army, and the Bengal Army. About 50,000 British troops were divided between the three armies, also employed by the EIC. The Bengal Army contained a large number of Sepoys who were higher-caste natives. The rebellion began in the Bengal Army.
It was rapidly and brutally suppressed by the EIC using Sepoy troops which remained loyal to the EIC. During the rebellion religious strife emerged and massacres of prisoners and civilians were frequent. Atrocities were perpetuated by all sides and were widely reported in the press in Great Britain, where sentiment against the Indians hardened. But in the aftermath of the rebellion, sentiment turned against the EIC and its administration of India. In August, 1858, the British government enacted the Government of India act of 1858, transferring the control of India to the British Crown.
Queen Victoria added the title Empress of India to her stylings, and the period known as the British Raj began in India following the Sepoy Rebellion. Most of the East India Company bureaucracy remained in place, though no longer employed by the company. The company itself remained in existence for another fifteen years, administering the tea trade for the British government, though it no longer had a monopoly. It also assumed the role of keeping the British outpost at St. Helena supplied, due to its importance to British ships and as a source of saltpeter, an essential component of gunpowder.
It was dissolved formally in 1874 by acts of Parliament. The company’s army and navy were absorbed by their counterparts under the British Crown. The Bombay Marine became Her Majesty’s Indian Navy. Most of the policies of the EIC regarding its military arm remained in effect under the Raj, as did those of the administration for some time. British influence continued to expand in the Indies through the middle of the 20th century, when Indian independence was finally granted as the British Empire broke apart in the aftermath of World War II.
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