The British had a standing army of 325,000 men by the late nineteenth century, two thirds of which was paid for by Indian taxes. Every British soldier posted to India had to be paid, equipped and fed and eventually pensioned by the Government of India, not of Britain. There were significant disparities in the rank, pay, promotion, pensions, amenities and rations between European and Indian soldiers. Biscuits, rice, flour, raisins, wine, pork and beef, authorized to the European soldier, came from Indian production.
In addition to soldiers, India’s labour and commercial skills helped cement imperial rule in many of the British colonies abroad. Indian labour was used to foster plantation agriculture in Malaya, southeast Africa and the Pacific, build the railways in Uganda, and make Burma the rice bowl of Southeast Asia. Indian retailers and merchants developed commercial infrastructure with lower overheads than their European counterparts. Indians also administered, in junior positions of course, the colonies in China and Africa. In the nineteenth century, large numbers of them were forced to migrate as convicts or indentured labourers to faraway British colonies, as we shall see in Chapter 5.
But India was denied any of the rewards or benefits of imperialism. The sacrifice that Indian troops made for the advancement of British interests, the results of which linger even today, was acknowledged neither in compensation to them nor the families they left behind, nor by any significant accretion to the well-being of India. (And this does not even take into account the huge contributions made by India and Indian soldiers in the two World Wars, which I will discuss later.)3
[3 India’s immense contributions to World War I are discussed in detail in Chapter 2. The figures for World War II are also instructive. At the beginning of the war (in 1939), the Indian Army stood at 194,373 men; it was raised to 2,065,554 men by 1945, serving both in India and overseas. The air force employed another 29,201 soldiers and the Royal Indian Navy had 30,478. (Bhatia, 1977, pp. 234–235.) Indian Army battle casualties were high, amounting to 149,225 between 1 Sept 1939 and 28 Feb 1945. Material assistance was also significant. One ironic detail, given Britain’s attempts to strangle India’s steel industry: India shipped 7,000 tonnes of steel sheet rolls to the UK after British steel shipments were lost at sea.]
In the era of Company rule, the British disregard for treaties, solemn commitments, and even the payment of sums they had demanded in exchange for peace, became legendary: Hyder Ali, a warrior-prince whom they had attacked without provocation, considered them to be ‘the most faithless and usurping of mankind’. William Howitt deplored ‘how little human life and human welfare, even to this day, weigh in the scale against dominion and avarice. We hear nothing of the horrors and violence we have perpetrated, from the first invasion of Bengal, to those of Nepaul and Burmah; we have only eulogies on the empire achieved: “See what a splendid empire we have won!”’
The assumption of responsibility by the Crown also witnessed the dawn of a new language of colonial justification—the pretence that Britain would govern for the welfare of the Indian people. When an Englishman wants something, George Bernard Shaw observed, he never publicly admits to his wanting it; instead, his want is expressed as ‘a burning conviction that it is his moral and religious duty to conquer those who possess the thing he wants’. Will Durant was scathing about this pretence: ‘Hypocrisy was added to brutality, while the robbery went on.’
And went on it did. The British liked to joke, with self-disparaging understatement, that they had stumbled into a vacuum and acquired their empire in India ‘in a fit of absence of mind’, in the oft-quoted words of the Cambridge imperial historian John Seeley. (Seeley, in his Expansion of England, had claimed disingenuously that the ‘conquest of India was not in its proper sense a conquest at all’.) But the reality was starker and more unpleasant: large-scale economic exploitation was not just deliberate; it was only possible under an umbrella of effective political and economic control. The Company’s expansion may well have flowed from a series of tactical decisions made in response to events and in a desire to seize opportunities that presented themselves to the beady eyes of Company officials, rather than from some imperial master plan. But they followed a remorseless logic; as Clive said to justify the expansion of his British empire in India, ‘To stop is dangerous; to recede ruin.’ As we have seen, kingdom after kingdom was annexed by the simple expedient of offering its ruler a choice between annihilation in war and a comfortable life in subjugation. When war was waged, the costs were paid by taxes and tributes exacted from Indians. Indians paid, in other words, for the privilege of being conquered by the British.
William Howitt wrote indignantly in 1839: ‘The mode by which the East India Company has possessed itself of Hindostan [is] the most revolting and unchristian that can possibly be conceived… The system which, for more than a century, was steadily at work to strip the native princes of their dominions, and that too under the most sacred pleas of right and expediency, is a system of torture more exquisite than regal or spiritual tyranny ever before discovered.’
But as Ferdinand Mount—a descendant of a famous Company general himself—recently explained, it was all the simple logic of capitalism: ‘The British empire in India was the creation of merchants and it was still at heart a commercial enterprise, which had to operate at profit and respond to the ups and downs of the market. Behind the epaulettes and the jingle of harness, the levees and the balls at Government House, lay the hard calculus of the City of London.’
In his Poverty and Un-British Rule in India, Dadabhai Naoroji—who in 1892 became the first Indian elected to the British House of Commons, there to argue the case for India in the ‘mother of parliaments’ (and also to support Irish Home Rule) by appealing futilely to the better nature of the English—laid out the following indictment based entirely on the words of the British themselves:
Mr. Montgomery Martin, after examining…the condition of some provinces of Bengal and Behar, said in 1835 in his Eastern India: ‘It is impossible to avoid remarking two facts as peculiarly striking, first the richness of the country surveyed, and second, the poverty of its inhabitants… The annual drain of £3,000,000 on British India has amounted in thirty years, at compound interest, to the enormous sum of £723,900,000. So constant and accumulating a drain, even in England, would soon impoverish her. How severe then must be its effects on India when the wage of a labourer is from two pence to three pence a day.…
Mill’s History of India (Vol. VI, p. 671; ‘India Reform Tract’ II, p. 3) says: ‘It is an exhausting drain upon the resources of the country, the issue of which is replaced by no reflex; it is an extraction of the life blood from the veins of national industry which no subsequent introduction of nourishment is furnished to restore.’
Sir George Wingate has said (1859): ‘Taxes spent in the country from which they are raised are totally different in their effect from taxes raised in one country and spent in another. In the former case the taxes collected from the population…are again returned to the industrious classes… But the case is wholly different when the taxes are not spent in the country from which they are raised… They constitute [an] absolute loss and extinction of the whole amount withdrawn from the taxed country… [The money] might as well be thrown into the sea. Such is the nature of the tribute we have so long exacted from India.’
Lord Lawrence, Lord Cromer, Sir Auckland Colvin, Sir David Barbour, and others have declared the extreme poverty of India…
Mr. F. J. Shore’s opinion: ‘the halcyon days of India are over; she has been drained of a large proportion of the wealth she once possessed, and her energies have been cramped by a sordid system of misrule to which the interests of millions have been sacrificed for the benefit of the few… The gradual impoverishment of the people and country, under the mode of rule established by the British Government, has hastened their fall.’
The Destruction of Shipping and Shipbuilding
It was bad enough that the theft w
as so blatant that even Englishmen of the time acknowledged it. Worse, Indian industry was destroyed, as was Indian trade, shipping and shipbuilding. Before the British East India Company arrived, Bengal, Masulipatnam, Surat, and the Malabar ports of Calicut and Quilon had a thriving shipbuilding industry and Indian shipping plied the Arabian Sea and the Bay of Bengal. The Marathas even ran a substantial fleet in the sixteenth century; the navy of Shivaji Bhonsle defended the west coast against the Portuguese threat. Further south, the seafaring prowess of the Muslim Kunjali Maraicars prompted the Zamorin rulers of Calicut in the mid-sixteenth century to decree that every fisher family in his kingdom should bring up one son as a Muslim, to man the all-Muslim navy. The Bengal fleet in the early seventeenth century included 4,000 to 5,000 ships at 400 to 500 tonnes each, built in Bengal and employed there; these numbers increased till the mid-eighteenth century, given the huge popularity of the goods and products they carried. This thriving shipping and shipbuilding culture would be drastically curbed by the British.
To reduce competition after 1757, the Company and the British ships that they contracted were given a monopoly on trade routes, including those formerly used by the Indian merchants. Duties were imposed on Indian merchant ships moving to and from Indian ports, not just foreign ones. This strangled the native shipping industry to the point of irrelevance in everything but some minor coastal shipping of low-value ‘native’ goods to local consumers.
The self-serving nature of British shipping policy was made apparent during the Napoleonic Wars, which led to a severe shortage of British merchant vessels. (The war of 1803 destroyed 173,000 tons of British shipping, forcing the government in London to employ 112,890 tonnes of foreign vessels to conduct British commerce.) Expediently, Indian shipping was now deemed to be British and Indian sailors were reclassified as British sailors, allowing them access to British trade routes under the Navigation Acts. But as soon as the Napoleonic Wars ended, the Navigation Acts were again amended to exclude Indian shipping and the industry once again declined.
The story was repeated in the early twentieth century, when V. O. Chidambaram Pillai in Madras was allowed to set up a shipping company in the run-up to World War I. His success set the alarm bells ringing, however, and when regulations alone did not destroy his business, he was quickly jailed for his nationalist views, breaking his spirit as well as the back of his enterprise. The nascent Indian shipping line was driven out of business. The experience of Indian shipping confirms that British authorities cynically and deliberately exploited Indian industries in their time of need and otherwise suppressed them.
Indian shipbuilding (which had long thrived in a land with such a long coastline) offers a more complex but equally instructive story. After an initial period of stagnation and decline after the advent of the East India Company to power, Indian shipbuilding revived in Bengal in the last quarter of the eighteenth century. This was thanks to British entrepreneurs, who realized the advantages of constructing their vessels in Calcutta itself, using Indian workers. By 1800, Governor-General Wellesley reported that the British Indian port of Calcutta had 10,000 tonnes of cargo shipping built in India. Between 1801 and 1839 a further 327 ships were built in Bengal, all British-owned.
The reasoning for this commercial British-led activity in India was purely professional and based on sound economic calculations. Indian workmanship and the country’s long shipbuilding tradition were highly valued by British shipwrights, who found themselves adopting many Indian techniques of naval architecture in constructing their own vessels. The Indian vessels, a contemporary British observer wrote, ‘united elegance and utility and are models of patience [sic] and fine workmanship.’ Indian workers were considered expert in all shipbuilding materials—wood, iron and brass (high-tensile brass was indispensable to the building of wooden ships, since it was used for ship fittings, source-water pumps, shaft liners and even nails). And their work proved remarkably durable: the average lifespan of a Bengal-built ship exceeded twenty years, whereas English-built vessels never lasted more than eleven or twelve, and often had to be rebuilt or repaired at Indian ports. (Part of the reason for this may have lain in the quality of the hardwood Indians used in shipbuilding, mainly teak and sal, as opposed to the British oak and pine.)
This meant that not only was the production cost of vessels built in India lower than that in Britain, but depreciation took longer, adding to the value proposition for British entrepreneurs. As a result of their lower costs, they were also able to charge lower rates for freight than companies using ships made in England. So attractive was it for British entrepreneurs to build ships in India that by the second decade of the nineteenth century, there was rising unemployment in the shipbuilding industry at home—shipwrights, caulkers, sawyers and joiners in their hundreds were reported to be unemployed in London.
British-based businesses simply could not compete, and so they petitioned Parliament for a ban on Indian shipbuilding. The first legislative act in their favour came in 1813 with a law that prohibited ships below 350 tonnes from sailing between the Indian colonies and the United Kingdom. That took some 40 per cent of Bengal-built ships out of the lucrative India-England trade. A further Act in 1814 denied Indian-built ships the privilege of being deemed ‘British-registered vessels’ to trade with the United States and the European continent. Though they could still, in theory, trade with China, that sector had become unprofitable, since the previous practice had been to sail from Calcutta with Indian goods to China, load up on tea there for London, and then return to Calcutta with British goods; with the London sector banned to them, these ships could only sail from Calcutta to China and back, but there was no market for Chinese goods in India (Indians were not yet tea-drinkers) and the ships, denied access to London, often had to return empty.
Meanwhile Indian sailors, for good measure, were also deemed non-British and companies were discouraged from recruiting them for voyages to England, where they were likely to be exposed to licentious behaviour by the locals that would ‘divest them of the respect and awe they had entertained in India for the European character’. (Morality and racism could always be used to dress up naked commercial interests.) Though, given the lack of available British seamen in Indian ports, these sailors could be allowed to crew the larger vessels upon issuance of a certificate from the governor that no British substitutes were available, the law required the ship-owner to hire a British crew for the return journey from England, significantly driving up the journey’s costs—both because he, in effect, had to pay for two crews and because the British sailors charged much higher wages.
The advantages for British companies of building ships in India and operating them from there, in other words, began to disappear as a result of policies of deliberate legislative discrimination. India’s once-thriving shipbuilding industry collapsed, and by 1850 was essentially extinct. This had nothing to do, as some have suggested, with changing technology that India could allegedly not keep up with: the collapse began well before steamships had begun to overtake sailing vessels, and in any case Bengal had proved adept at building steam vessels too, before the new laws and the resultant reduction in market opportunities made such activity unremunerative. As William Digby was to observe, the Mistress of the Seas of the Western world had killed the Mistress of the Seas of the East.
Other commercial enterprises were no exception to the practice of discrimination. One form of colonial discrimination that was almost ubiquitous and extremely effective was the use of currency to separate British businesses from Indian ones, and regulate the opportunities available to each. The division of businesses into ‘sterling’ (companies operating out of London) and ‘rupee’ (companies that operated out of India) created a commercial gulf that could not easily be bridged. Only the British could invest in sterling companies, while rupee companies were open to both British and Indian investment. Sterling companies tended to focus on utilities, tea and jute; this meant that there were significa
nt barriers to entry for Indians in these markets, which the British reserved for themselves. Moreover, all sterling companies were required to have a British managing agent to oversee them before London-based investors would commit capital. Indian investors were simply kept out. Thus, of 385 joint stock companies in the tea industry in India as late as 1914, 376 were based in Calcutta; and all were owned by the British. Scholars have established that in 1915, 100 per cent of the jute mills in India were in British hands; by 1929 this was down to 78 per cent, still enshrining British dominance.
British India occupied a unique position in the imperial trade and payments system. From 1910 to 1947, the Indian economy underwent a series of monetary and exchange rate experimentations. These included, amongst others, a transition from gold bullion to a sterling exchange standard; a controversial fixed-exchange rate system to manage the deliberate depreciation of the rupee; a gradual improvement in a weakly functioning formal banking system; and finally, the establishment of the Reserve Bank of India (1934/35) with limited authority. Buffeted by global and imperial forces of demand and supply, India suffered severe price volatility of some 20–30 per cent a year. The British used the fixed exchange rate regimes as it suited them, basically to accommodate British current-account deficits and other domestic exigencies, with scant regard for their Indian subjects. Such policies exacerbated India’s financial instability, adding to the miseries endured by Indians under the Raj.
The manipulation of currency, throughout a feature of the colonial enterprise, reached its worst during the Great Depression of 1929–30, when Indian farmers (like those in the North American prairies) grew their grain but discovered no one could afford to buy it. Agricultural prices collapsed, but British tax demands did not; and cruelly, the British decided to restrict India’s money supply, fearing that the devaluation of Indian currency would cause losses to the British from a corresponding decline in the sterling value of their assets in India. So Britain insisted that the Indian rupee stay fixed at 1 shilling sixpence, and obliged the Indian government to take notes and coins out of circulation to keep the exchange rate high. The total amount of cash in circulation in the Indian economy fell from some 5 billion rupees in 1929 to 4 billion in 1930 and as low as 3 billion in 1938. Indians starved but their currency stayed high, and the value of British assets in India was protected.
Inglorious Empire Page 6