6
THE PERIOD OF
COLONIAL RULE
Company Bahadur: trader and ruler
The acquisition of a vast empire by a trading company was certainly a
rather strange phenomenon. Contemporary opinion reflected this and
those who participated in the endeavour were also puzzled. The royal
charter under which the company operated had stated that the Crown
claimed all territories which might be conquered by that company, but
Parliament saw to it that this clause remained inoperative. Every twenty
years the charter came up before Parliament for renewal of the company’s
privileges. There was a growing feeling that these privileges should be
rescinded, the monopoly of trade being an anachronism and territorial rule
obviously not the business of a company of traders. As early as 1701 the
anonymous author of the Considerations upon the East India Trade had
suggested the cancellation of the charter and a completely free trade with
India. The company’s factories, stated the author, should be taken over by
the British government and financed by means of customs duties, Clive’s
offer to Pitt was even more attractive—not only customs duties, but the
revenues of Bengal could now be used for government finance.
Nevertheless, the risks were high, too. The British political system could
have been disrupted and furthermore there was the fear that military
expenditure on the defence of the new possessions might soon be greater
than the income they provided. Conquest with limited liability was
preferable: the privileges of the company were renewed and it remained in
control of the new possessions; Parliament was satisfied with an annual
tribute of £400,000.
In the nineteenth century, when the trading privileges of the company
were finally revoked, it still remained in charge of its territorial
possessions. Its only business was to govern India and to get paid very well
for this service. This transition could have been made just as well a century
earlier. Eighteenth-century private traders, whilst happy to circumvent the
company’s monopoly, did recognise their self-interest in making use of the
infrastructure and protection offered by the company and therefore did not