THE PERIOD OF COLONIAL RULEproduction of textiles in England reduced the demand for Indian textiles in
the home market, too. Consequently, the export of textiles from Bengal
dwindled—from £1.4m worth in 1800 to only £0.9m in 1809. Imports of
British goods increased over the same period—from £6m to £18m Under
such circumstances the trading monopoly of the East India Company no
longer made sense; it was abolished in 1813. The company was now only
one among many firms active in the India trade. In fact, this trade was of
interest to the company purely as a means of transfer of India’s tribute.
International financial transactions of various kinds were used for this
purpose. For instance, Indian revenues or income from the company’s
opium monopoly would be transferred to China in order to buy tea which
was then sold in London; or private traders shipped Indian cotton to China
and paid their sales proceeds into the treasury of the company at Canton,
obtaining drafts on London or Calcutta in return. Thus the company had
no problem in transferring the tribute to London. In fact, these financial
transactions provided additional profit, whereas a direct shipment of
precious metals from Calcutta to London would have caused a great deal
of expenditure.
In India the years after 1813 were a glorious time for the ‘agency
houses’. They had grown up under the protective shield of the East India
Company and had initially handled such business as providing European
goods to the British officers in India or investing their savings in the
‘country trade’. After the company’s monopoly was abolished these agency
houses entered the indigo trade in a big way, financing indigo cultivation
and processing by means of advances, and then exporting the finished
product. As there were no regular banks in India as yet, these agency
houses also served as their own banks. But the capital at their disposal was
limited and the indigo factories in which much of it was invested could not
be sold at the time of a crisis in the indigo trade. This trade was very
volatile, and in the years after 1830 the agency houses collapsed.
This development coincided with another important event: in 1833
Parliament decided that the East India Company should cease to be a
trading company. Consequently, the company had to liquidate all its
commercial and industrial assets in India. This included indigo factories
and silk-reeling establishments, too. An astute Indian entrepreneur used
this opportunity to his advantage: Dwarkanath Tagore, the grandfather of
Rabindranath Tagore, the famous poet and Nobel laureate. With a British
business partner who had not much capital but good connections, he
established the firm Carr, Tagore & Co. He raised the capital for this
venture by means of mortgages on his extensive landed property. On his
lands he also cultivated indigo and grew mulberry trees for the silkworms.
He bought the East India Company’s indigo factories and silk-reeling
workshops at a price which he could dictate, as these establishments were
surrounded by his own property.