Karl Marx
London, Friday, June 24, 1853
The debate on Lord Stanley’s motion to postpone legislation for India, has been deferred until this evening. For the first time since 1783 the India question has become a ministerial one in England. Why is this?
The true commencement of the East India Company cannot be dated from a more remote epoch than the year 1702, when the different societies, claiming the monopoly of the East India trade, united together in one single Company. Till then the very existence of the original East India Company was repeatedly endangered, once suspended for years under the protectorate of Cromwell, and once threatened with utter dissolution by Parliamentary interference under the reign of William III. It was under the ascendancy of that Dutch Prince when the Whigs became the farmers of the revenues of the British Empire, when the Bank of England[1] sprung into life, when the protective system was firmly established in England, and the balance of power in Europe was definitively settled, that the existence of an East India Company was recognized by Parliament. That era of apparent liberty was in reality the era of monopolies not created by Royal grants, as in the times of Elizabeth and Charles I, but authorized and nationalized by the sanction of Parliament. This epoch in the history of England bears, in fact, an extreme likeness to the epoch of Louis Philippe in France, the old landed aristocracy having been defeated, and the bourgeoisie not being able to take its place except under the banner of moneyocracy, or the “haute finance.” The East India Company excluded the common people from the commerce with India, at the same time that the House of Commons excluded them from Parliamentary representation. In this as well as in other instances, we find the first decisive victory of the bourgeoisie over the feudal aristocracy coinciding with the most pronounced reaction against the people, a phenomenon which has driven more than one popular writer, like Cobbett, to look for popular liberty rather in the past than in the future.
The union between the Constitutional Monarchy and the monopolizing monied interest, between the Company of East India and the “glorious” revolution of 1688[2] was fostered by the same force by which the liberal interests and a liberal dynasty have at all times and in all countries met and combined, by the force of corruption, that first and last moving power of Constitutional Monarchy, the guardian angel of William III and the fatal demon of Louis Philippe. So early as 1693, it appeared from Parliamentary inquiries, that the annual expenditure of the East India Company, under the head of “gifts” to men in power, which had rarely amounted to above £1,200 before the revolution, reached the sum of £90,000. The Duke of Leeds was impeached for a bribe of £5,000, and the virtuous King himself convicted of having received £10,000. Besides these direct briberies, rival Companies were thrown out by tempting Government with loans of enormous sums at the lowest interest, and by buying off rival Directors.
The power the East India Company had obtained by bribing the Government, as did also the Bank of England, it was forced to maintain by bribing again, as did the Bank of England. At every epoch when its monopoly was expiring, it could only effect a renewal of its Charter by offering fresh loans and by fresh presents made to the Government.
The events of the Seven-Years-War transformed the East India Company from a commercial into a military and territorial power[3]. It was then that the foundation was laid of the present British Empire in the East. Then East India stock rose to £263, and dividends were then paid at the rate of 12 1/2 per cent. But then there appeared a new enemy to the Company, no longer in the shape of rival societies, but in the shape of rival ministers and of a rival people. It was alleged that the Company’s territory had been conquered by the aid of British fleets and’, British armies, and that no British subjects could hold territorial sovereignties independent of the Crown. The ministers of the day and the people of the day claimed their share in the “wonderful treasures” imagined to have been won by the last conquests. The Company only saved its existence by an agreement made in 1767 that it should annually pay £400,000 into the National Exchequer.
But the East India Company, instead of fulfilling its agreement, got into financial difficulties, and, instead of paying a tribute to the English people, appealed to Parliament for pecuniary aid. Serious alterations in the Charter were the consequence of this step. The Company’s affairs failing to improve, notwithstanding their new condition, and the English nation having simultaneously lost their colonies in North America, the necessity of elsewhere regaining some great Colonial Empire became more and more universally felt. The illustrious Fox thought the opportune moment had arrived, in 1783, for bringing forward his famous India bill, which proposed to abolish the Courts of Directors and Proprietors, and to vest the whole Indian government in the hands of seven Commissioners appointed by Parliament. By the personal influence of the imbecile King [George III] over the House of Lords, the bill of Mr. Fox was defeated, and made the instrument of breaking down the then Coalition Government of Fox and Lord North, and of placing the famous Pitt at the head of the Government. Pitt carried in 1784 a bill through both Houses, which directed the establishment of the Board of Control, consisting of six members of the Privy Council, who were
“to check, superintend and control all acts, operations and concerns which in any wise related to the civil and military Government, or revenues of the territories and possessions of the East India Company.”
On this head, Mill, the historian, says:
“In passing that law two objects were pursued. To avoid the imputation of what was represented as the heinous object of Mr. Fox’s bill, it was necessary that the principal part of the power should appear to remain in the hand of the Directors. For ministerial advantage it was necessary that it should in reality be all taken away. Mr. Pitt’s bill professed to differ from that of his rival, chiefly in this very point, that while the one destroyed the power of the Directors, the other left it almost entire. Under the act of Mr. Fox the powers of the ministers would have been avowedly held. Under the act of Mr. Pitt, they were held in secret and by fraud. The bill of Fox transferred the powers of the Company to Commissioners appointed by Parliament. The bill of Mr, Pitt transferred them to Commissioners appointed by the King.”
The years of 1783 and 1784 were thus the first, and till now the only years, for the India question to become a ministerial one. The bill of Mr. Pitt having been carried, the Charter of the East India Company was renewed, and the Indian question set aside for twenty years. But in 1813 the Anti-Jacobin war, and in 1833 the newly introduced Reform Bill[4] superseded all other political questions.
This, then, is the first reason of the India question’s having failed to become a great political question, since and before 1784; that before that time the East India Company had first to conquer existence and importance; that after that time the Oligarchy absorbed all of its power which it could assume without incurring responsibility; and that afterwards the English people in general were at the very epochs of the renewal of the Charter, in 1813 and 1833, absorbed by other questions of overbearing interest.
We will now take a different view. The East India Company commenced by attempting merely to establish factories for their agents, and places of deposit for their goods. In order to protect them they erected several forts. Although they had, even as early as 1689, conceived the establishment of a dominion in India, and of making territorial revenue one of their sources of emolument, yet, down to 1744, they had acquired but a few unimportant districts around Bombay, Madras, and Calcutta. The war which subsequently broke out in the Karnatac had the effect of rendering them after various struggles, virtual sovereigns of that part of India. Much more considerable results arose from the war in Bengal and the victories of Clive. These results were the real occupation of Bengal, Bihar, and Orissa[5]. At the end of the Eighteenth Century, and in the first years of the present one, there supervened the wars with Tippoo Saib, and in consequence of them a great advance of power, and an immense extension of the subsidiary system.[6] In the second decennium of the Nineteenth Century the first convenient frontier, that of India within the desert, had at length been conquered. It was not till then that the British Empire in the East reached those parts of Asia, which had been, at all times, the seat of every great central power in India. But the most vulnerable point of the Empire, from which it had been overrun as often as old conquerors were expelled by new ones, the barriers of the Western frontier, were not in the hands of the British. During the period from 1838 to 1849, in the Sikh and Afghan wars, British rule subjected to definitive possession the ethnographical, political, and military frontiers of the East Indian Continent, by the compulsory annexation of the Punjab and of Scinde. These were possessions indispensable to repulse any invading force issuing from Central Asia, and indispensable against Russia advancing to the frontiers of Persia. During this last decennium there have been added to the British Indian territory 167,000 square miles, with a population of 8,572,630 souls. As to the interior, all the native States now became surrounded by British possessions, subjected to British suzeraineté under various forms, and cut off from the sea-coast, with the sole exception of Gujarat and Scinde. As to its exterior, India was now finished. It is only since 1849, that the one great Anglo-Indian Empire has existed.
Thus the British Government has been fighting, under the Company’s name, for two centuries, till at last the natural limits of India were reached. We understand now, why during ail this time all parties in England have connived in silence, even those which had resolved to become the loudest with their hypocritical peace-cant, after the arrondissement of the one Indian Empire should have been completed. Firstly, of course, they had to get it, in order to subject it afterward to their sharp philanthropy. From this view we understand the altered position of the Indian question in the present year, 1853, compared with all former periods of Charter renewal.
Again, let us take a different view. We shall still better understand the peculiar crisis in Indian legislation, on reviewing the course of British commercial intercourse with India through its different phases.
At the commencement of the East India Company’s operations, under the reign of Elizabeth, the Company was permitted for the purpose of profitably carrying on its trade with India, fo export an annual value of £30,000 in silver, gold, and foreign coin. This was an infraction against all the prejudices of the age, and Thomas Mun was forced to lay down in A Discourse on Trade from England to the East Indies, the foundation of the “mercantile system,” admitting that the precious metals were the only real wealth a country could possess, but contending at the same time that their exportation might be safely allowed, provided the balance of payments was in favor of the exporting nation. In this sense, he contended that the commodities imported from East India were chiefly re-exported to other countries, from which a much greater quantity of bullion was obtained than had been required to pay for them in India. In the same spirit, Sir Josiah Child wrote A Treatise wherein It Is Demonstrated That the East India Trade Is the Most National Trade of All Trades. By-and-by the partisans of the East India Company grew more audacious, and it may be noticed as a curiosity, in this strange Indian history, that the Indian monopolises were the first preachers of free trade in England.
Parliamentary intervention, with regard to the East India Company, was again claimed, not by the commercial, but by the industrial class, at the latter end of the 17th century, and during the greater part of the 18th, when the importation of East Indian cotton and silk stuffs was declared to ruin the poor British manufacturers, an opinion put forward in John Pollexfen: England and India Inconsistent in Their Manufactures, London, 1697[7], a title strangely verified a century and a half later, but in a very different sense. Parliament did then interfere. By the Act 11 and 12 William III, cap. 10, it was enacted that the wearing of wrought silks and of printed or dyed calicoes from India, Persia and China should be prohibited, and a penalty of £200 imposed on all persons having or selling the same. Similar laws were enacted under George I, II and III, in consequence of the repeated lamentations of the afterward so “enlightened” British manufacturers. And thus, during the greater part of the 18th century, Indian manufactures were generally imported into England in order to he sold on the Continent, and to remain excluded from the English market itself.
Besides this Parliamentary interference with East India, solicited by the greedy home manufacturer, efforts were made at every epoch of the renewal of the Charter, by the merchants of London, Liverpool and Bristol, to break down the commercial monopoly of the Company, and to participate in that commerce, estimated to be a true mine of gold. In consequence of these efforts, a provision was made in the Act of 1773 prolonging the Company’s Charter till March 1, 1814, by which private British individuals were authorized to export from, and the Company’s Indian servants permitted to import into England, almost all sorts of commodities. But this concession was surrounded with conditions annihilating its effects, in respect to the exports to British India by private merchants. In 1813 the Company was unable to further withstand the pressure of general commerce, and except the monopoly of the Chinese trade, the trade to India was opened, under certain conditions, to private competition. At the renewal of the Charter in 1833, these last restrictions were at length superseded, the Company forbidden to carry on any trade at all — their commercial character destroyed, and their privilege of excluding British subjects from the Indian territories withdrawn.
Meanwhile the East India trade had undergone very serious revolutions, altogether altering the position of the different class interests in England with regard to it. During the whole course of the 18th century the treasures transported from India to England were gained much less by comparatively insignificant commerce, than by the direct exploitation of that country, and by the colossal fortunes there extorted and transmitted to England. After the opening of the trade in 1813 the commerce with India more than trebled in a very short time. But this was not all. The whole character of the trade was changed. Till 1813 India had been chiefly an exporting country, while it now became an importing one; and in such a quick progression, that already in 1823 the rate of exchange, which had generally been 2/6 per rupee, sunk down to 2/ per rupee. India, the great workshop of cotton manufacture for the world, since immemorial times, became now inundated with English twists and cotton stuffs. After its own produce had been excluded from England, or only admitted on the most cruel terms, British manufactures were poured into it at a small and merely nominal duty, to the ruin of the native cotton fabrics once so celebrated. In 1780 the value of British produce and manufactures amounted only to £386;152, the bullion exported during the same year to £15,041, the total value of exports during 1780 being £12,648,616, so that the India trade amounted to only 1-32 of the entire foreign trade. In 1850 the total exports to India from Great Britain and Ireland were £8,024,000, of which cotton goods alone amounted to £5,220,000, so that it reached more than ‘/s of the whole export, and more than 1/4 of the foreign cotton trade. But the cotton manufacture also employed now 1/8 of the population of Britain, and contributed 1/12th of the whole national revenue. After each commercial crisis the East Indian trade grew of more paramount importance for the British cotton manufacturers, and the East India Continent became actually their best market. At the same rate at which the cotton manufactures became of vital interest for the whole social frame of Great Britain, East India became of vital interest for the British cotton manufacture.
Till then the interests of the moneyocracy which had converted India into its landed estates, of the oligarchy who had conquered it by their armies, and of the millocracy who had inundated it with their fabrics, had gone hand in hand. But the more the industrial interest became dependent on the Indian market, the more it fell the necessity of creating fresh productive powers in India, after having ruined her native industry. You cannot continue to inundate a country with your manufactures, unless you enable it to give you some produce in return. The industrial interest found that their trade declined instead of increasing. For the four years ending with 1846, the imports to India from Great Britain were to the amount of 261 million rupees; for the four years ending 1850 they were only 253 millions, while the exports for the former period 274 millions of rupees, and for the latter period 254 millions. They found out that the power of consuming their goods was contracted in India to the lowest possible point, that the consumption of their manufactures by the British West Indies, was of the value of about 14s. per head of the population per annum, by Chile, of 9s. 3d., by Brazil, of 6s. 5d., by Cuba, of 6s. 2d., by Peru, of 5s. 7d., by Central America, of 10d., while it amounted in India only to about 9d. Then came the short cotton crop in the United States, which caused them a loss of £11,000,000 in 1850, and they were exasperated at depending on America, instead of deriving a sufficiency of raw cotton from the East Indies. Besides, they found that in all attempts to apply capital to India they met with impediments and chicanery on the part of the India authorities. Thus India became the battle-field in the contest of the industrial interest on the one side, and of the moneyocracy and oligarchy on the other. The manufacturers, conscious of their ascendancy in England, ask now for the annihilation of these antagonistic powers in India, for the destruction of the whole ancient fabric of Indian government, and for the final eclipse of the East India Company.
And now to the fourth and last point of view, from which the Indian question must be judged. Since 1784 Indian finances have got more and more deeply into difficulty. There exists now a national debt of 50 million pounds, a continual decrease in the resources of the revenue, and a corresponding increase in the expenditure, dubiously balanced by the gambling income of the opium tax, now threatened. with extinction by the Chinese beginning themselves to cultivate the poppy, and aggravated by the expenses to be anticipated from the senseless Burmese war[8].
“As the case stands,” says Mr. Dickinson, “as it would ruin England to lose her Empire in India, it is threatening our own finances with ruin, to be obliged to keep it.”
I have shown thus, how the Indian question has become for the first time since 1783, an English question, and a ministerial question.
Footnotes
1. The Bank of England was founded by private persons in 1694. The founders loaned its fixed capital to the government, which explains the origin of the British national debt. The Bank was actually controlled by the government and functioned as the state bank, e.g. it was entitled to issue money. It remained nominally a private establishment, however, until the end of the Second World War.
2. A reference to the overthrow of the Stuart dynasty and the enthronement of William Ill of Orange, after which constitutional monarchy was consolidated in England on the basis of a compromise between the landed aristocracy and the financial bourgeoisie. p. 149
3. The Seven Years’ War (1756-63)-a war between the Anglo-Prussian and the Franco-Russo-Austrian coalitions. One of the chief causes of the war was the colonial and commercial rivalry between England and France. The main theatre of operations in the East was India where the French and their puppets among the local princes were opposed by the British East India Company, which took advantage of the war to seize new Indian territories. The war ended with France losing almost all her possessions in India (except five coastal towns whose fortifications she was compelled to demolish), while England considerably strengthened her colonial might.
4. A reference to the Reform Bill which was passed by Parliament in June 1832. The Bill was directed against the political monopoly of the landed and financial aristocracy and gave representatives of the industrial bourgeoisie access to Parliament. The proletariat and the petty bourgeoisie, the main forces in the struggle for the reform, received no electoral rights.
5. Marx lists a number of wars of conquest waged by the British East India Company. The war in the Carnatic (a principality in South-Eastern India) lasted at intervals from 1746 to 1763. The warring sides-the British and French East India Companies-sought to subjugate the Carnatic under the guise of supporting different local pretenders to the principality. The British, who in January 1761 took possession of Pondichery, the principal French bastion in the south, ultimately won the day.
In 1756, in an effort to avert a British invasion, the Nawab of Bengal started a war, seizing Calcutta, the British base in North-Eastern India. But the armed forces of the British East India Company under Robert Clive’s command soon recaptured the city, demolished the Bengal fortifications of the French, who supported the Nawab, and defeated him at Plassey on June 23, 1757. In 1763 they crushed the uprising that broke out in Bengal against British rule. Along with Bengal, the British took possession of Bibar, a region on the Ganges, which was under the rule of the Nawab of Bengal. In 1803, the British completed the conquest of several feudal principalities of Orissa situated south of Bengal.
6. In 1790-92 and 1799 the British East India Company waged wars with Mysore, an independent feudal state in South India. Its ruler Tippoo Saib had taken part in previous Mysore campaigns against the British and was a sworn enemy of the British colonialists. In the first of these wars Mysore lost half of its dominions, which were seized by the East India Company and its allied feudal princes. The second war ended with the total defeat and the death of Tippoo. Mysore became a vassal principality.
The subsidiary system or the system of so-called subsidiary agreements-a method of turning the potentates of Indian principalities into vassals of the East India Company. Most widespread were agreements under which the princes had to maintain (subsidise) the Company’s troops stationed on their territory and agreements which saddled the princes with loans on exorbitant terms. Failure to fulfil them resulted in the confiscation of their possessions.
7. Marx’s preparatory materials on India (Notebook XXI) include passages from J. R. MacCulloch’s The Literature of Political Economy, London, 1845. The book contains extracts from the works of English economists of an earlier period on British trade with India, among them the above-mentioned treatises of J. Child, Th. Mun and J. Pollexfen. p. 153
8. In the first Burmese war of 1824-26 the troops of the East India Company seized the Province of Assam, bordering on Bengal, and the coastal districts of Arakan and Tenasserim. The second Burmese war (1852) resulted in the seizure by the British of the Province of Pegu. Burma did not sign a peace treaty, however, and refused to recognise the seizure of Pegu. In 1853 the British authorities threatened to resume military operations but abstained from this step, largely due to the guerrilla warfare in Pegu against the foreign invaders, which continued until 1860. In the 1860s Britain imposed on Burma a number of unequal treaties and in 1885, as a result of the third Burmese war, annexed the whole territory of Burma.
SOURCE: New-York Daily Tribune, July 11, 1853