Reference has already been made to the activities of European trading companies in Bengal. The Portuguese had developed an extensive foreign commerce in Bengal in the early seventeenth century, but their trade in the eighteenth century was practically negligible. The Danes had never had any important trade in Bengal. The French commerce in Bengal was also very small until Dupleix was appointed Intendant of Chandernagore, but with his transfer to Pondicherry in 1741 the French trade rapidly declined. The Dutch and the British alone carried on a flourishing trade in Bengal during the first half of the eighteenth century. After the acquisition of political authority in Bengal by the British East India Company, the Dutch were ousted from the field and the English Company enjoyed the monopoly of foreign commerce in Bengal. As already noted above, the Charter Act of 1813 abolished the monopoly of the Company’s Indian trade, and the Charter Act of 1833 finally put an end to the commercial activities of the Company.
The volume of inland and foreign trade of Bengal, other than that carried on by the European Companies, was also very large during the first half of the eighteenth century. The Hindu, Armenian and Muhammadan merchants carried on a brisk trade with other parts of India and with Turkey, Arabia, Persia and even Tibet. The balance of foreign trade was, however, always in favour of Bengal, and the surplus value of its exports had to be paid for in gold. As a matter of fact, during the period 1708-1756, bullion formed nearly three-fourths of the value of total imports to Bengal.
The most important articles of export from Bengal were cotton and silk piece-goods, raw silk, sugar, salt, jute, saltpetre and opium. The fine cotton cloths, especial the Dacca muslin, were in great demand all over the world. Bengal cotton goods were exported in large quantities by the European Companies and went overland to Ispahan and by sea to the markets of Basra, Mocha and Jedda. The Dutch exported annually three-quarters of a million pounds of Cassim bazar raw silk either to Japan or to Holland in the middle of the seventeenth century, and a large quantity was exported to Central Asia. Even in ‘Alivardi Khan’s time, nearly seventy lacs of rupees’ worth of raw silk was entered in the Customs Office books at Murshidabad exclusive of the European investments.
Bengal was the chief centre of the sugar industry and exported large quantities of the commodity even in the middle of the eighteenth century. Down to the year 1756, a considerable trade in Bengal sugar was carried on with Madras, the Malabar coast, Bombay, Surat, Sind, Muscat, the Persian Gulf, Mocha and Jedda. The jute industry of Bengal also began to develop in the middle of the eighteenth century.
An eminent English authority has observed that even in the year 1756 there was a large volume of trade flowing to Bengal from “the coast of Coromandel and Malabar, the Gulf of Persia and the Red Sea, nay even Manila, China and the coast of Africa”. Thus down to the eve of British rule there was a rich and prosperous trade in Bengal due to its flourishing agricultural and manufacturing industries.
The battle of Plassey was, however, a great turning-point, not only in the political but also in the economic history of Bengal. Apart from the resulting misrule and confusion, which had an adverse effect upon trade and industry, several causes directly operated in impoverishing the country and ruining its rich and prosperous trade and industry.
1. To begin with, there was the large economic drain. Mir Jafar and Mir Kasim had to pay enormous sums of money to the Company and its servants for gaining the throne of Bengal. During 1757-1765 it amounted to more than five millions sterling. From 1765 when the Company received the Diwani, the surplus revenue of Bengal was invested in purchasing the articles exported from India by the English East India Company. By 1780, when this drain of wealth finally ceased, its amount had exceeded ten millions. There were, besides, exports of bullion to China, and the huge private fortunes of the servants of the Company, a substantial part of which must have found its way, in some shape or other to England. It has been estimated that the total drain from Bengal to England during the period 1757 to 1780 amounted to about thirty-eight million pounds sterling. It is immaterial whether this wealth was transferred in the form of bullion or in the shape of articles of export in exchange for which Bengal received nothing. The fact remains that Bengal became poorer in the course of twenty three years by nearly sixty crores of rupees (which was equivalent to three hundred crores of 1900, the purchasing power of the rupee being then at least five times as high). This heavy drain must have greatly impoverished the province, and crippled its capital wealth to the serious detriment of its trade and industry.
2. Abuse of Dastaks. In 1656, the East India Company obtained from Prince Shuja, the governor of Bengal, exemption from payment of the usual customs duty of 2.5 per cent in return for an annual payment of Rs. 3,000. Murshid Quli Jafar Khan having refused to make this concession, the English Company obtained a fresh Charter from the Emperor Farrukhsiyar in 1717, renewing the same privileges. The Nawab, however, stipulated and the Company agreed that the Company’s passports or dastaks could not be used for internal trade, and that they should cover the cases of only such articles as were either imported, or intended to be exported, by sea.
But the concession was abused in two ways. In the first place the servants of the Company used the dastaks for their private trade, and secondly the dastaks were sold to Indian merchants to enable them to evade the customs duty. In spite of the vigilance of Murshid Quli and ‘Alivardi, the abuses became very extensive, and were subsequently complained of by Siraj-ud-daulah. With the accession of Mir Jafar, these abuses became widely prevalent, and the servants of the Company also claimed exemption from the payment of duties in respect of inland trade. Mir Jafar made piteous complaints to the English Governor in Calcutta, but with no success. The result was that the Company’s servants monopolies the inland trade of Bengal and amassed huge fortunes, while the Nawab lost a large amount of revenue and the Indian traders were ruined by this unfair competition. In addition to this, the servants of the Company made unjust and illegal profit by oppressing the poor people. About them Mir Kasim wrote to the Company’s Governor in 1762: “They forcibly take away the goods . . . for a fourth part of their value; and by way of violence and oppression, they oblige the ryots to give five rupees for goods which are worth but one rupee.” Official documents of the Company confirm this state of things, and add that those who refused the unjust demands of the Company’s servants were “flogged or confined”.
Mir Kasim protested against these iniquities more vigorously than his predecessor, and when the Council refused to grant any redress, he abolished the inland duties altogether, so that all the traders should be on an equal footing. As we have seen above, this led to his quarrel with the English and cost him his throne.
3. Virtual monopoly enjoyed by the Company. The oppression of the Company’s servants soon took a new turn. In order to ensure a regular and abundant supply of cotton goods, the Company entered into forward contracts with the weavers to supply stipulated quantities of cloth at fixed dates. This became a new source of oppression in the hands of their servants. Armed with the authority of the Company, they forced the poor weavers, on pains of flogging, to sign most iniquitous bonds. The latter were paid for their goods much less than their usual price, sometimes even less than the cost of materials, while they were forbidden to work for any other party on pain of corporal punishment. A similar policy was adopted towards the workers in raw silk.
