HIS282Y1 Lecture Notes - Mir Jafar, Alivardi Khan, Subsidiary Alliance
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The East India company and its early period.
Benghal, the Mughal successor state is important because it’s the center of a
triangular trade between Britain, India and China and also agriculturaly important.
Gradually the British built up Calcutta with their trade. It comes to India, buys luxury
goods and sells them in china for a profit which is used to buy tea, which is sold in
Britain at an even higher profit. The company has to pay for indian goods with silver
so it develops close ties with the banking houses, especially the two that are on the
In 1757 the Nawhab of Bengal is Siraj Uddaula, the grandson of Alivardi Khan, the
one who consolidates the great successor state (as governor). The French are also
there, like bankers and landlords. He demands that the English stop building
fortifications in Calcutta which they had actually begun under his own grandfather
who had made a subsidiary alliance. The British now begin to demand that they
have more troops in the city. He also begins demanding more money from
merchants and levying higher taxes to finance his own army.
They are increasing the military fortifications not only because of the India people
but mostly because of the French. Therefore he goes from Murshidabad to Calcutta
and defeats the British army at first, but then comes Clive who allies with the
merchant banker families Jagatseth and Omichand who are also disaffected with
the Nawabh and also Mir Jaffer, who was the head of Uddaula’s army who was being
pushed by the Nawab. There is another battle at Plassey where the British wins and
the governor is installed like a British puppet. Clive collects 3 million pounds sterling
for the victory (the equivalent of 300 million pounds today). The army is largely
Indian except for the generals who are always british, but it is also a mercenary
army so they need money to pay them, another reason why they need the bankers.
The next one is Mir Kassim, successor of Uddaula.
In 1764 he tries to ally with Abad, followed by another battle and the company
defeats the last remaining armed control in India. 1765 the British obtain from the
Mughal emperor, a symbolic authority, the right to the diwani of Bengal, its revenue
and treasury. It obtains the right to collect all revenues from it. Once they have
control of that, the administration of its treasury changes because they don’t have
to bring in silver bullion anymore but instead they use the revenue of Bengal for
trade. They are used not only to purchase the commodities of Bengal but also to
finance the conquest of other parts of India as the revenues of Bengal are very
substantial. They are used to counterbalance losses in trade and the more they
conquer the bigger the army gets the more they have to pay. The regularization of
revenue is extremely important, it’s what informs the permamnet settlement of
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