Churchill's Secret War (12 page)

General Robert Clive’s victory in 1757 had drastically altered India’s economic relationship with the United Kingdom. “Very soon after Plassey, the Bengal plunder began to arrive in London, and the effect appears to have been instantaneous; for all authorities agree that the ‘industrial revolution,’ the event which has divided the nineteenth century from all antecedent time, began with the year 1760,” wrote nineteenth-century American historian Brooks Adams. The tribute from India, which amounted to almost a third of Britain’s national savings for the last three decades of the eighteenth century, financed trading networks, serving as lubricant for the new economic engine. It also enabled suddenly wealthy merchants to wrest power from the monarchy and stabilize the British parliamentary system, which would thereafter provide consistent support for their ventures. Ironically, the lack of liberty in the colonies subsidized the increasing political freedom in the United Kingdom.
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Its head start in industrialization meant that “for nearly fifty years Great Britain stood without a competitor,” Adams continued. During this period British banks, loaded with colonial spoils, lent to and traded with North America, Europe, and Australia, thereby helping them industrialize. These continents imported British machines and erected
tariff barriers behind which they nurtured their infant industries. The pace of advancement in the United States and Germany ultimately left the United Kingdom behind, but Indian revenues would allow the imperial nation to retain its financial primacy well into the twentieth century. “Under English domination, India became a key foundation of the emerging worldwide capitalist edifice,” wrote historian Eric Wolf.
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“India is your great free market,” Lord Randolph Churchill reminded Parliament in 1887. “Every kind of British goods flows into India without the smallest obstacle, and the possession of India is of incalculable value on that account to the British working man.” During the preceding century, however, while its own economy industrialized, the United Kingdom had sheltered it from Indian imports, especially textiles. The new spinning machines were initially banned in the colony, and by around 1800 Indian cotton and silk products were either banned in Britain or subject to import duties of 30 to 80 percent. “[H]ad not such prohibitory duties and decrees existed, the mills of Paisley and Manchester would have been stopped in their outset, and could scarcely have been again set in motion, even by the power of steam,” remarked historian Horace Hayman Wilson. Between 1790 and 1830, textile exports from Bengal fell by 95 percent, while those from the rest of India were reduced by 30 percent.
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Instead, bales of raw Indian cotton and silk came to feed Lancashire mills, which churned out cloth cheaper than many an Indian artisan could. Targeted tariffs ensured that not only would Indian textiles fail to sell in England; they would often be more expensive than English textiles sold in India. English cottons paid at most 3.5 percent duty upon import into India, whereas native products were subjected to internal duties of up to 17.5 percent. As a result, Calcutta, which had sent to London £2 million worth of cotton goods in 1813, instead imported the same value of similar British goods in 1830. Dacca, whose translucent muslin had once evoked awe, became ghostly as its specialized craftsmen deserted or died of starvation. Around 1848, spinning machinery was allowed into India, but tariff barriers continued to hinder
the rise of a domestic industry until the 1870s, when a few mills came up near Bombay.
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By the mid-nineteenth century, half of the United Kingdom’s exports came from cotton manufactures and virtually all of India’s from its fields. The colony had been reduced “from the state of a manufacturing to that of an agricultural country,” as a director of the East India Company had predicted in 1823. In many villages of India, spinning wheels, which women had operated between bouts of housework, and weaving looms, which men had worked in slack seasons, were stilled. Bereft of income from their cottage industries, villagers became ever more dependent on the crops of the fields.
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The paucity of manufactures also meant that agricultural exports had to bear almost the entire burden of India’s permanent financial obligation to the United Kingdom. The most visible portion of this payment, the Home Charge, met the expenses of overseas wars in which the Indian Army fought; the interest on mutiny charges, railway investment, and other debts; the pensions of British citizens who had been employed in the colony; and all expenses, including salaries and banquets, associated with the India House in London. The Home Charge, which Her Majesty’s Government regarded as fair payment for services rendered and capital employed, came to £20 million per year by the end of the Victorian era. Indian nationalists such as Dadabhai Naoroji argued that because virtually all of India’s foreign exchange earnings were used for paying the Home Charge, and for remitting to the United Kingdom the earnings of British citizens stationed in India, those profits could not be invested in domestic agriculture and industry. Most Indians thus remained so poor that they could not compete with foreign consumers in buying grain—with the result that a significant portion of the crop ended up abroad. Nationalist historian Romesh Chunder Dutt calculated that to meet its foreign exchange requirements India had to annually export rice, wheat, cotton, tea, jute, indigo, opium, and other produce of the land, equal in value to a year’s cereal for 25 million people.
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Such was the turn of the screw: to pay their rent, interest, and other dues, cultivators had to surrender their harvest, part of which was exported, thereby earning foreign exchange to pay for the charges, remittances, and imports (such as silver to maintain the flow of currency). The tax and interest demanded of the grower meant not only that his produce would be extracted and placed on the market but also that after meeting his liabilities he would have little money left with which to buy food for the family—which in turn boosted grain exports.

The advent of railways in the late 1850s had made matters worse. The Government of India guaranteed British financiers a 5 percent return on railway investment, compared with the 3 percent interest that banks offered. As a result, more than 25,000 miles of railway track, connecting every corner of the country, would be laid by 1900—“an impressive achievement indeed, but a very costly one too,” comments historian Dietmar Rothermund. He found that each mile of railway track cost Indian taxpayers 10,000 rupees for annual debt service, at a time when their average income varied from 20 to 30 rupees a year. As promised, trains helped to bring grain into famine-stricken locales, but that merely spread high grain prices over a broader area: whereas in an earlier era a famine would have killed many in a small region, now all the poorest in a larger region died.
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To top it all, the Suez Canal opened in 1869, halving the shipping time from India to the British Isles. A few years later, export duties on wheat were eliminated and rail freight charges to the ports were reduced well below those for transport within the country. In consequence, a greater portion of the crop ended up abroad. During the last three years of the 1870s, a time of famine when millions starved to death, India sent abroad seven times more grain than during the first three years of that decade. The colony’s wheat crop was exported at such cheap rates that it determined international overall prices between 1870 and 1900.
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Historian William Hunter observed in 1874 that in Bengal, if the price of rice after the winter harvest was twice that in a normal year, it foretold a famine—and a price three times the normal, later in the year, indicated that the famine had already set in. Yet even a tripling in the
cost of rice, enough to depopulate hundreds of villages, was of little financial significance to a consumer in the United Kingdom. Whereas the colony and the colonizer probably had the same level of prosperity in the mid-eighteenth century (with Bengal having been richer than this average), by the end of the Victorian era the per capita income in the United Kingdom was twenty times that in India. The industrial revolution and imperial policy had plugged India smoothly but asymmetrically into the global economy, such that the high incomes abroad siphoned off a good part of the grain that the land revenue system extruded onto the market. Because the grain was free to follow the cash out of the country, this forced-feedback loop went by the name of free trade.
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Nationalists invariably demanded that cereals not be allowed to be exported in times of famine. But the authorities pleaded the virtues of free trade, and local administrators who curbed exports or otherwise interfered with market forces were severely chastised. Even during devastating famines, the government rigorously collected agricultural taxes, thereby feeding whatever harvest there was into the free market. If the revenue collectors could not gather all the tax due during a famine, they recovered it the following year, along with that year’s dues. “The one good harvest that stood between the famine of 1897 and 1899 had to pay the famine revenue and the revenue for the current year,” observed journalist Vaughan Nash, so that “when the moneylenders had taken their share, the cultivator had nothing left for a rainy, or, rather, a rainless day.”
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The crux of the matter was that India’s agricultural exports had become crucial to the United Kingdom’s economy. The imperial nation settled more than a third of its trade deficit with the United States and Europe by means of India’s export surplus. Prohibiting the export of food from India would make it more affordable within the colony, admitted economist Fred J. Atkinson in 1909. Yet such a measure would adversely affect India’s trade balance, reduce the value of the rupee, and make the Home Charge (which had to be paid in sterling) effectively more expensive. Moreover, Atkinson continued, “if the food supply
from India ceased, unless the gaps could at once be filled from elsewhere, food prices outside India would rise, and this, owing to the existence of unions and their methods of enforcing their wishes by means of strikes . . . might affect wages outside India and thus indirectly all prices.” Should Indians eat their grain instead of exporting it, they would destabilize the economy of the United Kingdom.
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The death toll from the nineteenth-century famines is difficult to estimate, because starvation and disease fed off one another. Civil servant William Digby calculated a famine toll of 28.8 million for the latter half of the nineteenth century, but this number is probably too high. For instance, Digby obtained 10.3 million as the famine mortality from 1876 through 1878, whereas demographer Arup Maharatna calculates 8.2 million. Part of the discrepancy arises from contemporary observers having added up all starvation deaths, whereas modern scholars subtract from this total the deaths expected in a normal year. Because starvation was widespread even in so-called normal years, the modern method does not include all fatalities from hunger. A more meaningful measure is life expectancy, which can be calculated from after 1871, when the first nationwide census took place. The years of life a newborn Indian could expect hovered at about twenty-four until 1920, after which the age slowly increased.
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In contrast, life expectancy in Great Britain improved throughout the Victorian era to reach forty-seven years by its end, in large part because of better nutrition. In 1905, arguing in favor of free trade, Winston Churchill observed: “The harvests of the world are at our disposal, and, by a system which averages climatic risks, we secure not merely a low but a fairly stable price. With that marvellous operation by which the crowded population of this island is fed, we cannot take the responsibility of interfering.” During his 1930s campaign against Indian self-government, Churchill went so far as to warn of famine engulfing the United Kingdom if, “guided by counsels of madness and cowardice disguised as false benevolence, you troop home from India.” He feared that a full third of the English population would perish if the empire was lost.
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By then, however, India was no longer a net exporter of grain; the outflow of depression gold would instead enable the colony to temporarily meet its financial obligations to the United Kingdom. On the contrary, India imported cereals. Whereas in the nineteenth century it had been producing more than required to feed the people (had the grain stayed in the country), the population’s needs had since overtaken food production. But the depression slashed the net earnings of Bengali peasants, the vast majority of whom needed to buy some rice for their families, by 90 percent—with the result that they could not import enough. A 1933 survey revealed that 41 percent of India’s inhabitants were “poorly nourished” and another 20 percent “very badly nourished,” with the statistics for Bengal being worst of all: 47 and 31 percent, respectively. The province underwent serious food scarcities in 1934 and 1936; mass migration, the most egregious sign of famine, was averted thanks to rice shipments from Burma.
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By the time World War II hit, India was importing between 1 and 2 million tons of rice a year from Burma and Thailand. That lifeline would be cut by the Japanese occupation of Southeast Asia—just when India had again become an exporter of grain, this time for the war effort.
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“I WOULD GO to the political gatherings to listen,” said Chitto Ranjon Samonto, recalling his teenage experiences in rural Bengal of 1941. “They would say, leave school, come join us, we’ll free the country. But in school we sang the praises of the British.” Not until someone handed him a copy of the nationalist novel
Anandamath
did he make up his mind. “It inspired me to get rid of the British,” Samonto said.

Samonto hailed from Kalikakundu village in southeastern Midnapore. According to legend, Kalikakundu received its name from an image of the goddess Kali, carved out of black rock, that was discovered in a local pond
(kundu)
in the distant past. Two thousand years ago, this coastal region belonged to the glittering port city of Tamralipta, which berthed ships from as far off as the Roman Empire and China. Old fragments of terra-cotta testify to a cultural and spiritual melee. They depict harvesting scenes, copulating couples, and festivals with
musicians and dancers; scenes from the mythology of Jains, many of whose descendants worship the god Krishna; heads of the Buddha, who attained enlightenment in neighboring Bihar; figures of the sun god and other Aryan deities; phalluses of the fertility god Shiva; portraits of the goddess Durga felling the buffalo demon; and others. Tamralipta has since metamorphosed into the dusty and impoverished town of Tamluk. But Midnapore’s villagers exhibit an easy tolerance of other ways of life whose origins probably lie in that distant, cosmopolitan tumult.
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