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The Nawab of Arcot and his debts seem rather quaint today. However in the secod half of the Eighteenth Century and in the first decade of the nineteenth, the scandal surroundinghis debts became the suff of high politics. The House of Commons debated about the debts, the Court of Directors and the Government of Madras were all deeply involved in the debates policies or possessed a vested interest as "creditors" in them. Edmund Burke made scathing attacks on the Company for alowing what he termed as "clandestne and collusive practices" between the awab, the Company Officials and the political establishment in England. He charecterised the Consolidated Fund of Arcot as a massive fraud both on the people of Englenad who paid for the Fund and the people of India who were cheated out of their livlihood and legitimate earning. One can certainly say that Burke was the original inventor of the famous Drain of Wealth theory which was propagated by Dadabhai Naoroji as the cause of the improverishment of India,
The most ironic aspect of the whole Scandal is that the only people who were ever convicted during the long years this scandal unfolded were two "natives", Indians who were punished for the cimes committed by Company Officials often colluding with the Governor of the day. George Pigot rrefused to play the game and was arrested by his Council and imprisoned and died in a prson located somewhere in Madras' St. Thomas Mount. Sir George Barlow though occupied with the Revolt of the Madras Army (see earlier blogs) was careful in placating the various interests involved in the huge scandal surrounding the Arcot Debts. What exactly is the origin of this debt and how did it assume such a gigantic propotion that at one point threatened to put an end to the Company or at least its pretentions of sovereignty. Burke in fact labeled the Company the "incubus of oppression" and if we study this tragic episode in the history of the Raj, we find that Burke was right.
The Nawab of Arcot, Mohhamad Ali of the Walajah family was an ally of the East India Company in its wars against the Mahrattas and the Mysore userpers, first Hyder Ali and later Tipu Sultan. He pledged support to the Company and promised a Cavalry force reaised for the purpose of fighting the wars of the Company. However the problems was finance and to finance the military project, Mohmmad Ali turned to the rich Delta of the Kaveri, the rice bowl of South India. The evenuse of this territory alone could help finance the wars of expansion and provide fiscal muscle to the emreging Carnatic Nawabdom. Unfortunately for the Nawab, Tanjare was under the Mharatta ruler Tulaji who was an ally of the Company. Tanjore was not part of the carnatic Pyanghat, the Nait of Mohammad Ali but a section of the Company officials colluded with theNawab and had the Rule of Tanjavur removed so that they could access the rich revenue of the Tanjore Kingdom. tulaji was removed and the Nawab was proclaimed the ruler of the Kingdom, The London Court of Directors ordered the restoration of the ruler Tulaji and to give effect to the order Lord Pigot was sent back to India on a second tour of duty as the Governor of Madras and he reached India in 1776 and in 1777 he was killed/died at the hands of those who supported he claims of the Nawab over those of Tulaji,
From this point onwars the tragedy of Arcot and Tanjore rivalry gets lot more murky. The Nawab of Arcot, who himself came to the throne by killing a young ruler decided to make quick money by issuing tanccuas or receipts for loans whih would be paid against exorbitant rate of interest from the prospective revenues of Tanjore. This was a brilliant strategy on the part of the Nawab as he made the entire Company and its Madras and London officials acquire a vested interest in him and his political fortunes. A large number of speculators entered the market and Arcot Nawab's Revnue promisory notes became the hottest cake in the market. The rate of interest offered varied from 12 to 30 percent and it kept fluctuating according to the political fortunes of the Nawab'
Now enter Avadanum Paupiah and Reddy Row one a Niyogi Brahmin with roots in Nellore and the other a Mahratta brahmin, probably of Desheta background and both accused each other of trading forged bonds. By the end of the Eighteenth Century the Debts had mounted to 30 million pounds and it was well beyon the capaciy of the Madras Government to redeem the Bonds.Englishmen who worked for the Company like George Stratton and Paul Benfield made a killing by trading the Arcot Bonds. Like Junk Bonds of the Twentieth Century, the Arcot Bonds circualted under the shadow of expectation that money lay at the end of the rainbow. Once matters reached London, there was pressure from the creditors on the British Exchequer to honour the bonds issued to privae creditors by a Nawab who was not in possession of the revenue that he assigned to his creditors. As long as the American War of Independence occupied the English mind during the Government of North, the clamour over the debts was muted. The ministry of Lord Rockingham tried to intevene in the affairs of the Company using the Debt as the fine end of the wedge to prise the tightly organised web of profit and patronage that the Company had become by then. But it was defeated and the Fox Ministry tried to bring in the Regulating Act and other measure. Except for appointing Commissioners for the Carnatic Debt the Fox Regime did little.
In the Elections of 1784 Fox and his Policies were soundly rejected and Pitt came to power and more than 30 "India Interest" MPs were elected who ensure that a sum of 5 million pounds is set aside for the liquidation of the Carnatic Debts. Now came the more difficult question of recognizing the bonds that were legal and those which were forged. A Commission of 3 was appointed to ascertain the genuine bonds and identify the forged ones. This Commission became a battlefied of opposing interests: Paupiah and Reddy Row supported different claimants and both had powerful supporters. When Paupiah was convicted by the Commission for forgery on the basis of evidence supplied by his nemesis Reddy Row, he promptly filed a counter suit against Reddy Row in the Mayors Court. Reddy Row had the support of George Barlow and Paupiah the support of a number of Company officials who made a huge forture speculating on the funds. Barlow retaliated by punishing all the officials involved in the procecution of Reddy Row. The eagerness with which the vested interests protected its creatures is worth noticing. Similarly when Holland became the Governor Paupiah who had become very powerful by then engineered the fall of the President of the Board of Revnue who opposed the Betel and Tobacco Monopoly enjoyed by one of the friends of dubash; In the end, Paupiah was brought to trial on the charges of forgery of the very bonds that the Three Man Commission had declared valid and Sis Thomas Strange found his guilty and was sentenced to 3 year prison term. He died in 1809.
The Scandal of Empire as one post modernist Social Science man has termed is mch more than a scandal. It was a crime and the only person who understood the depth of depravity that the Debt Scandal represented was Edmund Burke' Like the Slave Compensation Commission of 1834, the Arcot Debt represents public charge for prvate greed and many English officials returned home as Nabobs thanks to their ill gotten wealth in India and the only ones who paid the price for British greed were tow hapless Indians.
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| Sir Thomas Strange, Chief Justice of Madras |
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| A street view of Fort St. George in the early 19th Century |
The Nawab of Arcot and his debts seem rather quaint today. However in the secod half of the Eighteenth Century and in the first decade of the nineteenth, the scandal surroundinghis debts became the suff of high politics. The House of Commons debated about the debts, the Court of Directors and the Government of Madras were all deeply involved in the debates policies or possessed a vested interest as "creditors" in them. Edmund Burke made scathing attacks on the Company for alowing what he termed as "clandestne and collusive practices" between the awab, the Company Officials and the political establishment in England. He charecterised the Consolidated Fund of Arcot as a massive fraud both on the people of Englenad who paid for the Fund and the people of India who were cheated out of their livlihood and legitimate earning. One can certainly say that Burke was the original inventor of the famous Drain of Wealth theory which was propagated by Dadabhai Naoroji as the cause of the improverishment of India,
The most ironic aspect of the whole Scandal is that the only people who were ever convicted during the long years this scandal unfolded were two "natives", Indians who were punished for the cimes committed by Company Officials often colluding with the Governor of the day. George Pigot rrefused to play the game and was arrested by his Council and imprisoned and died in a prson located somewhere in Madras' St. Thomas Mount. Sir George Barlow though occupied with the Revolt of the Madras Army (see earlier blogs) was careful in placating the various interests involved in the huge scandal surrounding the Arcot Debts. What exactly is the origin of this debt and how did it assume such a gigantic propotion that at one point threatened to put an end to the Company or at least its pretentions of sovereignty. Burke in fact labeled the Company the "incubus of oppression" and if we study this tragic episode in the history of the Raj, we find that Burke was right.
The Nawab of Arcot, Mohhamad Ali of the Walajah family was an ally of the East India Company in its wars against the Mahrattas and the Mysore userpers, first Hyder Ali and later Tipu Sultan. He pledged support to the Company and promised a Cavalry force reaised for the purpose of fighting the wars of the Company. However the problems was finance and to finance the military project, Mohmmad Ali turned to the rich Delta of the Kaveri, the rice bowl of South India. The evenuse of this territory alone could help finance the wars of expansion and provide fiscal muscle to the emreging Carnatic Nawabdom. Unfortunately for the Nawab, Tanjare was under the Mharatta ruler Tulaji who was an ally of the Company. Tanjore was not part of the carnatic Pyanghat, the Nait of Mohammad Ali but a section of the Company officials colluded with theNawab and had the Rule of Tanjavur removed so that they could access the rich revenue of the Tanjore Kingdom. tulaji was removed and the Nawab was proclaimed the ruler of the Kingdom, The London Court of Directors ordered the restoration of the ruler Tulaji and to give effect to the order Lord Pigot was sent back to India on a second tour of duty as the Governor of Madras and he reached India in 1776 and in 1777 he was killed/died at the hands of those who supported he claims of the Nawab over those of Tulaji,
From this point onwars the tragedy of Arcot and Tanjore rivalry gets lot more murky. The Nawab of Arcot, who himself came to the throne by killing a young ruler decided to make quick money by issuing tanccuas or receipts for loans whih would be paid against exorbitant rate of interest from the prospective revenues of Tanjore. This was a brilliant strategy on the part of the Nawab as he made the entire Company and its Madras and London officials acquire a vested interest in him and his political fortunes. A large number of speculators entered the market and Arcot Nawab's Revnue promisory notes became the hottest cake in the market. The rate of interest offered varied from 12 to 30 percent and it kept fluctuating according to the political fortunes of the Nawab'
Now enter Avadanum Paupiah and Reddy Row one a Niyogi Brahmin with roots in Nellore and the other a Mahratta brahmin, probably of Desheta background and both accused each other of trading forged bonds. By the end of the Eighteenth Century the Debts had mounted to 30 million pounds and it was well beyon the capaciy of the Madras Government to redeem the Bonds.Englishmen who worked for the Company like George Stratton and Paul Benfield made a killing by trading the Arcot Bonds. Like Junk Bonds of the Twentieth Century, the Arcot Bonds circualted under the shadow of expectation that money lay at the end of the rainbow. Once matters reached London, there was pressure from the creditors on the British Exchequer to honour the bonds issued to privae creditors by a Nawab who was not in possession of the revenue that he assigned to his creditors. As long as the American War of Independence occupied the English mind during the Government of North, the clamour over the debts was muted. The ministry of Lord Rockingham tried to intevene in the affairs of the Company using the Debt as the fine end of the wedge to prise the tightly organised web of profit and patronage that the Company had become by then. But it was defeated and the Fox Ministry tried to bring in the Regulating Act and other measure. Except for appointing Commissioners for the Carnatic Debt the Fox Regime did little.
In the Elections of 1784 Fox and his Policies were soundly rejected and Pitt came to power and more than 30 "India Interest" MPs were elected who ensure that a sum of 5 million pounds is set aside for the liquidation of the Carnatic Debts. Now came the more difficult question of recognizing the bonds that were legal and those which were forged. A Commission of 3 was appointed to ascertain the genuine bonds and identify the forged ones. This Commission became a battlefied of opposing interests: Paupiah and Reddy Row supported different claimants and both had powerful supporters. When Paupiah was convicted by the Commission for forgery on the basis of evidence supplied by his nemesis Reddy Row, he promptly filed a counter suit against Reddy Row in the Mayors Court. Reddy Row had the support of George Barlow and Paupiah the support of a number of Company officials who made a huge forture speculating on the funds. Barlow retaliated by punishing all the officials involved in the procecution of Reddy Row. The eagerness with which the vested interests protected its creatures is worth noticing. Similarly when Holland became the Governor Paupiah who had become very powerful by then engineered the fall of the President of the Board of Revnue who opposed the Betel and Tobacco Monopoly enjoyed by one of the friends of dubash; In the end, Paupiah was brought to trial on the charges of forgery of the very bonds that the Three Man Commission had declared valid and Sis Thomas Strange found his guilty and was sentenced to 3 year prison term. He died in 1809.
The Scandal of Empire as one post modernist Social Science man has termed is mch more than a scandal. It was a crime and the only person who understood the depth of depravity that the Debt Scandal represented was Edmund Burke' Like the Slave Compensation Commission of 1834, the Arcot Debt represents public charge for prvate greed and many English officials returned home as Nabobs thanks to their ill gotten wealth in India and the only ones who paid the price for British greed were tow hapless Indians.
ReplyDeleteDubash, Avadhanam Paupiah who was the factotum of the brothers and became for a time the most influential and dreaded man in Madras. This could not have been possible without the support of the British. In other words, he was much exploited by the EIC officials, for his multi-lingual skills and mathematics.
Paupiah Brahman, the Company’s Linguist, wrote that the new Nawab’s rule was “the most spiritless, covetous, severe and unjust” of all the administrations of the Carnatic. So as a faithful servant, he had done so. Contrary, the Nawab documents would have cursed him, as a kafir was spying over a momin.
Paupiah rose from the humble rank of a writer to be the anchorage accountant under the sea customs officer. It is because, again his services were required by the British for their evasion of Customs duty, carrying away Indian valuables and so on. That is how even Yale evaded Customs duty.
What Haliburton had done was not known to Indian historians or researchers. Similarly, we have never seen any of the documents of Paupiah or Reddy or Row to know their versions. Indian historians and researchers have been made to red the British documents and tell the stories.
Paupiah was such a claimant and was examined by the committee of inquiry that was ordered to examine the alleged forged bonds. Paupiah himself was tried for conspiracy at the Quarter-Sessions of 1792 by the Governor, Sir William Medows, who presided over the court. Paupiah was imprisoned for three years and fined a large sum. He was, however, exempted by the jury from the ignominy of standing in the pillory for an hour, to which he was at first condemned. Yes, the British wanted to show some gratitude towards his services.
“A prosecution for forgery was started against Paupiah in 1808; but he escaped further ignominy by death.” Yes, he must have been another Nandakumar.
It has been recorded that, “Paupiah was a typical Dubash of the lower type. But his corruption was largely a consequence of the corruption in which even some of the Europeans themselves indulged. His name is even now remembered in Madras being that of a street in Choolai”. Without the corruption of the masters, how a native faithful servant could indulge himself in such corruption.
K. V. Ramakrishna Rao
07-09-2020