FRENCH IMPACT France's most influential and successful period in India coincided almost completely with the reign of Louis XV (1723–1774). After the death of Louis XIV in 1715, the French East India Company created by Jean-Baptiste Colbert was replaced by a reconstructed French company of the Indies (Compagnie Française des Indes). The reason had to do with the moribund state of the company of Colbert, and the agents of this change were the regent, the duke of Orléans, and his financial adviser and controller general, John Law. This new company was far more profitable than its predecessor, and it reached its apex of power and influence in India during the governor-generalship of Joseph François Dupleix. At one point, it was a major threat to the British East India Company's commercial empire and seemed to be in position to drive its rival from the subcontinent. At its height, the French were perhaps the wealthiest and most powerful Europeans in India. However, largely due to repeated wars for supremacy fought between France and England in Europe, North America, and India, the French Company of the Indies lost its primacy and then its vigor during the Seven Years' War. It lasted until the French Revolution, but as a shell of the company that Dupleix had left behind at the time of his recall in 1754. The tactics and strategy adopted by Dupleix to accomplish this primacy formed the paradigm for what came to be called the "Nabob Game" when adopted by his rival and imitator, Robert Clive. French control and influence continued in Pondicherry, even now a French-speaking enclave on the Coromandal coast.
In 1714 the monopoly of the French East India Company (La Compagnie Française des Indes Orientales) founded by Jean-Baptiste Colbert expired. At the time of Louis XIV's death the next year, the company too seemed to be terminally ill. Its prospects were dim; the War of the Spanish Succession had cut profits, it was heavily in debt, its capital was undersubscribed, and disputes among the directors had sapped their energy and made it harder to obtain credit. In the previous three years the company had been leasing its trading privileges to merchants from St. Malo, the main competitor to the company's own port facilities in Lorient, its only revenues. Before dying, Louis XIV had granted the moribund company a ten-year extension with the expectation that the additional time would allow it to turn around or at least provide for its orderly liquidation.
Louis XIV also left behind an empty Royal Treasury. In this difficult environment, the duke of Orleans, regent (1717–1723), turned to a package of financial initiatives to stimulate the French economy. They were proposed by a Scotsman, John Law, who had seen the success of the Bank of England (flourished 1694) in increasing the money supply through the issuance of bank notes and the subsequent creation of financial enterprises that increased the value of those bank notes through guaranteed bonds and transferable stocks.
John Law's major proposals led to the creation of a Bank of France (La Banque Gènèrale) empowered to issue paper bank notes and to the merger of trade monopolies in both the West Indies and East India into one French company chartered by the regent. In 1717 the regent had granted Law monopoly trade rights in the Caribbean, Canada, and Louisiana to a publicly traded French West India Company, La Compagnie Française des Indes Occidentales. Its merger in 1719 with La Compagnie Française des Indes Orientales resulted in an entity named, simply, Company of the Indies (La Compagnie des Indes). It was formed over the objections of both the French company's directors and the merchants of St. Malo, and litigation continued until 1751.
The sale of stock in the conglomerate precipitated an inrush of capital and unprecedented speculative fever. Prices doubled and redoubled, but within months, the market crashed in a scenario reminiscent of the "South Seas Bubble" in contemporaneous England. A rush on the Bank of France soon exposed the fact that there was not enough specie on hand to cover all the paper bank notes. To salvage the situation, Law, on behalf of the Company of the Indies, offered to accept all shares at face value in return for a perpetual monopoly (its ten-year extension was due to expire in 1724). It was consequently renamed the Perpetual Company of the Indies (La Compagnie perpétuelle des Indes), the name it retained until its demise.
Its credit seriously tarnished, the Perpetual Company of the Indies cut all ties with Law and was exhaustively reorganized into a private monopoly in which the king and regent kept substantial investments, but with a board of directors appointed by the king and closer royal over-sight by the controller-general. The initial influx of capital had enabled Law's company to begin to put essential infrastructure into place, commissioning ships, buying cargoes, engaging crews, and otherwise preparing for voyages to India. Law had wisely purchased the tobacco monopoly, which assured a steady income, in return for an extension in perpetuity of the monopoly then slated to expire in 1724, and that provided for a steady and reliable annual income.
In addition to the tobacco monopoly, the major assets of the Perpetual Company were its trade monopolies with Asia and the West Indies. Commerce from the West Indies was generally disappointing, with only the slave trade showing profits. In India the major assets were trading colonies. French establishments, some no more than a warehouse, were located in Surat, Chandarnagar, Calicut, Dhaka, Patna, Qasimbazar, Balasore, and Jogdia, but Pondicherry on the Coromandal coast in India was the most vital of them all. Even though its port facilities were insufficient, its commercial viability was based on the ready availability of the silk and cotton textiles, for example, calico and muslin, produced by nearby cottage industries.
In order to grow its assets, the Perpetual Company expanded and improved its trading colonies. A settlement in Mahé was established, as was a secure and reliable way station on the Île de France (present-day Mauritius), replacing the never-successful stopover in Madagascar. During the 1730s under the leadership of Dupleix, Chandarnagar, close to Calcutta, was turned into a viable and habitable center of trade. East Indiamen of the Perpetual Company had, therefore, a choice of ports with which to engage in country trade. Country trade referred to a trading voyage between ports east of Africa to anywhere in Asia, but most often within India.
Agents for all East India companies engaged in country trade to supplement their meager salaries. Fortunes could be made in this private commerce, but by engaging in it, they played a dual role, purchasing goods as agents for their companies as well as on their own behalf. Due to a lack of effective controls, agents could make enormous fortunes at the expense of their company's profits. The hint that these fortunes were obtained by defrauding their employers underlay the pejorative use of the term "nabob" to refer to such agents.
The Perpetual Company of the Indies was also profiting from a decrease in competition. The Dutch East India Company, the chief bane of Colbert's company, withdrew to Indonesia after the Treaty of Utrecht in 1713. So the Perpetual Company of the Indies was in competition only with the British East India Company. By around 1740, French trade equaled half that of the English and might well have surpassed it, except that the British Company was heavily invested in tea, a commodity popular in England.
A third reason the restructured company's trade grew so dramatically was that it had three activist and extraordinarily capable governors-general in India: Pierre Christophe Lenoir, Pierre Benoist Dumas, and Joseph François Dupleix. They were ably supported by directors in Paris who valued Indian experience; both Lenoir and Dumas became directors upon their return. De Godeheau de Zaimont, the director who replaced Dupleix in 1754, had worked in India years before. Dupleix was a supernumerary director, whose proxy attended regular meetings in Paris.
As already mentioned, Dupleix was the governor of Chandarnagar responsible for developing that trading colony's value to the company. The administration of Dupleix as governor-general in Pondicherry (1742–1754) coincided with the height of French influence, wealth, and power, and so he is rightfully regarded as the greatest of France's governors-general and is often considered the inventor of the Nabob Game. Dupleix's version of the Nabob Game is perhaps the greatest contribution of the French in India.
Dumas and Dupleix, perhaps more than any other Europeans, analyzed the political situation in India and saw how to use it to French advantage. With the death of the last of the Great Mughals, Aurangzeb, in 1707, the vast territories he had spent his life conquering began to break up, leaving the potential for chaos. By the 1720s, any potentate with a title and armed forces, such as a mānsabdār, could gain control of a region and claim to rule. All that was required was taking control of its resources, assuming its governance, albeit without openly rebelling against the center, and actively using for their own ends whatever share of imperial authority they could grab. The Mughal successors to Aurangzeb were weak and offered little or no resistance to these secessions. Some of the first to go, and certainly the most notable, were the nawāb of Oudh (present-day Ayodhya) and the nizam of Hyderabad. Although their revenues and titles had been granted them by the Mughal emperor, once they removed themselves to their territories they began increasingly to rule as if sovereigns. They assumed the right to appoint revenue officials and collect land taxes, to select their successors, pursue independent diplomatic and military activity, and mint coins locally. For Muslim rulers, the final break was marked when their name was recited during Friday prayers.
By the 1730s, the Perpetual Company of the Indies was also pursuing the benefits of having titles and land revenues granted by Mughal authority, but with autonomy at least equal to the local governors, or nawābs. For instance, in 1736, during the administration of Dumas, the Perpetual Company of the Indies was given the title of nawāb and the rank of mānsabdār over five thousand cavalry by the Mughal emperor. Dupleix, stationed at the time in Bengal, closer to the Mughal court, was instrumental in this initiative. He was also in regular correspondence with the nawāb of Oudh. Dumas in Pondicherry would have been in diplomatic contact with the nizam of Hyderabad. Clearly, the Perpetual Company had established independent diplomacy with important elements of the Mughal administration of the country. Because Dumas insisted that the title of nawāb and rank of mānsabdār belong to the company, a corporate entity, and not to him, he anticipated the question of succession. Additionally, the company obtained the right to mint silver rupees in Pondicherry, saving several percent in minting costs. When combined with the grants given of the right to collect revenues in villages in the vicinity of Pondicherry, the Perpetual Company had become, for many intents and purposes, a sovereign entity in India, although it remained a commercial concern in France.
From both political and commercial points of view, assuming Mughal titles and ranks were brilliant moves that became central to the Nabob Game. Not only were demands on the company coffers reduced, a new revenue stream in local currency was introduced to the books. Company control of villages could also be used for encouraging the production of piece goods in cottage industries. A further benefit was the legitimization of armed force—an attractive prospect to a wealthy trade center in times plagued by plundering warlords.
Upon Dumas's retirement to France, where he took a seat on the board of directors, his successor, Dupleix, was faced with a new challenge: armed rivalry with the English in South India. During the private war between the English and French companies (1744–1748) that echoed the War of Austrian Succession (1740–1748), Dupleix captured Madras (Chennai) with the help of a fleet under the command of Mahé de la Bourdonnais. It was restored to English control under the terms of the Treaty of Aixla-Chapelle, but by then, both companies had became ever more deeply involved in India's local power struggles, allying with or battling, at different times, the Marathas, the nizam of Hyderabad, and the nawāb of Arcot.
Unfortunately, time was not on the side of the French East India Company. It had lost a significant part of its merchant marine to the British navy during the war. English forces under the command of an energetic Englishman, Robert Clive, reversed Dupleix's initial victories on the ground in India. It is said that Clive had studied Dupleix well and used his methods boldly. As French losses mounted, Dupleix's policies were perceived back in Paris to be too expensive, and so the directors of the company recalled him in 1754. He died there in 1763, disgraced, disappointed, in debt, and embroiled in lawsuits.
During the Seven Years' War (1756–1763) between France and England, the French were repeatedly defeated in India. Pondicherry was captured in 1761 (and returned to the French). British ascendancy could no longer be challenged after British East India Company victories against the Mughals in Bengal, again with Clive in command, and the decline of the Perpetual Company of the Indies as an economic and political force in the wake of the Seven Years' War. In 1769 the Perpetual Company of the Indies lost its monopoly and thenceforth merely languished until the French Revolution, when it was finally overthrown along with the rest of the old regime.
The impact of the French in India was primarily as European trading pioneers. The Perpetual Company of the Indies formed by John Law during the Regency recovered from early disaster and collapse, only to prosper for three decades because of the energy of its governors-general, notably Pierre Benoist Dumas and most especially Joseph François Dupleix. Their contribution to the history of India, if it can be termed as such, was to correctly analyze and exploit the internal political situation on the subcontinent for the commercial interests of the Perpetual Company. In doing so, they, and particularly Dupleix, set the course of European expansion on the subcontinent that was followed by the British East India Company.
J. Andrew Greig
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