To those back in England, Robert Clive represented the archetypal ‘nabob’. The word is a corruption of the Persian term nawab and denoted an East India Company merchant or officer who had amassed immense wealth in the East. Clive left England in his teens to become a factor and returned 22 years later as a multi-millionaire. The Georgian aristocracy, including the King, considered them nouveau riche and, as with investment bankers today, there was widespread resentment that the Company’s enormous revenues were shared between so few. The nabobs also faced widespread criticism on the grounds of their immorality and abuse of power both in India where they controlled a colossal army, and in London, where they were accused of using bribes to influence Parliament. This disquiet soon came to a head. Following the takeover of Bengal, the Company substantially increased taxes in the region at a time of severe drought. The result was catastrophic: between 1769 and 1773 a great famine swept Bengal, killing an estimated ten million people. In notes George III made from a letter received from India, he recorded that there were ‘many reasons alleged for this severe calamity, particularly the monopoly of Cotton by the servants of the Company, and the unfair means of raising the price of grain’.[10] The Company’s tax revenue fell severely short of its forecast, and, with the enormous costs of their military exploits, the Company’s finances faced total ruin.[11] As knowledge of this disaster spread, 30 banks across Europe collapsed.[12] The global financial crisis intensified and the British government had to decide whether the East India Company should be allowed to go under. Clive was summoned before Parliament in May 1772. He claimed he had never participated in corruption and was solely motivated by his sense of duty: If the administration had done their duty we should not now have heard a speech from the Throne intimating the necessity of Parliamentary interposition to save our possessions in India from impending ruin [...] I say frankly that I am not ashamed of any of the means which I have employed, and that I would use them again under the circumstances.[13] With many MPs holding shares in the East India Company, orders were given in 1773 for the first government corporate bailout. The Company was saved by public money, but Parliament passed a Regulating Act to legislate for the reorganization of the Company’s administration.[14] This included making the Governor of Bengal, the largest and most profitable presidency, superior to those of Madras and Bombay. He would be advised by a Supreme Council in London that would include members appointed by the King. Warren Hastings (1732–1818) (fig. 15) was appointed the first Governor-General of Bengal to oversee the Company’s reform. Yet the scandal of corruption did not go away and soon he too became the object of allegations of misconduct and financial mismanagement. In 1779, the King wrote that ‘the Company is ruined and Parliament turned to ridicule unless Mr. Hastings is instantly removed from his situation’.[15] Following a painful defeat in the First Anglo-Maratha War (1775–82), Charles James Fox attempted to nationalize the Company in his 1783 India Bill, proposing to place its management under a group of parliamentary-appointed commissioners. Owing to the intervention of George III, the bill was defeated and Fox’s coalition administration fell. The following year William Pitt the Younger introduced his India Act to bring the Company under Crown administration. The act established a Board of Control made up of six members of the King’s Privy Council ‘to check, superintend and control all acts, operations and concerns which in any wise related to the civil and military Government, or revenues of the territories and possessions of the East India Company.

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