Smoke and Ashes

Book: Smoke and Ashes: Opium's Hidden Histories
Author: Amitav Ghosh

Here are some things I have always wondered about (although never long enough to actually go find an answer):

1. How did the East India Company (EIC) make its money? Cotton and indigo, really?
2. Why are Bihar and UP the way they are compared to rest of India?
3. Bombay, Calcutta and Madras are all colonial cities. Calcutta has been on a constant downhill the past 75 years, while the other two are thriving. Why?

I suppose one learns about these things in school. While I loved history, clearly I didn't pay attention or maybe opium was never mentioned. Yes, opium. Turns out cultivation of poppy and its processing had a large role in funding the wars in the Indian subcontinent and China in the 19th century.

The East India Company's first major settlement in the Indian subcontinent was at Madras, which grew around Fort St George, in 1639. In 1668, they obtained the islands of Bombay from the Portuguese as dowry soon after the marriage of King Charles II to Catherine of Braganza. The next was at Calcutta, where Fort William was established in 1696. The Company gradually made inroads into the country, ostensibly in service of trade. The Company defeated the Nawab of Bengal at the Battle of Plassey in 1757 and replaced that Nawab with another one. Then in 1773 it abolished local rule and directly became involved in governance, with Calcutta as its capital. At this point in time, the Company administered an area encompassing modern day Bangladesh, West Bengal, Orissa, Bihar, parts of Uttar Pradesh and Jharkhand. The Company was the de facto ruler of large parts of the lower Gangetic plain. Over the next century it would defeat the Marathas, the Sikh Empire, the Mysore kingdom and find itself governing most of the subcontinent, either directly or via its native allies.

The motivation for this aggressive expansion was, unsurprisingly, the fortunes to be made on trade in the Old World. The company's revenues, and consequently the British Empire's, took the shape of a pareto distribution. The lion's share of the proceeds were due to two plants: tea and poppy.

The Two Plants

Through much of the eighteenth and nineteenth centuries, the tax on tea accounted for nearly a tenth of Britain's revenues. It earned the British government as much as all land, property and income taxes put together: it could pay for the salaries of all government servants; for all public works and buildings; for all expenses related to law, justice, education, art and science; and for Her Majesty's colonial, consular and foreign establishments—combined.

Britain got its tea from China via the Company. It took a while before they could pilfer tea seeds from China and grow tea themselves in India - China guarded its secrets and would not allow the foreign traders access to the mainland. The trade between China and the West took place within the confines of the Canton System, based in the southern Chinese city of Guangzhou. Since there was no demand for European goods in China, this tea had to be paid for in silver. There was a glut of silver in Europe thanks to the strip mining of that particular resource in the New World. In turn, there was huge outflow of bullion from Europe to China. By mid 18th century these supplies dwindled and the Company became desperate for another source to sustain its trade with China.

One solution was to grow tea in India, but as we discussed, China didn't make it easy to access tea seeds. Another was to increase exports from India to China. There was demand for two Indian products in China: cotton and opium. The opium trade was small, but brisk. In time it would dwarf everything else.

Opium was long used as an analgesic in the places it was cultivated. It was different from other psychoactive substances like cannabis, psycolibin mushrooms or khat leaves in that it had to be processed significantly before it be ingested. Even as recently as the eighteenth and nineteenth centuries it would take almost an entire year for poppy sap to be converted into usable opium. This meant that it was never used society wide and remained for a long time an habit of the elites, were they to acquire a taste for it.

In the Indian subcontinent the cultivation of poppies probably began towards the end of the first millennium of the common era, introduced by the Arabs and the Persians. The oral consumption of opium in various forms was popular among Mongol rulers and in their courts, and the practice was then passed on to their successors, the Ottoman, Safavid, and Mughal empires. The Mughals were great enthusiasts of opium and passed the habit to their Rajput allies. These were indulgences of kings and emperors and almost never within the reach of ordinary people. Cannabis and betel nuts were by far the most common psychoactive substances in India and remained so, sometimes serving ritual functions.

All of this is to say, before the Company control of the Gangetic plain, there was no widespread acceptance or availability of opium in Indian society. By late nineteenth century however, India was exporting around 100,000 chests of opium and its use within the subcontinent had become common. Amitav Ghosh's goal here, or at least one of them, is to describe the circumstances that led to this moment.

Bihar

The template for using opium as a means of monopoly and control was established by the Dutch VOC in South East Asia in the seventeen century. They would offer opium to local rulers in exchange for exclusive access to their products while insisting, at the same time, that they be the sole supplier of the drug to their kingdoms. It alone had the right to ship opium from eastern India to its territories, where it was auctioned off by its officials to opium ‘farmers' or retailers, who then arranged for its sale to consumers. The Dutch never attempted to cultivate poppy in their own colonial territories because of commercial as well as political considerations: they realized early on that if opium poppies were to be grown widely in the East Indies, not only would the price of the drug decline steeply, but the local rulers and chieftains would no longer depend on the Dutch for its supply.

The Dutch in East Indies were, in other words, a narco-state, whose survival was heavily dependent on drug revenues. This was the role taken up by EIC and later the British Crown in India, with some tweaks.

EIC grew its poppies in areas of modern day eastern Uttar Pradesh and Bihar, an area historically known as Purvanchal. Purvanchal had surplus labour that led to a thriving market in military labour, with soldiering and war-making being major industries employing as much as a quarter of the population. They supplied the armies of the EIC as well, and it was with Purbiyas that the EIC took control of the Gangetic Plains.

Under the Company rule, the farmers of this region were forced to cultivate poppy, which was then processed in two factories at an industrial scale: Patna and Ghazipur. Cultivating this land required the labour of more than a million peasant households. The Company had an Opium Department to oversee the quality and cultivation¹.

By the late nineteen century there were over thirty times more Indian than British employees on the Department's payrolls. The salaries of all the Indians together amounted to less than half that of the seventy-five white staff. One reason the British were paid more was to discourage corruption, not a bad idea and something that would turn out to work well in the future in Lee Kuan Yew's Singapore. However the wages of Indians were so low that it inevitably invited fraud and corruption. Amitav Ghosh emphasizes that the present day poverty and illiteracy in Bihar and Jharkhand is really an historical anomaly, and the current circumstances as can be traced back to the moment the Company seized these areas and forced the cultivation of poppy at significant losses on the harvest to the farmers.

These were the regions that were the epicenters of the war in 1857. After 1857, the British Crown directly assumed control of EIC's Indian territories, and the colonial regime rebalanced the ethnic composition of its army, drastically reducing its intake of soldiers from the Gangetic heartland: before, Purbiyas had constituted almost half the army; within a few decades their numbers were reduced to less than 11 per cent. Most of the sepoys after 1857 came from Punjab and the Maratha territories, which is also reflected in the composition of the Indian army to this day.

The Triangular Trade

So we have opium processed in India, exchanged for Chinese tea with bills on British banks. The Qing state in China banned the production and importation of opium by 1800. The opium trade that did happen after was because the Europeans flouted the Qing law, and smuggled opium into China. The volume of the sale was such that by 1820s, the balance of trade was reversed in Britain's favour, and it was the Chinese who now had to pay with silver.

Opium trade facilitated the growth of Hong Kong, Singapore, Bombay and Calcutta. By 1765, when the East India Company was already in control of most of the Gangetic plain, its holdings on the west coast consisted of little more than the port of Bombay. Bombay was subsidized by the revenues from Madras and Calcutta. In the next 150 years Bombay would become the commercial capital of India and Amitav Ghosh puts that down to two factors: Maratha pushback against EIC and opium trade. Poppy was cultivated and opium processed in Maratha territories and EIC tried to ban the trade in opium by Indians on the western coast. They never succeeded and the Indian states found ways around the embargo exported the opium to China and East Indies. between 1800 and 1803 over 63,500 kilograms of opium had been exported to China by private traders, through the Company's own port, Bombay. Since they couldn't stop the trade, they decided to legalize it. Bombay was on the verge of being abandoned by the British in the late eighteenth century because it produced very little revenue for the East India Company. Malwa opium solved Bombay's revenue problem: the transit tax charged by the British was a cash cow and led to native mercantile groups flocking to Bombay.

‘By the end of the nineteenth century,' writes Richards, ‘some ninety states engaged in opium production. These ranged in size from the largest in territory and population such as Indore, Mewar, Bhopal, Jaipur, Marwar, Gwalior, Alwar, and Bikaner, to smaller states that dwindled to the size of Sitamau in Malwa with its few thousand inhabitants and one principal town.'

In Bombay and Western India, business men of every community were involved in the trade: the Parsis, the Hindu Vanias and Bhatias, the Muslim Bohras, Khojas and Memons, Baghdadi Jews, Marwaris, Jains. This was in contrast to Calcutta, where the British retained a monopoly.

In just ten years, from 1831 to 1840, China received as much opium from India as it had in the whole of the century before. By 1837 opium accounted for 57 per cent of all of China's imports. After the two Opium Wars, the British Empire's opium exports kept growing until they peaked at 105,507 chests in 1880. In the 1790s the British Empire's annual earnings from opium were about 200,000 pounds sterling. This would rise to more than 10 million pounds sterling in the 1880s.

Opium was the third largest source of revenue for the British Empire after taxes on salt and taxes on land. It also needed the least bureaucratic apparatus, and hence was an easy money to finance wars. In 1837 a Qing official estimated that the equivalent of 20 million pounds sterling was pouring out of China annually.

With opium addiction seriously destabilizing the country, and the loss of bullion, the Qing state decided to crackdown further on opium. In 1839, it seized opium stockpiles in warehouses in Guangzhou and the thirteen factories and destroyed them. This was the impetus for the first Opium war in 1840, which ended in the Qing state's defeat and gave the British merchants access to Chinese ports and the Western states the ability to trade in any goods they liked. The Second Opium war resulted in another defeat in 1860, and China was forced to legalize opium.

Once opium became legal, China quickly became the single largest producer of opium in the world by early twentieth century, accounting for seven-eighths of global supply. Legalization only accelerated the spread of opioids through the country.

By this time, the early 20th century, these were enough critical voices in power in the West that in 1907 Britain signed an agreement with China, undertaking to phase out all opium exports from India, over a ten-year period, provided that China's suppression of its domestic drug industry met similar annual targets. China exceeded expectations and in some provinces like Sichuan, officials succeeded in almost eliminating opium in just four years.

It is not a coincidence that colonization became increasingly untenable once easy money from the narco trade ended. Ghazipur is still one of the world's largest producers of legal opium, manufactured for medicinal use.

Amitav Ghosh's book scope is wider than what is in mentioned in this review - he talks about the stateless merchant communities like Parsis, Jews and Armenians, the plants and garden aesthetics from China that spread to Britain, the opioid crisis in America, the palaces of “Incredible India”. It is worth reading in full. The book emerged from his research for the Ibis trilogy (or was it the other way around?) and given how extensive and absorbing it turned out to be, it doesn't seem like I will be disappointed with The Sea of Poppies when I get to it.

FOOTNOTES