by Alan Lester

1833 was a critical year for Britons who had invested in the Empire. Thanks to the work of the Legacies of British Slave Ownership team at UCL, we have got to know more about the thousands of British people from nearly all classes, regions, towns and cities, who owned slaves and were paid compensation for their emancipation after the act abolishing slavery was passed in that year. We know that some 40% of GDP was handed over to slave owners while formerly enslaved people received nothing, and that much of the payout was invested in projects like the building of railways and the establishment of banking and insurance firms at home, and in projects like the colonization of South Australia overseas. But many of those who now know about slave owners don’t necessarily recognise that the simultaneous transformation of the East India Company also safeguarded the interests of Britons invested in empire.

In 1833, the East India Company’s charter came up for renewal. Its directors had to renegotiate its role in trade and the governance of India with the British government. Its monopoly on trade with India had already been opened up by the last charter renewal act in 1813. In 1833, with the doctrine of free trade gaining ground in Britain, it was also stripped of its remaining monopoly, on the trade between India and China. In fact even this monopoly was more nominal than real, since the Company had long been encouraging private merchants to smuggle the opium that it grew in Bengal into China so that it could earn currency with which to buy tea. The element of the 1833 charter renewal that was perhaps more significant was the deal struck with the Company’s shareholders in Britain.

Rather than winding up the East India Company altogether now that it was no longer a viable commercial concern, the British government decided to turn it exclusively into Britain’s proxy government of India. Its trading functions were closed down and, just as British slave owners were being compensated through the Abolition of Slavery Act, the creditors, warehouse labourers and managers of its trading arm were also paid out. What remained, though, was the question of what to do with its shareholders.

Compensation for slave owners was conceded in 1833 because even the most ardent antislavery campaigners recognised that they needed compliance from the powerful West India lobby at home and from planter dominated legislative assemblies in the Caribbean if enslaved people were ever actually to be set free. Compensation (along with an intended four or six year period of continued ‘apprenticeship’ for slaves) was the compromise necessary to get the legislation approved. Remarkably, the East India Company’s shareholders were given the guarantee of continued dividends for their stock at pretty much the same time, and for similar reasons. The returns were generous to say the least: annual dividends of 10 ½ per cent.As Thomas Babington Macaulay, at that time Secretary of the Board of Control which oversaw the Company on behalf of the British government, explained to parliament, this was “precisely the same dividend which they have been receiving for forty years, and which they have expected to receive permanently”.[1] Rather than being derived from the profits of trade, from now on these dividends would be extracted exclusively from the rent paid by the Company’s Indian subjects in return for the privilege of being governed by it.

The early 1830s was a time of great transformation. In Britain itself, both the 1832 Reform Act and the increasingly powerful doctrine of free trade were magnifying the political force of commercial and industrial interests. As ever, imperial transformations were closely connected. The abolition of slavery, mainly in the western half of the empire, and the restructuring of the East India Company in the eastern half, were part of the same broad transformation. Both threatened vested interests among a cross section of British society. Both were handled simultaneously so as to protect those interests at the expense of colonial subjects.

[1] Hansard HC Deb 10 July 1833 vol 19 cc479-550.