Last Nizam (9781742626109) (9 page)

The poor Nizam, however, could not ‘pay for all' without borrowing money. In early nineteenth-century Hyderabad revenue collection was primitive. Districts were farmed out to contractors who were meant to advance a proportion of their anticipated revenue to the state, but rarely did so. Tax collection was haphazard, as was income derived from bestowing titles on landlords and revenue farmers.

What Chandu Lal and Russell saw as the solution only drew the Nizam further into debt. Ignoring warnings that Chandu Lal's intrigues could be ‘inconvenient and embarrassing' if not downright dangerous, Russell connived with him to allow the establishment of a banking firm known as William Palmer & Co. The bank was the brainchild of William Palmer, ‘a gentleman not of pure blood' who was born in Lucknow to a British
general and a princess of Oudh. Palmer served as a battalion commander in the Nizam's army and then as a tax collector, before toying with the idea of setting up a logging and shipbuilding scheme on the Godavari River. He quickly realised there was more money to be made from banking.

To add to the firm's prestige, Palmer used his East India Company connections to operate from a bungalow inside the Residency grounds. Russell held shares in the bank and used his influence to procure customers and funds from private sources. In case of any problems, Palmer would send over a woman from the
zenana
‘to favour the application'.
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To ensure the support of the Company's representative in Calcutta, Palmer appointed William Rumbold as a partner in the firm. Rumbold was married to a ward of the Governor-General, Lord Hastings, and had accompanied him to India ‘with the not very rare or unintelligible design of making as much money as he could'.
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Rumbold's connections in Calcutta through his quasi father-in-law gave the banking firm more clout than the Resident, Metcalfe later concluded. ‘From that time on the affairs of the firm have gone on swimmeringly till it has reached a point of undue influence and profit never I suppose before heard of in any mercantile concern.'
²⁶

The Hastings connection paid off when on 23 July 1816 the Governor-General personally intervened to give Palmer & Co. a licence from the Supreme Government of India to legalise its transactions. Under the arrangement sanctioned by Hastings, executed by Russell and kept well-oiled by Chandu Lal, the Nizam's treasury borrowed money from Palmer & Co. to pay the troops of the Russell Brigade to the tune of four million rupees a year, or roughly half the entire tax revenue of the state. Palmer & Co. then paid the troops and recovered what they had spent plus interest, which was charged at 24 per cent for villages mortgaged by the Nizam.

Forced into paying for troops he had no control over and little if any use for, the Nizam was soon caught in a dangerous debt trap. By the end of the first decade of the nineteenth century the Nizam owed Palmer & Co. a staggering six million rupees. His own soldiers were not being paid and morale in the administration fell to an all-time low. ‘They have no objects of hope or ambition. The splendour of the court has faded with the decay of the government,' Russell reported to the Court of Directors in 1819. ‘More than one half of the country is a desert; and even where there is cultivation, the farmer has no interest beyond the supply of his immediate necessities . . . Evils produce one another. As a Government becomes weak it becomes rapacious.'
²⁷

Ignoring the fact that he was largely responsible for this state of affairs, Russell wrote to Hastings in November 1819 proposing that ‘nothing short of a close vigilant and decided control over the internal administration of the country' was needed to rectify the situation. Such control, however, ‘should be exercised through the medium of advice and influence and not by exertions of authority'. Instead of appointing British agents to oversee the collection of revenue, he proposed selecting ‘men of integrity' as
taluqdars
(collectors).
²⁸

Russell's reforms were never implemented. He resigned as Resident in 1820 after getting word that he was about to be sacked for his blatant involvement in corruption and bribetaking. Despite enjoying an annual salary of £3400, he managed to ship home a fortune of £85,000.

Russell's replacement, Charles Theophilus Metcalfe, was of a much different calibre. The pimply-faced ex-Etonian had been Wellesley's star pupil at his new college for civil servants at Madras. When he travelled he preferred elephants to horses because a pachyderm's more deliberate motion made it easier to read. At 17, Metcalfe served as an assistant to Colonel John Collins at the court of Sindia in Ujjain. In 1805, at the age of
just 21, he became Assistant to the Resident in Delhi. He also shared the distinction, according to Lord Minto, of being ‘the ugliest and most agreeable clever person – except Lady Glenbevrie – in Europe or in Asia'.
²⁹
After his experience at Ujjain, where King Collins, as he was nicknamed, moved around with a
zenana
full of women and batteries of artillery, Metcalfe developed a strong distaste for native courts and a dislike for their princes.

When Metcalfe took over as Resident in 1820, Hyderabad personified the worst of these excesses. He described the Residency as ‘a magnificent and uncomfortable pile, on which immense sums have been unconscionably spent by my predecessors at the expense of the Nizam's government . . . I wish that I could introduce a nest of white ants secretly . . . and cause it to disappear.'
³⁰
Within a few months of his posting, Metcalfe accused Palmer of helping to plunder Hyderabad in league with Chandu Lal:

I do not object to merchants making good bargains for themselves. But when the resources of the State are sacrificed by a profligate servant, without any regard to the interests of his master, as the purchase of support of the Governor General through the influence of an individual, it is bribery in the most horrible degree and misery of it will be long felt by this suffering country.
³¹

But his initial attempts to close the bank were unsuccessful. When Metcalfe demanded a detailed account of various transactions with the Nizam's government, Palmer responded by saying that it would be ‘inconsistent with the confidence reposed in them by their customers'. Metcalfe wanted the government to repay the loans taken by the Nizam from the banking firm, and recover the amount in stages from the Nizam. He was supported by the Home Government in England but not by Hastings in
Calcutta. ‘Any ill will on your part towards the House of William Palmer & Co. must necessarily be idle imagination,' Hastings warned him.
³²

But by the end of November 1920, the evidence Metcalfe had collected was too overwhelming to ignore and the Court of Directors declared that the original sanction given to Palmer & Co. was illegal. ‘We can by no means approve of the indulgence which you have extended to Messrs Palmer and Co.,' the Board wrote to Hastings. ‘We positively direct that the instrument by which that indulgence was conveyed may be immediately upon receipt of this dispatch, revoked and cancelled.'
³³

Having removed one scourge, Metcalfe then undertook a tour of the Nizam's Dominions to see for himself the conditions of the peasantry. In some areas the mood bordered on insurrection; lawlessness was so rampant that many farmers were fleeing into neighbouring states. Arab and Persian mercenaries had occupied districts, murder and violence were rife. There was practically no civil or judicial administration and justice could be obtained only for money.

Metcalfe proposed a series of reforms, including the appointment of European officers in districts to collect revenue, receive complaints from cultivators and put down robberies and other crimes. The system restored confidence among the peasants and many villages that had been deserted were reoccupied. Though the reforms were a success in terms of increasing revenue, they caused friction between local authorities and the British. As Chandu Lal pointed out to Metcalfe ‘there was not room for two swords in one scabbard'.
³⁴

The fate of Metcalfe's reforms was sealed with the death of Sikander Jah in May 1829. Apart from the women in the
zenana
who faced being thrown out on the streets, few in Hyderabad mourned the Nizam's passing. His court had been totally devoid of the ‘splendour, frankness, spirit, resolution and liberality' that
would have ordinarily earned him a modicum of respect among his subjects. Had the British not rescued it from the French and the Marathas and subsidised it with territory and money, on the condition that it place its resources at the disposal of the British in time of war, Hyderabad would have ceased to exist. ‘No state', wrote Edward Thompson, ‘can ever have combined such material importance with so undistinguished a record and so fictitious an independence.'
³⁵
Even Russell conceded that over-reliance on the crutches of the Company ‘deprived the Nizam of the use of his own limbs'.
³⁶

Sikander Jah was succeeded by Nasir ud-Daula, one of nine sons he fathered during his long nights in the
zenana
. Although Nasir ud-Daula was illegitimate, he was nevertheless the eldest and therefore the most favoured by the British to become the next Nizam. Historian Henry George Briggs described him as a ‘large, powerful man, and very corpulent; he had a clear bright, blue Afghan eye, and his features were very pleasing, especially when he smiled.' Although illiterate like his father, the Fourth Nizam gained enough knowledge from his courtiers and servants to become a better ruler than his predecessor and was liked by his subjects. By the standards of the day he ‘was considered a good eastern sovereign'.
³⁷

In many ways Nasir ud-Daula's reign was a dress rehearsal for what would happen almost 150 years later when Mukarram Jah became the Eighth Nizam. Like Jah, Nasir ud-Daula did everything he could to keep the government of the day off his back while leaving the administration of the state to his own handpicked lieutenants, who were either untrustworthy or incompetent. His hands-off approach encouraged corruption, the siphoning of assets to corrupt officials and a general unwillingness to rein in extravagant expenditure and address basic
cash-flow problems. Jah's coterie would echo his predecessor's with dozens of Chandu Lals who over the years would do their best to hide the real financial position of the estate from the Nizam, the prying eyes of bankers and insatiable tax officials. These sycophants kept their rulers in the dark, knowing that their interests were best served by pretending that everything was in order. The tragedy of Nasir ud-Daula's reign was that he squandered an opportunity to prove that Hyderabad had the means both in terms of capable administrators and money-generating resources to be on an equal footing with the British. The tragedy of Jah's lifetime was that he didn't learn the lessons.

On his appointment as Nizam in 1829, Nasir ud-Daula found himself facing a very similar financial crisis to the one that had nearly broken the state just a decade previously. Prodded along by Chandu Lal, who wanted to get the Resident off his back, the Nizam asked the new Governor-General, Lord Bentinck, to end British interference in the administration of the state. Bentinck agreed. British superintendents were removed from districts where they had managed to introduce a semblance of order and fairness in the collection of revenue from farmers. The Nizam was allowed to exercise full power in appointing and dismissing his ministers, administering justice, setting fiscal policy and all other matters, as long as he continued to pay for British troops stationed in Hyderabad.

The sudden withdrawal of the British from the affairs of state proved disastrous. Within months, maladministration became the norm. The peasantry once again found itself at the mercy of unscrupulous
zamindars
, who looted entire villages and fled into the Company's territories knowing that the Nizam's troops could not pursue them there. Travelling through the Nizam's Dominions in the late 1820s, the British administrator Sir John Malcolm found that:

. . . the different quotas to be paid by each inhabitant had been fixed and every species of torture was then being inflicted to enforce them. Men and women, poor and rich, were suffering promiscuously. Some had heavy muskets fastened to their ears; some had large stones upon their breasts; whilst others had their fingers pinched with hot pincers. Their cries of agony and declaration of inability to pay appeared only to whet the appetite of their tormentors.
³⁸

Metcalfe, now a member of the Governor-General's Council, wanted the British to intervene. To ignore such intolerable oppression, he argued in August 1830, would make the British ‘tools of the most iniquitous tyranny'.
³⁹
The Board of Directors, however, continued to turn a blind eye to the state of affairs and Chandu Lal's role in perpetuating it.