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The predecessors of Wellesley concluded alliances with Indian princes like the Nawab of Oudh and the Nizam of Hyderabad. They received subsidies from the Indian rulers for the maintenance of British troops, which were used for the protection of respective Indian states. Wellesley enlarged and consolidated the already existing system. However, his originality was revealed in its application.
Any Indian ruler who entered into the subsidiary alliance with the British had to maintain a contingent of British troops in his territory. It was commanded by a British officer. The Indian state was called 'the protected state' and the British hereinafter were referred to as 'the paramount power'. It was the duty of the British to safeguard that state from external aggression and to help its ruler maintain internal peace. The protected state should give some money or give part of its territory to the British to support the subsidiary force.
The protected state should cut off its connection with European powers other than the English and with the French in particular. The state was also forbidden to have any political contact even with other Indian powers without the permission of the British.
The ruler of the protected state should keep a British Resident at his court and disband his own army. He should not employ Europeans in his service without the sanction of the paramount power.
The paramount power should not interfere in the internal affairs of the protected state.
Wellesley's Subsidiary System is regarded as one of the master-strokes of British imperialism. It increased the military strength of the Company in India at the expense of the protected states. The territories of the Company were free from the ravages of war thereby establishing the stability of the British power in India. The position of the British was strengthened against its Indian and non-Indian enemies. Under the system, expansion of British power became easy. Thus Wellesley's diplomacy made the British the paramount power in India.
The immediate effect of the establishment of subsidiary forces was the introduction of anarchy because of the unemployment of thousands of soldiers sent away by the Indian princes. The freebooting activities of disbanded soldiers were felt much in central India where the menace of Pindaris affected the people.
Further, the subsidiary system had a demoralizing effect on the princes of the protected states. Safeguarded against external danger and internal revolt, they neglected their administrative responsibilities. They preferred to lead easy-going and pleasure-seeking lives. As a result misgovernment followed. In course of time, the anarchy and misrule in several states had resulted in their annexation by the British. Thus, the subsidiary system proved to be a preparation for annexation.
Furthermore, the British collected very heavy subsidies from the protected princes and this had adversely affected their economy.
Hyderabad: Hyderabad was the first state which was brought under Wellesley's Subsidiary System in 1798. The treaty concluded in 1798 was an ad hoc measure. It fixed the amount to be paid annually at Rs.24 lakhs for the subsidiary force. In accordance with the treaty, all the French troops in Hyderabad were disbanded and replaced by a subsidiary British force. A new treaty was concluded in 1800 by which the Nizam ceded large territories to the Company and this constitutes the famous Ceded Districts.
Oudh: The threat of invasion by Zaman Shah of Afghanistan was the pretext for Wellesley to force the Nawab of Oudh to enter into a subsidiary treaty. Accordingly, the Nawab gave the British the rich lands of Rohilkhand, the lower Doab and Gorakhpur for the maintenance of an increased army which the British stationed in the capital of Oudh. The strength of Nawab's own army was reduced. For the maintenance of law and order the British were authorised to frame rules and regulations. By this, the British acquired the right to interfere in the internal matters of Oudh. Although the Company obtained a fertile and populous territory, which increased its resources, the highhanded action of Wellesley was severely criticized.
Wellesley assumed the administration of Tanjore, Surat and the Karnatak by concluding treaties with the respective rulers of these states. The Maratha state of Tanjore witnessed a succession dispute. In 1799, Wellesley concluded a treaty with Serfoji. In accordance with this treaty the British took over the administration of the state and allowed Serfoji to retain the title of Raja with a pension of 4 lakhs of rupees.
The principality of Surat came under British protection as early as 1759. The Nawab of this historic city died in 1799 and his brother succeeded him. The change of succession provided Wellesley an opportunity to take over the administration of Surat. The Nawab was allowed to retain the title and given a pension of one lakh of rupees.
The people of Karnatak had been suffering for a long time by the double government. The Nawab, Umadat-ul-Umara was an incompetent ruler noted for his extravagance and misrule. He died in the middle of 1801 and his son, Ali Hussain became the Nawab. Wellesley asked him to retire with a liberal pension leaving the administration to the English. Since he refused, Wellesley signed a treaty with Azim-ud daulah, the nephew of the deceased Nawab in 1801. Accordingly the entire military and civil administration of the Karnatak came under the British.
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