In 1765 Clive embarked for India for the third and last time. He went out with the firm determination to curb and crush the monster abuses that everywhere prevailed in our Indian territories. He had made a fortune of forty thousand pounds a year, and he was, therefore, prepared to quash the system by which thousands of others were endeavouring to do the same. No man was sharper than Clive in perceiving, where his own interest was not concerned, the evils which were consuming the very vitals of our power, and making our name odious in Hindostan. The first and most glaring abuse of power which arrested his attention was as regarded his old puppet, Meer Jaffier. He had lately died, and his own court had proposed to set up his legitimate grandson; but the Council preferred his natural son, Nujeem-ul-Dowlah, a poor spiritless youth, who agreed that the English should take the military defence of the country, and also appoint a Prime Minister to manage the revenue and other matters of government. The Council agreed to this, and received a present from the nabob of their creation of one hundred and forty thousand pounds, which they divided amongst themselves. This was directly in opposition to the recent order of the Court of Directors, not to accept any presents from the native princes; but, as Clive states, he found them totally disregarding everything but their own avarice.
Nujeem-ul-Dowlah, their new puppet, proposed to have one Nuncomar as his Prime Minister, but Nuncomar was too great a rogue even for them. He had alternately served and betrayed the English, and his master, Meer Jaffier, and the Council set him aside, and appointed to that office Mohammed Reza Khan, a Mussulman of far better character. Clive confirmed the appointment of Mohammed, but compelled Nujeem-ul-Dowlah to retire from the nominal office of Nabob, on a pension of thirty-two lacs of rupees.
The very name of Clive brought the war with Oude to a close. Sujah Dowlah was encamped on the borders of Bahar, strongly reinforced by bands of Mahrattas and Afghans, and anxious for another battle. But no sooner did he learn that Clive was returned, than he informed Cossim and Sombre that as he could no longer protect them, they had better shift for themselves. He then dismissed his followers, rode to the English camp, and announced that he was ready to accept such terms of peace as they thought reasonable. Clive proceeded to Benares to settle these terms. The council of Calcutta had determined to strip Sujah Dowlah of all his possessions, but Clive knew that it was far more politic to make friends of powerful princes. He therefore allowed Sujah Dowlah to retain the rank and title of vizier, and gave him back all the rest of Oude, except the districts of Allahabad and Corah, which had been promised to Shah Allum as an imperial domain. On Shah Allum, as Great Mogul, he also settled, on behalf of the Company, an annual payment of twenty-six lacs of rupees. Thus the heir of the great Aurungzebe became the tributary of the East India Company.
In return for this favour, Clive obtained one of infinitely more importance. It was the transfer of the sole right of dominion throughout the provinces of Bengal, Orissa, and Bahar. All that vast territory was thus made the legal and valid property of the East India Company. The conveyance was ratified by public deed, which was delivered by the Great Mogul to Clive in presence of his court, the throne on which he was elevated during this most important ceremony being an English dining-table, covered with a showy cloth. And of this prince—who was entirely their own puppet—the British still continued to style themselves the vassals, to strike his coins at their mint, and to bear his titles on their public seal! Clive saw the immense importance of maintaining the aspect of subjects to the highest native authority, and of avoiding alarming the minds of the native forces by an open assumption of proprietorship. By this single treaty, at the same time that he had freed the Company from all dependence on the heirs of Meer Jaffier, he derived the Company's title to those states from the supreme native power in India; and he could boast of having secured to his countrymen an annual revenue of two millions of money. Thus began a system which has played a leading part in our Indian history.
Having thus arranged with the natives, Clive came to the far more arduous business of compelling the Europeans to conform to the orders of the Company, that no more presents should be received. In his letters home he recommended that to put an end to the examples of corruption in high places, it was necessary that the Governor of Bengal should have a larger salary; that he and others of the higher officers should be prohibited from being concerned in trade; that the chief seat of government should be at Calcutta; and the Governor-General should have the authority, in cases of emergency, to decide independently of the Council. These were all sound views, but to carry them out required the highest exercise of his authority. He exacted a written pledge from the civil servants of the Company that they would receive no more presents from the native princes. To this there was considerable objection, and some resigned; but he carried this through, nominally at least. To sweeten the prohibition of civil servants engaging in trade, he gave them a share in the enormous emoluments of the salt monopoly—two hundred per cent. being laid on the introduction of salt, one of the requisites of life to the natives, from the adjoining state of Madras into that of Bengal.
With the military he had a far more violent contest. After the battle of Plassey, Meer Jaffier had conferred on the officers of the army what was called double batta, meaning an additional allowance of pay. Clive had always told the officers that it was not likely that the Company would continue this; and, now that the territories of Jaffier were become virtually their own, he announced that this must be discontinued. The Governor and Council issued the orders for this abolition of the double batta; he received in reply nothing but remonstrances. The officers, according to Burke's phrase, in his speech of December 1st, 1783, "could not behold, without a virtuous emulation, the moderate gains of the civil service." Clive was peremptory, and found his orders openly set at defiance by nearly two hundred officers, headed by no less a person than his second in command, Sir Robert Fletcher. These gentlemen had privately entered into a bond of five hundred pounds to resign on the enforcement of the order, and not to resume their commissions unless the double batta was restored. To support such as might be cashiered, a subscription was entered into, to which the angry civilians of Calcutta are said to have added sixteen thousand pounds. The conspirators flattered themselves that, in a country like India, held wholly by the sword, Clive could not dispense with their services for a single day. They were mistaken. On receiving the news of this military strike, Clive immediately set off for the camp at Monghyr. He was informed that two of the officers vowed that if he came to enforce the order, they would shoot or stab him. Undaunted by any such threats, although in failing health, and amid drenching rains, he pursued his journey, and, on arriving, summoned the officers of the army, and, treating the threats of assassination as those of murderers, and not of Englishmen, he reasoned with them on the unpatriotic nature of their conduct. His words produced the desired effect on many; the privates showed no disposition to support their officers in their demand, and the sepoys all shouted with enthusiasm for Sabut Jung, their ideal of a hero. The younger officers, who had been menaced with death if they did not support the conspiracy, now begged to recall their resignation, and Clive allowed it. He ordered Sir Robert Fletcher and all who stood out into arrest, and sent them down the Ganges to take their trial at Calcutta. Many are said to have departed with tears in their eyes. By this spirited conduct Clive crushed this formidable resistance, and averted the shame which he avowed not all the waters of the Ganges could wash out—that of a successful mutiny.
Whilst showing this firmness towards others, Clive found it necessary to maintain it in himself. In face of the orders of the Company which he had been enforcing, that the British officials should receive no more presents, the Rajah of Benares offered him two diamonds of large size, and the Nabob-vizier, Sujah Dowlah, on the conclusion of his treaty, a rich casket of jewels, and a large sum of money. Clive declared that he could thus have added half a million to his fortune; and our historians have been loud in his praises for his abstinence on this occasion. Lord Mahon observes:—"All this time the conduct of Clive was giving a lofty example of disregard of lucre. He did not spare his personal resources, and was able, some years after, to boast in the House of Commons that this his second Indian command had left him poorer than it found him." Ill-health compelled him to return to England in January, 1767.