Company, the Nabob shall be satisfied of the propriety of avoiding all
unnecessary expense, and will therefore agree not to maintain a greater
number of troops than shall be necessary for the support of his dignity
and the splendor of the durbar, which number shall be specified in the
treaty; and if any military aid is requisite for the security and
collection of his revenues, other than the fixed establishment employed
to enforce the ordinary collections and preserve the police of the
country, the Company must be bound to furnish him with such aid: the
Rajah of Tanjore must likewise become bound by similar engagements, and
be entitled to similar aid.
As, in virtue of the powers vested in Lord Macartney by the agreement of
December, 1781, sundry leases, of various periods, have been granted to
renters, we direct that you apply to the Nabob, in our name, for his
consent that they may be _permitted_ to hold their leases to the end of
the stipulated term; and we have great reliance[70] on the liberality
and spirit of accommodation manifested by the Nabob on so many
occasions, that he will be disposed to acquiesce in a proposition so
_just and reasonable_. But if, contrary to our expectations, his
Highness should be impressed with any particular aversion to comply with
this proposition, we do not desire you to insist upon it as an essential
part of the arrangement to take place between us; but, in that event,
you must take especial care to give such indemnification to the renters
for any loss they may sustain as you judge to be reasonable.
It equally concerns the honor of our government, that such natives as
may have been put in any degree of authority over the collections, in
consequence of the deed of assignment, and who have proved faithful to
their trust, shall not suffer inconvenience on account of their
fidelity.
Having thus given our sentiments at large, as well for the surrender of
the assignment as with regard to those arrangements which we think
necessary to adopt in consequence thereof, we cannot dismiss this
subject without expressing our highest approbation of _the ability,
moderation, and command of temper_ with which our President at Madras
has conducted himself in the management of a very delicate and
embarrassing situation. His conduct, and that of the Select Committee of
Fort St. George, in the execution of the trust delegated to Lord
Macartney by the Nabob Mahomed Ali, has been vigorous and effectual, for
the purpose of realizing as great a revenue, at a crisis of necessity,
as the nature of the case admitted; and the imputation of corruption,
suggested in some of the Proceedings, appears to be totally groundless
and unwarranted.
While we find so much to applaud, it is with regret we are induced to
advert to anything which may appear worthy of blame: as the step of
issuing the Torana Chits in Lord Macartney's own name can only be
justified upon the ground of absolute necessity;[71] and as his Lordship
had every reason to believe that the demand, when made, would be
irksome and disagreeable to the feelings of Mahomed Ali, every
precaution ought to have been used and more time allowed for proving
that necessity, by previous acts of address, civility, and conciliation,
applied for the purposes of obtaining his authority to such a measure.
It appears to us that more of this might have been used; and therefore
we cannot consider the omission of it as blameless, consistent with our
wishes of sanctifying no act contrary to the spirit of the agreement, or
derogatory to the authority of the Nabob of the Carnatic, in the
exercise of any of his just rights in the government of the people under
his authority.
We likewise observe, the Nabob has complained that no official
communication was made to him of the peace, for near a month after the
cessation of arms took place. This, and every other mark of disrespect
to the Nabob, will ever appear highly reprehensible in our eyes; and we
direct that you do, upon all occasions, pay the highest attention to him
and his family.
Lord Macartney, in his Minute of the 9th of September last, has been
fully under our consideration. We shall ever applaud the prudence and
foresight of our servants which induces them to collect and communicate
to us every opinion, or even ground of suspicion they may entertain,
relative to any of the powers in India with whose conduct our interest
and the safety of our settlements is essentially connected. At the same
time we earnestly recommend that those opinions and speculations be
communicated to us with prudence, discretion, and all possible secrecy,
_and the terms in which they are conveyed be expressed in a manner as
little offensive as possible to the powers whom they may concern and
into whose hands they may fall._[72]
We next proceed to give you our sentiments respecting the private debts
of the Nabob; _and we cannot but acknowledge_ that the origin and
justice, both of the loan of 1767, and the loan of 1777, commonly called
the Cavalry Loan, appear to us clear and indisputable, agreeable to the
true sense and spirit of the late act of Parliament.
In speaking of the loan of 1767, we are to be understood as speaking of
the debt as constituted by the original bonds of that year, bearing
interest at 10_l._ per cent; and therefore, if any of the Nabob's
creditors, under a pretence that their debts made part of the
consolidated debt of 1767, although secured by bonds of a subsequent
date, carrying an interest exceeding 10_l._ per cent, shall claim the
benefit of the following orders, we direct that you pay no regard to
such claims, without further especial instructions for that purpose.
With respect to the consolidated debt of 1777, it certainly stands upon
a less favorable footing. So early as the 27th March, 1769, it was
ordered by our then President and Council of Fort St. George, that, for
the preventing all persons living under the Company's protection from
having any dealings with any of the country powers or their ministers
without the knowledge or consent of the Board, an advertisement should
be published, by fixing it up at the sea-gate, and sending round a copy
to the Company's servants and inhabitants, and to the different
subordinates, and our garrisons, and giving it out in general orders,
stating therein that the President and Council did consider the
irreversible order of the Court of Directors of the year 1714 (whereby
their people were prohibited from having any dealings with the country
governments in money matters) to be in full force and vigor, and thereby
expressly forbidding all servants of the Company, and other Europeans
under their jurisdiction, to make loans or have any money transactions
with any of the princes or states in India, without special license and
permission of the President and Council for the time being, except only
in the particular cases there mentioned, and declaring that any wilful
deviation therefrom should be deemed a breach of orders, and treated as
such. And on the 4th of March, 1778, it was resolved by our President
and Council of Fort St George, that the consolidated debt of 1777 was
not, on any respect whatever, conducted under the auspices or protection
of that government; and on the circumstance of the consolidation of the
said debt being made known to us, we did, on the 28rd of December, 1778,
write to you in the following terms: "Your account of the Nabob's
private debts is very alarming; but from whatever cause or causes those
debts have been contracted or increased, we hereby repeat our orders,
that the sanction of the Company be on no account given to any kind of
security for the payment or liquidation of any part thereof, (except by
the express authority of the Court of Directors,) on any account or
pretence whatever."
The loan of 1777, therefore, has no sanction or authority from us; and
in considering the situation and circumstances of this loan, we cannot
omit to observe, that the creditors could not be ignorant how greatly
the affairs of the Nabob were at that time deranged, and that his debt
to the Company was then very considerable,--the payment of which the
parties took the most effectual means to postpone, by procuring an
assignment of such specific revenues for the discharge of their own
debts as alone could have enabled the Nabob to have discharged that of
the Company.
Under all these circumstances, we should be warranted to refuse our aid
or protection in the recovery of this loan. But when we consider the
inexpediency of keeping the subject of the Nabob's debts longer afloat
than is absolutely necessary,--when we consider how much the final
conclusion of this business will tend to promote tranquillity, credit,
and circulation of property in the Carnatic,--and when we consider that
the debtor concurs with the creditor in establishing the justice of
those debts consolidated in 1777 into gross sums, for which bonds were
given, liable to be transferred to persons different from the original
creditors, and having no share or knowledge of the transactions in which
the debts originated, and of course how little ground there is to expect
any substantial good to result from an unlimited investigation into
them, we have resolved so far to recognize the justice of those debts as
to extend to them that protection which, upon _more_ forcible grounds,
we have seen cause to allow to the other two classes of debts. But
although we so far adopt the general presumption in their favor as to
admit them to a participation in the manner hereafter directed, we do
not mean to debar you from receiving any complaints against those debts
of 1777, at the instance either of the Nabob himself, or of other
creditors injured by their being so admitted, or by any other persons
having a proper interest, or stating reasonable grounds of objection;
and if any complaints are offered, we order that the grounds of all such
be attentively examined by you, and be transmitted to us, together with
the evidence adduced in support of them, for our final decision; and as
we have before directed that the sum of twelve lacs of pagodas, to be
received annually from the Nabob, should be paid into our treasury, it
is our order that the same be distributed according to the following
arrangement.
That the debt be made up in the following manner, viz.
The debt consolidated in 1767 to be made up to the end of the year 1784,
with the current interest at ten per cent.
The Cavalry Loan to be made up to the same period, with the current
interest at twelve per cent.
The debt consolidated in 1777 to be made up to the same period, with the
current interest at twelve per cent, to November, 1781, and from thence
with the current interest at six per cent.
The twelve lacs annually to be received are then to be applied,--
1. To the growing interest on the Cavalry Loan, at twelve per cent.
2. To the growing interest on the debt of 1777, at six per cent.
The remainder to be equally divided: one half to be applied to the
extinction of the Company's debt; the other half to be applied to the
payment of growing interest at 10_l._ per cent, and towards the
discharge of the principal of the debt of 1767.
This arrangement to continue till the principal of the debt 1767 is
discharged.
The application of the twelve lacs is, then, to be,--
1. To the interest of the debt of 1777, as above. The remainder to be
then equally divided,--one half towards the discharge of the current
interest and principal of the Cavalry Loan, and the other half towards
the discharge of the Company's debt.
When the Cavalry Loan shall be thus discharged, there shall then be paid
towards the discharge of the Company's debt seven lacs.
To the growing interest and capital of the 1777 loan, five lacs.
When the Company's debt shall be discharged, the whole is then to be
applied in discharge of the debt 1777.
If the Nabob shall be prevailed upon to apply the arrears and growing
payments of the Tanjore peshcush in further discharge of his debts, over
and above the twelve lacs of pagodas, we direct that the whole of that
payment, when made, shall be applied towards the reduction of the
Company's debt.
We have laid down these general rules of distribution, as appearing to
us founded on justice, and the relative circumstances of the different
debts; and therefore we give our authority and protection to them only
on the supposition that they who ask our protection acquiesce in the
condition upon which it is given; and therefore we expressly order,
that, if any creditor of the Nabob, a servant of the Company, or being
under our protection, shall refuse to express his acquiescence in these
arrangements, he shall not only be excluded from receiving any share of
the fund under your distribution, but shall be prohibited from taking
any separate measures to recover his debt from the Nabob: it being one
great inducement to our adopting this arrangement, that the Nabob shall
be relieved from all further disquietude by the importunities of his
individual creditors, and be left at liberty to pursue those measures
for the prosperity of his country which the embarrassments of his
situation have hitherto deprived him of the means of exerting. And we
further direct, that, if any creditor shall be found refractory, or
disposed to disturb the arrangement we have suggested, he shall be
dismissed the service, and sent home to England.
The directions we have given only apply to the three classes of debts
which have come under our observation. It has been surmised that the
Nabob has of late contracted further debts: if any of these are due to
British subjects, we forbid any countenance or protection whatever to be
given to them, until the debt is fully investigated, the nature of it
reported home, and our special instructions upon it received.
We cannot conclude this subject without adverting in the strongest terms
to the prohibitions which have from time to time issued under the
authority of different Courts of Directors against any of our servants,
or of those under our protection, having any money transactions with any
of the country powers, without the knowledge and previous consent of our
respective governments abroad. We are happy to find that the Nabob,
sensible of the great embarrassments, both to his own and the Company's
affairs, which the enormous amount of their private claims have
occasioned, is willing to engage not to incur any new debts with
individuals, and we think little difficulty will be found in persuading
his Highness into a positive stipulation for that purpose. And though
the legislature has thus humanely interfered in behalf of such
individuals as might otherwise have been reduced to great distress by
the past transactions, we hereby, in the most pointed and positive
terms, repeat our prohibition upon this subject, and direct that no
person, being a servant of the Company, or being under our protection,
shall, on any pretence whatever, be concerned in any loan or other money
transaction with any of the country powers, unless with the knowledge
and express permission of our respective governments. And if any of our
servants, or others, being under our protection, shall be discovered in
any respect counteracting these orders, we strictly enjoin you to take
the first opportunity of sending them home to England, to be punished as
guilty of disobedience of orders, and no protection or assistance of the
Company shall be given for the recovery of any loans connected with such
transactions. Your particular attention to this subject is strictly
enjoined; and any connivance on your parts to a breach of our orders
upon it will incur our highest displeasure. In order to put an end to
those intrigues which have been so successfully carried on at the
Nabob's durbar, we repeat our prohibition in the strongest terms
respecting any intercourse between British subjects and the Nabob and
his family; as we are convinced that such an intercourse has been
carried on greatly to the detriment and expense of the Nabob, and merely
to the advantage of individuals. We therefore direct that all persons
who shall offend against the letter and spirit of this necessary order,
whether in the Company's service or under their protection, be forthwith
sent to England.
Approved by the Board.
HENRY DUNDAS,
WALSINGHAM,
W.W. GRENVILLE,
MULGRAVE.
WHITEHALL, 15th Oct. 1784.
* * * * *
_Extract from the Representation of the Court of Directors of the East
India Company._
MY LORDS AND GENTLEMEN,--
It is with extreme concern that we express a difference of opinion with
your right honorable board, in this early exercise of your controlling
power; but in so novel an institution, it can scarce be thought
extraordinary, if the exact boundaries of our respective functions and
duties should not at once, on either side, be precisely and familiarly
understood, and therefore confide in your justice and candor for
believing that we have no wish to invade or frustrate the salutary
purposes of your institution, as we on our part are thoroughly satisfied
that you have no wish to encroach on the legal powers of the East India
Company. We shall proceed to state our objections to such of the
amendments as appear to us to be either insufficient, inexpedient, or
unwarranted.
6th. Concerning the private debts of the Nabob of Arcot, and the
application of the fund of twelve lacs of pagodas per annum.
Under this head you are pleased, in lieu of our paragraphs, to
substantiate at once the justice of all those demands which the act
requires us to investigate, subject only to a right reserved to the
Nabob, or any other party concerned, to question the justice of any debt
falling within the last of the three classes. We submit, that at least
the opportunity of questioning, within the limited time, the justice of
any of the debts, ought to have been fully preserved; and supposing the
first and second classes to stand free from imputation, (as we incline
to believe they do,) no injury can result to individuals from such
discussion: and we further submit to your consideration, how far the
express direction of the act to examine the nature and origin of the
debts has been by the amended paragraphs complied with; and whether at
least the rate of interest, according to which the debts arising from
soucar assignment of the land-revenues to the servants of the Company,
acting in the capacity of native bankers, have been accumulated, ought
not to be inquired into, as well as the reasonableness of the deduction
of twenty-five per cent which the Bengal government directed to be made
from a great part of the debts on certain conditions. But to your
appropriation of the fund our duty requires that we should state our
strongest dissent. Our right to be paid the arrears of those expenses by
which, almost to our own ruin, we have preserved the country and all
the property connected with it from falling a prey to a foreign
conqueror, surely stands paramount to all claims for former debts upon
the revenues of a country so preserved, even if the legislature had not
expressly limited the assistance to be given the private creditors to be
such as should be consistent with our own rights. The Nabob had, long
before passing the act, by treaty with our Bengal government, agreed to
pay us seven lacs of pagodas, as part of the twelve lacs, in liquidation
of those arrears; of which seven lacs the arrangement you have been
pleased to lay down would take away from us more than the half, and give
it to private creditors, of whose demands there are only about a sixth
part which do not stand in a predicament that you declare would not
entitle them to any aid or protection from us in the recovery thereof,
were it not upon grounds of expediency, as will more particularly appear
by the annexed estimate. Until our debt shall be discharged, we can by
no means consent to give up any part of the seven lacs to the private
creditors; and we humbly apprehend that in this declaration we do not
exceed the limits of the authority and rights vested in us.
* * * * *
THE RIGHT HONORABLE THE COMMISSIONERS FOR THE AFFAIRS OF INDIA.
_The Representation of the Court of Directors of the East India
Company_.
My Lords and Gentlemen,--
The Court, having duly attended to your reasonings and decisions on the
subjects of Arnee and Hanamantagoody, beg leave to observe, with due
deference to your judgment, that the directions we had given in these
paragraphs which did not obtain your approbation still appear to us to
have been consistent with justice, and agreeable to the late act of
Parliament, which pointed out to us, as we apprehended, the treaty of
1762 as our guide.
Signed by order of the said Court,
THO. MORTON, _Sec_.
EAST INDIA HOUSE, the 3rd November, 1784.
* * * * *
_Extract of a Letter from the Commissioners for the Affairs of India, to
the Court of Directors, dated 3rd November, 1784, in Answer to their
Remonstrance_.
SIXTH ARTICLE.
We think it proper, considering the particular nature of the subject, to
state to you the following remarks on that part of your representation
which relates to the plan for the discharging of the Nabob's debts.
1st. You compute the revenue which the Carnatic may be expected to
produce only at twenty lacs of pagodas. If we concurred with you in this
opinion, we should certainly feel our hopes of advantage to all the
parties from this arrangement considerably diminished. But we trust that
we are not too sanguine on this head, when we place the greatest
reliance on the estimate transmitted to you by your President of Fort
St. George, having there the best means of information upon the fact,
and stating it with a particular view to the subject matter of these
paragraphs. Some allowance, we are sensible, must be made for the
difference of collection in the Nabob's hands, but, we trust, not such
as to reduce the receipt nearly to what you suppose.
2ndly. In making up the amount of the private debts, you take in
compound interest at the different rates specified in our paragraph.
This it was not our intention to allow; and lest any misconception
should arise on the spot, we have added an express direction that the
debts be made up with simple interest only, from the time of their
respective consolidation. Clause F f.
3rdly. We have also the strongest grounds to believe that the debts will
be in other respects considerably less than they are now computed by
you; and consequently, the Company's annual proportion of the twelve
lacs will be larger than it appears on your estimate. But even on your
own statement of it, if we add to the 150,000_l._, or 3,75,000 pagodas,
(which you take as the annual proportion to be received by the Company
for five years to the end of 1789,) the annual amount of the Tanjore
peshcush for the same period, and the arrears on the peshcush, (proposed
by Lord Macartney to be received in three years,) the whole will make a
sum not falling very short of pagodas 35,00,000, the amount of pagodas
7,00,000 per annum for the same period. And if we carry our calculations
farther, it will appear, that, both by the plan proposed by the Nabob
and adopted in your paragraphs, and by that which we transmitted to you,
the debt from the Nabob, if taken at 3,000,000_l._, will be discharged
nearly at the same period, viz., in the course of the eleventh year. We
cannot, therefore, be of opinion that there is the smallest ground for
objecting to this arrangement, as injurious to the interests of the
Company, even if the measure were to be considered on the mere ground
of expediency, and with a view only to the wisdom of reëstablishing
credit and circulation in a commercial settlement, without any
consideration of those motives of attention to the feelings and honor of
the Nabob, of humanity to individuals, and of justice to persons in your
service and living under your protection, which have actuated the
legislature, and which afford not only justifiable, but commendable
grounds for your conduct.
Impressed with this conviction, we have not made any alteration in the
general outlines of the arrangement which we had before transmitted to
you. But, as the amount of the Nabob's revenue is matter of uncertain
conjecture, and as it does not appear just to us that any deficiency
should fall wholly on any one class of these debts, we have added a
direction to your government of Fort St. George, that, if,
notwithstanding the provisions contained in our former paragraphs, any
deficiency should arise, the payments of what shall be received shall be
made in the same proportion which would have obtained in the division of
the whole twelve lacs, had they been paid.
* * * * *
No. 10.
Referred to from p. 103.