dividend gave their enemies great advantages over them in the Court
of Proprietors. The Directors had themselves caused a motion for an
increase of 2 per cent. to be brought forward in June, 1766, when
they succeeded in getting it negatived; and thus, in consequence of
particular rules, which regulated the Court's proceedings, gained
some time. But this delay did not check the determination of the
party in opposition, which daily gained strength. Lord Holland, and
several other great proprietors, joined it, and Mr. Johnstone and his
friends threw all their weight into the scale. Only two days before
the Quarterly Court, in September[135], the party split 125,000_l._
stock into shares, and, by their exertions, succeeded in carrying the
dividend to 10 per cent., in opposition to the expressed wish and
advice of the Court of Directors. But a consequence of this difference
of opinion between the Courts was, that this declared increase of
dividend had no influence in raising the price of their stock.
At this period, party animosity ran very high, and produced its usual
effects of mutual abuse and recrimination. The opposition started a
paper, called the India Examiner, which the Directors answered in the
India Observer.
Although it was on occasion of the vote for this increase of dividend
that the Government began to intermeddle in the affairs of the Company,
it may be most convenient, before attending to the proceedings of the
Ministry, to conclude the narrative of the contest of the Directors
with the Court of Proprietors.[136]
Mr. Johnstone and his friends had trusted to be relieved from the
prosecutions instituted against them, by exerting their influence to
effect a change of Directors. In April, 1767, however, their efforts
for that purpose again failed: the elections were still favourable
to the old Directors, and Mr. Rous was again chosen Chairman. Lord
Clive was then on his passage home. Mr. Johnstone's party, seeing that
nothing was to be looked for from the Directors, adopted the resolution
of attempting to work on the Proprietors, who were still, in general,
discontented on the subject of the dividends. At the General Court,
therefore, held on the 6th of May following, Mr. Pulteney moved, that
the dividend should be raised to 12-1/2 per cent.; a proposition which
met with very general concurrence. Mr. Pulteney having thus secured
the good-will of the Proprietors, Mr. Franks then moved to dismiss
the prosecutions which had been instituted against Mr. Johnstone and
other persons, for their alleged unwarrantable receipt of money in
Bengal. The Chairman in vain proposed that the opinion of the lawyers
should be read: the Court, displeased with the Directors, and elated
with the measure they had carried against them, with the assistance
of Mr. Johnstone and his friends, refused to hear it. Seeing them
so determined, and so strong, no opposition was attempted by the
Directors, nor even a ballot demanded. The motion of indemnity was
carried without farther examination; a great victory to the accused
members of Council, and a severe blow on the authority of the Court of
Directors and of the Indian governments. It declared indemnity abroad
to all who at home had powerful friends connected with the India House;
an intimation that was not long disregarded.[137]
The Ministry, in the meanwhile, had begun to take a share in the
proceedings of the Company, which for a long time before had not been
usual. The reported advantages of the trade, and the great fortunes
suddenly amassed and brought home, had excited in the country no small
envy, and some desire to share in these advantages; while the repeated
revolutions in India, the circumstances attending them, with the
rapacity and extortions which had distinguished the progress of the
inland trade, had, when known, produced general murmurs throughout the
nation. When the news arrived of the successful negotiations of Lord
Clive, and of the immense territorial advantages said to be acquired
for the Company, the question was raised, to whom belonged these
dominions, the government of which was apparently so little suited
to the system of a trading company; and the financial difficulties
which the Ministers so strongly felt, led them to consider in what way
the nation could be admitted to share in them. This was particularly
observable after the formation of Lord Chatham's administration.[138]
It has been already mentioned, that Lord Clive shared in that excessive
admiration of Mr. Pitt, which, during his first administration, and for
some years after, may be said to have been felt by the whole people of
England. Lord Clive, in his own politics, had, as we have seen, most
attached himself to the Right Hon. George Grenville, a man of great
knowledge of business, and of much talent and worth, the leader of one
great portion of the Whig interest; but who, at this period, was on
indifferent terms with his illustrious though overbearing friend. On
the great question of the right to territorial acquisitions, Mr. Pitt
was disposed to consider them as under the control of the state; but
he was not insensible to the difficulties, legal and political, which
the question involved, from the nature of the territories themselves,
situated in the dominions of an ancient and independent empire; from
the influence which such acquisitions, especially from the patronage
they afforded, must have on the British constitution, and the minor
difficulties of detail attending any change of local management. We
have seen that Lord Clive was strongly persuaded of the paramount
rights of the state, and had communicated his opinion to Mr. Pitt. Mr.
Walsh, who took an active share in the management of his affairs in
England, was anxious to have the approbation, or, at least, the opinion
of the great commoner on recent events in India. He, in consequence,
had occasional interviews with him, the circumstances of which he
communicated in his letters to his friend; and though Mr. Pitt, who
always entertained the highest opinion of Lord Clive's merits, appears
to have cautiously avoided committing himself by any decided opinion,
yet, as the letters relate to persons on every account so remarkable,
no apology seems necessary for introducing them.
The first of these notices occurs in a letter of Mr. Walsh, written
after the news had arrived of Lord Clive's negotiation with the
Vizier, and of the subsequent peace, and its advantages to the Company,
especially in the possession of the dewannee, which really made them
rulers of Bengal. "I am very sorry," says Mr. Walsh, "you did not write
a few lines to Mr. Pitt, to conciliate him to your negotiations: he
has left us for Pynsent, where he is doing great things. I spoke a
few words to him, just as he left the House of Commons, telling him
you had, in great measure, carried into execution what I had once the
honour of laying before him; to which he answered, that he had heard
of the great things you had done; that you had acquired great honour;
but that they were too vast: it was some time he had been dissatisfied
with our proceedings there: however, he was very glad to hear that Lord
Clive was well, and that he had not gone up to Delhi. This was all
that passed between us, whilst he was getting on his great coat."--"I
should be very sorry," he continues, "to have been adverse to you or
your regulations, therefore mention this that due attention may be
paid to him. One word from him would go far in making or unmaking the
Company; and it is the uncertainty of the public, how far the Company
may be supported by the Government, that makes their stock so low,
notwithstanding the late events. The renewal of their charter is a
serious object; the effecting it may possibly be reserved for you." It
gives a grand idea of Mr. Pitt's reputation, and of his influence on
the public mind, to consider, that, when this interview took place, he
was merely a private member of Parliament, holding no office.
In the interval between this letter of May, and the following of
November, Mr. Pitt had come into office with Lord Camden, Lord
Shelburne, the Earl of Northington, and Charles Townsend, and had been
raised to the peerage. There was some reason to think that the new
Ministry were disposed to take part with that portion of the Court of
Directors that was hostile to Lord Clive. Lord Shelburne in particular,
who was supposed to have much influence with the Premier, had always
favoured Sulivan. "Soon after the new administration was formed," says
Mr. Walsh[139], "the Chairman and Deputy Chairman were sent for to the
Cabinet Council, and were acquainted that, as the affairs of the India
Company were likely to be taken into consideration by Parliament, it
would be proper for them to be prepared. An intimation of the kind
could not fail to alarm, and affect the stock greatly.
"The Quarterly Court being over, I made an excursion to Bath, where
Lord Chatham, Lord Camden, and Lord Northington were assembled. My
private motive for this journey was to discover their disposition
towards the Company; and, by means of my intimacy with Lord Camden,
to endeavour to put you on a good footing with Lord Chatham, who,
there was some reason to apprehend, was not the best disposed either
towards you, the present direction, or the Company. I recollected Lord
Chatham's discourse to me about your acquisitions being too vast; and
saw Shelburne, Barré, and the enemies of the present direction in the
highest employs. Lord Camden immediately removed any apprehensions as
to any thing hostile being intended against the Company. I told him
that I was ignorant whether the Directors had given the Administration
full information concerning the affairs of Bengal: but, whatever their
conduct might have been in that respect, I, as acting for Lord Clive,
should use no kind of reserve with the Administration; that Lord Clive,
though a zealous servant of the Company, ever considered his duty to
his country to be the first and greatest obligation upon him; that he
had formerly submitted to Lord Chatham's consideration, whether the
Bengal acquisitions were an object for the state or the Company; and
that, though the Company had in a manner been left to pursue their
own measures in that respect, yet it was reasonable that, in such
great prosperity as theirs, they should contribute liberally to the
exigencies of the state; that your friends would readily concur in
such a measure, and that I wished for an opportunity of assuring Lord
Chatham of this; but as I knew him, particularly in his present ill
state of health, to be inaccessible, I requested his Lordship to report
it to him. He advised my writing a note to see Lord Chatham, which I
accordingly did, and was admitted, though it was then a favour, as I
understood, he had only granted to Lord Camden.
"I should have mentioned that, before I left town, I waited on General
Conway[140]; made him the same offer of information; gave him a state
of the revenues, and pointed out to him some of the means by which the
commerce of the Company might be greatly advanced. He appeared quite
unacquainted with these affairs, but very desirous to be informed.
"It was the 11th of last month that I saw Lord Chatham. I told him
the occasion of my visit in almost the same words I had used to Lord
Camden; in answer to which, after complimenting me on the purity, as
he styled it, of my intentions, and of the liberal way in which I
had considered this matter, he told me that all _matters of fact_
relating to India would be very acceptable to him, though he did not
wish to receive _propositions_ on that head, as the affair was of too
extensive and too difficult a nature for Ministers to determine; that
they could not undertake to decide between the State and the Company,
what was precisely proper for each; that the consideration must of
necessity come into Parliament; that by the means of so many gentlemen
coming from different parts of the kingdom, and turning the subject
different ways in their minds, many new lights might be gathered; that
the Crown had nothing to do in the affair, and that its ministers could
only interfere in preventing unreasonableness and oppressions on one
side or the other; and that the Company, in all cases, must subsist.
On my giving him the state of the revenues, he seemed much surprised
at the smallness of the amount, saying that Holwell and common report
had made it much larger. He spoke very handsomely of you; said that he
heard with concern of the virulent publications against you; that it
was incumbent on the Company to support you strongly, and likewise to
reward you. I mentioned how greatly the Company's commerce might be
extended with the assistance of Government; hinted the necessity there
was of excluding foreigners from being stockholders and sharing in our
benefits; and concluded with observing that every thing I had heard
from him gave me the highest satisfaction, except the impracticability
that he intimated of any arrangement between the Administration and the
Directors before the meeting of Parliament.
"This is the substance of my conversation with this great man, who is
certainly not only the most vigorous, but the most comprehensive and
judicious, minister this kingdom ever had. I hope, in consequence of
what I before wrote you, that you have taken some steps to conciliate
and attach him. He has a greatness in himself, which makes him feel and
assert the great actions of others.
"I put your public letters into the hands of Lord Camden, who,
doubtless, showed them to Lord Chatham. Both one and the other, I am
certain, are well satisfied with the confidence. Mr. Grenville has had
all the papers laid before him, and part of them, particularly those
relative to the conduct of the servants, have been communicated to
others."
From these letters, it is evident that Lord Chatham had been yet able
to form no plan on the vast subject of Indian affairs; that he was
disposed to let matters take their course for some time longer through
the intervention of the Company, and that the recent extension of
their dominions probably rather embarrassed him; that he was alive, as
he had always been, to Lord Clive's splendid merits, and an advocate
for the rewards the gratitude of the country ought to bestow. At the
same time he was cautiously guarded not to commit himself by any
opinions, but rather disposed to gain time and watch what the progress
of events might produce. It could hardly fail to gratify him to see
all parties contending for his favour, and laying the information they
possessed, and a tender of their services, at his feet.
Lord Chatham's administration was formed in the last days of July,
and it was in September that the Chairman and Deputy Chairman of the
Company were sent for to the Council, and informed that it was likely
that the affairs of the Company would be taken into consideration when
the Parliament met. The same notice was soon after communicated in
writing.
The Directors, thus put upon their guard, looked eagerly to what was to
follow. The movement began in the House of Commons, where Mr. Beckford
gave notice of a motion for an inquiry into the affairs of the East
India Company[141]; and in the course of his speech, adverting to the
burdens laid on the landed interest, and to the rich acquisitions of
the Company in the East, congratulated his brother landholders that
they should no longer be hewers of wood and drawers of water. The very
exaggerated statements of the revenues of Bengal, published by Mr.
Holwell and others, had induced the public to look to them for at least
a partial relief from their burdens. The Ministers, however, cautiously
concealed their intentions, if they had any, and proposed nothing.
Lord Chatham was constantly confined by the gout, remained chiefly in
the country, and showed himself but little; and his colleagues did not
venture, in his absence, to propose any important measure. Matters went
on languidly. Indeed, the symptoms of disunion very soon became visible
in the motley cabinet which had been formed, and was supported chiefly
by Lord Chatham's great name.
His opinions on the Indian question were veiled in impenetrable
mystery. Committees were, however, appointed to examine into the
state of the Company, and votes were passed that copies of their
charters, their treaties with native princes, statements of their
Indian revenues, and their correspondence with their servants in India,
should be laid before the Committees. On a motion for printing these
papers[142], the Directors being alarmed, presented a petition showing
the dangers and inconveniences likely to result from making public some
part of the papers, especially the private correspondence; when, after
a warm debate, that part of the order was discharged. Almost every
person of eminence who had been in India, or connected with it, was,
however, examined on oath before the House of Lords.
These inquiries inevitably led to the important question of the
Company's right to their territorial acquisitions, which a strong party
insisted must belong to the Crown. "The Crown," says Mr. Dudley[143],
the Chairman of the Directors, "claims a right to all the Company's
acquisitions, possessions, and revenues that have been obtained by
conquest, which the Cabinet Council, with Lord Chatham at their head,
say is the case with respect to every thing we have got from the King,
the Nabobs, or other princes of the country for some years past, both
at Bengal and Madras."--"We have been, and still are under the dilemma
of studying the wants of the Administration, for they themselves
will not open their mouths to utter one syllable. They seem to me to
determine in their own minds that the right is in the Crown; and,
therefore, if the Company have a desire to preserve a share in it,
they must acknowledge that right, and pay largely for it." In the
numerous debates on Indian affairs that took place in the course of
the session, Mr. Beckford, Colonel Barré, and Mr. Nugent pressed upon
the Company, while Mr. George Grenville and Mr. Charles Yorke strongly
supported its rights, and pleaded the injustice of making any demands
upon it in consequence of its conquests, as long as the term of its
charter was unexpired. The lawyers were, in general, in favour of the
Company; but neither the Ministry nor the Directors wished the dry
question of law to be decided: neither party were altogether prepared
for its consequences; both rather wished for a compromise, as more
favourable to their present ease and their future views. Sir Matthew
Fetherstonehaugh, a considerable proprietor of India stock, in a letter
to Lord Clive[144], describes some of these debates. "In a question
like this," says he, "about the right of property and the forfeiture of
a charter, one would have thought that the opinion of almost all the
lawyers in the house might have been attended to; but they were called
by Colonel Barré 'a sort of _heavy artillery_, which did very little
execution;' for which the Master of the Rolls called him, instead of
the _honourable_ gentleman, the _valiant_ gentleman. Mr. Grenville,
on both days, defended the Company's rights with a force that was
unanswerable, always declaring that, if the Company wanted the renewal
of their term, or any other favour from the public, they should be made
to pay for it in the best bargain which could be made for the public;
but protesting against extorting money from them by the terror and
threats of parliamentary power."--"But the finest piece of oratory was
Mr. Burke's (late secretary to Lord Rockingham). After pointing out
the ill effects which so violent a measure might have on the public
credit; 'but, perhaps,' said he, 'this house is not the place where our
reasons can be of any avail. The great person who is to determine on
this question, may be a being far above our view; one so immeasurably
high, that the greatest abilities (pointing to Mr. Townshend), or the
most amiable dispositions that are to be found in this house (pointing
to Mr. Conway), may not gain access to him; a being before whom
'thrones, dominations, princedoms, virtues, powers' (waving his hand
all this time over the treasury bench, which he sat behind), 'all veil
their faces with their wings. But though our _arguments_ may not reach
him, possibly our _prayers_ may.' He then apostrophised into a solemn
prayer to the Great Minister above, that rules and governs over all
to have mercy upon us, and not to destroy the work of his own hands;
to have mercy on the public credit, of which he had made so free and
large a use:--'Doom not to perdition that vast public debt, a mass
of 70,000,000_l._ of which thou hast employed in rearing a pedestal
for thy own statue.' Here Augustus Harvey called him to order to the
regret of many." After a long series of debates, the Directors were
finally frightened into a temporary compromise, agreeing to pay to the
Government 400,000_l._, by half-yearly payments, for one year; and an
act to that effect passed the house[145], and soon after received the
royal assent.[146] A similar agreement was renewed the year after.
It was some time before that the vote of the Court of Proprietors
raising the dividend to 12-1/2 per cent. had been passed[147]; on which
occasion a message from the Ministry had been read to the General
Court, recommending that no augmentation should take place till their
affairs, then under the view of Parliament, were considered. The Court
having proceeded nevertheless, a bill was introduced, by which this
order was rescinded, and the Company prevented from dividing more than
10 per cent. before the next meeting of Parliament.
While these various proceedings were in progress, a measure was
proposed that much more immediately concerned Lord Clive's interests.
During the discussions that had recently taken place in Parliament,
however much the public mind had been excited and disgusted by the
reported behaviour of the Company's servants in Bengal, all parties
had concurred in loudly praising his conduct and services. When the
news of his distinguished success in restoring the Company's affairs
reached England, and when the negotiations between the Directors and
the Government had begun, many of his friends considered that the
proper time had arrived for proposing that some suitable reward should
be conferred upon him for his extraordinary services; and accordingly,
to prevent his interests from being injured by any subsequent agreement
that might be made in the negotiation then depending, a motion was
made at a General Court of Proprietors[148], "That it is the opinion
of this Court, that the important services rendered to the Company by
Lord Clive merit a grateful acknowledgment and return; and that a grant
to his Lordship, and his personal representatives, of an additional
term in the jaghire of ten years, commencing from the determination of
his Lordship's present right therein, would be a proper acknowledgment
and return for such important services: and that it be recommended to
the Court of Directors, that, upon any future propositions being made,
either to Parliament, or to His Majesty's Ministers, this resolution of
the General Court be humbly represented."
On this motion being made, Mr. George Dempster, who was one of the
leaders of the opposition to the Directors, moved an adjournment, which
was negatived by 243 to 170. The main question was then put; when a
ballot was demanded by Sir George Colebrooke in favour of it, and by
Mr. Dempster in opposition; when Sir George Colebrooke's question was
carried by 456 to 264.
The Proprietors having now formed themselves into a general court, Mr.
Dempster moved to reconsider the question concerning the additional
term of ten years proposed to be granted to Lord Clive in his jaghire,
and which was to be considered on the 24th of March. This motion, after
some opposition, was finally carried.
On the appointed day, a ballot having taken place, the original motion
was carried by 361 to 332. The majority of 29 was small; but some
misunderstanding had, unluckily, taken place among the friends of Lord
Clive.