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the Company's servants, should be debarred from all concern in trade. But it CHAP. IX. neither occurred to the Deputy Chairman, nor was it pressed upon his notice by、 any other member of the legislative body, that the argument against the union of trade and government was equally conclusive, applied to the Company, as applied to their servants; to those who held the powers of government in the first instance, as to those who held them by delegation and at will.

1772.

brated exculpatory speech.

It was in the debate upon this motion that Lord Clive made the celebrated Clive's celespeech, in which he vindicated his own conduct, against the charges to which, as well from authority as from individuals, it had been severely exposed. He spared not the character either of his fellow-servants, or of the Directors. "I attribute the present situation of our affairs," he said, "to four causes; a relaxation of government in my successors; great neglect on the part of administration; notorious misconduct on the part of the Directors; and the violent and outrageous proceedings of general courts." To hear his account, no one would believe that any creature who had ever had any thing to do with the government had ever behaved well but himself. It was much easier for him, however, to prove that his conduct was liable to no peculiar blame, than that it was entitled to extraordinary applause. With great audacity, both military and political, fortunately adapted to the scene in which he acted, and with considerable skill in the adaptation of temporary expedients to temporary exigencies, he had no capacity for a comprehensive scheme, including any moderate anticipation of the future; and it was the effects of his short-sighted regulations, and of the unfounded and extravagant hopes he had raised, with which the Company were now struggling on the verge of ruin, and on account of which the conduct both of them and of their servants was exposed to far more than its due share of obloquy and condemnation.

'mittee of the

Commons ap

The suspicions of the nation were now sufficiently roused to produce a general A Select Comdemand for investigation; and on the 13th of April a motion was made and House of carried in the House of Commons for a Select Committee to gratify the public pointed to indesire. The bill which had been introduced by the Deputy Chairman was vestigate the thrown out on the second reading, to afford time for the operations of the Com- Company's mittee, and parliament was prorogued on the 10th of June.

state of the affairs.

affords relief.

During the recess, took place the extraordinary disclosure of the deficiency of The Minister the Company's funds, their loans were solicited from the Bank, and their application for support was made to the Minister. He received their proposals with coldness; and referred them to parliament. That assembly was convened on the 26th of November, much earlier, as the King from the throne informed

Book IV. them, than had been otherwise intended, to afford them an opportunity of

1773.

Company propose a com

pervision, which the

pose.

taking cognizance of the present condition of the East India Company. The Minister had already come to the resolution of acceding to the request of the Directors; it therefore suited his purpose to affirm that how great soever the existing embarrassment, it was only temporary; and a Committee of Secrecy was appointed, as the most effectual and expeditious method for gaining that knowledge of the subject from which it was proper that the measures of parliament should spring.

Among the expedients which the urgency of their affairs had dictated to the mission of su- Company, a new commission of supervision had been resolved upon during the recess; and six gentlemen were selected for that important service. The meaministry op- sure, however, was not approved by the ministry; and on the 7th of December the Committee of Secrecy presented a report, stating, that notwithstanding the financial difficulties of the Company, they were preparing to send out a commission of supervisors at a great expense, and that, in the opinion of the Committee, a bill ought to be passed to restrain them from the execution of that purpose for a limited time. The introduction of this bill excited the most vehement remonstrances on the part of the Company, and of those by whom their cause was supported in the two houses of parliament. It was asserted to be a violation of property, by curtailing the powers which the Company possessed by charter of managing their own affairs; and all the evils which can arise from shaking the security of property were held up in their most alarming colours to deter men from approbation of the threatened restraint. The Company's claims of property, however, so frequently, during the whole course of their history, brought to oppose the interposition of parliament in their affairs, proved of as little force upon this as upon other occasions; and their privileges, they were told, to which the term property, in its unlimited sense, could not without sophistry be applied, were insufficient to set aside that for which all property is created-the good of the community; now in one important article so formidably threatened in their mismanaging hands.

Terms on which the

for relief.

After this decisive act of control, the next ostensible proceeding was the petiCompany pray tion for a loan, presented by the Company to parliament on the 9th day of March. The propositions urged by the Directors were: that they should receive a loan of 1,500,000l. for four years, at four per cent. interest; that they should make no dividend of more than six per cent. per annum until the loan should be reduced to 750,000l.; that the dividend in that event should rise to eight per cent.; that the surplus of receipts above disbursements in England should be

1773.

applied to the reduction of the Company's bond debts to 1,500,000l.; that after CHAP. IX. such reduction, the surplus should be divided equally between the public and the Company; and that the Company should be released from payment of the annual 400,000l. to the public, for the remainder of the five years specified in the former agreement, and from the payments to which they were bound in consequence of the late acts for the indemnity on teas. In lieu of these, the Terms substituted by the following were the propositions offered by the Minister: to lend the Company ministry. 1,400,000/. at an interest of four per cent.; to forego the claim of 400,000%. a-year from the territorial revenue till that debt is discharged; to restrict them from making any dividend above six per cent. till that discharge is accomplished, and from making any dividend above seven per cent. till their bond debt is reduced to 1,500,000l.; after that reduction to receive from them, in behalf of the public, three-fourths of the surplus receipts at home, the remaining fourth being appropriated either for the further reduction of the bond debt, or the formation of a fund to meet contingent exigencies; and, under these conditions, to permit the territorial acquisitions to remain in their possession for six years, the unexpired term of their charter.

The Company treated these conditions as harsh, arbitrary, and illegal; petiOpposition of the Company tioned against them in the strongest terms; and were supported with great unavailing. vehemence of language by their own friends, and the enemies of the Minister, in both houses of parliament. The restriction of the dividend after payment of the debt, the exaction of so great a proportion of the surplus receipts, and in particular the appropriation even of that part which it was proposed to leave as their own, they arraigned as a violent disposal of their property without their own consent, equalling the most arbitrary acts of the most despotical governments, and setting a precedent which lessened the security of every right of a British subject. These considerations, however vehemently urged, produced but little effect: the ministerial influence was predominating; the Company were odious; and it was felt, perhaps, rather than distinctly seen, that the rules of individual property were not applicable, without great restrictions, to an artificial body, whose proceedings were of such a magnitude as deeply to affect the inte rests of the nation at large. Of all these pretensions, however, that which seemed most to alarm the Company was the claim now distinctly asserted by the government to the territorial acquisitions; and though a definitive discussion was still waved by the Minister, the Company expostulated against the limita tion of their possession to six years, as involving in it a decision of the question against them.

3

Book IV.

1773.

in the consti

tution of the Company.

A more important exercise of power over their affairs was still meditated by the Minister; an entire change in the constitution of the Company. On the 3d A great change of May he introduced a series of propositions, as the foundation for a law, which should raise the qualification to vote in the Court of Proprietors from 500/ to 1,000l., and give to every proprietor possessed of 3,000l. two votes, possessed of 6,000/. three votes, and of 10,000/. four votes; which should change the annual election of the whole number of Directors to that of six new ones, or one-fourth of the whole number each year; vest the government of Bengal, Bahar, and Orissa, in a governor-general, with a salary of 25,000l., and four counsellors of 8,000l. each; render the other Presidencies subordinate to that of Bengal; establish at Calcutta a supreme court of judicature, consisting of a chief justice with 8,000l. a-year, and three other judges, with each 6,000l. a-year, appointed by the Crown.

Objections of

As subsidiary articles it was proposed; that the first governor-general and counsellors should be nominated by parliament in the act, and hold their office for five years, after which the patronage of those great offices should revert to the Directors, but still subject to the approbation of the Crown; that every thing in the Company's correspondence from India, which related to the civil or military affairs, to the government of the country, or the administration of the revenues, should be laid before the ministry; that no person in the service, either of the King or of the Company, should be allowed to receive presents; and that the governor-general, the counsellors, and judges, should be excluded from all commercial profits and pursuits.

If the alarm and indignation of the Company, Directors and Proprietors, the Company. were excited before; that body were now struck with the highest terror and resentment. They exclaimed, that the very constitution was threatened with subversion, and the rights conferred by charter treated as dust. They tendered a direct application to the city of London, to join them with its influence in resisting a measure; which destroyed the principle on which its own privileges and those of every chartered body in the nation depended; and threatened the very freedom of the people, both by setting a conspicuous and prolific example of the arbitrary violation of law, and by adding the whole of the revenue and government of India to the power and influence of the Crown. They represented, that, by the clause which raised the qualification of the voters, above twelve hundred Proprietors were disfranchised; violently, and without compensation, robbed of an important right, and excluded from all share, direct or indirect, in the management of their own immediate property: That by destroying the annual

1773.

election of Directors, those Trustees for the Company were placed above the CHAP. IX. control of their constituents, and vested with new powers to gratify their own ease or corruption, at the expense of those whose interests were lodged in their hands: That by reducing to a small number the votes of the Proprietors, the ministerial management of that body became more easy: That, by rendering the situation of Director permanent for so great a number of years, under the incapacitation of the Proprietors either to punish or reward, and under the great power of the Minister to do both, the subserviency of the Court of Directors to all ministerial purposes was perfectly secured; and that, from these sources combined, the power of the Minister over the Company was rendered hardly any thing inferior to absolute: That the whole government of the settlements in India was taken from the Company, and, in effect, transferred to the Crown, by establishing a general presidency over all their affairs, of which the agents were in the first instance named by parliament, and ever after, in reality, under the condition of its approbation, named by the Crown: And that, “notwithstanding the Company were thus deprived of their franchise in the choice of their servants, by an unparalleled strain of injustice and oppression they were compelled to pay such salaries, as ministers might think fit to direct, to persons in whose appointment, approbation, or removal, the Company were to have no share."*

These considerations were frequently urged, with the utmost vehemence and asperity, in both assemblies of parliament. Every question, every clause, was warmly debated, and pressed to a division. The city of London, the Company themselves, and those stockholders who were deprived of their votes, presented strong and earnest petitions. In behalf of the Company, and the disfranchised Proprietors, counsel, at their prayer, were heard. And two protests, couched in censorial language of extraordinary strength, obtained a numerous. signature in the upper house.

All this opposition, however, and all this ferment were of little avail. The propositions of the ministry were all carried by great and decisive majorities, and being reduced into two acts, the one relating to the financial relief of the Company, the other to the establishment of their new constitution, they received the royal assent on the 21st of June and the 1st of July. The arrangements which concerned the business at home were appointed to commence from the 1st

→ Message from the East India Company to the Right Hon. the Lord Mayor, Aldermen, and Commons of the city of London, in Common Council assembled, dated 27th May, 1773.

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