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CHAP. 7.

1769.

BOOK IV and the Courts of Directors and Proprietors at home.

For the facility of their operations, and the success
of their government, it was of great importance for
the servants to preserve a full treasury in India,
secured by a small investment, and the receipt of
money for bills. It was the interest of the Directors
to have an ample supply of money at home, which
on the other hand could only be produced by a large
investment, and a moderate transmission of bills.
The Directors, accordingly, had given very explicit
instructions on this subject; and in their letter of the
11th of November, 1768, after acknowledging the
growing deficiency of the funds in India, had said ;
“Nevertheless, we cannot suffer ourselves to be
drawn upon to an unlimited amount, the state of the
Company's affairs here not yet admitting us to answer
large drafts upon us from India ; but should the exi-
gency of your affairs require your receiving money
into your treasury, we prefer the mode of borrowing
at interest to that of granting bills upon us : We
therefore permit you to take up such sums on in-
terest, for one year certain, as will answer your
various demands, which are to be paid off at the
expiration of that period, or as soon after as the state
of your treasury will admit of. You are, therefore,
to confine your drafts upon us, by the ships to be
despatched from your Presidency in the season of
1769, to the same amount as we allowed last year, ,
viz., 70,0001,1

1

Eighth Report from the Committee of Secrecy, 1773, Appendix, No. i. In their letter 17th March, 1769, they so far modify their former directions as to say, “Upon reconsidering the subject of remittances we find it so connected with that of the investment, that the increase of the former

When the amount of the sums which it was the BOOK IV

CHAP. 7. desire of individuals to send home exceeded the amount which it was permitted to the government

1769. in India to receive, in other words to draw bills for upon the Company at home, the parties who were deprived of this channel of remittance betook themselves to the French and Dutch factories, and paid the money into their treasuries for bills upon their respective companies, payable in Europe. This, from an early period of Mr. Verelst's administration, had constituted a heavy subject of complaint; as making these subordinate settlers to abound with money, while the English were oppressed with want. As he ascribed the financial difficulties of the Company's government merely to a defect of currency not of revenue, as he ascribed the defect of currency to the remittances which were forced into the Dutch and French channels; though neither of these nations carried any specie out of India, and were only saved to a certain extent the necessity of importing bullion ; to him it appeared surprising that the Dutch and French company should find it easy to pay the bills which were drawn upon them for money received in India; but that the English Com

must always depend on that of the latter. The produce of our sales here is the only channel of our receipts; and our flourishing situation in India would not avail us, if we were to suffer ourselves to be drawn upon to the amount of the cost of our homeward cargoes. In order therefore to unite the advantages of the Company and their servants, we do permit you to increase your remittances, by the ships despatched from Bengal in the season of 1769, beyond the limitation in our letter of the 11th November last, so far as one half of the sum which your investment sent home in that season shall exceed the amount of sixty lacks. But if you do not send home an investment exceeding that sum, you must then confine your drafts upon us agreeably to our said letter of the 11th November last.”

BOOK IV
CHAP. 7.

pany should find it impossible; and he ascribed the

restrictions which they imposed to a timid and narrow 1769. spirit. One circumstance, however, which consti

tuted a most important difference, he was ill situated to perceive. The French and Dutch Companies were chiefly commercial; and whatever money was received in India was laid out in the purchase of goods; these goods were carried to Europe, and sold before the bills became due; the bills were paid out of the proceeds; and a great trade was thus carried on upon English capital. The English Company, on the other hand, was become a regal, as well as a commercial body; the money which was paid for remittance into their treasury in India was absorbed

I In his letter to the Directors, dated 26th September, 1768, he says, “The extent of the Dutch and French credit exceeds all conception, and their bills are even solicited as favours. The precise sums received by them for some years I have endeavoured to ascertain, though hitherto without success : but if we only form our idea from the bills drawn this year from Europe on individuals here and Madras, the amount will appear prodigious and alarming. Advices of drafts and letters of credit hare been already received to the amount of twenty-eight lacks on Bengal, and ten on Madras; and I have the most certain information that their trea. sures at Pondicherry and Chandernagore, are amply furnished with all provision for both their investments and expenses for three years to come. You have often complained of the increase and superiority of the French and Dutch investments; but your orders and regulations have furnished them with the most extensive means of both. It is in vain to threaten dismission from ycur service, or forfeiture of your protection, for sending home money by foreign cash, while you open no doors for remittances yourselves. Such menaces may render the practice more secret and cautious; but will never diminish, much less remove the evil.” Vereist's Appendix, p. 113. So much did Mr. Verelst's imagination deceive him, in regard to the prosperity of the English rivals, that the exclusive pri; vileges of the French Company, after they had struggled for some time on the verge of bankruptcy, were suspended by the King, and the trade laid open to all the nation. They were found unable to extricate themselves from their difficulties; and resigning their effects into the hands of government, for certain government annuities to the proprietors of stock, the Company were in reality dissolved. Raynal, liv, viii sect. 26, 27.

CHAP. 7.

1769.

in the expense of the government;' and so much BOOK IV only as could be spared was employed in the purchase of investment. This was one cause undoubtedly of the comparative inability of the English Directors to pay the bills which were drawn upon them.

In the Consultation of the 23d of October, in consideration of great exigency, it was resolved, that the Board would receive all monies tendered to the Company's treasury from that day to the 1st of November, 1770; and at the option of the lenders, grant, either interest notes payable in one year; or receipts bearing interest at eight per cent. for bills to be granted at the sailing of the first ship after the 22d of November, 1770, payable with three per cent. interest, in equal proportions on each tender, at one, two, and three years sight. And as a resource to the Directors, it was resolved to enlarge the investment by purchasing, not with ready money, but with

" This is not warranted by the facts : a slight examination of the general accounts of receipts and disbursements exhibited in the accounts of the Bengal Presidency published by the Select Committee shows, that the financial difficulties experienced there arose not from the political, but the commercial transactions of the Company. From 1761 to 1772, there was a surplus on the territorial account of about 5,475,0001. (the smaller figures are purposely omitted). The whole produce of the import cargoes was 1,437,0001., the cost value of the goods remitted to England, 5,291,0001., of which, therefore, 3,854,0001. had been provided out of the revenue. Besides this, large remittances for commercial purposes had been made to other settlements, and to China, exceeding those received by 2,358,0001., and consequently, exceeding the whole territorial receipt by 737,0001. It is not matter of surprise, therefore, that the territorial treasury was embarassed, nor is it to be wondered at that the resources of the country were in progress of diminution, the constant abstraction of capital, whether in bullion or goods could not fail in time to impoverish any country however rich, and was very soon felt in India, in which no accumulation of capital had ever taken place from the unsettled state of the Government, and the insecurity of property, and the constant tendency of the population to press upon the means of subsistence.-W. VOL. III.

2 G

CHAP. 8.

1765.

BOOK IV bonds at eight per cent. and one year's credit. This

was the last considerable act in which the Governor was engaged. He resigned his office on the 24th of December, and was succeeded by Mr. Cartier. A new treaty had been concluded with Shuja-ad-dowla, which allayed whatever suspicions the ambiguous conduct of that Governor had raised, and Mr. Verelst left the three provinces in profound tranquillity.'

CHAPTER VIII.

Subahdar of the Deccan dethroned by his brother.

The English take possession of the Northern Circars.- Make a Treaty with the Subahdar of the Deccan.-Which embroils them with Hyder Ali.— History of Hyder Ali.Hyder's first war with the English.New Treaty with the Subahdar. - Peace with Hyder.

The Carnatic remained but a short time free from the pressure of the neighbouring powers. In the superior government of the Deccan, Nizam Ali, who

| The principal materials, before the public, for the history of Verelst's administration, are found in the Reports of the Two Committees of 1772, and in the Appendix to his own View of Bengal. Information, but needing to be cautiously gleaned, is obtained from the numerous Tracts of the day.

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