Affairs in India had in the mean time taken a very unfavourable turn. Even during the three years of the government of Mr. Verelst, a man of good judgment, of industry, and the purest intentions, a deficiency of funds was severely felt. This was not so much from a decline in the revenues, though Lord Clive had perhaps estimated them beyond their real amount, as from various other causes. The civil, military, and commercial expenses were daily increasing, when the steady hand that had checked their natural tendency to excess was removed. Immense sums were spent on building forts, barracks, &c.: the system of overcharge, and waste, from design or carelessness, again pervaded every branch of the service: the pay of the whole superior officers, civil and military, which had formerly been chiefly defrayed by the Salt Society, now fell directly on the revenues. The whole course of commerce, which had been disordered for some years, was disordered still more by the immense investments raised for the Company, not as formerly in exchange for bullion or silver imported from Europe, but from the revenues of the country itself, and with all the disadvantageous circumstances attending a political monopoly; for, while the exportation of bullion to China continued, even the sums formerly brought by foreigners had ceased; as the English, who had large private fortunes to remit home, supplied them liberally with funds in India, in exchange for bills on Europe, which prevented for a time the importation of the precious metals as merchandise. Clive's last act had been to withdraw the Europeans from out-stations, and to limit their interference with the internal trade; a measure which, however exceptionable it would be in a country where equal law existed, had become absolutely necessary where European delinquency had no adequate check, and where the grossest injustice could be practised by white traders and their agents, on the timid and defenceless natives. Soon after the Company had abolished the Salt Society, professedly on the general principle of hostility to monopolies, and to restore the trade to the natives, they published the order declaring the trade open to all, whether natives or Europeans; an act by which, contrary to their intentions, they in reality restored a more grievous and exceptionable monopoly than that which had existed before. Besides all this, the unfortunate and ill-conducted war on the Coromandel Coast, made it necessary to send large sums from Bengal to that quarter.
There is, perhaps, no instance in history of a country that has continued, for any considerable length of time, to send a very large proportion of its revenues, as a regular tribute, out of its own territory. The difficulty is to get a country, however rich, to be able to supply the expenses of its own government. This, even in the most favourable circumstances, is no easy task. A bold, active, and resolute ruler, like Frederick of Prussia, or Lord Clive, may, by the force of personal character, reduce expenses, for a given time, within the narrowest bounds; but the natural tendency of a prosperous country is, to contrive means of consuming on the spot, by indulgences, which come to be considered as necessaries, and by corresponding salaries or allowances, the whole sum that is raised by taxation. A country like Bengal, in which the European, so far as the native was concerned, was subject to the influence of no public opinion, and so far as regarded his own countrymen, to a very imperfect one, was not likely to form an exception to this rule. The golden dreams, in which all parties had indulged from the wealth of the country, were rudely disturbed, though none were quite sure of the exact causes.
We have already seen that an agreement, for one year, was concluded between the Government and the Directors, in 1767, and renewed in the ensuing year, by which the Company became bound to pay 400,000l. in each of these years to the Government. When the agreement was about to expire, the Directors were again strongly pressed by the Government, and after some negotiation a bargain was concluded, by which the Company agreed to pay to the public the sum of 400,000l. annually, for five years longer; besides undertaking to export a certain value of British goods: they were to be at liberty to increase their dividend, during that time, to 12½ per cent., the increase not to exceed 1 per cent. in any one year. If the Company were under the necessity of reducing their dividend, an equal proportion was to be deducted from the annual payment to Government; and if their dividends were reduced to 6 per cent., the payment to the public was to cease altogether. Provision was also made for the case of a large surplus, and its appropriation prescribed.
This agreement was violently opposed in every step of its progress. Among others, Lord Clive, we have seen, was decidedly hostile to it, and used every exertion, not only with the Directors, and in the Court of Proprietors, but in his place in Parliament, to prevent its being concluded. He was of opinion that the Directors sacrificed the interests of the Company to their fears, and that the Ministers extorted unreasonable concessions from their weakness. Writing to his brother-in-law, the Hon. Colonel Sempill, while the Act was in progress, he says[159], "My journey to the south of France and the Spa waters has restored me to more health than I have enjoyed for some years; and I think, in a very short time, I shall be tired of the bustle going on in this busy world, and seek for ease in a retired country life. The newspapers will make known to you the distracted state of affairs in almost every part of the extended empire of Great Britain. It is no wonder that our East India affairs should partake of the same confusion. Administration, and the Directors, seem to think of nothing but the present moment. The one seems resolved to strip the Company of all they can; and the other to submit to any thing, rather than risk their stations, power, and authority at the next general election."—"Parliamentary concerns have embroiled me more than is good for my health, and already I begin to grow tired of them."
He had ceased to attend the General Courts, and did not even ballot upon any question, except that regarding the agreement with Government, which he opposed; but which, after three efforts, the combined force of the Administration and the Directors carried by a majority of 40; 290 for, 250 against.
Writing to Mr. Claud Russell[160], in Bengal, he takes a comprehensive and sound view of national concerns at the turbulent period which immediately preceded the American war. "To describe the situation of our affairs at home," says he, "would require a much abler pen and more time than I am at present master of. We are drawing very fast towards a dangerous crisis, from which we can only be extricated by some first-rate genius, and where to find that genius does not appear at present. Our wide and extended possessions are become too great for the mother country, or for our abilities, to manage. America is making great strides towards independency; so is Ireland. The East Indies also, I think, cannot remain long to us, if our present constitution be not altered. A Direction for a year only, and that time entirely taken up in securing Directors for the year to come, cannot long maintain that authority which is requisite for the managing and governing such extensive, populous, rich, and powerful kingdoms as the East India Company are at present possessed of. So far are our Ministers from thinking of some plan for securing this great and national object, that they think of nothing but the present moment, and of squeezing from the Company every shilling they have to spare, and even more than they can well spare, consistent with their present circumstances. I have drawn out my thoughts on this important subject, but I dare not trust them to so divided, weak, and selfish an Administration. If Lord Chatham and Mr. Grenville should appear once more at the head of affairs (of which there is some prospect), they are the only men capable, in my opinion, of embracing such ideas, which you know are extensive ones.
"Mr. Sulivan," he continues, "still entertains hopes of being a Director, and Mr. Vansittart of being Governor of Bengal; to which ambitious views I shall give every opposition in my power. For, if I could admit, which is far from the case, that both are every way qualified for the stations they are aspiring at, yet, I know their connections to be such, that they must attempt the overthrow of that system which hitherto has been attended with so much advantage to the nation and the Company. The efforts which have been made are great, yet I am confident they will fail in their designs, if the Directors remain united among themselves, which, at present, there is a great probability of, notwithstanding the divisions and dissensions which have lately arisen among them, about the propositions made to Government. I myself am strongly against them, as they stand at present; because I think neither the welfare of the public, nor of the Company, have been consulted, and that the Directors have committed themselves too much to administration, from an apprehension of a Parliamentary inquiry, and from a dread of being again examined at the bar of the House of Commons.
"My best wishes are offered for your speedy return to your native country with health and independency, without which there can be no happiness in this life; and the sooner that event happens, the more pleasure it will afford,
"Yours, &c."