Chapter 3

These expressions, concerning the ground of the transaction, its effect, and its clandestine nature, are in the letters bearing date March 17, 1769. After receiving a more full account, on the 23d March, 1770, they state, that "Messrs. John Pybus, John Call, and James Bourchier, as trustees for themselves and others of the Nabob's private creditors, had proved a deed of assignment upon the Nabob and his son of FIFTEEN districts of the Nabob's country, the revenues of which yielded, in time of peace, eight lacs of pagodas [320,000_l._ sterling] annually; and likewise an assignment of the yearly tribute paid the Nabob from the Rajah of Tanjore, amounting to four lacs of rupees [40,000_l._]." The territorial revenue at that time possessed by these gentlemen, without the knowledge or consent of their masters, amounted to three hundred and sixty thousand pounds sterling annually. They were making rapid strides to the entire possession of the country, when the Directors, whom the right honorable gentleman states as having authorized these proceedings, were kept in such profound ignorance of this royal acquisition of territorial revenue by their servants, that in the same letter they say, "This assignment was obtained by _three of the members of your board_ in January, 1767; yet we do not find the _least trace_ of it upon your Consultations until August, 1768, nor do any of your letters to us afford any information relative to such transactions till the 1st of November, 1768. By your last letters of the 8th of May, 1769, you bring the whole proceedings to light in one view."

As to the previous knowledge of the Company, and its sanction to the debts, you see that this assertion of that knowledge is utterly unfounded. But did the Directors approve of it, and ratify the transaction, when it was known? The very reverse. On the same 3d of March, the Directors declare, "upon an _impartial examination_ of the whole conduct of our late Governor and Council of Fort George [Madras], and on the fullest consideration, that the said Governor and Council have, _in notorious violation of the trust_ reposed in them, manifestly _preferred the interest of private individuals to that of the Company_, in permitting the assignment of the revenues of certain valuable districts, to a very large amount, from the Nabob to individuals"; and then, highly aggravating their crimes, they add,--"We order and direct that you do examine, in the most impartial manner, all the above-mentioned transactions, and that you _punish_, by suspension, degradation, dismission, or otherwise, as to you shall seem meet, all and every such servant or servants of the Company who may by you be found guilty of any of the above offences." "We had" (say the Directors) "the mortification to find that the servants of the Company, who had been _raised, supported, and owed their present opulence to the advantages_ gained in such service, have in this instance most _unfaithfully betrayed_ their trust, _abandoned_ the Company's interest, and _prostituted_ its influence to accomplish the _purposes of individuals, whilst the interest of the Company is almost wholly neglected_, and payment to us rendered extremely precarious." Here, then, is the rock of approbation of the Court of Directors, on which the right honorable gentleman says this debt was founded. Any member, Mr. Speaker, who should come into the House, on my reading this sentence of condemnation of the Court of Directors against their unfaithful servants, might well imagine that he had heard an harsh, severe, unqualified invective against the present ministerial Board of Control. So exactly do the proceedings of the patrons of this abuse tally with those of the actors in it, that the expressions used in the condemnation of the one may serve for the reprobation of the other, without the change of a word.

To read you all the expressions of wrath and indignation fulminated in this dispatch against the meritorious creditors of the right honorable gentleman, who according to him have been so fully approved by the Company, would be to read the whole.

The right honorable gentleman, with an address peculiar to himself, every now and then slides in the Presidency of Madras, as synonymous to the Company. That the Presidency did approve the debt is certain. But the right honorable gentleman, as prudent in suppressing as skilful in bringing forward his matter, has not chosen to tell you that the Presidency were the very persons guilty of contracting this loan,--creditors themselves, and agents and trustees for all the other creditors. For this the Court of Directors accuse them of breach of trust; and for this the right honorable gentleman considers them as perfectly good authority for those claims. It is pleasant to hear a gentleman of the law quote the approbation of creditors as an authority for their own debt.

How they came to contract the debt to themselves, how they came to act as agents for those whom they ought to have controlled, is for your inquiry. The policy of this debt was announced to the Court of Directors by the very persons concerned in creating it. "Till very lately," say the Presidency, "the Nabob placed his dependence on the Company. Now he has been taught by ill advisers that an interest out of doors may stand him in good stead. He has been made to believe that _his private creditors have power and interest to overrule the Court of Directors_."[10] The Nabob was not misinformed. The private creditors instantly qualified a vast number of votes; and having made themselves masters of the Court of Proprietors, as well as extending a powerful cabal in other places as important, they so completely overturned the authority of the Court of Directors at home and abroad, that this poor, baffled government was soon obliged to lower its tone. It was glad to be admitted into partnership with its own servants. The Court of Directors, establishing the debt which they had reprobated as a breach of trust, and which was planned for the subversion of their authority, settled its payments on a par with those of the public; and even so were not able to obtain peace, or even equality in their demands. All the consequences lay in a regular and irresistible train. By employing their influence for the recovery of this debt, their orders, issued in the same breath, against creating new debts, only animated the strong desires of their servants to this prohibited prolific sport, and it soon produced a swarm of sons and daughters, not in the least degenerated from the virtue of their parents.

From that moment the authority of the Court of Directors expired in the Carnatic, and everywhere else. "Every man," says the Presidency, "who opposes the government and its measures, finds an immediate countenance from the Nabob; even our discarded officers, however unworthy, are received into the Nabob's service."[11] It was, indeed, a matter of no wonderful sagacity to determine whether the Court of Directors, with their miserable salaries to their servants, of four or five hundred pounds a year, or the distributor of millions, was most likely to be obeyed. It was an invention beyond the imagination of all the speculatists of our speculating age, to see a government quietly settled in one and the same town, composed of two distinct members: one to pay scantily for obedience, and the other to bribe high for rebellion and revolt.

The next thing which recommends this particular debt to the right honorable gentleman is, it seems, the moderate interest of ten per cent. It would be lost labor to observe on this assertion. The Nabob, in a long apologetic letter[12] for the transaction between him and the body of the creditors, states the fact as I shall state it to you. In the accumulation of this debt, the first interest paid was from thirty to thirty-six per cent; it was then brought down to twenty-five per cent; at length it was reduced to twenty; and there it found its rest. During the whole process, as often as any of these monstrous interests fell into an arrear, (into which they were continually falling,) the arrear, formed into a new capital,[13] was added to the old, and the same interest of twenty per cent accrued upon both. The Company, having got some scent of the enormous usury which prevailed at Madras, thought it necessary to interfere, and to order all interests to be lowered to ten per cent. This order, which contained no exception, though it by no means pointed particularly to this class of debts, came like a thunderclap on the Nabob. He considered his political credit as ruined; but to find a remedy to this unexpected evil, he again added to the old principal twenty per cent interest accruing for the last year. Thus a new fund was formed; and it was on that accumulation of various principals, and interests heaped upon interests, not on the sum originally lent, as the right honorable gentleman would make you believe, that ten per cent was settled on the whole.

When you consider the enormity of the interest at which these debts were contracted, and the several interests added to the principal, I believe you will not think me so skeptical, if I should doubt whether for this debt of 880,000_l._ the Nabob ever saw 100,000_l._ in real money. The right honorable gentleman suspecting, with all his absolute dominion over fact, that he never will be able to defend even this venerable patriarchal job, though sanctified by its numerous issue, and hoary with prescriptive years, has recourse to recrimination, the last resource of guilt. He says that this loan of 1767 was provided for in Mr. Fox's India bill; and judging of others by his own nature and principles, he more than insinuates that this provision was made, not from any sense of merit in the claim, but from partiality to General Smith, a proprietor, and an agent for that debt. If partiality could have had any weight against justice and policy with the then ministers and their friends, General Smith had titles to it. But the right honorable gentleman knows as well as I do, that General Smith was very far from looking on himself as partially treated in the arrangements of that time; indeed, what man dared to hope for private partiality in that sacred plan for relief to nations?

It is not necessary that the right honorable gentleman should sarcastically call that time to our recollection. Well do I remember every circumstance of that memorable period. God forbid I should forget it! O illustrious disgrace! O victorious defeat! May your memorial be fresh and new to the latest generations! May the day of that generous conflict be stamped in characters never to be cancelled or worn out from the records of time! Let no man hear of us, who shall not hear, that, in a struggle against the intrigues of courts and the perfidious levity of the multitude, we fell in the cause of honor, in the cause of our country, in the cause of human nature itself! But if fortune should be as powerful over fame as she has been prevalent over virtue, at least our conscience is beyond her jurisdiction. My poor share in the support of that great measure no man shall ravish from me. It shall be safely lodged in the sanctuary of my heart,--never, never to be torn from thence, but with those holds that grapple it to life.

I say, I well remember that bill, and every one of its honest and its wise provisions. It is not true that this debt was ever protected or enforced, or any revenue whatsoever set apart for it. It was left in that bill just where it stood: to be paid or not to be paid out of the Nabob's private treasures, according to his own discretion. The Company had actually given it their sanction, though always relying for its validity on the sole security of the faith of him[14] who without their knowledge or consent entered into the original obligation. It had no other sanction; it ought to have had no other. So far was Mr. Fox's bill from providing _funds_ for it, as this ministry have wickedly done for this, and for ten times worse transactions, out of the public estate, that an express clause immediately preceded, positively forbidding any British subject from receiving assignments upon any part of the territorial revenue, on any pretence whatsoever.[15]

You recollect, Mr. Speaker, that the Chancellor of the Exchequer strongly professed to retain every part of Mr. Fox's bill which was intended to prevent abuse; but in _his_ India bill, which (let me do justice) is as able and skilful a performance, for its own purposes, as ever issued from the wit of man, premeditating this iniquity,--

Hoc ipsum ut strueret, Trojamque aperiret Achivis,--

expunged this essential clause, broke down the fence which was raised to cover the public property against the rapacity of his partisans, and thus levelling every obstruction, he made a firm, broad highway for sin and death, for usury and oppression, to renew their ravages throughout the devoted revenues of the Carnatic.

The tenor, the policy, and the consequences of this debt of 1767 are in the eyes of ministry so excellent, that its merits are irresistible; and it takes the lead to give credit and countenance to all the rest. Along with this chosen body of heavy-armed infantry, and to support it in the line, the right honorable gentleman has stationed his corps of black cavalry. If there be any advantage between this debt and that of 1769, according to him the cavalry debt has it. It is not a subject of defence: it is a theme of panegyric. Listen to the right honorable gentleman, and you will find it was contracted to save the country,--to prevent mutiny in armies,--to introduce economy in revenues; and for all these honorable purposes, it originated at the express desire and by the representative authority of the Company itself.

First let me say a word to the authority. This debt was contracted, not by the authority of the Company, not by its representatives, (as the right honorable gentleman has the unparalleled confidence to assert,) but in the ever-memorable period of 1777, by the usurped power of those who rebelliously, in conjunction with the Nabob of Arcot, had overturned the lawful government of Madras. For that rebellion this House unanimously directed a public prosecution. The delinquents, after they had subverted government, in order to make to themselves a party to support them in their power, are universally known to have dealt jobs about to the right and to the left, and to any who were willing to receive them. This usurpation, which the right honorable gentleman well knows was brought about by and for the great mass of these pretended debts, is the authority which is set up by him to represent the Company,--to represent that Company which, from the first moment of their hearing of this corrupt and fraudulent transaction to this hour, have uniformly disowned and disavowed it.

So much for the authority. As to the facts, partly true, and partly colorable, as they stand recorded, they are in substance these. The Nabob of Arcot, as soon as he had thrown off the superiority of this country by means of these creditors, kept up a great army which he never paid. Of course his soldiers were generally in a state of mutiny.[16] The usurping Council say that they labored hard with their master, the Nabob, to persuade him to reduce these mutinous and useless troops. He consented; but, as usual, pleaded inability to pay them their arrears. Here was a difficulty. The Nabob had no money; the Company had no money; every public supply was empty. But there was one resource which no season has ever yet dried up in that climate. The _soucars_ were at hand: that is, private English money-jobbers offered their assistance. Messieurs Taylor, Majendie, and Call proposed to advance the small sum of 160,000_l._ to pay off the Nabob's black cavalry, provided the Company's authority was given for their loan. This was the great point of policy always aimed at, and pursued through a hundred devices by the servants at Madras. The Presidency, who themselves had no authority for the functions they presumed to exercise, very readily gave the sanction of the Company to those servants who knew that the Company, whose sanction was demanded, had positively prohibited all such transactions.

However, so far as the reality of the dealing goes, all is hitherto fair and plausible; and here the right honorable gentleman concludes, with commendable prudence, his account of the business. But here it is I shall beg leave to commence my supplement: for the gentleman's discreet modesty has led him to cut the thread of the story somewhat abruptly. One of the most essential parties is quite forgotten. Why should the episode of the poor Nabob be omitted? When that prince chooses it, nobody can tell his story better. Excuse me, if I apply again to my book, and give it you from the first hand: from the Nabob himself.

"Mr. Stratton became acquainted with this, and got Mr. Taylor and others to lend me four lacs of pagodas towards discharging the arrears of pay of my troops. Upon this, I wrote a letter of thanks to Mr. Stratton; and upon the faith of this money being paid immediately, I ordered many of my troops to be discharged by a certain day, and lessened the number of my servants. Mr. Taylor, &c., some time after acquainted me, that they had no ready money, but they would grant teeps payable in four months. This astonished me; for I did not know what might happen, when the sepoys were dismissed from my service. I begged of Mr. Taylor and the others to pay this sum to the officers of my regiments at the time they mentioned; and desired the officers, at the same time, to pacify and persuade the men belonging to them that their pay would be given to them _at the end of four months_, and that, till those arrears were discharged, their pay should be continued to them. _Two years_ are nearly expired since that time, but Mr. Taylor has not yet entirely discharged the arrears of those troops, and I am obliged to continue their pay from that time till this. I hoped to have been able, by this expedient, to have lessened the number of my troops, and discharged the arrears due to them, considering the trifle of interest to Mr. Taylor and the others as no great matter; but instead of this, _I am oppressed with the burden of pay due to those troops, and the interest, which is going on to Mr. Taylor from the day the teeps were granted to him_." What I have read to you is an extract of a letter from the Nabob of the Carnatic to Governor Rumbold, dated the 22d, and received the 24th of March, 1779.[17]

Suppose his Highness not to be well broken in to things of this kind, it must, indeed, surprise so known and established a bond-vender as the Nabob of Arcot, one who keeps himself the largest bond-warehouse in the world, to find that he was now to receive in kind: not to take money for his obligations, but to give his bond in exchange for the bond of Messieurs Taylor, Majendie, and Call, and to pay, besides, a good, smart interest, legally twelve per cent, (in reality, perhaps, twenty or twenty-four per cent,) for this exchange of paper. But his troops were not to be so paid, or so disbanded. They wanted bread, and could not live by cutting and shuffling of bonds. The Nabob still kept the troops in service, and was obliged to continue, as you have seen, the whole expense to exonerate himself from which he became indebted to the soucars.

Had it stood here, the transaction would have been of the most audacious strain of fraud and usury perhaps ever before discovered, whatever might have been practised and concealed. But the same authority (I mean the Nabob's) brings before you something, if possible, more striking. He states, that, for this their paper, he immediately handed over to these gentlemen something very different from paper,--that is, the receipt of a territorial revenue, of which, it seems, they continued as long in possession as the Nabob himself continued in possession of anything. Their payments, therefore, not being to commence before the end of four months, and not being completed in two years, it must be presumed (unless they prove the contrary) that their payments to the Nabob were made out of the revenues they had received from his assignment. Thus they condescended to accumulate a debt of 160,000_l._ with an interest of twelve per cent, in compensation for a lingering payment to the Nabob of 160,000_l._ of his own money.

Still we have not the whole. About two years after the assignment of those territorial revenues to these gentlemen, the Nabob receives a remonstrance from his chief manager in a principal province, of which this is the tenor. "The _entire_ revenue of those districts is by your Highness's order set apart to discharge the tunkaws [assignments] granted to the Europeans. The gomastahs [agents] of Mr. Taylor to Mr. De Fries are there in order to collect those tunkaws; and as they receive _all_ the revenue that is collected, your Highness's troops have _seven or eight months' pay due_, which they cannot receive, and are thereby reduced to the greatest _distress_. _In such times_ it is highly necessary to provide for the sustenance of the troops, that they may be ready to exert themselves in the service of your Highness."

Here, Sir, you see how these causes and effects act upon one another. One body of troops mutinies for want of pay; a debt is contracted to pay them; and they still remain unpaid. A territory destined to pay other troops is assigned for this debt; and these other troops fall into the same state of indigence and mutiny with the first. Bond is paid by bond; arrear is turned into new arrear; usury engenders new usury; mutiny, suspended in one quarter, starts up in another; until all the revenues and all the establishments are entangled into one inextricable knot of confusion, from which they are only disengaged by being entirely destroyed. In that state of confusion, in a very few months after the date of the memorial I have just read to you, things were found, when the Nabob's troops, famished to feed English soucars, instead of defending the country, joined the invaders, and deserted in entire bodies to Hyder Ali.[18]

The manner in which this transaction was carried on shows that good examples are not easily forgot, especially by those who are bred in a great school. One of those splendid examples give me leave to mention, at a somewhat more early period; because one fraud furnishes light to the discovery of another, and so on, until the whole secret of mysterious iniquity bursts upon you in a blaze of detection. The paper I shall read you is not on record. If you please, you may take it on my word. It is a letter written from one of undoubted information in Madras to Sir John Clavering, describing the practice that prevailed there, whilst the Company's allies were under sale, during the time of Governor Winch's administration.

"One mode," says Clavering's correspondent, "of amassing money at the Nabob's cost is curious. He is generally in arrears to the Company. Here the Governor, being cash-keeper, is generally on good terms with the banker, who manages matters thus. The Governor presses the Nabob for the balance due from him; the Nabob flies to his banker for relief; the banker engages to pay the money, and grants his notes accordingly, which he puts in the cash-book as ready money; the Nabob pays him an interest for it at two and three per cent _per mensem_, till the tunkaws he grants on the particular districts for it are paid. Matters in the mean time are so managed that there is no call for this money for the Company's service till the tunkaws become due. By this means not a cash is advanced by the banker, though he receives a heavy interest from the Nabob, which is divided as lawful spoil."