490 A. D. 1769. 



commands on General Smith to defift from purfuing the advantages he 

 was ready to reap by Hyder's abfence from his capital. 



The war with Hyder having exhaufted the treafury of the prefidency 

 of Madras, remittances were made to it from Bengal, for which they 

 were obliged to have recourfe to a bafe fpecies of gold coin, on the ex- 

 change of which the company loft ;(^4o,ooo. A total flop was put to 

 the inveftments, which uled to be made from Madras to China ; and 

 the manufadturers of the country were ruined by the ravages of the 

 enemy, or at a ftand for want of fale. Such were the effeds of this war 

 upon the company's affairs in India. At home the alarm excited by the 

 rumour of the diftant evil operated fo pow-erfuUy upon the imagination 

 and the fears of the ftock-holders, that India ftock fell above 60 per 

 cent in a few days, though the directors publidied the difpatches they 

 had jufl received from India, whereby it appeared, that the company's 

 affairs in that part of, the world were in general in a flourifliing flate, 

 and that there was no reafon to apprehend any ruinous confequences 

 from the war with Hyder. 



The directors, however, were fully fenfible, that it was abfolutely ne- 

 ceflliry to take fome vigorous fteps to correct the abufes, which were 

 too evident in the condud of their fervants in India ; and they deter- 

 mined upon fending out as fupervifors three gentlemen of acknowleged 

 ability, charader, and experience, in the affairs of India, and to inveft 

 them with ample powers to redrefs the evils, and controul the abufes, 

 which exlfted in that country. 



As to the necefTity of fuch a nieafure there was no doubt or difpute, 

 except with the friends of thofe who were fuppofed liable to fuffer by a 

 reform in India : but there were great differences of opinion refpeding 

 the degree of power proper to be delegated to the fupervifors. When, 

 after very keen difputes, this matter wis at laft fettled by the court of 

 proprietors, government unexpededly interfered with a demand that an 

 officer commiffioned from the crown fliould have a principal fhare in 

 the diredion of the company's affiiirs in India ; the confequence of 

 which was fuppofed by the company nothing fliort of a complete fur- 

 render of their territorial acquifitions into the hands of the miniftry, 

 than which, it was argued, it would be far better to refign them to the 

 princes of the country, who in return would give the company terms 

 of the greateft advantage to their commerce. The company thought 

 the government ought to be content with receiving from them annu- 

 ally a fum, exceeding the whole dividends paid to all the proprietors, 

 and exceeding the revenues of many fovereign princes, without attempt- 

 ing to fet up a jarring authority, which muft infallibly involve them in 

 ruin. At length the conteft between government and the company was 

 in a great meafure got rid of by the former fending out a naval officer 

 with extraordinary powers, the operation of which was confined to the 



