FINANCIAL DISTRESS. 2"}"? 



of their Sources of emolument. Yet down to 1744 they had 

 acquired only a few small districts around Bombay, Mad- 

 ras, and Calcutta. The war which then broke out in the 

 Carnatic had the effect of converting them into a military 

 power, and of rendering them, after various struggles, vir* 

 tual sovereigns of that part of the country. Much more 

 memorable results arose out of the war in Bengal and the 

 victories of Clive, when they obtained the dewannee, in* 

 eluding the real occupancy of that province, with Bahar 

 and Orissa, forming a territory more extensive, and at that 

 time supposed more opulent, than the whole of Great Bri- 

 tain. This event created an extraordinary sensation, and 

 inspired both themselves and the nation with an extravagant 

 idea of their wealth ; their stock rose to 263, and dividends 

 were declared at 12^ per cent. These treasures, however, 

 soon became an object of jealousy and desire both to the 

 people and the government. The question was mooted, 

 whether any body of subjects could exercise an authority 

 independent of the supreme power ; nor were ministers 

 slow to pronounce that the king must be the real and only 

 sovereign of every territory conquered by the British arms. 

 This alarming claim was for the time evaded by an agree- 

 ment made in 1797, that the company should annually pay 

 400,000/. into the exchequer, and reduce their dividend to 

 ten per cent. ; upon which they were allowed for two years 

 to retain their Indian acquisitions. In 1769 a similar ar- 

 rangement extended their power for five years longer. But 

 at this epoch a disastrous crisis had arrived in their affairs. 

 That wealth, supposed so immense, which had excited their 

 own exultation and the envy of the public, proved in a great 

 measure illusory. The revenues of the conquered prov- 

 inces, though very considerable, were found inadequate to 

 defray the expenses of war, the rapacity of their servants, 

 and the exorbitant dividends which the proprietors thought 

 themselves entitled to demand. Their affairs were now in a 

 state of extreme embarrassment, which they in vain endeav- 

 oured to mitigate by loans from the bank, first of 400,000/., 

 and then of 200,000/. They were then under the neces- 

 sity of stating to government their absolute want of an ac- 

 commodation to the amount of a million and a half sterling. 

 This application placed them entirely at the mercy of the 

 minister ; who determined indeed, after some hesitation, to 

 Vol. II.— A a 



