Part 16

That the debt be made up in the following manner, viz.

The debt consolidated in 1767 to be made up to the end of the year 1784, with the current interest at ten per cent.

The Cavalry Loan to be made up to the same period, with the current interest at twelve per cent.

The debt consolidated in 1777 to be made up to the same period, with the current interest at twelve per cent, to November, 1781, and from thence with the current interest at six per cent.

The twelve lacs annually to be received are then to be applied,--

1. To the growing interest on the Cavalry Loan, at twelve per cent.

2. To the growing interest on the debt of 1777, at six per cent.

The remainder to be equally divided: one half to be applied to the extinction of the Company's debt; the other half to be applied to the payment of growing interest at 10l. per cent, and towards the discharge of the principal of the debt of 1767.

This arrangement to continue till the principal of the debt 1767 is discharged.

The application of the twelve lacs is, then, to be,--

1. To the interest of the debt of 1777, as above. The remainder to be then equally divided,--one half towards the discharge of the current interest and principal of the Cavalry Loan, and the other half towards the discharge of the Company's debt.

When the Cavalry Loan shall be thus discharged, there shall then be paid towards the discharge of the Company's debt seven lacs.

To the growing interest and capital of the 1777 loan, five lacs.

When the Company's debt shall be discharged, the whole is then to be applied in discharge of the debt 1777.

If the Nabob shall be prevailed upon to apply the arrears and growing payments of the Tanjore peshcush in further discharge of his debts, over and above the twelve lacs of pagodas, we direct that the whole of that payment, when made, shall be applied towards the reduction of the Company's debt.

We have laid down these general rules of distribution, as appearing to us founded on justice, and the relative circumstances of the different debts; and therefore we give our authority and protection to them only on the supposition that they who ask our protection acquiesce in the condition upon which it is given; and therefore we expressly order, that, if any creditor of the Nabob, a servant of the Company, or being under our protection, shall refuse to express his acquiescence in these arrangements, he shall not only be excluded from receiving any share of the fund under your distribution, but shall be prohibited from taking any separate measures to recover his debt from the Nabob: it being one great inducement to our adopting this arrangement, that the Nabob shall be relieved from all further disquietude by the importunities of his individual creditors, and be left at liberty to pursue those measures for the prosperity of his country which the embarrassments of his situation have hitherto deprived him of the means of exerting. And we further direct, that, if any creditor shall be found refractory, or disposed to disturb the arrangement we have suggested, he shall be dismissed the service, and sent home to England.

The directions we have given only apply to the three classes of debts which have come under our observation. It has been surmised that the Nabob has of late contracted further debts: if any of these are due to British subjects, we forbid any countenance or protection whatever to be given to them, until the debt is fully investigated, the nature of it reported home, and our special instructions upon it received.

We cannot conclude this subject without adverting in the strongest terms to the prohibitions which have from time to time issued under the authority of different Courts of Directors against any of our servants, or of those under our protection, having any money transactions with any of the country powers, without the knowledge and previous consent of our respective governments abroad. We are happy to find that the Nabob, sensible of the great embarrassments, both to his own and the Company's affairs, which the enormous amount of their private claims have occasioned, is willing to engage not to incur any new debts with individuals, and we think little difficulty will be found in persuading his Highness into a positive stipulation for that purpose. And though the legislature has thus humanely interfered in behalf of such individuals as might otherwise have been reduced to great distress by the past transactions, we hereby, in the most pointed and positive terms, repeat our prohibition upon this subject, and direct that no person, being a servant of the Company, or being under our protection, shall, on any pretence whatever, be concerned in any loan or other money transaction with any of the country powers, unless with the knowledge and express permission of our respective governments. And if any of our servants, or others, being under our protection, shall be discovered in any respect counteracting these orders, we strictly enjoin you to take the first opportunity of sending them home to England, to be punished as guilty of disobedience of orders, and no protection or assistance of the Company shall be given for the recovery of any loans connected with such transactions. Your particular attention to this subject is strictly enjoined; and any connivance on your parts to a breach of our orders upon it will incur our highest displeasure. In order to put an end to those intrigues which have been so successfully carried on at the Nabob's durbar, we repeat our prohibition in the strongest terms respecting any intercourse between British subjects and the Nabob and his family; as we are convinced that such an intercourse has been carried on greatly to the detriment and expense of the Nabob, and merely to the advantage of individuals. We therefore direct that all persons who shall offend against the letter and spirit of this necessary order, whether in the Company's service or under their protection, be forthwith sent to England.

Approved by the Board. HENRY DUNDAS, WALSINGHAM, W.W. GRENVILLE, MULGRAVE. WHITEHALL, 15th Oct. 1784.

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Extract from the Representation of the Court of Directors of the East India Company.

MY LORDS AND GENTLEMEN,--

It is with extreme concern that we express a difference of opinion with your right honorable board, in this early exercise of your controlling power; but in so novel an institution, it can scarce be thought extraordinary, if the exact boundaries of our respective functions and duties should not at once, on either side, be precisely and familiarly understood, and therefore confide in your justice and candor for believing that we have no wish to invade or frustrate the salutary purposes of your institution, as we on our part are thoroughly satisfied that you have no wish to encroach on the legal powers of the East India Company. We shall proceed to state our objections to such of the amendments as appear to us to be either insufficient, inexpedient, or unwarranted.

6th. Concerning the private debts of the Nabob of Arcot, and the application of the fund of twelve lacs of pagodas per annum.

Under this head you are pleased, in lieu of our paragraphs, to substantiate at once the justice of all those demands which the act requires us to investigate, subject only to a right reserved to the Nabob, or any other party concerned, to question the justice of any debt falling within the last of the three classes. We submit, that at least the opportunity of questioning, within the limited time, the justice of any of the debts, ought to have been fully preserved; and supposing the first and second classes to stand free from imputation, (as we incline to believe they do,) no injury can result to individuals from such discussion: and we further submit to your consideration, how far the express direction of the act to examine the nature and origin of the debts has been by the amended paragraphs complied with; and whether at least the rate of interest, according to which the debts arising from soucar assignment of the land-revenues to the servants of the Company, acting in the capacity of native bankers, have been accumulated, ought not to be inquired into, as well as the reasonableness of the deduction of twenty-five per cent which the Bengal government directed to be made from a great part of the debts on certain conditions. But to your appropriation of the fund our duty requires that we should state our strongest dissent. Our right to be paid the arrears of those expenses by which, almost to our own ruin, we have preserved the country and all the property connected with it from falling a prey to a foreign conqueror, surely stands paramount to all claims for former debts upon the revenues of a country so preserved, even if the legislature had not expressly limited the assistance to be given the private creditors to be such as should be consistent with our own rights. The Nabob had, long before passing the act, by treaty with our Bengal government, agreed to pay us seven lacs of pagodas, as part of the twelve lacs, in liquidation of those arrears; of which seven lacs the arrangement you have been pleased to lay down would take away from us more than the half, and give it to private creditors, of whose demands there are only about a sixth part which do not stand in a predicament that you declare would not entitle them to any aid or protection from us in the recovery thereof, were it not upon grounds of expediency, as will more particularly appear by the annexed estimate. Until our debt shall be discharged, we can by no means consent to give up any part of the seven lacs to the private creditors; and we humbly apprehend that in this declaration we do not exceed the limits of the authority and rights vested in us.

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THE RIGHT HONORABLE THE COMMISSIONERS FOR THE AFFAIRS OF INDIA.

The Representation of the Court of Directors of the East India Company.