The Works of the Right Honourable Edmund Burke, Vol. 03 (of 12)

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 letter12 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 880,000l. the Nabob ever saw 100,000l. 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 him14 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 160,000l. 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 160,000l. with an interest of twelve per cent, in compensation for a lingering payment to the Nabob of 160,000l. 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."

Here, Mr. Speaker, you have the whole art and mystery, the true free-mason secret, of the profession of soucaring; by which a few innocent, inexperienced young Englishmen, such as Mr. Paul Benfield, for instance, without property upon which any one would lend to themselves a single shilling, are enabled at once to take provinces in mortgage, to make princes their debtors, and to become creditors for millions.

But it seems the right honorable gentleman's favorite soucar cavalry have proved the payment before the Mayor's Court at Madras! Have they so? Why, then, defraud our anxiety and their characters of that proof? Is it not enough that the charges which I have laid before you have stood on record against these poor injured gentlemen for eight years? Is it not enough that they are in print by the orders of the East India Company for five years? After these gentlemen have borne all the odium of this publication and all the indignation of the Directors with such unexampled equanimity, now that they are at length stimulated into feeling are you to deny them their just relief? But will the right honorable gentleman be pleased to tell us how they came not to give this satisfaction to the Court of Directors, their lawful masters, during all the eight years of this litigated claim? Were they not bound, by every tie that can bind man, to give them this satisfaction? This day, for the first time, we hear of the proofs. But when were these proofs offered? In what cause? Who were the parties? Who inspected, who contested this belated account? Let us see something to oppose to the body of record which appears against them. The Mayor's Court! the Mayor's Court! Pleasant! Does not the honorable gentleman know that the first corps of creditors (the creditors of 1767) stated it as a sort of hardship to them, that they could not have justice at Madras, from the impossibility of their supporting their claims in the Mayor's Court? Why? Because, say they, the members of that court were themselves creditors, and therefore could not sit as judges.19 Are we ripe to say that no creditor under similar circumstances was member of the court, when the payment which is the ground of this cavalry debt was put in proof?20 Nay, are we not in a manner compelled to conclude that the court was so constituted, when we know there is scarcely a man in Madras who has not some participation in these transactions? It is a shame to hear such proofs mentioned, instead of the honest, vigorous scrutiny which the circumstances of such an affair so indispensably call for.

But his Majesty's ministers, indulgent enough to other scrutinies, have not been satisfied with authorizing the payment of this demand without such inquiry as the act has prescribed; but they have added the arrear of twelve per cent interest, from the year 1777 to the year 1784, to make a new capital, raising thereby 160 to 294,000l. Then they charge a new twelve per cent on the whole from that period, for a transaction in which it will be a miracle if a single penny will be ever found really advanced from the private stock of the pretended creditors.

In this manner, and at such an interest, the ministers have thought proper to dispose of 294,000l. of the public revenues, for what is called the Cavalry Loan. After dispatching this, the right honorable gentleman leads to battle his last grand division, the consolidated debt of 1777. But having exhausted all his panegyric on the two first, he has nothing at all to say in favor of the last. On the contrary, he admits that it was contracted in defiance of the Company's orders, without even the pretended sanction of any pretended representatives. Nobody, indeed, has yet been found hardy enough to stand forth avowedly in its defence. But it is little to the credit of the age, that what has not plausibility enough to find an advocate has influence enough to obtain a protector. Could any man expect to find that protector anywhere? But what must every man think, when he finds that protector in the chairman of the Committee of Secrecy21, who had published to the House, and to the world, the facts that condemn these debts, the orders that forbid the incurring of them, the dreadful consequences which attended them? Even in his official letter, when he tramples on his Parliamentary report, yet his general language is the same. Read the preface to this part of the ministerial arrangement, and you would imagine that this debt was to be crushed, with all the weight of indignation which could fall from a vigilant guardian of the public treasury upon those who attempted to rob it. What must be felt by every man who has feeling, when, after such a thundering preamble of condemnation, this debt is ordered to be paid without any sort of inquiry into its authenticity,—without a single step taken to settle even the amount of the demand,—without an attempt so much as to ascertain the real persons claiming a sum which rises in the accounts from one million three hundred thousand pound sterling to two million four hundred thousand pound, principal money,22—without an attempt made to ascertain the proprietors, of whom no list has ever yet been laid before the Court of Directors,—of proprietors who are known to be in a collusive shuffle, by which they never appear to be the same in any two lists handed about for their own particular purposes?

My honorable friend who made you the motion has sufficiently exposed the nature of this debt. He has stated to you, that its own agents, in the year 1781, in the arrangement they proposed to make at Calcutta, were satisfied to have twenty-five per cent at once struck off from the capital of a great part of this debt, and prayed to have a provision made for this reduced principal, without any interest at all. This was an arrangement of their own, an arrangement made by those who best knew the true constitution of their own debt, who knew how little favor it merited,23 and how little hopes they had to find any persons in authority abandoned enough to support it as it stood.