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Lord Clive and Speculation in East India Company Stock, 1766*

Published online by Cambridge University Press:  11 February 2009

Huw V. Bowen
Huw V. Bowen
Affiliation:
University of Newcastle upon Tyne
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The Historical Journal , Volume 30 , Issue 4 , December 1987 , pp. 905 - 920
Copyright
Copyright © Cambridge University Press 1987

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References

1 Marshall, P. J., Problems of empire: Britain and India 1757–1813 (London, 1968), p. 30Google Scholar. See also Lawson, P., ‘Parliament and the first East India inquiry, 1767’, Parliamentary History Yearbook, I (1982), 99–100Google Scholar; Brooke, J., The Chatham administration (London, 1956), p. 73Google Scholar; Sutherland, L. S., The East India Company in eighteenth-century politics (Oxford, 1952), pp. 147–50Google Scholar.

2 Sutherland, L. S., ‘Lord Shelburne and East India Company politics, 1766–9’, English Historical Review, XLIX (1934), 450–1CrossRefGoogle Scholar.

3 Sutherland, , East India Company, pp. 142–3Google Scholar, n 3. Sutherland was countering SirForrest's, George claimb (The life of Lord Clive (2 vols., London, 1918), II, 258–9)Google Scholar that Clive's deep involvement in the stock at this time was for electioneering purposes.

4 Sutherland observed (ibid) that as stock was not bought in Clive's own name it could not be traced in the Company's stock ledgers However, Clive's stock transactions were recorded by his attorneys, and it is from these detailed records that the full extent of his dealings may be determined This evidence is to be found in the National Library of Wales, Clive MSS, vols 72–5 (correspondence and minutes of Clive's attorneys, 1764–7) It should be noted that the Clive MSS are flawed in an important way Many of the volumes (although not those of the attorneys) are nineteenth-century transcripts see Bowen, H V, ‘The Clive papers at the National Library of Wales – a cautionary note’ The National Library of Wales Journal, XXIV, 2 (1985), 244–7Google Scholar Where transcript volumes have been consulted in the present article, that fact has been noted in the appropriate footnote by the use of an asterisk

5 Throughout the early 1760s a dividend payment of 6 per cent a year had been maintained In 1766 this was raised to 10 per cent, and it was later increased again to 12½ per cent At a time of economic pressure at home and abroad this was an increase that the Company could ill afford (Bowen, H V, ‘British politics and the East India Company, 1766–1773’ (unpublished Ph D dissertation, University of Wales, 1986) ch 9)Google Scholar

6 Middlesex Journal, 1–3 June 1769

7 Throughout this article the stock prices quoted are those reported in the London Magazine

8 7 Geo III, c 49 ‘The Dividend Act’ For the circumstances surrounding the passage of the Act see Sutherland, , East India Company, pp 169–72Google Scholar.

9 Lenman, B and Lawson, P, ‘Robert Clive, the “Black Jagir”, and British polities’, Historical Journal, XXVI, 4 (1983), 827Google Scholar

10 Mortimer, Thomas, The elements of commerce, politics, and finance in three treatises on those important subjects (1780Google Scholar, reprinted from the 1772 edition), p. 409. Mortimer (1730–1810) was the author of the definitive eighteenth-century guide to the stockmarket, Every man his own broker: or a guide to exchange alley (13 editions, 1761–1801).

11 Sutherland, , East India Company, pp. 115–18, 136–7Google Scholar; Marshall, P.J., East Indian fortunes: the British in Bengal in the eighteenth century (Oxford, 1976), pp. 169–72Google Scholar; Dodwell, H., Dupleix and Clive: the beginning of empire (1920Google Scholar, reprinted 1967), part 2, chs. 6 and 7.

12 Clive set out his intended course of action in letters written to Major John Carnac and Robert Palk on 3 and 11 May 1765. These are reprinted in Sir John Malcolm, The life of Robert, Lord Clive: collected from the family papers communicated by the earl of Powis (3 vols., London, 1836), II, 318–20, 323–7.

13 Clive to Joseph Fowke, 25 Sept. 1765, Clive MSS, 236, p. 21

14 For Clive's actions see Marshall, , East Indian fortunes, pp. 168–75Google Scholar.

15 Clive to Salvador, 25 Sept. 1765, Clive MSS, 236, p. 23.

16 For chronological though dated accounts of Clive's actions, see Forrest, , Life of Lord Clive, II, 255–93Google Scholar, and Malcolm, , Life of Robert, Lord Clive, II, 328 ffGoogle Scholar.

17 In 1773 the secret committee of the house of commons appointed to enquire into the state of the East India Company identified four different types of revenue from which the Company had benefited following the assumption of the diwani: land rents, customs duties, farms of exclusive privileges, and fines and forfeits (Fourth report of the secret committee. Reports from committees of the house of commons, 1715–1801 (1803), first series, IV, 95).

18 Author of the monumental work, The history of the military transactions of the British nation in Indostan (3 vols, London, 1763–1778)Google Scholar

19 Clive to Orme, 29 Sept 1765, Clive MSS, 236, p 25

20 The definitive account of the Clive-Suhvan power struggle is presented in Sutherland, East India Company, chs 4 and 5 See also Lenman, and Lawson, , ‘Robert Clive and British politics’, pp 810 ffGoogle Scholar.

21 For an example of the type of agreement undertaken, see Clive to Thomas Hill, 22 Sept 1768, Clive MSS, 56 (no fohation) For a contemporary explanation of the system see Laurence Sulivan to Lord Shelburne, 24 Feb 1763, cited in Sutherland, , East India Company, p 103Google Scholar

22 Sutherland, , ‘Lord Shelburne and East India Company politics’, p 453Google Scholar

23 View incorporated in a plan submitted to Lord Shelburne in January 1767, William L Clements Library, Ann Arbor, Michigan, Lansdowne MSS, 90, fo 84

24 India Office Library and Records, stockledgers, L/AG/14/5/14, p 163 The account was closed with a transfer of £2,000 stock to Richard Clive and Co

25 Clive to Walsh, 17 April 1765 This part of the letter, which was written in the Company's cypher, is reprinted in the Third report of the select committee on East Indian affairs (1773), first series, III, appendix no. 82. This report is mistakenly cited by Sutherland as being that of the secret committee (East India Company, pp. 138, 142, and 143).

26 Forrest, , Life of Lord Clive, II, 259Google Scholar.

27 Clive to Richard, Henry, George Clive, and John Walsh, 27 Sept. 1765, Clive MSS, 236, p. 37.

28 Bence-Jones, M., Clive of India (London, 1974), pp. 220–1Google Scholar.

29 The list of correspondents makes interesting reading: George Dudley, George Grenville, the earl of Halifax, Sir Matthew Fetherstonehaugh, Luke Scrafton, Joseph Salvador, Robert Orme, Mr Smyth King, Rev. Dr Adams, Alexander Hume, Lenris Mendes, Ambrose Isted, Joseph Fowke, Richard Clive, and George Amyand (Clive MSS, 236, pp. 1–44).

30 Sept. 1765, ibid. p. 13. The figure of £4 million was also mentioned to Fetherstonehaugh, Orme, and Smyth King.

31 Ibid. p. 24. The figure of £2 million was reported to Amyand, Adams, and Mendes.

32 Throughout the late 1760s the directors requested that their servants in Bengal increase the quantity and quality of the goods, so that ‘the Company through this Channel may have the benefit of receiving as a large a proportion of the Bengal Revenues as circumstances will possibly admit of’ The directors to the president and council of Bengal, 20 Nov. 1767, Fort William-India House correspondence and other contemporary papers relating thereto (public series), V (1767–1769), ed. Sinha, Narendra Krishna (Delhi, 1949), p. 43Google Scholar. This was a theme repeated in the dispatches with monotonous regularity.

33 George Dudley to Clive, 17 May 1766, Clive MSS, 52*, pp. 177–8.

34 Rockingham to the king, 21 April 1766, SirFortescue, John (ed.), The correspondence of King George III from 1760 to 1783 (6 vols., 1928), I, no. 297Google Scholar. For a colourful account of the public celebrations at Bishop's Castle, Shropshire (the parliamentary seat of Clive's cousin, George) see London Evening Post, 2–5 May 1766.

35 Undated and unsigned account in the Chatham papers (Public Record Office, 30/8, 99, part in, fo. 178) estimating that the Company would receive £2,491,666 from the revenues of Bengal between August 1765 and December 1766; Clive to Rockingham, 6 Sept, 1766, Sheffield Central Library, Wentworth Woodhouse Muniments, R-66, ‘State of the Company's revenues for 1766’, in which it is stated that the net balance brought to the Company would be £2,136,977. I am indebted to Olive, Countess Fitzwilliam's Wentworth settlement trustees and the director of Sheffield city libraries for permission to cite the latter manuscript.

36 Lloyd's Evening Post, 18–20 March 1767. For an example of the reporting of the receipt of Clive's public dispatches in April 1766 see Gentleman's Magazine, 1766, p. 197. Here it was reported that the Company would receive between two and three million pounds a year.

37 Speech of 27 February 1769, British Library, Egerton MSS, 218, p. 251.

38 The net value of the territorial revenues received by the Company in Bengal rose from £606,132 in 1764–5 to £2,550,094 in 1766–7. It then fell to £2,009,988 by 1770–1. Military expenditure in Bengal doubled to £1,093,006 by 1770–1, whilst non-military expenditure soared from £725,198 in 1764–5 to £2,117,829 in 1770–1. (Third report of the secret committee (1773), first series, IV, 60–1.) Details of the gross income, together with the cost of collection are to be found in the fourth report, ibid. pp. 98–101. The directors were ‘amazed’ at the increase in the Company's expenses. (The directors to Clive, 4 March 1767, Fort William–;India House correspondence, V, 10.)

39 Clive MSS, 236, p. 16. In response to this advice Fetherstonehaugh bought £2,000 stock in May 1766. (Fetherstonehaugh to Clive, 11 May 1766, ibid. 52*, p. 136; Stock ledgers, L/AG/14/5/14, P. 459)

40 Clive to Isted, 29 Sept. 1765, Clive MSS, 236, p. 31. Ambrose Isted of Exton, Northants, was an East India Company proprietor who held between £2,000 and £2,500 stock during the years 1764–7. He did not purchase any additional stock in his own name upon receipt of Clive's letter. (Stock ledgers, L/AG/14/5/14, p. 459.)

41 Walsh to Clive, 5 May 1766, Clive MSS, 52*, pp. 87–8; Scrafton to Clive, 12 Apr., 6 May 1766, ibid. pp. 152–3, 157.

42 The letter of 17 April from Madras was carried by a ship sailing out of season, hence its eleven month journey. The Admiral Stevens which carried news of the diwani left Calcutta on 2 October 1765 and arrived off Falmouth in mid-April 1766. From there a messenger was dispatched to London, the news arriving on 19 April.

43 Walsh to Clive, 31 Mar. 1766, Clive MSS, 52*, p. 83.

44 Minutes of attorneys' meeting, ibid. 72, p. 101.

45 Ibid.

46 Ibid. p. 103.

47 16, 25 Apr., 6 May, ibid. pp. 105–8, 109–13, 118–20.

48 Walsh to Clive, 31 Mar. 1766, ibid. 52*, p. 85.

49 Same to same, 5 May 1766, ibid p 86

50 £39,000 had been borrowed from Richard Croft (of Blackwell, Hart, Darrel, and Croft), £15,000 from Robert Gosling, and £600 from John Kelsall

51 Walsh accurately reported all these purchases to the select committee of the house of commons in 1773 (Third report of the select committee (1773), first series, III, 314)

52 Walsh to Clive, 16 May 1766, Clive MSS, 52*, p 92

53 Third report of the select committee (1773), first series, III, 314

54 Walsh to Clive, 22 Nov 1766, Clive MSS, 52*, p 99 Walsh reported that Holland bought his stock ‘entirely on my representation’ See also Sutherland, L S and Binney, J, ‘Henry Fox as pavmaster-general of the forces’, English Historical Review, LXX (1955), 229–57CrossRefGoogle Scholar

55 The short-term effect on other stock prices was limited: the price of Bank of England stock remained around 134–6 between January and June 1766. However, in the longer term, and in varying degrees, the prices of Bank and South Sea stock did rise during the course of the rest of the year. See Mirowski, P. E., ‘The rise (and retreat) of a market: English joint stock shares in the eighteenth century’, Journal of Economic History, XLI (1981), 570Google Scholar.

56 Gentleman's Magazine, 1766, p. 246.

57 Scrafton to Clive, 6 May 1766, Clive MSS, 52*, p. 157.

58 Same to same, 27 May 1766, ibid. p. 182.

59 Sutherland, L. S. and Woods, J. A., ‘The East India speculations of William Burke’, Proceedings of the Leeds Philosophical and Literary Society, XI (03 1964), pp. 188–92Google Scholar.

60 SirColebrooke, George, Retrospection: or reminiscences addressed to my son H. T. Colebrooke (2 vols., London, 1898), I, 110Google Scholar.

61 Sutherland, and Binney, , ‘Henry Fox as paymaster-general’, p. 247Google Scholar; Sutherland, and Woods, , ‘The East India speculations of William Burke’, p. 190Google Scholar.

62 A pamphleteer later claimed that the major opponent of the increase had been the deputy chairman of the Company, Rous, Thomas: A letter from a proprietor of India stock in town to a proprietor in the country (1769), p. 8Google Scholar.

63 Gentleman's Magazine, 1766, p. 293.

64 Dudley to Clive, 21 Nov. 1766, India Office Library and Records, MSS Eur. G.37, box 43, fo. 67.

65 IOLR, court minutes, B/82, p. 75; Gentleman's Magazine, 1766, p. 293; Walsh to Clive, 22 Nov. 1766, MSS Eur. G.37, box 43, fo. 132.

66 Walsh to Clive, 22 Nov., MSS Eur. G.37, box 43, fo. 132.

67 Sutherland, to Woods, , ‘The East India speculations of William Burke’, p. 190Google Scholar.

68 Scrafton to Clive, 21 Nov. 1766, MSS Eur. G.37, box 43, fo 70.

69 Colebrooke, , Retrospection, I, 110Google Scholar.

70 Ibid. p. 110. See also Verelst, Harry, A view of the rise, progress, and present state of the English government in Bengal (1772), pp. 76–8Google Scholar.

71 Colebrooke, , Retrospection, I, 110Google Scholar.

72 Scrafton to Clive, 21 Nov. 1766, MS S Eur. G.37, box 43, fo. 72.

73 Copy to be found at B. L., T.929. The directors responded by publishing the East India Observer, but the first issue did not appear until after the September quarterly court (copy also to be found at B. L., T.929).

74 Report of the directors read to the proprietors: court minutes, B/82, p. 191.

75 W. Wedderburn to George Grenville, 25 Sept. 1766, B. L., Add. MSS, 42084, fo. 184. See also Thomas Whately to Grenville, 26 Sept.; ibid. fo. 186–7 for a report of the court's proceedings.

76 Court minutes, B/82, pp. 191–3; General court minutes, B/257, pp. 7–11.

77 Court minutes, B/82, pp. 196–7.

78 Scrafton to Clive, 17 May, 1766, Clive MSS, 52*, p. 185.

79 Dudley to Clive, 21 Nov. 1766, MSS Eur. G.37, box 43, fo. 67.

80 Walsh to Clive, 22 Nov. 1766, ibid. fo. 132.

81 Sutherland, , East India Company, p. 146Google Scholar.

82 The £54,600 borrowed by the attorneys required an annual interest payment of £2,730.

83 Clive MSS, 72, p. 129.

84 London Magazine, Feb. 1767.

85 Clive MSS, 72, pp. 173–4.

86 Bowen, , ‘British politics and the East India Company’, pp. 328–33, 367–72Google Scholar.

87 See the evidence of George Dudley to the parliamentary committee of inquiry, 6 April, B. L., Add. MSS, 18469, fo. 62.

88 Clive MSS, 72, pp. 176–7.

89 Ibid. pp. 178–9.

90 Ibid. p. 182.

91 Ibid. pp. 187–8.

92 Davies, C. C., review of Roy, A. C., The career of Mir Jafar Khan, 1757–1765 (Calcutta, 1953)Google Scholar in English Historical Review, LXIX (1954), 453CrossRefGoogle Scholar.

93 Clive to Richard Clive, 25 Sept. 1765, Clive MSS, 236, p. 39.

94 Cobbett, William (ed.), Parliamentary history of England from…1066to…1803 (36 vols., London, 1806–1820), XVII, cols. 330–1, 350–1Google Scholar.

95 London Magazine, XLI (1772), 224Google Scholar.

96 Stock ledgers, L/AG/14/5/16, p. 165.

97 Clive to George Clive, 9 Aug. 1767, Clive MSS, 58, p. 21.