§ Mr. Creevey
rose, pursuant to notice, to submit to the House a motion relative to the amount of the dividend made by the directors of the East India Company in the teeth of an act of parliament, at a time when they could not shew that they had any profits, from which alone such dividends were authorised to be made by law. The hon. gent. assured the House that he should that night content himself with moving for a paper to ascertain the fact, that at the last time of declaring the dividend a sum of 630,000l. was distributed in dividends. Although he should only now move for that paper, yet he thought it but fair to state, that in his view of the subject, this was a direct 182 violation of the laws. In the act of William III. by which this company was established, as also by the act of queen. Anne, in which they were allowed to add 1,200,000l. to their original capital of two millions, it was expressly enacted, for the security of the proprietors and their creditors, that there should be no dividend except upon the net profits. In 1765 a great alteration took place in the affairs of the company. The grant of Bengal from the Great Mogul elevated this company of merchants into territorial sovereigns. Although the original contract was changed by this circumstance, yet the rents of India, as well as the proceeds, were regulated by strict appropriation. The company were to be allowed to divide S per cent. on their capital, and of the excess of income, alter this dividend, three fourths were to go to the public, and one fourth to the company. If it should appear that there were no net proceeds, they were not entitled by law to issue any dividend. By a subsequent arrangement, after a dividend of 10 per cent. they were required to set apart half a million for a sinking fund, to pay their debts, and to give another half million to the public. The dividends were to be made only out of the proceeds, and according to the account of many of the directors, there had been no proceeds for a number of years. Not finding themselves able this year to pay the dividends by the old devices, they borrowed from government a million and a half, under pretence of carrying on their trade, but really, as he believed, to pay their dividends. He believed that if their affairs were truly stated, it would appear that the company was now 15 millions worse than nothing. They might, to be sure, have an equitable claim on the territory of India for that sure, on the assertion that many of their expences had been brought on them by the government at home. It was impossible for any company to have managed worse than they had done. They were now within three years of the expiration of their charter, and all their stock was spent. If the charter should not be renewed to them, they would still remain a great company, having power to trade to the East Indies, but they would not have this privilege exclusively, as they have at present. He gave notice, that he would, on a future day, bring this conduct of the directors under the consideration of the House; but at present, in order merely to ascertain 183 the fact, he moved "for the statement of the dividend of the years 1810–11, and of the rate per cent."
§ Mr. Astell
could have no objection to give the papers which were applied for. The hon. member would find that his ideas on the subject were perfectly erroneous. His statement was unfair and unfounded both in the law and the fact; and there could be nothing more prejudicial than to send forth to the public and the proprietors so unfounded a representation of the state of the company's funds. He did not understand the law sufficiently to detail it or argue upon it in the case before the House, but he understood from those who were perfectly versed in it, that the law and the fact bore out the directors in the line which they had pursued.
defended the statements of his hon. friend, which he said were drawn from the exposition of the directors themselves. From this it was clear that after deducting seven millions due to the proprietors of capital stock, yet more than seven millions were deficient, though the hon. chairman had roundly contradicted the fact, while he admitted his ignorance of the law. The act of parliament clearly laid down that the dividends should be paid out of the net proceeds of the company, and as this had not been complied with, he felt himself called on to support the motion of his hon. friend.
said, that the hon. gent. had entirely mistaken the scope and meaning of the law and acts of parliament, and drawn wrong inferences from them. It should be recollected that the whole territorial property of the company, together with the assets and other property, were to be set off against these seven millions—not to speak of the prospective resources of the company, which, instead of going on from bad to worse, as stated by the hon. gent. were much better than they had been. He did not feel it necessary at present to go far into the question, but he had to complain of the exaggerated statements which had been made, without any vouchers or papers to support them.
§ Lord A. Hamilton
observed, that he did not think the statements of his hon. friend had been at all invalidated by the observations of the hon. directors, who had merely contradicted the law and the fact, without entering into an explanation of either. He thought that it would be right that the right hon. gent. who presided at the Board of Control, should satisfy 184 the House in some degree on the question before them. He felt some surprise that the directors should find no profits to pay the public out of the net proceeds, but quite enough to pay themselves. Under all the circumstances of the case, he would vote for the production of the papers, in order to see the principles of the hon. gent. and the grounds on which they proceeded.
§ Mr. Adam
had no wish to bring on an extended discussion, but from his connection with the company, he thought it necessary for him to deliver his opinion. After the most minute consideration of the 107th and 111th sections of the Act of 1793, he must say, that the conduct of the East India company, and of the directors in particular, was perfectly correct in point of law, and justified in all its parts by the act of parliament. The grand fundamental principle which was to be considered by those who came to treat the question was, that the India system was the government of a great territory by a commercial company, audit was the right and duty of that commercial company to have their dividends paid out of the profits of their commerce.
§ Mr. R. Thornton
would not set about following the gentlemen who had already spoken on the other side of the House, as their information was so defective and their suppositions so extravagant. The hon. mover had told the company that they were beggars—all beggars—fifteen millions worse than nothing. How extravagant! That hon. gent. would perhaps have no objection to some of their stock, or a few of their India bonds, beggars as they were; or, whatever his contempt for them might be, he would not dislike a few of their acres of territory.
§ Sir H. Montgomery
said shortly, that the distresses of the company arose out of their extravagance, in speculations of trade, and their wasteful mode of raising money. He then proceeded to detail some of the modes adopted for the circulation of the company's bills in India, and ended by saying, that the directors would have to provide for twelve millions of bills in the course of the present year.
§ Mr. H. Smith
said, that the territorial expences of the company naturally absorbed a portion of their commercial profits; but under all the disadvantages of late years, the company were bound to pay their dividend, and by so doing benefit the public service at the same time.
§ Mr. Creevey
had heard nothing to convince him of his error. He had been charged with misconceiving the law and the fact. But for the fact, he had only taken the documents that were on their table. He found a learned member (Mr. Adam) agreeing with him that the company were entitled to pay a dividend only out of their profits; so that finally he had for his fact the secretary of the directors, unless they chose to disown their secretary's act; and for his law, he had the authority of the counsel to the board. By the documents signed by the secretary, the company were certainly fifteen millions worse than nothing. But it would be expedient to know if any case on the subject had been submitted to that learned counsel, and if it were, it ought to be laid before the House, as, on a subject of such high importance, they could not have too much information.
§ Sir J. Newport
wished to know, before the motion was put, whether the minister did not intend to give notice to apprise the House of the expiration of the company's charter.
§ The motion was then put and carried.