In the years before the East India Company’s charter renewal in 1813, London’s House of Commons became a battleground over the company’s money matters. MPs tore apart the company’s financial statements, questioned how it raised capital, and challenged whether its dividend payouts were legal.
Key worries centered on three hot topics: whether the company could legally pay dividends without real profits, the ever‑growing debt burden, and how commercial gains were mixed with empire‑building costs.
### Dividend Dispute
MP Christopher Creevey led the charge. He argued that the company’s founders’ acts—those of William III and Queen Anne—forbade dividends unless they came from net profits. Creevey claimed the company was “fifteen million worse than nothing,” yet had still handed out a £630,000 dividend funded by a £1.5 million government loan.
Lord Folkestone echoed this, pointing to company books that showed a shortfall of more than £7 million after accounting for its capital stock. “They paid dividends out of net proceeds they simply didn’t have,” he said.
Opponents defended the company’s actions. Counsel Adam argued that under the 1793 Act, the company could legitimately pay dividends because it operated as a commercial entity ruling a territory. He stuck to a “national principle”: the Indian government was run by a commercial company, and its profits should flow to shareholders.
Supporters like Mr Grant warned that critics imagined the company as an ordinary merchant, ignoring its massive assets. He argued that the company’s land, property, and other holdings should outweigh its debts, and that new resources were on the rise.
### Rising Debt and Rising Debate
Parliament also tackled the company’s ballooning debt. The “East India Company Bonds Bill” sought to let the company raise an extra £2 million on its own credit. MPs slammed the bill, noting that revenue had jumped from £7 million to £15 million, yet the company still had no surplus and its bond debt grew.
President of the Board of Control, Mr R. Dundas, defended the move, saying it simply transferred debt from India to England. He argued that borrowing in England at 5 % was cheaper than paying 8–10 % interest in India. He highlighted a £300–400 k surplus, a cut in Indian debt interest to 6 % saving £500 k per year, and unchanged Indian expenditures due to ongoing military campaigns.
Others, such as Sir H. Montgomery, remained unconvinced. They blamed the company’s extravagance, speculative trading, and high‑cost funding for financial distress and warned that the directors would face £12 million in bills within a year.
### The Bigger Picture: Company’s Role as Governor
The debate hit a fever pitch when MPs questioned the company’s status as a territorial sovereign. Creevey claimed that since 1765, the company had become a constant burden to Britain. He cited the 1793 Act’s failings:
* The company was supposed to pay £500,000 annually to the public but did it only once in 19 years.
* A promised reduction of external Indian debt from £8 million to £2 million turned into a £30 million debt.
* Bond debt rose from £2 million to £7 million.
* A £12 million guarantee fund never received a penny.
Mr Charles Grant tried to defend the company, stating that payments were covered by government costs, but critics saw this as evidence that the company leaned on public money instead of living up to its charter.
### The Legacy of Parliamentary Exposure
The parliamentary scrutiny exposed the clash between the company’s commercial goals and its imperial duties. Defenders argued the company acted lawfully within a complex charter, while critics saw a borrowing machine siphoning money from Britain while failing to meet its obligations.
The debates paved the way for the 1813 Charter Act, which tightened parliamentary control, stripped the company of its monopoly, and set the course toward direct Crown rule in India.
This intense analytical period in Parliament slowly dismantled the company’s independence, proving that its continued survival depended on state support rather than on its own profits.
Source: ianslive
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