A
CAUTION
TO THE
DIRECTORS
OF THE
EAST-INDIA COMPANY,
With regard to their making the
Midsummer Dividend of Five per Cent.
WITHOUT
Due Attention to a late Act of Parliament,
and a By-Law of their own.

LONDON:

Printed for George Kearsly, in Ludgate-Street.

MDCCLXVII.

A
CAUTION
TO THE
DIRECTORS, &c.

Gentlemen,

Perhaps there never was such a necessity, for an address to you upon the subject of caution, since the East-India company was established, as at present.—Your great successes in India, have drawn upon you the envy of your own countrymen, as well as the other European powers; the great increase of your dividend, has alarmed the proprietors of other funds for their own property; the differences among yourselves, and your fellow-proprietors, have furnished this envy, and these fears, with the means perhaps of overturning your constitution.

Tho' I will not presume to determine, whence these differences arose, or who have been to blame, that not being part of the present design, you will agree with me they have drawn upon you the notice of the legislature, and have produced an act of parliament, that affords either party but little cause for rejoicing, however grateful it may be to the public. I must suppose you would wish to keep your golden fleece to yourselves—union among yourselves would have secured it—but your differences have exasperated the watchful dragon, the guardian of this treasure, and you now only hold it in participation—A strange participation too, where the public is to receive four hundred thousand pounds, while you are to receive nothing—I say nothing—for I shall endeavour to prove you cannot make your dividend of 5l. per cent. due the 5th of last July, nor will you be able, as things now stand, to declare the dividend of 5l. per cent. at Christmas next.

I am satisfied that such a consequence as this, will not be admitted without some proof; but I should conceive very little proof necessary, to awaken your caution, at the time you are going to pay the 5l. per cent. dividend, if it is but hinted, that it cannot be done without incurring a danger of the censure of parliament. I presume only to recommend caution, but I will submit to your better judgments, the reasons which convince me, that while the late act of parliament, for regulating your dividends, remains in force, you cannot divide the 5l. per cent. which you have declared payable the 5th of July last, nor can you declare, or make the like dividend of 5l. per cent. at Christmas next.

I will set down the proper clauses in the several acts of parliament, with a letter of the alphabet before each, for the convenience of referring to them, as occasion may offer.

Cap. 49. A.

"That no dividend shall be made by the said company, for, or in respect of any time, subsequent to the 24th day of June, 1767, otherwise than in pursuance of a vote, or resolution, passed by way of ballotting, in a general court of the said company, which shall have been summoned for the purpose of declaring a dividend, and of the meeting of which general court, seven days notice at the least, shall have been given in writing, fixed upon the Royal Exchange in London."

Ibid.—B.

"That it shall not be lawful, for any general court of the said company, at any time between the eighth day of May, 1767, and the beginning of the next session of parliament, to declare, or resolve upon, any encrease of dividend, beyond the rate of 10l. per cent. per ann. being the rate at which the dividend for the half year ending the 24th day of June, 1767, is made payable."

Cap. 48. C.

"That, from and after the 10th day of July, 1767, no declaration of a dividend shall be made, by any general court, of any of the said company's, other than one of the half yearly, or quarterly general courts, at the distance of five calendar months, at the least, from the last preceding declaration, of a dividend, and that no declaration of more than one half yearly dividend, shall be made by one general court."

29. By-law. D.

"That no alteration be made in the dividend, on the capital stock of this company, without first giving six months publick notice."

By clause A, it appears that no dividend can be made, after the 24th of June, without the vote of a general court, (and by clause C, that must be a quarterly court) called for the purpose of declaring the intended dividend, with seven days previous notice thereof, in writing fixed upon the Royal Exchange—by the resolution, of your court of directors, of the 22d of May last, as well as by your uniform practice in making dividends, the half year's dividend of 5l. per cent. declared in September last, and now in course of payment, was due the 5th of July last, and that day, and not the 24th of June, is the day on which this dividend must be understood to be made, in consequence of the September declaration. Now as this dividend declared to be made on the 5th of July, is made for and in respect of time subsequent to the 24th of June, and is made not in pursuance of a vote, carried by ballot, in a general quarterly court, summoned for the purpose of declaring a dividend, with seven days notice of such a meeting, given in writing and fixed upon the Royal Exchange, it is not warranted by the act, but is, according to the plain and obvious construction of the act, illegal.

I have heard two objections, and two only, made to this construction; one, that the legislature was mistaken as to the time, in which the dividends are always made by this company, supposing them payable the 24th of June, instead of the 5th of July, and that they did not intend to prevent your dividing 5l. per cent. at Midsummer. The other, that if they were not mistaken, and if they did intend to prevent your dividing the 5l. per cent. at Midsummer, the act itself fails in this intention, since it only prevents your dividing for eleven days, being the interval between the 24th of June and the 5th of July, and you are, on this account, left at liberty to pay the 5l. per cent. after deducting the proportional part for those eleven days.

As to the first, I think nothing can be more absurd, than to suppose that the wisdom of the legislature, should be capable of such a blunder. In order to this, we must suppose, that they who, in the same session, made a law with