on an
agreement with the company, which in return for the confirmation of its
territorial revenues, bound itself to pay the government L400,000 a year
for two years; and parliament prohibited a higher dividend than 10 per
cent. The bill was violently opposed, specially by the Rockingham party,
on the ground that it was an unjustifiable interference with the rights
of property. In 1769 the agreement with the company was renewed, and
permission was given for a dividend of 12-1/2 per cent, on certain
conditions. The company was then in debt over L6,000,000.

[Sidenote: _HAIDAR ALI._]

A new and formidable enemy had arisen in Southern India. In 1767 Haidar
(Hyder) Ali, the ruler of Mysore, made war upon the English in
conjunction with the Nizam of Haidarabad. The allies were defeated, and
the nizam made peace. Haidar, however, continued the war. He had a large
force of cavalry which he brought to great perfection, and, as the
English were deficient in that arm, he was able to do much mischief in
the Karnatic. In April, 1769, having previously drawn the English army
away from Madras by skilful manoeuvres, he suddenly appeared in the
immediate neighbourhood of the town. The English were forced to make a
treaty with him on his own terms. The news sent the company's stock down
60 per cent. The same year the crops failed in Bengal, and in 1770 there
was a grievous famine which is said to have carried off a third of the
inhabitants. Yet in spite of the decreasing revenue and the heavy debts
of the company, the proprietors were receiving dividends of 12 and
12-1/2 per cent.

FOOTNOTES:

[68] _Newcastle's Narrative_, p. 11.

[69] _Annual Register_, viii. (1765), 92.

[70] _Bedford Correspondence_, iii., 281; Walpole, _Letters_, iv.,
365-66.

[71] _Annual Register_, xxi. (1778), 256.

[72] Lord Charlemont to Flood, Jan. 8, 1766, _Letters to Flood_, p. 5.

[73] Conway to Lord Hertford, Feb. 12, 1766, in a MS. collection of
Conway's letters, to which Messrs. Sotheran kindly gave me access.

[74] Conway to Hertford, April 29, 1766, MS. Sotheran, _u.s._

[75] Beckford to Chatham, Oct. 15, 1766, MS. Pitt Papers, 19; _Grenville
Papers_, iii., 336.

CHAPTER V.

GROWTH OF THE KING'S POWER.

While Chatham was suffering from gout and Conway from indecision,
Townshend had opportunities for mischief. His brilliant wit and oratory
gave him extraordinary influence in