An Empire on the Edge

by Nick Bunker

  “Things both at home and abroad are in a critical situation,” wrote one of his opponents in the Commons, Edmund Burke. For once, despite his habit of overstating every case he made with brilliant rhetoric that often hid a lack of rigor, Burke was entirely correct. Thanks to the Bank of England and the Scottish dukes, the financial panic of the summer had gradually subsided. But while the system had survived the acute stage of the fever, the patient remained very sick. In Europe the price of grain soared to reach levels not seen in fifty years, raising the specter of peasant revolt in Sicily and in the north of France. In Britain the banks were still fragile and the recession had sent the number of insolvencies to new heights. Since a poor harvest took six months or more to make its full impact by way of scarcity, it was likely that 1773 would witness deeper hardship. In the East End of London sailors were threatening to riot against a cut in their wages, and in Scotland the unemployed seemed likely to follow suit.3

  As more news arrived from Sweden and Poland, Lord Rochford continued to sound the alarm. The French, he said, were still readying their fleet, to defend the Swedes or to strike at India. In either case, Britain would have to reply with force. Politics at home supplied another reason for anxiety. It was election time in London, “this immense, unruly town,” as one member of the House of Lords described it, alerting the cabinet to signs of trouble on the streets. North did not worry unduly about that kind of thing: one summer evening the previous year, a mob had marched on Downing Street and smashed his windows, an incident he simply shrugged aside. But this time he could not ignore the evidence of disaffection that might give John Wilkes a sweeping victory at the polls.4

  No British government wanted to see a political opponent as lord mayor of London. If he wished, a mayor might devote himself to brandy, pomp, and ceremony, but if he chose to defy the king and the ministers, he had the power to do so. From the Old Bailey, the mayor and his two sheriffs administered the criminal justice system, not only for the city proper, the old Square Mile, but also for the surrounding county of Middlesex. Newgate Prison fell under their jurisdiction, and any warrant to arrest or search a suspect required their consent. If John Wilkes was elected as lord mayor, the city would become his fiefdom, with his friends taking turns to serve as sheriffs or succeed him as chief magistrate. Secure in his control of London, Wilkes might try to build a new radical faction in Parliament as well.

  In three years’ time, in the spring of 1775, a general election was due, and already North was making preparations, meeting likely candidates, and trying to ensure that every safe seat went to his supporters. Lose the metropolis, and by inches he would start to lose his reputation and his usefulness to George III. A new phrase, “public opinion,” had entered the language in the 1740s to refer to the prevailing mood of the country. In exceptional circumstances, public opinion could even topple an administration. If members of the press decided that a man was weak or unpatriotic, they could destroy him with a relentless campaign of ridicule and innuendo. In living memory, two chief ministers had fallen in this way.

  Might the same fate befall Lord North? Fleet Street could not do without his antagonist John Wilkes, an endless source of mischief and amusement. By 1772 Londoners could choose from among nineteen newspapers, with a daily sale between them of as many as thirty thousand copies and a total readership of perhaps ten times that number. Whatever appeared in the London press was swiftly reproduced in the provinces and then relayed to America as well. It was essential, therefore, to prevent Wilkes from winning victories that, as time went by, would undermine respect for authority. Allow the press to make Wilkes a hero again, and North’s own position might become untenable.5

  Suddenly Wilkes made his play for power. As North arrived back at Downing Street, the electors began to gather at London’s Guildhall, holding a series of polls to choose the new mayor. About nine thousand citizens were qualified to vote, making the city of London the nearest thing Great Britain had to a popular government. Often, an inner circle of aldermen found a way to fix the result in favor of a candidate with whom the king and his ministers were happy. So they had done in the past, but for nearly three years, since he lost his fight to take his seat in the Commons, Wilkes had been busy organizing a political machine.

  As each vote was taken, his support increased. When the polls closed on October 6, fewer than half the voters had opted for candidates loyal to the king and the cabinet. John Wilkes emerged as the winner. North and the king looked on with gloomy irritation, but as yet they saw no cause to panic. They assumed that Wilkes had won by means of fraud, and so, they believed, his margin of victory would disappear when the aldermen scrutinized the ballot.

  This was another miscalculation. A demagogue, an adulterer, and even perhaps a perverted infidel, Wilkes stood for everything that George III feared and despised. Lord North felt the same, but their hatred of the man led them to underestimate his talents as a politician. Nor could they see the breadth of genuine support that Wilkes commanded from thinking people on both sides of the Atlantic. A devious self-promoter who trusted only a few close friends and fell out with many of his allies, Wilkes could never build a lasting political movement. But he did have qualities and gifts—courage, intellect, and a brilliant flair for publicity—that in the short run made him a formidable foe. Even uglier than Lord North, he was fully his equal as a Latin scholar. But as the son of a wealthy distiller from Clerkenwell, Wilkes knew London more thoroughly than any cabinet minister could hope to do. For a few short years, he led a broad urban coalition composed of men and women longing for change.

  A year earlier, Wilkes and his entourage had drawn up a program for democratic reform. At its heart lay a fierce critique of Parliament and of the small elite who seemed to hold the reins of power with an iron grip. In fact North never felt like a man in firm control, and his colleagues were too selfish to form an entirely solid bloc. But when Wilkes gave a speech at the Guildhall hustings in 1772 calling Parliament “a Senate composed chiefly of hirelings and slaves,” his audience knew what he meant. As a way to cleanse the stable of corruption, the Wilkesites called for annual elections, a law against bribery at the polls, and another law to bar the king’s officials from sitting in the Commons. At their most radical, they called for “a full and equal representation of the people.” This phrase could mean many things, but it would definitely include an end to tame little boroughs like Lord North’s seat at Banbury. It might also imply a wide extension of the franchise and a vote for every householder.6

  The Wilkesite program had a wide appeal. Shopkeepers voted for Wilkes, but so did skilled artisans, attorneys, West India merchants, and traders who did business with America. Not least, he had the backing of religious dissenters, Baptists, Presbyterians, and the like. While their strongest support lay in the eastern districts of London, from Aldgate out to Hackney and Mile End, the dissenters formed a spiderweb of nonconformity, spun across the nation. They had close ties with like-minded people in seaports and commercial towns, places like Newcastle, Bristol, and even Taunton, in Lord North’s own backyard in Somerset, where the dissenters were especially troublesome. These were towns that, like the city of London, might choose to send a Wilkesite to the House of Commons.

  Given the way the British system worked, the Wilkesites could not hope to win more than a handful of seats at the general election. But even so, they could cause trouble for Lord North and make him worry for the future. They could also reach out across the Atlantic and help to incite a still more powerful movement of resistance. A bond of sympathy aligned the Wilkesites with the patriot opposition in America, not only in Charleston, but also in Virginia and New England. From the colonies, men and women followed the politics of London with keen attention, and nowhere more so than in Boston, where the radicals held the same attitudes to God and to authority. The patriot leader Samuel Adams—a failure in business, a very incompetent collector of taxes, but a fiery journalist and a superb politician—had two American contacts in London, Art
hur and William Lee from Virginia. Both men belonged to Wilkes’s inner circle. An even tighter connection existed between the Wilkesites and Adams’s Boston ally John Hancock. As his business agent in London, Hancock used a leading merchant, George Hayley, a man from Presbyterian roots who lived in Aldgate among the chapels of the brethren. Wilkes was his brother-in-law.7

  Whenever John Wilkes scored a political point, his admirers in America saw it as an extra reason to defy the empire. His every victory, including the mayoral election, echoed around the Boston waterfront. The British cabinet knew that this was so—the press cuttings from the colonies often spoke of little else—but they did not appreciate its full significance. In due course the Lees would act as instigators of rebellion, but this was still two years away. While they were known to the authorities, the extent of their activities would only become fully visible in 1774. In the meantime, Lord North and his colleagues had little inkling of how effective the Lees could be. As far as they were concerned, America remained a secondary issue at the most. At the top of their list of woes lay the East India Company.

  DISTRESSED IN POINT OF CASH

  For more than a year the market for tea had been nearing the point of collapse. In the autumn of 1772 the moment finally arrived. In July, Captain Thomson had reached the Thames with the Calcutta and the tea she loaded in Canton. By the end of August, another nineteen ships lay moored around her in the river, beaten by the weather but still safe. They carried between them ninety thousand chests of tea, twice as much as British drinkers of the legal product consumed in the course of a year. A huge overhang of unsold tea still remained from the previous season. When the auctions began in September, the price of Bohea fell by 20 percent.8

  Even then the East India Company could still turn a profit from its tea, but not enough to meet all the claims upon it. The company’s coffers of cash were all but empty, its debts were enormous, and in the wake of the banking crisis it was impossible to borrow any more. From all sides the company faced demands for cash from its creditors, many of them desperate for money as the recession continued.

  The moment the ships dropped anchor, the owners sent in their invoices for wages and transit, but the company could not even pay the bills left over from 1771, let alone meet the expense of the fleet that had just returned, the largest it had ever sent to China. The Treasury, meanwhile, submitted huge demands of its own for the customs duties owing from the tea sales in the spring. In addition, the government wanted twice as much again to cover another huge liability incurred by the company. In 1766, after the news from Robert Clive about the grant of the land tax in Bengal, the diwan, the government had demanded a cut for itself. Reluctantly, the company paid a hefty tribute to the Crown, but as a quid pro quo it asked for some tax relief. And so, for five years, as we saw earlier, the government slashed the duty on tea as a way to beat the smugglers who were stealing the company’s business. But the Treasury added a proviso: the company had to promise to make up any shortfall in the revenue owing to the king.

  The East India Company’s headquarters in Leadenhall Street, on the site now occupied by Lloyd’s of London, from an engraving dated 1777.

  In the autumn of 1772, the bill fell due for that as well. In a normal year, the company would have released a torrent of cash from the auctions in March; but credit was now so scarce in London that the dealers could not pay for the tea they had bought. This was bad enough, but the news from Asia was even worse. The ships coming home from India brought with them the Bengal bills, coming to more than £1 million, payable to bankers, merchants, and old soldiers in London, including Clive, who wanted their money without delay.

  To put it bluntly: the East India Company was very nearly broke. The company can be accused of many things, but nobody could fault its record keeping. Its books and ledgers survive, in impeccable calligraphy and bound in red leather, recording every item down to the last penny and rupee. When all the figures are added up, we find that the company needed £3 million to pay all the borrowings due in the next twelve months. Its ready assets, by way of cash, debtors, and stock on the shelves, came to little more than half that sum. In the twenty-first century, we have become accustomed to seeing financial institutions go down to ruin, with liabilities almost beyond comprehension. In 1772 men and women expressed the same outrage and anger.

  In the middle of September, while North was still in Somerset, the price of the company’s stock began to drop. On the eighteenth the fall became a crash. And then, just before the great gale came in off the Channel, the company assembled its shareholders to break the bad news. The chairman, Sir George Colebrooke, admitted at last that the company was “distressed in point of cash.” Even now he would not reveal the numbers: he simply warned of a delay to the next dividend.

  A visitor once called the company’s shareholders’ meetings “the most riotous assembly I have ever seen.” The session at noon on the twenty-third lasted four acrimonious hours. From the floor William Crichton leaped up to vilify the board with the relentless eloquence that earned him the title “orator Crichton.” Time and again he had warned the company that it was running fast to ruin, and time and again he had been brushed aside. He demanded the creation of a new committee, made up of nine independent men, to investigate misconduct by the board.9

  The meeting ended with Colebrooke, John Purling, and Laurence Sulivan still in control. Bloody but unbowed, Crichton withdrew to rally support and return to the fray at the next opportunity. During the fierce exchanges, he had won a tactical victory when Colebrooke was forced to reveal that negotiations were under way with the Treasury about a plan to rescue the company with public money. In fact this was another of Sir George’s fibs—Lord North was still on holiday, and no talks had begun—but from that moment the plight of the company became a political as well as a financial question.

  With each passing day the crisis grew deeper. For working capital between each sale of tea and silk, the East India Company relied on loans from the Bank of England. But the bank itself was under heavy pressure. Since Fordyce disappeared, gold had been draining away from its vaults, as worried men and women asked for bullion in exchange for notes. And while the bank tried to keep credit flowing by lending money to firms it thought worth saving, it became ever more uneasy about its own exposure to East India House.

  On Monday, October 5, the Bank of England met the company to discuss its overdraft of £600,000. Wary of Colebrooke and suspicious of the company’s accounts, the bank asked for first call on any cash that flowed from its sales of tea. In the future it would only give the company what it called “reasonable temporary assistance,” which meant no more than £100,000. The bank set a deadline of December for the rest to be repaid. That evening Lord North wrote another anguished letter to his father, telling him that Parliament had to be recalled. Everywhere, the news was “very unpleasant,” he wrote. “There are vexations enough in my office to make me melancholy, amidst all the honours I receive.”

  The following day, October 6, a deputation arrived from Oxford University to make him its chancellor, but dinner was scarcely over when they heard that Wilkes had topped the final poll for mayor. On the seventh North assembled his inner cabinet to be given Rochford’s dire assessment of the risk of war. Keen though they were to avoid hostilities, they drafted a strongly worded note to be sent to Paris, warning the French that if their fleet entered the Baltic, then Britain would send its navy in pursuit.

  Next morning Lord North held a first frustrating session with Sir George, who had done so much to wreck the company’s affairs. At first glance, it might be thought that North and Colebrooke belonged to the same privileged elite, but in fact they had almost nothing in common. A deep divide of social class and attitudes fell between a peer of the realm and the nouveaux riches of East India House. “The damned East India Company,” Lord Rochford called it, speaking for the rest of the landed aristocracy, who rarely owned more than token amounts of its stock.10

  In an age of gamblin
g, noblemen had many ways to lose their wealth, betting on a horse or on a game of cards, but they usually kept their distance from the company. Only one cabinet member, Lord Sandwich, took a personal interest in its affairs. About a third of the company’s stock actually belonged to foreigners, chiefly from the Netherlands. In England, most of the largest holders were merchants in London, old India hands like Clive, or men like Colebrooke, and he was little better than a vulgar parvenu. Sir George ran his own overextended bank, and he was one of those speculators who bought land in Scotland and Grenada at the very peak of the boom.11

  Like Brownlow North, he married an heiress from Antigua, but his resemblance to the Norths ended at that. Dr. Johnson’s friend Mrs. Thrale knew the Colebrookes well, and she drew a fine little sketch of his personality. Sir George was a “pretty little Dapper Man,” always dressed in the height of fashion, she wrote; in his green coat and white waistcoat he looked “like a Leg of Lamb & Spinach.” Despite his wealth, Colebrooke never seemed to have cash to spare. When he attended a fund-raising party, he had an annoying habit of borrowing a guinea to give away. But the thing that struck Mrs. Thrale most forcibly was the sheer scale of his extravagance: “His Wife was covered with Jewels, his Children harassed with variety of Masters, he bought pictures of great Value, & all was Rapacity, and all was Profusion.”12

  And so Sir George could not expect an ounce of sympathy from the nation’s leaders. When American historians describe the events that led to the Boston Tea Party, they sometimes assume that the king and his ministers were keen to help the East India Company, or even that North and his colleagues shared in its corruption. In fact George III disliked the company intensely. A monarch of simple tastes who lit his own fire in the morning, dressed like a country squire, and went to bed by eleven, the king believed that the best parts of the nation were the farmers. In his eyes, speculators like Colebrooke could never speak for an England with honest agriculture at its heart. In language similar to Mrs. Thrale’s, the king used the word “rapine” to describe the misconduct that brought the East India Company to its knees. Although Lord North expressed himself more diplomatically, he viewed the directors with the same distaste.13