Once again, the Company was financially embarrassed, lacking the wherewithal to pay its dividend. In June 1784, the Company’s chairman, Nathaniel Smith, pleaded to Parliament for temporary assistance, warning that another Europe-wide financial meltdown could take place if a bail-out was not forthcoming. If he had ’to go in to the Court of Proprietors and tell them they were to have no dividend’, Smith told the Commons, he ‘would not be answerable for the consequences. The news would soon reach Holland and the government need not be told what would follow.’ To avoid a run on the stock, Pitt pushed through legislation extending the Company’s ability to raise debt, and so pay its regular dividend at 8 per cent. Of course, this measure made little financial sense as the Company was paying dividends out of debt. But it helped to stabilise the situation.
“Direct and Control”, p130-131
