A special reason may be discerned for his desire to obtain such an increase at the end of 1766. The government wanted money; there was a heavy debt on the civil list, and the navy needed a large grant. An increase of taxation was inadvisable, for corn was dear. Various schemes for the increase of revenue were in the air. Many members of parliament, the court party, the country interest, and the Grenville and Bedford connexions were regretting the repeal of the stamp act. "We must look to the East and not to the West," wrote Beckford to Chatham,[75] and he spoke the mind of his leader. The cabinet was divided. Grafton and Shelburne agreed with Chatham that the question of the company's rights should be decided by parliament. Townshend declared that it would be "absurd" to force the company to share its power with the crown, and both he and Conway desired that the question of right should be waived and that its relations with the government should be settled by amicable arrangement. In May, 1767, the proprietors insisted on a dividend at the rate of 12-1/2 per cent. A motion was carried to bring the affairs of the company before parliament. Townshend, as Chatham said, "marred the business"; he managed to open the door for negotiation, and to make it a mere matter of money. In June, 1767, a bill was passed, based 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.