But the determined resistance of the Directors to any increase of dividend gave their enemies great advantages over them in the Court of Proprietors. The Directors had themselves caused a motion for an increase of 2 per cent. to be brought forward in June, 1766, when they succeeded in getting it negatived; and thus, in consequence of particular rules, which regulated the Court's proceedings, gained some time. But this delay did not check the determination of the party in opposition, which daily gained strength. Lord Holland, and several other great proprietors, joined it, and Mr. Johnstone and his friends threw all their weight into the scale. Only two days before the Quarterly Court, in September[135], the party split 125,000_l._ stock into shares, and, by their exertions, succeeded in carrying the dividend to 10 per cent., in opposition to the expressed wish and advice of the Court of Directors. But a consequence of this difference of opinion between the Courts was, that this declared increase of dividend had no influence in raising the price of their stock.
At this period, party animosity ran very high, and produced its usual effects of mutual abuse and recrimination. The opposition started a paper, called the India Examiner, which the Directors answered in the India Observer.
Although it was on occasion of the vote for this increase of dividend that the Government began to intermeddle in the affairs of the Company, it may be most convenient, before attending to the proceedings of the Ministry, to conclude the narrative of the contest of the Directors with the Court of Proprietors.[136]
Mr. Johnstone and his friends had trusted to be relieved from the prosecutions instituted against them, by exerting their influence to effect a change of Directors. In April, 1767, however, their efforts for that purpose again failed: the elections were still favourable to the old Directors, and Mr. Rous was again chosen Chairman. Lord Clive was then on his passage home. Mr. Johnstone's party, seeing that nothing was to be looked for from the Directors, adopted the resolution of attempting to work on the Proprietors, who were still, in general, discontented on the subject of the dividends. At the General Court, therefore, held on the 6th of May following, Mr. Pulteney moved, that the dividend should be raised to 12-1/2 per cent.; a proposition which met with very general concurrence. Mr. Pulteney having thus secured the good-will of the Proprietors, Mr. Franks then moved to dismiss the prosecutions which had been instituted against Mr. Johnstone and other persons, for their alleged unwarrantable receipt of money in Bengal. The Chairman in vain proposed that the opinion of the lawyers should be read: the Court, displeased with the Directors, and elated with the measure they had carried against them, with the assistance of Mr. Johnstone and his friends, refused to hear it. Seeing them so determined, and so strong, no opposition was attempted by the Directors, nor even a ballot demanded. The motion of indemnity was carried without farther examination; a great victory to the accused members of Council, and a severe blow on the authority of the Court of Directors and of the Indian governments. It declared indemnity abroad to all who at home had powerful friends connected with the India House; an intimation that was not long disregarded.[137]