WHEN WILLIAM arrived back in London in July 1770 he found the Company's financial situation worse than in 1767 following the Company's appointment as diwan. News of the French build-up at Mauritius had reached London a few months after William had reported it to the Governor of Bengal. This, soon followed by reports that Haidar Ali and his troops were before Madras, had caused the now volatile Company stock to collapse. Yet the belief that Bengal was the goose that laid golden eggs persisted. Company servants who returned and joined the ‘Bengal Squad’ in the General Court demanded an ever higher dividend. They succeeded in raising it to 12.5% in March 1771. Although aware by the summer of a deficit in the revenues of two million rupees caused by the Bengal famine and the consequent recession, the proprietors voted to maintain the dividend at that level in September.

The over-provision of tonnage contributed to the Company's mounting costs. There were now eighty-five ships afloat or on the stocks. Each ship spent over a year at home between voyages and those that were taken up sailed to the East half-empty and returned home half full. Despite the excess capacity, Sir Charles Raymond, an ex-Company captain who now led the small group of the most powerful owners, made sure that freight remained at a very high level. Some commanders converted voyages into personal cruises for their own private trade, entailing enormous demurrage bills paid by the Company and the ships’ shareholders. The commanders were able to retire with a fortune while the husbands sold on the command at a higher price. It was an Admiralty enquiry into the scarcity of timber for the navy that thrust the state of the Company's shipping into the public glare. This revealed that the cause was the general increase in shipping, particularly that of the East India Company whose ships had not only trebled in number in the past thirty years but greatly increased in size. The ships were now up to 800 tons, taking the same scantling as a naval ship of fifty or sixty guns.