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Rh was, in effect, but the creature of the British power. The tendency of events for some years past had been to throw on the Company's Government the military defence of the three provinces. They were now to be formally invested with this office. The Nabob was to be relieved from the expense of keeping up any greater military force than might be necessary for purposes of state, for the maintenance of internal peace, and for enforcing the collection of revenue; while the Company were to receive a monthly payment of five lacs to meet the increased expense that would thus be thrown upon them. The establishment of this new Nabob produced the usual shower of private rewards; and numerous lacs of rupees were distributed amongst the fortunate members of the existing Government.

At this period Clive, who, during his residence in England had been created an Irish peer, arrived for the third time in Bengal to assume the reins of government. The Vizier, with his allies the Mahrattas, having been defeated on the 3rd of May, 1765, by the English, he signified a few days afterwards his desire of peace, upon any conditions which the victors might think fit to prescribe. Clive accordingly proceeded to the English camp to arrange the terms, and the vanquished Prince had so little reason to complain of their harshness that he agreed to pay fifty lacs as an indemnification for the expenses of the war. The Emperor had some years before offered to bestow upon the Company the Dewanny of the three provinces of Bengal, Bahar, and Orissa; but it was then declined. It was now solicited, bestowed, and accepted; and by this title the English East India Company was acknowledged as the representative of the throne of Delhi in the three provinces, and receivers-general in perpetuity of the revenues of Bengal, Bahar, and Orissa.

These transactions having been brought to a happy termination, Lord Clive had a much more disagreeable task to perform, in reducing the emoluments of the army,