Hardly was this peril passed away, when a trouble, almost incredibly strange and formidable, followed upon it. As the Directors had complained of extravagance and expensive wars, Sir George Barlow thought fit, in a true English spirit, to cut down above all things military expenditure; and this he did mainly by reducing certain allowances to the officers of the Company's army. Now the discipline of the British officers of that army was in a very bad state. For the King's army the King himself was the fountain of honour, and rewards for good service took the form of the Royal approbation publicly signified, of titles of honour, or of the thanks of both Houses of Parliament. The Company's army (except in rare instances) received only the thanks of the Directors--a parcel of merchants in Leadenhall Street--which were naturally little valued; except so far as they were supplemented by grants of money, of which the officers, condemned to long exile in an unhealthy climate, were very justly tenacious. Hence they had instituted the practice of passing votes of appreciation and approbation of each other, which was most pernicious to discipline. This might rightly have been put down with a strong hand; but the reduction of pecuniary allowances was a real grievance; and the officers met it with a number of absurd and insubordinate resolutions. Barlow was a strong and determined man, but he hated soldiers; and, instead of appealing to the better feelings of the officers and using tact as well as firmness, he sent spies among them, suspended them arbitrarily right and left without trial, and employed emissaries to wean the devotion of the Sepoys from their regimental officers--this last an inconceivably dangerous measure. To be brief, in 1809 he succeeded in driving the officers into open mutiny, which was not suppressed without bloodshed; and in fact the trouble was only ended by the advent of his successor, Lord Minto; the officers yielding readily to him but declining altogether to submit to Sir George Barlow. The ill-feeling bred by this mutiny lasted for thirty years, and was not without its effect upon the greater Mutiny of 1857.
To return to more general matters, the policy of the Directors in holding aloof from affairs outside their own territory produced the worst consequences.