TWO:The Company was then compelled to reduce its dividends to six per cent. and apply to Parliament for a loan of a million and a half to meet its pecuniary difficulties. This, Ministers and Parliament complied with, and proceeding to relieve the Company of its embarrassments, Lord North[208] proposed and carried a measure, by which the Company, which had no less than seventeen million pounds of tea in its warehouses, should, without limit of time, be authorised to export its teas to the British colonies of America duty free. This was thought a great and conciliatory boon to the Americans, but it proved otherwise. The import duty of threepence in the pound was still stubbornly retained, and the Americans, looking at the principle of taxation, and not at a mere temptation of a cheapened article, saw through the snare, and indignantly rejected it. The principal tea merchants declared that this would be the case, and that the whole Government scheme was wild and visionary.On the 5th of June, the day after the king's birthday, Pitt introduced his plan of military defence. It was to leave the militia what it was, but to increase the regular army by making it compulsory on parishes to furnish each a certain number of men to what was called the Army of Reservea body called out for five years, and only to be employed within the United Kingdom. He desired to break down the distinctions between this and the regular army by attaching the Reserve to the Regulars as second battalions, and encouraging volunteering thence into the Regulars. This was known as the Additional Force Bill, which was denounced by the Opposition as veiled conscription. In other ways, notably by the erection of his martello towers, Pitt set himself to rouse the spirit of the nation, in face of the very real danger of invasion.