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On 1 May 1777 Malone left Ireland, and settled permanently in London as a man of letters. The death of his father in 1774 had put him in possession of a moderate competency with the estate of Shinglas, co. Westmeath, and a small property in Cavan. Until 1779 he resided in London at No. 7 Marylebone Street, and from 1779 to his death he lived at 55 Queen Anne Street East, now Foley Place. He rapidly gained admission to the best literary and political society, and exchanged generous hospitalities with the most distinguished men of the day. He was a frequent visitor to Johnson at Bolt Court (cf. Boswell, ed. Hill, iv. 141). In 1782 he joined the well-known literary club of which Johnson was a leading member. In 1784 he attended Johnson's funeral, and he conducted the negotiations for the erection of his monument in Westminster Abbey (cf. the collection of letters addressed to him on the subject in Brit. Mus. Addit. MS. 22549). As early as May 1774 Malone sat for his portrait to Sir Joshua Reynolds, another member of the club, and the two men were soon afterwards very intimate. Reynolds submitted at least one of his discourses on art to Malone's revision. He was one of Reynolds's executors, and published a collection of his writings, with a memoir, in 1797. With Bishop Percy, also a member of the club, Malone began investigations into Goldsmith's biography, and corresponded through life on literary matters (cf. Nichols, Lit. Illustr. viii. 26, 32).

In 1785 he sought an introduction to Boswell, after reading a sheet of the ‘Tour to the Hebrides’ in Baldwin's printing-office. The acquaintance ‘ripened into the strictest and most cordial intimacy’ (Gent. Mag. 1813, p. 518), and Boswell dedicated to him the ‘Tour to the Hebrides’ on 20 Sept. 1785, to let ‘the world know that I enjoy and honour the happiness of your friendship.’ Malone supplied a note on Burke's wit (Life of Johnson, ed. Hill, v. 33–4). In 1786 he was security for 100l., when Boswell was called to the bar at the Inner Temple (Johnson, Letters, ed. Hill, p. 317). Throughout 1789 and 1790 Malone was busily helping Boswell in revising the life of Johnson. ‘I cannot,’ Boswell wrote, ‘sufficiently acknowledge my obligations to my friend, Mr. Malone, who was so good as to allow me to read to him almost the whole of my manuscript, and made such remarks as were greatly to the advantage of the work’ (Advertisement to 1st edit. 1791). He also helped to correct half the proof-sheets, and he edited with useful notes the 3rd, 4th, 5th, and 6th reissues of the work, dated respectively 1799, 1804, 1807, and 1811. Boswell was till his death an enthusiastic admirer of Malone's dinners, and named him one of his literary executors, but Malone was too indolent to act, although he continued a close intimacy with Boswell's son. For a time in later life he was on very amicable terms with William Gifford, while Kemble and Mrs. Siddons always delighted in his society.

Malone's political friends included William Windham, Gerard Hamilton, Burke, and Canning. He was Burke's guest on many occasions at Beaconsfield. He also came to know Horace Walpole, who invited him to Strawberry Hill, and was a regular morning caller on Malone when he came to town. At Brighton, in October 1797, Malone dined in the company of the prince regent, and heard him detail ‘all the cant about the grievances of the Irish catholics,’ whereupon Malone declared that the complaints were imaginary.

Malone was always interested in Irish politics, supporting the union, and opposing the Roman catholic claim to emancipation, but he steadfastly resisted the solicitations of his friends to play any active political part. He paid occasional visits to Ireland, and maintained very intimate relations with the Irish friends of his youth, with his sisters, especially Catherine, and with his brother. In 1797 his brother received a new patent as Lord Sunderlin, with remainder to Edmund. Lord Charlemont was one of his most regular correspondents, and their letters form an interesting record of the literary effort of the times (cf. Hist. MSS. Comm. 12th Rep. App. x.). Flood constantly dined with him when in London, despite their divergent views on politics. On 24 April 1783 he confidentially suggested to Flood, apparently at the suggestion of his friend Windham, then Irish secretary, that a post in the Irish ministry was to be placed at Flood's disposal, but the negotiation failed. In the days of the Irish rebellion of 1798 Lord Clare found time to send Malone accounts of its progress and suppression. In behalf of his fellow-countryman and companion at school, Robert Jephson and dramatist, he exerted all his social influence. In 1781 he carefully revised and wrote an epilogue for Jephson's ‘Count of Narbonne,’ and then with Horace Walpole's aid induced the lessees of Covent Garden Theatre to produce the piece (Walpole, Letters, viii. 107–10). He rendered similar service to Jephson's ‘Julia,’ and edited his ‘Roman Portraits,’ a poem, 1793.

Almost as soon as he had settled in London, Malone concentrated his attention on Shakespearean criticism, and he was privately encouraged in his work by Lord