both civil and military, I have detailed very fully in my letters to the Court of Directors.

I can most truly say, that ever since I landed in Bengal, I have paid the most unremitted attention to every part of the Company's interests in this country. I have been a most rigid economist, in all cases where I thought rigid economy was true economy. I abolished sinecure places, put a stop to jobbing agencies and contracts, prevented large sums from being voted away in Council for trumped-up charges; and have been unwearied in hunting out fraud and abuse in every department. As a proof that I have succeeded, you will see this year what never happened beforethat our expenses have fallen short of our estimates. But I shall never think it a wise measure in this country, to place men in great and responsible situations, where the prosperity of our affairs must depend on their exertions as well as integrity, without giving them the means, in a certain number of years, of acquiring honestly and openly a moderate fortune. The Company has many valuable servants; the temper of the times is changing. Men are beginning to contract their present expenses and future views.

The splendid and corrupting objects of Lucknow and Benares are removed; and here I must look back to the conduct of former Directors, who knew that these shocking evils existed, but instead of attempting to suppress them, were quarrelling whether their friends, or those of Mr. Hastings, should enjoy the plunder.

I refer you to a letter which I transmit by this ship to the Court of Directors relative to the prosecutions. I have there stated my sentiments so fully, that I have scarcely anything to add. In the list which I have desired you to reconsider, there are some as honourable men as ever lived; they have committed no fault but that of submitting to the extortion of their superiors; they had no other means of getting their bread, and they had no reason to expect support if they had complained. I sincerely believe that, excepting Mr. Charles Grant,' there is not one person in the list who would escape prosecution. You will find that we have rather extended our plan of agencies; under a good Government it is certainly the safest and the best. We are sure that neither the manufacture will be debased, nor the manufacturer oppressed-two very important points to us as sovereigns of the country. It is not for the real interest of the Company that the manufactures should be very cheap, provided it pays no more than other purchasers.

Charles Grant, b, Feb. 1746, d. Oct. 31, 1823; m. Feb. 23, 1770, Jane, dau. of Thomas Fraser, Esq., of Balmain. M.P. for

the county of Inverness from 1802 to 1818, and a Director of the East India Company from May, 1794, till his death.

I am sorry to hear that there has been some little unkindness in the Court of Directors towards Sir Archibald Campbell. He is a man of great worth and ability, and has served the Company with a zeal and assiduity which they must not often expect to meet with. It would give me the greatest concern to be deprived of his assistance, and I think in the present situation of our affairs on the coast, his retiring from the government might be attended with the most fatal consequences.

Notwithstanding Tippoo's warlike preparations, and the rumours of war in Europe, the discount on our paper does not rise, and you will see that we shall supply most of the funds for our investment in ready money. I cannot sufficiently express my obligations to Mr. Larkins for his earnest zeal in the public service. I wish those who attacked him in the House of Commons had half his patriotism. I am, &c.,

CORNWALLIS.

EARL CORNWALLIS TO THE COURT OF DIRECTORS.

Dec. 19, 1787.-See Appendix, No. 17.

CHAPTER X.

Financial arrangements - Alliance with Maratha princes - Improper decision of a court-martial Mission to China - European politics - Conduct of Sir J. Macpherson - Convention with France - Creditors of the Nabob of the Carnatic-The Guntoor Circars - Negociation with Marathas- Affairs of Holland Shah Alem and his family-Company's Recruiting Service Changes in Supreme Council Debts of the Vizier - Influence of Europeans at Native Courts.

THE political state of Europe occasioned considerable alarm in Calcutta at the commencement of this year. It was feared that if France and England were at war, Tippoo, encouraged by the former power, would immediately invade the Company's territories. Fortunately, the discomfiture of the democratic party in Holland put an end to these apprehensions, and enabled Lord Cornwallis to reiterate his injunctions to the various Residents, not to allow the native powers to entertain any hope of forming offensive or defensive alliances with the Company.

There were two points on which Lord Cornwallis had received very specific instructions before he left England. The one-with reference to the amalgamation of the Company's European troops with the King's army, about which some details will hereafter be given. The other-of much more importance-related to the cession of the Guntoor Circars. The claim to this territory had arisen about six years before. It had been stipulated with the Nizam, that these Circars should be given up to the English on the death of his brother, Bazalet Jung; but although this event had occurred in 1782, the Nizam had evaded compliance with the arrangement, which Lord Cornwallis was therefore desired to enforce. For reasons already stated, he had thought it advisable to postpone executing these orders, but he conceived the time had now arrived when further delay was inexpedient, and he effected his object without any serious opposition. The pecuniary claims of the Nizam for the Peshkush due by the Company, and their counter claim for the revenue which had been collected since 1782, were also satisfactorily adjusted.

1 Bazalet Jung, d. 1782; next brother to Salabat Jung, Subahdar of the Deccan, and had been Covernor of Adoni in 1758. Nizam Ali, the youngest brother, who had been Go

vernor of Berar, dethroned Salabat in July, 1761, and assigned the Guntoor Circars as a jaghir to Bazalet, to be held so long as he was faithful to Nizam Ali.

Among matters of less importance, may be mentioned the completion of the treaty with France, setting aside the Mauritius Convention, and the passing of the Declaratory Act, which materially increased the powers of the Board of Control. The inquiry into the system of peculation previously existing was carried on, and means were adopted, if not to eradicate, at least greatly to diminish the evils of which complaint had so justly been made.

As a question of economy, Lord Cornwallis suggested the almost total abolition of the Bombay establishment, and he was not indisposed, if a due equivalent could be found, which he rather doubted, to restore the island of Salsette to the Marathas. But the authorities at home did not concur in these views.

The alarm of war having subsided, Lord Cornwallis had leisure to turn his attention to financial subjects. On these he wrote two despatches to the Court of Directors, dated November 1 and November 3, the second of which will be found in the Appendix. The first is devoted to revenue questions, and lays down principles of political economy far in advance of the times in which he lived. The second discusses the state of the Zemindarry of Benares, the abolition of internal customs' duties, the payment of the Company's servants by fixed and liberal salaries, instead of by almost unlimited perquisites, and the compilation of the Hindoo and Mahometan laws, a task which Sir William Jones' undertook to execute. Both these papers, though very long, deserve attentive perusal. The views they propound are thoroughly just, and are explained with great clearness; nor is the advice tendered to the Directors less sound in principle, than it must have been novel to their minds.

MY DEAR LORD,

EARL CORNWALLIS TO LORD SYDNEY.

[Private.]

Calcutta, Jan. 7, 1788.

Our alarm from Tippoo's preparations has ceased, and there is no reason to believe from General Conway's conduct, that he has any desire to foment disturbances or to promote a war in this country. We are not however without some apprehensions that your prospects in Europe are not so pacific, and of course most impatiently expect the arrival of a packet, which the newspapers inform us was to sail from Falmouth early in August.

No man can be more seriously interested in the continuance of peace than myself; we have everything to lose and nothing to gain

1 Sir William Jones, b. Sept. 28, 1746, d. April 27, 1794; m. April 8, 1783, Anna Maria, dau. of Jonathan Shipley, Bishop of VOL. I.

St. Asaph. A Judge in India from 1783 till his death.

Y

by war, and a peace for these next three years will enable me to put this country into such a state, that it will be a difficult task even for a bad successor to hurt it materially.

I am astonished to hear that the Court of Directors seize every opportunity of attacking Sir A. Campbell. Nothing could give me personally greater concern, and nothing in my opinion could be more fatal to the British interest in India, than his removal. He has shown great ability and the most perfect uprightness and integrity, and possesses the esteem and confidence of the civil, as well as military part of the settlement.

I have represented in the strongest terms the necessity of adopting some other mode of recruiting the Company's European troops. I know my brother officers at home will not approve of my proposals, but I likewise know that unless the system is altered, it would be much wiser not to send out any recruits. Without entering into the merits of the case, I am very sorry that things have gone so much against poor Hastings, for he certainly has many amiable qualities. If you are in the hanging mood, you may tuck up Sir Elijah Impey, without giving anybody the smallest concern. I think I told you how much Lord Ailesbury had distressed me by sending out Mr. Ritso. He is now writing in the Secretary's office for 200 or 250 rupees per month, and I do not see the probability of my being able to give him anything better, without deserving to be impeached.

I am still persecuted every day by people coming out with letters to me, who either get into jail, or starve in the foreign settlements. For God's sake do all in your power to stop this madness. I am, &c.,

CORNWALLIS.

SIR,

EARL CORNWALLIS TO MAJOR PALMER.

Calcutta, Jan. 11, 1788.

I have received your letters dated 29th and 31st ultimo, and I am very much satisfied both with the general tenor of the information which they contain, and with the manner in which you have conducted your conversations with Madajee Scindia.

It will be difficult to add any new explanations to Scindia, of the insurmountable reasons which prohibit this Government from interfering in the affairs of the Upper Provinces, and, in its present general political situation, from contracting an alliance offensive and defensive against Tippoo with the Maratta State; but a calm and uniform repetition of what you have already said of the prin