^5 
 
 f
 
 HF 
 REMARKS i-^f 
 
 ON X I 
 
 THE VOLUME 
 
 OF 
 
 HYDRABAD PAPERS 
 
 -PRINTED FOR THE USE OF THE 
 
 EAST INDIA PROPRIETORS. 
 
 BY THE 
 
 HON. DOUGLAS KINNAIRD. 
 
 LONDON: 
 
 PRINTED FOR J. M. RICHARDSON, CORNHILL, AND 
 JAMES RIDGWAY, PICCADILLY. 
 
 1825.
 
 LONDON : 
 
 IKINTK!) BY THOMAS PAVXSON, WHIl EFHIARS.
 
 TO 
 
 THE RIGHT HONORABLE 
 
 GEORGE CANNING, 
 
 4'c. Sfc. Sfc. Sfc. 
 
 Sir, 
 
 The volume of papers, upon which the ac- 
 companying remarks are made, was printed for 
 the purpose of exposing the truth or the falsehood 
 of leports, deeply affecting the public honor and 
 character of the late Governor-general of India, 
 the Marquis of Hastings. 
 
 As that nobleman's brilliant services were, for 
 the most part, rendered during the period in which 
 you presided over tlie Board of Controul, and 
 have found in you their official and eloquent pa- 
 negyrist before the assembled representatives of 
 his country, it is to be presumed you cannot be 
 indifferent to the result of the examination of these 
 documents.
 
 IV 
 
 In the confident anticipation that the following- 
 pages will exhibit the untainted purity, the states- 
 manUke wisdom, and the indefatigable zeal of the 
 Marquis of Hastings, in every detail of this mis- 
 represented and calumniated passage of his go- 
 vernment, I venture to submit them to your un- 
 prejudiced perusal. 
 
 I have the honor to be, 
 Sir, 
 Your very obedient and humble Servant, 
 
 Douglas Kinnaird. 
 
 Pall Mall East, 
 February 23d, 1825,
 
 REMARKS, &c. 
 
 1 HE following remarks are the result of an attentive ex- 
 amination of the volume of papers printed by the East 
 India Company, entitled Papers relating to the Pccuniarri 
 Transactions of Messrs. W. Palmer and Co. \soith the Govern- 
 ment of his Highness the Nizam. 
 
 Their publication was called for by a Court of Pro- 
 prietors of East India stock, upon the motion of Mr. John 
 Smith, M. P., subsequent to the refusal of the Chairman to 
 give any reply to a question, publicly put to him, whether 
 any charge of misconduct had been, or could be substan- 
 tiated against the Marquis of Hastings for any part of his 
 civil administration of the government of India. If any 
 such charo-e can be substantiated against that distinguished 
 person, it is to be presumed that the proofs are to be found 
 in this volume of papers. 
 
 The calumny of which the friends of the Marquis 
 of Hastings thought it necessary to take public notice, 
 vi^as contained in the following allegation. That Sir 
 William Rumbold had been invited by the Marquis of 
 Hastings to accompany him to India, being a creditor 
 on his Lordship for a large portion of his wife's (Lady 
 Rumbold's) fortune ; of which Lord Hastings was a 
 trustee. That Lord Hastings was to compensate Sir 
 William Rumbold, by using his power and his influence in 
 his favour, on any occasion that might present itself. That 
 he, (Lord Hastings,) had a corrupt interest and motive for 
 so doing : that, in contemplation of availing liimself of 
 
 B
 
 
 
 Lord Hasting-s' undue favour and protection in behalf ot 
 any commercial establishment with which he might connect 
 himself, Sir William Rumbold sought and formed a con- 
 nection with the firm of W. Palmer and Co., of Hyderabad, 
 
 That thereupon Lord Hastings did give to that establish- 
 ment improper countenance and privileges, contrary to his 
 duty and to the interests committed to his charge; — par- 
 ticularly, 1st, by granting to the firm of W. Palmer and 
 Co. a licence exempting its members, in the terms of the 
 37th Geo. 3d., from the penalties attached to dealings 
 in money between British subjects and native princes; 
 such licence being dated July 23d, 1816; — 2dly, in cor- 
 ruptly sanctioning in October 1819 their establishment at 
 Aurungabad, and their contract with the Nizam's minister, 
 Chundoo Loll, for the regular monthly payment of a body 
 of reformed regular troops ; — 3dly, In sanctioning a loan 
 from W. Palmer and Co. to the Nizam's government on 
 the 15th of July, 1820; all these acts being done for the 
 purpose of enabling the house of William Palmer and Co. 
 to make inordinate gains at the expence and to the ruin 
 of the Company's ally, the Nizam. The Company's resi- 
 dent at Hyderabad, Mr. Russell, is libelled as having been 
 a secret partner or participator in these luidue gains of the 
 house, and as having, therefore, corruptly recommended the 
 above mentioned sanctions. The minister, Chundoo Loll, 
 is also alleged to have wilfully sacrificed his country's in- 
 terest, from his supposed conviction of the power that Sir 
 William Rumbold had over the mind of the Governor- 
 general, whose favour and support were necessary to him, 
 Chundoo Loll, for his continuance in office. And the 
 house of W. Palmer and Co. is charged collectively and 
 individually with extortion, usury, legerdemain, fraud, 
 infamy, and perjury. 
 
 An attentive examination of the Hyderabad papers 
 has not only led the author of these remarks to the 
 conclusion, that there is not the slightest ground for
 
 3 
 
 any one of the above charges agahist any one of the 
 above persons ; but it has enabled him, he thinks, to dis- 
 cover the sources in which they had their origin, the 
 means by which they were put into secret circuhition, as 
 well as the gross credulity by which they were encouraged 
 into open assertion. It is owing to their present publication 
 alone, that the destined victims of calumny and injustice 
 have been enabled to learn the crimes, of which, without 
 trial and without a hearing, they have been declared guilty, 
 and for which they have been persecuted with a reckless 
 attack on their characters and fortunes. No call has been 
 made upon them, no opportunity has been afforded to them, 
 to reply to accusation, to explain misapprehension, or to 
 disprove mis-statement. 
 
 Mr. Russell thus addresses the Court of Directors on the 
 subject. " The proceedings out of which those allegations 
 have arisen, have, from first to last, been concealed from 
 us. The acrimonious party spirit in which they originated 
 is manifest in the tone and temper which pervade the whole 
 correspondence ; and although, when much higher autho- 
 rity is assailed, we ought not, perhaps, to complain, that 
 some blows fall on us also ; still we do very much complain 
 that on an occasion affecting our characters as public ser- 
 vants, we have been denied every opportunity of repelling 
 what was false, of explaining what was doubtful, or of say- 
 ing one single syllable in our justification." * 
 
 Thus, in the absence of any specific charge, and of any 
 responsible accuser, the objects of attack are compelled 
 to labour through an enormous folio volume of correspond- 
 ence, to pick out the matter on which they have been 
 condemned. It is, however, only necessary to be really 
 acquainted with the contents of this volume, to establish the 
 utter absence of all ground on which the accusations have 
 been made. 
 
 Mr. Russell's Letter, of 1824, to the Court of Directors, p. l. 
 
 B 2
 
 Whether the original motive for these calumnies may 
 have been to injure Sir William Rumbold and his partners, 
 or Mr. Russell, or Lord Hastings, it is abundantly apparent 
 that their judges and their accusers have been equally 
 ready to believe without examination, and to record as true 
 everv charge that has been made. In the course of these 
 observations the author has not knowingly stated a single 
 fact, for which he has not cited his authority, or given an 
 innnediate i-eference to the document. 
 
 The plot being laid in a country, with the manners, 
 habits, and laws of which comparatively few of that public 
 before whom the accusation is made, are acquainted ; it 
 may not be without advantage to give some general idea of 
 its condition, and of the relation in which the native and 
 the Beufral o-overnments stood towards each other. The 
 description shall be given principally in the language of 
 Mr. Russell, extracted from several of the Resident's dis- 
 patches in the years 1810, 1815, 1817, and particularly 
 from a report of 1 8 1 9, which Mr. Russell was called upon 
 to transmit in the discharge of his official duty as Resident, 
 at the conclusion of Lord Hiistings' brilliant achievements 
 for the pacification of India. These will, at the same time, 
 exhibit how differently both the Governor-General and the 
 Resident were employing their energies, from combining 
 and plotting the ruin of their ally. 
 
 Previous to the perusal of the following documents, it is 
 only necessary to state, that the Nizam is the Sovereign of 
 one of the very i'ew Indian states that still retain a nominal 
 independence, guaranteed by British protection ; and which 
 still bear the title of the East India Company's allies. The 
 rest, be it observed, have not exchanged that title to rank 
 amongst their enemies ; but the bands of their alliance have 
 been so tightly drawn, that one after another has gradually 
 disappeared in their embrace. The guarantee of the do- 
 minions of the Company's native allies, has offered a fair 
 pretence to introduce the aid and experience of British 
 officers, t() relieve them and their subjects from the duties
 
 5 
 
 of selt-deteiice. The sure irregiiiuiity vvilh which their 
 troops have been paid, has ever afFordetl a ready title to 
 proffer assistance, in the better collection and disbursement 
 of their revenues. The internal government has thus 
 gradually and necessarily fallen into the hands of the civil 
 servant, accredited to the Court : and the native troops of 
 the country have learnt to feel allegiance only to the 
 European officers in their command. The easy suppression 
 by diis armed force of many of the grosser acts of violence 
 of the chieftains and subordinate officers of the native Sove- 
 reio-n, have tended to make this direct interference to be 
 regarded by the natives with little of disfavour or of dis- 
 content. 
 
 Under such circumstances, the native Sovereign has been 
 permitted to wear his crown, until it has appeared more 
 convenient to the Company to rule in their own, than in his 
 name and authority. During such a process, the happiness 
 of the country, and the British character, are at once in 
 the hands of the Resident for the time being. His personal 
 conduct, and his statesmanlike talents, may enable him to 
 be the protector, instead of becoming the destroyer of the 
 national independence. Mr. Russell was resident at Hy- 
 derabad from the year 1810 to 1821. In the following 
 dispatches will be found sufficient evidence of his character 
 as a man, and of his talents as a statesman. They are a 
 few only of the many here recorded, and splendid proofs of 
 the services which his employers appear to liave under- 
 stood so little how to appreciate. 
 
 Extract from Mr. Russell's Letter tu the Court of 
 Directors, p. 12. 
 
 It would almost seem, by some of the expressions used in 
 the correspondence from Bengal, as if the sufferings and dis- 
 tresses of the Nizam's country had been occasioned by the mi- 
 nister's dealings with Messrs. W. Palmer and Co. ; or that, at 
 least, the investigation of those dealings had now first made 
 them known. Before any of the partners of that firm were 
 born, the Nizam's government was in a condition tending 
 
 B 3
 
 6 
 
 rapidly to decay. The despatches of your Residents, for 
 years, were full of complaints of the vices of his administration, 
 and the disorders of his country. My predecessor, Captain 
 T. Sydenham, in a despatch to the Earl of Minto, written in 
 1810, stated his conviction, that " during the reign of the pre- 
 " sent Nizam, no improvement could be expected, unless the 
 " administration of the country were placed under the con- 
 " troul of the Resident ; that the disorders of the present 
 " government were too deeply rooted, and too widely ex- 
 " tended, to admit of any partial reform ; and that it was, 
 " therefore, unfortunate, that the only effectual remedy that 
 " could be applied, should be so much at variance with our 
 " views and policy." From the time that I took charge of the 
 Residency in 1811, I repeatedly and earnestly called the at- 
 tention of government to this subject: and I had been at 
 Hyderabad only a month, when, after exhibiting a staternent 
 of the Nizam's public income and expenditure, I described 
 " the whole of the country to be in so lamentable a condition, 
 " that it could not long continue to endure the extortions 
 " which were practised upon it by the avarice and rapacity of 
 " its governors." 
 
 In the month of June 1815, the Marquis of Hastings called 
 upon the different Residents, to give him, confidentially, their 
 opinion on the measures to be pursued for the suppression of 
 the Pindarrees ; on our political and military position with re- 
 ference to other powers ; and on the expediency of a general 
 revision of our various treaties with the substantive states of 
 India. In my answer to his Lordship, after disposing of the par- 
 ticular points on which he had consulted me, I availed myself 
 of the opportunity to describe, in greater detail than I had before 
 had occasion to do, the evils which pervaded every branch of the 
 Nizam's government ; and I suggested, that when the accom- 
 plishment of the projects we then entertained should leave us 
 sufficiently at leisure, some attention should be given to the 
 state of his affairs, and some method devised for their improve- 
 ment. I pointed out the degree in which those evils were the 
 consequence of his alliance with us, and the degrading influence 
 which sucli a state of dependauce must necessarily have on the 
 character and conduct, both of the prince and of his ministers. 
 " All the functions of business," I stated, " have been ab- 
 " sorbed into the hands of the minister ; and even his office is 
 '* no longer the honorable station that it was. Neither his 
 •' talents nor his industry have an open field to act in. They 
 " are confined by restrictions. The qualities which would 
 " suit the minister of a free government, are of too bold, and 
 " manly, and patriotic a character, to suit the minister of a 
 •' subordinate and dependant power. A prince, be his natural
 
 " disposition what it may, cannot be virtuous or respectable 
 " when he has no longer any thing to hope or fear, either from 
 ■" his own subjects, or from foreign enemies ; and the best man 
 " in the world would in time become a bad minister, if his 
 " power were left, after his responsibility was taken away." 
 
 I renewed the subject in the following year; and, at the 
 close of the war it was resumed, with a declared intention, on 
 the part of the Marquis of Hastings, to enter on a comprehen- 
 sive system of reform. The successful issue of the contest, to 
 which the fidelity and exertions of Chundoo Loll, together 
 with his liberal and judicious application of his resources, had 
 essentially contributed ; and the consolidation of his authority 
 by the militaiy establishment which he had formed at so much 
 expence, haol removed many of the impediments by which our 
 views at Hyderabad had before been obstructed. The same 
 dangers no longer existed, either at home or abroad. We 
 were then enabled to meet the complicated disorders which 
 prevailed, without the invidious employment of our own troops ; 
 and to undertake, with a reasonable prospect of success, the 
 correction of evils which it had never before been thought 
 practicable to encounter. I annex to this letter some of the 
 principal passages of the reports to which I have referred. Is 
 it possible Jo r any body who reads them., to suppose that the 
 government, to vohich those reports ivere addressed, tvas kept in 
 ignorance of the real condition of the Niza7ns government and 
 country f 
 
 Extract Jrom Mr. Russell's Letter, 30th June, ISl 5, Jrom 
 
 Hyderabad. * 
 
 40. The character of a Mahometan government is exclusively 
 military. Every gentleman is a soldier. If he is not in the 
 army, he is nothing. His estates are held by military tenure ; 
 his distinctions are acquired by military service ; and his de- 
 pendants and retainers are the officers and soldiers of his mili- 
 tary party. The army constitutes, in fact, the nobility of the 
 country. Civil titles and distinctions are unknown. The in- 
 troduction of our subsidiary force, and the protection we are 
 bound to give the Nizam, have removed the necessity of his 
 supporting a large military establishment of his own ; and have 
 destroyed the field, in which even the small number of troops 
 he does keep up might have acquired credit and experience. 
 His army having become unnecessary, is, of course, neglected. 
 
 * Appendix B. to Mr. Russell's letter to (lie Court of Directors. 
 
 B 4
 
 8 
 
 The estates of the principal families have been resumed on the 
 death of the holders : and during the last fifteen years, where- 
 ever the head of a family has died, the ftimily itself has ex- 
 pired with him. There is now hardly a noble family left at 
 Hyderabad. It was not without the greatest difficulty that 
 4000 horse could be collected lately, to join our army in the 
 ceded districts : and not a single officer of family could be 
 found, who was qualified to command them. The person who 
 was chosen, though supposed to be a good soldier, was a pri- 
 vate horseman not many years ago. 
 
 41. Even the few men of birth that do remain, have no 
 longer any thing to look forward to. They have no objects of 
 hope or ambition. The splendour of the court has faded with 
 the decay of the government. The distinctions which arose 
 from the notice of the prince, and from the intercourse between 
 him and his nobles, have been lost. 
 
 42. The middle class of society, which, in well ordered go- 
 vernments, is at once the most important in itself, and the 
 most useful to the state at large, either never existed, or was 
 long ago destroyed. There is no tie to connect the higher 
 and lower orders together. The gradation, if there ever was 
 one, has been broken. And as to the lower classes, the great 
 bulk of the population, their condition is as abject and mise- 
 rable as it is possible to conceive. More than one half of 
 the country is a desert ; and even where there is cultivation, 
 the farmer has no interest beyond the supply of his imme- 
 diate necessities. He must provide himself and his children 
 with bread to eat, and more than that he knows he would 
 not be suffered to retain out of the fruits of his utmost in- 
 dustry. Men will not labour where they can have no share of 
 the profit. 
 
 43. The administration of justice, and the collection of the 
 revenues, which are nominally committed to the same hands, 
 are equally neglected and oppressive. The individuals in au- 
 thority consider nothing but how they may most easily ac- 
 complisii their own ends; and the great mass of the people are 
 treated as if the government had no need of their support, 
 and the prince thouglu them of no further use, than to supply 
 him with the means of gratifying his avarice, and ministering 
 to his pleasures. The officer who has the charge of a district, 
 is considered to do his duty according to the amount of his 
 remittances to the capital. He makes the most he can in a 
 short time, both for the government and for himself; and the 
 inhabitants are left without even the siiadow of a security for 
 their lives and property. The revenue is the branch in which 
 the defects of a government are most distinctly felt. It is 
 the pulse of the state. Evils produce one unotlier. As a
 
 9 
 
 government becomes weak, it becomes rapacious. It demandti 
 more, as it can enforce less. The consequence is, that, of the 
 Nizam's districts, many are in open rebellion, and the re- 
 mainder are daily sinking under oppression, and becoming 
 rapidly depopulated and impoverished. For several years, the 
 revenues have not been equal to the charges of the govern- 
 ment. The defalcation is annually and rapidly increasing, and 
 the period cannot be very remote, when the temporary expe- 
 dients of the minister must become ineffectual, and when he 
 must yield to the accumulated difficulties of his situation. 
 
 46. The disorders in the Nizam's government are of so in- 
 veterate a character, and have acquired so deep and extensive 
 an influence, that it would be difficult, if not indeed imprac- 
 ticable, to correct them by any change in the terms of our 
 engagements, or the mode of administering our controul. 
 Before it can become useful to us, it must acquire strength 
 and energy in itself. It must improve its revenue, recruit its 
 population, and repair its resources. It must form an army; 
 and, above all, it must recover confidence in its own power, 
 and inspire its subjects with the spirit and activity which 
 they have lost. It must regain something of independence ; 
 but the means of accomplishing this are hardly within our 
 reach. Although the restraints of our alliance did produce 
 the mischief, the removal of them would not correct it. The 
 effect has acquired an independent existence, and would not 
 cease with the cessation of the cause. To abandon our con- 
 troul now, would be equally injurious to the Nizam's govern- 
 ment, and to ourselves ; and even to relax it, would be a 
 hazardous experiment. There is almost always danger in 
 receding from the exercise of power. At all events it must 
 be done slowly, and cautiously, and deliberately. And even 
 if the attempt were made, there would not now be time for 
 the effects of it to be brought into action soon enough for our 
 present purpose. Nor could we, under the existence of the 
 danger against which our precautions are immediately di- 
 rected, make the trial with the same confidence and security, 
 as after our enemies shall have been reduced, and our own 
 power extended and consolidated. 
 
 47. When our present views shall have been accomplished ; 
 when the power of Meer Khan and the Pindarries shall have 
 been suppressed ; when the interests of Sindia, Holkar, and 
 the Rajah of Nagpore, shall have been assimilated with those 
 of their neighbours ; and when the general tranquillity of 
 India shall have been placed upon a firm and durable footing; 
 then it may be desirable that we should undertake a patient 
 and deliberate revision of our engagements with the various 
 powers, which are now in alliance with us. 13at, at present,
 
 10 
 
 the introduction of any substantial improvement into our re- 
 lations with the Nizam is an object rather to be desired than 
 expected. We cannot restore to him what we have been the 
 cause of his losing ; nor can he recover it by any efforts of his 
 own. A government cannot re-ascend to prosperity, by the 
 same degrees through which it has declined. It must com- 
 plete its course, and pass through dissolution, before it can 
 regain its strength. 
 
 48. Under every view of the question, therefore, there 
 seems to be only a choice of difficulties. We must either 
 continue the same controul which we now exercise ; or we 
 must lessen it ; or we must increase it. If we continue the 
 same controul, the calamities that have arisen will go on in- 
 creasing, until they reach that extreme point, at which evils 
 remedy themselves. If we lessen our controul, such anarchy 
 and disorder would at once spring up as would probably over- 
 throw the government ; and if we increase it, there are but few 
 steps left for us to take, short of assuming the actual manage- 
 ment and possession of the country. Of these three cases, the 
 last is, perhaps, the most likely to occur. 
 
 Extract from Mr. Russell's Report to Sir T. Hislop, 5th of 
 
 July, 1817. * 
 
 Par. 19. With regard to the political condition of the Ni- 
 zam's government, the Nizam himself may be considered, for 
 all purposes of practical utility, as a mere cipher. The ori- 
 ginal defects of his character, the habits of his life, his dislike 
 of his own ministers, and his jealousy of our controul, have 
 gradually withdrawn him into a sullen and total seclusion. 
 He never quits his palace or holds a public durbar; he is 
 seldom seen even by his own ministers, and he never takes 
 any part in the business of his government. This habit was 
 inconvenient at first, and matters which required dispatch 
 were often at a stand ; but, like many other evils, it has at 
 length produced its own remedy. Most of the functions which 
 were formerly exercised by the Nizam himself, are now exer- 
 cised by his minister, and the same result is attained by easier 
 and more expeditious means. It is difficult to say what the 
 Nizam's real views of policy may be. In all probability, he 
 never has had any distinct or uniform system in his mind : he 
 has rather indulged a petulant ill humour than meditated any 
 precise design. He certainly would be terrified at the notion 
 
 * Hyder. Pap. p. 29.
 
 11 
 
 of being abandoned by us ; but the unavoidable controul and 
 interference which his personal conduct, as well as the rela- 
 tive condition of the two governments, have compelled us to 
 exercise, are so offensive to his pride, and act so immediately 
 upon the worst features of his character, that if his natural 
 timidity and indecision would allow him, he would readily 
 engage in any combination which might be formed against our 
 power. It is on his weakness alone that we can rely for his 
 observance of either the spirit or letter of his engagements. 
 He will cease to be faithful whenever he ceases to be afraid. 
 
 20. The present ministry at Hyderabad is framed on a di- 
 vided, and therefore an inconvenient structure ; one person 
 holding the nominal office, and another exercising the real 
 authority of minister. This system was the result of a com- 
 promise between the Nizam and our government, both of 
 whom wanted to appoint a minister of their own selection. 
 Mooneer-ool Moolk, the uncle of the Nizam's wife, and the 
 son-in-law of Meer Allum, is nominally the dewan, or chief 
 minister ; but it was made a condition, at the time of his 
 appointment, that none of the affairs of the government 
 should be administered by him. Rajah Chundoo Loll, though 
 nominally only peishcar, or deputy minister, is invested with 
 all the functions of the office, and administers them without 
 any interference on the part of Mooneer-ool Moolk, and ge- 
 nerally without any reference to the sanction of the Nizam. 
 
 21. Mooneer-ool Moolk is a weak man, with not much 
 knowledge of business, of no personal weight or influence, and 
 inveterate habits of duplicity and intrigue ; but he has always, 
 from the circumstances in which he has been placed, been con- 
 nected with our government, and he is, I believe, as much 
 attached to our interests, as it is in the nature of his character 
 to be attached to any cause whatever. Such assistance as he 
 could afford, we might always, perhaps, command, except in a 
 case where the immediate danger of supporting us should be 
 greater than that of supporting our enemies. 
 
 22. Rajah Chundoo Loll is a man of great industry and 
 aptitude in business. He is indefatigable in his application, 
 and directs, in his own person, the details of every branch of 
 the government. In his manners he is gentle and unassuming, 
 and his disposition is particularly mild and amiable ; but his 
 personal virtues constitute the great defect of his public cha- 
 racter. He wants firmness to command respect, and energy 
 to controul the violence and rapacity of those who act under 
 his authority : every body likes him, but nobody fears him. 
 He is indebted exclusively to our government for both his 
 elevation and his support, and he is bound to us by the surest 
 of all ties, that of knowing that the very tenure of his oHice
 
 1'2 
 
 depends upon our ascendancy, If we were to lose our controul 
 over the government he would certainly lose his authority, and 
 probably his life. On all occasions, of what magnitude soever, 
 where we may require his co-operation, we may confidently 
 depend upon him to the utmost of his power. He will direct 
 and authorize the measure, but it must be enforced by our- 
 selves. 
 
 23. Upon the whole, the political condition of the Nizam's 
 government is just now as favourable to the prosecution of 
 our views as it ever can be, with such a prince and such an 
 administration as the present. We have as many friends, and 
 as few enemies, as we can ever expect to have; and hardly any 
 change of our circumstances could give us a more decided 
 controul over all the resources of the government. There are no 
 factions at the capital, and no parties; except the two there 
 always must be, of those who hold office, and those who want 
 it. The great families of the state are almost all extinct, and 
 even the few that remain have dwindled into absolute insigni- 
 ficance. The only efficient authority that exists is that derived 
 from office ; and all offices are now conferred, if not directly 
 by us, at least by the minister, who is under our total and im- 
 mediate controul. 
 
 24. But this state of affairs has been produced exclusively 
 by the indisputable predominance of our military power, and 
 can be preserved only by the maintenance of a commanding 
 force vv^ithin the Nizam's territories, &c. &c. &c. 
 
 Extract from Lord Hastings Letter to Mr. Russell, 
 26th October. 1819.* 
 
 I wish now to speak upon a subject much more important, 
 the means of upholding his government. 
 
 The state of Hyderabad is obviously labouring under difficul- 
 ties which have nearly come to the extreme. Had we any 
 unworthy views, we should only have to let the machine con- 
 tinue running down the slope till it broke to pieces. The con- 
 sciousness of consenting, in that manner, to the destruction of 
 a power which we professed to befriend, would be intolerable : 
 at the same time, the means of counteracting the evil are not 
 easily devised. We must not conceal from ourselves, that the 
 indirect, but actively operative share which we have in the go- 
 vernment, contributes seriously to the mischief. Our interven- 
 
 « Hyder. Pap. p. 88.
 
 13 
 
 tion, as it is unavowed, must necessarily be desultory ; so that it 
 cannot have the effect of keeping the machine in reguhir move- 
 ment, while, on the other hand, it prevents the ministers from 
 pursuing any consecutive system of their own. Matters are 
 hence approaching to a crisis, which threatens to place us in 
 the dilemma of either professedly undertaking the entire man- 
 agement of the Nizam's dominions, or desiring him to adopt a 
 course which shall be unembarrassed by any interference, be- 
 yond our representation, on matters affecting the common in- 
 terest. The first plan, objectionable in many other respects, 
 would be regarded at home, where the exigency could not be 
 comprehended, as an act of wanton oppression. The second, 
 from the peculiarity of the Nizam's character, and the incapa- 
 city of the [persons on whom he would repose himself, would 
 offer no chance of the state's escaping speedy subversion. Our 
 policy must, therefore, be to prevent, if possible, the progress 
 of affairs to the point where such an alternative would be 
 the only option. When I arrived in India, the state of Oude 
 was in circumstances very analogous to that of Hyderabad 
 We held the sovereign in a visible thraldom, which might well 
 have driven him to desperation. The consequences might 
 have been very inconvenient. Though his own military 
 means were null, his treasures might have afforded powerful 
 aid to the confederacy which Bajee Rao was then secretly 
 engaged in forming. Saadut All's hopes, that a new governor- 
 general might alter the system under which he was groaning, 
 made him turn a deaf ear to the private instigations which 
 he certainly received. I immediately removed some of the 
 things which galled him the most ; and on attaining more 
 distinct insight, I completely altered for his successor the 
 sovereign of Oude's position. Rejecting the odious practice 
 of the Resident's domineering, even ostensibly, over the sove- 
 reign, by a combination of his nobles whom we forced the 
 unfortunate prince to pay for keeping him in fetters, I tried 
 whether the government might not be swayed to the comple- 
 tion of all our objects by gentle influence. The experiment 
 has answered perfectly. The grateful return which the Nawaub 
 Vizier made for this emancipation, has been rewarded by our 
 consenting to recognize the regal title, which he wished to 
 assume: a dignity which I should, with equal pleasure, ac- 
 knowledge in the Nizam, were he disposed to follow the 
 example now. I have stated these particulars respecting Oude, 
 not as imagining Hyderabad to be a parallel case, but to shew 
 the principle by which we ought to be guided, as far as existing 
 points will admit. The good sense and honourable feelings of 
 the present king of Oude furnished us with a secure hold upon 
 liini. T apprehend no such reliance could be placed on the
 
 14 
 
 Nixam. But tlie main distinction is, that we have engagements 
 with individuals at Hyderabad, of a nature very different from 
 the narrow jobbing relations which we had with people at 
 Lucknow. Chundoo Loll has reposed his existence wholly on 
 our good faith. I lay it down as the basis for every pro- 
 cedure, that we must act up inviolably to the pledges, either 
 specific or implied, which have induced him to promote our 
 views, at the risk of his own fortunes. He must be, at all 
 events, upheld. 
 
 The great boon to the Nawaub vizier was the leaving to him 
 the free, unobstructed choice of his first minister. Whosoever 
 might be chosen, that person was sure speedily to answer our 
 purposes, because he could not move without our aid. In 
 short, this exists at Hyderabad; yet as the first minister, Moon- 
 eer-ool Moolk is not the one who works with us, there is al- 
 ways the danger of his thwarting secretly what we propose. 
 Further, Chundoo Loll has not the official character which 
 could authorize his joining us to save the state, by an exertion 
 possibly requiring changes unpalatable to many. The question 
 is, whether Mooneer-ool Moolk might not be won to co-operate 
 with us in so salutary an effort. The signal revolution which 
 has taken place in central India, offers a fair excuse for at- 
 tempting to remedy the mischiefs of the Nizam's government, 
 under the appearance of seizing the opportunity for compli- 
 mentary and flattering improvements in the tone of our re- 
 lations with him. The special respects in which any changes 
 could be made, would be to be determined by your advice, 
 grounded on reference to local considerations. Among the 
 latter, you would, of course, weigh how far it might be con- 
 sistent with the safety of our interests, to gratify the Nizam, 
 by assenting to the release of his sons from their confinement 
 in the fort of Golconda. That they can have influence with 
 the public, does not, by your details of the family, seem likely ; 
 and the punishment inflicted on their last transgression, will 
 probably make them fear to indulge in any future turbulence. 
 Still the security of Chundoo Loll is to be the first article of 
 measurement, in contemplating such an act of grace ; and the 
 disposition to the latter must not be indulged, if it be not per- 
 fectly reconcileable to the former. This invariable attention 
 to the interests of Chundoo Loll (to which we are in honour 
 bound) and the maintenance of the reformed troops, are the 
 essentials for us. From the first, which I hold to be more ob- 
 ligatory on our character than materially incumbent through 
 advantages for ourselves, time will free this government, and 
 then a procedure, more consonant to the general principle, 
 may be adopted. The reformed troops, which we owe to 
 Chundoo Loll, will have taken such root in the establishment
 
 15 
 
 of the country, that there can now be httle liazard, and shortl}' 
 there will be none, of any endeavours to reduce them. If, 
 therefore, we can put the financial concerns of the state into 
 decent condition, 1 see every reason to hope, that the country 
 may, at no distant period, be swayed to the preservation of 
 public tranquillity (our sole object) without any interference 
 with internal managements, which would always be equally 
 teasing to both parties. 
 
 I have, &c. 
 
 (Signed) Hastings. 
 
 Mr. Russell's Reply, of ^i'th November following. * 
 
 I have now the honour to reply to that part of your lord- 
 ship's letter of the 26th October, which relates to a reform in 
 the Nizam's affairs. 
 
 The disorders in the Nizam's affairs are not of recent origin : 
 the government of Hyderabad has not been in a secure or 
 flourishing condition at any period during the last seventy 
 years. When Nizam-ool Moolk, the founder of it, died in 
 1748, his authority extended from the Nerbudda to Trichino- 
 poly, and from Masulipatam to Beejapoor ; but his death was 
 immediately followed by domestic dissensions, and by the dis- 
 tractions in the Carnatic, in which the French and English 
 were engaged as supporters of the rival nabobs. Nasir Jung 
 was assassinated at Arcot, in 1750; and Mosuffer Jung, his 
 successor, who was murdered in the following year, had already 
 become so conscious of his inability to maintain himself with 
 the resources of his own government, that he had subsidized 
 a body of French troops. The musnud was then contested 
 between Ghazee-ood Deen and Salabut Jung : but Ghazee-ood 
 Deen was poisoned by the mother of his rival, and Salabut 
 Jung succeeded to the government. He was supported, how- 
 ever, entirely by the French party at his court, which exercised 
 a more decided control than has ever been attempted by us; 
 and when M. Bussy was recalled to the Carnatic by M. LaJly, 
 Salabut Jung foresaw the ruin of his affairs, and actually siicd 
 tears when he parted with him. The government was almost 
 immediately usurped by Nizam Ally ; and Salabut Jung, after 
 several ineffectual attempts to escape from the confinement 
 in which he had been placed, was at length put to death, in 
 1763. In the short space of thirteen years, therefore, three 
 reigning princes, and one competitor for the musnud, had suc- 
 
 Hyd. Pap. p. 9t).
 
 16 
 
 cessivcly died violent deaths. Tiie long reign of Nizam Ally, 
 though less disastrous to the prince, was even more injurious 
 to the country than the stormy period which had preceded it. 
 The government of Hyderabad had been worsted in every war 
 in which it had been engaged, between the death of Nizam-ool 
 Moolk and the treaty of Paungul in 1790, with the single ex- 
 ception of a short campaign against the Mahrattas, which 
 Nizam Ally conducted with some success in 1761, and the 
 result had, in every instance, been attended with a loss of ter- 
 ritory or of revenue. The government had gradually declined 
 in power, resources, and reputation : it had become weaker 
 abroad, and more oppressive at home. The disastrous cam- 
 paign of Kurdla was immediately followed by the rebellion of 
 Alee Jah ; and if Nizam Ally had not thrown himself into our 
 arms, he must either have been a prey of Tippoo and the 
 Mahrattas, or have fallen a sacrifice to the ambition of his own 
 son. 
 
 In a long and uninterrupted series of calamity and disgrace, 
 it is difficult to fix on the precise point at which any particular 
 disorder may have arisen. A government cannot decline in 
 one respect without declining in all others. Loss of honour is 
 loss of strength. As it becomes weak, it becomes rapacious ; 
 and it is the natural tendency of evils to propagate one another. 
 Yet it appears to me, that the greater number of the abuses 
 which now prevail, if not occasioned, were materially aggra- 
 vated, and received their most powerful and extensive action, 
 during the imbecile and extravagant reign of Nizam Ally, and 
 the oppressive, rapacious, and improvident administration of 
 his favourite, Azim-ool Omrah. The amusements of Nizam 
 Ally, though of the most puerile and frivolous kind, were at- 
 tended with almost incredible expence ; and the great object 
 of his minister appeared to be to feed his pleasures, and relieve 
 him from the cares of government. Azim-ool Omrah relied 
 upon us to protect him against external danger, and as long as 
 the country yielded money in any way, he cared nothing for 
 the sufferings of the inhabitants, from whom it was exacted. 
 The natives of India are less prone, perhaps, to indecorous 
 than to violent acts; yet, when Azim-ool Omrah died, in 1804, 
 his corpse was followed to the grave by the insults and im- 
 precations of the whole populace of Hyderabad. 
 
 His successor, Meer Alluni, was a very extraordinary man. 
 Of all the natives I ever knew, he had an understanding the 
 most nearly approaching to the vigour and comprehension of 
 European minds. He looked at once at the substance of 
 every thing that was presented to him, and was equally a 
 stranger to forms in his mode of transacting affairs, as in the 
 ordinary habits of his life. He was unquestionably a man of
 
 17 
 
 great talents for public business ; but lie was utterly tleficient 
 in those qualities of the heart which supply, and often more 
 than supply, the want of powerful intellectual faculties. He 
 was ambitious, unfeeling, vindictive, and relentless. He never 
 remembered a kindness or forgot an injury ; and although he 
 was fond of the appearance of charity, and courted popular 
 applause, he had no feeling for his fellow creatures, either in- 
 dividually or collectively. Both his situation and his talents 
 gave him the power of doing more good, perhaps, to his go- 
 vernment, than any other individual who has ever been em- 
 ployed under it. Yet he aggravated many abuses, and did not 
 redress one. He raised the assessment, already too heavy, 
 throughout the country, and made an additional imposition of 
 one anna in the rupee, or six and a quarter per cent, on the 
 whole revenues, for his personal emolument. His administra- 
 tion was chiefly passed in a struggle for power with the Nizam ; 
 and all the worst qualities of the present Nizam's character 
 were exasperated and confirmed, by his injurious and offensive 
 treatment. 
 
 When the present minister, Rajah Chundoo Loll, succeeded 
 to his office, in 1809, every department of tlie government was 
 already in a condition tending rapidly to decay. The admini- 
 stration under him has necessarily been one of expedients ; but 
 far from thinking that the present difficulties are to be imputed 
 to his mismanagement, it appears to me a matter of astonish- 
 ment, that affairs have been administered as they have been. 
 In the Mahratta war of 1803, when the minister had every 
 advantage which the stability of his own power and the un- 
 bounded confidence of his master could give him, although the 
 Nizam's exertions were so slender as to induce the Marquis 
 Wellesley to declare that he had forfeited every claim he could 
 have derived from fulfilling the obligations of the treaty, Azim- 
 ool Omrah was still obliged to insist on an extraordinary aid of 
 ten lacs of rupees out of the Nizam's private treasures. But 
 during the late war, though Rajah Chundoo Loll was charged 
 with the whole responsibility, without being invested with the 
 full authority of government ; though he is a member of a dis- 
 cordant administration, in which he has a rival instead of a 
 colleague in Mooneer-ool Moolk ; though his adherence to our 
 interests has lost him the Nizam's confidence, and deprived him 
 of all those advantages, which even the strongest minister must 
 derive from the favour and countenance of his sovereign ; he 
 still contrived to raise and equip a most respectable and useful 
 body of troops, and furnished, in every particular, an active 
 and efficient co-operation, without making any demand upon 
 the Nizam's coffers, or receiving any extraordinary assistance 
 from any other quarter. To those who compare what he has 
 
 c
 
 18 
 
 done with tlie means he hail of doing it, his exertions must 
 appear astonishing. Either the resources of tlie government 
 must have been improved, or they must have been applied with 
 greater judgment : in either case, Chundoo Loll's merit as a 
 minister is conspicuous- 
 Exaction is the necessary vice of every government, which 
 derives its principal revenue from the direct rent of land. It 
 seems to be universally acknowledged, that the assessment is 
 too high in every country in India : the government demands 
 too much, from the fear of receiving too little. What is exac- 
 tion in the sovereign, becomes extortion in its most oppressive 
 shape, under his subordinate officers ; and even our own go- 
 vernment, with a system the most elaborate and expensive, has 
 hitherto been unable to afford adequate security to the inferior 
 classes of its subjects. Every Indian government subsists upon 
 its immediate means : it is always from hand to mouth. If 
 ever there is a surplus revenue, it goes into the pocket of the 
 prince, not into the coffers of the state. There is no common 
 feeling between a Mahomedan government and its Hindoo sub- 
 jects : public credit has no existence. A minister may borrow 
 money on his personal security, but public loans among them- 
 selves are entirely unknown. Extraordinary expences, there- 
 fore, must be met by extraordinary exactions. This is the sole 
 and entire cause of the difficulties of the Nizam's government, 
 and the source of every oppression that is suffered by its sub- 
 jects. The officers of the revenue being required to pay to the 
 government more than their districts can afford, are obliged, in 
 their turn, to oppress the inhabitants by plunder and confisca- 
 tion. 
 
 In some degree, the weakness and disorders of the Nizam's 
 government are the necessary consequences of his political 
 situation. An alliance with us, upon the subsidiary system, 
 however it may contribute to the advancement of our own 
 power, leads inevitably to the ultimate destruction of the state 
 which embraces it. Diversities of national character and poli- 
 tical circvmistances will affect the manner and period of its 
 action, but cannot prevent the result itself. The Mahomedans 
 have survived the Mahrattas ; the Nizam is dying comatose, 
 while the Paishwah has expired in convulsions ; but the destiny 
 of both originated in the same cause, and necessarily tended to 
 the same termination. If we owe the foundation of our empire 
 in this country to the weakness in which we found the native 
 powers, we ought not to complain of the evils which that weak- 
 ness necessarily produces. If we have reaped the benefits, we 
 must submit to witness the inconveniences vvhich are its inse- 
 parable attendants. Yet evils may be palliated, though they 
 cannot be radically cured ; the crisis may be retarded, though
 
 19 
 
 it cannot be altogether averted. And if it be true, that a part 
 ot" the mischief has arisen from the predominance of our power, 
 it is for that reason the more incumbent upon us that we should 
 endeavour to apply the remedy. 
 
 The disorders of the Nizam's government are those, more of 
 the system itself, than of the agents by whom it is administered: 
 they are not, therefore, to be corrected by any partial measures. 
 Particular complaints are easily redressed, and particular abuses 
 removed ; but any plan of reform, to do effectual good, must 
 be general and comprehensive. Such a plan, under the pre- 
 sent circumstances of the Nizam's court, can proceed from no 
 other source than the supreme authority of the British govern- 
 ment, and must have its foundation either in the diminution or 
 in the increase of our interference. 
 
 If there were any individual among the Nizam's own servants, 
 qualified by his character and talents to exercise the functions 
 of government without controul, it would certainly be desirable 
 that he should be made minister, and that the correction of the 
 evil should be left to the spontaneous efforts of his judgment 
 and activity. But there is no person to be found ; nor, in the 
 present condition of the government, would it be reasonable to 
 expect that such a person should be found. It is among the 
 necessary consequences of the dependance of one state upon 
 another, that men of that description are not produced. There 
 is no field in which they can either form or exercise their 
 talents, and it is with faculties as with commodities, that the 
 production depends upon the demand. 
 
 The Nizam himself has not a single quality to fit him for the 
 administration of his own affairs. His character is a compound 
 of folly and madness, of obstinacy and caprice. He often 
 betrays a capacity for artifice and cunning, but never shows 
 any indication of an upright, manly understanding. The only 
 instance in which he lias been at all consistent, is his hatred of 
 us, and his resistance of every measure in which he thinks we 
 are interested. Whatever method of reform your lordship 
 might suggest would be sure of encountering his decided oppo- 
 sition. Even if it were determined to leave him the uncon- 
 trolled administration of his own affairs, he would not be satis 
 fied. He would resist the proposal, if for no other reason, at 
 least because it had proceeded from the English government. 
 He would then insist on having a minister, and his only anxiety 
 would be, to choose one whom he thought would not be ac- 
 ceptable to us. On the death of Azim-ool Omrah we forced 
 Meer Allum on the Nizam; and so many of the inconveniences 
 which attended his administration were considered (with what 
 justice it is not now necessary to examine) as having arisen 
 from that source, that when Meer Allum died, in 1808, it was 
 
 c '2
 
 20 
 
 determined to abstain altogether from interference, and ta 
 leave the Nizam the uncontrolled selection of his own minister. 
 The two principal candidates were Mooneer-ool Moolk and 
 Sliums-ool Omrah, of whom the Nizam hated Mooneer-ool 
 Moolk and liked Shums-ool Omrah. But he professed to be 
 undecided between them, and would not declare his choice, 
 until he discovered which of the two was preferred by ns. He 
 applied to Captain Sydenham, who declined giving an opinion,, 
 but recommended him, if he felt any difficulty, to refer to the 
 governor-general. The Nizam accordingly wrote to Lord 
 Minto, requesting his advice, and having ascertained by his 
 lordship's answer that we encouraged the pretensions of Shums- 
 ool Omrah, he was at once decided in favour of Mooneer-ool 
 Moolk. His only object, from the beginning, was to ascertain 
 which of the candidates we preferred, in order that he might 
 appoint the other : and by this spirit of senseless obstinate 
 counteraction, your lordship will find him influenced on every 
 occasion. Of all the persons who have ever been connected 
 with him in public or private life, no one has ever been able to 
 make a lasting impression upon his regard. He has had mo- 
 mentary favourites, who have ministered to his vices or flattered 
 his prejudices, but nobody ever retained his confidence long, 
 or was able to employ it usefully. Chundoo Loll has invariably 
 behaved towards him with the utmost deference and respect : 
 he has studiously avoided every appearance that was likely to 
 give him offence ; and although his devotion to our interests is 
 alone fatal to the Nizam's confidence in him as a public man, 
 I still believe that if the Nizam has in his heart a personal 
 regard for any body, it is for Chundoo Loll. 
 
 As to Mooneer-ool Moolk, such is his weakness and dupli- 
 city, that he can neither trust himself, nor will ever be trusted 
 by any body else. His whole talent, such as it is, and his 
 whole delight and occupation, consist in stratagem. He would 
 intrigue even without an object ; and, absurd as it may seem, 
 I almost believe that he had rather not attain his end at all, 
 than obtain it by fair and open means. Nor are these defects 
 of character redeemed by any useful qualifications. He has 
 no strength or solidity of understanding, no capacity for busi- 
 ness, nor any experience in the higher branches of govern- 
 ment. The very ground of our originally consenting to his 
 being made minister, was a proof of the contempt in which his 
 character was held. He was allowed to fill the situation, 
 merely to prevent its becoming an object of competition to 
 other people. The insignificance which disqualified him from 
 doing any good, it was expected, would disable him from doing 
 any harm; yet the whole of his time, and much of his money, 
 have been spent in intrigues, to obtain an authorit to which
 
 *21 
 
 he swore, upon the Koran, he never woald aspire : and 
 ahhough he has not advanced his own interests, he has suc- 
 ceeded in widening the breach between the Nizam and Chun- 
 doo Loll, in sowing jealousies and dissensions among the officers 
 of the government, and in impeding and obstructing the public 
 business. 
 
 Chundoo Loll is a most respectable man in his private cha- 
 racter, and too far superior to his rival as a public officer, to 
 admit of any comparison between them. He has great indus- 
 try, patience, and aptitude, in all the practical branches of the 
 government. He is indefatigable in his application, clear in his 
 views as far as they extend, and as a man of business, I hardly 
 ever knew liis superior. His long experience has given him 
 an intimate acquaintance with all the affairs of every depart- 
 ment, and rendered him perfectly familiar with the manner of 
 transactin<r them. He almost undertakes too much. What- 
 ever is done, is done by himself; and even the bodily labour 
 he undergoes is astonishing. He has great kindness of disposi- 
 tion, is easy of access, aifable in his manners towards the lowest 
 persons, and never, I believe, knowingly authorized a measure 
 of unjust severity : but he is too indulgent and compliant to 
 those who are employed under him, and he is certainly de- 
 ficient in that resolution, energy, and firmness, without which 
 it is impossible to preside with comj)lete etiect over the affairs 
 of a government. His great personal expence, indeed, the 
 only one of his personal expenccs that is very great, is his in- 
 discriminate habit of giving aliiis. He distributes many thou- 
 sand rupees every day to mendicants of all descriptions. 1 
 have often recommended him to confine his alms to those only 
 who are real objects of charity ; but he has a superstitious no- 
 tion, that it is to this practice he owes his elevation in life, and 
 nothing, I believe, would prevail upon him to abandon it. 
 With some harm, however, much good is unquestionably done. 
 Every poor person who will go to the Rajah's gate, may re- 
 ceive two pice and a quarter of a seer of grain daily, and a ru- 
 pee and a blanket the first time they appear ; and, in this way, 
 many thousand lives have been preserved during the recent 
 season of scarcity. The inhabitants of whole villages, who 
 flocked to the capital for supj)ort, have been fed and clothed 
 by the Rajah's bounty. So much does he consider this a point 
 of personal duty, that even to the most squalid and loathsome 
 objects he always administers his charity with his own hand. 
 The fairest mode of estimating the practical utility of a public 
 officer, is to consider how his place could be supplied. If any 
 accident were to happen to Chundoo Loll, no individual, I am 
 pursuaded, could be found under the Nizam's government, 
 capable of conducting the duties which are now discharged by 
 
 c ;}
 
 him. With our support, he is quahtied to make a better 
 minister than any other that could be chosen ; but he could 
 not stand by himself. He has no rank, fortune, or connections, 
 to protect him against the jealousy of the Nizam and the in- 
 trigues of Mooner-ool Moolk ; and if we were to withdraw, or 
 even to lessen the support we promised him, when he came into 
 power, if he did not immediately retire, as in all probability he 
 would do, he would soon be driven from his office. Those 
 very qualities which constitute his principal recommendation 
 with us, would be laid hold of by his and our enemies, as the 
 readiest means of effecting his ruin. 
 
 Under any mode, in short, which could be devised, of les- 
 sening our interference, I am convinced that the attempt, if 
 we did not abandon it in time, would be productive of the 
 subversion of the government. All the functions of adminis- 
 tration would be dissolved, the fabric of government would 
 sink under its own weakness, and the Nizam himself would 
 probably become the victim of an insurrection of his subjects, 
 and his country be made a scene of anarchy and outrage. 
 New hordes of Pindarries would spring from the disorder, and 
 we should have to renew the same measures which we have 
 only just completed. The Nizam's government cannot be up- 
 held at all, if it is not upheld by us. To give effect to mea- 
 sures of reform, the authority of the executive minister must 
 be strengthened, not impaired, and the vigour of that authority 
 now consists in our support. 
 
 If we increase our interference, to do any effectual good 
 we must increase it largely. Notwithstanding the objections 
 which I know are entertained, on general grounds, against in- 
 terfering in the domestic concerns of our native allies, it is a 
 melancholy but an unquestionable fact, that they have fallen 
 into too abject a state of ignorance and weakness to be left 
 with safety to themselves ; and I am persuaded that nothing 
 short of a close, vigilant, and decided control over the internal 
 administration of the country, will be attended with any real 
 or lasting benefit. But this control should be exercised through 
 the medium of advice and influence, and not by the direct 
 exertion of authority. We should improve and direct the im- 
 plements of the country, and not introduce new ones of our 
 own. I would rather enlarge the sphere, than increase the 
 degree of interference. On matters in which we do interfere, 
 I would not interfere more ; but I would interfere in many 
 matters in which we have never yet interfered at all. I would 
 exert, in short, the same iuHiience in correcting the abuses of 
 the internal administration, that we now apply to objects im- 
 mediately connected with our own interests. 
 
 Chundoo Loll is the person 1 would employ as the chief in-
 
 "23 
 
 strument ot' retbnn. The preference is due to him, both be- 
 cause he is fitter than any other person, and because, as long 
 as he is wilh'ng to act upon our principles, we are bound to 
 support him as the reward of his fidelity, to serve him because 
 he has served us. I would begin by frankly and fully disclosing 
 to him the object of our views. I would tell him what we 
 expected from him, and what he might expect from us. With- 
 out a thorough mutual understanding, nothing could be at- 
 tempted with effect. ". 
 
 The first object will be the reduction of expence, to make 
 room for the remission which it will be absolutely necessary to 
 allow in the revenue. This, indeed, easy as it may at first ap- 
 pear, will be the most arduous part of the undertaking. Every 
 retrenchment that is made, and every abuse that is corrected, 
 will be attenoled with a pecuniary loss to some person or other ; 
 and Chundoo Loll would be unlike other men, if he were not 
 reluctant either to injure his friends or exasperate his enemies. 
 But this reluctance must and will be vanquished ; and the first 
 step towards vanquishing it will be, to explain to him the claim 
 which your lordship recognizes in him to your protection. He 
 must be convinced, at the outset, that he may rely confidently 
 on the support of the British government. Without that con- 
 viction on liis mind, he neither can nor will attempt any thing 
 effectual. It vvill be necessary, not only to encourage his 
 efforts, but to repress the counteraction of his enemies, for 
 enemies he will have, who will view with eager dissatisfaction 
 the adoption of any measures calculated to increase his repu- 
 tation, or confirm the stability of his power. 
 
 The facility of making an immediate remission in the revenue 
 would, of course, be materially promoted, if the minister had 
 the command of a sum of ready money to set out with. Had 
 Chundoo Loll any money of his own, I am convinced he would 
 disburse it on such an occasion. The present Nizam will never 
 be prevailed upon to furnish any aid out of his private trea- 
 sures ; but, in the event of his death, a condition might be 
 made with his successor, that he should advance such a sum as 
 might be necessary for the relief of his own finances. Many 
 instances might at once be pointed out, where a saving might 
 be made to the government without the violation of any just 
 right ; in the reduction, for example, of troops which are use- 
 less or unnecessary, or in the resumption of jagheers or pecu- 
 niary stipends, granted for the support of troops which have 
 never been kept up. Of the whole of the troops, also, which 
 are maintained by payments from the treasury, I would make 
 a proportionate reduction in every party. The reformed horse 
 might be allowed to die away to three resalahs of six hundred, 
 instead of four of a thousand each ; the six regular battalions 
 
 c 4-
 
 ^24 
 
 might be reduced from eight hundred, to a peace establishment 
 of six hundred privates each. In this, alone, the saving on the 
 scale of the Nizam's resources would be considerable. At all 
 events, it would be a step in the process, and would serve both 
 as an example and as an encouragement for the remainder. 
 Some of the irregular battalions might be abolished altogether ; 
 and I have no doubt that, on a rigorous inquiry, some nominal 
 parties will be found, of which the reduction would be a clear 
 gain to the government, without occasioning the discharge of 
 a single individual. Numerous opportunities of retrenchment 
 would be discovered in the progress of the plan, facilities 
 would arise from the correction of each successive abuse, and 
 the minister would find himself rewarded, in the relief he would 
 experience from his difficulties ; and would acquire additional 
 confidence, in proportion as he found us determined to support 
 him against that hostility, which every minister in every coun- 
 try must encounter, who attempts to introduce a system of 
 retrenchment and reform. 
 
 The reduction of expence, and the establishment of a system 
 of general economy, would alone materially facilitate the 
 relief of the inhabitants of the country. The pressure of 
 every burthen falls ultimately on the cultivator of the soil. 
 Men in office are not unjust or oppressive from choice. The 
 collectors of the revenue will not press the inhabitants of 
 their districts, when they are not themselves pressed by the 
 government. The original system of revenue under Indian 
 government is better, perhaps, than any other which could 
 be substituted for it. The talents and characters of the dif- 
 ferent talookdars are generally well known. I would recom- 
 mend the minister to employ those only who have a good 
 reputation, and systematically to exclude those who are noto- 
 riously rapacious or ojvpressive. The districts should be 
 given to them in aumannee, not ajarah : that is to say, they 
 should be collectors, not farmers of the revenue. A pledge 
 of protection should be given to them against exaction on the 
 part of the government, and they should be peremptorily 
 warned against practising extortion or confiscation in their 
 districts. One of the most fertile sources of immediate injury 
 is the want of faith in agreements. Every cowl should be 
 held sacred. The rajah should never be required to })ay 
 more than the assessment for which he stipulated : if he is 
 pinched to fulfil his engagement in a had season, he should 
 be allowed to enjoy the whole of his profit in a good one. 
 Whenever an act of plunder, opju-ession, or breach of I'aith, 
 was discovered, it should he severely and sunnnaril}' pu- 
 nished. Examples will be eliicacious, though injunctions fail. 
 The people who suffer will always complain, where they know
 
 25 
 
 their grievances will be redressed ; and in a country where 
 litigation is not encouraged by regular tribunals, it is sur- 
 prizing how few false complaints are preferred. Many com- 
 plaints which could not reach the minister will reach the 
 Resident, and the knowledge of the simple fact that grievances 
 were redressed, would of itself encourage the inhabitants to 
 prefer their complaints, and restrain the local officers in the 
 exercise of their authority. 
 
 Upon a subject of such magnitude, and embracing such a 
 diversity and multiplicity of detail, it is impossible to do more 
 within the limits of a single letter than suggest the principle 
 and sketch the outline of a plan : this, therefore, is all that I 
 have attempted. Correct details, though indispensable to the 
 execution of the measure, are not necessary for determining 
 the principle of it, and can be procured only by degrees. If 1 
 have added any thing to your Lordship's knowledge of the real 
 condition of the Nizam's affairs, or of the views and characters 
 of the leading individuals of his government ; if I have exhi- 
 bited the objects which require to be attained, and indicated 
 the means which are likely to be most successful in attaining 
 them, with sufficient distinctness to assist your Lordship's 
 judgment in deciding on those to which a preference is to be 
 given, I have done all that I can at present desire. The rest is 
 ministerial : and I hope I need not profess the zeal and alacrity 
 with which my humble abilities will always be exerted in the 
 execution of your Lordship's orders, or the satisfaction with 
 which I should hereafter remember, that I had been, under 
 your Lordship's direction, a successful instrument in the per- 
 formance of so great and good a work. 
 
 I have, &c. 
 
 (Signed) H. Russell, 
 
 Resident. 
 
 Extract J'rom Government Letter in reply. * 
 
 Sir: 
 
 \. Your re})ort of the '21th November, relating to a pro- 
 posed reform in the affairs of his highness the Nizam, has 
 been under the consideration of the governor-general in 
 council, and I am directed to communicate to you the follow- 
 ing observations. 
 
 2. His lordship being anxious to establish tlie prosperity 
 
 * Hydur. Pap. p. 98.
 
 26 
 
 ot the Nizam's Jominiuns, and the happiness of his subjects, 
 authorises you to interpose your advice and influence for 
 those j)urposcs. 
 
 3. A salutary control over the internal administration of 
 tlie country, accurate accounts of all establishments, receipts, 
 and expenditures, the correction of abuses, a proper distribu- 
 tion of justice, the reduction of expence, the amelioration of 
 the revenue system, including the customs and duties levied 
 on commerce, the improvement of resources, the extinction 
 of debt, the efficiency of troops retained, and the discharge of 
 such as are useless, are objects to which your attention will 
 naturally be directed. 
 
 4. The minister, Chundoo Loll, appears to be the fittest 
 person to be employed as the chief instrument for carrying 
 into effect the proposed reform. In order to secure his faith- 
 ful and zealous assistance, you are authorized to assure him 
 of the protection and support of the governor-general in 
 council. 
 
 7. It is not considered necessary to furnish you, at present, 
 with any more detailed instructions. The principles laid down 
 in your able report of the 24-th November are entirely ap- 
 proved, and the governor-general in council relies with confi- 
 dence on your judgment, skill, and address, for the satis- 
 factory execution of his lordship's wishes. You will, of course, 
 refer for particular directions on points on which they may 
 appear to you to be necessary ; and it will be satisfactory to 
 his lordship in council to receive, from time to time, reports 
 of your proceedings under these instructions. 
 
 I have, &c. 
 
 (Signed) C. T. Metcalfe, 
 
 ; Secretary to Government. 
 
 Tlie facts in the followinfr remarks are gathered from 
 the volume of Hyderabad Papers, and from Mr. Russell's 
 letter to the Court of Directors, of the 21st of September, 
 1824. Tlie observations accompanying them appear to be 
 Ikirly elicited by the documents cited. 
 
 Lord Hastings reached India in 1813, at tlie same time 
 with Sir William llumbold. On the 22nd of April, 1814, 
 the first protection, or countenance, was granted by the 
 Bengal government to the house of William Palmer and 
 Co., of Hyderabad.
 
 27 
 
 The following are the documents relating the trans- 
 action : — 
 
 To John Adatn, Secrctarij to GaveriDticid, Fort IVitliuin *. 
 
 Sir: 
 
 I beg leave to submit to the favourable consideration of 
 the governmeut, a copy of a letter, dated the 30th ultimo, 
 which I have received from Messrs. William Palmer and Co., 
 expressing a desire of forming a mercantile establishment at 
 Hyderabad 
 
 The establishment of a commercial firm at Hyderabad, 
 framed upon the principles, and conducted in the spirit, of an 
 English house of business, will, I have no doubt, prove a 
 source of general convenience and benefit. 
 
 I have, &c. 
 
 Hyderabad, (Signed) HenTxY Russell, 
 
 6th April, 1814. Resident. 
 
 To Henry Russell, Esq. Resident at Hyderabad \. 
 
 Sir: 
 
 Having opened a correspondence with several mercantile 
 houses in different parts of India, and ascertained by experi- 
 ment the practicability of carrying on commercial concerns 
 with advantage, ive are d'\siroiis of availing ourselves of the 
 provisions of the commercial treat//, to establish a mercantile 
 firm at Hyderabad. We hope that our concerns may be ad- 
 vantageous to the interests of the Honourable Company's, as 
 well as of the Nizam's country, and that they may contribute. 
 
 Hyder. Pap. p. 2. -j- Hyder. Pap. p. 2.
 
 28 
 
 in some degree, to promote the objects m hicli the Legislature 
 liad in view, in making the recent provisions for the extension 
 of til e Indian trade. 
 
 The concerns in which we propose chiefly to engage are : 
 
 In banking- and agency transactions. 
 
 In supplying timber from the forests on the banks of 
 the Godavery, for the purpose of ship- building ; these 
 forests abounding in timber of a superior size and qua- 
 lity. 
 
 We entertain the most sanguine hopes, founded on our own 
 observations and authentic accounts derived from the inhabit- 
 ants of the Ramghur and Patoanclia districts, that we shall 
 be able to open a navigation of four hiuidred miles, during 
 four months in the year, on that river and the Wordu. The 
 opening of this navigation Mill also facilitate the commercial 
 intercourse subsisting between Berar and the coast. 
 
 We are persuaded that our iirm will receive from you 
 every proper degree of countenance and support ; but it 
 Mould contribute to the confidence, as well as the respect- 
 ability of our concerns, if, under the benefit of your recom- 
 mendation, the supreme government would be pleased to 
 sanction our establishment M'ith its approbation, and to autho- 
 rize the exertion of the Resident's influence for our security 
 and protection. 
 
 We have, &c. 
 
 Hyderabad, (Signed) Wm. Palmer and Co. 
 
 oOth Alarch, 1814. 
 
 To Hciirij PiisKfll, Es(]. Ucsirlent at Hyderabad *. 
 
 Sir: 
 I am directed to acknoM'ledge the receipt of your despatch 
 of the 6tli instant, submitting a copy of a letter to your 
 
 Hyder. Pap. p. ,'}.
 
 ^9 
 
 address from Messrs. William Palmer and Co., on the subject 
 of a commercial establishment which they propose to form at 
 Hyderabad. 
 
 2. His excellency in council is disposed to promote the 
 success of every mercantile enterprize which is likely to 
 prove of general utility to the interests of commerce, by af- 
 fording facilities to the transaction of trading concerns between 
 his highness's dominions and the territories of the Honourable 
 Company; and his lordship in council will accordingly approve 
 of your affording every proper degree of countenance to the 
 proposed conmiercial establishment of Messrs. Palmer and Co., 
 consistently with the provisions of the treaty, and of your 
 recommending it to the favourable consideration of his high- 
 ness the Nizam's government. 
 
 I have, &c. 
 
 (Signed) J. Adam, 
 
 Secretary to Government. 
 
 The circumstances, which led to Mr. Russell's forwarding 
 the above application for the licence, are detailed in the 
 followinn- two extracts from his letter to the court of di- 
 rectors. 
 
 Extract Ji-om Mr. Russell's Letter to the Court of Directors. * 
 
 The principal allegation appears to be, that my brother and I 
 had an interest in the house of Messrs. W. Palmer and Co., 
 and that the undue support of my influence was consequently 
 given to the firm. I positively deny both the fact and the in- 
 ference. Neither my brother nor I had any interest whatever 
 in the house ; nor did it, in any instance, receive from me any 
 support, beyond that which I was specially empowered by the 
 government to give, and xvhich ivas directed to the advancement 
 of the public interests comynitted to my charge. I can have no 
 hesitation in stating that I entrusted a sum of money to the 
 care of Mr. Samuel Russell, an old friend, though no relation 
 of mine ; but this was long before the establishment o? Mr. 
 Palmer's house; and I considered that he was acting for me 
 exclusively as one private friend often acts for another. Mr. 
 S. Russell was for many years in the habit of employing his 
 own funds advantageously at Hyderabad, in the various modes 
 
 * Mr. Russell's Letter, pp. 1,2, 3, and also Mr. R's. Letter, p. 30, 31.
 
 30 
 
 wliich offer at a lartje capital. At one time, he and Mr. Pal- 
 mer, who lieid a military situation under the Nizam's govern- 
 ment, for their nmtual convenience, managed their money 
 together ; and Mr. Pahner was constantly with Mr. S. Russell 
 at his house, which was at the Residency. It never entered 
 into my conception, nor could it have entered into that of any 
 body who knew the facts as they then existed, that the pur- 
 suits which they contemplated, individually or together, bore 
 any resemblance to a house of business. There was no pre- 
 vious plan or agreement between them ; no office ; nor any of 
 the conditions or ingredients which belong to a regular esta- 
 blishment. Their progress towards that result ivas sloiv, and to 
 me, for some time, imperceptible. When, hoivever, I did see that 
 their concerns ivcre advancing beyond their original extent, I 
 interposed, and prohibited Mr. Palmer foom transacting any bu- 
 siness within the limits of the Residency. 
 
 These measures were directed to the purpose, not of suppressing 
 Mr. Pahner s mercantile concerns, but of j^r eventing the possi- 
 bility of its being supposed, that they derived any undue support 
 from my authority. The peremptory manner, however, in which 
 I adopted and c) forced them, induced Mr. Palmer to believe that 
 I was bent on ruining him, and a total rupture between us was 
 the consequence. 
 
 It was subsequently to this, that Mr. Palmer set up regu- 
 larly in business. An establishment was then, for the first 
 time, framed by him, and all those arrangements made, which 
 belong to the formation of a commercial house. / am not 
 certain whether Mr. S. Russell joined Mr. Palmer or not ; T 
 believe he did not ; but if he did, he had no money of mine in 
 his hands. With the opinion which Mr. Palmer entertained of 
 my hostility towards him, he did not look to me for any assist- 
 ance ; but he applied, through the infuence of his brother, Mr. 
 John Palmer, the head partner of one of the prijicipal mercan- 
 tile houses in Calcutta, for the sanction of government to his 
 undertaking. It has been unworthily insinuated, that the mea- 
 sures pursued by me on this occasion, instead of springing 
 from a sense of duty, and being enforced with peremptory 
 strictness, arose from prudential considerations, and were the 
 result of clandestine concert. / appeal to the testimony of any 
 person ivho tvas then at Hyderabad, to support my denial of the 
 truth of the whole and every part of that insinuation. So far 
 from there being any concert, there was at that time no inter- 
 course between me and Mr. Palmer. From me he expected ojy- 
 position, not support; and I did not even know that an applica- 
 tion to government was meditated by him, until he had received 
 from Calcutta an assurance that it would be complied with. 
 
 The same policy which had suggested the conclusion of a
 
 31 
 
 commercial treaty with the Nizam, required the encourage- 
 ment oi' mercantile houses, to conduct the traffic which it was 
 intended to promote. Messrs. W. Pahiier and Co. were the 
 first merchants at Hyderabad, who pressed commercial enter- 
 prise with any vigour, or carried it to any important result. 
 They proved, by experiment, the practicability of navigating 
 the Godavery tour hundred miles through the interior; and 
 thus conveying at once, by water, to the sea coast, both the 
 cottons of Berar, which had before been carried by land to 
 Mirzapore, and the produce of the teak forests of Ramgeer 
 and Palooncha, which had hitherto been inaccessible to Euro- 
 peans. They also applied themselves to the introduction of 
 British manufactures into the Nizam's country ; and have suc- 
 ceeded in promoting their consumption to an extent which 
 certainly could not have been expected. The houses of many 
 of the principal natives are now furnished with a variety of 
 costly English conmiodities ; our plain and printed cottons 
 have been brought into general use: and I have seen the mi- 
 nisters, and many persons of rank at the Nizam's court, dressed 
 in English muslins, and English shawls. But it is said that 
 Messrs. W. Palmer and Co. are not entitled to any merit on 
 that account, as they entered into the traffic with a view to 
 their own profit. No doubt they did. Merchants, I appre- 
 hend, always do engage in trade with a view to their own 
 profit; and commercial enterprise is not, for that reason, less 
 the source of national prosperity, or the object of national 
 encouragement. 
 
 " Nothing," it is said, " was ever afterwards heard of the 
 " success of the great timber trade, which was to be produc- 
 " tive of such general benefit to the countr}'." If, by this, it 
 be meant to insinuate, that the timber trade was a pretext, and 
 that Messrs. W. Palmer and Co. never really intended to em- 
 bark in it, the insinuation is utterly false. An extensive esta- 
 blishment was formed by them, both in the forests on the 
 Godavery, and at Coringa, the seaport at the mouth of the 
 river. A captain in the navy was employed by them as their 
 principal agent, in which capacity he built a ship of their tim- 
 ber at Coringa; and considerable expence was incurred by 
 them, for several years, in the prosecution of the undertaking; 
 of which the reality is, in no degree, affected by the success 
 or failure of its issue. The result did not, I believe, answer 
 the original expectations of the house; but the facts which I 
 have stated are sufficient to repel the insinuation, that the pro- 
 ject was never seriously entertained, and was announced for a 
 fictitious purpose. 
 
 It has, however, been asserted, that a secret understanding 
 existed between the residency and the house. I most per-
 
 32 
 
 eniptorily repel the charge. The members of" the house were 
 the nio8t competent judges of my senthnents and proceedings 
 towards them. Far from looking on me as friendly, or even 
 impartial to their transactions, they considered me as absolutely 
 hostile ; and Mr. Palmer formed his connexion with Sir VV. 
 Rumbold, for the express purpose of resisting the opposition 
 which he expected from me. Mr. Palmer constantly and 
 openly complained of my counteraction. My rupture with 
 him, and the hostility which he attributed to me, were noto- 
 rious at Hyderabad. They were known to the minister, and 
 to the natives generally, as well as to the members of our own 
 society. They were topics of common conversation ; and there 
 are many individuals now in England, who, from their own 
 personal knowledge, can attest the fact. I assert that no one 
 single instance can be adduced to give colour to the charge, 
 that in my proceedings respecting the house, I was influenced, 
 either by a collusion such as that here imputed to me, or by 
 any unworthy motive of any kind whatever. I do not indeed 
 recollect any one occasion, on which the house required the 
 exertion of my influence, or on which I promoted its concerns 
 with the minister, or any other person ; and in every transac- 
 tion which could have the most distant relation to my own 
 government, my sole endeavour was directed to contract the 
 limits of its sanction, and secure it against the shadow of res- 
 ponsibility. Whether the effect of my measures was to ad- 
 vance or impair the interests of the house, I did what I thought 
 my duty ; and it does no discredit to my conduct, that while 
 the house complained of my doing too little, the opposite party 
 allege that I did too much. 
 
 The sanction was approved by the court of directors on 
 the 20th November, 1816, in a letter of which the following 
 is an extract.* 
 
 " We observe by an enclosure referred to in this para- 
 " graph, that the governor-general in council has author- 
 " ized the resident at Hyderabad to afford every proper 
 " degree of coinitenance to the proposed commercial es- 
 " tablishment of Messrs. Palmer and Co. in the Nizam's 
 " dominions, to which we are not aware of there being 
 " any objection." 
 
 In the latter end of 1814, Sir William Rumbold first 
 entertained the idea of becoming a partner with William 
 
 • Hyd. Pap. p. 1.
 
 33 
 
 Palmer and Co., and the following correspondence took 
 place with Lord Hastings, who at first disconraged the 
 measure. 
 
 Lord Hastings' Letter to Sir IViUiam Riimbold, 20fh November, 
 
 1814.* 
 
 My dear Sir William : 
 
 You are very good in making for me so mucli allowance 
 respecting tlie tardiness of my answer to your letter. It is 
 very true diat I have ample occupation for both my mind and 
 time, yet I should not have overlooked your business, had not 
 another cause than multiplicity of other advertencies operated. 
 I was very solicitous of recurring to a memorandum wliich I 
 had made of points discussed respecting your affairs by me 
 with Sir Edward East. I sought that paper in vain. The 
 hope of retrieving it when I might be able to make a closer 
 rummage, led me to delay till I should have a moment of lei- 
 sure for that research; but, alas! when was that moment to 
 be found ? though I have not got the scrap, I recollect suffi- 
 cient of the particulars to answer, perhaps, your purpose. 
 Sir Edward was decidedly of opinion, that I could not be jus- 
 tified in assenting to the embarking any part of Harriet's for- 
 tune in aught but government securities. This I mentioned 
 to you at the time, and I see you look to the direct operation 
 of that principle, but I am not sure whether you take into 
 calculation its indirect effect. You talk of borrowing the sum 
 which you are to advance for a share in the firm. How can 
 you do that without security to pledge ? Your own money 
 cannot be made that security, because that would be to subject 
 it to the very risk which Sir Edward East regarded as illegal. 
 If this be not an obstacle, I ought to suggest for your con- 
 sideration a point to which you probably have not adverted. 
 You do not only hazard the sum which you place in the firm, 
 but any one of the partnei's is individually liable, to the whole 
 extent of his property, for the debts of the house : any accu- 
 mulation, therefore, which you might make, with the view to 
 comfort hereafter in England, would be exposed to that danger. 
 I state this only for your reflection. I am not competent to 
 form a judgment, satisfactory to myself, of the advantage or 
 peril of your engaging in the business. A man of greater worth 
 and honour than John Palmer nowhere exists, if universal tes- 
 
 « Ilyd Pap. p. 7;31.
 
 34 
 
 timony is to be reKed upon, and he is unquestionably of strong 
 talents : on the other hand, he has the character of speculating 
 in commerce, to an extent dis})roportioned to his capital. This 
 opinion may be only the loose guess of the uninformed, or the 
 misrepresentation of the envious ; still having heard it advanced 
 by a person whose situation gave him a special view of the 
 commerce of Calcutta, I am bound to impart it to you. Whe- 
 ther tlie house of Hyderabad is in such acknowledged con- 
 nexion with the house of John Palmer in Calcutta, as that the 
 one can be responsible for the other, I am not able to say. 
 That fact would be a material consideration. Your best pro- 
 cedure will be to consult Sir Edward East. The kindness of 
 his disposition will insure you against his thinking it intrusion ; 
 and his judgment is so sure, that you would have perfect com- 
 fort in relying on it. Adieu, my dear Sir William. Give my 
 affectionate remembrances to Harriet, and believe me, &c. 
 
 (Signed) Moira. 
 
 Sir William liumhohrs Letter to Lord Hasti7igs, December 1814.* 
 
 My dear Lord : 
 
 I mentioned, in a letter I wrote you some weeks since, in 
 answer to one of your lordship's, that I should take the liberty 
 of troubling you again about the house at Hyderabad. I trust 
 you will let me trespass a few moments upon your time, in 
 explaining what has occurred relative to that subject since the 
 conversation I had with you. When my taking a share in the 
 house was first proposed, I imagined that I should be expected 
 to reside in Hyderabad ; the principal object of my inquiry 
 was, therefore, as to the advantages I should derive by giving 
 up all chance of employment under your lordship, and quitting 
 a place where I should leave the friends I have in this country. 
 I did not see any use in entering into the question of whether 
 or not the trust-money could be safely embarked in the house 
 till I had determined whether it was advisable to entertain 
 Mr. Palmer's proposition at all. 
 
 The conversation I had at that time with your lordship and 
 lady Loudon, and the kind intentions you expressed towards 
 me, induced me to give up all idea of leaving Calcutta. The 
 subject has since been revived, because it is now proposed to 
 me to become a member of the house without residing at 
 Hyderabad. All the information I have been able to procure 
 
 * Hyd. Pap, p. 7;52,
 
 
 lias convinced nic that sucli a step would aHovd mo a fair 
 chance of reahzing a fortune, and tliat with little or no risk. 
 The funds required for this object, in order to make it answer 
 to me, would amount to three lacs. I think they might be 
 procured without much difficulty : in fact, I have the offer of 
 the money at twelve per cent., provided I can find security 
 for it. The first object with me, however, is to act with your 
 lordship's approbation. My interests and my inclinations are 
 equally concerned in this line of conduct, the propriety of 
 which has been repeatedly urged by Mr. Palmer, however 
 unnecessary such a caution may be : at the same time he 
 perseveres in saying, that he knows no such certain way of 
 making a fortune. Were I assured of your approbation of the 
 scheme, I would state to you what occurs to me, vt^ith respect 
 to the possibility of appropriating the trust-money to this pur- 
 pose, and how far the matter may be arranged without that 
 money, should your lordship see any difficulty in the way of 
 its being so appropriated. I have already acquired from dif- 
 ferent persons much important information about the house, 
 and have been waiting for the letter, of vv'hich I now enclose a 
 copy, before I would trouble you. The letter is from Mr. De 
 Fries, a friend of my family, being under obligations to them, 
 and the head of the great Portuguese house at Madras. I 
 thought him, from his local knowledge and the reputation he 
 has of being a particularly careful man of business, the best 
 person I could refer to. I in consequence wrote to him, in- 
 forming him of the offer that is made me, and requesting he 
 would advise me what to do. Your lordship will, I trust, 
 consider his letter as very strong in favour of the house ; but 
 I should, if you approve of the plan, be inclined to go to 
 Hyderabad myself, before I positively embarked in the scheme. 
 
 I have, &c. 
 
 (Signed) Wm. Rumbold. 
 
 J. Fries' Letter to Sir JFilliam Rumbold, 1814. * 
 
 My dear Sir : 
 
 I was favoured, four days ago, with your letter of the 6th 
 ultimo, Soo llsagen. I shall with pleasure impart to you my 
 frank and sincere sentiments on the subject of your connnuni- 
 cation, and with perfect unreservedness, on the same condition 
 that you required it of me, namely, that whatever I may say on 
 
 * Hydcr. Pap. \>. 733. 
 D '2
 
 36 
 
 "the subject, it is to be considered entirely confidential, and in- 
 tended onl}' ibr your own private information and guidance. 
 
 Tliere could be no doubt of Messrs. William Palmer and Co. 
 carrying on a beneficial trade at Hyderabad, and I believe, as far 
 as the nature of it will admit, the risk not great, compared to 
 many other branches of trade. I have had several opportuni- 
 ties, from my intercourse and transactions with a gentleman of 
 respectability and fortune who had been long resident at 
 Hyderabad, to obtain a knowledge of the commerce of that 
 city, and my candid opinion is, that if you can be admitted into 
 the house of William Palmer and Co., and allowed at the same 
 time to keep and remain at Calcutta in your present employ, 
 you should by all means accept Mr. John Palmer's offer ; in 
 which case I should advise you, in order to render the concern 
 beneficial to you, you ought to advance a capital of two to 
 three lacs of rupees, for from my knowledge of the transac- 
 tions of that house at Hyderabad, it will require your carrying 
 that sum into the firm, to make it an object of advantage to 
 you. But if you are obliged to give up your present situation 
 on your becoming a partner of the house in question, I would, 
 were I in your place, prefer to remain in your present employ ; 
 for, believe me, a certain income of forty to fifty thousand 
 rupees yearly, without exposing to any risk, is much more 
 preferable to almost double that sum by entering into specu- 
 lation, when, with all the caution and circumspection, there is 
 generally some degree of danger unavoidable : and my maxim 
 is, that it is best to prefer a certainty to any other of much 
 greater advantage prospectively. This is my sincere and un- 
 biassed opinion, founded on long experience and practical 
 knowledge. To whatever you may determine upon, my cordial 
 best wishes attend such line you may pursue, assuring you, at 
 the same time, I shall ever feel happy in promoting your views. 
 Pray let me know when Lady Hood may be expected here. 
 What wonderful news from Europe ! It appears more like a 
 dream than reality. Britain stands in a very commanding atti- 
 tude, for it is owing to her noble perseverance that Europe has 
 been rescued, and the blessings of a general peace restored. 
 I shall be very glad to hear from you when leisure permits, 
 being, 
 
 My dear Sir, 
 
 With great regard. 
 
 Yours, &c. 
 
 (Signed) J. Fries.
 
 37 
 
 Lo7'd Hastings Letter to Sir William Rumbold, it/i Jan. 1 81 5. * 
 
 My dear Sir William : 
 
 The account you have given of the house of Palmer and Co. 
 at Hyderabad is very favourable, and certainly the details justify 
 your inclination for going to that city, in order to inspect the 
 books. I enclose you a letter to the Resident, couched in 
 terms which will ensure to you his attention and most earnest 
 good offices. The partners speculate, that you being one of 
 the firm will interest me in the welfare of the house, to a 
 degree which may be materially beneficial to them : it is a fair 
 and honest calculation. The amount of advantage which the 
 countenance of government may bestow must be uncertain, as 
 I apprehend it would flow principally from the opinion the 
 natives would entertain of the respect likely to be paid by their 
 own government to an establishment known to stand well in the 
 favour of the supreme authority here. Perhaps a more distinct 
 benefit may attend the firm, from the consequent discourage- 
 ment to competition with you, by any other British partner- 
 ship, to which a similarly professed sanction would not be 
 granted. It is on the ground of the service to the Nizam, at 
 the request of our Resident, that I have consented to let the 
 good wishes of Government for the prosperity of this firm be 
 signified. No new establishment could have such a plea. 
 
 Believe me, &c. 
 
 Camp, at Kurnaul, (Signed) Moira. 
 
 4th January, 1815. 
 
 As leave of absence from the Presidency will be necessary 
 on account of your magisterial functions, it shall be notified by 
 Mr. Ricketts. 
 
 The only ciixumstance worthy of observation in the fore- 
 going correspondence, is the direct and internal evidence of 
 the falsehood of the calumny, with regard to Lord Hastings 
 being a creditor for any portion of Lady Rumbold's fortune; 
 and the manly and open manner in which his lordship makes 
 Sir William Rumbold aware that he is alive to the sup- 
 posed value of his name to the firm, from the circumstance 
 of his connection with Lord H. He at the same time 
 distinctly points out to him the limits within which alone 
 
 * Hyder. Pap. p. 7;}3, 734. 
 D 3
 
 38 
 
 that connection can be indirectly useful : viz., by creating 
 confidence in the natives in their dealings with the house. 
 He at the same time suggests to him that no British liouse 
 of agency would be likely to compete with them, as they 
 would not have the same title with that on which Messrs. 
 Palmer and Co. founded their claim, and had received the 
 orimnal sanction in 1814. 
 
 In April, 1815, Sir William Rumbold went to Hydera- 
 bad, and became a partner with William Palmer, Hastings 
 Palmer, Bunketty Dass, Dr. Currie, and Hans Sotheby. 
 
 In July, 1816, the governor-general, in council, granted 
 to the house of Palmer and Co., an exemption from the 
 penalties of the act 37 Geo. 3. in order to enable them to 
 have pecuniary dealings with the Nizam's government. 
 
 Mr. Russell's Letter, 21th June, 1816.* 
 To John Adam, Esq., Secretary to Government, Fort William. 
 Sir, 
 
 I have the lionour to enclose a memorial, addressed to His 
 Excellency the Right Honourable the Governor-General, which 
 has been sent to me by the firm of Messrs. William Palmer 
 and Co., and which I beg leave to recommend to the favour- 
 able consideration of His Excellency. 
 
 I have, &c. 
 
 ^ • (Signed) Henry Russell, 
 
 Resident. 
 
 Extract from Bengal Political Consultations, 2SdJul?/, 1816. f 
 
 Ordered, That the following letter from Messrs. William 
 Palmer and Co., of Hyderabad, which was on the 13th instant 
 referred in the original to the Advocate-General, be here re- 
 corded, together with Mr. Strettell's letter on the point sub- 
 mitted to his opinion. 
 
 * Hjcl. Pap. p. 3.   t Ilycl. Pap. p. :]. 4.
 
 39 ^ 
 
 To the Right Honourable Francis Earl of Moira, K.G., Gover- 
 nor-General, &c. &c. &c., Fort William. 
 
 My Lord, 
 
 When we addressed your Lordship in council upon a former 
 occasion, we were persuaded that the establishment of a com- 
 mercial house here was an object of public utility, and upon 
 that ground we looked with confidence to the support of your 
 Lordship's government in our undertaking. The consideration 
 that address met with, did not disappoint our expectations of 
 the view you would take of our application, and we had made 
 no secret of our transactions. We were disposed to think, that 
 the sanction we then received was sufficient for our security, 
 and we acted upon this supposition. We have, however, heard 
 a doubt expressed, whether that sanction was explicit enough 
 to give security to all our money transactions ; and any uncer- 
 tainty upon this subject, is not only injurious to our affairs, but 
 diminishes the degree of benefit which the local government 
 derives from our establishment. Indeed, this benefit must be 
 mutual ; and the value of money, in this part of the world, 
 must rise and fall in proportion to our credit, which depends 
 upon the public. Impression has hitherto been so favourable 
 to us, that we have, to the great advantage of the Nizam's 
 government, and of the British interests combined with it, 
 established a system of confidence and regularity in the money 
 markets here, which a short time ago could scarcely have been 
 believed practicable. It is not, however, possible that we 
 should carry on transactions so extensive and so general as 
 ours, without being frequently concerned in pecuniary arrange- 
 ments with the government itself; and we entreat that your 
 Lordship in council will, in pursuance of the power vested in 
 you, exempt us from any penalties which we might be subject 
 to under the act of Parliament, provided that whatever trans- 
 actions we may have with the Nizam's government shall be 
 such as will be approved of by the British government. We 
 conceive ourselves to stand essentially wide of what was in the 
 purpose of the legislature, though we now find it doubted whe- 
 ther the letter of the provision might not reach us. We believe 
 that the penalties we allude to were imposed by act of Parlia- 
 ment, with a view to prevent European subjects from acquiring 
 privately too much influence at native courts, and from taking 
 advantage of the necessities of native governments, to extort 
 exorbitant interest from them. We feel confident that our 
 transactions cannot lead to either of these objects, and that 
 their immediate operation has no taint of that quality; so that 
 we are precisely in the situation which the act contemplated, 
 
 D 1<
 
 40 
 
 in giving power to the Governor-General in council to exempt 
 from tlie penalties. Our transactions have always been open 
 and public, and whenever we have considered them as con- 
 nected with the government, they have been directly with the 
 minister, who possesses the confidence and support of the Bri- 
 tish government. 
 
 The grounds upon which we indulge the hope that we are 
 entitled to especial support and protection from your Lord- 
 ship are, 
 
 1st. The acknowledged utility of our establishment (recog- 
 nized by the minister and the Resident), in facilitating and 
 augmenting a traffic, which has been deemed of sufficient im- 
 portance to be the object of a commercial treaty between the 
 Company's and the Nizam's governments. This object has 
 been attended with the decided melioration in the state of the 
 llyots, upon whom the pressure for payments in advance, 
 formerly made by the Nizam, is no longer necessary ; and by 
 the reduction of the rates of interest, owing to the preclusion, 
 in a great measure, of the oppressive dealings of the Patans and 
 Gosauns, and has been aclvnowledged as a benefit of the utmost 
 importance by the minister. 
 
 'idly. The benefit of our speculations in timber to both 
 governments, about three thousand logs of teak being annually 
 floated down to the coast by us from the forests on the Goda- 
 very; whereas no other persons have been able to turn those 
 vast internal sources of wealth to any purposes of public 
 utility, and the Bengal markets have hitherto been supplied 
 from the shores of aliens, and powers not unfrequently inimical 
 to the British government, 
 
 Sdly. The advantages which will result from our having as- 
 certained the Godavery to be navigable by boats for four hun- 
 dred miles, whence we expect to establish the practicability of 
 conveying Berar cotton (the best in India) by water to the 
 coast. The traffic in Berar cotton was formerly carried on by 
 land to Mirzapore, but given up on account of the exorbitant 
 taxes imposed by the petty Rajahs and Zemindars, and the 
 difficulties and dangers of the road Having satisfied ourselves 
 as to the Godavery's being navigable from Dhuinapoor to Co- 
 ringa, by taking boats down at two different periods, we are 
 now employed m ascertaining the practicability of navigating 
 the Wurda, (or, as the natives call it, the Puneeta), from 
 Chanda, in the country of the Rajah of Nagpore, to its junc- 
 tion with the Godavery at Scroucha. 
 
 We have every reason to expect success in this undertaking, 
 which has been attended with considerable expence and trou-
 
 41 
 
 ble, and Avill be productive, in all probability, of great advan- 
 tage to the commerce of this country. 
 
 We have, &c. 
 
 (Signed) Wm. Palmer and Co. 
 
 Mr. StretteU's Letter, 19th July, 1816. * 
 To John Adam, Escj. Secretary to Government. 
 Sir: 
 
 In obedience to the commands of the right honourable the 
 governor-general in council, conveyed to me in j^our letter of 
 the 13th instant, I have the honour to report, that I see no 
 legal objection to the governor-general in council giving his 
 consent and approbation to Messrs. William Palmer and Co. 
 carrying on the business they have entered upon at Hyderabad, 
 and to their doing the several acts from which they would be 
 restrained by the 37th Geo. 3., cap. \¥1., sec. 28., unless con- 
 sented to and approved of by the governor-general in council 
 in writing. 
 
 It is proper, however, to observe, that although the 13th 
 Geo. 3. cap. 63. sec. 30. confines the penalty for usury, in 
 taking more than twelve per cent., to such as commit the 
 offence within the company's settlements, I am by no means 
 clear that it does not avoid the security, although it be not 
 given, or the loan made within the company's settlements : It 
 appears, however, to be confined to our own settlements. 
 
 I have, &c. 
 
 (Signed) Edward Strettell, 
 
 Advocate-General. 
 
 Letter from Secretary to government to Messrs. Palmer and Co. 
 
 12>dJuly, 1816. t 
 Gentlemen : 
 
 1. I am directed to acknowledge the receipt of your letter 
 of the 27th of June, requesting the consent and approbation 
 of his excellency the governor-general in council to your doing 
 the several acts from which you would be restrained by the 
 
 * Ilyd. Tap. p. 5. " t Hyd. Tap. p, 5.
 
 42 
 
 37th Ceo. 3. cap. 142. sec. 28. unless consented to and ap- 
 proved of by the governor-general in council in writing. 
 
 2. The <rovcrnor-s:('neral in council beinor satisfied that the 
 interests, both of the doininions of his highness the Nizam and of 
 the Honourable Companij, will be promoted by the success and 
 security of your commercial and pecuniary transactions, as ex- 
 plained in your letter, has been pleased to comply with your 
 application. I am accordingly directed to transmit to you a 
 writing, under the signature ol' the governor-general in council 
 and the seal of the honourable company, signifying the per- 
 mission of the supreme government for your performing the 
 acts above referred to, with no other reservation, than that it 
 shall be at the discretion of the British Resident at Hyderabad, 
 for the time being, to satisfy himself regarding the nature and 
 objects of the transactions in which you may engage, under 
 the permission now accorded. 
 
 I have, &c. 
 
 (Signed) J. Adam, 
 
 Secretary to government. 
 
 The Licence to Messrs. Palmer and Co., 23</ Jidy, 1816. * 
 
 Whereas the riajht honourable Francis Earl of Moira, <ro- 
 vernor-general of and for tlie presidency of Fort William in 
 Bengal, in council, has taken into his consideration the benefits 
 resulting to the government of his highness the Nizam, and to 
 the commercial interests of the territories of his said highness 
 and of the neighbouring provinces of the honourable the East 
 India Company, from the transactions and dealings of the firm 
 of Messrs. William Palmer and Co., established at Hyderabad, 
 in the territories of his said highness, and is of opinion tliat 
 the maintenance and extension of the dealings and transactions 
 of the said firm of Messrs. William Palmer and Co., are a fit 
 object of the encouragement and countenance of the British 
 government ; these are to certify to all persons whom it may 
 concern, that the said governor-general in council does hereby, 
 in writing, and by virtue of the power in him vested by a 
 certain act of Parliament, made and passed at Westminster on 
 the 20th day of July, in the year of our Lord one thousand 
 seven hundred and ninety-seven, entitled " An Act for the 
 " better administration of justice at Calcutta, Madras, and 
 
 llyd. Pap. p. 5. and 6.
 
 43 
 
 " Bombay, and for preventing British subjects from being 
 " concerned in loans to the Native Princes in India/' give his 
 consent and approbation to the members of the said firm of 
 Messrs. William Palmer and Co. at Hyderabad, doing all acts 
 within the territories of the Nizam, which are prohibited by 
 the said act of parliament to be done or transacted without 
 the consent and approbation of the governor and council of one 
 of the governments of the United Company of Merchants of 
 England trading to the East Indies first had and obtained in 
 writing, until the said consent and approbation shall be in like 
 manner in writing withdrawn. Provided, however, that the said 
 
 Jinn of Messrs. William Palmer and Co. shall at all times, 
 vihcn required so to do by the British Resident at Hyderabad 
 
 for the time being, communicate to the said Resident the nature 
 and objects of their transactions with the government, or the 
 subjects of his said highness the Nizam. 
 
 Given at Fort William, this twenty-third day of July, 
 one thousand eight hundred and sixteen. 
 
 (Signed) Moira. N. B. Edmonstone. 
 
 A. Seton. W. Dowdeswkll. 
 
 Ordered, that the preceding despatch be sent under an open 
 cover to Mr. Russell, with the following instructions, and co- 
 pies of the letters addressed to Messrs. William Palmer and Co. 
 and the instruments enclosed in it. 
 
 To Henry Russell, Esq. Resident at Hyderabad *. 
 Sir, — 
 
 1. I am directed to acknowledge the receipt of your letter 
 of the 27th ultimo, transmitting an application from Messrs. 
 William Palmer and Co. 
 
 2. I am now directed to transmit to you, under an open 
 cover, the reply which I liave been instructed to return to 
 their application; from which, and from the instrument en- 
 closed in it, you will perceive that his lordship in council has 
 been pleased to comply with their request, subject only to the 
 discretion reserved to the Resident at Hyderabad, for the time 
 being, to satisfy himself with regard to the nature and objects 
 of the transactions in which Messrs. William Palmer and Co. 
 may engage under that permission. You will accordingly con- 
 sider it to be your duty to exercise that degree of control, at such 
 time, and in such manner, as you may judge to he expedient, in 
 the spirit of the resolution notv communicated to you. 
 
 * Hyd. Pap. p. 6".
 
 44 
 
 3. Copies (.if uiy letter to Messrs. VV illiam Palmer and Co., 
 and of the instrument enclosed in it, are herewith transmitted. 
 I have, &c. 
 Fori /Filliam, (Signed) J. Adam, 
 
 23d July, 1 8 1 G . Secretary to Government. 
 
 This licence was communicated to the court of direc- 
 tors in a letter dated od of January, 1817 *, in the follow- 
 ing paragraph. 
 
 285. In the mouth of July last, we received a memorial 
 from Messrs. Palmer and Co., requesting the consent and appro- 
 hation of the governor-general in council to their doing the 
 several acts, from which they would be restrained by the 37th 
 Geo III. cap. 142. sec. 28, unless consented to, and approved 
 ot^ by the governor-general in council in Avriting. 
 
 2y(j. Having previously consulted with our advocate-general, 
 fiiid being satisfied that the interests, both of the dominions of' 
 his highness the Nizam and of the Honourable Company, would 
 be promoted by the success and security of the commercial and 
 pecuniary transactions, as explained by IMesirs. Palmer and Co. 
 zve complied with their appUeation. A writing was accordingly 
 transmitted to Messrs. Palmer and Co. under the signature of 
 the governor-general in council, and the seal of the Honour- 
 able Company, signifying the permission of the supreme govern- 
 ment for their performing the acts above referred to, with no 
 other reservation, than that it should be at the discretion of the 
 Resident at Hyderabad, for the time being, to satisfy himself 
 regarding the nature and objects of the transactions in which 
 Messi's. Pahner and ("o might engage under the permission 
 accor<led. 
 
 At the end of 1816, the probability of a serious con- 
 test with the Mahratta.s being apparent, Lord Hastings, 
 with a view to vender the alliance of the Nizam more 
 ^..Ifective, })er;-;uaded him to have a portion of his cavalry 
 jjU;! infantry discipHned by European officers. 
 
 Tlie following are the words of the government letter 
 to the court of directors f. 
 
 " in 181(J, and the beginning of the succeeding year, the 
 " probability of a serious contest with the Mahrattas became 
 " visiiile; there was an obvious ni<jde of rendering the Nizam 
 " more etlir.ient to our aid by prevailing on him to have a 
 " portion oi' his soldiery, both cavalry and infantry, disciplined 
 
 * Hvd. Tap. |). I. t 5^v(!. V.\\<. p. M].
 
 4.5 
 
 " after tlie iiianncr of our troops^ which was practicabio only 
 " by allotting a proportion of our European officers to them. 
 " Ihis condition \5'ould make the troops essentially ours, 
 " though paid by the Nizam. His highness's consent was 
 " gained by his being made to see how he would be enabled by 
 *• such a force to subdue his refractory zemindars ; an object in 
 " which he had hitherto failed, either through the collusion of 
 " the chiefs sent against them, or the incompetency of that 
 " armed rabble to any duty : and it may be stated here, that in 
 " this prospect the Nizam was not deceived, the principal 
 " rebellious feudatories having been brought into complete 
 " subjection by those new organized corps." 
 
 On 31st December, 1816, Mr. Russell had reported 
 as follows: — 
 
 " For the pay of the 2000 Sirkar horse in Berar, an arrange- 
 ment has been made with Rajah Govind Buksh, who has 
 engaged that they shall not be more than one month in 
 arrear ; the pay of January, for instance, being issued on 
 the 1st of March ; and for the payment of the Sirkar horse 
 (1000) that have gone from Hyderabad, the house of Messrs. 
 Palmer and Co. have agreed with Rajah Chundoo Loll to pro- 
 vide the monthly sum of fifty-two thousand rupees, at Aurun- 
 gabad."— f/y. 'Pap. p. 102. 
 
 The following extract from Mr. RusselFs letter to the 
 Court of Directors, will more fully explain the necessity 
 that led to this measure : — 
 Extract from Mr. Russeirs Letter to the Court of Directors* . 
 
 Our political interests at Hyderabad required, at that time, 
 to be guarded with peculiar circumspection. They were beset 
 with difficulty on every side. From tlie Nizam himself, we 
 had nothing to hope, and every thing to fear. He was Aveak 
 in his own character, uneasy under our control, and notori- 
 ously friendly to e\"ery project that vras hostile to us. His own 
 family submitted, v.ith equal reluctance, to his authority, and 
 our influence. Two of liis sons had recently broken into open 
 rebellion, and, after a sharp conflict in the heart of the city, 
 in M'hich an officer of my escort was killed, had been arrested 
 and confined. His ministry was distracted by jealousy and 
 dissension. Mooneer-oo! Mooik was a nominal minister with- 
 out authority, and Chundoo Loll the efficient minister without 
 tlie name of office. They were necessarily rivals instead of 
 colleagues. Whatever one proposod the other resisted, and 
 the Nizam's influence waS always thrown into the opposite 
 scale to ours. Mooneer-oo! Moolk, with an habitual propen- 
 
 .Mi. Russdl's Letter, p. 4. and 5.
 
 46 
 
 sity to avtilice and stnitagoni, was engaged, botli at home and 
 abroad, in perpetual intrigues against Ciiundoo Loll, M'ho was 
 the minister of our choice, and who stood almost alone as the 
 advocate and supporter of our interests. The chieftains and 
 noble families imputed their loss of weight and influence in 
 tlie state to our ascendancy, and hated us with double rancour, 
 because we were powerful, and because we were Christians. 
 The populace, like that of all Mahometan cities, were turbu- 
 lent, discontented, and fanatic, and ^ ere ripe for the perpetra- 
 tion of any enormities or excesses. We had, therefore, to 
 support a government, which, though unable to support itself, 
 was unwilling to be supported by us ; and had every thing to 
 apprehend that could arise from national hatred and religious 
 bigotry, from secret disaffection and open hostility. Only a 
 few months before, on the occasion of an insurrection in the 
 city, the Nizam had been invited to raise the standard of a 
 holy war against the infidels; and his own brother-in-law, 
 Shums-ool Omrah, declared publicly at the palace, that if 
 every true believer would but throw a handful of earth upon 
 us, we should be overv.dielmed. The hostilities which we were 
 afterwards compelled to undertake against the Pindarrees, and 
 in which we were eventually involved with the Mahrattah 
 powers, were then evidently ap})roaching ; and Chundoo Loll 
 could not have pursued the course which was essential to the 
 maintenance of internal tranquillity, as well as to the efficient 
 prosecution of the war, without extraordinary assistance, and 
 the command of pecuniary means beyond the dilapidated re- 
 sources of his own government. It is incumbent upon those 
 who object to his measures, to show, either that he could have 
 done without the money which he borrowed, or that he could 
 have borrowed it upon better terms than he did. 
 
 From the application of that money, our interests derived at 
 least as much benefit as the Nizam's. One of the conditions 
 of the treaty which Marquis Wellesley concluded with the 
 Nizam in 1 798, preparatory to the war with Tippoo, was, that 
 he should disband a large military force then in his service, 
 under the command of French officers ; and it became our ob- 
 vious policy, to indiice him to su])ply its place by a similar 
 force, officered by British subjects. The importance of this 
 force was, in an eminent degree, enhanced by the peculiar 
 circumstances of the Nizam's government, and the critical re- 
 lation in which we stood towards other powers ; and Chundoo 
 Loll had therefore been obliged to incur considerable expence 
 in extending and improving it. In the end of 181C, a few 
 months before the operations against the Pindarrees began, I 
 prevailed u})on the Nizam's government to organize a body of 
 four thousand of their own irregular cavalry, and to place it
 
 47 
 
 mulcr the comniaiul of English olticors. The partioulurs ol 
 this measure were reported by nie to tlie supreme gorerumeut, 
 in a despatch to JMr. Chief Secretary Adasn, dated tlie 30th of 
 December, 1816, in which, among other details, I stated that 
 the house of Messrs, W. Palmer and Co. iiad agreed with the 
 minister to provide the monthly sum of fifty-two thousand 
 rupees, for the payment of one thousand of the liorse ; the 
 payment of the remaining three thousand liaving been pro- 
 vided for by other means. 
 
 The answer from the chief secretary to the foregoing 
 despatch, of !JOth Decemher, 1816, contained the fol- 
 lowiui^' passage : — 
 
 " T<» your approved judgment and address, his excellency 
 in council nmiidy ascribes the success with which so im- 
 portant a measure has been carried into eft'ect. His lord- 
 ship in council, also, desires to exju-ess his entire approbation 
 of the details of the arrangement for organizing the cavalry in 
 question, as reported in vour despatch. " 
 
 The following extract from the Resident's report to 
 Sir T. Hislop, of the 14th of June, 1817, will show the 
 successful result which attended the measure. 
 
 " The two battalions at Hyderabad conipose the Russell 
 brigade, which is commanded by Captain Flare of the Com- 
 pany's army. The enclosed return exhibits the strength 
 and composition of this corps. The men are chiefly Hin- 
 doos, natives of the Company's territories in Hindoostan. 
 They are disciplined, armed, clothed, and equipped, in all 
 respects, like ova- own troops : they are paid regularly, every 
 month, out of the Resident's treasiu'y : they do no duty in 
 the city, nor with any other troops in the Nizam's service, 
 nor have they any sort of communication with any branch 
 of the Nizam's government ; in fact, they belong to the 
 Nizam's army in name alone : they consider themselves as 
 Company's troops, and for all practical purposes, they are as 
 much 60 as those on our own immediate establishment. I am 
 persuaded that your excellency will find this brigade equal to 
 the native corps of the Company's own army. It is evident, 
 that the whole of the regular and reformed troops are, in a 
 great degree, subject to the same control by the Resident." 
 
 In December, 1818, Mr. Russell reported to the go- 
 vernor-general in council, that an arrangement had been 
 made by the minister with the house of W. Palmer and 
 Co. for supplying him with two lacs of rupees monthly, 
 for the punctual payment of the regular and reformed 
 troops at Aurungabad.
 
 48 
 
 'J'he following documents explaining tlie transactions., 
 will incidentally show, — 
 
 1st. That the Aurnngabad contract was made at the 
 instance of Captain Sydenham, the Company's agent in 
 Berar. 
 
 2nd- That no guarantee on the part of the Rfe- 
 sident, for securing Messrs. Palmer and Co's. repay- 
 ment, was either given or expected ; and, 
 
 Bd. That the house had not any power to interfere, 
 by themselves or by their agents, in the collection of the 
 assignments made to them over the districts. 
 
 E.t'tract from Captain Sydenham to Mr. Russell, 
 \Oth March, 1818 *. 
 
 " I have repeatedly had occasion to notice to you, in my 
 private correspondence, the irregularity with which the Nizam's 
 regular infantry and reformed horse in Berar are paid by 
 Rajah Govind Buksh f . My remonstrances to the Rajah on 
 this subject have been incessant, and are, in fact, repeated 
 every month ; but so far from causing punctuality in the pay- 
 ment of the troops, they appear to be losing their effect, from 
 the frequency of their repetition, and to be productive of little 
 else but constant discussion and altercation ; of demands on one 
 side, and of delays, evasions, and deceit on the other ; which 
 not only obstruct the progress of the public service, but cannot 
 fail to affect the temper of ray intercourse with the local 
 government. The admonitions which the Rajah has received 
 from yourself and the minister, on the subject, have not been 
 attended with the effect which might have been expected from 
 them ; and under these circumstances, it becomes necessary 
 that some arrangement be immediately adopted, to remedy an 
 evil which will increase with the increasing expences of the 
 troops, and the declining resources of the government, and 
 which cannot be suffered to exist, without serious detriment to 
 the public interests. 
 
 " The payment of the contingent troops is a matter of such 
 vital importance, that I would beg to suggest its being specially 
 provided for by treaty, with due security against its failure : 
 and an opportunity may soon occur for inserting an article in 
 our engagements with the Nizam, expressly stipulating for the 
 amount of his highness's auxiliary force, and for the supply of 
 funds for its payment." 
 
 * Mr. Russell's Letter, p. II. 
 
 ■\ The minister'i brother, and goremor of Berar.
 
 49 
 
 Mr. Russell's Letter, 31 st December, 1818. * 
 
 Sir: 
 
 Considerable difficulties having been experienced at Aurun- 
 gabad, in procuring adequate funds for the payment to the re- 
 gular battalions and reformed horse in Berar, it became abso- 
 lutely necessary to substitute some other system to that which 
 had hitherto prevailed, and which had been rendered defective 
 principally by the mismanagement of the country, the improvi- 
 dence of the government, and the increasing difficulties of the 
 Talookdars, and, in some measure, certainly by the misconduct 
 of Rajah Govind Buksh. In consequence of the repeated repre- 
 sentations tvkich I made to Rajah Chundoo Loll on this subject, 
 and the importance which he saw I attached to it, as the very 
 Joundation of the efficiency of the whole establishment, lie entered 
 into a7i arrangement with the house of Messjs. William Palmer 
 and Co. of Hyderabad, by which they have engaged, on the 
 security of orders to be granted on the revenue of certain dis- 
 tricts in Berar, to provide the monthly sum of two lacs of 
 rupees at Aurungabad, which, it is calculated, with the addi- 
 tion of the jagheers, from the produce of which a part of the 
 reformed horse is already paid, will cover the whole expence of 
 the four battalions of infantry, the artillery, and three resselahs 
 of the horse ; the pay of the fourth resselah, which was origin- 
 ally detached from Hyderabad, having, from the first, been 
 provided under a separate engagement between Messrs. Palmer 
 and Co. and the minister. 
 
 The adoption of this arrangement has necessarily been at- 
 tended by a considerable diminution of Rajah Govind Buksh's 
 authority. The regular and reformed troops in Berar, like 
 those of the south of the Godavery, have been placed in imme- 
 diate dependance on the minister, and the orders for the secu- 
 rity of the pay being issued by him, it became necessary to the 
 system of revenue, which prevails under all native governments, 
 that the districts on which they are granted should be managed 
 by Talookdars appointed immediately by himself. A good 
 deal of angry discussion took place, in the progress of this 
 arrangement, between Rajah Chundoo Loll and his brother, 
 who, although he distinctly declared his own inability to pro- 
 vide funds for the military establishment in Berar, was reluctant 
 to lose, by the substitution of the only plan which affi:)rded a 
 prospect of efficiency, so large a portion of the influence and 
 authority which he had previously acquired. The minister, in 
 a manner more creditable perhaps to his personal kindness than 
 to the firmness of his public character, has consulted his 
 
 * Hyd. Pap. p. U. 
 IS
 
 50 
 
 brother's wishes to the utmost extent which was consistent with 
 the efficiency of the new system. The reguhir and reformed 
 troops are the only establishments which have been translated 
 from Rajah Govind Buksh's authority, and he still continues to 
 exercise the same control as before, over every other branch of 
 the local government of Berar. The annual revenue of the 
 districts, which were previously in the hands of Rajah Govind 
 Buksh, was estimated at fifty-one lacs of rupees. Of these a 
 certain number have been set aside to answer the minister's 
 orders, to the nominal amount of twenty-nine lacs of rupees 
 a-year, a sum which, it is calculated, will not produce an actual 
 payment larger than will be required to meet the principal and 
 interest of the monthly sum to be provided by Messrs. Palmer 
 and Co. at Aurungabad ; and all the remaining districts, pro- 
 ducing an estimated annual revenue of twenty-two lacs, have 
 been left, as they were before, under the management of 
 Rajah Govind Buksh, to cover the charges of the irregular 
 troops and the various other local establishments of the 
 province. 
 
 I have, (S:c. 
 
 Hyderabad, (Signed) Henry Russell, 
 
 31st December, 1818. Resident. 
 
 Mr. Meicalfes JReply, SOfh Jammry, 1819.* 
 
 Sir: 
 
 1. I am directed to acknowledge the receipt of your despatch 
 of the 31st ultimo, respecting pecuniary arrangements between 
 the government of Hyderabad and the house of Messrs. Wil- 
 liam Palmer and Co., for the payment of the regular battalions 
 and reformed horse in Berar in the service of his highness the 
 Nizam. 
 
 2. The governor-general in council is desirous of knowing in 
 what degree your sanction has been given to these ai'range- 
 ments, and whether you consider that any guarantee is implied 
 on the part of the British government, and in what manner the 
 liquidation of the orders to be granted on the revenues of the 
 assigned districts is secured to the house of Messrs. William 
 Palmer and Co., and on what terms their advances are made. 
 
 3. The governor-general in council is further desirous to be 
 informed, whether arrangements, equally efficient and econo- 
 mical, could, or could not, have been made with native bankers 
 at Hyderabad. 
 
 * Hyd. Tap. p. I'J.
 
 51 
 
 4. Tliis last question will indicate to you an apprehension, 
 on the part of government, that there maybe some implication, 
 though not expressed, through which the honourable company 
 might be expected to enforce fulfilment of the Nizam's agree- 
 ment, should arrears or obstructions occur. 
 
 5. I am accordingly directed to request that you will be 
 pleased to report on these points. 
 
 I have, &c. 
 
 Fort William, (Signed) C. T. Metcalfe, 
 
 30th January, 1819. Secretary to Government. 
 
 Mr. Russell's Letter, 28th April, 1819. * 
 
 To C. T. Metcalfe, Esq. Secretary to Government. 
 
 Sir: 
 
 I have the honor to acknowledge the receipt of your letter 
 of 30th January, requiring further information on the subject 
 of the arrangement between the Nizam's government and 
 Messrs. William Palmer and Co., which was referred to in my 
 despatch to the Chief Secretary of the 31st December. 
 
 That arrangement zvas Jirst suggested by Captain G, Syden- 
 ham to Messrs. Palmer and Co., proposed by them, to me, and 
 mentioned by me to the minister. The discussions •which took 
 place on the subject of it, bettxieen the minister and Messrs. 
 Palmer and Co., tvere carried on ivith my full knoivledge, and the 
 conclusion of the arrangement had my entire concurrence, as I 
 considered that the punctual payment of the regular and re- 
 formed troops was indispensable to their efficiency, and as I 
 knew that it could not be securely provided for by any other 
 means. None of the native bankers at Hyderabad could have 
 commanded funds adequate to the purpose ; and even if the}'^ 
 could, their terms would have been much higher than those of 
 the present arrangement. 
 
 Both the 7)iinister and Messrs. Palmer and Co. tvcre atvare 
 that I considered the object to be one of considerable j)ubljc im- 
 portance, and certainly expected that I should give it the same 
 support, ivhich I have already been directed by the supreme 
 
 fovernment to give to the transactions of the house generally ; 
 ut there tvas no assurance or understanding, expressed or im- 
 plied, ivhich amounted to a guarantee, or tvhich could be possibly 
 construed into a pledge, that the Honourable Company tcould en- 
 
 • Hyd. Pap. !>. 12. 
 E 2
 
 /lO 
 
 force the fi 
 
 government 
 
 %lfiiment of the agreement on the part of the Nizayns 
 t. In order, however, to put this important point 
 
 L' ' ^ • » I. 1, 
 
 beyond the possibiHty of a misconception, I addressed Messrs. 
 Palmer and Co. on the subject. I have the honour to inclose 
 copies of my letter to them, and of their answer, which I hope 
 will be satisfactory to the Governor-General, and afford in- 
 formation on all the points on which it has been required. 
 
 I have, &c. 
 
 (Signed) Henry Russell, 
 • , Resident. 
 
 Mr. Russell's Letter to Palmer and Co., 22d April, 1819. * 
 
 Gentlemen : 
 
 In a despatch from the supreme government, in answer to 
 my report of the arrangement which has been made between 
 you and the minister for the payment of the regular and re- 
 formed troops in Berar, I have been directed to state, in what 
 degree my sanction was given to that arrangement ; whether I 
 considered that my guarantee was implied on the part of the 
 British government ; in what manner the liquidation of the 
 orders granted to you on the revenues of certain districts is 
 secured to you, and on what terms your advances are made. 
 
 It is my intention to state, in answer to these enquiries, that 
 the arrangement between you and the minister was framed 
 with my full knowledge and concurrence, and that I consider 
 you to have entered into it under the assurance of receiving 
 from the Resident that support, which is essentially necessary 
 to the security of your transactions of every description ; but 
 that no such guarantee was given or implied on the part of the 
 British government, as could either impose any pecuniary ob- 
 ligation on the Honourable Company, or require that they 
 should enforce the fulfilment of the Nizam's agreement. As 
 it is necessary, however, that the understanding on this im- 
 portant point should be perfectly distinct, I am desirous to 
 give you the opportunity of making any observations that 
 occur to you on the subject. 
 
 I have, &c. 
 
 (Signed) Henry Russell, 
 Resident. 
 
 * Hyd. Pap. p. l;j.
 
 53 
 
 Palmer and Co.'s Reply, 2Sih April, 1819.* 
 
 To H. Russell, Esq., Resident, &c. &c. &c., Hyderabad. 
 
 Sir : 
 
 We have the honour to acknowledge the receipt of your let- 
 ter, of the 22d April, communicating to us that you are 
 directed by the supreme government, to state certain particu- 
 lars regarding the agreement between the minister and our 
 firm, for the payment of the Nizam's regular and reformed 
 troops in Berar. In answer to these points, we beg to state, 
 that our agreement with the minister, having been made with 
 your full knowledge and concurrence, and for the promotion 
 of a public object of some importance to the Honourable 
 Company's government, which we believe could hardly have 
 been otherwise effected, we considered ourselves entitled to 
 receive from you the fullest support which you could give us, 
 by the exertion of your influence with the minister. We be- 
 lieve it is unnecessary for us to tell you, that we were by no 
 means influenced to enter into our engagements at Aurun- 
 gabad, with a view to any considerable pecuniary benefits. 
 We could have emploi/ed our capital more advantageously ; and 
 our principal object was, to recommend ourselves to the favourable 
 notice of the supreme government, by making ourselves useful in 
 promoting your public objects. 
 
 We have never understood, that a guarantee of any sort was 
 afforded to us by the British government, or that any pecuniary 
 liability whatever, on the part of the Honourable Company, 
 was involved, either in the encouragement which you gave to 
 the arrangement, or in the support which we expected from 
 you for our security in the conduct of it. But tvc must observe, 
 that in a country tvhere there are no regular courts cf judicature, 
 we never could have established an extensive mercantile concern, 
 ivithout the conviction that we should receive from the Resident 
 that support, which is essential to the transactions of any British 
 merchant in this country; and that we considered ourselves 
 justified in looking for that support, in consequence of the 
 letters which the supreme government was pleased to address 
 to you on the subject of our establishment. 
 
 We beg to add, that we have no security for the liquidation 
 of the orders granted to us on the revenues of certain districts, 
 beyond the good faith of the minister, and such an eventual 
 support from your influence, as, from the justness of our de- 
 mands, and the public utility of our agreement, you may deem 
 it proper to atibrd us. 
 
 * Hyd. Pap. p. 13. 
 K 3
 
 54 
 
 With regard to the terms on which our advances are made, 
 they will be most fully and distinctly exhibited by the enclosed 
 copy of the written agreement which was entered into with the 
 minister. 
 
 We have, &c. 
 
 (Signed) W. Palmer and Co. 
 
 Palmer and Co.'s Agreement with the Minister. * 
 
 Substance of a Wajibool submitted by Messrs. W. Palmer 
 and Co., to Rajah Chundoo Loll, consisting of eleven arti- 
 cles, with the Rajah's answers annexed to each article. 
 
 1. It will be necessary for the establish- 
 ment of a banking-house at Aurungabad, 
 with means competent to make a monthly 
 loan of two lacs of rupees, for the pay- 
 ment of the troops in Berar, that the 
 capital should not be less than 2,000,000 
 rupees ; for although the tunkhas are con- 
 sidered as becoming due quarterly, pay- 
 ment on them is not realized usually till 
 till the expiration of five months. 
 
 A?isiver 1. It is essentially necessary 
 that an establishment be formed at Au- 
 rungabad, for the payment of the troops. 
 
 2. It will be required that the minister, 
 in consideration of the loan of twenty -four 
 lacs of rupees, to be made within the 
 year, should grant tunkhas to the amount 
 of thirty lacs of rupees, the extra six lacs 
 being required to cover deficits in the 
 revenues, to cover interest, and to give 
 facility to the estabhshment to make the 
 required monthly payments. It is pre- 
 sumed that this arrangement, even, will 
 leave no balance, from the circumstances 
 enumerated, and from the delays in pay- 
 ment in favour of the minister. 
 
 Answer 2. In conformity to the requi- 
 sition of the House, tunkhas to the amount 
 of thirty lacs shall be annually assigned to 
 
 Note. — The best 
 tunkhas formerly grant- 
 ed to us were on Se- 
 reenewas Row and Ka- 
 ree Moongee Venkut 
 Row, and these Ta- 
 lookdars were allowed 
 one month's grace from 
 the time that the tunk- 
 ha became due ; and, 
 at the expiration of that 
 period, Soucars bills, 
 and private bills on their 
 own Fotedars, were 
 given by them, payable 
 at one month's sight. 
 Ruffat-ool Moolk, who 
 is the most regular Ta- 
 lookdar, pays in the 
 same manner the kist 
 due by him at the end 
 of the year, having still 
 a more protracted pe- 
 riod of payment. 
 
 • Hyd. Pap. p. 14, 15. 16.
 
 55 
 
 it. But such balances as shall remain 
 due to government, after the payment of 
 the principal sum advanced to the troops, 
 and interest on it, shall be carried out to 
 the accounts of the succeeding year. 
 
 3. Such portions of the tunkhas as shall 
 not have been paid at the expiration of 
 the third month of the following Fuslee 
 year, to be re-imbursed to the House by 
 a payment in cash at Aurungabad. 
 
 Ansiver 3. Tunkhas to an amount of 
 thirty lacs shall be given. Should a ba- 
 lance still exist in favour of the House, it 
 shall be paid in cash, three months after 
 the expiration of the year. The collec- 
 tions of the revenues of the districts in 
 Berar commence in Sawan and end in 
 Chyt. 
 
 4). It will be required that the minister 
 should furnish the best tunkhas, and that 
 the Aumils should be urged to adhere to 
 regularity in their payments, as it will 
 otherwise prevent the House, by a defi- 
 ciency of its funds, from making the pay- 
 ment with punctuality. 
 
 Ansvoer 4. The best tunkhas will be 
 granted, and the Talookdars shall be par- 
 ticularly directed to close their jiayments 
 within the year. 
 
 5. It will be necessary that every pos- 
 sible accommodation be given to the 
 House, in respect to the currencies which 
 it shall issue for the required monthly ad- 
 vances ; for, from the known deficiency 
 of a circulating medium, and the variety 
 of coins in circulation, it is apprehended 
 that the House may occasionally find it 
 impracticable to procure a particular cur- 
 rency ; and as specie is made on that ac- 
 count a marketable commodity, bearing a 
 fluctuating value in proportion to the 
 existing demand, it becomes necessary 
 that the House keep its accounts in some 
 fixed currency, to be hereafter deter- 
 
 E !•
 
 56 
 
 mined upon, and that entries upon the 
 score of premium and discount be ad- 
 mitted. 
 
 Ansiver 5. You are directed to pay the 
 troops in the coinage of Aurungabad and 
 Hyderabad, the halle zoolferaree, which 
 is the current coin of the country. If 
 you receive other currencies from the 
 districts, you will enter the difference of 
 exchange to the credit or debit of the 
 sircar. 
 
 6. That in the event of payments being 
 to be made to detachments at a distance 
 from Aurungabad by bills, the command- 
 ing officer be directed to receive pay- 
 ments from the House in specie, and ne- 
 gotiate his own bills, thereby saving the 
 house from incurring a responsibility on 
 the bills. If it be found convenient to pos- 
 sess the security of the House on this 
 transaction, that a charge of one per cent. 
 on del credere be allowed to it, on the 
 consideration of its being required to 
 cover it from an eventual loss. 
 
 Anstoer 6. The commanding officer may 
 take the money ; but if he receive bills 
 from the House, one per cent, shall be 
 allowed to it, besides the exchange which 
 such bills may bear. 
 
 7. To give facility and security to the 
 negotiation of its bills, the House will 
 endeavour to enter into correspondence 
 with Soucar's houses at all the consider- 
 able mercantile places. 
 
 Ansxver 7. Let the House establish a 
 correspondence to give facility to a nego- 
 tiation of bills. 
 
 8. Tliat the commanding officer be re- 
 quired to receive payments fifteen days in 
 advance, in such sums, not under ten 
 thousand rupees, as the House may find 
 convenient to make ; and that a period of 
 one month from the time oi the pay be- 
 
 This article becomes 
 necessary, as the House 
 is compelled to collect 
 specie whenever it can, 
 of which it has no means 
 of disposing.
 
 57 
 
 coming due, be granted to it, for com- 
 pleting its payments. 
 Answer 8. Agreed to. 
 
 9. As the establishment, for the em- 
 ployment of its funds must necessarily 
 engage in transactions unconnected with 
 the payment of the troops, it is requested 
 that the same protection, which is afforded 
 to the House at Hyderabad, be given to 
 its transactions at Aurungabad. 
 
 Answer 9. The same support which is 
 given to you here, will be afforded to you 
 there. 
 
 10. That Rajah Govind Buksh, to 
 whom a direct and frequent reference 
 will be necessary, be requested to afford 
 his protection to the establishment, and 
 to forward the views and traffic of the 
 House. 
 
 Answer 10. Rajah Govind Buksh shall 
 be directed to give his support to all your 
 transactions. 
 
 We have not been 
 able to engage in other 
 transactions, from cir- 
 cumstances connected 
 with Rajah Govind 
 Buksh's disposition to- 
 wards us, and from the 
 previous occupation, by 
 certain Soucars, of the 
 traffic of Berar, with 
 whom Rajah Govind 
 Buksh is supposed to 
 have a participation, as 
 we have before explain- 
 ed to Mr. Russell, and 
 we consequently suffer 
 an occasional loss from 
 an unoccupied capital. 
 
 11. That the House be permitted to 
 advance money to the troops, subject to 
 a limitation of the amount, by their im- 
 mediate commanding officer, and that 
 such advances be deducted from the 
 monthly stipulated payment. 
 
 Answer 11. As the advances will be 
 made with the permission of the com- 
 manding officer, he will be directed to 
 deduct the amount from their pay, and 
 give it over to you. 
 
 (Signed) W. 
 
 This arrangement 
 ])rincipally bears a re- 
 ference to the House, 
 to enable the men to 
 mount themselves. Cap- 
 tain Davies, the officer 
 commanding the re- 
 formed horse, has found 
 this arrangement a very 
 considerable accommo- 
 dation to the men of his 
 corps. 
 
 Palmer and Co.
 
 58 
 
 Mr.Russcirs Letter, I2th January, 1820.* 
 
 To C. T. Metcalf, Esq., Secretary to the Government, Fort- 
 William. 
 Sir: 
 I have the honour to acknowledge the receipt of your letter 
 of the 9th ultimo, conveying the instructions of His Excellency 
 the most noble the Governor-General on the subject of the pe- 
 cuniary arrangement between the Nizam's government and the 
 House of Messrs. William Palmer and Co. for the payment of 
 His Highness's regular and reformed troops in Berar. 
 
 No agents have ever been employed on the part of that 
 establishment, either in the collection of the revenues or in the 
 discharge of any other duties connected with the management 
 of the districts on which tunkhas have been granted by the 
 minister; nor should I, under any circumstances, have ad- 
 mitted of the exercise of any such interference, without the 
 express authority of the government- 
 
 I have, &c. 
 
 (Signed) H. Russell, 
 Resident. 
 
 On the 3d July, 1819, the subject was discussed in 
 council at Calcutta ; and on that day, in consequence of 
 Mr. Stuart's desire, (as he himself records in his minute of 
 10th November,) a reference was made to the Accountant- 
 Generalf " for his opinion as to the expediency of the 
 " arrangement in a financial view, with reference to the in- 
 " terests of the Nizam's government, and ultimately per- 
 ^' haps of that of the Company." 
 
 This gentleman's opinion, if such it can be called, was 
 given in a letter of 21st July:}:, and fully bears out Lord 
 Hastings in his subsequent regret and self-condenuiation, 
 for having permitted the reference to be made, and for 
 having (to use the words of His Lordship's minute ||) 
 " unfairly betrayed that gentleman beyond his depth." 
 
 * Hyd. Pap. p. 34. 
 
 t See the letter to Mr. Sherer, Hyd. Tap. p. \Q. 
 \ See Mr. Shercr's letter, Hyd. Tap. p. 17. 
 II Hyd. Pap. p. 32.
 
 59 
 
 Because the two letters of the Resident were laid before 
 tlie Accountant-general for the purpose of enabling him 
 to understand the questions submitted, he thinks proper 
 to dedicate twelve out of the thirteen paragraphs, of which 
 his letter consists, to matters totally distinct from the ques- 
 tion on which his opinion was or could have been required. 
 First, in utter ignorance that the house had received a 
 licence from the Governor-general in council, three years 
 before, exempting them, in the terms of the 37 Geo. III., 
 from its penalties, he is pleased to inform them, that the 
 parties are prohibited by that act, from having any pecu- 
 niary transactions whatever with the Nizam ; for, he adds, 
 that " he presumes, that had the house received such a 
 *' licence the circumstance would have been alluded to 
 " in the correspondence submitted to him." He next 
 solemnly intrudes his doubts on the political question, 
 whether a private house of business be a proper channel, 
 through which to make payments to the troops, and 
 further (assuming falsely such to be the fact) denounces the 
 danger of entrusting to persons, not under the control of 
 immediate authority, in a country where there are no regu- 
 lar courts of judicature, powers, which may be so easily 
 abused. What powers he assumes or alludes to, he does 
 not condescend to name. In point of fact, the house 
 neither had, nor exercised any powers whatever. After he 
 has, in his 12th paragraph, flijipantly denounced the ar- 
 rangement, as highly objectionable, the following words 
 contain the only answer he is pleased to give to the ques- 
 tion on which his opinion was asked. 
 
 " In a financial view I am unable to discover from this 
 " correspondence any necessity in the case." But he re- 
 commends that Messrs. Palmer and Co. should be desired 
 to furnish figured statements of the whole of their pecuniary 
 transactions with the Nizam's government under the ar- 
 rangement. 
 
 That Mr. Sherer should have taken upon himself, to
 
 60 
 
 volunteer his crude notions, as a counterpoise to the 
 opinion and authority of Mr. Russell, the Resident on the 
 spot, with all cause of local knowledge ; and that he should 
 have done this in a manner so indecorous, requires some 
 theory to account for. His letter is little short of a direct 
 and unqualified attack on the integrity of Mr. Russell. It 
 is a singular and remarkable coincidence, that Mr. Stuart, 
 whose groundless suspicions of Mr. Russell were after- 
 wards exposed by Lord Hastings, in full council, on the 
 9th October, 1819, should have been the person to call for 
 this opinion of the Accountant-general ; and should have 
 quoted that gentleman with such eagerness in his minute 
 of 10th November. * 
 
 The circumstances attending that exposure are not re- 
 corded in the minutes of council; but the unjust imputa- 
 tions, cast upon Lord Hastings by the Court of Directors 
 in their never-to-be-forgotten letter of November 1821, 
 drew from his lordship the following statement, as his 
 reason for not having placed them on the record of the 
 council book. 
 
 Extract from Lord Hastings Letter to the Chairman^ of 6ih 
 
 December, 1822-1 
 
 The charge against me rests upon my having adopted a 
 course of procedure, on grounds which I studiously, and almost 
 avowedly, withheld from the honourable court. As a basis 
 for that supposition, it is assumed that Sir William Rumbold 
 was examined before the council, regarding the particulars of 
 the dealings between the house of William Palmer and Co. 
 and the Nizam's government. No such examination took place: 
 of course, the suppression of information given by Sir William 
 Rumbold on that occasion is inaccurately presumed. It would 
 have been idle to require from Sir William Rumbold exposi- 
 tions already before the board in various documents, and sifted 
 in repeated discussions. The appearance of Sir William Rum- 
 bold was demanded by me, that I might put to him a single 
 question. To explain this, I am compelled to state the cir- 
 
 * Hyder. Pap. p. 2.5. 
 t'Hyd. Pap. p. 108, 109.
 
 Gl 
 
 cumstances of that sitting : I do it with pain, but I have no 
 option. 
 
 To all in this country it would be absurd to expatiate on the 
 character of John Palmer, Esq. ; but, since the statement is 
 meant for submission to the honourable court, it is not super- 
 fluous to mention, that the above gentleman is at the head of 
 the British mercantile interest in India, and that he is not 
 more distinguished by that pre-eminence, than by the strict 
 and manly cast of his uprightness. By the communication 
 which he has, on my requisition, made to the council, it ap- 
 pears that he had informed me of a very grave doubt expressed 
 respecting the probity of Mr. Russell. The suspicion pur- 
 ported no less, than that Mr. Russell had been secretly leagued 
 with the house of William Palmer and Co, in negociating the 
 Aurungabad loan, whence exorbitant profit was to be drawn 
 from the Nizam. It had long before been imparted to me 
 by several persons, that Mr. Stuart was strongly prejudiced 
 against Mr. Russell, through artful misrepresentations from 
 the father of a Moonshee whom Mr. Russell had dismissed 
 for malpractices ; but I had, till then, never imagined that 
 any one could listen to an imputation on Mr. Russell's in- 
 tegrity. Though I was entirely unacquainted with that gen- 
 tleman, all I had heard of his character made me confident 
 the surmise had been loosely hazarded. Nevertheless, when 
 such an accusation was hinted against a person holding an 
 important trust, a public duty obviously forbade my suffering 
 such an insinuation to sleep uninvestigated ; and I expressed 
 that sentiment energetically to Mr. Palmer, who was somewhat 
 reluctant to have it known that he had repeated Mr. Stuart's 
 observations. In consequence, I directed that Sir William 
 Rumbold should be requested to attend the council on the 
 morrow. I did not specify my object ; so that the summons 
 might have been expected to apply to a misapprehension on 
 the part of Sir William Rumbold, in correspondence about the 
 nature of accounts which the board desired should be laid 
 before it. On the entrance of Sir William Rumbold into the 
 council chamber, I moved that he should be put upon oath, 
 and be asked, whether, in the transactions above alluded to, 
 Mr. Russell had taken any step in concert with the house of 
 William Palmer and Co., by which he could, directly or in- 
 directly, participate in its profits ; or had any connection with 
 the house, whereby he could, immediately or remotely, com- 
 pass gain, other than the interest of any money of his own 
 which he might have lodged in their bank ? Mr. Stuart, then 
 a member of council, tvas evidently/ in the instant sensible of Mr. 
 Palmer's havinor communicated to me the conversation vohich 
 passed betiveen them. He started up, and eagerly objected to the
 
 62 
 
 proposition, on the ground that such a question jnit 2ipon record, 
 xvoidd be degrading to Mr. Russell, as exhibiting him in the light 
 of a person obnoxious to a suspicion, tvhich no man, tvho hicio his 
 character, ivoiddjbr a moment admit. I could not press mij mo- 
 tion liiithout justifying my pertinacity, by bringing fortvard the 
 language held to Mr. Palmer, so much at variance with the pre- 
 sent professio?is. I gave credit to Mr. Stuart for his having, in 
 the interval, satisfied himself that his conjectures tverc unjbunded ; 
 and I shrunk from distressing a gentleman thoroughly honour- 
 able, though too jjrone to listen to defamatory vnhispers. I said, 
 if it were understood in council that no doubt was e^itertained of 
 Mr. Russell's pmrity, I should not agitate the matter further. Of 
 course, the motion dropped. Sir William Rumbold, however, 
 complained strenuously of not being permitted to vouch, upon 
 his oath, that which he asserted on his honour ; namely, that 
 Mr. Russell had not (in the abovementioned transactions) any 
 connection with the house, or cognizance of its procedures, be- 
 yond what was involved in those references to him, of which the 
 particulars were necessarily laid before government. Beyond 
 what I have recited, any thing addressed to Sir William Rum- 
 bold, or started by him before the council, was incidental and 
 unconnected. It was intimated by me, that as Sir William Rum- 
 bold was before the board, he was open to be questioned on any 
 particular. If any interrogatory was put to him, it must have 
 been in a manner so light and so professedly colloquial, as that 
 there was no thought of reducing what passed in that manner 
 to writing ; but nothing of the kind is retained by my memory. 
 I am speaking of topics distinct from that which is represented 
 in a minute of mine on the occasion. As that minute was 
 transmitted home, and is commented upon by the honourable 
 court, its subject will not come within the description of in- 
 formation withheld. Sir William Rumbold's offer to wait upon 
 Mr. Stuart at his own house with the accounts was included in 
 that part of the discussion. Observation on that point shall 
 be reserved, till I shew it in context with matter which will 
 define its bearing. Reverting to the forbearance which has 
 entailed so rigorous a construction from the honourable court, 
 I may truly say, that if I acted improvidently for myself, in 
 not causing these particulars to be recorded on the proceedings 
 of Council, I still cannot regret a delicacy no less due to the 
 honourable court than to Mr. Stuart. No foresight could have 
 looked to the possibility of such an interpretation as I have 
 experienced. My having refrained from gratuitously obtruding 
 upon the honourable court a detail at once so superfluous and 
 so unpleasant, may perhaps now be thought not absolutely 
 blameable.
 
 63 
 
 The letter of Mr. Sherer is the first recorded attack on 
 the character of Mr. Russell. It is clear, that if the house 
 of William Palmer and Co. (//z<? notorious object of jea- 
 lousy^ because the members "were not in the Companies ser- 
 vice), were to be attacked, it was impossible to reach it, 
 without first destroying Mr. Russell's character for integ- 
 I'ity ; and, consequently, the value of his testimony in their 
 favour. That was necessarily therefore the first outwork 
 to assail or undermine. It is not, under the extraordinary 
 conduct of Mr. Sherer, difficult to believe, that he had 
 been made acquainted with and possibly attached full credit 
 to the poisonous suspicions which Mr. Stuart was bold 
 enough to express to Mr. John Palmer, of Mr. Russell's 
 corrupt connection with the house at Hyderabad. 
 
 It is singular that Mr. Stuart should have been so 
 anxious to have the opinion of Mi'. Sherer, as if he had 
 prophetically felt he should find a congenial view of the sub- 
 ject in that gentleman. 
 
 It has been shrewdly remarked, that those are the surest 
 prophets who are instrumental in fulfilling their own pro- 
 phecies. 
 
 In compliance with the recommendation of Mr. Sherer, 
 a letter was addressed to Mr. Russell, requiring the ac- 
 counts. * 
 
 Mr. Russell replied on the 15th Oct. transmitting them 
 with the letter addressed to him by Messrs. Palmer and Co. 
 
 Mr. Russell's Letter, 1 5th Oct. 1819. f 
 
 To C T. Metcalfe, Secretary to the Government. 
 
 Sir : 
 
 1. I have the honour to acknowledge the receipt of your 
 
 letter of the 4th ultimo, requiring figured statements of certain 
 
 parts of the pecuniary transactions of Messrs. William Pahner 
 
 and Co., under the arrangement made by them with the Ni- 
 
 * Hyd. Pap. p. 19. 
 t Hyd. Pap. p. '-'I.
 
 64 
 
 zam's government, for the payment of his highness's regular 
 and reformed troops in Berar. 
 
 2. I called on Messrs. William Palmer and Co. to furnish 
 those statements, and have now the honour to enclose a copy 
 of their answer, which contains detailed accounts of the whole 
 of their pecuniary transactions with the Nizam's government at 
 Aurungabad. 
 
 3. After the completion of the arrangement with Messrs. 
 William Palmer and Co. at Aurungabad, the necessity of which 
 had arisen principally from llajah Govind Buksh's declaration 
 of his inability to continue to provide funds for the regular 
 payment of the troops, Rajah Govind Buksh apprehending that 
 the removal of that branch of his authority would impair his 
 influence, expressed a wish to have the payment of the regular 
 infantry restored to him, and Messrs. Palmer and Co. imme- 
 diately declared their readiness to relinquish, in his favour, the 
 whole, or any part of the arrangement which had been made 
 with them. I communicated this proposal to Rajah Chundoo 
 Loll; but he declined a compliance with it, on the ground 
 that an efficient system having at length, with a great deal of 
 difficulty, been completed, he was unwilling to forego any part 
 of it, for the substitution of an arrangement which was not 
 only likely to prove inefficacious, but which, on its failure, 
 would occasion the renewal of similar embarrassments to those 
 from which he had just been extricated. I agreed in opinion 
 with the minister, and therefore communicated to Messrs. 
 WilHam Palmer and Co., that he declined availing himself of 
 their offer. . _ 
 
 I have, &c. 
 
 (Signed) H. Russell, 
 Resident. 
 
 Messrs. Palmer and Cos. Letter, I2th Oct. 1819.* 
 
 To Henry Russell, President, &c., &c., Hyderabad. 
 Sir: 
 
 1. We have the honour to acknowledge the receipt of your 
 letter of the 22d September, enclosing a copy of a letter from 
 Mr. Metcalfe to your address, dated the 4th of September. 
 
 2. We herewith have the honour to forward to you copies 
 (No. 1 to 3) of our accounts- current with the minister, includ- 
 ing a period of fifteen months, from the foundation of the 
 
 Hyd.Pap. p. 21, 22, 23.
 
 G5 
 
 establishment, and terminating with the end of" Ilamzaun, 1228 
 Fuslee year, corresponding with the 23d of July last. The 
 accounts-current include every item of" our transactions, and 
 will exhibit the advances in detail. 
 
 3. The charges of interest are shewn in the account-current, 
 and we also enclose copies of the interest accounts, from 
 No. I to 3, for the better information of government on the 
 subject. During the period of our transactions, we have had no 
 balances in our hands in favour of the Nizam's government. 
 If such balances had accrued against us, an interest of twelve 
 per cent, per annum would have been allowed, being the usual 
 rate of interest given by us on deposits in money. 
 
 4. Although the accounts- current exhibit the amount of 
 tunkhas realized by us, and the dates of realization, we beg, 
 for the information of government, to enclose a statement 
 (No. 5), exhibiting the full amount of tunkhas granted to us, and 
 the deficits of the collections, and consequent deficits of pay- 
 ments to us. 
 
 5. Although our accounts run for a period of fifteen months, 
 the minister was enabled, from the lateness of the season when 
 our arrangements were first made with him, to grant us tun- 
 khas for twelve month? only. The accommodation, therefore, 
 which was given by us to the government, of a payment in 
 excess for three months, has occasioned a considerable increase 
 of balance; and the Fuslee year 1228 having expired but on 
 the 4th of Zecad, or 26th of August last, the third article of 
 agreement has, as j'et, had no operation. The minister is, 
 however, preparing assets for the discharge of a considerable 
 portion of the balances against the government, according to 
 the terms of the agreement. 
 
 6. The advances have been made in the same currency in 
 which the payments from the talookdars have been received 
 by us, in the Halee Zoolferaree rupees, the present coinage of 
 the Nizam's government, at their mints of Aurungabad and 
 Hyderabad ; and the 5th article of the agreement has conse- 
 quently had no operation. 
 
 7. We beg to enclose, also, a separate paper (No. 4) exhi- 
 biting the remittances on which the sixth article has operated, 
 and the amount of premium received by us on that account. 
 We have collected the items from the accounts-current, which 
 we transmit. 
 
 8. We sincerely hope, that government will be satisfied with 
 the details with which we have had the honour to furnish 
 you ; and we beg to remind you, that subsequently to our 
 having formed the establishment at Aurungabad, for the ex- 
 press purpose of paying the troops commanded by officers 
 from the Company's service, we offered to resign the payment
 
 (56 
 
 in favour of Rajah Govind Buksh, the governor of Berar, whicli 
 was dechned by you- 
 
 9. We also beg to submit to the consideration of govern- 
 ment, that our establishment vk^as formed at Aurungabad, at a 
 time when the demand for money on the frontier was great, and 
 that we suffered a considerable loss in our remittances to that 
 place, and that ali subsequent returns have been made to us 
 at great disadvantage : the demand for money on the frontiers 
 being reduced, and our known wants for a speedy return of 
 cash to this capital, from our confining ourselves to govern- 
 ment transactions alone, occasioning constantly a reduction in 
 the rates of exchange against our remittances. It will, perhaps, 
 be necessary to explain, that the purpose we contemplated of 
 employing our money in other transactions at Aurungabad, 
 has been deprived of effect from local circumstances connected 
 with the stagnation of trade in Berar, and the indisposition of 
 Rajah Govind Buksh towards us, which have been brought 
 before under your consideration by us, and that we are occa- 
 sionally, in consequence, called upon to provide funds at Au- 
 rungabad, and to recall them as hastily. The extent of these 
 transactions, and the heavy loss incurred by them, can be ex- 
 hibited by us; and we have no hesitation in saying, that we 
 believe the amount cannot be far under thirty thousand Hy- 
 derabad rupees. The half per cent, agency allowed to us on 
 balances, may appear large; but we beg to state, that if these 
 losses, which must periodically occur, the charge of agency 
 according to the usual practice of English houses in India, 
 our charges of collections made from distant talookdars, and 
 the expense of a separate establishment for the purpose of 
 government alone, are taken into calculation, this arrangement 
 would be found to encroach even upon the rate of interest 
 charged by us ; and the minister seems to have contemplated 
 the heavy amount of the charges, in limiting us to a charge of 
 half per cent. only. We also beg to explain, that the accounts- 
 current closed to the end of Ramzaun, Fuslee 12'28, or the 23d 
 of July last, does not include the whole period of the Fuslee 
 year 1228, but as made up to that period for the information of 
 government, and is an open account. 
 
 We have, &c. 
 
 (Signed) W. Palmek and Co. 
 
 It i.s singular that althouoh Mr. Russell's letter is dated 
 the 15th Oct., and most probably reached Calcutta at the 
 end of the month, Mr. Stuart, in his minute of 10th Nov., 
 records it as a matter of coinj)laint against the Resident,
 
 67 
 
 that no answer has been retiimed to the requisition ior the 
 accounts. 
 
 In the meantinte, on the 6th Oct. Sir William Rum- 
 bold, a partner of the firm of William Palmer and Co., 
 being in Calcutta, and understanding that a requisition to 
 the foregoing effect had been despatched to Hyderabad, 
 requested from the secretary to government, a copy of the 
 same, and on its receipt, he objected, as a mercantile man, 
 to be subjected to such an improper demand, from any 
 authority whatever, in the following letter. 
 
 Letter from Sir Wm.RumboId, 1th October, 1819.* 
 To C. T. Metcalfe, Esq., Secretary to Government. 
 
 Sir, 
 
 I have the honour to acknowledge your letter of this date, 
 enclosing a copy of the enquiries which the Governor-general 
 in council has directed to be made from Messrs. William 
 Palmer and Co., and to which I am authorized to reply. I re- 
 gret extremely, that our answer to Mr. Russell, when he 
 formerly addressed us upon the subject, has not been deemed 
 sufficiently explanatory. 
 
 I request you will submit to the consideration of the Gover- 
 nor-general in council, that, as mercantile men, we could not 
 with propriety furnish copies of our accounts with our consti- 
 tuents ; that such a measure would be higlily injurious to our 
 affairs, and destroy the confidence which the public repose 
 in us. 
 
 We did not conceal any part of our transactions widi the 
 minister from Mr. Russell, when he formerly called upon us, 
 in consequence of tlie letter addressed to him by the Secretary 
 to government, and we are at all times ready to afford him 
 similar information. We feel so confident that there is no part 
 of our engagements with the minister which is not unexcep- 
 tionable, that we trust the Governor-general in council will 
 pardon our earnest request, that he will relieve us from llie 
 painful state of anxiety in which we are now placed, which is 
 very injurious to our affairs, and may destroy much of the con- 
 fidence we have acquired from the public. 
 
 I have, &c. 
 
 (Signed) W. Rumbolo. 
 
 * IIv<l Pap. p. 20. 
 
 F '1
 
 68 
 
 Letter from the Secretarij to Sir WiU'ntm Riimhoid, Bart.* 
 
 Sir, 
 
 1. I have had the honour of receiving and submitting to the 
 Governor-general in council your letter of yesterday. 
 
 2. I am "directed to observe, that you have not been called 
 on to furnish copies of your accounts with your constituents; 
 but merely a copy of your account with the Nizam's govern- 
 ment, respecting a particular arrangement of a public nature, 
 sanctioned by the Resident, and submitted by him to the notice 
 of government. 
 
 3. The Governor- general in council requests that you wil! 
 be in readiness to wait on His Lordship in council to-morrow. 
 
 I have, &c. 
 
 (Signed) C. T. Metcalfe, 
 Council Chamber, Secretary to Government. 
 
 8th October, 1819. 
 
 In obedience to the foreiroino; letter, Sir Wm. Rumbokl 
 attended at the council-board on the 9th of October ; and, 
 in consequence of wliat passed on that day, the following- 
 letter of the same date was dispatclied to Hyderabad, re- 
 calling the orders issued to demand the accounts of the 
 House. 
 
 To Henry Russell, Esq., Resident at Hyderabad. 
 
 Sir, * 
 
 With reference to my letter of the Hth ult. respecting the 
 pecuniary arrangement between the Nizam's government and 
 the house of Messrs. W. Palmer and Co., for the payment of 
 the Nizam's regular troops, I am directed to apprise you that 
 the accounts therein called for are not required ; and that the 
 Governor-general in council does not propose to take cogni- 
 zance of that arrangement, furtlier, than to prevent any inter- 
 ference on the part of the house, or of any native agent be- 
 longing to that establishment, in the collection of the revenues, 
 or in any other branch of the management of the districts as- 
 signed, under the agreement of the parties ; for which purpose 
 you are directed, if ever it be necessary to interpose your in- 
 fluence and authority. It ma}' be proper to add, that such 
 
 * Hyd. Pap. p. 30. 
 
 * Hyd. Pap. p. 21.
 
 inter t'ereiKe on the part of the house is not understood to be 
 a part of the agreement, and is not supposed to have been in 
 contemplation of either party. 
 
 I have, Sir, &c. 
 
 T.Metcalfe, 
 
 Fort-William, Secretary to Government. 
 
 9th Oct., 1819. 
 
 The accounts had, however, been already transmitted to 
 Calcutta, and luid crossed tiie foregoing letter on its route 
 io Hyderabad. They were circulated for one month 
 amongst the members of council, and were then returned 
 to Hyderabad. Mr. Metcalfe announced that circumsUmce 
 io Sir Wm. Kumbold in the following letter. * 
 
 To Sir Wm, Rumbold, Bart. 
 
 " Mv deiir Sir William, 
 
 " Befoi'e you receive this, you will have found the ques- 
 *' tions contained in your letter of the 14th ult. fully 
 *' answered at Hyderabad. After a little discussion it was 
 *' determined that, consistently with the resolution of 
 *' government not to take cognizance of your arrangement 
 *' with tlie Nizam, there was no pleji for scrutinizing and 
 *' recording the accounts ; they are, therefore, returned to 
 *' Hyderabad, after passing in circulation among the mem- 
 *' bers of government. I hope, and believe, that the ques- 
 " tion is at rest ; and I do not see any probability of a re- 
 '"' vival of any correspondence on the affairs of the House 
 " at Hyderabad, unless it originate there. 
 
 " (Signed) C. T. Metcalfe." 
 " Barrack pore, 
 
 *' 3d Feb. 1820." 
 
 It has been already observetl, that there is no record of 
 
 Hyd. Pap. p. 735.
 
 70 
 
 wluit passed in council on ihe 9th October, wlien tSir Win. 
 Rumbold attended ; but both Mr. Stuart and Lord Hastings 
 allude to it in their several minutes of the 10th November 
 which follow. 
 
 Mr. Stuart's Minute, dated 10th November. * 
 
 The Board are aware, that from the time we received the 
 Resident at Hyderabad's report of the arrangements concluded, 
 under his sanction, between the NizaniV government and the 
 House of Messrs. William Palmer and Co., I have been strongly 
 impressed with the propriety and expediency of procuring 
 fuller information on the subject, before we committed the 
 government, by any approbation, either express or tacit, of 
 the plan. 
 
 Ill t/ie discussion of the question it has been suggested, that such 
 an inquirij ivould be an undue interference xi:ith an independent 
 government, tvhich is free to conduct its internal administration 
 according to its oivn discretion ; that having, in the exercise of 
 its independent powers, and for its own convenience and ac- 
 commodation, entered into pecuniary arrangements with 
 Messrs. William Palmer and Co., the Britisli government have 
 neither title nor motive to enquire into the transaction. 
 
 If I could admit the facts upon which that view of the sub- 
 ject is founded, I should still feel myself obliged to oppose the 
 conclusion. 
 
 Admitting the Nizam's government was, with respect even 
 to its internal administration, in the full exercise of an inde- 
 pendent authority, I shotdd still have thought, that this govern- 
 ment had a right to ask an account of any transaction bcfiveen a 
 native allied government and British subjects ; and I should have 
 further thought, that this government had a clear and power- 
 ful motive for enquiry, xvhen it found British subjects in posses- 
 sion of assignments upon the revenue of a native prince, to the 
 annual extent of thirty lacs of rupees. 
 
 But I acknowledge I have fallen into great errors, if the 
 Xizam's government be in the free exercise of its internal ad- 
 ministration. 
 
 Should I have formed a conception, in any degree accurate, 
 of the state of that wretched and distracted government and 
 country, it is this: — The imbecility and perversencss of the 
 reigning prince have compelled the British government, in 
 effect, to set him aside, while the government is carried on 
 
 Hydcr. P;ii<.
 
 71 
 
 witli despotic authority by a minister, who is the creature oi' 
 British inHuence, and wholly and entirely dependant on the 
 British power. 
 
 The extract which I have annexed to this minute, from a 
 despatch addressed by the Resident, in June, 1817, to Sir 
 Thomas Hislop, will vouch for me, that I have not overcharged 
 the picture. 
 
 The transaction out of which this discussion has arisen, 
 affords, in itself, the fullest evidence of that state of things. 
 
 The following account by the Resident, extracted from the 
 same despatch, of a part of the troops for which the arrange- 
 ment is intended to secure funds, will shew, that there has not 
 been nmch scruple in interfering with one branch of the 
 Nizam's government, to wit, the organization and control of its 
 military forces. 
 
 When the Resident described the Russell Brigade as belong- 
 ing to the Nizam's government in name alone, he must have 
 meant to speak of power, authority, control ; all the privileges, 
 in short, of a government over its own forces. The Resident 
 knew that the charge of those troops falls upon the Nizam's 
 government alone, and must be no inconsiderable burthen upon 
 his exhausted and impoverished dominions. 
 
 The slightest attention to the Resident's reports will evince, 
 that the arrangements concluded with the Nizam's government, 
 for securing the pay of these troops, have been throughout 
 the fruit of British influence ; that the plan originated with 
 Captain Sydenham, the British agent at Aurungabad, was first 
 proposed to the minister by the Resident himself, and was evi- 
 dently pressed in a manner not to be resisted. " That arrange- 
 " ment,'' says the Resident, in his letter of the 28th April, 
 1819, " was first suggested by Captain G. Sydenham to Messrs. 
 " Palmer and Co., proposed by them to me, and mentioned by 
 " me to the minister. The discussions which took place upon 
 " the subject of it between Messrs. Palmer and Co. were car- 
 " ried on with my full knowledge, and the conclusion of the 
 " arrangements had my entire concurrence, as I considered 
 " that the punctual payment of the regular and reformed 
 " troops was indispensable to their efficiency, and as I knew 
 " that it could not be securely provided for by any other 
 " means." in his first letter upon the subject, under date the 
 '3lst December, 1818, reporting the arrangement, the Resident, 
 after observing upon the difficulties which had arisen in pro- 
 viding funds at Aurungabad, proceeded to state : " In conse- 
 " quence of the repeated representations which I made to 
 " Rajah Chundoo Loll on this subject, and the importance 
 " which he saw I attached to it, as the very foundation of the 
 " efficiency of the whole establishment, he entered into an 
 
 I- !■
 
 7'2 
 
 " arrangement with the House of Messri?. William Palmer and 
 " Co. of Hyderabad, by which they have engaged, on the 
 " security of orders to be granted on the revenue of certain 
 " districts in Berar, to provide the monthly sum of two lacs of 
 " rupees," &c. &c. 
 
 Upon tiie strength of these extracts, I feel myself entitled to 
 assume, that with respect to these troops, at least, this govern- 
 ment need not Jiave been restrained by any apprehensions of 
 an indiscreet or unwarranted interference in the concerns of 
 the Nizam's government, from instituting any inquiry which 
 might have been deemed expedient. In my judgment, the sole 
 question could be, whether the government had suHicient 
 grounds for interposing. 
 
 But that was a point on whicli I could not bring myself to 
 doubt. JF//en the Resident had, tvith ali tli'i weight of the British 
 influence, pressed an arrangement upon the native state, it ap- 
 peared to vie that he xvas hound by solemn obligations of duty, to 
 pay the most zealous attention to its interests, to demonstrate, 
 ill a manner beyond all doubt or suspicion, that the measure had 
 originated, and tvas prosecuted from no other inotix'es than a dis- 
 interested regard for the ivetfare of that government. In like 
 manner I judged, that when the arrangement was reported to 
 this government, we were bound, by obligations ecjually cogent, 
 to satisfy ourselves that the Resident had fully and carefully 
 performed that duty. 
 
 I must do the llesidcnt the justice to observe, (hat he ap- 
 pears to have viewed tiie matter in the same light. He is far 
 from holding up the arrangement as a spontaneous uribiassed 
 act of the Nizam's government, into which he, as the British 
 Resident, had no right or motive to cncjuire. He exj>lains the 
 i'ollowing passage of his letter, dated the '28th April, 1819, that 
 lie sanctioned the measure, because he regarded it, under all 
 the circumstances, to be advantngeous ; " as I considered 
 that the punctual [)ayment of the regular and reformed troops 
 was indispensable to their efficiency, and as I knew that it 
 could not be securely provided for by any other means. 
 None of the native bankers at Hyderabad could have com- 
 manded funds adetpiate for the purpose; and even if they 
 " could, their terms would have been much higher than those 
 " of the present arrangement." Unfortunately, hoivcvcr, the 
 information which the Resident lias furnished is too imperfect to 
 enable this government to form a satisfactonj Judgment on the 
 merits (fthe arrangement, and is, in fuel, moue calculated to 
 
 EXCITK THAN RELIEVE ANXIETY. 
 
 The circumstance, that at a capital like Hyderabad, native 
 bankers cannot be found possessing adequate funds to make 
 an ailvance to (he government of two lacs o^ rupees monthly,
 
 73 
 
 secured upon the growing revenue of the country, and the 
 consequent utter dependance of the Resident and the Nizam's 
 government, for the payment of the troops, upon the only 
 British house of agency estabhshed in the country, is in itself 
 sufficiently extraordinarij and alarming. The terms which, ujmii 
 common mercantile principles, a mercantile house possessing such 
 an advantage over a government ivill demand, must be a natural 
 SUBJECT OF SOLICITUDE AND ENauiRY. But the Resident has en- 
 tirely failed to mention the terms ; and in the communication of 
 the house the same omission is apparent. All the information tve 
 have from the Resident on that important point is, that if native 
 bankers coidd have commanded funds, their terms tvould have 
 been much higher than those of the British house. We have no 
 means of knoiving that those terms are not ruinous, but the as- 
 surance only, that they are less than would have been extorted 
 by native bankers. 
 
 It certainly did very forcibly strike me, that the duty of this 
 government could not permit us to sanction a transaction of 
 this nature, while we were left in such complete ignorance of 
 all the particulars essential to a just appreciation of its merits, 
 and ivhile all that did appear was calculated to aivaken solicitude 
 and doubt. 
 
 With that impression, I suggested that the government should 
 recur to the assistance of tlie accountant-general, whose ex- 
 perience in such matters would enable him to offer the go- 
 vernment valuable suggestions on the bearing and tendency 
 of the proposed plan, and in particular, to indicate any points 
 on which further information might be requisite, in aiding the 
 government to come to a right conclusion. 
 
 The accountant-general having in consequence been called 
 upon, that officer, in a report recorded on our proceedings of 
 the 4'th September last, submitted his reasons for thinking the 
 plan highly objectionable ; and stated, that he was unable to 
 iliscover from the correspondence ani/ necessity in the case in a 
 Jinancial point of view. 
 
 The accountant, however, indicated some points for further 
 inquiry as proper, with the view of enabling the government 
 to arrive at a more satisfactory decision than was practicable 
 with the information previously submitted. He suggested, 
 that the house should be required to furnish figured statements, 
 showing the sums paid by them in advance to the Nizam's 
 govermnent from time to time ; the interest thereon charged 
 and received by them, specifying dates ; the tunkhas, or as- 
 signments, received and realized by them, specifying dates ; 
 the payments made to them in cash at Aurungabad, under the 
 third article of their agruenicnt ; the discount and premium 
 on dillercnt currencies admitted under the filth article of the
 
 74 
 
 agreement; tlie j)reiiiiuiii on bills admitted under the sixth 
 article of the agreement. 
 
 The government acceded to the accountant-general's propo- 
 sition, and the necessary call was made upon the Resident. 
 
 But no ansiver has been received from the Resident ; and the 
 government has now seen lit to cancel its former resolution, 
 and to inform the Resident that the statements required, ac- 
 cording to the accountant-generals suggestion, are no longer 
 wanted ; that the governor-general in council does not propose 
 to take cognizance of the arrangement, further than to prevent 
 any interference on the part of the British house or its native 
 agents, in the collection of the revenues, or in any other branch 
 of the management of the districts assigned under the agree- 
 ment of the parties : for which purpose the Resident has been 
 directed to interpose his influence and authority. 
 
 After the strong feeling upon the question which I have repeat- 
 edhf expressed, and which, I fear, I urged npon the Board xvith 
 too much importuniti/, it was to be anticipated that I should 
 require some very important novel information, or some very 
 powerful novel arguments, to ettect a change of my opinion, 
 and to bring me to acquiesce in the abandonment of that, 
 which appeared to me the wise and prudent resolution of the 
 government, to withhold its sanction from the arrangement 
 until it had been thoroughly sifted. 
 
 There is before the government, no new information or 
 reasoning upon the subject, other than is comprehended in a 
 letter from Sir William Rumbold, one of the partners of the 
 house, dated 7th October. Hut Sir William also attended the 
 council in person, and entered into explanations on the subject 
 of the arrangements. 
 
 No minute having been made of Sir William Rumbold's 
 personal communications, they do not appear on the records 
 of government : all I can say of them, therefore, is, that they 
 did not, in my judgment, tend to shake, in the slightest degree, 
 the public grounds on which the government had decided to 
 oall for more accurate information. 
 
 In Sir William Rumbold's letter, that requisition is taken up in 
 an entire new light. It is represented as being injurious to the 
 reputation and interests of the house. The objection is thus 
 stated : " As mercantile men, we could not with propriety 
 " furnish copies of our accounts with our constituents ; such 
 *' a measure would be highly injurious to our affairs, and 
 '* destroy the confidence which the public repose in us." 
 
 I am sure that the board will recollect the surprize which 
 that intimation excited when we first received it. We were 
 (juite at a loss to conceive in what manner the production of 
 ligured statements, comprising particulars of a pecuniary
 
 "15 
 
 arrangement concluded witli the Nizam's minister, under the 
 sanction of the Resident, for the public service of the Nizam's 
 government, could be thought to involve a disclosure of the 
 affairs of the constituents of the house, and a breach of private 
 confidence. We had not imagined that, in speaking of their 
 constituents, Sir William Rumbold could possibly have alluded 
 to the Nizam's government. 
 
 In the reply of the government, of date the 19th of October 
 last, Sir William Rumbold was accordingly reminded, that the 
 house had not been called on to furnish the accounts of their 
 constituents, but merely their account with the Nizam's go- 
 vernment. 
 
 Sir William Rumbold, however, xuhen he attended the board, 
 explained that he had meant to include the Nizam's government 
 among those constituents, whose accounts the house could not 
 lay open to the government without an injurious breach of 
 confidence. 
 
 I should be sorry to treat too lightly a representation from 
 respectable individuals, professing to maintain their rights and 
 interests ; but I acknowledge, that antecedently I could not 
 have brought myself to believe that such an objection would 
 have been seriously urged. 
 
 The slightest attention to the circumstances in which the 
 house stands, relatively to this government and to the Nizam's 
 government, will, it appears to me, suffice to appreciate the 
 validity of their plea. 
 
 The house of Messrs. William Palmer and Co. was estab- 
 lished v/ithin the dominions of the Nizam, undei* the special 
 sanction of the British government. They admit throughout 
 the correspondence, that they could not conduct their mer- 
 cantile concerns in that country a day, or an hour, without the 
 protection of the British representative ; and they state, that 
 but for their reliance on that support, they could not have 
 ventured to engage in the arrangements which form the present 
 subject of our deliberations. 
 
 But further, the abuses experienced in pecuniary transac- 
 tions between native states and British subjects have created 
 so great a jealousy of all such concerns, that by an act of the 
 legislature, the engaging in them, without the special licence 
 of the Indian governments, has been constituted a criminal 
 offence. 
 
 It is, therefore, by a special dispensation from the penalties 
 of that statute, granted by thi.s government, that the house of 
 Messrs. William Palmer and Co. have been enabled to enter 
 into any pecuniary transactions with the Nizam's government; 
 and the instrument by wliicii the dis])ensation was granted, 
 comprehends a clear and distinct condition, that the hou?e
 
 76 
 
 should, at all times, when required so to do by the Resident at 
 Hyderabad, for the time being, communieate to the Resident 
 the nature and objects of their transactions with the govern- 
 ment on the subject of the Nizam. 
 
 Sir William Rumbold has, in his letter, dwelt with some 
 emphasis upon the willingness of the house to disclose to the 
 Resident any part of their transactions with the minister. 
 The faith due to constituents, then, was no impediment to any 
 disclosures to the Resident : It is to be opposed only to the 
 demand of this government for information ! But are the 
 house prepared seriously to urge, that, because the British 
 representative at the court of Hyderabad was indicated to the 
 house, as the person who was to exercise immediate control 
 over their conduct, and to whom they were bound to com- 
 municate all their transactions with the native state, this go- 
 vernment, therefore, meant to abdicate their right, and their 
 duty of satisfying themselves that the control was duly exer- 
 cised, or of requiring from the Resident, or the house, any 
 information which might be deemed necessary to that end? 
 
 When the house of Messrs. William Palmer and Co. were 
 applying to this government for the dispensation, they appeared 
 fully sensible of the obligations which it implied. They were 
 conscious that it was their duty to be prepared for the most 
 thorough exposure of their concerns witli the Nizam's govern- 
 ment, not merely to the Resident, but, whenever required, to 
 this government, whose representative the Resident is, and 
 from which all his powers and authority, in this as in every 
 other respect, are derived. 
 
 The following passage is copied from the memorial of the 
 house, recorded on the proceedings of the government of the 
 23d July, 1816. " We entreat that your lordship in council 
 " will, in pursuance of the power vested in you, exempt us 
 " from any penalties which we might be subject to under the 
 " act of parliament, provided that whatever transactions we 
 " may have with the Nizam's government shall be such as 
 " will be approved of by the British government. We conceive 
 " ourselves to stand essentially wide of what was in the pur- 
 " pose of the legislature, though we now find it doubted, 
 " whether the letter of the provision might not reach us. We 
 " believe that the penalties we allude to were imposed by act 
 " of parliament, with a view to prevent European subjects 
 " from acquiring privately too much influence at native courts, 
 " and from taking advantage of the necessities of native go- 
 " vernments, to extort exorbitant interest from them. We 
 " feel confident that our transactions cannot lead to either of 
 " these objects, and that their immediate operation has no 
 " taint of that quality ; so that we are precisely in the situation
 
 77 
 
 '* which the act contemplated, in giving power to the governor- 
 " general in council to exempt from the penalties. Our 
 " transactions have always been open and public; and when- 
 " ever we have considered them as connected with the so- 
 " vernment, they have been directly with the minister, who 
 " possesses the confidence and support of the British govern- 
 " ment." The contrast of the language held by the house on 
 the present occasion is remarkable. Having procured assign- 
 ments on the Nizam's revenues, to the annual extent of thirty 
 lacs of rupees, and having been called upon by this government 
 to furnish statements, requisite to enable us to form a judg- 
 ment upon the propriety of the arrangements connected with 
 that assignment, the house have thought fit to replj^ that their 
 reputation and interests would suffer if they were to disclose 
 the concerns of their constituents. 
 
 So far, therefore, as the opposition on the part of the house 
 might influence the question, I am constrained, after the most 
 careful reflection upon the facts and circumstances which 1 
 have detailed, to regard their objection as destitute of all rea- 
 sonable foundation. 
 
 After all, and supposing, for the sake of argument, that the 
 plea of the house could be admitted, I apprehend that there 
 could not be the slightest difficulty in procuring the desired 
 information throuijih the Nizam's sjovernment. Attending to 
 
 CD CD cD 
 
 the general influence which the Resident possesses over the 
 minister, and to the origin and attendant circumstances of the 
 particular transaction, it would be unreasonable to imagine 
 that Rajah Chundoo Loll could have any objection to furnish- 
 ing any information respecting it, which the Resident, or this 
 government, might desire. 
 
 It is always to be remembered, that the former resolution 
 of the government, of which I am the feeble advocate, was 
 not confined to inquiry, and pledged the government to no 
 ulterior cause, and was quite consistent with the measure of 
 permitting the arrangement to proceed, if ultimately deemed 
 to be expedient. Yet the Board are aware, that I have never 
 viewed the particular arrangement as an insulated transaction; 
 but, in discussing the question, have submitted to their judg- 
 ment considerations connected with the state of the Nizam's 
 dominions, and the situation of the house of Hyderabad, whicli 
 appeared to me of general importance. Throughout the cor- 
 respondence, the house will be seen, as I have already stated, 
 to weigh on their dependance upon the protection of the 
 British Resident. In their letter of the 25th April, 1819, sent 
 with the Resident's letter of the 29th of April following, they 
 observe: " In a country where there are no regular courts of 
 ■* judicature, we never could have (established an extensive
 
 78 
 
 •' mercantile concern, without the conviction that we should 
 " receive from the Resident that support, which is essential to 
 " the transactions of any British resident in this country; and 
 *' that we considered ourselves justified in looking for that 
 " support, in consequence of the letters which the supreme 
 " government was pleased to address to you on the subject of 
 " our establishment." What may be the nature of the assist- 
 ance which the Resident has afforded, is not particularly 
 explained. But the misfortune is, that in the disorder and 
 distractions of that unhappy country, it is too certain that 
 there can be no equal justice. More or less than justice is 
 the alternative. A single British house, which, through the 
 irresistible influence of the British Resident, can always com- 
 mand justice, may be said to possess a monopoly of that pre- 
 cious article ; and that monopoly must draw, in its train, a 
 monopoly of the moneyed concerns and traffic of the country. 
 The facts already before the government lead to the conclu- 
 sion, that the house already enjoy a monopoly of the money- 
 market at the capital. It is clear that none of the native 
 l)ankers dare trust the Nizam's government; and if they have 
 funds to lend, they are probably obliged to advance them 
 through the agency of the house. We may observe, also, that 
 the house is extending the system over the country. With 
 the large assignments on the land revenue whicli they have 
 obtained, they have connected the establishment of a bank at 
 Aurungabad, and they contemplated a correspondence with 
 Soucars at all the principal mercantile places. From the note 
 on the ninth article of the Minute of Agreements annexed to 
 the house's letter to the Resident of the 25th April, cited 
 above, it will be remarked, that the house had already come 
 into collision with certain Soucars who had pre-occupied the 
 traffic of Berar, and with whom Rajah Govind Buksh, the 
 Nizam's chief officer in that province, was supposed to be in 
 participation, and that the house expected the support of the 
 Nizam's government in this contest. Their concerns will tJius 
 pervade the whole country, M-ith the same predominating in- 
 fluence which they possess at the capital. This is a state of 
 things which 1 cannot regard without uneasiness. If present 
 circumstances are adverse to attempting a reform of the dread- 
 ful abuses which exist in the administration of the Nizam's 
 "•overnment, it is at least to be earnestly deprecated, that his 
 iiighness's suffering subjects should see British subjects exten- 
 sively engaged in the system, and largely profiting by its weak- 
 ness and corruption. 
 
 I had, indeed, indulged in more propitious anticipations. I 
 had cherished the hope, that by a more equable and benign 
 exertion of our influence, we nn'ght extend (he blessings of
 
 79 
 
 order and justice to the whole country ; that we might thus 
 redeem the British government from the odium of tolerating, 
 in dominions where our power and influence are confessedly 
 uncontrollable, evils of mal-administration, which I believe to 
 be as great as any that prevailed in the worst of the native 
 governments, which it is the boast of our policy to have cor- 
 rected. 
 
 I am very sensible of the difficulty of such reforms, when 
 they are to be accomplished by the mere exertion of in- 
 fluence, and I am not over credulous to the sudden ameliora- 
 tions often ascribed to that species of interposition ; but I fear 
 that, in the Nizam's dominions, the evil is too urgent to admit 
 of choice. The Resident, at a former period, has declared, 
 that the utter ruin of the country can be averted only by the 
 direct assumption of it; and if we are not prepared to resort 
 to that extrenuty, the attempt to correct the most prominent 
 abuses by the exertion of our influence, seems to be the only 
 practicable alternative. 
 
 (Signed) James Stuaht. 
 
 Lord Hastings' minute.* 
 
 Uncertain whether I accurately conceive the object of Mr. 
 Stuart, in recording his minute of this date, it is with some 
 doubt that I comment on it. Imagining, however, that it ad- 
 dresses itself to a short remark which I lately made, in writing, 
 relative to the transactions between the Hyderabad minister 
 and the house of Palmer and Co., I feel that it would not be 
 right to let Mr. Stuart's minute pass without attenlion, though 
 what I can say will be little more than amplification of what I 
 have already stated. 
 
 On the inherent right of this government to take cognizance 
 of any conduct in its subjects which may affect the interests 
 of the Honourable Company, no man can entertain a doubt: it 
 ~is only on the mode of exercising that right, as referable to 
 equity or expedience, that there can be a question. Before I 
 examine how that consideration bears on the present subject, 
 I must be allowed a preliminary observation. 
 
 Mr. Stuart indulges in lamentation on the disastrous condi- 
 tion of the Nizam's government. I not only join in that la- 
 mentation (though possibly with a more measured contem- 
 plation of the circumstances), but I have preceded him with 
 
 riyder. Pap. j). 30, 31, 3^, 33, 34.
 
 80 
 
 expression of regret. I furtlicr concur with Mr. Stuart, that 
 much of the disorder might perhaps be justly ascribed to the 
 nature of our interference. This I have before professed, 
 declaring my solicitude to correct that evil. The sincerity of 
 such an inclination, on my part, will be credited, if advertence 
 be given to my having actually restricted the Resident at 
 Lucknow from meddling, in any ordinary instance, with the 
 internal government of Oude; a policy, the results of which 
 have been sufficiently encouraging, to recommend its adoption 
 in any parallel case. But I have stated distinctly, that there 
 are peculiarities respecting the government of Hyderabad, 
 which entirely, for the present, preclude the applicability of 
 this system. Mr. Stuart does not attempt to show that this 
 opinion is erroneous, yet he launches out into an expatiation 
 which seems altogether inapposite, if it does not mean to im- 
 peach this government for suffering the continuance of an abuse 
 corrigible at its pleasure. 
 
 The abuse is not corrigible at our pleasure. The obstacle 
 exists in the personal character of the reigning prince. A 
 constitutional irregularity of mind, approaching to derange- 
 ment, and an evinced propensity to yield himself to the wild 
 councils of the ignorant, profligate parasites about him, make 
 it quite certain, that were the existing control over him sud- 
 denly withdrawn, his country would soon fall into convulsion. 
 This is so clearly seen by others as well as by me, that I am 
 much misinformed if the government of Fort St. George have 
 not disclosed the sentiment, how far more advisable it would 
 be for the Resident not to assist the Nizam's government, but 
 let it come to an otherwise inevitable dissolution, whence con- 
 siderable benefit might be attained by that presidency. Dif- 
 fering widely as to the advantages of such an event, I must 
 uphold the state of Hyderabad, by such means as are practi- 
 cably capable of being directed to the purpose, though they 
 be not of the exact fashion I should desire, and, in this, I 
 believe myself to consult essential justice, not less than the 
 interests of our honourable employers. 
 
 The establishment of the reformed troops in the Nizam's 
 service is noticed by Mr. Stuart, in a manner which appears 
 to imply a disapprobation of the plan. It is perfectly true, 
 that those troops are, in fact, more ours than those of the so- 
 vereign by whom they are maintained. Although paid by the 
 Nizam, and nominally appertaining to his highness, their habit 
 of receiving their stipend through us, and of being commanded 
 by British officers, leave room for the expectation, that in any 
 rupture between the states, they would side with us against 
 their ostensible master. Now, would it be consonant to wis- 
 dom, or to the trust reposed in us by the Honourable Com-
 
 81 
 
 pany, that we should sacrifice such a security to a casuistical 
 point of equity ? I call the point casuistical, because it is 
 wholly gratuitous to represent the arrangement as being im- 
 posed on the Nizam against his secret wishes, there never 
 having been the slightest indication of a sentiment adverse to 
 the measure on his part: therefore, the acting upon it would 
 be palpably to act upon an abstract conception. The esta- 
 blishment has gradually grown to its present size, and linked 
 itself with us, not from any antecedent project, but from the 
 course of events. A force, of a quality more operative than 
 the irregular troops of the Nizam, was wanted to reduce to 
 obedience the refractory Zemindars. A disciplined body, under 
 British officers, was tried; its superiority for all purposes was 
 experienced, when the Pindarries ravaged the Nizam's domi- 
 nions in contempt of his ordinary troops. Necessity urged 
 the extending the amount of an efficient soldiery to its present 
 scale. The direct object and immediate advantages were for 
 the Nizam: that a collateral benefit arises from it to us, does 
 not vitiate the quality of the plan. The interests of the two 
 states are identified by alliance, and it cannot be a legitimate 
 reason for the condemnation of a plan, that while the welfare 
 of the Nizam is promoted, a convenience accrues to us. 
 
 Should it be admitted as impolitic to let an over refinement 
 cause our open abrogation of such an unexpensive addition to 
 our strength, it would hardly be deemed less so, were we wil- 
 lingly to assent to its extinction for want of support. To this 
 Mr. Stuart (I speak from the tenor of his reasoning) would 
 agree, and would state his objection to be, that the support 
 required was to be on terms injurious to the Nizam, when less 
 onerous conditions might have been elsewhere obtained than 
 from the house of Palmer and Co. In the first place, I beg 
 leave to say, the argument, that the terms with the house of 
 Palmer and Co. are in themselves pregnant with embarrassment 
 to the Nizam's government, is an assumption, for which no 
 colour has been adduced. In the second place, the Resident 
 has, in the most distinct language, informed us, that the 
 Nizam's ministers could not obtain such easy terms in any 
 other quarter with the smallest security that the engagement 
 would not fail, and the troops be left without their pay. In 
 the first position Mr. Stuart would reply, that the assumption 
 was not his, but that of the Accountant-general. When it xvas 
 originally proposed to make a reference to the Accounta7it -general, 
 I did not exactly perceive the Jitness of the step ; but as I cotdd 
 not foresee inconvenience, I voordd yiot dissent. I novo feel my 
 error ; I find that lue have unfairly betrayed the Accountant- 
 general beyond his depth. On every thing relating to his branch 
 of business, the known good sense, as well a» the official accu- 
 
 o
 
 82 
 
 racy oi" that gentleman, must give his conclusion important 
 weight; but that the council should ivtpUcitly refer to the Ac- 
 countant-General as a political oracle, ■would be rather an extra- 
 vagant abandonment of our judgments and our duties. He states, 
 that he must suppose Shroffs could be found at Hyderabad 
 capable of supplying the Nizam with the funds required. In a 
 case tvhere the mutiny of the troops is the expected consequence 
 of delay in decision, or of subsequent unpunctuality in payment, 
 I cannot suffer the loose supposition of any man to stand in the 
 balance against the unequivocal assertion of a public functionary 
 bound by his honour, and by the obligations of his station, to re- 
 present conscientiously that vohich he cannot but know positively. 
 
 A consideration occurs here which perplexes me. The 
 Accountant-general reasons on the terms of Palmer and Co., 
 therefore he was acquainted with them : Mr, Stuart argues 
 about them as if they were concealed. His not being inti- 
 mately apprized of them rests with himself. When Sir Wil- 
 liam Rumbold was called before the council, he explained, 
 that the supplication of the house for government's dispensing 
 with the delivery of a copy of the accounts bad this sole 
 motive : — the accounts once put on the proceedings of council 
 must be transmitted home, so that the transactions of the house 
 would be subjected, in London, to the inspection of persons 
 liable to form all kind of false deductions, from total ignorance 
 of the habits of the country, and of every concomitant parti- 
 cular. At the same time, he offered to explain every part of the 
 transactions verbally, on oath, to the council. He further pro- 
 posed to wait upon Mr. Stuart at his own house, and there submit 
 the accounts to his examination. The validity of the objection 
 to producing the accounts in council struck me immediately ; 
 and, I believe, was similarly felt by two other members. That 
 we did not question Sir William Rumbold minutely on parti- 
 culars, arose, I apprehend (I know it was so with me), from our 
 being already in full possession of them. After this proffer of 
 Sir William Rumbold's to furnish information in any manner 
 that would not put the accounts on the records of council, it is 
 somewhat hard to treat the house as if it studiously kept back 
 from our view the quality of the transaction in which it was 
 engaged. 
 
 The license granted to the house of Palmer and Co., to deal 
 with the Nizam's ministers, was founded on the experienced 
 inability, or fear of the Shroffs, to render the necessary aid to 
 the administration : those very Shroff's who are now, in the 
 teeth of that fact, supposed by the Accountant-general to be 
 competent for the supply of all the government's wants. No 
 imputation was till now ever attached on any transaction of 
 the house : on the other hand, I believe it to be well under- 
 stood, that but for the occasional assistance derived from that
 
 83 
 
 house, the Nizam's government could not have been kept above 
 water. Surely it would be unequitable to hold forth such an 
 establishment as likely to add to the anguish of a suffering 
 people, when its operation hitherto has been to ward off general 
 confusion in the state, with all the violence to which the in- 
 dustrious part of the community is invariably subjected, when 
 military commotion takes place in India. Surmises of the 
 nature lately agitated ought not to remain afloat. Obscure 
 rumours against a mercantile establishment must be deeply 
 injurious to its credit, especially when those implied doubts of 
 its conduct appear to come from this government. I thence 
 feel bound to declare my opinion definitively, that there is no 
 colour, from any thing which has come within my view, for the 
 slightest imputation on the house of Palmer and Co. The 
 terms of the arrangement are undoubtedly heavy for the 
 Nizam ; but if he will not himself supply from his private 
 treasure (confessedly very large) tiie funds for paying his 
 troops, and if the minister cannot elsewhere obtain money, 
 unless on still more burthensome conditions, there is only the 
 alternative of acquiescing in those terms, or of suffering the 
 troops to disband themselves and plunder the country. That 
 the Shroffs might have been induced to advance money at a 
 an easier rate (though the rate in question is the ordinary scale 
 of accommodation to native princes throughout India) upon 
 the security of similar assignments on particular districts, is a 
 presumption, contradictory not only to the direct assertion of 
 the Resident, but to probability. What trust can a Shroff 
 place in an assignment, when the native government, after 
 having received the loan, can at pleasure annul the security. 
 It is what has repeatedly happened. Asaph-oo Dowlah's ex- 
 tinction of assignments, to vast amount, is in the memory of 
 every one. Mr. Stuart seems to think that the hazard might 
 have been precluded, by the Resident's pledging the interven- 
 •tion of this government to maintain the security inviolate. 
 This entanglement of ourselves in the Nizam's pecuniary con- 
 cerns, is what we have been most studiously, and, in my judg- 
 ment, most prudently, avoiding. It is inferred, however, that 
 this pledge does internally exist, respecting the engagement 
 with Palmer and Co. The conception is erroneous. The Re- 
 sident and the house reciprocally deny the existence of any 
 such understanding. Messrs. Palmer and Co. frankly acknow- 
 ledge, that they could not have entered into the agreement 
 with the minister, were they not confident that their being 
 British subjects would prevent a laxity towards them, which 
 would be exercised with little hesitation towards a native 
 creditor. This reliance on an indefinite degree of protection, 
 differs essentially from an obligation binding us to interference, 
 
 G 2
 
 84 
 
 although it might be in circumstances such as would render it 
 most objectionable. There is much misapprehension, I con- 
 ceive, in regarding Chundoo Loll as the obsequious creature 
 of the Resident : a misapprehension whence an accurate con- 
 clusion is liable to be drawn, that the improvidence supposed 
 to exist in the management of the Nizam's affiiirs may strictly 
 be laid to the Resident's charge. From all that I have heard 
 of Chundoo Loll, I entertain no notion of there being any 
 tincture of servile dependance in his co-operation. Though 
 deemed not a bold man, he is uniibrmly represented as of con- 
 siderable abilit}', of great readiness in the dispatch of affairs, 
 and of steadfast integrity. He has embarked his fortune with 
 ours ; but has been, as appears to me, from his conviction, 
 that the British government is honest in its view of supporting 
 the Nizam's sovereignty. In that persuasion, he usually adopts 
 with cheerfulness the outline of policy suggested by those, 
 whose more extensive knowledge is likely to furnish a sounder 
 opinion than his own : at the same time, he seems to reserve 
 all details to himself, from the confidence that his habitual 
 intimacy with them must make him more competent than the 
 Resident to judge upon such particulars. With such disposi- 
 tion, and the strong sense of duty professed by him towards 
 the Nizam, Chundoo Loll cannot well be contemplated as 
 pliable, in countenancing agreements injurious to his master's 
 interests, even were Mr. Russell capable of endeavouring so to 
 influence him. The character of that minister, therefore, 
 concurs with every fact which inquiry has brought forth, to 
 satisfy me, that in the transaction under review he acted on 
 his own judgment, and as expediently as the unfavourable 
 situation of the Nizam's affairs would allow. It follows, from 
 this rejection of the suspicion of the engagements having been 
 imposed upon him, that he is entitled to belief, when he asserts 
 the advantage of the terms concluded with Messrs. Palmer and 
 Co., beyond what he could obtain in any other quarter. If 
 that belief be conceded, a charge of extortion cannot rest 
 upon a house which has furnished aid on conditions the lightest 
 offered, in a case where acknowledged risk increased the usual 
 high demand for interest in a native state. I am sensible that 
 I have been diffuse in my treatment of this subject. An 
 uneasy consciousness has been the cause of the prolixity. I 
 unadvisedly slid into a procedure, which I am now aware was 
 oppressive towards any commercial firm, possibly grievously 
 hurtful to the one in question ; and the only reparation I can 
 make, is the showing fully my reasons for exonerating the 
 house from all suspicion, and for revoking my concurrence to 
 putting its accounts on record. 
 
 Fort William, (Signed) Hastings. 
 
 10th Nov. 1819.
 
 85 
 
 This minute of Mr. Stuart is too remarkable to be 
 passed over without comment. Nothing but the existence 
 of prejudice of the strongest character can account for his 
 frivolous and cavilling objections, the exhibition of appa- 
 rent ignorance on the commonest matters of every day 
 occurrence in commercial transactions, and the undisguised 
 expression of his unwarrantable suspicions of Mr. Rus- 
 sell's integrity. The Resident had distinctly reported, that 
 the regular payment of the troops was an important object 
 of British policy, and that he had repeatedly urged it 
 upon the minister. That Captain Sydenham had origin- 
 ated and pressed on Messrs. Palmer and Co. the under- 
 taking of these payments. That Messrs. Palmer and Co. 
 mentioned to him the plan, and that he communicated it 
 to the minister. That he (Mr. Russell) knew that the 
 object could not be attained by any other means, than 
 through the liouse, and further, that had it been practica- 
 ble, it could not have been done on so favorable terms for 
 the Nizam. The terms were such, tliat Messrs. Palmer 
 and Co. were induced to undertake the payment, more 
 with a view to recommend themselves to the British go- 
 vernment, than to their own profit, and Mr. Russell re- 
 ported, (Hyder. Pap. p. 21.) that " When Rajah Gavind 
 " Buksh expressed a wish to have the payment of his 
 .*' troops restored to him, the house offered at once to give 
 " it up to him." But the minister, fearing fresh irregu- 
 larity, would not consent. Here then was it distinctly 
 stated: — 
 
 1st. That the object was paramount and purely British. 
 
 2nd. That Captain Sydenham suggested the plan, and 
 not Mr. Russell, nor Messrs. Palmer and Co., nor Chun- 
 doo Loll. 
 
 3rd. That Mr. Russell knew it could be attained by no 
 other means, and that both the conduct and completion of 
 the arrangement had received his full concurrence. He 
 had further stated that the guarantee of the British go- 
 
 G 3
 
 86 
 
 vernnient had in no respect been given to the house ; and 
 tliat the house had never interfered in the collection of 
 the revenues of the districts, over which they held assign- 
 ments. 
 
 With all this before him, Mr. Stuart states that the 
 information furnished by the Resident, is " more caladated 
 " to excite than to relieve anxiety." That, while the full 
 details of the accounts of the house with the minister were 
 not before the council, " all that did appear xvas caladated 
 " to awaken solicitude and doubt." 
 
 " That the circumstance of the ?iative bankers not being 
 *' able to make the advances to the government^ and the con- 
 " sequent utter dependance of the resident and the Nizam, 
 ^^for the regular troops, on the British house of agency. Was 
 *' siifficieyilly extrawdijiary and alarming. 
 
 " That the terms on which a house possessing such ad- 
 " vantages over a goveimment will demand, was a naticral 
 
 siibject of solicitude and inquiry. 
 
 That although Mr. Russell assured them the terms were 
 *' more favourable than could have been obtained from native 
 " bankers, they do not know that the terms are not ruinous. 
 " And that he considers Mr. liussell bou7id, by solemii obli- 
 " gations of duty, to remonstrate in a manner beyond all 
 " doubt and stispicion, that the measure had originated and 
 *' was prosecuted from no other motives than a disinterested 
 " regard for the welfare of that government" 
 
 It is remarkable, that Mr. Stuart confines himself to the 
 expression of his alarm and his solicitude, and his doid>t and 
 his uneasiness. The i<^norance displayed in his astonish- 
 ment that natives would not lend their money to sucli a 
 native government, and his alarm at the consequent im- 
 portance of the British house, if sincere, may be pitied 
 and pardoned; but his insinuations and expressed sus- 
 picions of Mr. Russell, in calling upon him to prove the 
 negative of corrupt motives for the origin and conduct of 
 the transaction, in the face of the information and state- 
 
 (( 
 
 ((
 
 87 
 
 nients before him, affect no less his public character than 
 that of his understanding. Well does the whole of this 
 minute sustain Lord Hastings' charge against Mr. Stuart, 
 *' that he exhibited nothing but an indefinite discontent 
 " at his lordship's administration, in default of any intelli- 
 " gible objections." In the commencement of his minute, 
 Mr. Stuart records his astonishment, that the native 
 bankers will not lend their money to the Nizam's govern- 
 ment, with a view to insinuate his disbelief of the fact; and 
 in the latter part of it, he says, it is " clear that the native 
 " bankers in a country, 'where there is no equal justice, dare 
 " not trust the Nizam's government. ^^ 
 
 He then complains that a British house of business, 
 which, through the influence of the Resident, can com- 
 mand justice, may be said to possess a monopolxj of 
 that precious article ; and that monopoly must drauo in its 
 train a monopoly of the moneyed concerns and traffic of the 
 country ; and that the house already enjoys a monopoly of 
 the money market in the capital ; for the native bankers, if 
 they have funds to lend, prefer advancing them through the 
 agency of the house. He then strangely avows his jealousy 
 of the house on this account, not appearing to comprehend 
 the transcendent benefit to the Nizam's government, from 
 transacting its business on lower terms, in consequence of 
 its observing good faith in its transactions with the house, 
 owing to the minister's deference to the British government. 
 They had corrected that evil which * Mr. Russell had stated 
 to be " the sole and entire cause of the difficulties of the 
 " Nizam's government," by creating and establishing, for 
 the native government, a public credit. 
 
 Can it be believed, that a man in his senses would have 
 made it a matter of regret, either as a friend to the Nizam's 
 government, or as a friend to justice, that a British house 
 of agency should be enabled, in consequence of being 
 
   Hyder. Pap. p. 92. 
 G 4
 
 88 
 
 pretty sure of obtaining bare justice, to supersede the 
 ruinous terms on wliich the natives, owing to their not 
 being able to act on^a similar reliance, were compelled to 
 deal? This is to be jealous of the influence which is 
 acquired by moderation and fair dealing. In point of 
 fact, the house did change altogether the rate of usance at 
 Hyderabad, reducing it to nearly one half of what it had 
 previously been. This was at once a benefit to the whole 
 country, and of infinite importance to the minister. 
 
 The imbecility of this minute is reconcileable only with 
 the existence of the strongest prejudice, which was capable 
 of obscuring a very ordinary understanding. Mr. Stuart 
 distinctly states, that he has not viewed the arrangement, 
 but as in connection with the more important question, viz. 
 ihe weight of the house at Hyderabad ; a remarkable in- 
 stance of the notorious and petty jealousy of the civil 
 servant. 
 
 Two folio pages are occupied by Mr. Stuart in cavilling 
 comments upon Sir William Rumbold's letter, wherein he 
 objects, as a mercantile man, to be liable to be called upon 
 for the disclosure of the accounts of his constituents, of 
 whom the Nizam's minister was one. But he carefully 
 abstains from noticing the further and stronger reasons 
 which, as appears from Lord Hastings' minute, Sir Wil- 
 liam Rumbold gave in person at the council board, and 
 which influenced Lord Hastings, Mr. Adam, and Mr. 
 Dowdeswell in their decision, to abstain from having the 
 accounts produced ; viz. that he objected to their accounts 
 being unnecessarily made matter of record, and to be trans- 
 mitted to England, 'where they lijoidd be likely to be (as it 
 turned out they have been) misapprehended from ignorance 
 of local circumstances, rate of interest, 4-c. He likewise, 
 when complaining of want of information, and of the ac- 
 counts not being before the council, omits all reference to 
 the fact, stated in Lord ILislings' foregoing minute, that 
 Sir William Rumbold was ready to give to the council
 
 89 
 
 any information ««erbally on oath, anil to wait upon Mr. 
 Stuart at his own house and explain the accounts. Had 
 Sir William Rumbold been permitted to have so done, 
 Mr. Stuart would have been unable to have left on record 
 expressions of his marvellous anxiety and alarm, and 
 doubt and solicitude, by making it appear as a matter of 
 complaint that the house was unwilling to afford informa- 
 tion to the council. The rest of his minute consists of a 
 rambling and unmeaning lament on the state of the Ni- 
 zam's country, which is totally misplaced, and unintelligi- 
 ble, for any purpose but that of recommending by inference 
 a direct assumption of the internal administration of the 
 country, which, however, before he closes his minute, he 
 declares to be an inadmissible alternative. 
 
 The sanction given to the Aurungabad arrangement 
 was communicated to the Court of Directors in a despatch 
 of 21st October, 1820. 
 
 On the 24<th May, 1820, eight /«ort/'/;5 after the foregoing 
 discussions had taken place in the council at Calcutta, the 
 {bllowing letter from the Court of Directors, with the sig- 
 natures which are attached to it, was despatched to 
 Bengal. 
 
 1. Our last letter to you in this department was dated 15th 
 December last. 
 
 2. In paragraphs 284 to 287 of your letter from this depart- 
 ment, dated the 3d January 1817, you have drawn our atten- 
 tion to an application from Messrs. William Palmer and Co., 
 British merchants at Hyderabad, and to the proceeding, on 
 your part, to which it gave rise. 
 
 3. This communication we deem of sufficient importance to 
 make it the subject of a separate despatch. 
 
 4. In the 79th paragraph of our political despatch to Fort 
 St. George, dated 20th November 1816, we stated that we were 
 not aware of any objection to the countenance which you had, 
 in the year 1814, authorized the Resident at Hyderabad to 
 afford to a British commercial establishment at that capital. 
 
 5. In thus expressing ourselves, we presumed that the objects 
 
 * Hyd. Pap. p. 6.
 
 90 
 
 of Messrs. Palmer and Co. were completely consistent with 
 both the enactments of the legislature, and with those views of 
 policy to which we have been accustomed to require confor- 
 mity on tlie part of our Indian governments. 
 
 6. It appears, however, from the memorial addressed to you 
 by that firm on the 27th June 1816, which constituted the 
 ground of your proceeding, that besides their business as mer- 
 chants, they had large pecuniary dealings with the government 
 of his highness the Nizam, which, as you state, would subject 
 them to the penalties enacted by the 37th Geo. III. cap. 142. 
 sec. 28. unless, by an exercise of the power vested in you by 
 that act, you gave your consent and approbation to their en- 
 gaging in such tranactions. And you inform us, that, at the 
 request of these gentlemen, you had granted your permission 
 to their performing the several acts from which, without that 
 permission, they would have been restrained, with no other re- 
 servation than that it should be at the discretion of the Resi- 
 dent at Hyderabad, for the time being, to satisfy himself re- 
 garding the nature and objects of the transactions in which 
 Messrs. Palmer and Co. might engage. 
 
 7. We have to observe, in the first place, that the power 
 which you have thus thought fit to exercise, could not have 
 been granted by the legislature, in contemplation of such an 
 use as you have made of it. 
 
 8. It was obviously intended for the purpose of meeting 
 extraordinary exigencies, not of generally licensing an illegal 
 traffic ; and tve have great doubts whether such a license as 
 you have given (a general license, without a special case of 
 necessity, and without limit) would be held to be legal, and 
 would be found effectual for the protection of Messrs. Palmer 
 and Co. against any prosecution under the act. 
 
 9. But waving this discussion, we desire to be informed 
 whether the Resident has availed himself of the power re- 
 served to him, by acquainting himself constantly and thoroughly 
 tuith the nature of the pecuniary transactions of that house with 
 the Nizam's government ; and, in the next place, whether he 
 has reported to you respecting them. In the event of his 
 having done so, you will not fail to transmit the report for our 
 information. 
 
 10. After the experience which we have had, both in Oude 
 and in the Carnatic, of the dreadful abuses which resulted 
 from the pecuniary dealings of British subjects with native 
 princes, and the jealousy manifested by the legislature of all 
 such transactions, tve can by no means approve of the indulgence 
 xvhich you have extended to Messrs. Palmer and Co. ; and tve 
 positively direct, that the instrument by which that indulgence 
 was conveyed, may be, immediately upon the receipt of this
 
 91 
 
 despatch, revoked and cancelled, and that the countenance of 
 our governments may be strictly confined to those objects of 
 a commercial nature, which they professed originally to have 
 in view. 
 
 11. You will understand this order as peremptory; and the 
 execution of it must not be delayed, for the purpose of a re- 
 ference to us, or on any ground whatever. 
 
 12. We think it necessary to add, that if any discussion 
 shall at any time arise between the Nizam's government and 
 the house of Messrs. Palmer and Co., respecting any pecuniary 
 transactions which may have taken place between them, you 
 are hereby positively prohibited from interposing, in any way 
 whatever, the name, authority, influence, or good offices of any 
 sort of the British government, for the furtherance of any de- 
 mand which these gentlemen may bring forward. 
 
 13. Since the preceding paragraphs were written, it has 
 been suggested to us that Mr. Palmer, whose name is first in 
 the firm of the house to which you have given the permission 
 in question, is a native of India, but that there are other 
 partners who are Europeans. We desire to be informed of 
 the names of all the partners of the house to which your 
 license has been granted ; and we direct that if, on any future 
 occasion, you should find it necessary to grant a license to 
 lend money, not only the sum to be lent, but the names of all 
 the persons to whom the license extends, may be distinctly 
 specified in the license, and a copy of every such license, with 
 a statement of your reasons for granting it, be transmitted to 
 us by the earliest opportunity. 
 
 It. We desire that the receipt of the present despatch may 
 be immediately and separately acknowledged. 
 
 We are, &c. 
 Signed by Sir G. A. Robinson, Chairman. 
 Sir T. Reid, Deputy Chairman. 
 
 J. BOSANQUET. 
 
 Jos. Cotton. 
 W. T. Monet. 
 J. Morris. 
 W. S. Clarke. 
 R. C. Plowden. 
 Geo. Raikes. 
 R. Campbell. 
 S. A. Allen. 
 E. Parry. 
 C. Grant. 
 W. Wigram. 
 
 S. TOONE. 
 
 Sir D. Scott.
 
 92 
 
 It is to be observed, tluit the foregoing despatch is stated 
 to have been written on the 24th May, 1820, for the espe- 
 cial purpose of replying to three paragraphs of a letter, 
 written three years and four months prior to that date ; the 
 matter contained in those paragraphs " is deemed of suffi- 
 " cicnt importance to become the mhject of a separate 
 *' despatch:' 
 
 The Directors refer to no communication whatever on 
 the subject, as having been received, subsequent to the let- 
 ter of the 3d January, 1817 ; nor does it appear that any 
 such communication had been made or called for. 
 
 The tone of this letter exhibits a state of feelincr which 
 it was evidently not thought worth while to suppress or to 
 disguise ; for it were harsh to suppose that this is the ordi- 
 nary tone, and this the usual language, in which the gen- 
 tlemen of the Direction are in the habit of addressin<r the 
 constituted authorities in India. 
 
 The sixth, seventh, and eighth paragraphs convey the 
 expression of a doubt, as to the legality of the construction 
 of the 37th Geo. 3., under which the Bengal council, on 
 the authority of their Advocate-general, unanimously exer- 
 cised the discretion vested in them. It is a bare doubt, 
 loosely hazarded, and arbitrarily enforced, but it is not sus- 
 tained by the exhibition of the shadow of a reason. 
 
 In the ninth paragraph a demand is made to know, if 
 the Resident have discharged his duty, by making himself 
 acquainted with the nature and objects of the transactions 
 of the House ; and a call is made for any reports he may 
 have transmitted to the government thereupon. As the 
 Court knew, both from the terms of the license, and from 
 the instructions given to the Resident, that he was only 
 called upon to interfere with the transactions of the House, 
 if he saw occasion to be dissatisfied with their nature and 
 object, the natural conclusion should have been, that, in 
 the absence of all reports, no opportunity lor objections 
 had occurred.
 
 93 
 
 The suspicion and imputation of neglect, at least on the 
 part of the Resident, if not of the Governor-general in 
 council, thus suddenly evinced and conveyed by the 
 peremptory tone and terms of this requisition, after an in- 
 terval of above three years' silence, would have been at all 
 times unbecominor and ung-racious ; but when united with 
 other circumstances attending this despatch, is not unwor- 
 thy of particular remark. If the Court, indeed, fully be- 
 lieved upon sufficient evidence, that the Resident had been 
 a traitor to his duty, and that the Governor-general in 
 council had been conniving at the treason, both the time 
 and the tone of the letter become perfectly intelligible. 
 But whence the cause for such a suspicion ? It does not 
 appear that any information whatever on the subject of the 
 license, or of its effects, had reached the Court since the 
 Bengal letter of the 3d January, 1817. 
 
 The 10th paragraph would encourage the belief, that their 
 intemperate jealousy and displeasure had been suddenly 
 roused, by the recollection of the evils which had grown 
 out of the unrestrained pecuniary dealings between British 
 subjects and native princes in Oude and in the Carnatic. 
 But those dealings preceded, led to, and were remedied 
 by the very act which authorized the same dealings, under 
 a license from the hand and seal of either of the sro- 
 vernors of the three presidencies. The cases are, there- 
 fore, totally and entirely dissimilar ; and the striking dissi- 
 milarity leaves the reference to Oude and the Carnatic, 
 rather in the light of a pretence, than a motive for the 
 displeasure expressed. 
 
 Pecuniary dealings between Europeans and native princes 
 had unquestionably, when unrestrained by any check or 
 controul, frequently interfered with objects of British 
 policy. The pecuniary and commercial dealings were not 
 in themselves an evil ; but were only objectionable as en- 
 tailing other evils in their train. The legislature in forbid- 
 ding them when uncontrouled, distinctly laid down the
 
 94 
 
 principle of their possible utility and advantage when under 
 controul; and for that reason it placed a discretionary 
 power to license them under proper superintendance, no 
 only in the hands of the Governor-jreneral of Bengal, but 
 in each of the governors of the two other presidencies. 
 
 Referring, however, to Oude and the Cai-natic as the 
 sole grounds for their disapproval, they peremptorilv order 
 the recall of the license, which they are pleased to de- 
 signate " the indulgence isohich the coimcil had extended to 
 " Messrs. William Palmer and Co^ 
 
 By these words they would intimate their belief that the 
 motive of the council, for having granted the license, had 
 been to further the private objects of a house of business, 
 and to stamp their utter disbelief on the recorded motives 
 of state policy, which had been announced as the sole 
 grounds for its grant, in the letter to which they were 
 replying. The words of that letter were as follow. 
 
 " * Having ■previously consulted "with our Advocate Gene- 
 *' red, and being satisjied that the interests both of the 
 " dominions of the Nizam, and of the honourable Company, 
 " 'woidd be promoted by the success and security of the com- 
 " mercial and pecuniary transactions, as explained by Messrs. 
 " Palmer a7id Co., we complied xvith their application." 
 
 Not satisfied with the unfounded imputation thus cast 
 upon the Bengal government, by the peremptory terms of 
 their orders, the court would seem gratuitously and offen- 
 sively to anticipate an evasion or disobedience to them, and 
 follow up, therefore, their lOth paragraph with these 
 words, " You will understand this order as peremptory ; 
 " and the execution of it must not be delayed for the pur- 
 ** pose of a reference to us, or any ground whatever." 
 
 When it is recollected that these absolute gentlemen are 
 at a distance from their officers and from their empire, 
 which requires half a year to convey a single communication 
 
 Ilyder. Pap. p. 1.
 
 95 
 
 of their decrees, these terms will appear little consistent 
 with the discretion becoming men, whom the accidents of 
 human affairs have placed in the situation to be able thus 
 to exhibit themselves to their fellow men. Omniscience is 
 the only attribute that could justify a similar course of pro- 
 cedure. It is clearly inconsistent with the limited nature 
 of human faculties ; no wonder that it has been at once a 
 standing jest and complaint of the governors general of 
 India, that they are habitually and peremptorily commanded 
 to perform impossibilities. 
 
 " Why, man, they do bestride the narrow world 
 Like a Colossus." 
 
 In the absence of all statement of the grounds for their 
 determination transmitted, it was not to be expected they 
 would condescend to account for the rude and intemperate 
 manner of expressing their impatience for its being carried 
 into effect. But it might have been expected they would, 
 these gods on earth ! from motives of self respect, have 
 recorded some explanation of the strange inconsistency 
 between their present haste, and their three years' previous 
 silence and delay. So much for the tone and terms 
 of this first of the printed despatches of the Court of Di- 
 rectors, as meant to affect the governor general in council 
 and Mr. Russell ; a most edifying exhibition, truly, for the 
 secretaries and official underlings in the government house 
 at Calcutta; at once teaching them obedience and respect 
 to the authorities there, and filling them with an awful 
 admiration of the thunderers at home. 
 
 But come we now to the 12th paragraph. 
 
 " We think it necessary to add, that if any discussion 
 " shall at any time arise between the Nizam's government 
 " and the house of Messrs. Palmer and Co. respecting any 
 " pecuniary transactions which may have taken place 
 " between them, you are hereby positively prohibited from 
 " interposing in any way whatever, the name, authority,
 
 9(i 
 
 " influence, or good offices of any sort of tlie British go- 
 " vernment tor the furtherance of any demand which those 
 *' gentlemen may bring forward." 
 
 In what language shall the heartless and wanton injustice 
 of the orders conveyed in the above paragraph be cha- 
 racterized ? 
 
 The reason given by the wolf for destroying the lamb is 
 not less consonant with sense, reason, and the principles 
 of common honesty, than the motive for the issue of these 
 directions. 
 
 Even if the council had erred, the house was in no way 
 to blame. No charge of misconduct on their part had 
 been even hinted at ; yet their utter ruin and destruction 
 was thus deliberately contemplated, and carefully provided 
 for. The very suddenness of the recall of the licence, the 
 court appears to have keenly perceived, must be fatal, to 
 the confidence of their constituents and the security of their 
 transactions. 
 
 Their prospects were to be doomed to certain destruc- 
 tion. It necessarily occurred to the court, that having 
 entered into pecuniary engagements with the native go- 
 vernment, with the full knowledge and under the sanction 
 of the governor-general in council, the house would be 
 entitled to claim, at least, the protection and good offices 
 of the British government, for the payment of any just 
 claims which would be brought into jeopardy solely by 
 he suddenness of the recall of the license: such a claim, 
 indeed, would and must have been irresistible in the breast 
 of every honest man. But the court eagerly provided 
 against such an appeal. Their ukase was to bear unqua- 
 lified and irrevocable ruin in its train. Not only was the 
 ship to be sunk, but not a plank or a hand was to be held 
 forth to save any portion of the cargo, or the lives of the 
 strugfjling: crew. A more barbarous decree never issued 
 from the Spanish council of the Indies, or of the holy 
 inquisition. 
 
 "-N
 
 97 
 
 Consistently proceeding cjiudis ah inccp[o, they con- 
 clude by commanding that this their memorable despatch 
 may be answered, as it was written, unconnected with any 
 other subject. Unfit, indeed, was it to be blended with any 
 other subject ; and long will it remain a signal, though not 
 a single proof, to be found amongst these records, of the 
 extravagant folly and cruelty to which irresponsible power 
 will conduct the weakness of our nature. But shall we 
 then be satisfied with merely execrating, without attempt- 
 ing some explanation of this unjustifiable proceedint^-? Is 
 there no way in which it can be accounted for ? It has 
 been above noticed, that about eight months preceding 
 the composition of this despatch, {six months being the 
 usual time for the conveyance of a letter from Bengal to 
 this country,) a newly introduced member of the govern- 
 ment at Calcutta had been exposed in full council, as 
 having slandered Mr. Russell : the same gentleman is 
 described, indeed, by Lord Hastings as being " thoroughly 
 " honorable^ hut being too ■prone to listen to defcanatori/ 
 " "whispers." 
 
 It is possible that the same gentleman who thought 
 proper to spread his injurious and unfounded suspicions 
 regarding Mr. Russell about Calcutta, may have thought 
 himself equally justified in communicating them to his cor- 
 respondents at home. It is matter of universal report 
 'that Mr. Stewart was in the habit of corresponding 
 with a leading and most influential director of the time, 
 who had been openly hostile to Lord Hastings' original 
 appointment, and to the policy his lordship was known to 
 pursue. But whether Mr. Stuart did or did not commu- 
 nicate his injurious suspicions of Mr. Russell to his corre- 
 spondent; or whether some person to whom Mr. Stuart may 
 have confided them in Calcutta, was the channel through 
 whom they were received and adopted at the East India 
 House ; it is to the writer of these remarks as clear as the 
 
 H
 
 98 
 
 sun at noon day, that these unworthy calumnies had been 
 communicated, had there received a ready belief, and were 
 the real foundation of the foregoing letter. The belief in the 
 foul conspiracy, slanderously alleged to have been formed 
 between Lord Hastings, Mr. Russell, and the house of 
 Palmer and Co., will alone account for the tone, and the 
 terms and the orders of the despatch in question ; no other 
 theory can render it intelligible. The circumstantial evi- 
 dence in this, as in most cases, is of a nature that convinces 
 more fully than any direct proof Can an intelligible ex- 
 planation be given of it in any other manner ? 
 
 It is scarcely necessary to advert to the destructive 
 effects of this despatch in the country to which it was sent. 
 The authors and the ready believers of the calumnies 
 found that their poison had successfully tainted the very 
 sources of power and of patronage, and that they might 
 safely persist in their career of calumny. The disgusting 
 detail of the subsequent events ; the history of wilful mis- 
 representation and malicious persecution, will only serve 
 to confirm the importance here attached to the above in- 
 strument, as being the substantial cause and encouragement 
 for all the abuse of power that followed. 
 
 On die 19th May, 1820, Mr. Russell transmitted in the 
 following letter, together with its enclosures, his recommen- 
 dation of the Government's sanction to a loan fi-om Messrs. 
 W. Palmer and Co. to the minister. 
 
 To C. T. Metcalf, Esq., Secretary to the Government.* 
 
 Sir, 
 I request that you will do me the honour to lay before his 
 Excellency the most noble the Governor-general, the enclosed 
 translation of a letter from Rajah Chundoo Loll, containing a 
 correspondence which he has had with Messrs. William Pal- 
 mer and Co., regarding the negociation of a loan to the Nizam's 
 
 Hyd. Pap. p. 38.
 
 99 
 
 government, wliieh the Rajah wishes to apply, in prosecution 
 of his measures of reform, to tlie purposes, 1st. of reducing un- 
 necessary establishments ; 2d. making advances for the im- 
 provement of the country ; 3d. relieving the revenue from the 
 heavy assignments which have been granted as security for 
 some debts ; 4th. and discharging others which stand at a high 
 rate of interest. 
 
 As Messrs. Palmer and Co., in their answer to the minister's 
 proposal, state that they cannot enter into the arrangement 
 without the knowledge and sanction of the Resident, I called on 
 them to explain the nature and extent of the sanction they 
 require. I have the honour to enclose a copy of their answer. 
 
 It mil be extremely difficult for the minister to prosecute 
 his measures of reform with any real effect, unless he can ob- 
 tain the command of a sum of readij money, for the purposes 
 described by him ; and he certainly cannot obtain it by any 
 other meayis than the assistance of Messrs. William Palmer 
 and Co., whose circumstances enable them to secure a cow- 
 bination of the native monied interest. I therefore beg leave 
 to submit the minister's request to the favourable consideration 
 of government. 
 
 The reduction of establishments, to the annual extent of 
 twenty-five lacs of rupees, which the minister is making, though 
 certainly not so large as the situation of the Nizam's govern- 
 ment will admit, is still a great deal for the first attempt ; and 
 it is my intention, therefore, not to press him with any impor- 
 tunity for other reductions, until he has accomplished the one 
 in which he is now engaged. 
 
 The minister's agreement to consult the Resident on the ap- 
 pointment or removal of Talookdars, is very important as a 
 general principle, independently of its application to the par- 
 ticular case which forms the subject of the accompanying cor- 
 respondence. There is, perhaps, no one instance, in which 
 the influence of the Resident can be more beneficially exerted, 
 than in procuring the appointment of respectable men to the 
 management of the country, and preventing their removal when 
 they have brought their districts into so flourishing a condi- 
 tion, as either to tempt the government to raise their rents, 
 or encourage other persons to make higher offers for their ap- 
 pointments. 
 
 I have, &c. 
 
 (Signed) H. Russell, 
 
 Hyderabad, Resident. 
 
 19th of May, 1820. 
 
 H 2
 
 100 
 
 Translation of a Note from Rajah Chundoo Loll to the Resident. 
 
 At this time being desirous of reducing the expences of the 
 government, so as to make the reveiiue correspond with the dis- 
 bursements, and of improving the state of the country, I re- 
 quire the command of a considerable sum of money : First, 
 for the purpose of dischari^ing the arrears due to the estabHsh- 
 ments which I am reducing, as well as those which must be 
 maintained ; Secondly, for advancing tuckavie to the Ryots, 
 with the view of restoring the condition of such districts as 
 hnve fallen into bad order, M'hether owing to famine, the ra- 
 vages of war, or the poverty of the people, wliich has pre- 
 vented them from repairing tanks, and of enabling them to 
 bring waste land into cultivation, which will require new tanks 
 and more cattle ; thirdly, for repaying the debts which have 
 been incurred to Soucars and others, on account of the ex- 
 pences of the war, 7nany of xvhich stand at a high rate of in- 
 terest ; fourthly, to relieve me from the necessity of imposing the 
 heavy assignments on the country, which I have hitherto been 
 obliged to grant, to cover such debts as have unavoidably been 
 incurred, and which being a forestalment of the revenue has, 
 by obliging me to require advances from the Talookdars, in 
 some degree weakened my authority over them, and afforded 
 them pretences of oppression and exaction in their districts. 
 I have, therefore, applied to Messrs. William Palmer and Co., 
 whose assistance was necessary to enable me to carry on the 
 affairs of the government, and xvho have ahvai/s shoiim them- 
 selves anxious to save me from extortion, and ivho, having the 
 confidence of the monied men and bankers, can, in conjunction 
 ivith them, provide the means of meeting my vietvs, by negoci- 
 ating such a loan for me as may relieve me from my embar- 
 rassments, and enable me to resume the assignments ivhich I have 
 granted them, in discharge of my former debt to the house, as 
 tvell as to carry my present plans into effect. I enclose copies 
 of my letters to the house and of their answers. The assist- 
 ance for which I have applied is indispensably necessary to 
 the accomplishment of the important object which has been 
 prescribed to me. The sixty lacs of rupees, more or less, tohich 
 I propose to borroxv, shall be applied in advances of tuckavie, in 
 discharging arrears due to troops which are to be retained as well 
 as those that are to be reduced, and in dealing off debts to Sou- 
 cars and others. The negociation of this loan through Messrs. 
 Palmer and Co. will enable me to reduce establishments to the 
 a7inual amount of tiventyfive lacs of rupees, according to the ac- 
 companying statement. Of that sum, sixteen lacs will be appro- 
 priated for about six years to discharge the principal and interest 
 of the loan; at the expiration of xvhich time there will he a clear
 
 lUl 
 
 increase to that extent in the actual income of the government, 
 and the saving of the remaining nine lacs will be of important 
 use in reducing the expences of the government to the limit 
 of its receipts, which they had exceeded, on account of the war. 
 Considering myself as a dependant on the British government, 
 and being solicitous for the accomplishment of the object which 
 you have pointed out to me, I trust that you will have the 
 kindness to call on Messrs. Palmer and Co. to assist me in this 
 necessary object, which relates exclusively to the public in- 
 terests of the government ; under the conviction that, without 
 a command of money, it will be next to impossible for me to 
 effect the reduction of troops and other establishments which 
 I desire. 
 
 I also enclose a copy of the Wajib-ool Urz which has been 
 sent to me by Messrs. Palmer and Co., with the answers which 
 I intend to give to their several proposals. If you agree in the 
 propriety of them, I will write them on the original Wajib-ool 
 Urz, and return it to the house. 
 
 (Enclosures.) 
 
 No. 1. — Translation of a Note from Rajah Chiindoo Loll to 
 Messrs. Palmer and Co. 
 
 My attention having been particularly directed to the improve' 
 ment of the condition of the country and the redtiction of the 
 troops, in consequence of the increased expences tvhich ivere un- 
 avoidably incurred during the war, and which have involved 
 me in debt to the Soucars, / a^n now in want of money to dis- 
 charge these debts, to advance tuckavie to the Ryots, and to pay 
 the arrears of the troops which I mean to reduce, as well as those 
 which are to be kept up. Your house, during the war, have 
 always given me assistance when I required it; and the present 
 occasion being one of great emergency, I am persuaded you 
 will give me your aid. You may depend upon it, that tunkhas 
 for the discharge of the debt shall be given on districts of 
 which the revenues are amply sufficient to meet them. 
 
 No. 2. — Translation of a Note from Messrs. William Pahner 
 and Co. to Rajah Chiindoo Loll. 
 
 We have had the honour to receive your letter expressive 
 of certain proposals. On account of the kindness which we 
 have invariably experienced from you, and our solicitude for 
 the prosperity of this government, we are anxious to afford 
 you every possible assistance upon all occasions. The tunkhas 
 which you have already granted to us, to cover our large ad- 
 vances to you, are not yet due, and the amount of them ivill not 
 
 H 3
 
 be realized Jor seven or eight months to come. The sums re- 
 quired for the public purposes described in your note must 
 necessarily be considerable ; but we are ready to meet your 
 wishes, provided we can protect ourselves and our consti- 
 tuents from loss. We hope you will state to us at once, and 
 without reserve, the whole sum that you will require to ac- 
 complish your objects; because tve should not be able to raise 
 the necessary sum tvithout the co-operation of the bankers and 
 vionied men, and tve must apprize them of the purpose Jor which 
 tve require their aid. Having told them the object that the 
 loan was to accomplish, we could not go to them again. The 
 same observation applies to the Resident. You are aware 
 that we cannot enter into an arrangement without his know- 
 ledge and sanction, which, if it be obtained once, could not 
 be applied for again for the same purpose. Moreover, tve con- 
 sider that our best security 'will consist in the assurance, that the 
 sum ivhich is taken up by the government will be really sujfcient 
 to accomplish thoroughly the double object of discharging the 
 ivhole of the public debt, and the goieral improvement of the 
 affairs oj' the government ; and as the rate of our interest is much 
 lower than that of any other person, we have no hesitation in 
 asking you to state to us, at once, the whole amount you 
 will require, and the mode you propose to adopt for the liqui- 
 dation of it, (that is to say, on what districts, and what Talook- 
 dai"s, you intend to give us tunkhas), in order that, after framing 
 the necessary engagements, we may proceed to take steps for 
 the execution of the measure. 
 
 No. 3 — Translation of a Letter from Rajah Chundoo Loll to 
 Messrs. William Palmer and Co. 
 
 I have received your note. / require the sura of about sixty 
 lacs of rupees ; 1st. to discharge the arrears of troops, including 
 those who will be retained as well as those who tvill be reduced ; 
 2nd. to clear off" my debts to Soucars and that to you, which I 
 ivas obliged to incur on account of the expences of the war ; 
 3rd. and to advance as tuckavie to the Ryots, which is indispen- 
 sably necessary to the improvement of the country. I trust, 
 therefore, that you will negociate a loan for me to that amount, 
 in order that I may promote the interests of the government 
 by applying it to the foregoing purposes. The following is the 
 method which I intend to adopt for the discharge of the loan. 
 I will give you tunkhas for the annual sum of sixteen lacs of 
 rupees, of which fifteen lacs shall be on the districts held by 
 Rao Naneck Ram, and the remaining lac on those of Kurrar 
 Newauz Khan, to remain in force until the whole of the prin- 
 cipal and interest shall have been repaid. The Talookdars shall
 
 103 
 
 pay that amount out of their collections punctually, until the 
 extinction of the whole debt. 
 
 No. 4. — Translation of a Note from Messrs. William Palmer 
 and Co. to Rajah Chimdoo Loll. 
 
 We have had the honour to receive your letter, proposing 
 to us to negociate a loan of about sixty lacs of rupees for you, 
 for the purpose of discharging the arrears of troops, including 
 those to be retained, as well as those to be reduced, clearing- 
 off your debts to Soucars and that which you oive to us, and 
 for advancing tuckavie to the Ryots, and describing the me- 
 thod in which you propose to repay that sum. The arrange- 
 ment which you have framed is, in all respects, agreeable to 
 us. We enclose a W^ajib-ool urz, which we require for our 
 satisfaction, and which we request you will execute and return 
 to us. As the Resident's name is inserted in our Wajib-ool 
 urz, his sanction to the arrangement is absolutely necessary ; 
 we therefore request that you will communicate our Wajib- 
 ool urz, with the whole of the correspondence, to him, and 
 that you will obtain his sanction, in order that we may take 
 measures for negociating the sum which will be required. 
 You propose to give us a tunkha for one lac of rupees on 
 Kurrar Newauz Khan; but as the article of our Wajib-ool urz, 
 regarding the exclusive appropriation of the districts of Rao 
 Naneck Ram to the discharge of our tunkha, does not apply 
 to the tunkha of a lac of rupees which you propose to give on 
 Kurrar Newauz Khan, we request that a tunkha for that amount 
 may be granted to us from year to year, consulting the prefer- 
 ence which we may give to Kurrar Newauz Khan, or any 
 other Talookdar. 
 
 No. 5. — Translation of the Wajib-ool Urz enclosed in the Letter 
 from Messrs. William Palmer and Co. to Rajah Chundoo Loll. 
 
 Proposals of the House. Answers of the Minister. 
 
 1. In payment of the loan No other tunkhas shall be 
 
 of sixty lacs of rupees to be issued on the districts on which 
 
 negociated by the house, let a tunkhas may be granted to the 
 
 tunkha be granted by the go- house for the annual sum of 
 
 vernment for the annual sum sixteen lacs of rupees, until 
 
 of sixteen lacs of rupees, until the principal and interest of 
 
 the principal and interest shall the loan shall have been dis- 
 
 have been discharged; and let charged, 
 no other tunkhas whatever be 
 issued on the districts in which 
 the tunkhas to the house are 
 
 H 4'
 
 104 
 
 Proposals of the House. Answers of the Minister. 
 
 to be granted, except for Si- 
 bendies and tbe necessary 
 charges of the district. 
 
 2. Let the Resident be con- The Resident shall be con- 
 sulted on the appointment of suited on the appointment of 
 the aumil of the district on the Talookdars. The tunkha 
 which the tunkha of the house shall not be transferred with- 
 inay be granted. Let no re- out the consent of the house ; 
 moval or changes be made in and what depai'ture can take 
 the concerns of the district, place from an engagement 
 without the Resident's know- which has been secured by 
 ledge. Do not let the tunkha stipulation ? 
 
 be transferred to any other 
 district without the concur- 
 rence of the house, and let no 
 departure take place from the 
 ensagement which has been 
 made with us by the govern- 
 ment. 
 
 3. The house will represent If (which God forbid) any 
 to the minister the merits of differences or disputes should 
 any differences or disputes arise between the Talookdars, 
 which may arise between the they shall be impartially set- 
 Talookdars of the district on tied. 
 
 which their tunkha is granted, 
 and the Talookdars of any other 
 districts ; and we trust that 
 they may be settled impar- 
 tially, and without delay, as any 
 circumstance which may be 
 injurious to the district will of 
 course affect the payments to 
 the house. 
 
 4. If the whole amount of If (which God forbid) there 
 the tunkha which is to be should be any deficiency in 
 granted to the house for the the payment of the tunkha, it 
 annual sum of sixteen lacs of shall be made good by govern- 
 rupees shall be realized, well ment. 
 
 and good; otherwise, should 
 any portion of it remain due 
 at the end of the year, the 
 amount of such deficiency shall 
 be paid in cash by the minis- 
 ter.
 
 105 
 
 No. 6 — Translation of the Statement of the Reduction to be 
 made in the Establishment of the Nizam'' s Government. 
 
 HORSE. 
 
 In Rajah Chundoo Loll's party 300 men and 300 horses. 
 
 In Rajah Govind Bukhsh's party... 300 men and 300 horses. 
 
 In Rajah Row Rumbha's party 250 men and 250 horses. 
 
 In Noor-ool Omrah's party 300 men and 300 horses. 
 
 In RufFat-ool Moolk's party 350 men and 350 horses. 
 
 In Hissam-ool Moolk's party 100 men and 100 horses. 
 
 In Fyaz Ally Khan's party 500 men and 500 horses. 
 
 In Rao Boochur Mull's party 500 men and 500 horses. 
 
 In Rao Naneck Ram's party 100 men and 100 horses 
 
 In Neaz Bahader Khan's party 200 men and 200 horses. 
 
 In Kurrar Newauz Khan's party ... 50 men and 50 horses. 
 
 In Mahummud Sahib's party 100 men and 100 horses. 
 
 In the parties of Kohee Beg Khan, 
 
 Zubberdust Khan, Caudir Sahib 
 
 Dechanee, Buz Meer Khan, and 
 
 others 300 men and 300 horses. 
 
 In the party of Mohkum Jung 25 men and 25 horses. 
 
 In the party of Rao Seetul Doss... 100 men and 100 horses. 
 In the party of MohummudKhan... 160 men and 160 horses. 
 In the party of Newauz Khan 25 men and 25 horses. 
 
 Altogether 3660 men, and 3660 horses, at forty rupees for 
 each man and horse, giving a total of rupees 146,400 per 
 month, or rupees 1,756,800 per annum. 
 
 FOOT. 
 
 In Rajah Govind Bukhsh's party 300 men, Arabs, Rohillas, 
 Sikhs, and other miscellaneous parties, 2500 men. 
 
 In the party of Rao Seetul Doss, 1000 men, peons 50 men. 
 
 Altogether 3850 men, at six rupees each, giving a total of 
 rupees 23,100 per month, or 277,200 per annum. 
 
 JAGHEERDAR TROOPS. 
 
 From Shums-ool Omrah 2,00,000 
 
 From Mooneer-ool Moolk 60,000 
 
 From Ameer-ool Moolk 80,000 
 
 From Munsoor Khan 79,000 
 
 Rupees 4,19,000
 
 10(j 
 
 RECAPITULATION. 
 
 Horse 17,56,800 
 
 Foot 2,77,200 
 
 Jagheerdar troops 4,19,000 
 
 Add on account of troops wliose rates 
 of pay are higher than those esti- 
 mated above 47,000 
 
 Total of annual reduction Rupees 25,00,000 
 
 To H. Russell, Esq. Resident at Hyderabad. 
 
 Sir, 
 
 We have the honour to acknowledge the receipt of your let- 
 ter of yesterday's date. By the sanction which we require 
 from the Resident, we do not mean to imply any security by 
 which the British government would be responsible for the 
 money we should lend to the minister : all we require is, the 
 certainty that the Resident will use his influence to prevent 
 our being defrauded, or any misappropriation made of the 
 revenues of the talooks on which we are to have assignments. 
 We shall never require that influence to be exerted beyond 
 the point to which the Resident can go, without making it a 
 subject of discussion between our government and His High- 
 ness the Nizam's. , - ^ . . •■ 
 
 We have, &c. 
 
 (Signed) W. Palmer and Co. 
 Hyderabad, 
 19th May, 1820. 
 
 It will be observed that the Resident's letter is precise 
 and clear in stating the substance of the documents he 
 encloses, and brings at once under the eye of the go- 
 vernment the nature and object of the proposed trans- 
 action. The government was well aware that he had been 
 pressing on the minister the absolute necessity of an im- 
 mediate reduction of the expenditure of the state, and of 
 useless military establishments at once destructive to the 
 finances, and to the tranquillity of the country.
 
 107 
 
 He states the object of the loan to be, to enable the 
 minister to prosecute the following measures of reform. 
 
 1st. To reduce unnecessary establishments. 
 
 2d. To make advances to the cultivators of the deserted 
 districts. 
 
 3d. To set free the assignments over the districts, which 
 the minister had pledged himself to give for money bor- 
 rowed, in anticipation of the accruing income of the state. 
 
 4th. To discharge debts which stood at a high rate of 
 interest. He adds that a command of ready money is ne- 
 cessary for the minister to carry the foregoing measures 
 into effect, and that he is certain no such sum can be ob- 
 tained but through the means of Messrs. Palmer and Co., 
 "whose a'cdit and 7'esponsihUity stand svjficiently high to 
 enable them to secure a combination of the native bankers 
 for this ptirpose ; he encloses the details of the immediate 
 reduction of troops proposed to be effected by the minister, 
 in consequence of obtaining the loan ; by which an annual 
 saving of 25 lacs of rvipees to the state will thenceforward 
 be effected ; and further adds, that a very desirable object 
 of British policy will incidentally arise out of one part of 
 the arrangement suggested by Messrs. Palmer and Co., 
 viz. that the Resident is to be consulted by the minister on 
 the appointment and removal of any of the Talookdars or 
 collectors of the districts, over which asisignments were 
 to be given. And he anticipates the benefit not being 
 confined to the immediate districts to be pledged to the 
 house, but that the principle will be extended to other 
 districts. 
 
 The minister's letter to the Resident is equally clear and 
 distinct in stating the objects of the loan ; the third and 
 fourth being placed only in a different order of succession. 
 He distinctly marks, that the assignments, which it is his 
 object to redeem, were those he had been bound to give to 
 Messrs. Palmer and Co. in discharge of his former debt to 
 the house. He repeats that the assistance of Messrs. Palmer
 
 108 
 
 and Co. was absolutely necessary to him, as they, having 
 the conjidence of the monied men and hankers, can, in con- 
 junction -with them, lirovidc the means of meeting his views. 
 Thus distinctly explaining the meaning of Mr. Russell's 
 expression, of " securing a combination of the monied 
 " interest." So little did Mr. Russell consider it a part of 
 his duty to learn, or to make known to the government at 
 Calcutta the terms of the interest to be paid on the loan, 
 that he does not even once allude to the subject in his com- 
 munication. And the minister equally omits all allusion to 
 it, except indeed incidentally in bringing to the Resident's 
 attention what would be the beneficial effect of the mea- 
 sure on the finances of the state. This he does in the 
 following: words : — 
 
 " The negociation of this loan through Messrs. Palmer 
 " and Co. will enable me to reduce estabhshments to the 
 " annual amount of twenty-five lacs of rupees, according 
 " to the accompanying statement; of that sum, sixteen 
 " will be appropriated, for about six years, to discharge 
 " the principal and interest of the loan ; at the expiration 
 " of which time there will be a clear increase to that 
 " extent in the actual income of the government, and the 
 " savmg of the remaining nine lacs will be of important 
 " use in reducing the expences of the government to the 
 " limit of its receipts, which they had exceeded on ac- 
 " count of the war.'' 
 
 There is here nothing of studied misstatement or con- 
 cealment. He does not pretend to give the terms of the 
 loan. There is no reticence on the subject of the existing 
 debts of the liouse. 
 
 It will be observed, the minister, in his note to Mr. Rus- 
 sell, distinctly alludes to his former debt to the house of 
 Palmer and Co. There is no concealment of it whatever. 
 The minister equally distinctly records in his note to the 
 house, that they have frequently made him advances of 
 cash. The reply of William Palmer and Co. to the
 
 109 
 
 minister re-echoes and records the fact of their having; 
 made him large advances, for wliicli they held the very 
 tunkhas or assignments, which he required them to give 
 up, and in lieu of receiving payment of them, to let the 
 debt be made a part of the loan. 
 
 They record distinctly that they must have recourse to 
 the native bankers ; having then reason to believe that they 
 could not get the funds elsewhere. 
 
 They state their interest to be much lower than that of 
 any other person, and they truly remind him how much 
 their security depends on his faithfully applying the pro- 
 duce of the tunkhas they are to set free, together with the 
 further sums they are to raise for him, to the precise 
 objects and purposes he professes to have in view. Their 
 interest, as in all cases of large creditors, was necessarily 
 involved in the prosperity of the resources of their debtor. 
 
 In the minister's rejoinder (No. 3.) to Messrs. Palmer 
 and Co. the debt due to the house is a fourth time re- 
 corded, and is specifically included in the list of objects, 
 which he thus states as second in the order of succession : 
 " To clear off all my debts to the Soucars, and that to yo7i" 
 
 This is repeated for the fifth time by Messrs. Palmer 
 and Co. in their note, No. 4. 
 
 The Wajib-ool urz, or list of the proposals and answers, 
 has reference solely to the means of securing the regular 
 realization of the tunkhas. 
 
 The subject of this transaction appears, from the va- 
 rious minutes hereafter recorded, to have been discussed 
 in council between the 10th June and the 15th July, when 
 it was sanctioned by the majority of the council, in the 
 following letter. 
 
 To Henry Russell, Esq., Resident at Hyderabad* 
 Sir: 
 " I have the honour to acknowledge the receipt of your 
 " despatch of May 19th. 
 
 * Hyder. Pap. p. 55.
 
 no 
 
 « 
 
 The governor-general in conncil authorises you lo 
 sanction the loan of 60,00,000 which the Nizam's go- 
 " vernment proposes to obtain from the house of William 
 " Palmer and Co. 
 
 " The terms of the loan are not mentioned in your des- 
 " patch, hut his lordship understands, that an assignment of 
 " sixteeji lacs of rupees 'per annum mil discharge the interest 
 " and pay off the principal within six years. 
 
 " His lordship is very happy to observe that this mea- 
 " sure will enable the Nizam's government to effect a re- 
 " duction of expence, to the extent immediately of nine 
 " lacs per annum, and eventually of twenty-five. 
 
 " I have, &c.- 
 
 (Signed) " C. T. Metcalfe, 
 
 " Fort William, Secretary to Government." 
 
 « 15th of July, 1820." 
 
 Previous to the foregoing decision, Mr. Stuart appears 
 to have recorded four, and the other members of council, 
 including the governor-general, three minutes each. 
 
 They are here given in the succession of their dates, 
 together with the opinion of the advocate-general, on a 
 question submitted to him. They will furnish some mea- 
 sure of the mind of their respective authors, provided it be 
 admitted that they were in equal possession of their judg- 
 ments, unclouded by prejudice, and unfettered by any 
 undue bias of personal feelings or objects. 
 
 They will display a specimen of the pernicious trifling, by 
 which the public business in council appears to have been 
 habitually obstructed, and of the sort of co-operation which 
 Lord Hastings encountered from his colleagues in council, 
 during his administration of the government of India. 
 An attentive perusal of these documents will, at the same 
 time, prepare the reader for the absolute riot which Mr. 
 Adam, and his council, appear to have run during his
 
 Ill 
 
 subsequent temporary elevation, when they were no longer 
 controlled and rebuked by the presence of a statesman to 
 conduct their deliberations and model their decrees. 
 
 Mr. Stuart's \st Minute. 
 
 The letter and enclosures of the 19th ultimo from the 
 Resident at Hyderabad convey the proposition, that this 
 government shall sanction a pecuniary arrangement between 
 the Nizam's government and the House of Messrs. William 
 Palmer and Co., under which the House are to advance that 
 government a sum of sixty lacs of rupees, and to receive as- 
 signments on the country to the amount annually of sixteen 
 lacs, until the principal and interest of the loan shall be 
 liquidated. 
 
 The papers submitted by the Resident afford no information 
 with respect to the rate of interest or other advantages stipu- 
 lated by the House, so as to enable this government to judge 
 how far the arrangement may be an economical and beneficial 
 one for the Nizam's government. 
 
 In my minute of the 10th of November last, recorded on the 
 proceedings of the 1st of January, 1820, following, I advanced 
 objections against this government sanctioning a former pecu- 
 niary arrangement between the Nizam's government and the 
 House of Messrs. William Palmer and Co., upon the ground of 
 the same defect of information which I have remarked on the 
 present occasion. The Board will infer, that I must entertain 
 objections to the present proposition equally insurmountable. 
 My objections, indeed, have acquired increased force from the 
 great and apparently growing extension of Messrs. William 
 Palmer and Co.'s pecuniary concerns with His Highness's 
 government. 
 
 Fort William, (Signed) James Stuart. 
 
 10th June, 1820. 
 
 Mr. FendalVs \st Minute. 
 
 Upon a perusal of the Hyderabad Resident's letter and its 
 enclosure, it appears that the introduction of a regular reform 
 in the Nizam's government is no less anxiously wished for by 
 this government than by the minister. The mode proposed to 
 accomplish this object is, by reducing unnecessary establish- 
 ments, making advances for the improvement of the country, 
 relieving the revenues from the present heavy assignments on
 
 112 
 
 it, given as security for loans from Messrs. Palmer and Co. ; 
 and paying off" otliers which stand at a higlier rate of in- 
 terest. The minister has i-epresented the impossibihty of 
 any attempt towards an effectual reform, unless he can imme- 
 diately procure a loan to the amount of sixty lacs of rupees ; 
 and placing full confidence in the ability of the House of 
 Messrs. William Palmer and Co. to raise this sum, as well 
 as in the liberality of their terms, he has been negociating a 
 loan with them to the extent of the above-mentioned sum. 
 Messrs. William Palmer and Co. have agreed to come forward 
 to the assistance of the minister upon certain conditions, to 
 which the minister has agreed. One of these is the previous 
 sanction of the Resident; and in explanation of the nature and 
 extent of this sanction, they do not require the guarantee of 
 this government for the payment of the loan, but merely such 
 local influence to be afforded them by the Resident, as will 
 protect them from being defrauded. Although no specific 
 mention is made of the rate of interest ivhich is to be paid, yet, 
 Jrom that part of the minister s proposition ivhich refers to the 
 payment of debts standing at a high rate of interest, it is fairly 
 to he inferred, that the loan in contemplatio7i is to be made at 
 a loiver rate than tvhat the old loans bear, and is, therefore, 
 advantageous to the Nizam's govermnent. It is evident, that 
 unless an immediate loan can be raised, the minister's plan 
 cannot be carried into execution. The stipulations required 
 by Messrs. William Palmer and Co., appear calculated only to 
 secure the due and regular payment of the loan; and as the 
 Resident takes no notice of any other tenders more favourable 
 to the Nizam's government having been made, but on the con- 
 tary, represents the impossibility of the minister's obtaining it 
 by any other means than through the House of Messrs. Wil- 
 liam Palmer and Co., I am of opinion that every facility, short 
 of guarantee for the repayment, should be afforded towards the 
 completion of the proposed loan. 
 
 Fort William, (Signed) John Fendall. 
 
 16th June, 1820. 
 
 Minute of the Governor General. 
 
 The letter from the Resident at Hyderabad, dated 19th May, 
 soliciting that this government would sanction the advance of 
 a considerable loan by the house of William Palmer and Co. 
 to the Nizam's minister, Chundoo Loll, demands a special ex- 
 planation of the course I mean to pursue, on account of former 
 discussions connected luith the subject, and of sentiments new ex- 
 pressed upon it.
 
 113 
 
 That the loan must be advantasreous to the house of William 
 Pahner and Co. cannot be questionable, as otlierwise they 
 would have no inducement to listen to the application of the 
 minister. A person in wliom I take a verij lively concern, from 
 his having married a ward of mine, brought up nearly as if she 
 had been my daughter, is a partner in that house. 27ie degree 
 in ivhich his interest is engaged in the proprosed tra:r}acti.on 
 might, without my being conscious of the bias, wnrj) my judg- 
 ment. I shall, therefore, forbear taking jjart in the decision of 
 council ; but it is incumbent on me to define some advertences 
 ivhich must attend it. 
 
 I have put upon record my deep anxiety to save the Nizam's 
 government from a peril which immediately overhangs it. The 
 disorder in the finances of the Hyderabad state not only pro- 
 duces a general oppression of the subjects, discreditable for 
 us to uphold, but has thrown the army into arrears so grievous, 
 as that extensive mutiny is likely to break out at any moment, 
 lievolting at the idea, that the dissolution of that government 
 nn'ght be made profitable for strengthening our position in 
 that part of India, I contemplate such an event as big with 
 reproach to us, the nominally protecting power. It would be 
 a heavy impeachment of the British character, were we charge- 
 able with not having exerted the inHuence which we possess, 
 or applied the resources which we command, to secure from 
 so seri'jus a calamity a sovereign who depends on our foresight 
 and good faith. Adopting my sentiments, this government 
 directed the Resident to call upon Rajah Chundoo Loll for 
 instant measures to parry the impending evil; the reducing the 
 expenditure of the state within its regular income being pointed 
 out to that minister as the only mode of avoiding the con- 
 vulsion, and as thence indispensable. 
 
 The representation has been frankly and manfully met by 
 the minister. He has, as a first step, brought forward a de- 
 tailed plan for immediately dismissing an amount of troops, 
 the aggregate of whose pay is twenty-five lacs yearly. It is, 
 however, stated by him, that he cannot get rid of those troops 
 without liquidating their arrears, which he is unable to effect 
 but by means of a large loan. The sum is proposed by him 
 to be borrowed through the agency of William Palmer and 
 Co., and the terms are agreed upon between the parties, sub- 
 ject to the assent of this government. Repugnance to this 
 arrangement is professed here. In a matter of such pressing 
 and serious import, I am entitled to expect that some intel- 
 ligible way of settling the difficulties will be suggested by those 
 who desire to reject the present proposition. Its outline is, 
 that the whole capital, with the interest, shall be paid oft' in 
 six years ; for which purpose an assignment of territorial re- 
 
 1
 
 J 14 
 
 venue, famishing sixteen lacs annually, is to be granted to 
 Messrs. Palmer and Co. Mr. Stuart pronounces it to be an 
 insurmountable bar to his concurrence, that the rate of interest 
 is not specified. The assignment is calculated to yield in six 
 years ninety-six lacs. Deducting the proposed amount of the 
 capital (sixty lacs), there would remain thirty-six lacs ; that is 
 to say, six lacs for every year. This would be ten per cent., 
 were the capital unreduced. It would come to a higher rate 
 were the six lacs still payable as interest, notwithstanding the 
 yearly diminution of the capital by ten lacs ; but it would be 
 extravagant to presume any such condition. The computed 
 receipt of sixteen lacs is only the security to William Palmer 
 and Co., through which the gradual liquidation of the capital 
 and regular payment of the interest is to be effected ; while 
 the moderation of the terms is evinced, by the destination of a 
 portion of the sum to pa}^ off debts standing at heavy interest. 
 
 This, however, is not the only objection: in a looser way, 
 two others have been hinted. It is said to be undesirable that a 
 British house of agencij shoidd have any concerns ivith the Nizam's 
 government : secondly, it is argued, that the furnishing a loan of 
 such extent tvould give to the house of Palmer and Co., an in- 
 fluence over the minister, tvhich no British subject ought to jjossess. 
 As to tJiefrst, the original permission to the house of William 
 Palmer and Co. to deal with the Nizam's government was granted, 
 as I have understood, from the notoriety, that the Nizam could 
 not, at the time, be kept (float but by such efficacious aid ; and I 
 have always heard, that the benefits arising from the intervention 
 of that house, were as distinctly ack7iowledged by this government 
 as by the court of Hyderabad. As to the second objection, a 
 creditor on so great a scale will, in ordinary instances, have pow- 
 erful weight over the administration to tvhich he has furnished 
 the supply ; but, did this stand good on the present occasion, there 
 tvould only be to estimate that disadvantage against the hazarding 
 such embarrassment and injury to the Honourable Company s 
 concerns, as must be anticipated from tvide convulsion in the 
 Nizam's dominions. It is not, however, easily comprehensible, 
 that such an influence could operate inconveniently, or indeed 
 could ever be employed at all, when the real security to the 
 lenders exists solely in the countenance and support to be 
 given to them by the representative of this government. I 
 therefore hold those arguments to be wholly inapplicable ; and 
 I repeat, that if this provision for the exigency of the Nizanfs 
 affairs be condemned, an available substitute should be ofi^ered 
 by those who counsel the rejection. It will not do to say, 
 " were the house of William Palmer and Co. put aside, I have 
 no doubt but that the Shroffs would produce the money." 
 Some reasonable ground for trusting to such a persuasion
 
 115 
 
 ought lo be yhown, where the consequence of a fallacious 
 reliance may be so distressing. Against such a loose presump- 
 tion we have the positive declaration of the Resident, that the 
 Joan cannot be procured from native bankers alone. Clearly, 
 they fear to advance their money but through a British house, 
 the interest naturally taken in which by this government gives 
 them a confidence, such as they could never feel in a direct 
 negociation v/ith a native court. 
 
 A point of no small delicacy presents itself on the above une- 
 (juivocal assertion of the Resident. Is he to he credited or not ? 
 Such a circumstance is supposable, as that there might he a corrupt 
 tindeistanding betiveen the Resident, the house of Palmer and 
 Co., and the minister. When I state it as Mathin possibility, I 
 feel bound to declare my solemn conviction, that there is not 
 room for any imagination of the kind ; and I make that pro- 
 fession not merely from the known and established character 
 of the persons, but also from the total absence of any particular 
 that could justify the shadow of such a notion, when the re- 
 lations between the parties were recently sifted in council. If 
 a different conception has been formed in the mind of any 
 member of the board, its bearing must extend far beyond the 
 limit of the question now before us. It involves considerations 
 of the deepest importance to the concerns of the Honourable 
 Company ; therefore, I disiinctlij say, tliat any member of 
 council impressed tvith such a suspicion, is bound in duty to 
 avow it, and to specify the grounds on which he entertains ?t. 
 If there be no colour for a doubt of the Resident's integrity, 
 it will be difficult to refuse the testimony which he, on the 
 .spot, bears to the inability of the Nizam's minister to procure 
 the necessary funds, otherv/ise than in the way proposed. I 
 recur then to my position, that they who impugn the plan are 
 under the obligation of this alternative : — They must record, 
 .that they think the existing distresses and apprehended sub- 
 version of the Nizam's government a less evil than the possible 
 consequences of the projected remedy, or they should show 
 some other practicable course, through which the minister can 
 effect what we have enjoined. 
 
 (Signed) Hastings, 
 
 Air. Stuart's second Minute. 
 
 I have had the honour to peruse the governor-general's 
 minute of the 17th instant, upon the subject of the Hyderabad 
 loan. 
 
 I 2
 
 116 
 
 I perceive tliat, from the minister's representation to the 
 Resident, liis lortlship inlers the interest upon the proposed 
 loan to be ten per cent. 
 
 It" I could Scitisty myself on that head ; if I saw accurate 
 ground for inferring that the interest and charges of all de- 
 scriptions were not meant to exceed ten per cent., I should not 
 hesitate to express my opinion of the fairness and reasonable- 
 ness of the terms. 
 
 In that case, I should not, indeed, abandon the objections ivhich 
 I stated on a former occasion, to a single house oj' agency holding 
 a monopoli/ of pecnniari/ supply to the Nizam's government ; but 
 viewing the urgency of that government's pecuniary wants, 
 and the prospect of its obtaining prompt assistance by the 
 adoption of the proposition, I would not propose my objections 
 against it as a temporary measure. 
 
 But, on calculation, 1 iind, if ten per cent, be assumed as 
 the interest and charge of the loan, the appropriation of six- 
 teen lacs per annum would extinguish the loan, principal and 
 interest, in live years, and leave a surplus of a lac of rupees. 
 
 If sixteen per cent, be assumed as the amount of interest 
 and charge, then the annual appropriation of sixteen lacs for 
 six years would extinguish the loan, principal and interest, all 
 but about two lacs and a half of rupees. 
 
 That calculation squares very well with the minister's state- 
 ment, who says, that the application of sixteen lacs for about 
 six years will extinguish the debt. 
 
 These results confirm, in my humble judgment, the desir- 
 ableness of procuring the more accurate inibrmation which I 
 had wished on the terms of the proposed loan, including in- 
 terest and charges of all descriptions. 
 
 His lordship lias expressed his expectation, that they who 
 desire to reject the present proposition, will suggest some 
 mode of providing for the exigency. 
 
 Upon that point I beg permission to remark, that the 
 opinion which I have expressed ivent merely to suspend the 
 decision of government until further information should be ob- 
 tained. I have already stated, ij'the terms of the proposed loan 
 "were satisfactorily shorvii to be at the rate which his lordsliip has 
 inferj-ed, I shoidd be prepared to assent to the measure. 
 
 But supposing the house of William Palmer and Co. to ex- 
 pect terms whicli this government should not deem reasonable, 
 / should not anticipate difficulty in otherwise providing for the 
 exigencies of the Nizam s government. 
 
 In professing that opinion, I assume, that the influence of the 
 Resident is sufficient to ensure the realization of the assignments 
 ivhich the. Nizam's minister proposes to grant as sectirity for the 
 money which he wants to borrow. It appears to me, that the
 
 117 
 
 operations of the Iiousc of William Palmer and Co. are founded 
 on that confidence. 
 
 That assumption being admitted, it appears to me that, 
 perhaps, the best and simplest plan might be, to advance at 
 once from this treasury the sum which the minister wants. 
 
 The financial situation of this government is peculiarly fa- 
 vourable to such a measure. Not to mention other circum- 
 stances, it is understood that the greatest part of the half-yearly 
 interest, for the payment of which cash has been collected at 
 the treasury, is likely to be taken out in bills. That circum- 
 stance will place about fifty lacs of rupees at. the disposal of 
 government ; and I imagine that the appropriation of it, with 
 the addition of ten lacs, to supplying the wants of the Nizam's 
 government, would not only be not inconvenient, but advan- 
 tageous. 
 
 Should there be obstacles, of which I am not aware, to that 
 plan, / think that by encouraging competition, the Resident in 
 the present glut of money in the markets of India, would expe- 
 rience no difficulty in raising the sums required upon moderate 
 terms. 
 
 If assurances of the Resident's protection should not succeed 
 in drawing the desired supply from the native bankers at 
 Hyderabad, I should presume that invitations to the opulent 
 and respectable commercial firms at the different presidencies, 
 could hardly fail to accomplish the object. 
 
 / have been concerned to observe, that the doubts tvhich have 
 been entertained upon the Resident's propositions, should have 
 appeared to his lordship open to the construction of a personal 
 reproach to that officer. 
 
 I have certainly held the matter to be one, on which the 
 government has been called to exercise its own judgment. 
 In exercising mine upon the Resident's propositions, I have seen 
 'grounds not to reject them, but to suspend my opinion upon them, 
 until they should be more satisfactorily elucidated than they ap- 
 peared to me to be. But I can ivith entire sincerity declare, that 
 the opinions which I have expressed have been independent of all 
 personal reference to the Resident. 
 
 His lordship has been pleased to advert to the interest which 
 he takes in the welfare of a gentleman who is associated in 
 the house of Messrs. William Palmer and Co. 
 
 Even to the illustrious character and high station of the 
 governor-general, the avowal of such an interest can be only 
 honourable. Next to the highest objects of power, the good 
 of our country and of mankind, the opportunities which it 
 affords of promoting the welfare of those endeared to us by 
 friendship and affection, will be deemed by generous minds 
 the fairest reward of its toil and anxiety. How forcibly such 
 
 1 3
 
 118 
 
 ties mast be felt by his lordship, will be understood by all 
 those who know the kindness and benignity of his nature. 
 How much gratification I shall always derive from being able 
 to concur in his lordship's indulgence of that feeling, how 
 much mortified I must be when motives of duty may constrain 
 me to deny myself that happiness, I hope I need not profess. 
 The sentiment is due, no less to his lordship's exalted station 
 in the government, than to the kind and liberal disposition 
 which he invariably manifests, to meet claims of a simUar 
 nature on the part of the other members. But whatever may 
 be the difference of views upon the present case, there is one 
 point upon which I venture to submit a confident opinion. I 
 do not hesitate to pronounce, that his lordship is the only 
 person who can think that his friendship for a gentleman, whose 
 interests are involved in the question, constitutes the slightest 
 ground for his withdrawing from the determination. 
 
 (Signed) James Stuart. 
 
 Mr. Adams first Minute. 
 
 Having assented to the arrangement made with the house 
 of William Palmer and Co. of Hyderabad, under the sanction 
 of the British government, for providing funds for the payment 
 of the regular forces of his highness the Nizam in Berar, it is 
 necessary that I should state distinctly my sentiments on the 
 measure now proposed by the Resident, which may seem to 
 rest on a similar footing of expediency. Tlie considerations 
 which weighed with me, in acceding to the former plan, were 
 shortly these. Tliere seemed, at the moment, no other equally 
 convenient and economical mode of securing the supply of the 
 required funds, at a specified time and place, for the regular 
 payment of the troops, on the punctuality of which their 
 efficiency was understood to depend. The ordinary resources 
 had failed, or at least were in such danger of failure, as to 
 make any reliance on them wholly insecure. The terms of- 
 fered by Messrs. William Palmer and Co. were represented, 
 and I believe correctly, to be more favourable than any other 
 that could be obtained by the Nizam's minister on his own 
 credit, or that of the state, while the condition of the money 
 market and of our own treasury did not enable us to assist 
 him in procuring funds elsewhere, or by direct pecuniary ad- 
 vances. On the whole, it appeared to be as favourable an 
 t'.rrangement for the Nizam as circumstances would admit of; 
 and, as such, a fit object for the sanction of the British go- 
 vernment, so deeply interested in the welfare of its ally, and 
 
 «\
 
 119 
 
 in the permanence ot" an establishment so conducive to the 
 preservation of our ascendancy and of the general tranquillity, 
 as the Nizam's regular forces. But while the force of these 
 considerations led me to accede to the former plan, Iivas never 
 insensible of the objections to encouraging, or even permitting, 
 extensive pecuniari/ dealings betiveen a native government and an 
 opulent British house of ageiicy ; and if any other available re- 
 source had presented itself I voould xvilUngly have resorted to it, 
 in preference to a measure which, tvhatever was its convenience in 
 other respects, had that objectionable Jeature. This brings me 
 to the question immediately before us, namely, whether we 
 should adopt the Resident's proposition, or assist the minister 
 with other means for effecting his reforms ; for I willingly 
 admit, that we are not entitled to oppose his plan, if ive do not 
 J'urnish him with a better. Such a one is, in my judgment, to 
 be found iu the suggestions contained in Mr. Stuart's minute, 
 which appears to me to oft'er every possible advantage to the 
 minister as a pecuniary arrangement, with some convenience 
 to the British government, and to be in some respects unex- 
 ceptionable, either in a financial or political point of view. As 
 a financial question, it will necessarily, if it be entertained by 
 the board, become a subject of otficial reference to the ac- 
 countant-general, on whose statement I presume Mr. Stuart's 
 representation of the state of the treasury to be founded. En- 
 tertaining this decided opinion in favour of a direct advance from 
 our 01071 treasury, on solid security, such as is of course at- 
 tainable, I might dispense with further observations on the 
 plan submitted by the minister. But if the other arrangement 
 should unexpectedly be opposed, by objections which are not 
 at present visible to me, / conceive that we shoidd, at all events, 
 call for more distinct information concerning the terms of the 
 proposed loan from Messrs. William Palmer and Co., before it 
 'is sanctioned. At present, we are left to infer the actual rate 
 of interest ; and the imperfect means of coming to any thing 
 like an accurate conclusion on this point, from the information 
 before us, is evident, from the different results of the calcula- 
 tions of the governor-general and of Mr. Stuart. In the event 
 of the high rate of interest proving to be that v/hich it is in- 
 tended to demand, / conceive that an endeavour should be made 
 to procure more favourable terms. We have lately seen a 
 large loan negociated for the Guicowar at nine and a half per 
 cent. The facilities of borrowing at Hyderabad, fnot opposed 
 by a combination, ought not to be inferior. / have been struck 
 by a passage in Mr. Russell's letter, viz. that the minister cannot 
 obtain the requisite funds " by anij other means than the assist- 
 " ance of Messrs. William Palmer and Co., whose circumstances 
 " enable them to secure a combination of the native monied in" 
 
 I 4
 
 1^20 
 
 " tercsty If tliis be so, 1 am so tar from considering it as a 
 motive for giving tlie additional strength to such an infiucnce 
 which it would derive from the proposed loan, that it seems to 
 me to form a powerful reason for abstainmg from any measure 
 calculated to confirm a monopoly^ from tvhich no good can residt, 
 either to the Nizam's government or the general commercial in- 
 terests of the countrij, and for resorting to the plan of a direct 
 loan from the British treasury. That measure has accordingly 
 my decided preference. I trust that I need not profess, that I 
 have endeavoured to form my judgment of this question solely 
 upon its own merits. In dissenting from Mr. Ihissell's recom- 
 mendation, I distinctly disclaim the slightest suspicion of his 
 having been influenced by any other motive in bri)iging it before 
 7is, than a sense of public duty. I am satisfied that he consi- 
 ders tlie plan to be the best that can be ibllowed for the be- 
 nefit of the Nizam's government, and although I cannot agree 
 in this view of the subject, a doubt of his integrity never entered 
 my mind. 
 
 I am concerned to perceive that the governor- general has 
 intimated his intention of taking no part in the determination 
 of this question. No one can estimate more highly than I do, 
 the feeling which has prompted this resolution. But I trust 
 his lordship may see reason for departing from it ; for although 
 I have the misfortune not to concur in opinion with his lordship 
 on the case before us, I am fully persuaded that no decision 
 on a subject of such importance, in which he shall not take a 
 part, can be satisfactory, either to ourselves or to the autho- 
 rities at home. 
 
 (Signed) J. Adam. 
 
 Mr. FendalFs second Minute. 
 
 I have perused the minutes of the governor-general, Mr. 
 Stuart, and Mr. Adam, as also the correspondence which has 
 taken place upon the subject of the loan required by the mi- 
 nister at Hyderabad, to carry into effect the plan of reform in 
 that government. During the discussions which have taken 
 place at Hyderabad, no mention is made as to what rate of 
 interest the loan is to bear ; but, upon reference to the time in 
 which it is to be liquidated, and the appropriation of the annual 
 sum of sixteen lacs of rupees for that purpose, I infer with 
 Mr. Stuart, that the rate of interest is sixteen per cent. The 
 sum wanted by the minister is sixty lacs of rupees, and Messrs. 
 William Palmer and Co. have engaged to negociate the loan 
 to that extent, upon certain conditions agreed to by the mi- 
 nister. It cannot be supposed that Messrs. William Palmer
 
 and Co. have the means of providing for tliis sum from their 
 own funds, but must look for the assistance of monied men, 
 and particularly native bankers, to its completion. They will 
 not, I think it is evident, come forward, unless they have the 
 intermediate security of some respectable house of agency in 
 which they can place confidence, and this confidence they 
 appear to have in the firm of Messrs. \Villiam Palmer and Co. 
 fVhat interest they ivill demand it is not easy to say ; hut, from 
 the former loan having been negotiated at tiventyfour per cent., 
 I do not imagine they ivill advance their money at less than twelve 
 per cent. In addition to the interest which Messrs. William 
 Palmer and Co. must pay to the native bankers, they must be 
 at some expence in realizing the annual assignments, perhaps 
 not to the extent of the remaining four per cent. ; but they 
 must also naturally look to derive some advantage, to cover 
 the risk and responsibility which will attach to them as the 
 negociators of this loan, which, at the inferred rate of sixteen 
 per cent., is one-third less than the former one bore. Taking, 
 therefore, into consideration the reduction of the interest obtained, 
 the risk and responsibility incurred by the house in standing 
 betvoeen the minister and the native bankers, and the expence iti 
 realizing the assignments, the rate of interest does not appear to 
 me exorbitant, provided the inferred sixteen per cent, covers all 
 expences. With respect to this government advancing the loan, 
 I have very great doubts as to the policy and expediency of 
 the measure. I submit, with great deference, whether it might 
 not instil into the mind of his highness the Nizam, suspicions 
 unfavourable to the good faith of this government ; whether it 
 might not be suspected to be a preliminary step towards en- 
 croachment of this government, prejudicial to the interests of 
 his highness ; and should suspicions arise, however unfounded 
 they are, whether obstacles would not be thrown in the mi- 
 ' nister's way, which would render all his attempts at effectual 
 reform nugatory. If the loan be made by our government, 
 the cash must be remitted from hence, either by bills of ex- 
 change or in specie, which must clog the loan with additional 
 expence ; and, in the latter mode, in addition to the expence, 
 there will be the risk of transportation. If the assignments are 
 hot regularly paid, unpleasant discussions must take place between 
 the minister and the Resident, and a heavy responsibility will rest 
 on this government ; all which will, in my opinion, be avoided, if 
 the loan be negociated by Messrs. IVilliam Palmer and Co., and 
 our interference limited to its proper boundary. I confess I do 
 not perceive that any house of agency can obtain an undue in- 
 fluence over the measures of the minister, by its having the ne- 
 gnciatlon of this loan. Admitting even any attempt at such 
 interference being tried, the Resident, I :?!iouId think, has it iu
 
 T 00) 
 
 his power to prevent its taking effect. The credit of any 
 house of agency at Hyderabad must, 1 should conceive, de- 
 pend in some measure upon the countenance and support 
 shown it by the Resident, and the apprehension of doing any 
 thing which might compel the Resident to withdraw his coun- 
 tenance and support, must, I think, prevent it from attempting 
 any interference, further than in effecting the completion of 
 agreements entered into by tlie minister. / submit the fore- 
 going remarks ivith great diffidence ; but J am compelled to do 
 so, from a conviction that the safest and best mode of effectually 
 supporting the minister in the completion of the plans ivhich he 
 has so zealoushj undertaken, ijoill be by allowing the negociation 
 •with Messrs. William Palmer and Co., as recommended by the 
 Resident, to proceed, and confining the interference of this go- 
 vernment to the terms stipulated by the house and agreed to by 
 the minister. I cannot conclude without expressing the high 
 respect and veneration I feel for the motives, which have in- 
 duced the governor-general to decline taking part in the 
 decision of the council upon the present occasion, and sin- 
 cerely lamenting, that the circumstance alluded to by his 
 lordship should deprive us of the benefit of his judgment upon 
 the case. 
 
 (Signed) John Fendall. 
 
 GovernoT'generaVs second Minute. 
 
 Having already explained so fully my sentiments on the 
 proposed loan to the Nizam, little remains for me to add, 
 beyond the expression of my opinion respecting what Mr. 
 Stuart and Mr. Adam consider as possible substitutes for that 
 measure. 
 
 First, however, I must observe, that I have been misappre- 
 hended, when it was supposed that I computed the interest at 
 only ten per cent. I had no information whatever on which 
 I could ground such an assumption ; nor was such a rate re- 
 concilable to probability, aware, as we are, of what has been 
 for a long time back the course of money transactions at Hy- 
 derabad. To an arbitrary inference that the terms must be 
 extortionary, I opposed a calculation, loose indeed, yet suffi- 
 cient for that purpose, to show there was no reason for adopt- 
 ing such a conclusion. I showed that the portion of the as- 
 signment which would remain, after extinguishing ten lacs of 
 capital in the first year, would be only ten per cent, on the 
 origmal sum. The residue, in succeeding, would furnish an 
 aggravated interest, in proportion as the capital was reduced ;
 
 V2S 
 
 but the contemplation could not be confined to any one of the 
 latter years : the whole transaction must be taken together, 
 and then the aggregate amount of interest could not be exor- 
 bitant, when compared with the known rate in that part of 
 India. The calculation of Mr. Stuart squares so well with the 
 time reckoned upon by the minister, that I should expect six- 
 teen per cent, to be the agreed condition. The borrowing at 
 eight per cent, less than he has hitherto done is so evident a 
 relief to the Nizam, that the arrangement (with the reform 
 which it is destined to eifect) must be deemed advantageous, 
 if no less burthensome plan could have been fashioned. On 
 this head the Resident speaks decisively, in his letter of the 
 19th May, 1820. The passage is quoted in the margin.* 
 
 To obviate the difficulty asserted by Mr. Russell, Mr. Stuart 
 and Mr. Adam propose the issue of sixty lacs of rupees to the 
 Nizam, as a loan, from our Treasury. Mr. Fendall judiciously 
 anticipates the alarvi and invincihle repugnance xvith ivhich the 
 Nizam would meet such an offer from us. In corroboratio?i of 
 Mr. Fendall's opinion, I request the atterdion of the board to the 
 communication ivhich tve received from the Resident, in his letter 
 of the 30th April, 1 820. t A more poiverful instrument for 
 toorking 07i the jealousy of the Nizam coidd not be furnished to 
 the enemies of Chuudoo Loll than such a proposition. But that 
 is not the sole objection. No consideration shall ever induce me 
 to assent to a measure, sure to be viewed with suspicion and dis- 
 favour at home. The advance of such a sum from the Company s 
 Treasury to a Native Prince would not fail to be generally re- 
 garded, and probably to be charged in parliament, as an insidious 
 policy, on my part, to entangle the Nizam in obligations not ex- 
 pected to be fulfilled, the failure in. which should give me the pre- 
 
 * " It will be extremely difficult for the minister to prosecute his measures 
 of reform with any real effect, unless he can obtain the command of a sum of 
 ready money, for the purposes described by him ; and he certainly cannot 
 obtain it by any other means than the assistance of Messrs. William Palmer 
 and Co., whose circumstances enable them to secure a combination of the 
 native monied interest. I therefore beg leave to submit the minister's request 
 to the favourable consideration of government." 
 
 i* " A combination appears to have been lately formed between Mooneer- 
 ool IMoolk, Ameer-ool Moolk, Shums-ool Omrah, Shar Yar-ool Moolk, and 
 some other principal persons about the Nizam, to resist the measures of re- 
 trenchment in which the minister is engaged, and by which they find that their 
 undue emoluments will be seriously affected. For this purpose they endea- 
 voured, by alarming the Nizam's jealousy, to make him a party in their cause. 
 They represented to him that in this, as in all other instances, Chundoo Loll 
 was merely a tool in the hands of the Britisii governmL'nt, and that, under 
 the specious pretext of reducing his expences and reforming his affairs, we 
 were in reality preparing a scheme for taking possession of l)is government 
 and country."
 
 r24 
 
 text for subjugaling him to ihiit thmldum, ivhence I am realltj 
 labouring to extricate him. I repeat, that I never can be pre- 
 vailed on to concur in such a proposition ; ivhich is at the same 
 time intrinsicalli/ unadvisablc, as it ivotdd to a certainty entail 
 those verij interferences in the Nizam's internal administration 
 Ivhich ive have been recently condemning. 
 
 Mr. Adam, as an alternative, suggests that a loan might be ob- 
 tained J'rom other sources, tender a declared protection either from 
 this government directly or J'rom the Resident. He unjbrtunatcly 
 instances the nine and a half per cent, loan negociated for the 
 Guicowar in that manner. The illustration immediately brings 
 fonvard the objection. The measure to tvhich Mr. Adam alludes 
 necessitated the Bandhary system at Baroda. The system ivas 
 glanced at, in discussions respecting Hyderabad, very lately in 
 the Council; and I iJtought ive had been unanimous in repro- 
 bating the notion of any procedure ivhich coidd even virtually 
 involve us in a similar species of pledge to overrule the Nizam s 
 expenditure. The Resident at Hyderabad was explicitly in- 
 formed, I hww not ivhether in a public or private letter, that 
 this government voould never furnish even an implied security to 
 parties furnishing the Nizam tvith money. He iias, on this oc- 
 casion, exacted a declaration from Messrs. William Palmer and 
 Co., that they do not understand, as any such indirect assur- 
 ance, the sanction which they request from govei'nment. Un- 
 less we depart from the above principle, which I have no dis- 
 position to abandon, what chance can there be of the Nizam's 
 procuring money by recurrence to Shroffs in various places ? 
 
 / conceive Mr. Adam to have entirely misconstrued a material 
 pnrticidar in the Residcnfs letter. It is supposed by Mr. Adam 
 that there is the avotval of a combination, headed by the house of 
 William Palmer and Co., to exclude the greater portion of the 
 Shroffs. The obvious meaning of the passage is, that William 
 Palmer and Co. had prevailed on the Shroffs to combine tvith 
 them in producing the amount of money tvanted, and ivhich the 
 house could not of itself furnish. 
 
 This question cannot, for any practical end, be considered 
 unconnectedly. It is not a simple discussion on the more or less 
 of interest expediently admissible. Unless the consultations 
 which we have held, and tlie determinations which we have 
 recorded respecting the condition of the Nizam's dominions, 
 were absolutely inept, there is the most urgent call for effica- 
 cious remedial procedures in that state. We enjoined the 
 Resident to press upon the minister the necessity for imme- 
 diate steps of reform : the evil was represented as not admit- 
 ting of procrastination or palliatives. We were moved to this 
 intervention by the clear perception, that extensive convul- 
 sions in the Nizam's territories would not only be materially
 
 injurious to us in that quarter, but would infallibly stir up 
 commotion north ot" the Nerbudda, and subject us to heavy 
 expence. Our assurances ot" support were plighted to the 
 minister, in case he would undertake a measure which we both 
 knew must draw upon him the violent hostility of all those 
 powerful chiefs about the Nizam's court, whose emoluments 
 were to be curtailed by the proposed alterations. On the faith 
 of our pledge, Chundoo Loll embarks in an enterprise, which 
 puts to hazard his very existence. Having nothing specific pre- 
 scribed to him, he frames for himself an arrangement which, 
 though only partial, exhibits a beneficial result, in the degree of 
 instantly furnishing to him an additional revenue of nine dis- 
 posable lacs for six years ; after which period, the improve- 
 ment of income achieved by the operation will stand at twenty- 
 five lacs annually. Instead of encouraging this first effort to 
 meet our wishes, we tell him that his conduct is improvident, 
 and we assert that he might have made a better bargain, 
 though he and the Resident both declare the terms of this 
 loan to be the most advantageous that the situation of affairs 
 in that country could enable the Nizam's government to pro- 
 cure. But there is a consideration still more serious than the 
 repressing the confidence and the activity of Chundoo Loll. 
 The importance of time, and the lapse of it, seem to be en- 
 tirely overlooked, though we professed delay to be perilous. 
 The suspense inevitably gives formidable advantage to the 
 party opposed to Chundoo Loll, and that advertence should 
 call our attention to the risk of a dilemma. It would be an 
 awkward alternative, when we must either forfeit our honour 
 to Chundoo Loll, or must interfere for his protection, with an 
 open usurpation of control over the Nizam, painful to our 
 sentiments, and destructive of the liberal system which we 
 have endeavoured to establish. I thence solicit a speedy and 
 final decision. 
 
 (Signed) Hastings. 
 
 Mr. Sttiarfs third Minute. 
 
 In suggesting that this government should extend relief to 
 the Nizam's government, by an advance of money direct from 
 the treasury, I had certainly not foreseen the difficulty to which 
 that measure has appeared to the governor-general and Mr. 
 Fendall to be liable. 
 
 I have been accustomed to think the exercise of tlie British 
 power over that government to have been for many years so 
 confessed and decisive, that I had not anticipated any general
 
 increase of dissatisfaction, or claim, from tlie proposed advance 
 of money. 
 
 Nor did I contemplate any probable inconvenience from tbe 
 probable operation of the measure upon the mind of the 
 Nizam. 
 
 The information on our records shows, that that prince has 
 long entertained sentiments of jealousy and aversion towards 
 the British government, ivhichthc measure looidd hardlij increase, 
 and which have led to his exclusion, by our power, of all 
 authority in the state. 
 
 The 7-casons, in explanation of the measure, "which the govern- 
 ment usouldhave been able to submit to the authorities in England, 
 would, I should have hoped, have prevented the misconstruction of 
 tohich his lordship is apprehensive. 
 
 Having already had the honour to offer my sentiments fully 
 on the question, I leave the specific course which it will be 
 proper to follow, without further observation, to the wisdom of 
 the Board. 
 
 Fort William, (Signed) Jas. Stuart. 
 
 11th July 1820. 
 
 To R. Spankie, Esq., Advocate-general. 
 Sir: 
 
 Were a large loan (not less than 700,000/.) from our treasury 
 to a native sovereign to be recommended by supposed motives 
 of policy, I wish to know if such an application of the money 
 would be legal. 
 
 The project implies a surplus, either existing or anticipated: 
 because the procedure would otherwise be clearly irrecon- 
 cilable to duty. Now I apprehend, that the legislature has 
 established a specific destination for the surplus of Indian re- 
 venue, and I am thence doubtful whether the measure alluded 
 to would not be a contravention of the statute. 
 
 I have, &c. 
 
 Fort-William, (Signed) Hastings. 
 
 8th July 1820. 
 
 To his Excellency the Governor-general, &C.&C. &c. 
 My Lord : 
 
 I have the honour to state, in reply to your lordship's letter 
 of the 8th instant, that a loan to a native prince, in the circum-
 
 127 
 
 stances therein supposed, out of any surplus of revenue in the 
 hands of government, appeal's to me inconsistent with the ap- 
 propriation directed by the 53 Geo. III.j cap. 155. sec. 55 to 61, 
 and, in my opinion, would be illegal. 
 
 I have the honour to be, &c. 
 
 Fort William, (Signed) R. Spankie, 
 
 11th July 1820. Advocate-general. 
 
 Mr. Adam's second Minute. 
 
 I am concerned to find, that the plan for assisting the Nizam's 
 government, by a loan from the British treasury, is viewed with 
 such repugnance by the governor-general. I certainly did not 
 conceive it to be open to the objections urged by his lordship 
 and by Mr. Fendail, nor on any other grounds materially excep- 
 tionable ; and, tvith the utmost deference for the authority that has 
 pronounced against it, I mtist continue to regard it as preferable, 
 in every point of vieix, to the measure recommended by the 
 Resident at Hyderabad. I imagine Rajah Chundoo Loll to 
 entertain too just a confidence in our good faith, and in the 
 sincerity with which we are co-operating with him in the reform 
 of the administration at Hyderabad, to suspect us of any in- 
 sidious design, in tendering the loan directly from ourselves. 
 He must feel, I think, that the territorial security he has offered 
 to Messrs. Palmer and Co. is no less adequate to the discharge 
 of a debt on more favourable terms to the British government, 
 and he cannot suspect us of the enormous injustice of wresting 
 that loan to our own selfish purposes, and to the injury of his 
 sovereign. I should not object, however, to leaving this point 
 to be determined by the result of a proffer of the loan to 
 Chundoo Loll ; and I would by no means propose to press it 
 on him, against his wishes or his prejudices. The effect it 
 might produce in the mind of the Nizam, I conceive to be of 
 very inferior moment. We may presume, indeed, from his 
 ordinary conduct, that having given his consent to the reform, 
 and entrusted the minister with the execution of it, he will not 
 take any interest in the manner in which it is accomplished. 
 If the enemies of Chundoo Loll should draw his highness's 
 attention to the loan, and endeavour to pervert it to the 
 minister's disadvantage, I should even then scarcely consider 
 the degree in which the Nizam's confirmed jealousy and dislike 
 of the minister and the British government would be increased 
 by this means, as a reason for receding from the plan, provided 
 it were acceptable to the minister himself 
 
 I foel all the intportance attached by the governor-general to
 
 158 
 
 ihe inews that mai/ be taken of this tmnsactio>t at home ; bid I 
 confess, that the grounds on zvhich it is to be explained and de- 
 fended, appear to me to be so clear, that tve should entertain no 
 apprehension of their being liable to misconstriiclion by the un- 
 prejudiced part of the jmblic. 
 
 I shall be verij happij to Jind that I have misapprehended the 
 import of the passage in Mr. RusseU's letter, ivhich appeared to 
 me to impljj, at least, the power of the house of William Palmer 
 and Co. to create a combination of the monied interest at Hyder- 
 abad. If that were disproved, and the terms obtained through 
 the intervention of that house sJtoxmi to be as advantageous to ihe 
 minister as any that could be got elseivhere, inuch of my objection 
 rvould be removed, though I still sliouhl think, that that house had 
 as large a share of pecuniary engagement with the Nizam as it 
 is desirable for any single establishynent to have. 
 
 In iidverting to the recent loan effected for the Guicowar, I 
 had no other object than to show, that money was obtainable 
 by a native state on easier terms than those of the proposed 
 Hyderabad loan, and to suggest the practicability of terms, nearly 
 as favourable, being procurable by the Nizam's minister. Ad- 
 mitting that our interference with the Guicowar's internal 
 administration has been carried beyond wholesome limits, 1 
 conceive myself to be justified in assuming, that the recurrence 
 of an improper intervention has been guarded against, in the 
 arrangements connected with the particular loan in question. 
 
 The pressure of time, and a disinclination to prolong the 
 discussion, prevent me from enlarging further on the subject ; 
 but I have thought the few foregoing observations necessary in 
 support of the view I take of the question under consideration. 
 Tlie opinion of the governor-general and Mr. Fendall being 
 adverse to the loan from the British government, that proposi- 
 tion is, of course, negatived. I have stated in my former 
 minute the course which, in that event, I conceive ought to be 
 pursued, and it will remain to be decided by the majority of the 
 board how far that course is expedient, or the reverse. 
 
 Fort-William, (Signed) J. Adam. 
 
 12th July 1820. 
 
 Mr. Fendall' s third Minute. 
 
 I have perused the further minutes oi^ the governor-general, 
 Mr. Stuart, and Mr. Adam, uj)on the Hyderabad loan, and con- 
 curring, as I have the honour to do, in the sentiments expressed 
 by his lordship upon the plan proposed by Mr. Adam, ior 
 effecting the loan, I have now only to repeat what I have be- 
 fore stated, that the safest and best mode this government can
 
 129 
 
 pursue, is to close with the tei*ms recommended by the Resi- 
 dent, and agreed to by tlie minister and the Iiouse of Messrs. 
 WiUiam Pahner and Co. 
 
 Fort William, (Signed) John Fendall. 
 
 13th July, 1820. 
 
 Mr. Stuart's Fourth Minute. 
 
 Mr. Spankie's opinion, for which I have always a high respect, 
 appears to me, on the present occasion, / ivill not say wrotig, 
 but irrelative. 
 
 The question to Mr. Spankie contains an assumption to 
 which I cannot assent, xnz. that the proposed advance implies 
 either existing or anticipated surplus. If the proposed expen- 
 diture be expedient for promoting essential political interests, 
 I cannot see that we must await or anticipate a surplus before 
 we can legally incur it. That is the question I should desire 
 to put to Mr. Spankie. The matter appears to me to turn not 
 upon the appropriation of surplus, but upon the application of 
 the revenues and funds of the state. Until all expenditure in- 
 cident to the military, civil, and political government of India 
 be supplied, there can, I imagine, be no question of a surplus 
 or of its appropriation. This is my first impression of the legal 
 view of the case ; but the point will, of course, require mature 
 consideration. What is there in the statute to prevent the go- 
 vernment borrowing for such a purpose ? 
 
 Fort William, (Signed) Jas. Stuart. 
 
 14th July, 1820. 
 
 Mr. Adams Third Minute. 
 
 I have only to remark on the subject of Mr. Spankie's opinion 
 relative to the proposed loan to the Nizam's government, that I 
 do not consider the appropriation of surplus revenue, either 
 actual or prospective, to be involved in the question at issue. 
 I regard the advance as an appropriation of the general funds 
 of government for a presumed beneficial public purpose ; but 
 the arrangement being viewed with disapprobation, on political 
 grounds, by the Governor-general and the majority of the 
 Board, I should not imagine any further reference to the law 
 officers necessary. 
 
 Fort William, (Signed) J. Adam. 
 
 Uth July, 1820. ^ 
 
 K
 
 ISO 
 
 Governor-generaV s Third Alinnte. 
 
 The sole substitute proposed by Mr. Stuart and Mr. Adam 
 for the loan contemplated by the Nizam's minister, is one 
 which (my own judgment being fortified by professional 
 opinion), I must consider as entirely inadmissible. Those gen- 
 tlemen endeavour to maintain, that the loan of sixty lacs to the 
 Nizam would not be taken from surplus, but would come out 
 of the current receipts ; and they attempt to assimilate it with 
 those moderate advances which we are in the habit of occa- 
 sionally making for political purposes. With sincere respect 
 for their sentiments, I must think they have overlooked an ob- 
 vious difference. In the case of petty advances, if they fail to 
 be repaid in the course of the year, they do not seriously affect 
 the state of the account: but the abstraction of sixty lacs 
 (professedly not to be returned for a considerable period) from 
 the revenue, would, at the close of the year, exhibit a defi- 
 ciency in the provision for the investment, which would exact 
 replacement from the cash balance ; so that it would be pre- 
 cisely the same thing as if the sum were taken at once from 
 consolidated surplus. Mr. Stuart asks, what is there in the 
 statute which forbids our borrowing the sum in question, in 
 order to lend it to the Nizam ? I apprehend the framers of 
 the statute never thought it necessary to proscribe specially, 
 that which would be a manifest perversion of our powers, 
 already included within the general description of misconduct 
 declared to be visitable by parliamentary chastisement. 
 
 As the matter now stands I am in a dilemma. Either I 
 must abandon the principle which I at the outset adopted, of 
 non-interference, or I must leave Rajah Chundoo Loll to feel 
 himself deserted in the first hazardous step taken by him, 
 through compliance with the instigation of this government. 
 His now forbearing to carry into effect those reductions which 
 he had announced, would be a triumph to his powerful adver- 
 saries, of such mischievous consequence, that I should be 
 hopeless of bringing about any reform in the Nizam's adminis- 
 tration, unless by measures, on our part, bearing an odious 
 character of violence. I cannot hesitate in my choice. I must 
 retract my profession, acknowledging that I was wrong, in ever 
 letting a personal consideration induce me to withdraw myself 
 from any part of my public duty. 
 
 Joining myself in opinion with Mr. Fendall, I decide upon 
 giving to the loan that degree of countenance, which alone has 
 been solicited by the house of William Palmer and Co., and 
 recommended by the Resident. 
 
 Fort William, (Signed) Hastings. 
 
 14th July, 1820.
 
 181 
 
 Mr. Stuart, in his minute of 10th June, (p. 37.)? re- 
 ftises his assent to tlife sanction of the k)an, on precisely 
 the same grounds he had advanced for objecting to the 
 Aurungabad contract, viz. First, because he was not made 
 acquainted -joith " the rale of' interest^ or other advantages 
 " stipulated hy the Moused'' Secondly, from an undefined 
 jealousy of increasing the importance of the House of 
 W. Palmer and Co. He makes no reference whatever to 
 the pressing and paramount importance of the object to the 
 Nizam's country, by an immediate command and apphca- 
 tion of the money ; nor to the uncontradicted assurance of 
 Mr. Russell that it could be obtained by no other means. 
 He seems to have made no appreciation of the advantages 
 to the minister, but to have been solicitously jealous of 
 any advantages to the House. He appears to have con- 
 cluded, that whatever a<:lvantage accrued to the one, must 
 necessarily be obtained to the injury of the other, as if no 
 bargain could be made with mutual advantage to both its 
 parties. 
 
 Mr. Fendall's first minute, in a view at once concise and 
 comprehensive, exhibits the whole merits of the question 
 before the council, and conclusively establishes the propriety 
 of the sanction required. 
 
 In the minute of Lord Hastings, of the following day, 
 the effect of Mr. Stuart's injurious suspicions towards Mr. 
 Russell, upon the Governor-general's quick sense of 
 honour and high feelings, is abundantly apparent. His 
 Lordship appears to have felt that if Mr. Russell had been 
 made the object of unjust suspicion and of unfounded ca- 
 lumny, his own family connection with one of the partners of 
 the House, might with more colour be made the foundation 
 of injurious suspicions, by men of Mr. Stuart's disposition. 
 He therefore forces that connection upon record, as the 
 ground on which he announces his intention to abstain 
 from being a party to the decision of the council. But he
 
 132 
 
 expounds, in a masterly manner, the powerful consider- 
 ations of state-policy which should guide the determination 
 of the other members of council ; and calls upon those, 
 who refuse their assent, to suggest an adequate substitute 
 for the scheme. 
 
 If Lord Hastings' determination to abstain from voting 
 be admitted to have been hasty and inconsiderate, (as it 
 was afterwards deemed by himself,) it is impossible not to 
 respect the feelings in which it originated. It ought to 
 have filled with regret the gentleman, whose injurious con- 
 duct towards Mr. Russell had called for such a resolution 
 on the part of the Governor-general. 
 
 Mr. Stuart, in his second minute, replies to the Gover- 
 nor-general's challenge for a substitute, by denying that he 
 has refused his assent to the present plan, but only desires 
 the decision to be suspended ; and takes occasion to record 
 his denial, not (be it observed) of his suspicions of Mr. 
 Russell's integrity, but that his own opinions have been 
 founded on any reference to that gentleman ; and he con- 
 cludes by an expression of regret, (which, if it means any 
 thino" at all, is a most offensive insinuation towards the 
 Governor-general,) that his public duty may compel him 
 to deny himself the happiness of indulging His Lordship's 
 feelings of personal friendship for one of the partners of 
 that House. 
 
 Mr. Adam, in page 47, records his adoption of Mr. 
 Stuart's two grounds of objection, but admits the force of 
 the Governor-general's call upon the dissentients for a sub- 
 stitute. He suggests an advance from the Company's trea- 
 sury, a measure which had been hinted at indirectly by 
 Mr. Stuart. Mr. Adam remarks, " that he had been 
 struck by the following passage in Mr. Russell's letter. 
 
 * That the minister cannot obtain the requisite funds by 
 
 * any other means than the assistance of Messrs. Palmer 
 ^ and Co., whose circumstances enable them to secure a
 
 133 
 
 ' combination of llie native monied interest.' " He eagerly 
 misinterprets this passage into a ground for alarm and sus- 
 picion, and insinuation against the House; and actually 
 states the very circumstance, which alone enabled the 
 House to render an important service to the Nizam's 
 government, viz. the confidence of the native hankers in 
 their integrity^ as a ground for his jealousy of them, and 
 for his decision in favour of the money being obtained 
 through any other channel. 
 
 If any evidence were wanting to mark distinctly the parts 
 of this transaction, which were not the subject for the coun- 
 cil's consideration, it would be found in the labyrinth of 
 errors in which its members become involved, the moment 
 they quit the political for the commercial parts of the ques- 
 tion. It really excites a smile of pity to read the palpable 
 blunders in which they all equally flounder in their calcula- 
 tions and deductions from the imperfect data before them, 
 as to the rate of interest at which the money was to be 
 advanced to the Nizam's minister. 
 
 Time and stationery without limit appear to have been 
 consumed in contradicting and refuting each other, upon a 
 matter that a broker's clerk could have settled for them in 
 five minutes' calculation. 
 
 Their conjectures and their speculations upon the facility 
 of raising money in a distant district, with the local, com- 
 mercial, and pecuniary circumstances of which they appear 
 to have been wholly unacquainted, are made the grounds 
 on which they are to decide upon a question purely po- 
 litical, as far as the British interests were concerned. Not 
 the interest of the Nizam's country, but the possible advan- 
 tages to the House of Palmer and Co. appear to have alone 
 arrested the attention of the dissentient members. Mr. 
 Adam admits, that even after he shall have learnt what the 
 interest is to be charged, he shall then decide whether he 
 (fit judge!) deems the terms to be moderate ; and there- 
 
 K 3 
 
 /
 
 IS4 
 
 upon he will reeommencl, what ? that etideavours be made 
 to find the money upon easier terms elsewhere : and this 
 he records with the unchallenged assertion of tlie Resident 
 before him, " f/iai the monetj cotdd he jprocnred at Hijderahad 
 *' Jnj no other means" 
 
 Lord Hastings, in his second minute, exposes the in- 
 admissibility of an advance from the Company's treasury, 
 founded on its inconsistency with the rule of conduct laid 
 down by the Court of Directors, and with the council's 
 recorded anxiety not to be involved in the necessity of in- 
 terfering directly in the Nizam's government of his countiy, 
 for which reason they had all along been so careful not to 
 guarantee any loan to tlie minister of any description. 
 
 The Advocate-general, Mr. Spankie, is consulted upon 
 the legality of the application of any such sum from the 
 Company's treasury vmder the act of the 53d Geo. 3. 
 cap. 155. sec. 55. to 61, and his opinion is given in the 
 negative. Upon this decision, Mr. Stuart records, that he 
 considers it not wrong bid iiTelative, and whimsically sug"- 
 gests in answer to it, that although the act forbids the 
 lending of any of the surplus territorial revenue, yet that 
 it does not prohibit such loan, if there be no surplus. A 
 most ingenious device, truly, for escaping from and defeating 
 the act. The law authorities in England (it will be seen, 
 Hyd. Pap. p. 107.) did not sustain Mr. Stuart's legal read- 
 ing of the act. Mr. Adam most happily and ignorantly 
 concurs in Mr. Stuart's view of the legal bearing of the 
 statute. 
 
 The Governor-general seems now to have become aware 
 that he was culpably permitting the business of government 
 to be trifled with, and, in the absence of any other feasible 
 plan being suggested for attaining tlie important object to 
 the Nizam, decides, on 15th July, by virtue of his casting 
 voice, with that of Mr. Fendall, for the approval of the loan. 
 
 On the 1st September, 1820, Mr. Russell transmitted a
 
 135 
 
 report, Irom which the following are extracts, on the effects 
 which had resulted from the loan at that time on the ad- 
 ministration of the Nizam's country. 
 
 7. Among the principal officers whom it has been found ne- 
 cessary to remove from their situations, I am sorry to be obliged 
 to mention the minister s own brother. Rajah Govind Biiksh. 
 
 8. At Ellichpoor a relation of the minister, named Rao Rajah 
 Ram, tvho, as Naib Subahdar, had charge of the Eastern portion 
 of Berar, has also been removed from his office. 
 
 9. Of the remaining districts resumed from the charge of 
 Rao Rajah Ram, the minister has appointed his own son, Rajah 
 Bala Pershaud, to be talookdar, the local duties being con- 
 ducted by a very intelligent revenue officer of the name of 
 Rao Vencat Row, whom the minister has chosen as his son's 
 deputy. In my original report to your lordship on the subject 
 of the condition of the Nizam's affiiirs, dated 2kh November 
 last, T enumerated the advantages with which I thought this 
 particular arrangement would be attended. It has now been 
 adopted by the miyiistcr of his own accord, and is of itself, for the 
 strongest (fall reasons, a conclusive proof of the sincerity of his 
 exertions to improve the country, 
 
 35. The money raised by the minister on the loan, which 
 has received your lordship's sanction, has been very judiciously 
 applied, and has already accomplished much of the purpose for 
 which it was designed. 
 
 36. A reduction of useless establishments has been effected, 
 to the annual extent of between twenty-two and twenty-three 
 lacs of rupees, on a plan similar in principle, though varying 
 in detail from that enclosed in my despatch to the Secretary, 
 dated the 19th of May last. Among these reductions are 
 included 305 horse and 500 foot on the minister's own per- 
 sonal establishment, and 237 horse and 250 foot on that of 
 his brother. Rajah Govind Buksh. All recruiting throughout 
 the Nizam's army has been suspended, except in the regular 
 and reformed troops, which are to be kept up at their full 
 strength. The reductions which have hitherto been made 
 have not, I believe, thrown any industrious or deserving indi- 
 viduals out of employ ; and, by careful and gradual revision, 
 they may undoubtedly be prosecuted to a much larger extent. 
 
 37. Advances have been made in all the different districts : 
 and the minister being relieved from his most urgent embar- 
 rassments, has been enabled to allow large remissions in the 
 revenue, without which it would have been utterly irapracti- 
 
 K 4
 
 13(5 
 
 cable, by any measures, lo revive the prosperity of the eoun- 
 try. Of the twenty lacs of rupees paid last year by RuHat-ooi 
 Moolk's districts, the minister does not calculate, under the 
 system of amaunee which has now been introduced into them, 
 to realize above fifteen lacs this year. From Shums-ool Om- 
 rah's districts, which did yield about twenty-five lacs, he will 
 not, perhaps, collect more than seventeen or eighteen. 
 
 38. After the measures which Rajah Chundoo Loll has 
 already adopted, and the course he has pursued towards some 
 of the most powerful persons in the state, including even his 
 own brother, it can no longer be a question, whether he is 
 cordially disposed to promote your lordship's views for cor- 
 recting the abuses in the Nizam's affairs ancl ameliorating the 
 condition of his country. But be his disposition what it might, 
 it would have been impossible for him to act with either con- 
 fidence or effect, without our encouragement and support. 
 The evils he had to remove were not of common magnitude 
 or recent origin : they M'ere the result of remote causes, 
 and had become inveterate from long standing. When I 
 first travelled through the Nizam's country, upwards of twenty 
 years ago, it was in a condition not substantially better than 
 it is now; and my predecessor. Captain Sydenham, in his last 
 despatch to the Earl of Minto, dated the 29th of May, 1810, 
 only a few months after Rajah Chundoo Loll came into his 
 present office, expressed his opinion on the subject in these 
 strong terms: 
 
 39. " With regard to the amelioration of the state of this 
 " country, I am convinced that during the reign of the pre- 
 " sent Nizam no improvement can be expected, without the 
 " administration of the country be placed under the control of 
 " the Resident. The defects of the present government are 
 " too deeply rooted, and too widely extended, to admit of any 
 " partial reform : and it is, therefore, unfortunate, that the only 
 " effectual remedy that can be applied, should be so much at 
 " variance with our views and policy." 
 
 40. The minister, therefore, has had, and still has, to con- 
 tend against all the disadvantages arising from the peculiarity 
 of the Nizam's character, as well as to encounter at every step 
 the active opposition, not only of the individuals, who having 
 an immediate interest in the maintenance of abuses, are now 
 suffering from their correction, but that of the whole faction 
 associated with Mooneer-ool Moolk, who are personally and 
 politically opposed to his administration. In this (juarter, every 
 possible effort has been made, and will continue to be made, 
 to counteract his measures, by resistance, and intrigue, and 
 misrcprcbcntution.
 
 137 
 
 4'2. It cannot be expected that the full practical elFect of 
 any extensive system should become immediately apparent. 
 . The process of correction and improvement is gradual in its 
 nature. There are already, however, manifest proofs of a sa- 
 lutary impression having been made upon persons in authority, 
 and of the people having acquired a confidence which they 
 did not before feel in the disposition of their rulers. The fol- 
 lowing passage in a letter from Captain Seyer shows that the 
 minister's decisive measures have produced their effect, even 
 at places the most remote from the capital. The character 
 given in it of the person who has been dismissed from the 
 chief authority at Ellichpoor, is applicable to a large portion 
 of the Nizam's local officers. " I am glad to find the mi- 
 " nister has taken such decided steps regarding Ruffat-ool 
 " Moolk: he was proverbially infamous for his tyranny and 
 " oppression. Salabut Khan mentioned to me what had be- 
 " fallen him, in a way that showed the example was not lost 
 " on him. Rajah Ram's recall to Hyderabad will be extremely 
 " useful. He is weak, vain, and ostentatious; rapacious, not 
 " out of the love of money, but merely to supply his profu- 
 " sion; perfectly indifferent to the welfare of the people com- 
 " niitted to his charge; easily led, but unfortunately surrounded 
 " by bad advisers. I have never found him at all unwilling to 
 " attend to my suggestions; and the particular instances of 
 " misconduct in his officers, or in himself, which I have brought 
 " under his notice, have generally been redressed; but his con- 
 " stant want of money forces him into the practice of all sorts 
 " of means to procure it, and he will, perhaps, meet a demand 
 " for restitution to one man, by adopting similar violence to 
 " that complained of to another." 
 
 48. I have confined my advice to the minister, on every 
 occasion, to the correction of abuses, and have been careful to 
 avoid recommending any measure in the shape of innovation. 
 fVe have not done justice, in our otvu si/stem, to the original 
 institutions of the country. As strangers, we are hasty in con- 
 demning what we do not understand; and have often defeated 
 our good intentions, by establishing our own arbitrary rules 
 and methods, to the exclusion of those which have grown out 
 of the circumstances of the people, and are inseparably blended 
 with their manners and their opinions. 
 
 1 have, &c. 
 
 (Signed) PI. Russell, 
 Hyderabad, Resident. 
 
 1st September, 1820.
 
 138 
 
 On the 16th December following, the supreme govern- 
 ment, in replying to the court's imperative mandate of the 
 24th May, for the immediate recall of Messrs. Palmer 
 and Go's, licence, communicated all the preceding details 
 reo-ardino- the last loan of that house to the Nizam's 
 minister. 
 
 The court is therein apprized, that their orders regarding 
 the licence had been obeyed on the 16th of the same 
 month. Previous to the execution of those orders, their 
 consideration appears to have called for the following ad- 
 missions from Mr. Stuart and Mr. Adam, as recorded in 
 their several minutes of the 2d and 4th December. * Mr. 
 Stuart says, " But the court's letter embraces the following 
 " further instructions, ' xve think it necessary to add, that if 
 " ani/ discussio?i shall at any time arise between the Nizam's 
 " government and the house of Messrs. W. Palmer and Co. 
 *' resjjecting any pecuniary transactions xdiich may have taken 
 *' jplace hetisoeen them, you are hereby positively prohibited 
 " from interposing in any isoay 'whatever, the name, atithority, 
 " or good offices of any sort of the British government, for the 
 " fortherance of any demands ivhich those gentlemen may bring 
 " fo)-ward.' Messrs. Palmer and Co. have uniformly declared 
 " that they could not venture to engage with a government 
 *^ like that of Hyderabad, unless assured of the countenance 
 *' and support of the British government. In approving 
 " the arrangements pi-oposed by the house, accompanied 
 *' with such a declaration, this government has pledged 
 " itself to sanction the required support. The instructions, 
 *' therefore, which I have cited from the court's letter, 
 " could not reasonably or equitably be enforced, without 
 " relieving the house from the engagements with the 
 " Nizam's government.' 
 
 Hyd. Pap, p. 68, 69.
 
 139 
 
 " Mr. Adam says, * I am sensible at the same time, that 
 " after the sanction given by the government to the trans- 
 " actions of the house of W. Palmer and Co. with the 
 " government of the Nizam, those orders could not be 
 " carried into complete effect unless the house were to be 
 " secured against the consequences of the act.' " 
 
 Notwithstanding these recorded opinions, the justness 
 and moral force of which nobody can impugn, these papers 
 record the almost incredible fact, that not only did the 
 council not abstain from executing the orders of the court 
 to the full extent of their unjustifiable spirit and letter, 
 but encouraged by their tenor, they proceeded to further 
 lengths, still more outrageous and unjust. 
 
 Not only did they subsequently leave this commercial 
 house knowingly exposed to all the consequences of this 
 hint to their native creditors, that they might withhold 
 the payment of their just debts with impunity, but the 
 Resident was directed to inform the house, " That in 
 " the event of the minister taking upon himself to pay 
 *' the very debts, which he had under his own hand ac- 
 *' knowledged, and was still ready to acknowledge to be 
 " due and just, a remonstrance against such misapplica- 
 " tion of the public money should be made to his high- 
 " ness the Nizam." A fact almost incredible, when it is 
 avowed, without the fear of contradiction, that not the 
 slightest ground or justification can be stated for the mea- 
 sure. 
 
 Mr. Russell retired from his post, as Resident at Hy- 
 dei-abad, in December, 1820, and Mr. Metcalfe, who had 
 been for some time secretary to the government at Cal- 
 cutta, replaced him in that station. This gentleman's first 
 despatch is dated February 21st, 1821, and transmits a 
 copy of the terms in which he had communicated to 
 Messrs. Palmer and Co. the sudden and peremptory recall 
 of the licence. Their letter in reply, points out the ne-
 
 MO 
 
 cessary consequences to their establishment, and details, 
 in obedience to the Resident's directions, the several pe- 
 cuniary advances, amounting to fifteen lacs, which they 
 had made under the guarantee of the minister Chundoo 
 Loll, independently of the loan and the Aurungabad ad- 
 vances.* 
 
 The Governor-general in council acknowledges the pro- 
 priety of the nature of the above advances, in the follow- 
 ing despatch of 10th February. 
 
 To C. T. Metcalfe, Esq>, Resident at Hyderabad. f 
 Sir, 
 
 1. I am directed to acknowledge the receipt of your letter, 
 dated the 21st ultimo ; copy of one which you addressed to 
 Messrs. William Palmer and Co., in consequence of instruc- 
 tions from this government, with a copy of the reply from 
 that firm. 
 
 2. It was necessary towards the fulfilment of the above 
 instructions, that your language should be strong and precise ; 
 but Messrs. William Palmer and Co. have erred, in construing 
 the tenour of the third paragraph in your letter to be rigorous, 
 if not oppressive. The pleasure of the Court of Directors has 
 been signified, that no more loans should be made by the firm 
 to the Nizam or his minister; and it was incumbent on his 
 lordship in council to communicate the interdict in such 
 terms, as should not leave room for any possible misapprehen- 
 sion. At the same time, nothing can be more remote from the 
 intentions of this government, than to impose any shackle on 
 the commercial dealings of the house. The prohibition could 
 never be meant by the Honourable Court, or by the Governor- 
 general in council, to apply to transactions purely commercial, 
 even though they should be with the government of the Ni- 
 zam. It is only requisite, in the latter case, that reference 
 should be made to your judgment, lest the engagement should 
 operate as an imposed invasion. The restrictions ought not to 
 be considered by the house as conveying the shadow of impu- 
 tation on their integrity. Perfectly sensible of the advantage 
 
 *,Hyd. Pap. p. 146, 147. 
 t Hydtr. Tap. p. 148.
 
 141 
 
 reaped by the Nizam and Iiis subjects from the aid furnished 
 by Messrs. WilHam Palmer and Co., the Governor-general in 
 council cannot but be disposed to ascribe thorough fairness to 
 their dealing, so that an oblique impeachment of their conduct 
 would be altogether inconsistent. 
 
 3. The advances specified in the seven items enumerated by 
 Messrs. William Palmer and Co., appear to the Governor- 
 general in council consonant to the principles which had the 
 general assent of this government. The faith plighted by the 
 minister, that he would not, without answering to Messrs. 
 William Palmer and Co, for the sum, dispossess the revenue 
 of that tenure, on the strength of which alone the house fur- 
 nished money to restore the cultivation of the district, in a 
 simple and actual pledge, liable to no suspicion of incorrect- 
 ness. A reliance on the honour of the minister, which is all 
 the amount of reference to him, is not meant to be invalidated 
 in those instances, the engagements having in them been made 
 before any supposition could be entertained of an objection 
 on the part of the Honourable Court to the transactions of the 
 house generally with the Nizam's government. Such an ob- 
 jection having been signified it must be construed to extend 
 (though possibly with some strain of interpretation) even to 
 such an assurance from the minister as is above alluded to ; 
 consequently you are not to sanction, in future, any transaction 
 involving his intervention, however restrictively. 
 
 4. The Governor-general in council requests that you will 
 inform yourself, as minutely as may be, respecting the effects 
 of the late loan from the house of William Palmer and Co. 
 to the Nizam's government, and that you will report in what 
 degree the satisfaction of the sovereign, the convenience of 
 the government, and the comfort of the people, have been 
 promoted by it. To this exposition you will please to add 
 your view, how far the interests of the honourable company 
 may have been affected, advantageously or otherwise, by these 
 results. 
 
 I have, &c. 
 
 (Signed) G. Swinton, 
 
 Calcutta, Secretary to Government. 
 
 February 10th, 1821. 
 
 To the subject of the last paragraph of the foregoing 
 letter, Mr. Metcalfe replies in the following letters of the 
 17th March and 5th April.
 
 14^ 
 
 To G. Swinton, Esq., Secretary in the Secret and Political 
 
 Department. 
 Sir, 
 1 have the honour to acknowledge the receipt of your des- 
 patch of the 10th ultimo, relating to Messrs. William Palmer 
 and Co. 
 
 2. I have communicated to that firm the sentiments conveyed 
 in the second and third paragraphs of your letter. 
 
 3. Of the effects of their late loan to the Nizam's govern- 
 ment, on which I am commanded by your letter to report, I 
 cannot speak without hesitation, because not having been 
 here at the time when it was negociated, I may not be fully 
 competent to appreciate the advantages which may liave at- 
 tended it. 
 
 4. I am directed by your letter to submit my opinion as to 
 its effects, with reference to the following points: the satisfac- 
 tion of the sovereign, the convenience of the government, the 
 comfort of the people, and the interests of the Honourable 
 Company. 
 
 5. As to the degree of satisfaction derived by the sovereign, 
 I have never heard that he has expressed any opinion on the 
 subject of the loan ; and so much as he is abstracted from the 
 affairs of his government, it will not be very surprising, if to 
 this day he remains either ignorant, or but partially informed, 
 of the circumstances of that transaction. In any event, his 
 satisfaction, I imagine, must be entirely of a negative nature, 
 arising from the continued payment of expences and supply of 
 funds for his private treasury, which without that loan, or some 
 other, must have been withheld. With regard to its conse- 
 quences on public affairs, I do not believe that he has con- 
 cerned himself about them. 
 
 6. The degree in which the convenience of the government 
 may have been promoted, is a subject requiring more detail. 
 
 7. The government was undoubtedly relieved from much 
 pecuniary embarrassment by the loan, and was enabled to pay 
 off large arrears, which had accumulated in several branches 
 of expenditure; but I have been disappointed in finding that 
 the relief was not so much of a permanent nature as I had 
 expected, and that the loan was not appropriated to the per- 
 manent reduction of expence to such an extent as I had 
 supposed. 
 
 8. Previously to the receipt of your letter, I had called on 
 the minister for an account of the expenditure of the money 
 received in that loan ; and the following is the substance of the 
 account which he rendered.
 
 143 
 
 H.l. R. A. P. 
 Amount of loan from 
 Messrs. William Pal- 
 mer and Co 07,62,703 9 6 
 
 Deduct amount of former 
 debts to Messrs. Wil- 
 liam Palmer and Co., 
 which became conso- 
 lidated in this loan 28,94,632 9 6 
 
 Remainder, appli- 
 cable to the ser- 
 vice of the state 38,68,071 
 
 Of which disbursed on 
 account of establish- 
 ments and charges which 
 still continue : 
 
 H^. R. A. 1'. 
 Arrears of Nizam's 
 
 household 6,03,620 
 
 Choute for Appa Des- 
 
 sye 68,360 
 
 Purchase of arms and 
 
 accoutrements 46,.549 8 
 
 7,18,529 8 
 
 Remainder, after 
 deducting the 
 above 31,49,541 8 
 
 Tuckavy, or advances to 
 
 the cultivators 2,35,000 
 
 Debts to native bankers 
 
 discharged 13,27,528 
 
 Arrears of troops and 
 other establishments, 
 part of which are re- 
 tained and part dis- 
 charged 15,87,012 10 6 
 
 31,49,540 10 6 
 
 Deduct remainder 7 TT j , i t^ TTI Z 
 
 unaccounted for ] Hyderabad Rupees 13 6 
 
 9. The only items in this statement which can, in any de-
 
 U4 
 
 gree, have conducetl dirtdiy to a reduction of expense, are 
 those wliicli relate to the payment of debts to native bankers, 
 and to the ])aynient of arrears to troops and establishments dis- 
 cliarged. 
 
 10. The annual saving on the debt liquidated, compared with 
 that simultaneously incurred to the same amount, according to 
 the minister's statement, would be about rupees 79,582 ; for he 
 informed me verbally, in answer to my enquiries on that point, 
 that the difference between the interests payable to native 
 bankers and that to the house of Messrs. William Palmer and 
 Co. was six ^;pr cent, per annum. 
 
 11. With regard to the item relating to the payment of 
 arrears to troops and other establishments, partly discharged 
 and partly retained, it is impossible to distinguish, from the 
 account rendered, what portion of the sum total, amounting to 
 rupees 15,87,012, was conducive to the reduction of annual 
 cliarge. The replies of the minister to my enquiries on this 
 subject, were not clear nor satisfactory. All that I could ex- 
 tract from him Mas, that of the sum above-mentioned, no more 
 than five or six lacs went to establishments retained, and that 
 the rest went to establishments discharged. Omitting ten lacs 
 on this account, it remains to be shown what amount of annual 
 charge the disbursements of ten lacs enabled the government 
 to reduce. 
 
 12. As a set-off against any reduction of expence that may 
 be supposed to be the consequence of this loan, it must be con- 
 sidered that an annual charge is created by the loan of twelve 
 lacs, on account of interest, at the rate of eighteen per cent, 
 per annum, with the addition of four lacs as a sinking fund; in 
 all sixteen lacs^jer annum. 
 
 13. Nevertheless, there is no doubt that the loan was most 
 convenient to the Nizam's government at the time, and espe- 
 cially to the minister himself personally; and by enabling him 
 to struggle through temporary difficulties and embarrassments, 
 it may possibly prove the means of greatly assisting the restora- 
 tion of prosperity in the country. 
 
 1 4. I think, however, that the Nizam's government is bound 
 to exert itself to effect a reduction of the high interest of its 
 public debt : and, with this view, I shall hereafter submit a pro- 
 position for the consideration of his Excellency the Governor- 
 general in council. 
 
 15. It does not appear to me that the comfort of the people 
 has been visibly promoted by the loan. It is not improbable 
 that good may have been done, by the distribution of advances 
 to the cultivators to the amomit stated ; and if I were sure that 
 advances had been distributed truly, honestly, and judiciously.
 
 I should conclude that good had been done ; but no decided 
 marks of it have come under my observation, and the general 
 cry of complaint from all parts forbids the supposition of much 
 having been done for the comfort of the people. 
 
 16. It does not strike me that the interests of the Honour- 
 able Company have been much affected, in any way, by the 
 loan ; disadvantageously, certainly not. But for the loan, the 
 increasing embarrassments of the Nizam's government might 
 have induced, perhaps must have induced, some other mea- 
 sures ; and other measures might, perhaps, have been devised, 
 more advantageous to the Nizam's interests, and so far in- 
 directly to our own, than the one under discussion. It is, 
 however, certainly some advantage gained, that the Nizam's 
 government has been enabled to struggle on, without any sa- 
 crifice on our part, to its present position, from which, with 
 proper measures, there is a prospect of future prosperity. 
 
 17. I offer n)y opinion on the subject of the advantages re- 
 sulting from the loan with considerable diffidence, as it does 
 not come up to that which was entertained by my predecessor. 
 At the time of making the arrangement, it was stated by the 
 minister that it would enable him to make reductions to the 
 extent of twenty-five lacs per annum ; which, sixteen lacs 
 being assigned in payment of the loan, (i.e. interest and sinking 
 fund) would occasion a yearly gain of nine lacs. If this has 
 really been effected by the loan, there can be no doubt, I think, 
 that the loan has been highly advantageous to the Nizam's 
 government : I acknowledge that I am sceptical on this point, 
 and that I am not much impressed with a belief of the cor- 
 rectness of the minister's statements ; but I have not the 
 means of disproving his assertions. I shall continue to watch 
 the subject attentively, and shall be most happy at any time 
 to have it in my power to report, that the reductions then 
 promised were really accomplished. I am aiming at other 
 reductions, which are necessary for the welfare of the state, 
 and am told that they are in progress ; but I am not yet sa- 
 tisfied that they are so. In such matters, the minister's cha- 
 racter and conduct inspire great distrust; and even were he 
 actually making a reduction with one hand, he would very 
 probably be squandering the same amount uselessly with the 
 other. 
 
 18. This despatch having so much relation to the transactions 
 of Messrs. William Palmer and Co.'s house, it may not, perhaps, 
 be out of place, if I submit one or two observations regarding 
 them and their concerns. 
 
 19. The debt which they hold of the Nizam's government 
 bears a very high interest, which it is desirable to reduce ; 
 
 L
 
 14(> 
 
 and in tliis particular alone, I think their interests and those of 
 the Nizam's government opposed to each other, and tliat only 
 under the supposition, that with the countenance of the British 
 government it might not be difficult to raise money on better 
 terms elsewliere ; for here, without a guarantee, and perhaps 
 even with it, money could not be procured for the Nizam's 
 government on advantageous terms. 
 
 20. With this single exception of the high rate of interest, 
 which I hope to see lowered, as its continuance is not con- 
 sistent with the financial prosperity of the Nizam's government, 
 I do not observe any thing in the transactions of the house 
 requiring interference or restraint on the part of our govern- 
 ment. 
 
 21. The enterprize of such a commercial establishment, and 
 the efforts which it would make for its own benefit, must tend, 
 I conceive, to promote the prosperity of the country ; and I 
 cannot discover any cause for alarm in its being allowed to 
 have transactions with the Nizam's government, provided that, 
 in these transactions, proper attention be paid by that govern- 
 ment to its own interests, and that the firm of William Palmer 
 and Co. be dealt with as any other firm would be. 
 
 22. With an extravagant minister like Chundoo Loll, un- 
 controlled in his expences, and anxious only to supply tem- 
 porary wants without heed for the future, a firm, such as that 
 of William Palmer and Co., if sufficiently adventurous to incur 
 the risk, might in time have obtained a mortgage on the greater 
 part of the Nizam's revenues ; and as long as the British go- 
 vernment took no interest in the internal management of his 
 highness's affairs, there may have been reason to apprehend 
 some such consequences from transactions with a house of 
 such extensive influence ; but since our government has agreed 
 to interpose its advice in all branches of the Nizam's adminis- 
 tration, there seems to be no room for any apprehension of 
 that kind ; and to preclude the Nizam's government from 
 dealings with the first commercial establishment in his do- 
 minions, may be injurious, but cannot be advantageous to his 
 affairs. 
 
 23. I should think it desirable, in every point of view, that 
 this house should be as unfettered in its transactions as any 
 other commercial concern, and that vigilance on our part 
 should be exercised, not with a view to restrictions on the 
 proceedings of the firm, but solely in order to guard the in- 
 terests of the Nizam's government and our own, in those trans- 
 actions in which they might be at variance with the interests 
 of the house. 
 
 24. In the crude remarks herein submitted, I offer the 
 
 ^
 
 147 
 
 result of my local observations, without of course meaning to 
 presume to discuss the propriety of the restrictive orders issued 
 by the Honourable the Court of Directors. 
 
 I have, &c. 
 
 Hyderabad, (Signed) C. T. Metcalfe, 
 
 17th March, 1821. Resident. 
 
 To G. Swinton, Esq., Secretary, Secret and Political Depart- 
 ment. 
 
 Sir, 
 
 1. In a recent despatch, I reported that I should soon sub- 
 mit for the consideration of his Excellency the Governor-general 
 in council, a scheme for the reduction of the rate of interest 
 of the public debt of the Nizam's government. 
 
 2. There seems to me a mode by which, under his lordship's 
 sanction, this object could be accomplished with immense ad- 
 vantage to the Nizam's government, and with little, if any 
 inconvenience to our own. 
 
 3. The most eflPectual mode which seems to me, is by open- 
 ing the Honourable Company's treasuries for the receipt of 
 money on loan to the Nizam, under a guarantee from the 
 Governor-general in council for the regular payment of the 
 interest by half-yearly instalments, and the eventual payment 
 of the principal at the convenience of the Nizam's government, 
 or if preferable, within a stated time. 
 
 4. The only inconvenience that strikes me as possible to 
 arise from such a transaction, is the effect which it might 
 produce on the value of the Company's notes in the market ; 
 but the effect, if any, would, I should imagine, be very slight 
 and insignificant. On this point, however, I am not competent 
 to form a judgment. 
 
 5. It may perhaps appear, at first sight, tliat the proposed 
 guarantee on the part of the British government might be an 
 inconvenience ; but I hope to be able to show, that it would 
 not be so in any degree, as long as we maintain our present 
 power in India. 
 
 6. A virtual guarantee exists already with regard to the 
 public debt of the Nizam's government, for with the least in- 
 terference in his highness's affairs, it is impossible that the 
 British Resident can sanction or tolerate any breach of faith 
 
 h 2
 
 148 
 
 towards the public creditors. If the Nizam's government had 
 no public debt, and could be prevented from contracting one, 
 the expediency of guaranteeing or sanctioning any loan might 
 be questionable ; but when, by the intimacy of our connection 
 with the state, we virtually guarantee the payment of eighteen 
 and twenty-four per cent, interest on existing debt, it does not 
 appear to me that there is any ground, on this score, for hesi- 
 tation, as to an avowed guarantee of a loan at a rate of interest 
 better suited to the state of the money-market in India. 
 
 7. Moreover we have in our hands the means of securing the 
 regular payment of the interest, and the eventual liquidation of 
 the principal of such a loan, without the necessity of a word of 
 discussion on the subject at the Nizam's court, at any future 
 period, which 1 proceed to demonstrate. 
 
 8. I presume that, in the present state of the money-market, 
 with the confidence which the avowed guarantee of the British 
 government would inspire, money might be obtained at six per 
 cent, interest. We at present pay to the Nizam, through the 
 hands of the Resident, what is termed a peshcush, or tribute, 
 of seven lacs of rupees, on account of the northern Circars. 
 Herein we have the means of securing the regular payment of 
 the interest of any loan contracted under our guarantee. The 
 amount required by the Nizam's government to pay off its 
 present debts might be eighty or ninety, or at the utmost one 
 hundred lacs. The minister's accounts would make it appear, 
 that the least of the sums would suffice ; but the interest on the 
 largest would be six lacs, leaving at least some surplus in our 
 hands as a sinking fund. We have only, therefore, to appro- 
 priate the peshcush to the payment of the interest of the loan, 
 and that point would be settled without further trouble. By 
 the same means, the liquidation of the principal would be 
 gradually effected, or it might be expedited, at the convenience 
 of the Nizam's government, from other resources, which I con- 
 ceive would be advisable. 
 
 9. If the principles on which I have advocated the measure 
 hereby proposed be admitted, the details of its execution would 
 not, I apprehend, be difficult. The more they were made to 
 resemble those of our own loans, the greater it may be sup- 
 posed would be the confidence of the public in the transaction. 
 
 10. Considering, on the one hand, the benefit of the Nizam's 
 government, which would be so greatly promoted by the reduc- 
 tion of the interest of its public debt from twenty-four and 
 eighteen, to six per cent., and, on the other hand, the easy 
 means by which the British government could confer so great 
 a boon on its ally, the arrangement, with respect to these parties, 
 appears to me to be unobjectionable ; and I hope that it may
 
 appear in the same light to his Excellency the Governor-genoral 
 in council. 
 
 11. There is, however, another party concerned, whose 
 interests would necessarily be affected by such an arrangement, 
 and are, therefore, entitled to consideration. I mean the Nizam's 
 present creditors : and in speaking of the Nizam's creditors, 
 one's thoughts turn instantly towards Messrs. William Palmer 
 and Co., who are almost the sole creditors of the Nizam's go- 
 vernment, or who at least hold debt to the amount of sixty- 
 seven lacs of rupees. 
 
 12. I thought it due to them, as they were so deeply in- 
 terested, to communicate to them my intention of submitting 
 the present proposition, in order that they might be prepared 
 for the measure, if it should be carried into effect, or have an 
 opportunity of objecting to it, if they regarded it as a violation 
 of their rights, or so injurious to their interests as to entitle 
 them to peculiar consideration in managing its details. 
 
 13. I entertained the hope, that they might have other 
 means of disposing of their capital eqnally advantageous; but, 
 in the comnmnications which have ensued since the intimation 
 of my views, it has appeared, that they do not contemplate the 
 possibility of such means, and that they would consider the 
 discharge of the loan as extremely disadvantageous. 
 
 ISA. It appears that they relied on the continuance of the 
 advantages which they derive from the existing loan for at least 
 the period at the end of which it was to be discharged, accord- 
 ing to the provisions originally devised for its liquidation ; that, 
 in this confidence, they withdrew their funds from other trans- 
 actions, in order to consolidate them in this one, and that they 
 could not now return, with benefit, to those transactions from 
 which they then withdrew. 
 
 14. It seems that, in raising money for this loan, they en- 
 countered some difficulties, and were in some instances obliged 
 to pay higher interest than they received, and that they looked 
 for their profit more to the later than the early period of the 
 loan's duration. 
 
 15. It is not necessary to argue, that there vvas not any 
 actual contract, on the part of the Nizam's government, for 
 the duration of the loan for any definite period, as they do not 
 assert that there was, and admit that the Nizam would have 
 been at liberty to pay it off at any time from his own treasury ; 
 but as they knew that such an event, owing to his disposition 
 for hoarding, was most improbable, they seem to have reckoned 
 on the duration of the loan for a certain period, almost as if 
 there had been a contract to that effect, and to have taken their 
 measures accordingly. 
 
 L 3
 
 150 
 
 16. They allege, that at a time when the Nizam's govern- 
 ment could not obtain money elsewhere, they advanced it at a 
 tremendous risk, before any sanction had been obtained from 
 the British government. 
 
 17. On the grounds stated in the preceding paragraphs, 
 they rest claims on the Nizam's government : and it appears 
 to me that they may be deemed entitled to liberal consider- 
 ation, not to the extent of injuring the Nizam's government by 
 a continuation of the high rate of interest attached to the 
 existing debt, supposing that a loan could be negotiated on 
 more moderate terms, but in the way of compensation for the 
 loss of their present profits, if, at the same time, the Nizam's 
 government can be sufficiently benefited. 
 
 18. It is to be considered, that the Nizam's government is 
 paying now not only the profits of Messrs. William Palmer and 
 Co., but the difference between the ordinary rate of interest at 
 our presidencies and the high rate which that house pays to 
 their constituents, from whom the money for the loan was 
 borrowed ; so that it would be a great advantage to the Nizam's 
 government to get rid of this loan, if money could be obtained 
 at the ordinary rate of interest, even though it were to continue 
 to pay to Messrs. William Palmer and Co. the whole amount of 
 their profits. 
 
 19. In offering my opinion, that compensation to some extent 
 to Messrs. William Palmer and Co. would be an act of liberal 
 justice on the part of the Nizam's government, I am at a loss, 
 I confess, as to forming any judgment of the precise amount 
 which it might be right to appropriate to this purpose. The 
 Nizam's government acknowledges its obligations to the house, 
 and is ready to agree to whatever may be proposed. There 
 would be no difficulty in that quarter ; but taking into con- 
 sideration their present profits, their possible losses, and their 
 former risks, I find it very difficult to determine what would 
 be a suitable compensation. 
 
 20. I stated in a former report, that eighteen per cent, was 
 the interest received by Messrs. Palmer and Co. from the 
 Nizam's government. I was not aware at that time, but have 
 since been informed by the minister, that at the time of ne- 
 gociating the loan, a bonus was allowed of eight lacs. This 
 sum now forms a part of the capital of the debt, and whenever 
 paid off, will be in excess to the amount actually borrowed. 
 It bears interest, I conclude, like the rest of the loan. This 
 being part of a past transaction, is only mentioned here, be- 
 cause it is proper to submit all the information that I possess 
 on the subject : it should have been mentioned in my former 
 re|)ort regarding the loan, had it been in my knowledge at the
 
 151 
 
 time. This being an advantage already gained, will not, I 
 suppose, be considered in the light of a compensation for the 
 loss of other advantages now in hand. 
 
 21. What should be the extent of compensation for the loss 
 of about six per cent, annual profit on sixty-seven lacs, is to 
 be considered. This six per cent, profit would be about four 
 lacs per annum, till such time as the debt should be paid off, 
 which I consider to be uncertain, otherwise than by the means 
 proposed in this despatch ; for I doubt the power of the Nizam's 
 government to appropriate sixteen lacs per annum for the 
 interest and sinking fund of this loan, without incurring further 
 debt. If sixteen lacs could be annually appHed for those 
 purposes, the profit of four lacs would, of course, suffer annual 
 diminution. 
 
 22. I understand, from communications with Messrs. William 
 Palmer and Co., that a payment of one lac and a half of ru- 
 pees per annum for four years, would reconcile them to the 
 discharge of their loan, and be considered by them as very 
 liberal treatment ; though, for their own interests, they would 
 prefer that matters should stand as they are. 
 
 23. This may appear a very liberal compensation, but the 
 advantage to the Nizam's government would still be very great 
 and, if any compensation is to be offered on so large a concern, 
 it could hardly be less than that stated. 
 
 24<. The gain to the Nizam's government would be as follows : 
 
 Interest on the debt to Messrs. William Palmer 
 
 and Co. at eighteen per cent Rupees 1,200,000 
 
 Interest on the debt to Messrs. William Palmer 
 
 and Co. at six per cent 400,000 
 
 Difference in favour of the Nizam's government 800,000 
 Deduct proposed compensation to Messrs. Wil- 
 liam Palmer and Co. for four years 150,000 
 
 The gain would, notwithstanding, be Rupees 650,000 
 
 per annum for that period, and eight lacs for the rest of the 
 probable duration of the debt, supposing the present rate of 
 interest to continue. 
 
 25. It would, I conceive, be gratifying to the Nizam's go- 
 vernment to have the loan transaction with Messrs. William 
 Palmer and Co., if it can be terminated with benefit to his 
 highness's affairs, so terminated as not to give to that house 
 any just cause for reproach. And for myself, though I must 
 crave indulgence for intruding my own feelings, it would, I 
 acknowledge, be a great relief to me, to reflect that my duty 
 
 L 4
 
 152 
 
 had been accomplished, without excessive injury to those 
 whose interests must unavoidably in some degree be affected, 
 if the plan proposed in this despatch should be carried into 
 effect. 
 
 26. As it is understood to be personally in the Nizam's 
 power to pay off all the debts of his government, it may be 
 asked why any assistance on the part of the British government 
 should be called for for that purpose. The only answer is, that, 
 in reality, the Nizam takes little or no interest in the affairs of 
 his government ; that he looks on his hoard as personal property, 
 which is not to be touched for the use of the state, and that 
 there is no hope of overcoming his reluctance on this point, 
 1 have discussed this matter with the minister, and he is not 
 inclined to venture to propose to his highness the payment of 
 any part of the debt from his private hoard. If the Nizam's 
 government is to be befriended and benefited, it must be done 
 for the sake of good itself, in opposition almost to those who 
 ought to be most zealous in the undertaking. Here is a prince 
 who takes little or no concern in the government ; a prime 
 minister who, if possible, takes less ; a deputy, who is absolute, 
 but whose administration has been of the most depraved and 
 most mischievous description, who requires continual goading 
 to do the least good, and has an invincible tendency towards 
 sliding back to evil, and from whom there would not be the 
 slightest hope of co-operation for any beneficial purpose, were 
 it not that he is submissive to the power whose support is ne- 
 cessary for his political existence. On this submission rests 
 my hopes, that good will be done for the Nizam's subjects in 
 spite of the defects of his government. 
 
 27. If any objection unseen by me should lead his Excellency 
 the Governor-general in council to reject the proposition which 
 I have submitted, some benefit may still be gained for the 
 Nizam's government, if I be permitted to exert myself to ob- 
 tain money at a lower rate of interest than that which is at 
 present paid ; but the success of my endeavours in that way 
 can neither be so complete nor so certain, as that which would 
 attend the execution of the plan herein proposed ; and while 
 the gain to the Nizam's government would be less, the loss to 
 the present creditors would be greater, from its not being so 
 much in the power of the government to afford compensation. 
 
 I have, &c. 
 
 Hyderabad, (Signed) C. T. Metcalfe, 
 
 5th April, 1821. Resident. 
 
 Hyder. Pap. p. 190 to 197.
 
 15 
 
 o 
 
 The following observations suggest themselves upon the 
 three foregoing letters. 
 
 1st. In the supreme government's despatch there is a 
 distinct declaration, that the Court of Directors' inhibition 
 of all further pecuniary transactions between the house 
 and the Nizam's government, was meant to be confined 
 to advances of money alone, and not to interfere with 
 transactions purely commercial, although with the said 
 government. 
 
 2nd. Full testimony is borne to the thorough fairness 
 of the dealings of the house, as far as was known to the 
 council up to this period. 
 
 3rd. The declaration is equally distinct, that no oblique 
 impeachment of any part of its conduct was to be implied 
 from the recall of the licence. 
 
 ^th. An acknowledgement is recorded, that the council 
 was sensible of the advantage which the Nizam and his 
 subjects had derived from the aid which had been furnished 
 by Messrs. Palmer and Co. 
 
 5th. It is distinctly admitted that the minister's plighted 
 faith for the fulfilment of all engagements, into which he 
 had already entered with the house, was not meant by the 
 court, or by the council, to be in any way invalidated. 
 Thus in the latter passage sanctioning the sentiments pre- 
 viously recorded by Mr. Stuart and Mr. Adam. 
 
 The two letters from Mr. Metcalfe are fully confirmatory 
 of the report which Mr. Russell had made on the 1st 
 September of the beneficial effects from the loan, which 
 was completed in August, 1820, although the advances 
 on account of it had been making from the preceding 
 March. In the first of these despatches Mr. Metcalfe 
 announces, J 
 
 1st. That the Nizam's government had been undoubtedly 
 relieved from much pecuniary embarrassment by the loan. 
 
 2nd. That it had been enabled to pay off" large arrears. 
 
 3d. That it enabled the minister to struggle through
 
 154 
 
 temporary difficulties and embarrassments, and might prove 
 tiie means of greatly assisting the restoration of the pro- 
 sperity of the country. 
 
 4th. That the interests of the Honourable Company 
 had certainly 7iot been affected disadvantageously by it. 
 
 5th. That the comforts of the people did not appear to 
 have been visihlTj promoted by it. But that if the advances 
 to the cultivators have been honestly distributed, he con- 
 cludes that good must have been done. He then adverts 
 to the debt of the Nizam's government to Messrs. Palmer 
 and Co., which, bearing high interest, he thinks it would 
 be desirable to reduce, and he suggests, that with the assist- 
 ance of the British goverment, money might be raised on 
 better terms elsewhere, " for here," he adds, " without that 
 *' guarantee, and perhaps even with it, money could not be 
 " procured by the Nizam on advantageous terms." 
 
 He says, that in this particular alone of the rate of 
 interest, does he think that the interests of the house, and 
 those of the Nizam's government, are opposed to each 
 other; in other words, that a debtor and creditor have 
 not, in all respects, one and the same interest; for he 
 distinctly records " that the enterprize of such a house, 
 " and its efforts for its own intei'est, must tend to promote 
 " the prosperity of the country ;" and he cannot discover 
 any cause of alarm in its being allowed to have transactions 
 with the Nizam's government, provided that the govern- 
 ment attends to its own interest, and the firm be dealt with 
 as any other firm could be. 
 
 He answers all the objections arising from groundless 
 alarm on this head which had been sounded by Mr. 
 Stuart and Mr. Adam, whilst he (Mr. M.) had been se- 
 cretary to government, at the time the loan was sanctioned, 
 and states, " that to preclude the Nizam's government from 
 " dealings 'acith the Jirst commercial establishment in his do- 
 ** minions, may be injurious ,• but cannot be advantageous to 
 " his affairs.^'
 
 155 
 
 It is right to notice here, that Mr. Metcalle, in the 
 substance (which alone he professes to give,) of the accounts 
 received from the minister has himself made a palpable 
 mistake, which he afterwards attempts to father on the 
 minister as a wilful mis-statement. He states the minister 
 to have given him the amount of the loan received from 
 Messrs. Palmer and Co. at sixty-seven lacs. The minis- 
 ter stated no such thing. He stated that the whole amount 
 of the money he had received from the house, up to the 
 completion of the loan, was sixty-seven lacs ; and this will 
 be found by the printed accounts to be correct. The loan, 
 which was completed on the Uth August, was fifty-two 
 lacs, the diminished sum to which it was agreed to be re- 
 duced; and the balance due to the house for advances 
 made up to that time, was fifteen lacs over and above the 
 loan, making together sixty-seven lacs. 
 
 In his foregoing despatch of the 5th April, Mr. Metcalfe 
 submits his project for the British government to raise a loan 
 at the pi'esidencies at six per cent, for the Nizam, to enable 
 him to discharge his present debt, bearing a higher rate of in- 
 terest. He endeavours to meet the objection to the British 
 government becoming involved in all the consequences of a 
 guarantee, by stating that, seeing the actual interference in 
 his highness's affairs, he considers it a moral impossibility 
 that the British Resident can sanction or tolerate any breach 
 of faith to'aoards its imblic creditors* He then pro- 
 ceeds to consider what would be the effect on Messrs. 
 W. Palmer and Co.'s contract for six years, which had 
 been already acted upon, and justly concludes that they 
 ought to be held harmless from any injurious effect of 
 the sudden return upon their hands of a large capital 
 which they had partly borrowed and partly abstracted 
 
 * The moral impossibility he afterwards was himself the instrument of 
 disproving.
 
 156 
 
 from other advantageous employment, to meet the Ni- 
 zam's purposes. He incidentally mentions the bonus of 
 the eight lacs, as a part of the loan transaction, to which 
 he makes not the slightest objection. Yet it was clearly a 
 new circumstance to himself; it had not been known at the 
 council board, at which he had been present when the 
 loan was sanctioned, and must, therefore, have arrested his 
 attention if it were objectionable. His comments on it 
 clearly indicate, that at that time neither in itself nor in the 
 circumstance of its not having been made known to the 
 council, did he find the least cause for blame. He states 
 that the government of the Nizam would be equally gra- 
 tified with himself, that in any such plan as he proposes, 
 Messrs. W. Palmer and Co. should not meet with loss or 
 disappointment in return for the important relief they had 
 afforded to the native government's necessities. These 
 sentiments and views form a notable contrast with the 
 opinions and conduct exhibited by this gentleman, at a 
 subsequent period. 
 
 The proposal contained in the latter despatch of Mr. Met- 
 calfe, appears from the recorded minutes of the Governor- 
 general, Mr. Adam, and Mr. Fendall, to have been rejected 
 by a majority of the council ; and a proposal of Mr. Fendall 
 for the absolute purchase or redemption of the peshcush, 
 or annual payment of seven lacs by the British government 
 to the Nizam, in order thereby to furnish a large sum of 
 ready money to the Nizam's minister, appears to have been 
 the subject of discussion and of reference to the Advocate- 
 general, during the months of June, July, and August. 
 The questionable legality of the measure, in reference to the 
 appropriation clause of the .53d Geo. 3., which was after- 
 wards sustained by the legal advisers at home, appears to 
 have been the objection to its having been adopted. * 
 
 On the 10th June, 1821, and pending those discussions, 
 
 * See Hyd. Pap. pp. 193 to 'Jl'J.
 
 157 
 
 Lord Ha.'itingsi addressed the following private letter to Sir 
 Wm. Riimbold. 
 
 To Sir William Rumbokl, Bart. 
 
 My dear Sir William, 
 
 It is difficult for me to make you comprehend the unpleasant 
 discussions which have been within this fortnight past recorded, 
 with regard to the pecuniary engagements between the house 
 of William Palmer and Co. and the Nizam. The whole has 
 originated in these underhand suggestions of Mr. Stuart, which 
 a false delicacy towards him prevented my exposing. They 
 made impressions on others, who, acting on the erroneous per- 
 suasion, staked themselves in a manner which makes them 
 flounder obstinately now, in order to preserve consistency. 
 Much advantage is given to them by an apparent (I am sure 
 not a real) want of frankness on the part of your house. I 
 apprized you long ago that it was expedient for the firm to 
 define, upon oath, whether or not any British public function- 
 ary had at any time had pecuniary transactions with the house 
 which could influence him in countenancing your dealings with 
 the Nizam's government. The evitation of so simple a declar- 
 ation is awkward, even in the eyes of me, who have so strong 
 a belief in the honour of your proceedings. Though Mr. 
 Stuart declared he had never thrown on Mr. Russell the imput- 
 ation of a secret understanding with you, peculiar circum- 
 stances convince me that such a suspicion was communicated 
 to persons at home, and was received with ready faith. 
 
 It depends on the house whether I also must not admit 
 doubts. 
 
 Sincerely yours, 
 
 Barrackpore, (Signed) Hastings. 
 
 10th June, 1821. 
 
 To this letter Sir Wm. Rumbold tluis replied on the 
 26th, enclosing the affidavit subjoined. 
 
 To the Most Noble the Marquis of Hastings, &c. &c. 
 
 My dear Lord, 
 
 I trust the enclosed affidavit will satisfy your lordship, that 
 any backwardness we may have shown to make the declaration 
 required, did not arise from any such motive as you have 
 thought possible. It is a difficult thing for people who have 
 had such numerous and extensive transactions to take so
 
 lo8 
 
 sweeping an oath. If I could have said roundly, that none but 
 the partners of tlie house had had any advantage in any of our 
 dealings, I should have sent the declaration long ago ; but this 
 I could not do : for we have frequently been obliged to resort 
 to friends for accommodations, and if we have given them any 
 benefit for their assistance, it has been from motives purely 
 disinterested and honest. The enclosed paper proves that 
 those friends have not been the persons whom it is your object 
 to be satisfied about, and it would be very hard that we should 
 be obliged to injure them by our declaration. I say, " injure 
 them," because nearly any person in this country may be 
 termed a public functionary, being in the Company's civil or 
 military service ; and I believe, strictly speaking, no such per- 
 sons ought to have any dealings, which could be in any way 
 construed into mercantile ones, and that if we were not to 
 make the exception we have made, we should find it difficult to 
 take the oath at all. 
 
 I have, &c. 
 
 Hyderabad, (Signed) Wm. Rumbold, 
 
 26th June, 1821. 
 
 Affidavit by William Palmer, Esq. and Sir William Rumbold. 
 
 We, the undersigned, William Palmer and William Rumbold, 
 tlo hereby make oath and declare, that the partners of our 
 house at Hyderabad, called by the name of William Palmer and 
 Co., are as follow. William Palmer, Esq., Sir William Rum- 
 bold, Bart., Hastings Palmer, Esq., George Lamb, Esq., and 
 Bunketty Dos, and that no other persons of any description 
 have, directly or indirectly, any partnership with us, or any 
 interest in any concerns, beyond such as the public has in 
 every other house of agency. We further declare, that no 
 public functionary, at the head of any public office or depart- 
 ment, ever had any avowed or direct partnership, directly or 
 indirectly, with us, or any interest in our concerns, which could 
 influence him in countenancing our dealings with the Nizam's 
 government, or give him any means of deriving any personal 
 advantage from them. 
 
 We think it proper to add, that several individuals, natives 
 and Europeans, who supported us with their capital at the 
 commencement of our establishment, did, in consequence of 
 such accommodation to us, derive benefits from our house. 
 These were, however, such as we gave them from private 
 friendship, or a sense of private and pecuniary obligations 
 to them ; but we repeat, that although we have made this 
 declaration for the purpose of being perfectly explicit, no
 
 159 
 
 person or resident at the liead of any public office or de* 
 partment of government, or any one to whom we looked 
 for public support or influence, have had any such bene- 
 fit : and that no persons, of any description, but the above 
 named partners of our house, have been associated with us in 
 any way, since the time we first entered into treaty for the 
 loan we negotiated for the Nizam's government. 
 
 (Signed) Wm. Palmek, 
 Wm. Rumbold. 
 
 Sworn before me, this 26th day of June, 1821. 
 
 (Signed) Hans Sotheby, 
 First Assistant to the Resident, (Mr. Metcalfe being absent.) 
 
 As this affidavit has been made the subject of the most 
 unfounded calumny, particular attention is challenged to 
 the document itself, as well as to the foregoing coi'res- 
 pondence, which called for and accompanied its trans- 
 mission. 
 
 Lord Hastings, though evidently having intended to 
 describe rather than name Mr. Russell as the person 
 alluded to, does incidentally, by his allusion to Mr. Stuart, 
 positively fix the late Resident as the only person to whom 
 his enquiries related, and about whom his doubts might be 
 excited. That this was so understood by Sir Wm. Rum- 
 bold and Mr. Palmer is clearly proved, not only by the in- 
 strument itself, but by the letter which accompanied its 
 transmission. 
 
 It has been said, that the affidavit was framed for the 
 purpose of misleading the reader of it into the belief, that no 
 person whatever, connected with the residency, was a part- 
 ner in the House. The slightest attention to the instru- 
 ment will show, that the only anxiety displayed in the 
 wording of it, is to prevent that error. It strictly limits 
 the denial to any person at the head of a department But 
 for whose eye alone was the affidavit meant ? whose doubts 
 was it to remove ? and on what point ? Those of Lord 
 Hastings alone, in regard to Mr. Russell alone. It is in 
 its terms an echo to liis lordship's expressions of enquiry.
 
 160 
 
 The document, thou2:li introduced and recorded twelve 
 months afterwards by Lord Hastings, was never in- 
 tended to be so by the parties attesting. If at all recorded, 
 it ought to have been recorded together with the letter 
 which called for and accompanied it. Without these it 
 was an imperfect instrument, and very likely to mislead. 
 In fact, the misconceptions and unjust imputations which 
 resulted from this act of Lord Hastings were not unnatural, 
 but are nevertheless wholly without foundation.* The affi- 
 davit was recorded by Lord Hastings in May 1822, appa- 
 rently for the purpose of directly meeting some calumnies 
 which had been at that time revived and repeated regarding 
 Mr. Russell. 
 
 Immediately after writing his despatch of the 5th April, 
 Mr. Metcalfe appears to have made his first tour through 
 the provinces of the Nizam's country. His second was 
 from the middle of January, 1822, to the end of the fol- 
 lowing May, as stated in his despatch of the 20th June. 
 
 Previously, however, to noticing the contents of this dis- 
 j^atch, it may be mentioned diat the contents and date 
 challenge particular notice. It contains the first indication 
 of Mr. Metcalfe's hostile feelings towards either Chundoo 
 Loll, or to Messrs. William Palmer and Co. 
 
 On the 7th of the same month, orders had been de- 
 spatched to the residency from Calcutta (in obedience to 
 the Court of Directors' remarkable letter of the 28th Nov. 
 1821) requiring that the payment by Messrs. William 
 Palmer and Co., of the Nizam's troops at Aurungabad, 
 should forthwith cease. 
 
 On the contents of this letter it is only necessary here to 
 remark, that it is dictated by the same spirit, and that its 
 tone and commands are equally peremptory and unjust 
 with those of its brother despatch of 24th May, 1820, which 
 decreed the instant recall of the licence of 1816. As little 
 
 * Eleven months after it was made.
 
 un 
 
 reference appears to have been made by the Directors to the 
 effect of this order, either on the Nizam's country, or on the 
 house of Wilham Pahiier and Co. It was called for by no 
 recorded imputation against the fairness and propriety of the 
 dealings of the firm in this or in any other transaction; 
 and it was issued with the full knowledge that the House 
 had been acting under the sanction and approval of the 
 supreme government and of its Resident. The exhibition 
 of their contemptuous treatment of their government at 
 Calcutta is worthy of and consistent with themselves alone. 
 
 On the 5th July, Mr. Metcalfe reports his execution of 
 the orders transmitted, which he appears to have obeyed 
 by drily communicating an extract of the despatch he had 
 received. A marked change is to be observed in his views 
 and opinions in every thing that relates to the House of 
 W. Palmer and Co. ; they form a striking contrast to those 
 of his despatches of March and April, 1821, on the self- 
 same subjects, previous to his expeditions through the pro- 
 vinces of the Nizam's country. 
 
 When he received the Coint of Directors' orders, in 
 March, 1821, for the recall of the licence, he had not 
 hesitated to transmit to Calcutta a long series of comments 
 on the unfitness of those commands ; and to point out the 
 impossibility of the Court's having meant them to be liter- 
 ally executed, when they knew that all the transactions 
 of the House had received the sanction of the supreme 
 government. So strongly had he felt, and so clearly had 
 he demonstrated the outrageous injustice of the concluding 
 paragraph of that memorable mandate, that he found il 
 necessary to terminate his despatch with the following dis- 
 claimer : " In these crude remarks herein submitted, I 
 " offer the result of my local observation ; without, of 
 *' course, meaning to discuss the propriety of the restric- 
 " tive orders issued by the Honourable Court of Di- 
 " rectors."* 
 
 * Hyd. Pap. p. 161. 
 M
 
 1(52 
 
 The very abrupt manner in which he now thought it 
 proper to discharge his official duty, occasioned the follow- 
 ing letter to be addressed to the council at Calcutta by Mr. 
 Joini Palmer of that city. 
 
 To the Most Noble the Marquis of Hastings, K. G. &c. &c. &c.* 
 
 My Lord, 
 From communications just made to me by Messrs. William 
 Palmer and Co., of Hyderabad, consequent to the injunction 
 conveyed to them by the Resident to terminate immediately 
 their arrangements with his Highness the Nizam's minister for 
 paying his highness's military force at Aurungabad, it would 
 appear that they are led to harbour the most lively apprehen- 
 sion of ruin to their establishment, unless the immediate inter- 
 vention of your lordship's protection be afforded them, inas- 
 much as the implied loss of credit, and of that countenance and 
 encouragement they have from the first prescriptively enjoyed 
 from the supreme government, threaten them with a shock 
 they may be altogether unable to resist. 
 
 2. I have the honour to submit a copy of the Resident's 
 letter to Messrs. William Palmer and Co., and of the extract 
 of the instructions from your lordship's government which ac- 
 companied it, and to intimate, that this was the first commu- 
 nication upon so important a subject to Messrs. William Palmer 
 and Co., and to acquaint your lordship, that, with a view of 
 averting the effects of your lordship's order on the 27th June, 
 two of tlie members of their firm waited upon the Resident, to 
 solicit some qualification in the execution of such abrupt and 
 peremptory conmiands, but, as they inform me, without effect, 
 the imminent and immediate danger they dreaded from the 
 measure making no impression on his mind. 
 
 3, I am not sufficiently informed of the nature of Messrs. 
 William Palmer and Co.'s engagements for paying the troops 
 of his Highness the Nizam; but if they received the sanction 
 of the supreme government, virtual or implied, I humbly sub- 
 mit to your lordship, that they cannot be unentitled to protec- 
 tion, until those engagements are faithfully fulfilled ; and 
 that, in consideration of their having established a branch of 
 their house at Aurungabad, for the express purpose of giving 
 full effect to those engagements, they are not unentitled to 
 any lenient modification of the Honourable the Court of Di- 
 rectors' orders, which shall shelter them from prejudice, injury, 
 or loss. 
 
 Hyder. Pap. p. 1.59, 160.
 
 Kid 
 
 4. Under the operation of this peremptory injunction, 
 Messrs. William Palmer and Co. are penetrated with a dread, 
 that all persons having current pecuniary transactions with 
 them will instantly press their demands, in the persuasion that 
 so signal a proceeding is a clear manifestation of their dis- 
 grace with the supreme government, and that they no longer 
 deserve the protection they have hitherto enjoyed. And were 
 the consequent injury only inflicted on themselves, I should 
 venture to hope that it would be grateful to your lordship's 
 feelings to avert it; but as it involves the property and inte- 
 rests of all their connections, they feel justified in appealing to 
 your lordship for whatever succour the case admits of. 
 
 5. Messrs. William Palmer and Co. feel the singular seve- 
 rity of not only having their engagements suddenly cancelled, 
 under denounced penalties, to such amongst them as are ob- 
 noxious to the statute, but the guarantees on which they 
 rested for security in their dealings with the Nizam's govern- 
 ment are wrested from them, and they are left to realize or 
 recover their advances to his Highness's ti'oops how they 
 may. They conceive that, in this particular, some confusion 
 must have crept into the orders of the honourable court or of 
 the supreme government, inasmuch as it does not seem con- 
 sistent with justice, that they should at once be removed from 
 their position, and deprived of the securities voluntarily of- 
 fered them by the Nizam's government at the instance of our 
 own, and that this apparent proscription shall be applicable to 
 all their other transactions with the Nizam's minister. Such a 
 construction of the Honourable Court's orders would seem still 
 more inconsistent with those liberal sentiments which have 
 always distinguished its measures, in relation to the interests 
 and concerns of individuals*, deprecate its pernicious influence 
 on their credit and prosperity. 
 
 6. If it might be assumed that the government of Hyder- 
 abad was neither arbitrary nor capricious, the credit of 
 Messrs. William Palmer and Co.'s establishment would not re- 
 quire the impression, that it possessed the countenance and 
 protection of the supreme government, nor might it suffer any 
 irreparable injury from the imphed forfeiture of that honour- 
 able distinction: but if its minister be interdicted all dealings 
 with Messi's. William Palmer and Co., without a stipulation 
 for his faithful adjustment of all existing accounts, they are 
 brought into such disadvantageous relations with him, that 
 they can never rationally hope for the discharge of any ba- 
 lances which may be due to them. 
 
 * Some words are obviously omitted here in the original manuscript, the 
 import of which may be easily collected from the context. 
 
 M 2
 
 1(34 
 
 7. Messrs. William Palmer and Co. allege, that on a former 
 occasion, when the discharge of their loan to the Nizam was 
 only a topic of conversation, they had a run upon their house, 
 which they met with considerable difficulty and extraordinary 
 sacrifices. Thej' therefore view with terror the torrent which 
 may rush in upon them, under this signal instance of appa- 
 rently lost protection. 
 
 I have, &c. 
 
 Calcutta, (Signed) J. Palmer. 
 
 14th July, 1822. 
 
 In consequence of the foregoing letter, the council agreed 
 unanimously, on the 17th July, to transmit the following 
 directions to Hyderabad.* 
 
 To C. T. Metcalfe, Esq., Resident at Hyderabad. 
 Sir, 
 
 -1. The Governor-general has received a very urgent repre- 
 sentation, on the part of Messrs. William Palmer and Co., of 
 the apprehended injury to their credit, and to the stability of 
 their establishments, from the promulgation of the orders con- 
 veyed to you in my despatch of the 7th June, as creating an 
 impression that they had forfeited the protection of the Bri- 
 tish government generally. 
 
 2. The Honourable the Court of Directors having, in their 
 instructions to this government, on which those orders were 
 founded, distinctly expressed a desire, that the execution of 
 the measures which they have felt it their duty to present, 
 with relation to that firm, shall be so regulated as not to injure 
 its credit, and having indeed manifested a generous anxiety 
 upon the point, the Governor-general in council, with a just 
 participation of the feeling, considers it necessary to direct, 
 that you shall formally apprise Rajah Chundoo Loll the tenour 
 of the Court's orders referred only to pecuniary transactions 
 between the house and the Nizam, or his government. You 
 will please further to explain, that with those exceptions, the 
 countenance of the British government has not been in any 
 degree withdrawn from the house, but that the house con- 
 tinues to enjoy it in regard to its ordinary banking and com- 
 mercial dealings within his highness's dominions, not involving, 
 
 • Hyder. Pap. p. 163, 164.
 
 165 
 
 directly or imJirccdy, the guarantee of tlie minister or the 
 responsibihty of the public revenues of the state. 
 
 3. The Governor-general in council thinks it probable that 
 you have represented to the minister the obligation on his 
 honour and good faith, to make as early payment of the ba- 
 lance due on the unadjusted accounts of the house, which 
 have been ordered to be brought to a close, as the paramount 
 exigencies of the state will admit; for the Honourable the 
 Court has expressly defined its notion of a close to the ar- 
 rangement, to consist in the restoration of the tunkhas by the 
 house of William Palmer and Co., as soon as the advances 
 made by that firm on the Aurungabad account shall have been 
 repaid. That degree of interposition, as referring to arrange- 
 ments made before the receipt of the positive inhibition from 
 home, will be equally consonant to the pleasure of the Ho- 
 nourable Court and the disposition of the Governor-general in 
 council. 
 
 4. In your letter of the 20th June, you allude to some debt 
 to the house from the minister, standing at twenty-four per 
 cent, interest, distinct from either the Aurungabad arrange- 
 ment or the loan of sixty lacs. Were this a personal account 
 of the minister's with the house as his bankers, you would 
 scarcely have called the attention of government to a matter 
 with which it could have no concern ; but, by the context, it 
 is judged that you mean to indicate it as connected with some 
 public transaction, on which account government must desire 
 information respecting it. 
 
 I have, &c. 
 
 Calcutta, (Signed) G. Swinton, 
 
 I7th July, 1822. Secretary to the Government 
 
 In his reply to this reproof Mr. Metcalfe appears to have 
 been no longer able to restrain within his own bosom the 
 hostile feelings which he now entertained towards W. Pal- 
 mer and Co. He does not hesitate, in a tone full of flip- 
 pant disrespect to the council, and full of malicious insi- 
 nuation against the House, to assure the government they 
 need be under no apprehension of the minister's not ful- 
 filling his engagements to them, for that every pressing 
 demand in that country is postponed to their interests; 
 and that he has observed^ ever since he came to Hijderabad, a 
 
 IM 3
 
 U)6 
 
 persuasion oj' ihcir puwcr and injluence^ 'which iviU continue 
 to ensure them every possible advantage. 
 
 It will be as well at this place to expose at once 
 the cause of this new hostility, and the intrigue, in the 
 defeat of which it had its origin. 
 
 On Mr. M.'s return at the end of May from his second 
 tour, the assistant Resident (Lieutenant Barnett,) he states, 
 met him at one or two marches from Hyderabad, and in- 
 formed him that he (L. B.) had, a few days before, received 
 a note from Chundoo Loll, the contents of which he de- 
 scribed to him. This note, (to be found at page 174 of the 
 Hyd. Pap.) submits a proposal to borrow thirty-five lacs of 
 rupees from the British government, at a low rate of in- 
 terest, in order to pay off' a part of the minister's debt to 
 Messrs. William Palmer and Co. ; and contains an able 
 and powerful remonstrance or appeal against Mr. Met- 
 calfe's whole course of open and direct interference in the 
 internal government of the country, which the minister 
 therein expressly states to have been written for the inform- 
 ation of, and for the purpose of being forwarded to, the 
 supreme government at Calcutta. A copy of this note the 
 minister (having in vain waited two months for a compliance 
 with his request) forwarded, through Mr. William Palmer, 
 in a letter addressed by himself to the Governor-general in 
 council. Mr. Metcalfe learnt, from Lieutenant Barnett, that 
 the note had been delivered to him shortly after an interview 
 between the minister and Messrs. William Palmer and Co. ; 
 and Mr. Metcalfe's suspicions were iynmediately carried to- 
 •wards those gentlemen as the instigators of the proceed- 
 in". * Lieutenant Barnett could not have failed, at the 
 
 "b 
 
 same time, to point out to Mr. Metcalfe some of the imme- 
 diate effects of his arbitrary interference in the settlement 
 of the country, on the credit and station of the minister. 
 He had been thereby reduced to a cypher in the eyes of 
 
 * Vide Letter of 30th September, Hyd, Pap.
 
 167 
 
 his countrymen ; and his downfall was now confidently an- 
 ticipated by all the open and secret enemies of that influence 
 which had alone raised him to his office. The very pedestal 
 of his elevation had been removed from under him. He no 
 longer was treated by the British resident as the minister 
 of an independent ally ; but was made to stand forth the 
 degraded instrument of the subjugation and submission of 
 his country to the imperious delegate of a foreign power. 
 It is only necessary to read Mi". Metcalfe's despatches, to 
 perceive that he had considered himself invested with a full 
 right and power to exercise a jiaramount and despotic 
 authority in the Nizam's country. In utter contempt of 
 the instructions to Mr. Russell, his predecessor, (trans- 
 mitted, too, by himself, whilst secretary to the government,) 
 that the Resident's interference should be coiifined solely 
 to advice and injiuencc "with the minister, he had proceeded 
 at once to the direct exercise of sovereign power, by making 
 new assessments all over the country, and by appointing 
 and permitting his young officers to break through the as- 
 sessments recently made by the minister himself. 
 
 All outward appearances of decency and respect for 
 Chimdoo Loll, or his office, seem to have been utterly dis- 
 regarded. So deliberately determined was he to adopt 
 this course of conduct for that of his duty, that he had 
 prudently lulled the supreme government into an inatten- 
 tive acquiescence in his usurpations, by frequent assurances 
 that in all he did, or proposed to do, he had received the 
 free and full consent of the minister. Of the nature of that 
 consent, no one acquainted with the supple timitlily of the 
 native character, can, for a moment, entertain a doubt. 
 
 If Mr. Metcalfe was deficient in the intelligence of a 
 statesman, the common feelings of a man should have 
 pointed out the heartlessness and the folly of thus com- 
 promising the nominee of the British government, who was, 
 on every ground of policy and of good faith, entitled to his 
 consideration. But in his tlictatorial progresses through 
 
 M 4
 
 168 
 
 the country, no thought seems to have been wasted on the 
 consequences of liis own acts on the minister's feelings or 
 position. An open and manly opposition however on the part 
 of Chundoo Loll, was an event for which the Resident was 
 evidently unprepared. A direct appeal against a British 
 Resident to the Governor-general in council by a native 
 minister, the creature of the very power against whose 
 representative he complained, was too rare an occurrence 
 to have been readily foreseen. Upon being made acquainted, 
 however, with the contents of the note, Mr. Metcalfe states 
 he had to determine what course he was to pursue. What 
 ground for doubt or hesitation could exist in an upright 
 functionary at such a moment ? The positive instructions 
 of the service of which he was a member, made it his 
 prescribed and bounden duty to transmit to Calcutta the 
 complaint against himself, together with his own com- 
 mentary or justification upon it. Nothing but a conscious- 
 ness tliat he had already been misleading the government at 
 Calcutta with false assurances of the minister's ready con- 
 currence in all his proceedings, could have prevented him 
 from treading the straight-forward and open path of his 
 duty. His own previous arbitrary conduct and crooked 
 policy had shut this road against him. 
 
 He appears to have determined, therefore, for the present 
 at least, to conceal from his employei's both the remonstrance 
 of the minister, and the effects of his own infraction of the 
 Governor-general's recorded instructions for his guidance. 
 
 He appears, however, to have taken some time to chuse 
 his course; for not till the 20th June does he think fit to 
 announce to the supreme government his return to Hydera- 
 bad. This letter affords the strongest evidence of the 
 intrigue in which he had resolved to engage; or, as he 
 phrases it, of the cotirse he meant to ■purme. He could 
 not but feel, that the members of the house of Messrs. 
 William Palmer and Co., the only Europeans in the 
 Nizam's country who were not dependent on his smiles or
 
 169 
 
 his frowns, were very inconvenient witnesses of any pro- 
 ceedings which he might wish to conceal from, or to dis- 
 colour to the eye of the government at Calcutta. He could 
 not but know that their intelligence must have perceived 
 the striking difference in his conduct from that of his pre- 
 decessor. The necessary intercourse which must exist 
 between the members of that firm and the minister, from 
 their large and important transactions with him, must give 
 him opportunities of making known to European ears of 
 independent station and of unsullied character, the subject 
 of his complaints. 
 
 The permanent intimidation of the Rajah into a blind 
 submission was, under such circumstances, not to be hoped. 
 But his removal might be effected. That event Messrs. 
 William Palmer and Co., however, must necessarily be 
 disposed to contemplate with disquietude and alarm. They 
 had, under the sanction of the supreme government, em- 
 barked their all in the pecuniary aid of his administration ; 
 and upon his good faith and continuance in office alone 
 could they rely for the repayment of their supplies. 
 
 The destruction of the credit and of the eventual testi- 
 mony of the members of that establishment in favour of 
 any statement at variance with the views of the Resident, 
 was, therefore, of necessity a preliminary achievement 
 With such views accordingly does the letter of the 20th 
 June 1822 conclusively appear to have been framed. 
 He repeats and exaggerates his thrice told tale of the 
 abuses to be witnessed in the internal administration of 
 the districts of the Nizam's country ; and, as if he had 
 been the first to make the disclosure of the disease, 
 he seems to think he has only to point out and apply 
 the remedy. Full of unreflecting self-conceit, he does 
 not seem to have consulted even the records of his 
 office, or he would have learnt that this subject had 
 been the frequent theme of Mr. Russell's valuable and 
 statesman-like comniunicalions. Had he so done, he
 
 170 
 
 woukl liave discovered that the government ot" Calcutta 
 had been made fully and frequently acquainted with 
 the state of the country, and that the final consummation 
 of the evil had been equally foreseen and foretold. He 
 would have discovered that it had been deliberately re- 
 solved that such consummation, come when it might, should 
 not be hastened by any direct British interference in the 
 administration of the country, and that the resident's 
 efforts should be confined to the exercise of his advice and 
 influence through the minister, as long as the tranquillity 
 of the country could in any manner be prolonged. It 
 required no conjuror in the shape of Mr. Metcalfe, to per- 
 ceive and to pronounce that the existing evil could be at 
 once removed by the direct assumption of the government 
 by a person acting in the name and with the authority of 
 the British power. But the prescribed duty of the re- 
 sident, which had been so judiciously discharged by Mr. 
 Russell, had been limited to availing himself of any op- 
 portunity to influence the minister to the best conduct, 
 under circumstances, which, it had been repeatedly ac- 
 knowledged, forbade the hope of even an angel, in 
 Chundoo Loll's position, being able to restore prosperity 
 to the state. 
 
 He in this letter, for the first time, insinuates rather than 
 ventures directly to state, that he has met with some want 
 of co-operation from Chundoo Loll. But he insists strong- 
 ly on the absolute necessity of the continuance of that 
 intervention of advice and injluence xohich his Exccllencij the 
 Governor-general in Council had authorized for the 'welfare 
 of the countrij, and then boasts of the beneficial effects of 
 his own measures, as if his interference had been limited by 
 and in conformity with those instructions. 
 
 In his 1 7th paragraph, he informs the goverimient, in the 
 ingeniously familiar and gossipping style, which is observ- 
 able in his letters whenever he wishes to divert attention 
 from his design, that it is reported that the Nizam is dis-
 
 171 
 
 rj^usled loit/i /lis minister C/mndoo Loll. In the next para- 
 graph he, in a manner equally uncalled for, forces the 
 nominal minister (the rival of Chundoo Loll), Mootieer-ool 
 Moolk upon the Governor-general's attention in a false and 
 favorable point of view; following up this panegyric 
 with an attack in contrast upon Chundoo Loll. This 
 brings him to the minister's alleged extravagance, and 
 then incidentally (and, as it were, by the bye) he contrives 
 to mention one of the subjects of the minister's celebrated 
 note, namely, the proposal to borrow thirty-five lacs. This, 
 however, he flippantly puts aside as an insincere propo- 
 sal ; taking occasion, however, to introduce two or three 
 unhandsome insinuations against the house of W. Pal- 
 mer and Co. But he carefidly conceals, never even al- 
 luding to, the remonstrance, the far more important part 
 of that note, from which he had extracted the proposal for 
 the loan. Thus did he practise disingenuously upon his 
 own employers, at the very moment he was plotting the 
 ruin of those whom he was bound by every tie of honour 
 and of duty to protect from misrepresentation and misfor- 
 tune. To this letter of the 20th of June, the Supreme 
 Government replies on the 1 9th July, and in it are to be 
 found the following paragraphs : — 
 
 "The Governor-general in council observes, that the 
 " points submitted in your despatch are too numerous and 
 " important to admit of immediate decision, but will be 
 " taken into deliberate consideration hereafter." 
 
 " The only point to which his Lordship in Council 
 " deems it necessary to advert on the present occasion, is 
 " that stated in the twenty-second paragraph of your des- 
 " patch, viz. the minister's professed anxiety to pay ofl^the 
 " loan, and the mode he proposes of accomplishing it." 
 
 " His Lordship in Council concludes, that in an affair 
 " of such moment, the minister will have submitted his 
 " proposition to you in writing; and, in tiiat case, his 
 " Lordship in Council will be glad to receive a copy of 
 " the paper in which it was conveyed."
 
 I7'i 
 
 The concealment Mr. Metcalfe had already practised in 
 withholding the note, in which both the proposal for the 
 loan and the remonstrance were contained, obviously com- 
 pelled him to elude complying with the above orders. In 
 no one of the following despatches accordingly is to be 
 found even an acknowledgement of, much less an obe- 
 dience to them, though he writes to Calcutta on the 1st, 
 9th, and 31st August. It was not till after the last 
 despatch was written, that he learnt that the note had, 
 throuo-h Mr. Palmer, reached the hands of the Govenor- 
 general in Council. Accordingly, on the 8th of September, 
 he has no longer motive for silence, and he with apparent 
 cai'elessness, states in reply to the letter of 19th July, to 
 'xhich he then for the Jirst time replies, that the proposi- 
 tion for the loan had been included in a note addressed to 
 one of' his assistants, which note he believes to be in the 
 Government's hands, amongst the papers clandestinely 
 transmitted by Messrs. W. Palmer and Co. When the 
 murder came out on the 31st of August, and the expo- 
 sure of conduct became known to him, his was, doubt- 
 less, a desperate position. He had now no alternative 
 but to persuade the Government that Chundoo Loll and 
 Messrs. W. Palmer and Co. were in a league to counteract, 
 to discredit, and finally to displace himself; or his own in- 
 tritrue for the subversion of the minister, and for the ruin 
 of the witnesses of his plot, must inevitably be made mani- 
 fest to his employers. From that time forth, therefore, 
 he had but one game, however desperate, to play. Unhap- 
 pily he found at the Council Board in Calcutta, instruments 
 but too ready and well fitted to second his efforts. Up to 
 this period of discovery, from which time he threw off all 
 restraint on his disposition to misrepresent, it is at once 
 amusing and disgusting to watch, in his despatches from 
 the 20th of June to the 31st of August, the deliberate 
 course of slanderous insinuation, by which he prepares 
 the council for the reception of his destined attack on
 
 173 
 
 the obstacles to his uncoiitrouled assumption of diclalorial 
 power. 
 
 7^he letter which he obtrudes on the Government on 
 the 9th August, indicates at once his confidence and his 
 progress in the accomplishment of Chundoo Loll's remo- 
 val. The intrigue is rendered so glaring in this letter, 
 that its insertion must carry conviction with it. 
 
 To G. Swinton, Esq., Secretary to Government, Fort-William. 
 Sir, 
 
 1. Some days ago, the nominal prime minister of the Nizam's 
 court, Nawaub Mooner-ool Moolk, sent me a message, saying, 
 that he had been directed by his highness to wait on me, and 
 adding a complimentary intimation of the gratification which 
 he derived from that order. I returned the reply usual on 
 such occasions, expressive of the happiness which I should 
 have in seeing him, and he came the next day. 
 
 2. A visit of this kind from the Dewan was so unusual, if 
 not unprecedented, since the nomination of the present minis- 
 ters, that it naturally attracted much attention. Rajah Chun- 
 doo Loll considered that it was meant as an attack on his 
 power, and was much alarmed. He gave me notice of it pre- 
 viously to Mooneer-ool Moolk's message, but added a difterent 
 account of the cause, for he informed me that the Nawaub had 
 persuaded the Nizam that he had been invited by me. 
 
 3. When Mooneer-ool Moolk came, after some common 
 complimentary conversation, he apprised me that he had been 
 sent by the Nizam to enquire how matters stood, with regard 
 to the interchange of territory between his highness and the 
 British government, especially as to whether or not further 
 cessions would be required from his highness. I replied, that 
 that there was a balance against his highness, arising out of 
 the excess of revenue which he had received compared with 
 what he had ceded, and that I hoped the matter would soon be 
 adjusted to his highness's satisfaction. 
 
 4. This being the whole of the commission with which 
 Mooneer-ool Moolk professed to be charged, he went on to 
 talk of other matters on his own part. He spoke of our mea- 
 sures for the amelioration of the condition of the Nizam's sub 
 jects, and praised highly what had been done. He described 
 also the Nizam's feelings on my conduct generally in such flat- 
 tering terms, that if I could believe what he said, I should be 
 satisfied that my endeavours to carry into effect the benevolent 
 nitentions of the Governor-general in council had not been ex-
 
 174 
 
 erted in vain. But I need not point out how impossible it is 
 to be sure that a native of India is speaking truth, when he 
 has any object to effect. 
 
 5. He used different terms, as was to be expected, with re- 
 gard to Rajah Chundoo Loll, and dwelt particularly on the 
 waste of the public resources in bribery, for the support of liis 
 power. He said that the whole of the Nizam's family was 
 bribed ; and of his own, he declared not only that every servant 
 that he had was in Chundoo Lolfs pay, but that even his own 
 mother-in-law sent that minister a daily account of the occur- 
 rences of the inmost recesses of his (Mooneer-ool Moolk's) 
 house. Of the general truth of what he said on this subject I 
 have no doubt, having always received similar information from 
 various quarters. 
 
 6. During his discourse on the state of the country, I availed 
 myself of the opportunity to endeavour to impress on his mind, 
 with a view also to its possible communication to the Nizam, a 
 correct notion of the real nature, object, and extent of our inter- 
 ference in the affairs of his government. I knew that reports, 
 exactly such as under such circumstances might be expected, 
 had gone abroad, of our present measures being only a prelude 
 to taking entire possession of the country as a British possession : 
 I therefore explained to him that our actual interposition was 
 precisely with an opposite view, and in order to save the Nizam 
 from such a result, which, in the way in which ruin was pro- 
 ceeding, would have been inevitable. I further explained, that 
 as soon as any assurance could be obtained that oppression 
 would cease, our interference would be immediately relin- 
 quished as unnecessary and useless. I have repeatedly held 
 out the same pledge to Rajah Chundoo Loll, when he has of- 
 fered temporary opposition to measures which I have recom- 
 mended as essential ; and I hope to see the day, when this 
 pledge may be safely redeemed. I hold the same language to 
 all persons who communicate with me on the subject, in anti- 
 cipation of the suspicions which, with or without interference, 
 the natives of India are universally inclined to entertain, judg- 
 ing from the events of our history, without being able to dis- 
 cern their causes. 
 
 7. This visit from Mooneer-ool Moolk has doubtless been 
 considered as the commencement of an intrigue against Chun- 
 doo Loll. From the alarm which it produced in the mind of 
 the latter, he must have entertained a similar apprehension. I 
 have endeavoured to persuade him, that he has no reason to 
 dread any serious consequences. One of his observations was 
 remarkable : " What can Mr. Metcalfe do, however much in- 
 " clined to support me, if the Nizam himself proposes my dis- 
 " missal ?" This was before Mooneer-ool Moolk's visit, and
 
 175 
 
 it seems that Chundoo Loll must liave apprehended that such 
 a communication tVoni the Nizam was in contemplation. My 
 own belief is, that this fear is without ground ; and I am happy 
 to say, that Mooneer-ool Moolk did not hint, in the most 
 distant manner, at the probability of the Nizam's entertaining 
 such an intention. 
 
 8. Mooneer-ool Moolk has since informed me by message, 
 that the Nizam was much pleased with the assurances which 
 our conversation had enabled him to carry to his highness, of 
 my attachment to his highness's interests, and of the friendly 
 disposition of the British Government ; that the Nizam ex- 
 pressed much gratification at Mooneer-ool Moolk's commu- 
 nication of the result of his visit, I hear, also, from other 
 quarters: but why he should particularly be so I know not, 
 for there was nothing in my communications to Mooneer-ool 
 Moolk, which his highness might not have heard long ago 
 through Chundoo Loll. I am uncertain, therefore, as to what 
 I may infer from this information. 
 
 I have, &c. 
 
 Hyderabad, (Signed) C. T. Metcalfe, 
 
 9th August, 1822. Resident. 
 
 For what purpose was the above letter written, but to 
 prepare the government for the contemplated substitution 
 of Mooneer-ool Moolk, who was to be Mr. Metcalfe's 
 creature, for Chundoo Loll, who acknowledged fealty only 
 to the British power, but not to its capricious abuse in the 
 hands of an irresponsible representative ? The eiFect of this 
 visit at Hyderabad may be easily conceived. Tliat it was 
 achieved by Mr. Metcalfe no rational person can doubt. 
 So conscious is he of this necessary conclusion, that he 
 himself states, " that the visit has doubtless been considered as 
 " the commencement of an intrigue against Chundoo Loll.'" At 
 length, on the 3 Lst August, in the fifty-seventh paragraph 
 of that apparently rambling but designing despatch, he 
 proves his eager anticipation of the dismissal of Chundoo 
 Loll, by asking the government xtjhether^ in the event 
 of the Nizam proposi^ig such a measure to him, he is 
 to receive the intimation favourably, or otherwise P This 
 denoted a foreoone conckision in Mj-. Metcalfe's mind.
 
 176 
 
 He had, in the fifty-fourth paragraph of the same despatch, 
 given it as his opinion, " that the conduct best suited to 
 " the ciramistayiccs, 'would be to court the good 'will of the 
 " Nizam himself, in ^preference to any of his servants.^^ That 
 Mr. Metcalfe should have hazarded the expression of such 
 an opinion, after the character which had been given of that 
 strange personage by himself, as well as by all his prede- 
 cessors, accredited to that court, can only be accounted 
 for in connection with his ulterior object. He offers no 
 explanation whatever of this new point of view in which he 
 would exhibit the Nizam. It is impossible to doubt, that 
 he already held the minister's dismissal to be certain, con- 
 scious as he was, that it only required a hint being conveyed 
 to the Nizam to ensure the proposition being made. In the 
 thirty-third to the thirty-sixth paragraph of the same 
 despatch, he rings the changes on the supposed removal 
 of Chundoo Loll, and entertains the government with 
 sundry speculations on the result of that event. But the 
 concluding paragraph is not the least deserving of notice. 
 It runs thus : " I have this day received intelligence of a very 
 " extraordinary nature, which induces me to transmit it 
 " (this despatch) witliout correction and without delay, 
 " lest the additions and alterations I might make to it, 
 " should receive a bias from that intelligence." 
 
 What could be the news so destructive to the self-con- 
 ti'ol of this upright statesman, that he feared to trust any 
 longer the weapon he was wielding, lest he should distort 
 the facts, or falsify the conclusions of his despatch ? There 
 is something of candour, if not of prudence, or of wisdom, 
 in the confession of his weakness. But this important in- 
 telligence, the reader is destined to learn, was no less than 
 that the minister had had the consummate audacity to 
 transmit the note directly to the Governor-general in coun- 
 cil, appealing from the Resident to the judgment of his 
 masters. 
 
 Having recruited himself in three days from the effect
 
 177 
 
 of the intelligence alluded to, Mr. Metcalfe, on the third ^ 
 of September, resumes his pen. This letter must be read 
 to be appreciated. In it he states, " He has long been 
 " aware of a plot hostile to him and his proceedings, one 
 " part of which has been to persuade the minister, that he 
 '* {Mr. M.) was inimical to him, and that he must look else- 
 '* where for support" He then gives a long rigmarole 
 story of his having called on the minister to account for 
 his conduct ; and by his own account he appears to have 
 so frightened the poor man, that he states him to have put 
 up his hands in a beseeching attitude, and to have prayed 
 to the great man to forgive him. He makes the minister 
 say a great many things, which he adroitly and boldly says 
 he believes to be true, or not, as suits his purpose. He 
 puts in the minister's mouth slanderous insinuations against 
 Messrs. Palmer and Co., and makes him accuse them as 
 the real authors of the letter and its transmittal. He says 
 he talked four hours with the frightened minister ; that 
 there was, however, more good humour on his own part 
 than he had expected, and he told the minister jocularly, 
 " he never could forgive the trick he had plaijed him, and 
 " that the matter went off" with a laugh on both sides." 
 
 This is evidently written to divert the attention of the 
 government from the short and simple facts, and it con- 
 chides with the following ominous and half-threatening 
 paragraph : — 
 
 21. " Much more conversation passed between us, than 
 " I am able at present to relate or recollect. I may here- 
 " after have many observations to make on the subject of 
 " this letter ; but I await your intimation of the commands 
 " of his Excellency the Gover?ior-ge7ieiril in council, regard- 
 " ing the communications of Rajah Chundoo Loll through 
 " Messrs. William Palmer and Co. The mode in which they 
 " have been received, will either render necessary a very dis- 
 " agreeable detail, or will relieve me from that necessity. It 
 
 * Hyd. Pap. p. 220. 
 
 N
 
 178 
 
 " will also decide, to Chmidoo Loll's conviction, what his 
 ," conduct shows to be at present doid)tful in his mi7id ; i. e. 
 " whether the Resident, or the firm of William Palmer and 
 " Co., be the real representative of the British governmejit 
 " at this court." 
 
 If any evidence were wanting of tlie state of mind in 
 which Mr. Metcalfe wrote his Reports of 31st August, 
 and the 3d September, it is furnished by himself in the 
 following despatch, written two days after the latter had 
 been sent off. 
 
 To G. Swinton, Secretary to Government, Fort William. 
 
 Sir, 
 I hasten to correct a mistake into which I have fallen in 
 my report of the 31st ultimo. 1 observed therein, that I had 
 not discovered any explicit instructions on my records for 
 the Resident's giving his support to the minister Chundoo 
 Loll. I have this instant met with a despatch, under my 
 own signature, conveying very ex})licit instructions on that 
 point, and I wonder how it before escaped my notice and 
 recollection. I hope that the Governor-general in council 
 will excuse this inadvertency. 
 
 I have, &c. 
 
 Hyderabad, (Signed) C.T.Metcalfe. 
 
 5th September, 1822. 
 
 A singular confession truly ! — He had, at that time, 
 been the representative of the British government at the 
 Nizam's court, for nearly two years. During that period 
 he had taken upon himself a most active and offensive 
 direct interference in the internal government of the coun- 
 try; — a conduct not only directly opposed to that of his 
 predecessor, but to the express orders of the supreme 
 government, penned and communicated by himself. And 
 at the end of this period, he confesses to have never given
 
 179 
 
 himself the trouble to ascertain the first and most important 
 duty of his office, the very foundation on which the tone, 
 demeanour, and conduct he was to observe towards the 
 Nizam's minister, were to be constructed. That minister, 
 he liad observed, was confessedly the most capable man 
 in the kingdom, the firm and attached adherent to 
 British interests, the openly avowed creature of British 
 power, and the designated irjstrument through whom he 
 had been told to work out the objects for which he was 
 himself sent to Hyderabad. These letters called fordi the 
 following reply from the Governor-general in council. 
 
 (Enclosure No. 4. in Bengal Political Letter of 20th December 
 
 1822.) 
 
 To C. T. Metcalfe, Esq., Resident at Hyderabad.* 
 Sir, 
 
 1. Your letters of the 31st August, and 3d and 5th Septem- 
 ber, have been hvid before the Governor-general in Council, 
 and I am directed to communicate the observations which oc- 
 curred on their perusal. 
 
 2. In the second paragraph of your first letter you say, that 
 " you suppose our interference in the Nizam's affairs to be not 
 *' merely right, but also a duty, arising out of our supremacy 
 " in India, which imposes on us the obligation of maintaining 
 " the tranquillity of all countries connected with us ; and^ 
 " consequently, of protecting the people from oppression, aa 
 " no less necessary than the guaranteeino- of their rulers against 
 " revolution." The assumption of our possessing an universal 
 supremacy in India, involving such rights as you have de- 
 scribed, is a mistake. Over states which have, by particular 
 engagements, rendered themselves professedly feudatory, the 
 British Government does exercise supremacy; but it never 
 has been claimed, and certainly never has been acknowledged 
 in the case of Native Powers standing within the denomination 
 of allies. Although a virtual supremacy may, undoubtedly, 
 be said to exist in the British Government, from the inability 
 of other states to contend with its strength, the making such a 
 superiority a principle singly sufficient for any exertion of our 
 will, would be to misapply that strength, and to pervert it to 
 tyrannic purposes. 
 
 Hyd. Pap. 
 
 N 2
 
 . 180 
 
 3. In your third paragragh you observe, " the only refuge 
 " of a people intolerably vexed, is in emigration or insurrec- 
 " tion ; and as we secure the Nizam's government against re- 
 " hellion, it seems to be incumbent on us to save his subjects 
 " from grievous oppression." The argument of supremacy 
 having been set aside, nothing but the tenour of some special 
 engagement could render us liable to the call, or allot to us 
 the title for such interposition. Our treaties, characterising the 
 Nizam as an independent sovereign, authorise no such latitude. 
 When, for our private views, that prince was constrained to 
 support a body of our troops, to be stationed near his capital, 
 the then government disguised the interested oppressiveness of 
 making him pay a portion of our army for holding him in 
 thraldom, by a sturdy declaration, that his highness had spon- 
 taneously sought the aid of a subsidiary force to secure his 
 person and territories. The veil thus thrown over our policy 
 required that any stipulations which could mark the prostration 
 of his power should be forborne, so that, in appearance, he 
 legitimately retained his freedom. The measure, however, 
 really placed him at our mercy. It was hardly to be imagined 
 that our advantage would not be abused, and it was abused : 
 the independence which the very conditions of the compact 
 recognised and pledged us to respect, was set at nought. 
 Gradual but unequivocal encroachments on the Nizam's just 
 authority were perceived by the honourable court, and a more 
 becoming system was enjoined. The Governor-general in council 
 laboured to introduce it; — a work of no small difficulty when 
 the country was so disorganised ; — and having established an 
 understanding with Rajah Chundoo Loll for the correction and 
 future conduct of affairs, (this government, in return, binding 
 itself to support that minister,) the Resident was directed to 
 adopt a course of conciliatory counsel, instead of those starts 
 of despotic dictation which had before been in use. That 
 limited degree of interference would still be objectionable, but 
 for the common interest between the two governments, that 
 his highneas's territories should be restored to prosperity: 
 yet even that excuse would be insufficient, were not our in- 
 fluence to be managed with delicacy, and to be unavowed. 
 Such is the distinct nature of our relations with the Nizam ; 
 and a disregard of its terms would be no less repugnant to ge- 
 neral principles, than to the orders of this government. 
 
 4. Paragraphs four and five plead necessity for our inter- 
 position, because the Nizam does not rule his subjects with 
 equity and prudence. The fact of mal-administration is un- 
 questionable, and must be deplored. Does that, however, de- 
 cide the mode in which alteration is to be effiected? Where is 
 our right to determine, that the amount of the evil is such as
 
 181 
 
 to demand our taking the remedy into our hands ? His lord- 
 ship in council observes, that the necessity stated is altogether 
 constructive. Were such a pretence allowable, a powerful 
 state would never want a colour for subjugating a weak neigh- 
 bour. The consequence is so obvious, that no principle in the 
 law of nations leaves room for acting on such a presumption. 
 It is admitted, that if convulsions rage so violently in one state, 
 as clearly to threaten the excitation of ferment in a bordering 
 one, the latter may be justified in reducing to order the nation 
 by which its tranquillity was menaced. This, however, is an ex- 
 treme case, at the same time that it is of a description strictly 
 defined. No analogy exists between indisputable exigency and 
 an asserted convenience, where vague arbitrary charges, if to- 
 lerated as a ground of procedure, would furnish ready pretext 
 for the foulest usurpations. 
 
 The Governor-General in council contemplates with pleasure, 
 throughout the subsequent paragraphs, uniform indications of 
 that zeal and excellent intention, for which perfect credit has 
 been constantly given to you. Where the measures flowing 
 from that solicitude to bring into regularity the course of the 
 Nizam's government, and to produce comfort among his high- 
 ness's people, have been carried to an undesirable length, it 
 has arisen from their being founded on the erroneous sup-, 
 position detailed in the paragraphs before noticed, and the ex- 
 planation now signified to you would prevent their being 
 pushed still further. Nevertheless, it is deemed expedient to 
 communicate some more precise observations for your future 
 guidance. 
 
 6. After reading the despatch in question, it was with more 
 pain than surprise that the Governor-General in council pon- 
 dered on your inculpatory allusions to Rajah Chundoo Loll. 
 Their source was easily conceivable. To his lordship's appre- 
 hension, the renitence of that minister in certain instances, 
 which you have regarded in the light of a deliberate and cor- 
 rupt counteraction of your plans, is sufficiently accounted for 
 as an unpremeditated hesitation. While it was not unnatural 
 for you to slide into that misconstruction, when you believed 
 yourself invested with authority to overrule his conduct, it was 
 equally venial in him to be staggered by such a tone, when he 
 had been apprised that we disclaimed any arbitrary sway, and 
 should only point out to his judgment the measures which ap- 
 peared to this government to be requisite and efficacious for 
 his master's benefit. He had been taught that he was, in his 
 sovereign's behalf, to govern the country, hearkening only, in 
 that occupation, to the counsels of the Resident ; and that, 
 attaching to him a direct responsibility, we would uphold him, 
 «o long as he displayed a just and provident rule. Procedures 
 
 N 3
 
 182 . 
 
 inconsistent with this assurance must have been no less perplex- 
 ing than wounding to him, and his embarrassment would ap- 
 pear to you ill-will. A striking illustration is furnished by 
 your letter. In the twenty-sixth paragraph you mention, that 
 the British officers acting under you, and charged with the 
 duty of receiving, in the districts over which they were re- 
 spectively placed, appeals of the cultivators against any exac- 
 tions attempted by the native functionaries, were " also autho- 
 " rised and directed to give their attention to the suppression 
 " of depredations, robberies, and such crimes as atfect the 
 " safety of the community." The first duty was of very deli- 
 cate discharge. With regard to that which was superadded, a 
 more ostentatious assumption of the government could not 
 well be imagined ; nor is it easy to figure to one-self any other 
 case, which would in an equal degree agitate Rajah Cfsundoo 
 Loll ; first, as it inspired doubts of the British government's 
 sincerity ; secondly, as it exposed him to the probable indig- 
 nation of his master, to whom his acquiescence in the exercise 
 of such unlicensed power, would not fail to be represented 
 with distorted features. 
 
 7. Much as the Governor-general in council regrets a step 
 so completely at variance with the principles which he had laid 
 down, he is aware that it cannot be retracted suddenly, with- 
 out the alterations being attributed to a disapprobation notified 
 by this government. As it is the Governor-general's wish that 
 your possessing his entire confidence should never be doubted, 
 the arrangement must remain as it is, for so long as it shall be 
 thought by you really necessary according to your views ; and 
 its abrogation hereafter should be gradual. In the mean time, 
 the Governor- General in council must require your holding a 
 vigilant eye over those very young and inexperienced indivi- 
 duals, to whom that important superintendence is delegated. 
 You must be sensible, that the possession of a power, large in 
 proportion as it is vmdefined, may readily lead to a flippant 
 parade of it, than which nothing could be more revolting to 
 natives of consequence ; you must, therefore, check austerely 
 any unnecessary exhibition of superiority. 
 
 8. His lordship in council notices, in paragraph nine, your 
 observation, that the Nizam having withdrawn himself entirely 
 from public business, and the first minister, Mooneer-ool Moolk, 
 being a cypher, the government rests wholly in the bauds of 
 Rajah Chundoo Loll. The terms in which this is mentioned, 
 would seem to infer its being a circumstance to be lamented. 
 It appears to have escaped you, that the non-interlerence of 
 Mooneer-ool Moolk was stipulated, whether providentially or 
 not, by this government. Our concurrence in the elevation 
 of Moneer-ool Moolk was obtained by him on the condition
 
 183 
 
 tliat he should take no share in the current transactions of the 
 state, we being unable to place reliance on his dispositions 
 towards us. The Nizam was satisfied with the ostensible ap- 
 pointment of a prime minister, while this Government reposed 
 itself on the experienced attachment of Rajah Chundoo Loll, 
 the second in office, who was destined to be the efficient per- 
 son. His qualifications for the office will not be questionable, 
 since you have described him as the man the most competent 
 in the whole country for the situation, on the score of ability. 
 The position of Chundoo Loll, however, was too slippery to 
 allow of his undertaking, without a specific engagement from 
 the Governor-general in council for his security, those rough 
 corrections which the disorders of the state required; and this 
 Government, reluctant so to bind itself, was tardy in yielding 
 to the necessity of stimulating him to these vigorous efforts, 
 on the pledge of faithful support. The promise was at length 
 given, and was answered by the desired exertions. Certainly 
 the full amount of advantages speculated upon by Chundoo 
 Loll, from the measures adopted in concert with this Govern- 
 ment, was not realized. The probability of miscalculation, to 
 some extent, in arrangements so novel and so complicated, 
 was foreseen. Yet the Rajah did act with all the energy ex- 
 pected from him ; did disband the licentious soldiery, which 
 trampled on the ryots ; did displace those chiefs of districts 
 who had practised extortion, or had connived at predatory 
 associations ; did remove the immediate danger of commotion, 
 thereby affording time for the application of those more per- 
 manently effectual remedies, which 3'ou were instructed to 
 fashion with him. Against this actual fulfilment of a difficult 
 and meritorious service, you urge the insincerity of Rajah 
 Chundoo Loll, his unfeelingness towards the people, and his 
 rapacious pursuit of undue gains. The habits of the country 
 are apt so far to vitiate the character, that it would not be easy 
 to find a native in high station untinctured with such faults. 
 The Governor-general in council, however, cannot conceal his 
 persuasion, that somewhat of prejudice, arising from your 
 belief in his studied opposition, leads you to impute to him 
 those defects on an exaggerated scale. The frequent repeti- 
 tion of those charges in general terms, charges so little conso- 
 nant to any former accounts of that minister, impress the con- 
 clusion. An indulgence of such adverse leanings may be of 
 great inconvenience, since it is indispensable that you should 
 work with Chundoo Loll. After his performance of that which 
 was prescribed to him by this Government, it would be the 
 deepest "stain to British honour, were he left to the ruin which 
 must follow the discontinuance of our plighted support. 
 
 9. The above remarks are irresistibly demanded, in the opi- 
 
 N 4
 
 184 
 
 nl<in of the Governor-general in council, by your representing 
 the aukvvardaess of our advancing obstacles, should the IMizani 
 express his pleasure for the dismission of Chundoo Loll. The 
 contingency is pointed at in such a way, as to give some alarm 
 of its having encouragement. You are well aware, that such 
 a purpose would never occur to his Highness without external 
 suggestion. The instigation could not originate with you, 
 because no greater contravention of the orders under which 
 you are acting would be imaginable, so that it must be insinu- 
 ated by some private enemy of the rajah. The interested 
 malignity of the advice, and the known indifference of the 
 Nizam on the subject, would render this a case totally different 
 from one, in which a competent sovereign should intimate his 
 will, and obstacles may honestly be opposed. You would not, 
 indeed, object in a broad manner. The proposition would have 
 to be met with such a countenance as should imply serious 
 consequences. You would give it to be understood by intel- 
 ligible hints, that the removal of Chundoo Loll would cause a 
 material change in the connection between the two govern- 
 ments. It would be fitting to throw out, as if loosely, that 
 should a minister in whom the British Government could have 
 no confidence, be entrusted with his Highness's concerns, it 
 might be incumbent on the British Government to look to its 
 interests in another mode than what had hitherto sufficed, 
 and to claim for itself, as standing in the Paishwah's position, 
 all those rights over the Hyderabad dominions, which that 
 prince had possessed. This glimpse of eventual procedures 
 would assuredly be decisive. In short, the Governor-general 
 in council holds the good faith of this Government to be staked 
 for the maintenance of Rajah Chundoo Loll in his office, unless 
 he shall be guilty of some distinct delinquency ; and you will 
 please to regard it as a special obligation upon you, to support 
 that minister. Such estrangement as exists between you, has 
 been owing to unfortunate miscomprehensions. It would yield 
 at once to a conciliatory tone and demeanour : and his lordship 
 in council observes, it ought not to be retained, when its con- 
 sequences must be seriously embarrassing to both governments. 
 The questions put by you will be sufficiently answered by the 
 foregoing remarks. 
 
 10. That an exaggerated sensitiveness has been indulged by 
 you is visible to his lordship in council, from your letter of the 
 3d of September. The complaint which you there prefer, of 
 the minister's having made the house of William Palmer and 
 Co. the channel for forwarding a letter to the Governor-general, 
 containing representations against steps of yours, is corres- 
 pondent to the view which you will have found this Govern- 
 ment took of the procedure. It is but candid to meet with
 
 185 
 
 belief what is asserted on both sides, namely, that when the 
 minister pressed upon Mr. Palmer the transmission of the des- 
 patch, he did not address himself to Mr. Palmer as a partner 
 of the firm ; but as an old servant of the Nizam's ; and that 
 Mr. Palmer, in obeying the requisition after much resistance, 
 conceived himself to be bowing to an authority which had 
 claims upon him. The discrimination was obviously illusive ; 
 for, in truth, it was impossible to divest Mr. William Palmer of 
 his character as head of a house which was accused of extra- 
 ordinary dealings with the Nizam's government, and which, 
 therefore, if justly accused, might have a corrupt interest in 
 impeding reform. To that extent his lordship in council has 
 condemned both. At the same time, when in the seventh pa- 
 ragraph you declare, that you had long been sensible of a plot 
 against you, it is evident you indulge an overstrained jealous}^. 
 All at which you point is explicable much more simply. It 
 was not in nature, that Chundoo Loll should not deeply feel 
 the being exhibited in the eyes of the country as a passive and 
 helpless instrument under British direction, and that he should 
 not thence occasionally break out into fits of peevishness,perhaps 
 of culpable obstruction ; but the notion of forming a conspi- 
 racy against you, where no materials for such a fabric could 
 be found, must be thought too lightly admitted. It is hoped, 
 that what is said in the former part of this letter, will induce 
 you to dispel suspicions, which must unavoidably hazard your 
 success in the beneficial efforts you are exerting. 
 
 11. With regard to the minister's addressing the Governor- 
 general otherwise than through you, his lordship in council 
 desires me to say, that he will never bar such direct communi- 
 cation. Though the recurring to Mr. William Palmer was 
 improper, it was so from peculiar circumstances, applying spe- 
 cially to that gentleman. Any other mode for the transmission 
 of a letter would have been unobjectionable. The estimation 
 in which the Governor-general in council holds your character, 
 renders his reliance upon you as full and as fair as your utmost 
 wish could desire : still the highest trust of an individual 
 should not occasion the relaxation of a just and necessary 
 public principle. The Governor-general in council must hold 
 it obligatory on him, to give every facility for such appeals as 
 any native prince or minister may be solicitous to lay before 
 him. The measures of a resident or agent are more likely to 
 be the ground of those references than any other subject ; and 
 to require that such applications for intervention should be 
 made through the person complained against, would, from the 
 apprehensive dispositions of the natives, be to exclude them 
 wholly. The Governor -general in council must not narrow his 
 means of affording redress ; nor can his keeping them open
 
 186 
 
 justify a supposition of his unworthily encouraging imput- 
 ations, or counteractions against his own representative. 
 
 I have, &c. 
 Fort William, (Signed) G, Swinton, 
 
 25th October, 1822. Secretary to the Government. 
 
 The attention of the reader is challenged to the sound- 
 ness of the leasoning, and to the mildness of the almost 
 paternal reproof conveyed in the foregoing despatch. Yet 
 such was the willing and blind confidence Mr. Adam 
 thought proper to place in Mr. Metcalfe's bare assertions, 
 that he records his opinion on the above letter in the fol- 
 lowing terms : — * "In my minute of the 1st inst. I have 
 " jirqfessed a very decided cojiviction^ founded on the facts 
 " stated hi/ the Resident at Hyderabad, of the combination 
 " of Messrs. Wm. Palmer and Co. and the Minister, insti- 
 " gated by the former, against the measure and credit of the 
 " Resident ; the terms of the draft now circulated do not 
 " therefore go to the extent which I was prepared to do in 
 " passing a judgment on the question." 
 
 Mr. Fendall says on the following day, f " The facts 
 " stated by the Resident at Hyderabad are certainly such as 
 " to warrant a strong presumption of Messrs. W. Palmer 
 " and Co.'s having instigated the Minister to prefer com- 
 " plaints against him — hid they have not had an opportunity 
 " ^if^ff^^'^^^S (anything in their defence ; I therefore think the 
 " instructions sent in circulation should be forwarded." 
 
 We have here, then, Mr. Adam, upon the simple and 
 bare assertion of an interested accuser, recording his de- 
 cided conviction of the guilt of the accused, without waiting 
 for investigation, or hearing the accused party in their de- 
 fence. His conduct from the period of this, his own re- 
 corded declaration, exhibits an uniform perseverance in the 
 same unjustifiable course, even up to the fatal and final 
 period *, when it will be seen that he decreed the ruin of the 
 
 • Hyd. Pap, p. 259. f Hyd. Pap. p. 260. 
 
 \ Sec Mr. Adam's Minutu, 30lli July, 18S:3. Hyd. Pap. p. 701.
 
 J 87 
 
 Jioiise, with the full means of inquiry in his hands, and 
 luider his eye, without investigation, and upon his blind 
 confidence on the naked misstatement of Sir Charles Met- 
 calfe. Mr. Fendall seems to have been the dupe, but not 
 at least so ready and willing a believer of the calumnies 
 contained in Mr. Metcalfe's despatches. From the month 
 of September 1822, up to 20th November 1823, the date 
 of the latest despatch of Mr. Metcalfe, to be found in the 
 volume of Hyderabad Papers, a perusal of his correspond- 
 ence with the Supreme Government, is challenged in order 
 to fully bear out the following description of it. 
 
 It is a series of misstatements as to facts : he never trans- 
 mits any copies of his correspondence with Messrs. W- 
 Palmer and Co., without a slanderous commentary and 
 perversion to his own purposes of every expression of their 
 letters. It is one continued chain of calumny and accus- 
 ation. He finds encouragement in the ready adoption of 
 every assertion and accusation on the part of the government; 
 and, from the moment Lord Flastings quitted the council at 
 the commencement of the year 1823, no term, no tone was 
 too coarse for the ear of the council, which had been now pol- 
 luted for months by his disgusting and vulgar misrepresent- 
 ations. The main subject of his attack, however, appears to 
 have been the discovery he pretends to have made, that the 
 loan was fictitious. His assertions were taken by the go- 
 vernment for proofs ; nor does the only obvious step, ne- 
 cessary for the proof of the assertion, appear to have been 
 ever taken, first, by waiting for the delivery of the books 
 of the House, and when delivered, by having their contents 
 submitted to examination. 
 
 The objections to the loan transaction between Messrs. 
 Palmer and Co. and the Nizam's minister, appear to have 
 arisen out of two assumptions, neither of which is founded 
 in truth, and of which no proof whatever has been either 
 sought or offered.
 
 188 
 
 1st. It is assumed that Messrs. Palmer and Co. did not 
 make any considerable advance of cash on account of the 
 loan, but that it was made up of a transfer of old balances 
 antecedently owing to them by the minister. The printed * 
 accounts of the house, the accuracy of which is not pre- 
 tended to be denied, completely disprove and falsify this 
 assertion. 
 
 The loan was first solicited by the minister at the latter 
 end of 1819.; and the payments on account of it com- 
 menced about the 11th of March, 1820, at which time the 
 debt due to the house on the account current was under 
 five lacs of rupees (see p. 620.) This debtor balance was 
 occasioned by a transfer made by Messrs. W. Palmer and Co. 
 from the minister's account current to the Aurungabad 
 establishment of 6,00,000 rupees in die preceding month. 
 The Berar Su war's account was, at the same period, debtor 
 about 18 lacs (see p. 683.); and the Aurungabad account 
 was debtor about 14 lacs (see p. 511.), making together 
 37 lacs. But Messrs. Palmer and Co. held tunkhas fall- 
 ino- daily due to the amount of 10 lacs against these ba- 
 lances, which reduced the whole debt at that time to 27 
 lacs ; and, but for the above transfer of the six lacs to the 
 Auruno-abad account, the house would have been a cre- 
 ditor on the minister at the beginning of March, the 
 period when the loan payments commenced, for only 21 
 lacs. The printed accounts exhibit that, between the 11th 
 March and the 11th August (the day when the loan was 
 completed, the assignments granted, and the transfers of 
 the debtor balances on the Aurungabad and Berar Swaar 
 accounts were made to the account current), the house ad- 
 vanced no less a sum than 40 lacs (see p. 620. to'625.) on the 
 Rajah's drafts and orders ; not one rupee of which would 
 have been advanced but in furtherance of the contract 
 which was first verbally proposed and discussed in the 
 
 * See Hyder. Pap. p. 620 & 624,
 
 189 
 
 conclusion of the year 1819; on which the correspondence 
 transmitted in May to Calcutta, took place between the 
 house and the minister in the month of February following ; 
 and on which the first payments were made in March, and 
 the last in August. It is remarkable, that upon the above 
 unaccountable misstatement alone, which ten minutes' ex- 
 amination of the accounts is sufficient to expose, the motive 
 of Messrs. W. Palmer and Co. is alleged to be founded for 
 having wished to make the loan ; viz. for the purpose of 
 obtaining the government sanction to old balances, the exist- 
 ence of which had not been known at Calcxdta. 
 
 It has been shown how the balances stood in March, when 
 the payments on account of the loan commenced. But the 
 state of the account at the end of the year 1819, wlien the 
 loan was first solicited by the minister, is still more inconsis- 
 tent with the imputed motive of Messrs. Palmer and Co. for 
 makinff the scheme of the loan, in order to cover old ba- 
 lances ; for although there were five lacs due to the house, 
 on the minister's account current in March, not specifically 
 known to the government at Calcutta, there was actually 
 a balance* in favour of the house at the end of December, 
 1819, when the loan was first proposed and discussed. Out 
 of the aggi'egate debt due to the house at the time, when 
 they actually commenced their payments on account of 
 the loan, there were only five lacs, the nature and object 
 of which had not already received the sanction of the su- 
 preme government. The advances made by the house 
 for the payments to the Berar Swaars, and to the reformed 
 troops at Aurungabad, had been both distinctly and se- 
 verally brought under the notice of the government, the 
 one in 1816, and the other in 1819. The united balances 
 on these two accounts (owing to the non-fulfilment of the mi- 
 nister's part of his agreement with W. Palmer and Co. and 
 which was their misfortune, not their fault,) amounted in 
 
 * S*e the printed accounts. Hyd. Pap. p. 619.
 
 190 
 
 March, 1820 to 32 lacs. No subsequent recognition of this 
 debt in the new shape of a loan could give it more validity 
 than it possessed already. In neither case did the Calcutta 
 government give any guarantee ; it only took cognizance of 
 the nature and object of the advances. The making these 
 balances a pai*t of the loan was nothing more or less than a 
 liberal concession on the part of Messrs. William Palmer 
 and Co. to postpone immediate payment (to which they were 
 entitled) to a distant period, and to accept periodical in- 
 stalments on the terms hereafter stated ; and in the mean 
 lime to release forthxmth the Twikhas which the minister had 
 given and was bound to give them, in order that he might apply 
 them to his other necessities. So much for the fictitious 
 loan ; out of which false statement alone grows the ground- 
 less charge against Messrs. W. Palmer and Co. of passing 
 as trick and fraud on the Bengal government. 
 
 2nd. It is assumed, and thereon a torrent of unmea- 
 sured calumny has been directed agahist Messrs. William 
 Palmer and Co., that they intentionally concealed from 
 the Resident, and from the Bengal government, the bonus 
 of eiofht lacs, which was one of the conditions on which 
 they were to complete the loan. From that assumed 
 concealment, fraud is unhesitatingly inferred, and a con- 
 sciousness is imputed to the house, that this part of the 
 transaction would not bear the light ; for that its dis- 
 closure would have prevented them obtaining the sanc- 
 tion of the governor-general in council to the whole trans- 
 action. The calumny connected with the bonus has 
 grown altogether out of that assumption ; for to this day it 
 has not been attempted to show upon calculation, that 
 the contract, including the bonus, was one that savored 
 of extortion on the part of the house; or which re- 
 quired any concealment on their part: such a calcula- 
 tion could only be properly made by enquiring (which 
 does not appear to have been done) on what terms the 
 house was compelled to hold the funds of their consti-
 
 191 
 
 tuents. Tliat fact alone can determine, whether theis' 
 terms with the minister were exorbitant or moderate ; 
 such an enquiry would have shown that Messrs. Palmer 
 and Co. were compelled to allow for a lai'ge amount of 
 the money, which the minister was retaining from them 
 for six years, (or longer if he did not punctually keep his 
 engagement,) an interest varying from 18 to 24 per cent. 
 Under such circumstances what ground is there for a 
 charge of extortion ? Or what motive for concealing the 
 bonus from the government of Calcutta? The bonus did 
 not render the transaction one, of which they needed to 
 have feared the exposure ; on the contrary, even with the 
 bonus, it was a liberal and even inconsiderate bargain on their 
 part. They bound themselves to lend the money at 20| 
 per cent, during six years, or till it should be repaid, whilst 
 they were compelled to allow for a large portion of their 
 funds from 20 to 24 per cent. If the minister failed (as 
 he was but too likely to do) to make the instalments punc- 
 tual, every day's delay deteriorated the terms to the house, 
 and made them more advantageous to the minister. The 
 very risk of the destruction of the government itself (at all 
 events of the minister), made this loan a peculiarly dan- 
 gerous subject of commercial speculation, and the wonder 
 is, that the minister should have been fortunate enough to 
 find an immediate supply at any interest with such a con- 
 dition of distant repayment. But further, not only in point 
 of fact is there no part of the conduct of the house from 
 which an intentional concealment of the bonus from the 
 Resident or the Bengal government can be inferred, but 
 it is beyond proof, that there was any possible motive for 
 such concealment. It was not their duty, by the words 
 of their licence, to communicate to the British autho- 
 rities the terms, but the nature and object alone of 
 their pecuniary transactions with the Nizam's government. 
 The condition on which their licence of exemption was 
 granted, is to be found in the following words : " Pro- 
 " vided, however, that the said firm of Messrs. William
 
 192 
 
 " Palmer and Co. shall at all times, when reqinred to do 
 " so by the British Resident at Hyderabad for the time 
 " beinff, communicate to the said Resident the nature and 
 " object of their transactions with the government, or with 
 " the subjects of his said highness." 
 
 In the * memorial from Messrs. William Palmer and 
 Co. to die governor -general in council, for the licence, 
 a paragraph had been introduced by themselves, impower- 
 ing and calling upon the Resident, to examine in detail 
 into the various transactions of the house. In that shape 
 it had been privately shown to the members of council. 
 But Mr. Russell protested against any such responsibility 
 being thrown upon him, as he felt he could not efficiently 
 discharge the duty. The superintendance of the British: 
 authorities was, therefore, advisedly limited to the nature 
 and object alone of their transactions. 
 
 Mr. Edmonstone, Mr. Dowdeswell, and Mr. Seton, with 
 Lord Hastings, the governor-general, granted the licence, 
 with this condition inserted in it. 
 
 In the discharge of the above definite duty imposed on 
 the Resident, Mr. Russell communicated to the Bengal 
 government on the 30th December, 1816, (five months 
 after the licence had been granted,) that the house had 
 agreed to furnish Rajah Chundoo Loll with 52,000 rupees 
 monthly, for the payment of the Sirkar horse, which had 
 left Hyderabad. No detail or statement of the terms was 
 either given or required. It was sufficient for the govern- 
 ment to know, that the object was stated by the Resident 
 to be favorable to British interests, and that it had his 
 entire approval. The second communication, which the 
 Resident had to bring under the notice of the supreme 
 trovernment, was the contract by which the house had 
 engaged to furnish the minister Chundoo Loll with two 
 lacs of rupees monthly at Aurungabad, for the more 
 punctual payment of the reformed troops. 
 
 •• See Mr. Russell's Letter to tlic Court of Directors.
 
 193 
 
 On that occasion Mr. Russell transmitted copies of the 
 written correspondence which had taken place between the 
 minister and the house on the subject ; fi*om which the 
 nature and object of the transaction would necessarily be 
 made manifest. A more candid, satisfactory, and hondjide 
 method of communicating the information can scarcely be 
 imagined. But in that case there was no statement of the 
 terms, on which the advances were to be made ; two seve- 
 ral letters were despatched to Hyderabad to make enquiries 
 on two other points. First, whether any guarantee on the 
 part of the British government had been given, or was 
 expected. Second, Whether the house had any power to 
 interfere in the collection in the districts, over which they 
 held assignments. These were political objects, and fit for 
 the attention of the council. But no enquiry was made as to 
 the terms. It is true that a member of council, who exhibited 
 the most unfounded and unjust suspicions of the integrity 
 of Mr. Russell, and of the house, did, for want of a better 
 reason, object to approve of the transaction, because he was 
 not acquainted with the terms and details of the arrange- 
 ment. But it was decided by the whole council, against 
 Mr. Stuart's single voice, that it was not the duty of the 
 supreme government to enter into the terms and details of 
 the minister's pecuniary dealings. The following letter 
 from the secretary to government, will exhibit how dis- 
 tinctly and unequivocally the line of their interference was 
 marked out by the government. 
 
 To Henry Russell, Esq., Resident at Hi/derabad. 
 " Sir, 
 
 " With reference to my letter of the 4th ultimo, re- 
 " specting the pecuniary arrangement between the Nizam's 
 " government and the house of Messrs. William Palmer 
 " and Co., for the payment of the Nizam's regular troops ; 
 " I am du-ected to apprize you, that the accounts, therein 
 " called for, are not now required ; and that the Governor- 
 
 Q
 
 194; 
 
 " general in council does not propose to take cognizance of 
 " that arrangement, further than to prevent any interfer-/ 
 *' ence on the part of that house, or of any native agents 
 *^ belonging to that establishment, in the collection of the 
 *' revenues, or in any other branch of the management of 
 'f- the districts assigned, under the agreement of the parties; 
 *5 for which purpose you are directed, if it be ever neces- 
 " sary, to interpose your influence and authority. It may;- 
 '.' be proper to add, that such interference, on the part of 
 " that house, is not understood to be a part of the agree-, 
 " ment, and is not supposed to have been in contemplation 
 V of either party. ^ 
 
 " I have the honour, &c. 
 
 , « Fort WiUiam, (Signed) « C.T. Metcalfe, ' 
 
 9th Oct. 1819." « Secretary to Government."^ 
 
 ' If any doubt had existed, the words of the foregoing let- 
 ter were land marks for Mr. Russell and Messrs. W. Palmer 
 and Co. ; but a circumstance occurred, which marked the 
 deliberate view of the government on the subject, in a 
 manner still more decisive. The details and terms of the 
 Aurungabad arrangement had, in consequence of Mr.- 
 Stuart's wish, and of the Accountant-general's recommend-' 
 
 ation, been hastily and unadvisedly called for.- ' 
 
 The resolution, however, was almost imrriediately re-'^ 
 scinded; and the accounts having been sent from Hyder-' 
 abad, were returned without having been officially noticed.'^ 
 The sanction had been transmitted previous to their arrival. 
 The nature of this sanction, which is falsely supposed to 
 have been of so much value and importance to Messrs. 
 William Palmer and Co., is riot unworthy of remark ;• the 
 house was naturally, at all times, anxious for the goed^ 
 opinion and favourable countenance of the Calcutta go-' 
 vernment. It was their chief moral hold and security on * 
 the firmness and good faith, which the minister might be" 
 disposed to observe in his dealings towards them. It was*
 
 195 
 
 so far contributive to their security ; although it amounted 
 to any thing but a guarantee to them for the recovery of a 
 single rupee. They thought, and justly too, that if the 
 transaction exhibited a libez'al zeal to forward objects im- 
 portant to British interests, it was at once an honourable 
 claim, and a grateful return, for the protection and good 
 offices of the British government. It was, therefore, in 
 any point of view, an object of interest to them, that the 
 government at Calcutta should be well acquainted with the 
 transactions, hazardous at best, into which they were enter- 
 ing with a native government, for the purpose of advancing 
 the objects which the Resident had so much at heart. 
 But the cognizance and approval of the Calcutta govern- 
 ment gave them no guarantee for their claims on the 
 native minister. It turns out, indeed, that it has not been 
 regarded as even securing them from the persecuting in- 
 terference of the Bengal government with their debtors, in 
 defiance of all justice, to effect their ruin and destruction. 
 The licence of 1 8 1 6 exempted them from the penalties to 
 which, by the 37 Geo. III., persons dealing with a native go- 
 vernment would have been liable. That licence was granted 
 on a deliberate consideration of the benefits, that might ac- 
 crue to British interests, and to the tranquillity of the Ni- 
 zam's government, an object so important at that time to the 
 safety of the British empire in India ; but security it gave 
 them none. They were, under the licence of the exemp- 
 tion, to be at liberty to pursue their own commercial and 
 pecuniary interests. It was the duty of the Resident to 
 see that, in so doing, they were not made the incidental 
 instrument of injury to the country, or of thwarting the 
 objects of British policy. That alone was the evil to be 
 guarded against; and watched over by the authorities, 
 which first permitted the establishment of their house. 
 Innocent of that evil, a commercial European liouse could 
 not but be beneficial to the country at large. 
 
 It has been above stated, that no part of the conduct of 
 
 o 2
 
 196 
 
 the house justifies the inference of intentional concealment 
 of the bonus on their part. The history of the loan trans- 
 action from its first proposal in the end of 1819, to its 
 completion on the 1 1th August, will show at once what 
 their conduct was, and how the bonus became subsequently 
 a part of the transaction. When the proposal was first 
 made by the minister to the house, it was represented to 
 them, and truly, that it was to enable him to attain at 
 once and effectually all the objects which the British 
 Resident had been so long and so urgently pressing upon 
 him, as the only means of securing the stability and res- 
 toring the prosperity of the country. The house was 
 first desii'ed to forego the discharge of the balances owing 
 to them on the payments they had been making to the 
 Berar Suwaars, and to the reformed troops, which then 
 amounted together to from twenty to thirty lacs of rupees ; 
 and further, to procure on their credit, for the purpose of 
 placing it in the hands of the minister, such an additional 
 sum as should make up, with their balances, the sum of 
 sixty lacs of rupees ; which sum they were to be repaid by 
 means of assignments on districts, to produce to them 
 sixteen lacs annually for six years. The interest on the 
 loan was to be eighteen per cent. The balances due to 
 the house were at that time bearing an interest of twenty- 
 four per cent. They were required to lock up, be- 
 yond their own disposal, not only the sums actually 
 then due to them from the minister, and to consent to 
 accept their repayment in six equal portions at the 
 end of each of the six following years ; but to procure a 
 still larger amount on their credit, to be equally placed 
 beyond their command, for the same period and on the 
 same terms ; the house standing during the period the risk 
 of any demand for increased interest, that the events of the 
 day might at any time invite from their constituents; them- 
 selves being bound down and limited, under all contingen- 
 cies, to the charge of eighteen per cent. The calculation
 
 197 
 
 on which the house entertained the proposal was, that 
 they would be enabled to obtain the money at an interest 
 of twelve per cent. But this was out of the question at 
 Hyderabad ; that limited market would not supply so large 
 a demand, without raising considerably the interest on all 
 the funds then in their hands, and which were, to so con- 
 siderable an extent, locked up by their several unliquidated 
 advances for the payment of the troops : but they looked 
 to raising the supplies at the British presidencies. The 
 unbounded importance of the minister being enabled to 
 effect the objects so strongly urged upon him by the Re- 
 sident, led the house to conceive that the authorities in 
 Calcutta would encourage, and as far as they could, gua- 
 rantee a transaction productive of such immediate and 
 important benefits, as it will be seen did actually result 
 from it, and particularly to give effect to a loan raised on 
 terms so unusually favourable for a native government. 
 Under that impression, Mr. Russell was consulted by them 
 at the latter end of 1819, (see his letter to the Court of 
 Directors) through the good offices of a Mr. JefFeries. The 
 Resident at once discouraged the hope of the Bengal go- 
 vernment being induced to break through the rule laid 
 down, of doing nothing that could involve it in the ne- 
 cessity of interfering in the Nizam's government of his 
 country. 
 
 In the month of February, 1820, the minister became 
 urgent, and reduced his propositions to writing. The 
 correspondence that took place between them will be found 
 among the printed Hyderabad Papers, p. 39. to 41. The 
 house was anxious to ascertain, through Mr. John Palmer at 
 Calcutta, and through other friends at the other presi- 
 dency, what chance they had of finding supplies for the 
 loan on the terms they had flattered themselves with ob- 
 taining. They also, through the same friend, Mr. J. 
 Palmer, endeavoured to ascertain what would probably be 
 the disposition of the Bengal government to infringe the 
 
 o 3
 
 198 
 
 rule they had laid down, by giving some description of 
 guarantee to enable the house to make the loan on the 
 above terms : on both subjects their enquiries ended in 
 disappointment; but they did not renounce their hopes 
 and endeavours for some time to obtain funds at tvi^elve 
 per cent, from the presidencies. In the mean time, con- 
 siderable payments had been yielded to the impatience of 
 the Rajah Chundoo Loll, from the 1 1th of March onwards : 
 no prospect appeared of the minister being able to dis- 
 charge the balances on the Berar Suwaar and Aurungabad 
 accounts. Under these circumstances there was no alter- 
 native, but to resort for money to the native bankers on 
 the best terms they could. The alteration of these cir- 
 cumstances from those under which they had made their 
 early calculations and contract with the minister, was ex- 
 plained to him, and the impossibility stated of the house's 
 proceeding any further to fulfil the contract upon terms 
 that must have ended in their obvious and certain ruin. 
 The minister could not but assent to the propriety of 
 altering the terms of the contract to meet their altered 
 prospects of supplies, and readily preferred that alternative 
 to their not proceeding with their advances. 
 
 He stated, that he the more readily assented, because he 
 would be enabled to save by the immediate discharge of a 
 large establishment, at least such a sum as would compen- 
 sate him for the payment of the higher rate of interest 
 required. The minister was not ignorant that the funds 
 he was to receive from Messrs. Palmer and Co. were not 
 their own, and that they had no talisman to charm monied 
 men, who saw a pressure for money in the market, into a 
 neglect of their obvious interests, by enhancing the terms 
 upon which they would part with their commodity. 
 
 Thei'e were but two ways of altering the terms ; either 
 by increasing the amount of each annual instalment to be 
 repaid, or by diminishing the sum to be advanced, and 
 allowinff the instalments to remain the same. The alter-
 
 U)0 
 
 ation of the terms of a contract for raising a loan, when 
 tiie circumstances have varied between the time when the 
 bargain was made, and the time when it was put into 
 action, is a circumstance by no means new, or involving 
 either of the parties in a charge of misconduct. When a 
 minister agrees with any party to negotiate a loan, it is not 
 a blind bargain ; both parties know perfectly well what the 
 calculated profit is to the one, and what the other is to pay 
 for a pressing and paramount object. Mr. Baring is not, 
 in any manner, considered to have acted improperly in 
 having applied to the French government, a few years ago, 
 for an improvement of the terms on which he had con- 
 tracted to raise a large sum for the minister, when an 
 unforeseen alteration of circumstances forbade him to pro- 
 ceed, but at his certain ruin. The terms were altered, and 
 the loan proceeded. In point of pecuniary payment, it is 
 obvious the two plans might be adjusted by calculation to 
 a perfect equality. But both the minister and the House 
 preferred the alternative of advancing the lesser sum. To 
 the House it was important to force the limited market at 
 Hyderabad as little as possible, and to the minister it was 
 an object of no little importance, for obvious reasons, to 
 have the credit among his enemies, as well as his friends, 
 of being able to borrow money at so low an interest as 
 eio-hteen pe?- cent. It was not only a feather in his cap for 
 the moment, but might be of essential service to him and 
 his government at subsequent periods. For that reason 
 alone was it politic on the part of the minister not to make 
 the alteration of the terms public. But the House of 
 W. Palmer and Co. had no interest whatever in concealing 
 that part of the transaction. This matter being adjusted, 
 the House proceeded to the completion of the loan ; and, 
 therefore, the correspondence, which had passed with 
 Rajah Chundoo Loll, was communicated to the Resident, 
 as had been done in the case of the Aurungabad arrange- 
 ment, for the purpose of clearly exposing the nature and 
 
 o 4
 
 ^00 
 
 object of the transaction. This was transmitted by Mr. 
 Russell on the 19th of May, 1820, to Calcutta. The 
 documents are fully explanatory of the nature and object 
 of the transaction ; and it will be seen that the conditions 
 which Messrs. W. Palmer and Co. alone insist on, are such 
 as approach to the prohibited ground, viz. the interfering 
 in the collection of districts. That was a subject very pro- 
 perly and specifically submitted for the consideration and ap- 
 proval of the Resident. The sanction of the government of 
 Calcutta was communicated to the Resident on the 15th of 
 July *, and it is remarkable that the government distinctly 
 marks, but without comment or disapproval, that the terms 
 of the loan have not been communicated to them. Nor 
 were Messrs. Palmer and Co. ever asked for them. They 
 were not aware of the discussions that had taken place be- 
 tween the diffei'ent members of council on the subject. 
 Had they or the Resident but suspected that their fair 
 ■fame was the object of attack and discussion, they would 
 have been too happy to open and produce their books, 
 where every transaction has been found on examination to 
 have been fully and openly recorded. 
 
 Thirdly, It is assumed that the terms on which Messrs. 
 Palmer and Co. finally agreed to advance the fifty-two 
 
 * To H. Russell, Esq., Resident at Hyderabad. 
 Sir, 
 
 1. I have the honour to acknowledge the receipt of your despatch of May 
 19th. 
 
 2. The Governor-general in council authorises you to sanction tlie loan of 
 60,00,000 rupees, which the Nizam's government proposes to obtain from 
 the house of William Palmer and Co. 
 
 3. The terms of the loan are not mentioned in your despatch ; but his lord- 
 ship understands, that an assignment of sixteen lacs of rupees per annum will 
 discharge the interest and pay off the principal within six years. 
 
 4. His lordship is very happy to observe, that this measure will enable the 
 Nizam's government to effect a reduction of expence, to the extent imme- 
 diately of nine lacs per annum, and eventually of twenty-five. 
 
 I have, &c. 
 
 Fort William, (Signed) C. T. Metcalfe, 
 
 1 5th July 1 820. Secretary to Govennncnt.
 
 201 
 
 lacs to the minister were exorbitant. It does not appear, 
 that to this day any one of the parties who have either 
 originated, repeated, or adopted this assumption has ever 
 taken pen in hand, and sat down calmly to ascertain by 
 calculation what those terms really were ; for they are stated 
 by the same persons, at different periods, as being widely 
 different; nor is any single statement or calculation 
 hazarded but on assumed erroneous data. 
 
 The House was never either asked for, nor had any op- 
 portunity of stating the terms, or of learning that these 
 were the subject of objection, till they were called on, at 
 the end of 1822, for the production of copies of their 
 books. By these it appears that the altered terms, on 
 which the loan was finally agreed to be completed, were 
 these. That instead of sixty lacs, which the house had at 
 first agreed to advance, charging only for interest 18 per 
 cent., the amount was to be reduced to fifty-two lacs, but 
 that 18 per cent was to be charged on the nominal sixty 
 lacs. This was exactly the same as if another form of 
 words had been used to the following effect. That it was 
 to be a loan of fifty-two lacs, on which an interest of 20-1 
 per cent, was to be charged. The amount of annual in- 
 terest (10,80,000 rupees) is the precise sum to be charged, 
 either on sixty lacs at the rate of 1 8 per cent., or on fifty- 
 two lacs at the rate of 20f per cent. But the house would 
 not have found adequate compensation for the risk and ex- 
 pences to be encountered even on these terms, considering 
 the rate of interest which they were subjected to allow to 
 their constituents. The minister, therefore, agreed to give 
 them a further compensation in a promise to pay them eight 
 lacs at the expiration of the six years. 
 
 The question then is, what was the value of the minister's 
 promissory note for eight lacs of rupees, to become pay- 
 able only at the expiration of six years, and bearing no 
 interest in the mean time ? A calculation in reference to 
 the rate of interest of the country (viz. 24' per cent.) will
 
 show that the note was worth very little more- than two 
 lacs of rupees paid down ; for that sum, being lent out at 
 interest for six years, would have produced between seven 
 and eight lacs at the end of that period.. But this sum 
 would have been its value had there been a real security for 
 ,its payment when it should have become due. The 
 minister's death, his removal from office, the destruction of 
 the independence of the government, and many other 
 contingencies rendered that distant payment of greatly 
 diminished value. What, then would the note have sold 
 for in the market ? What sum would a house of agency 
 • have given for it at Calcutta or Madras ? In Hyderabad 
 it would have been totally unmarketable. It is confidently 
 affirmed, witwout fear of contradiction, that no house of 
 agency would have given one lac of rupees for it. This 
 then is the mighty sum which was to compensate the house 
 for locking up fifty-two lacks of rupees, to be gradually 
 repaid during six years at 201 per cent. What the opi- 
 nion was of Mr. John Palmer, of Calcutta, a pretty compe- 
 tent judge, on the loan, maybe collected from the following 
 ■extracts from letters, which were addressed by him to Sir 
 William Rumbold at the time. It will be seen that he was of 
 . opinion that .1 8 per cent, would not compensate the house, 
 even if they could have borrowed their funds, as they had 
 hoped, at 1 2 per cent. From these letters it will be seen 
 that the security/ was so bad in the eyes of the monied men 
 •at Calcutta, that they would not touch it on any terms, 
 and their principal objection was that they would not lend 
 their money for a longer period than one year. 
 
 The result of an impartial investigation of the terms on 
 which the money was lent, shows directly the reverse of any 
 attempt to extort great advantages. The terms were sucli 
 as the house could only have been willing to consent to, 
 because they found themselves already so deeply involved 
 with the minister, that it was their interest to support him 
 at a momentous crisis of reform which was beneficial to the
 
 ^203 
 
 State, and thereby could better their security for their ex- 
 isting claims. For although their previous advances had 
 been distinctly recognized by the supreme government, 
 their sole security rested on the good faith and ability of the 
 minister to liquidate them. 
 
 Calcutta, 30th July, 1820. 
 My dear Rumbold, 
 
 I received your letter of the 12th instant too late yesterday 
 to answer. 
 
 I do not think if he (Hurry Kishen) were ever so zealous, that 
 he could raise the wind for you without our security, and this 
 is a measure I can no longer countenance : so that you will 
 expose your wants to him, and without any benefit what- 
 ever to yourselves. I must speak to some of the monied Eu- 
 ropeans, and see whether they will come forward with a few 
 lacs: but I oxvn a ivant of confidence in the result, although I 
 should probably raise as large a sum at 8 or 9 per cent, as at 
 12 per cent., neither do I believe any one "will lend for more than 
 one year. 
 
 I had given you credit for having secured all the funds 
 you required on the spot, and really there is a want of cir- 
 cumspection In the omission, which is reprehensible. But had 
 you secured the whole loan at 12 per cent., I submit whether 
 18 per cent., if you have no latent advantage, can possibly 
 compensate your anxieties, trouble, and concomitant expences. 
 But you require my aid and not my reflections ; I will do you 
 all the good I can, be assured. 
 
 Your's faithfully, 
 
 (Signed) J. Palmer. 
 
 Sir William Rumbold, Bart. 
 Hyderabad. 
 
 Calcutta, 1st Aug. 1820. 
 
 My dear Rumbold, 
 
 I saw Hurry Kishen yesterday, he encouraged me to hope 
 for one lac from himself, and something from his friends, pro- 
 vided they were secured; and he so pointedly urged the se- 
 curity, that I thought it best to say distinctly we would not 
 be pledged. He assured mc that he had not opened his lips 
 to any body, nor would he after my injunction, except to the
 
 204 
 
 monied men, and that provisionally of their consent. I have, 
 however, cause to suspect that he had already conferred with 
 Barretto ; for calling upon him immediately after on the same 
 errand, he adverted to Hurry Kishen, too palpably for mere 
 accidental allusion ; — said Barretto was averse, and distinctly 
 said he could not propose it to his house ; but not willing 
 that I should retire wholly disappointed, he intimated seeing 
 what he could do of himself; he has taken twenty-four hours 
 to consider, and I am still without his answer. I crossed over 
 to James Young to see what he could do, for there is a 
 friendly understanding between us, but he was not come to 
 the office, neither has he to-day ; but I hope for an interview 
 to-morrow. These friends are flush, and cannot employ their 
 money, I understand ; but there is an aversion to remote en- 
 gagements. I put both Hurry Kishen and Barretto in full 
 possession of your loan, &c., for I could by no other means 
 make them understand why you wanted money from here; 
 and I told them that it was principally to avoid a dependance 
 on the Shroffs at Hyderabad, that you travelled so far for your 
 supplies. I told Hurry Kishen 1 wanted in all six lacs, and 
 let him understand that I hoped for three from him. I thought 
 I might pick up as much more between Barretto and Young ; 
 I will send for Chundoo Comar, Gopee Mohun's now eldest son, 
 and see whether he will help us, and I won't, with any of 
 them, lose the cash for a niggardly effort to secure it under 
 12 per cent. 
 
 I confess the straits you are in, if you are not humbugging 
 me in point of some reservation, lead me to consider 7/our 
 project very ill digested and of very little promise . 
 
 Yours affectionately, 
 
 (Signed) J. Palmer. 
 
 Sir William Rumbold, Bart. 
 Hyderabad. 
 
 No. 3 with Enclosure. 
 
 Calcutta, 4th Aug. 1820. 
 My dear Rumbold, 
 
 If all my negociations terminate in this manner, I fear yours 
 will not wind up with eclat : my best hopes were built on 
 Young. Some of the reasons might have been suppressed 
 from a regard to more principles than one, as I happen to 
 know that they are " not reluctant to engage in remote and
 
 205 
 
 foreign transactions," and upon mere speculation, and that 
 ■with security, they would lay down three or four lacs imrae- 
 diately. 
 
 Yours affectionately, 
 
 (Signed) J. Palmer. 
 
 Sir William Rurabold, Bart. 
 Hyderabad. 
 
 Confidential. 
 My dear P. 
 
 This house declines — fearful of the security — unacquainted 
 with the transactions and state of things — reluctant to engage in 
 remote and foreign transactions — I need say no more. 
 
 Yours truly, 
 
 J. Young. 
 4th August. 
 
 This, then, is the short, clear, and indisputable history of 
 the loan transaction. Out of it has Mr. Metcalfe fabricated 
 charges, to which the most opprobrious epithets have been 
 unwarrantably attached. Upon the bare assumption of their 
 truth has the Bengal government, without any examin- 
 ation, in the teeth of the accounts before them, decreed the 
 ruin and bankruptcy of a house against which, it is confi- 
 dently affirmed, not one atom of just reproach has been or 
 can be substantiated ; and this has been effected by the 
 arbitrary use of threats over the minister of a dependent 
 ally, to deprive him of his office, should he discharge the 
 very debts he to this day acknowledges to be due. 
 
 It is confidently submitted that it has been shown in the 
 foregoing pages, ^ 
 
 1st. That the original countenance afforded to the house 
 of W. Palmer and Co., was given on 22d April, 1814, upon 
 the application of the partners, and upon the recommend- 
 ation of the Resident, Mr. Russell : that gentleman and 
 Mr. William Palmer being at the time not on friendly 
 terms.
 
 20G 
 
 The concerns in which tlie house wished to ensaffc were 
 distinctly stated to be, 1st. Banking and agency transac- 
 tions. 2d. In supplying timber from the forests on the 
 banks of the Godavery. 
 
 The countenance was given expressly on the ground of 
 such an establishment being likely to prove of general 
 utility to the interests of commerce, and to afford facilities 
 to the trading concerns between the territories of the 
 Nizam and of the Company. This was communicated to 
 the court of directors on 1st March 1815, and was approved 
 of by them on 20th November 1816. 
 
 2d. That Sir William Rumbold became a partner in 
 the month of April 1815. 
 
 The private correspondence between Lord Hastings 
 and Sir William Rumbold, on the project of the latter 
 entering into the house, shows that it was discouraged by 
 his lordship. 
 
 3d. That the house addressed a letter on the 27th June 
 1816, to the Governor-general in council, fully and openly 
 makinsT known the nature and extent of their transactions 
 at Hyderabad with the Nizam's government, but stating 
 their apprehensions that the 37th Geo. III. required a spe- 
 cific license under the hand and seal of the Governor- 
 general, to protect them from the penalties attaching to 
 pecuniary dealings between British subjects and a native, 
 government. Their letter states distinctly the public 
 gi-ounds on which they conceive the licence should be 
 granted in the real spirit of that act. The statute itself was 
 submitted to the advocate-general, who stated there was no 
 legal objection to the council acceding to the application. 
 
 All the members of council signed the license, agree- 
 ing fully in the propriety of the measure. 
 
 This act of the supreme government was communicated 
 to the Court of Directors on the 3d January 1817. 
 
 The Court of Directors did not reply to this com- 
 munication till 24th May 1820, three years and four months
 
 ';?07 
 
 afterwards, wlien they peremptorily commanded Its instant 
 recall. In December of that year the Bengal government 
 informed the Court their orders had been obeyed. 
 
 4th. That in December 1816, Mr. Russell informed the 
 supreme government of the contract into which Messrs. 
 W. Palmer and Co. had entered with the Nizam's minister 
 to pay a body of horse by regular monthly supplies of 
 52,000 rupees, which was approved. 
 
 5th. That in 1819 the Resident informed the council 
 that a similar arrangement had been made with that house 
 for the payment of a body of reformed troops at Aurung- 
 abad, after the rate of two lacs of rupees per month. This 
 was also approved. 
 
 6th. That in May 1820 the Resident submitted to the 
 council the negociation of a loan which was proposed to 
 the house by the minister, in order to enable him to dis- 
 charge arrears of pay due to useless troops, and to dis- 
 charge debts he had incurred to the house on the two 
 before mentioned transactions, as also debts to the Soucars, 
 and to enable him to make advances to the cultivators 
 and to relax his immediate demands on some of the dis- 
 tricts. This transaction was sanctioned in July 1 820. 
 
 7th. That the discussions in council and the Resident's 
 letters establish, not only the sound political grounds on 
 which the Governor-general sanctioned the three foregoing 
 transactions, but that the results arising from them com- 
 pletely confirmed the wisdom of those decisions. 
 
 The safety of India, in the crisis which existed in 
 the years 1817, 1818, and 1819, was mainly secured 
 by and resulted from the establishment and sanction to 
 those very pecuniary transactions of the house. The Ni- 
 zam's country was secured and converted into an effective 
 ally by those supplies of Messrs. William Palmer and 
 Co., without which it would unquestionably have been a 
 most dangerous enemy. 
 
 8th. That there is not a single ground on which to
 
 208 
 
 support a charge of any partial or undue feeling having 
 swayed the Governor-general in a single act regarding the 
 house ; but that, on the contrary, there was unfounded 
 prejudice and jealousy on the part of other members of 
 Council, openly avowed by themselves as the grounds on 
 which alone they opposed themselves to measures ob- 
 viously beneficial to the Nizam's and the British interests. 
 And finally, That the credulity of the directors, and 
 the blind confidence of the Bengal government in the bare 
 assertions of Mr. Metcalfe, have been the means of ena- 
 bling that person to effect the ruin of Messrs. William 
 Pabner and Co., and to blacken the characters of honour- 
 able and irreproachable men. 
 
 THE END.
 
 APR 12 1985 
 
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