XXXIX. 1806. insult and protecting them from injury. But all this not- CHAP. withstanding, independence is the first of national as of individual blessings; and so it is soon found, alike by nations and private persons who have lost it. Ere long the evils of dependence, the bitterness of protection, are experienced. All persons, whether in power or subject to authority, come to be convinced by a little experience that the state of weakness and thraldom in which the government is placed cannot long continue, and that things are only arranged for a time. A feeling of insecurity, a conviction of brevity of existence, comes to pervade all classes ; and when once this idea has taken possession of a nation, unbounded calamities await them all. The tax-collectors exact the last farthing from the cultivators, from a conviction that every season may be their last; the Government are equally rigorous with the collectors, from the effects of the same belief. Expenditure on public works or private undertakings there is little or none-hoarding, on the contrary, generally prevails; for every one is looking for the advent of the period, too certainly approaching, when the protecting Government will at once take possession of the State, and an entire new set of functionaries will be established. Under the effects of this belief, cultivation and production rapidly decline; this only renders the condition of those who still carry it on more distressing, for they can look for no indulgence from the collectors. At length matters come to such a point that the revenue in great part fails; the troops, as the only means of keeping them quiet, are quartered upon the inhabitants; and in the end, with the cordial approbation of all classes, the protected State is incorporated with its protector, and under a reduced rent, and greater regularity of administration, the people hope at least that they have entered i. 156, 172. upon a better order of things.1 There is no country in which the want of an extensive paper circulation is more strongly felt than in India, for there is none in which the capacity of the people for I Warren, XXXIX. 31. of a paper in India. observed from CHAP. industry is more fettered by the want of adequate capital to carry it on. Previous to its conquest by the English, 1806. such was the distracted state of India that wealth was Great want generally hoarded instead of being spent; and it was the circulation propensity to do this which caused the drain of the precious metals to the East which has been the earliest period of commercial history. Since it has fallen under British dominion, the annual abstraction of capital to this country has caused India to be constantly destitute of the wealth requisite to put in motion its industry, especially in a country where a great outlay for the purposes of internal communication or irrigation is essential to its first efforts. To a country so situated, an extensive paper circulation, founded on a secure basis, would be the first of blessings; what the want of it has proved, may be judged of by what in America its presence has occasioned. Yet, strange to say, there are very few banks in India, and such as exist have been established within a very recent period. They are only twelve in number, and their notes in circulation amount only to the * BANKS IN INDIA, with the DATE OF THEIR ESTABLISHMENT, THEIR Capital, XXXIX. 1806. trifling sum of £3,700,000, being not 3d. a-head to each CHAP. inhabitant; whereas in Great Britain the proportion is £1, 8s., and in the United States of America £1, 18s. Nothing more is required to explain the stationary condition of industry in great part of India, or the extreme difficulty experienced of making the revenue keep pace with the necessities of the Government. 32. on the pre tals of Eng This consideration is of vital importance, not merely to the inhabitants of India, but to the monetary interests of Great drain the British empire. Since the heavy import-duties on cious meIndian produce have been lowered by Sir R. Peel's tariff, land from Great Britain has experienced the usual fate of a rich and India. prosperous in connection with a comparatively poor and uncultivated country-that of being able to consume more than the State from which it imports the objects of consumption. The result of this is, that an extended commercial intercourse between the two soon runs into a huge balance of imports over exports, which requires to be adjusted by a great export of gold and silver to the poor agricultural State. That its inhabitants are always glad to take to any amount; but articles of manufacture are only taken off to a considerable extent when comfort has been long enjoyed, and artificial wants acquired among them. This effect has already taken place to such an extent, since the commercial intercourse with India has become so considerable, that the balance paid by Great Britain in specie has come (1835) to exceed £5,000,000 annually, and in 1836 amounted to £7,000,000; a severe drain upon her metallic resources at any time, but which, in the event of its coinciding with a foreign war, or bad harvest in Great Britain, may at once induce a monetary crisis of the severest kind. In point of fact, it largely contributed, with the necessities of the war in the Levant, to the severe drain upon the Bank in the end of 1855 and first four months of 1856, which reduced its stock of bullion to £9,875,000, and would have rendered a suspension of cash payments unavoidable, but XXXIX. 1806. CHAP for the supplies from Australia and the termination of the war. A large extension of the paper circulation of India, therefore, is loudly required, not merely to carry through its great and growing public works, and sustain the industry of its inhabitants, but to lessen the perpetual danger, under our present commercial and monetary systems, of a serious crisis in the mother country.* 33. To narrate the successive steps by which this great Splendour empire has been formed since the period when Lord cent history Wellesley sheathed the sword of conquest and retired of the re of India. from India in 1806, after having added so much to the fame and the dominions of the English in it, would require a separate work not less voluminous and detailed than the present, and few historical compositions will be able to boast of a wider or a nobler field of narrative and description. A brief analysis of this splendid subject can alone be here attempted, which may perhaps, from the interest of the matter involved, tempt other readers to adventure upon it, and lead, in the hands of another, to a work second to none in modern Europe in interest and importance. Lord Wellesley's administration was based on that clear perception of the perils which at that period envi * Colonel Sykes, whose intimate acquaintance with Indian affairs is well known, has unfolded the extent of this danger in a very interesting paper published in the Statistical Journal. The results of his researches, which were very numerous and elaborate, are thus given : £55,292,000 £95,115,000 £18,993,000 £20,830,000 £4,713,000 -Statistical Journal, June 1856, p. 126. XXXIX. 1806. 34. wallis's ministra July 1805. roned our Indian empire, and that resolution in facing CHAP. them, which form the characteristics of a great statesman. It was attended, accordingly, with the success which it deserved, but that very success proved fatal to its author. Lord CornThe East India Directors at home were far from being as second adthoroughly impressed as their able and intrepid viceroy tion. with the necessity of "conquest to existence," as real to the British in India as it had been to Napoleon in Europe. They deemed, on the contrary, the career of conquest just concluded as not only extremely expensive in the outset, but eminently dangerous in the end, and therefore the instructions given to the new Governorgeneral were of the most positive kind to conciliate rather than overawe, and, above all things, reduce the public expenditure within the limits of the income. Lord Cornwallis, who was now advanced in years, was compelled to yield to these urgent representations, and set himself in good earnest to carry them into execution. In pursuance of this system, Scindia and Holkar were gratified, not merely by the surrender of part of dearly-purchased conquests, but by the renunciation 1 Martin, of the alliance with the Rajpoot and other states which 405; Ann. Reg. 1805, had taken part against the ambitious Mahrattas in the 372-375. late crisis.1 35. able terms ment. This discreditable treaty proved to the last degree prejudicial to British interests in India. Scindia had per- Discreditmitted the English Residency to be attacked and plun- of the dered by a body of Pindarrees, and had himself detained treaty to the English the Resident, Mr Jenkins; but no reparation was demanded Governfor this outrage. The territories of Holkar had been solemnly promised as the reward of conquest to the allied states, but they were all restored to the defeated chief. Not content with this, the English gave up the strong fortress of Gwalior and territory of Gohud, which they had promised to include in the protected states, to Scindia ; "an act," as the Governor-general wrote to the Directors, entirely gratuitous on our part." The rajahs and |