The Sun.
London, England, 1825-03-07 00:00:00

for that purpose elsewhere, (p. 13, 33), tin less on Conditions
still more burdensome. No guarantee was given or implied on
the part of the British Government, to the house, which could
impose any pecuniary obligation on the Company, though the
house considered themselves entitled to receive the fullest sup-
port from the Resident, which he could give by the exertion of
his influence with the 31inister,(p. 13). 31r. Stuart, (p. 23, 5,
8), objected to this arrangement, upon the ground that it was
necessary to procure fuller information before the Government
was committed by any approbation of the plan, either express
or tacit; that they had no information as to the terms upon
which it was to be made, of the amount of the assignments to
be given, the rate of interest to be paid, or as to the nature of
the assistance the Resident was to afford.
i%lr. Adam, though he was not insensible to the objection to
permitting extensive pecuniary dealings between a native Go-
vernment and an opulent British house of agency, if any
other available resources could be had ; felt that the regular
payment of the Nizam's troops was an object so essential to
the general tranquillity of India as to induce him to give the
measure his support; as the arrangement appeared as reason-
able and• economical as circumstances would permit (p. 47, 8.)
The argument received the sanction of the Supreme Go-
vernment, 9th October, 1819, (p. 21), after a distinct acknow:
ledgment by the house that no guarantee was afforded, or pecu-
niary liability by the British Government of any sort was in-
volved in it (p. 14).
This arrangement was strongly diapproved of the Court of
Directors, who in their dispatch of 20th November, 1821, sign-
ed J. Pattison, &c. &c. (p. 70), after an elaborate discussion
of all the circumstances, directed (p. 84) peremptory notice to

_
be given to the firm to bring the arrangement to a termination,
the ceasing to make further payments tgp the troops and deli-
vering up their assignments as soon as they were reimbursed
the sums advanced, and unless it would injure the credit of the
house, which the Court did not wish, they directed criminal
prosecutions to be hvtituted against any parties who should
disobey these injunctions.
Until the arrival of these orders in India, the arrangement
continued in operation. It was put an end to in June, 1822,
in pursuance of these orders, (p. 159, and 161), but before this
time, very large arrears had become due to the house from the
Nizam's Government, on which interest at the rate of 24 per
cent. was charged (p. 501).
Early in the year 1820, it appears from Mr. Russell's letter
to the. Court of Directors, (p. 20, Russell's Letter), a proposal
had been made to him of aloan of sixty lace of rupees to be
advanCed by the house of Palmer and Co. to the Nizam, under
the sanction of the British Government; but that Mr. Russell
considered this proposal. as so .decidedly inadmissible, that he
declined even to forward the proposition. Upon his refusal,
he states that the house were satisfied with the resident giving
it such support as his instructions authorized ; but that in the
mean time, he received an intimation that the proposition bad
been forwarded through some other channel, anti that Lord
Hastings expressed his surprise that Mr. Russell should have
hesitated to forward the application. Upon this intimation,
Mr. Russell did forward the proposal to the supreme govern-
ment in the month of May, 1820, (p. 20, ibid.)
The objects of the Nizam's government in raising this sum
of money are stated to have been (p. 88, 39, 70, § 55) :-
1. To discharge arrears of establishments about to be reduced
in prosecution of his measures of reform.
2. To make advances to the cultivators.
3. To repay debts incurred to Soucars and others, on account
of the war, many of which stood at a high rate of interest.
4. To relieve the revenue from heavy assignments granted.
Mr. Russell the resident stated, that the minister could not
prosecute his measures of reform unless he could procure money
. .

For these objects; and that he certainly could not obtain it by
other means, than the assistance of Messrs. Palmer, whose cir-
cumstances
enabled them to secure a combination of the native
monied interest.
He stated that the reductions the minister was making
amounted to twenty-five lacs of rupees (p. 88.)
The terms of the loan were, that assignments to the extent
of sixteen lacs per annum should be granted by the Nizam to
Messrs. Palmer, till the principal and interest should be dis-
charged (pp. 41, 79, 55.)
When this proposition came to be discussed in the council at
Calcutta, Lord Ilastings (p. 44,) declared that he should for-
bear taking a part in the decision, lest the beticial interest Sir
William Rumbold had, as a partner of Palmer;,s house, should
warp his judgment.
Mr. Stuart (p. 46,) and Mr. Adam, (p. 47,) were of opinion
that the loan should not be sanctioned.
Mr. Stuart observed, (p. 43,) that the papers afforded no in-
formation as to -the rate of interest or other advantages to the
house so as to enable him to judge how far the arrangement
was beneficial to the Nixam.
Mr. Stuart conceived that the rate of interest to be reserved
was sixteen per cent., (p. 46), but urged the necessity of further
inquiry.
He suggested at the same time, that k would be a preferable
measure to advance the money required out of the company's
treasury, (p. 46), or to raise it by competition in the money
markets of India: where, with the assurance of the resident's
protection, he was of opinion it might be procured on moderate
terms. . .

Mr. Adam (p. 48), agreed with Mr. Stuart in his suggestions
as preferable to the sanction of a loan by Messrs. Palmer, and
mentioned as a proof that money could be procured with the
sanction of the British Government, that a loan had been lately
raised by the Guicowar at nine and a half per cent.
He concurred in thinking their information too imperfect to
decide upon, and expressed his alarm at.the power of Messrs.
Palmers' house, to secure a combination of the monied interest
at Hydrabad, and thought that to strengthen their influence by
sanctioning the proposed loan would confirm their monopoly.
Mr. Fendal (p. 49) objected to Mr. Stuart's proposal, as it
would offend the jealousy of the Nizam, and would involve the
British Government in unpleasant disputes with the Nizam if
the interest was not regularly paid. Ile did not apprehend
that it could give Palmer.' house any undue influence, as the
credit of the house must mainly depend on the countenance of
1 the resident, which could be withdrawn if any undue influence
was used.
All the council expressed their concern at Lord Hastings not
taking a share in their decision.
Lord Ilastings disapproved of the plan proposed by Mr.
Stuart and Mr. Adam, on the ground that, besides exciting the
jealousy of the Nizam, (p. 50,) it would be viewed with suspi-
cion at home (p. 51), and would entail interference with the
Nizam's internal government. His Lordship was of opinion,
thattnimmediate reduction of expence by the Nizam was in.
dispensable to prevent mutiny in the army (p. 44.)
That no loan could be procured from native bankers (p. 45.)
That there was no fear of undue influence by the house.
That a solemn pledge of support had been given to Chundoo
Loll, and must not be forfeited (p. 51-2, 55.)
His Lordship was further of opinion, that any advance by the
British Government was illegal (pp. 52, 55) ; and in conclu-
sion, to prevent the abandonment of Chundoo Loll, he gave up
his intention of not taking a share in the decision, and gave his
casting vote to sanction the loan.
This sanction was communicated at Hydrabad on the 15th of

July, 1820 (p. 55.)
It is admitted on all hands, that the grounds of this sanction
were (pp. 38, 39, 43-4-5, 200, 186, 79, ti 55)
Ist. The understanding that it would diminish the Nizant's
expenditure. •
2d. Reduce the amount of interest then paid.
3rd. Enable money to be advanced to the cultivators.
4th. That the amount of interest to he paid to Messrs. Pal-
mer was sixteen per cent. (pp. 46, 49, 50, 80), effecting a reduc-
tion of eight per cent. (p. 50.)
5. That money could not be had on lower terns from others
(1)..• W3B.he) ther the first of these objects was attained, seems ex-
tremely doubtful. Chundoo Loll, the Minister of the Nizani,
states that he had reduced the charges forty-one lacs annually
(p. 143), and applied sixteen lacs of the money saved to dis-
charge the debt. And he afterwards, October, 1822 (p. 270),
repeats the statement ; anti alleges that the arrears of pay
amounted to only eleven lacs, which enabled him to reduce a
three that required twenty-five lacs per annum to pay.
Be also enumerates the troops that were reduced (p. 271.)
Sir. Russell also stated, in Sept. 1820 (p 64), within little
more than a month after the sanction of the loan, that reduc-
tions had been made to twenty-two or twenty-three lacs, and
advances made to the cultivators. But he appears, from his
statements in his letter to the directors (p. 25, Russell's letter),
to speak on Chundoo Loll's authority, and not from his own
investigation, though he gave him credit ; and adds, that some
persons who suffered from the reductious. had complained of
them (p. 26, ibid.)
Sir C. Metcalfe, however, observes, that the particulars of
the reductions given in October differ materially from those the
minister had formerly given in (p. 262) ; and points out, that
he only states eleven Lacs to have been paid out of the loan (p.
263, 270.)
That since he became resident, the reduction was but eight
lacs, of which he feared six were only nominal (p. 236.)
After after examining the accounts, he states he can per-
ceive but one item, for a year .after the loan, that appears to
-
to have any connexion with reduction ; and that item, he af-
terwards states, was to pay the creditors of the Rajah, to whom
it was paid as well as his troops (p. 554, 809.)
What, however, throws the greatest discredit on any real re-
duction having been accomplised, is, that the Nizani's debt,
in September, 1822, was 129 lacs (p. 228)
whereas, Mr. Itus.
sell, in November, 1819 (p. 96,) states t s it to have been but fifty.
An increase of seventy-nine lacs of debt, in two years of peace,
seems to negative any reduction of expenditure.
But the great object of the loan was to reduce the rate of in-
terest payable by the Nizam, which amounted to 24 per cent.
(p. 49, 50); and the. sanction of the British Government,
Which, ,in fact, *at a.virtual guarrantee, 75, § 481 p. 81,.