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

INDIA.

II YDRA B. \ D LOAN.
The mischievous effects of pecuniary transactions between
Native Princes and British subjects in India, which always led
to the ruin of the former, and the degradation and abasement
of the character of the latter, (p. 7*), was so conspicuously dis-
ulayed in the case of the Nabobs of Arcot and of Oude, as to•
4ead at last, after the pure and dterested government of
Lord Cornwallis, to the passing of the satute -37 Geo. 111.
c. 142, (p. 8) ; by which, after a declaration that the practice
of British subjects lending money to native princes had been
productive of much mischief, and the source ,of much usury
and extortion, it is enacted, under the ,penalty of a misde-
that no British subjects shall lend money, directly
orindirectly, to any native prince, unless they shall obtain the
consent of the court of directors, or some governor in council
in India.
it I, impossible to conceive a practice more positively prohi-
tested unless with this special permission • and the proof of the
-vast importance of the prohibition is to be found it. the altered
4J:erecter of the company's servants; who, from a band of
,usorers and money-lenders, had entitled themselves to the cha-
ra.ter truly bestowed on them by Lord Hastings in his summary
Ip. 33), as proudly merited, of a body of men than whom, ge-
nerally, none can be more high-minded, more conscientiously
zealous, or more rigidly intolerant of any turpitude among their
fellows.
A system which combined such important consequences to
tie Native Princes and to the British subjects, ought obviously
so be held sacred, and only relaxed for reasons undisputed in
point of fact; and of vital importance in their consequences ;
and nothing short of a clear case of state necessity could
justify the sanction of a loan by British subjects to a native
prince.
If these observations are true at all, they apply with dou-
ble force to the case of the Nizam, who is admitted to
be a person wholly incapable of any attention to business
to lamentable hypochondriac, p. 115), and whose effective
cainister is described by Mr. Russell (p. 30), to be in-
il oted exclusively to the British Government, for both his ele-
seinen and support : bound to them by the surest of all ties,
ti-iat of knowing that his office depends on their ascendency so
much so, that if they were to lose their controul over the go-
vernment, he would certainly lose his authority, and probably
his life; and as a person on whom on all occasions,.of what
magnitude %never, where they may require his co-operation,
they may confidently depend.
It was m February, 1814, that Mr. William Palmer, who
had previously carried on some (p. 357, § 9, 358,) commercial
speculations at Hydrabad, established, a hotise of trade there,
ansler the firm of William Palmer and Company. The part-
nership consisted of Mr. William Palmer, Mr. Samuel Russell,
Dr. Currie,_ Mr. Hastings Palmer, and Bunketty Dos.
It would appear from the first application made by the.house
of ,William Palmer and Co., to the supreme government in
March, 1814, (p. 2.) that the house was then about to be esta-
blished for the first time; for they state, that having ascer-
tained by experiment the practicability of carrying on commer-
cial concerns with advantage, they are desirous of availing
theniselves of the commercial treaty, to establish a mercantile
firm at Hydrabad.
Banking, Agency, and supplying ship timber, were the
sieved objects of their trade.
They desired the sanction of the approbation of the supreme
government, and the exertions of the resident for their security
and protection.
This -was extended to them by the supreme government in
A-psi], 1814, (p. 3.) Towards the end of 1814, Mr. Sotheby,
who then filled the situation of second assistant at the British
residency at Hydrabad, an intimate friend of Mr. William
Palmer, and whose pecuniary Circumstances were in great dis-
order, became a partner in his house, in which he continued until
February, 1820, when upon the proposal of the loan to the
Nizam being made, Mr. Sotheby retired from the firm, re-
ceiving an equivalent for his share (p. 712, 13, 14.)
Sir Wm. Rumbold, who married a ward of Lord Hastings,
" nearly brought up as if she were a daughter," (p. 44,) accom-
panied Lord Hastings to India, as one of his family. He landed
in Octobers 1813, and early in 1814, .(p5727,) a proposal was
made to him to becomes partner in the house of Wm. Palmer
and Co. After considerable deliberation, Sir William acceded
to this proposal, and became a partner in April,'lBls, (p. 727,)
at which time he resided at Calcutta, where he continued till
1819 (p. 581.) -Sir W. Rumbold had no mercantile experience,
lie acted at Calcutta as a Magistrate, Ap. 5660 and had no
capital except-what he could borrow (p. 731, 2.)
The purpose of Messrs. Palmer in desiring Sir William
ilumbold, under these circumstances, to become a partner in
their house, appears from a letter of Lord-Hastings to Sir 'Wil-
liam of 4th January, 1815.
The letter is as follows (p."734):—" 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
lekely to be paid by their own Government to an establishment
known to stand well in the favour of the supreme authority
bare; perhaps a more distinct benefit may attend the firm from
the consequent discouragement to competition with you by any
other British partnership to which a similarly-professed sane-
- thin would not be granted. It is on the ground of servicet
to the Niaam, at the request of our resident that I have con-
sented to let the good wishes of the government for the pros-
perity of this firm be signified. No new establishment could
have such plea."
In July, 1816, Messrs. Palmer applied (p. 3, 4,) to the su-
_ prenie government to grant them an exemption from the penal-
t.es of the 37 (ieo, IIF. c. 142, which they stated had become
desirable, as doubts had arisen, whether the sanction of the Go-
vernor-general was explicit enough to give security to all their
money transactions, which they stated were too extensive and
general to be carried on without being frequently con-
cerned in pecuniary arrangements with the Government
UAW. They conceived themselves to stand essentially wide of
what was the purpose of the Legislature ; they believed the
penalties were imposed with a view to prevent European sub-
jects from acquiring privately too much influence at native
"Courts, and from taking advantage of the necessities of na-
tive governments, to extort exhorbitant interest; that their
transactions could not lead to either of those objects, and their
immediate operation had no 'taint of that quality. Their trans-
action. had always been open and public.
In consequence of this application, permission, 211 July,
1816 (p. 5), was given to the house to do all acts which were
prohibited by the Act of Parliament without the approbation of
the Government in Council, with a proviso, however, that they
should at all times, when required by the resident, communi-
cate to him the nature and objects of their transactions with the
government or subjects of the Nizam (p. 6).
After this license had been granted, Messrs. Palmers' en-
tered into a transaction with the Nizam government, for the pay
of a body of horse in Berar, which at the instance of the resi-
dent, had been put upon an improved system and discipline
(p. 71, § 8 P, 9, § 60)-
- When this permission was communicated to the Court of Di-
rectors (24th May, mos p. 7), that body expressed their strong
disapprobation of the measure, and positively directed that the
instrument, by which that indulgence was conveyed, might be
immediately revoked and cancelled, and the countenance of
government strictly confined to those objects of a commercial
nature, which they professed originally to have in view. That
order was stated to be peremptory, and the execution not to be
delayed on any ground whatever.
The-Court added that, if any discussion should at any time
arise between the Zizarn's government and the house, respect-
ing any pecuniary transactions, the Bengal Government were
positively prohibited from interposing in any way whatever,
the name, authority, influence, or good offices of any sort
of the British Government," for the fortherance of any demand
which these gentlemen might bring forward.
Biefore the receipt of this letter in India in the year 1818, an
arrangement was entered into between Chundoo Loll, the act-
ing minister of the Nizam, and the house of William Palmer,
by which they engaged to provide the monthly sum of two lacs
of rupees, at Aurungabad, for the payment of the Nizam's
forces there, on the security of orders or assignments to them
on the revenue of certain districts in Berar to the amount of
thirty lacs of rupees a year (p. 11, 14, 15). This arrangement
received the sanction of the Supreme Government, with the
exception of Mr.- Stuart, upon the grounds, that unless the
funds were found for paying the troops, they would disband and
plunder the teidntry, and that the minister could not obtain money

• The references are always to the-volume of. Hydrabad pa-
pers, unless some other authority is mentioned.
t Mr. Russell's 'letter on forwarding the application, makes
no statement of services rendsred by the house to the Nizam,
but recommends it on the ground, that an establishment i
framed on the principles, and conduct n--the spirit, of an Eng-
lish house of business, will prove a source of general conveni-
ence and benefit (p. 2.) Neither does Messrs. Palmeri' own
letter alleged any such services (p. 2-)
t It is a singular 'fact that Mr. Russell does not confirm
thstatement. declares he was on bad terms with Mr.
yt4l,n7 (p. 2, Russell's letter) and that the countenance of go-
ciu„-`e,"t,to Palmers. House; was applied for by him, in conse-
-o,7„,sei‘ all as,ialipince from Calcutta,that it would be granted
uett,ze, ,
granted ,
40 an assurance from Calcutta, that it would be
apoica4Uenee. of a previoui application, (p. 2, ibid.)
autenitted to the goirwas not madeto the resident till it had been
tigo. Lp, •,4 tinkt*-General and received bis-approba-