master, Sir John Malcolm, wrote to him at this time the following high-toned words of encouragement:

"Every step you take to ameliorate the condition of the country will be misrepresented by fellows who have objects as incompatible with public virtue and good government as darkness is with light. That these men should be allowed to speak or write upon subjects such as you discuss and manage is deplorable. But the fact is so; and though the circumstances in which you are placed require all your firmness, recollect at the same time they call for all your caution and prudence, and, above all, for great temper and patience. These qualities I should never ask you to exercise in any extraordinary degree for selfish views. Were your personal interests alone at stake, I know you might give way to the spirit of an offended gentleman and a high public officer. But you have a more momentous duty to perform. You have to fight the good fight, and to stand with the resolute but calm feelings such a cause must inspire against all species of attacks that artful and sordid men can make, or that weak and prejudiced men can support. I am quite confident in your ultimate triumph, though I expect that you will have great vexation and annoyance."

These were prophetic utterances the vexation and annoyance were close at hand, and the ultimate triumph was not far behind.

*MS. Correspondence.

THE PLUNDER OF THE NIZAM."

39

CHAPTER II.

[1820-1825.]

"THE PLUNDER OF THE NIZAM.”

Finances of the Nizam-Residency Expenses-William Palmer and Co.The Sixty-lakh Loan-Influence of the House-Sir William RumboldMetcalfe's Friendship for the Partners-Proposed Financial Arrangement -Correspondence with Lord Hastings-Intrigues of the House - The Governor-General and Mr. Adam-Further Revelations-Reconciliation with the Governor-General-Discussions in England.

WHILST, under Metcalfe's instructions and superintendence, the subordinate officers upon whom he relied were pushing forward, with good success, these ameliorative measures, the Resident himself was diligently inquiring into the financial circumstances of the Nizam, and tracing the causes of that chronic state of embarrassment which had so grievous an effect on the prosperity of the country. It had been his first care, on entering upon his new duties, to see that the Residency itself was entirely free from the reproach of increasing the unprofitable expenditure of the Nizam; and at one of his first interviews with Chundoo-Lall he had "urged the Minister to discontinue on his own part, and to procure the discontinuance on the part of Mooneer-ool-Moolk, of all clandestine allowances to servants, &c., at the

Residency; the same with regard to fruits, dinners, &c., &c., sent to the Residency, which came in such quantities as to give them the appearance of regular supplies, instead of being merely complimentary.' And he especially "desired the Minister not to give ear to any natives who might pretend to have influence with him; and informed him (Chundoo-Lall) that he should never employ natives in any communications with the Nizam's Government-that ordinary matters would be discussed by notes-and all of importance either personally or through one of his assistants."* He saw clearly the importance of putting a check at once upon every description of back-stairs influence, and preventing the Nizam or his Ministers from being fleeced by the fathomless cunning of the native underlings of the Residency. He was averse, too, to any of those convenient arrangements which, by transferring the expenses of certain parts of our own establishment to the treasury of the Nizam, lightened our own burdens at the cost of our ally; and wherever he scented a job he was resolute to suppress it.†

Memoranda for Journal, by C. T. Metcalfe.

+ I find a memorandum in his handwriting, written soon after his taking possession of the Residency, in the following words:-" February 13.Wrote to Secretary in Political department privately to apprise Government that certain expenses at the Residency, amounting to 1200 or 2000 rupees per mensem, were defrayed by the Nizam's Government, in order that I might receive orders on the subject." His private letters, written at this time, also touch upon the subject of these payments. See the

following, written to Mr. Jenkins:"Hyderabad, March 23, 1821.-The officer of the escort here gets a whack. ing allowance from the Nizam in lieu of bazaar profits, and I have not interfered with it. The compromise which I make with myself in this matter is, that I will put a stop to it whenever the present commander may quit. It is not, however, with regard to the oath that I propose this, as I should have done the same without the oath. Indeed, I was so dissatisfied with having an oath imposed on our line as a security for our good conduct, that I have, I fear, treated

THE HYDERABAD LOANS.

41

But of all the sources of the financial embarrassments of the Nizam, that which in Metcalfe's eyes seemed to call most obtrusively for the consideration and intervention of the British Resident, was the connexion of the Hyderabad Government with the great mercantile house of William Palmer and Co. It seemed to him that the State was lying prostrate and helpless at the feet of the English money-lenders. In the preceding chapter mention has been made of the manner in which the Hyderabad Government first became the debtors of the House, and of the extent of their obligations. Since those loans had been contracted, a new arrangement had been entered into between the two parties, with the avowed object of a gradual liquidation of the liabilities of the Nizam. A re-adjustment of the business, however, had become expedient upon other grounds. In spite of the immense payments of interest, the claims of William Palmer and Co. on the Hyderabad Government were increasing; and the members of the House were not without a hope that, by placing the transaction altogether on a new footing, seemingly

it with too much neglect, and have merely regulated my conduct by the same rules which guided me in my former situation at Delhi. Fruits and flowers-though, to avoid what is unpleasant, I discourage the sending of them as much as possible-I consider as quite excluded from the bonds of the oath, and have no hesitation on that score as to accepting them. Presents to servants I discourage also; and, if I am not deceived, have stopped entirely. There were some bad habits here in that respect, and the Residency servants got vastly too much from the Minis

ters. It was necessary to check this, and the best way was to prohibit it in toto; but common enaums to servants, such as we give to those of others, I should not think affected by the oath-though I object to them, for the reasons before stated. Some expenses of the Residency here, such as repairs of the house, &c., establishment for the garden and grounds, with some others, have been hitherto borne by the Nizam's Government. I have reported particulars privately to Government, and they will be regulated differently in future."

more advantageous to the Nizam, a guarantee might be obtained from the British-Indian Government for the repayment of the entire advance.* In the course of the year 1820 the loan was negotiated. The amount advanced was sixty lakhs of rupees, or 600,000l., to be paid within six years. For this accommodation the Nizam's Government were to pay interest at the rate of 18 per cent., seemingly a reduction of 7 per cent. on the old advances. But the reduction was no more than a sham. In consideration of the nominal advance the borrowers were to pay a bonus of eight lakhs of rupees. The whole business of the loan Metcalfe subsequently described as "a fiction."

reality about it.+

There was nothing of

Of the terms of this loan the partners of the House were naturally anxious to keep the Government in ignorance. Metcalfe was at this time Political Secretary; and not only did all the official corre

* See Metcalfe's own version of the story, written some years afterwards: "They (the House) found their claims on the Nizam's Government increasing, notwithstanding the immense sums which were pouring in on account of interest; and their great object was to obtain the guarantee of the British Government for the whole of the debt due to them by the Nizam's Minister. In order to accomplish this purpose, a statement was trumped up of the desire of the Nizam's Government to pay off other debts, and effect various beneficent arrangements, for which a loan of sixty lakhs was required. This statement, according to previous arrangement, was addressed by the Minister to the Resident. The House professed their readiness to meet the Minister's