Title:
PP/GC/LE/102 Letter from Sir G.C.Lewis to Henry John Temple, third Viscount Palmerston, regarding the recapture of Delhi by British forces during the Indian mutiny, financial relations between Britain and India, and the failure of two banks, 28 October [1857]
Date:
28/10/1857
Content:
Letter from Sir George Cornewall Lewis, second Baronet, [Chancellor of the Exchequer], Harpton [Court], Radnor, [Radnorshire, Wales], to Henry John Temple, third Viscount Palmerston: he will not be present at cabinet the following day. "The recapture of Delhi at the first attempt, and with a loss apparently of only about 200 killed, simplifies our future course for the government and renders the reduction of the north a matter of certainty, dependent on the arrival of reinforcements and their transport to scenes of action. The moral effect of this blow, accompanied with the ludicrous incident of the new Great Mogul running away in the dress of a woman, in order to avoid being hung at his own palace gate, must confirm the wavering minds in Madras and Bombay, and dispirit the mutineers in the revolted and disaffected districts. If I was General Wilson, I should enter Delhi as a liberator, who came to free the peaceable inhabitants from the tyranny of rapacious sepoys and I would assume that the population were panting to be relieved from their new rulers." Vernon Smith will explain to Palmerston what has passed with the chairs [of the East India Company] with regard to money matters. There is sufficient for the present, but there may be fresh demands in the mail. There is a probability that Parliament will have to be called before the usual time. "The fall of Delhi ought to restore the credit of the Indian government and if they can borrow, though at a high rate of interest, the imperial government ought not, in my opinion, to be called upon for a guarantee. I wish to hold the doctrine of the entire separateness of the English and Indian exchequer, except in cases when the English government has distinctly and by act of Parliament assumed the obligation. In my opinion therefore the Indian government ought to be compelled to exhaust, not only its income and its credit, before the imperial government comes to its assistance. This has been the principle hitherto invariably acted upon." The American [financial] failure has put pressure on two great joint stock banks, in Liverpool and Glasgow, which had made enormous advances to mercantile houses. The Bank of England has agreed to advance 1,500,000 pounds to the Borough Bank of Liverpool, upon the security of several firms and individuals, and on condition that it should immediately liquidate its debts and wind up its concerns. These terms have been accepted, and the bank will be saved from insolvency, but will cease to exist. The Western Bank of Scotland has likewise applied to the Bank of England for assistance, but has been refused - in my opinion, quite rightly. Its liabilities are 7,900,000 pounds: its assets are 6,500,000 pounds, of which 400,000 pounds are in cash and available securities, and 6,100,000 are in county bills and advances upon open accounts. They have met with one refusal from the other Scotch bank, but they will make another attempt - I suspect that they will obtain assistance from that quarter upon some terms." The Deputy Governor of the Bank [of England] has informed Lewis that the banks had expressed some intention of applying to the government for assistance. "We have no funds out of which we could advance millions to some falling banks, even if we were authorized by law and custom to take such a step. If you should receive any such application, pray say at once that the thing is out of the question, and that we have no means of affording any assistance. They will probably be saved, but those who have the strongest interest in saving them will hold back, if they think there is any chance of their getting help from any other quarter. The greatest favour we can do them is to give them a distinct and instant refusal, and not to treat the matter as one for consideration." He will come to London on any day if required for financial business. 28 Oct [1857]
Extent:
Three papers
License:
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Subject:
Bahadur Shah II, Moghul Emperor of India
Lieutenant General Archdale Wilson, later first Baronet, commander of artillery in India
Deputy Governor of the Bank of England
Robert Vernon Smith, President of the Board of Control
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