When England bowed before the force of circumstances, and concluded peace with America, France, Spain, and Holland in 1783, she had touched the lowest point of weakness which had been her lot since the fifteenth century. Peace had been imposed by victorious enemies, after a fruitless struggle of eight years. English armies had grown accustomed to defeat; English fleets could barely hold their own upon the seas. Money had been spent with a lavish hand, and the National Debt was doubled. As a result of all her efforts, England had not only to surrender smaller possessions all over the world, but to witness the loss of her great Western empire, the thirteen colonies which had been the pride of her statesmen, and one of the main outlets of her commerce. A blow such as the loss of America seemed likely to be fatal to England. Not only was her prestige gone, and her pride humbled, but she was left with her finances in an apparently hopeless condition of exhaustion, and her internal politics in a state of complete disintegration. King George's great experiment in autocratic government had completely failed; he had led the nation into disaster and bankruptcy. His ministry had been struck down by the course of events, the irrefutable logic of the American war. Lord North had retired; his master had been forced to own himself beaten, and to make over the conduct of the realm to a Whig ministry. But the Rockingham cabinet was evidently a mere stop-gap. George's skilful policy of the last twenty years had so divided and broken up the Whig party, that it was difficult to reconstitute a strong cabinet from its remnants. When peace with America and France had been secured—that peace being the one great mandate which the nation had given to the Whigs—it seemed likely that the perennial jealousies of their cliques and clans would once more wreck the party, and that the king, with his steady power of intrigue, his pension list, and his power of patronage, would succeed in placing some second North in office.

The Whigs, however, were no longer their old selves. The great effect of their twelve years' exile from power had been to teach the better men of the party to detest the old methods of parliamentary corruption and family jobbery which they had learnt from Walpole and Newcastle. The Whigs had failed to realize the hatefulness of these practices when employed by themselves, but when their own engine was turned against them by the king, they began to see its shame. That the party which professed to represent the people and to forward the immortal principles of the Revolution, should ground its power on official bribery and corruption, was humiliating to the better men in the Whig camp. Hence it came that the nobler spirits among them resolved to protest against the old methods, and to claim that the victory of their party over the king in 1782 should result in something more than a distribution of the loaves and fishes of office among their partisans. Unhappily, however, much of the old leaven of corruption still hung about the Whigs, and the section which represented it was just about to perpetrate the worst piece of jobbery which their party ever committed.

The one thing in which all sections of the Whigs could agree, was dislike of the royal influence, as employed by George III. The first end, therefore, which the Rockingham cabinet set before itself, was to cut down the means of corruption which the king possessed. The pension list was diminished, no single person was to be allowed to draw more than £300, the "secret service" funds in the royal hands were cut down, and a certain number of the useless and expensive offices about the court abolished. This was all very well so far as it went, but much more was needed, and it was very uncertain how much time would be granted to the new Whig ministers to carry out further reforms. Their leader, Lord Rockingham, died suddenly in July, 1782, long ere the formal treaties of peace with France and Spain had been signed. He was a man of slender abilities, but honest and popular, and able to keep his party together. On his death the old clan rivalries of his followers burst once more into life. The king sent for Lord Shelburne, the leader of the liberal and reforming party among the Whigs, and offered him the premiership. But Shelburne was viewed with bitter dislike by many of the Whig chiefs; his sharp tongue and his love of intrigue made him many foes, and when he took office they refused to serve under him. On the mere ground of personal jealousy and resentment, the larger half of the party went into opposition and joined the Tories. Not only the old family cliques that represented the corrupt and selfish Whigs of an earlier day, but many of the younger men, who called themselves the friends of liberty and reform, took this suicidal step. Among them was Charles James Fox, the most able and open-minded man in the party, but irregular in his private life, a gambler and a lover of the bottle, somewhat tainted with the failings of a political adventurer, and too factious to be altogether honest in his actions. Fox had been a Tory in his earlier years, but had quarrelled with Lord North in 1772, and after that date had joined the opposition, become one of its chiefs, and been the first to favour peace with America.

Shelburne took office, therefore, with a comparatively weak following. So many of the old leaders had refused to aid him, that he was constrained to give the post of Chancellor of the Exchequer and leader of the House of Commons to a young man of twenty-three, William Pitt, the second son of the great Earl of Chatham. This appointment, startling though it appeared, was a very wise one. The younger Pitt was the most remarkable man of his age. He had inherited from his father high principles, an enthusiastic belief in the future of England, and a sympathy for the cause of reform. He had been reared as a Whig, but had no sympathies for the old parliamentary jobbing and corruption of the party. His personal integrity was as great as that of his father, and his hatred of intrigue and bribery even greater. Though quite new to the House of Commons, he made a sensation on his first appearance in it, which showed that men saw that the mantle of his father had fallen upon his shoulders. His self-confidence and belief in his own powers were as great as those of Chatham had been, but he was devoid of the theatrical pomposity which had sometimes marred the effect of his parent's eloquence. As Chatham had believed himself the destined saviour of England from the dangers of foreign war, so it was his son's aim and end to deliver England from internal faction, and to build up a great constitutional party which should combine loyalty to the crown with liberal and progressive legislation. This party, as Pitt imagined, would consist of the more enlightened Whigs, the section of the party which had once followed his father, and now obeyed Shelburne. That it would ever grow to be known as the "Tory party," would at this moment have been beyond his comprehension.

The Shelburne ministry only held office for nine months (July, 1782, to April, 1783). From the first it was doomed to fall before the hostility of the Whig opposition. It survived long enough to ratify the final conclusion of the peace negotiations which the Rockingham cabinet had begun. But it fell before a factious motion of Fox, who moved a vote of censure on the very reasonable and moderate terms on which peace had been bought from France. This motion was supported by the ominous combination of the old Tory supporters of Lord North with the discontented sections of the Whig party. It drove Shelburne to instant resignation.

But no one could have foreseen the strange sequel to this vote. To the surprise of all save those who were in the secret, it was suddenly announced that Fox and North were about to unite their forces, not for a single division, but for a permanent alliance. Lord North seems to have imbibed in his long tenure of power—from 1770 to 1782—a craving for office at any price. Seeing that the king was too weak for the moment to replace him in his old seat, he plotted an unnatural union with his foes the Whig clans. He could command the allegiance of that section of the Tories who cared more for place and power than for their loyalty towards the crown, of the men who had aided King George from purely personal and corrupt motives. Now he offered Fox and the Duke of Portland, the Whig leaders, the invaluable aid of this solid phalanx of votes, if they would admit him into their alliance. Having no political aims or principles of his own save a desire to possess power and patronage, he could undertake to fall in with any schemes that they might desire. To their great discredit the Whigs closed eagerly with this immoral proposal, and took North into partnership, though they had been spending the last ten years in vehement abuse of his methods of government and his mean subservience to the king.

Hence came into existence the "Coalition Ministry" of April, 1783, in which the followers of North and Fox sat together under the nominal control of the Duke of Portland, one of the chiefs of the old Whig families. The cynical immorality of the combination displeased every one. The king was enraged with his old hireling North for leading away half the Tories to join the hated Whig oligarchs. The nation was puzzled and disgusted to see men who had so often abused each other, combining from no better motive than mere lust for power and office. But unpopular though the new cabinet was, it was for the moment supreme in Parliament by means of its overwhelming majority of votes.

The continued existence of the Coalition Government would probably have led to a return to the ancient corruption of Walpole and Newcastle. What the principles of the new Whig administration were, was sufficiently shown by the fate of a Reform Bill, to abolish rotten boroughs and increase the representation of populous districts, which William Pitt brought forward in the summer of 1783. The ministry frowned on a measure which would diminish their power to buy votes, and the bill was rejected by a majority of 144.

But, fortunately for England, the Coalition was not to last for long. It fell partly because of its unpopularity with the nation, and partly because the king tried against it the last of his autocratic methods of interfering with politics.

In November, 1783, Fox brought in a bill for rearranging the government of our Indian possessions, a measure which had become necessary in consequence of changes in that country which we shall have to narrate a few pages later on. The manifest failure of the East India Company to provide for the good administration of the growing empire which was falling into its hands, rendered the interference of the Home Government imperative. Fox produced a bill for taking the rule of our Indian possessions entirely out of the power of the Company, which was in the future to confine its activity to commerce alone. All the English officials in India, from the governors of presidencies down to ensigns in the army and clerks, were to be selected by a council of seven commissioners in London, nominated by Parliament. The names of the seven were given, and they were all violent partisans of Fox and North. The bill, good in many ways, was liable to censure in the one point that it gave the ministry a fund of patronage which was certain to be abused. The Fox-North cabinet was nothing if not unscrupulous, and when it got control of the £300,000 of annual patronage which the East India Company possessed, there is no doubt that it would have employed it to forward Whig family jobs and political corruption. An opponent of the bill complained that "it took the diadem off the king's head to place it on that of Mr. Fox." Much was also said as to the injustice of stripping the Company of its chartered rights.

The India Bill, however, passed the Commons, and then came before the Lords. To throw it out, the king now took the unprecedented step of sending down to the House a paper written with his own hand, which Lord Temple was to show to such of the peers as he thought fit. It was to the effect that "whoever voted for the bill was not only not his Majesty's friend, but would be considered as his enemy." This notice was given to all who wavered, or who did not wish to incur the king's personal enmity. It led so many of the weaker Whig peers to abstain from voting, that the bill was thrown out by a majority of nineteen. George's conduct was quite unconstitutional; if it were possible for the king to engage in such an underhand intrigue against his own cabinet, the system of government by responsible ministers became impossible.

The Whigs revenged themselves by passing a vote through the Commons stigmatizing Lord Temple's conduct in showing the paper as a high crime and misdemeanour. Nevertheless they had to quit office, though they boasted that they would soon be back again, since George could not find any other ministry to put in their place (December, 1783).

They were mistaken, however. The king, ready to dare any expedient that would keep the hated Coalition out of power, had offered the position of prime minister to William Pitt. The ambitious young statesman accepted the charge, and took office, though he could only rely on the support of the Shelburne Whigs, the reforming section of the party, aided by the "King's Friends," as those of the Tory party who had not followed North were once again styled.

The sight of a prime minister of twenty-four, backed by a weak minority, moved the derision of the partisans of Fox and North. They said that they would drive him to resign in three weeks, and at once threw out all the bills which he brought before the House. But, instead of resigning, Pitt was resolved to dissolve Parliament and to face a general election. He knew that his own name was great with the nation, and that the Coalition was universally detested and condemned. His policy was crowned with enormous success. Almost every borough and county where the election was free and the voters numerous, declared against the candidates whom Fox and North recommended. No less than 160 supporters of the Coalition lost their seats, and Pitt came back to Parliament with a clear working majority in his favour (March, 1784).

Thus began the long and eventful ministry which was to last for the next seventeen years. With the triumph of Pitt English politics are lifted to a higher level, and lose the mean and petty aspect which they had displayed ever since the days of Walpole. For the first time since the century began, England was in the hands of a minister of a spotless personal integrity, who possessed broad views and a definite political programme. His power was enormous, for, in return for having delivered the king from his hated enemies the Whigs, Pitt was granted the royal support even for measures which his narrow-minded sovereign hardly understood and could not love. George tolerated in him a policy which would have maddened him if it had been pursued by the Whigs. In return the minister treated the king with a loyalty and a personal regard which were perhaps hardly deserved by his master.

Pitt took from the elder Tories the loyalty which they had degraded into subservience, and from the Whigs the liberal and reforming principles and hatred of corruption which they had preached but not practised. On the basis of the two combined, he strove to build up a party, new in fact if not in name, from the scattered knots and sections of politicians who had united to oppose the iniquitous coalition of Fox and North. The wonderful success of the earlier years of his administration fixed him firmly in his seat, and enabled him to carry out his policy.

He found the country still in the depths of the depression caused by the American war, with a deficit of £12,000,000, and a National Debt which had just mounted up to what was then considered the crushing sum of £200,000,000. So low was public credit that Consols only stood at 60. Yet in five years Pitt could show a prosperous balance-sheet, a revenue rapidly increasing without any additional taxation, a scheme—if a faulty one—for extinguishing the National Debt, and the 3 per cents. at par.

The fact was that in 1784 the state of England was not so bad as it appeared. Financially, the American war failed to ruin the country, because new sources of wealth were developed exactly at the moment when they were wanted. To replace the comparatively small commercial profit which we had been wont to draw from our lost Western colonies, a sudden increase of wealth came flooding in from our new Eastern empire in India. Nor was this all. Even more important were the new channels of profit opened by the development of our home manufactures.

We have already spoken of the symptoms of an approaching development in our domestic industries which were beginning to be felt toward the end of the reign of George II. This movement came to maturity in the earlier years of George III. While the king was wrangling with the Whigs, and sowing the seeds of the American war, a revolution was quietly transforming the character of English trade. Between 1760 and 1780 a network of canals had been constructed to connect the centres of manufacturing life. The muddy lanes, which England had hitherto called roads, began at last to disappear, and a multitude of turnpike Acts created new highways along which traffic could readily make its way. The fast-travelling coach superseded the lumbering stage-waggons, which had crept from town to town.

Along the new roads and canals rolled a vastly increased volume of trade. The great discovery of the last reign, that iron might be smelted with coal, made Northern England, where coal and iron lie side by side, a great manufacturing district instead of a thinly peopled range of moors, and before the century was out Yorkshire and Lancashire had become the most important industrial centres in the realm.

A few years after the expansion of the iron industry came the growth of textile manufactures, fostered by the new discoveries made by Watt and Arkwright. The former, a Glasgow instrument-maker, began the application of steam to the setting of machinery in motion. The latter, a barber at Bolton, perfected the details of that machinery, and showed that it was possible to do quickly and accurately with iron what had hitherto been done slowly and more clumsily with human fingers. Where previously the spinner and weaver co-operated with the precarious motive-power of running water, the new mills, working by steam and able to establish themselves wherever coal was to be found, made their appearance. Thus the price of production was enormously lessened, and English woven goods became able to underbid any others in the markets of the world. For as yet no other nation had learnt the use of steam and machinery, and England had a monopoly of the new inventions. Our linen, woollen, and cotton manufactures were increasing with an astounding rapidity, and wealth and population mounted up by leaps and bounds. It is true that the new factory system was to lead to many social troubles and miseries. In the haste to grow rich, the mill-owners took little thought of the bodily or moral welfare of their workmen. In the new centres of population the lower classes were crowded together in narrow and unhealthy streets, forced to work too many hours a day, and grievously stinted in their wages as competition grew fierce. But these evils were only beginning to develop, while the rush of wealth produced in the new industries was apparent at once.

Moreover, the growth of manufactures had stimulated other sources of prosperity. The increased population called for a larger food-supply, and therefore forced agriculture to develop. Waste and moor were everywhere being ploughed up, to raise corn for the new thousands who annually swelled our ranks. It is said that more new ground was taken into cultivation in the years between 1760 and 1780 than in the whole century which preceded them. Thus the landholding classes shared in the prosperity of the manufacturers. Nor was it only in the quantity of new corn-bearing land that progress was seen; the older acres also were cultivated with improved methods, and brought forth double their former produce.

The growth of manufactures and the development of agriculture were enough in themselves to account for the marvellous ease with which England bore the burdens imposed upon her by the American war. So greatly was the national wealth increased, that losses which had seemed ruinous at the time were forgotten in ten years. The £120,000,000 of debt incurred in the struggle were no longer a nightmare to Chancellors of the Exchequer; it became evident that the country had suffered no incurable wound in the disastrous struggle with America, France, and Spain.

Pitt, then, fell upon a fortunate time when he took office in December, 1783. But we must not deprive him of the full credit of restoring the prosperity of English finance. It is a great title to praise that he saw the bright side of things when other men were hopeless. And it must be remembered that his own enlightened conduct of affairs had much to do with the improved condition of the country. For he was far ahead of his contemporaries in his knowledge of finance and political economy. First of all English statesmen, he had studied the laws of wealth and the workings of international commerce. He had found an inspiration in Adam Smith's celebrated book, the "Wealth of Nations," published in 1776, and from it had convinced himself that Free Trade was the true policy of England, and that the old and narrow commercial policy of restriction and Protection was radically unsound. In all his legislation he bore this principle in mind, and the realm profited thereby to no small extent.

The first ten years of Pitt's rule (1783-1792) were a time of profound peace both at home and abroad. Though his foreign policy was not weak or vacillating, the young premier avoided all collisions with our neighbours. A slight difficulty with Spain in 1789 about our colony on Vancouver's Island, in the North Pacific, is hardly worth mention.

Meanwhile Pitt's ascendency at home was complete. The disgrace of the Coalition still hung over the Parliamentary opposition. There seemed to be hardly any reason for the longer existence of the old Whig party, which followed Fox, Burke, and Sheridan. The popular principles on which they had always pretended to rest had now been adopted by the opponent whom they styled a Tory. The opposition in the years 1783-1793 was factious rather than honest. The Whigs had to see measures, which they could not but approve, carried by their political enemy, or else to withstand them on the inadequate ground of pure party spite. The spectacle of a conscientious and enlightened minister opposed by men who could find no real fault with his principles or measures, disgusted the nation, and the Whig party sunk into a disrepute which proceeded from a general belief that it was insincere. Not least among the causes of its ill odour with the country was the close connection of its leaders, Fox and Sheridan—neither of them men of a high moral reputation—with the Prince of Wales. For the young prince's dissolute habits, wanton thriftlessness, and unfilial conduct towards his father rendered him a byword among right-minded men. Yet the only hope of the Whigs returning to office lay in the help of the younger George. He had promised to dismiss Pitt and call Fox to office if ever he were able, and when in 1788 his father was stricken down with a temporary fit of insanity, it seemed that he might be able to carry out his design. But the king recovered before his son had been formally named regent, and the Whigs lost their opportunity.

The early years of Pitt's domination were a period of active legislation. He took in hand many schemes, and brought most of them to a successful end. His enlightened views on Free Trade were shown by a commercial treaty with France which took off many prohibitive duties, and much increased the commerce between the two countries (1786). He also attempted to remove all trade restrictions between England and Ireland, but was foiled by the factious Irish parliament, which refused to ratify the terms which he offered. Smuggling he succeeded in reducing to a low ebb, by lessening the exorbitant duties on tea and spirits; so that the excess of profit on smuggled goods was no longer large enough to tempt men to incur the risk of capture.

We find Pitt abolishing the shocking scandals of public executions at Tyburn, supporting measures for the abolition of the Slave Trade, repealing most of the ancient legislation against Romanists, and opening the bar and the army to them. He turned the ancient punishment of being sold into slavery on a tropical plantation, which had hitherto been the lot of convicts, into the comparatively mild form of transportation to Botany Bay, the penal settlement in Australia established in 1788 as our first possession in that continent.

Of wise and liberal dealing with the colonies Pitt set an example, which has ever since been followed, in his Canada Bill of 1790. This measure gave a liberal grant of responsible government to that great colony, where so many of the exiled loyalists from the United States had settled down after the war. But perhaps the most important of all the measures of the years 1783-1793 were those dealing with India. Pitt had to face, not only the problems which had called forth Fox's India Bill, but some further difficulties of a personal kind.

A word as to the history of our Indian Empire is required to carry it on from the point where we left it, after Clive's conquest of Bengal and the final rout of the French at Wandewash (1760).

It was impossible for the English to halt in the position which they had then reached. Most especially was it unlikely that they would long bear with the unsatisfactory state of affairs in Bengal and the Carnatic, where the East India Company had taken the nawabs under their protection and made vassals of them, but had not thought out any scheme for making those princes govern in accordance with English interests and ideas. It was intolerable that we should be responsible for the misrule of effete oriental despots, while keeping no real control over them; for, except in the suburbs of Madras and Calcutta, we made no pretence to territorial sovereignty.

The feeble Mohammed Ali in the Carnatic did no worse than pile up mountains of debt, and quibble with the Governor of Madras. But Mir Kasim, the Nawab of Bengal, was made of sterner stuff. Resenting all interference of his suzerains in the governance of his realm, he rebelled against the Company, and sealed his own fate by massacring 150 English merchants of the factory of Patna. This brought down prompt chastisement. He was driven out of Bengal, and forced to take refuge with his neighbour Suraj-ud-Dowlah, the Nawab of Oude, who consented to espouse his cause. But at Buxar, Major Munro, with a handful of sepoys, defeated the united armies of the two Mohammedan princes (1763). This important victory gave England the control of all North-Eastern India: she enthroned a new nawab in Bengal, but made him a mere puppet and tool, with no real authority. For the future the Company administered Bengal and Bahar in its own name, under the authority of a grant from Shah Alum, the powerless Grand Mogul of the day. At the same time Oude came within the sphere of British influence, for Suraj-ud-Dowlah was forced to become our ally and to pay us a subsidy.

Shortly after this pacification, Lord Clive came out again to India, to act as Governor of Bengal. His second tenure of power lasted two years (1765-1767), and was notable for great improvements which he introduced into the governance of the land. Hitherto the English officials and military commanders had received very low pay, while placed in positions where money-making was easy. Many succumbed to the temptation, and accumulated fortunes by blackmailing the natives, by selling their patronage, or by engaging in private trade. Clive wisely stopped these sources of corruption, by raising the salaries of his subordinates, but forbidding them to trade with the country or to receive gifts from natives. His reforms were much resented, and almost led to sedition among the military; but he carried them through with a strong hand, and left the army and civil service much improved and purified. Ill-health forced him to return to England in 1767, where some years after he put an end to himself in a fit of depression.

For the next six years our Indian possessions were ruled by men of lesser fame, and were unvexed by foreign wars. But in 1773 a new era began. In that year a Governor-General was for the first time appointed, and entrusted with the command of all the three presidencies of Bengal, Madras, and Bombay. The first man placed in this office was the greatest who has ever held it—the able and undaunted Warren Hastings. For twelve years this stern ruler maintained the prestige of the English name in India, though he had to face the fearful storm of the American war, which shook the foundations of the British empire in every part of the world. Not the least of his achievements was that he asserted his own will in every crisis against the strenuous opposition of his factious council, who, headed by Philip Francis—the virulent writer of the "Letters of Junius"—did their best to thwart every scheme that he took in hand.

Hastings began his rule by placing in English hands all the posts in the administration of justice and the collection of the taxes, which had hitherto been in the charge of natives. This led to increased revenue and pure law. But the Bengalis did not at first understand the methods of the new courts, which in some ways worked harshly enough. When Sir Elijah Impey, the first Chief Justice, hung for forgery the great Calcutta banker, Nandukumar (Nuncomar), they could only believe that he suffered because he had offended the Governor-General by intriguing with Francis and the other discontented members of council. Hence came a most unjust accusation against Hastings and Impey, of having committed a judicial murder.

The worst trouble which Hastings experienced was the continual cry for increased dividends with which the directors of the East India Company kept plaguing him. They were not particular as to the way in which money was to be earned, and the Governor-General sometimes tried strange expedients to satisfy them. The worst was the hiring out to Asaf-ud-Dowlah, the Nawab of Oude, of English troops for use in wars with his neighbours. By such aid that prince subdued the Rohillas, an Afghan tribe on his northern frontier. The only excuse that Hastings could plead for this undignified traffic was that the Rohillas were a race of plunderers and a public nuisance to Northern India (1774).

A little later an attempt to extend the English influence in Western India involved Hastings in a dangerous war. The Bombay government wished to acquire over its neighbours the Mahrattas the same sort of suzerainty which Madras exercised over the Nawab of the Carnatic, and Bengal over the Nawab of Oude. With this object a treaty was concluded with a prince named Raghonath Rao, who claimed to be Peishwa, or head of the Mahratta confederacy, by which he was to be lent troops, and to pay in return a large subsidy to the Company. But the other Mahratta chiefs, headed by Scindiah, the most powerful of their race, refused to acknowledge Raghonath, and attacked the Company. They utterly defeated the Bombay army, and the credit of the British arms was only saved by a daring experiment of Hastings, who made an English army march from Bengal right across Northern India. This force took Gwalior, Scindiah's capital, and overran the province of Gujarat. The Mahrattas made peace, ceding to Hastings the island of Salsette; but the attempt to make them into vassals had distinctly failed, and had to be postponed for twenty years.

But the greatest danger which Hastings had to face came from the outbreak of the war with France in 1778. It is true that his troops easily captured Pondicherry and the other French settlements, but they could not prevent their enemies from stirring up against them a very dangerous enemy. This was Haider Ali, a Mohammedan military adventurer who had built up an empire for himself in Southern India. He had usurped the throne of his master, the Rajah of Mysore, and had conquered all his neighbours by the aid of a great mercenary army of fanatical Mussulmans. While Hastings was still engaged in the dangerous Mahratta war, the French easily induced the ruler of Mysore to interfere in the struggle, for he coveted the rich dominions of our vassal, the Nawab of the Carnatic.

Haider Ali poured his hordes of predatory horse down from the plateau of Mysore into the Carnatic. They swept over the whole country, and burnt the villages at the very gates of Madras. Hastings, already involved in one war, and vexed by a French fleet under De Suffren which was hovering about, felt himself at his wits' end for troops and money to resist the 100,000 men whom Haider had sent against the southern presidency. To raise new resources he harshly fined Cheyte Singh, Rajah of Benares, a vassal prince who was slack in contributing to the war. For failing to give £50,000, the unfaithful rajah was mulcted in the sum of £500,000. When this was unpaid, Cheyte Singh was deposed from his throne. More funds were procured from our ally, the Nawab of Oude, in a not very reputable way. When Hastings asked him for aid, Asaf-ud-Dowlah answered that he was penniless at the moment, because his late father had illegally left the state-treasure to the Begums, his widow and mother. He asked permission from Hastings to extract the hoard from the old ladies, and did so by the cruel imprisonment and torture of their servants. Of course the Governor-General was not responsible for the Nawab's methods. But he profited by them: more than £1,000,000 was torn from the Begums, and served to pay the expenses of the Mysore war.

That struggle, which had begun under such unfavourable circumstances, was finally carried to a glorious end. The veteran Sir Eyre Coote, who had won the Carnatic at Wandewash twenty years before, now saved it by the victory of Porto Novo (July, 1781). Haider's multitudes were routed, and he was driven back into the hills. Next year he died, and the throne of Mysore fell to his son, Tippoo Sultan, a cruel and fanatical prince of talents very inferior to those of his father. After two years of war, Tippoo was constrained to make peace, and to cease from molesting the Carnatic (1784).

Hastings' work was now done; he had saved our Indian empire by his hard fighting with the Mahrattas and the rulers of Mysore, at a time when England, oppressed by war in Europe and America, could give him no aid. He had organized the administration, increased the revenue, and set justice on a firm basis. If some of his acts had been harsh, yet all should have been pardoned him when his difficulties were taken into consideration.

But when Hastings came home in 1785, hoping to receive the thanks of the nation and to be rewarded with a peerage, he was woefully undeceived. His enemy Francis had returned from India before him, and had laid before Fox and Burke, the leaders of the Whig opposition, all the doings of the last ten years painted in the darkest colours. He persuaded them that Hastings was a tyrant and a monster, and moreover that a damaging blow could be dealt to Pitt by impeaching the great governor. For if the prime minister defended him, as was likely, he might be accused of protecting guilt and malfeasance. The Whigs therefore demanded with loud cries the impeachment of Hastings; but Pitt—rather to their surprise—granted it. Then began the famous trial of the Governor-General before the House of Lords, which lasted fully six years. Accused of having judicially murdered Nandukumar, of having illegally sold British troops to the Nawab Asaf-ud-Dowlah, and of having cruelly oppressed Cheyte Singh and the Begums of Oude, Hastings was acquitted on every point. But the law expenses had ruined him, and the nation's indifference had soured him, so that he died an unhappy and disappointed man.

Hastings was succeeded as Governor-General by Lord Cornwallis, the victor of Camden and the vanquished of Yorktown. This honest and brave man was set the task of governing India under a new constitution. In 1784 Pitt had passed an "India Bill" not very unlike that of Fox. It gave the Crown the supreme power over the Company, making the Governor-General and the Board of Control in London nominees of the Crown. But the Company was still left its patronage, its monopoly of trade, and a certain undefined power over the Governor-General which led to much trouble in the future.

Cornwallis ruled British India for seven years (1786-1793), and, though he had gone out with no intention of engaging in wars or aggrandizing the Company's dominions, was driven by the force of circumstances into a policy which was practically identical with that of Warren Hastings.

The Sultan Tippoo of Mysore, always restless and quarrelsome, made war on all his neighbours, till at last, in 1789, he attacked the Rajah of Travancore, a vassal of the Company. Resolved to crush the Sultan, Cornwallis built up a great alliance with the Nizam, the Mohammedan ruler of the Hyderabad state, and with the chiefs of the Mahrattas. Standing at the head of this confederacy, the English appeared for the first time as asserting a predominance over the whole peninsula. Neither the Mahrattas nor the Nizam gave any very material aid towards the suppression of Tippoo, but Cornwallis proved able to accomplish it without their assistance. His first advance into Mysore was foiled by lack of provisions, but in the next year (1791) he forced his way into the heart of Tippoo's realm, beat him at the battle of Arikera, and then stormed the lines of Seringapatam, which covered the Sultan's capital. A few more days' fighting would have put it in the hands of Cornwallis; but when Tippoo humbled himself and asked for peace, he was spared. Nearly half his dominions were taken from him—part to be added to the Madras Presidency, part to be given to the Nizam and the Mahrattas. It was fortunate that Tippoo did not delay his attack on the allies for a few years; if he had waited a little longer, he would have found England deep in her struggle with the French Revolution. As it was, he was so crushed that he gave no trouble for eight years more.

Hardly less important than the Mysore war was Cornwallis's well-intentioned but ill-judged measure, the "Perpetual Settlement" of Bengal. This was a scheme for permanently fixing the land revenue of that province, by assessing a fair rent to be paid to the Company—as supreme lord of the soil—which should not vary from year to year, but remain for ever at the moderate figure at which it was now settled. But unfortunately Cornwallis did not make the bargain with the ryots, or peasants, the real owners of the land, but with the zemindars, a class of hereditary tax-collectors who were one of the legacies left to us by the old Mogul rulers of India. As the Government made its contract with the zemindar for the rent of each group of villages, and undertook never to ask more from him than a certain fixed amount, it became the interest of this tax-collecting class to screw up the contributions of the villagers to the highest point, as the whole profit went into their own pockets. The rack-renting led to a general strike among the peasantry, who agreed to withhold their rents, and to go to law with the zemindars en masse, knowing that they could choke the law-courts for years by sending in thousands of appeals at the same moment. The result of this conspiracy—much like one that was seen in Ireland only a few years ago—was to ruin most of the zemindars, who became liable for the land-tax to the Government, and could not raise it while the ryots were fighting them in the courts. In any other country than Bengal this crisis must have led to agrarian civil war, but the Bengalis preferred litigation to outrages, and affairs ultimately settled down. Later legislation has wisely taken note of the rights of the ryot as well as those of the zemindar, but the pledge of the "Perpetual Settlement" has never been broken, and to this day the lands of Bengal pay no more to the crown than the moderate assessment of 1793—a standing proof that the British Government keeps its word.

Cornwallis came home in 1794, to find England plunged in the greatest war that she has ever known—that with the French Revolution.