The Peshwa, alarmed by the news of his army's situation in the north, was moving up from the Dekhan, and had reached the Nerbada river. There his scouts brought to him a runner who was carrying a letter from some bankers at Pâniput to their correspondents in the south. He opened it and read-'Two pearls1 have been dissolved, twenty-seven gold mohurs lost, of the silver and copper the total cannot be reckoned'-an enigmatic message that told him of an immense political, military, and family catastrophe. He never recovered from the shock, which destroyed the baseless fabric of Maratha domination in northern India. They might plunder towns, levy contributions, and even occupy some of the provinces for a time; but the fate of empires is decided by pitched battles, and in close lists the southcountry freebooters would always go down before the hardier races of the north-west.

Such a decisive victory has usually been followed in Asia by the rise of a new dynasty and the establishment of an extensive dominion. Yet although the Marathas were clean swept out of northern India for the time, and although Ahmed Shah represented precisely the type of those Asiatic conquerors who had hitherto founded imperial houses at Delhi or Agra, it is a remarkable fact that the results of Pániput were quite disproportionate to the magnitude of the exploit. If Ahmed Shah had consolidated in the Punjab a powerful kingdom resting on Afghanistan beyond the Indus, and stretching southward down to Delhi and the Ganges, the history of India, and the fortunes of the English in that country, might have been very different. But his troops, laden with booty, insisted on retiring to their highlands; his western provinces

1 His son and cousin.

on the Persian frontier were exposed to invasion and revolt; and so north India gradually slipped out of his grasp. The Punjab relapsed into confusion for the next forty years, until it was temporarily consolidated under the kingdom of Ranjit Singh. Some inroads were made, subsequently to Ahmed Shah's retirement, into India from Afghanistan; but Ahmed . Shah's withdrawal practically closed the long line of conquering invaders from central Asia, at a time very nearly simultaneous with the establishment in Bengal of the first conquerors that entered India by the sea.

CHAPTER IX

THE MARATHAS AND MYSORE (1765-1770)

SECTION I. Lord Clive's policy in Bengal (1765–1767).

To return to the affairs of the East India Company. The Marathas, in spite of their overthrow at Pániput, were still the most active and dangerous of the native powers in India; but since they embodied the principles of insatiable aggression and of irreconcilable hostility to Mahomedan predominance, the universal dread of their predatory incursions united all other chiefs and princes, especially the Mahomedans, against them. The result was advantageous to the English, for it drew towards them those who drew away from the Marathas. The Vizier of Oudh, who had now become the leading Mahomedan prince in upper India, and who had been again repulsed in a second attempt upon Bengal in 1765, now showed himself very willing to conclude an alliance with the Company. Lord Clive, a statesman no less than a soldier, whose despatches show admirable foresight and solidity of judgment, had returned to India in 1765 vested with plenary authority to reform the internal administration and to make peace abroad. He found the springs of government clogged by indiscipline and corruption; he suppressed resolutely the most glaring abuses; he reconstructed the administration with remarkable ability; and by two

cardinal acts of public policy he settled the English dominion on a sure foundation within our territory and regulated our foreign relations.

The first of these acts was his acceptance for the Company of the Diwáni, which was readily granted by the Emperor on the terms of payment to himself of 26 lakhs of rupees annually from the Bengal revenues, and the assignment to him of two districts beyond the Ganges. The Company having thus acquired possession of the whole revenue of the provinces, were at once transformed from irresponsible chiefs of an armed trading association into responsible administrators, with a direct interest in abolishing the peculation, scandalous frauds, and embezzlement that were rife in the country. The measure also put an end to the incessant disputes between the nominal government of the titular Nawab of Bengal and the actual authority of the Company. 'The time now approaches,' wrote Clive, 'when we may be able to determine whether our remaining as merchants, subjected to the jurisdiction, encroachments, and insults of the Country Government, or the supporting your privileges and possessions by the sword, are likely to prove more beneficial to the Company,'-in other words, whether the Company should openly take up an attitude of independent authority. And he decided, rightly, that nothing else would give them a stable or legitimate position. They could not continue to maintain themselves by pulling the strings of native government, or by revolutionary methods whenever the machinery broke down; and as they could not abdicate power they were bound to take charge of its direction.

The second of Clive's measures was the conclusion of the alliance with Oudh. The war of 1764-65 had been disastrous to the Vizier, for his strong fortress

of Allahabad had been taken by the English troops, who had also compelled him to withdraw from his capital Lucknow; and he had taken refuge with the Marathas. It now lay with the Company to choose between annexing, by right of conquest, some of his important districts situated on their north-western frontier, or attaching the Vizier to their interests by reinstating him in this tract of country, which he held by a very dubious title, and from which he might have been easily ousted. Lord Clive adopted without hesitation the latter alternative; he restored the districts to Oudh upon the grounds that every motive of sound policy weighed against extending the territorial possessions of the Company. This decision, he found, 'disappointed the expectations of many, who thought of nothing but a march with the emperor to Delhi. My resolution however was, and my hopes will be, to confine our assistance, our conquest, and our possessions to Bengal, Behár and Orissa. To go further is in my opinion a scheme so extravagantly ambitious and absurd, that no Governor and Council in their senses can adopt it, unless the whole system of the Company's interest be first entirely new re-modelled '' He therefore decided to maintain and strengthen Oudh as a friendly State interposed between Bengal and northern India. And the barrier-treaty 2 framed upon this principle by Lord Clive constituted the basis of our foreign policy upon that frontier up to the end of the century.

It should be understood that the prime object of those who at this critical epoch directed the affairs of the English in India, was to place a limit upon the expansion of the Company's possessions, to put a sharp curb upon schemes of conquest, and to avoid any con1 Committee Reports, 393, vol. iii. 2 August, 1765.