a body of convicts were to be sent immediately to improve it. This portion, therefore, only required improving, and from the time when the Madras Government wrote this despatch, which could not have been later than May 1861, four working months were available to the end of the year. Every probability existed, therefore, that this portion would be ready.

6. As to the third portion, it is stated that a fair-weather road is now being made along the whole distance from Iddagunjee to Sedashegur; that "1,05,330 rupees had been sanctioned; that orders had been given that the engineer should be supplied with funds as fast as he could employ them advantageously; and that the Government promise that no exertion should be spared to have the road throughout completed as early as possible, but this, they add, cannot be this year." The information thus conveyed to the Directors by this letter of 7th June was not calculated to, nor did it materially, alter their opinion on the subject of the road being ready in time for the next cotton season; for as to these three divisions of the road, the first was promised to be ready, the second would in all probability be ready, and the third, though not completed by the end of the year, was evidently expected to be ready soon afterwards, and was undoubtedly expected to be ready in time for operating upon the cotton of that season. That the opinion of the Directors, as to the road being ready in time for their operations, was not materially affected by this letter may be thus proved.

7. Dr. Forbes was at that time in constant communication with the Directors, as well as with the Government, and he always held out the fullest expectations of the road and pier being ready by the end of 1861, a little sooner or later; for it could not have been a question of a day or a week, or even one or two months, as Sir Charles Wood now somewhat unfairly implies by insisting upon the mere letter of his promises.

8. Dr. Forbes was present at the drawing up of the instructions under which Mr. Haywood proceeded to India. In these instructions it is stated that cotton cleaning machinery, presses, &c., should be sent out to Sedashegur, in order that they might be erected in time for cleaning cotton in February 1862; and it was originally arranged under Dr. Forbes' advice, just before he left England, that the vessel should reach Sedashegur about the end of December 1861. Circumstances however prevented the arrival of the vessel before the month of May 1862. That Dr. Forbes was cognizant of these arrangements is proved by the following extract from a letter addressed by him to the Directors, dated 25th June 1861, three weeks after the reception of the letter to the Cotton Supply Association, quoted by Sir Charles Wood. He wrote thus: "It is now close upon July (1861); if the machinery arrives in January next, a month would still be available for setting it to work. The intervening seven months could be employed in providing the buildings, &c., necessary for its reception, and everything should be organized, as far as possible, to commence operations in March next."

9. Dr. Forbes Watson, also, in a letter dated 25th June 1861, addressed to the Chairman of the Board, says: "There is time even this season to do a great deal. The position of the several cleaning and packing depôts should be settled, and the buildings should be ready for the reception of the power and other gins, and the necessary presses, by the end of February or early in March."

10. Dr. Forbes was made acquainted with the contents of the letter of 7th June 1861, quoted by Sir Charles Wood to prove "that no promise was made of a road or pier to be ready by the end of 1861," and although that letter stated that the road would not be ready by the end of 1861, still Dr. Forbes, it is evident, attached very little importance to it, as evidenced by his wishing our machinery to be in India in time to be erected by February or March 1862. Moreover, in June 1861, Dr. Forbes informed the Directors, and Sir Charles Wood subsequently confirms his statement, that the Madras Government had been instructed to hand over to the Bombay Government the District of North Cauara. Dr. Forbes at the same time stated to the Directors that the works in progress upon the road and pier would be greatly accelerated by the transfer to Bombay; and most distinctly, as has been shown from his letter, confirmed the Directors in their belief that both pier and road would be ready in time for the arrival of the machinery. In proof of this statement the Directors refer to the following passage of Mr. Haywood's printed letter, dated Coompta, 18th October 1861: “Dr. Forbes says, that if the line of road were in the hands of the Bombay Government he could answer for the completion of the road in time for the next cotton season." Dr. Forbes was in constant communication and correspondence, not only with the India House, but also with the Government authorities and officers in India, and his advice and information were regarded by the Directors as reliable and official. But the letter of 7th June, quoted by Sir Charles Wood, although speaking of the road never refers to the pier, and it was but reasonable for the Directors to believe that whatever might be the position of the road, the pier at least would be ready for unloading the machinery by the end of 1861. No information whatever was conveyed to the Directors to the contrary by Sir Charles Wood.

11. It may be said that Sir Charles Wood cannot be held responsible for any statements of Dr. Forbes. This the Directors cannot admit, as Dr. Forbes was unquestionably the accredited and recognised medium of communication in all the negotiations then in progress between them and the India Office, and, if not, the Directors were all along greatly deceived.

12. On every fair and reasonable ground the Directors still maintain that the Indian Government promised that the pier and road should be ready by the end of 1861.

13. Sir Charles Wood, referring to the fact of Mr. Haywood's arrival in Bombay at the end of August 1861, states, "that with respect to the progress of the works in connexion with the port of Beitcul, the Company from that time had ample means of knowledge through their own agent."

14. The Directors are satisfied that they were kept fully informed as to the progress of the work, so far as information was available; and that Mr. Haywood freely communicated with the local Governments of India, and the officers of the Public Works Department as to the progress of works, is plain from the following evidence :

15. On the 14th October 1861, Mr. Haywood forwarded to the Government of Bombay the following letter:

"Sir, Sedashegur, 14 October 1861. "I have the honour to inform you that, in conformity with the instructions of my constituents in Manchester, I have to-day had an interview at this place with the Honourable Mr. Frere, and have inquired of him whether he is now in a position to assign to me a suitable site of land for the purposes of the Manchester Cotton Company at this harbour. "Before leaving England, in an interview with the Secretary of State for India, I was informed that on my arrival in Bombay I should find that the question of the transfer of that part of North Canara, which includes this port and also the road leading from it into the cotton districts of Dharwar, would be settled; and, moreover, that the Governor of Bombay would be in a position to grant to me, on behalf of the Manchester Cotton Company, such a site of land as I should require.

"I regret now to have to state that Mr. Frere, after an interview with the Governor of Madras, has informed me that the Bombay Government is not in a position to place such land at my disposal, in consequence of the transfer of the port, and the country in its vicinity, not having been agreed to by the Madras Government.

"I am now waiting the arrival of a large consignment of machinery, already on its way here, from the Manchester Cotton Company; and unless the Government of Bombay can speedily be put in a position to fulfil the conditions made by Sir Charles Wood, and on the faith of which our enterprise was undertaken, I fear that, as my stay in India is limited, I may have instructions to send back to England the machinery and engineering establishment accompanying it, and return home without having accomplished one of the principal objects of my mission, to the serious loss and dissatisfaction of the cotton trade of Lancashire.

"Under these circumstances, I beg respectfully to request, should his Excellency the Governor think proper to do so, that this representation be submitted to the consideration of the Supreme Government in India, as I believe that the Governor General is already fully empowered to place the Bombay Government in a position to put me in possession of such land as I may require to lease or purchase.

"I make this request in order to obviate the delay which a reference to England must

entail.

"I have, &c.
"G. R. Haywood."

16. In his letter from Coompta of the 18th October 1861, he gives an account of his interviews at Sedashegur with Sir William Denison and Mr., now the Honourable Mr. Frere, of the Bombay Government. He also refers to his interview with Captain Fraser, who was there, and had surveyed the harbour.

17. From Dharwar he wrote that he had seen Captain Playfair, who furnished him with information as to the state of the road in progress through the Dharwar district to the Madras frontier, and that information was received by the Directors. He also reported from Dharwar the progress being made by Captain Walker with his portion of the road from the Bombay frontier to Sedashegur.

18. On Mr. Haywood's return from an inspection of the Dharwar cotton districts he reported (20th December 1861) information he had obtained from Captain Baker as to his own progress and that of other officers employed upon the line of road. On his way down the Kyga Ghat to Sedashegur, Mr. Haywood spent many hours with the engineer in charge of the ghaut road, and the information he then obtained was communicated to the Directors. On reaching Sedashegur on the 24th December, Mr. Haywood had several conversations with Captain Walker, the Chief Engineer for North Canara. On his arrival in Bombay, 9th January 1862, he reported that " he had waited upon his Excellency Sir George Clerk, and given him, at his request, a statement (verbal) of my views and experience in passing through the Dharwar districts. I informed him of the state of the road, and generally gave him the information now communicated to you. He states that he will do all in his power to get the road open speedily, and that he has already sent officers down to inspect and push on the works. He wishes me also to have an interview with Colonel Turner, who is at the head of the Engineers' Department, that I may advise with him as to what is needed to be done." Mr. Haywood waited upon Colonel Turner in accordance with this request. 19. It now appears from your letter that no less than four changes have been made in the decisions of the Public Works Department in reference to the site of the pier or wharf

which was originally intended and promised for the unloading of the Company's vessels, and that the accommodation about to be afforded will be available one year and a half later than the time originally promised.

20. Sir Charles Wood further states "that the Directors do not themselves appear to have relied on the assistance of a pier to disembark their machinery."

21. In reply to this statement, the Directors have to remark that they sent out with the Seringa patam" the necessary means for unloading and of landing the machinery from that vessel, as a precautionary measure, having been informed by their agent, on his arrival at Beitcul in October 1861, that "the site of the pier had not been determined." Mr. Haywood, on reaching Sedashegur, informed the Directors by letter, 18th October 1861, that the pier had not been begun. The Directors received this information a month or five weeks afterwards; by that time the machinery was nearly on board their vessel, their charterparty had been signed, and it was impossible for them to detain her. They were, therefore, compelled to rely upon their agent making the necessary arrangements for unloading her, and they wrote to their agent accordingly.

22. Sir Charles Wood is rightly informed that the Company's agent was compelled to unload under Carwar Head, on the side of the bay opposite to the Company's premises, on account of the approach of the monsoon; but this was entirely owing to the absence of the pier promised to be provided by the Government. With such a pier the vessel would have been speedily unloaded, and Sir Charles Wood has therefore been erroneously informed as to the necessity of landing under Carwar Head, owing to "the late despatch of the Company's vessel." For this the Government and not the Company is most distinctly responsible, through the non-fulfilment of its promises.

23. Sir Charles Wood says that he cannot conceal his astonishment at the following statement of the Directors, that " had the Company been in a position to purchase and cart cotton to Beitcul for pressing and shipment at the time originally arranged for with the Government, it is impossible to estimate the profit which might have accrued to the Company from its purchasing, cleaning, and pressing operations. All this, the Directors add, is a clear loss to the Company."

24. Upon which Sir Charles Wood remarks that "as the "Seringapatam' reached Beitcul only on the 6th of May 1862, it would have been impossible for the presses to have been set to work during the fair season of that year," and in corroboration, quotes the following extract from one of Mr. Haywood's letters to the Directors, dated Bombay, 11th February 1862. "I learn that there is no probability of the Seringapatam 'arriving under four months. This will bring her to Sedashegur about the middle of April, as she left, according to your letter, about the 10th or 12th of December. The rains commence about the 10th of June, so that we have only two months, or thereabouts, for unloading and erecting the buildings before the rains set in. It is evident, therefore, that no actual work can be done this season."

25. In reply, the Directors not only repeat their statement, but substantiate it on the following grounds, viz.: had the pier as promised been ready by the end of 1861, and had the road from Beitcul to Dharwar been completed even four months after the end of 1861, an entirely different phase would have been thrown over the position of the Company at home, and of its agents in India. With facilities of unloading in view, the Company's agent could have employed the time, labour, and material lost (as has been shown) upon preparing foundations for the buildings and presses, and these could have been so advanced as to have enabled the Company to be in a position for work by the beginning of October last; for this they have the assertion of Dr. Forbes himself. Had the road been ready, the cleaning machinery intended for the cotton districts could have been despatched up country, together with the workmen, who were sent out expressly for its erection before the monsoon set in, and during the monsoon they could have set the machinery in working order.

26. The erection of the presses and necessary buildings would have been proceeded with, and the Company at once placed in a position to enter fairly upon a profitable business, arising from the working of their machinery and other operations.

27. The statement of Dr. Forbes, that "when he left home with Mr. Haywood it was on the distinct understanding that full powers had been conferred upon that gentleman to act for the Company with respect to the purchase of cotton, with the command of ample funds for all these purposes." The Directors beg to quote the following extracts from Dr. Forbes' letter to the Directors, of 25th June 1861, a fortnight prior to his leaving England :—“ I have learned from very good authority in London that orders have been sent out to India for the purchase of cotton to a very large extent, and also that merchants are preparing to buy in the Dharwar districts to a very considerable figure, so largely indeed that it is very doubtful whether it would be prudent on the part of the Directors to do more than make one or two experimental purchases of moderate amount."

28. It was never intended by the Company to send cotton by way of Coompta as other merchants, such cotton being always liable to adulteration and under the necessity of being sent to Bombay for pressing.

29. The main object of the Company from the outset having been, as Dr. Forbes well knew and advised, to send home such cotton from the port of Sedashegur, cleaned and

pressed by the Company's machinery, as it was always intended by this process to demonstrate to the trade of Lancashire that India could furnish cotton of such quality and in such condition as would compete with that of America. The absence of both pier and road has so far totally defeated this intention.

30. The allegations of your letter have now been successively and fully replied to, and the Directors repeat their claim for compensation on the grounds stated in their former

letter.

T. G. Baring, Esq., M.P., Under Secretary of State for India.

I have, &c.

(signed) Hugh Mason, Chairman.

To Hugh Mason, Esq.

Sir,

India Office, 22 May 1863. 1. I AM directed by Sir Charles Wood to acknowledge the receipt of your letter of the 23d of March, and to inform you that it has received his careful consideration in Council. 2. The Directors of the Manchester Cotton Company (Limited), repeat their original statement, that the communication to them on the 12th of April 1861, of the intentions of the Madras Government with respect to the probable date of the completion of the works. in connexion with the port of Beitcul" conveyed by Sir Charles Wood to the Directors a clear and positive promise as to a definite time by which the pier and the road would be ready."

3. On this point Sir Charles Wood can only repeat that the communication of the intentions of the Madras Government could not constitute a promise on the part of the Secretary of State as to the time when the road and pier would be ready. He gave to the Directors the only information of which he was in possession, and he had no other means of forming an opinion. The Directors admit that within two months, namely, on the 7th of June 1861, they were informed that the Government of Madras did not expect that the road would be completed by the time mentioned in the letter of the 12th of April, but they state that their expectations were not materially modified by that information. They appeal to the opinion of Dr. Forbes as to the date at which the works would be finished, and contend that the Secretary of State is responsible for that opinion, because Dr. Forbes "was unquestionably the accredited and recognised medium of communication in all the negotiations then in progress between them and the India Office."

4. Sir Charles Wood is not aware what opinions or information Dr. Forbes gave to the Company, but that gentleman certainly was not the accredited and recognised agent of the Secretary of State in the communications with the Company. The nature of his connexion with the Company is clear, from a correspondence which commenced with an urgent request, addressed to the Secretary of State by order of the Directors, in the following

terms:

"Sir,

"Manchester Cotton Company (Limited), 1 Newall's Buildings, Manchester, 20 February 1861.

"A Company has been formed in Manchester styled the Manchester Cotton Company (Limited), having for its object the purchase of cotton in India and other countries. From the very valuable information obtained through Dr. Forbes, the acting Directors of this Company have determined to establish an agency in the cotton-growing district of Dharwar. It has been resolved, as a preliminary measure, to send out a representative of the Company, to make the necessary local arrangements for commencing their operations. In taking this step, the acting Directors feel that the advice and co-operation of Dr. Forbes on the spot is a matter of essential importance to the success of the project. The Directors, therefore, respectfully request that the Right honourable the Secretary of State for India will be pleased to place the services of Dr. Forbes temporarily at the disposal of the Company, to aid their representative during his stay in India (which may extend over a few months), in carrying out the objects of his mission. As the representative of the Company will leave England in the same steamer with Dr. Forbes, the acting directors will feel greatly obliged by as early a reply as convenient to this communication.

"To the Right Honourable

Sir Charles Wood, Bart., M.P."

"I have, &c.

(signed) G. R. Haywood, Secretary."

5. To this letter Mr. Merivale replied on the 25th of February: "I have to acquaint you that Sir Charles Wood will be happy to authorise Dr. Forbes to render to the representative of the Company any assistance which he may be able to afford, consistently with the due discharge of the duties of the office which he now holds. A copy of this letter will be furnished to Dr. Forbes."

6. The office which he held was not any office in this country, but that of superintendent of the cotton gin factory at Dharwar; and the inference from this correspondence is, that he was, as regards the matter in question, rather attached to the service of the Company than to that of the Secretary of State.

7. But further, there were no negotiations between the Government and the Company which required the services of an agent. The Directors addressed their requests for information directly to the India Office, in the usual manner, and received answers to them direct from the India Office; and, in reference to the time for the completion of the road, they did receive direct from the Secretary of State within two months after the communication of April, and five months before their first vessel was dispatched, information that the road would not be ready by the time mentioned in the communication of April. If they neglected that information, the Secretary of State clearly cannot be held responsible for any consequences which may have occurred, and the Directors cannot complain that they were misled by any previous communication from him.

8. With reference to the further question whether the Directors are justified in asserting that the Company have sustained serious losses, in consequence of the delay which has occurred in completing the works at Beitcul, I am to make the following observations.

9. As to the expense incurred for the trans-shipment of the machinery, the Directors admit that it was unloaded on the side of the Bay opposite to the Company's premises on account of the approach of the monsoon; but they say that this was entirely owing to the absence of the pier promised to be provided by the Government. Sir C. Wood is informed, on the contrary, that if proper preparations for the shelter of the machinery had been made on the Company's premises, it might easily have been landed there; and I am also to observe that the pier was not intended for the purpose of unloading the cargo of machinery which the Company proposed to dispatch. The object of constructing a pier was to facilitate the shipment of cotton from the port of Beitcul, and so far from any expectation having been held out to the Company's agent that a pier would be constructed on the land which he purchased for the Company, Sir William Denison distinctly states that Mr. Haywood was perfectly aware when he selected the site that no such pier was intended to be built there.

10. The Directors state that if the road to Beitcul had been ready, the cleaning machinery intended for the cotton districts would have been dispatched up country before the monsoon of 1862 set in. Sir Charles Wood is informed that the machinery having arrived in the month of May 1862, that is at the very beginning of the monsoon, could not possibly have been moved until the fair season had opened the roads for traffic.

11. The Directors having complained that losses had been incurred by the Company in consequence of their not having been able to "purchase and cart cotton to Beitcul," I was directed to acquaint you that Sir Charles Wood had been informed by Dr. Forbes that the Company's agent had no authority to purchase cotton, and in fact declined to do so when a favourable opportunity offered. It now appears that the original intention of the Company to purchase cotton, was abandoned before Mr. Haywood left England, and therefore Sir Charles Wood cannot understand how the Company can complain of losses and prefer a claim for compensation on the ground that they were prevented by the act of Governinent from pursuing operations which they had themselves determined to abandon.

12. I am directed, in conclusion, to acquaint you that the Secretary of State in Council adheres to the decision communicated to you in my letter of the 19th February last, that the claim for compensation in the amount of 20,000 7. advanced by the Directors of the Manchester Cotton Company (Limited) cannot be admitted.