"I think that no one responsible for the financial administration of this Empire would at present venture to make the smallest reduction in any of its limited sources of income. Let me, however, take this opportunity of assuring you that, so far as I am aware, the abolition or reduction of the Cotton Duties, at the cost of adding one sixpence to the taxation of this country, has never been advocated, or even contemplated by her Majesty's Secretary of State for India.... It is due to myself, and the confidence you express in my character, that I should also assure you, on my own behalf, that nothing will ever induce me to tax the people of India for any exclusive benefit to their English fellow-subjects." A short time previously he had told the Bombay Chamber of Commerce that "he was of opinion that, with the exception of about forty thousand pounds sterling, the duties were not protective, because Manchester had no Indian competitors in finer manufactures. He thought the £800,000 collected yearly as duty, on finer fabrics, a fair item of revenue. With regard to the duty on coarse goods, he thought it protective, because Bombay mills competed with Manchester; but he did not see how it could be abolished, because it would lead to irregularities in order to evade duty." These assurances were given in 1876. In 1879, when the finances of India were in a state of almost hopeless embarrassment--when the Famine Insurance Fund had been misappropriated in the way I have related--when the Indian Government frankly acknowledged that it was beyond their power to estimate their future expenditure, even approximately, the Indian Government deliberately sacrificed revenue to the amount of £200,000 derived from this source. The motives which persuaded them to this sacrifice may have been as pure as driven snow; but with Lord Lytton's assurances fresh in their memories, I need not say that their motives were not so interpreted by those in India. There the explanation given was this:--The war in Afghanistan, from which so much had been expected, had resulted, not in success, but ignominious failure. The Government had been compelled to patch up a peace without a single element of permanence in it. Despite of the choral odes which Ministers sang together on the occasion of this peace, it was impossible that they could have been wholly blind to the real character of the Treaty of Gundamuck. They felt that discovery could not be long delayed, and, like the steward who had wasted his master's goods, they hastened to make themselves friends of the mammon of unrighteousness. While, therefore, the war was still nominally unfinished, they sought to propitiate Manchester by throwing its merchants this sop of £200,000. Like Canning's famous policy of calling on the New World to redress the balance of the Old, the prestige of Imperialism, damaged by the failure in Afghanistan, was to