“At ten we went to breakfast with Salar Jung, a farewell visit. We had bargained to have no English with us, and the party consisted of himself, his brother, and his sister’s governess Mdlle. Gaignaud, of Seyd Huseyn Bilgrami, and of our two selves. We talked very freely of the political situation, which is this. In a few weeks the Nizam will come of age, and an attempt is going to be made by the Residency to get his signature to a treaty which, in renewing the alliance existing between the Nizam and the Government of India, contains an article abrogating all previous treaties, thus putting the Berar provinces permanently into English hands.”
The question of the Berars was this. Many years ago, before the time of old Salar Jung, the Hyderabad State was badly governed, and its finances became so involved that the Nizam was obliged to borrow several millions sterling from the Calcutta Government. The Government took in pledge for the debt the provinces in question, which were the richest he possessed, it being agreed that they should be administered by the Government of India until the loan was repaid. This arrangement naturally gave much employment to Englishmen and many highly paid posts to members of the Covenanted Civil Service, and it has consequently been their settled policy to make the resumption of the provinces by the Nizam impossible. In this view the provinces have been exceptionally well administered; the taxation has been light, and everything has been done to make the peasantry satisfied with English rule, so that they form a striking contrast with most parts of British India. It was never expected that the Nizam would be able to repay his debt, but, in case he could, the prosperity of the provinces would then, it was thought, be a reason for refusing. This is precisely what happened. Salar Jung, being a man of great ability, not only restored order in the Deccan, but brought the Hyderabad finances into so prosperous a condition that he was able to come forward with the borrowed millions in his hand, and claimed their repayment and the restitution of the provinces. It was for his insistence on this point that his persecution at the hands of the Imperial Government began, and was carried on relentlessly until his death. The claim, however, still remained, and could not be contested, as it was embodied in a public treaty between the two States, and advantage was being taken of the Nizam’s minority and the death of his powerful Minister to get it annulled.