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THREE:In the course of this commercial madness the imports greatly exceeded the exports, and there was consequently a rapid drain of specie from the country. The drain of bullion from the Bank of England was immense. In August, 1823, it had ��12,658,240, which in August, 1825, was reduced to ��3,634,320, and before the end of the year it ran as low as ��1,027,000. Between July, 1824, and August, 1825, twelve millions of cash were exported from Great Britain, chiefly to South America. During the Revolutionary war, which had lasted for fourteen years, the capital of the country had been completely exhausted, while all productive labour had been abandoned. The unworked mines were filled with water. They were accessible, it is true, to English speculators, but they were worked exclusively with English capital. The South American mining companies were so many conduits through which a rapid stream of gold flowed from Great Britain. The catastrophe that followed took the commercial world by surprise; even the Chancellor of the Exchequer failed to anticipate the disaster. On the contrary, his Budget of 1825 was based upon the most sanguine expectations for the future, and on the assurance that the public prosperity was the very reverse of what was ephemeral and peculiar, and that it arose from something inherent in the nation. Even at the prorogation of Parliament in July, the Royal Speech referred to the "great and growing" prosperity on which his Majesty had the happiness of congratulating the country at the beginning of the Session. The commercial crisis, however, with widespread ruin in its train, was fast coming upon Britain. Vast importations, intended to meet an undiminished demand at high prices, glutted all the markets, and caused prices to fall rapidly. Merchants sought accommodation from their bankers to meet pressing liabilities, that they might be enabled to hold over their goods till prices rallied. This accommodation the bankers were unable to afford, and sales were therefore effected at a ruinous loss. The South American mines, it was found, could not be worked at a profit, and they made no return for the twenty million pounds of British money which they had swallowed up. The effect was a sudden contraction of the currency, and a general stoppage of banking accommodation. The country banks, whose issues had risen to ��14,000,000, were run upon till their specie was exhausted, and many of them were obliged to stop payment. The Plymouth Bank was the first to fail, and in the next three weeks seventy banks followed in rapid succession. The London houses were besieged from morning to night by clamorous crowds, all demanding gold for their notes. Consternation spread through all classes. There was a universal pressure of creditors upon debtors, the banks that survived being themselves upon the edge of the precipice; and the Bank of England itself, pushed to the last extremity, peremptorily refused accommodation even to their best customers. Persons worth one hundred thousand pounds could not command one hundred pounds; money seemed to have taken to itself wings and fled away, reducing a state of society in the highest degree artificial almost to the condition of primitive barbarism, which led Mr. Huskisson to exclaim, "We were within twenty-four hours of barter."

THREE:After these victories an armistice was agreed upon, as a preliminary to negotiations. The result was submission on the part of the Mahrattas, and the occupation of Gwalior by British troops. The Governor-General then imposed the terms of peace, which did not include the seizure of any territory, but consisted solely in the usurpation of[595] sovereignty. The Mahrattas were compelled to disband their army and abolish their government. The supreme authority was lodged in a Council of men devoted to the East India Company, whose President was to receive his instructions from the British Resident. A new army was organised as a contingent, which was to be at the service of the Indian Government when required. Until the majority of the reigning Prince, the administrators of the Government were to act on the British Resident's advice, not only generally or in important points, but in all matters wherein such advice should be offered.For the reasons here stated, early in the summer a powerful fleet was fitted out with the utmost dispatch and secrecy by the new Ministry, and sent to the Baltic. The fleet consisted of twenty-five sail of the line, more than forty frigates, sloops, bomb-vessels, and gun-brigs, with three hundred and seventy-seven transports to convey over twenty-seven thousand troops from Stralsund, a great part of which were Germans in British pay. Admiral Gambier commanded the fleet, and Lord Cathcart the army, having second in command Sir Arthur Wellesley. On the 1st of August the British fleet was off the entrance of Gothenburg, and Admiral Gambier sent Commodore Keats into the Great Belt to cut off any passage from Holstein for the defence of Copenhagen. Admiral Gambier himself entered the Sound, passed the castles without any attack from them, and anchored in Elsinore Roads. By the 9th of August the whole fleet and the transports were collected there, and Mr. Jackson, who had been many years British envoy in the north of Germany, and knew most of the Danish Ministers, was dispatched to Kiel, in Holstein, where the Crown Prince lay with an army of from twenty[541] thousand to thirty thousand men, to endeavour to induce him to enter into an alliance with Great Britain, and to deliver the fleet to its keeping till the peace, stating the necessity that the British commanders would otherwise be under of taking possession of it by force. The Crown Prince, though the British had made it impossible to cross over and defend the fleet, received the overture with the utmost indignation. Mr. Jackson returned to Admiral Gambier, and the Crown Prince sent a messenger to order Copenhagen to be put into a state of defence. But there was scarcely a gun upon the walls, and the population only numbered, excluding the sailors, some thirteen thousand men, inclusive of five thousand five hundred volunteers and militia. On the 17th several Danish gunboats came out of the harbour, fired at some of our transports coming from Stralsund, burnt an English vessel, and attacked the pickets of Lord Cathcart's army. These vessels were driven back again by bombshells, and that evening Admiral Gambier took up a nearer station north-east of the Crown battery, the Trekroner. He then proceeded to surround the whole of the island of Zealand, on which Copenhagen stands, with our vessels. The division of the army landed at Wedbeck having now marched up, was joined by other divisions, and proceeded to entrench themselves in the suburbs of Copenhagen. They were attacked by the gunboats, but, on the 27th, they had covered themselves by a good battery, and they then turned their cannon on the gunboats, and soon compelled them to draw off. On the 29th Sir Arthur Wellesley marched to Ki?ge, against a body of Danish troops that had strongly fortified themselves there in order to assail the besiegers, and he quickly routed them. The Danish troops then made several dashing sorties from Copenhagen, while their gunboats and floating batteries attacked our advanced vessels, and managed, by a ball from the Trekroner, to blow up one of our transports. The French had now arrived at Stralsund, and Keats was sent to blockade that port, to hinder them from crossing over into Zealand; nothing but the extreme rapidity of the movements of the British prevented a powerful army of French from being already in Copenhagen for its defence.

THREE:Napoleon now called up his auxiliary forces from Saxony, Würtemberg, Bavaria, and from all the Confederation of the Rhine, as well as new battalions from France, and advanced against the Russians. In the first place, the French, who had completed the subjugation of the Prussian states east of the Oder, pushed forward towards Poland, to attack the Russian general, Benningsen, who advanced to Warsaw, and occupied it in conjunction with the Prussians. Benningsen, however, finding the Prussians few and dispirited, fell back beyond the Vistula, and Murat, at the head of the French vanguard, entered Warsaw on the 28th of November. He was soon after joined there by Buonaparte, and Warsaw being put into a state of defence, the French army advanced to the Vistula and the Bug, in spite of the lateness of the season. Benningsen again retreated behind the Wkra, where he united his forces with those of Generals Buxhowden and Kaminskoi. Kaminskoi took the supreme command. When Napoleon arrived at the Wkra on the 23rd of December, he formed his army into three divisions, and forced the passages of the river. Kaminskoi fell back behind the Niemen, and the French pursued him, committing some injury on him. This trifling advantage Napoleon converted, in his bulletins to Paris, into the rout and general defeat of the Russians. It was true that the Russians were destitute of stores, having applied to Britain for money, and obtained only eighty thousand pounds. They fought, therefore, under great disadvantages, against an army furnished with everything. Notwithstanding, Benningsen, who was by far the most vigorous of their generals��for Kaminskoi was fast falling into lunacy��posted himself strongly behind Pultusk, his right led by Barclay de Tolly, and his left by Ostermann. Kaminskoi ordered Benningsen to retreat, but he refused, and stood his ground. At first Tolly was driven back by Lannes and Davoust, but Benningsen converted this disadvantage into a ruse, ordering Tolly to continue his retreat, till the French were drawn on, so that he could bring down his left wing on them. This he did with such effect that he killed and wounded nearly eight thousand of them, having, however, himself five thousand killed and wounded. Lannes and five other generals were amongst the wounded. The French seized the opportunity of darkness to retreat with such speed, that the next morning not a trace of them could be seen near Pultusk. Prince Galitzin fought another division of the French the same day at Golynim, and with the same success. Had Benningsen had the chief command, and brought down the whole united Russian army on Napoleon, the victory must have been most decisive; as it was, it taught the French that they had different troops to Prussians or Austrians to contend with. They drew off, and went into winter quarters at Warsaw and the towns to the eastward. The chief command of the Russian army was now conferred on Benningsen, and so far from Buonaparte having, as he boasted, brought the war to a close with the year, we shall find Benningsen, at the head of ninety thousand men, soon forcing him into a winter campaign.

THREE: