In his statements the chancellor of the exchequer took a cheerful view of the commercial prospects of the country; and he referred to the increase of exports for the present year over those of 1838 as a symptom of returning prosperity. So confident was he of a return of prosperity, that he proposed to reduce the rates of postage. At this time there was a committee sitting on the post-office acts; and Mr. Rice moved this resolution:—“That it is expedient to reduce the postage charged on letters to the uniform rate of one penny, for every letter of a weight to be hereafter fixed by law; parliamentary privileges of franking being abolished, and official franking strictly regulated. This house pledges itself at the same time to make good any deficiency of revenue which may be occasioned by such an alteration in the rates of the existing duties.” In moving this resolution the chancellor of the exchequer said that he proposed a penny rate, because he had been convinced by the arguments and evidence of the committee that the latter expedient would involve less loss to the revenue than a twopenny postage, which had been recommended by the committee. After some observations from Mr. Goulburn and Sir Kobert Peel, both of whom intimated further hostility to such a change, the resolution was agreed to without a division. On the 12th of July, when the order of the day was read for receiving the report of a committee on the postage-acts, Mr. Goulburn rose for the purpose of proposing a series of resolutions to be substituted for the report. These resolutions were:—“That with a deficiency of revenue during the three years ending on the 5th day of April, 1840, of not less than £8,860,987, it is not expedient to adopt any measure for reducing the rates of postage on inland letters to an uniform rate of one penny, thereby incurring the risk of a great present loss to the revenue, at a period of the session so advanced, that it is scarcely possible to give to the details of such a measure, and to the important financial considerations connected with it, that deliberate attention which they ought to receive from parliament.” This amendment was opposed by the chancellor of the exchequer, and supported by Sir Kobert Peel. After a few words from Messrs. P. Thomson and Warburton in favour of the proposition, the original question was carried by a majority of two hundred and fifteen against one hundred and thirteen. The report was then brought up and read; and on the question that the resolution agreed to by the committee be read a second time, Sir R. Peel moved an amendment to omit such part of the resolution as pledged the house to supply any deficiency of the revenue occasioned by the reduction. This amendment, however, was rejected, and the report agreed to; and on the 18th of July Mr. S. Rice brought in a bill, intituled, “An act for the further regulation of the duties on postage until the 5th day of October, 1840.” This bill was read a second time without a division, and by the 29th of July it passed the commons.

The second reading was moved by Lord Melbourne in the house of lords on the 5th of August; on which occasion the Duke of Wellington criticised the manner and circumstances under which it had been brought forward in the face of a deficiency of more than one million, which, considering the state of our affairs both at home and abroad, was likely to be greatly augmented by the 5th day of October, 1840. At the same time the noble duke said that he would vote for the bill, and would recommend their lordships to follow his example. Several other noble lords addressed the house, chiefly in favour of the measure; and the bill was then read a second time, and subsequently became law without further opposition.

In his remarks on the postage-bill the Duke of Wellington recommended ministers to reduce the amount of the floating debt, under the pressure of which the market had been labouring, by funding exchequer-bills. Apparently acting upon this suggestion, on the 12th of August Viscount Melbourne and the chancellor of the exchequer made public their determination, subject to the approval of parliament, to effect the funding of four millions of exchequer-bills in the three per cent, consolidated annuities. This arrangement was effected on the 17th.

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PROROGATION OF PARLIAMENT.

In the house of lords the labours of the session were brought to a close by a long and animated discussion on a motion made on the 24th of August, by Lord Lyndhurst, for “a return of all bills that had arrived from the house of commons since the commencement of the session, with the dates at which they were brought up.” In his speech, the noble lord directed the attention of the house to the fate of four important subjects—the Irish municipal corporations, the affairs of Canada, the recommendations of the ecclesiastical commissioners, and tire administration of justice; after which he went on to pass under a searching review, the whole parliamentary conduct of ministers in the course of the expiring session. Lord Melbourne replied in an effective speech. Lord Brougham contended that the country would be glad to see the Conservatives return to office.

Parliament was prorogued by her majesty in person on the 27th of August. After being addressed by the speaker on the various measures which had occupied the attention of parliament, and after having given the royal assent to several bills, her majesty read the speech, which the lord-chancellor put into her hands, in her usual distinct and impressive manner. The speech referred to the various topics which had engaged the attention of parliament, and the differences which had lately sprung up between the British government and that of Persia.

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AFFAIRS IN THE EAST INDIES.

Her majesty, in her speech on the prorogation of parliament, alluded to an army which the governor-general had led across the Indus. This “army of the Indus” was put in motion for the western frontier at the commencement of the present year; and the circumstances which led to so important a proceeding were briefly these. The kingdom of Affghanistan has been called the land of transition between eastern and western Asia: a proverb says, “No one can be king of Hindoostan without first becoming lord of Cabool.” The founder of the Affghan empire was Ahmed Shah, who died in 1773. Ahmed Shah made several victorious incursions into the East; and his son, Timour Shah, followed his example. The decease of Timour Shah, however, delivered over the Affghan empire to the domestic hostilities of his sons; and the rival tribe of the Barukzyes took advantage of their dissensions to precipitate them from their sovereignty. When, indeed, Sir Alexander Burnes visited Affghanistan in 1833, the only portion which remained in the hands of a descendant of Ahmed Shah was the principality of Herat. The remainder was parcelled out in the following manner between the usurping family:—Dost Mohammed Khan ruled in Cabool; Sirdar Sooltan Mohammed Khan ruled Peshawar, although his two brothers. Peer and Sared Mohammed Khan, shared its revenues; and Candahar was governed by Kohun Dil Khan, assisted by Ruhun Dil and Shere Dil, his two brothers. The chief of Cabool owed his success to Futteh Khan, the chief of the great family of Barukzyes, and the most powerful of the Affghan nobles. Futteh Khan, in fact, governed the kingdom under the designation of vizier, while Mahmood abandoned himself to debauchery. If Mahmood, however, submitted to the ascendancy of his able minister, not so did his son, the prince Kamrau. By his orders Futteh Khan was seized at Herat and deprived of his eyesight; and a few months afterwards the unhappy vizier was literally hacked to pieces by the courtiers of Mahmood, in the presence of that monarch. In the days of his power Futteh Khan had distributed the different governments of his kingdom among his numerous brothers, and this act drove them into rebellion. Mahmood abandoned his throne without a struggle, and, although he retained Herat, with the title of king, became, in effect, a vassal of Persia. The Barukzye brothers were left to dispose of his dominions at pleasure, and they determined on recalling Shoojah to the throne, who after many perilous adventures had fallen into the hands of Runjeet Sing at Lahore. Shoojah escaped from Lahore; but the Barukzye brothers having taken offence at his arrogant treatment of one of their friends, transferred their support to his brother, Gyooh: the trappings of royalty were given to him, while they retained to themselves the power and revenues of the kingdom. The dismemberment of the Affghan empire, however, from this time proceeded more rapidly. Runjeet Sing seized some of its finest provinces, including Cashmere; Shere Dil Khan established himself at Candahar as an independent prince; Dost Mohammed made himself master of Cabool; Sirdar Sooltan Mohammed Khan became tributary governor of Peshawar; Balkh was annexed to the kingdom of Bokhara; and the Ameers of Scinde declared themselves independent. Gyooh fled to Lahore; and the only province of the kingdom which remained in the hands of a descendant of the royal family was Herat. The prince who governed Herat was Kamrau, who had directed that the eyes of his lather’s vizier, Futteh Khan, should be put out. Without directly acknowledging the sovereignty of Persia, Prince Kamrau had been for some years in the practice of rendering an occasional tribute to the shah, as often as the governor of the Persian province of Khorassan was strong enough to extort it from him. At this time, however, the prince of Herat refused to perform any such engagement; and he even permitted his vizier to pass through Siestan into Khorassan, where he compelled the chiefs of Khiva and Khafin to pay tribute to his master, and carried away twelve thousand persons, and sold them as slaves. This conduct of Kamrau furnished Mohammed Shah, the Persian monarch—who had recently ascended the throne by tire assistance of British officers, and supplies of money from the English treasury—with a pretext for endeavouring to make himself master of Herat. There was an existing treaty between England and Persia, which stipulated “that if war should ensue between the Persian and Affghan governments, the English government should take no part in it; nor should give assistance to either party, except as a mediator, at the solicitation of both parties, for the purpose of producing peace.” Had the Persian monarch limited his views to an attack upon Herat, this treaty would have been binding on the English nation; but it soon became evident that he extended them to Ghizni and Candahar. Mr. Ellis, who had been sent to Persia as British envoy in the year 1835, thus wrote at the commencement of the following year:—“The intention cannot be mistaken: Herat once annexed to Persia, may become the residence of a Russian consular agent, who would from thence push his researches and his communications, avowed and secret, throughout Affghanistan. Indeed, in the present state of the relations between Persia and Russia, it cannot be denied that the progress of the former in Affghanistan is tantamount to the advance of the latter, and ought to receive every opposition from the British government that the public faith will permit.” Russian influence, was, in fact, predominant in the councils of Mohammed Shah, and the power of Russia appeared to stand higher in the general opinion than that of Great Britain. Moreover, the Russian ambassador was urgent upon the shah to complete his designs against Herat, and he even offered his military services in the expedition. Under these circumstances Mr. Ellis signified to the Persian ministers the extreme displeasure with which the English would look upon the prosecution of any extended schemes of conquest in Affghanistan: without disputing their right to obtain redress from the prince of Herat, he intimated that the British government would be better pleased if that purpose could be effected by negotiation; and offered to send a British officer to Herat for the purpose of facilitating the adjustment of the existing differences. To this proposal the Persian ministers at first assented, but they afterwards rejected it altogether. In the meantime Uzeez Khan arrived on a mission from Kohun Dil Khan and his brothers at Candahar, with the object of effecting an alliance offensive and defensive, with the shah, and uniting in the attack upon Kamrau. Towards the close of 1835, Dost Mohammed Khan, the chief of Cabool, also dispatched an agent to the court of Persia with letters, in which he offered to cooperate in an attack upon Herat, and sought in general the protection of the shall against the Sikhs. The real objects of the chiefs of Candahar was also to obtain protection from the same enemies; and neither they nor the chief of Cabool had any disposition to become feudatories of Persia. Thus supported, the shah set forth on his expedition; but owing to the appearance of the cholera by the 3rd of November, 1836, he had only reached Asterabad. His army was in fact reduced to such a deplorable condition, from the scarcity of provisions and the predatory incursions of the Turcomans, that all hopes of undertaking a winter campaign against Herat were given up, and, despite the remonstrances of the Russian plenipotentiary, the shah led back his forces into Persia. In the meantime Mr. M’Neill had succeeded Mr. Ellis, and he did not fail to make known the advice which had been tendered by the Russian ambassador in the late expedition; and Lord Palmerston directed the Earl of Durham, our envoy at Russia, to inquire of Count Nesselrode whether the Russian envoy was acting in accordance with the instructions of his government. It was stated in reply that if Count Simonich had acted in the manner mentioned, it was done in direct opposition to his instructions: he had been ordered to dissuade the shah from prosecuting the war at any time and in any circumstances. It was added, that our minister in Persia must have been misinformed; but in a subsequent despatch, Mr. M’Neill stated that tire information he had given had been confirmed by the concurrent testimony of all the Persians with whom he had conversed on the subject, including the prime-minister. The allegations against Count Simonich were, in fact, indisputable; and the prospect of a combination of Russian and Persian influence could not fail to alarm the government of India; and as the shah’s designs against Herat were not given up, Mr. M’Neill was instructed to inform him that any attempt to prosecute schemes of aggrandizement in Affghanistan would diminish the cordiality existing between England and Persia. Mohammed Shah, however, was so far from giving up his designs upon Herat, that he sought to obtain a more intimate alliance with Russia; and he was so far successful, that an envoy was dispatched by him with presents from himself and the Russian envoy resident at his court, to Candahar and Cabool. His preparations for war were still continued; and in the midst of them a messenger arrived from Herat to negotiate an arrangement. Mr. M’Neil was invited to take part in the conference. The terms brought by the envoy from Herat were so advantageous that the British envoy recommended the Persian government to accept them, lest the British government should suspect that Persia, in persisting to prosecute the war, had other objects in view than those avowed. The conditions, however, were rejected, and it was evident that the shah would only be satisfied with the sovereignty of Herat. His troops were again put in motion on the 23rd of July; but in consequence of obstructions, on the 14th of October they had advanced no further than Nishapoor, about half the distance from Teheran to Herat. About this time an emissary from Russia appeared in the Persian camp, from whence he proceeded to Candahar and Cabool; everywhere giving out that he was sent to intimate the arrival of a large Russian army to co-operate with the army against Herat. Dost Mohammed, the chief of Cabool, had sent agents to St. Petersburg, as well as Teheran, to procure assistance against the Sikhs; and shortly after, he applied with the same intention to Lord Auckland, who had just arrived in India as governor-general. Lord Auckland decided on sending Captain Burnes on a commercial mission to Cabool; and that officer reached the capital of Dost Mohammed about the time that the Persian and Russian agents arrived in Candahar and Cabool. Negotiations were commenced between these various agents and the chief of Cabool; and they were not concluded when the Persian army arrived before Herat. The shah had previously captured the border fortress of Ghorian; but he was destined to meet with a different reception before the city of Kamrau Shah: week after week elapsed, and not the slightest impression was made upon its walls. While the siege was proceeding, Lord Auckland directed Mr. M’Neill to proceed to the camp, and make one more endeavour to effect a pacific adjustment, and to obtain redress. He had so far succeeded as to bring the mind of the shah to be favourable to a treaty; but all his efforts were again set aside by the arrival of Count Simonich, the Russian envoy, in the Persian camp. The siege, therefore, continued, nor could subsequent efforts made by Mr. M’Neill set it aside. His failure was made known to the British government; and on the 21st of May he received a despatch from Lord Palmerston, which authorized him to inform the shah that his designs were in complete contravention of the spirit of the alliance subsisting between the two nations; and that he must expect the cessation of intercourse in the event of such hostile proceedings being persevered in. In consequence of this direction Mr. M’Neill wrote the following letter to the Shah of Persia:—“I am directed to inform your majesty that if Herat should have surrendered to your majesty, the British government will consider your continuing to occupy that or any other portion of Affghanistan as an hostile demonstration against England. Your majesty is no doubt informed by your government of Fars, that a body of British troops, and a naval armament, consisting of five ships of war, have already arrived in the Persian Gulf, and that for the present the troops have been landed in the Island of Karrak. The measures your majesty may adopt in consequence of this representation, will decide the future movements and proceedings of that armament; but your majesty must perceive, from the view which her majesty’s government has taken of the present state of affairs, and from the effect which must have been produced upon the minds of her majesty’s ministers and the British authorities in India, and by the subsequent proceedings of the Persian government, with which they were not then acquainted, that nothing but the immediate adoption of measures complying with the demands of the British government, can induce the authorities acting under the orders of that government to suspend the measures that are now in progress for the defence of British interests, and the vindication of British honour.” Before this declaration had come to the hands of the Shah, the Persian army, after six days of incessant battering, had made a general assault upon Herat; but although the troops went forward courageously, and had even planted their standards three several times upon the breach, they were finally defeated in their attempt: the Affghans attacked them sword in hand, with energy too resolute to be resisted, and drove them with great slaughter across the ditch: nearly two thousand Persians were slain. This failure, however, had not the immediate effect of forcing the Shah to raise the siege.