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ONE:Meanwhile, the American emissaries were both busy and successful at the Court of France. Though the Government still professed most amicable relations towards Great Britain, it winked at the constant sale of the prizes taken by American privateers, or those who passed for such, in their ports. The Government had, as we have seen, supplied the insurgents with money and arms. It was now arranged between Silas Deane and the French Minister, Vergennes, that the supplies of arms and ammunition should be sent by way of the West Indies, and that Congress should remit payment in tobacco and other produce. The French Government supplied the American agents with money for their purchases of arms and necessary articles for the troops, also to be repaid in tobacco. Two of the ships sent off with such supplies were captured by the British men-of-war; but a third, loaded with arms, arrived safely. To procure the money which they could not draw from Europe, Congress made fresh issues of paper money, though what was already out was fearfully depreciated. They voted a loan also of five millions of dollars, at four per cent. interest. They authorised a lottery to raise a like sum, the prizes to be payable in loan-office certificates. These measures only precipitated the depreciation of the Government paper; people refused to take it; and Washington, to prevent the absolute starvation of the army, was endowed with the extraordinary power of compelling the acceptance of it, and of arresting and imprisoning all maligners of the credit of Congress. Congress went further, and passed a resolution that their bills ought to pass[237] current in all payments, trade, and dealings, and be deemed equal in value to the same sum in Spanish dollars; and that all persons refusing to take them should be considered enemies to the United States; and the local authorities were called upon to inflict forfeitures and other penalties on all such persons. Still further: the New York convention having laid before Congress their scheme for regulating the price of labour, produce, manufactured articles, and imported goods, it was adopted. But these arbitrary and unscientific measures the traders set at defiance, and the attempts to enforce them only aggravated the public distress. Loans came in slowly, the treasury ran low, the loan offices were overdrawn, and the issue of bills of credit was reluctantly recommenced; ten additional millions were speedily authorised, and as the issue increased, the depreciation naturally kept pace with it. The Commissioners in France were instructed to borrow money there, but the instructions were more easily given than executed.These acquisitions were more valuable for the defence which they afforded the British than for the direct income, which did not amount to more than half a million sterling a year; but they included all Tippoo's dominions on the coast of Malabar, thus cutting off his mischievous communications with the French by sea. It would have been easy at this time to have stripped Tippoo of the whole of Mysore, but it was not deemed politic. We were far from having great faith in the continued fidelity of the Mahrattas, and it was thought necessary not to remove the check which the existence of Tippoo's power, and his desire for revenge on the Mahrattas, presented. Besides, the finances of India were in a very embarrassed state, and the question of Indian war was unpopular in Britain. With all the territory resigned to the Indian allies, Lord Cornwallis could not avoid giving deep offence to the Mahrattas, who desired to obtain a regiment of British troops in pay. The ill-concealed jealousy between them and the Nizam made an outbreak between these States very possible; and the moody resentment of Tippoo, who writhed under his humiliation, added greatly to the uncertainty of long-continued peace. On the other hand, the soldiers were highly discontented at not having had the opportunity of plundering the opulent city of Seringapatam; and to soothe them Cornwallis and General Medows, the second in command, surrendered to them their shares of prize money, and the former ordered them, besides, six months' batta out of the money paid by Tippoo.

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