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Regrets the financial difficulties of the Indian Government. It will be possible to send two or three millions of bullion, but Stanley does not know where the fourth million will be found. The Loan Bill stands for third reading, and cannot be altered now, but Stanley should have asked for nine million instead of seven had he been prepared for Canning's present demand. The best must be done with the present supplies, and if absolutely necessary Parliament must be asked for more money at the close of the session; the application will not be well received. Government will support Canning in the increase of the Customs duties, though. Stanley wishes there had been time to consult Stanley will deal with any outcry from Manchester. He awaits further details of the stamp and tobacco duties; he would be afraid of a labour tax. The succession duty is a favourite idea in England. Stanley has read Ricketts summary, and thinks reductions might be made without the proposed increases. But no considerable reduction of expenditure can take place in this way. Agrees that the principal future source of economy must be a reduction of military expenditure. The native army might be reduced, without waiting for a scheme of reorganisation to be sent out. Parts of Canning's letter have caused anxiety in England, the Government did not expect more than 8 regiments to be returned to England and the financial arrangements will have to be adjusted. The Cabinet hope that no further regiments will be sent home without ample notice. Private.