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Thanks Canning for his letter on Wood's assumption of the India post, but does not know if in the present state of Indian affairs he is greatly to be congratulated. Has sent out a paper on Indian finances. Has raised £5,000,000 on reasonable terms, and hopes that Canning will eventually raise more in India than estimated. Canning must exert himself to reduce the levies, Wood is anxious about the expense of Indian Government The army question is in a difficult state, the Queen has agreed to two fifths of the total European force being local, and the Government must now learn what Canning believes to be the number of Europeans for India. Wood has never heard from Canning about honours. Lord Clyde and Sir William Mansfield both write strongly against a local army, and the Queen and the Horse Guards are opposed, but the Council and the House of Commons are in favour of one. Asks if Canning's views are changed by the mutiny. Government has decided against an envoy from India Kandahar and Herat, so hopes that Canning has not sent one. Rawlinson is about to leave for Persia. If the mission has already been sent, Rawlinson is to give them aid, if not he will send an officer merely to announce his arrival to Sultan Jan and assure him of the friendly disposition of the British. Sir John Lawrence is strongly in favour of giving Peshawur and Kohat to the Dost, which he says could be done as a reward for his good conduct on withdrawing the subsidy. Lawrence thinks this will look magnanimous, and not be construed as weakness, and the territory will be a pledge which the British can always take if the Dost threatens to behave badly, and that the territory is not only expensive but very unhealthy. Lawrence thinks the Indus line is as strong, asks for Canning's opinion. Wood has always been in favour of giving up Singapore to the Crown, and hopes to hear from Canning in support of this. Canning will receive a Despatch directing that in appointing Cazees nothing should be said or done which may be construed as sanctioning them as ministers of Mahomedan religion. This follows from a complaint by the Bishop of Oxford. Has replied to a deputation that instruction in the Bible might be given out of school hours to voluntary attenders, but has refused to write a Despatch to this effect. The agitation has been encouraged by Lawrence. Asks for Canning's reply on teaching the Bible in schools. Canning will know that his information about his Council is incorrect, Frere has been appointed and nothing else has been done. Mentions the proposed reform of the Calcutta Council, making the present Secretaries to Government into Councillors, and appointing Under Secretaries to the Departments. Asks for Canning's views, and also for his views on the Legislative Council, which is reported to be an expensive failure. There is a great demand in England for more work to be left to the Provincial Governments, and Wood has asked Canning in a financial Despatch to leave more discretion to the local Governments to carry out Public Works, after the Government of India has allotted to each Government money for Public Works. Trevelyan has been warned not to go too fast, but there is a good deal of reason in his aims. Wood will look into the matter of defences. India should not pay the Singapore expenses, if the colony goes to the Crown. The recruits from the Queen's troops should only be for the Artillery. Is anxious to know how many men have taken their discharge, he expects the cavalry regiment will be almost non-existent. Asks Canning to do nothing about reorganizing the regiments in India, except forming one regiment out of the debris of the rest. Sees so many difficulties about a local army that he wavers in his belief that there should be one. Is glad that the King of Oudh is at liberty. Has seen Canning's letter to the Prince on knighthood, agrees with most of it, but thinks a chapter of the Knights impossible, and that the high order should be confined to native families.