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Sends papers received from Captain Hungerford, in command of the Battery of Bengal Artillery in the Fort of Mhow. Elphinstone believes in the sincerity of Holkar's friendly professions; had he not remained staunch, there would have been a great deal of trouble. Elphinstone has written to Durand to this effect, and begged him to consider Holkar a friend of the British Government, unless he has good reason to suppose the contrary. The Chusan has been sent to recall General Jacob and his troops from Bushire, Elphinstone is very glad Canning gave permission for this. Sends condolences on the loss of Sir Henry Lawrence, and the catastrophe at Cawnpore, and congratulations on Havelock's brilliant affair at Futtehpore.

Enclosed:1. Letter from Captain Hungerford to Lord Elphinstone, Mhow Fort, 20 Jul, Hungerford considers it his duty to inform the Government about Colonel Durand. Durand left Indore believing that Holkar was against the British, and on his arrival at Sehore, is believed to have turned Holkar's Vakeel away, and has never communicated with the Durbar, nor answered letters sent to him by the Durbar. The mere rumour of Holkar's joining the insurrection caused several outbreaks, which were quietened by Holkar's own actions. Even if Holkar behaved suspiciously on the first outbreak (Hungerford does not think this was so) he is certainly loyal now. He is powerful enough to raise the whole countryside against the British, and probably gain the support of the whole of Rajpootana and Central India. Holkar was said to be in such a state of alarm after Durand's departure, that had not Hungerford's letter of 3 Jul opened to him a means of communicating with Government and explaining his real feelings, he would have been turned against the Government by those advisers who wish to spread dissension throughout the country. Holkar imagines that Durand is still irritated against him, and has said to Captain Hutchinson (a son-in-law of Sir R Hamilton) that any difference between them now would lead to bloodshed. Urges Lord Elphinstone to direct Colonel Durand to make every effort to conciliate Holkar and his Durbar. Hutchinson's visit to the Maharajah, and the message from Lord Elphinstone, have done much good, but it is still possible that Colonel Durand could do harm. Hungerford has never seen or spoken to Durand.

2. Letter from Captain Hungerford to Lord Elphinstone, Mhow Fort, 21 Jul, he has read his letter of 20 Jul to Captain Hutchinson, who agrees that it should be sent to Government after letter of 20 Jul was written, letter from Colonel Durand was received. Private.

3. Copy of a letter from Colonel Durand to Captain Elliot, Camp Peeplia, 17 Jul. Durand has already asked Elliot to take charge of the Treasury, and asks him to abstain from the exercise of any political functions, the charge of the Treasury conveys no other authority. Durand is obliged to Elliot for the advice in his letter of 11 Jul but though he does not doubt that Mhow Fort is safe, duty, not personal safety, rules Durand's movements. Any communications with Holkar's officials must be limited by an entire absence of political action.