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ONE:The military transactions of the Continent this year had been of the most remarkable kind. Buonaparte, after his repulse at Pultusk, had retired to Warsaw, which he entered on the first day of the year 1807. He calculated on remaining there till the return of spring. But Benningsen, the Russian general, was determined to interrupt this pleasant sojourn. He had an army of eighty thousand or ninety thousand men, with a very bad commissariat, and equally badly defended from the severity of the winter. The King of Prussia was cooped up in K?nigsberg, with an army of a very few thousand men, and his situation was every day rendered more critical by the approach of the divisions of Ney and Bernadotte, whom the treacherous surrender of the Prussian fortresses by their commanders had set at liberty. But Benningsen hastened to relieve the King of Prussia at K?nigsberg; his Cossacks spread themselves over the country with great adroitness, surprising the French convoys of provisions. More Cossacks were streaming down to their support out of the wintry wilds of Russia, and the French were forced from their pleasant quarters[543] in Warsaw, to preserve the means of their existence. Buonaparte, alarmed at these advances, determined to turn out and force the Russians eastward, towards the Vistula, as he had forced the Prussians at Jena with their rear turned to the Rhine. To take the Russians thus in the rear, he ordered Bernadotte to engage the attention of Benningsen on the right whilst he made this man?uvre on the left. But Benningsen, fortunately, learned their stratagem, by the seizure of the young French officer who was carrying Buonaparte's dispatches to Bernadotte. Benningsen was therefore enabled to defeat Buonaparte's object. He concentrated his troops on Preuss-Eylau, where he determined to risk a battle. But he was not allowed to occupy this position without several brisk encounters, in which the Russians lost upwards of three thousand men. The battle of Eylau took place on the 7th of February. It was such a check as Buonaparte had never yet experienced. He had been beaten at every point; Augereau's division was nearly destroyed; that of Davoust, nearly twenty thousand in number, had been repulsed by a much inferior body of Prussians. Fifty thousand men are said to have been killed and wounded, of whom thirty thousand were French. Twelve eagles had been captured, and remained trophies in the hands of the Russians.During the absence of Major-General Smith Lord Lake maintained the bombardment of the fortress of Bhurtpore. As Holkar continued to hover near with a large body of cavalry, Lord Lake went in quest of him, and coming up with him, now again joined by Meer Khan and some bands of Pindarrees, he gave him a most crushing defeat on the 2nd of April, and drove him across the Chumbul river. On this, the Rajah of Bhurtpore consented to treat; and, on the 2nd of April, he agreed to surrender the fort of Deeg to the British till such time as they were satisfied of his fidelity; to renounce all connection with the enemies of Britain; to pay by instalments twenty lacs of Ferruckabad rupees; to surrender a portion of his territory, and deliver one of his sons as a hostage for the fulfilment of his engagements. This was settled on the 10th of April, and on the 21st Lord Lake went in quest of Scindiah and Holkar, who had united their forces. At his approach they retreated towards Ajmere. As the rainy season was approaching, Lord Lake returned, and quartered his troops at Agra, Muttra, and neighbouring towns. Lord Wellesley was now superseded in the government of India by Lord Cornwallis, who was averse from the system of extensive annexation which Lord Wellesley had pursued. But his own health was failing, and as he ascended the country in order to confer with Lord Lake on his future policy, he died at Ghazee-pure, near Benares, having returned to India only three months. Sir George Barlow assumed the direction of affairs till the appointment of a new Governor General; and as Lord Lake was of opinion that there could be no security till Holkar and Scindiah were driven over the Indus, it was resolved to carry out that object. Scindiah, however, came in and made peace, and Holkar went northward, boasting that he would cross the Indus, and then return with a new avalanche of Sikhs and Afghans, and sweep away the British forces. But the Sikhs, who wished both him and us away, refused all aid to Holkar, except to mediate for him. Even then he hung back, and made great difficulties about the conditions; but Lord Lake at last informed him that unless the treaty were signed by a certain day, he would cross the Sutlej and advance to attack him. This brought him to, and on the 7th of January, 1806, the treaty was duly signed by him. By it Holkar renounced all claims on Poonah and Bundelcund, and, indeed, on any territory on the northern bank of the Chumbul, as well as all claims on the British Government and its allies. On her part, Britain agreed to restore to him, eighteen months after the treaty, Chandore, Galnauh, and other forts and districts south of the Taptee and Godavery, provided he fulfilled his engagements, remained peaceful, and did not molest the territories of the Company and its allies. By the treaty with Scindiah, which was completed on the 23rd of November, that of Surjee Anjengaum, made by General Wellesley, was confirmed: to restore to him Gwalior and Gohud, with the right to resume them in case he violated the treaty. The river Chumbul was made his boundary. In exchange for certain jaghires, amounting to fifteen lacs of rupees annually, which had been granted to some of his officers by the former treaty, he received an annual pension of four lacs of rupees for himself, a jaghire, worth two lacs of rupees, for his wife, and another, worth one lac, for his daughter. As for his father-in-law, Surjee-Row-Gautka��a man most hostile to the British, and who was supposed to have stimulated both Scindiah and Holkar to their late war��he was bound, like Holkar, not to admit him again to his counsels or service. No interference was made with his conquests between the rivers Chumbul and Taptee, nor with his arrangements with his tributary chiefs in Mewar and Marwar; but, on the other hand, he was required not to take into his service any Europeans, without consent of the British. French officers, indeed, who had served under M. Perron, were found to have directed the defence of the hill forts in this campaign, greatly to our damage. TWO:[See larger version]"To issue forthwith an Order in Council remitting the duty on grain in bond to one shilling, and opening the ports for the admission of all species of grain at a smaller rate of duty until a day named in the order.

ONE:The commercial treaty with France, Pitt's greatest achievement as a financier, was not signed until the recess��namely, in September. It was conceived entirely in the spirit of Free Trade, and was an honest attempt to establish a perpetual alliance between the two nations. Its terms were:��That it was to continue in force for twelve years; with some few exceptions prohibitory duties between the two countries were repealed; the wines of France were admitted at the same rate as those of Portugal; privateers belonging to any nation at war with one of the contracting parties might no longer equip themselves in the ports of the other; and complete religious and civil liberty was granted to the inhabitants of each country while residing in the other. One result of the treaty was the revival of the taste for light French wines which had prevailed before the wars of the Revolution, and a decline in the sale of the fiery wines of the Peninsula. But the treaty was bitterly attacked by the Opposition. Flood reproduced the absurd argument that wealth consists of money, and that trade can only be beneficial to the country which obtains the largest return in gold. Fox and Burke, with singular lack of foresight, declaimed against Pitt for making a treaty with France, "the natural political enemy of Great Britain," and denounced the perfidy with which the French had fostered the American revolt. In spite of the illiberality of these arguments, Pitt, with the acquiescence of the commercial classes, carried the treaty through Parliament by majorities of more than two to one.

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THREE:Great Britain, which had made some show of restoring the legitimate prince, soon became satisfied that Bernadotte would lean to its alliance. Meanwhile Alexander of Russia displayed more and more decided symptoms of an intention to break with France. He hastened to make peace with the Turks, and to pour his sentimental assurances into the ear of Count Stadingk, the Swedish ambassador. As he called God to witness, in 1807, that he had no wish to touch a single Swedish village, so now he professed to be greatly troubled that he had been obliged to seize all Finland. "Let us forget the past," said the Czar. "I find myself in terrible circumstances, and I swear, upon my honour, that I never wished evil to Sweden. But now that unhappy affair of Finland is over, and I wish to show my respect to your king, and my regard for the Crown Prince. Great misfortunes are frequently succeeded by great prosperities. A Gustavus Adolphus issued from Sweden for the salvation of Germany, and who knows what may happen again?" And he began to unveil his disgust at the encroachments of Buonaparte. "What does he mean," he said, "by his attempt to add the north of Germany to his empire, and all its mercantile towns? He might grasp a dozen cities of Germany, but Hamburg, Lübeck, and Bremen��'our Holy Trinity,' as Romanoff says��I am weary of his perpetual vexations!" The result was the offer of Norway to Sweden as the price of Bernadotte's adhesion to the proposed alliance. Great Britain also offered to Sweden as a colony, Surinam, Demerara, or Porto Rico.