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Lawrence had averted a serious rebellion. The annexation of the Punjaub was the consequence of the successful conclusion of the war. Largely on Lawrence's advice the annexation took place immediately.

The administration of the new territory was placed under a board of three members, to the presidency of which Henry Lawrence was appointed. John Lawrence and Charles Greville Mansel [q. v.l soon succeeded by Robert (afterwards Sir Robert) Montgomery [q. v.], were the other members. With singular success and in the most thorough detail this board during the next four years, throughout a newly conquered and warlike country as large as France and destitute of the machinery of civil government, created and established a system of administration complete in all its branches — military, civil, and financial — provided roads, canals, and gaols, put an end to dacoity and thuggee, codified the law, reformed the coinage, and promoted agriculture. Large part of the credit of this work, as the largest part of its entire labour and the special charge of its financial portions, belonged to John Lawrence, whose experience in all details of civil administration surpassed that of the other members of the board. In the course of this work the board was exposed to the unsparing and hostile criticisms of Sir Charles Napier (the commander-in-chief) and others, which its success for the most part sufficiently answered. Repeated and severe attacks of fever, which only the extraordinary strength of his constitution enabled him to shake off, almost obliged him to go home in 1851, but the prospect of completing his service in 1855 and of then retiring on a pension induced him to remain at his post. He was further harassed by the friction produced between himself and his brother Henry, owing to the divergence of their views on many points of administration, but principally upon all questions relating to the treatment of the jagheerdars and upon the system of collecting the land revenue and the management of the finances. Both were men of strong wills, strong opinions, and hot, fiery tempers. They differed so much in habits and in training that in the face of serious differences of opinion conflict and recrimination became inevitable. Their personal affection and esteem, however, remained unimpaired.

As far back as 1849 John had applied to Lord Dalhousie for a removal to a more independent post. In 1852, the Hyderabad residency falling vacant, both brothers independently applied for it, both alleging as their ground that the tension between them as colleagues upon the Punjaub board was unbearable to themselves and damaging to the public service. Lord Dalhousie seized the opportunity of putting an end to the board, which had never been designed to be more than a temporary expedient for dealing with a newly annexed country. Henry Lawrence was appointed to the Rajputana agency, and John Decame chief commissioner for the Punjaub in February 1858. The new arrangement of the work between the chief commissioner and two principal commissioners under him (one for finance and one for judiciary) was John Lawrence's own. For the next four years he remained occupied with the active and continuous discharge of the duties of this office, corresponding on the greatest variety of affairs both with the governor-general, under whose control the Punjaub remained, and with his own subordinates, visiting the whole of his province and the native states under his charge, and superintending the whole administration of the Punjaub. During the Crimean war he earnestly opposed any forward movement into Afghanistan, either political or military, and then, as always afterwards, urged the sufficiency of the existing frontier for all the purposes of the safety of India. 'Let us only be strong on this side the passes.' he wrote, 'and we may laugh at all that goes on in Cabul. I would waste neither men nor money beyond.' Even Peshawur he considered a source not of strength but of weakness. A treaty was, however, concluded with the ameer, and at the ameer's own request Lawrence was sent in March 1855 to negotiate it. For this and for his other services he was, on the recommendation of his firm friend Lord Dalhousie, made a K.C.B. early in 1856. Lord Dalhousie also strongly recommended that the Punjaub, now 'fit to walk alone.' should, with or without Scinde, be constituted a separate lieutenant-governorship, and that Lawrence should be its first lieutenant-governor; but the Punjaub did not become a lieutenant-governorship till after the mutiny. He was subsequently despatched to the frontier to meet Dost Mohammed, the Afghan ameer, who had expressed a desire for an interview with some high British official. The meeting took place at Jumrood on 6 Jan. 1857, and, after several conferences, a subsidy and a supply of munitions of war from the British to the ameer, for defensive purposes against Persia, were agreed to. Lawrence forbore to press for the presence of British officers in Cabul, being well aware that their lives would be in danger from a fanatical population, and that another Afghan war might in consequence become necessary; and a commission was merely despatched to Candahar to check