Solution:During Lord Wellesley’s tenure, army was an expensive machinery of the British East India Company. He had waged war on many Princely States and native rulers like Mysore, Marathas, Nizams etc. Hence, to sustain such a larger army, he spent huge amounts (42.5% of the compary’s total expenditure) on army.He also devised the infamous Subsidiary Alliance System which required to maintain British army in native ruler’s courts. Hence, statement (1) is correct.
Wellesley was an excellent administrator. He used his Subsidiary Alliance System to interfere with the commercial and military affairs to Indian rulers by making them mandatorily consult him on important decisions.
Hence, statements (2) is also correct.