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The Storming of Seringapatam (1799), Extracted from a Family Paper
The writer of the prologue says that he's writing an accurate account of what happened in India that caused the feud between himself and his cousin, John Herncastle.
Basically, he doesn't want the rest of the family to think that he's to blame. It was all John's fault.
Before we go any further, we should pause for a Historical Context Lesson: the storming of Seringapatam (also spelled Srirangapatna) was a real, historical event, and it's one of the most important in the history of British India. In 1799, British soldiers stormed the city of Seringapatam, which was the capital of Mysore in southern India. After this, the British East India Company (a private, English business that employed hundreds of British people in India) became the dominant power in southern India. The East India Company had a charter from the British government to rule over India, which was a British colony. The British soldiers looted and stole an incredible amount of treasure in Seringapatam. Accurate figures are impossible to come by, but we're talking treasure worth millions. And that's it for the Historical Context Lesson!
At the time of the siege of the city of Seringapatam, the narrator tells us that many of the soldiers were swapping stories about the various treasures they'd heard about (and that they were planning to steal, if possible).
One of the craziest stories was about a diamond, called the "Moonstone" because of its yellow color.
The Moonstone was sacred to a Hindu god of the moon (note that Wilkie Collins took a lot of liberties with Hindu religion – he's not basing this on a particular, real Hindu deity).
Most of the soldiers thought that the story of the Moonstone was just a legend, but John Herncastle was convinced that it was real.
So when they broke through the walls of the city, he separated himself from the rest of the soldiers.
His cousin, the narrator, went to go find him.
He found Herncastle in a Hindu temple.
As he entered, he saw a Hindu priest falling down, and Herncastle holding a bloody knife.
As the priest died, he cried out, "the Moonstone will have its vengeance on you yet!"
The narrator asked Herncastle what was going on, and Herncastle just shrugged and refused to admit to anything.
Since the narrator didn't actually see Herncastle stab the priest, he couldn't prove a thing.
Herncastle didn't mention anything about the Moonstone, either.
The narrator says that he didn't speak a word to Herncastle again after that.