EAST INDIA LOAN.—COMMITTEE.

HC Deb 01 August 1859 vol 155 cc769-837

Order for Committee read.

House in Committee.

Mr. MASSEY in the Chair.

SIR CHARLES WOOD

It has often been my duty to address the House upon questions of great national importance, and more than once upon the subject of India; but I confess I never addressed it under feelings of such deep responsibility as those under which I now rise to bring before the Committee the state of India, more especially in reference to its finances. I do not think that my hon. Friend the Member for Birmingham overstated the importance of this subject, when he told us the other night that it was hardly second to those questions of domestic and foreign policy which have occupied our attention for the last two months. When we consider not only how important India is to England, but the many millions in that country who now own the sway of the British Sovereign, and as to whom we have undertaken the solemn duty of providing good Government, I do not think it possible to overrate the task which is imposed upon the Government and the Parliament of this country. It is not my intention, however, upon the present occasion to go into general questions concerning the state or welfare of India. Her financial prospects are grave enough to occupy the attention both of Government and of Parliament, and certainly no deeper responsibility was ever imposed upon either. It will need all the wisdom and all the energy which the Government can bring to the consideration of the subject; it will require all the aid and support which I doubt not they will receive from Parliament to deal properly with a matter of such vital importance. It is not necessary for me to remind the Committee of what vital importance to all countries the state of their finances is. If their financial state be good, there are few dangers which they may not confidently hope to overcome; if their financial state be bad, there are few dangers with which they can effectually cope. I need not say, because I am convinced that every one who hears me is aware, that the financial state of India at this moment demands the most anxious consideration. In saying that, however, I must not be understood to say that the future prospects of India are, in my opinion, gloomy or hopeless. I confine that statement to the present time, when we have not recovered from the effects of an overwhelming and unforeseen calamity. When we have surmounted the difficulties of the next two or three years, I see no reason why India should not be restored to that state of prosperity, material and financial, in which she was before the late mutiny broke out. I see no reason whatever to anticipate that she may not be restored to that state in which it was my good fortune to leave her when I held the office of President of the Board of Control. It is but four years and a half since I filled the post which I have now the honour to occupy of Indian Minister, and a more grave and melancholy contrast can hardly be conceived than that which exists between the state of India when I left that position and the state in which I find her on resuming it. At that time we had, as I hoped, closed our career of war and conquest. Universal confidence prevailed. We had an army in the fidelity of which every one trusted, and for which those who were best acquainted with it—namely, its officers—would have answered with their lives. We had a surplus revenue, and the only object we had was to develope the internal resources of the country, to devise an improved system of education, to promote a better administration of justice, the more rapid progress of railways and electric telegraphs, to improve the navigation of the rivers and the means of irrigation, and, in fine, to bring out those resources which India so abundantly possesses, and which may make her the source of wealth not only to herself, but, by furnishing us with an ample supply of raw materials for our manufactures, to this country. Since that time the whirlwind of the mutiny has passed over the land, marking its course with murder and bloodshed. Confidence is destroyed; our trusted soldiery have proved unfaithful; public works are checked; and financial difficulties of the most serious description have been caused by the late events. Within the last few weeks to those misfortunes has been added the discontent, and, I am afraid I must say, from the reports just received, the mutiny of a portion of the local European troops in India. These are diffi- culties great enough to grapple with. They require the most careful consideration—the most vigorous and well-matured action—on the part of the Government and the Parliament. I do not intend, however, as I have already said, to go beyond the financial position of India on the present occasion. At an earlier period of the Session the noble Lord who preceded me as Secretary of State for India went at considerable length into many subjects connected with the general state and welfare of India. Those who take an interest in India expressed their opinions at that time, and, considering not only the importance but the vastness of the subject which I must bring before the Committee to-night, I think I shall best consult the wishes of hon. Members, and enable them to form a more clear judgment upon the one great and important question of the finances of India, by abstaining from going into those general topics which were abundantly discussed at the commencement of the Session, and upon which I cannot pretend to be able to throw any additional light at the present moment. The noble Lord, upon the occasion to which I have referred, in dealing with the state of Indian finances, necessarily spoke from imperfect information. Very soon after his statement was made further information, of the most serious character as to the finances of India, reached this country, and although I think the reports which then appeared rather exaggerated the evil, yet the accounts which we have subsequently received, and which have been laid on the table of the House, present no very promising prospect for the next year or two at least. I have laid on the table every despatch which has been received. No information has been withheld from the House. The despatches were printed and delivered on Thursday morning. The annual accounts up to 1858 have also been laid on the table, but I am sorry to say they have not been printed, though I do not think they materially affect the question now before us. I repeat, then, the House is in possession of all the information which we can place before it in respect to Indian finance. But, before proceeding to deal with the figures, there are two further observations which I may be permitted to make. One is that the House must remember that it is perfectly impossible to answer with precision for the absolute accuracy of the sums. Since the 30th of April, 1858, everything is a mat- ter, not of account, but of estimate. Of course the estimates will be nearer the truth when they apply to the past than to the present year, but there will he discrepancies, many, however, of which will be accounted for by the alteration of circumstances which is explained in the papers before the House. For instance, the annual sketch estimate is dated the beginning of April, but a most material alteration is made in it by a despatch dated the 14th of May. I cannot pretend, therefore, to great precision in statements of figures. I shall deal with the subject in round numbers, keeping as near the truth as is possible in matters of estimate, not of account. The second observation which I have to make is, that in my statement I shall speak of the rupee as being equal to 2s. of our money. Some confusion was caused by the statement of my predecessor, owing to the circumstance that in one place he took the rupee at 1s. 10½d, and in another at 2s. I think it will be more convenient, and will certainly prevent misunderstanding, to calculate the rupee invariably as being worth 2s. Let me premise also that I do not intend to go back beyond the month of April, 1857. I shall not go back to the accounts of former years, in which the rupee, is taken at 1s. 10½d. It so happens that the last financial accounts which have been printed are those for the year ending the 30th of April, 1857, and, as that was the last complete year of peace, the mutiny breaking out in May, 1857, we have the best possible point to start from. At that time the Revenue and expenditure of India may be said to have been equal. The debt of India bearing interest was £59,442,000. The annual interest upon that debt was £2,525,000, and the military expenditure was £12,561,000, of which £12,196,000 was ordinary, and £365,000 extraordinary expenditure, likely to cease in the course of that year. That was the state of India immediately before the mutiny broke out. In the course of the two subsequent years the expenditure considerably exceeded the income. In 1857–8, the expenditure was about £40,226,000, including an item of interest upon the railway capital, which is a charge on the revenue of India: and the revenue was £31,706,000, leaving a deficit in the course of the year of £8,520,000. In the next year 1858–9 —hon. Gentlemen will remember that the financial year in India ends on the 30th of April—the expenditure, including the interest on railways beyond the receipts, amounted to £48,507,000. The revenue was £33,800,000, thus leaving a deficit of £14,701,000. The deficit in the two years was £23,221,500. That deficit was provided for in the following manner:—We have borrowed in India in 1857–8, £5,157,000, and in 1858–9, £5,398,000, making together borrowed in India in the two years in round numbers £10,556,000. We borrowed in England in 1857–8 £4,788,000; in 1858–9 (and this is exclusive of my noble Friend's loan), £6,773,000, being a total sum borrowed in England of £11,562,000 for the two years. The whole sum borrowed is £22,118,000, and the remainder of the deficit is made up by a diminution of balances up to this time of £1,103,000, the sum borrowed and the diminution of balances being of course equal to the excess of the expenditure, or £23,221,500. That is the state of things up to the 30th of April last. On that day the debt of India bearing interest there and at home amounted to £81,580,000. The interest on that amounts to£3,564,000. But then comes the item of expenditure which is the source of our difficulties—the military charges of that year, which amounted to £25,849,000, including the expenditure on military buildings. It is fair, however, to say that some portion of that was due to the charges of previous years. That is as near an estimate as can be made for the year ending April last. I now come to the income and expenditure for 1859–60. Hon. Gentlemen who may happen to have in their hands the late despaches laid before the House will see that there is a despatch dated April 1, containing a sketch estimate of the year, 1859–60. Owing, however, to information subsequently received, the statements in that account are corrected by a rough estimate of receipts and disbursements for 1859–60, which will be found at page 34 of the same papers. It will be better, I think, to proceed upon the estimate only, without referring to the previous one subsequently corrected, excluding also from consideration a great deal which appears in that account, because mixed up in it are not only the receipts and expenditure but the balance one way and the other as between the two countries. I shall, however, deal only with revenue and expenditure, leaving unnoticed the cash account between India and England. The expenditure in India I will take at £38,380,000. It appears in the account at £39,000,000, but then they include part of the expense of the stores from England, which is rather a charge in England than in India, seeing that the expenditure takes place here. Excluding that item, but including the payment on account of the Tanjore debt, which is in point of fact a repayment of the debt, the expenditure in India in 1859–60 is £38,380,000. The charges at home, including the stores, is £5,581,000. I then come to a large item—namely, the interest on the railway capital paid into the Treasury here, which interest becomes chargeable upon Indian revenue as soon as the capital is so paid. I hope that ultimately, when Indian railways become remunerative, this item will cease to appear in the accounts, but at present it constitutes an annual charge, which must be provided for either out of the revenues of India or by a loan. The interest for this year is about £1,114,000, while the receipts on account of Indian railways in the course of the year are upwards of £200,000, so that I take the item at £900,000. I must then add the charge to which the noble Lord referred, but as to which he was unable to give any estimate to the House—namely, the compensation to be paid in consequence of losses by the mutiny. In some cases, to a small extent in the Punjab, a fine was instantly imposed on the villages, and compensation was made. With regard, however, to the greater part of the losses, no such measure was possible. An officer has been appointed in India to receive claims on this ground and the amount has been sent home to this country; but his report is only a primâ facie one, and as to some of the claims no sufficient evidence has been received to enable him to adjudicate. Now, I must say that I cannot admit these to be claims of right. In many cases—such for example, as the Santhal rebellion—no compensation at all was allowed. In other cases compensation was given as a matter of favour distinguished from right—a just and due consideration, I think, for the losses of the parties, though not going to the full extent even of the admitted injury, but dealing with different kinds of property on different grounds, and allowing a proportion of the loss ultimately established. The view which the Government entertains on this subject is that a distinction should be made between property which it was impossible to move and property which might have been saved from injury. In the one case we propose to give about one-half, and in the other one-third of the loss which was ultimately established. The estimated amount, taking these figures, would be somewhere about £800,000; but, supposing that there are some claims not yet adjudicated, and others not brought in, I take a margin. The whole compensation allowed may not, perhaps, be as great as the losers will be anxious to obtain, but considering the financial state of India, I think it will he a reasonable one. We propose to limit the amount of compensation to £1,000,000. Adding that to the sums I have already stated, the charge for 1859–60 will amount to £46,131,500. With regard to the revenue, the estimate, as stated in the papers to which I have referred is £35,850,000. That includes the amount which it is calculated will be received from the additional taxes that have been imposed. Their probable proceeds will he found at pages 16 and 17 of the last papers presented to Parliament. The estimated amount of Customs' duties is about £1,000,000 and the increase of opium is also stated. Now, I know that considerable objection has been taken to the increase of Customs' duties, and much complaint has been made at Calcutta, at least, of the charges thereby imposed on the European population. I am not one of those who are fond of an increase of Customs' duties as a permanent source of revenue; but it was essential for the Government of India to have money at once. They might have imposed duties which would have brought in money at some future time; but they wanted it immediately, and I know of no way in which they were so sure of procuring it as by the course which they took in increasing the Customs' duties. However, therefore, some hon. Gentlemen may object to the increase of the Customs' duties as a permanent source of revenue, I think the Government of India were, under the circumstances, perfectly justified in taking the course which they adopted. I hope, nevertheless, the time may come when it will be found possible to reduce some at least of those duties to their former state. The increase of the duty raised upon opium is from 400 to 500 rupees per chest in Bombay, and I do not, I confess, think there is any objection to our getting a maximum duty upon opium, if in doing so we do not diminish the production of the article. Includ- ing these two items of increase,—and they are the only duties of whose increase I am aware,—I estimate the product of the revenue of India for this year at £35,850,000; which sum, deducted from the anticipated expenditure, leaves a deficiency of £10,250,000. lam, however, afraid that I must ask for a further sum beyond that amount. In consequence of what has taken place in India we have been unable to push on railway works as fast as we could desire and as fast as we should be justified in doing by the amount of capital which has been received in this country. The estimated expenditure for railroads for the next year in India is about £8,000,000, while the amount which will be raised in this country is about £6,000,000, I have stated already that the balances have been reduced upwards of £1,000,000. The fact is, that having the railroad money in hand we were able to reduce them by a larger amount than would otherwise have been prudent. In order, therefore, to provide for the additional expenditure which we must incur beyond the sum which we shall receive for railways in the course of the year we must ask for a further sum of rather more than £2,000,000 to make up our balance to the sum which we ought to have in hand, thus raising the deficiency for the year to a sum of £12,500,000. [Mr. BRIGHT: £12,250,000.] Twelve millions and a half is the sum for which I propose to ask the House. Then comes the question how is provision to be made for raising that sum. From the accounts to which I have already referred, page 34, I find that the Indian Government expects to receive a sum of £300,000 from the old 5 per cent loan. Of that amount the last accounts inform me they have already received £276,000. The great probability, therefore, is that they will receive the entire sum. They then estimated the receipts on the 5½ per cent loan and Treasury bills at £5,600,000. I regret, however, to be obliged to say that I do not think, having made the best calculation in my power, they will receive anything approaching that amount. They have received in the course of the month of May altogether about £125,000. I trust, therefore, that they will receive at least twelve times as much in the course of the twelve months. Last year they received in the course of the month, subsequent to May payments, considerably exceeding those which they obtained in that month. Under those cir- cumstances, I estimate that they may expect to receive from £1,500,000 to £1,700,000 in the course of the year. Adding that amount to the £300,000, to which I have already alluded, I have calculated the probable receipts from India for the twelve months commencing in April last at £2,000,000, instead of £5,600,000. The accounts which reached me to-day are not very encouraging on this point, but it may be that when they find in India we are disposed to assist them—as I trust the House will enable me to do—confidence may be restored; and my estimate of a receipt from India of £2,000,000 justified. The noble Lord opposite took power to issue seven millions of debentures this year. Of those, five millions have been issued which have produced in cash, in round figures, £4,800,000, which sum, added to the £2,000,000 I hope to receive in India, will make altogether £6,800,000. That amount being deducted from the £12,500,000 which I stated to be the amount of the deficiency, will leave £5,700,000 for which provision must be made. Now, of course, it is impossible for me to say what amount of cash I shall receive from the debentures which are unissued. The £100 debentures of the noble Lord brought £95 in cash, and I trust the money market will be disposed to come forward liberally and support the Indian market in this case. But, however that may be, I clearly must take some margin, and after the accounts which I received to-day I am afraid it must be a considerable one, in order to render myself secure of obtaining the money which I want. I estimate that it is necessary to have a margin above £5,700,000 and I propose, therefore, to issue the two millions of debentures which the noble Lord opposite left unissued, and to take power to borrow five millions more, making in all seven millions, which I think it will be necessary to provide to meet the probable demands from India for the current year. If, as I anticipate, I should by means of this loan be enabled to meet the expenditure of the year, I calculate that at its close—that is to say, in April, 1860—the Indian debt would amount to £95,836,000, and the interest of the debt' to nearly £3,900,000. I should be glad that I could now bring to a close all that I have to state to the House; but I think it will be only fair to those who may be called upon to lend their money on Indian securities that I should, as far as I am able, without entering into minutiaæ, state what are the prospects of the ensuing year. It will be unnecessary to provide any sum for compensation for the mutiny in the course of next year, but, upon the other hand, it will be necessary to add to the expenditure the interest of the debt incurred in the present year, and so far as I can judge the increased charge for interest will amount to £600,000. There will be an addition to the interest on railroad capital of about £200,000. I do not therefore think, judging from the expenditure of the past, that I can put the expenditure of next year at less than £46,000,000. We should therefore start in 1861 with a charge nearly as high as that which we have to bear in the present instance. Taking the revenue in like manner without any additional taxation, and allowing something for the greater amount of opium which would pay duty, I will put the income at £36,000,000, which would leave a deficit to start with of £10,000,000. This sum will of course be reduced by any reduction made in expenditure on the one hand, and upon the other by any increase that may be effected in the revenue. There will, however, be on the 30th of April a deficiency of £10,000,000 in round numbers. It is needless to say that it is indispensable that the income and expenditure should be more nearly balanced. The first question which presents itself is, How is that object to be effected? The answer is a simple one. By a considerable reduction of expenditure, and, as I hope, by some increase of income. Now, with respect to the making a reduction, I can only say that something must depend on the state of India. The reduction of this year would be larger but for the discontent which exhibited itself among the local troops, which could not be foreseen, and which rendered it necessary that some of the Queen's regiments should be detained in India when they might otherwise have come home, and thus relieve the Indian Government from the expense of their maintenance. In any estimate which I may make this evening the House must therefore bear in mind that I am proceeding on the supposition that no unforeseen events will occur to disturb the tranquillity of India, and that no demand will be made on us for expenditure beyond that which is requisite in ordinary and peaceful times. If any thing should occur to disturb the state of peace, no calculation can be depended on. The first item in which expenditure may be reduced is the civil es- tablishments of India. I think I should deceive the House if I told them that, in my opinion, any considerable reduction could be made under that head. The noble Lord said the same thing early in the Session. I concurred with him at that time, and although in particular places, or particular offices, some reduction may take place, I believe that it cannot be more than will be sufficient to meet the additional demand for the superintendence of European officers which the best interests of India require. I do not think it would be just or fair to reduce the amount of the salaries of persons who, in nine cases out of ten, are not receiving now any overpayment for the services rendered. Some reduction may be made on new appointments to offices, but the demand for the employment of additional Europeans will be to such an extent that we should be proceeding without reason if we supposed that any reductions in the civil establishment would make any material impression on the expenditure. I was reading the other day an amusing book, which, as it was not written by an Englishman, is therefore more impartial testimony, and in it the writer states in very strong terms the evil of a want of European superintendence. He says, "The only possible remedy is in the great increase of European officials. It is not too much to say that it requires 100 men to perform the work now assigned to a single magistrate." Making a large allowance for that estimate, I believe myself that if you are to introduce an improved system of administration, additional European superintendence is absolutely required, and therefore I do not think it possible materially to reduce the civil expenditure of India. The next item of any large amount is the public works of India. There is no expenditure which I should be so sorry to reduce as that. At the same time I believe that some saving may be made without, in the slightest degree, impairing the value of the works. This, however, is not a source from which any large reduction could be obtained, although I believe that without stopping works of great public utility, some reduction of expenditure may be made. I also think some saving may be made in the home expenditure, and in the articles furnished from this country to India. But after all, every one is aware that the great item in which reduction can be made, is that of military expenditure. The amount of troops in India before the mutiny was of Europeans, including the officers of Native regiments, 45,522; of Natives, 249,153, making together 294,675, The amount of troops at this moment in India is, of Europeans, 110,320; of Natives, 207,765; making together 318.0S5, to which must be added police militarily organized, 89,829, giving a total of 407,914. We also have in England depôts of regiments of the line in India 21,700, and depots of local corps about 2,000, so that, including the force in India, the force on Indian pay at home, and the military police in India, the total force at the present moment is 431,600. I do not know that it is very unnatural, considering the state of alarm which prevailed in India, that the Government should have raised levies in every part of India, and those levies swell the number. But the danger having passed away, I do not see any reason why those levies should be kept up any longer. A reduction has been effected to a certain extent, and orders have been given for further reduction. But the Governor General has stated it to be impossible, in his opinion, to reduce the expenditure in the course of this year more than to the extent of £2,000,000, whether by sending regiments home, or by a reduction of the Native force. I think every hon. Gentleman present must agree that it is perfectly indispensable to maintain a larger European force in India than we have hitherto done. No doubt the paucity of Europeans in India gave encouragement to the mutineers, and Sir John Lawrence has told me that the Native chiefs told him such was the case. I think it is also clear, from the opinion of Sir John Lawrence—and no one's opinions are entitled to greater weight than his—that the mutiny may be considered almost exclusively a military mutiny. He states, in a despatch which was referred to the other night— The mutiny had its origin in the army itself; that it is not attributable to any external or any antecedent conspiracy whatever, although it was afterwards taken advantage of by disaffected persons to compass their own ends, and that its proximate cause was the cartridge affair and nothing else. I think it is a very satisfactory thing that the Native population generally took no part in the mutiny. The exception, of course, is in the province of Oude and its neighbourhood, from which the Sepoys were principally drawn, and whose families could not but have had considerable sym- pathy with their brothers and sons who originated it. But, with the exception of Oude and the neighbouring districts, the Native population took no part in the mutinous proceedings; on the contrary, they, in many instances, showed most kind consideration for Europeans, whom they sheltered, concealed, and protected. Sir John Lawrence goes on to say that he believes the "mutiny arose from their belief that a systematic attempt was about to be made on their ceremonial religion, and seeing the force of Europeans, from a sense of overwhelming power, acting upon men exasperated by a fancied wrong." I am inclined to believe, from all we have heard, that that is a just and true account, as near as we can form an opinion, as to the cause of the mutiny, and from this we learn two things. We learn first of all that we must be very careful not to give to the Natives of India any reason to believe that we are about to attack the religious feelings and prejudices which they hold so dear. No doubt in the recent case there was no just cause for suspicion; but they entertained that belief. We have seen the consequences, and if we hope to retain India in peace and tranquillity we must take care so to govern it as not only to consult the interests, but the feelings of the Native population. If we have a contented population we shall require less force, and then we shall be able to do that, which we learn, in the second place—namely, not to maintain so large a Native force in India as we have done. Wherever there was no Native force, there no disturbance arose; but almost in every place where a Native force was stationed, there disaffection, if not mutiny, appeared. Well, then, if we can reduce the army, we can reduce our expenditure, and consequently may be able to reduce taxation. But we must keep up a larger European army in India than we have done; and we cannot entirely dispense with some Native force. There are many places at which European troops cannot be stationed without great loss of life; and even where Europeans are stationed, there are many duties unsuited to men from this country; for these duties we must have Natives of India. To what extent a reduction of the army can be carried, it is not easy from hence to say. In India a much better opinion on that point can be formed than in England. Various estimates have been furnished me of the force that will be required, but I cannot say that we are as yet in a condition to determine the question. I will read to the House an extract from a paper written by Sir H. Frere, the Commissioner of Scinde, which seems to convey in clear language the principles on which in my opinion we should proceed to make this reduction of the army. The question asked was as to the number of the military force that should be kept up in India, and this is the answer:— It seems to me principally, if not wholly, a question of finance. Our income is limited and capable of little rapid extension; large portions of it are very precarious. We cannot long go on borrowing. It is necessary to our existence that we should bring our expenses, of which the military charges are the heaviest portion, within our income. Even in a military point of view the value of a surplus income, good credit, and a contented Native population, which needs no large force to keep it from rising, is greater to us in India than that of a powerful and well prepared army. Give us the former and time, and we must, with our naval superiority and vast mechanical resources, always be a fair match for any enemy, whether internal or external, that can assail us. But if we have a deficient income, low credit, and discontented classes among our own subjects, the largest and best appointed army will only precipitate our downfall. Time will then befriend our enemies, who will have only to force us to keep our army up to a war standard in time of peace, in order to insure our ultimately ruining ourselves by costly victories. This is not the place to dwell on the political and social questions affecting the feeling of our subjects towards our Government, further than to note that no army we could possibly maintain, if our own pecuniary resources were double what they are, could enable us long to hold the country if any large classes once become convinced that there are other Governments possible which would be preferable to ours, and to introduce which it is worth their while to make some present sacrifice. Hence it is necessary, in answering the present question, always to bear in mind that we must bring our expenses within our income, and that the vital question is not, what do we want to insure our perfect safety, but what can we afford to spend for defence, and how can we lay it out to the best advantage? This extract shows the true principles on which we must proceed in reducing our army, and the true sources of our strength in India; we must avoid a system that creates a discontented population, and forces us to make perpetual loans. It is just to the noble Lord (Lord Stanley) to say that he has enforced these principles in his military despatch to the Governor General, dated the 7th of April last. He says— I have now to request your earnest attention to the object of relieving the drain upon your resources by avoiding all expenditure which is either not absolutely necessary, or which can be postponed without serious detriment to the public service. It appears that until our finances are placed upon a sound basis we are not at liberty to consider what expenditure is desirable or likely to be beneficial, but what is essential and within our means to allow. Now that hostilities on a large scale have terminated, a considerable reduction of commands, whether of divisions, brigades, or stations, with the staff attached thereto, must obviously be practicable. It is obvious that the finance of India cannot be placed on a satisfactory footing without a very large reduction of the military forces, Native as well as European, maintained at a cost which cannot be estimated at less than twenty millions per annum. It appears from the annexed statement that the comparative strength of the Native armies, inclusive of police and other levies, exceeds by at least 50,000 men the forces which were maintained before the mutiny. The paramount necessity for an early and considerable reduction of military expenditure will not be lost sight of in this country. I shall not fail to use my best exertions to reduce to the utmost limits the home charges on account of Her Majesty's forces in India. It was intended early in the year to send home ten regiments from India, but in consequence of recent events part of that force has been detained in India. However, I believe that seven regiments have actually left, and are on their way home, I have said that the Indian expenditure before the mutiny was £12,000,000; it is now £21,000,000—an increase of £9,000,000 on which reductions may be effected. I cannot say we shall be able to reduce the military expenditure so low as it was before the mutiny, yet there is a large margin on which reduction may be possible, now that military operations have ceased, and the expense of marching and transporting troops has come to a close. All I can say is, that the most rigid care shall be taken to effect a reduction of our Indian expenditure as rapidly as it can be done consistently with the safety of that country. With regard to the revenue, authority has been sent to the Indian Government to raise the salt duty in Madras, in Bombay, and the North-eastern provinces. The estimated produce of that duty is £300,000. The Indian Government has also expressed its intention of considering the possibility of imposing some other duties; these are a stamp duty, the payment for a licence by traders, and, if possible, a succession duty. No account has been received from India of the precise measures which the Government intends to take with regard to these duties, nor can I form any estimate of what amount of revenue they will probably produce, but certainly several hundred thousand pounds ought to be raised by them altogether. But when we have done all we think it is possi- ble to do for the reduction of the expenditure and the increase of the revenue it will still leave a considerable deficiency, which will have to be provided for by loan. It may be four or five millions, or it may amount to six millions—I hope it will not exceed this last sum—which will have to be provided for next year by loan. Altogether, I fear we cannot anticipate the closing of the account of the mutiny before the debt of India is raised to upwards of £100,000,000. In that debt a considerable reduction might be effected if this country would associate itself with the finances of India. Circumstances may arise when the propriety of doing so will become a serious question. The noble Lord (Lord Stanley) saw the probability of it. No one has expressed a stronger opinion against it than myself; but when the House looks at the circumstances of the case it must not shut its eyes to the possibility of a state of things arising in which we may have to entertain the proposal. If we bring our expenditure within our income, as I hope we shall within the next two or three years, all will then go well; but if any circumstances arise, and they may arise as unexpectedly as the recent mutiny, which add to our expenditure, the matter will then become very serious indeed. In order, however, to put the finances of India on a sound footing it is necessary to take some steps for the purpose of putting them under proper superintendence. The organization of the financial part, of the Indian Government, in my opinion, has always been very unsound. In this country the Chancellor of the Exchequer, who has to meet the expenditure, has also to provide the Ways and Means, but in India the department which provides the money has no connection with the department which spends it. A mode of- administration more likely to lead to carelessness and extravagance one cannot well conceive, and it will, I am convinced, be most advantageous for India if some person is sent from this country well versed in our financial system, acquainted with our mode of keeping accounts, and of raising and checking the expenditure of money, to take charge of the financial department in that country, and it is the intention therefore of Her Majesty's Government to send out to India some person in whom they may have confidence with that view. I am not now imputing blame to any officials in India, who may have had to do with the financial departments; it is the system which is to blame. If this be done, if we can meet the pressure of the next two or three years, I have little fear for the Indian finances. It is a remarkable thing that, spite of recent circumstances, the revenue has continued to improve. In 1856–7, the year before the mutiny, the revenue produced £31,700,000. In the year 1857–8, the year in which the mutiny broke out, the revenue in round numbers was about the same—£31,700,000. In 1858–9 it was £33,800,000, being an increase of nearly £2,000,000; and the estimate for 1859–60 is £35,850,000, being an increase of £4,000,000 including £1,000,000 from additional taxation, since the year before the mutiny. It is to be remarked, too, that this increase has arisen simply from improvements in the revenue, and not from accessions of territory. In the ten years before the mutiny there was an increase of revenue, mainly caused by accessions to territory, which did not meet, however, the increased charges; but this increase is owing entirely to improvements in the revenue. The accounts of the trade of India are also very satisfactory. My hon. Friend the Member for Birmingham will be glad to hear that the export of cotton from India is on the increase. The average of the five years ending 1852–3 was 116,000,000lb; for the five years ending 1858–9, the average was 175,000,000lb.; and it is curious enough that the cotton goods sent to India in the last six months was equal to the value of the whole exports to that country in 1856. We need not, therefore, despair for the future of India. A large portion of the country has been entirely untouched by the late calamities, even in the districts where the mutiny raged, it generally passed lightly over the Native population, trade is improving, the sources of material prosperity are on the increase, and if we have not a recurrence of such events as those which we have recently had to deplore, I see no reason why India should not again be flourishing and prosperous. It has great natural resources, labour is cheap, the cultivators are skilful and industrious, English capital is going there, and I sincerely hope that we may, under the blessing of Providence, very soon see the Natives of India, a happy, prosperous, and improving people. The exact sum which I am about to ask power to borrow for the service of the Government of India is £5,000,000. That I believe, will enable us to meet all the demands of the present year—as to what may be wanted—for the future I must wait until the time comes. For one or two years, as I have pointed out, there may be demands on the money market, but after that I hope that the income will meet the expenditure. I ought to say that I do not require this sum of £5,000,000 all at once. How much I shall want, will of course depend, to a certain extent, on the receipts of the Indian exchequer. I certainly shall not require it all until the end of April, but I think it would be unwise of me if I did not take at once sufficient to carry me through the year.

MR. CRAWFORD

said, he could not help expressing his concurrence to a certain extent with the sanguine view which the right hon. Gentleman (Sir Charles Wood) had taken of India prospectively, but he thought that in his statement he had overlooked one important feature, namely, that there were at present about £7,000,000 of India bonds in existence, the owners of which had the option of being redeemed by giving a year's notice. There had also been placed upon the market within the last year about £13,000,000 of debentures, which would come in course of payment in the years 1863 and 1864. So that, on the whole, a sum of about £20,000,000 of debt would have to be provided for in the course of the next four or five years. He could hardly, therefore, concur altogether with the expression of satisfaction with which the right hon. Gentleman had concluded his speech. He would also like to have heard in what manner the right hon. Gentleman proposed to raise the £5,000,000 which were now asked for. It was to be hoped the mode intended to be adopted was not by way of debentures, an expedient which many practical authorities on that question were convinced would prove a failure. The debenture market, as far as India was concerned, was overdone. The public did not regard debentures favourably enough as a means of investment to enable the right hon. Gentleman to depend upon such a source. A great many of the principal holders of money were absent from the tenders for the last Indian loan, a great portion of which was taken up by the gentlemen of the Stock Exchange and private gentlemen; but they were bitten on that occasion, and were not likely to come forward again. With regard to the increase of the customs duties in India, he was perfectly prepared to admit that there was no more legitimate mode of raising resources in times of diffi- culty than by such an increase, if it were not carried to such a point as to interfere with the consumption of the commodities on which they were raised. He did not think, speaking generally, that the trade of India had been hitherto subject to anything like an inordinate rate of customs duty, and he thought no particular disadvantage would result from the direction the increase was proposed to take. But great exception had been taken, and he thought justly, to the mode in which the increase had been effected. The authorities in India had no doubt followed the course pursued in England, and had made the increase take effect from the date of the Resolution passed in Committee; but the public mind in India was not accustomed to so rapid a change of circumstances. Considerable difficulty had consequently been caused. In Bombay, for instance, it was the practice of merchants to contract to deliver large quantities of goods at certain prices. The effect of the sudden alteration was, that all goods that had not passed the Custom House were subject to the rise. The Bombay people declined to pay, took legal opinions, and were advised they were not liable. A suit was threatened to enforce payment, and if the suit had been instituted and carried to the Privy Council all trade at Bombay would have been suspended until its final decision. Such was the disposition of the Natives; they declared they would not transact any more business until the question was settled; and it resulted in the merchant, the buyer of the goods, paying the excess of duty out of his own pocket. He knew another instance where a gentleman had had to pay as much as £6,000 out of his own pocket additional duty on goods for which he had contracted before the duty was raised. He mentioned these circumstances to show how necessary it was, especially during times of confusion like the present, to consult, as far as possible, in India the Native mind and feeling, and not to introduce habits and ways of thinking to which they were unaccustomed, for the Native mind became unsettled, suspicious, and felt no confidence in the actions or intentions of the Government. Indeed, many of the difficulties we had had to contend with in India were produced by the ever-shifting and almost dodging policy of the Government in its endeavours to raise money. He observed also that the local Government had been authorized in one of the despatches to increase the export duties. Export duties he consider ed economically wrong, unless goods to which they were applied were a monopoly in the country in which they were manufactured or grown. Such exceptions to this rule might be found in the opium of India, the guano of Peru, and the tallow of Russia. But such articles as hemp and rape seed, and numerous other seeds which had entered to an enormous extent into the export trade of India, were the products of other countries as well; and therefore to whatever extent you increased the export duty upon them to that extent you placed the dealers in those commodities at a disadvantage as compared with the dealers of other countries. An export duty would eventually operate as a tax upon land by adding to the charges of sending the produce of the land to the foreign market, and as the land in India was the chief source of revenue, it followed that an export duty was one of the worst expedients that could be resorted to for the purpose of adding permanently to the resources of the State. The right hon. Gentleman had referred to the railways, and appeared to be looking forward to the time when the railways would no longer be a burden to the State. It might be satisfactory to the House to know that in the case of one of the most important of the India railways, with which he (Mr. Crawford) was connected, and which was now in course of construction, they were taking upon the 143 miles already opened from Calcutta to the coal districts, and to the north-west, £34 per mile per week; and as the traffic was carried at about 45 per cent working expenses, it followed that the net earnings were from £18 to £19 a mile per week. The cost of this line was not more than £12,000 a mile, so that the net annual return was considerably more than the guaranteed interest, and, in point of fact, the railway bad repaid to the Government already about £250,000 against the advances made on account of the guaranteed interest. In the case of the Great Indian Peninsula line, on the other side of India, they were taking £18 a mile, the cost of carrying on the traffic being about the same. It would be seen by going into the figures, that that also was earning sufficient to repay the guarantee. The line also from Allahabad to Cawnpore, which was 126 miles long, was opened last March, and upon that the earnings were in the gross about £18 or £19 a mile. Therefore, it might be taken almost as a cer- tainty that as those railways were opened up, the amount of revenue received from them would greatly exceed the guaranteed interest, and that the railways would not form any permanent charge upon the Government. It was true that the Government of this country had found it necessary to pay large sums of money to the proprietors of those railways during the progress of construction, but that money had been paid not out of the funds of India, but out of the funds of the shareholders themselves. The power having been given to pay up the calls to a great extent, they had done so. They had paid the money in advance to the Indian Government in this country, and those payments had largely exceeded the amount returned in the shape of the guaranteed interest; so that thus far the guarantee had not operated as a tax upon the Indian finances. In a paper issued last week, giving a statement of the public debt of India, he found included amongst the creditors of India his Majesty the King of Oude, for a sum in the whole amounting to £1,770,000, in three several sums, bearing interest at the rate of 6, 5, and 4 per cent respectively. He wished to know whether these sums represented a debt due by India to the state of Oude, and if so, whether the right hon. Gentleman (Sir Charles Wood) would have any objection to state what course the Government intended to take in respect to it—whether it was intended to "write the money" off, as it was termed in commercial phrase, or still to regard it as a debt? It was with great satisfaction that he heard the announcement that it was intended to send out some gentleman of large financial experience to take charge of the financial administration of India, a course which he had himself suggested last Session, and from which he anticipated great advantage. He thought the time had arrived when some improvement in the banking affairs of India might be introduced. By banking on a large scale, as in this country, he believed that a great improvement might be effected in the mode of carrying on the public service.

LORD STANLEY

Sir, I agree in part of what has fallen from the right hon. Gentleman, and even if I differed from some of his opinions to a greater extent than I do, still I should feel that as he must be bound to some extent by the course of those who preceded him in office under circumstances of a very unusual description, he is entitled not merely to forbearance from opposition, but to the cordial aid of this House; and that aid, I may venture to answer for those who sit on this side, will be freely and frankly given. It is hardly possible to conceive a situation of greater difficulty or responsibility than that which is occupied by whoever is at the present time Minister for India. The India of 1859 is totally different from the India of three or four years ago. No doubt external peace has been restored; but there is, I am afraid, an amount of animosity, distrust, and ill-feeling in India which will take a considerable time to eradicate. The military reputation of England has been retrieved; but it will be impossible for the Natives of India to forget that our power was during many months seriously shaken, and that it was so shaken although a considerable proportion of those who had the greatest power and influence in the country not only held aloof from the movement of the Native army, but cordially supported us. The financial difficulty has been clearly stated by the right hon. Baronet, and, so far from there being any tendency in this country to underrate its magnitude, we are now, whatever may have been the case twelve months ago, rather in danger of running into the opposite extreme, and of considering it as more permanently formidable than it really is. All the sources of difficulty which I have mentioned are in great degree temporary in their character, but while they last they are undoubtedly the most serious obstacles that a Minister can have to encounter. The question of Indian finance may be either a very wide or a very narrow one, according to the manner in which it is considered. There is no subject connected with the government of the country that docs not somewhere or another touch upon the question of finance, and therefore, if we were to go into all the topics that might be dealt with in considering the proposed loan I scarcely know within what limits it would be possible to confine the debate of this evening. I cannot, however, avoid mentioning one or two matters which are not strictly in connection with the propositions of the right hon. Gentleman; but at the same time I shall endeavour as closely as I can to keep to the subject actually before us. In the present state of things it is clear that a deficit like that which exists at the present moment can be diminished only by one of three modes. Either taxation must be increased or some measures must be taken to obtain relief beyond the limits of India, or else there must be a reduction either in the civil or military expenditure. The right hon. Baronet has not held out much hope of an augmented revenue from an increase of taxation beyond that already sanctioned, or now under consideration, and I am glad that he has not done so. The measures actually taken by the Government at Calcutta for increasing the taxation of India were determined upon independent of, though coincident with, those sanctioned by the Government at home. I believe, indeed, that the two schemes crossed each other on the road. The Government at Calcutta proposed a larger amount of increase than that which was recommended from this country. I am far from saying that they were wrong in doing so; in fact, on the part of the Government at home, I at once acquiesced in the course they took; but I mentioned the circumstance to show that the view of the Government in this country was not favourable to a larger increase of taxation than that actually adopted. A considerably larger sum will be realized from the scheme of the authorities in India than that which would have been received if the recommendations of the Government at home had been carried into effect; but, when those sources of revenue have been exhausted, I am not very sanguine that more can be obtained in other modes from the people. Certainly, at all events, a great majority of the schemes of new taxation which have been put forth both here and in India have been more calculated to be dangerous than productive. The proposed tobacco tax, for example, would be a tax upon the poorest class of the people, depriving them of one of the few luxuries which they enjoy, and from its nature it would be singularly liable to evasion, unless the collection were enforced by means of a Government monopoly, which would be objectionable in every respect. The plan of a succession tax seems at first sight more feasible, but we must remember that in India such a tax would assume a very different character from that which it bears in this country. I speak with some hesitation and doubt, but I do not believe that you would find it easy to impose anything in the nature of a succession-duty upon property other than landed property. To attempt to ascertain the amount of capital possessed by a Native merchant or banker would only be to incur disappointment and failure; your tax would be evaded with the greatest possible facility, and would prove unproductive unless the collection was conducted on a system so inquisitorial as would not long be tolerated even among the patient people of India. Even with respect to landed property many difficulties present themselves, for it should be remembered that in India, where the Government is the owner of large portions of the land, and where the cultivators of the soil stand in the relation of tenants, the Government is already receiving in one shape or another as much as the land can yield without making its cultivation unprofitable. Any attempt, therefore, to tax a man who succeeded to the occupation of lands which he held subject to large payments to the Government would simply be taking out of one pocket what you are putting into another. So with respect to the proposal to impose licences upon certain trades. That is a proposition not free from objection in principle, and, if an attempt were made to put it in force, its effects would require to be very closely and carefully watched. Upon the whole, looking to the present amount of your taxation in India, and the considerable increase now being made in the various branches of revenue, I do not think we can expect much more from that source. Then comes the question which we have mainly to consider this evening—whether it is necessary or possible to afford any relief to the finances of India from any quarter beyond India itself. Some discussion took place at the beginning of last Session as to the possibility of an Imperial guarantee for Indian loans. The arguments for and against a retrospective guarantee—that is to say, a guarantee upon debt already contracted—are capable of being summed up in few words. It is argued in favour of such a measure, that in the event of the Indian Empire being lost, the pressure which its creditors would bring to bear upon the Imperial Government would be such as no Government could resist; that if the Indian Government were able to borrow at an English rate of interest upwards of £1,000,000 per annum would be saved; and, finally, that a guarantee would not entail upon the Imperial Government any actual outlay, nor would the amount, large as it might be, be sufficient materially to lower the credit of England in the market. It is contended, on the other hand, that the contingent obligation to which you would render yourselves in a certain event liable would be greater than any Government ought to take upon itself without ab- solute necessity; that it would be wrong to remove from the Indian Government that liability to financial difficulty and distress which is one of the best securities against rashness and improvidence; and that—to this argument I attach more weight than to the two others—you cannot afford the benefit of a guarantee without creating a feeling of apprehension on the part of the holders of your existing debt. It is well known that the reduction of interest a few years ago, however reasonable and proper according to English ideas, created among the Natives a greater feeling of uncertainty and unwillingness to trust the Government than any other step which we have taken; and I am afraid that an Imperial guarantee, naturally followed by a reduction of interest, would produce the same discontent only upon a larger scale. I am not surprised, therefore, that the right hon. Gentleman does not ask Parliament to take upon itself retrospectively the whole or any part of the Indian debt; but I confess I do entertain some doubt whether, looking only to the circumstances of the moment, and to the loan which it is now proposed to raise, the same determination that India shall rely wholly upon Indian resources is applicable to its present condition. I think it may be fairly argued whether, under present circumstances, India is not entitled to look for aid in some way or other to the Government of this country. I have heard it stated in this House, and upon high authority, that financially we have gained nothing by the possession of India; that all we have got by it is the power of trading there, which we should equally possess if it were an independent country. But in examining the financial relations of the two countries, it is impossible to overlook the fact that for half a century past an immense number of Englishmen have been employed and supported out of the revenues of India; that those who go there are for the most part persons without fortune; and that they return, not all with great wealth, but still with a competence derived from Indian resources. I believe the amount of contribution, not to public, but to private necessities, from the people of India to the people of England cannot be taken at less than from £5,000,000 to £6,000,000 sterling. Now, that is a sum which, in striking a balance between England and India, we cannot fairly leave out of sight. But I do not think you can argue this as altogether a question of right or policy. I am afraid—and this is one of the very few points upon which I differ from the statement of the right hon. Gentleman—that something in the nature of Imperial assistance will become before long a matter of absolute necessity. I confess I am inclined to doubt—and on this point I am supported by the authority of an hon. Gentleman who is far more intimately acquainted with this matter than I can pretend to be—whether it will be possible to throw so large an amount of debentures upon the market (if that he the course adopted) without considerably decreasing their value, and I believe it is well known that if the value of the security falls below a certain point, you not only have to give higher terms, but it will not be saleable upon any terms. Well, then, I think it ought to be considered whether the operation which the right hon. Gentleman proposes will not seriously affect the progress of those public works upon which he justly lays so great a stress. We must remember that it is not only the Government of India which wants money, but I think I understood him to say that something like £6,000,000 would be required by the various public companies connected with India. They will go into the market equally upon the credit of the Indian Government, so that in point of fact there will be required not £5,000,000, but £11,000,000, which the Government and the companies will be borrowing together. I think, therefore, the question may arise—not merely as a matter of policy or of right, but as a matter of sheer necessity consequent on failure of credit—whether the assistance of the Imperial Government should not be given, not retrospectively, but to satisfy present exigencies, and to cease when those exigencies cease. If, however, no proposition of that kind is entertained by the Committee, then, I think, another question arises, which may be taken in either of two ways as between the finances of India and England. Parliament will have to consider on what ground it can justify, at a time of difficulty like the present, the distinction which has always existed, and for which I have never known a reason assigned, between the military expenditure of the Colonies and the military expenditure of India. It would be madness to contend that the same rule should be applied to the two cases. That would be wholly out of the question; but I think that both the Indian and the colonial system of military expenditure might mutually borrow something with advantage. Take, for instance, the case of a large colony like the Cape, where the finances are flourishing, and the population prosperous, but where an enormous military expenditure is borne by this country. I have never been able to understand why the British Government does not reduce its military expenditure on account of such colonies as those, giving to their Governments the option of defraying part of the charges of the Imperial troops stationed there, or of establishing a local militia. Of course I know that you are bound by many old engagements, and that if any change is made it must be a gradual one. But the fact remains, that in the case of the Colonies we take too much of the military expenditure upon ourselves, while in the case of India we go into what I think is the opposite extreme, by absolutely refusing to hold ourselves liable for any portion of the military expenditure there. Now, I think that, not relying on one single instance, but taking the whole course of our colonial Government in this respect, and comparing the two systems, it would not be difficult to prove that, unless the force in the Colonies is altogether lavish and disproportionate to their wants, India has in point of justice some claim—to what extent I am not at present prepared to say—to Imperial assistance in bearing its military charges. If this view be not adopted, there is another which deserves consideration. I think it will be found if we look into the history of the military charges imposed upon India, and of the wars carried on by the Indian Government, that some of these—and those the most expensive—have been distinctly undertaken from English and Imperial as distinguished from local policy. Take, for instance, the Affghan war. It can be proved that England, considered apart from her connection with India, had an interest in that war. It was an English war, carried on from motives of European policy, and yet I believe every shilling of the expenditure has been defrayed by the Indian Exchequer. Now, I mention these circumstances because if the Indian Government is driven, as I believe it will be by necessity, to appeal to this country for financial aid, either in the form of a guarantee for a new loan or in any other way. I think it will be wise and just to remember that that appeal is not altogether a groundless one, that it is not an appeal ad misericordiam, arising merely from the necessities of the Indian Exchequer, but that it really has some foundation in reason and in justice. Well, then, let us next consider what it may be possible to accomplish in the reduction of Indian expenditure. We have been told of a deficit of £10,000,000, the expenditure in round numbers being £46,000,000, and the income only £36,000,000. With regard, first, to the cost of the civil service, I pass over the expenses of the home Government, for they are comparatively insignificant. The question was argued at great length, and was very recently settled by Parliament, and I do not apprehend that, for the sake of any slight saving of the salary of one or two members of the Council, it would be worth while for Government or for Parliament to interfere with that settlement. The principal value of the Home Council of India will, I think, be found to consist in the assistance which it will afford to the Indian Minister of the day in resisting claims and charges which there is always a tendency to throw unduly upon the Indian Exchequer. I am not speaking now of any particular time or Government; the controversy to which I refer has gone on ever since the Board of Control was established; but where there is a large amount of discretionary military expenditure with regard to which, at various times, questions may arise as to whether it should fall upon India or upon England—where there is a Chancellor of the Exchequer and a Government naturally bent on reducing English expenditure as far as they can in the Parliamentary Estimates—there will always be an inclination, an involuntary, an inevitable inclination, to throw upon India, especially in military matters, financial charges which belong properly to England. A body of men like the members of the Indian Council, who are independent of the Government and of the Treasury, will therefore be highly useful in resisting this pressure. With respect to the larger question of the civil administration in India itself, I can only say that in dealing with it there are in my opinion two distinct and separate points to be considered. The first is what course we ought to take with respect to that subject at the present; the second, what it may be in our power ultimately to carry into effect. Looking merely to the exigencies of this, or to those of the next two or three years, I concur with the right hon. Gentleman opposite in thinking that nothing worth speaking of can be done in the way of reduction in that direction. I say so because it is quite clear that, except in case of extraordinary emergency, you could hardly reduce existing salaries by any large amount, and it may be a question, if you did so, whether the saving thus effected would compensate the country for the discontent which such a proceeding would unquestionably create. With respect to the future, I can only say that I do not concur with what fell from the right hon. Gentleman—and it was almost the only sentence to which he gave expression which I heard with regret—as to the expediency of increasing the amount of Europeans employed in the civil service in India. The state of feeling which exists at the present moment—a state of feeling which is, perhaps, not the unnatural result of the distrust and jealousy which such a struggle as that which they have just gone through tends to engender between two distinct races—may be favourable to such a change. That feeling, however, will not, I feel assured be permanent in India, and I, for one, see no good reason for altering the opinion which met with such general concurrence in 1853, and which was favourable to our introducing ultimately larger and larger numbers of the Natives—especially the educated Natives—of India into the civil service. I do not, indeed, suppose that any one would propose to do away with the covenanted service. It may or it may not become, in the course of time, faulty as an institution; but it is at the present moment working well, and you cannot dispense with it. Without taking such a course, however, means may be adopted to remove that which in India forms the principal ground of objection to the service—namely, its entirely exclusive character. I am aware of the risk of favouritism and jobbing which may be incurred by a departure from the strictness of the existing rule; but I also know that nothing operates so much to discourage those who form the uncovenanted service of India, whether its members be European or Native, as the knowledge that there is a limit in the degrees of official rank beyond which they must not hope to pass. And when I had the honour of being in office, as Secretary of State for India, I intended to bring before the House—for I believe the object which I had in view could be accomplished only by means of an Act of Parliament— a measure by which I thought the present necessities of the case might be met. I should have proposed that it should be possible—notwithstanding former Acts limiting certain offices to the covenanted service—that the uncovenanted servants should be admitted to any or to all of those posts, but only after a certain number of years' service in the country, and upon the recommendation of the Governor General, and with the sanction of the Secretary of State. If you establish these three checks, aided as you would be by the individual jealousy of the covenanted service itself, which always looks with disfavour upon those who enter it from without, and would prevent the privilege from being abused, and if you proceed in the first instance gradually, admitting in rare instances those who deserved well in the lower branches of the service of India, be they Natives or Europeans, my opinion is that you would be enabled ultimately to effect, I will not say a very large, but a considerable saving in the general expenditure of that country. You would do more; you would give satisfaction to a large class of persons who now naturally look upon their position with feelings of discontent, and thus economise, though in a different way, to a greater extent than you suppose. There is also another measure with respect to the Indian Civil service on which I am anxious to say a few words, and which is, I believe, at present under consideration. I thought a saving—though certainly, perhaps, not a very considerable one—might be effected by dealing with the higher departments of the Indian service, and thus affording an indication of the intention of the Government to enforce economy in earnest. In speaking of the higher departments of the service I refer especially to the composition of the Governor General's Council in Calcutta. At present that council consists of four members, each of whom receives a salary of £8,000 per annum. They are, however, charged with the duties of no particular department, and simply revise and superintend, as it were, the whole administration, thus acting as a nominal—for it is only a nominal—check on the Governor General, while they write minutes home on all the subjects which come under their notice. Now it is, I admit, quite right that the Governor General, who has had in many instances no previous acquaintance with India, should on his arrival there be surrounded by competent and experienced advisers. I am nevertheless of opinion that you might have a Council equally efficient as the present, and yet effect a saving of expenditure to some extent, if, instead of employing councillors who discharge no executive functions, you would engage the services of those in that capacity who happened to be the actual heads of the principal departments. I of course did not mean these observations to refer to those who now occupy the position of members of the Council in India. I simply meant to suggest it as a proposal worthy of consideration, that, as in England we have a Cabinet—which is the consulting body—the individual Members of which have charge of separate departments, while they are collectively responsible for the conduct of affairs, so in India a similar system might be established. Something would be saved directly by the adoption of such a course; but I believe a still greater advantage might be gained indirectly, inasmuch as there would be less cause for complaint in the lower branches of the service, when it was found that reductions had commenced in the higher quarters. But however that may be, I am of opinion that in considering the balance of income and expenditure, it will be found that a large reduction in the present outlay in India must be on account of railways. About £20,000,000 capital—to speak in round numbers—have been paid up. The interest which the Indian Government has guaranteed, and which is paid, amounts to £1,000,000. From this expenditure there has been as yet very little return, inasmuch as there are only a few lines open, and there is in consequence hardly anything to be set off against the outlay. When, however, the main lines are once completed I feel confident that although a line hero and there, which has been constructed for military purposes, may not pay—it will be found, setting off the good against the bad, that they will more than meet the amount which has been guaranteed. You may, therefore, loot forward to a prospective reduction in this respect of £500,000 or £1,000,000. I cannot help thinking also, although the point is one on which I venture to give an opinion with some hesitation, that the sums we have paid in the shape of compensation for losses incurred will not be altogether without an offset in future years. The account is not, at all events, so unfavourable as it may appear to be, because, notwithstanding the large and liberal sums which have been given to our Native allies and to those who have suffered by the outbreak in different parts of India, something will be saved to the revenue from the forfeiture of pensions and estates. But, passing from that subject, I may be permitted to observe that the right hon. Gentleman stated only the simple and literal fact when he told us that the question of equalizing the balance of income and expenditure depended mainly upon the position in which we maintained our military force. The expense of the Indian army previous to the insurrection was £12,500,000. It has been since that period nearly doubled, and that circumstance alone would more than account for the total deficit of the last two or three years. Upon this score I entertain no sanguine anticipations, inasmuch as I think it will be impossible to return for some time to the old standard in the ease of our military force in India. The right hon. Gentleman stated truly enough that previous to the mutiny between 45,000 and 46,000 troops were the maximum amount of the European force in India; the number of the Native army being then 250,000, while they have since increased enormously; the European force also being much greater than before. Now, with respect to the Native troops, I may say that if no reduction has been made before the present time in their number, it has been because the Government of India on the spot did not think it expedient that any such reduction should be made. The Indian authorities have, indeed, been pressed over and over again by the Home Government to make such reductions in the Native force as they thought could be made consistently with the safety of the empire. For my own part, I believe this may be done, and done soon, without giving rise to any discontent on the part of the men themselves, specially in the case of men such as those who come from the Punjab, and who were informed that their services would be required only for a particular emergency. Looking at the whole military question and with a lively recollection of the condition of Indian finance, I confess, though on this point I speak with hesitation and doubt, I do not see that it would in any case be safe or wise to reduce the European force hereafter to be retained in India below 60,000 or 65,000. I am not speaking of what would be advisable in a military point of view, but I do not think any Minister would take upon himself to reduce the European force below that number, and I am afraid that even this force would impose a very serious burden on the resources of India. With regard to the Native force, undoubtedly a much larger reduction might be made, and I think when the immediate exigency is over, this question of military police, on which an enormous outlay has taken place, ought to be looked into carefully and minutely. In every case this great force of military police was raised by the authorities on the spot with the view of meeting the emergencies of the moment, and not in consequence of directions from home. I do not say that it was a mistake, or could be avoided, but, of course, when the force was partially created and a good deal of money had been spent, we had no option except to sanction that expenditure. I know that many of the highest authorities in India doubt whether, with the exception of newly-acquired countries, any police force should be kept, on a purely military organization. There is the danger of such a force becoming neither one thing nor the other—not disciplined enough for a military force, and at the same time too regular a force for the ordinary duties of police. If I had to suggest the means by which the difficulties of this question of military organization could be diminished, I should say that in the first place it would be better for the Indian Government to confine their attention to the army of Bengal, and not attempt to introduce large changes into those of Madras and Bombay. I think also, that whatever other steps are taken, a large proportion of the European force maintained in India—probably not less than two-fifths—should be troops exclusively for Indian service. I say that on many grounds, partly because it is a great object to save the cost of transport to and fro, but mainly because I think that if you withdraw from the Governor General and the administration of India the assistance of many hundreds of able and intelligent young men who have gone out as officers, intending to pass their lives in India, and available for either civil or military duties, and if you replace them by men of equal intelligence and ability, yet not intending to remain beyond a few years, you weaken the Indian administration in a civil and military point of view to an extent hardly possible to calculate. I do not know that there are any other remarks which I feel it my duty to make at present. The subjects connected with Indian administration are almost without limit, and it is possible to go into them at much greater length; but I have endeavoured to dwell upon those which have a more immediate and practical reference to Indian finance.

MR. BRIGHT

Sir, I have so often addressed the House upon the question of India that I feel some hesitation in asking a portion of the time of the Committee this evening. But notwithstanding an observation of the right hon. Gentleman the Secretary for India that he does not see anything gloomy in the future of India, I confess that to my view the question assumes yearly a greater magnitude, and I may say a greater peril. I think, therefore, that having given some attention to this subject in years past I may be permitted to bring my share, be its value more or less, to the great attempt which we are now making to confront this great evil. When we recollect how insufficient are the statements which he has from India, the right hon. Gentleman has given us as clear an account of the finances of India as it was possible for him to do, and looking at them in the most favourable point of view we come to this conclusion:—We have what we have had for twenty years, only more rapidly accumulating, deficit on deficit and debt on debt. The right hon. Gentleman told the Committee that when he left the Government of India, I think, in 1855, everything was in a most satisfactory condition. Well, it did happen in that year, perhaps by some of that kind of management which I have observed occasionally in Indian finance, that the deficit was brought down to a sum not exceeding £150,000. [Sir C. WOOD: There was a surplus of £400,000.] The deficit, I believe, before the mutiny was £143,000. But, if the right hon. Gentleman will allow me to take the three years preceding the mutiny, I think that will give a much fairer idea of the real state of the case, and it is not the least use shutting our eyes to the real state of the case, because some day or other it will find its out, or we shall find out it. The real state of the case in the three years preceding the mutiny, 1855, 1856, and 1857, ending the 30th of April, is a deficit of £2,823,000, being an average not very far short of £1,000,000 a year. That is the state of things immediately after the right hon. Gentleman left office. I do not the least find fault with him. He did not make the deficit, but I merely state this to show that things were not in that favourable state at the moment which the right hon. Gentleman would induce the Committee to believe. Keeping our attention to that period, there is another point of view, also very important. It appears to me that any Government must be an excessively bad Government which cannot defray its expenses out of the taxes which it levies on its people. We know, and every one has for years known, that in India there is a source of revenue, not from taxes levied on the people, but from opium, very like the revenue derived by the Peruvian Government from guano. If we turn to those three years and see what relation the expenditure of the Government had to taxes levied on the people of India we shall find, though we may hear that the taxes are not so much as we imagine, or that the people are extremely poor, or that the Government is very extravagant—we shall find that the sum levied for the sale of opium and transit was no less than £10,500,000, and if we add that to the £2,800,000, we get a sum of £13,300,000 which is the exact sum which the Government of India cost in those three years over and above what was raised from the people by actual taxation. I say that it is a state of things which ought to cause alarm, because we know and we find it stated in the last despatches that the income derived from opium is of a precarious character and by the variation of climate in India, or by the variation of policy in the Chinese Government, that revenue may very suddenly either be very much impaired or be cut off altogether. The right hon. Gentleman brings us to the condition in which we are now, and it may be stated in the fewest possible words to be this,—that the debt of India has been constantly rising, in fact, as long as we have any recollection of the country, that it amounts now to £100,000,000 sterling. ["No, no!"] The right hon Gentleman said £95,000,000, but he said there would be £5,000,000 next year, and I will undertake to say that it is fair to argue on the basis that the debt of India at this moment is about £100,000,000, and there is a deficit of £12,000,000 this year, and there may be expected to be a deficit of £10,000,000 next. It is not to be wondered that it should be difficult to borrow money on Indian account. I am not surprised at the hon. Member for Kendal (Mr. Glyn) being so lively in the House to-night, and other hon. Gentlemen connected with the city, who, I understand, have been impressing on the Secretary of State the fact that money cannot be had in the city for the purpose for which he wants it. I do not wonder that it is difficult to raise money on Indian account. I should think it extraordinary if it could be borrowed without a high rate of interest, and that it can be borrowed at all can only arise from the fact that England, whatever disasters she gets into, generally contrives by the blood of her soldiers or by the taxation of somebody, to scramble through her difficulties, and to maintain before the world, though by enormous sacrifices, a character for good faith which is scarcely held by any other country in the world. With regard to the question of an Imperial guarantee, I take an opposite view from the noble Lord (Lord Stanley) on that particular point, though I agree with what he said as to certain expenses thrown on the Indian Government. Last year I referred to the enormous expense of the Affghan war—about £15,000,000—the whole of which ought to have been thrown on the taxation of the people of England, because it was a war commanded by the English Cabinet, for objects supposed to be English, but which, in my opinion, were of no advantage either to England or India. It was most unjust that this enormous burden should have been thrown upon the finances of the Indian Government. But I do not oppose an Imperial guarantee because I particularly sympathize with the English taxpayers in this matter. I think the English taxpayers have generally neglected all the affairs of India, and might be left to pay for it. But there was no justice in imposing on the unfortunate millions of India the burden of a policy with which they had nothing to do, and which could not bring any one of them a single handful of rice more—it did bring them rather less than more—than he would have eaten without it. But I object to an Imperial guarantee on this ground,—if we let the Service of India, after exhausting the resources of India, put its hands into the pockets of the English people, the people of England having no control over the Indian expenditure, it is impossible to say to what lengths of unimagined extravagance it would go; and in endeavouring to save India may we not go far towards ruining England? But look at this question of Indian finance from another point of view. The noble Lord (Lord Stanley) and the right hon. Gentleman the Secretary for India have both referred to the enormous amount of the whole taxation of India taken by the military service. I believe it has been shown that at this moment almost, if not altogether, the whole of the net revenue of India is being absorbed by the military service of that empire; that not a farthing is left out of the whole net revenue of India to pay the expenses of the civil government or the public creditor. If we leave out the opium duty, perhaps we shall see how far the military service hears on the taxation of India; we shall see that more than its net amount is absorbed by the military service. That is a state of things that has never existed in any other country or among any other people, for any considerable period, without bringing that country to anarchy and ruin. We have been told by the Governor General that the great bulk of the revenue of India is not elastic; that with regard to the land-tax there had been for a long period no increase in it; that, on the contrary, that large source of income had decreased. He tells us, further, that the army cannot, at present, be largely reduced with safely. If so, what is the end to which we must come? Either the Government of India must come to an end, or England itself must become tributary to India. Seeing that the Chancellor of the Exchequer has within the last fortnight asked £70,000,000 of the English taxpayer for the expenses of the English Government, to ask nine or ten millions more for the government of India would certainly cause great dissatisfaction in this country. The picture is, to my mind, an alarming one, notwithstanding the cheerful view taken of it by the Secretary for India; and it has filled many besides myself with dismay. Now, looking round fur modes of escape from this position, I believe they exist, if we had the courage to adopt them. An hon. Friend has asked me, "Is there nobody to tell the House of Commons the truth on this matter?" I might ask why he has not done it himself. I suppose he is afraid of being thought rash; but his advice is, that the Government should re-establish the independence of the Punjab, recall the Ameers of Scinde, restore the Government of the King of Oude, giving to it the dependency of Nagpore. I confess, whether it be rash or not, that I think it would be wise to restore the Government of the Panjab and to give independence to that province which is called Scinde, because—I will not say because—hut it is one reason, as from that part of the country no revenue is received in excess of the expense which its retention causes to this country, why we should endeavour to bring our dominions in India, within a reasonable and manageable compass. No policy can be more lunatic than the policy of annexation we have pursued of late years in India, and the calamity we are now meeting is the natural and inevitable consequence of the folly we have com- mitted. It is not easy for great generals and statesmen who have been made earls and marquesses and had bronze statues put up in their honour in our public squares—it is not easy for the statesmen who have done all this to turn round and reverse it all; they have not the moral courage to do it; it might be an act of peril; it might appear a descent from the summit of empire and be wrongly construed throughout the world. But as a question of finance and good government we should, a few years hence, admit that it was a sound policy. But I will not pursue this subject, for I may fairly take it for granted that the House of Commons and the Government of England are not likely to take such a course till we are reduced to some extremity even greater than that which now meets us. But there is another course that may fairly be recommended. It is to take India as it is, the empire with all your annexations as it stands, and see if it is not possible to do something better with them than you have done before, and give it a chance in future years of redeeming not only the character of the Government but its financial and legislative position. The noble Lord (Lord Stanley) says there cannot be any great diminution in the expenditure for the civil service of India; but I do not in the least agree with the Secretary for India when he says that the gentlemen of the civil service in that country are not overpaid. Every one knows that they are overpaid; except some very large incomed bishops of whom we have heard, no men are so grossly overpaid as the officials of the civil service in India. The proof of this may be found everywhere. Look at the Island of Ceylon; there the duties are as arduous and the climate as unfavourable as in India; yet the Government does not pay its officials there more than one half or two thirds of the salaries they are paid in India. There are in India itself many hundreds of Europeans, the officers of the Indian army, all the Indian clergy, and missionaries; there are also English merchants, carrying on their business at rates of profit not much exceeding the profits made in this country. But the civil service of the Indian Government, like everything privileged and exclusive, is a pampered body; and, notwithstanding it has produced some few able men who have worthily done their duty, I do not think the civil service of India deserves the loud praise we have so frequently heard awarded to it by speakers in this House. Now if you could reduce the expense of the civil service by any considerable amount, the best thing you could do with the money would be to increase the establishment by sending a greater number of competent persons as magistrates, collectors and officials into the distant provinces, and thereby double the facilities for good government in those districts. If you could reduce the income of the civil service one half, you could for the same money have a more efficient service throughout India than at present. You might not save money, but you would get a more complete service for it. But for the military question the House of Commons will certainly have to take it in hand; Secretaries for India are afraid to grapple with it. I am not astonished that they feel some hesitation in doing so, for from every one connected with the military service they would hear the strongest objections to reducing the number of the troops. But let me ask the Committee to consider what it has just heard. Before the Revolt the European troops in India numbered 45,000 and the Native troops 250,000; now the 45,000 European troops are 110,000, and the 250,000 Native soldiers are raised to 300,000. What was it that we heard during the Indian mutiny; what was the cause of all the letters that appeared in the newspapers? Why every man said that the great evil was having a Native army far larger than was required. That has been the source of peril, and that was the real cause of the mutiny. Now we have even a larger portion of this most perilous element than we had before. The authorities in India do not appear to have learnt anything from the mutiny, or they have learnt that all that was said in this House and in this country was untrue because they have 50,000 more Native troops than they had before the mutiny. Therefore, the mode of argument appears to be this:—A Native army was the cause of the mutiny, the cause of all our perils, and that now it is necessary to have more of it; and, as that is the perilous element, of course, 45,000 troops are not sufficient to keep them in check; therefore, you have at present 110,000; and certain officers who were examined, and the Commissioners who reported recommend that you shall always have at least 80,000 Europeans there. If we are only to have one body of troops to watch another, it seems to me there can be no hope of any diminution of our military force, nor any real reduction in our expenditure. Why is it that you require all this army? Let me ask the Committee to look at the matter as sensible men of business. The revolt, which has been such a terrible affair, has been suppressed. It was suppressed mainly by the 45,000 men in India, and not by the 110,000 you have succeeded in having there at a later period. More than that, there is not at the present moment any alarming amount of dissatisfaction in India, or at least the dissatisfied are dispirited, and have lost all hope of resisting the power of England, and must for a long period, I think, remain wholly dispirited. At the same time, you have disarmed the people over a vast province. There are millions of people in India, a great number of whom were previously in possession of arms, who do not now possess a single arm. I have seen in the last accounts, only a day or two since, a statement that not less than 1,400 forts in the kingdom of Oude alone have been destroyed, and we know that many more have been destroyed in other parts. There is at this moment no power for combined organized armed resistance against you, except that which is in the Native army, which the Indian Government has been building up of late to a greater extent than ever. The noble Lord (Lord Stanley) spoke of one point—the great importance of which I admit—the want of confidence and sympathy that must have arisen between the two races in consequence of the transactions of the last two years. The shock of revolt must have created great suspicion and hatred and fear, and there is nothing out of which panic grows so easily as out of those conditions. I believe that is the case in India, and perhaps there are indications of something of the kind at home. There is a panic, therefore, and neither the Governor General nor the civil service nor military officers can make up their minds that they are safe, recollecting the transactions of the past two years, in having a less military force than we now have in India. But if you ask those gentlemen they will never say they have enough. There are admirals here, as we know, who are perfectly wild about ships, with whom arithmetic on such a question goes for nothing. They would show you in the clearest possible manner that you had not ships enough. So also, although I am glad to find not to the same extent, as to troops. Some one said the other night, in answer to an hon. Gentleman, about an increased force of a particular kind, "There is nothing like leather," and it is so. I say naval officers and military officers are not the men to whom the Chancellor of the Exchequer should depute the great and solemn duty of determining what amount shall be expended for military purposes. There is not a country in the world that would not have been bankrupt long since, and plunged into irretrievable ruin, if the military authorities had been allowed to determine the amount of military force to be kept up, and the amount of revenue to be devoted to that purpose. I have another objection to this great army, and I now come to the question of policy, which, I am sorry to say, for India, has not been touched upon. I do not think this is a question to be merely settled by a very clever manner of giving the figures of the case. Those figures depend upon the course you intend to pursue, upon the policy which the Government intends to adopt, in that country. With this great army two things are certain—we can have no reform of the Government of India in India of any kind, nor an improved conduct on the part of the English in India towards the Natives in India. With a power like this—110,000 English troops, with an English regiment within an hour's reach of each civil servant, you will find the supremacy of the conquering race will be displayed in the most offensive manner. Everybody connected with India—the hon. Member for Devon-port (Sir Erskine Perry), the hon. Member for Aberdeen (Colonel Sykes)—all who are connected with India, know well that when the English were supposed to be feeble in India, when they had not a great army in the field or a great revenue to support it, every Englishman treated the Natives by whom he was surrounded rather with the feeling that he was an intruder in the country, and that it was not only proper but absolutely necessary to treat in a conciliatory and just manner the great body of the Natives of India; but precisely as our power increased the conduct of our countrymen changed, and I find in the excellent book of F. Shore that thirty years ago, he describes this as the very source of the growing ill-feeling between the races in India. It has grown from that time to this until we have an irritation and animosity which in our time, it may be, we shall see very little removed, or perhaps never wholly allayed. A Government, then, with this vast army, must always be in a difficulty. Lord Canning, nor lord anybody else, can turn his attention to anything but this wearing, exasperating question of how money is to be got for the next quarter to pay this army. He can't turn his attention in any way to reforms, and I am convinced that this House must insist upon the Government reducing the large amount of its army, whatever be the risk. A large army will render it impossible for you to hold the country, for you will have a constantly increasing debt, and anarchy must inevitably overwhelm you in the end. A small army, a moderate conciliatory, and just Government, with the finances in a prosperous condition, and I know not but for generations and centuries this country may possess a share, and a large share, in the government of those vast territories which it has conquered. As to measures of reduction, I admit that it is of little use attempting them unless accompanied by Amendment, and I have this charge to bring against the Indian Government. I did hope when the noble Lord spoke tonight that he would have told us something which I am sure he must have known—that there is no such thing as a real Government in India at all—that there is no responsibility either to a public opinion there, or to a public opinion at home, so that we can expect a better policy or happier results. Let hon. Gentlemen imagine a Government like that in India, over which the payers of the taxes have not the slightest control; for the great body of the people in India have, as we all know, no control in any way over the Government. There is no independent English opinion either that has any control over the Government, and the only opinions are that of the Government itself, or those of the military and civil services, and chiefly of the latter. They are not the payers of taxes; they are the spenders and the enjoyers of the taxes, and therefore the Government in India is in the most unfortunate position possible for the fulfilment of the great duties that must devolve upon every wise and just Government. The civil service, being privileged, is arrogant, and I had almost said tyrannous, as any one may see who reads the Indian papers, which mainly represent the opinion of that service and the military service, which, as everywhere else where it is not checked by the resolution of the taxpayers and civilians, is clamorous and insatiable for greater expenditure. The Governor General himself, and I do not make any attack upon Lord Canning, although I could conceive a Governor General more suited to his great and difficult position, he is a creature of these very services. I now ask the noble Lord to remember a case which happened during the time he held office, and if the Committee will allow me, for the sake of illustration, to refer to it, I don't think it will be any waste of time. Hon. Gentlemen will recollect that during the last year, my hon. Friend the Member for Stockport (Mr. J. B. Smith), who has paid great and untiring attention to Indian subjects, put a question to the noble Lord relating to the annexation of a small territory called Dhar. What has been the course of events in relation to that case? The news of the annexation reached this country on the 20th of March last year. Upon the 23rd the question was put in this House, when the hon. Member for Inverness (Mr. Baillie), then Under Secretary, replied, that the Government had just been informed of it by the Governor General, and that he was solely responsible for the act, the Government here having had no previous communication. Upon the 11th of June the noble Lord (Lord Stanley) announced to the House, in answer to a question, that he had disallowed the annexation of Dhar. The despatch disallowing it has since been laid upon the table. It is dated June 22, and it asks for information from the Governor General. In India they assumed this unfortunate Rajah to be guilty of misdemeanor, because his troops had revolted, and the noble Lord in his despatch said, as I think, very sensibly, "If we can't keep our own troops, what argument is it for overturning the independence of the territory of Dhar, seeing that the Rajah himself has been faithful towards us, but his troops have rebelled?" The noble Lord asked for further information. In the preceding April the Ranee, the mother or step-mother of the Rajah, a mere boy of 13, sent two memorials to the Governor General, one by post, and the other through the local British officer, remonstrating against the annexation, and proving, as far as she could, that the Rajah had not been guilty of any wrong against us. This memorial was not acknowledged until August, when the Secretary for the Government of India desired the Ranee to forward the memorial through the Governor General's agent in Central India. In April these papers were laid upon the table of the House with one exception. The Ranee's memorial was not included in those papers. Now, when those papers were laid before the House, why was not that memorial, relating to the annexed territory, sent home and printed with the other papers, so that hon. Members of this House might have read it? The letter of the noble Lord (Lord Stanley) was dated the 22nd of June, 1858, and to this hour it has never been answered. The noble Lord's despatch disallowed the annexation; it condemned it, and asked for information. From the date of that despatch to this present 1st of August, 1859, there has not come any official information from the Governor General of what he has done, or any answer to the noble Lord's despatch, although sixteen months have elapsed. I say it is not fitting that the-Secretary of State for India should be treated with utter disregard, if not with something like contempt, by any great satrap who happens to be sent out to govern any of the provinces of this country. Why, this very case shows, that in the midst of the terrible hurricane of that mutiny, the thirst of annexation was unslaked. At the very moment, or just before, that the Queen issued Her gracious Proclamation here, the Government in India annexed the territory of this Rajah, a boy of 13 years of age, manifesting at the same time an utter disregard of the Government at home and the just sentiments, if they could have been ascertained, of the whole body of the people of this country. And this must be so, as long as you have a Government like that of Calcutta. Procrastination is its very nature. The noble Lord opposite (Lord Stanley) did an excellent thing. He did honour to himself by appointing a man of a new sort as Governor of Madras. I have not an extensive acquaintance with Sir C. Trevelyan, but I believe him to be a very intelligent man and very earnest for the good of India, and anxious to do the best he can for that country. But he finds that at Madras he is like a man who is manacled, as all the Governors arc. He is able to do almost nothing. But he has a spirit above being the passive instrument for doing nothing in the hands of the Governor General, and he has been disposed to make several changes which have looked excessively heterodox to those who are connected with the old Government of India, and which have shocked the nerves of the fifteen old gentlemen who meet in Leadenhall Street, and their brethren in India. I find that among the changes endeavoured to be effected by Sir C. Trevelyan, the following are enumerated:—He has endeavoured to conciliate the Natives by abolishing cer- tain ceremonial distinctions which were supposed to degrade them when visiting Government House; he has shown personal courtesy to them which appears to be too much neglected in India; he has conspicuously rewarded those who have rendered services to the State; he has made one of the Natives his aide-de-camp; he has endeavoured to improve the land tenure, to effect a settlement of the Enam, and to abolish the impress of cattle and carts. He has also abolished three-fourths, or, perhaps, more, of the paper work of the public servants. He also begun the great task of judicial reform, than which none is more urgently pressing. But what is said of Sir C. Trevelyan for instituting these reforms? He has raised a hornets' nest about him. Those who surround the Governor General at Calcutta say, "We might as well have the Governors of the Presidencies independent, if they are to do as they like without consulting the Governor General as has been done in past times." The Friend of India is a journal not particularly scrupulous in supporting the Calcutta Government, and which has a horror of any Government of India except by the Governor General and the few individuals who surround him. A writer in the Friend of India says:— Sir C. Trevelyan relies doubtless on Lord Stanley, and we do not dream of denying that the Secretary of State has provocation enough to excuse the unusual course he seems obliged to pursue. To send a reform to Calcutta is, at present, simply to lay it aside. It will probably not even be answered for two years, certainly not carried in five. Even when sanctioned, it will have to pass through a crucible through which no plan can escape entire. That weary waiting for Calcutta, of which all men, from Lord Stanley to the people of Singapore, now bitterly complain, may well tempt the Secretary to carry on his plans by the first mode offered to his hand. Here are only a dozen lines from a long article, and there are other articles in the same paper to the same purport. I think, then, that I am justified in condemning any Secretary for India who contents himself with giving us the figures necessary to show the state of the finances, which any clerk in the office could have done, and abstains from going into the questions of the Government of India and that policy upon which alone you can base any solid hope of an improvement in the condition of that country. There is another point I would mention. The Governor General of India goes out knowing little or nothing of India. I know exactly what he does when he is appointed. He shuts himself up to com- mence the first volume of Mr. Mill's History of India, and he reads through this laborious work without nearly so much effect in making him a good Governor General as a man might ignorantly suppose. He goes to India, a country of twenty-one nations, speaking twenty-one languages. He knows none of those nations, and he has not a glimmer of the grammar and pronunciation of those languages. He is surrounded by half-a-dozen or a dozen gentlemen who have been from fifteen to forty years in that country, and who have scrambled from the moderate but sure allowance with which they began in the service to the positions they now occupy. He knows nothing of the country or the people, and they are really unknown to the Government of India. To this hour the present Governor General has not travelled through any considerable portion of the territory of India. If he did, he would have to pay an increased assurance upon his life for travelling through a country in which there are very few roads and no bridges at all. Observe the position, then, in which the Governor General is placed. He is surrounded by an official circle, he breathes an official air, and everything is dim or dark beyond it. You lay duties upon him utterly beyond the mental or bodily strength of any man who ever existed adequately to perform. Turning from the Governor General to the Civil Service, see how short the period in which your servants in that country remain in any particular office. You are constantly criticising the bad customs of the United States, where every postmaster and many other officers lose their situations, and others are appointed whenever a now President is elected. You never make blunders like the United States, and you will therefore he surprised at a statement given in evidence by Mr. Underhill, the Secretary of the Baptist Missionary Society. He says that in certain districts in Bengal there are three or four Englishmen to 1,000,000 inhabitants, and that the magistrates are pepetually moving about. I have here the names of several gentlemen cited. Mr. Henry Lushington went to India in 1821, and remained till 1842. During these twenty-one years he filled twenty-one different offices; he went to Europe twice, being absent from India not less than four and a quarter years. Upon an average, therefore, he held his twenty-one offices not more than nine months each. Mr. J. P. Grant was Governor of Bengal. That was so good a place that he remained stationary in it. But he went to India in 1828, and remained there until 1841. In those thirteen years he held twenty-four different situations, being an average of less than six months for each. Mr. Charles Grant is a name which for three or four generations has been swarming in India. He was in India from 1829 to 1842, and in those thirteen years he filled seventeen offices, being an average of only eight months for each office. Mr. Halliday, Governor of Bengal, went to India in 1825, and remained until 1843. In those eighteen years he held twenty-one offices, and he did not become stationary until he was accredited to the lucrative and great office of Governor of Bengal. I think these facts show that there is something in the arrangements of the Indian Government which makes it no Government at all, except for the purpose of raising money and spending the taxes. It is no Government for watching over the people and conferring upon them those blessings which we try to silence our consciences by believing the British Government is established in India to promote. What can a Governor General do with such a Council, and with servants who are ever changing in all the departments? I am not stating my own opinion, but what is proved by the blue-books. Mr. Halliday stated that the police of Bengal were more feared than thieves and dacoits. But how is this Government, so occupied and so embarrassed, to be expected to put the police on a satisfactory footing? With regard to justice, I might appeal to any gentleman who has been in India whether, for the most part, the Judges in the Company's Courts are not without training, and if they are without training they will probably be without law. The delay is something of which we can have no conception, even with our experience of the Court of Chancery in this country, and perjury and wrong are universal wherever the courts of the Company's service have been established in India. Of their taxation we hear enough to-night. It is clumsy and unscientific. In their finance there is such confusion that the Government proposes to send out somebody, not to raise revenue, not to spend it, but somebody who will be able to tell you how it is, for that is what you want to know. They have no system of bookkeeping whatever. The Secretary of State to-night gives us a statement of revenue and of expenditure up to the 30th of April, 1858, sixteen months back, and even for the year preceding he can only furnish what he calls an "estimate." Would any other Legislative Assembly in the whole world, except this, tolerate such a state of things? I did try myself several years ago to get a statement of the accounts up to a later period; but I found it was of no use. They ought to be brought up to a later period; the thing is quite within the range of possibility; it is simply not done because there is no proper system of bookkeeping, and no one responsible for not doing it. You have no Government in India; you have no financial statement; you have no system of bookkeeping; no responsibility, and everything goes to confusion and ruin because there is such a Government, or no Government, and the English House of Commons has not taken the pains to place things on a better footing. The Secretary of State to-night points to the increase in the English trade. In that trade I am myself interested, and I am most delighted to see that increase; but it should be borne in mind that just now it is not a natural increase, and therefore not likely to be permanent. If you are spending so many millions in railroads and in carrying on war—that is, £22,000,000 for your armaments in India, instead of £12,000,000—is not that likely to make a great difference in your power to import more largely from this country? Do not we know that when the Government of the day was pouring English treasure into the Crimea the trade with the Levant was most materially increased? And, therefore, I say it will be a delusion for the right hon. Gentleman to expect that the extraordinary increase which has taken place within the last three years will go on in future in the same proportion. Now, the point which I wish to bring before the Committee and the Government is this, because it is on this that I rely mainly—I think I may say almost entirely—for any improvement in the future of India. It would be impertinent to take up the time of the Committee by merely cavilling at what other people said, and pointing out their errors and blunders if I had no hope of being able to suggest any improvement in the existing state of things. I believe a great improvement may be made, and by a gradual progress that will dislocate nothing. I dare say it may disappoint some individuals, but where it will disappoint one man in India it will please a thousand. What you want is to de-centralize your Government. I hold it to be manifestly impossible to govern 200,000,000 of persons, composing twenty-one different nations, speaking as many different languages, by a man who knows nothing of India, assisted by half-a-dozen councillors belonging to a privileged order, many of whom have had very little experience in India, except within narrow limits, and whose experience never involved the consideration and settlement of great questions of statesmanship. If you could have an independent Government in India for every 20,000,000 of its people, I do not hesitate to say, though we are so many thousand miles away, that there are Englishmen who, settling down among those 20,000,000 of people, would be able to conduct the Government of that particular province on conditions wholly different and immeasurably better than anything in the way of administration which we have ever seen in India. If I were Secretary of State for India, and not being so I would recommend the right hon. Gentleman to do that which I could do myself, or I would not hold his office for one month; because, as to holding office and coming before the House Session after Session with a gloomy statement, and with no kind of case to show that you are doing anything for India, or that you are justified in holding possession of it at all, is nothing but to receive a salary and to hold a dignity without any adequate notion of the high responsibility attaching to them. I am not blaming the right hon. Gentleman in particular; he is only doing what all his predecessors before him have done. There has been no real improvement since I have sat in Parliament in the government of India, and I believe the Bill of last year is not one whit better for purposes of administration than any that has gone before. But he would suggest to the right hon. Gentleman, whether it would not be a good thing to bring in a Bill to extend and define the powers of the Governors of the various Presidencies in India? I do not ask the right hon. Gentleman to turn out the fifteen gentlemen who assist him in Leadenhall Street to vegetate on their pensions, but I ask him to go to India and take the Presidency of Madras for instance. Let arrangements he made by which that Presidency shall be in a position to correspond directly with him in this country, and let every one connected with that Government of Madras feel that, with regard to the interests and the people of that Presidency, they will be responsible for pro- tection. At present there is no sort of tie between the governors and the governed. Why is it that we should not do for Madras what has been done for the Island of Ceylon? I am not about to set up the Council of Ceylon as a model institution; it is far from that, but I will tell you what it is, and you will sec that it would not be a difficult thing to make the change I propose. The other day I asked a gentleman holding an office in the Government, and who had lived some years in Ceylon, what was the state of the Council? He said it was composed of sixteen members, of whom six were non-official and independent, and the Governor had always a majority. He added that at the present moment in that Council there was one gentleman a pure Cingalese by birth and blood, another a Brahmin, another a half-caste, whose father was a Dutchman and whose mother was a Native, and three others who were either English merchants or planters. The Council has not much prestige, and therefore it is not easy to induce merchants in the interior to be members and to undertake its moderate duties; but the result is that this Cingalese, this Brahmin, this half-caste, and these three Englishmen, although they cannot out-vote Sir H. Ward, the Governor, are able to discuss questions of public interest in the eye and the ear of the public, and to tell what the independent population want, and so to form a representation of public opinion in the Council, which I will undertake to say, although so inefficient, is yet of high importance in the satisfactory government of that island. Why is it that we can have nothing like this in the Councils of Madras or Bombay? It would be easy to do, and I believe that an Act of Parliament which would do it would lay the foundation of the greatest reform that has yet taken place in India. At present all the governors are in fetters; and I see that blame has been imputed to Sir Charles Trevelyan for endeavouring to break through those fetters. No doubt an attempt will be made to get him recalled, but I hope that the right hon. Gentleman, while he moderates the ardour of the Governor so far as to prevent a rebellion among the civilians, will support him honestly and faithfully in all those changes which the right hon. Gentleman knows as well as I do are essential to the improvement of the government of that country. There is yet another question, and that is, what is to be done with regard to the people of India on the subject of education, and especially with reference to the matter of religious instruction? I beg the right hon. Gentleman to be cautious how he takes the advice of any gentlemen in this country who ask him to make changes in the established order of things there by appearing in the slightest degree to set yourselves to overthrow the caste and religion of the Natives of India. I have here an extract from a letter written by a gentleman who was present at one of the ceremonies of reading the Queen's Proclamation in November last. He says:— Not less than 7,000 Natives of all ranks and conditions and religions flocked to the esplanade at Tellicherry, where there was no show but the parading of a company of Sepoys, who fired a feu de joie very badly, to hear the Queen's Proclamation read. All who heard, all who heard not, manifested the deepest interest in it. The pledged inviolability of their religion and their lands spread like wildfire through the crowd, and was soon in every man's mouth. Their satisfaction was unbounded. … I mentioned that I went to Tellicherry to hear the Queen's Proclamation read. We have since had it read here (Anjarakandy). You will see an account of what took place on the occasion in the accompanying copy of an official report I addressed to the assistant-magistrate. What I have described understates the feeling manifested by the people. They were all eyes and ears, listening breathlessly to what was being read. You will observe that convening them for any public purpose whatever, except here, was a thing unknown, and would have been a thing scouted under the Company's government. Here I always assemble them, communicate everything they ought to know and hear, and talk it over with them. But a Queen's Proclamation is not an every-day affair, so they came in crowds, and I will venture to say that there is not another place in the Queen's India where it was so clearly explained to them or so thoroughly understood. But the impartial toleration of their religion and caste was the be-all and end-all of their comments, praise, and individual satisfaction. One Mafitta said, 'They had had scores of proclamations upon every conceivable subject, but never one so wise and sensible as this.' The East India Company was a wonderful Company for writing despatches, and there is nothing so Christian as their doctrine, nothing so unchristian as their conduct. That Proclamation has in it the basis of all you should aim at in future in India—a regard to the sacredness of their property, and the sacredness of their religion, and an extension to them of as regular and full justice as you show to your own fallen countrymen who are living in this country. Depend upon it these Natives of India can comprehend this as well as we comprehend it; and, if you treat them as we are treated, and as they ought to be treated, you will not require 400,000 men to help you to govern a people who are notoriously among the most industrious and most peaceable to be found on the face of the earth. There has lately been an act done by the noble Lord (Lord Stanley) to which I must allude. Why he did it I do not know. I am sure the noble Lord did not mean by it to do an act of injustice—though very great injustice has been done. A question was put the other night about a Native of India who had come to this country to qualify himself for entering into competition for employment in the civil service of his country. I have seen that young gentleman, and conversed with him; and when I state his case, it will be seen whether he has been treated well or wisely, though the regulation under which he has suffered may have been made without any reference to him individually. He arrived in this country in June, 1856, and remained preparing himself for competition for two years and a-half till December, 1858, when a new regulation came out, which made twenty-two instead of twenty-three years of age, the period for entering the civil service. He might have been ready for competition in July, 1860, but he could not be ready in July, 1859. Under these circumstances he would be past the age of twenty-two before he could be able to present himself for examination. The consequence is, that he has been obliged to turn himself to another channel for employment. His father is an assistant-builder in the Government dockyard of Bombay, and has been in England. There was great interest excited among the Natives when the young man left India to come to England, and there is great disappointment among his friends at the result. He has been laughed at for trusting the Government, and it is said that while the Government go on changing their regulations in this way no faith can be put in them. Now this is the first case of this kind that has happened. This young gentleman, or his father, has expended £1,500 in bringing him here and in endeavouring to give him the best education, solely with a view to suit him for the civil service. If he had entered into that civil service a great thing would have been accomplished. The result would have been that the House and the Secretary for India would have seen that it was very unjust, while the son of any one here could at home pursue his studies and enter into competition for the civil service, the sons of the Natives of India who wished to enter into the service of their own country must come thousands of miles at great expense, and live apart from their families for years before they were able to accomplish their object, and the result must have been that you would have established in some city in India the same mode of examination that you have established here. You must have been led to do that which would have enabled young men in India to offer themselves for the civil service of their country on as favourable terms as could be done in England. I am sure the noble Lord never had the slightest idea of the regulation having reference to this young man, or of injuring him; yet it has been done, and what has occurred leads to the conclusion that either somebody very deep in these matters has been at the bottom of this change, or that some wonderful combination of unfortunate circumstances has been at work, by which that which we have all so much at heart has been retarded. If the noble Lord had struck out this regulation, or made a new one, by which this young man could have had a chance of going home as a servant of civil service, the fact would have been worth a regiment of soldiers in India. In speaking on this subject I have nothing new to offer to the attention of the House. I have propounded the very same theories and remedies years ago. They are not my remedies and theories. I am not the inventor of local government for India, but the more I have considered the subject—the more I have discussed it with Members of this House and with gentlemen connected with India—the more I am convinced that you will not make a single step towards the improvement of India unless you change your whole system of government—unless you give to each Presidency a government with more independent powers than are now possessed by them. What would be thought if the whole of Europe was under one governor, who knew only the language of the Feejee Islands, and that his subordinates were like himself, only more intelligent than the inhabitants of Feejee Islands are supposed to be? You set a governor over nearly 200,000,000 of human beings, in a climate where the European cannot do the work he has to do so well as here—where neither the moral nor physical strength of the individual is equal to what it is at home—and you do not even always furnish the most powerful men for the office; you seem to think that the atmosphere will be always calm and the sea always smooth—and so the government of India goes on; there are promises without number of beneficial changes, but we never hear that India is much better or worse than before. Now, that is not the way to do justice to a great empire like India. If you had had a Native government in India, the late disturbances among your own troops would not have happened; and I own I tremble when I reflect that every post may bring us, in the present temper of the European troops in India, some dire intelligence of acts which they may have committed, thinking this a convenient opportunity for pressing some great claim of their own. I beg the Committee to consider this matter, notwithstanding that the right hon. Gentleman is not disposed to take a gloomy view of the state of India. Look at your responsibilities. India is ruled by Englishmen, but remember that in that unfortunate country you have destroyed every form of government but your own, you have cast the thrones of the Natives to the ground. Princely families, once the rulers of India, are now either houseless wanderers in the land they once called their own, or are pensioners on the bounty of the strangers by whom their fortunes have been overthrown. Nobles and gentry for ages are now merged in the common mass of the people. All over those vast regions there are countless millions helpless and defenceless, deprived of their natural leaders and their ancient chiefs, looking with only some small ray of hope to that omnipresent and irresistible Power by which they have been subjected. I appeal to you on behalf of the people. I have besought your mercy and your justice for many a year past; and if I speak to you earnestly now it is because the object for which I plead is dear to my heart. Is it not possible to touch a chord in the hearts of Englishmen, to raise them to a sense of the miseries inflicted on that once happy country by the crimes and the blunders of our rulers here? If you have steeled your hearts against the Natives; if nothing can stir you to sympathy with their miseries, at least have pity upon your own countrymen. Rely upon it the state of things which now exists in India must, before long, become most serious. I hope that you will not show to the world that, although your fathers conquered the country, you have not the ability to govern it. You had better disencumber yourselves of the fatal gift of empire rather than the present generation should be punished for the sins of the past. I speak in condemnatory language, because I believe it is deserved, and I hope that no future histo- rian will have to say the arms of England in India were irresistible, and before their victorious progress that ancient empire fell, but she was finally avenged, because the power of her conqueror was broken by the intolerable burdens and evils she cast upon her, accompanied by a waste of human life and a waste of money, which England herself was not able to bear.

MR. T. G. BARING

said, the hon. Gentleman owed no apology to the Committee for addressing them on a subject to which he had paid much attention for so many years past, and on several points he agreed very much with what the hon. Gentleman had said. He did not think, however, that there was any foundation for the complaint that the Secretary of State for India had confined himself to a dry statement of figures, as it was but a short time ago since the noble Lord who preceded him in office had entered into a very able and comprehensive statement with regard to all those questions of public policy which the hon. Member himself had brought before the House to-night, and the present question was essentially a financial one; he would, however, touch upon a few of the points to which the hon. Gentleman had adverted. He agreed with the hon. Gentleman that the Governor General was overworked, and that it was impossible for him to give his attention to all the matters submitted to him. That would probably explain why there had been no answer to the despatch in reference to the annexation of Dhar. A further despatch had, however, been recently sent out to India. The hon. Gentleman alluded to the frequent changes of office passed through before a civil servant attained high office in India. The recommendation in Mr. Rickett's report that salaries should be personal and not attached to the office merely, would probably meet many of the objections on that point; but the hon. Gentleman must recollect that much the same thing happened in this country, as most of the persons who held posts of great political importance here had passed through a great variety of offices. With respect to the Government of India, one change at least of great importance had been announced to-night—the union of the finance and revenue departments under a Member of Council appointed from this country to take charge of them both. That arrangement might be expected to confer great benefit on Indian administration. The hon. Gentleman was not quite accurate in say- ing that we had merely an estimate of the revenue of 1857–8, since the accounts for that year had been laid on the table and printed. We had an estimate only for 1858–9, for of course, it was too early yet to have received the accounts of that year with respect to Sir Charles Trevelyan. He could assure the hon. Gentleman that the Home Government had not the slightest desire to fetter his laudable zeal. From his great abilities and his knowledge of India, he was qualified to deal with questions of the highest importance, and, so far from any obstacle being thrown in his way, any suggestions which he might have to make would receive the fullest consideration. Several suggestions of his were now under consideration, such as a proposal for shortening correspondence—and certainly a change might be made in that particular with great advantage to both the Government at home and in India. With regard to the Enam Commission, Sir Charles Trevelyan had forwarded his opinion, but the opinion of the other Members of the Madras Government had not yet been received. The question was one which required the most deliberate consideration before any decision could be arrived at with regard to it. One circumstance connected with a minute of Sir Charles Trevelyan had certainly excited considerable comment in India, but it was an exceptional circumstance. It appeared that a minute written by the Governor on an Act passed by the Legislative Council, had been published in one of the Madras newspapers before it was communicated to the Supreme Government at Calcutta or the Home Government—a circumstance which had naturally attracted much attention. With regard to the question of decentralization, he could not go along with the hon. Gentleman in thinking that the minor Governments of India could be made independent of the Supreme Government. The chief powers of Government must rest in the hands of the Supreme Government; the financial check must be there, and the military control, but he admitted that a considerable saving of time would be made by relieving the minor Governments from the necessity of referring to the Supreme Government in regard to matters of detail. With regard to the Natives of India the hon. Gentleman had justly drawn attention to the necessity of associating the Natives in the Government of India. He entirely agreed with him. The right hon. Baronet (Sir Charles Wood) was of the same opinion, and there would be no disinclination on the part of Her Majesty's Government to do so when opportunity offered. In reference to the case of the Native gentleman who had come from Bombay to offer himself as a candidate at the next competitive examination for the Civil Service, but was prevented from doing so, that decision was come to by the noble Lord the late Secretary of State, and the cause of his exclusion was simply this. The limit of the age had formerly been 23; two years ago it was changed to 22; in consequence of some remonstrance it was retained at 23 for this year only, and as far as his age was concerned, the young gentleman was perfectly able to go up this year, but he wished to postpone his examination until next year when he would be above the age. To show that full justice had been done in this case he might mention that the noble Lord opposite, the late Indian Secretary, had referred the matter confidentially to Sir Edward Ryan, one of the Civil Service Commissioners, who was the person by whom this young man was originally recommended to come over to England, and his opinion was that except by altering the regulation as to the limit altogether, there was no way by which this young gentleman could come up. He regretted the case, but the decision could not be avoided. The real question, however, before the Committee was the financial question: and that of course depended mainly upon the amount of the military expenditure. The hon. Gentleman had stated he saw with regret, and almost with despair, that it now equalled the net revenue. This was hardly quite accurate, for in point of fact it was only two-thirds, and he (Mr. T. G. Baring) drew a more satisfactory conclusion from the fact: the military expenditure for the year 1859–60 was estimated at £21,000,000, the year before the mutiny it was only £12,000,000, showing a margin of £9,000,000 for a reduction to what it was before the mutiny; and when that was accomplished, as he hoped it soon would be, the revenue and expenditure would be equalized. The reduction in the military expenditure could not but be gradual. During the mutiny a large number of Native levies had been raised which could not at once be reduced, as it would not be advisable to let these levies who had served us well in the late struggle think they were hardly treated. The Government of India were applying themselves with great vigour to this question of the reduction of the Native army. The noble Lord, the late Secretary, had given instructions to that effect. A despatch had been received this morning announcing certain reductions, and no exertions would be omitted by the Government either at home or in India to reduce as fast as possible the large millitary expenditure which was the main cause of the present financial difficulty. As to reductions in the salaries of the civil service, the hon. Gentleman had again drawn a comparison between the salaries of the civil servants in Ceylon and those in India as an argument for reduction in India; but the climate in Ceylon was much better, and if the number of Europeans in proportion to the population was taken into account, the comparison would not be so unfavourable. He believed the salaries of working men in India were not too high. He believed, however, there were some which were not working appointments and which ought either to be reduced or abolished. As far back as 1855 the right hon. Baronet (Sir Charles Wood), then President of the Board of Control, sent out instructions for a revision of the salaries of the civil service. The gigantic undertaking was entrusted to Mr. Ricketts. His report, occupying five folio volumes, has just been received, but had not yet been considered; he recommended some reductions, but at the same time certain additions. With regard to the uncovenanted servants, Mr. Ricketts raised the question whether the number should not be increased, and also recommended the employment of additional Europeans, of whom there was now a great want, as was proved before the Committee upon Colonization upstairs. Mr. Ricketts recommended the division of some of the large collectorates, which were too much for the supervision of one man, and upon the whole we could not look for any large saving in the cost of European superintendence in India. With regard to the actual position of the finances, the right hon. Baronet had stated that for the year 1859–60 the deficiency would be £10,000,000, To meet this there was the loan of £7,000,000, raised by the noble Lord the Member for King's Lynn; this £4,500,000 had been obtained, £2,000,000 were expected to be raised in India, making £6,500,000, which with £2,000,000 of the English loan not yet called in made £8,500,000; they now proposed to take power to borrow £5,000,000, making £13,500,000 as against a deficiency of £10,000,000; but there was a sum of £2,000,000 required for railway expenditure, leaving it £12,000,000 against £13,500,000—not too large a margin under the circumstances. The hon. Member for London (Mr. Crawford) had complained of the new export duties upon raw materials; but, in fact, no additional duty had been placed on jute or hemp, and the duty had been entirely taken off raw silk and some other articles, which came in competition with the produce of foreign countries. With regard to the future financial prospects of India he trusted the Committee would believe the Government were determined to make every reduction which was consistent with the efficiency of the military service and of all other departments. The charge for interest on the railway expenditure would soon be diminished, or disappear altogether. The revenue of India had always hitherto shown a great and steady increase from year to year, and there were sources of taxation yet untouched. When they recollected all these facts, he thought the Committee would feel that the right hon. Baronet had not taken too sanguine a view when he expressed the hope that if tranquillity were preserved, in two or three years the income and expenditure would be balanced. That this result should be realized, it was, he agreed with the hon. Member for Birmingham, essential that the people of India should be convinced that the country was to be governed for the promotion of their interests, and that the principles of Her Majesty's most gracious Proclamation should be conscientiously carried out, perfect religious equality being secured to all classes of Her Majesty's subjects.

MR. DANBY SEYMOUR

said, he regretted that the right hon. Gentleman the Secretary of State had not dwelt more on the general question of the Government of India. He seemed to differ from the noble Lord his predecessor on some points; amongst others, with regard to the expediency of the sale of the fee simple of the land, as proposed by Sir C. Trevelyan. In his (Mr. Seymour's) opinion that was a most useful proposal, and if carried into effect at Madras with success, he trusted the Government of India would depart from its usual course, and not allow the change to be confined to the district for twenty years. Some years ago a great improvement was effected in Chittagong, by the substitution of oral pleadings in the court for the long written form before in use, but nothing had since been done to introduce the change elsewhere. There was one great fault in India, that if an intelligent officer made an improvement, the apathy and clog of the central Government prevented its being carried out. There was a plethora of business at Calcutta, which it was impossible to get through satisfactorily, and this led to the saying that when "once a thing was referred to Calcutta it was shelved for ever." The question was—Did the Government really wish to carry out reforms, and had they taken the practical means of doing so? One subject would afford an illustration—the reduction of the salaries of the civil service; the idea was right, but they did not begin the right way. The right hon. Baronet the Secretary for India, when he was formerly in power, ordered one of the ablest officers in India, Mr. Ricketts—who, he thought, had been unwisely taken from his duties at a time when civil servants were greatly wanted—to go into every part of India, and to inquire into every office and every Presidency. This took him two years to do, and that gentleman had since produced twenty-two reports; but though it was now four years since this direction had been first issued, no measure whatever of a practical character had yet resulted from his labours. The original idea of the right hon. Baronet (Sir Charles Wood) was a good one. It was to prepare a classification of officers in this country and consider the reduction of their salaries, and then send the scheme out to the Government in India for them to make their remarks on it. As was usually the case, however, with Presidents of the Board of Control, and Secretaries of State for India, the right hon. Gentleman was overriden by the gentlemen around him; and the question had remained in the same state to the present time. The army of Bengal was known to be in a dangerous state of insubordination for ten, or even twenty years before the mutiny broke out; and here he must say, that the Marquess of Dalhousie was not to blame. The noble Marquess had paid great attention to the subject, and had prepared long before he left India a series of despatches in which he suggested the reorganization of every part of the Indian army. The first of those despatches was sent home. It was a very important one, for it suggested the conversion of the regular into irregular cavalry. The noble Marquess said to the India House, "You have nothing to do but to send me back your authorization as quickly as possible, and I will carry out the plan." But what took place? That despatch remained unanswered for eighteen months; and then a refusal to sanction the scheme was returned to India. He (the hon. Member) believed that if he had been permitted to make the attempt, the noble Marquess would have succeeded in carrying out those reforms which his experience so fitted him to inaugurate; and he might thus have saved the country from the dreadful explosion that followed. He (Mr. Seymour) had great pleasure in bearing his testimony to the noble Marquess's great administrative ability, though he was certainly no admirer of his policy of annexation. No doubt the hon. Member (Mr. Bright) was quite right in saying that the amount of our Indian army must depend upon the principles upon which we governed the country. The noble Lord (Lord Stanley), by his proclamations, by his sending out such a benefactor to India as Sir C. Trevelyan, and by his treatment of the people, had begun to draw them towards us; and he (Mr. Seymour) hoped that the right hon. Baronet would follow in the noble Lord's steps. The people of India were capable of warm emotions, and the best way to attach them to our rule was to show them that we took an interest in them, by diminishing the interference of officials, and by listening to the reasonable complaints that from time to time they might send to this country. The Native Princes who came to this country to urge their claims had not hitherto had their cases properly considered or had justice done to them. Take the case of the Stipendiary of the Carnatic. The other day that gentleman, a Prince in his Native country, brought to him (Mr. Seymour) quite a touching letter which he had written to the right hon. Baronet, and in which he stated that though the Government had acknowledged the claims of his family, they could not obtain any practical redress. He (Mr. Seymour) was glad to hear the right hon. Gentleman say a few months ago that he was averse to the alienation of land, so long as an heir could be found by any Hindoo theory of relationship or adoption; and if the right hon. Gentleman, now that he held an official position, would only repeat, that observation, he was sure it would be hailed in India with the deepest satisfaction. With regard to the question of revenue, he thought all the propositions of increased taxation were open to great objection. First, as regarded the salt tax, that impost was already a great burden, which it would be most impolitic to increase, especially in Madras, where at least 50 per cent of the produce of the soil was consumed by the assessment, and the population were reduced to the greatest state of penury. If they expected people to accumulate property which could be taxed, they must reduce rather than add to their burdens; besides all which, the salt tax prevented the Natives from availing themselves of that vast source of wealth which presented itself in the great shoals of fish frequenting their coasts. Then, again, what could be a greater grievance than the stamp duties, the augmentation of which was proposed? No one in India at present could come before a court of justice without the stamp of permission; and, in fact, the stamps were a great public nuisance, which yielded a very small revenue. As to the new licences, he really did not know what they could mean; for the tax on spirits already existed in the form of licences. The succession tax, again, could scarcely bring much to the public coffers in a country where land was said to have no value. There were several taxes which would be far better than any of those mentioned by the right hon. Baronet. Why not, for instance, devise some plan for making the moneyed classes contribute to the public Exchequer. In Russia every merchant was obliged to belong to one of three guilds; and then a tax was laid on each of those institutions. Why not adopt a similar plan? If we must have an increased revenue, we should have recourse to forms of taxation which would not offend the Oriental mind. In Southern India there was the motufur, a collection of small taxes. No doubt some of those were bad ones, but there were some of them that were not. Again, why not adopt a tax which had existed in every country in the world, namely, a poll tax? At all events it was necessary to find something better than taxing the poorer classes of the Indian people. Another source of revenue that would be perfectly legitimate was the sale of lands. There was no reason in the world why the Government of India should not, like that of the United States, derive a large annual sum from this source. There were enormous tracts of land lying desolate in India. The people of India were very anxious to redeem their land from assessment, and why should not that be permitted? A revenue of £1,000,000 or £2,000,000 might be obtained from that legitimate source. He was glad to hear the noble Lord speak as he had done of the exclusiveness existing in the civil service and of the intention he had formed of introducing a more liberal system. Civil services existed in every despotic country, but in no country was a man who wished to enter the civil service required to enter at the bottom of the service as the only means of reaching the top. It would be a great improvement to let persons enter at the third or fourth rank with the permission of the Government. In the case of Mr. Venables, the Government had been absolutely unable to reward him as they wished, simply because he was not a covenanted servant. Last Session he (Mr. Danby Seymour) asked the House to consent to the repeal of the Act of Geo. III., with the view of enabling the Secretary of State to permit the civil service to be entered in the way he had referred to. Years ago the Marquess of Dalhousie and other high authorities in India recommended that alteration. If it were adopted it would allay the bad feeling which existed 'between independent Europeans in India and the official community. Of late that feeling had been much diminished by the trying circumstances under which the two classes had been brought together, but with the return of peace it would revive: and there could, at all events, be little doubt that the disparaging manner in which the independent Europeans used to speak of the officials just before the mutiny had done the Government no good. It would likewise be a great improvement to resort once more to the old plan of placing the heads of the different departments in the Council. The Councils were formed of men who had been longest in the service, and it was not etiquette for a man to enter the service again after he had been a member of the Council. Such men were looking to their return home, and were likely to feel much interest in public affairs. The consequence was that at present these Councils were clogs upon the Governor; but if they were formed in the same manner as our own Cabinet was formed they would possess all the knowledge that was necessary and all the interest that they ought to feel in the prosperity of India. They would also feel a greater responsibility. He did not think that the statement of the hon. Member for Birmingham was overcharged. There was in India a uni- versal complaint of the stagnation of affairs, and the decentralization advocated by the hon. Member was called for. Decentralization, however, could not be carried out to the extent advocated by the hon. Member. But Burmah, the Tenasserim provinces, and Singapore, should be put under separate government and attached to the Colonial Office. Burmah had nothing to do with India. Its people were a totally different race from that of India. Singapore was much more closely connected with China than India. The Council in Calcutta was too overworked to attend to the government of these places, and, in fact, they were left to Under Secretaries, whose names no one had ever heard of. With regard to the resources of India, he could not see why the Government should not make use of its credit, as Russia did. In Russia, Government paid its soldiers in Asia with paper, which circulated everywhere; the Government refused to give India the same facilities for establishing banks which were accorded without hesitation to the Colonies. There were dreadful complaints of the way in which business was done at the India House; and it was said to be not half so well done now as when the two departments were divided. He had heard that two-thirds of the establishment might be dispensed with, and he trusted that they would set an example to the Government in India by the way in which they would put to rights the Government at home.

MR. VANSITTART

said, he was glad to hear that the right hon. Baronet did not intend to reduce the salaries of the present incumbents of the civil service. Now that India had become an integral portion of the British Empire, we required the introduction of a new system and a greater number of civil functionaries with reduced jurisdictions in the Mofussil—i. e. the provinces. Indeed, each of the present districts of those officers ought to be divided into two, or even four, so as to bring justice to every man's door. He would introduce a new tone in society, a stricter supervision in every single department, and a simple, civil, and criminal code in the place of our present tardy, complicated, and cumbersome system. He would strongly advocate the immediate abolishment of that costly and nonsensical Legislative Council at Calcutta, unless it could be remodelled upon a totally different footing; and he would at once amalgamate, without further reference to India, the Supreme Courts with the Sudder Courts; and adopt such other measures as would induce the English capitalist to invest his money and enterprise in the country; for we might depend upon it that the greater the number of Europeans who could be induced to settle there, the stronger would be our hold over the Natives, and the more would they see to admire and respect in the English character. As an instance of this growing feeling, he could not do better than read the proceedings of a meeting held in the Town-hall of Calcutta last November, to consider a loyal address to Her Majesty on the occasion of the promulgation of the Proclamation penned by his noble Friend the Member for Lynn—a Proclamation which had been pronounced in all parts of India, and by all classes, civilians, merchants, colonists, and Natives of every sect, creed, denomination, and caste, to be a great success. Mr. Wylie took the chair, and amid tremendous cheering pointed out that the word "amnesty" was heard for the first time in India, and it was Christianity alone which taught men to forgive. Baboo Ramgopaul Ghose then rose from the Hindoo side of the House, and spoke as follows in English:— If I had power and influence I would proclaim through the length and breadth of this land, from the Himalayas to Cape Comorin, from the Behmapootra to the Bay of Cambay, that never were the Natives more grievously mistaken than they have been in adopting the notion, foisted upon them by designing and ambitious men, that their religion was at stake, for that notion I believe to be at the root of the late rebellion. They do not understand the generosity, the benevolence of the governing Power, the evenhanded justice with which that Power is willing and anxious always to do that which is right between man and man, without any reference whatever to the fact whether the men belonged to the governing or to the governed class. When he saw highly intelligent Hindoos attending public meetings and giving vent to such noble sentiments, when he reflected upon the elasticity of the resources of India, and when he beheld men like Sir Charles Trevelyan acting in a bold and energetic manner, he could not but think that all we required was the co-operation of an equally bold and energetic Indian Minister at home, in order to insure to India a glorious future; and, notwithstanding the gloomy forebodings entertained by so many in consequence of the financial depression under which she was at present suffering, he believed that only a few years were required to restore India to the state in which she was before the mutiny.

MR. GREGSON

said, he agreed with the noble Lord the Member for Lynn that a tax upon tobacco would be an exceedingly undesirable mode of increasing the revenue of India. It was tried a few years ago, and failed. He could not but thank the right hon. Gentleman the Secretary of State for not having proposed an Imperial guarantee, which would be very unfair to those who had already lent us money. He thought that some reduction might be made in the military expenditure, but condemned the proposal to increase the duty upon salt. It was not justified by the paltry increase of £300,000 which was all that was expected from it. Considering the difference in the value of money in the two countries, and the elasticity of the resources of India, he thought a higher rate of interest might be given than that at which the last loan was raised. The Bank of India were paying 9 per cent; therefore 4, 5, or even 6 per cent was a moderate rate of interest for an Indian loan. In this view the rate of interest upon the Indian debt was not, in his opinion, greater than that which we paid at home.

MR. KINNAIRD

regretted that the Government had resolved to refuse to India the temporary assistance of an Imperial guarantee. India had been the source of great advantage to this country; the Secretary of State admitted that her resources were elastic, and yet she was not to receive that small aid which was readily granted to the West India Islands in a moment of difficulty. Every one acknowledged that a guarantee must ultimately be given. Why not, then, give it at once, and so by a bold policy meet a temporary evil? He regretted that when a Governor General was wanted for India, Ministers should send out a man who knew nothing of that country, for such a man was at the mercy of his council for two or three years at least, and only became acquainted with the duties of his position about the time he was removed from it. The question of the finances of India was one that would brook no delay, and he hoped that with a deficit staring them in the face measures would be adopted to balance the income and expenditure. He was persuaded that the thing not only ought to be done, but that it could be done, if right measures were adopted. To say what those measures were, required a man of vast experience, and one who possessed an aptitude for finance. He had no hesitation in declaring his firm conviction that such a man existed if only scope were given to his transcendent ability. Sir J. Laurence was a financier of a very high order. It was his custom when directing the operations in the Punjab to impress upon all under his influence that the whole system of Government depended upon the Ways and Means. He did not ask what was desirable only, but what was practicable. In that newly conquered Province, when the mutiny of 1857 convulsed the North West, and separated him from the seat of the Supreme Government, Sir John Laurence, by the financial measures which he adopted, contrived not only to meet the current expenses of his own Province, but to raise new levies for the war who had to be paid in advance, to maintain the army at Delhi, to subsidize the Ruler of Afghanistan, and in other ways to uphold the credit of England in their own territory and beyond their frontier. There was, therefore, amongst them a man not only with a head for finance but well practised in it—one who had shown his ability and stood when weaker men would have broken down—and it would be their own fault if his tried ability for finance was not enlisted in the service of the State, and that not indirectly in a position of comparative inferiority, but directly in one of definite responsibility and power. He exceedingly regretted that at a critical moment in the history of India the right hon. Baronet had failed in giving the Imperial guarantee to the loan which was to be effected. The time would come, however, when this would have to be done, and by neglecting it now an additional burden would be entailed both on India and on this country.

MR. CONINGHAM

remarked, that he also regretted that an Imperial guarantee had not been given, by which an enormous sum of money would he saved hereafter. He trusted that on fuller consideration the right hon. Gentleman would adopt a course which alone could lead to the permanent restoration of our authority and prestige in India.

MR. HANKEY

deprecated the middle course which the Government were taking by leaving matters as they were. The existence, by a legal fiction of the East India Company, which might easily have been abolished altogether, alone prevented the Indian Council from borrowing money in any part of the world. So long, therefore, as it was necessary to come to Parliament every year and ask for a special Vote in order that money might be borrowed for India the people of this country would be- lieve that there was a quasi-guarantee by the Imperial Government. This was shown by the fact that whilst the rate of interest in India was 6 per cent, a 4 per cent loan raised in this country was at 94. No one would believe that a loan raised by the sanction of Parliament would ever he repudiated by them.

SIR CHARLES WOOD

, in reply, said, he was much obliged to the Committee for the reception given to his statement. With regard to the remarks of his hon. Friend (Mr. Bright), he could not think he was open to censure for not having expressed his views upon almost every conceivable subject connected with India. It had seemed to him that he was best consulting the wishes of the House, at this time of the Session, by confining his statement to the finances of India, which certainly afforded sufficiently wide scope for debate. It was surely unnecessary to repeat the discussion which took place earlier in the Session on the general condition of India, especially when he felt that he had not been long enough in office to be quite aware of all that was going on in his department. The noble Lord (Lord Stanley) had stated that a sum of £6,000,000 was to be raised by railway debentures in the current year. That was a slight error. It was true that £6,000,000 were to be raised for railway purposes, but of this £3,500,000 would be raised by calls upon the shareholders, and only about £2,500,000 by debentures. The hon. Member for Birmingham said that he represented the debt of India at £100,000,000. Now the debt was so large already that no one need exaggerate its amount. It was not however quite so bad as this. What he had said was, that before we were finally clear of the charges entailed by the mutiny the debt of India would amount to upwards of £100,000,000. This estimate, of course, included the sum which we should have to borrow next year, and probably in the course of the year following. With regard to Sir Charles Trevelyan, he could assure the Committee that he had no indisposition to support him in the very useful reforms which he would, no doubt, introduce into the Presidency. Sir C. Trevelyan and he were old friends. On previous occasions he had had to defend him against unfounded attacks. Sir Charles Trevelyan would no doubt bring great knowledge and great zeal to bear upon the administration of affairs in Madras, and if he only tempered his zeal with discretion he would he a most valuable public servant. The hon. Member (Mr. Bright) had spoken, he thought, in undeserved terms of the Earl Canning. At the time of his appointment the noble Lord was a Cabinet Minister of known ability, and the mode in which he had conducted the government of India under the most arduous circumstances in which a Governor General was ever placed merited the warmest approbation of his fellow countrymen. He would not follow the hon. Member for Poole (Mr. Danby Seymour through the various taxes to which he had referred, but would merely remark that he had not imposed any taxes nor was it known to what conclusion the Indian Government would come on the various points to which the hon. Member had referred. He was not of opinion that a poll tax would be a popular one, there was already a tax of that kind in the Province of Pegu, and he thought that it should be done away with as soon as possible.

Resolution agreed to.

Resolved, That it is expedient to enable the Secretary of State in Council of India to raise money in the United Kingdom for the Service of the Government in India.

House resumed.

Resolution to be reported To-morrow.