HC Deb 29 June 1865 vol 180 cc927-63

Considered in Committee.

(In the Committee.)

SIR CHARLES WOOD

said: I must throw myself upon the kind indulgence of the House in the statement which I am about to make. I am not sure whether my voice will enable me to go through with it, but I was very anxious not to delay for a single day the statement which the Committee, I am sure, wishes to be made in regard to Indian finance. If I fail to go through with my statement it will not be from want of will, but want of power, and the Committee will, I am sure, excuse me for making my speech as short as I can. It has been often urged in the House that this statement ought to be made at an earlier period of the Session. Some time ago I gave directions for expediting the accounts from India which are now, according to Act of Parliament, laid on the table by the 14th of May. Under that arrangement they cannot well be printed, and be placed in the hands of Members before the 14th of June. It was found on going through the statement of the Indian accounts that they were kept on the most erroneous principles, and were very confused. I thought it better, instead of trying merely to expedite the accounts, to go into an entire revision of the whole system, with the view of putting it upon clear and intelligible principles of sound financial accuracy. Mr. Wilson did something towards that end; Mr. Laing did still more; but it was not till Sir Charles Trevelyan arrived in India, and set to work with that marvellous energy which distinguishes him, that the task of putting them on a sound footing, was undertaken in earnest. Two gentlemen were sent out from this country to assist in this work—Mr. Foster, of the Paymaster's Office, and Mr. Whiffin, of the War Department. Two other gentlemen also gave their aid, and I am in hopes that before this year is at an end the new and improved system will have been established. It happened with this attempt, as it has often happened with others in India, that it was interrupted from time to time, by the failure of the health of the gentlemen employed; Mr. Whiffin came home, the health of another gentleman entirely broke down, Sir Charles Trevelyan was obliged to come home in consequence of serious illness; so that the work was retarded through the failure in health of two of the principal persons employed in it. I trust, however, that before the end of the year the improved system which has been already applied in Bengal, and partly in the other provinces, will have been brought into full operation, and will have been permanently established throughout India. I hope that those Gentlemen who are naturally anxious for an earlier exhibition of accounts in this country will think that I have done rightly in caring rather that we should have a permanent system of accounts based upon true principles than that for the last, or present, or even next year, the accounts should be presented two or three months, or two or three weeks earlier. With regard to the accounts which are now on the table, it is not necessary for me to trouble the House with many details. It turns out that the surplus for 1863–64, according to the actual accounts, is less than appeared from the regular Estimates. The surplus, according to the regular Estimates, was £257,000, but the actual accounts show that the surplus was only £78,000. That is not a very large amount; the difference is owing to the large stock of duty paid salt or. hand from the preceding year. A much more serious matter is the difference between the surplus in the year 1863–64 and that of the previous year 1862–63. In that year the surplus was £1,827,000; in the last year, or 1863–64, it was only £78,000, the falling off being no less than £1,749,000. That falling off, however, is almost entirely owing to that which every gentleman knows to be the most uncertain source of revenue in India—namely opium. Between diminished receipts and increased charge there was a difference in opium returns of £1,673,000, so that, in point of fact, almost the whole difference is due to opium. With regard to the last year, I am sorry to say that the results disclosed by the regular estimates are much less satisfactory than those which I anticipated at the time the Budget Estimate was framed. According to the Budget Estimates there would be a surplus of £823,000, but according to the regular estimates there is a deficit of £263,000, the calculations being, in point of fact, worse by £1,086,000. Now, so far as the revenue goes, it is actually better than was estimated. The Budget Estimate was £46,163,000, the regular estimate is £46,284,000—giving an increase of £120,000. But I am sorry to say that there is an increase of charge of £1,206,000; the charge in England is less, but there was an increased charge in India of £1,562,000. The increase of charge in respect of opium is £453,000; that, however, is a temporary increase. A more serious increase is that on the army of £674,000. In public works there is an increase of £327,000. Now, it is right to say that with respect to that increase for the army there is very little prospect of finding anything to cut off, because, although we have reduced the army considerably, there has been an increase of allowances given to it in order to compensate both the officers and soldiers of the Native army for the increased price which they have to pay for their provisions. The increased price of provisions amounts to £272,000. Then the additional charge for the Bhootan war is about £160,000. A change from half to full batta has been made. Half batta, which was a very invidious thing, and under the circumstances very unjust, has been abolished, and the increase under that head, together with increased pay for the medical officers, and some other minor additions, amount to £242,000. These items make up the additional charge for the array of £674,000. Now, Sir, if I compare the last year with the preceding year, so far as revenue goes, I must say that it is impossible that anything could be more satisfactory. There has been an increase in the revenue of 1864 65 as compared with the actual receipts of 1863–64 of £1,671,000, of which the main items are salt, £588,000; opium, £682,000; and the receipts from sale of building lands at Bombay, which, however, is only of a temporary character, £554,000. But, on the other hand, I am very sorry to say that, although the revenue has increased in a most satisfactory manner, that which is not so satisfactory is that the charge in India for 1864–65 has increased as compared with 1863–64 by no less a sum than £2,262,000. Of that increase of charge £401,000 is on account of opium, £630,000 on account of the army, from the causes which I have mentioned before—namely, increased pay and allowances, a portion only of which entered into the former year, £310,000 for public works, £186,000 for law and justice—that is, for the improvement of the courts of justice throughout the country, £143,000 for education, and £270,000 for superannuations. Now, the House will observe that almost all these charges are charges owing to the improved administration of the country, in which I do not see it possible to expect anything but a steady, though gradual, increase. It is indispensable to execute advantageous public works, and most desirable to aid education and make better provision for the administration of justice. These are the sources of the additional expenditure. I come now to the year 1865–66, and here again nothing can be more satisfactory than the Indian revenue. In spite of the loss of £685,000 in the current year by the loss of the income tax, the whole revenue will be better than last year by £264,000. It affords matter of great satisfaction to find that the increase is general throughout the main items of the revenue. The land revenue is better by £113,000; salt, by £158,000; opium, by £209,000; stamps, £146,000. And I hope that we may without hesitation accept that as a clear proof of the general improvement in the prosperity of the whole country from one end to the other. Again, I am sorry to say, however, that if the revenue has increased so have the charges. According to the Budget Estimate of this year, in spite of the reduction of £753,000 in the charge of opium, there will be an increased charge in India and England over the regular Estimates of last year of about £376,000. This is partly owing to the increased allowances rendered indispensable by the price of provisions to the army, and partly by the increased expenditure on public works, on law, and justice, and police. The increase in the army charge is £426,000; public works, £202,000; law and justice, £210,000; and police, £95,000. That contains, as shortly and succinctly as I can give it, an account of the progress of the revenue and expenditure for the last three years. Before making any more general observations on the subject, I will come to the circumstances of the Budget of this year, the main features of which are the dropping of the income tax and the imposition and disallowance of the export duties. The circumstances of last year were very exceptional, and the variation which took place in the Estimates, which were framed at one time or another in the course of the year, and the difference there shown between income and expenditure were very remarkable. In the Budget of April, 1864, it was estimated that there would be a surplus of £823,000. In a revised estimate sent home in December last it was anticipated that there would be a deficit of £135,000. In February the deficit was estimated at £800,000; and other circumstances occurred which rendered it not improbable at that time that the deficit would be even greater—that is to say, according to the accounts furnished by the Government of India. I mention this now to show the reasons for the change of purpose on the part of the Indian Government. Towards the end of the year the accounts forwarded were of a much more favourable character, and at the time the regular Estimate was framed the deficit had got down to £263,000. At that time, there being a notion that the salt duties might be increased, a large quantity of salt was suddenly taken out of bond, and £170,000 was paid upon that account, which really and truly belongs rather to the present than to last year. If that sum be deducted from the deficit appearing in the regular Estimate, I should not be surprised if, when the actual accounts come to be prepared, the deficit is not more than £93,000. The fact is, as I have stated before in this House, that I was entirely taken by surprise when I heard that the income tax had been discontinued. Up to the middle of March it never seemed to have entered anybody's head, that it was possible to go on without the income tax; and at the time the despatch was written, which is contained in the papers moved for by my hon. Friend behind me, anticipating a very large deficiency and the necessity for an increased expenditure upon public works, the notion of the Government of India was that, maintaining at all events the existing taxation, even if it was not increased, it would be requisite to borrow to a considerable amount and in the financial propositions as ultimately made. The sum to be borrowed was taken at £1,200,000. On the 14th of March I heard from Sir John Lawrence, that they were all agreed that the income tax must be continued; the only question was whether it would not be necessary to increase it. Mr. Maine, one of the Indian Council, who left India on the 24th of March, was overtaken on his way home by the intelligence that the income tax had been dropped, and was quite as much surprised as I was that such had been the course adopted by the Government of India. In point of fact, it was only the day before the Indian Budget was announced that the determination was come to to drop the income tax; and, as may be inferred from the statement I have made, it was owing to the very improved account of the state of the finances which reached the Government of India in the course of the latter end of March. Of course, if things had remained up to the end of the month as they stood at the beginning, everybody was agreed that the income tax must be continued. However, on the last day of March a council was held, in which the only person in favour of maintaining the income tax was Sir John Lawrence. Everybody else was against its being continued. I am sorry, though I cannot say I am surprised, that Sir John Lawrence yielded to what clearly was nearly the universal opinion in that part of India. The views of Sir John Lawrence, expressed in the Minute of Council, seem to me to be those of a far-seeing statesman. I cannot, however, deny that from the views they maintained the other members of Council had some warrant in the promises and expectations which had been held out, though under different circumstances, upon the imposition, of the tax. Clearly, if it was possible to do so with a due regard to the revenue of India, the Government were bound to drop the tax. For myself, I think it doubtful whether the circumstances justified that course. However, I do not wish to blame anybody for the course which has been taken. All that we have to do is to look forward and see what is the best course to pursue for the future. It is quite impossible for the Secretary of State here to direct the finance of India, To a certain extent he may control it, but the responsibility rests upon the Government of India, who are much better acquainted than anybody here can be with the state of circumstances, the prospect of revenue and expenditure, the feelings and wishes of the people, and the opinions of persons most competent to decide upon this matter. I should deceive the House, therefore, if I were to assume the power of directing the finance of India, though I do claim and have exercised the power of controlling it. The distinction is very obvious, and I hope hon. Gentlemen will bear it in mind in any observations which they may think proper to make on this occasion. One advantage, at least, may be derived from what has taken place. The attention of the Indian Government will be drawn more closely, perhaps, than by anything else to the necessity of exercising strict economy. Year after year, as the House will have seen, the revenue has increased in the most extraordinary and satisfactory manner; and, although a large proportion of the increase of expenditure is one which I do not think it was in the power of the Indian Government to prevent, nevertheless I think they might have kept their expenditure within narrower limits. When we compare the revenue in India in 1861–62, which was the first year when the income tax came into full operation, with the revenue of the last year, 1864–65, we find that in the first of those two years it amounted to £43,829,000, and in the last to £46,284,000, being an increase of nearly £2,500,000. In the estimate for the next year, 1865–66, the income is calculated to be larger, in spite of loss by income tax of £685,000, than it was last year, in consequence of the increase of the ordinary sources of revenue. The amount next year is calculated at £46,548,000. The actual expenditure in India, excluding interest on railways, was in 1862–63, £36,800,000, and in the Budget for 1865–66 it is estimated at £40,487,000, being an increase of £3,687,000, of which £1,000,000 is due to the army, £1,400,000 to public works, and £500,000 to law and justice. The prices of food, which of late years have been very extravagant, were last year in Guzerat exactly twice as high as the famine prices in the North West Provinces. There is a certain height of price at which the soldiers are granted an increase of allowance, and last year the prices were in parts of Western India four times greater than the amount which entitles the soldiers to an increased allowance. There cannot be any reason to doubt that the greatest possible sufferings were thereby entailed on persons in the lower ranks of almost every department of the public service. The Committee will be aware that it was proposed at the same time to add to the duty on salt, but Sir John Lawrence refused to consent to that measure, and I think he was right in his determination. I do not think that a small increase would have been objectionable under ordinary circumstances, but I think that Sir John Lawrence was perfectly right in saying that he would not consent to take a certain amount of taxation off the shoulders of the rich, who paid the income tax, and transfer it to the shoulders of the poor, who paid the salt tax. With regard to the proposal for levying export duties, I do not mean to say that under no circumstances ought they to be imposed, and they have, indeed, existed to a certain extent in India, but I must own it is the last species of taxation which we ought to have recourse to, and I am not of opinion that the cir- cumstances of the times justified their imposition. The levying of export duties on some of the articles would have been most impolitic. Coffee and tea are infant cultivations in India, and the imposition of export duties on them would be most injurious, and productive of little or nothing in the way of revenue. As soon, therefore, as I heard that the export duties had been imposed I sent a telegram to the Indian Government stating that I would not allow them. An hon. Member asked a short time ago a question respecting the repayment of such duties as had been levied. We have not the full accounts yet of what has been done, but I have directed the Government in India to repay all the export duties which may have been levied. I have already adverted to the extraordinary increase of prices of every sort which occurred at Bombay, owing in a great measure to the extraordinary wealth which flowed into that place for the last two or three years. Another consequence of this was that speculation among the Bombay merchants ran perfectly wild, and I desire to state to the House the amount of speculation which took place in two sets of shares. On the Back Bay Bombay shares 5,000 rupees were paid. In August last they rose to 18,000 premium, in January last they were at 42,000 premium, and in May they were at 5,000 premium. Their value varied from 23,000 rupees in August, and 47,000 rupees in January, to 10,000 rupees in May. The shares of the Elphinstone Land Company in February last were at 180,000 rupees premium. New shares were issued at 1,000 rupees paid, and in February they were at 2,600 premium, and in May at 450 premium. It is not to be wondered at, then, that the gentlemen who invested at very high prices should afterwards, when prices fell so much, have found themselves in a difficult position, and this accounts for a good deal of the pressure which has prevailed within the last few months. Somehow or another—I do not know how—the bankers of Bombay got the power by their charter of advancing money on speculative shares, and they used that power to a considerable extent. I wrote early in the year to Sir Bartle Frere, calling his attention to the necessity of looking after what they were doing; and whether in consequence of my letter or not I cannot say, but the Government directors went down to the Bank and on their representations it ceased to do that which it had been doing for some time—namely, advancing largely upon these shares. It was very wrong ever to have advanced money in that way at all upon a security, which in times of difficulty would obviously be perfectly un-negotiable. Whatever rumours may have reached this country, I wish to state that as far as I can judge from all the accounts which I have received the Bank of Bombay will in future go on in the ordinary way, and there need be no apprehension in the public mind on this subject. I have been asked whether it was my intention to raise any large loan in this country for the service of India, and I have said it was not my intention to do so. I may remark that I think this year may be fairly regarded as a sort of transition year. A new Finance Minister has gone out to India, and it is impossible for me to act until he has had time to consider matters and give a mature opinion upon them. I believe that Mr. Massey's appointment has been received with great satisfaction in India. We all knew him in this House to be a cool-headed, sober-judging man, and I place great confidence in his plain common sense—a quality which I believe goes a long way to enable a man to discharge any public duties imposed upon him. I do not propose to borrow money for public works till I know where I am. If the people of India themselves find the money, we can spend it well for them; and I have stated that when they send me a well-digested plan for useful improvements I might be prepared even in this market to borrow funds for their execution, but that I would not go hand over head to put money into their pockets which they might not expend so economically, as if their plans were carefully prepared beforehand. I think the Committee will agree with me that that is the wise course to pursue. I do not, however, wish the Committee to run away with the idea that there has not of late years been an enormous expenditure upon public works in India. There has been spent upon them, during the last six years, from public funds, £30,000,000. and from local funds £4,500,000, making together £34,500,000. If to that we add the expenditure for railways, amounting to £38,500,000 there has been expended within the last six years upon public works of more or less importance in India no less a sum than £73,000,000. This expenditure from public and local funds has been gradually increasing. If we take the last two years, the expenditure has been upwards of £11,000,000 from public funds, and upwards of another £2,000,000 from local funds, making together £13,200,000 spent in public works, exclusive of railways, during those two years. I will not trouble the Committee with any statement of the general improvement of India, because the state of the revenue is a pretty good index as to that. I read on a former occasion a letter from Sir Bartle Frere, showing that districts which were formerly under jungle had been brought into cultivation. Mr. Temple gives an equally favourable account of districts in which he was Commissioner. The cultivation of cotton has extended, and, what is more important, the capitalists of Bombay are introducing at all the railway stations establishments fitted with machinery for cleaning, pressing, packing, and to some degree spinning and weaving the cotton. I do not think our manufacturers at home have anything to apprehend from this, as the goods so made only displace the produce of the native hand loom. The great want in that part of India, in connection with the growth of cotton, is the want of labour; and the hand-loom weavers, whose former employment has been displaced, have been set free to devote themselves to agricultural pursuits. A few months ago I saw an article in an Indian newspaper stating that, unless the Government interfered to check the cultivation of cotton and restore the cultivation of grain and food, the people of India would be plunged in great distress. The great object at present of our manufacturers is to obtain a better quality of cotton. I believe that as soon as the Indian cultivators are convinced of the necessity of improving their article, they can and will do it. Hitherto they have had no reason for attending to it. In the appendix to a letter bearing on this subject, and written by Lord Tweeddale, an authority of great experience, I observed the other day that he says— As long as there is so high a price given for quantity, no ryot will trouble himself about improving the quality until the demand for quantity has been satisfied. The only remedy I know is to improve the indigenous cotton plant of India. Now that has been done, and I do not think the fall in the price of cotton is so very bad a thing. My conviction is that it will drive the ryot to that which is not less important than the production of quantity—namely, an improvement in the quality of the article. Several manufacturing gentlemen came to my room, and showed me a quantity of cotton, saying, "Look what stuff this is." Perhaps, when they listened to an account he was about to read, hon. Members would not be surprised at the description sometimes given of the state of Indian cotton as it reached this country. Dr. Forbes, in describing how cotton was treated in India, said— That portion of the province of Berar which is now being penetrated by the railway yields three times the above amount of cotton, and manual labour is still more scanty. The produce, as it is picked from the field, is piled up in one large heap in the open air, where it remains sometimes for months until labour can be obtained. When first stored in this way, from a short distance it resembles a heap of snow in whiteness; dust storms, however, set in, and the heap becomes gradually covered with fine sand and earth, until at length one can no longer distinguish what the contents may be. A few showers of rain generally succeed those dust storms, and the amalgamation of mud and cotton is completed. I do not know that on this subject I need say any more; but there is another subject to which I would refer, with reference to which I have answered questions more than once put by the noble Lord the Member for King's Lynn (Lord Stanley), and on which my hon. Friend the Member for Poole (Mr. Henry Seymour) has intimated his intention to ask a question—I mean the state of the inquiry in Oude. With regard to that subject, there certainly was at the beginning of the year I must think unnecessary alarm, that in the course they were taking, the Government of India were reversing the policy of Lord Canning, breaking the faith he had pledged, and destroying what was called the native aristocracy of India. I do not think there ever was the slightest cause for these apprehensions, and certainly, as far as the inquiry in Oude is concerned, they are totally groundless. There has been, I know, a good deal of excitement on the subject; but I would only beg permission, in correction of statements that have been put forward, to observe that, although it has been supposed that some new policy had been inaugurated a few years ago, generally called the Thomasonian policy, it was in entire accordance with that which had been pursued from the time of Lord Cornwallis, downwards. I cannot do better than read a portion of a letter from Lord Cornwallis, which I stumbled on ac- cidentally in his memoirs last Easter. Lord Cornwallis says— Neither is the privilege which the ryots in many parts of Bengal enjoy of holding possession of the spots of land which they cultivate, so long as they pay the revenue assessed upon them, by any means incompatible with the proprietary rights of the zemindars. Whoever cultivates the land, the zemindars can receive no more than the established rent, which in most cases is fully equal to what the cultivator can afford to pay. To permit him to dispossess one cultivator for the sole purpose of giving the land to another, would be vesting him with a power to commit a wanton act of oppression from which he could derive no benefit. The practice which prevailed under the Mogul government of uniting many districts under one zemindary, and thereby subjecting a large body of people to the control of one principal zemindar, rendered some restriction of the nature absolutely necessary. The zemindar may, however, sell the land, and the cultivator must pay the rent to the purchaser. I have read that extract to correct what seems to me a great mistake in many of the statements which have been made on this subject. What has taken place in Oude is simply an inquiry as to whether these rights did or did not exist. It was admitted by Mr. Wingfleld, the Chief Commissioner, by the talookdars themselves, and by every one, in the clearest and most unequivocal manner, that if they existed they ought to be maintained. The order of Sir John Lawrence was simply for an inquiry as to their existence. I certainly thought, when I read the order of the Financial Secretary, Mr. Davis, that it went rather further than inquiry; but it is only justice to Mr. Davis to state that the circular he issued had been submitted to Mr. Wingfleld, and there could be no doubt, from the approval it met with from Mr. Wingfleld himself, of its perfect and complete impartiality. The inquiry has since been going on, and I would take the liberty of reading two documents to show in what spirit it has been conducted on the part of Government. The first is an extract of a letter from Colonel Durant to the Chief Commissioner of Oude, dated Fort William, 8th of April, 1865. He says— I am directeed by the Governor General in Council to forward, &c, and to request that you will take every opportunity of explaining to the talookdars of Oude the object and limit of the inquiries now going on, and repeat to them the assurance that the spirit and letter of Lord Canning's policy, and the condition of his sunnuds will be scrupulously maintained. In pursuance of that direction, Mr. Wing-field addressed the following circular to all talookdars in Oude:— Lucknow, April 19, 1865. Sir,—I have been directed by the Governor General to take every opportunity of explaining to the talookdars the object and limit of the inquiries into rights of occupancy going on, and, as I cannot expect to meet many of you for some months to come, I must have recourse to a letter to give effect to the Governor General's instructions. 2. I have always told you, and you have readily admitted, that if right of occupancy existed at annexation on the part of non-proprietary cultivators of the soil, they have been preserved by the condition of the sunnuds, that 'all holding under you shall be secured in the possession of all the subordinate rights they formerly enjoyed.' You will also recollect Lord Canning's words in his speech at Durbar, in October, 1859—' The preservation of the great families of the soil has been encouraged and facilitated. The rights of the humble occupants have been protracted.' 3. The only foundation on which rights of occupancy exist is their previous existence at the time of annexation. But there has been difference of opinion among officials whether they did exist there or not. To remove all doubts on this point is the object of the present inquiry, if the results should be to establish the existence of such rights, they must, of course, be maintained, as you yourselves allow. If, on the other hand, it should prove that they did not exist at annexation, no new rights will be created. 4. I have repeatedly told most of you to wait patiently the termination of this inquiry, which can have no other result than to elicit the truth. I am glad to say my advice has been attended to. 5. You are aware that the policy of Lord Canning was to maintain in Oude a class of superior landholders in an influential position. For this reason he also invested many of you with judicial and revenue powers. This policy had the full approval of the Home Government. It will be steadily pursued in its spirit and letter by the Governor General, and the condition of the sunnuds will be scrupulously maintained. I think it is impossible to read two documents which more completely express the will and determination of Her Majesty's Government, of the Government of India, and the local Government of Oude. The talookdars themselves admit that what-ever rights exists should be preserved, and nobody proposes that new rights should be created. That is what Lord Canning contemplated, and what we have done our best to perform. It will be satisfactory to those Gentlemen who were so much alarmed to know that for the most part the rights of the talookdars have been recognized, and that for the most part a very good feeling seems to have prevailed between the talookdars and ryots. Except in some very disturbed districts the relations enjoined by ancient custom have remained undisturbed, and very few claims have consequently been put forward by the occupiers. There has therefore been little necessity for any judicial decisions, and, as far as I have learned, judicial decisions could hardly be given in favour of claimants whose cases rest upon immemorial customs rather than any tangible rights capable of being established in a Court of Law. In all semi-barbarous countries customs are the protection of the weak against the strong, and as long as things go on well it is of course the interest of the talookdars to retain the ryots on their side. Many of them were retainers and followers of the talookdars in war as well as in peace; but, on account of the universal tranquillity prevailing under our rule, the talookdars are no longer under the necessity of maintaining supporters of their own; and hence the question of how far the talookdars may some day feel it expedient to get rid of the ryots is one of very great importance. Nothing could have been better than the relations existing between the talookdars and ryots under the old system; but we cannot be surprised that people in India, looking mainly to the interests of the masses, should have felt alarmed at the prospect of injury to those masses, arising from the withdrawal of one of the great securities of their position, consequent, though that withdrawal may be, on the increased securities to life and property under British administration. With regard to what has taken place in Bhootan, I think I explained on a former occasion our position in that district. The country is distracted by internal dissensions, and, in point of fact, no regular Government or authority adequate to control the Bhootan chiefs could be said to exist. When, therefore, representations come from our subjects of injuries for which no reparation could be obtained, it became indispensably necessary to take some steps, especially after the treatment experienced by our envoy, whom we had dispatched with a view to bring about a peaceable settlement, in the full belief that he would be courteously received. I was very unwilling to occupy the country, to go far into it, or to do anything that might lead to a permanent occupation. But the position of affairs was this, that the country was subjected to a divided rule, each authority enduring in its turn for six months at a time, and, as hon. Gentlemen may imagine, the unfortunate inhabitants were equally plundered by both. Our main object, in undertaking-operations, was to establish one permanent authority, from which securities might be obtained against future inroads upon our subjects. The first step was to occupy the passes leading to the valleys, and the operation was successfully accomplished with the loss of only five men beyond what was owing to the accidental explosion of a mortar. The passes were held in perfect quiet for a month, but at the expiration of that period the Bhootans began to move, and one of the commanding positions held by our troops was abandoned in what I must call a most disgraceful manner. Nothing could be more discreditable than the behaviour of the commanding officer, the relieving officer, or the troops under their command. Another of the passes was also evacuated, and of course it became necessary to retake these posts. They were retaken in the most gallant way, and one of the native regiments distinguished itself in a most remarkable manner by scaling a stockade. There was no great loss on our part, and they inflicted considerable loss upon the enemy. It was not thought desirable to retain during the unfavourable season all the positions at first taken up, so that, with the exception of a few artillerymen and native troops, the body of the forces were withdrawn from the unhealthy districts, and the utmost pains were taken, as far as possible, to insure the health of those who remained. The time during which active operations can be pursued in this quarter is, in fact, very short, the rainy season lasting for about nine months out of the twelve. Since the beginning of April there has been, on this account, a cessation of operations. In the meantime, overtures of accommodation have been made by one of the Rajahs, but we do not yet know what amount of reliance can be placed upon them. Nothing definite can be done till next November or December, and, in the meantime, the Government will have made up its mind as to the course to be pursued with regard to what, after all, is a very trumpery affair; because we are engaged with a people who fight with bows, and arrows, and matchlocks, and have not a twentieth part of the forces that we can bring against them. It is a most unsatisfactory state of things, but one which cannot possibly be avoided under the circumstances. The only anxiety of the Government of India is to put an end to the war as speedily as possible—that is to say, as soon as we can obtain from our present opponents the security that they will respect the lives, the per- sons, and the property of our subjects. I thank the House very sincerely for the patience with which they have listened to my statement—a statement which I have made with some difficulty—but I hope as far as it has gone it has proved satisfactory. I can only say that if further information be desired by any hon. Member I shall be happy to endeavour to afford it. The right hon. Baronet concluded by moving the following Resolutions:—

  1. "1. That the total net revenues of the territories and departments under the immediate control of the Government of India for the year ended the 30th day of April, 1864, amounted to £3,956,776 sterling, and the charges thereof, for the same period other than military charges, amounted to £3,208,118 sterling.
  2. "2. That the total net revenues of the Bengal Presidency for the year ended the 30th day of April, 1864, amounted to £11,662,738 sterling, and the charges thereof, for the same period, other than military charges, amounted to £2,513,263 sterling.
  3. "3. That the total net revenues of the North Western Provinces for the year ended the 30th day of April, 1864, amounted to £4,847,051 sterling, and the charges thereof, for the same period, other than military charges, amounted to £1,485,351 sterling.
  4. "4. That the total net revenues of the Punjab for the year ended the 30th day of April, 1864, amounted to £2,755,169 sterling, and the charges thereof for the same period, other than military charges, amounted to £1,096,999 sterling.
  5. "5. That the total net revenues of the territories and departments under the immediate control of the Government of India, of the Bengal Presidency, of the North Western Provinces, and of the Punjab, together, for the year ended the 80th day of April, 1864, amounted to £23,221,734 sterling, and the charges thereupon, including the military charges, amounted to £15,464,862 sterling, leaving a surplus available for the general charges of India of £7,756,872 sterling.
  6. "6. That the total net revenues of the Madras Presidency (Fort St. George) for the year ended the 30th day of April, 1864, amounted to £5,973,313 sterling, and the net charges thereof, for the same period, amounted to £5,167,165 sterling, leaving a surplus available in the above Presidency, for the general charges of India, of £806,148 sterling.
  7. "7. That the total net revenues of the Bombay Presidency for the year ended the 30th day of April, 1864, amounted to £6,441,851 sterling, and the net charges thereof, for the same period, amounted to £5,386,361 sterling, leaving a surplus available in the above Presidency, for the general charges of India, of £1,055,490 sterling.
  8. "8. That the total net revenues of the several Presidencies for the year ended the 30th day of April, 1864, amounted to £35,636,898 sterling, and the charges thereof amounted to £26,018,388 sterling, leaving a surplus revenue of £9,618,510 sterling.
    9. 944
  9. "9. That the interest on the registered debt of India, paid in the year ended the 30th day of April, 1864, amounted to £3,093,250 sterling, and the charges defrayed in England, on account of the Indian territory, in the same period, including interest on debt incurred in England, and guaranteed interest on the capital of railway and other companies, after deducting net traffic receipts of railways, amounted to £6,446,913 sterling, leaving a surplus of Indian income for the year ended as aforesaid, after defraying the above interest and charges, of £78,347 sterling."

MR. HENRY SEYMOUR

said, it would conduce to the ease both of the Indian Minister and the House if, instead of making so detailed a statement of the Indian Budget, the right hon. Gentleman would lay upon the table a document resembling the Exposé de V Empire, annually laid before the French Chambers, and containing authentic details, relative to the various departments of the Indian Government. Such a statement of accounts was actually provided for by Act of Parliament, and the right hon. Gentleman was violating the law by not giving it. With respect to the mode in which the Indian accounts were kept, he was glad to hear that gentlemen had been sent from the English Treasury. Lord Dalhousie had asked that these gentlemen should be sent out ten years ago, and it would have been much better if they had gone to India in 1854 instead of 1864. In April every year the Finance Minister of India came to the Indian Council and made his annual statement. It was generally an elaborate one, giving his motives for proposing various taxes, and containing an Estimate of the revenue and expenditure of the year. The right hon. Gentleman, however, steadily refused to lay the document before the House, although it was necessary to enable the House to understand the subject. The Finance Minister for India accompanied it by two estimates—one a Budget Estimate for the coming year, and the other a regular Estimate, giving the actual revenue and expenditure for eight months in the year that had elapsed, and showing how the figures agreed with the Budget Estimate. He regretted to see that according to the regular estimate of 1864–65 the land revenue had decreased by £218,000, compared with 1863–64. He observed also that there had been no receipts from the sale of waste lands in India. These might be made to bloom with cotton and other crops; why were they not sold? In opium there was a large increase. The military expenditure was £630,000 more than in 1863–64. One or two items of this increase were, no doubt, unavoidable; such, for instance, as the rations to soldiers owing to the increase in the price of the necessaries of life. With regard to other items he doubted whether a due regard to economy had been practised. There was an increase of £35,000 by the substitution of beer to a certain extent for spirits. This did not appear, according to another paper, to be the whole of the increase, and the change might have been effected at much less expense, by the establishment of English breweries on the spot, instead of the costly method of importation. The item of £57,000 for barrack furniture and gas for the soldiers' reading-rooms, and noncommissioned officers' rooms seemed enormous. The retention of two regiments that had been ordered home, was put down at £50,000. The expenditure on public works was estimated at £5,600,000. He saw it stated in every direction in the papers, that this expenditure was under no control, and that the Department was in a most disorganized state. There was an increase of £140,000 for gaols in Bengal alone. He had received complaints from jute manufacturers complaining that the Government were spending £10,000 in putting expensive machinery in the gaols for the manufacture of jute, which must soon be followed by the outlay of another £10,000 or £20,000 in order to enable the prisoners to compete with the labour outside the gaols. The Budget Estimate of 1864– 65 assumed a surplus of £823,000, while the regular Estimate of the year showed a deficit of £344,000. The total Indian army was now costing us £15,700,000. There was another item in the Budget—an estimated expense of £10,000,000 for barracks for the European troops in India, although the Government had been spending money year after year in improving the present barracks. The question was whether 70,000 or 80,000 Europeans troops were required in India. During the troublesome times of the mutiny, and when the railways were less advanced, we had only 40,000 European troops in India, and yet they contrived to quell the mutiny. Did the right hon. Gentleman intend to keep the army in India at double its amount in 1857. If he did, no increase of revenue would meet so enormous a charge. The right hon. Gentleman also proposed to build a fleet of steam ships to carry his troops to India. If the troops were unnecessary, why build additional barracks, or provide new transports? [Mr. VANSITTART: Are they unnecessary?] That was the question, flow did the right hon. Gentleman intend to carry on the reliefs? The increase of the trade and prosperity of this country would make it more and more difficult to provide the number of troops. Then public works for the year 1865–66 were to cost £5,800,000, being an increase on the year of £200,000. The civil expenditure was £3,450,000, out of which the establishments would cost no less than £800,000 to dispense these £3,450,000. These figures gave some clue to the complaints in every Indian newspaper as to the extravagance with which the machinery of these civil departments was carried on. Then the education grant was constantly increasing. He would be the last to object to that were it not that nearly half the amount of the grant was swallowed up in the establishments. The total estimated expenditure was £47,186,000, and showed an increase over the expenditure of the preceding year of no less than £2,652,000. The Budget Estimate of the year—and they all knew how fallacious that Estimate was—reckoned on a deficiency of revenue. His right hon. Friend, however, had not told the House what steps he intended to take in order to force economy on the Government of India, and oblige them to make income and expenditure meet. And then as the waste lands were brought under cultivation, they did not appear to add anything to the revenue of the State. Some explanation was required, and some papers were necessary, to show what the facts of the case were. As to the mode in which this revenue was raised, he must comment upon what was called in India the "cowardly" policy whereby Sir Charles Trevelyan wished to replace the increased expenditure by imposing duties upon jute, which was a new manufacture in India, upon wool, which was a new product of commerce, and upon tea and coffee, which were taxed already, whilst he dared not tax cotton, out of regard for home interests. He regretted very much to see the income tax taken off, which, in five years, had produced nearly £8,000,000, and during all that time there was but one assessment, the assessment of the first year. India had so much benefited by the state of things in America, that, had there been an assessment lately, the tax would have been doubled, and he would suggest that it should be imposed in this form: exempt all incomes under £100 or £125 a year; and impose a tax of 3 per cent, realizing about 60 rupees, or £6 per annum, from incomes of £125 to £250; £12 from incomes of £250 to £500; and £25 on incomes from £500 to £1,000 a year. There might also be a license duty imposed on two or more classes on those following a trade or profession, excluding agriculturists, day labourers, and servants, and those who paid income tax. This was a tax in accordance with native feeling, and perhaps the only direct one that would be fairly paid. Before this expenditure of £10,000,000 was determined upon he would like to know whether the right hon. Gentleman had considered the important question of the defence of India as a whole, in the best, and cheapest manner, with the smallest number of troops? He should like to know whether his right hon. Friend had written out to India calling on the Government to reduce its enormous military expenditure? He should like to know whether his right hon. Friend, before sanctioning the enormous expenditure which it was proposed to make upon barracks, had read M. Brialmont's great work on fortifications and consulted the best authorities; for the problem was, how India was to be defended in the best manner? Another subject which was necessarily connected with the defence of India was, where they would have the capital? He had long considered there could be no doubt where it should be. For many reasons it should be at Bombay. Everybody admitted that Calcutta was too far to the east. The west was much better suited to European constitutions. Then Bombay was nearer Europe, it had a magnificent harbour, and its people were better adapted to receive European civilization. In short, all the social, commercial, and political requirements of the capital of India were fulfilled in the same city; and now that the Governor General and his Council were like a roving commission on the look-out for a capital, and constantly on the move, was the time to consider where the capital should be. Bombay was now really being re-built. The Government had gained a large sum of money by the sale of the waste lands there; and there could be no better time for establishing the seat of empire at Bombay. At present the Governor General and his council were compelled to go to the hills in the hot season, and for six months in the year the government of India was left practically in the hands of subordinate officers. If all the chief officers of State were in the interior, and not on a sea-board, and if they could not be communicated with easily, our empire in India would run great risk in the event of any such outbreak occurring as the mutiny of 1857. This question of the change of capital, therefore, ought to be taken into consideration speedily; and in his opinion but one decision could be arrived at. As to the inquiry in Oude, he did not wish to reflect in the least upon Sir John Lawrence, but must say, that remembering past passages in the history of the Viceroy, he greatly regretted that inquiry. The zemindars in Oude were naturally frightened in seeing the same machinery at work which had reduced their compeers in other portions of the country. One result of the system heretofore pursued in the North-West of India had been the utter uprooting of the native aristocracy; and some of our officials had reckoned it as great a feat to root out a zemindar as to kill a tiger. There were men whose position formerly was on a par with that of the highest aristocracy in England, who now, owing to our policy, were forced to beg their bread. But this policy of destroying the native aristocracy in the North-West Provinces for the benefit of the village proprietors had been a failure, for during the mutiny the ryots, the very men who should have been attached to our cause, had brought back the old aristocracy and replaced them in their feudal estates. He believed that only two things were requisite for the prosperity and contentment of India. One was that we should respect the systems we found existing there, and not endeavour to carry out theories of our own; and the other was to leave the religion of the natives entirely untouched. He should like to hear the views of his right hon. Friend (Sir Charles Wood) with regard to the ecclesiastical establishments of India. Was it intended to divide the country into various bishoprics and to introduce the parochial system, defraying the cost of this out of Indian revenue? His hon. Friend had taken steps which justified apprehensions of this kind. Such a system should be nipped in the bud. In India we should carry out the plan which had been adopted in our colonies, and allow the grant of no money for ecclesiastical establishments of any kind. This policy was as desirable in the interests of Christianity as it was in the interests of British rule in India. He was pleased to hear that it was not intended to revert to Lord Dalhousie's system with regard to the native aristocracy of India, and he wished that his right hon. Friend would make a similarly satisfactory announcement with regard to religion. Just now the Indian Government were severing all connection with the native religions of India, and was this a time for using the money of Mahomedans and Hindoos in order to further Christianity? We had had a warning in the case of Ireland, and the thin end of the wedge should not be inserted in this direction. In his opinion such a system, if persisted in, would end disastrously for our rule in India.

MR. VANSITTART

said, the hon. Gentleman had deprecated a merely theoretical policy in India, but was, in fact, himself a great theorist. He had set down the number of European troops necessary in India at 40,000 and no more, because that was the number in the country at the time of the mutiny; but it was notorious that the Sepoys had taken advantage of the small number of Europeans then in the country to try to upset our rule. He was far from sharing the opinion of the hon. Gentleman on this point, and thought it was to be regretted that the right hon. Baronet had paid so little attention to the very earnest recommendation of Sir John Lawrence and his Council to raise a loan of ten millions, in order to construct new barracks and other military works which! were urgently required for our European troops if we had the slightest regard for their health and safety. It appeared that for several reasons the Indian Government recommended that this outlay should not be charged to revenue. In the first place, they could hold out very little prospect of the revenue accounts for the next and following years being so elastic as the current year, although there was a deficit of £375,000. In reality it was £665,690; but it had been reduced to £375,000 by the right hon. Baronet delaying the construction of the transports to be built at home for the conveyance of our troops. In the second place, the Indian Government represented that the Bhootan war might be prolonged to an indefinite period owing to the difficulty in getting these savages to sue for peace; and as everything connected with that war has to be conveyed from a distance, it must necessarily be a costly one. Then, again, they had sold Government estates in Bengal and confiscated estates in the North-Western Provinces, which would not be available as a source of revenue in future years; and, lastly, £1,200,000 had been given up by the total remission of the income tax. He was aware that the right hon. Baronet had expressed his dissatisfaction that this tax was not renewed at the same rate as last year, but the right hon. Baronet quite forgot that the Indian Government had no alternative, for when Mr. Wilson imposed it he was obliged to assure the people of India that it should cease in five years—on the 31st of January, 1865. Mr. Laing reiterated this, and Sir Charles Trevelyan very properly remarked that— At all hazards, we must try and keep faith with the people of India by not prolonging it, and the expiration of this tax will do more to secure the confidence of the people of India than anything else that could have happened. The Indian Government gave another reason against the impolicy of making no provision to meet the deficit, and that was the uncertainty of the opium sales. The revenue to be derived from this source had been put down at £7,723,600, but during the last two years it had largely fallen short of the Estimates, and there was no security that this might not occur again. Further, the cash balances had fallen off from £19,000,000 to £11,000,000, notwithstanding the sale of a large amount of Government property. Probably English enterprize and capital had never been so profitably employed as at present. In proof of this it was only necessary to refer to the daily journals; scarcely a week elapsed without some new tea, coffee, or other scheme making its appearance. The remission, therefore, of the income tax would have been more than an equivalent, more than a compensation to the proprietors of those companies and the Indian public generally for the imposition of the export duties proposed to be levied by Sir Charles Trevelyan. Looking to these facts and the gloomy financial prospect before us, he was by no means disposed to think that the right hon. Baronet had acted wisely in reversing, in his usual summary off-hand manner, Sir Charles Trevelyan's financial arrangements—arrangements which had received not only the approval of Sir John Lawrence and his Council, but which after all, with reference to the peculiar local circumstances of the case, were about the best that could have been framed, and, at all events, they possessed the merit of balancing the income and expenditure. The effect, moreover, of this perpetual interference and snubbing on the part of the right hon Baronet could not fail to be attended with the worst results, for it would end by no one of any rank or position condescending to accept the office of Governor Generalship, with its large emoluments, if he was to be converted into a mere cipher. If report was to be believed, the evil had already shown itself, for it was said that Sir John Lawrence contemplated resigning. He complained, and justly so, that he possessed less independent authority now than when he was Lieutenant Governor of the Punjab, and that, while all the responsibility and blame devolved upon him, the Secretary at home gained all the credit and glory. It was also very generally believed that that enlightened Governor, Sir Bartle Frere, was so mortified by the snubbing he received from the right hon. Baronet for the introduction of his liberal measures, that he had actually tendered his resignation. This was a most unsatisfactory state of affairs, and he hoped the new Parliament would, among its earliest acts, decide how India was to be governed in future—namely, in India or in England. Before he resumed his seat he begged to ask the right hon. Baronet if he had received Mr. Robert Cust's Report, or the Indian Government's despatch on that Report, relating to a scheme to reduce the salaries of the civilians of the North-Western Provinces? He could assure the right hon. Gentleman that that order had given rise to the same feeling of discontent as prevailed in the military and other services, and, it seemed, with great reason. The cost of the Indian Home Office amounted to £171,120 per annum. Every one connected with it, from the right hon. Baronet, the members of his Council, secretaries, clerks, and even those fifty porters and hall-keepers required to be employed in that overgrown, unwieldy establishment, were, one and all, in the receipt of handsome salaries. A Bill was passing through Parliament for augmenting the salaries of our County Court Judges, and another Bill giving handsome retiring pensions to our Colonial Governors. The Civil Service at home was well paid and possessed a well established superannuation system. The Government selected as their victims the actual rulers of India, a body of men who were striving conscientiously and indefatigably to perform their duties in that distant, unhealthful, and even deadly climate. This was done, too, in the very teeth of the recommendation of Sir Bartle Frere, the Governor of Bombay, who had lately sent home a Report that the cost of living in India was so enormous that it would be impossible for the officers, both civil and military, to continue on their present salaries.

MR. BUXTON

said, he was sorry that the hon. Member for Poole (Mr. Henry Seymour) should have given countenance to the misapprehension which prevailed with regard to Sir Charles Trevelyan's proposals. The general idea appeared to be that Sir Charles Trevelyan had to deal with a failing income; that he nevertheless abolished the income tax, induced thereto by a supposed obstinate adherence to views expressed when he was Governor of Madras; and that, having created a deficiency, he sought to make it up by a loan and by the imposition of export duties on various Indian products. Nothing could be more unlike the truth than that representation. The fact was that the income of India for the ensuing year was calculated, after the abolition of the income tax, to be considerably greater than in the preceding year, and Sir Charles Trevelyan did not in his original scheme propose any export duties. The income of the ensuing year was calculated to produce more than the current expenditure, and but for the outlay on public works Sir Charles Trevelyan would have had a surplus. It was to meet the demand for public works that he proposed a loan, Sir Charles Trevelyan's view being that for reproductive public works it was right and wise, while paying the greater portion of the cost out of revenue, to meet some part of the expense by a small loan; and, in his financial statement, he observed— It is true that the Ways and Means of the year are, to the extent of £1,200,000, composed of borrowed money. But this loan has nothing in common with the shifts and expedients of insolvent or embarrassed States. It is the result of a discriminating policy which confines taxation to its just objects, and provides by loan for reproductive works and for works of every kind which are on such a scale as would too severely strain the resources of a single generation. The best employment of money is that which the industrial classes make of their annual savings for their own sake, and it is no real advantage to the community to interfere seriously with this natural process and to cause general harassment and discontent in order to accelerate the execution of public works. Even if the condition of the finances were all that could be desired, it would still be expedient to limit taxation to the proper business of Government, and to provide for reproductive works by means of specially appropriated funds. Sir Charles Trevelyan justly decided that this was a case for raising money partly by loan, and that he could drop the income tax and substitute a loan. He therefore adopted the principle proposed by the Government in the case of dockyard fortifications. Lord Macaulay had made the observation that nothing was so essential as that faith should be kept with the people of India. It was the idea of the people of that country that Mr. Wilson had pledged the Government to the abolition of the income tax, and in such a country, where the people were suspicious and jealous of the British tenure, it was of the highest importance that it should appear that the faith of the Government was maintained inviolate. There existed, then, a powerful inducement to do away with the income tax, which, besides, was demoralizing the people by causing them to resort to chicanery and cheating. Sir John Lawrence, disapproving the proposition to raise so much money as £1,200,000 by loan for public works, urged the imposition of export duties to the amount of £400,000, in order partly to recoup the temporary loss of the income tax, and his proposal was accepted by Sir Charles Trevelyan and the Council. These export duties had been much condemned in England, and he did not wish to defend them; but certainly in India they had not been looked upon as pernicious. There the whole scheme had been exceedingly approved, and especially by the Calcutta community; and it was thought they would operate only as a slight tax, falling principally on the European capitalists in that country, without interfering in any appreciable degree with the commerce of India. As to the army, he ventured, with the greatest diffidence, to think that we were keeping up an unnecessary amount of European force in that country. The late mutiny had been put down, as the hon. and gallant Member for Aberdeen (Colonel Sykes) had reminded him, by little more than 12,000 European troops in the field, and since that period the power of the Government had been enormously increased. The artillery had been transferred to our own hands; the fortresses and strong places were now held by European soldiers; we had greatly reduced the Native army—the one enemy we had to fear; and railways, telegraphs, and an improved organization all contributed to augment the strength of the Government as compared with that of the Natives. The experience of the mutiny proved that we had no reason to apprehend a rising of the people, but only a revolt on the part of those whom we ourselves had armed. We had now, in fact, no enemy without, and none whom we need really dread within. We might, therefore, in his opinion, largely reduce our European force in India without endangering our power in that country, while we at the same time lessened the heavy drain upon the British army. In conclusion, he would only add that he had observed with much regret the evident pain and difficulty under which his right hon. Friend (Sir Charles Wood) had made his statement—a statement as interesting and gratifying as any that he had ever heard in that House.

MR. BAZLEY

said, he wished, in common with every Member of the Committee, to express his regret at the indisposition of his right hon. Friend (Sir Charles Wood) and his desire for his speedy recovery. Passing to the subject of his statement, he sincerely trusted that on another occasion they would be furnished with the Indian accounts at the commencement, instead of at the end of the Session. The question involved the welfare of 150,000,000 people, and the management of a revenue of £47,000,000, and, therefore, well deserved the earliest and most careful consideration of the House. There were many features of his right hon. Friend's statement which he could not regard with satisfaction. The financial affairs of India had not been placed before them in as clear and explicit a manner as could be wished. The Revenue Budget for 1865–6 amounted to £46,488,760, which, with the addition of the proposed loan of £1,200,000, made a total of £47,688,760. The estimated expenditure for the same year was stated thus:—In India, £40,469,540; in England, £6,717,390;making together£47,186,930; and then concluded with a surplus stated at £501,830, the total given being £47,688,760. Surely it was a gross inconsistency to be borrowing £1,200,000, with that apparent surplus of £501,830. He trusted that the Indian Department would direct its attention to that glaring discrepancy. The estimated sum required for the army and marine was £14,292,670; for public works for military purposes, £5,888,640; for law and justice, £4,942,650; for interest, £3,201,820; the total sum expended in England was £6,717,390; and the sum set down to meet treaty engagements was £1,682,900; making together an expenditure of £36,726,160, against a revenue of £47,688,760. But, in addition to that expenditure, there was an item of no less than £8,642,569, for what was called "collections," or, in other words, an expense of nearly 20 per cent, which he thought enormous, was incurred in collecting the revenue, while there was still a further outlay under the head of "sundries" of £2,320,031. Now, he maintained that, with prudent and economical management, it would be necessary neither to borrow money nor to weaken our means of defence, nor to impose export duties. A large sum might easily be saved in conducting the business of India, without diminishing its efficiency, and, instead of requiring additional funds, a much smaller sum than the £6,000,000 now spent would amply suffice for all the public exigencies. They were about to build splendid offices in London, at the cost of the people of India—a very questionable proceeding indeed, and one that ought to be resisted. Something like £10,000,000 was proposed to be expended upon barracks and other conveniences for the army. That was an amount at the rate of £140 for every soldier, or, if divided also among the native army and police, it would give £30 for each individual. That was obviously a most extravagant outlay. When the Government spoke of executing public works they contemplated barracks and other accommodation for the troops, but very little, indeed, that was of a truly reproductive character and calculated to benefit the great mass of the people of India. In his Minute of the 30th of March, 1865, Sir John Lawrence said— India is a vast continent, in which the amount of capital hitherto expended on public works, however considerable in amount, is quite insignificant compared with its wants. The right hon. Baronet (Sir Charles Wood) took credit for spending in six years £73,000,000 on public works in India, including railways; but in the present Session alone the Imperial Parliament had sanctioned undertakings the aggregate of whose capital was £126,000. Without more roads, railways, and means of irrigation, the trade and commerce of India must stagnate. The right hon. Gentleman had referred to the cultivation of cotton, instead of grain, in India; but there was much more land under cultivation there than would be required if it were only cultivated at all as it should be. Instead of causing the poor Hindoo to starve, they should help to develop the resources of the soil. In the Marquess of Tweeddale's letter to Colonel Showers, dated June 21, 1865, which had been alluded to, there occurred this passage— If we must look to India as the principal source of supply for cotton wool, we find three years of great demand, accompanied by high prices, have not had the effect of improving the length of the fibre or its substance. I therefore presume that there is no one in India who is com petent for the undertaking … Surelyin a country where no part of the produce of the soil is returned to the land, such as farmyard manure, it is more necessary that agricultural chymistry should supply the want, as cow-dung is used for fuel, and few horses or sheep are kept. India, therefore, requires a gardener. Connected with the loan of £1,200,000, it was due to the Secretary of State for India to state that on the 9th of May last his right hon. Friend wrote in these terms— You have not, however, continued the income-tax, producing upwards of £1,200,000 per annum, but you have proposed to raise a loan of precisely that amount, and to impose Customs duties of a most objectionable nature. He was delighted with that statement, and he hoped it would be a motto in the India Office. He hoped that for the future the improvement of India would be carried out on bonâ fide capital, and that the country would be advanced by reproductive public works. He believed there was a great future for India, that she was capable of sending to this country comforts and raw materials which we needed; and that she might take in return those comforts with which England, better than any other country, could supply her. In conclusion, he wished his right hon. Friend health and strength to combat with the difficulties which he had to encounter in the administration of the affairs of India.

COLONEL SYKES

said, he would be very glad if the prospects so satisfactory to his right hon. Friend should be realized; but to his mind, matters did not look hopeful when he found that there was scarcely a charge on the expenditure side of the account which had not been increased. As to the Estimate for 1865–66, he felt bound to say he did not place the slightest confidence in it. His right hon. Friend had given them ample proof that those prospective Estimates were not worth a rush. They were completely in nubibus. Such Estimates varied in a year, as had been proved that night, from a surplus to a deficiency of £800,000. Again, looking to some of the items of the increased revenue, he regarded them as anything but satisfactory. For instance, there was an increase of £212,000 from abkaree, or, in other words, from the consumption of spirits. Now, that was scarcely desirable. There had been a decrease on the assessed taxes that was not satisfactory. Next, there was an increase of £600,000 from salt. This article was positively necessary for the people of India. If they did not consume it, from their vegetable diet they would be themselves consumed by worms. It was said that to tax beer in England was to tax the beverage of the working man; and certainly to tax salt in India was analogous to levying a tax on beer in England. Then there was an increase on opium, a drug which poisoned the people, and this was scarcely matter for congratulation. In Bengal the Government went the length of mixing itself up with the production of opium, by making advances to the producers in the first instance, and afterwards buying up the article, and this brought us into much odium. The large surplus anticipated by his right hon. Friend for the year 1863–64 had come down to £78,000, and this year not only was that £78,000 absorbed, but, in addition, the increased revenue. The increased expenditure in India demanded the earnest attention of his right hon. Friend, for its progress would be most embarrassing. The difference between the expenditure last year and the year before was upwards of £2,225,000. There was an increase in the civil branch of the Indian service, there was an increase in the home charges, and, in fact, in every branch they found an increase, and the increase for the police was worthy of observation. The Native veteran army of India had been reduced 135,000 men with a view to economy, leaving only 130,000 armed men to be paid; but it appeared by a Return to the House of Commons that the number of troops was 132,067, and of Native police 154,435—making a total of 286,502, so that there had actually been an increase of 165,000 armed men. And who were they? They consisted of undisciplined police, armed, dispersed throughout the country, having no European officers with the detached bodies, and at liberty to do just as they pleased. This had been the result of the reduction of the regular Native troops; they were increasing the number of armed men in the country—men dangerous from their want of discipline and utterly useless in the field. He had received information from an officer of experience in Central India, that in several instances it was suspected that atrocities had been committed by bands of police, who were without the discipline and control of European officers. Under these circumstances he could not say that the state of things in India had been improved. In fact, it was unsafe. A feeling was obtaining among those who were once native regulars—veterans—that their past services had been overlooked. Their old officers had been taken from them, and with those who were placed over them they had no sympathy, because they were strangers and had never served with them. The officers themselves were dissatisfied. Even the petted Staff Corps, the origin of all the confusion and wrong, were beginning to complain, and according to the testimony of a staff officer whose letter he held in his hand, and who spoke from personal experience, if some measures were not speedily adopted to remedy the present very unsatisfactory state of the service it would become completely disorganized, and the administration of the country would be rendered difficult. He entirely approved the course which had been taken by Sir Charles Trevelyan with regard to the income tax. A pledge had been given on the part of the Government that the income tax should continue for only five years, and Sir Charles Trevelyan only acted in the spirit of an English gentleman in fulfilling that pledge, not that he objected to an income tax which should touch the wealthy only. With respect to what had been said as to the zemindars being driven into beggary, he believed that many had fallen into difficulties by their foolish pride and pomp. They had got into debt, and the Government had sold their estates because they did not pay the Government land tax. The result was beggary, but it did not arise from granting proprietary rights to the cultivators. There were several other topics on which he had intended to touch, but, in the absence of a quorum, he would not detain the Committee. He could not sit down, however, without entreating his right hon. Friend to look seriously on the state of feeling in India, and especially to reflect on the uncertainty of the opium revenue and the impolicy of any increase in the salt tax.

MR. KINNAIRD,

thought that the Secretary for India was placed in a most unenviable position. First, he was found fault with for not doing something, and then, when he had sought to remedy the evil complained of, he was abused and virtually told that he had better have done nothing. His hon. Friend who had just sat down complained of the increase of the police and of their being armed. Some years ago he remembered bringing before the House the need there was for an increase. With regard to their being armed, he believed when they were so it was exceptional, and that ordinarily they were not so. Again, an accusation had been brought against the Governor General, Sir John Lawrence, on account of the inquiry he had instituted in Oude into the rights of the under tenantry; and it was said that he wished to destroy the aristocracy as he had done in the Punjab. That he had not done anything to forfeit the confidence of the talookdars and other large landholders was evidenced by the late Durbar, the success of which was a sufficient reply to such accusations. Again, with regard to the army, one would have thought from the observations then made that there was a proposal greatly to increase it, whereas, the fact was, that the Secretary for India had reduced it by two regiments and a battery of artillery. He thought that the Government might be congratulated on the condition of India under many of its aspects, and he was glad that a policy of protection, or restriction on trade, had not been sanctioned. The testimony of facts proved that free trade was a permanent source of wealth, whatever apparent or temporary advantages might result to the revenue from an opposite course. He was also bound to express his satisfaction at the wise view adopted by the Government with respect to the land question, and that, while maintaining a native aristocracy as necessary for India, they at the same time were determined to uphold the rights of the peasantry, and give them that security of tenure which must be at the base of all improvement, social and moral—the more liberal construction placed upon the grant in aid system, by which the cause of education had been advanced showed the progressive spirit that had animated the councils and the legislation for India during the past year. He trusted that, by the develop- ment of public works, by the progress of enlightened education, India might rapidly advance both socially and morally, and that by contact with the Christian faith of this land the natives of India might be induced more and more to examine the foundations of that faith, so as to embrace it for themselves.

MR. W. EWART

said, he thought that a printed statement of the affairs of India should be prepared annually and placed in the hands of Members of that House.

SIR CHARLES WOOD

said, with regard to the observations of the hon. Member for Poole on the disposition of troops in India, he could assure the hon. Gentleman that the subject of disposing the troops in such a manner that the smallest number could be made most available had been very seriously considered by the authorities in India for the last three or four years, and the position of the barracks in each Presidency had been determined partly by this consideration and partly by that of the healthiness of the site. With regard to the reduction of troops, that was a subject on which the authorities in India were the best judges. As he was blamed by the hon. Gentleman the Member for Poole for having too many troops, and by the hon. Member for Windsor for having too few, probably he had hit somewhere about the happy medium. He was surprised to hear the hon. Member for Poole, who had been Secretary to the Board of Control, talk about our establishing an ecclesiastical establishment there. The hon. Gentleman must know that the principle on which clergymen were sent out to India was that of military chaplains. When a large body of servants of the State, whether civil or military, were sent out to a country where the whole population is Mahomedan, Hindoo, or heathen, it was not unreasonable that we should send out clergymen to minister to their spiritual wants, as we sent out medical men to administer to their bodily ailments. And when we sent out a number of clergymen we sent Bishops out to look after them, as when we sent out a number of surgeons a certain number of Inspectors General were sent to look after them. The hon. Gentleman opposite said that the Home Government had so constantly interfered with Sir John Lawrence that he had offered to resign. He did not know where the hon. Gentleman had got his information, and it was certainly a remarkable time to make the statement when the Home Government had been steadily supporting him against his Council. Sir John Lawrence had said that the income tax ought to have been continued, and the Home Government said he was quite right. He was glad to have the opportunity of contradicting the statement. He had no reason whatever to believe that Sir John Lawrence was anything but perfectly satisfied with his position in India, and he had received undeviating support from home. There was an advantage derived from the visits to Simla by the Governor General, that they were less expensive and less inconvenient than to the tours which it had been formerly the custom to make. The hon. Gentleman had said that Sir Bartle Frere was dissatisfied with his treatment, but that statement did not accord with what he had heard from a dear connection of his, who had been assured by an equally near connection of Sir Bartle Frere that he fully appreciated the kindness and courtesy he had received from himself. The hon. Gentleman also asked, whether a memorandum had been received concerning a reduction of salaries? No such memorandum, he believed, had been received, although the subject had been referred to in a private letter from Sir John Lawrence. There was no intention of adopting so unfortunate a system as that of under-paying public servants in that distant country. The hon. Member for Manchester had referred to the expense of collecting the Revenue in India; but if the hon. Gentleman had looked at the finance accounts which were on the table of the House, he would have seen that the expense of collection was, in the case of the land tax, 10 per cent; assessed taxes, 3 per cent; customs 7 per cent; salt duty, 6 per cent; and stamps, 6 per cent. [Mr. BAZLEY: Opium.] No doubt upon opium the cost of collection was 33 per cent, that tax was of an anomalous character, and ought not to be taken as an element of calculation in estimating the average cost of collection of other taxes. There were strong objections to the tax, but unless any one could point to any other source whence £8,000,000 a year could be obtained, he feared the tax must be continued. The hon. Gentleman also referred to the £126,000,000 voted this year for new railways in this country; but probably all that amount would not be expended. Those railways were private undertakings, and he (Sir Charles Wood) had only referred to public works in India, and was unable to give an account of the works resulting from private enterprise in that country. The hon. Gentleman had also read a passage from a letter from the Marquess of Tweeddale referring to the want of manure. In India that was a great want, because the people in many parts of the country used for fuel the only manure they possessed. The hon. Member for Aberdeen had alluded to what he conceived to be the falling off in the proceeds from the land revenues and assessed taxes, but those apparent diminutions were the result of exceptional gains in former years. The increase in the amount derived from the salt tax was not a proof of additional burdens upon the people of India, but was evidence of increased comfort and wealth, and the greater quantity of salt carried up the country by the railroads. With respect to the additional number of armed men referred to by the hon. and gallant Gentleman, the answer was that the 281,000 men of the police thus referred to were not armed men. The police did not in most cases carry arms. They were scattered all over the country. There was a vast difference between a scattered unarmed body of police and a well-disciplined, well-armed Native array, and no danger could be apprehended from the former. In conclusion, the right hon. Baronet thanked the Committee for its consideration towards him, and hoped that the statement he had made would prove generally satisfactory.

Resolutions agreed to.

  1. 1. Resolved, That the total net Revenues of the Territories and Departments under the immediate control of the Government of India for the year ended the 30th day of April 1864, amounting to £3,956,776 sterling, and the Charges thereof, for the same period, other than Military Charges, amounted to £3,208,118 sterling.
  2. 2. Resolved, That the total net Revenues of the Bengal Presidency, for the year ended the 30th day of April 1864, amounted to £11,662,738 sterling, and the Charges thereof, for the same period, other than Military Charges, amounted to £2,513,263 sterling.
  3. 3. Resolved, That the total net Revenues of the North Western Provinces, for the year ended the 30th day of April 1864, amounted to £4,847,051 sterling, and the Charges thereof, for the same period, other than Military Charges, amounted to £1,485,351 sterling.
  4. 4. Resolved, That the total net Revenues of the Punjab, for the year ended on the 30th day of April 1864, amounted to £2,756,169 sterling, and the Charges thereof, for the same period, other than Military Charges, amounted to £1,096,999 sterling.
    5. 963
  5. 5. Resolved, That the total net Revenues of the Territories and Departments under the immediate control of the Government of India, of the Bengal Presidency, of the North Western Provinces, and of the Punjab, together, for the year ended the 30th day of April 1864, amounted to £23,221,734 sterling, and the Charges thereupon, including the Military Charges, amounted to £15,464,862 sterling, leaving a surplus available for the general Charges of India, of £7,756,872 sterling.
  6. 6. Resolved, That the total net Revenues of the Madras Presidency (Fort Saint George), for the year ended the 30th day of April 1864, amounted to £5,973,313 sterling, and the net Charges thereof, for the same period, amounted to £5,167,165 sterling, leaving a surplus available in the above Presidency, for the General Charges of India, of £806,148 sterling.
  7. 7. Resolved, That the total net Revenues of the Bombay Presidency, for the year ended the 30th day of April 1864, amounted to £6,441,851 sterling, and the net Charges thereof, for the same period, amounted to £5,386,361 sterling, leaving a surplus available in the above Presidency, for the General Charges of India, of £1,055,490 sterling.
  8. 8. Resolved, That the total net Revenues of the several Presidencies, for the year ended the 30th day of April 1864, amounted to £35,636,898 sterling, and the Charges thereof amounted to £26,018,388 sterling, leaving a surplus Revenue of £9,618,510 sterling.
  9. 9. Resolved, That the Interest on the Registered Debt of India, paid in the year ended the 30th day of April 1864, amounted to £3,093,250 sterling, and the Charges defrayed in England, on Account of the Indian Territory, in the same period, including Interest on Debt incurred in England and Guaranteed Interest on the Capital of Railway and other Companies, after deducting net Traffic Receipts of Railways, amounted to £6,446,913 sterling, leaving a surplus of Indian Income for the year ended as aforesaid, after defraying the above Interest and Charges, of £78,347 sterling.

House resumed.

Resolutions to be reported To-morrow.

House adjourned at Nine o'clock.