MR. VERNON SMITH
said, he rose to ask for leave to introduce a Bill for enabling the East India Company to raise money in the United Kingdom for the service of the Government of India. The Bill which he desired to introduce had been rendered necessary by the emergencies which had arisen out of the state of affairs of India, and it would probably surprise no one, that in consequence of the confusion which existed there, the East India Company should come to Parliament to ask for power to borrow money. The provisions of the Bill would be strictly confined to the necessities of the present emergency, and would extend only over the present Session and that of 1859. The House might not, perhaps, be aware how the borrowing powers of the East India Company stood. It was rather singular, that while in India the Government of India had an almost unlimited power of borrowing, subject to the approbation of the Court of Directors and of the Board 781 of Commissioners, in England the Court of Directors had hardly any such power. All that they had, had been given to them by Acts of Parliament, which bad been passed from time to time, beginning with the first which was passed in the reign of William III., and ending with 21st of George III. These Acts gave them power to borrow sums, amounting altogether to £7,000,000, of which at the time the mutiny broke out they had raised £4,000,000, and they had therefore, power to borrow only £3,000,000 more. The Government in India supplied all that was necessary for expenses there, and the home Government gave notice at the commencement of every year what amount of money was to be remitted from India; which was either received in money, or bills were drawn on India. The mode of regulating the supply of bills was, that when they found the supply of these bills superabundant they checked" it by raising the rate of exchange; and, on the other hand, when the supply became slack they increased it by lowering the rate of exchange. Such was the manner in which money had hitherto been received from India for the purposes of the home Government. During the past year the Board of Directors limited their calls upon India rather below the usual amount. They gave the usual notice that £4,000,000 would be required, but they did not receive bills for more than £500,000 or £600,000. When the rebellion broke out, however, they were compelled to see how to make all their resources available. An application came in the autumn from the Government in India, requesting them to draw no further bills on India, and stating, moreover, that their own necessities would require a transmission of bullion. To that application the Directors immediately replied that they would draw no more bills on India, and would raise the rate of exchange to such an amount as would prevent merchants from taking them in preference to private securities. They also transmitted bullion to the amount of £1,000,000 as requested, and gave the Government of India notice that a further supply would be sent. On the 10th of December, however, they wrote to the Government of India that, as a considerable sum might be expected in the shape of subscriptions to the five per cent loan in India, in consequence of the rate of interest having been practically raised to six per cent, they thought they would not require a further supply of bullion. It was 782 not surprising that the Directors should have found themselves in difficulties. The additional expense thrown upon them had been very considerable. In the summer their resources consisted of borrowing powers to the extent of £3,000,000, a cash account of about £1,000,000, a reserve fund of £1,000,000 in Three per Cent Stock, and £1,800,000 of Exchequer bills. All these resources had been called into requisition, and were now nearly exhausted. He had received a statement from the India House, showing the receipts and disbursements in the first four months of the present year, and what they were expected to be from the 1st of May, 1858, to the 30th of April, 1859. The receipts from the 1st of January to the 30th of April, 1858, were as follows:—Cash balance on the 1st of January, £1,187,963; bills of exchange on India, £40,000; loans on security of East India bonds and interest, £70,310; securities, £2,430,000; Indian railway companies, £1,000,000; total, £4,728,273. The disbursements in the same period were:—Dividends to proprietors of East India stock on Indian transfer loan property, and interest on home bond debt, £432,888; military and other stores, purchase of steam vessels, and transport of troops and stores, £755,909; stores supplied by Her Majesty's Government, pay-office claims, retiring pay, pensions, &c, of Queen's troops, postal arrangements, mission to the Court of Persia, and establishment in China, £1,257,560; civil service annuities payable in England, civil absentee allowances, furlough, and retired pay to military and marine officers, and advances on account of the civil, military, and provident funds of India, £403,582; bills of exchange from India, bullion consigned to India, family remittances, remittances by the Administrator General, and miscellaneous, £359,214; general charges for home establishments, civil, military, and marine pensions, recruiting, &c, £168,000; Indian railway companies, £918,912; total, £4,296,065; leaving a balance of receipts over disbursements of £432,208. The estimated receipts in the financial year 1858–9 were—balance at the 1st of May, £432,208; bills of exchange on India, £120,000; from Her Majesty's Government on account of ordinary supplies, £120,000; Indian railway companies, £2,500,000; total, £3,172,208. The estimated disbursements were—dividends, £980,000; military and other stores and 783 transport of troops and stores £1,099,442; stores from Her Majesty's Government, pay-office claims, retiring pensions, &c, £1,474,711; civil service annuities, &c, £1,403,480; bills of exchange from India, &c,£152,600; general charges £595,800; loan from the Bank of England £ 1,000,000; bonds to be paid, £653,900; amount repayable to security fund, £315,000; minimum amount required to be held in cash, £1,000,000; Indian railway companies, £2,511,093; total, £11,186,026, showing a balance against the Company of £8,013,818, which, however, would probably be reduced to about £7,500,000. It was in order to provide for the raising of that sum that he now proposed to ask the House to extend the borrowing powers of the East India Company. A sum of £8,000,000 would cover the deficiency, but as it had been intimated to the Government that a further transmission of bullion might be required, he proposed, with the consent of the House, to empower the Company to borrow £10,000,000. The only other alteration he proposed in the existing law was to enable the Company to receive subscriptions in England for Indian loans. He could not imagine that there would be any objection to this Bill, because the House had always shown itself ready during these disturbances in India to provide the means of suppressing them. It was clear that the Court of Directors ought to have the means of defraying their expenditure in this country, with which alone he was now dealing, and of making provision for sending troops to India. He believed that the mode in which he proposed to provide them with these means was, upon the whole, the best and easiest that could be adopted for the present emergency. After consulting with the Chancellor of the Exchequer and the highest commercial authorities, he had come to the conclusion that the best mode of raising the required sum would be by debentures rather than by bonds, and therefore he proposed to enable the Company to negotiate loans in that manner. As there would be so small a balance in hand in April, it was desirable that this Bill should pass as speedily as possible, and he was sure the House would have no objection to expediting its progress, as any information that was required he should be happy to afford either in private or in the House. The necessity for such a proposition had been foreseen and came as no surprise on the money market. The only reason why 784 the Bill was not introduced in the short Session before Christmas was, that as Parliament had met only for a particular purpose, it was thought no measures not applicable to that purpose should be brought forward, while there would be sufficient time before April, 1858, for its consideration. The right hon. Gentleman concluded by moving for leave to introduce the Bill.
MR. T. BARING
said, he fully agreed with the President of the Board of Control that no one could feel any surprise that the Indian Government should require assistance in the present emergency, and he believed there could be no doubt that the House of Commons would be ready to support by grants of money in this country our dominion in India; however, at the same time he could not refrain from expressing his great astonishment at the mode by which Ministers proposed to aid the Government of India. If he could have anticipated the proposal to extend the borrowing powers of the East India Company, and their continuance for two Sessions, or at least a year and a half, ha should have expected the right hon. Gentleman to preface his observations by the declaration that Her Majesty's Ministers did not intend to interfere at present with the system of Government in India. Upon whom was the House asked to confer these borrowing powers? The noble Lord at the head of the Government had given notice of his intention to place India under the more direct control of the responsible advisers of the Crown. That involved, if not the extinction of the East India Company altogether, at least its extinction as a governing power. What Government was to borrow this money, for what was it immediately wanted, and in what proportion? The right hon. Gentleman, the President of the Board of Control, did not give the House any information on those points; it might perhaps be gathered from the right hon. Gentleman's statement that only a small portion of the £10,000,000 was wanted to pay any immediate expenses or advances, and the rest was to be borrowed successively at different periods, as required, between this and the middle of next year. Was, then, the East India Company to exist till that period as the governing power of India? If not, who, he would again ask, was to borrow the money and to have control over it? He had always conceived that on the proposition of any loan it was first inquired, previous to assent being 785 given to the loan, whether the money was required for reasonable, legitimate, and necessary purposes, and, next, by whom the money was to be borrowed, and by whom it was to be spent? It appeared to him, also, that another consideration should be that the money should be borrowed on the cheapest and most favourable terms. It seemed to him, however, that the plan of the right hon. Gentleman failed in all these essentials, and was, besides, most mischievous and unconstitutional, for who was to have the borrowing power? The East India Company, according to general report, was in extremis. Surely, it would not be proposed to give to a dying body the power of borrowing and disposing of money, or of leaving that power to some other body to come into existence afterwards. Perhaps the whole of the plan with respect to the Government of India was not yet matured, but let a corner of the veil which covered that marvellous wisdom of the Treasury bench be raised up, and let the House be informed at once who was to have the power of borrowing—who was to have the management of the loan. He thought that the House, before granting that power, should understand who was to be responsible for its expenditure. If the management was to be in the hands of the Chancellor of the Exchequer, he should have perfect confidence in his character and integrity; but it would be impossible for him to watch the disposal of the money. It must go through some other channel, and if the power should be delegated to an agent, the money and the paymaster-general might both disappear. Before granting the power now asked for, the House ought to know by what Government the money was to be raised, by what Government it was to be spent, who was to be responsible, and whether or not it was the intention of Her Majesty's Government, in giving to the East India Company the power of borrowing until the middle of next year, to continue their authority until that period. He considered that as money was wanted, the best thing that Government could do in the present emergency and state of affairs was to refrain from agitating the public mind by legislation with respect to the form of administration for India. He must here guard himself from being supposed to express any but his own individual opinion, for he had no communication with the Directors of the East India Company 786 on the subject; and he knew not whether they were in favour of the Bill now proposed to be brought in or not. In taking charge of their petition, in the general sentiments of which he concurred, he was not committing himself to the support of any policy, and would not have undertaken the duty of presenting it except in the exercise of an independent judgment. In the exercise of that same independent judgment he was commenting on the measure of finance now under consideration. The right hon. Gentleman proposed that the money should be raised in England. Now, he could quite understand that if the loan in India was not filling up as rapidly as could be wished at 6 per cent, that there should be a necessity, or at any rate a desire to borrow money here. But if the Government of India was to be the Government of the Crown, why not give to India the privilege of enjoying the advantages of the country of which it was part? When the double Government was objected to, and it was said that it would be an advantage to place India directly under the Crown, why refuse to India the most apparent advantage of facilitating for it the power of borrowing money? He for one believed that the lending of money to India directly by the Crown might be done with perfect security, and with the certainty of its gradual repayment out of the revenues of India. But, whether it was done directly or by guarantee, he believed that the operation would be perfectly safe to this country, and that it would be a benefit to which India was legitimately entitled. The Government had guaranteed money on loan to Canada, to Demerara, and to other colonies, not only with advantage to those colonies and security to the mother country, but had also by such means riveted the bonds of mutual interest between this country and its dependencies. Could the same advantage be denied to India, at the same time, when it was said that England was going to take the direct government of India into its own hands? The right hon. Gentleman possibly might say that they were chary of guaranteeing loans; but had they not guaranteed a loan to Turkey with the view of putting the finances of that country into order? Were the finances of India of less importance to this country? Had they not given money to Sardinia for troops to aid in the war with Russia? He was not now arguing whether that was right or wrong, but would it be more objectionable to guarantee a loan for 787 the maintenance of our Indian empire? Again, this money might be raised and lent on bonds which the East India possessions would guarantee. When the English three per cents were at 95 and the East India Company were borrowing money at 6 per cent, would it not confer a great advantage on India and give a favourable introduction to the abolition of the double Government to allow India to enjoy fully her union with this country? But this was refused. It was said, "You shall be under the Crown for the purposes of power and honour, but as to the question of credit, you shall have none of our credit." When the right hon. Gentleman proposed to give to the East India Company the power of borrowing for two years, and the probability was that that Company would not live for many weeks, the absurdity of such a plan must strike every Member of that House. It seemed to him to be contrary to every principle of constitutional usage to grant a minister, who was not known, the power of borrowing £10,000,000, to dispose of existing obligations and debts, leaving the remainder to be managed no one knew how. He was not aware whether any opposition would be given to the measure at its present stage, but he trusted some hon. Member, of greater influence than himself, would express his opinion on the subject.
THE CHANCELLOR OF THE EXCHEQUER
Sir, I do not think that the House, on a mature consideration of the question, notwithstanding the high financial authority of the hon. Member for Huntingdon and the weight with which he speaks on matters of this nature, will come to the conclusion that the Bill proposed to be brought in is founded upon incorrect principles of legislation on the two points in respect to which my hon. Friend has impugned it. The two points which he raises against this Bill are—first, that we seek to obtain for the East India Company a power of borrowing money, which, in consequence of expected legislation, that body may not be able to exercise hereafter either in respect to the borrowing or the expenditure of the money; and, in the next place, he argues that the exigencies of the Indian treasury ought to be satisfied, not by loans borrowed on Indian credit, but by loans raised on Imperial credit. Now, I venture to maintain, with great confidence, after full consideration of the subject, that the proposed Bill is founded on correct principles in both these 788 respects, although that policy is diametrically opposed to the policy recommended by my hon. Friend. It will hardly be disputed by any one that the necessity for the Bill arises from the East India Company, the existing Government, desiring to raise money by loan for the payment of the expenses of their home treasury. If that be conceded, we have made considerable progress in the solution of this question. What is the condition of the Company with respect to borrowing powers? In India their power of borrowing is unlimited, and is included in the legislative power of the Governor General and Council. They have already created a considerable debt, and it has never been asserted that any distinct statutory authority, or any consent on the part of this House, was necessary to enable the Governor General in Council to borrow money. There is always a loan open in the three Presidencies of India, and the borrowing power of the Company in India, so far from having been disputed, has constantly been actively exercised. With regard to this country the borrowing powers of the Company have been peculiar, owing to the manner in which their anomalous authority has been created. Having been originally a trading company, which accidentally acquired sovereign and governing authority, their power of borrowing was limited by Act of Parliament, as Parliament would limit the borrowing power of any ordinary joint-stock company, such as a railway company, or the Bank of England. Owing to that circumstance it is necessary for Parliament to give to the Government of India acting in this country a specific statutory authority to enable them to borrow money in the United Kingdom; but as, although originally exercising merely mercantile functions, they have now become a political body, they have not the same advantages in the money market which are possessed by the local Government of any other dependency or colony. If, for example, the Governments of Canada or of Demerara wished to effect loans in this country, and if their credit enabled them to borrow, there is nothing in our statute law to prevent them from exercising that power to any extent to which they may be able to induce lenders to come forward; but the East India Company is peculiarly situated, and it is therefore necessary for us to ask Parliament to remove those restrictions by which, from the accident of its having been a trading company, it has been em- 789 barrassed. What we ask, therefore, is, that the existing Government of India in this country—that is to say the Board of Directors of the East India Company, subject to the approval of the Hoard of Control—may have the power of borrowing money to a certain extent in the United Kingdom, in order to defray the expenses of their home treasury. If they exercise that power they will exercise it subject to all the laws now in existence which regulate their power of borrowing. The power, therefore, is clear—the responsibility is complete—so long as the existing state of things shall remain unaltered. If it should please Parliament, upon the proposition of Her Majesty's Government, to make any alteration in the constitution of the Home Government of India, it will undoubtedly be their duty at the same time to provide for the transfer of this power, and to take care that for the future any borrowing powers created by Act of Parliament shall be exercised under proper responsibility, and that the application of the money obtained under such borrowing powers shall be subject to all the laws which regulate the expenditure of the Government of India. No dangerous interval will, therefore, occur, but there will be a clear power and complete responsibility, both during the currency of this Bill and under any amended system which Parliament may think fit to adopt. I cannot admit, then, that there is the slightest weight in the objection of my hon. Friend with regard to the principle upon which this Bill is framed. A necessity exists for authorizing the present home government of India to raise money for the wants of the home treasury. While the existing constitution of the home government continues, this Bill is adapted to that constitution: the power will be exercised, and the money will be expended under the existing law. If, however, Parliament should think fit to alter the present constitution of the home government, it must deal with this power as well as with all the other powers inherent in the East India Company, and no peculiar difficulty can arise with regard to this Bill, which does not apply to the whole of their other powers. They have already a small unexhausted power of borrowing upon Indian bonds, to which all the objections of my hon. Friend are fully as applicable as they are to the Bill of my right hon. Friend.
I now come to what I cannot but consider a most alarming proposition on the 790 part of my hon. Friend—namely, that the loans for the service of the Indian Government should be raised, not on the credit of the revenues of India, but upon the credit of the Imperial Exchequer; and he argues that Her Majesty's Government are in some degree bound to accede to his principle, because it is understood that they are about to propose the abolition of the political powers in this country of the East India Company. I confess that I cannot see the smallest connection between the premisses and the conclusions of my hon. Friend. We have only to look to the other dependencies and colonies of this kingdom to see manifold instances in which there is a direct relation between the Crown and the dependencies—in which no proprietary body is interposed between the Crown and the dependent communities; but, nevertheless, the exchequers are just as distinct as the Imperial Exchequer and the Indian Exchequer. The loans effected by the Colonial Governments are effected upon colonial credit, unless an Imperial guarantee should be given by specific legislation of Parliament. My hon. Friend has referred to the cases of a Canadian loan and of a Demerara loan, and says that, these examples ought to lead us to adopt a similar course with regard to India. Now, my hon. Friend must be well aware that the Canada loan was effected under peculiar circumstances, with a view to the settlement of differences then pending with the colony, and that it can hardly be regarded simply as the case of an Imperial guarantee for a colonial loan. Surely the case of the Demerara loan and of loans guaranteed for various islands in the West Indies—small communities which were exhausted by the measure for the emancipation of slaves, and which were in a condition of great financial distress—afford no example for extending the Imperial guarantee to an exchequer generally so wealthy as that of India. During the last Session an Imperial guarantee was given to the island of New Zealand on the ground that it was a young and struggling colony, and that there were peculiar relations with the New Zealand colony which rendered it expedient that the assistance of the British Treasury should be given to that nascent community. But these reasons do not apply to our East Indian dominions. They have never hitherto been a burden upon the British Exchequer; but, on the contrary, in the early history of our relations with India, we find that an attempt 791 was made to extract from that country a contribution to the English Exchequer. That "tribute," as it was called, was paid for a series of years; and we know to what an extent the delusion has prevailed that England is, in some incredible degree, enriched by contributions from India. So far from the Imperial Exchequer being called upon to guarantee Indian loans, and to become itself tributary to India, it has been the common belief of foreigners—and to some extent the opinion has been shared by our own countrymen—that the Imperial Exchequer derives assistance from the Indian revenues. I do not wish to revive a long-settled dispute as to the tribute of India in aid of the expenditure of this country; but, believing that it would never be possible, or that, if possible, it would not be just or expedient, to call upon India to meet the financial wants of the Indian Government, I cannot for one moment admit the principle that, except for some extraordinary purpose—except on account of the failure both of the Indian revenue and of Indian credit—it would be expedient or just to aid the finances of India by the credit of the Imperial Exchequer. Therefore, differing entirely from my hon. Friend the Member for Huntingdon upon the two important questions which he has raised, I justify the Bill of my right hon. Friend as founded upon principles of sound policy, and as deserving the support of this House when it shall come regularly under discussion.
§ MR. DISRAELI
Sir, My hon. Friend the Member for Huntingdon (Mr. Baring) can scarcely flatter himself that Her Majesty's Ministers will withdraw their intended Bill for changing the Government of India because, as they are reminded, it is brought forward during a period of great emergency; for my hon. Friend may recollect that it was in the midst of a great emergency that, after full and complete consideration, Her Majesty's Ministers arrived at a conclusion that such a policy ought to be recommended to Parliament. Considering the intimation on that subject which was contained in the Speech from the Throne in December—considering the documents, consisting of correspondence between the highest authorities connected with the Government of India at home and no less a personage than the First Minister of the Crown in this country, which, if not formally placed upon the table, are, I believe, in the possession of every Member of this House—considering that only last 792 night the First Minister of the Crown in another place signified the intention of the Government to bring forward speedily a measure for changing the governing powers of India in this country,—I think my hon. Friend can scarcely flatter himself that his appeal will be successful, and that the Government will abandon that intention. It does not appear to me, however, that Ministers are acting with that ingenuousness and candour to the House of Commons on this subject which we have a right to expect. After the notification from the Crown, and the correspondence that has taken place between the ministers of the Crown and the Court of Directors, after the announcement made to the other House of Parliament on this subject, it appears to me very remark-able that the House of Commons should be the only place in which no official intimation has been received from Her Majesty's Government of their intentions on this important subject, although our attention is now called to a measure of great magnitude, which affects the whole revenue of India, and in which the interposition of the House of Commons is necessary to carry out the government of that vast country. Nor do I see that the right hon. Gentleman has met the difficulty of this question, because the point really is—what will be the most advantageous terms on which the home government of India can raise the money required? We are told to-night that it is the determination of the Government that, whatever charges may take place by reason of any loans raised in this country by the home government of India, those charges shall fall upon the revenue of India, and upon that only. Now, Sir, I am not going at this moment to question the policy or propriety of that determination. But if that be the determination of the Government, and if the loans proposed to be raised are to be a charge on the revenues of India, it becomes an element of calculation to those who lend whether the security will be best under the government that now exists and administers the affairs of India, or under the administration of the government projected by Her Majesty's Ministers. That is a distinction of the utmost importance—one which the House is bound to consider—and so far as the financial question is concerned it involves the whole question of the policy of the change about to be made in the government of India. I agree, therefore, with my hon. Friend the Member for 793 Huntingdon that it is a matter of grave consideration whether the House either should or can entertain at the present moment a measure of this kind which empowers the home government of India to raise—not for pressing and immediate purposes alone, but for future and distant purposes—loans to a large amount. It is and must be a matter of the first consideration to those who have money to lend, to ascertain and estimate what is the security upon which that money is lent. If the security is only to be the revenue of India, the first question with those who lend money will be as to the government by which the affairs of that country are to be administered, and the means by which that revenue will be raised. There may be, in the answer to this question, a difference between 3 and 6 per cent, and between 6 and 9 per cent. There are some who may be so sanguine of the advantages of the change which is meditated by Her Majesty's Ministers, that they may consider the security offered for the loan infinitely improved by the administration of India being placed under the Crown. But there may be, on the other hand, an influential body of persons in this country, and those peculiarly attracted to these loans, who may look with alarm and distrust to the proposed alterations of the Government, which may, in their opinion, shake the very foundations of Indian revenue and touch the resources of that country. The House will understand that I do not refuse to sanction the introduction of this Bill. That would be an act of discourtesy to the Government, to which I for one can be no party; but we ought to signify to-night that the House of Commons, in permitting the Bill to be introduced, does not pledge itself to support it at any future stage. I incline to think that when this measure is well weighed it will be found replete with grave objections, and that it will demand our most serious and earnest consideration.
§ MR. CARDWELL
There can be no doubt that the East India Company are in need of money, and that for us to give them the power to raise it is not only a reasonable demand, but one that we cannot refuse. But there is a question which it is of great importance that we should understand before we take any step that commits us to the Bill now before us,—I mean the question, what are the future liabilities of the Consolidated Fund with 794 regard to the finances of India? It will be our bounden duty to take care that all the money which may be a charge upon the taxpayers of England, levied only for a necessary purpose, shall be levied at the lowest cost, so as to be the smallest possible burden upon the taxpayers. There is a great difference between money borrowed by the Crown and that borrowed by the existing Government of India, and it may happen that money may cost half as much again when raised by the Government of India as it would when raised by the Crown. I admit that there is great inconvenience in forestalling a discussion upon the wide, important, and difficult question which I know we are going to consider in the present Session of Parliament. I will therefore ask no question which is calculated to forestal or precipitate that discussion; but the question of what is to become of the finances of India forces itself upon us in the consideration of this Bill. I understand the Chancellor of the Exchequer to say—and if I am in error there will be ample opportunity of correcting me—that in any changes that are to take place in the Government of India the finances of India will remain upon the same basis on which they now rest—namely, the revenue of India, and that in undertaking the Government of India Her Majesty's Ministers do not undertake the responsibility of Indian revenue so as to make it, in any event, a burden on the taxpayers of England. I understand the right hon. Gentleman to say that if any calamity should occur which would render it impossible for the liabilities contracted by the Crown of England for the Government of India, to be paid out of the resources of India, no charge and no liability can arise in regard to India for which the House of Commons can be called upon to provide out of the revenue raised by the taxpayers of England.
§ MR. HENLEY
said, no one would dispute the proposition of the right hon. Gentleman (Mr. Cardwell) that the East India Company were in need of money; but the question was whether the course taken by the Government was calculated to obtain the money on the best terms. He thought that the House had been rather cut short of the information necessary with regard to Indian finance, and that when so large a sum was to be borrowed entirely upon the credit of the finances of India it would have been well if some general exposition 795 of the state of the finances of India had been offered to the House. Indeed, when Government were about to borrow so large a sum as £10,000,000 upon any system of finance, the Ministry generally condescended to give some information as to the means by which the loan was to be repaid and the interest secured. No financial exposition of the state of Indian finance was made last year, and the House was therefore in a worse position than usual for forming an opinion on the subject. It must be considered a serious omission in the right hon. Gentleman's statement that he did not even tell the House whether the finances of India stood in a better or worse position than they were in when the last statement on the subject was made to the House. It appeared that money could not at present be raised in India at less than 6 per cent. The Chancellor of the Exchequer proposed to take power to let English persons contribute to these loans for India. If the security were to be exactly the same for loans raised in India and in England, the Bill might facilitate the raising of money in India, but it would also have some effect upon the rate of interest for which money could be got in this country. He was glad that the credit of the Consolidated Fund was not to be pledged for Indian loans, because if that system were once begun no man living would see the end of it. He was afraid that troubles would always arise if they were to entail a pull on the Exchequer, and he therefore hoped the Government would stand fast by the determination they had announced.
was satisfied that he should readily be believed when he said that it was not the East India Company who had requested the Government to bring in the Bill, the tendency of which, as far as he knew—and he knew very little—would be to dissolve the connection of that Company with the government of India; but he was bound to state that it was at the request of the Company that Her Majesty's Government had consented to bring in the present measure, which be assured the House was absolutely necessary for the current service of the Government of India. No matter in whose hands that government might be placed, it was at the present moment absolutely essential that the home treasury should have the command of much larger sums than had hitherto been found necessary. It was needless for him to say that that replenishment was rendered necessary by 796 the number of troops sent out owing to recent events, and the enormous pecuniary losses sustained in the course of the mutiny, which had prevented the Government of India from making the ordinary remittances. He would, however, in reply to the right hon. Gentleman opposite, specify some of the reasons why the sum now named was required. So large an amount was wanted in consequence of the enormous sums paid for the conveyance of troops; in consequence of the vast quantity of military stores which it was necessary to send out to India; in consequence of the Government of India having made a requisition upon the Company, which had been already met to the extent of £1,000,000 in silver bullion; in consequence of the probability of still larger numbers of troops and greater quantities of stores being required—for there could not be the slightest doubt that as regarded troops a number very far beyond the average would have to be sent out next year; in consequence of the possibility that they would have to make another large remittance of bullion to maintain their credit in India; in fine, in consequence of the difficulties which any Government would have to encounter before the settlement of Indian affairs could be effected. Was it not evident that the home Government must be placed in a position to surmount those difficulties? And how ruinous it would be at the present moment to stop the machinery of government, and thus deprive the authorities in India of the means of defence. The right hon. Gentleman the Member for Buckinghamshire said that this money was not wanted for immediate and pressing purposes. The House would judge of the accuracy of that statement when he informed them that at the present moment the home Government of India were indebted to the Imperial Government for stores, for charges on account of troops, and other matters, in a sum of more than £3,000,000, a large proportion of which the Treasury were now pressing for, and which would have to be paid within the next month. The right hon. Gentleman the President of the Board of Control had read to the House an estimate of the amount required, which showed that for 1858 the expenditure would exceed £7,000,000. Probably it would be found necessary to send out troops by steam, in order to expedite their passage to India, which would cause an additional expen- 797 diture. The right hon. Gentleman the Member for Oxfordshire (Mr. Henley) argued that because money could be obtained at Calcutta only at 6 per cent, it was a natural consequence that the money required could not be raised at a less rate of interest in this country. But the fact was that 6 per cent at Calcutta, measured by the rates at which private merchants borrowed on the best security, in India and England respectively, did not amount to more than 3 per cent in this country. And the Company, in fact, borrowed as cheaply in relation to private individuals when it borrowed in Calcutta at 6 per cent, as the Government here did when they borrowed at 3 per cent. The Company's 4 per cent. bonds were at this moment at a premium of 20s. per cent, which at least proved that the credit of the East India Company had not fallen so low as the right hon. Gentleman thought. His hon. Friend stated that when other colonies wanted money they came into the market and borrowed it upon their own responsibility, and high legal authorities were of opinion that the Government of India might do the same; but it was thought that, in circumstances so unparalleled as the present, the fairest and most open course was to come to Parliament, state the facts of the case, and ask for authority to borrow £10,000,000 more. He did not think that this sum would he a larger margin than was wise and safe for the service of the country. He thought the House would agree with him, that whatever measure was looming in the distance with respect to the future government of India, the present was not a time when they ought to allow the machinery of Government to stand still for want of funds; but that when their resources were, as now, exhausted, they should at once authorise them to borrow sufficient to enable them to carry on such operations as would strengthen the hands of the Government in India, and supply them with sufficient men and materials to bring the great event which they had on hand to a successful conclusion.
§ SIR FRANCIS BARING
said, that the hon. Gentleman who spoke last did not seem quite to understand the difficulty which had been raised and which he was bound to say he himself entertained. He apprehended that no one had the slightest wish—certainly he had none—to throw any difficulty in the way of the East India Company, or any other Government what- 798 ever, obtaining sufficient funds to carry on the public service. For his part he was quite prepared to act with liberality towards the Company; all that he asked was that such a loan only should be demanded as was sufficient for the present year. As he understood the hon. Gentleman, that amount required would be about £7,000,000. Confine it to that, and let them not be issuing debentures for a year and a half. By adopting the suggestion he now made, they would only be pursuing the just and natural course which was pursued with reference to loans required for this country. Of what use was it making a different rule with respect to the East India Company, when the probability was that in less than six months the East India Company would be matter of history? Of course he alluded only to what he supposed to be the intention of Her Majesty's Government—he did not, any more than any one else, know what the House might do; but, at all events, he thought it would be no harm to let the Government bring in a Bill which he, for one, should cordially support, the object of which should be to provide, by way of loan, for the amount of money they would require for one year. No doubt what the hon. Gentleman (Mr. Mangles) had stated was quite correct; the East India Company had very properly made an application to the Government, a communication had taken place, and a statement had been made as to the amount required for the service of the year; and he had not the slightest objection to a measure which would provide a liberal allowance over that; but he did object to vote money which was to be dealt with, they did not know when or by whom. On what guarantee it was proposed that this sum should be raised did not seem to him very clear. It was quite certain that the Chancellor of the Exchequer would have nothing to do with it, for he had assured them that he would throw no additional sum on the finances of England to provide for the wants of India; he stated that he would take care that the finances of India should not be transferred to the general Imperial finance; and, therefore, as far as finance was concerned, he assured them that the Government of India would be no acquisition to the home Government at all. Whatever other effect it might have, he did not think the speech of the Chancellor of the Exchequer would contribute much to getting the money at a good price. But he hoped the House would not be led away by 799 such a statement from the real point of the case. Let them remember what Sir Robert Peel said—"Chancellors of the Exchequer may make speeches, but good sense and good faith will be stronger than all your Chancellors of the Exchequer." If their dominion in India were restored—and God forbid that he should express any doubt about it—they would have ample funds to meet their difficulties; but if they failed, did they suppose that the nation would not have to pay? Did they fancy that because the Chancellor of the Exchequer said that he could not be responsible for sixpence the people of this country would not have the good faith and honesty to pay the money?—and the right hon. Gentleman would be the very first man to come down to that House and move that the expenditure should be transferred to the general finance of the country. What he contended was, that it was the duty of Parliament to see that no unnecessary charge was imposed on the revenues of India; and that their real interest would be to raise the money at the most reasonable rate of interest, because if there was the slightest chance of their being called upon to repay it, it was their business to do so. If, then, advantage could be taken of the credit of this country, and the money could be raised at a lower rate by giving the guarantee of this country, it was for the interest of India, and ultimately of this country also, that such a course should be taken. He understood his hon. Friend to say that at the present moment the Company owed the Government £3,000,000; there would be no great harm done if, after all, it was found that the estimated £7,000,000 was not sufficient, in allowing this debt to the Government to stand over for a short time. Probably his right hon. Friend would consider whether during the course of this Bill it would not be expedient to furnish the House with an account of the exact amount required for the service of the year; and reduce the amount of the loan to that sum.
§ COLONEL SYKES
said, this was not the time to address the House on the subject of the proposed plan of Her Majesty's Government, which was at present in nubibus. He would give his opinion on that plan when it came before them. The measures adopted for the preservation of our empire in India had necessitated an enormous outlay which had almost drained the Treasury of the Indian Government, and it was absolutely necessary that money should he 800 had in this country. Whether by guarantee of the Government of this country, or merely on the revenues of India, the money must be had. With regard to this guarantee, he would express his conviction that in the present temperament of the 180,000,000 of persons in India, if it were the intention of Her Majesty's Government to carry out the views expressed by certain parties in India and England as to placing India under the direct authority of the Crown, the guarantee of any sum of money to be raised now or hereafter, whether upon the revenues of India or the revenues of England, would in the course of a few years not be worth a rush.
§ SIR HENRY WILLOUGHBY
said, he considered that it was absolutely necessary that the whole state of Indian finance should be laid before the House. The House of Commons had done many queer things in the way of finance, but they would never do a queerer than the authorising of a loan for the purpose of raising £10,000,000 without the slightest information upon a branch of finance which he did not hesitate to say was, as far as he knew, in the most critical position. It was notorious that, taking the revenue of India for the last five years, it showed, although reaching the enormous amount of £28,000,000, a deficiency on the charges, which deficiency, be it remembered, existed before the commencement of any of the troubles which had since come upon it. It was difficult, therefore, as far as India was concerned, to know what security could he granted for loaning to any extent. He quite concurred in the view of the hon. Member for Portsmouth (Sir F. Baring), that they ought not to go one single step beyond the absolute necessity of the case, but should limit the loan to the amount required for the year. It was impossible not to remark that Her Majesty's Government had chosen the present critical moment to raise questions which could not fail to embarrass the Government both here and in India. He could not conceive what had induced them to think of making the slightest change at such a moment. At all events, he was pursuaded that if once the Government of India was placed under the direct control of the Ministry, it would he impossible for the House to prevent the country from drifting into liability—in other words, the finances of England would have to be abstracted to pay the deficiencies of India. It was difficult, perhaps, to trace at this moment how liability would arise, but he 801 did not feel the slightest doubt that it would arise. It was, therefore, doubly important at a time when a measure placing the Government under the Ministry was contemplated, that they should know upon what basis the present proposed loan was to be raised. He understood the right hon. Gentleman the Member for Oxford (Mr. Cardwell) to say that the House represented the taxpayers of the kingdom; it represented, also, the whole empire, and it was, therefore, peculiarly their duty to see that no class slipped out of their liabilities, or they would certainly have to tack them on to the general taxation. But another question arose. When, in 1833, the Home Government was instituted on its present basis, it was expressly stated that the interest of the Proprietors was confined to the East India Stock which was converted into annuities of £680,000, which were to be a first charge on the Indian revenue, and that system of government was supported on the ground that no class of persons had so much interest in the good government of India as those whose property depended upon it. He should like to know whether they were not by the proposed Bill very much affecting the security of the Proprietors? One of the great questions to be considered was, whether Parliament was acting in good faith in matter of finance if it did not take into consideration the ground upon which the principles of the Home Government were settled at that time. He only mentioned that fact to show the necessity of proceeding with caution in dealing with the finances of India. He was quite persuaded that the noble Lord at the head of the Government would find it the most difficult of all questions to settle in his attempt to place the Indian dominions under the direct authority of the Crown.
§ MR. DANBY SEYMOUR
observed, that the Proprietors' dividends would still be secured by their continuing to be a first charge on the revenues of India. His hon. Friend behind him (Sir F. Baring) would limit the amount of loan to the necessities of one year; and if he (Mr. Danby Seymour) understood the speech of his right hon. Friend the President of the Board of Control, the Government did really wish to limit the loan to the necessities of the present year. He believed the necessary expenditure for the present year would be nearer £8,000,000 than £7,000,000; it was always customary to keep a reserve of £1,000,000, which would bring the sum 802 up to £9,000,000; and surely, under such extraordinary circumstances, it was not too much to ask leave to raise another £1,000,000, which would complete the amount of the proposed loan. From the speech of his right hon. Friend (Sir F. Baring), he should think that he would be strongly in favour of raising the loan on the credit of this country, because he seemed to say that in any case the whole debt of India would be in the most difficult position, and he referred to a statement made by Sir Robert Peel fifteen years ago. But taking into consideration the whole subject, most people would arrive at the conclusion that the liability would fall on this country, not in consequence of any debt hitherto contracted, but in consequence of having utterly exhausted the purse of India, and being obliged to raise other loans on the credit of this country, in order to carry on wars which had arisen out of certain states of circumstances, and cost us an enormous expenditure. If the question were to be argued in any other way, why did they not go into the market at once and endeavour to save 2 per cent, instead of proposing to raise the money at 5 per cent. The present rate of interest in this country was little more than 3 per cent, and they would indeed be giving people a good bargain if they were to propose to raise money at 5 per cent on a guarantee of the revenue of this country. As the loan was put out it was solely on the guarantee of the revenue of India, and on no other guarantee whatever.
MR. J. B. SMITH
considered that before this loan was granted an estimate of Indian finance should be laid upon the table of the House.
MR. VERNON SMITH
, in reply, said he should omit all reference to any expected measure with respect to the future government of India, except it bore upon the objections which had been raised to this Bill. He wished to confirm in the strongest manner the statement of his right hon. Friend the Chancellor of the Exchequer, that there was not the slightest intention of charging the revenues of this country with the payment of any portion of this loan. The objections raised on the present occasion seemed to him applicable to the Bill when it was in Committee more than at present. The question, for instance, as to what amount was sufficient for the necessities of the year was one which it would be very competent for his right hon. Friend (Sir F. Baring) to raise 803 in Committee; and he hoped that the House would, considering the urgent necessity there was for the East India Company's obtaining money, consent that the Second Reading of this measure should be taken at as early a period as possible. The urgency of the case, indeed, was admitted on all sides, as it was well known that there had been for a long time a deficiency, and he trusted no obstruction would be offered to the progress of the measure. The want of a thorough knowledge of the state of the Indian finances complained of by the right hon. Gentleman the Member for Oxford, was not owing to any fault of his. What he stated last summer on this subject was equally applicable at the present moment. The right hon. Gentleman wished to know whether the finances of India had improved. His own knowledge of what had passed in India during the last six months might satisfy him that it was impossible that its finances could have improved—to maintain them at an average point was all that could be expected. With respect to the amount now required, he might say that not one farthing of it was required for the general purposes to which the Indian revenue was applied, but it was only to complete the necessary home expenditure. He said that advisedly, because whether the government of India remained with the Company, or was vested in the Queen's Government, it was absolutely necessary to raise a sum of money for carrying on actual operations in our Indian empire.
§ Leave given.
§ Bill ordered to be brought in by Mr. VERNON SMITH, the CHANCELLOR OF THE EXCHEQUER and Mr. MANGLES. Bill presented and read 1°