§ Order for the consideration of the Bill as amended read.
THE CHANCELLOR OF THE EXCHEQUER
I have now, Sir, to move the further consideration of the East India Loan Bill, and upon the present occasion I would ask the House to avoid all unnecessary discussion upon this Bill. I am convinced that, next to the necessities of the State, there is really no subject which is more important or which requires more urgently to be dealt with, than that to which this Bill relates. If, however, we enter upon any discussion upon the principles upon which this Bill is based, and seek to connect this Bill with any measure which may be brought forward to regulate the government of India, we shall be led into very protracted discussions. The practical fact before us is, that the East India Company are in the same state from want of supplies as Her Majesty's Ministers. It is quite impossible this question can be longer postponed, and, under the circumstances, I hope the House will pursue the same course as Her Majesty's Government, and take a practical view of the matter, and not connect this Bill with any measure that has been or may hereafter be brought forward relating to the construction of the Government of India. There are pressing engagements which must be kept, there are liabilities which cannot be avoided, and obligations which must be answered and fulfilled, whatever changes may take place in the government of India; and these are questions not of days, but almost of hours. Since the Bill has been introduced there has been a discussion, at which, not having the honour of a seat in the House at the time, I was not present, but I am acquainted with the bearing of that discussion. I believe that the original amount of £10,000,000 was, in accordance with the prevailing opinion of the 142 House, reduced to £8,000,000. The Government is willing to bow to the decision of the House in that respect, but we do not think it would be expedient to reduce the sum any further, and I trust the House will not entertain any such suggestion, as the sum of £8,000,000 is really necessary for the service of the East India Company. There was also a question about the 11th clause—the controverted clause. In my opinion it is not at all necessary to insist upon the retention of that clause. I therefore shall not ask the House to sanction it. The amount being reduced from the sum originally proposed, which might have been larger than was absolutely necessary —but on that I give no opinion—and having proposed to omit the 11th clause, I hope and trust the House will be of opinion that in the present state of affairs it is necessary we should pass this Bill, and, if that be so, it will also see that it is of the utmost importance that we should pass it without any unnecessary delay. I hope, therefore, we shall advance it a stage tonight, and afterwards proceed with it, so that it may speedily become law.
§ MR. CARDWELL
said, on former occasions when the Bill was under consideration, two objections had been taken to its progress. One was to the 11th clause, which he rejoiced to hear from the right hon. Gentleman would no longer form part of the Bill. It must have been obvious that the labours of that House would be futile in limiting the amount of the loan to £8,000,000 if in the same Bill there remained a clause giving power to the same parties to borrow continuously, without limit of time or amount. The other objection had also now fallen to the ground, but while it existed it was a serious one. An idea prevailed that when the Bill passed through Committee in a House of scarcely forty Members, the Minister who was then responsible for the affairs of India made a statement which materially affected the obligations of this country in respect of debts contracted upon the revenues of India. Upon the last occasion the Bill was before the House the right hon. Gentleman (Mr. Vernon Smith) had had an opportunity of showing that the prevailing impression was unfounded. The House, however, knowing that no delay could occur beyond one day, preferred that the present stage, upon which alone Amendments could now be introduced, should not be passed until an opportunity was afforded to the Minister now responsible for the 143 finances of this country, of stating his opinion in regard to it. That opportunity had been given, and as they had now guarded against any misunderstanding which might affect the Consolidated Fund of this country, and as the controversial clause was to be omitted, he had the greatest pleasure in concurring with the right hon. Gentleman the Chancellor of the Exchequer that every facility should be afforded for the passing of the Bill, which was required to enable the East India Company to raise the money which they so much needed. He cordially agreed with the right hon. Gentleman that any discussion upon the large questions of Indian finance and other portions of Indian Government, which, no doubt, they were about to consider, would with advantage be deferred until they were called upon to deal with the general measure affecting the government of India.
§ SIR ERSKINE PERRY
said, that he wished he could agree with the right hon. Gentleman that the reduction of the amount and the omission of a clause would remove all the objectionable features of the Bill. He did not wish to thwart the desire of the Government to raise money for the service of the East India Company, but he thought they could do so much more speedily by a simple Resolution of the House. There had been no previous opportunity for discussing the principles of the Bill, but he believed it was based upon two assumptions; first, that the finances of India were only lightly burdened with debt, and the other, that the course now proposed by the East India Company to meet their difficulties, was in accordance with Parliamentary practice. He denied both propositions. On the lost occasion, the late Chancellor of the Exchequer, who appeared to have hold a brief on behalf of the East India Company, notwithstanding his slashing speech against them on a former occasion, had quoted some figures which to his mind, were very unsatisfactory. He (Sir E. Perry) would call the attention of the House to the finances of India. It was certain that for the last four years there had been a chronic deficit, that deficit in the year before the outbreak of the mutiny being £2,000,000. They were now told upon authority that the deficit for the year ending April, 1859, would be £7,500,000. Therefore they began with a total deficit of £14,000,000 or £15,000,000. The right hon. Gentleman, the late Chancellor of the Exchequer, told them the total debt of the East India 144 Company was £68,000,000. To that must be added the £14,000,000 of deficit which he had mentioned, and £20,000,000 more would probably be required to meet the expenses of the mutiny. Those sums made a total of more than £100,000,000. To this must be added an item for guarantees upon railways amounting to £20,000,000, so that altogether the real amount of the debt reached £120,000,000. On the other hand, it was said that the debt was small as compared with the revenue of India which was stated to be £23,000,000, whereas it was only £22,000,000 and a fraction. The revenue of India, however, which was derived from the taxes on land, opium, and salt, could not be raised by any additional taxation. Thus there was increasing debt and a fixed revenue. The course which had been adopted by the East India Company was to open a standing loan in India to meet every deficit, the inevitable result of which, unless Parliament interposed, must be the bankruptcy of India. It was now for the first time proposed to raise a standing loan in this country, for although the 11th clause was to be omitted, such was still the character of the Bill. And supposing the bankruptcy of the Indian Government, how would the finances of England be affected? He did not wish to raise the question of how far British credit was pledged to meet Indian loans, but it would he unwise to deny the fact that capitalists lent their money on the faith of the English connection. There was certainly no intrinsic security in Indian finance unless guaranteed by British credit, and if the references of India should be insufficient, the army and navy and other services would remain unpaid, and then would arise the question whether the revenues of England were not to he resorted to in order to retain India as a British dependency. The revenue of India was a fixed revenue, and the expenditure was greater than the revenue. These were facts, with respect to which be challenged contradiction, and taken together they must lead to national bankruptcy. Well, if this was the true state of the question, he contended that it was raised precisely and positively by the present Bill, because they were seeking to perpetuate here a system of borrowing to supply the deficit of the Indian revenue. It was true that the East India Company had power to raise £7,000,000 in this country, and that that power was now exhausted; but he denied that Parliament 145 had ever given to the East India Company, since they had been a political body, the power of borrowing in England. That power to borrow £7,000,000 was granted under peculiar circumstances. The last time it was given was in 1811, when they wore a trading Company with large assets, and it was supposed therefore that there was abundant security. In point of fact, the East India Company during the eighteenth century were insolvent, but it suited their purpose from time to time to represent their affairs to Parliament as in a flourishing condition, and when they wanted their monopolies perpetuated they offered Parliament money as a kind of bribe to pass the Bill. He used the word "bribe" because that was the term used by the historian Mill. Having got their now charter on those terms, they came immediately to that House for a new Bill, giving them borrowing powers, and those were the precedents on which the East India Company now came to Parliament and asked for borrowing powers. As capitalists undoubtedly looked to English credit, and as it was only Indian credit that was a security for these loans, the result would probably be that that security would be very much depreciated, and that we should have to open the national purse. He believed the money actually required by the East India Company at present was only £3,000,000. If that was so, he contended that the course proposed by several hon. Members of that House of high financial authority, by the hon. Member for Huntingdon (Mr. T. Baring) and others, was a simple course, namely, for that House to lend the credit of the country directly to the East India Company, and to secure the interest on the revenues of India. This would be the most economical course, as by that means India would be enabled to take advantage of the great benefit of getting the money at a lower rate, and a stop would be at once put to that indiscriminate system of borrowing which had been the opprobrium of Indian Ministers, for it would have the good effect of inducing constituencies to pay more attention to Indian affairs, when they found that Indian expenditure might possibly become a burden upon the Imperial exchequer. Adverting to the statement of the late Chancellor of the Exchequer, that India: brought little or no material advantage to this country, he contended, on the contrary, that, looking to the magnitude of our trade with India and its capacity 146 for development, the benefits arising and to arise to us from our connection with it on commercial grounds could scarcely be exaggerated. The trade with India was already greater than with any other of our colonies or dependencies; indeed, it was greater than with any other country except the United States. But, beside the advantage we derived from commerce with India, we received in actual money from that country three or four millions a year. Upwards of two mil- lions a year came into the pockets of individuals in England, bondholders, stockholders, and pensioners, which undoubtedly was a clear addition to the national wealth. He thought also that the army of India might he made ancillary to our military strength in this country. As Algeria was to France, so India ought to be made the nursery and training ground for our soldiers. We had lent our money and our credit to every other country, and he thought, if we could enable the East India Company to borrow the money they required on easier terms, by lending them the credit of this country, it was our bounden duty to do it.
§ MR. BAILLIE
said, it was not his intention on the present occasion to enter into a general discussion on the state and condition of Indian finance, because that would be done much better and more appropriately when the whole subject wa3 brought before the House in the shape of an Indian budget. But, disagreeing as he did entirely with the figures stated by the hon. and learned Gentleman (Sir E. Perry) he was nevertheless prepared so far to agree with him that the finances of India were in a somewhat dilapidated condition. That, however, could not be said to be the fault of the present Government. They had not been in office for the last fourteen years, except for a few months, and they had not allowed the East India Company, year after year, to exceed their revenues by a large expenditure, and to increase their national debt. Nor had they forced the Company into wars of which they disapproved. All that had been done by pre-ceding Governments, and all those Governments had received the support of the hon. and learned Gentleman opposite, who was therefore the last man in the House who had any right to complain of the state of the Indian finances. He (Mr. Baillie) thought the hon. and learned Gentleman was the more responsible because he had great experience and knowledge of Indian 147 affairs, and ought, therefore, to have been among the first to warn the House of the dangers of the policy they were pursuing. But the hon. and learned Gentleman had completely mistaken the present state of the Indian debt. He had fallen into the blunder of adding to the £68,483,000 stated by the Chancellor of the Exchequer as the Indian debt, the deficit of the last four years, whereas the deficit for the fourth year was not yet ascertained. Then he had adverted to the state of the East India railway stock, but for that the East India Company were in no way responsible. Besides, as soon as the railways came into operation, they paid the interest themselves; indeed, some of them paid as much as 6 per cent. The hon. and learned Gentleman said that it was the duty of the Government to take the matter into their own hands, and virtually to make the people of England responsible for this debt. He did not know the opinion of the hon. and learned Gentleman's constituents on this point, but the mass of the people of this country would be, he thought, disappointed at the change of Government if the first act of the new Ministry were to introduce a Bill to make this country responsible for the debt of India. On a former occasion a misunderstanding had taken place on this subject. It was then believed by some that there must be some moral responsibility on the part of the Government for the debt of India if this Bill passed. They thought that, in the event of the Indian revenue failing, the Government might be made responsible; but there was not the slightest foundation for such apprehensions. This bad been clearly explained by the late President of the Board of Control, and the whole of this argument might at once fall to the ground. The question was very simple, The permission of the House was now asked to enable the East India Company to raise the sum of £8,000,000 on the credit of the revenue of India. There was no doubt the revenue of India would be perfectly able to provide for the debt. The hon. and learned Gentleman (Sir E. Perry) declared that the revenue of India was a fixed revenue, which he denied. It was liable to change, like all other revenues; but it was perfectly competent to bear this charge. The House was asked to give the East India Company permission to raise money in England for the very obvious reason, that the money could be obtained with much greater facility at pre- 148 sent in England than in India. The East India Company already possessed the power of borrowing money on loan in India, and in ordinary times they were able to raise money there to any extent without coming to Parliament. Under these circumstances, and considering the great exigency of the public service, he trusted that no further obstacles would be made to the passing of this Bill.
§ SIR HENRY WILLOUGHBY
said, he trusted that there would be no objection on the part of the Government to the insertion of a clause securing that returns should be made to Parliament of the sums raised under this Bill. He would not go into the question whether the British Ex. chequer ought to be liable for Indian expenditure, but we had one foot in the water, and whenever it was brought out, he was afraid we should slip into these liabilities. The debt of India rested on promissory notes, the security for which was the property of the East India Company, and if Parliament took the Government of India upon itself and with it the property of the Company, they must put something in its stead, he should move the insertion of the following clause after Clause 10.Provided always and he it enacted, that on or before the 1st of February in each year, the Court of Directors of the East India Company, under such direction and control as aforesaid, shall prepare, or cause to be prepared, a return of all moneys raised on loan under the provisions of this Act, and of the expenditure thereof; also, a return of all stocks, loans, debts, and liabilities, then chargeable on the East India revenues at homo and abroad, up to the latest period of time to which such return can be made out. That all such returns shall be presented to both Houses of Parliament on or before the 1st day of February in each year, if Parliament is then sitting; and if Parliament is not sitting, then such returns shall be presented within ten days of the first meeting of Parliament after the 1st day of February in each year.
§ Motion made and question proposed, That those words be there inserted.
said, his hon. Friend the Member for Devonport (Sir E. Perry) as he understood him, wished to persuade the House to lend the Imperial credit to the Government of India, in addition to the security afforded by the territorial revenues of that country, in order to enable the Court of Directors to borrow the money of which they stand in need on the most favourable terms. But he took a very odd course to induce the House to adopt that stop; for he proceeded to show that the Government of India was entirely insol- 149 vent, that its revenue could not possibly be increased beyond its present point, that that was a chronic! deficiency, and that that Government could only exist by a continual system of borrowing. Those assertions, if true, were not calculated to persuade the House to agree to the hon. and learned Gentleman's proposal to make the English Exchequer responsible for the Indian debt. No doubt the hon. and learned Gentleman's figures presented the appearance of the insolvency he asserted, but it so happened that those figures were not correct. The hon. and learned Gentleman asserted, that the total debt of India amounted to £120,000,000. The fact was, that in round numbers the Indian debt, including all that was known of the receipts of the loan now open in India up to last December, amounted to £53,842,000. Then there was the capital stock of the Company, amounting to £12,000,000, but against that there was a guarantee fund of £4,500,000, which would go on accumulating until 1874, when the debt would be paid, at which time the sum of £7,700,000 would be available towards meeting that debt. The hon. and learned Gentleman, however, had made no rebate on that account. The bond debt of the Company in this country was only £5,885,000, so that the whole debt of India, except the £12,000,000, was under £60,000,000. The hon. and learned Gentleman then estimated the deficiency of the present financial year in India at £7,500,000, to which he had added £20,000,000 as the expenditure of the war. But surely the £7,500,000 ought to be deducted from that sum, of which it is, in fact, a constituent part. Then he had added £20,000,000 to the debt on the ground of railway guarantees. But he must remind the hon. and learned Gentleman that the small portion of the Calcutta Railway now open paid 6 per cent, which was 1 per cent over the guarantee. That portion of the Bombay Rail way now open paid 4½ per cent, which was within half per cent of the guarantee. Those best acquainted with the facts of the case, who knew how cheaply Indian railroads were made — at an expense of £6,000 per mile, for instance as compared with an average of some £40,000 or £50,000 per mile in England—were convinced that, instead of proving a burden on the State, the railways could greatly increase its resources. His hon. and learned Friend said, that the revenue of India was so utterly unelastic that it was quite im- 150 possible to look for any increase; and in the same breath be referred to the greatly increased and still increasing trade of the country, as if that would not produce any increase of revenue. His bon. and- learned Friend spoke of what he termed the chronic deficiency; but the fact was, that with the exception of £200,000 or £300,000, the deficiency, during the last three or four years before the mutiny, was entirely caused by the expenditure on public works, many of which were of a reproductive character; and even those public works which did not seem to partake of that description, such as the barracks, would indirectly save future expenditure by preserving the valuable lives of European soldiers. His hon. and learned Friend had defied contradiction, but he thought he had shown that in facts and figures the hon. and learned Gentleman had laid an erroneous estimate before the House. He would not enter into what had been called the controversial clause, because it appeared to be the general opinion that it should be struck out; but he bad very high legal authority for stating that there was nothing now to prevent the Indian Government, if they pleased, opening a loan in the European markets; and that such a course could not be prevented except by passing an Act positively prohibiting it. It was nothing more than what the Government of Canada and other colonies were continually doing. The hon. and learned Gentleman had spoken as if the Home Government had no expenses of their own to bear, and no need of money at present except to repay Her Majesty's Government. They had usually received large remittances from India to pay the half-pay and retired allowances in this country and many other charges; but those remittances, amounting to £4,000,000 a year had ceased under existing circumstances in India, and the expenses, not merely the expenses of the troops, but all the ordinary home charges must be defrayed out of the proceeds of the loan which this Bill would enable the Company to raise.
§ MR. CRAUFURD
said, it was true that the proprietors of Indian railways had the power of throwing the undertakings upon the East India Company, and receiving back their capital at any time, although they were not likely to do so, as he could confirm the statement of the hon. Member for Guildford (Mr. Mangles) that the railway Companies were generally earning a dividend in excess of the guarantees.
thought it ought to be placed on record that the reason why the East India Company was compelled to resort to this country for a loan, was not owing to the mutiny, but because it had lost the confidence of the Native and other resident capitalists, by its utter want of good faith on a former occasion. A few years ago it was proclaimed in Parliament that the East India Company could obtain any amount of money they might require in India itself, and on quite as good terms as in the London market, and such was the case. But in 1853, under the administration of Lord Dalhousie, the fundholders were induced to assent to a conversion of the 5 per cent loan into a 4 per cent under the false pretence, which was officially circulated in the Government organ, the Friend of India, that the Company had superabundant funds in hand to any off all dissident fundholders. He said, this conversion was effected under false pretences advisedly, because the Government organ proclaimed that the treasure actually in hand amounted to £17,000,000 sterling, and that the annual revenue was more than one million in excess of the expenditure. It was also alleged that the normal interest of the Indian debt could never be more than 4 percent, and most likely would soon be 3½ per cent. This went on throughout 1854, and Sir Charles Wood (the then President of the Board of Control) confirmed and triumphantly referred to the saving which had been effected of £330,000; per annum by this conversion, in his speech on the presentation of the Indian Budget, on the 8th of August in that year. Sir Charles Wood said—I am happy to think that this is a satisfactory operation in the face of one war (Burmese) just terminated, and a general war just commencing. These facts prove the stability of the Indian finances.Incredible as it may appear, yet it is not the less true, that in the following year— six months only after this glowing panegyric on Indian finance—and without any unforeseen event or catastrophe, the Company was reduced to such straits that it was compelled to become a borrower, and at the rate of 5 per cent. To mask the bad faith it had shown in the previous con- version, and, if possible, to conceal its poverty, the new 5 per cent loan was announced as a public works' loan for £2,750,000. The dismay and astonishment this announcement created, may be understood when it is said that the 4 per 152 cent loan fell immediately to 20 per cent discount. This was an actual loss to the fundholders of the converted 4 per cent loan of £7,000,000 sterling. But the worst part of this extraordinary transaction is yet to be named. It was subsequently admitted that the finances of India were never in the condition to justify the conversion, and, moreover, the published Minutes of the Supreme Council of the 12th March, 1855, demonstrated that the public works' loan was necessitated (not for the object it professed to be raised), but to provide for the most urgent exigencies of the general public service. After such a wholesale spoliation could it be surprising that Native capitalists had so small a faith in the Company's financial integrity? Native and English holders of East India funds implicitly relied on the official statements of superabundant assets in the Government treasuries, and assented to the original conversion. But it afterwards turned out that so far from the Company having such superabundant treasure and annual surplus, as alleged, they were really wanting ways and means, and hence were so soon after driven to open a fresh loan at 5 per cent, under the discreditable disguise of a "public works' loan." Thus this conversion of the 5 per cent stock to 4 per cent, under such circumstances, amounted virtually to a confiscation of £7,000,000 sterling, on the ground that the Company were perfectly able to pay off the debt which it was so soon after proved they were not then in a condition to do. He might cite many cases of great individual hardships to both Native and English holders of Indian Stock. He might refer to the privations which many widows and orphans had been exposed to by this despicable fiscal oppression. In former times the Native community much distrusted the Company's financial faith, hut this feeling was fast wearing away. For instance, he found that out of £23,000,000 of Indian debt, in 1834, only £7,000,000 was held by Natives, whilst in 1847, of the same amount of debt, as much as £13,000,000 was so held. The hardship of this trans-action was much aggravated to the Native mind, when it is remembered that allied, or rather dependent Princes are, as it were, coerced into being large holders of the Government Stocks. the late King of Oude was a holder to the extent of two millions sterling, many other Native Princes and Princesses of proportionately 153 large amounts. To come nearer home he might refer to a case of a Life Insurance Company at Calcutta, (for the behoof of Europeans), and presided over by an honourable Friend, whom he did not then see in his place. This institution, in a very praiseworthy care for its constituents, had invested only in Government securities, and by this financial trickery of the Company were losers by the depreciation of their funds to the extent of £75,000 in one year. To show with what hot haste —despite the delays of the double Government—a bad measure could be carried out, the proposition of Lord Dalhousie to reduce the interest of the Indian debt was acceded to instanter by both the Court of Directors and the Board of Control here; and yet no agreement had yet been come to to carry out an imperial necessity—to wit—an electric telegraph communication with India. He (Mr. White) had only now to thank the House for its patient attention to the detail of an act of bad faith, such as people would sometimes be guilty of in their corporate, though they would shrink in horror from doing it in their private capacity.
SIR GEORGE LEWIS
I cannot assent to the doctrine laid down by the hon. Member that the financial question to which he alludes was an act of perfidy and spoliation. It was simply a conversion of a five per cent into a four per cent stock, it took place with the consent of the stockholders, who were offered the choice of receiving their money or a 4 per cent stock in lieu of it, so that nothing was done which, by the most perverse construction of the conduct of the Indian Government, can be described as an act of confiscation. Whether it was a successful financial operation is an entirely different question. It may not have turned out advantageously to the credit of the Indian Government, and, as often happens in such cases, the turn of the market may have been unfavourable to the conversion, and the reasonable expectations of those who designed it may have been disappointed. That may have occurred in the present case, but there has certainly been nothing in the affair to justify the very harsh manner in which the hon. Gentleman has spoken of it. I have no wish to prolong the discussion on this Bill, but I must protest against the doctrine of granting the Imperial guarantee in the case of India, of any of the colonies, or any public works without absolute necessity being proved with regard 154 to the particular loan. If the Chancellor of the Exchequer listens to the claims which may be made upon him from all quarters for a Government guarantee to diminish the interest on the capital to be raised, — if he gives a guarantee for £10,000,000 one day to India, another day to a colony, and a third day to a project, say for cutting a great sewer through London, he will find that the national credit, which I am happy to say has been far superior to any private credit, and which during the late monetary crisis never underwent the smallest diminution, will not maintain its superiority. If the Imperial credit is given on all occasions without proof of absolute necessity, we shall no longer see the three per cents sticking at ninety-six and ninety-seven. In this case the absolute necessity has not been shown. The Indian bonds which bear interest at 4 per cent are now at a premium of from 25s. to 30s. and it is absurd, therefore, to say that the credit of India is so low as to require a national guarantee. There are very few of the continental Governments which could borrow money now at that rate. With regard to the hon. Baronet's clause, I see no objection to the first four lines, but this Bill is only intended to continue in force one year, so that it is scarcely necessary to call on the Directors to make a return year after year of their proceedings under it. As to the return of the manner in which the loan is expended, I do not believe it to be possible. The money will be paid into the Home Treasury, and it will be perfectly impossible to discriminate between the expenditure of the loan and of the other moneys arising from the usual sources of revenue, which are also paid into the homo Treasury. As to the last return, I believe if the hon. Baronet will look into the documents on the table of the House he will find that it has already been given in them.
§ COLONEL SYKES
said, that he (Colonel Sykes) had not anticipated the attack of the hon. Gentleman (Mr. White), and he must therefore speak from recollection instead of from actual documents; but when the conversion alluded to was made, there was £16,000,000 in the Indian treasury to meet £8,000,000, so that there was an actual disposable balance of £7,000,000 or £8,000,000. Money was to be had in the Calcutta market at 4 per cent., and the 5 per cents. had risen to par, consequently it was an act of duty on the part of 155 the Government to reduce the interest on the debt. The plan they had adopted was in accordance with the precedents in this country. It was perfectly optional with the stockholders whether they would take their money in full, or accept a lower rate of interest, and a considerable amount was actually paid off. The operation was legitimate, equitable, and necessary. But then the House of Commons interfered, calling for more public works, although £1,000,000 a year was actually spent on them, and the Government of India, without any surplus revenue, had to undertake an expenditure of £2,500,000, for public works. Then the Burmese War breaking out a loan became necessary, and this could not be raised at a less rate than 5 per cent.
said, that he considered that the House had departed in this discussion from the original object of the Motion before them. The wants of the East India Company at present could not exceed £3,000,000, and he thought that the House would exercise a wise discretion in now assenting to a grant to such an extent as was absolutely necessary. If this were done, he had no doubt that when the new Government of India should be settled they would be enabled to borrow on better terms than they could do at present, for the announcement of the intention of the Government to assume the powers of the East India Company had already caused a rise in their paper of 5 or 6 per cent.
§ MR. AYRTON
observed, that he thought that his right hon. Friend had fallen into an error in stating that the Act would only remain in force for one year; because the fact was that it remained in force for perpetuity, and operations might take place under it from year to year. He hoped that before long the Estimates for India would be brought before the House every Session in the same way as the other Estimates, for he was satisfied that that would be the only effectual mode of cheeking the gross mismanagement which at present pervaded the whole system of Indian finance.
SIR GEORGE LEWIS
said, that the Bill as regarded its borrowing powers was only to last one year—until the 30th of April, 1859, and there was no power of borrowing an additional sum after that date. It was true that Bills issued before that time could be re-issued; but that was merely keeping the same instruments in force, and was incurring no new debt. He hoped that the hon. Baronet would consent 156 to omit from his clause the words "and of the expenditure thereof."
§ SIR HENRY WILLOUGHBY
observed that, he looked upon those words as very important, and felt inclined to adhere to them.
SIR GEORGE LEWIS
said, that the Indian Government would render an account of the expenditure generally; but there would be no distinction between payments which were made out of loans and payments out of other revenues. That was not the way in which the accounts were kept, and it would be utterly impossible that the wish of the hon. Baronet in this respect, could be complied with.
It was then agreed to omit the words in question, and the Clause, as amended; was added to the Bill.
§ On the Motion of the CHANCELLOR of the EXCHEQUER; Clause 11 was omitted.
§ Bill to be read 3° on Monday next.