§ Order for Consideration read.
§ MR. CRAWFORD
said, he felt very much disappointed at the restricted and narrow view taken by the right hon. Gentleman the Secretary for India on introducing this Bill of the pecuniary liabilities of that country, and the manner in which such liabilities were to be met. During the next four or five years it would be necessary to provide not only for a large amount of East India bonds and debentures, but also, upon the security of the revenues of India, for the large sums required to complete the railways in progress in that country. He therefore regretted the right hon. Gentleman had not taken a comprehensive purview of the whole matter. He had on a former occasion objected, and he repeated his objection to any guarantee being given by this country for a loan raised for the service of India. He thought, however, that Parliament should do as it had done on former occasions of much less pressing emergency; it should interpose to borrow money on the credit of this country, and then lend it again for the service of India, taking some specific adequate security for the repayment of the debt. If the right hon. Gentleman went into the market to borrow £5,000,000 on Indian debentures the attempt would be a failure; or, if the right hon. Gentleman succeeded in obtaining the money, it. would be on terms that would be tantamount to failure. The money could not be had under £5 or £5½ per cent. On the other hand the right hon. Gentleman could get any amount of money at 3¼ per cent on the credit of England. Another advantage of the plan he suggested would be, that it would raise the position of the other Indian securities then in the market. He was aware that at this period of the Session it would be useless to attempt anything in this matter. His object, however, was by calling attention of the House to prepare the House for the full consideration of the subject next Session. The time could not be far distant when this country would be called upon to relieve India from her present difficulties. He regretted to hear from a right hon. Gentleman in that House that India was of no value to England, and he should further regret that such a statement should pass current in this country. He would just mention a few figures 1261 which would show in what manner India was of value to this country. In the first six months of the present year the exports of manufactured goods to India amounted to no loss than £7,374,000; the exports of iron alone to £1,273,000; and the whole exports during that period to not less than £10,000,000. She also supplied, in the first instance, nearly the whole of the money required for carrying on our trade with China. This country then had the greatest possible interest in supporting the credit of India.
§ MR. VANSITTART
said, he wished to ask the right hon. Gentleman the Secretary of State for India whether it was true, as had been reported, that the right hon. Gentleman the Member for Devonport (Mr. Wilson) had accepted a very important appointment in connection with Indian finance? As he had himself given notice that he would that evening move some very important resolutions relating to that subject, he was anxious to know whether the right hon. Gentleman had accepted the proposal made to him to proceed to India. On the general question now before the House he would not detain them long. He had already stated his opinion that Parliament would, at an early date, have to take into serious consideration the expediency of giving India the benefit of an imperial guarantee. There was no doubt that the borrowing powers in India were almost exhausted, and in corroboration of that assertion he might state that out of a loan of £5,000,000 attempted to be raised at 5½ per cent in India the Government had been able to obtain only £1,000,000, although the loan had been before the public for a very considerable period. This country had not hesitated to go into the market for £20,000,000 sterling for the emancipation of the negroes in our West Indian colonies; it had also raised £10,000,000 for the mitigation of the sufferings of Ireland; and it had even pledged its credit on behalf of Turkey. Why, then, should it haggle and finesse in the most unstates-manlike and undignified manner rather than enter the market to procure the means of affording relief to 180,000,000 of our own fellow-subjects in India?
§ MR. AYRTON
said, that as he had already done on former occasions, he must again protest against the doctrine that the finances of India were exclusively the concern of India, and that that country must be left to depend entirely on its own resources. Such a doctrine could only stand 1262 on the assumption that the Government of India was like a colonial government. But in the latter case the Government was carried on under the direction of the people themselves, though under the supervision of some colonial authority. On the other hand, in India, we had established an English government which was entirely directed by English subjects, and controlled by the Government in this country. As long as the present system was pursued, it would be impossible to bring the expenditure of India within the resources of India. It was a wrong principle to propose loans from time to time for India, while the whole question of Indian administration was but imperfectly brought under the consideration of that House. Concurring in the recommendation of the hon. Member for London, he thought we should not enter into any complicated guarantees, but should obtain money at the cheapest rate on the credit of England, and then lend it to India on the security of its revenues. The reduction in the interest which India would thus have to pay might form a sinking fund, out of which both the principal and interest of her debt could speedily be extinguished. Why should we go on wasting £10,000,000 a year merely to maintain those abstract principles of political economy which were so dear to the dogmatists on the Treasury bench? He deeply regretted that they should persist in this course, but he regretted the more that they were entering upon those transactions without any explanations from the right hon. Gentleman the Secretary for India of improvements or political arrangements in progress which would render it unnecessary at some future time to sanction these loans. He had heard no explanation—nothing had been done or said which would lead them to the belief that at the end of next year the affairs of India would be in a better position than they were at present; and, indeed, an hon. Gentleman who knew a great deal about India had told them that next year there would be a demand for another loan. It was true, indeed, that the Government were about to send out an English financier, who by the magic of his inspiration was to set the finances of India in order, and afterwards turn his attention to the improvement of her civil administration. That, however, would be inverting the natural order of things. First reform the civil administration, and the finances would in a great measure correct themselves. Centralization in the Government 1263 of India had been the hobby of the Whig party; but it was to be hoped that the admirable State paper of Sir B, Frere on that subject would induce them to revise that system which had been the fruitful cause of so much of the evil by which India had been afflicted. The first step towards amelioration was to compel the civil services to feel that they were to govern India, not for their own convenience and advantage, but for the benefit of the Natives. It was to be regretted that the Secretary of State proposed to give way to the views of the "Old Indians" in regard to the maintenance of a local European army. The only effect of perpetuating the distinction between the local European force and the Queen's ordinary troops would be to sow afresh the seeds of that sedition which we had recently witnessed, and to impair the resources of both India and England. In point of efficiency as well as of economy, it would be far better to get rid of a European force in India that was purely local, and to substitute for it Queen's regiments, each having one battalion in India and another at home, and both being identical in interests and sympathies. There ought to be no local service for the officers, who ought all to enter the Queen's army, and when they had specially qualified themselves for duty in India they might be transferred to that country according to a principle of selection by merit. The mutiny in the Bengal army had been ascribed to the want of a sufficiency of European officers. That was a very convenient cry for the late Court of Directors, who wished to increase their patronage. Colonel Green, in his evidence before the Commission on the organization of the Indian army, stated that only four officers were requisite for a Native regiment, a greater number being not only unnecessary, but tending to lower the character of the officers in the opinion of the Natives under them; and the Commission itself had recommended for the irregular Native regiments a small staff of officers, who, by dint of their superior capacity, managed their men far better than the less efficient, but more numerous staff attached to the regular Native levies.
§ COLONEL SYKES
said, that he believed that if the hon. Member for the Tower Hamlets had ever been a single day with a Native regiment, the House would have been spared the remarks—for which there was no foundation—that he had just made on the subject of the Native army. A gentleman who had never been out of Bombay 1264 could not well tell what a Native soldier had on his back when in the field. He (Colonel Sykes) had served with armies of the three Presidencies in the field, and emphatically declared that the efficiency of Native regiments in action depended entirely upon the number of European officers with them. Adverting to the subject more immediately before the House, he had next to offer a few observations, not as an apologist of the Indian Government, but in the interest of the taxpayers of India. There could be no doubt that the present financial condition of India had produced great distrust. He found that in India on the 19th of April last, the Four per cent loan was at 22½ percent discount; the Five per cent loan, though guaranteed for fifteen years, was at 11¼ per cent discount; the Five and a half per cent loan now open, and obliged to be guaranteed for twenty years, was also at a discount; and the Treasury-bills were issued at the rate of 5¾ per cent. In England also the Loan Debentures, which were issued last year at 4 per cent, £95 paid for every £100 subscribed, were at 93½. As a contrast to this, on the 30th of April, 1854, the home bond debt of the Company was £3,899,500, the minimum rate of interest upon the greater portion of which was £2 10s. per cent, and the maximum £3 5s. per cent. In India, in 1853, the cash balances had accumulated to £15,439,135 sterling, and so satisfactory was the general state of Indian finance that the Marquess of Dalhousie was in a position to offer to pay off the Five per cent loans, and a financial operation took place involving a reduction of interest upon £28,222,452; whereas now money could not be obtained at 6 per cent. Even after that operation a loan was opened at 3½ per cent, towards which more than half a million sterling was subscribed. Why, then, the present revulsion? Was it that the revenue had been steadily decreasing? A table that he had in his hand gave the net revenue of India for the last fifty years. In 1809–10, it amounted only to £11,238,410; in 1819–20 it rose to £13,016,790; in 1829–30 to £14,200,005; in 1839–40 it stood at £13,742,360; in 1849–50 it increased again to £19,510,098; and in 1856–7 the gross revenues were £33,303,391. All this increase took place before the transfer of the Government to the Queen, and according to the statement of the Secretary of State the gross revenue of India 1265 was estimated in 1859–60 at £36,190,349. There had, consequently, been no ground whatever for distrust on account of the diminished capability of India to meet her engagements as far as revenue indications went. Well, then, could that distrust be ascribed to an enormous increase in the military expenditure during the period to which he had referred? In 1809–10 the military charges absorbed nearly 59 per cent of the net revenue; in 1819–20 they absorbed 64 and 2–10ths per cent; in 1829–30, they took 53 and 7–10ths per cent; in 1839–40 they were 57 and 7–10ths per cent; in 1849–50 they were 51 and 6–10ths per cent; while in 1859–60 they were estimated at 58 and 4–10ths per cent of the gross revenue. It ought not, therefore, to be the present military pressure that was the cause of distrust. Was it the pressure of the interest on the debt in relation to the net revenue of India? The pressure of the interest of the debt in relation to the net revenue in 1809–10 was 18 per cent; in 1819–20 was 12 8–10ths per cent; in 1829–30 was 12 l–10th per cent; in 1839–40 was 9 7–10ths per cent; in 1849–50 was 10 5–10ths per cent, thus indicating a gradual diminution of pressure but still infinitely lower than it was in 1809–10. For the year 1859–60 it was estimated at 13 9–l0ths per cent on the gross revenue. At the moment the finances were getting into a healthy state, the Government of India was compelled to carry on expensive public works for irrigation, roads, bridges, and other undertakings beyond the means of the Treasury. The distrust which existed with regard to the finances of India was very much due to the recent mutiny no doubt, but it was also in part attributable to the statements of the hon. Member for Birmingham (Mr. Bright) and of the hon. and learned Gentleman who until recently represented Devonport (Sir Erskine Perry), who had taken a gloomy view of the question. What, then, was to be done under the circumstances? India was not like a colony, but was to be treated as a portion of this country, and it was for Imperial interests and not for Indian interests that the present loan was asked. It was said in a recent article in The Times:—The first thing to do is to recognize the fact that India is now as much a portion of the British empire as Yorkshire or Westminster. To suppose that we can go on spending lavishly and borrowing recklessly, and that we can at some future day repudiate the obligations entered into by our 1266 officers, is a folly which is only redeemed from being a wickedness by its utter absurdity. England could no more repudiate her Indian loans than she could repudiate her Consols.The remedy, then, which he (Colonel Sykes) would suggest, was comprised in two talismanic words, "Imperial guarantee," and the moment those words were embodied in an Indian Loan Bill universal confidence would replace the distrust which now existed.
said, he did not wish at that moment to enter into the question of an Imperial guarantee. He merely rose to express his satisfaction at one of the provisions of this Bill, which gave the Secretary of State a new power of creating either capital stock or annuities. He believed that it would be a useful and an efficient provision, and that his right hon. Friend would discover when he tried to raise the money that the market for debentures would be extremely heavy, and that it would be absolutely necessary, therefore, to have recourse to some other mode. He would suggest to his right hon. Friend whether he should not next Session introduce a Bill giving to the present holders of debentures the power, if they chose, to convert those securities from time to time, either when they were due or previously to their becoming due, by negotiation, into the new stock. It would be a convenient mode of dealing with the subject. It would relieve the debenture market, and would give his right hon. Friend a fixed instead of a floating and redeemable stock at a particular period.
§ SIR EDWARD COLEBROOKE
observed that the announcement of an Imperial guarantee for a new loan would rather injure the holders of the older stocks. But the question of an Imperial guarantee was too large to be discussed at that moment, and it must eventually come before Parliament. When the right hon. Secretary for India made his statement with reference to Indian finance, he informed the House that a right hon. Gentleman was about to proceed to that country to set its finances to rights, and he wished the right hon. Baronet (Sir Charles Wood) would state distinctly what position that Gentleman was to occupy. He had understood the right hon. Baronet to say that this defect existed in India—that the same officials who were responsible for the collection of the revenue were not responsible for its expenditure. He had always supposed that the Governor General in Council 1267 was responsible both for the collection and expenditure of the revenue, and he thought nothing could be more dangerous than to set up a departmental authority opposed to that of the Governor General. If the object was merely to send to India a Gentleman who would take part in the Council, and who might be checked by the other members of that body, he believed that in such a position a person experienced in English finance might confer great benefits upon India, especially if he placed himself in communication with gentlemen possessing local experience; but if, as he understood from announcements in the public journals, this Gentleman was to supersede the public officers of the finance department in India, he thought a change would be effected in the constitution of the Indian Government, which ought not to be made without the assent of that House. Such a measure would imply a want of confidence not only in the civil service of India, but in the Governor General himself.
§ SIR HENRY WILLOUGHBY
remarked that he was also anxious to know something about this financial council. Being acquainted with the peculiar character of the civil service in India, he thought that unless great precautions were used they would make "confusion worse confounded," and do very great mischief. He considered that the question of Indian finance was in a rather perilous condition; but there was one point which he certainly could not understand. It was, who by law had the power of borrowing money upon the revenues of India? It appeared to him that the House, after having destroyed the Company, had no option but to look boldly in the face the question which related to that dependency, its finances, and its army. With respect to finance, he thought it was necessary that the borrowing power should be under one control, place that control where they would; and he had the highest opinion of what the Secretary of State and the new Indian Council had done since they had been in existence. In fact, the House knew little of how well and ably they had performed their duties. But he was persuaded that the power of borrowing and charging the revenues of India must be placed in one set of hands; for nothing could be more unwise than borrowing large sums of money in this country, and at the same time borrowing by open loans in a period of difficulty, and so destroying our own finances. 1268 He hoped, therefore, the right hon. Gentleman would explain in whoso hands, legally, the power of charging the revenues of India now rested.
§ MR. W. WILLIAMS
said, all gentlemen connected with India seemed very anxious to have the guarantee of the capital and industry of this country for their loans, and no doubt it would be the most effectual guarantee possible. The present embarrassment of the finances of India was owing to the extravagance of the Government. They had been promised that the Government in this country would exercise a direct control over India, but that was not so; a most important despatch had remained unanswered for twelve months, and that showed how little the Government in India cared for the control over them. It would be a most fatal mistake to grant an Imperial guarantee. A paper currency was the only way to reestablish equilibrium in the finances of India. Retrenchment ought to commence in the home department of the Government. Any money required could he raised without a guarantee; and if once they commenced the system it would never be put an end to, and there would be a stop to all ideas of retrenchment and economy.
§ SIR CHARLES WOOD
was understood to say, he quite agreed with the hon. Member for Evesham (Sir H. Willoughby) that it would be far more convenient that he should reserve anything he had to address to the House on the subject of the Indian army until the next Bill on the paper [The European Troops (India) Bill] came on for discussion. As to the great question of an Imperial guarantee, it was a matter of such vast magnitude and importance, and one on which such diametrically opposite opinions were entertained, as, indeed, had been somewhat exemplified in that debate, that, if discussed at all, it ought not to be discussed in the incidental and imperfect manner which was alone possible on that occasion. The Government had not deemed it advisable to make any proposal of that kind at present. At the same time he had thought it incumbent on him the other night to intimate his opinion that circumstances might hereafter arise when it would be the duty of the House at any rate to give that subject its most serious consideration. He did not, however, believe that the occasion had yet arisen, or that there was any pressing necessity for the consideration of the subject. He had also previously stated that the 1269 financial position of India opened so wide a question that he had not thought it expedient then to enter into the civil and military administration of that country. In the civil expenditure there was not much reduction to be made. Some of the civil salaries might, indeed, he reduced; but the chief source of retrenchment lay clearly in the military charges. Before the mutiny broke out the revenue and expenditure were almost equalized; and, now that India was rapidly resuming her former tranquil state, it was to be hoped that by the adoption of a system of government in accordance with the interests, the wishes, and the feelings of her people, a large diminution in the military expenditure would be effected. With regard to the sending out of a person to supervise, and he trusted to improve, the financial condition of India, he hoped that his right hon. Friend the Member for Devonport (Mr. Wilson) would be induced to undertake that task. [Mr. VANSITTART: Has he accepted the office?] He had not accepted it; but no other man in this country possessed the commercial and financial knowledge combined with the great Parliamentary experience of his right hon. Friend, or was so well qualified as he was to attain the end in view— namely the improvement of the system of finance in India. It was, of course, a very serious question for his right hon. Friend whether he would undertake a duty of that kind; and although he had pressed him to do so there were various considerations which rendered it doubtful whether he would accept the appointment or not. He hoped, however, that in a few days his right hon. Friend would be able to decide, and that the Government would be authorized in announcing that he had accepted a situation in which he would labour to promote the interests both of India and of this country. It was not for him (Sir C. Wood) to answer for what was said by other people, or what appeared in the public prints. The responsibility for the expenditure of India rested with the Governor General and his Council, and not with any single individual. The finances of this country, like every other public department, were, for example, under the special direction of a particular Minister; but everybody knew that the Chancellor of the Exchequer was not exclusively responsible in matters of revenue and expenditure. So, if his right hon. Friend the Member for Devonport, or any other person, went out to 1270 India in the capacity he had described, he would not go as the alter ego of the Governor General, and he would not be solely responsible for the finances of that country. He would be a member of the Council of the Governor General, taking charge of the financial department; but the Governor General and the Council would be responsible for his acts, because he could do nothing without their sanction and concurrence. He was glad to hear that the hon. Member for Kendal (Mr. Glyn) approved of power having been taken by that Bill for raising the loan either by debentures or by stock. There being a difference of opinion as to the best mode of effecting that operation, he thought it right, in the present state of the money-market, to arm himself with the power of taking either course which might be most advisable. The hon. Member would also see, that by the tenth clause of the Bill power was given to raise money for the payment of debentures by the creation of stock. In answer to the question of the hon. Baronet (Sir H. Willoughby) he had to state that there could be no doubt that the Governor General in Council in India had power under the authority of the Act of Parliament to raise money and charge it on the revenues of India, that power being exercised with the sanction of the Secretary of State for India and his Council in this country.
§ Motion made and Question proposed,—"That the Bill be now read the third time."
§ MR. NEWDEGATE
said, that amongst the Orders of the day was a Bill for continuing the exemption of Roman Catholic Charities from the general law; and this being a day on which Motions took precedence of Orders this had occurred; that at three o'clock this morning it was proposed that the House should meet at one to-day, and that Orders should have precedence of Motions. The effect was to contravene the Standing Orders of the House, and this particular Bill would be brought in at a morning sitting upon a day when, according to the usual practice, it would have stood for the evening sitting. He wished to know when the right hon. Gentleman proposed to take the Charitable Trusts Bill.
§ MR. SPEAKER
said, the course taken was in accordence with the rules and Orders of the House. When the House met before two o'clock the rule was to adjourn at four o'clock and meet again at six o'clock, and though no doubt it was a fault that no dis- 1271 tinction had been made on the paper between the morning and evening Bitting, no inconvenience could result if the rule were borne in mind.
§ MR. NEWDEGATE
said, that to put himself in order, he would move the adjournment of the House. He wished to remark that the paper delivered to hon. Members, although it contained a number of Orders for the morning sitting, made no reference whatever to an evening sitting.
§ Motion made, and Question proposed—"That this House do now adjourn."
SIR GEORGE LEWIS
said, he would take the Roman Catholic Charities Bill in its order. If any discussion was likely to arise, he hoped hon. Gentlemen would consent to postpone it till tomorrow, on the question that the Bill be committed.
§ Motion by leave withdrawn.
§ Main Question put, and agreed to.
§ Bill read 3° and passed.