HC Deb 14 February 1859 vol 152 cc346-84

—Sir, I have to entreat the patience and forbearance of the House while I lay before you a statement which, however important may be the facts to which it refers—and I believe hardly any facts can be more important with reference to the interests both of India and of England—and however it may be treated, will, I fear, be somewhat long and tedious. Of this, at least, I can assure hon. Gentlemen, that I have endeavoured, and shall endeavour, to compress what I have to say within as narrow a compass as is consistent with the necessities of clear and full explanation.

In the first instance, Sir, I propose to place before you an outline of the financial state of India during the last two years as compared with the years immediately preceding. The insurrection began, as we are all aware, in the month of May, 1857. At that time the financial year 1856–7 had just closed. What, then, was the condition of the finances of India at that date? Taking the exchange at 2s. to the rupee the revenue of 1856–7 was £33,303,000. The expenditure of the same year was £33,482,000; leaving a deficit of £179,000. But it must be noticed of this deficit—and the same remark applies with but little modification to all the preceding years for some time back—that there had been laid out under the general head of "Public Works" a sum of £2,350,000. Now, in India, the term "public works" is comprehensive. It includes public buildings; it includes roads; it includes a great variety of items of expenditure, many of which yield no return in a direct form, but may be compared to that outlay which in England a landholder has to make upon his property. It is quite impossible to ascertain by any accurate analysis how much of the Indian expenditure on public works is an outlay in the strict sense of the word, and how much may be regarded as an investment. But, assuming on a rough estimate that credit may be taken for one-half as remunerative investments, we shall have for the year 1856–7 an apparent deficit of £179,000, but a real surplus—making the deduction I have stated—of something less than £1,000,000. That state of things, compared with the accounts of the previous years, shows a considerable improvement. Of the ten years preceding the year 1856–7, beginning with 1846–7, the first three and the last three show a deficit, and only the intermediate four a surplus. If I do not make myself intelligible, I hope that hon. Gentlemen will ask for any explanation which may be needed. The deficit of the year 1853–4 was £2,100,000; that of 1854–5 was £1,700,000; that of 1855–6 was exactly £1,000,000; while the deficit of 1856–7, as I have just stated, was £179,000. We have, therefore, this result—that, at the outbreak of the mutiny, the equilibrium between income and expenditure had been very nearly restored; and that, as I must remind the House, with an average outlay of £2,000,000 per annum on works of improvement. We now come to consider what change has been produced in the financial state of India by the disturbances of the last two years. The accounts for the year 1857–8 have not yet been received. They will shortly arrive, and will be laid before the House, probably in the month of May next. I have, however, an estimate for that year, 1857–8, which gives the gross revenue at £31,544,000 and the expenditure in India at £39,120,000, showing an estimated deficit in India, which we may reckon with sufficient accuracy at £7,600,000. But to that deficiency must be added an extra expenditure upon troops and stores in England, which nearly reaches £1,500,000. We have, therefore, for the year 1857–8 a total estimated deficit amounting in round numbers to, as nearly as possible, £9,000,000. This is the estimate for the year 1857–8. I now proceed to the estimate for 1858–9, the financial year which will close on the 30th of April next. The revenue, as estimated for that year, is £33,016,000, and the expenditure, including home charges of all descriptions, is £45,629,000, making a deficit of £12,600,000. Add to that the deficit of the previous year, which was £9,000,000, and we have upon the two years since the mutiny began a total deficiency amounting to £21,600,000. That, however, does not constitute the entire amount of loss which has been sustained by the rebellion; for the outlay upon public works during those two years was only £3,000,000 instead of £4,000,000, as it should have been according to the average of previous similar periods. We have, therefore, £1,000,000 more diverted from an outlay partly remunerative to one wholly unremunerative. The estimate of Indian expenditure for the year 1859–60 has not yet been received, and we have, therefore, only the comparatively small estimate for home charges, with which I shall deal more conveniently in a subsequent part of my statement. In the calculations which I have submitted to the House no account is taken of the compensation to be made for losses and injury of private property in the disturbances. There is, as many hon. Gentlemen are aware, a commission sitting in India to investigate the claims which may be made on account of compensation for such losses. I have applied officially to know when it is likely to report, and also, if possible, to accelerate its proceedings, but I have not as yet received any reply. The question is often put to those who are concerned in Indian administration in this country, "Upon what principle do you intend to deal with these claims for compensation?" I wish it were in my power to give to that question a satisfactory answer. It is, however, quite impossible to lay down any general rule for dealing with these claims, until their amount and their nature are better known than they are at present. The difficulty of the case is this, that you cannot, with any regard to justice, apply one rule to European claims and another to claims preferred by Natives. There are many Natives who have been engaged in the service, or who have taken the part of the Government, who have fought with us, and who have suffered loss by plunder in the same manner as Europeans have, and it is quite obvious that, whatever rule we lay down for dealing with these claims, no distinction can be drawn between the claims of Native sufferers and those of European residents. That is a circumstance, which, of course, increases enormously both the amount of these claims and the difficulty of dealing with them. I regret that I can offer no explanation upon this subject except in these general terms. Against these claims fur compensation there will, however, have to be set a considerable amount which will be derived from the forfeiture of land and pensions by those who have been leaders in the insurrection. I am sure the House will feel that it would be most inexpedient and impolitic, even in our present financial position, to attempt to press these confiscations for the sake of revenue. An amnesty has been declared, and we are bound by the spirit as well as by the letter of that amnesty. All the mercy ought to be shown which is consistent with the strict demands of justice; and it must also be borne in mind that, even from the property which may be legitimately placed in our hands, a large portion will have to be deducted to meet the just claims of our Native allies who have stood by us in the late emergency. But, after sparing all who can put forward any reasonable claim to be spared, and recompensing all who can fairly claim recompense, I anticipate that there will remain in the hands of the Indian Government some—perhaps a considerable—balance to meet the claims arising out of losses in the course of the mutiny.

I propose now, Sir, to examine, as briefly as 1 can, one or two of the principal items from which is derived the revenue of India. I need not tell the House that the chief source of income in India is the land revenue. In the return from which I have taken the figures that I ant about to read, the land revenue is coupled with two other small taxes—the sayer and the abkarree, or spirit duty—and with some small subsidies from native States. I am unable to separate these items, but the deduction to be made on those accounts will be but small. The figures which I shall submit to the House will show that the land revenue, with these small items thrown in, constitutes nearly sixty per cent, or three-fifths, of the whole of the financial resources of India. That land revenue has grown with the growth of our territorial possessions. At the commencement of the present century it amounted to £7,330,000. In the year 1810 it rose to £13,000,000. It then appears to have remained stationary* until 1840, when it was £13,158,000. In 1850 it had risen to £17,395,000; and in 1856–7, the first year with which I am dealing, and that immediately preceding the mutiny, it had reached the amount of £19,080,000, being the largest amount which it has at any time realized. In 1857–8, the first year of the disturbances, the land revenue fell to £16,271,000; in 1858–9 it rose again to £18,392,000. Now, Sir, it must be observed of this item of revenue, that it is by its very nature susceptible of only a slow and gradual rate of increase. In those parts of India, as in Bengal, where a perpetual settlement exists, that is to say, where the landowner is guaranteed against being at any future time called upon to pay more to the State than he contributes at present, it is obvious that there can be no increase of revenue from this source, except in so far as new lands are brought into cultivation. The same state of things exists, * There was, in fact, an increase; but it is not apparent, as, on the introduction of the Company's rupee, a lower rate of exchange was adopted in the Parliamentary accounts of the latter year. though to a lesser degree, where permanent settlements—that is, settlements for long terms of years—have been introduced. Now, the tendency all over India at the present time is to favour long or permanent settlements, as affording a greater amount of security to the cultivator; and we must, therefore, consider this branch of the revenue as being comparatively inelastic. The increase of which it is capable arises principally from two causes. One cause of increase, which has been very active in times past, but of which we may hope there will be no more just at present, is addition to the British territory, and consequent increase of the area over which the tax is levied. The other cause is the taking into cultivation of lands hitherto waste. That process is likely considerably to increase, as railways and other means of communication open up the interior of the country; and we have, therefore, in its results a probable source of great wealth at some future period, but one on which no prudent financier can with any approach to certainty calculate as likely to become available within a short time. Next in importance to the land revenue is that derived from opium. The increase in the revenue derived from the opium monopoly is very remarkable. At the beginning of the century the revenue derived from opium was £372,502. In the year 1810 it amounted to £935,996. In 1820 it was £1,436,432; in 1830, £1,553,895; and in 1840, it was £1,341,093. In 1850 it had risen to £3,558,094—an enormous increase, attributable to the new trade then opened with China. In 1856–7 the opium revenue was £4,696,709. In 1857–8 it had risen to £6,443,706, being an increase of £1,800,000 in a year. In 1858–9 the revenue derived from this source had fallen to £5,195,191. It is obvious that opium is a source of revenue which varies with the season, with the demand that may happen to exist for the article, and with the abundance or scarcity of the crop. The House will see how large a revenue is involved in the continuance of that trade, and will judge from the statements I have made how materially the financial resources of India are affected by it. The House is aware that the continuance of this opium monopoly has been objected to on two separate grounds. One argument against it, which I confess I have never been able to regard as devoid of force, has been removed by the announcement made this evening, that it is the intention of the Chinese Government to legalize the trade in opium. No argument against the culture of opium can therefore in future be based upon the contraband system of importation into China which has so long prevailed. The other objection comes front those who argue in favour of a total prohibition of the cultivation of opium in British India. I only mention this opinion for the purpose of saying that, setting aside the fiscal considerations of the present time, I regard this argument as unsound, and based on a false theory as to what the duty of a Government is. I have never heard any plea for the prohibition of opium culture in Bengal that might not equally be urged in favour of the introduction of the Maine Law in England. Whatever may be the abuse of opium in India, or China, it can hardly be greater than the abuse of spirits in this country. So far from opium being necessarily, and in all cases, a poison to those who use it, as has been strongly urged, I believe it is used habitually but moderately by large classes in India, and probably without serious injury to their health. There is, however, consequent upon the legalization of the opium traffic with China one consideration of which we should not lose sight, and that is the possibility that the Chinese Government, having now abandoned their objections to the introduction of opium into China on the score of morality, may also legalize its cultivation in China itself. In that case, the demand for Indian opium would probably be greatly reduced, and the revenue derived from it cannot fail to be affected. I do not participate in the objections on moral grounds, to the culture of opium in India, but I think it may be a question as a matter of fiscal policy, how far its cultivation ought to be kept a monopoly in the hands of the Government. It is impossible to deny that, upon general considerations, the principle of that monopoly is open to grave objections, and many of those who have considered this subject would be glad to see their way to the possibility of doing away with the Government monopoly, and substituting for it a system of excise. I have been in communication with the Government of India on this subject, and I shall be glad to find that the monopoly can be done away, and a system of excise substituted; but I am bound to add, in frankness, that, although the object would justify some temporary sacrifice, I do nut think it au object of such pressing necessity as to justify a large permanent sacrifice of revenue. Taking the land revenue at about 60 per cent of the whole revenue of India, and taking the large return of 1857–8, from opium, as 20 per cent of the remaining revenue, we may thus, without any material inaccuracy, consider the land revenue and opium as supplying four-fifths of the whole of our Indian finance. The revenue from other sources I will review more briefly. The salt duty and Customs, taken together, yielded in 1800, £1,442,000; in 1850, £3,538,000; in 1856–7,£4,443,798; in 1857–8, £3,785,782; and in 1858–9, £4,398,960. Miscellaneous items, including all not classed above, give:—In 1800, £132,000; in 1850,£1,340,000;in 1856–7, £3,000,000; in 1857–8, £3,071,380; and in 1858–9, £2,966,091. Considering the great variety of these sources of revenue, the House will pardon me if I refer them for a more detailed explanation to the annual accounts, in which they will be found at length. What I have said, however, shows in a brief summary what is the real and practical difficulty of Indian finance. First, you have the land revenue, which, except from two sources of increase, an increase of territory and an improvement of culture, is comparatively inelastic compared with our taxes at home. Next, you have the opium revenue, which, as I have shown, is somewhat fluctuating and precarious, since it depends not only on the season and state of the market, but also upon circumstances connected with the Chinese Government to which I have adverted. These two sources of revenue, as I have said, are nearly four-fifths of the whole. The general result is, that an increase of material prosperity in India does not produce upon the revenue the same immediate result as in England, where the great bulk of your taxation rests upon the consuming power of the people. We all know here that, if a tax is taken off, or if a new market is opened, the revenue feels the effect in a few months in an increase of the Excise and Customs' returns. In India, although the amount of trade has enormously increased within the last twenty years, the effect upon the revenue has been relatively, although not absolutely, small. Under the Native Governments which preceded ours, many taxes existed which by us have been abolished. There were taxes on sale and purchase, transit duties, poll taxes, and taxes, in some countries of India, upon almost every action of a man's life. In a majority of cases these taxes were open to the gravest objection—they were clumsy, unequal, vexatious, and arbitrary. But they possessed one advantage that is wanting in our system—namely, that all classes paid more equally than they do at present. Under British administration large classes in India have escaped taxation altogether. The opium revenue is paid almost entirely by foreigners, the land revenue by the cultivators of the soil. But, except the duty on salt, which is in effect a poll tax, and a few Customs' duties, the mercantile classes in India pay absolutely nothing to the revenue. Various plans have been laid before the Government for imposing new taxes. I need not tell the House that it is a very difficult and delicate matter to attempt to impose a new tax in England. But it is far more so in India than in England, because in India, all changes, whether for better or worse, are regarded with dislike, merely as changes, and the acts of Government are viewed, as the acts of a foreign Government necessarily must be, with jealousy and suspicion. And what is, perhaps, more important to consider is, that in India you have not the same means of ascertaining what the public feeling really is, and consequently, you have not the same facility for drawing back from rash and inconsiderate measures. A large increase of indirect taxes would check that development of trade which is our chief hope and resource: while direct taxes, unless imposed with great care and judgment, are very costly to collect and liable to abuse in their collection. Taking these things into consideration, we have not ventured to say to the local Government of India in direct and positive terms, "You shall lay on this or that new tax." We have thought it right rather to confer with them, anti I hope it may be possible, as the result of such deliberations, to add considerably to our present income; but I cannot hold out the hope that, even with these additions, the amount of Indian revenue will be such as to approach the present rate of expenditure. Perhaps the House will allow me to read upon this subject an extract from a financial despatch addressed to Lord Canning on the 19th of last month,— A graver duty is, however, imposed on your Government by the uncertainty which exists as to the period when extraordinary military expenditure caused by the mutiny will cease or be materially diminished; and by the increase, from year to year, of the debt of India, which, if allowed to continue unchecked, cannot fail at an early period to prove injurious to your credit. I see no reason to doubt that the present revenue of India (of about thirty-three crores) ought, in ordinary times, and by the exercise of a proper and judicious economy in the several departments, civil as well as military, to be ample for all purposes of the Government, including a liberal outlay on works of improvement. But the question of the manner in which to meet the heavy disbursements of an unusual character, which, owing to late events, will have to be defrayed in each year for some years to come, both here and in India, is of a wholly distinct nature. To that question it is now my duty to call your earnest attention. It has often been asserted that the imposition of new taxes, a task of difficulty in any country, is impracticable in India, where the revenue is principally derived from the land. Nevertheless, the exigencies of the present time are so emergent that I wish the subject to receive your mature consideration. It is manifestly ruinous to continue a system of loans to meet the general expenditure of the State. I need hardly say that, in any measure which you may consider practicable, either for augmenting revenue or reducing charge, it is my anxious desire that no unnecessary check should be placed on the works of public improvement which were in progress previously to the late calamitous disturbances, and which, I am gratified to observe, the events of the mutiny have only partially suspended. It should ever be borne in mind that in India, where the main portion of the revenue is raised from the land, railways, canals, works of irrigation, and other undertakings which tend to raise the market value of the produce of the soil, form the best foundation on which to hope for a permanent increase to the income of the State, and that this result can only be obtained by a corresponding improvement in the condition of the mass of the people. As no positive instructions as to the exact mode of taxation have yet been sent out, probably the House will not think it expedient that I should now discuss the greater or less expediency of the various plans which may be, or have been, proposed.

But, if the state of India be such that we cannot hope, even with the aid of new taxes, to meet the present rate of expenditure, there is only one other resource to which we can look, and that is diminished outlay. I think I can show, by a few figures, that the present deficiency, enormous as it is, of £21,600,000, to which I have referred, is wholly due to the extraordinary charges caused by the insurrection. The military expenses of 1856–7, which I take as an average year, as it did not vary very much from the years immediately preceding, were £11,546,000. The military expenses of 1857–8, which was the first year of the mutiny, were £18,212,000. The military expenses of 1858–9, which was the second year of the mutiny, were estimated at £22,598,000; thus showing an increase, in round numbers, of nearly £18,000,000 in those two years under the head of military expenditure alone. But, in addition to that, there are other losses which are distinctly traceable to the insurrection. In 1857–8 there was a loss of revenue by non-collection of £3,600,000: in 1858–9 there was a loss of revenue of £775,000, and there was a loss of treasure plundered of £1,275,000:—making together £5,650,000. I ask the House to listen to these figures, because they show that to these two causes—the war expenses, and the losses consequent upon the war, we may attribute a loss equal to £23,650,000. The deficit has only reached £21,600,000, and therefore £2,000,000 have been paid out of the ordinary revenue of India towards those extraordinary charges. I do not propose to ask the House to enter into the details of the civil expenditure. I do not believe that the civil expenses have varied much of late years. They have not undergone any revision since the change of Government; and it must be obvious to the House that, whatever may be effected in course of time, yet, as the rights of existing office-holders must be respected, that change cannot for the moment be productive of any considerable saving. I do, however, look forward to a considerable future reduction of the civil expenditure, and I believe such reduction will be brought about by a double process. One process is that which for the last twenty years—ever since the establishment of the uncovenanted service—has been going on to a certain extent—namely, the substitution of cheap Native agency for the comparatively costly agency of Europeans; and the other a process which has not been so often adverted to, but which, nevertheless, it is worth while to bear in mind, namely, that as India is brought every year nearer to England, as the inconveniences of distance and exile tend every year to diminish—we all know how much less they are than they were thirty years ago—probably Europeans will be found willing, hereafter, to serve in India at a lower rate of salary than at present. It is often made a subject of complaint that the salaries of the covenanted service are fixed at a very high rate. I do not think it necessary or possible to deny the fact. I have no doubt that the civil service is one of the best-paid administrative bodies in the world. Nor do I care to argue whether the salary of this or that particu- lar office may or may not bear revision; but this I do say, and I venture to dwell upon the fact as of some importance, that no one can have attempted to deal with this question without being struck with the extreme difficulty of getting men of high attainments and good position at home to undertake official duty in India. Even with appointments in this well-paid civil service thrown open for competition, there certainly has not been that eagerness to compete which might have been looked for—certainly not the same eagerness which there would have been if the prizes had been appointments of infinitely smaller value at home. In one branch of the service, the medical establishment, which is also open to competition, at the last examination the number of candidates was less than the number of appointments, there being, I believe, 51 places and only 42 candidates. I believe all those who have bad anything to do with India, will confirm that which I am prepared to lay down as a general rule—namely, that you can hardly get professional men who are doing well in this country to go to India, unless they have the inducement of a rate of remuneration fully double that which they could obtain at home. If a test were wanted of the accuracy of that view I should refer to a service entirely unconnected with the Government—the service of the various railway companies established in India. Any one who regards the high civil salaries of India as intentionally extravagant, had better look at the salaries which are paid by these railway companies, for the same kind of skilled labour and supervision as railway companies require at home, and it will be found that the difference between the Indian and the English rates of salary is fully as great in that as in the Government service in India and in England. It follows, then, that, if we can hardly hope for any great augmentation of Indian revenue, nor yet for any large reduction of civil expenditure, the problem of Indian finance is reduced to this—how to bring the military expenditure within its former limits. It is quite idle to enter into estimates or prospective calculations on that subject. No plan can be framed at this moment which events occurring in India may not overthrow. But there are some general considerations which encourage in my mind the hope that when peace is again thoroughly restored we shall be able to do in India with no larger amount of military force than was necessary before the outbreak of the mutiny. At no former period has the military ascendancy of England in Asia been as complete as at the present time. Within the limits of India there is no single Native State left which has the inclination or the power to provoke a war. After the events of the last two years, a fresh outbreak in the British possessions in India is not probable. I think also that the Government, whether in India or in this country, have profited sufficiently by the recent and costly experience, not to feel inclined to pursue that policy of annexation, which, whether well or ill founded, has undoubtedly, in a great degree, been the cause of the present disaster. There is another consideration which may lead us to look forward to the prospective reduction of our military expenses in India. The British army in India is now only one portion of the entire army of the Empire. When telegraphic communication is complete, and with the increased facilities of communication which steam is giving every day, it is obvious that the distance between the two countries will be materially diminished, and that the whole resources of the British Government can be brought to bear in India more easily than they ever could before. So, again, in India itself. The great system of railway communication to which I shall hereafter advert, which at present is only commenced, will in a short time bring together the entire Peninsula, and the troops there will then be efficient in many quarters almost simultaneously. Then, again, we have to remember, and it is not always borne in mind, how large a part of our dominions in India is composed of provinces, which have been acquired within a comparatively recent period, and which therefore have hardly had time to become consolidated and incorporated under our rule. Within the last twenty years we have added the Punjab, Scinde, Pegu, Nagpore, and Oude, and it is obvious that a province newly acquired by force requires a much larger garrison to defend it than it is likely to require twenty or thirty years afterwards. It is on these considerations that I rely, when expressing a hope that the present increase of military expenditure will not be of a permanent character.

But the House will naturally wish to know what, according to the latest returns, is the present strength of our forces in India as compared with recent years. On the 1st of January, 1857, the European troops in India were 45,522; by the last returns they were 91,590. The Native troops on the 1st of January, 1857, were 232,224; by the last returns they were 243,956. So that the European forces in India have been doubled, and the Native troops, notwithstanding all that has taken place, have been of necessity rather augmented than diminished, But it is necessary to say that many thousands—I am not prepared to state the precise number—who appear as part of the Native army, are local levies, raised to meet the emergency of the moment, and should not be considered as forming a portion of our permanent force.

Sir, I come now to an important branch of my subject—the present state of the Indian debt, and the manner in which it has been affected by late events. I may mention, for the sake of being intelligible, that, when I speak of the Indian debt, I include not only the home debt of India, but all debts bearing interest for which the revenues of India are liable. It is common to hear of the rapid increase of the Indian debt, and perhaps the House may not be aware that, however great the increase of that debt absolutely considered maybe, yet relatively—which is a fairer way of testing it—to the amount of the revenue upon which it is a charge, there has been, up to the year 1856–7, no increase whatever since the beginning of the century. That can be shown by a few plain figures. In 1800 the debt was £16,600,000, and the revenue £9,200,000. In 1810 the debt was £29,200,000, and the revenue £16,600,000. In 1820 the debt was £37,000,000,and the revenue £21,300,000. In 1830 the debt was £45,000,000, and the revenue £21,900,000. In 1840 the debt was £33,800,000, and the revenue £19,500,000.* That reduction of debt was due to the application of the commercial assets of the Company, for the purpose of paying it off. In 1850 the debt was £51,900,000, and the revenue £25,800,000; while in 1856–7 the debt was £55,900,000, and the revenue £33,300,000. The House will see that only once in all that series of years has the debt exceeded the amount of two years' income. It was below that amount at the be- *The decrease in the revenue observable between 1830–31 1840–41 is nominal, arising from the use of high rates of exchange in calculating the Indian currency at the former period, and the adoption in the Parliamentary accounts of a lower rate, equal to 1s. 10½d., on the introduction of the Company's rupee. ginning of the century; it was below it in 1856–7; and it is remarkable to see, generally speaking, how nearly the proportions of the two remain the same. Since the late outbreak the state of affairs has become altered. The Indian debt, including every liability, bearing interest, of which up to the present time we are aware, but not including an item to which I shall refer by-and-by, is £74,500,000. Of that amount the home debt is £15,000,000, and there has been raised in India £59,500,000. The amount so raised in India is held by Natives in the proportion of two-fifths to three-fifths held by Europeans. From the total amount of the debt I have omitted the item of deposits, amounting to £7,000,000, because these bear no interest, and part of them will never be claimed. I may advert here to a measure, sanctioned in the course of last year, for allowing the payment in England, by bills upon the Government of India, of the interest of the Indian debt. That measure was adopted at the instance of the Chamber of Commerce in Calcutta, and of mercantile bodies here. It was recommended to us in strong terms by the Government of India, on the ground that it would tend to increase the value of our securities. Now, when that measure is criticised, it is common to say that it will have the effect of enabling the Natives more readily to get rid of their investments in our debt, and inducing Europeans to take their place, and that thus the Government of India will lose the hold which it at present possesses upon the interests and fidelity of Native capitalists. I do not believe that, even as a matter of argument and theory, that criticism is well founded. I rest my answer to it upon this—that whatever brings the competition of Europeans into the Native market necessarily has the effect of raising the general credit of the Government, and therefore of increasing the value of its securities to the Natives who hold them. Nothing will induce Natives to lend their money freely to the Government so much as seeing that Englishmen resident in this country have confidence in Indian securities, and the contrary opinion would undoubtedly produce distrust in the Native mind. But, to turn from theory to what has actually happened, we find that, though the time during which this measure has been in operation has been very limited, the proportion of Native subscriptions, so far from diminishing, has rather increased. Between the 2nd of June and the 21st of December last, a period of about seven months, the European subscriptions amounted to £3,229,000 and the Native to £2,412,000, a good deal more than the general proportion which has hitherto existed—namely, two-fifths for Natives to three-fifths for Europeans. I may here mention the total amount of debt incurred by the Government of India since the 1st of May, 1857; in other Bards, since the outbreak of the mutiny. There has been raised in India by the 5 per cent loan £8,712,000, the home bond debt has produced £3,105,000, and the debenture loans £7,997,000, giving a total of £19,814,000. Now, reverting from the present to a period more remote, it is worth notice how materially, in the course of the present century, the credit of the Indian Government has improved. In 1800, upon the comparatively small amount of debt which then existed, the Indian Government had to pay 8½ per cent. The average amount now paid upon the whole of the present debt is little more than 4½ per cent. It ought to be remembered, when we are considering the question of the future solvency of the Indian Government, that its debt of £74,500,000 has been incurred in what has been little else than one constant series of wars. There was the war in Mysore, at the close of the last century; there were the Mahratta campaigns; there was the Pindarrie war; the war in Nepaul; the first Burmese war under Lord Amherst, which alone cost £15,000,000; the Affghan expedition, said to have cost £20,000,000; the wars in Scinde and Gwalior, the two Punjab campaigns, a second Burmese war, and now we have the present insurrection. I shall not go into the question how far all of these wars were inevitable; but I say that, when we compare the amount of liability incurred in India, in consequence of that almost uninterrupted succession of wars, with the financial difficulties of almost any European State, after half a century of peace, our only wonder will be, not that the Indian debt has reached its present amount, but that it is not a good deal larger.

Let me now, Sir, call attention to a topic which ought to be considered in connection with this subject—the position of the English Exchequer in regard to Indian debt. I am aware that the uniform policy of the Parliament and the Government of this country has been to decline all responsibility in regard to the debt of India, and to bold it as a charge only on the Indian Exchequer. Dealing with the present state of affairs, I may say at once that I am not going to recommend any change in that policy. I know well the alarm which any such proposition would create, and I know the refusal which it would inevitably receive. But this is a question which will recur again and again, and which will have to be considered in the future as well as in the present. Observing, then, that I do not speak with any reference to practical action at present, I would ask the House seriously to consider how far, looking at the fact that more than £50,000,000 has been contributed in aid of the Indian Government by English capitalists, it would be morally possible for this country altogether to repudiate the Indian debt without shaking its own credit? I would likewise ask the House to bear in mind that, if ever the time should come when the established policy of Parliament in this respect should undergo a change, and when an Imperial guarantee should be given for these liabilities, that guarantee would operate to reduce the interest paid upon the Indian debt by not less than £750,000, or even £1,000,000, which, formed into a sinking fund, would go far to pay off the whole. At present, India on the one hand is paying a great deal more in the way of interest than with the assistance of this country she need pay; and we, on the other hand, are apt to consider that, as we have nothing to do with it, the amount is indifferent to us, though, after all, it is a matter of doubt whether practically we are so entirely free from all responsibility as we suppose. I will ask the House now to consider what is the amount of burden to which the people of India and the people of England are relatively subjected by their debts. You may take two tests by which to ascertain that. You may take first—and probably it is the fairest test—the ratio which the interest paid bears to the total revenue. That interest in India is about £3,500,000 on an income of £33,000,000, or little more than ten per cent; in England the proportion of interest on debt to the gross revenue is nearly two-fifths, or forty per cent. This comparison is taken, too, at a most unfavourable time, when England has been enjoying an almost unbroken peace of forty-five years; whereas in India there has been nothing but a series of wars. Looking at it in another light—the pressure on the population—while the amount per head on the 130,000,000 of people included in the area of our Indian taxation is not more than 14s., in England it is £28 per head. I do not mean to compare the material resources of the two countries; I know well the difference between them; but, looking to the future as well as the present, wherever you have what you have in India, a fertile soil and an industrious people, I say you have there the material out of which national wealth is produced. Therefore, when we are told of the comparative poverty of the Indian people, it is a fair question to ask whether the continuance of that comparative poverty is necessary.

I wish now to show how far at the present time, and for some time past, the development of the material resources of India has proceeded, and I cannot but think that upon that subject the public mind is not well informed. I take the last twenty years, beginning from 1837, and I divide them into periods of five years each. Taking the aggregate imports and exports for that time, I find that, in the first period of five years ending 1842, the aggregate imports into India were £43,500,000; in the next period, ending 1847, £62,500,000; in the next period, ending 1852, £69,500,000; and in the last period, ending 1857, £101,500,000. That estimate is taken before the commencement of the insurrection, so that it cannot be affected by the import of increased supplies for the large reinforcements of European troops which have lately been sent out. Taking next the aggregate exports from India, I find that they were, in the five years ending 1842, £63,200,000; in the five years ending 1847, £83,378,000; in the five years ending 1852, £91,000,1100; and in the five years ending 1857, £112,700,000. We have, therefore, these plain general results, that within the last twenty years the exports from India have nearly doubled, and the imports into India have more than doubled. I have not been able to ascertain as exactly as I could have wished the comparative rate of increase in the exports and imports of the various European nations, but I believe I am not wrong in saying that the increase in the case of India during the last twenty years is in a greater ratio than that of any European nation except England and France. It would not be just to compare India in this respect with the United States, or with the larger British colonies, because you have there a constant increase of population due to emigrants from Europe. Take another indication of commercial progress in India—the tonnage of vessels entered inwards and cleared outwards at the various ports of that country during the same period. I find that this aggregate tonnage in the five years ending 1842 was 10,700,000 tons; in the five years ending 1847 it was 12,700,000 tons; in the five years ending 1852 it was nearly 16,000,000 tons; and in the five years ending 1857 it was just 19,000,000 tons; showing an increase of nineteen to ten, or nearly double, in the twenty years. These returns, I may add, include the coasting trade. I select another test, not so general and comprehensive in character, but selected because it bears upon a question upon which a great deal is said at present, the amount of cotton sent from India to England. In the five years ending 1842, the amount was 352,000,000lbs.; in the next five years, 358,000,000lbs.; in the next five years, 494,000,000lbs.; and in the five years ending 1857, 863,000,000lbs.; showing an increase of export in that very item of cotton about the deficiency of which so many complaints are made, in a proportion not less than five to two. Going a little more into detail, and taking a more limited and recent period, the annual average increase of imports in the last five years into the Bengal Presidency has been £956,000, and of exports £445,000. During the last five years the annual average increase of imports into the Bombay Presidency has been £959,000, of exports £518,000. Taking the town of Calcutta alone, and this perhaps is the most remarkable instance, I find that the imports there were in 1852–3, £6,387,000; and in 1856–7, £13,959,000. The imports into the town of Bombay have increased from £7,000,000 in 1852–3 to £11,732,000 in 1856–7. Summing up this part of the case, and taking all the tests together, I find that the trade of one capital has more than doubled in five years, and that of the other increased by one-half. The cotton supply has increased at a ratio of five to two: the tonnage and the exports have nearly doubled, and the imports have more than doubled. With these results, therefore, we are justified in saying that the producing and mercantile interests of India have not been so entirely neglected under the Company's administration as it has been sometimes the custom to assert.

Now, Sir, from the question of past increase in trade, I proceed to consider what is to be done for the development of the future trade of India, and first of all I shall notice the extent to which, and the system under which, public works are being carried on in India. We are often asked when we speak of an average annual expenditure of £2,000,000 upon these works, what result have you to show? In some degree the figures which I have quoted will supply an answer to that question, but with regard to the much larger portion of these works we are in the position of the cultivator at this period of the year—the seed is sown, but the crop is not yet above ground. Not only has Government expended of its own revenue £2,000,000 yearly for many years past, but it has encouraged private enterprise on an even greater scale. To deal first with that class of works upon which the largest expenditure has been incurred, I will give you a few figures with regard to the railways. The length of lines projected and sanctioned is 4,847 miles; the length in course of construction, 3,038 miles; and the length opened for traffic is 559 miles. In the course of the year, there will be 747 additional miles opened; in 1860, 279 miles more; in 1861, there will be in addition 2,076 miles opened: thus, in three years more, if our calculations are verified, which I have no reason to doubt, more than 3,600 miles of railway will be open. I think that this state of things, showing as it does that, for every mile of railway open, there are six miles under construction, justifies the statement which I made to the House the other night, that we are now arrived just at that very point of time, when the outlay on these works is the greatest, and the return upon them is the least. Now, let us see what is the amount of liability incurred by the Government of India on account of railways. The land is given by Government, and a guarantee of interest in almost every case, at the rate of 5 per cent, is also granted. The total capital guaranteed is £39,731,000. Of that amount £19,221,000 Las been paid up. We may say in round numbers, therefore, that the total amount of our liabilities for these guarantees is nearly £40,000,000, and that one half has been paid up; that the total amount of interest for which we shall become liable is £2,000,000, and that at present the interest paid is £1,000,000. But I do not believe that those liabilities can be regarded in any sense as burdens upon the Government of India. Setting aside entirely the enormous indirect advantages which will eventually accrue to the Government from opening up the country, I believe it will be found that on the working of the lines themselves there will be rather a gain than otherwise. Lord Dalhousie, the author of the railway system in India, to whose energy and talent it owes its development, has recorded his opinion that, when once a line is finished, the Government will probably not in any case be called upon to pay interest upon these guarantees—that is to say, his estimate is that, in every case, the profit upon these lines will exceed 5 per cent. I have endeavoured to ascertain what materials we possess for forming a conclusion upon the subject from the experience we have. Those materials as yet are very scanty. In the Bengal Presidency 121 miles of railway, which are open from Calcutta to Raneegunge, pay 7 per cent. By the last returns the traffic upon that line has nearly doubled since 1856, though it must be admitted that that increase is in great measure due to the conveyance of troops and military stores. In Bombay, upon 88 miles of the Bombay and Baroda railway, which have been opened, the returns are 4½ per cent. With respect to the Presidency of Madras I do not know what the returns are; but it is fair to bear in mind that we are not at present in a position to judge of what the receipts may ultimately be; because, when only a small section of a line is finished, and it ends abruptly, perhaps, in a jungle, instead of having an important town for its terminus, we cannot expect that the traffic will be anything like what it will become when the line is finished from end to end, and great inland markets are by its means connected with the coast. On the East Indian line, the cost of construction has averaged £11,500 per mile, which is about one-third of the English average; but then the land has cost nothing. When this system of railway communication which is now being carried out shall be completed, we shall have four great arterial lines of railway, opening up the whole of India. One from Kurachee to Hyderabad will connect the Indus with the sea, opening up the Punjab and Central Asia to trade, and will continue from Mooltan, where navigation ceases, to Lahore. Another will descend from Lahore, through the North-West Provinces, down to Calcutta, and on eastward to Dacca. A third, traversing the centre of the continent, will link Calcutta with Bombay; and a fourth, with many branches, will unite Madras and Bombay, and thus open up the entire south. I have stated before that it is more important for the Government of India to complete the undertakings which they have commenced than to embark in new ones. But upon new works something, although not much, has been done. Last July a branch line was sanctioned, connecting Bangalore with Madras. Bangalore is an important military station; it stands on high table land; the climate is healthy, and it opens large and attractive tracts to settlers. In November also a guarantee was given for the formation of a line from Calcutta to Matlah, a distance of only 25 miles, which will give to Calcutta a new port, and will effect a considerable saving in time in getting to the sea. Surveys also are being commenced for trunk lines through Oude and Rohilcund by the Oude Railway Company. A line from Coringa to Berar also has been projected, and is referred to the Government of India. It will open up the cotton districts; the only objections to it are, that it will be a competing line with the navigation of the Godavery, and that the district through which it passes will be opened to the Bombay side by another line. I mention these because they are the principal works which have been brought under the consideration of the Government for some time back, and to show that what could be done has been done to facilitate the advance of works already in progress. But any difficulty that there may be in that respect does not rest, I apprehend, with the Government, but with the companies, who do not find it easy, in the present state of the market, to obtain the necessary funds for carrying on their works. With regard to other public works, not railways, I will mention the most important lately sanctioned:—First, the Madras Irrigation Company has received a guarantee of 5 per cent upon £1,000,000; second, at Madras a pier has been ordered at a cost of £103,000, which is to be completed in two and a-half years; third, at Kurachee, works costing £140,000 are sanctioned for improving the harbour, the period for completing which is spread over three or more years; fourth, plans have been directed to be prepared for improving the harbour of Sedashevaghur, south of Goa, and connecting it with the country inland; fifth, a plan for rendering the Godavery navigable for a distance of 300 miles, is referred, with recommendation, to the Government of Madras; and, sixth, there has been a considerable outlay upon small steam cargo-barges and tugs for the navigation of the Ganges and the Indus-fifteen vessels in all. I do not mention smaller undertakings, which, though of local importance, are of no general interest; but there are two plans which have been taken in hand by the Government which are of so important a character that I am bound to call attention to them. One is the establishment of telegraphic communication between this country and India. After the failure of the experiment with the Atlantic cable, it was impossible not to feel that the undertaking presented a greater amount of difficulty and a greater risk of failure than had been at first anticipated. But, whatever the difficulty or the risk of failure, still the object appeared to the Government to be one of so much importance, and the saving that would be effected in every way so great, that we thought it to be our duty to incur that risk, and the consequent expenditure. A guarantee of 4½ per cent upon a capital of £800,000 was accordingly given, and operations were begun at once. I am told that the cable is nearly ready, and the promoters anticipate that they will be able to lay it as far as Aden by June next. Beyond Aden, where the line touches the southern coast of Arabia, which is inhabited by wild tribes not under any recognised government, the difficulty of the undertaking is materially increased. We have, however, communicated with the Bombay Government, and directed them to offer all the assistance in their power. But we do not rely upon a single line. The Turkish Government have initiated a line of their own from Constantinople to Bussorah, and, either the Indian Government on its own account, or some private company assisted by it, will undertake the completion of that line on to Kurrachee. In this way the risk of interruption will be reduced to a minimum, a duplicate line being established throughout. The other scheme to which I have referred, and which has received the sanction of Government, relates to the supply of civil en- gineers for the Indian service. Hitherto civil engineering in India has been carried on exclusively in one of two ways. Either military engineers—themselves not always conversant with civil duties, have been taken from their professional pursuits for that purpose, or engineers have been engaged and sent out from England, arriving in India, for the first time, comparatively late in life, and having there, owing to the difference of climate, of the material, and of the class of labourers employed, a great deal to learn. It has been found necessary too to pay these gentlemen at exceedingly high rates, because they had to be remunerated, not only for the work they did, but also for the interruption of their professional career at home. Both these systems having been found defective, I propose now to create a special engineering service, though by no means excluding either the assistance of military engineers, or of engineers specially engaged as at present, should such still be required. The appointments will be open to all young men of a certain age. They will be required to have passed through a certain practical training here, and they will be sent to India on a small salary to acquire further instruction in their duties. They will then be regularly taken into Government employ for life, with pay and pensions on the same general scale, probably, as are given to other uncovenanted servants. I believe that the effect of this plan will be to produce a considerable saving of expense, and certainly an increase of efficiency in that service. There is no doubt we shall he able to find work for those whom we send out; and one advantage of the proposal, which will be shortly laid before the public, is that it will not involve on the part of the Government any permanent outlay, it will not involve the establishment of any college or institution, but it can be discontinued, if necessary, almost at a moment's notice, without giving any one a ground of complaint or creating any permanent charge.

I am not willing entirely to pass from this subject of public works without alluding, however briefly, to the amount of return which has been obtained from some of a particular class of works—I mean irrigation works which have been already completed in India.

The Coleroon anicut, opened in 1836–7, cost £21,700; the average net profit yearly for sixteen years was £25,700—about 120 per cent. The Godavery anicut was opened in 1852–3; cost £203,000; caused increase of revenue by £44,000; and in a year of drought saved produce to the value of £4,000.

I do not mention the Jumna nor the Ganges canals, which have been opened about a year and a-half, the amount of profits from which is very great, but I am not in a position now to state it exactly. Taking the small examples, we have one canal in Scinde, the Fordwah, of eight miles in length, which cost £2,700, and paid £5,000 in the first year. Another, on the Fulailee, paid 58 per cent of its cost the first year; and a third, which cost £3,600, produced £5,000 in the first twelve months. Of course, in quoting these instances, I do not mean to contend that all works of irrigation will be equally productive. I have no doubt that on these works, as on all others, money may be thrown away if they are not constructed in a proper manner; but these instances show—for they are not necessarily exceptional instances—that, if the sites for such works be judiciously selected, and the works themselves be executed by engineers who understand the country, there is a reasonable probability of some of them, at least returning so enormous a profit, as not only to cover their own cost, but to repay the expenses of others which may be less successful.

I feel that I am trespassing upon the patience of the House, but I cannot avoid, in a statement such as I am now making, touching upon a question which is of hardly less interest and importance than that of public works, and which in an equal degree affects the financial resources of India—I mean the question of land-tenures, whether as applied to colonization by Europeans or to the occupation of land by Natives. It is no light matter to attempt to deal, however small the changes introduced, with the customs of more than 130,000,000 of people, those customs varying greatly in each Presidency, and varying to some extent in every district. All those who have any acquaintance with Indian affairs are familiar with the three great systems of land tenure which prevail in that country. There is the zemindaree system in Bengal, under which there exists a class of large landholders, with occupiers under them, to whom certain rights are secured; there is the village-system in the North West Provinces, under which the whole community is responsible to Government for tile tax; and the ryotwaree system in Madras, where the tax is collected from individual landholders. To attempt to alter any one of these systems, to change one for another, would be, I believe, an impossibility, or, at least, a perilous attempt. Whether they are good or bad those systems of tenure exist—they are rooted in native habits and ideas; and what we have to do, I apprehend, is, taking these tenures as they exist, or rather starting from them as from a foundation on which we may build, to give to the cultivator, under each of them, the utmost amount of security which they admit of. There is one class of lands, however, with which the State has power to deal, and is not hampered by any arrangements formerly existing. I mean lands which are unoccupied and in the hands of Government. I believe the House will feel that it is most important to open these lands to European colonization. The extent of them is more limited, I believe, than is generally supposed, but in Assam, in the Sunderbunds, in the Neilgherries, in Gurwhal, and in various parts of India, they exist to a considerable extent. Hitherto the custom of the Government in India has been to give allotments of these lands upon easy terms for long periods, but those periods have never extended to perpetuity. The wish of Europeans, who apply for these lands, we find to be to obtain the fee simple; in fact, to possess them for ever. They are willing to pay a sum down, but they ask on that condition to have a perpetual term, free from future payments. That subject was considered here, and the desire was considered to be reasonable, and, if the House will allow me, I will read an extract from a despatch, dated December 22, and addressed by me to Lord Canning:— In such districts, where large tracts of unreclaimed land are to be found absolutely at the disposal of the State, rules have already been promulgated under which settlers can obtain allotments on very easy conditions and for long terms of years; but in no case, I apprehend, extending to a grant in perpetuity. In such cases, I desire that you will take such steps as may seem to you expedient for the purpose of permitting grantees to commute the annual payments stipulated for under the rules (after a specified period of rent-free occupancy) for a fixed sum per acre, to be paid on possession of the grant. In all other respects, and particularly in regard to the conditions which provide for a certain proportion of the land to be cleared and brought under cultivation within specified periods, the rules will of course remain unaltered. That is to say, what we propose is that the tenant, after certain improvements are made, may, upon the payment of a sum of money down, become the absolute pro- prietor of the soil. That is almost the first introduction into India of a freehold tenure. No doubt a new system will require careful watching. There may be difficulties to overcome at first, but I am confident that such a compliance with what is the universal demand of Europeans, who desire to settle in India, will lead to a great increase in the investment of British capital in that country. In Bengal and the Northern Circars there exists a perpetual settlement by which the landowners are free from all demands except the payment of a fixed annual sum. In such cases it is clear that there can be no loss to the revenue, if these annual payments are commuted for a sum down, and that sum applied to the extinction of debt. The effect of the commutation will be to give to the landholders possession of the land for ever, free from all future charge. In any arrangement of this kind it will be necessary that existing sub-tenures and rights of all descriptions shall be treated with consideration. We have pointed out, in the despatch from which I have already quoted, to the Indian Government the advantage of this process. We have pointed out the policy of giving a feeling and position of ownership to those who are now, in some sense, tenants of the State. We have indicated the wisdom of giving the Native landowners a direct interest in the permanence of our rule, because it is clear that, where a commutation of this kind has taken place, and a perpetual exemption from future taxation on account of land has been given to the landholder, he cannot reasonably expect that such immunity, so acquired, will be respected by any Government but that with which it has taken place. We have not thought it right to go so far as to instruct the Government of India to carry into effect this process of commutation, but we have distinctly indicated that our views were favourable to it, and invited theirs in return. In those parts where the settlement is not perpetual, but only for a term of years, the difficulties in the way of a commutation of this kind are, although perhaps not insuperable, at least much greater. Where the settlement is perpetual, the Government has no power to demand increased payments, and so there will be difficulty in commuting the annual payment; but, where the tenure is for thirty years, at the end of which the State has the power to increase the land-tax, we should, by allowing redemption, preclude ourselves from gaining by future improvements. There is one subject that was partially adverted to the other night which deserves mention upon this occasion, because it concerns the tenure of land—I mean the Enam inquiries going on in India. I need scarcely tell the House what Enam means. The word means bounty, and is a term applied to grants of land, or rather exemptions from land-tax, made by our predecessors in power, as acts of favour or rewards for service. These Enams vary much as to the rights they convey. Some are perpetual and unlimited; others—the more numerous class—are limited to a family, and sometimes depend upon the performance of certain duties. By these grants a large portion of the land revenue has been alienated; but, besides that which has been so alienated by the act of Government, there have been many forgeries of grants, and such frequent disputes of title have arisen, that thirty years ago inquiries commenced to be instituted into the subject, with the view of ascertaining which of these grants were genuine, and of resuming or cancelling those which were not. At the time this inquiry was commenced, much less was known by Europeans, official or unofficial, of the system of land tenures in India than is now known. The execution of the work was often intrusted to officers of no great experience, and I do not deny that, at that early period of our dealing with this matter, many harsh and many unwise acts were done. In Bombay, in 1843, a Commission was appointed for the purpose of bringing these proceedings into something like a regular form, and of expediting them by special machinery. Charges were made last year, before a Committee of this House, affecting the manner in which the objects of that Commission had been carried out. Now, I am not about to enter into a vindication of the proceedings of the Commission; but, as these charges have been publicly and extensively made against the members of the Commission, and have no doubt produced an impression on the public mind, I think it only right to state that Colonel Cowper, who is at the head of that Commission, denies in the most unqualified terms many of the charges brought against him. He says that, not merely in matters of opinion, on which every one, of course, has a right to form his own judgment, but that, in matters of fact, the proceedings of the Bombay Commission have been very greatly misrepre- sented. I think it only right, as he is a public officer, and has no other means of denying these charges, that this statement should be given to the public. At the same time, I wish to guard myself against pronouncing any opinion on the question. The evidence is not yet heroic me, and until it be, it is impossible that I should do more than make the statement which I have now made. I believe it has been rumoured that steps have recently been taken in this country to revive the suspended action of the Bombay Commission. Now, that is not the case. No instructions have been sent out from home upon that subject, and no report has arrived from Bombay. But I believe it is true that steps are now being taken to arrange something in the nature of a compromise between the Government and the holders of these "Enams," by which their title to the lands will be confirmed upon the payment of a moderate yearly sum. I have received this statement only in an unofficial form, and I cannot therefore speak positively as to its truth: but I believe it to be true. Now I come to the case of Madras. There has been much controversy in the country, and complaints have been made against the late Court of Directors with respect to the despatch sent out by them to institute an inquiry into the tenures of land in the Presidency of Madras; but I submit that for that despatch I am as responsible as the late Court of Directors. It was sent out on the 1st of September last, but, as I stated to the House the other night, on the appointment of Sir Charles Trevelyan as Governor of Madras, I thought it right on behalf of Government, to inform him that the inquiry would be suspended, in order that he might have an opportunity of dealing with the whole question as he thought best. I may now mention that I have his authority for saying that, when his appointment took place, I offered to him, if he thought the inquiry was inexpedient at the present time, or embarrassing to his administration, either to suspend it or to put an end to it altogether. No man in India, I believe, understands better than Sir Charles Trevelyan this complex subject of land tenures. He was one of the earliest of those who were engaged in its investigation. I believe the inquiry can be placed in no better hands. Sir Charles Trevelyan, without hesitation and without delay, gave his opinion that the inquiry ought to go on, but he said that care must be taken to guard it from the abuses which had occurred in former cases. He believed that to put an end to it would be a mistake, and that, if properly conducted, it would be the means of producing great benefit to the people, and would give additional security and permanence to private property. There has been a good deal of misrepresentation of the motives which have led to setting on foot an inquiry of this kind. The popular notion is that the only object of the Government is to increase the revenue by seizing the landed estate of any man who happens to have a flaw in his title. Now, the real fact is that the main object of this inquiry is, not to improve the revenue, not to disturb titles, but, on the contrary, to confirm them, whereby the value of the land will be greatly enhanced. Every landowner, as matters now are, is liable to have his title questioned upon succession, and the value of his holding is depreciated by the consequent uncertainty. Our object is to give him what in this country would be called a Parliamentary title, to give him a title as to which no question or controversy can hereafter arise. Further, a revenue survey of the whole Presidency is at this moment in contemplation, with the object of fixing the assessment for a term of years instead of leaving it fluctuating from year to year as at present; but, until the survey has been completed we cannot assess, as we have no means of deciding what land is free from assessment. What are you to do in such a case? If you postpone the survey, you postpone the period at which fixed assessments are levied, and prolong, in its worst form, that uncertainty as to the amount of the payment for which the cultivation is liable, which is the greatest hindrance to improvement. You merely increase the difficulty by such postponement. Of course it is easy to say you ought to confirm all the titles of all the lands which are "Enam;" but obviously, to confirm indiscriminately every title which anybody might claim as being an "Enam," would be to hold out a premium to fraud. I have heard of a paper being brought to a resumption officer by a person who represented that it was a title to land which had been given by the King of Delhi 200 years ago; but, on examining that paper, it was found that it bore the mark of that very year, and was, in fact, not six months old. It is easy to conjecture how many frauds of that kind might be attempted, if the suggestion to which I have alluded were adopted. The question, then, comes to this:—You ought to confirm these titles; you ought to do it without delay; you ought not to do it indiscriminately; and it follows that in some form or other you must inquire into their validity. The real question is, what precautions should be taken against harsh and arbitrary proceedings. That is a question which has been, and is still being, deeply considered, and one of the first objects of the Governor of Madras will be to report upon the best manner of dealing with it. I apprehend that the general principle to be adopted should be this—to respect absolutely undisturbed succession for a certain period of years. In the next place, not in any case, as a rule, totally to resume any "Enam," even where the title is found to have been originally acquired by fraud, unless the holder has been a party to that fraud. Of course, where the holder has been a party to such fraud, he does not deserve consideration, or command sympathy. Where the title is invalid, not by any act of the holder, that fact would probably form the natural basis for a compromise between the holder and the Government. On the condition of a moderate payment, he might receive what would be in future a title which could not be disturbed. Lastly, there is a question which will have to be considered necessarily rather in India than here. I am told that scarcely any of these "Enam" tenures are unconditional holdings. The great majority are limited tenures; that is to say, they are held subject to a contingent remainder to the Government in certain cases, usually in case of failure of heirs male. That sort of reversional claim is of very little value to the Government, but at the same time it is a great annoyance, and a source of discontent to the holders. I believe it will be in our power to confer material benefit on the holders of these "Enams," if these claims, so comparatively worthless to us, and so annoying to them, can be commuted for the payment of a sum of money, and if all "Enams" recognized as genuine are made tenable in perpetuity.

There is only one other subject connected with land tenure on which I will touch briefly. The House is possibly aware that great dissatisfaction has been produced in many parts of India by the manner in which estates have been sold in consequence of decrees of the Civil Court. The process, I believe, is generally this:—An es- tate is, in most parts of India, on the death of the landowner, divided among all the children, or, what is not uncommon, is held jointly by all of them. By that subdivision naturally each generation becomes poorer than that which preceded it. They aim at keeping up appearances; they become encumbered; they borrow at an enormous rate of interest; then follows a suit, and the estate is sold. The old proprietors often in such cases become tenants on the estate which they owned. The new owner is a stranger who does not command the sympathy of the people. From this class, in the late disturbances, Government received no help. Indeed, the new owners were, in many instances, driven out by the people, who sympathised with the old chiefs. Now, strictly speaking, there is nothing in this change of proprietors beyond the ordinary process by which lands pass from those who are poor to those who can buy; but neither in India nor in England can the question be regarded as entirely one of political economy. There is no doubt that these large and rapid changes have been extremely unpopular, and there is no doubt that they have weakened the authority of the British Government. We have, therefore, recommended the Government of India to consider whether any restriction can be placed on this process. Two methods have been suggested—one, that of limiting the amount for which sales should take place, so that an estate shall never be sold for less than a certain per-centage on its value, the other of empowering the persons against whom decrees for sale have been made, to appeal from the subordinate to a higher court.

Reverting once more to the actual financial position of India, it is impossible to conceal from ourselves the fact that a large deficit exists, and is likely for some time to continue. In the ordinary state of things, we are in the habit of receiving funds from India by drawing bills on the Government of that country for the use of the Indian Government in England. From that expedient we are now cut off. We cannot draw on the Government of India, as it requires all its revenue for its own necessities. The Indian Government is, in fact, a borrower; it has a five per cent loan now open; and all home disbursements, therefore, must be provided for at home. Indeed, we do not know whether the process may not be reversed, and whether the Indian Government may not draw on us. This was the case eighteen months ago. In the autumn of 1857, the Government of India did draw for £1,000,000, which was shipped from this country in bullion. We have no reason to expect that a similar demand will be made now; but, from the uncertainty of the present state of affairs, it is prudent to have a margin above actual requirements. Now, what are the disbursements in England on account of India? The estimate of their amount from May 1, 1859, to April 30, 1860, is £6,151,680. It has been the practice of late years always to have in hand a cash balance of £1,000,000; the total requisition, therefore, is £7,151,680. The details of this sum, excluding on the one hand all receipts, and on the other all payments, on account of Indian railways, these being understood to balance each other, are these:—For dividends and interests, £1,278,449; payments on account of troops and stores, postal arrangements, &c., £2,465,671; for civil service annuities, absentee allowances, furlough and retired pay, and advances to the Provident Funds, Civil and Military, £1,439,480; for bills of exchange, remittances, and miscellaneous, £263,400; for charges of home establishment, civil, military, and marine pensions, outfits, and recruiting charges, £704,680. To meet these items of expenditure, our assets are, a cash balance on the 1st of May, 1859, estimated at £78,961; Exchequer bills and bonds in hand, £1,598,900; bills of exchange on India, £36,000; remittances from India on account of supplies through the Lords of the Treasury, £60,000; the balance left deficient is £5,377,819. Considering the amount of this deficiency, and considering also the possibility, though I trust it is only a bare possibility, of our being called on within the year to assist the Government of India, I hope I shall not be considered unreasonable in asking this House to sanction a loan of £7,000,000. In respect to the manner of raising this loan, we propose to follow strictly the precedent of last year. The sum will be raised on bonds or debentures secured on the revenues of India alone. We propose to confine the liability to those revenues; and, notwithstanding the magnitude of the present deficiency, we think that, looking to the chances of a speedy restoration of peace, and to the certainty that, with peace, public credit will be restored, there will be no need to make application for another similar loan in this country. On the subject of the Indian revenue alone being made the security for the loan, I addressed a despatch to the Government of India on the 19th of January last, a passage from which I will read:— While the extraordinary crisis through which you have past has fully justified the resort to extraordinary measures for raising the requisite funds to meet the emergent military expenses which had suddenly and unexpectedly to be incurred, at a time when the revenue was as suddenly and unexpectedly diminished, I must impress upon your Government the great importance, on the resettlement of India, of your again, as in time past, depending solely on your local resources for the ways and means required for the conduct of the Indian Government, both here and in India. Every effort should be made so to provide for the wants of India that the loan for which Her Majesty's Government is about to obtain Parliamentary sanction may be the last required to be raised here. I have now, Sir, endeavoured—I well know how imperfectly, and I also know at what length—to describe to this House the financial state and requirements of India. I have shown you what is the actual financial state of that country—I have indicated its principal sources of revenue—I have touched upon its burden of debt, past and present—I have dwelt on the rapid increase of Indian commerce in late years, and I have attempted to shadow forth and indicate the means by which that commerce may be further developed and extended. If I have succeeded in conveying to the House the impression that exists in my own mind, I should say that the present state of India is such as to require and call forth the utmost vigilance, but not such as to give cause for despondency. I do not deny that the present embarrassments are grave. I do not affirm that we have seen their end; but I do say that any difficulties that may yet have to be surmounted are not greater than peace and good Government may enable us, in a few years, to surmount. The permanent burden is that to which alone we need look when considering the future; and I think I have shown that the permanent burden on the resources of India is light when compared with the future amount of these resources if duly developed. Much has been done, and much is still doing, to open India to the enterprise of England and the world. Every year the distance between the two countries is lessened. Every year the interest felt here in Oriental affairs is increased. And, though it may be vain to expect that this House will ever undertake a minute and continuous supervision of Indian affairs, yet its general supervision will be more effectually exercised, under the new system of administration, than it has been hitherto. I believe that supervision will do much directly to remove abuses and to stimulate improvements; and indirectly it will do much more; it will impress on the minds of Englishmen, serving in the East, the fact that their service is performed under the eyes of their own countrymen; it will hold out the hope of remedy for wrong suffered, and of punishment for wrong done; it will call forth, as they have never yet been called forth, those characteristic qualities of English statesmanship, that practical sagacity and administrative energy, which, throughout the long and varied course of our national existence, have always hitherto controlled fortune and commanded success.

The noble Lord, whose Notice on the Paper was "Bill to enable the Secretary of State in Council of India to raise money in the United Kingdom, for the service of the Government of India," sat down without making any Motion; but on cries of "Move! move!" the noble Lord said that, instead of the Motion on the Paper, he would beg leave to move. That this House will To-morrow resolve itself into a Committee to consider of enabling the Secretary of State in Council of India to raise money in the United Kingdom, for the service of the Government of India.

Question proposed.


said, he had wished to make a few observations to the House, but he thought that the fairest and most obvious method on this, as on other matters of a similar nature, would be to take no discussion that night, but to postpone it until the following sitting.


said, he wished to inquire of the noble Lord whether lie would have any objection to lay on the table of the House the despatch of the 10th of January, relating to the finances of India, since it appeared to him that the House was in considerable darkness regarding that important matter? He would also suggest the laying before the House a Return showing the expenses of the troops in various parts of India, distinguishing the cost of the officers and men; for the consideration of these subjects would form an important element in dealing with the subject of Indian finance, and assist the House in any future discussion of the question.


said, he wish- ed to know whether the noble Lord would lay on the table the papers and accounts on which he had based his statement of that evening? It was impossible for hon. Members to carry the noble Lord's figures in their beads. Another point worthy of attention was this:—The noble Lord had that night given them a statement of the revenue of India for the year 1856–7, which differed considerably from the figures contained in the official documents before the House. The noble Lord had given the gross revenue at £33,000,000 odd, whereas the published accounts laid on the table last year stated the amount at £29,500,000. Unless the noble Lord furnished hon. Members with the papers from which he derived the larger figures that he had quoted, it would be impossible for them to meet him on the ground that he had selected.


said, that notices of Motion had precedence to-morrow, and it was desirable they should know whether this discussion would proceed then, or be taken on Friday.


said, he would suggest that on so important a question hon. Gentlemen having notices of Motion for to-morrow should give way.


said, he apprehended there was no intention to offer any opposition to the present Motion of the noble Lord, because in the present state of Indian affairs and finance he could not see what alternative there was but the payment of the expenses that the war had entailed upon them. At the same time it would be impossible to go on with the discussion until the very material discrepancy between the noble Lord's figures and those of the Return presented at the end of last Session was cleared up or explained away. That discrepancy was one of between three and four millions sterling upon the Indian revenue for 1856–7. Perhaps it arose from the noble Lord quoting the gross receipts instead of the net.


said, he had taken his figures from the documents at the India House. He had stated at the outset that he estimated the rupee at 2s., whereas, in the return to which the right hon. Gentleman referred, the rupee was computed at 1s. 10½d. That might account for the difference. He knew of no other explanation.


remarked that he had seen nothing of the discrepancy to which allusion had been made. He had no doubt that if the debate were deferred till to-morrow, the noble Lord would be able to produce the figures on which he had based his statement.


said, the noble Lord, in his able and comprehensive speech, had alluded to financial and other reforms, but had not informed them whether it was intended to introduce the police system into Bengal and other parts of India.


replied that, a large scheme for the establishment of a military police in India had been sent home by the local Government.


said, he thought that unless the noble Lord furnished more information relative to the discrepancies that had been discovered they would be exactly in the same position as they were then, and they must postpone it until some other night, until the requisite information was supplied. The noble Lord had not only quoted returns different from 1856–7, but had quoted figures bearing on the probable prospects of 1858–9, from information in his own private possession, and regarding which they had no possible sort of information. No doubt the noble Lord sketched the picture from information in his own possession, but not in possession of the House; and therefore the House would be precluded going into it. The noble Lord said he would present a letter to the House written to him, stating all the results he had enunciated that night in so clear and able a manner; and if he did so, they could then proceed with the general discussion, and if not, all they would have to refer to was the speech of the noble Lord himself. He hoped the noble Lord would produce it before they discussed the second reading of the Bill, and give the House further time for consideration.


said, he could only repeat the explanation already given of the discrepancy between the two statements of the revenue of 1856–7. By reckoning the rupee at 1s. 10½d., instead of 2s. they would get a difference of several millions. [An hon. MEMBER: No, no! only one million and a half.] Moreover, the Parliamentary paper to which reference had been made was probably only an estimate, not an account of actual receipts and expenditure.


No; it is the usual annual account laid before Parliament.


said, that the accounts given that evening by his noble Friend might be relied upon as perfectly accurate.


said, he thought it would be very inconvenient as well as difficult for the House to enter on the discussion of the question of the whole finance of India on Tuesday, and upon the questions that the noble Lord had dealt with with so much ability and clearness. He could not see any objection to allowing the noble Lord to introduce his Bill, whatever the opinion of the House might be upon its merits, but it would be inconvenient to take the discussion either then or on the night ensuing, on so important a subject.


said, he believed the discrepancies alluded to might be easily accounted for, on going into detail and Committee, and he agreed with the noble Lord (Lord J. Russell), that as the subject was of great importance the House was not called upon to come to any sudden decision. The facts and statements that his noble Friend had placed before them with so much comprehension and lucidity, required to be fairly considered by the House, and on further information placed before the House the discrepancies noticed might be easily accounted for. The second reading of a Bill was the stage at which, according to usual custom, measures were discussed upon their merits. He thought that the question might be further fairly considered on Friday, but that it would be inexpedient to interfere with the routine business on Tuesday, which was set apart as a Motion day. He would suggest the adoption of this course, without at all anticipating the decision of the House upon a subject which was not only important in its general character, but important in all the details it involved.


said, perhaps the noble Lord would move that on Friday the House would resolve itself into Committee upon the Bill.

In answer to Sir ERSKINE PERRY,


said, he would lay on the table the financial despatch to which reference had been made, together with a statement respecting the loan.


said, that on the part of the Government he would willingly accede to the suggestion that the Motion now put from the Chair should be that the House do resolve itself into Committee on Friday next, which would give everybody the opportunity of asking questions, and would afford his noble Friend an opportunity of answering them.

Motion (by leave of the House) withdrawn.

Committee to consider of enabling the Secretary of State, in Council of India, to raise money in the United Kingdom, for the service of the Government of India. (Queen's Recommendation signified) on Friday.)

House adjourned at a quarter before Nine o'clock.