HC Deb 18 February 1859 vol 152 cc534-91

Order for Committee read.


Sir, I rise to move that the House resolve itself into Committee on this subject; and I may possibly save time if I now offer some explanations respecting the discrepancy between the statement made by me the other night and that contained in the Parliamentary accounts, a discrepancy which I had not then an opportunity of explaining to the House. I stated the gross revenues of India for 1856–57 at £33,303,000, and the Parliamentary Accounts for that year put them at £29,702,000. The greater part of that difference is due to the cause I mentioned at the time, namely, the difference in computing the exchange of the rupee; I took the rupee at 2s. sterling, whereas in the Parliamentary Accounts the rupee is taken at 1s. 10½d. I believe the bullion value is about ls. 10½d., but the exchange value at the present time has even exceeded 2s. It was in 1834 that the Sicca rupee was assumed at 2s,, which gave a value to the Company's rupee of 1s. 10½d.; but the value I took is nearer than any other to the actual exchangeable value at the present time. This difference of computation accounts for a discrepancy to the amount of £2,081,462. Another cause of discrepancy, which at the time I was not—and probably no other Member was—aware of, is that in the Parliamentary Accounts a considerable number of charges on the one hand and receipts on the other are not included, having been considered as not properly forming part of revenue or expenditure. I will not read the entire list, but the first item is Civil and Political charges, Contributions from Native States, Road Fund, Contingencies, &c., £357,000; Un-claimed Deposits. Public Labour, and other items, £183,000; Military charges, Sales of Rum, Malt Liquors, Miscellaneous Stores, &c., £418,000; Buildings, Roads, &c., £369,000; the total difference accounted for in this manner, is £1,519,000, making the total discrepancy £3,600,537. There is no inaccuracy in the Parliamentary accounts, notwithstanding these omissions, for as regards the balance between income and expenditure, they create no difference whatever. It is simply a question whether these items, being on one side of the account as charges, and balanced by receipts on the other, ought to appear in the account at all. I think that they ought; and I propose, after a mature consideration of the subject, that the Parliamentary Ac counts shall contain every item received and expended. As I have already stated, the aggregate difference arising from receipts being deducted from charges in the Parliamentary Accounts, instead of being credited as revenue, is £1,519,075, and the difference in computing the exchange being £2,081,462, the total aggregate difference is £3,600,537. After this explanation, I hope the House will free me from any charge of inaccuracy. There is another matter, although a small one, to which I may allude. When I casually touched upon the number of European forces in India, I used the last returns received from India, dated October. But nearly 20,000 men were sent out between June and December, and a large proportion of these would probably not have reached India in time to be included in the return for October. Therefore, in estimating the total number of English troops at the disposal of the English Government, these reinforcements also ought to be taken into account. There was no error in my statement as far as it went, but there is a larger charge for troops than would be accounted for in the statement I made. With regard to the Public Works in India, I have seen some doubt expressed whether the returns from these works were accurately given. I have since gone through the figures, and verified them from official documents, and I find they are strictly correct; and correct, moreover, in this respect, that the figures are not founded upon the calculations of engineers, which are apt to be sanguine, but upon the statements of the Board of Revenue, made in various despatches and minutes, in which it is the object of the Board not to make the total appear as large as possible, but rather to reduce the estimates sent in by their officers, which they consider as too favourable. With regard to the question put to me by an hon. Member as to the authority given to Lord Canning to raise a loan at 6 per cent, I thought it desirable not to answer it when it was first put, as it seemed to require some explanation. The state of the case is this:—Last July the Government of India thought they had cause to apprehend a more serious financial embarrassment than they had hitherto experienced, or than has, in fact, resulted; and under these circumstances they addressed to the Government here a despatch which, with the reply, I shall be prepared to lay upon the table. In that despatch they enumerated the various alternatives by which that embarrassment might be relieved, one being that large remittances should be made from this country, and others referring to the various ways in which money might be raised in India at a higher rate of interest than had hitherto been given. That was not a case of option, but of necessity. There were no means at the time of making remittances from this country to the amount that the Indian Government considered necessary, and on the 8th of September the Indian Department sent a reply authorising the issue of Treasury notes at 6 per cent, if it should be found absolutely necessary. No intimation has, up to this time, been received that this authority has been acted upon, and it is obvious that this is an expedient to which the Government of India will not willingly have recourse, unless under circumstances that leave it no option. The rate of interest hitherto paid by the Government of India has not been nominally above 5 per cent. I say has not been "nominally" above 5 per cent, because in point of fact it has been a good deal more. The 5 per cent loan is about 92. Of course no one will subscribe to that loan at par when he can buy into it at 92; and the operation is, that 4 per cent paper, which can be bought at 82, is allowed to be paid in with an equivalent amount of cash into the 5 per cent loan. That is to say, any person is allowed to pay £1,000 in 4 per cent paper, and to get 5 per cent for it, provided he also pays in £1,000 cash. The effect is that, in consideration of getting £1,000 cash at 5 per cent, the Government is paying 1 per cent more upon an equal amount of paper; so that tin Government of India is borrowing practically at a little less than 6 per cent, and therefore the distinction between the course which has been adopted and the power of issuing Treasury notes at 6 per cent is greater in appearance than in reality. Some time ago it was expected that there might be a necessity for e issuing the 6 per cent Treasury notes; but the last returns received on Monday show a considerable increase in the open 5 per cent loan, and not the least gratifying circumstance is that the increased subscription is principally from Native sources. With regard to the authority to raise money by Treasury notes at 6 per cent, I have stated that I hope the occasion will not arise for its being used, but it is not contemplated that the authority should be withdrawn. As to the closing of the 5 per cent loan, it does not appear to be desirable at present. It is the general feeling on the part of the public in this country—and I think the feeling a just one—that India ought, as far as possible, to supply the capital that may be required fur works in India. It is not easy to explain why there should be so large a difference between the price paid for money in India and in England—some hon. Members may be able to explain the reason, but I cannot—it is a fact, however, that this difference in the rate of interest paid in the two countries respectively on precisely the same security has existed for a considerable time. Last year the average price paid for the £8,000,000 loan you sanctioned, was 4½ per cent here, while the rate at Calcutta was between 5 and 6 per cent. There is one other question to which I am desirous of adverting—the amount of Indian debt as estimated by me. I have seen since Monday, various comments and remarks upon that debt which indicate some confusion as to its actual amount. I have been asked why I did not include the £40,000,000 of railway guarantees. My answer is, that the £40,000,000 of railway capital, on which interest is guaranteed, cannot be considered in any sense a burden upon the Indian revenue. The railway guarantees are no charge; they are an investment, and when the lines are opened we shall probably see the railways a source of profit. Again, I ant asked why East India Stock was not included. East India Stock is never included, because it is not a permanent, but a terminable charge, which will cease in 1874, and, therefore, cannot have a place in any general calculation of the permanent resources and burdens of Indian revenue. I thought, also, that I could not safely include the £7,000,000 of deposits. It is hardly pos- sible to say how much of that £7,000,000 constitutes a real liability upon the Government of India. These deposits are composed of various items. Above £1,000,000 is bullion in the Treasury. Part of these deposits will never be claimed; and on the whole no interest is paid. Therefore I did not include them in my statement of the debt. When these deductions are made, it will be found that my statement of the amount of the debt is strictly accurate. Up to April, 1857, the debt of India was, by the Parliamentary account, £52,074,986. There had been borrowed in India, up to November, 1858, £7,468,181. The debenture loan of last year was £8,000,000. The home bond debt is £7,000,000, and the aggregate debt bearing interest is thus £74,543,167. I do not know the exact amount, but it is comparatively small, which has been borrowed in India since the 8th of November, 1858, when the return was made up. I thought it better to offer these explanations at the present time; they may save trouble hereafter. I now move, Sir, that you leave the Chair.

Motion agreed to.

House in Committee.

The CHAIRMAN read the Resolution— That it is expedient to enable the Secretary of State in Council for India, to raise money in the United Kingdom for the service of the Government in India.


I am very glad that the discussion upon this question was postponed until to-day, and that the noble Lord has had an opportunity of making his explanation of the very large discrepancy between the published accounts of the revenue of India and his statement the other evening. It was rather startling that between those two accounts there should be a discrepancy of no less than £3,600,000. The noble Lord has accounted for it upon two grounds. He has pointed out that in the printed accounts there have been omissions of certain items, which he thinks ought, in any future account, to be included. But the accounts laid on the table have up to this time been considered the final accounts—the audited accounts of Indian expenditure—and now for the first time it seems that in the last account so laid before Parliament pursuant to the Act there are omissions of about £1,500,000. I am glad to hear that in future years that error will be corrected. There remains to be accounted for a difference of about £2,000,000, and that the noble Lord states is owing to the different value at which he has taken the rupee in his statement from that which is taken in the accounts laid before Parliament. In those accounts the value of the rupee is taken at ls. 10d. and in the noble Lord's statement at 2s. the amounts therefore in his statement, when stated in pounds sterling, would always be higher than those in the Parliamentary accounts. If we confine ourselves to his figures, and his figures only, it will matter very little whether the rupee is taken at 1s. 10d. or 2s., but inevitable confusion must arise in any comparison with the Parliamentary papers, because they would give one sum, which according to the noble Lord's statement should be another. I am afraid that another error may also be the consequence of this discrepancy. If all the noble Lord's statements relative to preceding years—to years long gone by—are calculated upon the rupee at 2s., as his recent statements really are, the comparison would give a faithful representation of the increase or decrease; but if the statements of by-gone years are based, as they probably are, on Parliamentary papers, and the statement of recent times are based on the value of the rupee at 2s., it is obvious that the comparison will be fallacious. Without access to the papers it is impossible for me to say how this may be, but it may very probably be a source of inaccuracy in the noble Lord's statement, and I think it is a great pity that he did not take the trouble to calculate the rupee at the same rate as the Parliamentary papers, because if we have to refer to any figures except those stated by the noble Lord, it introduces an element of confusion, I hope on future occasions the noble Lord will have the kindness to avoid this error. Having said thus much on the subject of the corrections, I will proceed to notice some points in the speech which the noble Lord addressed to us the other night which cannot pass without some observation. There were, in truth, three divisions of the subject alluded to by the noble Lord in the able and lucid statement which he made on that occasion. There was a statement of several matters of interest in India, there was a statement of the war expenditure, and there was a much more important general financial statement, which occupied a considerable portion of the noble Lord 's speech. On the first of these topics it is necessary for me to say very little, as in much, I may say all, which the noble Lord said on that subject I entirely concur. For instance, some attacks have been made upon him in reference to the Enam Commission, but I think that he has acted perfectly right on this subject. It is notorious that great frauds have been per. petrated on the revenue and that still greater frauds have been attempted. It is undesirable to disturb long possession, even though acquired by fraud, but it is equally absurd to allow the revenue to suffer by frauds so gross as that which has been mentioned by him as an illustration. It is impossible to distinguish, except by means of some inquiry between frauds recently perpetrated and possession obtained years ago, and I think the facts can best be discovered by inquiry on the spot. The objections, if any, should therefore be urged against the manner in which the Commission proceeds, and not against the appointment of the Commission itself. I was very glad to hear of the progress which has been made in railway works. When I became President of the India Board they were treated rather as experimental lines, and my first directions to Lord Dalhousie as well as to the Court of Directors was, that the great lines ought to be completed with the greatest possible rapidity consistent with determining the proper course which the railway should take and the character of the works to be executed. The full advantages to be derived from such works can only accrue when the line is completed throughout, and not before, because as the noble Lord says, though a line which terminates in a jungle may not pay, it will return a fair profit when it ends at some great town, the centre of a large population. With regard to public works, I was glad to hear that they are going on, but I confess 1 did not think the noble Lord's statement as full and satisfactory as I expected from the interest which he has taken in those subjects. The Godavery survey was in hand five years ago, Kurrachee harbour was under consideration, and a pier at Madras has been projected for many years. I should have wished to have been told what progress had been made with these works. With regard to the tenure of land, the noble Lord showed that the power to grant freehold tenure applied in very few cases, and I doubt very much whether the inducements will be sufficient to attract persons to settle in one of the districts referred to by the noble Lord, the Sunderbunds, now chiefly occupied by tigers and manufacturers of salt. I will not detain the House by further observa- tions on those matters, but pass to that which, in point of fact, is the subject before the House—namely, the loan for war expenditure. Of course it is not my intention to offer any opposition to the proposal of the Government to raise £7,000,000 by loan. The noble Lord stated that the war expenditure up to the present time has been £21,600,000, of which £2,600,000 have been defrayed from the Indian revenue, and £19,000,000 has been provided by borrowing to that amount. He proposes to defray the expenses in England for the ensuing year by a loan of £7,000,000, and I should be very glad to think that that will be the whole of the expenditure necessary to be provided for in this way. The noble Lord said nothing upon that subject. He did not induct us to suppose that £7,000,000 will provide for the whole expenditure likely to be caused by the war in India in the course of the ensuing year, and, if I may use the expression, the noble Lord was remarkably chary of any opinion on that subject. We know very little from the noble Lord of what progress has been made in India. We hear of marches and counter-marches, but, somehow or other, the chief rebels appear in some other place nearly as soon as they are defeated in any given spot. He does not indulge us with any hope that hostilities will be carried on in the course of the ensuing year, except at much greater expense than can possibly be defrayed from the ordinary revenue of India. I do not understand from the statement which he has made to-night, whether money is being raised in India by open loan as usual; and I think we ought to be told what are the expectations of the Government with regard to operations to be undertaken in the course of the ensuing year; whether it, is expected those operations will be brought to a close in such time as to obviate the necessity of a larger loan in India in addition to the £7,000,000 to be raised here; and, if the Government do anticipate that such will be the case, whether any measures are to be taken in dealing with the very large force in India at the present time. I do not know, however, that the noble Lord could have taken a wiser course than what he has proposed as to this loan, and I raise no objection to it. I come now to that which is the most important matter of all—the general state of Indian finance. At all times the financial state of any country is one of no little importance; but in the present state of India its finan- cial state is of vital importance, not merely to that country but to England also. Here, if there is a little larger expenditure than usual, there is no great difficulty in finding some additional tax to meet it. This year we have an increase of about £1,000,000 on the Naval Estimates; but the Chancellor of the Exchequer, I have no doubt, will have no difficulty in devising means, either by increasing the income tax, or in some other way which the country will readily sanction, to defray the expense necessary to put the country into a state of security. But when things in any country are in the condition in which the Indian finances are, it becomes a far more serious matter. History tells us that it is almost always from a disordered state of their finances that great countries are brought into their real difficulties. It was incumbent upon the noble Lord, and it is incumbent upon us, on the first opportunity on which, under the direct administration of the Queen's Government, the financial state of India has been brought before us, to look carefully into it, and to be warned in time as to the danger which lies ahead of us. The ordinary state of the Indian revenue for some time past has been, I am sorry to say, a deficit. If the Secretary of State for India and the Council, supported by this House, do not pay the most earliest attention to this question, depend upon it we are in the first place in some danger of having a charge imposed upon us. We had some warnings last year from Members of this House that there was danger of such a charge, and the noble Lord the other night intimated something very like a moral, if not a positive responsibility. I protest myself against any such responsibility. I object to this country being made liable for Indian charges. I am quite sure that nothing would be more prejudicial to wise administration in India than to lead those who administer the government in that country to suppose that they might fall back upon the resources of this country. If we are to have loans from England to India, how can we refuse to do the same for other colonies? If we were incautiously to admit the liability which was intimated by some hon. Members last year, and by the Secretary of State the other night, we should be "drifting" into a responsibility which I am quite sure this House would not be willing deliberately to undertake. I would therefore warn hon. Gentlemen against this possible, and, as it appears, not very remote danger. But further than this indirect danger, this House has shown itself not indisposed to meddle with Indian finance in two most objectionable ways. It is very much disposed to increase expenditure and also to take away revenue. It is not long since this House inserted a clause in a Bill which put the salt revenue in great jeopardy. Thanks to a noble Lord who understood the subject well, that clause was struck out elsewhere, and the revenue was saved. I see now that a notice of Motion has been given by an hon. Member to prohibit the growth of opium, which will destroy the revenue from that source. We are in danger enough of being fixed with a liability for Indian charges, but of course if we take away Indian revenue by Imperial legislation we incur not merely a moral but a positive liability. I hope the House, therefore, will forgive me for taking this opportunity of endeavouring to impress upon it this solemn warning, that if we mean to avoid responsibility here we must be exceedingly cautious in dealing with Indian revenue and expenditure. I have thought it my duty to say thus much as to our possible liability for India, and I will now revert to the state of the revenue and expenditure of that country. The ordinary state of Indian revenue is not so cheering as could be wished. The account of last July contains the financial state of India up to April, 1857—a most convenient period—for it just precedes the outbreak of the mutiny, and does not include, therefore, any of the war expenditure. The noble Lord compared the other night the increase of revenue with the increase of debt; but there is another comparison quite as important, but not so satisfactory—the increase of charge with the increase of revenue. The account of revenue and expenditure laid on the table by the Secretary of the Indian Board shows that in 1850–1 there was a surplus of £400,000, in 1851–2 of £513,000, and in 1852ߞ3 of £424,000. The accounts of these years arrived in this country while I had the honour to hold the office of President of the Board of Control, and we took the opportunity of reducing the charge upon the Indian debt. Objections were raised to that course in this country, but on financial grounds it was a very expedient and useful measure. The interest upon Indian debt was reduced to the amount of £500,000 a year—a larger reduction in the expenses of India than had been known for years past—and such as I shall be very glad to see made in any year to come. But in the next year a change took place, and instead of there being a surplus of £400,000 there was a deficiency of £2,000,000. In the next year there was a deficiency of £1,700,000, and in the year after that of £972,000. The deficiencies of these three years amounted to £4,700,000, while the surplus of the three previous years was only £1,300,000. This is a most unsatisfactory state of things. In the next year the deficit was, according to the Parliamentary papers, £143,000, according to the noble Lord £179,000. But now let us compare the revenue and the charges upon it. The revenue of 1850–1 amounted to £18,844,000, and of 1856–7 to £23,270,000, while the charge for the year 1850–1 was £18,429,000, and for 1856–7 £23,413,000—the charge having increased more than the revenue, and this increase of charge took place notwithstanding the reduction of half a million in the interest of the debt which I have mentioned. That is the state of things at the period immediately before the commencement of the mutiny. Let us see now how we shall stand when the war expenditure is at an end. It certainly will be taking a very favourable view of our probable position if I assume that the war expenditure will be at an end on the 1st of April, 1860, that all the unnecessary troops will be disbanded, and that we shall have reverted to the ordinary expenditure. I have shown that, during the last ten years, the charges have increased more than the revenue, and I shall not therefore take up a too unfavourable position if I assume that in 1860 the relative amount of the charges and the revenue will be the same as in 1856–7. But what has happened in the mean time? We shall have borrowed £26,000,000. I wish rather to understate than overstate the case, and therefore I will suppose that this is the whole amount that we borrow. The interest upon this sum will necessarily form an addition to the charge on account of the debt. Taking the interest at 5 per cent, the additional charge under this head would be £1,300,000; but I will take it at 4½ per cent—as I am anxious to be rather below than above the mark—this will make it £1,170,000. If we add to this the deficit admitted by the noble Lord, £179,000, there will be an excess of charge beyond the ordinary revenue of £1,349,000, or, to take the lowest possible figure, of £1,250,000. Now how is that charge to be met? After having paid a due tribute to the noble Lord for the lucid statement he made the other evening to the House, I am bound to say that he entirely failed in holding out to us any reasonable or intelligible prospect of meeting this difficulty. The noble Lord stated, and stated very correctly, the various sources of income in India. He stated truly that 60 per cent of the revenue was derived from the land, and that there was little prospect of its being increased. He also correctly stated that the principal increase in the land revenue must be derived from annexation or from the cultivation of waste lands. I entirely concur with the noble Lord when he says that it is undesirable to annex native States in India. I acted on that principle when I had the honour to be at the Board of Control, and never allowed such annexation to be made, when there were heirs on any theory of Indian adoption. The noble Lord stated the lowest amount of the land revenue in 1850 at £17,395,000, and the highest amount in 1856–7 at £19,080,000, giving an increase of £1,685,000. Now the land revenues of the new provinces of Pegu, Nagpore, and Oude, yield about £1,500,000.

There have been some other small States annexed, and accidental circumstances will account for the remaining difference up to the £1,685,000; but it is obvious that almost the whole increase of land revenue is owing to annexation. This source of increase has ceased, and no further increase can be looked for from that source. Certainly some increase may be gained from the cultivation of waste lands, though it must necessarily be very small. Neither in Bengal, where the permanent settlement is in force, nor in the Punjab or Bombay, where the leases run from twenty to thirty years, can we look for any increase; and the noble Lord would not say, with regard to Madras, that he expected much increase in the land revenue from that province. My own opinion with regard to the land tax in Madras is, that it would be wise to reduce the assessments. In one district Lord Harris, by my desire, tried the experiment, and it succeeded completely, for in two years the revenue recovered itself; but I do not know that this could be a fair specimen of the country generally. I will not now go into the general question of the merits or demerits of these assessments. What I wish to impress on the House is, that there is in the meantime quite as much prospect of a decrease as of an increase in this source of revenue, and that you have no right to expect an increase till twenty years, at least, have expired. The statement of the noble Lord does not differ very much from mine in this point; but I am anxious to bring forward the views I entertain regarding it, as I think it is very important that the House should be put in possession of the whole truth on an occasion like the present. So much for the land revenue. Then we come to the revenue from opium. The opium revenue will, I hope, stand the attack which the hon. Member for Northampton threatens to make upon it. I can see no objection to a revenue from opium any more than to a tax on brandy and other spirits, and wine. I do not see that the moderate use of opium is more injurious than the use of spirits. There may, no doubt, be objections to the mode of raising the revenue; but after what we know of the conduct of Native officials in exacting revenue from their poor countrymen, we may well believe that though there are objections to the present mode of raising revenue, the evils of any system of excise to be levied, as it must be, by Native agency, would be far more oppressive and objectionable. But I agree with the noble Lord that the revenue from this source is very precarious. In the first place, it varies exceedingly from year to year. In 1850 it was £3,500.000; in 1856–7, £4,696,000; in 1857–8, £6,443,000; and in 1858–9, £5,195,000. In one year it rose £1,800,000, and in another it fell £1,300,000; so that it is an exceedingly uncertain revenue. But there is another consideration which we must not dismiss from our minds. The Chinese have legalized the admission of opium, and I am afraid they may sanction its cultivation. Then what becomes of the opium revenue? Should the Chinese, who are a skilful and able people, cultivate opium, then there must be a material diminution in the revenue. It might no doubt be possible to meet the Chinese in their own market with the Indian opium, which is of a superior description; but that could be done only at a much reduced price, and reduced price in this case, means reduced revenue. It is clear, therefore, that the opium revenue is not one of permanence on which we can safely rest.

The next source of revenue is salt; but to that article we cannot look with confidence for any increase. The revenue from salt is indeed more likely to be reduced than increased. I come now to customs' duties. On these there has been some increase of late years, though not very large; and if the trade of India was materially to be enlarged we might look for some additional increase in the customs, though not to any great extent. The articles of import likely to be consumed by any number of the people has very little duty, and there are some taxes which it might be desirable to repeal. I think, on the whole, it is no unfavourable supposition to assume that for a long time to come the revenue derived from opium, salt, and the customs will remain very nearly the same as at present. This is the case as to revenue, and I agree with the noble Lord who has shown that there is no likelihood of the income being increased for some years to come. It is indispensable, however, to bring the expenditure of India within the income, and if the income cannot be increased our only alternative is to reduce the expenditure. The noble Lord stated that there must be some reduction both in the civil and military expenditure, and he has expressed that opinion in a despatch to the Governor General. It is very well, no doubt, to express that opinion; but I was disappointed, I must confess, in the statement which the noble Lord made the other night as to the probability, or even the possibility, of any material reduction being effected. Considering the importance of the subject, and the occasion upon which the noble Lord addressed the House, I thought that he would have given us some clearer notion of the views entertained by himself and his Council than I was able to gather from his observations. He proposes to reduce the civil expenditure. I confess that I do not much think that he will be able to do much in that direction. He proposes to do it by two means—first, by reducing the salaries of the European servants of the Company, and next by the employment of what he calls "cheaper Native agency." With regard to reducing the salaries of the European servants of the Company, these words had scarcely passed his lips when he showed the impossibility of doing anything of the kind. He said that under the competitive system there were not more candidates than there were places to be filled; and I remember one occasion when some medical appointments which were by no means of an unprofitable character, were to be made, that there were not so many candidates as places, and the competitive examination therefore became a perfect farce. He also stated that the sums which railroad and other private companies were obliged to give to persons to induce them to go to India were much higher than it was necessary to give for the same services here, and that those companies remunerated their officers at quite as high a rate as the Government did. How then is he to effect any general reduction of salaries? I do not mean to say that there are not some salaries that may be reduced. I think there are, and I should like to know from the noble Lord what has been done in that respect in the last four or five years. In 1854, having had my attention drawn to these salaries, and being very anxious to provide additional European servants out of the money that might be saved from judicious reductions, I went through them with a great deal of care. I found that there were great inequalities existing, without, as it appeared to me, sufficient reason; and by my direction a despatch was sent out, calling the attention of the Government of India to the subject, and calling upon them to revise the civil salaries, and to effect such reductions as might be possible—of course with justice to the existing holders of situations—with the view of providing the means of employing additional European servants. I should like to know what has been done in consequence of that despatch. The noble Lord tells us that the civil salaries must be reduced, and he has written to the Governor General that the income and expenditure must be equalized. That is only a very general shadowing forth of the noble Lord's views of what should be done; but in 1854 I directed attention to the subject with great minuteness, and I should be glad to hear whether anything has been done in consequence. Then the noble Lord said that he proposed to substitute cheap Native agency for European. I believe that to be extremely undesirable. I believe that in some cases it will lead to additional expense, and in many cases to a much worse administration than exists at present. I remember that in so small a matter as the ordinary superintendence of the public works, Colonel Cotton represented to me that we should have European superintendents, even of a low rank, and he wished me to send out non-commissioned officers and private sol- diers to be appointed overseers of the Indian labourers. So also with respect to the police and the administration of justice, the uniform demand made by India reformers was that we should send out a larger number of Europeans. There is one reduction of expenditure which I was very anxious to effect when I was at the India Board, but it was then not easy of accomplishment. I allude to the saving which would have resulted from the amalgamation of the Queen's Supreme Court and the Company's Supreme Court. It was very difficult at that time to reconcile two such great bodies acting under different authorities; but the Act of last Session removes the difficulty, for it makes them both Queen's Courts, and I should be glad now to see the amalgamation carried out. It is being attempted, I believe, in the inferior courts; but this is a matter in which reform ought to begin at the top and spread thence throughout all the courts of the country. Complaints are rife at this moment of the peculation and corruption of the native Judges. The only remedy is to send out additional European officers, and by doing so you will of course increase the expense of administering justice. Precisely the same thing must take place with the police. The Lieutenants Governor of Bengal, Mr. Halliday, complains of the state of the Native police—they appear frequently during the recent insurrection to have been in correspondence with the mutineers, whom they allowed to pass to and fro without molestation. If that is to be remedied, you must abandon cheap Native agency, which has failed, and send out, at an increased expense, Europeans in sufficient number to insure the proper management and control of the police force. But this is not all. We have undertaken the task of improving the administration of India, and there can be no doubt that as civilization advances the civil administration of every country becomes more expensive. I remember being struck upon one occasion with the enormous expense charged for prisoners confined in gaols in the Punjab, and I asked how it was that it had so much increased since our rule began. The answer was, "Because justice is administered in a much more merciful way than hertofore. Formerly, if a man committed an offence Runjeet Singh would cut off his hand or his leg and turn him loose to starve. That cost the country nothing; but you put him in prison and keep him there, and thus expense is immediately incurred." It is impossible that it should be otherwise under our more humane and enlightened administration. Therefore, although I am of opinion that some, but not many, salaries may be reduced, my belief is that the civil administration of the country will become costlier from year to year as civilization advances and improvements are carried out. With regard, therefore, to the civil administration, I think that upon the whole the expense will be increased rather than diminished. Then I come to the military expenditure. The noble Lord said there should be some reduction in that expenditure. I hope and trust that some reduction will take place. If some reduction in military expenditure cannot be made when the war is put an end to, I do not know where reduction can be made. I had hoped that the noble Lord would on this subject have given us something more than a general assurance. The noble Lord said that there were now no great Powers like Runjeet Singh or Scindiah in India, on account of whom it is necessary to keep up the large armies that we had hitherto maintained. I remember pressing upon Lord Dalhousie some years ago the necessity of reducing the military expenditure in India; but he said, We have acquired the whole of the Punjab and Nagpore, and the province of Pegu, and we therefore now occupy a larger territory with the same force; I cannot reduce any of the army; on the contrary, you must increase the European forces. Well, I consulted Lord Hardinge, who had been Governor General of India and Commander-in-Chief, and with his concurrence and by his advice I assented to the sending of three European regiments to India in addition to those already there. I did make an attempt to reduce the Native army. I was in correspondence with Lord Dalhousie with the view of reducing the regular Native cavalry, and substituting for them Irregular Horse, which would be more useful and less expensive. These Irregular Horse have rendered most excellent service in Scinde, and I am glad to have this opportunity of saying how much this country is indebted to that gallant officer, whose decease during the last few months we all lament, for the skill with which he formed that body of horse, and the benefits which by his means were conferred upon India. It so happened that I quitted the Board of Control at the time that that correspondence was going on. I do not know whether any further step has been taken upon the subject, as in the case of the civil service, but here I had taken a more practical step than anything which the noble Lord has ever stated. I think it indispensable that some reduction should take place. A Commission, I believe, has been sitting for some time with the view of considering the means of effecting some reduction in the Indian army when peace is restored. I should have liked to know if that Commission had come to any conclusions of any kind on the subject. I do not think that much reduction can be made in the civil expenses, but on that subject, as well as on the military expenses, the noble Lord left us destitute of any views or prospects entertained by the Government. The House must remember that, though some reduction may be effected in the Native army, we must be prepared for a considerable increase in the European forces. We should be utterly unjustifiable if we did not henceforth maintain in India a European force far larger than we have hitherto maintained. In my opinion the artillery should be European; and you must have an additional force both of infantry and cavalry, placed in healthy stations as a garrison for the country, and with all the improved arms and equipments which modern science has discovered. This cannot be accomplished without considerable expense, and beyond this, although reductions may be made in the Native Indian army, yet it is upon Native troops that we must rely to perform the ordinary work in India. We must maintain a Native Indian army of considerable amount. The only other financial feature of the noble Lord's speech was one which, I must say, I think exceedingly objectionable. I allude to the guarantee about to be given to the Madras Irrigation Company to the extent of, I think, £1,000,000, and the guarantees to an indefinite amount to be given to other companies for the construction, not of great trunk railways, but of minor railways. The whole of that system is, I think, excessively objectionable. It might be necessary, in the first instance, to give guarantees for great lines of railway, though it is questionable whether even they might not be constructed without Government guarantees, but I am quite sure that upon their construction guarantees should cease altogether. And let it be remembered that this guarantee is given to a private company to raise money at a moment when their securities will compete with your own loan. You are raising the market against yourself. That seems to me to be as unwise a thing as could possibly be done. Another measure of which the noble Lord spoke—namely, making the interest of the Indian debt payable in this country, seems to me of a questionable character. The tendency must be to transfer the Indian securities from Native to English holders. Now, it seems to me exceedingly desirable to encourage, to the greatest possible extent, the Natives of India to hold the securities of the Indian debt. In this country there are plenty of modes in which people can invest their money. The more the Natives of India are peculiarly interested in the public debt of that country, the more likely are they to be loyal subjects of the Queen. I believe that the moneyed men of India, and the people of property in India, generally were found among the most faithful supporters of the Government during the recent disturbances. They had the strongest interest in the safety and permanence of our rule. But, passing by that, I cannot see the least necessity for such guarantees as the noble Lord has mentioned. He represents the returns from all these works as certain and large. The interest of money in this country is about £2 and £2 1Os. per cent; but if it be true, as the noble Lord said, that these works will yield £26, £40, £70, and even more per cent, what necessity is there for Government giving guarantees for such works? If I am not wrong, the object of the Madras Company is not to accomplish any particular work of irrigation, but it is to be a sort of roving Irrigation Commission throughout the whole of Madras. If their work succeeds, the shareholders will be profited; if the work fails, the loss will fall upon the Government. I think such a one-sided arrangement, with a possible loss and no possible gain, a very bad arrangement. I do not at all dispute the statement of the noble Lord as to the amount of the Indian debt. It appeared to be correct, but I see in a Return which was laid on the table of the House, I think, yesterday morning, and which brings the liability in India up to April, 1857, and that in England to December, 1858, that the liabilities amount to £82,000,000; and if to that you add the sum borrowed in India and the loan proposed by the noble Lord, the total liabilities will exceed £90,000,000. I really do not see how we should be justified in adding even another million to these liabilities. But, Sir, to revert to the main point which I wish to impress upon the Committee, it is essential that the expenditure shall be brought within the income. We have a great task to perform in India—a great mission in the improvement of its administration; and the basis of all good administration is a wise economy. We are now, under the Queen's Government, commencing a new era in the administration of India. I did hope we should have had a more full development of the views of the Government on this great and important question than we have hitherto had; and I should have neglected my duty—having learnt something of that country during the short time I was at the India Board—if I had not stated what my impressions were, and what my fears and hopes were as to the future financial condition of India. I believe that by a wise administration the expenditure and income may be equalized, but it will require very decisive measures to attain that result. I am sorry that the speech of the noble Lord does not afford any practical view of how that may be done. The prospects at this time are certainly not very encouraging, but, nevertheless, I believe it to be perfectly feasible to accomplish the object. It is quite impossible to overrate the vital importance of the subject, and I feel that I should grossly have neglected my duty if I had not urged the necessity of taking effective measures for the attainment of so great and all-important an end.


said, the right hon. Baronet had just stated the real question before the Committee in precise terms—namely, that the important subject for them to determine was, how to balance expenditure and revenue. They would all agree that this loan must be raised; no objection had been yet made to it from any part of the House; but he confessed he thought the right hon. Baronet had drawn the most lugubrious picture of Indian finance ever yet presented. He had shown that many of the means indicated by the noble Lord the Secretary of State for India for raising the revenue in future were not to be depended upon, and that many of the items of revenue were precarious; but he had failed to point out what it was the proper object of statesmanship to discover, how in future the revenue was to be augmented. He (Sir E. Perry) was the last man in that House who had a right to complain of any gloomy picture being drawn of Indian finance, for he had brought that subject more frequently under their consideration than any other Member; and three years ago, before the rebellion broke out, he had sought to impress on the House that if the principles of Indian finance, then in force, and the principles of Government then in operation were persisted in, they would inevitably lead the first to national insolvency, the other to national disaffection. At that period he was thought a croaker, and met by Sir James Hogg and others, who drew a more flattering picture of the state of affairs. Now, however, a Cabinet Minister and an ex-Cabinet Minister both agreed with him as to the precarious state of Indian revenue, but he was happy to think he took a far more favourable view of the future than the right hon. Baronet (Sir C. Wood). He would address himself to this question, but first of all, he would attempt to settle with precision some of the leading facts of the case. The amount of the Indian debt at the present moment was a matter of fact that ought to be placed beyond doubt. The noble Lord had stated it to be £74,500,000, and the right hon. Baronet had added the debt incurred in India during the last year, making the sum about £90,000,000. He (Sir E. Perry) had taken the trouble to ascertain from Parliamentary papers what the debt was, and it appeared to be, up to a certain period, £82,000,000; for they must take into account the £10,000,000 of deposits not bearing interest—which the noble Lord called £7,000,000—in respect of payments due to officers, which the Government might be called on to discharge at any moment. Then £12,000,000 must be added to represent the £630,000 payable annually to the proprietors of the East India stock. A sum had been set apart to accumulate at compound interest, in order to defray that charge; but till 1874 there would be a charge equal to the interest on twelve millions. Then must be added the additional loan of about £9,000,000 raised in India, and all these items together made a total of £103,776,565, to which must be added the new loan of seven millions, making thus a total debt of £110,776,565. Then they were told that the debt of India did not much exceed two years' revenue; but in making a comparison of that kind it was clear that they ought to take not the gross, but the net income, which was £23,000,000 a year. Thus the total amount of the debt was equivalent to more than four years' revenue. That might not seem to be a very heavy burden when compared with some European debts; but when the inelastic character of Indian finances was taken into consideration, it would be seen that it was in reality very onerous. The net revenue of India was not capable of much increase. The land revenue was not likely to grow larger; opium was liable to contingencies which might diminish its value as a source of income, as was also salt, and the Customs' duties could not be increased without provoking the strongest opposition from the manufacturers of this country. It followed, therefore, that a debt in India, amounting to between four and five years' net revenue, was a large debt. Another mode of estimating the charges on Indian Revenues was to ascertain the great amount payable for interest and dead weight. The total amount of interest payable upon the debt in India and in London was made up of the following sums:—payable in India, £3,500,000; in London, £1,230,000; temporary loans, £48,000; civil service annuities, &c., £1,439,000; total, £6,217,000. It was admitted now on all hands that the present state of the Indian finances was alarming, but there were still delusions afloat which ought to be dispelled. Hon. Members had cheered, and certain monetary circles had approved of the declaration of the noble Lord, that he did not ask an Imperial guarantee for the new loan, and it was thought that if no guarantee were given, England would be clear of all responsibility. It was quite true that those who maintained that the finances of India were inseparably bound up with those of England could not show any verbal or technical guarantee from the Imperial Government; and so far as the holders of Indian securities were concerned, it did not matter to them whether they had such guarantee or not, for they possessed a higher security than any Government stock. The holders of Consols could not sue the Government, but the holders of Indian securities could formerly have sued the East India Company, and now they could sue the noble Lord the Secretary of State for India. Supposing, then, that the expenditure in India should at any time increase so as to prevent the payment of all the charges of the State, the fundholders having a remedy at law, would be able to secure payment on the first revenues collected, and then the cost of maintaining the army and the Governor General must fall upon this country, or we must give up India. He therefore repeated that it was a delusion to imagine, because a specific guarantee was not given, that this country escaped from the responsibility arising from its connection with India. Admitting, then, as he had always done, that the principles now in operation in Indian finance must lead to insolvency, still if he entertained no brighter hopes than the right hon. Baronet (Sir C. Wood) in his views as to the future, he should say it would be best for the material interests of this country to sever the connection with India at once. Of course he was not speaking of the moral claims which the country possessed on us after we had deposed every Native ruler, and rendered self-government impossible; but for mere pecuniary interests if the views of the right hon. Baronet were sound, the possession of India was a mere incumbrance. As all, however, would admit that the union between England and India must be maintained, the true course was, after first probing boldly the extent of the difficulties to be dealt with, to endeavour to apply remedies in an equally vigorous manner. The first duty of the Government was to compel a reduction of expenditure within income. The financial system of the East India Company had always been the weakest part of their government, because, while the expenditure had gone on increasing they had found no other modes of meeting it than by loans or annexations. In a country where the revenue did not expand, the system of borrowing, borrowed from modern Europe, was inapplicable, and the Governor General should be directed to make his expenditure balance with his income without resorting to loans. If a great emergency should arise, then the extra expenditure caused thereby must be borne by the mother country. Much as it might shock the moneyed circles to propose an addition of £30,000,000 to the burdens of this country, he ventured to think that if they contrasted the wars for which we had expended hundreds of millions with what India might be made worth to us, the balance would be found vastly in favour of a war for the maintenance of our Eastern possessions. The Indian accounts laid before Parliament exhibited a striking instance of the improvidence engendered by the system of borrowing. In 1856, in the accounts laid before the House, there was an estimated deficit for the ensuing year of about £2,000,000. It turned out, at the end of the year, that the deficit was only £143,000, but, notwithstanding, the Government in India increased the debt by about £1,500,000. Then, again, he would ask where was the interest of the new loan to come from? The noble Lord had pointed out two or three sources from which he expected an increased revenue, but the right hon. Baronet (Sir C. Wood) had criticised those views. The noble Lord had referred to an anticipated saving from reforms in the civil administration of India, while the right hon. Baronet deprecated the cheap agency of Natives. Between the two opinions he (Sir Erskine Perry) considered the noble Lords to be the soundest; for it is mainly by giving effect to the principle faintly enunciated by the noble Lord, that improvements in finance as well as in Government were to be obtained. It was quite impossible to carry on affairs in India satisfactorily and for the advantage of the inhabitants of that country, if Natives were not permitted to take a greater share in its government. One of the most philosophical writers who ever visited the East—Volney—had described the condition of most Eastern countries, by stating that there were two races, the conquerors and the conquered, the first of whom monopolized all offices of power and emolument, whilst the latter were reduced to the condition of slaves. But these latter, if they were sufficiently numerous, were sure, sooner or later, to rise upon their masters. They had heard a great deal within the last twenty months of the increased strength obtained by the success of their arms in India. It was stated that they might now disregard the prejudices of the inhabitants of India, assert their own supremacy, call in their own countrymen to fill every office, dispense with the Natives as an armed force, set aside their customs, disregard their system of caste, introduce their religious instruction into Native schools, and assume all the rigour of successful conquerors. This was one theory of Government, and if a permanent force of 150,000 or 200,000 Europeans could be spared, it might possibly be successful. But as all knew this could not be, the juster and more generous view of Government must prevail, and Native talent and Native co-operation must be relied on. If Natives of influence were duly admitted to take a share in the government, the task of increasing the revenue would be much lightened. The ministers of the Native Princes were as able as any men in India, and it was mainly owing to their co-operation the Government held its present position. The noble Lord had indicated another mode of developing the resources of India—giving titles to land to whoever invested capital in it, Native or Europeans. In this would be found the second great lever for raising Native society. The land was undoubtedly the source of wealth in every country, and although the process of dealing with it in India should be slow, yet if it was systematically persevered in plenty of Native capital would be forthcoming year by year, and the wealth which follows from the application of capital to the soil would undoubtedly spring up. To the noble Lord he looked with the greatest confidence. He deserved the highest commendation for his Indian reforms. With one exception, they merited the warmest admiration. The noble Lord's Proclamation had been welcomed with one applauding cheer from Cape Comorin to the Himalayas. Its principles were so wise and generous he could wish to see it printed in every school-book throughout India. But the Natives were very acute, and apt to compare words with actions. And in one part of India one act of the noble Lord had tended to shake Native confidence. He referred to the despatch of the 1st of September last—the last dying act of the Directors, which extended to Madras the powers of the Enam Commission that had been for some years in operation in Bombay. He believed the noble Lord had been too much occupied to master all the facts of this question. He stated the object of the Commission to be, to give an assurance of a good title to the rightful owners of land, whereas the main and undisguised object of the Madras Government was to get more revenue. But the question was so important, he hoped the House would allow him to explain what the Enam Commission was. An Enam was a donation of land made by the Native Princes in several states to Native subjects. When the Government occupied the Bombay country it recognized the validity of these Enam tenures, but reserved a power of inquiring into the authenticity of the titles. And if any inquiry had been then made, when evidence was forthcoming, and parties alive whose testimony as to ancient possession was available, it would have been most just; but a most extraordinary course was pursued. Thirty-five years after the con- quest a sort of Quo Warranto Court was instituted. In 1852 the Legislative Council of India created an Enam Commission which was authorized to call on any landowner to prove his title. There was to be no interference by any court of justice; evidence of titles of ninety years standing had to be produced; frauds committed or encroachments made in the last century were investigated, and any such fraud disentitled the owner of the estate. These difficult duties were intrusted, not to Judges or men trained to sift and examine evidence, but to sharp infantry officers, whose only duty was to carry into effect the strict terms of their instruction. That Commission had given the utmost dissatisfaction. It had decided about 6,000 cases, and there were still 100,000 cases of title pending before it. The Commission had worked so badly that opinion in India was now much opposed to it, even among those who once strenuously advocated it. These facts came out during the inquiry before the Colonization Committee of last year, and an impression was produced that the Commission would be abolished; but, to his surprise, the Home Government during the recess had just issued another of a similar kind. A similar institution had existed in Bengal, but there it was found so intolerable the Government after a few years abolished it. [Cries of "No, no!"] He might be wrong in saying it was abolished, but at all events he believed it was at an end. It was stated in an official Return that the sum obtained by the Commission in Bengal was between £300,000 and £400,000 a year; but the expenses of the Commission amounted to £1,500,000. Its operation caused nothing but dissatisfaction, and brought little emolument to the Government. He trusted, therefore, that the Madras Commission would not only be suspended, but abolished at once. It was to be hoped that Sir Charles Trevelyan, when he had had an opportunity of making personal inquiries on the spot, would retract the advice he had given to the noble Lord—that this Commission should be allowed to proceed. These Commissions were justified on the ground that frauds had been perpetrated on Government; but without in any way sanctioning frauds, it was plain that some limit should be put to their effect upon titles. If a man's ancestor, for example, had committed a fraud in 1650 or 1700, it would be improper at the present day to turn his descendants out of their posses- sions on that account. Let them lay down their period of prescription, be it 30, 40, or any other number of years, and leave all questions touching the validity of titles to the ordinary tribunals of the country. On the application, then, of views such as theses to India, he entertained most sanguine hopes as to the future. The right hon. Member for Radnor (Sir George Lewis) had told them last year that India was of little value to England. Now, our trade with India exceeded that with any other country in the world, except the United States and California, and was increasing month by month in the most marvellous manner. India also paid a tribute of between £3,000,000 and £4,000,000 sterling per annum in the shape of dividends to East India proprietors and pensions to civil and military officers; and if it was only permitted to enjoy the benefits of good Government there would be no limit to the development of its prosperity. If the Natives were treated as we should ourselves wish to be were we a conquered people—if an interest was given to them in their institutions, and their co-operation was invited in the administration of their own affairs—they would not be found unwilling to lend the State the aid of their purses in periods of emergency. An instance of this might be found in the irrigation works effected in Bombay. They had been referred to as the results of Government operations, but in reality they had been effected by the municipality of Bombay, of which the Natives formed an equal part with Europeans. The same effects would follow the same causes all over India. To no other hands than those of the noble Lord would he prefer to see the inauguration of the Queen's Government in India confided, because, from his remarkable industry, his high connections, his popularity with the country, and, above all, his weight and authority in a Conservative Government, he would probably be better able to carry out vigorous reforms than anybody on the Opposition benches. [A laugh.] His hon. Friends near him smiled, but such reforms, if emanating from that side of the House, would most likely be resisted by the Conservative party, whereas, if emanating from the noble Lord, that party would give them their support. But the noble Lord must guard against the predominance of Leadenhall Street influences. The Council by which he was surrounded was but the old Court of Directors with a new name and increased salaries; and measures like the granting of property in the land, the abolition of an exclusive Civil Service, and the admission of Natives to high office, militated against the most cherished prejudices of "old Indians." Unless, therefore, the noble Lord threw himself boldly upon the support of public opinion, he would find his best plans thwarted or obstructed, as had been the experience of Presidents of the Board of Control before him. If he relied on his own sound principles, and used the influence which he know how to wield, India, instead of becoming an intolerable burden to this country, was capable of being made an increasing blessing to us, while at the same time our rule over her would be the means of spreading civilization and happiness throughout her vast territories.


said, that something in the nature of a charge had been made against the noble Lord at the head of the Government of India—namely, that while depicting the somewhat gloomy features of Indian finance, he had omitted to lay before the House a carefully matured plan for improving the Indian revenues. That charge was hardly fair, because the noble Lord had stated that the latter point was now under the consideration of the Indian Government, from whom, according to ordinary usage, any proposition for imposing new or altering existing taxes should in the first instance proceed. The noble Lord, indeed, argued that the revenue of India was not capable of any great or immediate extension; he had described the first great power of revenue, namely, the land revenue as inelastic, and the second, namely, the opium tax as precarious; and, though these circumstance might not be very encouraging to capitalists to invest in the new loan, yet the indications of a better policy and the prospects held out in his speech from a wise and beneficent system of government, were calculated to reassure the despondent, and to restore public confidence in the resources of India. The noble Lord evidently looked rather to negative than to positive sources for re-establishing a balance between revenue and expenditure—he looked to economy to bring about the required equilibrium. He had spoken with considerable hope of future reductions in the military expenses of India; it would be presumptuous to attempt to calculate the extent to which these reductions might be carried. The House must bear in mind that we had held India for more than a century by force of arms, but so long as Mahomedan ambition upon the one hand, and the credulous fanaticism of the Hindoo upon the other remained unabated in their intensity, the tranquillity of India must be regarded as at any moment liable to be disturbed. It was, besides, a well-known fact that our possession of that country was looked upon by great European Powers with feelings of jealousy; that Central Asia was year by year becoming more subject to European influence; and was it under those circumstances desirable, he would ask, that we should effect any great reduction in our military establishment in the East, entirely leaving out of consideration the probability that such a reduction might rouse into action that foreign ambition or those internal sources of ill-feeling to which he had just adverted? Taking, however, the most favourable view of the question, let him suppose the disarmament of Bengal to be proceeded with, and the policy of annexation to be completely abandoned—a subject on which he was glad to hear the expression of opinion which had fallen from the noble Lord the Secretary for India a few evenings before and that a more complete system of police should be established throughout Bengal, yet he could not help thinking that the lesson which we had received from recent events in India ought to be sufficient to convince us that no small outlay for military purposes in that country must still be incurred. Stations and depots would require to be fortified and the condition of the barracks in many parts of India also called for increased expenditure, inasmuch as they were in many instances overcrowded and situated in unhealthy localities, while the maintenance of an enlarged European force must in itself be productive of a considerable additional cost. How, under these circumstances, our military expenditure in India could in any remarkable degree be diminished for some time to come he was at loss to understand; but, if the amount of our forces there should be reduced, it was, at all events, of paramount importance that we should be in a position to concentrate rapidly a given number of men on any particular spot. Upon that point Colonel Kennedy had several years ago made calculations which he (Mr. Liddell) believed to be sound; and, he might add that, in his opinion, the concentration of which he spoke could be properly carried into execution only by an efficient system of railways. The speedy construction of such works he regarded as of the highest importance; and while upon that subject he should venture to challenge the assertion which had been made by the Secretary for India in his financial statement, which was to the effect that the progress of the system of railways in that country depended rather upon the railway companies themselves than upon the Government. The matter was one which had come under the consideration of a Committee of that House last year, and he believed he did no more than express the almost unanimous opinion of the Members of that Committee when he stated that the delay in the construction of railways in India was mainly due to Government interference. When works of that nature had first been entered upon, a feeling had been prevalent in high official quarters that, being of vast importance, they ought to have been undertaken by the Government; and he believed that, as a consequence, there had ever since been a certain amount of jealousy and a great lack of confidence displayed by the Government officials towards those who, whether rightly or wrongly, had been intrusted with the task of their execution; while, upon the other hand, the circumstance of their being placed under military control—the persons selected as the Government engineers in these cases being military men—was productive of great irritation on the part of the engineers and servants of the railway companies. He was anxious to direct the attention of the noble Lord particularly to that point, because from his long advocacy of the value of public works in India his accession to the office which he now held had been looked upon with the utmost confidence by various interests concerned in the developement of the resources of our Indian empire, and because it was expected that under his control every unnecessary obstruction which stood in the way of the attainment of that desirable object would be removed.


Sir, I rise to offer a few observations to the House upon the important subject under discussion before the debate closes. The question of Indian finance is one into which I should feel disposed to enter at greater length than I propose to do this evening, were it not that there is the same absence of any tangible result to be arrived at on this as I have noticed on all previous occasions of a similar nature. It is, indeed, perfectly true that the novelty of the noble Lord's position as the first really responsible Minister for India, the early age at which he fills that office, the good things which he has already done, and the still greater of the performance of which he gives such high promise, have attracted more of attention to the subject of Indian finance in this than it received in any former Session. But what, let me ask, has the noble Lord really done in connection with this question? He has seized upon the occasion—a very good one, I admit—of proposing an Indian loan to give a sketch of the state of the finances of that country; but he has laid before us nothing which can be productive of any results; so that most of the hon. Gentlemen who have spoken in this debate have been reduced to the necessity of confining themselves to the delivery of essays upon Indian Government. Now, the accounts which the noble Lord has submitted to Parliament do, in my opinion, require close examination, and I would therefore suggest to him whether it would not be expedient to refer those accounts to a Select Committee of the House of Commons, Members of which were they chosen from among hon. Gentlemen acquainted with Indian affairs, would probably hit upon some plan of dealing with them, from adopting which he would be likely to derive advantage. The noble Lord has told us candidly enough that he does not expect to receive much assistance from public opinion in India in the way of enabling him to cut down expenditure, and I quite concur with him in the opinion that it is extremely improbable that any proposition for a reduction of expenditure will emanate from that quarter. He also stated that he was unable to distinguish in his financial exposition between the outlay in India on public works which were reproductive and the expenditure on works which were of an unremunerative character; but there is a distinction, which, as every man ought to be able to draw it in the management of his own affairs, I see no reason to despair of being able to arrive at in the calculation of public accounts. When I was at the head of the Board of Control I always thought that some accountants might with advantage be sent out from this country to examine the state of the Indian finances, but I used to be met by the statement that Indian accountants were very efficient and ought not to be superseded. I entirely agree, however, with the proposal once made by the Earl of Ellenborough, that there should be an independent audit of accounts in India by persons in no way connected with the Civil Service. Upon the whole, although the noble Lord made a very fair statement, he certainly did not point out how those things were to be achieved which he hoped to see effected. But he made some omissions which require consideration. For instance, he omitted altogether the question of the large amount of compensation for losses of property during the mutiny, on which a commission is now sitting to inquire into the amount. Now, when the noble Lord says the forfeitures of land will be sufficient to make up this compensation, I fear he is greatly deceived. Most of the land forfeited will probably be restored to the heirs or to other persons, and what is left will go a very little way towards making good those losses, the amount of which will be extremely large. At the storming of Delhi, General Wilson told his soldiers that if they abstained from plunder they should be compensated; at the same time the Europeans who lost property there would demand compensation, so that the Government would have to pay on both hands. With regard to the elasticity of this revenue, I differ somewhat from the opinions expressed both by my right hon. Friend (Sir C. Wood) and by the noble Lord. It is said that we have no power to increase the Indian revenue. Now, by the noble Lord's (Lord Stanley) own showing, the land revenue has largely increased during the present half century. [An hon. MEMBER: By additions of territory.) Yes, but independently of that, it has been increased, and I believe it might be still more increased by a reduction of assessment. Just before I left office, Lord Harris declared that such a reduction in Madras would greatly improve the revenue. That is a slow process, for surveys, without which it is difficult to complete the assessments, can be hardly completed within twenty-two or twenty-three years. Nor does what I say apply, of course, to any permanent assessment, but by such a course as that suggested, some amount of elasticity may no doubt be secured in the land revenue. Is it not possible also to lay on further taxation in India? The noble Lord says, and says truly, that to do so is difficult; but I believe it is a fact that the commercial classes and the civil servants in India pay less in taxation than in any other portion of the globe, and I see no reason for any such exemption. For example, the stamp duties might well be increased, and, I have no doubt, that if the noble Lord were to turn his attention to the subject, he would be able to impose fresh taxes. That task, however, should be undertaken here; it should not be left to the local Government. There is, as the noble Lord says, the greatest difficulty in eliciting public opinion in India, so as to enable you to judge what is a proper tax to lay on, and it is almost impossible to know, except by an actual levy, whether a tax is unpopular or not. It will be much better, therefore, that taxation should originate here instead of being left to the Indian Government. Another question should be considered and settled here, and that is the diminution of outlay, involving a reduction in the salaries of the civil servants. To show the necessity of offering sufficient inducements to Europeans to go out to India, the noble Lord instanced the difficulty experienced in procuring assistant-surgeons. That may be, but assistant-surgeons arc by no means the highest-paid class of civil servants, and thus have not the same temptation to offer themselves, besides which, the competition which it is necessary to undergo prevents many from coming forward, from the belief that they will not obtain other situations if they are known to have been rejected here. The other argument used by the noble Lord was, that the railways pay as high salaries as are paid to the civil servants. [Lord STANLEY:—I said they paid salaries which were relatively as high.] But the railway service is generally a temporary one, and presents no temptations like those offered to our civil employés. I believe that in no part of the world is there a service so highly paid as the Civil Service of India. Nowhere else do you find salaries beginning at £300 or £400 and rising up to £4,000. I know it is the worst economy to pay men shabbily, and I know that the Civil Service of India contains many most able and eminent members. When, however, it is spoken of as the first service in the world, I would take leave to say that other services contain men just as able and as eminent. The Bar of England is an eminent profession, but we know how many men make nothing, or next to nothing, by it. Like the Church of England, the Bar is paid by the prizes which fall to the lot of a few; but, in the Civil Service of India, you always begin by a high rate of salary, and you may arrive at something beyond competence. In Ceylon the salaries are not half those paid in the East Indies; and I have heard Madras you find our civil servants in the one place surrounded by comfort, and in the other by luxury. Now, if the extra rate of pay only secures luxury to those who receive it, there seems no advantage in maintaining it, although of course, if it secures superior talent, it must be an advantage. On the whole, I think the noble Lord may fairly look for some reduction in this item of expenditure, though the saving effected upon the £2,500,000 thus spent cannot be a very large one. I warn the noble Lord, however, that he must effect this reduction himself; it must emanate from this country. My right hon. Friend (Sir C, Wood) has alluded to a letter which he wrote on the subject. I myself despatched a letter in June, 1856, two years afterwards, and a commission was in consequence appointed, which, instead of recommending a diminution, actually suggested an increase of official salaries in almost every instance. That is the result to be expected when such inquiries are conducted in India by the civil servants themselves; conducted, no doubt, with the purest possible intentions and adducing many instances where an increase was necessary, but proving too much when they declared that the increase should be general. With regard to the military expenditure, I confess I was much astonished to hear the noble Lord say, he expected that the European force in India would shortly be reduced to the number which was stationed there before the mutiny.


—The right hon. Gentleman has wholly misunderstood me. I said nothing as to reducing the European force to such an extent; on the contrary, I believe that would be quite impracticable. Perhaps I expressed myself badly, but what I meant to say was, that I thought we had fair ground to hope that, after a certain lapse of time, when tranquillity was restored, the military force of every description which was maintained in India would not cost much more than it did before the mutiny.


I am very glad to hear that explanation, though not only I but other Gentlemen understood the noble Lord in the sense I have stated. I certainly think it very desirable that for the future there should be in India a much larger European force than was maintained before the mutiny. I believe that you will henceforth be obliged to keep European regiments wherever there are considerable detachments of Native troops, and that otherwise you will never be safe. That confidence may gradually be restored is my sincere hope, but for a period longer probably than the lives of any of us it will be necessary to maintain a large European force in India. That being so, I cannot see how the military expenditure is to be reduced, except indeed by abolishing the distinction of pay which at present exists. That bad-climate pay should be given is a perfectly reasonable proposal, but surely it should apply to all bad climates alike; and if you have 80,000 men in India I do not see why they should have double pay any more than our soldiers in the West Indies, or at similar stations. Perhaps a reduction of expenditure might be effected on this head. With regard to the Native troops I heard with surprise and regret that their number at this moment exceeds the number maintained before the mutiny. I do not question the necessity of such a measure, but it is certainly a melancholy result induced by our necessities. If these levies have to be disbanded, it will occasion some discontent, and a considerable number of armed men will be turned loose in the country. Nor must the noble Lord suppose that the tribes who are now being introduced into the Indian army will be affected towards us otherwise than the sepoys themselves, or that by obtaining Sikhs he is introducing a better species of levies than before. The noble Lord tell us we are to have no more annexation. That is a most popular doctrine on both sides of the House; and, as there is not much left to annex, I do not see how we can have more annexation. I should be the last man to be the advocate of annexation; but I do not know what an "annexation policy," as it is called, means. If it means that wherever you are to go you are to grab everything of which you can get hold, a more detestable policy could not exist; but I do not suppose that any sensible man would advocate such a policy as that. A non-annexation policy, however, would have left us within the confines of the Mahratta ditch, and we should never have become the Lords of the East. Each case of annexation must be judged upon its own merits. There may be most wanton and wicked annexations, and there may be others which are perfectly just and expedient. People always rail at annexation after the territory has been acquired, but, except from the noble Lord the Chief Commissioner of Works (Lord John Manners)—and even he has discontinued his remonstrances now that he has power to enforce them—we have never heard a word about restitution. The noble Lord rails at annexation, but he must remember that it is to it that he is in part indebted for his present revenue. He well knows that in all the territories which have been annexed of late years, except Scinde and, I think, Nagpore, the revenue has far exceeded the expenditure. In the Punjab it does so now; in Oude it did so in the last year for which there is an account; and even in the Burmese cessions, Pegu and Martaban, the same has been the case. Had we not annexed the Punjab, I should like to know in what position we should have been when the mutiny broke out if, instead of having there that eminent man Sir John Lawrence, with his Sikh levies, to assist us, we had had an able and ambitious chieftain, like Runjeet Singh, to attack us. I make these remarks in fairness to those who have been connected with these annexations. I had myself nothing to do with the annexation of the Punjab, but I think that the Marquess of Dalhousie, who had, would have no difficulty in justifying that measure, either as regarded the revenue or the security of our Indian Empire. There is one point with reference to the increase of Native levies upon which I hope the noble Lord will be able to satisfy us. I trust that whatever may be the organization of the army in India, no new Native artillery has been raised, and that never again shall we see a Black artillery, because I believe that our greatest danger and our severest losses have arisen from our teaching the Natives the use of that arm. I have so far, I hope, strictly confined myself to the subjects which were introduced to us by the noble Lord. I do not agree with my right hon. Friend the Member for Halifax (Sir C. Wood) in one or two remarks which he had made upon the speech of the noble Lord, and I think I am bound to mention in what I differ from him. In the first place, I entirely approve what the noble Lord has done, or proposes to do, for the establishment of freehold tenure in India. I myself strongly urged that upon the East India Company, but acting upon their commercial feeling and their original antipathy to settlers, they always maintained that a lease for thirty years was as good as a freehold, and constantly opposed the creation of the latter kind of tenure. I was always favourable to it myself, but I own I am surprised that, even under leases for thirty years, there have not been more settlers than there have. The other point upon which I differ from my right hon. Friend is as to guarantees. I certainly think that in the first instance the guarantee system was an erroneous one. I always urged upon the East India Company, nor did I find them unwilling to support my views, the importance of some undertakings being brought forward without a guarantee, and I am exceedingly sorry to hear that the only one which was so introduced to the public has now accepted a guarantee. At the same time I do not think that the noble Lord has done wrong in giving a guarantee to the Madras Irrigation Company, because the irrigation of India is a most necessary and valuable object, and no doubt after the guarantees which had been given to railway and flotilla companies and other undertakings it would have been impossible to obtain shareholders in that concern without a guarantee. I would, however, press upon the noble Lord the importance of obtaining the formation of companies to carry out some of these undertakings without a guarantee, or, at all events, with a greatly diminished one; and I think that the experience of the East Indian Railway, which is now earning 7½ per cent., is a proof that there is no occasion for such a security. One important point in regard to railways is the desirability of constructing cheap railways. The experiment was never fairly tried in India,—it was once said that cheap railways would not do; but I have myself no doubt that railways constructed of cheaper materials than those ordinarily used, according to the plans of Mr. Crosskill and others, upon which trains should travel at the rate of from ten to twelve miles an hour, might in many instances be laid down between places between which there is not sufficient commerce to justify the formation of a large railway, and might be amply remunerative to the shareholders and highly beneficial to the country. I have said that the noble Lord's statement was upon the whole a very fair one; but in one or two particulars it hardly deserved that praise. One instance was the allusion to the Imperial guarantee. That is a question which we really ought to settle at once. It ought not to be held up as something which will probably induce persons to subscribe to the present loan upon the chance of an Imperial guarantee. If we are to have such a guarantee at all, in the name of common sense let us have it at once. Let us gain all the advantage of it in the market, and not wait until we have made a number of bad bargains, and thus enormously increased our expenditure. If the noble Lord thought fit to mention this subject at all as fluctuating in his mind in a state of uncertainty, he ought to have stated what his opinion was upon it, and whether he thought it likely that within any moderate distance of time we shall have to appeal to an Imperial guarantee. Another instance in which the noble Lord has departed from his general fairness was noticed by my right hon. Friend the Member for Halifax, when he said that the noble Lord asked for £7,000,000 of money, but said very little about it, and did not inform us whether or not it would be the last loan he should require. The noble Lord has not furnished us with much information on that subject, and unluckily the information which he promised us has not yet been placed in our hands. I do observe that in one short paper which he has given to us—his letter to Viscount Canning—he says that this will be the last loan required to be raised here. That is holding out an expectation by which I suppose that no one who can calculate probabilities will be deceived, but it may produce some deception in the market as to shareholders. That the noble Lord should take a loan of £7,000,000 is perfectly reasonable; but I cannot conceive that tranquillity will be so completely restored by the end of the present year that the relations between this country and India will resume their ordinary character, and that we shall be able to do without any further loan. I cannot help anticipating another loan in a future year; but at the same time, as I see no possible objection to the mode in which the noble Lord proposes to raise the money at present, and as I agree with him that the loan in India has been very much filled by Native subscribers, I shall be perfectly satisfied to give him my vote.


Sir, with regard to the Enam question which has been introduced into this debate, I fear I shall not obtain much sympathy when I say I have been a resumption officer, and in that capacity I have resumed thousands of acres held as rent-free; and that I have relinquished from resumption and government assessment a like amount. I think it was in 1839, when my noble relative the late Lord Auckland was Governor. General, I was appointed special deputy collector, or resumption officer, to inquire into the lakhraj or rent-free tenures in the Tirhoot district, and subsequently in the two adjoining districts of Bhaugulpore and Monghyr. Now I should observe that the estates, villages, and grants of land, fraudulently alienated and held rent-free in Bengal, Behar, and the North-Western Provinces, were quite as numerous as in other parts of India. As an instance, in illustration of what I wish to convey to the House, I will, if the House will permit me, read an extract from the evidence given by Major George Wingate before the Indian Colonization Committee, and which has been placed on the table of the House. Major Wingate was appointed Revenue Survey Commissioner for the entire Presidency of Bombay, and, on being asked what proportion of land is held rent-free of the Government assessment in Dharwar and Belgaum, answers "I will, in my reply to that question, quote, if the Committee will allow me to do so, a paragraph from a letter from Mr. Hart, who was our Enam Commissioner." He says, 'On the appointment of Mr. Goldsmid, as superintendent of the revised survey and assessment in this province, he was naturally startled by the enormous proportion of land alienated in the shape of Enams, &c., in the collectorates of Dharwar and Belgaum. Besides the whole mahals entirely assigned as jaghire and surinjam, he found about 700 entire villages alienated out of the Kbalsat Mahals of both collectorates, and in the balance of 2452 villages left for Government and Khalsat by denomination, he estimated the number of minor alienations at about 60,000 estates—the share left for Government, even in these its own Khalsat villages, not averaging one-half thereof. According to this statement more than one half of the whole land was alienated. Major Wingate is clearly of opinion that owing to these gigantic alienations, Bombay has never been able to pay its expenses. Now, Sir, it appears to me, that a strange misapprehension prevails, not only in this House, but out of doors, that great injustice has been inflicted upon the lakhrajdars or rent-free landholders by those to whom the administration of the operation of the resumption laws has been entrusted. I can assure the House when I was appointed resumption officer—I may say the same in behalf of my brother officers—I could speak the Native language as well as my own, and that it had been my sad misfortune to have been sent into the interior of my district for months together, and during which time I never saw a white face, nor heard my own language spoken; and this being the case I had no difficulty in examining the sunnuds, firmans, and other documents under which these rent-free tenures were held, and detecting such as were genuine and bona fide, and such as were forged, and the House would not credit me were I to state the unblushing, gross, and wholesale manner in which a vast proportion of them were forged. I have had a sunnud or firman produced, purporting to have been granted by the Emperor Aurungzebe, or some other Mogul Emperor, who flourished 150 or 200 years before, and on putting the firman up to the light I have proved to the lakhrajdar, amidst the derision of my whole court, that it had not been given so many weeks, and the seal was so clumsily done, a child would detect it on comparing it with a genuine one in the office. Then, again, the lakhrajdar had an appeal against my decree to the Special Commissioner—a gentleman who had been twenty-five or thirty years in the country—and he again, on good cause being shown, could grant another appeal to the Sudder Deewanny Court in Calcutta. Now, Sir, let me for a moment compare this state of things with a parallel case in this country. I will take a deeply important subject—which Her Majesty's Government have so wisely promised to bring before the House directly—namely, the exercise of the elective franchise. The revising barrister is armed with such arbitrary powers under the old Reform Bill of 1832, that he can and does strike off a whole body of voters from the lists; and if he possesses a morose disposition—and this, unfortunately, is too often the case—he denies them an appeal to the superior court—that is, the Court of Common Pleas; and even if he does grant them an appeal they must appeal agreeably to the statement drawn up by the revising barrister, and not with reference to the views, circumstances, data, and facts furnished by the voters. I afterwards became magistrate and collector of Monghyr. I mixed freely with the Natives, particularly on making my annual tour of the district, and I was never once annoyed or heard a word of discontent from the dispossessed lakhrajdars or landholders, and that during the late fearful military revolt there has been no disturbance in Bhaugulpore and Monghyr; and as regards Tirhoot, where I resumed largely, on the civil authorities quitting that station at that absurd order of Mr. Commissioner Taylor, the city people and the police not only repulsed a body of marauding mutinous sepoys and budmashes, but they guarded the gaol and treasury, and, on the return of the civil authorities, handed them over in the same condition as when they had quitted them so precipitately. Now, Sir, in regard to the ap- pointment for the Madras Enam Commission, I think the defunct East India Company were much to blame for not having extended the operation of the resumption laws to that Presidency many years ago; and that the time they have selected for commencing operations is singularly ill-timed and badly chosen. We are only just, emerging out of one of the foulest rebellions ever promoted by a well-paid but treacherous Native Bengal Sepoy army, in the suppression of which the Madras Sepoys have signally distinguished themselves by their fidelity and bravery, and that Presidency has remained perfectly tranquil. I apprehend, it will be found that the greater portion of the rent-free tenures in Madras have been granted by the Nabobs of the Carnatic, the possession of which we obtained on the 25th of July, 1801. Under these circumstances I would respectfully submit to the noble Lord the Secretary for India, that a proclamation should be issued announcing that with reference to the time which has elapsed all grants, however obtained, prior to the 25th July, 1801, will be recognized and confirmed to the present holders, chargeable with a light succession duty; that all rent-free tenures held by the Madras Sepoys will also be respected and confirmed; but that as Government cannot consistently, with reference to what has taken place in the other Presidencies, exempt Madras altogether from the operation of the resumption laws, an inquiry will be held into all grants made since July 25, 1801. Let this be done, Sir, and I venture to say, notwithstanding the gloomy prognostications uttered by many hon. Members, the noble Lord need not be under any apprehension in regard to any discontent or in, surrectionary feeling being raised; but, on the contrary, the Natives will consider it as being one more of those moderate and just measures, accompanied with only such an amount of firmness as is essential to what is due to the assertion of our own dignity and rights as the governing power, and for which the noble Lord is so honourably distinguished above his predecessors in the Indian department. Now, Sir, I do not consider I am justified in detaining the House longer; but, with reference to that portion of the noble Lord's remarks in his masterly statement, namely, the substitution of cheap Native agency for the comparatively costly agency of Europeans, I wish, in justice to my old service, the Civil Service, to say a word. Major Ge- neral Tremenheere, in his evidence before the Colonization Committee, says that The civilians are an exemplary body of men, and that a certain proportion of highly educated civilians is absolutely necessary. Many Natives are highly educated, but it is the gentlemanly training and high principle of the English gentleman that is wanted for India. Mr. Mackenzie, an indigo planter—and these gentlemen are by no means mild or choice in their language in speaking of the civilians—says— When I was in India I imbibed the general prejudice that the Civil Service, as a body, was not efficient; but since I have been at home and had more experience, I should say that, as a body, there is none under Her Majesty's Government so efficient as the superior servants of the Company, and I beg to be permitted to say we never hear of the public money being squandered in India in the way it is in this country. Mr. Freeman, another indigo planter, and who far surpassed all his brother planters in the bitter and violent manner in which he calumniated the civilians, coolly asserted that there were not three civilians to be found who could converse for five minutes together with a Native; and such was the maladministration of justice by them that no European could reside in the Mofussil—that is the interior of the provinces; and yet he was actually induced to buy an estate in the Hooghly district for two lacs of rupees, or £20,000, and which he sold in the course of a few years afterwards for three lacs and 3,000 rupees, or £30,300, thus clearing £10,300 by the transaction, or something like 50 per cent. Mr. Marshman, who is too well known to require any eulogium to be passed on him by me, says, With regard to throwing open the Civil Service, I think whatever advantages might be derived from it would be more than counterbalanced by the bribery and corruption that would be inseparable from it; and in regard to the salaries of Natives, 750 rupees a month to a Native is quite as much as 2,500 rupees to a European, and it enables the Native to occupy the same position of respectability and dignity in his own circle as an Englishman with three times the amount. In conclusion, I will merely add, that I cannot take the same gloomy view of our Indian finances as many hon. Members do; and I do really believe, if the noble Lord the Secretary of State for India is permitted to preside long enough over our Indian possessions, that under his auspices we shall avoid the insane policy of past Governments in annexing kingdom after kingdom without a corresponding increase of European troops; that strict neutrality and peace will be preserved, and which, if it were to last for twenty years, will be more than enough to wipe out the whole of the present debt; and, lastly, that the noble Lord will introduce measures to re-establish a conviction in the Native mind that we are not only the best rulers they can have, but prove that we are their best friends also, and that when the influence of European capital, skill, and energy shall have been more fully applied to the vast and undeveloped resources of Hindostan, it will be strange indeed if an acute and tractable race cannot discover its best interests in seconding the policy of a powerful and beneficent Government.


said, he wished to offer to the Committee a few remarks on some of the points which had been raised in the course of the discussion. And, first, with reference to what had fallen from the right hon. Gentleman below him (Mr. Vernon Smith) as to the construction of cheap railways in India: he was perfectly satisfied that the attempt to make a cheap railway through the part of the country alluded to—namely, from Calcutta to the North-Western Provinces—would be perfectly impracticable. No other than a first-class line could possibly be successful. Upon that line bridges had to be constructed upon a much larger scale than in England. In one instance a bridge was required over a river three times as wide as the Thames at London-bridge; in another case, at the Soane River, the bridge was 4,200 feet long; and a third bridge of equal magnitude had to be made over the Jumna at Allahabad. It would be impossible, therefore, to construct a cheap line in such a country. Then, as to constructing railways without a guarantee, the attempt had been made, but it had failed. Until it was proved that the traffic would be remunerative, the railway companies in India could not proceed on the strength of the undertakings themselves; they could only succeed by means of Government guarantees. But he would observe that the East India Railway Company had now 1,000 miles of their line in progress, and 270 open; on 144 miles of which the receipts amounted to £4,000 a week, and in railway phrase it was earning at the rate of 7s. 2d. per train mile, which was about the average rate of the first-class railways in England. He mentioned this to show that there was every prospect of these lines being ultimately remunerative. With regard to the capital stock of the East India Company there was one point on which the public mind was not at ease. In 1833 Parliament assumed the responsibility of the capital stock of the East India Company, retaining and placing in the hands of the Commissioners for the Reduction of the National Debt, the amount of £2,000,000 out of the assets of the Company, as a security fund. The dividends were made receivable out of the revenues of India, and provision was made that, if the revenue should not he sufficient, part of the security fund should be sold to make them good. Now, it had been said that part of that fund had been sold, and he thought the noble Lord would do well to state what amount of the security fund had been thus appropriated, and whether the provisions of the Act had been complied with—namely, that the first receipts of money from India should be applied to keep up this security fund. Any payment made by the Home Government to the Government of India in this country for payment made on account of the former abroad was in fact a return made to Indian finance, and any sums so received ought to be applied to the security fund. Then, as to the question of exchanges. There ought to be some statement of the principles upon which exchanges were now regulated. He (Mr. Crawford) remembered that a statement had been made of the amounts which had been expended in contracts for the Persian war. They reached a large sum, and there might be a very large amount, or possibly a very small proportionate one, levied upon the taxpayers of this country on that account. He thought the system of exchange ought to proceed upon some fixed principle. Considering, moreover, the close connection that subsisted between the financial systems of the two countries, he thought there ought to be some public intimation of the amount of Government balances in India. A periodical statement of the balances in the Indian Treasuries should be published in the London Gazette. A publication every three months of the amounts received on account of Indian loans would be also a great advantage. Information with respect to the trade returns of India should also be given in as authentic a form as that given by the Board of Trade in this country. The information which the public possessed at present did not come from official sources. The noble Lord had alluded to the small number of Native holders of public debt in India. He said that the amount of European holders to Native was 29 to 16. But it should be remembered that a large amount of Indian debt was now held by banks in which Natives were large shareholders. The Native holder of Government stock was in the habit of taking it to the bank and obtaining credit upon it, and then the stock became transferred into European names. This might account in some measure for the contrast to which the noble Lord had referred. With respect to the cultivation of opium, he (Mr. Crawford) thought too much stress had been laid upon the probable diminution of the Indian revenue from this source, arising from the growth of opium in China. The Chinese climate was subject to periods of excessive cold, which were unfavourable to the growth of opium. Besides, it was a densely populated country, and the laws of political economy indicated that in such a country an article of luxury could never be raised to any great extent. The Chinese, moreover, preferred the article which was grown in India as being more agreeable to the palate, and preferred giving a high price for it as an article of luxury. In short, the inferior article grown in China could no more compete with opium the produce of India, than Cape wine did in this country with the wines of France and Portugal. He did not anticipate any material reduction in wages and salaries of the Europeans employed in India. It was absolutely necessary, if they wished to secure the services of duly qualified men, to give them salaries at least twice as great as for the same posts in England. In India a man was wholly dependent on himself, and was subject to the attacks of ill health in a dangerous climate, and it was not unreasonable that he should expect a large salary. The right hon. Gentleman had ridiculed the mention of the Madras pier; but he (Mr. Crawford) would beg to remind him that this pier, after having been talked about for many years, was now actually in the course of construction. Lastly, with regard to the immediate subject before the Committee, he (Mr. Crawford) admitted the desirability of raising funds in England for Indian purposes at the present moment, but he looked upon it only as a matter of necessity. He trusted it would not be permanent; and he hoped as a general principle the noble Lord would direct all his efforts towards obtaining in India itself, and not in England, the resources that were necessary for the government of that country.


Sir, I think it rather premature to call upon those who are responsible for the government of India, to be prepared with an exposition of their mode of accommodating the expenditure to the revenue. Before we address ourselves to that problem we ought to remember the position in which we stand. We have just recovered security after a great and extraordinary rebellion, and we have not yet arrived at the time when we could be expected to commence those retrenchments, by which alone the expenditure can be brought down to a level with the income. I think, therefore, that we shall not be departing from the usual maxims of prudence, which regulate onr conduct, if we deal with this question of a loan, without making that very rigid examination of income and revenue. If the time had arrived for so doing, our prospect would not be very good, because we are told on the one hand that the balance is on the wrong side at present, even excluding the extraordinary expenditure of war; and on the other, that the expenditure, even when the rebellion is over, would probably not be quite reduced to so low a level as before the rebellion began. Therefore the prospect is not very cheerful, the only hope held out depending on the gradual improvement of the people, by which means wealth would flow to the exchequer. You cannot possess in India either of the two great channels through which the revenue flows into the Exchequer at home—the Excise and Customs. You cannot propose to levy heavy Excise duties, because you dread the effects that may be produced by the severity of the collectors, while a regard for trade renders you unwilling to saddle that trade with import duties in India. There remains, then, only this, that in the important question of expenditure, even upon public works, you should exercise prudence and circumspection. I do not hold with the right hon-Gentleman the Member for Northampton (Mr. Vernon Smith) that it would be a wise and judicious economy to make railways that shall traverse that great continent, and convey your troops with rapidity, in a cheap and inefficient manner. If you depend upon railways for great political considerations, the money you spend in their construction will be a matter of no moment in comparison with the importance of making them effectively and well; and when you bear that for £12,000 a-mile those railways have been made. I think there is no charge for extravagance on that score. The hon. Gentleman the Member for Lon- don (Mr. Crawford) has said that it was necessary to give a guarantee to a particular railway, because the railway company tried in vain to get money, and were obliged to come to the East India Company for a guarantee. But I would suggest to him that the day has very nearly come when railways may be made in India without a guarantee, and I hope that the system of guarantees will soon come to an end. I know of no argument for giving a guarantee for a railway at the public expense, which is not a stronger argument for making the railway by the public money and by public servants. Parenthetically I may say, I regard this question of guarantee with some anxiety, because I do not wish the question of guarantee to creep into the Exchequer at home any more than into the India revenue. I hope that the branch railways which are to feed the great lines may be made with capital furnished by the growing wealth of India, and that we may thus create a national interest and a national property favourable to the maintenance of our government in India. But the principal point on which I wish to say a few words arises from an obiter dictum of the noble Lord's the other evening, which it is not right to pass without the fullest discussion. In law there is no such cause of mistake and confusion as the obiter dicta of great Judges. They are usually made carelessly and with no special reference to the cause before them. The dictum of the noble Lord too, had nothing to do with the present loan, because he does not propose that the loan should have a guarantee from the Imperial Exchequer. But the noble Lord did let fall an expression which has excited observation out of doors as well as here. It is most important that the House should not depart from the strong ground which it has taken up on this question. In the Indian Bill of the present Administration, which became an Act last year, the Government introduced a clause, most properly, as I think, for the purpose of settling that controversy for ever, in which Parliament declared distinctly that the debt of India should fall upon the Indian exchequer, and upon that alone. I hope we are not about to set loose a doctrine that we thought we had settled and made fast. It has been said that any one may bring an action against the noble Lord the Secretary of State for India; but, if so, it must be upon the contract by which the loan is raised. Now, Parliament has declared that the interest of Indian loans shall be paid out of Indian revenue, and not out of the Imperial Exchequer. What is the rate of interest upon Indian loans? We are told it varies from 4½ per cent in this country to nearly 6 per cent in India. But are you going to give gentlemen 4½ and 6 per cent interest with an Imperial guarantee in the background? Are you going to give them the benefit of the high rate of interest as for an inferior security, and then the benefit of the superior security which would have enabled you to obtain a low rate of interest? There is an argument, very insufficient as I think, in favour of taking the whole of the Indian debt upon Imperial security for the sake of the lower rate of interest. There is also the stronger and more valid argument, that Indian loans ought to be raised upon the security of the Indian revenue alone. But there is one course for which there is no argument, and that is, that you should borrow money upon the Indian rate of interest, and then that you should saddle the payment upon the English Exchequer. We do not allow the tax-payers of this country to be saddled with financial incumbrances without their assent, and without giving their representatives the opportunity of inquiring into its disbursements. But the Indian loans are borrowed without the control of Parliament in the appropriation of the funds. I appeal to the statute. It was there established that the burdens of India should belong to the Indian exchequer, and I hope you will never allow that wholesome dectrine to be perilled. I think we need not take a very gloomy view of the finances of India. Looking at the great development that has already taken place, and remembering how largely internal communication may be expected to promote the growth of those staples which, come whence they may, our manufacturers are so well able to consume, I believe that great additional developments in the industry and wealth of India may be looked for. When we remember that we are debating a proposition for providing for the finances of India in the second year of a great rebellion—when we reflect that we have only raised £10,000,000 or £11,000,000 in the London market for this purpose, that this year we only risk for £7,000,000 more, and that the noble Lord encourages us to hope that it will not be necessary to come to us again upon another occasion—when we remember the great peril to which India has been ex- posed, and that the whole rebellion has been put down in less than eighteen months—we cannot think that the result is anything but matter of thankfulness on our part. The moral spectacle and the exhibition of our prowess have produced the greatest effect in Europe in raising our character, and I think it will also produce a very salutary effect when it is found that so great is our pecuniary strength that almost the whole of the money required has been found in India itself, with so small an appeal to the money market of Europe.


said that many of the considerations which the right hon. Gentleman urged had occurred to his own mind. It was now proposed to raise a loan in England, to be put into the Indian Exchequer and to be spent without any check or control. When a loan was raised for home purposes it was guarded by certain precautions, and he would ask the Committee, therefore, whether it was no desirable to adopt the same precautions upon this subject. It was a dangerou system of finance to raise a large sum of money to be spent in a distant dependency without control, and he would, therefore, suggest to the noble Lord whether in the Bill he was about to introduce he would not, on behalf of India, insert some appropriation clause providing that the money should be properly spent, and to appoint some independent auditor, who would see that the wish of the House was fully carried into effect. He wished to make a few observations on the financial part of the question. The noble Lord appeared to be at variance with the accounts of Indian Finance presented by Act 3 & 4 William IV., c. 85. The gross revenue of India was stated to be £33,000,000, which the noble Lord explained exceeded the real amount by nearly £2,000,000, in consequence of the rupee being calculated at 2s., and not 1s. 10½d. It would be also seen, on looking over the papers which were laid before the House, that on every single item there was a discrepancy between the statement of the noble Lord and the accounts laid on the table. Thus the land revenue was stated by the noble Lord at £19,000,000, in the statutable accounts it amounted to little more than £18,658,888; opium was stated by the noble Lord at £4,696,000, in the accounts it was stated at £4,689,750. In the salt and customs and miscellaneous, the discrepancies were still greater; and the result of the whole was, that while the noble Lord estimated the whole revenue at £31,220,507 the statutable accounts represented it at £29,702,854. He hoped some further explanation would be given of those discrepancies. But the point to which he wished to call special attention was, that there was nothing so deceptive as the statements of gross revenue, and no greater mischief could be done than by entertaining exaggerated notions of the revenue of India. The noble Lord had told them that the revenue of India amounted to £31,220,507; but it must not be forgotten that £10,000,000 of that sum was forestalled—about £3,708,703 costs of collection £255,000, pensions, allowances, &c., and nearly £4,000,000 as interest on the debt. He urged this as an additional reason for using the greatest precautions, and adopting the strictest economy. He must say he did not think the right hon. Gentleman the Member for Halifax (Sir C. Wood) had dealt quite fairly with the noble Lord. The right hon. Gentleman gathered all the Indian difficulties together in a heap, and threw them at the head of the noble Lord, asking him how he would extricate himself from them. He did not think that was quite fair. The mutiny could hardly yet be said to be suppressed, and it would be an impeachment of the noble Lord's judgment if he were now to come forward with a complete financial scheme. At the same time he was surprised to hear the noble Lord say that he did not consider the Indian stock a permanent charge on the Indian revenue. He, for his part, considered it to be the first charge, and he understood, according to the Act of 1833, that if India were lost to this country, that stock would constitute a charge upon this country as far as the guarantee fund did not cover. With respect to the question of an Imperial guarantee, he would ask the right hon. Member for Oxford (Mr. Cardwell) to recollect what he (Sir H.Willoughby) said last year, that we were gradually drifting into that guarantee. It was to avoid that he was anxious to maintain the existence of the company, as at least one barrier against Indian claims being brought against this country; but now he thought it was impossible to consider a Secretary of State insolvent while the Chancellor of the Exchequer was not. He thought the probability was that both would become insolvent together; but he hoped that result would happen to neither; only it was an additional reason for precaution on all sides. The whole question would turn upon how they were to maintain a European force in India. The Indian revenue could not support a European army of 100,000 men there; for according to the opinion of the Duke of Wellington, formed when he was in India, and signed himself, not Colonel Wellesley, but Colonel Wesley, both the climate and the expense rendered such a proceeding impracticable.


said, he quite agreed with those who had complimented the noble Lord on the candour and fairness of his statement, but he also agreed that they had been unable to gather from it the means by which the noble Lord would extricate himself from the difficulty in which he was undoubtedly placed. The noble Lord said that he did not see his way to any considerable increase of ways and means, or any great reduction of expenditure, except some trifling decrease in the Civil Service, for the noble Lord said, in answer to the right hon. Gentleman the Member for Northampton (Mr. Vernon Smith) that he thought he might reduce the army to what it was before the mutiny, but not lower. It followed, therefore, that the deficit would be equal to the interest of the loans which the mutiny created. He thought they had a right to expect that the noble Lord should suggest some remedy for the chronic state of debt which might be anticipated from his own statement. The noble Lord had done nothing of the kind. He said the land revenue was inelastic, but he suggested no means of taxing the wealthy classes of India, who, he admitted, were entirely untaxed, except the small proportion which they paid of the salt tax, while the cultivators of the soil were taxed to the extent of their whole profits, save a bare existence. The noble Lord has called upon the Government of India to devise some tax which should balance income and expenditure, but that was, in his (Mr. Lowe's) opinion, the duty of the Home Government. What were the Gentlemen in Leadenhall Street for, if not to relieve the local Government from abstract speculations on matters of taxation? How could it be expected that with the cares and difficulties which beset Viscount Canning and his Council they could find time to go into a careful comparison of statistics, and of the different kinds of tax which might be imposed? To refer such a measure to the Indian Government was tantamount to putting off the question sine die. If they turned to the other side they found the noble Lord ex- pressing hopes of some trifling reduction in the civil expenditure. He apprehended that his right hon. Friend the Member for Halifax had entirely answered that by showing that, as they raised the standard of comfort and personal safety in India, they would create wants which the Government would be bound to satisfy. Therefore, if they looked forward to the improvement of India, they must look forward also to the gradual increase of the civil expenditure. What was the case of this country? Why, that our civil estimates had nearly doubled within a short period, simply because, the standard of comfort and convenience being raised, the people would no longer put up with the rude contrivances which satisfied their forefathers. The only other head upon which reduction was possible was the military expenditure, and the noble Lord had disposed of that himself. Merely looking, then, at the taxes and the expenditure, there seemed no means of doing any good, and we ought to look deeper, therefore, to see whether any change could be devised which would relieve India from the burden of a great military expenditure, would bind the inhabitants closer to our rule, and raise a feeling in our favour that would fight for us as effectually as an overwhelming military force. The noble Lord, however, had not given the house any intimation with regard to a measure of this kind. Every one knew that the noble Lord's aspirations were of the most philanthropic nature—could he see nothing in the state of India in the way of alteration and improvement which bore upon this part of the question? The great evil which must strike every one who knew anything of India was that the land, which in every other country was the basis of society—the basis on which everything was built, on which the Government relied for the supply of that portion of the population which would stand by law and order, and resist all change in India—entirely failed to fulfil that condition. Inheriting the oppressive system of our Oriental predecessors, we had so contrived as not to create any property in land. Those who cultivated it had no ownership in it; they were rackrenters to the utmost extreme, and whatever Government might succeed us they could be no worse. If the only hope of receiving the revenue from land was that the land which had gone out of cultivation—in many cases owing to our heavy assessment—might some time or other be brought into cultivation again, what did we gain by the power we retained of still raising the assessment higher, by marking it for a few years at such an amount as we believed the cultivator to be just able to pay, with the power of raising it higher? By that system we lost the affections of the people and the conservative influence of property, and we were forced to incur a large military expenditure to retain our hold of a country, the inhabitants of which we had not bound to us by any of those ties by which a beneficent Government secured the obedience and affection of its subjects. These were questions which must be considered if we meant to bring our revenue to a balance with our expenditure. With regard to an Imperial guarantee, setting aside the impolicy of making this country liable for the debts of India, and admitting that the foreign dominions of the Queen in India stood in a different position from Her Majesty's dominions in tile Colonies, for the sake of India itself we ought not to countenance this notion. It was difficult at all times to maintain an effective control over a distant Government such as that of India; but there was this check,—that by undertaking rash wars the Government knew that it was embarrassing its own resources. If it once got hold of the idea that it had the boundless credit of the Imperial Exchequer to fall back upon, this check would be lost. As to the system of guarantees, the expedient of guarantees had probably been hit upon from the supposition that advantages would be gained in the management of a private company which could not be looked for from the management of a Government. No expectation could be more futile. By giving it a guarantee the chief advantage of a private company—economy—was lost. It might be said that there was the incitement left to gain a higher dividend than that guaranteed; but of the two motives—hope and fear—the last was the strongest, and if you secured a company from the risk of getting less than 5 per cent, it would not be very actively stirred by the hope of getting more. The system of guarantees was most expensive, too. If the work failed, the Government had to bear the expense, aggravated by the expense of the machinery which it had needlessly called into action, and if it succeeded it had uselessly to forego the advantages of it. Once begun, the system could not be stopped. If one thing was guaranteed, everything must be guaranteed, and all at the same rate. For the future no work could be executed without a guarantee. Not that it would be impossible to persuade people that the work would be remunerative, but because those who dealt in these stocks would get so accustomed to the notion of Indian guarantees that they would not look at a project which was not guaranteed. At the moment, too, when the Government perhaps wanted most to borrow on good terms, it might be confronted in the common market by the competition of its guaranteed compeer. To one matter he wished to call the particular attention of the noble Lord. When the Committee of 1853 finished its sitting, it was the opinion of the then President of the Board of Control and others who had paid considerable attention to the matter, that the Sudder and Supreme Courts ought to be amalgamated. A Commission was appointed on which he had had the honour to serve, and of which the Master of the Rolls and the late Sir John Jervis were members, to draw up a code of simple and uniform procedure for these amalgamated Courts, which might also serve as an example for the inferior Courts. For three years the Commission laboured at this work, and when the code was drawn up it was sent to India. There it was submitted to that anomalous body, the Legislative Council, which had altered a great deal the Commission had done—to his mind, though it might be prejudice, for the worse. For instance, the Commission had abolished written procedure, and had given only one appeal. The Legislative Council restored written procedure, and gave a second appeal of a purely technical nature. The Legislative Council had proposed, too, to leave the Sudder and Supreme Courts alone, and confine the procedure to the Mofussil Courts. The Commissioners were of opinion that if this was allowed to be done a great opportunity would be lost. All these Courts now were the Queen's Courts, and it would thus be given out to the Indian people that the Queen had one Court for her English subjects resident in the Presidential towns, and another for the Hindoo subjects resident in the country. But should the noble Lord and the India Council or the Governor General and his Council in India be of opinion, for reasons which he did not know, that the time was not come for pressing this measure, then he thought it would be more wise to allow it to drop for the moment, and wait for a better opportunity of carrying it fully into effect. He submitted this matter to the judgment of the noble Lord in the hope that he would take it into his serious consideration, and that he would listen to no suggestions that it was a matter foreign to the duty he was called on to discharge. Of all the evils that had created discontent in India, there was none that had operated so powerfully to that end as the judicial system. In saying this, he expressed the judgment of men who ought never to have been subjected to the slight—to use no stronger term—of having their opinions reviewed by gentlemen otherwise so respectable as the members of the Legislative Council in Calcutta. A great opportunity now offered of placing the procedure of civil justice on a clear and simple footing in India, and he hoped that the noble Lord would carry out the plan in all its integrity. If, however, for reasons which he (Mr. Lowe) did nut know, he found that that could not, at the present moment, be effected, he thought it would be better to wait till a more favourable time occurred.


said, a great variety of subjects had been touched upon in the course of the evening, but probably the Committee would only expect that he should notice one or two of the most important of them. He would first advert to that topic which had been introduced by the right hon. Gentleman the Member for Halifax (Sir C. Wood), and which had also been commented on by the right hon. Gentleman who had just sat down—he meant the union of the Sudder and Supreme Courts. On that subject he entirely concurred in the view taken by the right hon. Gentleman the Member for Kidderminster (Mr. Lowe), that it was desirable to make this reform in its integrity, and not to carry out any partial measure. With that feeling he had, on behalf of the Government, sent out by the last mail a request to the Government of India to suspend all proceedings in the matter till they had heard from the Government at home. He should be glad if it were possible to act upon the recommendation of the Commissioners at once; but he agreed with the right hon. Gentleman in thinking that it would be better to go on with the system as it was for a time, rather than to alter it in a partial and imperfect manner, and so in the end increase the difficulties with which the subject was surrounded. Various quesitons had been put to him with regard to the "security fund," and in reference to that matter he had been told that about a year ago there was a sale of £315,000 of the security fund to pay the dividend of the capital stock, due in January, 1858, but that amount had been replaced. The right hon. Gentleman the Member for Halifax (Sir C. Wood) made an inquiry with reference to the Report on Civil Salaries. He had not seen that Report, though he believed it had arrived in the country. But from what he heard, the general result of it was rather to increase than diminish the civil expenditure. On that point he could only repeat what he had said the other night, when he carefully guarded himself from expressing any opinion that a large immediate reduction in that branch of expenditure could be looked for. Something had been said with regard to the guarantee system as applied to railways. It was rather too late to raise that question now, as they had already guaranteed the interest on railroads to the extent of £40,000,000. He quite admitted the system was open to many objections, but the Committee should recollect, however, that there was a vast difference between the Government guaranteeing those works and carrying on the works themselves, for in the one case the Government only accepted the liability to pay a sum not very great for interest; whereas, if they had undertaken the works themselves, they would have had to supply the whole capital. A most important question had been raised with regard to the responsibility of the English Exchequer for the debts of India. On that point he agreed with what was the general feeling of the House. He quite agreed with those who held that the late Act did not affect the question of responsibility and that the state of things as regarded the responsibility of this country for Indian debts continued just what it was under the administration of the Company. The obiter dictum of his, to which the hon. Member for Oxford had alluded, was merely to the effect that he thought it worth while to remember that we had a contingent interest in the matter. The nature of that contingent interest had been fairly stated by an hon. Member, who said that it was not easy to see how the Secretary of State for India could be insolvent and the Chancellor of the Exchequer solvent. No doubt the Indian debt would be held to be a charge on the Indian revenues alone. Still, the question he threw out on Monday evening was with relation to the contingency that at any time the Indian revenue should be insufficient to meet the demands made upon it. The creditor had a first charge on Indian revenue, and if after paying him, the Indian revenue proved insufficient to carry on the civil and military administration of India, by whom were the necessary funds for that purpose to be supplied? Either we must leave India without administration and without defence, or we must contribute to the cost of both? That was the way in which the question really came up. It was in that sense only he ever asserted, or meant to assert, that there was a contingent responsibility lying on this country, and he thought it well that the House should be aware of its existence. He ought to state, that after the discussion on Monday night the Government had laid on the table of the House a despatch containing a summary of our financial condition for the two years, but he regretted that it had not been printed in time for this debate. With regard to the omission of various items in the accounts, it was quite true that the last accounts were issued only six months ago, but the Government were not otherwise responsible for it than that the form which existed previously had been followed in this instance. He would look into the matter before another account was published, and he must say that he thought that the proper course was, that every item of receipt and expenditure should appear in the account. In conclusion, he could only express to the house his thanks for the fair and impartial spirit which had been shown in the discussion, and for the willingness evinced on all sides to assist the Government of India in its difficulties.


said, he could not but congratulate the House on the absence of that party feeling which it had been said last year would be imported into all Indian debates after the transference of the Government to the Crown. He thanked the noble Lord for what he had said with regard to India, and begged to say that, for one, he cordially agreed in the policy which the noble Lord had adopted. He approved the policy which had led to the giving of guarantees for the interest upon money expended in works of great national importance, for he was satisfied that such guarantees would be the means of effectually developing the resources of India.


said, that the right hon. Member for Halifax had taken a gloomy view of the prospects of India, for which he trusted there was no ground. He held in his hand a comparison of the revenue and expenditure of India for decennial periods from 1809–10 to 1849–50, and he found that in 1809–10 the expenditure was 98 per cent of the revenue; in 1819–20 it was 99 per cent of the revenue; in 1829–30 it was 92 per cent; in 1839–40 it was 94 per cent; and in 1849–50 it was 84 per cent; showing 16 per cent of revenue surplus in the last year; and a surplus in each of the preceding decennial periods. A gain, in 1809–10 the interest of the debt was 18 per cent on the revenue, while in 1849–50 it was only 10 per cent. and though the debt had greately increased, it had not increased in the ratio of the increase of the revenue. He believed that no other country in Europe could show a similar result. As to the prospects of India arising from what was called the development of her resources, really it had become mere jargon. Her resources had been developed to this extent, that £8,000,000 of exports in 1834–5 had swelled to upwards of £25,000,000 in 1856–7, being an increase of 318 per cent, while the imports in the same period had increased 332 per cent. The silver bullion imported into India since 4834–5 in adjustment of the balance of trade had exceeded £94,000,000 sterling, and if this enormous sum £76,000,000 sterling nett had remained in the country, and £66,000,000 sterling had been coined in rupees in the mints of India, most of which no doubt had found its way into the interior in payments of labour and first cost of produce. He quoted an extract from the Friend of India, a paper of late not friendly to the Indian Government, in support of his proposition that the prospects of India were, on the whole, satisfactory, provided that that confidence which had formerly existed between the Government and the people were restored. So long, however, as distrust operated upon the European mind the people of India would be alienated from us, and he was satisfied that it would be impossible to equalize the revenue and expenditure of India while we had to support there an army of more than 90,000 European troops.

Motion agreed to.

Resolved, That it is expedient 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.

Resolution to be reported on Monday next.

House resumed.