COMMITTEE.

HC Deb 13 August 1860 vol 160 cc1181-226

Order for Committee read.

House in Committee.

SIR CHARLES WOOD

said: A year ago, or thereabouts, it was my duty to lay before a Committee of this House the best estimate which I could then give of the Indian revenue and expenditure. Since then two events have happened which materially affect the statement which I shall have to make to-night. One is that a gentleman whom we all know, Mr. Wilson, has proceeded to India to aid with his financial knowledge and experience the Indian Government in their measures of fiscal administration, and in the endeavour to bring the finances of India into a sounder position. The other event is that the Indian Government, aided, no doubt, by Mr. Wilson's experience, have proposed, and by this time, I have no doubt, have carried into law the most important financial measures which have for some time been brought forward in India. The statements which Mr. Wilson has made, very much like those of the Chancellor of the Exchequer in this country, and which are among the papers printed for the use of the House, arc so clear and full that I might almost dispense with any but a very short summary of them. On the other hand, the proposals of the Supreme Government have excited great criticism and great opposition, and have led to a controversial correspondence with the other Governments in India. The diversity of opinion and of statement is so great that it is not very easy to unravel the web, and it would be still more difficult to put the whole controversy before the Committee. It is not necessary, however, to do so; and I hope I shall be able to state the results, and to make them clear in no very great compass. The correspondence on the table is almost entirely that which arose between the Government of India and the Government of Madras in reference to these measures. They were laid on the table in connection not only with the proposed financial measures, but with the recall of Sir Charles Trevelyan. Upon that subject I hope it is utterly unnecessary to say a single syllable. In the whole course of my public life I never had so painful a duty to perform, and I regret exceedingly that necessity, for I believe it has deprived the Presidency of Madras of the benefit of services which would have been invaluable. I had the pleasure of seeing Sir Charles Trevelyan this morning, and he promised to give me every information and assistance in reference to the Government of Madras; and I should not be doing justice to him or to myself if I did not take the earliest opportunity of expressing my grateful sense of that assurance. In addition to the correspondence on the table, there is a letter from the Government of Bombay—a Minute of Lord Elphinstone's—and an answer from the Government of India. The papers would, I think, have been incomplete without those two documents, and, in fact, they were almost necessarily included, as they are referred to in the Minute of the Madras Government. Here, again, I cannot help saying what a loss to India and to this country has been the death of Lord Elphinstone. No man had greater experience of Indian administration, under ordinary circumstances, and when the late mutiny called for more energetic action, in no respect was he wanting to the emergency. I can only say that his is a loss which this country, equally with India, must greatly deplore. Having paid this tribute to his memory, I will only say that in addition to this voluminous correspondence there are the ordinary finance accounts of India, with an explanatory despatch; and beyond that there is a paper which is still more material than any—a comparative account of revenue and expenditure for the last five years. There are some differences between the finance accounts and the figures contained in that paper, but the comparative account is compiled from more recent information, and contains some items which are not in the other accounts. Before, however, I go to the expenditure and income of the year, I wish to refer to the deficits of the last two years. I have been sometimes accused of taking too gloomy a view of Indian finance. I can only say my sole object has been to present to the House and the country the most faithful accounts in my power to produce. I stated last August what I estimated the deficit of the years ending April, 1859, and April, 1860, would be. I was wrong, no doubt, both as to revenue and expenditure. The revenue has been larger and the expenditure has been larger than I anticipated, but the two have so far kept pace together that the deficit is as nearly as may he what I stated. I estimated the deficit of 1859 at £14,707,000, whereas it was only £14,187,000. For the year ending April, 1860, I put the deficit at £9,281,000, while it was actually £9,981,000. Payments are sometimes thrown from one year to another, which prevents a perfectly accurate estimate; but while my estimate of the deficits for the two years was £23,988,000, the actual amount was £24,163,000, there being only a difference of about £180,000. The close agreement is, of course, to some extent accidental, but I think I may take credit for having formed no inaccurate estimate, and for not having exaggerated the unpromising state of affairs. I now come to the present year. The expenditure in 1859–60 was £45,890,000, and the income £37,796,000, leaving a deficit of £8,094,000. To that is to he added the guaranteed interest upon railroads which amounted to £887,000, making a total deficit of £8,981,000. The expenditure for the year 1860–1 is estimated at £43,958,000 and the income at £37,762,000, leaving a deficit of £6,196,000, to which is to be added the guaranteed interest upon railroads, which has this year increased by £400,000, and amounts to £1,276,000, thus increasing the total deficit to £7,472,000. It seems to me that the mere statement of these figures is enough to dispose of the controversy which has been carried on in India and completely overthrown the opinion of the Government of Madras, and of that of Bombay, that is, that the whole deficit might be made good by a reduction of military expenditure. When I show the Committee that the deficit is £7,400,000, it can be conceived how difficult it would be to get rid of such an amount by a reduction in the military expenditure to that extent within the year. The military expenditure for the year is estimated at £15,276,000, and deducting from that amount the supposed deficit, there would remain in round numbers £8,000,000, which sum would be £3,000,000 below what the military expenditure was in the year he-fore the mutiny. No one can he sanguine enough to expect that our military expenditure can be reduced as low as it was before that mutiny, now that a large additional European force must inevitably be maintained under the altered circumstances of India. In the Estimates upon the table the proposed reduction in the military expenditure is about £2,600,000, and if we were to add to that the amount of the deficit a reduction of no less than £10,000,000 must be made in the military expenditure at the end of this year. Will any one maintain that that will be possible? That Estimate is made by the Government of India, not upon any hypothetical notion of their own, because they had received the actual estimates of reductions from the Governments of Madras and Bombay. The reduction proposed by the Government of Bombay is £655,000, by Madras £591,000, while reductions by the Government of Bengal swell the total amount to £2,600,000. This question of what reductions in the military expense can be expected is not a question upon which we are without experience, as attempts were made last year to make reductions, and the greatest pressure was employed to enforce them. The Government of Madras however, last year reduced its expenditure by only £330,000, but that of Bombay was actually increased by £197,000. There was a larger reduction in Bengal, where, of course, it was more natural to expect it. In the last and the present years there will be a total reduction of military expenditure of £6,000,000—namely. £3,400,000 in 1859–60, and £2,600,000 in 1860–1; and I am not sanguine enough to think that reduction can be carried much further within the year. That is the state of affairs for the present year, but we must, of course, look beyond and see what are our prospects of reductions in future years. I have always taken the year 1856–7 as a pattern year. It was the year immediately preceding the mutiny, when there were no additional expenses, and when the income and expenditure in India were about equal. Starting from that year I find that the military expenditure has increased by £3,785,000. For local corps there is besides an increased sum of £333,000, and for transport £141,000. Then there is an increased home charge for payment in this country, on account of troops £1,195,000—making a total of £5,454,000. But in looking at this question we must include the police, which has necessarily been increased to a considerable extent. Since 1856-57 the increase in the police has amounted to £1,024,000, so that taking military and police together the increase has amounted to £6,478,000. Then there has been an increase of expense for barracks during the last four or five years. It is not necessary in regard to Native troops to have this kind of accommodation, as they provide for themselves after their own fashion, but in the case of European troops it is not reasonable or fair that we should send them to India without providing for them such barracks as are necessary for their health. It has been thought right, too, to construct the barracks in such a way as to make them capable of defence—to make them fortified posts to which in cases of emergency the women and children, and invalids, might retire. This naturally entails considerable expense, though it is an expense that cannot last more than a year or two. But though this expense has increased from £374,000 in 1856–57 to £1,827,000 in 1859–60, there has at the same time been an almost perfect stoppage of expense on account of civil public works and buildings, and, therefore, though I anticipate a considerable reduction in regard to military buildings in the course of the next year or two, I do not expect any reduction whatever in the total expenditure for public works. There has been, as I have stated, a great increase of expense in military buildings that will be stopped in the course of next year, but the saving thereby effected will be counterbalanced by the increase that will take place in civil public works of various kinds which are most urgently required in all parts of India. There will be a transfer from the military to the civil expenditure, hut the charge on the Indian revenue will not be diminished. There has been since 1856-57 an increase in the cost of collection of £476,566; civil and political establishments, £508,361; judicial establishments, £163,625; public works, £452,732; miscellaneous, £124,573—making a total of £1,725,857. There is another item of increased expense—the interest on the debt. Before the mutiny took place the debt was £59,442,000, and the interest £2,525,000. In 1859–60 the debt is £97,851,000, and the interest is £4,461,000, being an increased charge for interest of £1,936,000. Beyond that there is an increased charge for what is called guaranteed interest on railways. In 1856–57 the amount of guaranteed interest was £404,000; 1857–58, £526,000; 1858–59, £606,000; 1859–60, 887,000; 1860, £1,276,000; being an increase of £872,000. The sum total of all these increased charges since 1856–57 is military, £5,454,000; police, £1,024,000; civil, including buildings, £1,725,800; interest on debt £1,986,000, out of interest guaranteed to railways, £872,000—making a total increase of £11,011,800. The revenue has increased-partly from the old sources and partly from additional taxes, to the extent of £4,400,000. A large portion of the arrears due subsequent to the mutiny has been paid up, but I do not anticipate more receipts from that source; and, after as fair and impartial an estimate as we can make of the entire revenue and of the expenditure, the result arrived at is that we shall have a deficiency for 1861–62 of about £6,611,000. Then comes the question how is that to be met? Are we to borrow? I think not. I am of opinion that to leave the Indian Government the power of borrowing, as has been the practice on open loans, would hold out the greatest temptation that can possibly be offered to a wasteful expenditure. It has always been found to be so, and therefore it is the last step that ought to be taken if it is wished to promote economy. This House has resolved, very wisely as I think, not to guarantee the payment of any part of the Indian debt, but to throw the Government of India entirely upon its own resources. That being so, and when they are made to feel that they are themselves responsible for every shilling of their expenditure, they will find in it an inducement to economize in their outlay as far as possible. I am satisfied that these two considerations—the knowledge that they have not the power to borrow, and that they are responsible for their own expenditure—will go very far to render the Indian Government cautious of imposing any unnecessary charge on the revenue of India, and to produce the most rigid economy. Then, if we are not to borrow, there is no other resource but to impose additional taxation. I have explained to the House that I am speaking of that which I believe is possible for the next three or four years; and I must repeat my conviction, after careful examination of the whole case, that it is impossible to effect any such reductions of expenditure as would meet the deficiency of the revenue. We must, then, have recourse to taxation, and the question is, what ought that taxation to be? On this point the most various opinions have been pronounced. Just to take one instance, we have been often told how foolish it was to look upon the revenue from opium as an uncertain revenue, and that we were entitled to reckon it as a perfectly certain source of revenue. That assertion, however, made last year, has this very year received a signal contradiction, for the Government has been obliged to increase the price paid/or opium. They anticipate a reduction of the receipts from that source of £300,000 and an increased charge of £275,000, so that the amount of revenue received from opium will be £575,000 less than last year. I think we ought not to rely on such a source of income. A good deal has been said about Mr. Wilson visiting India with English notions, and about his having started a scheme of taxation that no one in India ever heard of before. If hon. Members will look to the papers, they will find that this question of raising a further income in India was under discussion for about a year before Mr. Wilson's arrival. The first of the papers on the table of the House will show that the whole question of the system of taxation necessary to supply the deficit was discussed during the whole spring and summer of 1859, and that a Bill was introduced into the Legislative Council for a licence tax, which wa3 more or less of an income tax, in the summer of 1859. During the whole of this discussion an income-tax in some form or other was more or less contemplated, and the opinion of the Madras Government upon that subject is given. It will be found also, by reference to the papers, that although the Government of Madras objected to any additional taxation at all, yet Sir Charles Trevelyan said that if the time ever came for the imposition of such additional taxation, an income tax, and not a licence tax, would be the best method of raising the revenue. As soon as Mr. Wilson arrived in India he went up the country to join Lord Canning, and with his full concurrence and approbation it was determined that the new taxation should be that which has been proposed—an income tax, with the addition of a duty on licences to trade, and a duty in some shape on tobacco. This was not done without communication with the officers of the Government in the various Presidencies; and, with the fullest concurrence on the part of the other Members of the Government in India, with the approbation of the Governor General. After the fullest consideration and discussion, the Bills were put substantially into the shape in which they now stand. I am not aware that any other course was open to the Government than that which I have described. I attach great weight to the opinion of Sir Bartle Frere. He was not an officer of the Bengal Government. He came from Scinde and Bombay to Calcutta with the conviction that additional taxation was not necessary in India, and that by a reduction of expenditure the Indian deficit might be met. Sir Bartle Frere was, however, unprepared for the state of things that he found at Calcutta, and, unwilling as he was to admit that reductions could not be made, and that taxation was necessary, he was compelled to admit that no other alternative than the levying of new taxes was open to the Government. Sir Bartle Frere said— I therefore assented to Mr. Wilson's schemes not as free from difficulty and danger, but as less open to objection on that score, and far more complete and effectual for their purpose, than any which had been offered. I believe that I rate the risks much higher than he does; but I am convinced that the risks are as nothing compared with the certain ruin of drifting into bankruptcy, or remaining as we are. He also stated that the notion that the taxes proposed were alien to former practice in India, was unfounded. He stated, on the contrary, that taxes of the same character, but not so fair in their incidence, had been constantly imposed and paid in India. In another Minute Sir Bartle Frere said:— No notice has been taken of the fact, that during the present discussion no scheme of fresh taxation has hitherto been propounded by any one, Native or European, which would bear a moment's examination, which has not included some form of direct taxation, all more or less partial, inadequate to our wants, or otherwise more objectionable than that selected by Mr. Wilson; but all direct taxes, and generally, in some form more or less cumbersome, taxes on incomes—such taxes, in fact, being from the earliest times component parts of all Native schemes of finance. It seems to be forgotten that up to 1834-6 taxes on incomes, trades, and professions were levied almost universally throughout British India, under various names, and that they were then abolished in parts of Bengal and throughout the North-Western Provinces and Bombay, not because they were in theory bad taxes, but because they were so unfairly assessed and unequally levied, that it was difficult to reform them in their then existing shape. The Indian authorities felt that, much as some persons objected to the income and licensing tax, no one had proposed a scheme of taxation at all adequate to the necessities of the case, or which would not have left us drifting into bankruptey. That being so, they took the greatest pains to gather information from the greatest number of persons; and after giving the subject the fullest consideration, the Government of India, without a dissenting voice, determined on adopting the system of taxation of which I am now speaking. I confess I thought the low point at which the income tax began, a great objection to the scheme. Mr. Wilson, however, informs me that in India no complaint was made on that score, and that a person in the receipt of an income of 200 rupees, was very much in the same position as a person having £100 a year in this country. It was also felt that if the limit were raised, the tax would be altogether unproductive. It was thought by some that it pressed rather hardly upon the smaller landholders; but, with the alterations and amendments adopted since its introduction, the Indian Government consider that it will not press hardly at all upon leaseholders for twenty or thirty years, whom they wished to see pretty well exempted from the tax. In the Presidency of Madras there are 1,518,187 landholders, only 1,800 of whom would pay the tax, if assessed at half the amount of the rent paid, So that, out of the 1,518,187 holdings in that Presidency, not less than 1,516,387 persons would be exempt from payment, if assessed at one-half the rent. It is now proposed that the tax shall be levied on one third, instead of one-half the rent; which, in the Presidency of Madras, will reduce the number of those who pay the tax to a much smaller number. We hear from the Punjab, and various parts of India, that there will not be the smallest difficulty in raising the tax. I am not aware whether hon. Members have seen a letter addressed to Mr. Wilson by the Rajah of Burdwan, the largest landholder in Bengal. He sees the value of the rule of Great Britain, in the protection given to life and property; and declares that the Natives of India, who derive so much benefit from that protection, ought not to object to pay so small a percentage of their incomes for this purpose. Such a declaration is highly to the credit of the Rajah of Burdwan; and I trust that in these sentiments the Rajah only represents the large zemindaries and landholders of Bengal. It has been frequently said that the mercantile classes, both European and Native, ought of all men to contribute to the wants of the State, considering the benefit they derive from our rule and the protection they enjoy. The result of the taxation now proposed is, that the small landholders will escape; that a small number will pay; and that the tax will be paid, as it ought to be, by the richer landholders and the mercantile classes, who have hitherto paid nothing to the revenue. The licence-tax also presses on the latter class, which, in fact, derives the greatest benefit from our rule, and contributes the least to its expenses; and for it, I think, the least objectionable shape has been selected. Within the last few days one of the strongest opponents of this system of taxation has confessed to me his opinion that, if taxes must be imposed, they have now assumed their least objectionable form. I think that the many Amendments which have been introduced into the Bill, have placed the taxes in the shape in which they can best be levied. Of course I am bound to admit that I contemplate the new mode of taxation with some anxiety; but, considering the circumstances of India, and seeing that no other alternative has been proposed, and that unless we are prepared to raise additional revenue for the purposes of the country, we must proceed in the ruinous course of incessant borrowing, I feel we can do nothing better than give our cordial support to the Government of India, who are directly responsible for the administration of that Country, and who, being on the spot and in the midst of the people, have the best means of judging what taxes it is possible and expedient to levy. I have the strongest conviction that the less this country interferes in the affairs of India, the better they will be administered. We have frankly told the Government of India what our opinions on the question were; and are now prepared to give them our cordial support in carrying out the determination they have formed. The nest point I come to is the probable produce of the tax. It is very difficult, of course, to estimate with any certainty the produce of any new taxation. The Government of India expect that no very large sum—probably not more than £1,000,000 i—will be raised during the present year; and that £3,500,000 will be obtained in 1861-2. Deducting this amount from the deficit which I have already mentioned, we shall still have in 1861-2 a deficit of upwards of £3,000,000. I am in hopes, however; that the Government of India, by making, as I have no doubt they will do, an earnest effort, will be able to make a still further reduction in the expenditure for 1861-2; which is obviously indispensable, if we are to equalize our income and expenditure. There is, unquestionably, Considerable scope for reduction.

I have said that I do not think the Civil Service expenditure can be diminished, but there are various branches of the military expenditure in which a saving may possibly be effected. The military expenditure of 1860-61, exclusive of building, may be estimated at £17.000,000, and the police at £2,000,000. These must be taken together, for any increase in the one would lead; to a certain extent, to a reduction in the other. We have here an expenditure of £19,000,000, in which it will be very hard indeed if we cannot effect a reduction of £3,000,000, or even more than that, in the Course of the year. With that reduction and the increased taxation I think there is a reasonable prospect of placing the income and expenditure on an equality during 1861-62, or at any rate in the following year. The ordinary sources of revenue show marked symptoms of improvement, and in the course of three or four years I hope the ordinary income will meet the ordinary expenditure. That can not be, done at present, however, unless there are some extraordinary resources to draw upon; and it is as clearly demonstrated as any matter of finance can be, that additional taxation, to at least the amount which we expect will be derived from new taxes, is indispensably required at this mo- ment. The prices of produce I am glad to say are rising, and the wages of labour in all parts of the country are higher than they ever have been. In Madras there is abundant employment for every one; and Sir Charles Trevelyan tells me that the men of some disbanded troops have found there higher wages than in the army. This is very remarkable, as formerly men in the military service were held to be in a much better position than others. These circumstances indicate an improvement in the condition of the people, and consequently an increased power of consumption. Therefore I think I may fairly say that there is every prospect, in the course of time, of a reduced expenditure and an increased income. The more immediate question is how I am to provide for the deficit of this year? I am glad to say that I shall be able to do so from the balances in the Treasury, without bringing them below what both the Indian and home Governments deem to be safe. It may be asked, then, why I propose to take any power of borrowing? My answer is, that I depend in a great measure for the means of defraying my home expenses, on the sums to be paid in by the railway companies. We receive into the home Treasury all the sums paid by them. The expenditure in India for railway purposes is provided out of the Indian treasuries, and I apply to disbursements here, the sums which would otherwise be sent to India for that purpose—instead of receiving remittances from India. If the railways pay all they ought to pay, then I shall not require a single shilling additional. There may, however, be some deficiency on their part, and it is to provide against that that I propose to take the power of raising, if it should be necessary, a loan of £3,000,000. In the course of this year the Railway Companies ought to pay in £7,000,000. Of that amount between £4,500,000 and £5,000,000 will, we expect, be expended in India for the construction of railways. What is not disbursed in this country; and would, if the Indian Government did not, defray the expenditure on railroads in India, be sent to India to defray railroad expenditure there, is left in the Home Treasury, and it is on this balance that I depend for meeting the home expenses. I have,however, thought it wise and prudent to take powers to raise £3,000,000, in case the railway companies should happen to pay in less than I now anticipate. I hope and trust that the railways will provide the full amount required, and that I shall not need to avail myself of the borrowing powers which I now propose to take by way of precaution. The Resolution which I shall place in the hands of the Chairman is a general Resolution, but in the Bill which I shall introduce I shall insert a clause limiting the power to raise money to£3,000,000. With regard to the Customs duty, which is to be at the uniform rate of 10 per cent, I have not heard much complaint of the rate of duty, though it is very odd indeed if some of those who have to pay do not complain of the taxation. The objection which the hon. Member for Sheffield has taken is opposed to the view of Sir Charles Trevelyan, who says— The circumstances that the new advantages conferred by the arrangement are in favour of the European interest is an additional reason for distrusting our first impressions. In both points of view the arrangement is singularly advantageous to the European mercantile interest in this country. The objection principally urged is not so much to the amount of duty as to the valuation on which it is assessed. Several representations were made to me on the subject by deputations from manufacturers, and to all of them I have drawn the attention of the Indian Government. Among others it was stated that the system at Calcutta is not so fair as that pursued at Bombay, where the duties approximate more nearly to what they profess to be—namely, ad valorem duties. It is the intention of the Indian Government to call on civil servants at Bombay and Madras, as well as representatives from the Chambers of Commerce, of Calcutta, Madras, and Bombay, who are well acquainted with the matter, to meet at Calcutta for the purpose of devising such a system of valuation as shall be as nearly as possible equal and uniform. With regard to the paper currency, I am afraid that in Calcutta, as well as here, a great deal of time has been taken up in the discussion of financial subjects, and that from that cause the measure has been delayed. As far as I can learn, the proposal has been favourably received in India, and I hope before long to receive from Calcutta the Bill which has been introduced for that purpose. It will no doubt be a great convenience and advantage to trade, and at the same time, by facilitating the transmission of money from place to place, it will remove the necessity of large balances being held in the 365 treasuries which exist in India, The railroads are going on, upon the whole, very satisfactorily in India. We hope that by the beginning of next year 1,200 or 1,300 miles will be open for traffic. Some of the works are very heavy, and render necessary a large expenditure. A very able Report has been laid on the table, which gives the fullest information on this subject. In order to complete the railways £52,500,000 will he required. The amount authorized to be raised is £36,500,000. The amount paid up is £29,500,000, and the amount exnended is about £28,000,000. Of the £29,500,000 which has been raised £25,250,000 has been raised by shares, and £4,250,000 by debentures. The traffic returns are, so far, very good, and when it is remembered that none of the lines are open between substantial termini, there is every reason to believe that, when great towns become the termini of the railroad lines, the returns will increase far beyond the ratio of distance on the lines now in operation. The electric telegraph extends nearly 11,000 miles. The submarine cable appears to be subject to a great number of accidents; and, although on one occasion a message was received in six days from Calcutta, communication has been interrupted by an accident, to which I fear the cable will be very liable in the Red Sea and on the coast of Arabia. A line will shortly be laid down between Calcutta and Singapore, which will very much shorten the time necessary for communication with China. The civil public works have been very much at a stand-still during the mutiny. Many of them were interrupted because it was necessary to draught off the officers superintending them to military duties, and since then the officers have been employed on military public works, the necessity for which has been more pressing. But I trust the necessity has passed away, and that we shall be able to revert with increased vigour to the civil public works, and to which I attribute the greatest possible value, as tending to benefit the resources of India. The works which are being proceeded with in the Punjab are the BareeDooab Canal, the trunk road to Peshawur, and the Attock tunnel under the Indus. The last promises the greatest success, and when completed, will be a very wonderful work. In Seinde the irrigation works are going on, and an expenditure has been authorized which will open up canals throughout the Province. These works are being carried on as fast as, is consistent with the non-disturbance of the labour market. The harbour at Kurrachee and the works there are in course of improvement. In Bengal 17 roads are under construction, 450 miles long, which will be feeders to the railroads; and a new town is being created at Mutlah. The Orissa works, for saving Cuttack from the violence of the Mahanuddy, and utilizing the waters of the stream, are works which the Madras Irrigation Company propose to undertake without any guarantee. Negotiations are not quite concluded, but if they do not undertake it we shall do it ourselves, and in one way or the other it will certainly be done. The Grodavery works are delayed for negotiations with the Nizam. If we are to respect the rights of Native Princes we cannot take possession of the banks of a river running through their territories without previous arrangement, although we may propose to improve them. I do not anticipate any objection in this instance, but we must make such arrangements as will entitle us to effect the improvement with the Nizam's concurrence. In Southern India two roads are ordered through the Eastern ghauts to effect communication between the cotton districts and the port of Sedashevaghur. Gogo will soon be connected with the cotton-growing districts of Ahmedabad, and the anchorage improved. We have also sanctioned the proceedings of a Company formed for constructing docks at Bombay. I am not aware that I have anything more to say on this important subject, but I must pay a tribute to the course, which Lord Canning has been pursuing in Upper India, by which a revolution, as I hope and believe, will be effected in the feelings Of the higher classes. I do not mean to underrate the conduct of those who have hitherto administered Indian affairs in reference to land settlements and matters of that kind. They have invariably been actuated by benevolent and beneficent intentions, but somehow or other they have not succeeded. The ryotwar system was introduced in Madras with the belief; that it was calculated to promote the welfare of the people. We introduced what is called the village system in the North-West Provinces, and considered it as a vast improvement on anything that had been done before, and on our taking possession of Oude we introduced it there. In the North-West Provinces the result was the utter destruction of the.old landowners. In truth we thought we were I conferring a benefit on the vil lagers by emancipating them from the oppression of the Talookdars. In the North-West Provinces the result was that the property of the landowners was sold up and got into the hands of the great money dealers. During the mutiny the people rose up and turned out the legal owners, and re-installed the old hereditary landowners. In like manner the villagers in Oude rose against us, under their talookdars, who, in many cases, had exercised the greatest cruelty and injustice towards them. On the whole, however, they preferred the former system to that which we introduced. The mistake we fell into, under the influence of the most benevolent feelings, and according to our notion of what was right and just, was that of introducing a system foreign to the habits and wishes of the people. A curious result of what was called the confiscation of Oude was that, whereas we thought that it had been proposed to confiscate the talookdar system in favour of the village settlement, the latter has become confiscated, and the property is reinvested in the talookdars. Lord Canning has carried that system a little further, and has enlisted on his side the feeling of the landowners. He has invested the talookdars with magisterial powers to a certain extent, and the report of the Commissioner at Oude states that they undertake these duties with alacrity, and show a disposition to exercise the powers with which they are invested, and to administer justice with great impartiality. It is exceedingly gratifying to find that these persons exercise their responsible functions in so satisfactory a manner, and I hope this course of proceeding will have the effect of attaching the landowners of the country to our rule. A similar system has been carried into effect, but only to a certain extent, in the Punjab, where Lord Canning proposes to invest the Sirdars with the same magisterial powers. A further step has been taken in assuring a great number of chiefs in the northern part of India that we recognize what is called the right of adoption. The manner in which certain properties had been taken possession of has told very much against us. Lord Canning assured several of the great chiefs that, in the event of their dying without heirs, adoption, according to the customs of the country, should be recognized. He has proposed to carry this a great deal further, and to give to the generality of the chiefs the same assurance, anticipating, and I believe truly, the most beneficial effects from such an announcement. He says that unless something of this kind be done you cannot depend on the attachment of the people. It is necessary to attach them to us, and to make them feel that they would lose and not gain by a change of rule in India. If the result he anticipates should be attained it will be very much easier then to withdraw some of our troops from those places where our rule would be exercised over a well-disposed and contented people of all classes, and not merely the masses, who certainly showed no indisposition to our rule during the late mutiny, for the only districts where the population took part in the mutiny were those in which the brothers, sons, and relations of the mutinous Sepoys dwelt. But I hope that by the measures now adopted we shall soon se cure not only the passive but the active attachment of the people. Under these circumstances, I trust that India may by the blessing of Providence be preserved in peace, and that we may look forward in time to the improvement of the country, and to the application of English capital, which is necessary to the development of its resources, by which I believe that the finances of the country may be restored to a healthy and prosperous state. The right hon. Gentleman concluded by proposing the Resolution, which he had explained in the course of his speech.

MR. DANBY SEYMOUR

said, that as far as the financial part of the right hon. Gentleman's speech was concerned he had never heard a more unsatisfactory or unfair statement. The right hon. Gentleman stated that the lowest point to which the Government of India could reduce the deficit for the year 1860-61 was £7,000,000; whereas Mr. Wilson, in the Council at Calcutta, showed that the deficit might be reduced now to £5,700,000. It was true that Mr. Wilson did not get down to that figure until he was hardly pressed by Sir Charles Trevelyan, who had shown that the military expenditure of the Madras and Bombay Presidencies might be reduced within the present financial year by upwards of two millions, and before the end of the following year by another million. A very small de crease had been taken into account, and not the very large decrease which Lord Elphinstone and Sir Charles Trevelyan spoke of. How was it that Lord Elphinstone was regarded as a high authority when he spoke in favour of amalgamation, and as no authority at all when he pronounced against the plans of Mr. Wilson? Both Lord Elphinstone and Sir Charles Trevelyan stated that our expenditure in India need not be greater after the mutiny than it was in 1856. It was true that they did not go into details, because they had not the accounts, but they should not on the statement of Mr. Wilson impugn the testimony of the Governors of Madras and Bombay. It was said by Sir Charles Trevelyan that the delay in effecting a reduction of expenditure was caused by the sluggish action of the Supreme Court, and the Commander-in-Chief also stated that they could reduce the army if the Supreme Court would take up the question of the police, and get the police to do duty performed by the army of Madras. But the Supreme Council kept the project for a police force before them for another year, and that was the real cause of the army of Madras not being reduced, as had been anticipated by Sir Charles Trevelyan, and also by Sir Patrick Grant. The right hon. Gentleman put down the police at £2,000,000, but Sir Charles Trevelyan declared that the police necessary for the Presidency of Madras, with its population of 30,000,000 would not exceed £123,000, or at the utmost, 143,000 a year. Sir Charles Trevelyan was supported in that statement by the chief of police, and he went into details to show that for, at the most, 140,000, they would have one policeman for every thousand inhabitants. He (Mr. D. Seymour) would therefore ask the right hon. Gentleman how it was that that estimate was put so high. It appeared that the Supreme Council were making an effort to keep up this enormous expenditure to the highest point, instead of reducing the expenditure to the lowest amount. The Budget of the right hon. Gentleman, therefore, was unsatisfactory, as he had failed to show that he had used to the utmost his endeavours to keep down the expenses in India and in this country to the lowest point. Sir Charles Trevelyan said that having visited all the Indian presidencies, served twelve years in Bengal and Upper India, and made Indian affairs his study all his life, he was of opinion that the military expenditure might be reduced to £11,500,000, the standard before the mutiny, with great additional security to our position in India. He went on to say that Mr. Wilson had not only overestimated the sum which the army need cost, and which was believed by responsible persons to be necessary, but that he had under-estimated our resources in India for the future. The amount of the estimated increase in the revenue for 1860-1 was, in his opinion, much too small; and Sir Charles declared that if real protection to life and property were established in India by an adequate system of police, the magnificent valley of the Ganges alone would yield a greater revenue than the whole of British India now produces. He could not find that in his military estimates Mr. Wilson had ever counted on a sufficient reduction in the armies of the minor Presidencies, but Sir Patrick Grant said that several regiments might be disbanded were it not for the apprehension of a rising of the population of southern India in consequence of the imposition of the three new taxes. What better authorities could they have than the men who had been charged with the superintendence of the military and civil resources of the country? They showed the great decrease that might be effected by the cutting down of the military expenditure, if the Government did not harass the people by the imposition of new taxes, and surely they knew as much about it as the secretaries in Bengal, who were not responsible for anything.

The right hon. Gentleman said that £1,500,000 would be required this year for building barracks and forts for the reception of women and children, and it appeared from the Estimates that a similar amount would be required next year. That was equal to what the Government asked for to fortify Great Britain. But there was no security that that expenditure would not be continued from year to year. He should wish to know whether the whole question of fortifications in India had been considered by the right hon. Gentleman, and whether he had inquired into the best points for establishing forts. M. Brialmont was now occupied upon a great general work upon fortifications, and had specially considered the case of India. When such an enormous expenditure was contemplated surely the whole subject should be considered, and the best authorities, British or foreign, should be consulted. The right hon. Gentleman spoke of "many places," but the highest authorities in India were of opinion that the forts for the reception of troops and the protection of the helpless portion of the European community should be as few as possible. But in order to carry out this military expenditure the outlay for civil works had been stopped. He regarded it almost as a crime to discontinue works which produced from 40 to 600 per cent interest upon the outlay, when, as Sir Charles Trevelyan said, "if we sowed water we reaped gold." He regretted that the plan suggested some years ago by the Marquess of Dalhousie had not been carried out—that they had not come to that House for a loan for public works, and keep a separate account of such advances, and then their system of borrowing would not be looked upon by strangers as a sign of the weakness of the empire, but of prudence and wisdom, when they raised money in that way, instead of burdening the people with increased taxation? Before the mutiny, three millions a year were laid out on those works, and two millions during the mutiny. Now, these sums should not have gone into the general account, but a separate one; and if it were publicly known for what purpose this money was raised, the result would be favourable to the Government.

Again, with regard to railway shares. They had guaranteed shareholders to a large amount. Never had fifty millions been better laid out than in making those railways. They had guaranteed, from the time the money was subscribed, an interest of 5 per cent. That had amounted to about half a million, and in future years would reach a million. Now, instead of taxing the people to pay this million; instead of putting on a tax for five years, as it was said, but which, from what they knew of the income tax in this country, was likely to be permanent, and which, he was prepared to contend, should be made permanent; that money was a fit subject to be paid from a public works loan. With regard to the paper currency, he believed it would be of the very greatest advantage to India. A paper currency was spread all over Russia, who paid her troops in Asia by that means, and found it to answer. He had always advocated the introduction of a paper currency; and he was glad that at last they were on the eve of seeing it established.

He would also call the right hon. Gentleman's attention to the desirability of expending the money proposed to be laid out at Galle, in providing a port near Cape Comorin; and would refer him to the plans prepared by Colonel Cotton upon that point, whose estimates ought to be laid upon the table. Again, there was a charge for making a road to Sedashevaghur; but a road would be of small use compared with the benefits which a short extension of the railway to that place would produce.

The right hon. Gentleman had spoken of the land sale, the questions of police, and of trusting the Native gentry. These were matters which all persons taking an interest in India had always advocated, and which had been pressed on the right hon. Gentleman for seven years. He had been struck by an observation of Mr. Campbell, the author of an excellent work on the resources of India, who replied to a question which he had asked, "Why not promote the Native gentry to high offices?"—that there were none of them left. And when he (Mr. Seymour) said, "How is that? In former times we read of their having been employed by the Duke of Wellington?"—Mr. Campbell said, "Our system has been to destroy all the upper classes in India; we have left merely the ryot and an aristocracy of civil servants." He was glad to hear that they were now going to restore those gentlemen to that place in the Native society for which God intended them. With regard to the land question, the noble Lord, the Member for King's Lynn, was the first Minister who took that view which he (Mr. Seymour) had always believed the right one; and which was, that they never would have a rich people, or a prosperous state of things in India, until they sold the fee-simple of the land. The noble Lord ordered the fee-simple of the land to be sold in certain cases; and Sir Charles Trevelyan was the individual who had done most in carrying out those orders.

He should like to make one or two observations upon the accounts. Last year the military expenditure of India was nearly three-fourths of the whole net revenue; but if they wished the country to be really safe from bankruptcy, it was absolutely necessary to insist that that military expenditure should be enormously reduced. He saw a very considerable sum for the ecclesiastical establishment; that is, for the maintenance of the clergy of the Etablished Church. The amount for all India was not less than £125,000; and that sum was quite separate from that for the establishment of chaplains. The promotion of Christianity in India had gone on separately from the chaplains; and he might almost say, with reverence, separate from the Bishops; and it was well known that the most efficient teachers of God's Word in India were missionaries, who lived generally on £100 a year and under, while the chaplains had six times that sum. He strongly objected to the State Establishment which was growing up in India, and which did not exist in their Colonies. He did not believe that in the colony of Australia any allowance was made for Bishops or Ministers of the Established Church. The Bishops were continually asking for fresh chaplains to be placed upon the different stations; and he saw by the returns beforn him that there was a sum voted for carrying out the Bishop to Calcutta. He thought that religion and ministers of all denominations should be placed upon a certain footing, and that the Secretary for India, or the Government, should not have the power to transgress any rule which might be laid down in this respect.

The right hon. Gentleman had promised to lay upon the table anuually a blue-book which should give the House a complete picture of the prospects of the Indian empire; but he (Mr. II. Seymour) had not yet seen anything of that kind. He remarked that the Punjab was made to show a surplus, and Bombay and Madras a deficit. They knew that the Punjab was a pet province of Calcutta, but he could not believe that it really did show a surplus, because they knew also that there was a larger portion of European troops placed in the Punjab than in any other part of India. They had the territories under the Governor General, the revenue of which was, he believed, £18,000,000, bringing in only £2,000,000, leaving £16,000,000 of a deficit. Attention was specially called to that point by the noble Lord the Member for King's Lynn (Lord Stanley), who wrote out to India a peremptory letter that it should be altered; but the right hon. Gentleman had totally neglected this matter, as he had many other excellent reforms begun by his predecessor in office. The right hon. Gentleman was the complete autocrat of India. He did not consult his Legislative Council, and he governed India as the Emperor Nicholas governed Russia. The House of Commons ought therefore to know what this autocrat was doing in his empire. He had on previous occasions suggested that there should be one Mint instead of three in India, and that the copper could be sent out ready coined, by which a considerable sum would be saved. The Bill called the Coast of Africa Act Amendment Bill ought to be postponed till next year, in order that not only Singapore, but Tenasseram, and perhaps Burmah, might be formed into a separate governor-generalship of the Malay provinces. The Government of Calcutta had plenty to do without looking after these provinces; and the people were a separate race, and required a different Government to develope their immense resources. These provinces might then be made to pay. Singapore, with its £10,000,000 sterling of commodities passing through it, ought certainly to he made to pay its own expenses. The right hon. Gentleman had said nothing of the Civil Service and the law reforms, both which subjects were of pressing importance. The law of India was a disgrace to any people, and the taxes upon obtaining permission to commence suits were unknown to any other county in the world. A Bill was brought in three years ago by the Law Commissioners of India, which the right hon. Gentleman had not yet presented to the House. The right hon. Gentleman (Sir Charles Wood) had been sixteen months in office, and he had done so little during that time that the Indian Office, it was said, might as well have been shut up. The delays in answering letters and transacting business were greater than they used to be under the Company's rule, and there had been indeed no perceptible improvement whatever since the East India Company had been done away with and the right hon. Gentleman had presided at the India House. Since the right hon. Gentleman was raising a loan, why did he not make provision for the abolition of the taxes on the administration of justice, which were a scandal to the English rule? What also was the right hon. Gentleman doing about the sale of land? Was he encouraging the sale of land or not? Was the redemption of the land-tax still allowed? He believed Mr. Wilson, in his new scheme of taxation, was right in principle. The fault of the Government was that they had not done all in their power to keep down expenditure. A reduction of the salaries of civil servants would never be effected as long as it was left in the hands of interested persons in India. A plan of reduction ought to be drawn up at home by the Secretary of State, assisted by men of experience in Indian affairs. He was of opinion that the salaries of the higher class of civil servants might well be cut down, and that the Native servants should receive higher remuneration. At present it was notorious that there were thousands of Native officials who received such a miserable pittance from the Government, that they were obliged to pilfer in order to obtain a livelihood. The Secretary of State ought to set an example to the Indian Govern- ment, by reducing the expense of the home establishment. He was surprised the right hon. Gentleman should not only have continued the office of Under-Secretary of State, of which Sir George Clerk, on his removal to Bombay, had advised the abolition, as it was a complete sinecure, but should have bestowed it upon Mr. Herman Merivale, who knew nothing about India, and had never been in that country in his life, instead of upon some tried and experienced Indian official. With regard to Sir Charles Trevelyan, he thought that he had not shown discretion in sending so strong a Minute to a member of the Legislative Council against a law which after all he might have to carry into effect, but that literally, if not morally, he was justified by an order of the Supreme Council which appeared to authorize such communications. He did not believe, however, that if the Secretary of State had done his duty the difficulty would ever have occurred. Sir Charles Trevelyan and Mr. Wilson had been rivals in the public service in England for a vast number of years, and when Sir Charles Trevelyan was saying to a friend, on leaving, that he was making great sacrifices, his friend endeavoured to console him by reminding him that, at all events, he would not have Mr. Wilson near him. It was a parallel case to two appointments in the Crimean war, and it was the duty of the Secretary of State to warn Sir Charles Trevelyan and Mr. Wilson of the dangers to the public service which would ensue should they not agree together in India. There was no indication in the despatches that these rivals were not left to their own passions, and if anything passed in the shape of private letters he entirely objected to that kind of correspondence. It appeared to him that the Secretary of State was as indifferent upon this matter as when he replied to a question of his, that he knew nothing about and had not seen the Bills which threatened to convulse India. He did not find the same energetic desire to reduce expenditure expressed in the despatches of the right hon. Gentleman which he could trace in the despatches of the noble Lord the Member for King's Lynn, and he really did not see the use of paying the right hon. Gentleman so much to do so very little. It was not the way in which the right hon. Gentleman ought to execute his high office, and he was convinced that the right hon. Gentleman would never make a more satisfactory speech than the speech of this evening, while he conducted his business in the manner ho had done since his return to the Indian office.

He believed that Mr. Wilson's taxation would inaugurate a new era for India of the greatest possible importance. It was somewhat similar to that which commenced with our glorious Revolution, at which time the bulk of the taxation was raised by the land tax. Since then personalty had enormously increased, and the taxes had been gradually placed on that branch of wealth. The same principle was being introduced in India by Mr. Wilson, and he (Mr. Seymour) believed that the people of that empire were sufficiently enlightened to see that it would be to their lasting advantage and interest. He must say, in conclusion, the Whig theory of Government appeared to him to be that able men were to be found scattered on the streets. He had been amazed during the ten years he had been in Parliament at the appointments of the Whigs. Take the two last cases. There were two men of the greatest talent—in every respect exceptional men—men of whom there were very few produced in the course of a century—ho referred to Sir Charles Trevelyan and Sir Henry Rawlinson, and both of them, on account of some trifling blunders, which were more the fault of the Whigs than themselves, were recalled, and were wasting their lives in idleness. These men were the appointments of the Government opposite. They would never have been picked out by the Whigs, hut they showed the greatest alacrity in getting quit of them.

MR. W. EWART

said, he fully concurred in the praises which had been bestowed upon Sir Charles Trevelyan, but he thought that, after the course taken by that officer, the Government could not do otherwise than remove him, notwithstanding his great abilities, as they could never allow a governor to act at variance with the instructions of his superior. With regard to the army in India, he trusted that, in due course of time, it might be reduced, and he thought the reduction could be effected if a proper and vigorous police were established throughout the country. He was glad to hear that the Government of India had adopted the plan of appointing magistrates selected from the principal landowners of India, whether Europeans or Natives; and the recognition of the system of adoption he considered to be a wise concession, calculated to attach the territorial proprietors to the British rule. The establishment of military posts in the most healthy parts of the hill districts would be in his opinion, a most desirable measure. From these posts the troops might be brought down into the plains at any time, when their services were required, retaining all the vigour of European constitutions. But what ho mainly trusted to was the development of the resources of India by encouraging the introduction of English capital, by improving the means of communication, and by a judicious extension of public works, especially works of irrigation. Irrigation, he maintained, would be found the great agent for developing the resources of India. It might he said, to use a somewhat Irish expression, that water was the blood of India. He wished to say a word with regard to the planters. He believed them to be a vigorous and valuable race of men, and likely to produce great benefit to India. No doubt they had, in former times, abused this power. But he believed they were destined to do much good hereafter. Ho thought that the salaries of the civil officers might be reduced, but he did not anticipate any great saving from the reduction. If the salaries of the lower officers were raised, then some reduction might be made in the salaries of the other officers. With regard to the revenue, what was wanted was a strict system of appropriation, and he was of opinion that there ought to be an Imperial audit. The India Council in this country he conceived to be inconsistent with a vigorous executive, and be did not believe that there could ever be a proper system of government with a sort of Parliament sitting in the India Office. He hoped and believed that the people of India would in time be conciliated by a mild but firm system of Government, watchful over the security of persons and of property and considerate of the feelings, while it did not sustain or justify the religious errors of the people.

MR. GREGSON

said, he also concurred in regretting the loss which the public service had experienced by the removal of Sir Charles Trevelyan, who during the short time he had been in Madras had effected many improvements. He considered that the military expenditure might be prospectively reduced, and a considerable saving effected. In 1856 the revenue was £33,000,000, and in 1860 it had increased to £37,000,000, so that it might be hoped by degrees the income and expenditure would be equalized. He hoped that the right hon. Gentleman was not going to add to the heavy taxes which were being imposed on India any increase in the duty on salt. Sir Charles Trevelyan said, he should he sorry to see such an increase, and, considering the millions of people in India who possessed not more than £5 a year, and who were consumers of salt, they ought to be spared any additional tax on this commodity. He hoped that the right hon. Gentleman would be successful in carrying out the reductions which he proposed; and, from what he saw of the increasing resources of India, he had every confidence that at the time when the right hon. Gentleman expected that the income would balance the expenditure it would really largely exceed the expenditure.

SIR HENRY WILLOUGHBY

said, he could not quite agree with the hon. Gentleman in the sanguine view he had just expressed of Indian finance. In his opinion a more serious question could hardly come before the Committee than the prospective state of that finance, which seemed to him most alarming. When the hon. Gentleman referred to the increase which had taken place in the revenue between 1857 and 1860, he overlooked the elaborate Minute signed by Sir Bartle Frere and Mr. Wilson, showing that the increase did not arise from a legitimate development of the resources of India, but was owing to accidental circumstances, and that there was no reasonable mode of meeting the difficulty except by imposing these new and dangerous taxes. In considering this question the Committee should remember the doubt which beset every proposal respecting Indian finance. Mr. Wilson's first discovery on going out was that the deficit had been largely under-estimated; and the difficulty of discussions in this House on Indian subjects was that they could not be sure of the ground on which they were treading. The chief point on any question of Indian finance was of course the composition of the army. In 1856–7 there appeared to have been 45,000 Europeans and 287,000 Natives, and in the present year there were 80,000 Europeans and 300,000 Natives. He should like to hear whether these numbers were correct, because with anything like that army it was perfectly impossible that Indian finance could right itself. In 1856-7 the expense of the army was £13,500,000; next year it was £17,500,000; then it was £24,000,000; in the following year £21,000,000; and for 1860–1 it was taken at £15,250,000. He greatly feared that the cost in the current year was under-estimated. But even taking it at that amount, and assuming that the income tax was ordinarily successful, how could you expect to wring such a sum from India or to avoid deficits for a series of years? Before you could touch a single rupee of Indian revenue it was necessary to clear off ten or eleven millions of dead weight, in the shape of cost of collection, allowances and grants, and interest on the debt. When to this was added£15,000,000 for the army and £800,000 or £900,000 for the navy, there was but a small sum left to defray the general expenses of Government. Mr. Wilson, with Lord Elphin-stone and Sir Charles Trevelyan, agreed that the expense of keeping up a European army of 80,000 men in India would be enormous; and the whole question of military expenditure was one of vital importance. There was more danger of losing India by means of obnoxious taxes than even through a mutiny, and the greatest caution was therefore required in the imposition of new duties.

MR. GREGSON

explained that ho had quoted from memory the revenue was £32.000,000; he found on reference the net revenue was £33,300,000.

MR. ROEBUCK

said, he wished to refer to a question which had not been touched on during the debate. In the Indian mutiny a large amount of property was sacrificed by persons who were not in the Company's service, but were settlers and planters. The value of their property so destroyed was, by their computation, about £3,000,000. These losses were occasioned by the servants of the Company. The Indian army rebelled. The servants of the Company, therefore, caused all the losses that were incurred during the rebellion. By the law of England, any loss sustained in consequence of rebellion would fall upon the hundred within which the property was situate. The persona to whom he referred considered that they had a distinct right to come upon the Government for compensation. The Government had acknowledged that right, for last year the right hon. Gentleman said the Government proposed to draw a distinction between property which it was impossible to move, and property which might have been saved from injury. They proposed to give half the value in the first case, and one-third the value in the second, and they further proposed to limit the whole amount to be distributed to £1,000,000; but within a few days after making that statement the right hon. Gentleman wrote a Despatch, in which he recommended that in the cases of building factories, and crops where the admitted loss did not exceed 2,000 rupees, the compensation should be one-half of the admitted loss, and if the loss exceeded 2,000 rupees then only one-third of the additional loss beyond 2,000 rupees should be granted. In regard to jewels, cash, and personalty one-third of the admitted loss should be allowed; but in no one case should more than 5,000 rupees compensation be allowed. Thus there were two departures from the proposition which the right hon. Gentleman had stated to the House, and those departures seemed to militate against a principle which he had dwelt upon, in that India might flourish English capital must be introduced. But English capital would not be introduced unless its owners were satisfied that they were under the protection of English justice, and if questions of that kind were to be dealt with in the offhand and fantastic manner in which the right hon. Gentleman had dealt with the sufferers by the late mutiny a feeling of uncertainty would be created that would keep capital out of India. He might also refer to another class of cases—that of the insurance companies. Those offices insured the lives of civilians. Those civilians were called upon by the Government to act as soldiers. They did so, and many were slain. In all those cases the insurance offices paid the insurance moneys, and then appealed to the Government to reimburse them. The Government, however, refused to recognize their claim, and would not permit them to participate in the £1,000,000 that was to be distributed as compensation for losses. He would warn the right hon. Gentleman that this subject would be renewed next Session and in future Sessions, until justice was done, or the sufferers were convinced that they had no grounds of hope from the justice of Parliament or the Government.

SIR DE LACY EVANS

said, he fully-agreed with the hon. and learned Gentleman that civilians having been required to act as soldiers, and having perished in performing the duties of soldiers, and the insurance companies having liberally paid the claims upon them, those companies were entitled to expect a liberal consideration from the Government. The only part of the right hon. Gentleman voluminous statement to which lie should refer was the military expenditure. He was glad to find that it was intended to construct barracks calculated to preserve the health of the troops, and also places of safety for women, children, and treasure, in case of a sudden rising either of troops or people against our authority. He quite concurred in the remarks of the right hon. Gentleman as to the great loss the public service in India had sustained by the removal of Sir Charles Trevelyan from the Government of Madras. He admitted that the conduct of Sir Charles Trevelyan might have given some cause of complaint to the Supreme Government, but, on account of the undoubted abilities of that high Officer, he (Sir De Lacy Evans) regretted that some less severe course had not been pursued, and he hoped that the Government would take a speedy opportunity of utilizing that gentleman's great abilities. He had listened with much attention to the statement of the right hon. Baronet, but confessed himself unable fully to understand it. Thus much, however, was clear that the whole statement rested upon the immense military establishment now retained in Bengal. In 1857 there were but 45,000 European troops on the Indian establishment, and, in fact, there were not more than 40,000 in that country. The neck of the rebellion was broken by those men. The capture of Delhi was the turning point of the mutiny, and that was accomplished without the aid of a man or a gun from England. The Government very properly made every effort to send out men, but the great event took place before they arrived, and it was always said that the Native population did not take part in the outbreak. He knew of no conquest more decisive than that which we had accomplished in India, and yet, notwithstanding the prestige our triumphant success had given us, English troops were being continually sent out to India. He believed that at this moment there were not fewer than 80,000 European troops in India, and he understood that the Native army had also been greatly increased. How was it possible in these circumstances to have the finances of India in a prosperous state? Why was it necessary to have this vast army in India? It would be easy to reduce them gradually and continuously, but he had not heard that there was any intention to make a reduction at all. He must say that, independently altogether of financial considerations, the retention of so large an army in India was very much to be deprecated.

MR. VANSITTART

said, he regretted to hear the right hon. Baronet announce that it was necessary to raise another loan this year, as he had been in hopes, on perusing the speech which Mr. Wilson delivered in the Legislative Council of Calcutta on the 18th of February last, that that ruinous system was about to be put a stop to. On that occasion Mr. Wilson observed:— But what has this state of our finances brought about? Our deficiencies have been supplied by loans in England and in India, and what have been the results? And here I claim the special attention of every one, Native and European, who feels a real interest in India. What was the state of our debt before the mutiny? What is it now? And let me ask what will it be soon if we are to resort to the miserable, the disreputable expedient of continuing to borrow in time of peace? With regard to that speech—and upon which they had refrained very properly from commenting up to that period, lest it might have embarrassed the operation of Mr. Wilson's financial scheme—it appeared to him that the most serious, almost appalling circumstance, that could not fail to strike the reader, was that, since the commencement of the present century, with the exception of fifteen years, there had been an annual deficit, sometimes larger and sometimes smaller in amount, and that of the entire Indian debt of £97,851,807 no less than £38,410,755 had been incurred by the late mutiny of our Bengal Sepoy army. When Mr. Wilson left the shores of this country for India it was thought that he would have to provide for a deficit of a few millions, whereas on his arrival at Calcutta he found that the deficiency for the past year ending the 30th of April last, and for the current year, amounted to no less a sum than £15,790,129. A more gloomy view of the financial condition of a country had, perhaps, seldom or never been presented, and he thought, therefore, that great allowances should be made if the right hon. Gentleman had been compelled to resort to a severe system of taxation. He could not, however, approve the income tax portion of his scheme, which occupied 181 folio pages in print, containing 206 clauses, and which, by exempting nothing but the pay of private soldiers and non-commissioned officers, was ill-calculated to reconcile the Native population to the payment of such a novel, oppressive, and searching tax. He was aware that he had since amended it very materially, and that he had cajoled the zemindars to pay it by an abatement of the Government rent from one-half to one-third.

SIR CHARLES WOOD

said, the abatement referred to did not apply to the landholders.

Mr. VANSITTART

was under the impression that it did, but he would not pursue that part of the subject. He must say, however, that he much doubted whether the right hon. Gentleman would not be disappointed with the Returns under this head. In corroboration of that opinion he would only mention that an inquiry had been set on foot a few years since by the Indian Government, in order to ascertain what would be the probable return from a succession duty, similar to what prevailed in this country, and that it had not been estimated at more than thirty-seven lacs of rupees, or £370,000. He would further observe that he could not anticipate any difficulty in regard to the machinery by which the income tax was to be collected. He apprehended that duty would devolve upon the Revenue Commissioners, collectors, deputy-collectors, and assistants of the different districts in the Mofussil, and that that much vilified body of public servants, the covenanted civilians, disregarding all apprehension of the consequences likely to arise in carrying out such an unpopular measure, would, with that zeal and fidelity for which they had always been distinguished, proceed to realize it in the same manner as they did the land revenue, the abkarry, and other sources of revenue. He considered the enhanced tax that Mr. Wilson had imposed on salt and tobacco, which latter article was the one sole luxury and universal solace of the toiling millions, to be not only impolitic but likely to be met in the interior with a dogged, passive resistance. Mr. Harrington, the Member for the North-Western Provinces, laid himself open to ridicule by exempting himself and other officials from the first licence tax which he introduced into the Legislative Council, but he thought it was to be regretted that he did not proceed with his second or amended Bill, as this mode of taxation was evidently not only far more in harmony with the feelings and prejudices of the Natives, but he believed that the returns would have been found to be more profitable. Indeed, he held in his hand a Return which the right hon. Baronet laid on the table on the 30th of last month, and he found that the yield from the trade taxes in the province of the Punjab only was estimated at £230,000. The right hon. Baronet did not seem to he indisposed to introduce certain measures which were demanded by the transfer of India to the Crown; but he might depend upon it that it was hopeless to expect to effect any real practical good until the Legislative Council of Calcutta was remodelled, for it was absurd to suppose that a Council of eleven members, all paid nominees of the Government, could cope with the wants and requirements of such an enormous country as India. He had been conversing a day or two previously with Governor Keate and Sir Charles Maearthy, and he learnt that Trinidad with its population of 100,000 souls had a Council of twelve members, six paid officials, and six unpaid non-officials; and that Ceylon, with its population of 2,500,000, had a Council of fifteen members, nine paid officials, and six unpaid non-officials; wheroa3, India with 200,000,000, had a Council of but eleven members, all officials. That some non-official element was greatly needed had been fully confirmed by the mail which arrived that day, for it appeared when it left Calcutta that the Council, at the dictation of Earl Canning, were discussing a Bill having for its object to re-arm the Native population and to disarm the Europeans, and were it not for the fearlessness with which the Bill was opposed by those two upright judges, Sir Barnes Pea-cocke and Sir Mordaunt Wells, it would probably pass into law. This being the case, could it be wondered at that the finances of India should have fallen into such a dilapidated condition, and that mutinies and agrarian riots should so continually take place? One word about the Indigo Commission then sitting at Calcutta. That Commission consisted of two civilians, Messrs. Seton Kerr and Temple; Mr. W. Fergusson, an indigo planter, chosen by the Indigo Planters' Association; the Rev. Mr. Sale, a missionary; and Baboo Chunder Mohen Chatterjee, chosen by the British Indian Association; and this mixed Commission was working admirably. Now, he thought they might draw an advantageous lesson from it, and request the Indigo Planters' Association, the Chamber of Commerce, and the British Indian Association to select two gentlemen from among their respective bodies, in order to associate them with the members of the present Legislative Council, and he ventured to say that their varied knowledge and this infusion of fresh blood would quicken that jaded Council into something like activity and efficiency. At all events, were the right hon. Baronet to adopt that suggestion, he would have the satisfaction of knowing that he had done something towards repairing the error into which he fell in 1853 by creating such a ludicrous assembly as it was at present: and that, although the Eastern horizon was overclouded by financial difficulty, and the resources of India were well-nigh exhausted, yet they would not be quite without hope that her future might ere long assume a brighter and serener aspect.

MR. CRAWFORD

said, he could give a cordial concurrence to the Resolution with which the right hon. Gentleman (Sir Charles Wood) concluded his speech, as he looked upon it as a measure not only of caution but of absolute necessity. The hon. Member for Poole had urged the construction of one or two more new railways in India, and had recommended an extension of the guarantee. He trusted that the Secretary of State would pause before he extended the system of guarantee, whatever the merits of the railways might be; because, if the plan of subsidizing were further carried on, the thing would be overdone and a guarantee of 5 per cent would be insufficient for the purpose. The railway companies were at present guaranteed 5 per cent on their capital. When the lines were opened, if the profits exceeded 5 per cent, one-half the surplus went to the Government in repayment of their advances of interest during construction, and the other half was to be divided among the shareholders. He would susrgest that the agreement should take effect as soon as the lines were worked, although a portion was yet unconstructed, and that half the surplus profits over 5 per cent should be immediately divided among the shareholders, Such an arrangement would, he thought, stimulate the companies to proceed with the construction of their lines. The hon. and learned Member for Sheffield had adverted to the question of compensation. He did not know whether the claimants to compensation had any common law rights or not, but he could not but join in an appeal to the right hon. Gentleman to consider the sum of £1,000,000 set aside for this purpose as a minimum as well as a maximum. With regard to Customs' duties, they were, no doubt, a fair source of revenue, but he could not but feel that there was a disposition in India to stretch this source of revenue, and to raise the duties so as to interfere with the trade of India. He entirely concurred with Sir Bartle Frere in the Minute quoted by the right hon. Gentleman, that a tax in the nature of an income tax was one to which the Natives of India were in some degree habituated, and that if it were left to the Natives to carry out they would readily conform to it, and it would form a most productive source of revenue.

Mr. T. G. BARING

thought the hon. Member for Evesham (Sir Henry Willoughby) had no ground for the complaint he had made of the inaccuracy of the statements of his right hon. Friend the Secretary of State for India. The Estimate which the right hon. Gentleman gave last year of the deficit of the present year had proved to be within a few hundred thousand pounds of the actual amount. From the speech of the hon. Member for Poole (Mr. H. D. Seymour), it appeared that nothing which the right hon. Baronet had done had had the good fortune to please him. The complaints of the hon. Gentleman were singularly inconsistent. According to him the Secretary of State governs India like an autocrat, and yet stoically leaves India to govern herself. If a Bill is introduced it ought to be postponed. If one is postponed it ought to be pressed. He complained that Papers had not been produced which no one had asked for, and that a document which had not yet been received from India had not been laid upon the table. In one breath he condemned the Secretary of State for not abolishing an office and for not filling it in a different manner. The hon. Member declared that nothing had been done, and yet his whole speech was an objection to what had been done. He could inform the hon. Member that there was no foundation for his assumption that any good measures introduced by Lord Stanley had been checked. The measures as to the sale of lands had not been altered; and the accounts which he was so anxious to see were contained in Papers which had already been laid before the House. An improved system of accounts was being introduced in India, much simpler and more rapid than the old system; and, in consequence, the Indian accounts had this year been presented for the first time within the period laid down by Act of Parliament. He denied that there had been any delay in the public works. As his right hon. Friend had stated, all the works of importance were being carried on. The canals in Scinde were being pushed forward, the Madras Irrigation Company were actively employed, the improvement of the river Godavery was in progress. It was absurd to talk of a railway to Sedashe-vaghur, as it would have to be carried over a steep mountain pass, and would be enormously expensive both to construct and to work. If any new port were to be established instead of Galle, as suggested by the hon. Member, it should be at the point where the Madras railway touched the west coast, rather than on the south coast. He was glad to be able to inform the Committee that a decrease of nearly six millions since the year 1858–9 had already been effected in the military expenditure, and that there had been a considerable reduction in the number or Native troops. The Government of India were fully conscious that it was absolutely necessary that the Native army in India should be largely diminished, and were endeavouring to effect that object as rapidly as they could do with safety. It would be dangerous to be in too great a hurry in the matter. His right hon. Friend had made allowance for the greatest possible reduction during the year in that branch of expenditure. The difference between the military expenditure of 1856–7, the year before the mutiny, and 1860–61 was £3,500,000; and that was the amount of reduction anticipated by the Secretary of State, in order, together with the estimated produce of the new taxes, to square the revenue and expenditure for the year 1861–2. Hon. Members, therefore, could not say that reduction in the military expenditure had not been fully taken into consideration. The hon. Member for Poole (Mr. H. Seymour) was altogether mistaken when he asserted that the home expenditure had not been revised, for since he had been in office his right hon. Friend had cut down the Home Establishment considerably, abolishing a number of offices and one whole department. A revised scheme had recently been approved by an Order in Council, which had been laid upon the table of the House, and if the hon. Member for Poole had taken the trouble to examine it he would have seen that large reductions had been made. The Committee would also be glad to hear that by simplifying the mode of conducting business the time necessary for passing papers through the department had been very much reduced. He was glad to hear from the hon. Member for the City of London that his experience of India confirmed the opinion of the great majority of persons who were conversant as to the feelings of the Natives, that the measures which were rendered necessary by the state of the finances would meet with no more difficulty than was incidental to the introduction of renewed taxes in most countries. He agreed with the hon. Member for Windsor that the greatest reliance might be placed on the tact and ability of the officers of the Civil Service who would have to carry those measures into effect, and, while alluding to the civil servants, he might state that Mr. Rickett's Report was not laid on the table, because it occupied five folio volumes, and the expense of printing would be far more than commensurate with the advantages of its being printed, If, however, the hon. Member for Poole desired to see the Report he would gladly furnish him with a Copy, and he was sure that the perusal of it would occupy the hon. Gentleman during the whole of the recess.

MR. AYRTON

expressed his regret that at so late a period of the Session, when many hon. Members had left town, the right hon. Baronet should have made a statement of another year's mismanagement and another year's insolvency, for, if such a statement had been made at an earlier period of the Session, the House would have felt that it was its imperative duty to appoint a Committee to investigate the circumstances which had brought about so lamentable a result. It had been proposed to save 2 per cent in the rate of interest by the Government of England making advances to the Government of India upon the security of the revenues of India. There were objections to that proposition, but it possessed this advantage—that the attention of Parliament would, under those circumstances, be specially directed to the manner in which the Government of India was conducted. Another course to meet the difficulties in Indian finance was an open loan, but the right hon. Gentleman dismissed that proposition, because it would foster the extravagance of the Indian Government. The course which was adopted was, to his mind the worst of all, because it declared to the Government of India that, let their expenditure be what it might, they had only to write a despatch to the Secretary of State in Council, and the Secretary of State in Parliament would obtain authority to raise millions without consideration and without discussion. Credit must produce unlimited extravagance in the administration of the Indian Government, and the result at which they had arrived proved the truth of that assertion. The foundation of all improvement must be, not to restore, hut to establish confidence in the British Government. He could see only one redeeming feature in the statement of the right hon. Gentleman, and it was that in which he told them that the Governor General had at last entered on that career which could alone place the Government on a solid and enduring basis. Since the new school of the Civil Service was introduced it had been their settled plan to oppress, to harass, to degrade, to insult, and to injure the territorial aristocracy of India, and it was most gratifying to find that this policy was now to be abandoned, and that the Governor General had at last undertaken the duty of recognizing the rights of the territorial aristocracy to the possession of that territorial interest which many of them had enjoyed for centuries. But if that was a consoling circumstance, he could wish that it were not marred by other events which had taken place at Calcutta. He did not intend to express any opinion about these matters because the time for that had not yet arrived. They had not had on the table of the House the Bill introduced into the Legislative Council of Calcutta, and therefore, it was impossible to form an opinion of the measures which had been the subject of discussion there. But it was a remarkable circumstance that upon the introduction of this new scheme of taxation, it was taken for granted that there was to be a very large expenditure, and that there must be a deficit. Mr. Wilson, in addressing the council, never condescended to explain whether there was any necessity for the new taxation, or whether it was possible to reduce the expenditure within the income. But it was one of the anomalies of the question that there was a Legislative Council at Calcutta, presuming to deal with the finances of India. It was announced to the council that the expenditure would be so much, and then they were to find the revenue. The whole subject had been withdrawn from the consideration of the House of Commons. Sir Charles Trevelyan pledged his official character—and the opinion was backed by Lord El-phinstonc—that if the finances of India were properly managed the military ex- penditure could soon be reduced to the same level as before the Indian mutiny. Against that firm and deliberate assertion on one side was placed the authoritative negative of Mr. Wilson, speaking likewise for the Commander-in-Chief and the Governor General. In this conflict it was impossible for Members to form an opinion, unassisted as they were by a particle of practical information. All they could do was to assume the deficit to be as stated by Mr. Wilson, and to vote the amount requisite to cover it. This was the melancholy position to which the House of Commons was reduced, after undertaking the superintendence of the finances of India! The course pursued at Calcutta was such that it would become necessary next Session to consider whether such a mockery of legislative proceedings—such an injurious farce as the Legislative Council—ought to be continued. A few Members, appointed by the Governor General at salaries of £4,000 to £5,000 each, met in a room, and entered into controversies in which they absurdly mimicked the proceedings of the House of Commons, addressing each other as the "hon. Member" for a particular district, and having Treasury and Opposition benches each maintained by the State; but the effect of those discussions could only be to lessen British influence in the eyes of the Native population. There was taxation without the shadow of a real representation, and the sooner the errors resulting from the doctrinaire policy of 1834 were corrected the better, in his opinion, it would be. A tax might be levied without danger in any one district of India, in the Punjab, in Oude, or Bombay, but as soon as it was attempted to apply the system generally, every sort of opposition and disloyalty was evoked which might attain to a pitch subversive of British rule in India. He hoped the right hon. Gentleman would think it right to establish separate Governments, each of which would apply itself to the local circumstances of its own district, and impose taxes in accordance with the feelings and ideas of the people. How was it to be supposed that the Natives of India could know anything of the 180 clauses of which this Bill was said to consist? Sir Charles Trovelyan rightly attributed their supposed contentment to their total ignorance. A Native inhabitant of Madras knew as little of the proceedings of the Council at Calcutta as a peasant in Lincoln did of the regulations of the Chancery of Austria; but they were painfully sensitive when visited by the taxgatherer. The large military organization which had to be kept up was required to guard against the danger to be apprehended from sedition. But besides the military expenditure, there were other branches to which the right hon. Gentleman would do well to address himself at an early period. There was a very large item of £100,000 for naval expenditure in India, the necessity of which he never could make out. There was a little service kept up in Bombay called the Indian Navy, which was the growth of the East India Company, who thought, as they bad an army, they must also have a navy. It had never done any useful service; it gave rise to a large expenditure, and a reduction might safely be made under that head. It was said that it would be quite impossible to reduce the civil service expenditure; but he found that though it had not been reduced, it had been considerably increased. But what was the cause of that increase? It was to be found in the tendency to set aside Native administration, and to substitute European. But it was by the use of Native agency, to be paid upon a Native scale, that they could economize the Indian expenditure. Again, the uncovenauted service was a sort of abortion between the regular establishment and the Native service. When a Native got into it he was overpaid; when an English gentleman got into it he was underpaid. He did hope that the right hon. Gentleman would apply his mind to the reorganization of the Civil Service in India, and that he would effect those reductions which he (Mr. Ayrton) believed could be accomplished, provided the right hon. Gentleman did not lend himself too much to the prejudices which had grown up in times past. He could not help expressing his regret that the right hon. Gentleman did not proceed with that most important measure, which was the foundation of any improvement in the administration of justice in India—namely, the amalgamation of the Courts of Appeal, which would effect a saving not only of money but of time to the people, and must lead to very great improvement in every branch connected with the administration both of civil and criminal justice.

There was another point which he wished to impress upon the right hon. Gentleman. He (Mr. Ayrton) observed that no sooner was any scheme of improvement suggested in India, than forthwith it was made the pretext for an enormously expen- sive establishment. A despatch had gone out from this country, giving directions to improve the education of the Natives; and what was done? A great educational department was created, and he would venture to say there was more money spent in inspectors, superintendents, and chiefs, at salaries ranging from £300 to £1,000 a year, than was actually spent in the education of the Natives. The same was the case with the Public Works Department, and in consequence of the new system of currency, he saw looming forth the Currency Commissioners, their deputies, and a whole staff of persons who, it would be said, occupied very responsible positions, and if any profit should arise out of the currency, it would be all absorbed in the enormous establishment which would attend its introduction into the country. That was a most pernicious system. With regard to the cultivation of the existing revenue, there was only one means by which the increase could take place, and that was by increasing the productive resources of India. That must be done by the foundation of an excise, customs, or land revenue. That, again, could only be increased, in the first place, by irrigation; and secondly, by improving the communications in India. He wished to impress upon the right hon. Gentleman that if he desired that the railways in India should flourish, he must be cautious in entering into engagements; but when he had entered into them, he should take care that they were honestly observed on the part of the Government of India. As far as his own observation had gone, he did not think the Government had exhibited that disposition faithfully to perform its engagements that the railway companies had a right to expect. He sincerely trusted that early in the next Session of Parliament the House would be favoured with the measures which the right hon. Gentleman had shadowed forth in the present Session, and that he would be enabled to check and control the disposition to extravagance that was still manifested by the Indian Government.

MR. HADFIELD

complained that under Mr. Wilson's Tariff the imposition of 10 per cent Customs duty on British manufactures amounted to protection in favour of the Native manufactures. Nearly all the produce of India, which was sent to this country, came free of expense; but, under Mr. Wilson's tariff, the British manufacturer would be debarred from sending his manufactures to India, and from the same cause would also be prevented from ordering from India the produce of that country. That was a most unreasonable tax, which, he would venture to say, must prove injurious to India, both on the principles of political economy and free trade; and he therefore appealed to the better judgment of the right hon. Gentleman to say whether this tax on British manufactures was one that ought to he imposed. He desired to know if it was correct, as stated by the hon. Member for Poole (Mr. H. Seymour), that £120,000 of taxes were raised in India from a Heathen and Mahometan population to maintain the ecclesiastical institutions of that country? He should be glad to hear from the right hon. Gentleman an explanation, or rather a contradiction, of that statement. His objection to it was, that a tax of that nature was prejudicial to Christianity itself; and damaged the exertions made by different societies in this country, which, by voluntary contributions, defrayed the expense of Missionaries in India.

MR. KINNAIRD

said, he did not agree with the hon. Member for Poole in all his invectives against the right hon. the Secretary of State for India, who had made a clear statement of the revenues and liabilities of India with great fairness, and without any attempt at concealment. He understood the right hon. Gentleman to say that he was most anxious to foster the introduction of British capital into India; and that the Madras Irrigation Company, having a simple guarantee, which cost the country nothing, saved, by the mere introduction of labour, a vast population from starvation. The Company were willing to undertake further operations without guarantee; but be understood from the right hon. Gentleman that the Government were ready to carry on the works themselves. Now, if he wished to introduce British capital into India, he had certainly better accept the terms offered by the Company.

MR. LYGON

said, he hoped that the right hon. Gentleman (Sir Charles Wood) would review the system under which the official director of railways to the Indian Council dealt with contracts for the construction of lines in India. Those contracts ought to be thrown open to wider competition; and the specifications in connection with them ought to be delivered in plainer and more intelligible terms than those in which they had been hitherto couched.

MAJOR WINDSOR PARKER

said, in reference to the observations which had been made by previous speakers to the effect that the course pursued by the authorities in India towards the Natives had been one of a discouraging and humiliating tendency, that if there was one point in which the Government of India had shown itself more anxious than another to conform to the customs and habits of the Natives, it was the way in which they had conducted their intercourse with them. In fact, the Government had evinced this disposition to an almost excessive degree; and he was quite sure, therefore, that there was no foundation for the observations to which he had alluded.

MR. GREGSON

inquired whether the subscribers to the intended £3,000,000 would be liable to the income tax in India?

SIR CHARLES WOOD

said, that the hon. Member for the Tower Hamlets had complained of the late period at which this question had been brought forward, but in making his remarks the hon. Member must have forgotten that it was impossible for him (Sir Charles Wood) to make the statement until after the financial accounts were received from India; and it was only the previous day at three o'clock that a most important financial despatch from India was received. With respect to the comments made by the Member for Poole, (Mr. D. Seymour) he must say that he gave up all hopes of satisfying that hon. Member, who attributed to him everything that he considered to be wrongly done—even matters which were transacted when the hon. Member was himself Secretary to the Board of Control. He could inform the hon. Gentleman that he was not aware of any intention to expend money from the Indian revenue on improvements at Point de Galle. With regard to the improvement in the land revenue, owing to reductions in the land assessments, the credit of which the hon. Member gave entirely to Sir Charles Trevelyan, he (Sir Charles Wood) must observe that he had himself suggested those reductions to Lord Harris, and therefore his hon. Friend would perhaps allow him some little credit on this score. His hon. Friend complained of the largo expenditure arising out of the ecclesiastical establishments of India. But his hon. Friend must surely know that ever since civil and military servants were sent to India it had been considered the duty of the Government to provide them with the means of spiritual instruction. He (Sir Charles Wood) had not increased those establishments in any way whatever, but had only filled up such vacancies as occurred. His hon. Friend had spoken of the necessity of enforcing economy on the Government of India; but he bad not lost sight of this subject, for of four despatches of his which were published there were two enforcing economy on the local Government in the strongest terms, and these were not the only despatches on the subject. His hon. Friend was wrong in assuming that there was not a large allowance for reductions in the Bombay and Madras Presidencies. The reductions in those two Presidencies would amount to £1,200,000, and the Government had based their proceedings on the official returns. His hon. Friend (Mr. Ayrton) said the House had no means of judging of the deficit. But there had been furnished to the House the financial account of the Indian Government, with the Estimates for the current year, and every possible paper. There was, indeed, a plethora of information, for letters and papers had been produced beyond those ordinarily laid before the House, and he had never heard a complaint so unreasonable.

MR. AYRTON

remarked, that he had not complained of the want of a statement of figures, but of the absence of any details corresponding to our Army Estimates, so that nobody could form an opinion as to whether the account presented was reasonable or not.

SIR CHARLES WOOD

said, that he could only repeat that all the information usually furnished to the House was now on the table, with a good deal more besides. The lion. Member for Poole attacked him for the appointment he had made of a gentleman as Under-Secretary of the India Board, who was not an Indian servant, and contrasted that appointment with Sir George Clerk, a very distinguished Indian servant, as Under-Secretary of the Board of Control; but his hon. Friend entirely overlooked the change of circumstances. The Minister responsible for India did not necessarily possess any Indian knowledge. In former times the President of the Board of Control, had not in his office any person connected with India, and therefore it was very important for him to have as one of his secretaries a person of experience in Indian affairs. The Secretary of State, however, bad a Council of fifteen persons of large Indian experience, and it was therefore not necessary that he should add to them a sixteenth person of Indian experience as Under-Secretary. Mr. Herman Merivale was a gentleman of great administrative ability and of great experience, and lie did not think it would have been possible to make a better choice. With regard to the question put by the lion. Member for Lancaster (Mr. Gregson), there had been an increase in the duty on salt, but there was no intention of making any further increase. As to the planters who had lost property during the mutiny, he did not see the discrepancy to which the lion. Member for Sheffield (Mr. Roebuck) referred between his speech last year and his despatch. He had stated generally the principle which the Government had laid down—namely, the allowance of one-half in the case of fixed and one-third in the case of moveable property, and that the probable amount of allowances would be £800,000. In the despatch he had entered more into detail, but its substance was the same. He declined to pledge himself to distribute pro raiâ the difference between the £1,000,000 and the sum first awarded. There might be some among the former and smaller holders who in equity might have a stronger claim than others, and he reserved to himself the power of considering whether any such claims might not be more deserving of attention. From private letters received from Mr. Wilson, he believed that the 1st of August was the period fixed for distribution. The hon. Member for Windsor (Mr. Vansittart) had directed his attention to the stale of the Legislative Council. He admitted it had not answered so well as he expected the purposes for which it was instituted, though he believed a great deal of injustice had been done to it, and, without giving any pledge on the subject, he would seriously consider whether some alteration might not be made in its constitution. There could be no doubt that some reduction might be made in the naval expenditure, but during the present Session he had experienced difficulty enough in dealing with the Indian army. Then as to the amalgamation of the courts, he should have been very happy if he could have attended to that subject this year, but the same obstacles which prevented legislation on other subjects had prevented it on that also; but he hoped early next Session to be able to introduce a measure for that purpose. He had always encouraged the construction of railways on the most liberal terms between the Government and the companies, but be was not prepared to say that full and open competition to an unlimited extent would he the best mode of procuring railway materials. In sending out such materials to India—he alluded particularly to rolling stock—it was essential to sec that they were constructed by competent persons. He could not agree with the hon. Member for Sheffield that the Customs' duties were imposed for protection, and not for revenue. The hon. Member for Perth (Mr. Kinnaird) had misunderstood what he said on the subject of irrigation. What he stated was that he hoped the Madras Company would undertake the Orissa works without a guarantee, but that, if they declined to do so, the Government was pre-prepared to undertake the works themselves.

Resolution 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 To-morrow, at Twelve of the clock.