COMMITTEE.

HC Deb 25 July 1861 vol 164 cc1509-41

House in Committee.

(In the Committee.)

SIR CHARLES WOOD

said, that some time ago, when he moved for power to raise a loan for the service of East India, he stated that probably before the end of the Session he should have to apply for discretionary powers to raise money to make good any deficiency in the amount required for constructing railroads in India, and he now rose to ask for such powers to raise money to be used only in the event of the railway companies not furnishing the sum required. As he stated the case pretty fully on a former occasion, it would not be necessary for him at present to refer, except very briefly, to the matter. In the course of last year it was anticipated that there would be spent about £6,000,000 in India on the construction of railways; and by the accounts last received the amount came up very nearly to that sum, the actual expenditure having been between £5,800,000 and £5,900,000. The expenditure in this country had been upwards of £2,000.000, and the whole expenditure in the course of the year ending on the 30th of April last amounted to upwards of £8,000,000. It was believed that as far as India was concerned the expenditure for the present year would be about the same—namely, £6,000,000 in round numbers; and that the expenditure in this country would be about £1,700,000 or £1,800,000. Supposing, then, that there should be a little more expenditure in India (which the Government would be glad to incur, in order to proceed with the railroads now in the course of execution as rapidly as was consistent with their due construction), a sum somewhat greater than £6,000,000 might be expended; but, as it was not worth while making estimates except in round numbers, the estimate for the expenditure in this country and in India was £8,000,000. Of course, therefore, from the money market in this country, in one shape or another, either by means of the railway companies or by means of the Indian Department, that sum must be raised. It was impossible for him to say what amount the railway companies would raise, and he had no means of raising a single sixpence unless he received power to obtain the sum required for this purpose, if the railway companies failed to do so. What he wanted the House and the country and the money market clearly and distinctly to understand was that there was no double demand on them. If the railroads raised the money, then he should not raise a sixpence; but, if they did not, then it was incumbent on him to raise the money, because all were agreed that for the interest of India, of England, of the shareholders, and of the Indian Government, who were losing money by paying the guaranteed interest, the railroad expenditure in India should not be checked, but that all the railroads should be completed at the earliest possible period consistent with the due execution of the works. Therefore, he proposed to take a discretionary power to raise such a portion of the sum of £8,000,000 as the railroad companies might not he able to raise for themselves. His own impression was that, assuming the worst, they might be able to raise £3,000,000, and, therefore, he proposed to take a discretionary power to raise £5,000,000 between this and the 30th of April next. Considering what had already taken place, he certainly must say that he found no indisposition on the part of the money market to furnish him even with more than he asked for. On a recent occasion he asked for £4,000,000, and he was offered about £21,000,000. However, he had no wish to borrow more than was necessary for the purpose of carrying on the works of the railroads; and with respect to other works which it might be desirable to construct in India, he believed that the state of the Indian finances was such that it would not be necessary to borrow on that account. Without going further into details, he wished the House and the country to understand that not one single sixpence would be borrowed by him under any circumstances for railroad purposes in India, unless the railroad companies failed to raise the money themselves. He proposed to make the loan in the same stock as the previous loan, and on that subject this was all he had to say. He now proposed to make a statement with respect to the finances of India, and he thought the statement would prove satisfactory, as it was not his intention to raise a sixpence by borrowing for the Indian Government, because there was not the slightest occasion to do so, It was usual, on occasions like the present, to refer to the estimate of the past year, and to the accounts of the year preceding that, and to the estimates for the current year. It had been stated by an hon. Member that the accounts from India were exceedingly complicated. That was true; and one reason for his not making the present statement at an earlier period was because he had waited for an explanation of some discordant statements which had come from India. He was happy, however, to be able to say that the statement which he had made on the subject on a former occasion was borne out by the actual result. The accounts of the Indian revenue and expenditure for the year 1859–60, together with the regular Estimate for 1860–1, had been laid on the Table of the House, but there was, he was bound to admit, a very considerable discrepancy between the estimated and the real amounts coming under those heads. He found, for example, that the estimated amount of the expenditure for 1859 60 was £46,890,000; the actual expenditure, £50,475,000; the estimated revenue, £37,796,000; the actual revenue, £39,705,000; the anticipated deficit being thus in round numbers £9,000,000; the actual, £10,770,000; the actual income was larger than the estimated by about £2,000,000, and the actual expenditure more than the estimated by about £3,500,000. That appeared to be incredible, but no explanation of the matter had been sent from India. An explanation had been written for, and he had anticipated that it would be found to consist in the fact that the reductions made by Mr. Wilson in the military expenditure had not been brought into the accounts for the year, and would appear in the accounts for the years 1860–1. While, however, he was waiting to receive some information in reply to his inquiries on the subject, he had been very much surprised to see a statement made by Mr. Laing to the effect that the expenditure for the year l860-l was, notwithstanding the reductions to which he alluded, actually £200.000 in excess of that for the year immediately preceding. Upon making inquiry of Mr. Laing himself, who had returned to this country the other day, and who he was sure the House would be glad to hear was much improved in health by the voyage home, he learnt that the statement in question was attributable to the fact that Mr. Laing had been misled by the accounts published by the Financial Department of the Government of India in the Calcutta Gazette, which turned out to be altogether erroneous; the real truth of the case being, as he had anticipated, that the reductions stated by Mr. Wilson to have been brought to account in 1859–60 were not brought to account till the following year. Those reductions in the military expenditure, as estimated by Mr. Wilson, amounted for the year 1859–60 to £3,500,000; for 1860–1 to £2,500,000; making a total of £6,000,000; and he was happy to be able to say that, although the actual reduction under that head amounted in the former year to only £171,641, the estimated decrease for 1860–1, based on figures on which he could place reliance, was so large that the reduction in the two years was £5,800,000. He now came to the year 1860–1, the expenditure for which was, in round numbers, £46,000,000; the income, £39,500,000; deficit, £6,500,000; but, if from that amount were deducted the sums paid in the shape of compensation for losses incurred during the mutiny which did not constitute an annual charge, and some other items, the actual deficit would be found to be reduced to little more than £5,500,000. [Mr. H. SEYMOUR: Does that statement include home charges?] Yes. That being so, the Committee would at once see that the expenditure for 1859–60 having been £50,475,000, and that for 1860–1, £46,000,000, a comparison of the expenditure for the two years showed a reduction in favour of the latter of, in round numbers, £4,400,000. Now, it might be asked whether the result of the statements he had just made ought not to be to shake the faith of the House of Commons in the accuracy of the Estimates of Indian revenue and expenditure which might hereafter be drawn up, but his answer to that question must be in the negative, inasmuch as greater pains had been recently and were now bestowed on the framing of these Estimates than used to be the case. That he was justified in making that statement was, he thought, proved by the fact that the amount of cash balances in the Indian Treasury at the end of the financial year was greater than had been anticipated—a circumstance which was to be attributed rather to a reduction of expenditure than to any increase in revenue. The cash balances, as estimated in the regular Estimates for 1861–2, contained in the papers which had been laid on the Table of the House in March last, amounted to £11,448,000, while it appeared by the Financial Letter from India, dated the 2nd of May— which contained, of course, the actual amount so far as the great treasuries were concerned, and the estimated only so far as related to the more distant treasuries; that these cash balances reached the sum of £12,850,000, thus leaving a surplus over the amount estimated so recently as March last of £1,402,000. No more satisfactory proof than that could, he thought, be afforded of the improved state of Indian finance; nor need he, he felt assured, say anything I further to point out that greater confidence than hitherto might be placed on the system of accounts in India, and that that confidence ought to be extended to the Estimate for the current year. That Estimate he found given by Mr. Laing in a very clear manner in his official statement, although he could not help thinking it was somewhat too favourable. Mr. Laing, by transferring to the local budgets £500,000, omitting loss in connection with railroad money, £470,000, and making a reduction on home charges, beyond the estimate which was sent out from this country, of £300,000, arrived at a surplus of nearly a quarter of a million; but, taking a view of the case which be believed, after due consideration, to be more correct than that formed by Mr. Laing, and assuming the revenue of India to remain as it was, I and no reduction of expenditure to take place, he calculated there would be a deficit of £1,000,000 at the close of the current year. That amount would be diminished to the extent of £500,000 if a transference of expenditure to that amount were made to the local Budget. Mr. Laing also hoped that a considerable reduction might be effected in connection with the army, and he hoped that in the proposed modification of the licensing tax, some additional revenue might be derived from that source. He was in hopes that in one way or another the deficiency would entirely disappear. But, even if it did not, the cash balances were amply sufficient to defray any excess of expenditure which might occur in the course of the present year. At the end of the present year, at latest, the expenditure and income would be brought into a state of complete equilibrium, and he trusted that in future there would be no necessity for raising any loan, either in India or in England, to meet the Government or State expenditure in India. There were one or two things very satisfactory in the Budget statement from In- dia. In the first place, the expenditure for this year included a sum of £600,000, which was entirely due to the recent famine in India, and that item of course would not occur again. In the next place, a large portion of the expenditure consisted of the guaranteed interest on railway capital, and of the loss arising from the transmission of money to India. This was for the present a charge upon the revenues of India; but, of course, when the railways were completed and became remunerative, to however small an extent, that charge would cease. For the present year the charge for guaranteed interest, less traffic receipts, was £1,300,000, and the loss by exchange last year amounted to £473,000, the result being a charge upon the revenue of India of £1,773,000 on account of railways alone. But that charge, as he had said, would soon cease, and he hoped he might look forward to a state of things in India such as had not been seen for many years past. For some time past there had been an excess of expenditure over income, but he trusted that after this year, unless some great calamity occurred, we should have a surplus instead of a deficiency, and then we should be able to make those alterations in the taxation of the country which everybody wished to see carried into effect. The reduction of the duty on yarn from 10 to 5 per cent had caused some loss to the revenue, but be hoped the yield would soon reach its former amount. He also trusted that we might be able before long to reduce, in like manner, the duty on manufactured goods from this country. The duty on salt had been most productive, and he was glad to say that, owing to the improved condition of the people in India, it had in no degree diminished the consumption. In Bengal, where the additional duty was highest, the consumption had increased very rapidly. The additional duty was 25 per cent, whereas the increased consumption was 30 per cent. He believed that the only duty as to which any apprehensions were entertained was, as usual, the duty on opium. Last year, owing to the very high price of opium at Calcutta, the duty was exceedingly productive; but within the last few months the price had fallen considerably, and one never could speak with confidence as to I what the yield of the tax would be. Mr. Laing had taken a low figure, and he believed his estimate would not be found too large. The House already knew that the I reduction which had taken place was mainly in the military expenditure. He did not I mean to say that it had been carried as far as he could have wished. If it had been begun earlier it would have been more valuable; but he thought the House would be satisfied, after hearing a few facts, that a great deal had been done in a short time. The following short paragraph from the last financial despatch from India would show the amount of the reduction:— Seventy-seven Native regiments will have been broken up since 1859, and the Native army reduced from 284,000 to about 140,000 men. Including military police, the reduction of Native armed force since 1859 will not have been less than 200,000 men. A certain proportion of the soldiers had been absorbed in the police, and a considerable number had found employment in various ways. He thought that, considering the state of the country, the Government of India had gone quite as far and as rapidly as prudence would warrant. In 1858–9 the military expenditure was £24,750,000; in 1861–2 it was estimated at £15,500,000 — showing a reduction since 1858–9 of no less than £9,250,000. He had nothing further to say on points of finance; but there were certain matters connected with the administration of India upon which, he wished to make a few remarks. A most interesting and instructive report on the famine had been received from Colonel Baird Smith, and he would state one or two facts from it. The extent of the area over which the drought prevailed was much more restricted than many people supposed. A considerable portion of the North-West Provinces was visited by the famine, but in the neighbouring countries—Oude, for example— there was plenty of grain to be had; the difficulty was in paying for it. In the afflicted districts the distress arose from the utter impossibility of cultivating the soil, which, from the want of rain, became almost as hard as iron. Perhaps the best proof of the severity of the pressure was to be found in the price of grain. It was very remarkable that though the famine of 1837–8 was infinitely more severe, and infinitely more destructive to human life and cattle, than that which recently raged in certain districts in India, the price of grain was never so high as it was during the last year. Taking the mean of the six districts where the famine was most severe, the average price of grain in common years was 40 1/2 seers per rupee; during the famine the same sum purchased only nine seers. Relief had been extended very largely to the people, partly by the Government and partly by liberal subscriptions raised in India and in this country. For a considerable period no fewer than 143,000 people were daily employed on the relief works—irrigation, railways, and roads. The famine led to an extensive emigration from the afflicted districts, but he had every reason to suppose that the people would return to cultivate the soil when the rain came. Colonel Baird Smith showed in his Report the diminished quantity of rain which fell during the last year. In the six districts where the famine raged the average fall of rain was, in autumn, 24.19; in spring, 6.86; but during the famine year it was, in autumn, 9.09, and in spring, 1.33. These variations in the fall of rain were quite sufficient to account for the failure in the production of food for man and beast, the productiveness of the soil in India being almost entirely dependent on the rain-fall. It was curious enough that those tribes which were the best agriculturists had resisted the famine throughout, while those who had not given their attention to agriculture were not only worst off, but actually would not receive assistance; their heart failed them, and to a great extent they emigrated to other districts where the famine was less severe. Fortunately, by the blessing of Providence, rain had fallen more early this year than usual, and he hoped, therefore, they might anticipate that the worst of the famine was over, and that next year would be one of prosperity. The next subject to which he would call the attention of the House was one on which some discussion had taken place, on the Motion of the hon Member for Southwark, in connection with the planting of Indigo in Bengal. The state of feeling between the ryot and planter was, unfortunately, one of some standing, and its more recent intensity had been productive of great suffering and loss. He held in his hand a letter from the late Lieutenant Governor of Bengal, so long ago as 1854, stating that while the planting of indigo ought to have been one of the greatest blessings to the country, the ryots themselves regarded it as their direst curse. The cultivation of indigo during the present year had ceased to a great extent. There had been attempts to enforce by criminal proceedings the performance by the ryots of the contracts into which they had entered. A measure had been passed with that view; but of course that was only a temporary Bill. No doubt the indigo planters would lose very largely, and it was natural that they should be exceedingly irritated at the present lamentable state of things. The Government, however, had done their duty in all cases by holding the scales as impartially as possible between the ryots and planters, He was sorry, however, to say the bad feeling which existed had been increased by a fact to which the hon. Member for Westminster had on a former occasion referred;—namely, the circulation under an official frank of a Bengal play not calculated to raise the character of the planters in Bengal. He thought that a most improper act, which had been done not only entirely without the sanction, but without the knowledge of the Lieutenant Governor of Bengal. When brought to his knowledge in such a way that he could take notice of it, be had expressed his extreme disapprobation of such conduct. It was the duty of the Government, as he had stated, to hold the scales of justice perfectly even between the one and the other—to protect the ryot from oppression and the planter against violence; and all parties in this country must be anxious to contribute as far as they could to a fair and reasonable settlement of the dispute. They were the best friends both to the ryot and the planter, to the interests of this country and of India, who sought to soothe feeling on both sides, and promote as far as possible that settlement which would restore the cultivation of indigo on a sounder and healthier foundation than before. The next point to which he would call attention was one which at all times was of the greatest importance, but at the present moment was of vital importance to this country and India—he meant the cultivation of cotton. He need not say that his attention had been directed to this subject in former years; and his attention had been constantly directed to it since he held the office he had now the honour to fill. Various opinions were entertained as to the capability of India to produce cotton in the quantity required by this country. His firm conviction was that if proper means were taken in India by the Government, and by those in this country who were interested in the production of cotton, all co-operating together—and it could not be done without that co-operation—India might be made a source of supply which, to a very large extent, would render this country independent of other countries. He trusted before long that would be the case. So far as he could make out the probable supply of cotton from India this year would he very large—considerably in excess of any previous supply. Upwards of 620,000 bales had already left India for this country; from 300,000 to 400,000 bales more were expected; so that in all there would be 1,000,000 bales, or 320,000 more than ever before wore; received from India. The price obtained, he hoped, would stimulate still further the cultivation of cotton in India, and lead to an improvement in the processes of picking and cleaning, which the cultivators were too apt to forget. The Indian Government had laid out considerable sums of money in endeavouring to ascertain what were the best sorts to be grown in India, and in the southern parts a considerable quantity had been grown and sent to Calcutta. He thought it well worth the while of those interested in the growth of cotton in India to take active measures in order to obtain from all accessible points the best information on the subject. With this view he was happy to state that Mr. Haywood had been sent out from this country. Dr. Forbes, in India, was, he believed, intimately acquainted with the best modes of producing cotton in that country. These two gentlemen were going to visit the cotton districts together, and he hoped the result would be to lay the foundation of producing cotton in India to a much larger extent and in better condition than had hitherto been the case. So much for private enterprise. The duty of the Government was to improve the communications from the coast to those portions of tho interior where cotton was grown. The main source of supply were two—Dharwar and Berar—and every effort was being made to improve the communications as rapidly as possible. With regard to Dharwar cotton, the most convenient port was Sadashevagur, and orders had been given for proceeding rapidly with the road to that place. He would read an extract from the last report which had been received on that subject— Orders have been given that the engineer in charge shall be supplied with funds as fast as he can employ them advantageously. The Government promise that 'no exertion shall be spared to have the road completed throughout as early as possible; but this,' they add, 'cannot be this year.' He now came to the second source of sup- ply, Berar. Cotton would be brought thence in two ways—first, by the East India Peninsula Railway, for the prosecution of the works of which, as rapidly as possible, orders had been issued. What ever money was necessary for that purpose would be forthcoming, and both branches of the line—namely, that through the centre districts to Nagpore, and also the northern branch, would be completed as expeditiously as practicable. Another route by which cotton could come from Berar would be by the Godavery. The navigation of that river was to be opened up with the least possible delay. When Captain Haigh was here, he asked for money to provide plant and machinery with which to improve the Godavery along its whole course, and whatever he had asked for had been supplied. No means would be spared and no time lost in furthering that important work. Sir W. Denison, the Governor of Madras, said that immediately on his return from Calcutta he would proceed along the course of the Godavery himself to see what would be the most advantageous mode of conducting these works. For himself, he had always been convinced of the expediency of opening this great channel of communication into the interior; but hitherto the main difficulty had been the want of funds. That difficulty was now got over; and although when questioned on this subject the other day, he was then unable to answer until he had consulted his Council, he was happy to have it in his power now to state that it had been determined that morning in the Council to send out orders to India directing that the opening up of the Godavery should be carried out as rapidly as the supply of labour available would allow, and as was consistent with the due execution of the work. In the present precarious state of our cotton supply, the Government would not do its duty either to this country or to India if it lost a moment in taking energetic measures to provide the means of communication between the cotton growing districts of India and the coast. He would next make a few observations on one or two points connected with the political administration of India. He had briefly adverted on a former occasion to the policy pursued by Lord Canning towards the Native Princes and chiefs. That policy he believed to be sound in principle, and well calculated to lay a firm foundation for our power. As far as it had already been carried out it had proved ex- ceedingly successful. In past years the tendency had been rather to depress the Native Princes. That had been entirely reversed of late. New treaties had been made with several of those Princes, and territory assigned to them which, while consolidating our dominions, increased the dignity and honour of those to whom that territory was assigned; and an assurance was held out that Native rights would not be invaded by the British Government. An exemplification of the effect of that policy was seen in the recent events in Sikkim. The people of that country made inroads into our territory, and carried off our subjects. It was the duty of our Government to despatch a force to that quarter to obtain the liberation of the captives, and also reparation for the outrage committed upon them. Reparation was accordingly demanded by our agent, accompanied by an intimation that we had not the slightest intention of annexing an acre of territory. What was the result? Our troops had hardly entered Sikkim before a conciliatory message was sent by the Rajah, which led to the speedy conclusion of a treaty between that Prince and Mr. Eden in the most amiable and satisfactory manner. And not only so, but, with the Rajah's concurrence, a road was to be opened from our dominions through Sikkim into Thibet, and goods were to be allowed to pass into Thibet and Sikkim either at no duty at all or at a very low one. Thus would be attained that which had long been a great desideratum—namely, a land communication between China and India. The Governor General had written to our Minister at Pekin to procure the requisite authority for the introduction into Thibet of a small party of Indian officials, who would penetrate into that country to ascertain what openings there were for commerce. A similar policy had been pursued towards the upper classes of Natives in our own provinces. They had been associated more than they formerly were with the higher agents of our Government. The talookdars of Oude now acted as magistrates, collected the revenue, and performed the other duties of country gentlemen, and the most friendly spirit existed between them and our officers. In a Report from the Chief Commissioner of Oude as to the instructions given to our officers there was this passage— The Chief Commissioner's wish is to treat the talookdars as gentlemen of property and station, whose interests are identified with those of the Government, who are its natural born adherents, not opponents, as they have too frequently been considered by our officials; and this view he has inculcated in his subordinates. All district officers have been desired to hold weekly receptions of the native gentry, to visit them on their estates during the cold weather, and to communicate with them as much as possible direct, and not through native subordinate officials, who designedly often adopt an uncourteous tone.

MR. VANSITTART

asked the name of the author of that document.

SIR CHARLES WOOD

believed it was Mr. Wingfield. Experience had shown, especially during the rebellion, how much the people of Oude and other provinces were attached to their Native gentry and chiefs. Our Government in India had profited by that lesson, and sought henceforth to make the Native gentry and chiefs our steadfast friends and supporters, instead of our enemies. The Home Government had been guided by the same spirit. Some mode of rewarding Native chiefs for their fidelity had long been wanted; and lately Her Majesty had been graciously pleased to institute an Order of Knighthood, which had already been conferred on seven or eight Native Princes of India, some Hindoos and some Mahommedans, with whom were associated European officers, either of the Company or of the Crown, who had rendered distinguished service in that country. The Governor General believed that this measure had had the very best possible effect, and that such a mark of favour from the Sovereign of England and of India would be highly valued by the Native chiefs. The three Indian Bills introduced into Parliament this Session were framed in one and the same spirit—namely, a desire to break down the system of exclusiveness, and admit to a participation in the management of public affairs both European settlers and Natives of rank and ability. By those measures both of those classes would or might have a voice in the Legislature, a seat on the bench, or a part in the Administration of India. The earnest aim of the Government, both in India and at home, was to consult the interests and conciliate the affections of the inhabitants of that country, European and Native. He was aware that one of the three Bills had excited considerable alarm among the Civil Servants. That alarm, however, was, he hoped, now allayed. The Civil Servants had met the proposed changes in the frankest spirit. He did not believe they would be at all injured by what had been done; but it was right to acknowledge the spirit in which they met these changes. He was happy to say that since the Bill had passed he had received a minute from the Governor General recommending a course substantially the same as that which had been adopted. As to the other two Bills, the nature of them was so well known to the Committee that he need only remind them that the first admitted Natives to the highest places in the Legislature of India, while the other would enable them to take their places upon the bench along with Europeans, and by their knowledge of the laws of their own country there was no doubt the administration of justice would be improved. Provision was also made for legislating on local subjects at Madras and Bombay, and other parts of India, which was so much desired by the inhabitants of parts of India away from Calcutta, and which would, he thought, tend much not only to the contentment but to the advantage of India. Those were the measures which had been adopted within the last few months in India and in England, and which he hoped would be productive of great advantage to both countries. It had been a matter of satisfaction to him to find that there was a general concurrence in the policy which those measures indicated. That they were measures of vast importance no one could deny, and he had deeply felt the responsibility that weighed upon him in proposing measures affecting the vast and anomalous fabric of our Indian Empire. Upon such matters no man could be certain of results; but he could only say that those measures were the result of deep deliberation, and had the concurrence of the highest authorities upon Indian subjects. The event must be left in the hands of Providence, and now he could only hope and pray the measures that had been adopted would contribute to the welfare of both countries, and would cement the bond of union between England and India by promoting the prosperity and happiness of all Her Majesty's subjects. The right hon. Baronet concluded by moving a formal Resolution, that it was expedient to give power to the Secretary of State to raise money by way of loans.

MR. DANBY SEYMOUR

said, he rose to express his satisfaction at the lucid statement of the right hon. Gentleman, and the wise policy which it enunciated. Indeed, he considered it to be the most satisfactory statement he had made with regard to India since he had the honour of a seat in the House. He could not, in the first place, pass over the great debt which the country owed to the late Mr. Wilson, who had fallen a victim to his zeal in the interests of the public. Another hon. Gentleman had also nearly fallen a victim to his arduous labours in the same cause; but he was gratified to learn that Mr. Laing had just arrived in England in better health than was expected, and looked forward to being able in a short time to resume his labours in India. It was most desirable that he should be able to do so, because his last speech showed that Mr. Laing felt the absolute necessity of equalizing the revenue and the expenditure, and of admitting the Natives of India to some share in their own Government. The right hon. Gentleman had omitted to notice one point urged by Mr. Laing, that the local Governments should have the power of making minor budgets for their own localties. It would be satisfactory to hear that the right hon. Baronet concurred in that view. Mr. Laing had shown that in Madras 40 per cent of the outlay upon public works was consumed in the supervision of those works. That was an enormous waste of money, but it would always occur as long as the Government had no interest in keeping down the expenditure. The most unsatisfactory part of the right hon. Baronet's statement was that while Mr. Laing estimated a surplus of £300,000, the right hon. Gentleman expected a deficiency of a million. The right hon. Gentleman proposed to make up the deficiency in some part by a lieence-tax, which Mr. Laing objected to inflict upon the Natives of India. He (Mr. Seymour) thought less objectionable means could be adopted, one of which he would point out. They had very large military charges in proportion to the reductions in the army. There had been a reduction of 200,000 Native troops, and the number to be kept up in future was 140,000, but the contemplated expenditure for military purposes in future years was higher in amount than it was in 1857. They were quite right in keeping up a sufficient European force in India, but the force now in that country was 19,000 in excess of the European force which the right hon. Gentleman himself had estimated to be necessary for the security of our empire. It was proposed to absorb that excess at the rate of 2,000 men a year, but when the finances of India were so much pressed upon he thought the reduction might be carried out more speedily. But, above all, it was wrong under those circumstances to send out more troops from England, no less than 3,000 men of the most expensive arm, artillery, had been sent from England to India. He could not understand why the number of men could not have been obtained as volunteers from the surplus troops now in India. There was another point to which he would call attention. It appeared that an error of £4,500,000 had been made not six months before in the revenue department of Calcutta in the estimate of last year. He should be glad to know whether this department had lately been thoroughly remodelled, in accordance, with a promise of the right hon. Gentleman. He knew that it was the wish of the Marquess of Dalhousie that the Indian accounts should be kept in precisely the same manner as the accounts of the Imperial Government. He saw no reason why trade and navigation returns should not be published periodically, similar to those of this country. The income tax was an apparent failure, but the right hon. Gentleman was, be thought, right in persevering with it, so as to uphold the principle of taxing personal property instead of raising all the taxes from the land. It should not, however, be carried too low. He was glad the right hon. Gentleman did not mean in future to borrow. If the House could depend on the Estimates—and he trusted that Mr. Laing had given the right hon. Gentleman satisfactory assurances on this subject— the expenditure and revenue at the end of the current year would balance each other, leaving out the railways. The recent famine could not fail to draw the right hon. Gentleman's attention to the subject of emigration from India to the West Indian Islands, and other places willing to receive labour. The question was of great importance, from its bearing on the subjects of the slave trade and the supply of cotton, and he trusted that the Indian Government had now ceased to place obstacles in the way of emigration from India. Had the French Emperor been enabled to obtain labour from India for the French West Indian colonies, he would not have been compelled to obtain importations from Africa. He considered the French Government not so much to blame for the temporary extension of the slave trade arising from that cause as the Indian Government. The famine must have convinced the right hon. Gentleman of the importance of encouraging public works in India, for had there been better roads and communications in the North of India no famine would have occurred. The right hon. Gentleman's statement respecting the indigo districts was not perfectly satisfactory. The right hon. Gentleman had prevented the Indian Government from carrying out a beneficial law of contract, but had not suggested any law of contract himself. The Civil Service disliked the planters, and he must say that the conduct of Mr. Eden, which had been justly praised on other grounds, deserved blame with reference to the planters. He thought that the Government had acted improperly in circulating an obnoxious pamphlet, which was a caricature of the planters. With regard to the question of the cultivation of cotton, he considered it would be better promoted by the construction of railroads than common roads. Mr. Locke, formerly a Member of that House, and Mr. Brassey had both assured him that the expense of the maintenance of a road was exactly the same as that of a railway, when it was once made. The only difference was the first cost. He regretted that nothing had been done to advance railways in the southern parts of India, where a communication with the cotton districts was much wanted. He was delighted to hear that at last the Government had adopted a policy so rational and so excellent in every way as that which it had announced with regard to the Native Chiefs and Princes of India, for he believed it would be productive of the greatest possible benefit to the Natives, and ensure the permanent tranquillity of the country, but it had, unfortunately, required a great convulsion and revolution, and a terrible massacre in India to convince them of the wisdom of such a step. If that policy had been adopted in 1853 he firmly believed the mutiny would never have occurred, and an addition of £40,000,000 to the Indian debt might have been averted. They had already found the profit of a wise policy in the opening of China. He remembered when, immediately before the mutiny, a gentleman connected with the East India Company said how easy it would be to govern India for the future. However, since then the mutiny had taught him better, and a policy of conciliation had been introduced. He was glad that the Order of the Star of India had been established, and he was sure the Native Princes had accepted with pleasure and gratitude the the conciliatory policy of the British Government, and that they would henceforth consider themselves magnates of the British Empire as much as Peers of Parlia- ment. As a general rule, every educated Native of India was a friend to this country. He was told by schoolmasters in India that the difficulty was to get the boys out to play, so anxious were they to learn the English language, and so studious and painstaking was the Native character. So good and great a change of policy as had now taken place could not fail to lead to beneficial results.

SIR HENRY WILLOUGHBY

said, that instead of following the hon. Gentleman over the wide field of discussion he had opened, he would confine his observations to the subject before the Committee— the state of Indian finance. He had no idea the right hon. Gentleman intended to make his financial statement on India that night. He supposed from the notice paper that the right hon. Gentleman only intended to move in Committee a Resolution upon which he might found his Bill for the Indian loan for railways. The right hon. Gentleman would not forget that on the 11th of February in the present year he had stated that in his view no loan would he wanted for the public exigencies of India, although it was possible a railway loan might be required. But only the other day the House had passed a Bill empowering the Indian Government to raise £4.000,000 for the public exigencies, and, therefore, that amount had been added to the public debt of India. The railway finance of India appeared to be so intimately dove-tailed with the general finance that it required a sharp intellect to distinguish the one from the other. In 1857 the debt of India was £57,500,000, now it amounted to £103,000,000. The dead weight upon the finances of India had, indeed, increased so alarmingly that it had become a source of financial danger to that empire. The collection of Indian revenue amounted to £4,500,000; the allowance to Native Princes and other charges to £2,250,000; and the charge on account of the debt was from £3.500,000 to £4,000,000, making a total of £10,000,000. For the last three years there had been a series of most extraordinary miscalculations, both in India and at home, with regard to Indian finance. Mr. Laing only recently made a mistake of £1,300,000 by the omission with regard to the transfer of the Indian navy. He (Sir Henry Willoughby) must say that the right hon. Gentleman had been very sparing in his observations as to the state of Indian finance. He certainly had hoped to hear something from him as to the cost of the new scheme of amalgamation. They had heard a good deal about the reduction in the military expenditure, and no doubt it had been very great, but the House had not heard a word about the Staff corps, or how the Indian officers were to be secured those prospects which were guaranteed them by the Act of 1858. He could not help sharing and sympathizing with the disappointment Mr. Laing had expressed that the right hon. Gentleman, the Secretary in Council, had not been able to do something to curb the military expenditure on this side of the water. It appeared that the War Office had more control over the finances of India than the right hon. Gentleman and his Council. It appeared that the Secretary of State and Council had no effective control over the military expenditure. The number of men in the Indian depots in this country was reduced, but the officers were not reduced; and why had not the Secretary of State and Council pluck enough to insist upon a reduction of the officers? If the right hon. Gentleman did not defend the Indian Exchequer, there would be no end of the charges which, on one pretext or another, would be placed upon it. He hoped the House would back the Secretary of State for India, and induce him to defend the Indian Exchequer with more spirit than he had hitherto done. When they were endeavouring to reduce expenditure in India at every risk, and were resorting to the most extraordinary modes of taxation, they should on this side of the water do what was fair and just. It would, therefore, have given him pleasure to hear the right hon. Secretary of State speak with a little more determination on that point; in fact, he believed he had not spoken on it at all. Passing to the subject of railways, he would say that he looked with great distrust upon a Government engaging in such matters, in which substantially they could have no control. This year £8,000,000 would be required, but how long was that to go on? The original estimate for railways in India was £54,000,000 or £56,000,000. Now, he would like the right hon. Gentleman to state what was the extreme amount of obligation that was contemplated on these railways. The companies had raised on paper £32,000,000, of which they had actually advanced £30,500,000. Would the remaining £24,000,000 be the whole of the possible obligation which the House would be called upon, either directly or in- directly, to furnish or guarantee? Those were questions which appeared to him to be of great importance, and he thought the Committee ought to receive information upon them.

MR. KINNAIRD

said, he was glad that the hon. Baronet had called attention to the Indian military expenditure in this country. It was a subject that required the attention of the right hon. Gentleman the Secretary for India, for it was clear that when the amalgamation of the armies took place the object of the Home authorities would be to throw as much expense as possible on the Indian finances, by maintaining large depots in this country. He agreed with the hon. Member who spoke in favour of giving due importance to the Native Princes in India, but he thought that the hon. Member carried his idea too far when he said that if that policy had been adopted before, there would have been no mutiny. The mutiny, it must be remembered, was a military mutiny. The reduction of an overgrown Native army had long been imperative. A large expenditure under that head was absolutely ruinous, and retrenchment was a source of strength. He could not but deprecate the course taken by the right hon. Gentleman with reference to the loans, as, instead of giving an Imperial guarantee, he was raising money at 5 per cent, which might otherwise be had at three and a quarter, thus disturbing, also, the finances of the country. The Chancellor of the Exchequer must look upon the right hon. Gentleman as his greatest enemy, for he was disturbing his money market for the sake of theories. In India, however, retrenchment was not the only remedy for a deficiency of revenue. He should have been, therefore, glad to hear that remunerative public works were to be extensively undertaken. Increased instead of diminished expenditure in that respect was the secret of wealth and power; and he hoped they would soon see the day when there would be a separate Board of Public Works composed of men like Colonel Baird and Sir Arthur Cotton, who were entirely devoted to their development. Deficiency of revenue instead of being an argument for diminishing expenditure under that head, was only a reason for increasing it. In the water-courses of India lay the wealth of that empire. The old Native Princes had executed the most magnificent works for the purposes of irrigation and navigation, but these had long since fallen into ruin; and it was the duty of England, as the governing power in that country, to see that her internal resources were properly developed. Let those works be restored and they would become the source of fertility and riches. Let them be left as they were, and while occasionally the rivers fertilized the country through which they passed, at other times they desolated it by flood, or left it barren through failure of supply. He might illustrate what he had said by a reference to Cuttack and Tanjore, which were districts of about the same size. During twenty-three years only £2,400 was expended anually upon waterworks it Cuttack, while in Tanjore £11,600 was spent. The annual revenne from Cuttack consequently was only £85,000, while that of Tanjore was £470,000. Land in Cuttack was worth £1 10s., in Tanjore £5 an acre; and while Cuttack had the best natural supply of water, yet in twenty-three years it had three years of famine, four of drought, seven of inundation, two of severe inundation, and only seven moderate seasons. The total excess of revenue from Tanjore during that period was nearly £7,000,000. He would ask them, then, which was the true economy?—to increase our expenditure on works of irrigation, and thus our revenue; or to diminish it or allow it to remain stationary? Again, as a mere question of finance, what could be more ruinous than periodical famines? It was unquestionable that they could be averted; and, happily, our interest and our duty equally called upon us to avert them. Closely connected with irrigation was increased facility for the conveyance of goods. The waste of goods in India caused by the want of canals was a fearful evil. He had heard it said in general terms, for instance, that as much cotton was wasted in the interior of the Madras Presidency as was produced in America. Give the Natives of India a market for their goods, and a remunerative price, and there was no limit to what they could produce. But, more than that, the development of roads and of other means of communication was absolutely essential for the administration of justice. He believed that a strict inquiry into the condition of Bengal, for instance, would show that to false economy was owing some of the terrible evils under which the ryots there had for years been groaning. European magistrates were placed in charge of enormous districts, and the difficulty of doing their duty was greatly increased by the want of roads. On every ground, there- fore, he felt imperatively called upon to press the question of public works on the attention of the Government, and to demand for the people of India every facility that could be granted, for the development of its natural resources, and of its commerce.

MR. VANSITTART

said, that, having trespassed so often on the indulgence of the House during the Session in reference to Indian questions, he rose very reluctantly on that occasion. He could not, however, refrain from expressing the feeling of deep regret with which he had listened to the statement of the right hon. Baronet, as he thought the practice of coming down to the House year after year for powers to raise loans for India very objectionable. The objection was the greater on the present occasion, because the right hon. Gentleman asked for another loan actually within a week after the acceptance of tenders for a loan, which had been already sanctioned during the year. If, however, the right hon. Baronet preferred to adopt that course, instead of submitting a bold and comprehensive financial scheme. in reference to the entire debt for India, that unhappy state of affairs must continue. He was aware that that course had its attractions, inasmuch as all that the right hon. Baronet had to do was to announce his intention to make a loan, and calculate a price at which it would be sure to command a premium, and he was aware by experience that he would find no difficulty in obtaining tenders for twenty times the amount required. But he begged to warn him that, however popular such an arrangement might be regarded on the Stock Exchange, it involved a serious loss to the Indian Government, because the loans were obliged to be issued at a price below that, which would be given by regular contractors. The right hon. Gentleman, moreover, encouraged stock-jobbing, and be disturbed the regular and legitimate monetary and banking business I of the City. He had no sort of intention to dispute the absolute necessity of completing these railways as rapidly as possible. He thought that was only due from England as the ruling Power—that they were calculated to be advantageous to her, and it must be for her interest that the trade and industrial resources of India should go on expanding like her own every year. But what he complained of was that the right hon. Baronet did not explain the precise position and the relationship existing between those railway companies and the Government. Now that the English Government had stepped forward with the necessary funds to complete them, some explanation on that point was very naturally sought to be obtained by the proprietors and shareholders. It should also be borne in mind that the Indian Government, at the instigation of the Home Government, had interfered very actively in the construction of those railways from the very commencement, and not always to the advantage and profit of the railway companies. Let him take, for instance, the Madras Railway, which ran from Madras to Beypore, on the Malabar coast. The Indian and Home Governments insisted that for military purposes it should be made from point to point, as straight as a needle; and so cleverly had that been done that the railway contrived to avoid every town and village of any importance. The consequence was that the receipts of the last six months, after paying the working expenses, amount to only £7,000, on an outlay of several millions. For his own part, he confessed that, looking to these facts and to the great stake and interest which the Home Government had acquired in these railways, he thought the time had arrived for considering whether it would not be desirable for all parties concerned that we should adopt the Ceylon system —namely, abolish the twelve or fifteen separate companies which how existed in this country, and transfer the management of them to the Secretary of State for India and to his not overworked Council. Would it be believed that to manage a capital not so large as that of the London and North-Western or Great Western Railways there were some twelve or thirteen separate companies, with chairmen, deputy-chairmen, directors, secretaries, clerks, and handsome offices? They were all amenable to one and the same authority, the Secretary of State and his Council, and they refuse to stir an inch or to turn a clod of earth until they obtained a guaranteed interest of 5 per cent. Now, the great advantages resulting from his proposition would be that the shareholders would possess increased confidence in the soundness of their investments—the necessary funds to complete them would be easily raised—very great economy would be introduced, because that part of the Indian Council which was called the Committee for Public Works, would perform all the duties of those twelve or fifteen separate companies with the assistance of a few additional clerks; and, lastly, the great mercantile community would be spared the trouble of having to wander to all parts of the City in quest of the numerous companies now in existence.

MR. CRAWFORD

said, that if the hon. Member for Windsor, before recommending that all the railways in India should be handed over to the Secretary of State and his Council, had inquired into the relations which at present existed between the railway companies and the Government, he would have found that they were of such a nature as could not be interfered with except by a direct act of the Legislature. The railways in India had been constructed and were to be managed under contracts entered into by the companies with the Government under the sanction of Parliament, and if they were to be transferred to the Secretary of State and his Council, what, he asked, was to become of the shareholders? The Government could not take possession of the railways without repaying to the proprietors their capital, which was the reason, perhaps, why the hon. Member for Windsor wished to see the railways placed under the management of the Secretary of State and his Council. The hon. Member was largely concerned in the Madras Railway, which happened to occupy a worse position in the market than any other line in India, and if that railway were to be taken by the Government at par, the hon. Member would receive £10 more for every £100 which he had invested in the undertaking than he could obtain by the sale of his shares on the Stock Exchange. Reference had been made to a statement by the Governor General as to enormous extravagance on the part of the railway companies in India; but it should be borne in mind that the whole of the expenditure on railways in India was incurred under the direct control and superintendence of the Government itself. The Government Was a party to every item of expenditure, and, therefore, when the Governor General said that enormous extravagance had marked the expenditure of the railway Companies, he was fostering a censure upon his own administration. The hon. Member for Poole had urged the construction of more railways; but he could not help thinking that to enter upon such works at the present moment would only increase the difficulties of the time. Money could not be obtained for new railways without the security of a Government guarantee. The existing companies were pushing forward their works with the utmost vigour, and in a very short time there would he 7,000 instead of 700 miles of railway opened in India. Of course, in some instances, the shareholders would he disappointed; but he believed that in the great majority of cases the traffic and profits would considerably exceed the guaranteed amount. He agreed with the hon. Member for Perth (Mr. Kinnaird) that beneficial results would ensue from the sale of waste lands. There was at present a large accumulation of capital in Native hands. That capital would soon require an outlet; and, since the confidence of the Natives in public loans had; been completely shaken, he did not see how it could be more judiciously invested than in land. He rejoiced to hear that there was no necessity to ask for money for the general purposes of the Indian Government. The powers now asked were to be only discretionary. He could not help, under these circumstances, expressing his opinions that, in the present state of the money market and the increasing value of Indian securities here, the railway companies would find no difficulty—or, at least, not so much as had been expected—in finding money in the course of the year, and that the Government would not have to use to anv very great extent the powers which the House was asked to vest in them.

MR. VANSITTART

said, he must altogether disclaim the motives which had been imputed to him by the hon. Member for the City of London, in the recommendation he had made. He had but a small stake in Indian railways; whereas the hon. Gentleman (Mr. Crawford) was not only chairman of the East India Railway, but possessed a very large stake in Indian railways.

MR. J. B. SMITH

said, that the statement of the right hon. Baronet in relation to the condition of Indian finance was under the circumstances satisfactory; and he congratulated the Committee that no further loans would be resorted to or needed, except for reproductive public works. In one item of revenue, indeed, there was a likelihood of a further and very rapid increase—he alluded to the revenue produced by the duty on salt. Every additional mile of railway and river navigation which was opened reduced the present enormous cost of carriage, and thus enabled the Natives to obtain salt upon lower terms than before, and in that proportion would the consumption increase. There was one point in the right hon. Baronet's speech which would give great satisfaction to the manufacturers of cotton in this country. For the last twenty years they looked with alarm at their growing dependence upon one source of supply. That dependence had gone on increasing, until last year the consumption of American cotton was 85 per cent of the entire amount. Various steps had been taken from time to time to enlarge the supply; and it was now found that India was the only source to which they could look for receiving any considerable quantity. The right hon. Baronet said that probably 1,000,000 bales would be received from India this year. That receipt was stimulated solely by high I prices in England; but what was required was a regular and constant supply from India, so that India might be placed upon the same footing as the United States of America. The foundation of American prosperity in the growth of cotton arose from the cheapness with which the cotton could he brought to market. The American planters had availed themselves of the advantages afforded by their rivers of bringing their cotton to a port of shipment at a very smaller cost. A few millions of dollars had been spent in removing the obstructions to the navigation of the Mississippi, and the result had been to make New Orleans the largest port of shipment in the world. We had evidence that the same results may be obtained by the adoption of the same means in India. Within the last few years the navigation of the Indus had been opened and improved; steam-boats had been introduced and were plying upon it, and Kurrachee now promised to become another New Orleans. The right hon. Gentleman said, the Government had decided upon opening the Godavery in the shortest possible period. He hoped this promise would be crrried out in good faith. If it was the greatest advantages would result. A large part of the richest land in the centre of India—an extent of surface equal to four times that of Ireland—would be opened to trade and cultivation. In the words of Sir Charles Trevelyan, "the opening of this river would be equivalent to the creation of a new trade, to the extension of which no limits could be assigned." There was at present, not unnaturally, great excitement and alarm with respect to the supply of cotton; but if the civil war in America should cease to-morrow, the necessity would still be urgent to secure new sources of sup- ply. It was neither politic nor just that we should rely on one source of supply which, in a great measure, was dependent on the labour of slaves while we had in our own dominions an extent of territory suitable for the cultivation of cotton greater than existed in any other part of the world.

COLONEL SYKES

said, he had to observe, with reference to the discrepancies in the statements of the Indian revenue by Mr. Laing and the right hon. Gentleman, that if they could only trust to estimates and budgets, they might rest satisfied. But, unhappily, hope told a flattering tale in India as well as elsewhere, and wishes had been substituted for facts. The real explanation, however, was that the military retrenchments in one of the statements had been assumed to be made, whereas they were only prospective. They however, would soon be effected and to a very considerable extent. But the savings produced by the reduction of the Native force were more than absorbed by the increase of the European force. The reduction of the Native troops had been carried to an extent which would cause inconvenience, and he was afraid would prove dangerous to the public interests. They had now 19,000 Europeans in India beyond the proposed future establishment, in addition to which 3,000 artillerymen were to be sent out immediately from this country. Surely, out of that excess of 19,000 Europeans in India, 3,000 volunteers for the Artillery might have been obtained, so as to save the expense of sending out those 3,000 men. The debt of India was 57 1/2 millions sterling in 1857. Now it amounted to 103 millions, but this was only two and a half years' revenue. In that respect India was better situated than England, whose debt was twelve and half years revenue, or any European country. He had, therefore, good hopes of a satisfactory financial condition in India, provided the proper sources of economy were duly attended to. The civil and political establishments of India, including the charge for contingencies, cost in 1856–7, £2,556,000, while in 1860–1 they cost £3,684,000. The judicial and police charges had risen from £2,812,409 to £4,004,500. Those figures exhibited a vast increase, for which there was no apparent necessity. In the charge for the police establishments of India considerable retrenchments might be effected. Any outlay on works of irrigation, canals, and roads was politic and highly reproductive. The Gauges canal was as magnificent a work as any in Europe; and a commercial company had taken advantage of it to establish a system of transit by boats in its channel, and on the 31st of January last the Company advertised from Cawnpore a dividend of 34 per cent on its capital in one year from the transit of boats on that canal. The value of that means of carriage during the late famine it was impossible to exaggerate. No doubt India would prosper if we ruled it in a manner calculated to insure the confidence, and to win the affections of its people. The ill-judged income-tax had yielded 50 per cent less than its estimated produce; and, its operation reaching down to persons having only £20 a year, and living from hand to mouth, it had led to frightful oppression in numerous instances. The myrmidons employed in its collection were reported, in some cases, to have forced their way into women's apartments, and to have stripped them of their earrings and other jewellery. He trusted that, in accordance with Mr. Laing's suggestion, this obnoxious impost would be restricted to incomes of above £50 per annum. Upon the whole, however, he congratulated the right hon. Gentleman upon the statement he had made, and he confessed he looked forward to a happier future for India.

MR. W. EWART

said, that he, too, wished to congratulate the right hon. Baronet (Sir Charles Wood) on the general character of the statement he had laid before the Committee. At the same time he wished to call attention to the importance of encouraging the emigration into India of British settlers, upon whose capital and intelligence the fate of that empire must to a great extent depend. It was indispensable to any sound system of internal commerce in India that there should be a more satisfactory law of contract, visiting with proper penalties any breach of faith between the landlord and the ryot. In Bengal a great improvement was required in the police, and small debt courts, administering justice cheaply and expeditiously between debtor and creditor, ought to be established. The laws should be executed impartially towards Natives and Europeans; but the English settler who had not been fairly treated heretofore ought to be fairly treated. It was to him that they must look for the introduction of Western civilization into India. One of the great evils of the present system of conducting business was the making of advances.

If the system of advances could be got rid of, and a good law of contract established, a great benefit would be conferred upon India; and if the extended cultivation of cotton was to take place, such a law would be more necessary even than it is at present. It would be wise, as suggested by the Committee on settlement in India, to sell waste lands in fee simple. Thus, cultivation by means of British capital, would confer lasting advantages upon India. The extended communication through Thibet with Central Asia would open a new outlet for our manufacturers, especially our woollen fabrics. He was disappointed that nothing had been said by his right hon. Friend on the cultivation of tea upon the southern slopes of the Himalayas. That cultivation was destined to become a source of immeasurable wealth to India. He was gratified to find that the right hon. Gentleman intended to recognize the legitimate position of the Native gentry of India. From long habit, from time-honoured associations, the people of India recognized and respected them, and their authority was an obvious means and instrument of govering the people. After hearing the speech of the right hon. Gentleman, he ventured to believe that the financial difficulties of India were not irremediable. Far from it. Better times were opening on them, disclosing a futurity hopeful alike to India and to England.

MR. ADAM

observed that at last they had turned the corner in Indian finance, and were about to enter upon the region of surplus after being so long in the deserts of deficits. That hope, however, was damped by a recollection of how often they had been deceived by fallacious figures in relation to Indian finance. The same thing had happened now. Mr. Laing estimated a surplus, but the right hon. Gentleman the Secretary of State declared a deficiency. What was the Committee to believe? They had hitherto been working in the dark, but he trusted, under the new system about to be inaugurated, more reliable information might be obtained. He had read Mr. Laing's speech to the Council with very great pleasure, and had risen from the perusal of it with the impression that India had at length got a financier who would be able to understand her requirements. There were, however, many things in the speech with which he could not agree. In the first place he thought that in the attempt to diminish the Native force too rapidly he had incurred some danger. The last accounts stated that there was an uneasy feeling in the Punjab, arising from the number of soldiers who had been disbanded, or who were about to be disbanded. Another point upon which he differed from Mr. Laing was as to the Indian navy. It was quite right that the Indian navy should be put upon a different footing; but, although it might be a saving to India, it would be none to this country, which must keep up a naval force if the Indian navy was not employed. Mr. Laing had unconsciously borne testimony to the truth of what was urged by the late Lord Elphinstone and Sir Charles Trevelyan against the taxes proposed by Mr. Wilson. The three taxes proposed by that gentleman were now practically in-operative. The income tax only produced one-half the estimated amount. The Licence Tax Bill had not been read a third time, and the tobacco tax was never mentioned now. He did not object to a licence tax or an income tax which would reach the richer classes—those who most benefited by our rule, and he hoped that what Mr. Laing proposed would be carried out—a blending of the licence with the income tax in such a way as to satisfy Native ideas. One of the most important fixtures of the Budget was the granting to local Governments a voice in matters of legislation and taxation. The great curse of India was centralization, and he trusted that that evil would now be remedied. He agreed with the hon. Member for Perth (Mr. Kinnaird) that they were now borrowing money at an unnecessarily high rate, for although they practically gave an Imperial guarantee they could not do so formally, and thus, for an idea, they were losing a large sum every year. Another point deserving consideration was the unfairness of charging the Indian depots in this country to India, seeing that they constituted so much increase to the force in this country. The question of the land tax and its redemption had been treated incidentally in the course of the present discussion, and an hon. Gentleman had suggested that any person holding land in India should be allowed to redeem the land tax. He believed that, if that matter were worked judiciously, the Government possessed a mine of wealth in connection with it. In conclusion, he expressed a hope that in future years Indian business would be brought forward a little earlier in the Session, so that the House might have more time to consider it. He thanked the right hon. Gentleman the Secretary for India for his able statement, and he had great hopes that they had at length got into calm weather as regards Indian finance.

MR. GREGSON

remarked that the debt of India amounted to only about two and a half times the revenue of India, while that of England was equal to twelve years' purchase of our revenue. He could not, therefore, think it desirable to encourage India by an Imperial guarantee to raise money in this country. He admitted that the statement which had been made respecting the finances of India presented a favourable appearance; but, seeing that India was in perfect tranquillity, and that all the Native Princes were in amity with the Government, he believed that the expenditure might be still further reduced. He was glad to hear it distinctly stated by the right hon. Gentleman the Secretary for India that it was intended to go on with the works for improving the navigation of the Godavery, and he should offer no objection to the proposed loan, for he concurred with Mr. Laing in thinking that money could not be more advantageously employed than in improving the roads in India. He conceived that the Bengal planters had some reason to complain that the system of contracts had not been put on a proper footing, and he trusted that the right hon. Gentleman would turn his attention to that subject, in order that harmony might be restored between the Natives and the planters. He also would express a hope that the duty on salt would be reduced as soon as the increased revenue derived from it would permit.

MR. BAZLEY

said, he wished to thank the right hon. Gentleman on the part of the commercial community for the efforts that he was making in their behalf. At present a great commercial calamity was impending. There existed in this country at the present time a supply of cotton from the United States that might be sufficient for our immediate wants; but if the United States blockade were not broken, or some other source of supply were not obtained, next year would be one of calamity. His right hon. Friend had referred to a larger importation than usual that might be expected from India. Last year it was600,000 bales; this year it was expected to be 1,000,000. But they must recollect that other nations would be competing with us for that additional supply from India. America at the present time was receiving supplies of cotton from Liverpool. The embarrassment which existed at the present moment with regard to the supply of cotton he hoped would be beneficial in developing the great resources of India. The consumption of cotton in this country was 2,500,000 bales last year. The imports from India this year it was expected would amount to 1,000,000. It was the duty of Government to do all they could to promote the cultivation of cotton in India. There was a general impression that the great desideratum was an improvement in the cleaning and preparation of cotton in India. But that was not so. It was a better quality of cotton that was required. The cotton from America had a fibre twice as long as that from India, and ho did not hesitate to say that by proper modes of cultivation, and by growing cotton of a superior quality, the ryot might get eight times the reward for his labour and produce as he now obtains. His hon. Friend had stated that more cotton was wasted in India than was used in England. Nothing could be more erroneous. The cotton consumed in England was worth £30,000,000, and the same quantity of Indian cotton would be worth £12,000,000, and it was not likely the ryots would lose such an amount. It was another mistake to suppose that as much cotton was grown in India as in all the world beside. The truth was as much might be grown there as in the United States; but while the latter crop was worth £40,000,000, the ryots never obtained more than £15,000,000 for what they grew. He would urge upon the Government the propriety of encouraging the improvement of the crop in India, and of opening up the means of transport; and, if they did, they would not only promote the prosperity of India, but would relieve this country from dependence on a foreign source of supply, and take away our share of the guilt that was incurred by the encouragement we gave to slave-grown cotton.

MR. HADFIELD

urged the propriety of giving power to trustees to take advantage of the opportunity which was presented by the proposals of the Secretary for India to invest the funds at their disposal at a better rate of interest than was to be obtained by an investment in Consols.

SIR CHARLES WOOD

briefly replied. The hon. Member for Evesham (Sir Henry Willoughby) had alluded to the close connection there was between the railway ex- penditure and the general expenditure, It was impossible to keep the two entirely separate. The hon. Gentleman wished to know what the future charge would be. The utmost amount for the construction of railways in India would be £56,000,000, The hon. Gentleman the Member for Windsor (Mr. Vansittart) objected to a loan to make good the deficit in the payments on account of the railways. What were they to do? So long as the railways were not completed the Government were losers to the extent of the guaranteed interest.

MR. VANSITTART

said, he did not object to the railway expenditure. What he had said was, that the Government I ought to have submitted a more comprehensive plan with regard to the railways.

SIR CHARLES WOOD

said, the cost of the railways would be £56,000,000. If the railway companies could not raise the money for the completion of the lines, the Government must. They must complete the railways that they had undertaken should be constructed. The Government had considered the question of taking possession of the railways; but they had come to the conclusion that, on the whole, it would not be advantageous to do so. They thought it better to advance money, thus putting themselves in the position of shareholders.

Resolution agreed to.

Resolved, That 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.

House resumed.

Resolution to be reported To-morrow.