HC Deb 13 June 1861 vol 163 cc1002-10

Order for Committee read.


said, he thought that trustees ought to be allowed to invest trust money in the stock which would be created by this Bill in the same manner that they were allowed to invest in the existing India stock, and gave notice that he would move a clause to that effect.


said, that that House had been called upon from time to time to vote loans for India, which amounted in the aggregate to an enormous sum, and yet they knew very little at any particular moment of the financial condition of that country. It was quite astonishing to see how mistaken the right hon. Gentleman the Secretary of State for India had been in the statements he had submitted to the House with reference to the finances of that country. The right hon. Baronet was, no doubt, anxious to state what was the truth, but the facts had completely contradicted his anticipations. On the 6th of February last he told them that, although a loan might be required in the course of the year on account of the Indian railways, none would be necessary for the current service of the Government; and the right hon. Gentleman had, in fact, made what was known as a "prosperity" speech. He (Sir Henry Willoughby) said at the time he thought the right hon. Baronet took too sanguine a view of the financial state of that country, but he was rebuked by the hon. Gentleman, the present Under Secretary for War (Mr. Baring), for his want of confidence in the calculations of the Indian Minister. The fact was, however, that the House was now asked to sanction a loan on account of India to the amount of £4,000,000. That loan would raise the debt of India to more than £100,000,000, upon which an annual interest of £5,000,000 would have to be paid, although the interest on the Indian debt in 1857, only four years ago, was only £2,500,000. On the 3rd of June the right hon. Gentleman said that he anticipated that in the year 1860–1 there would be a reduction of expenditure. A few days after there came a lengthy statement from Mr. Laing which showed that the expenditure of that year, instead of diminishing, would be increased by about a quarter of a million. The financial condition of India seemed to him to be totally unintelligible. Mr. Laing had certainly made a very able statement upon the subject, just as his predecessor, Mr. Wilson, had done a short time previously. They were at present aware, however, that there was not much ground for their trusting to the calculations of the latter distinguished and lamented gentleman. The scheme of Mr. Wilson had since fallen to the ground; and, although Sir Charles Trevelyan had told the truth in a rather awkward way, it was clear that he was entirely right and that Mr. Wilson was entirely wrong. It was now generally admitted that the only remedy for the unfortunate state of the finances of India was to be found in a reduction of military expenditure. They were all very much at sea with respect to the real condition of the evil with which they had to deal. They were intermingling the expenses of the Indian Government with the outlay upon gigantic railway works; while, in his opinion, the two subjects should be kept entirely distinct, or nothing but danger and confusion would ensue. He confessed it appeared to him that Mr. Laing, in his recent calculations, had taken too favourable a view of the finances of India, and he doubted very much whether it would be possible to realize in the coming year that Gentleman's anticipated surplus. We raised the enormous revenue of £41,000,000, and Mr. Laing attempted to show that this would leave a surplus over expenditure; but the hon. Gentleman's own figures showed this to be very doubtful. Mr. Laing proposed to effect a reduction of expenditure by abolishing the navy of India. But the result of such a measure would be to transfer an expenditure of £600,000 or £700,000 from the revenue of India to that of this country. He (Sir Henry Willoughby) believed that there were many items of expenditure which Mr. Laing had overlooked—such, for instance, as the loss on the exchanges, which might be estimated at £500,000 a year. Nothing could be more amusing than to read the affectionate exhortations addressed by the right hon. Gentleman to the Government of India, urging them to reduce their expenditure, and the replies of that Government, humbly suggesting that he should reduce the home charges. But the truth was that the House had no means of controlling the expenditure of India. No doubt, the home charges, especially as regarded the military expenditure, were most extravagant, and in asking for this loan the right hon. Baronet ought to show the necessity for those charges. Was it true that, although the men in the depôts had been reduced by one-half, yet that the officers who were paid out of the Indian revenue had been maintained at their full strength; and had not stores been sent from this country to India which were not required there and had not been asked for? It was the duty of the House to call upon the Government to look strictly into these matters. The debt of India had increased from £59,500,000 in 1857 to £103,000,000, and the only chance for that country was the reduction of the army. Yet those reductions could not be carried out without danger. He understood that 200 regiments of the Native army were about to be reduced. [Sir CHARLES WOOD signified that this statement was not correct.] He believed that 100 battalions were to be reduced instanter. He thought that sudden changes of that kind in India, where affairs were in a delicate, if not critical, state, were much to be deprecated. He doubted the wisdom also of imposing new and dangerous taxes upon the people, and, above all, he was certain that they were acting with great impolicy by adding to the existing dead weight of India, which at this very moment was not less than from £15,000,000 to £16,000,000. It was, therefore, with very great reluctance that he saw this proposition for an Indian loan brought forward, particularly after the assurance of the right hon. Gentleman that the year 1860 would see the end of these loans. With respect to the accounts, he could not too strongly condemn the mode which had been adopted, of mixing up railway accounts with the general revenue of the country.


said, that unless the Secretary of State for India was assisted by means of a loan he would not be able to fulfil his engagements in this country, and the public service would be, in consequence, greatly damaged. The estimates sent from India were not trustworthy, and the explanations not easy to be understood. First they were told that no less then £6,678,097 would be required to balance the income and expenditure in 1860–1; and now, coming close upon the heels of the former estimates came one from Mr. laing, in which he stated that he actually anticipated a balance of income over expenditure of £239,896 in 1861–2. That excess of income could, however, only be obtained by making a very formidable and dangerous reduction in the Native army. He did not know whether it was resolved to reduce as many regiments as had been stated, but he believed the proposal was to dismiss 64,000 men. Surely the Indian Government would not be guilty of such rashness and impolicy as to dismiss all those men who had been trained to arms at once? The saving, therefore, could only be prospective, for if they proceeded to disband this large number of men at once the result would be to cover the country with bands of brigands. If, in addition to reviewing the Indian expenditure, his right hon. Friend would turn his attention to the expenditure at home, he would find a wide field for curtailment. The troops in the depots far exceeded the number required, and the amount of stores sent out to India was so great as to be actually embarrassing to the authorities there. At the same time he was sensible how inexpedient it would be to embarrass the right hon. Gentleman, and, therefore, though with very great reluctance, he should vote for the loan.


said, that in reference to the remark of the hon. Member (Sir Henry Willoughby) that the Indian Government had embarked in "gigantic railway schemes," he wished to remind the House that every one of the railways waiting for completion had been contracted for by the old Court of Directors, and certainly no contract of the kind of any importance had been entered into since the time of the mutiny; the Government, therefore, were merely carrying out engagements into which they had long entered. If the railways were not completed, the Government would sustain immense loss in paying guaranteed dividends upon the money raised, and, therefore, it was far better for them to advance the money required to complete them with as little delay as possible. Practically, no difference would be made to the money market, for no greater amount would be levied by the Secretary of State than the companies themselves would raise were they in a position to do so. He utterly denied that the statements of accounts were obscure. Having read with great attention the speech of Mr. Laing to the Legislative Council, and the various official returns and accounts submitted to the House, he must say that he had never seen financial statements conveying a clearer perception of the matters to which they referred, the railway accounts being kept wholly separate from the general accounts of the Government of India. It was true that occasional mistakes were found to have been made in the estimates of expenditure; but when such difficulty was experienced in attaining a clear view of the public income and expenditure of this country, as appeared from a Return recently laid on the table of the House, it was not to be wondered at that discrepancies were sometimes observable in the statements of Indian revenue. For himself he did not feel the slightest apprehension for the future of India, either in respect to finance or any other matters, and he believed that the Government of that country were fully prepared to take every measure for the curtailment of the expenditure with judgment and discretion.


said, in times past he had joined in pressing on the Government the necessity of embarking in the construction of Indian railways, and he thought the right hon. Gentleman the Secretary of State for the Indian Government had some reason to complain that rival schemes should now for the first time be pointed out as desirable or advantageous. For his own part, he did not think the objections well founded. It was suggested the other night that the water communications might be so improved as to render railways unnecessary; but this idea was opposed to the experience of practical men for the last ten or fifteen years, and to the considerations which had repeatedly been urged upon the Government. In connection with the construction of railways in India, they had seen enough to show them that there must be ground for stating that it was not easy to improve the water communication, and that great results in the way of such improvement could not be effected for the small sums which some persons considered to be sufficient for that purpose. His own idea was that the Government could not have adopted a better course than promoting the lines of railway they had sanctioned. It was not enough for the right hon. Gentleman to come and ask for power to raise money to contribute to the railway companies, unless he gave those companies practical support and protection in the prosecution, of their great enterprises, and unless he gave guarantees that he was willing to carry out the engagements of the Government with perfect good faith. For instance, he understood that the Government were now offering land to the companies, in very inconvenient situations, provided they would pay for it; whereas the original understanding was that the Government would grant the land to the companies free of cost, wherever they wished for it. He trusted that the right hon. Gentleman would see that it was very shortsighted policy on the part of the Government to attempt to gain any small advantage over the railway companies, or to deviate in the smallest degree from any engagements, however onerous, which they had undertaken, with a view of inducing private persons to invest their money in those railways. If he held out the prospect of fresh guarantees, and brought new competitors into the market, great difficulties would be experienced in raising the money necessary for the completion of the present undertakings. As the right hon. Gentleman had sent into the market a number of companies, all with guarantees, and all competing with each other for capital, there was no other course open to him than that of obtaining the loan which he now proposed to raise. It should be remembered that the money thus raised would not be unproductive; it was not analogous to loans raised to make good deficiences of Indian revenue, but would pay interest, which would be derived from the industry which the railways themselves would develope.


said, the first question raised was that of the hon. Member for Sheffield (Mr. Hadfield). He (Sir Charles Wood) was the last person to ob- ject to the introduction of such a provision in its proper place as the hon. Member proposed, but he did not think it would be proper that the clause suggested should be introduced into the Bill before the House. In 1859 a Bill was introduced to amend the law of property and to relieve trustees, one of the clauses of which empowered trustees to invest trust-money not only in the Securities in this kingdom, but in certain other Securities, amongst which was included the Stock of the East India Company. A question was raised in the Courts of law, whether that clause enabled trustees to invest money in the loans raised in this country by the Government of India. The decision of a Court of law was, that trust-money could not he so invested in India Stock of that description, it could only be invested in the Stock of the East India Company. Now, anxious as he was to improve the India Stock, he thought that to introduce into this Bill a clause conferring that power would be very unfair; but he should be very glad to see such a power given by any Bill relating to the power of trustees to invest trust property. It was exceedingly inconvenient to mix up with this Loan Bill the general question of the finances of India. He had stated before, and he now repeated it, that he was not at present in a position to bring forward the question relating to the general finances of India. All he could say on that point was that, whether there was a surplus or a deficiency, he was alike under the necessity of asking for this loan. The hon. Baronet the Member for Evesham (Sir Henry Willoughby) said he had given too favourable an account of Indian finance in his speech in the House in February last. To show that he had not done so, he begged to read the following statement from Mr. Laing, with reference to the deficit of 1860–1. Mr. Laing in his recent speech said:—"The position, therefore, we are left in by the Budget of 1860–1 is simply this—a deficit of £6,000,000, less £500,000 increased revenue; remaining deficit, £5,500,000." What was the statement which, in February last, he (Sir Charles Wood) made to the House, and transmitted to India? On the 2nd of February he wrote to the Government of India in these words—"The annual deficit that will have to be dealt with at the close of 1860–1 may be assumed to be £5,500,000." He did not think he had taken too favourable a view of the reve- nue, when it turned out to be identical with that which Mr. Laing stated it to be at the end of the year. At the same time he must admit that there were certain discrepancies in Mr. Laing's statement, which, without an explanation not yet received, it was impossible to reconcile with the accounts on the table of the House, and he should only refer to one of them, Mr. Laing stated that so far from there being a diminution of expenditure in 1860–1, as compared with 1859–60, there was a positive increase of upwards of £200,000 in 1860–1. But there were on the table of the House the official accounts, signed by the Members of Council, and the figures showed that the nett expenditure amounted in 1859–60 to £43,997,000 and in 1860–1 to £38,362,000, showing an actual reduction, in the gross expenditure amounting to £5,635,000. He begged to say that upon the whole he was inclined to place more confidence in the official document, sent with the authority of every Member of the Council of India, than in the statement of the hon. Gentleman made in the reported speech. It appeared that there was a balance of £1,000,000 more in the Indian Exchequer than had been anticipated, and he had a general confidence in the improved state of the Indian finances. What the hon. Member for the Tower Hamlets (Mr. Ayrton) said was perfectly true. But he (Sir Charles Wood) would again repeat whilst with regard to the income and expenditure of India it was easy to keep the railway expenditure distinct, with regard to Ways and Means it was impossible to separate it. In this country we depended on the railway receipts for payment; the railway expenditure in India depended on the public treasuries; so that it was impossible to keep this expenditure apart from the account of Ways and Means, Then he had been asked why he was obliged to have recourse to this fresh loan? It was not for the purpose of keeping a balance between income and expenditure, but because he (Sir Charles Wood) was not in possession of funds at home to make the payments that must be made. He had in the home Treasury £2,000,000 more last year than he had this; and he had sent £1,000,000 to meet the possible demands on account of the famine and of the railroads—so that he had £3,000,000 less at his banker's this year than he had last. With the exception of the demands for railways, he did not expect to have to borrow a single sixpence, in order to defray the expenditure of India.

Bill considered in Committee; House resumed; Bill reported, without Amendment, to be read 3° To-morrow.