GENERAL PEELsaid, he rose to ask Mr. Chancellor of the Exchequer, What portion of the sum of £850,000, granted by Parliament to cover the entire expenditure on account of the China War during the financial year 1859–60 has been appropriated to, or is reserved for, the liquidation of the claims of the Indian Government, on account of advances made or expenses incurred in India. His object in putting the Question was to endeavour to obtain, before proceeding with the Estimates of next year, some information relative to the expenditure of 1859–60. The only true test to be applied to the Estimates was a comparison with the actual expenditure of previous years; the mere comparison of the Estimates of one year with those of another year, which Was now so much the practice, being utterly fallacious, unless we knew whether those previous Estimates had answered their purpose or not. It would be in the recollection of the House that the sum of £850,000 was voted at the end of the financial year 1859–60 for meeting any excess of expenditure in the army and navy Votes in consequence of the China war. The necessity of that Vote was, no doubt, rendered apparent by the information received by the Government from the Indian Government of the money that would be required. It was not very creditable to the Indian Government that when they were called upon in February, 1861, to give an account of what those expenses were, they merely rendered the bare Estimate which they had presented to the Chancellor of the Exchequer in February, 1860. He supposed it would not be disputed that this Vote of Credit was necessary to meet the sum stated to be required by the Indian Government early in the spring. The Chancellor of the Exchequer, he observed, shook his head, but he could prove it by abundant evidence—by the evidence given by the gentlemen from the Treasury examined before the Organization Committee, and by the testimony of the Secretary of State for War. 1961 But that on which he particularly relied was the good faith of the right hon. Gentleman himself, because he was in possession of these facts on the 28th of January, long before he made his financial statement. If that Vote of Credit were not intended to cover those expenses then the right hon. Gentleman was open to the charge that he had not dealt fairly with the House when he brought forward his Budget. The right hon. Gentleman then believed that this Vote would be perfectly sufficient to cover all the charges inasmuch as he endeavoured to make the House believe it. But he (General Peel) never believed it, and he stated his conviction at the time, founded upon a comparison of the actual expenditure of previous years, that the portion of that sum,—namely, £500,000—and devoted to the army—would not cover the excess of expenditure on five Votes of the ordinary estimate of the year. He (General Peel) stated that in the previous year 1858–9 the average number of effectives on the British establishment was 130,235, and the absolute expenditure on the Votes he had mentioned was £7,403,003. Of that sum upwards of £400,000 was repayable by the Indian Government and did not properly belong to the expenses of these troops. Now, in 1859–60 the average number of effectives was 139,000, and the money voted was £6,700,000; in other words, there were 9,000 more men and £700,000 loss money voted for them. On that occasion he said he was perfectly convinced that, on those Votes alone there was an excess of £600,000. He did not, however, succeed in convincing his noble Friend (Lord Herbert) who appealed, he said, not to Estimates, but to formal accounts of the money spent and told him he might rest assured that the Government would run into no excess, and that, after making a liberal allowance for embodied militia and other miscellaneous charges, there would be a saving of £5,000 on these Votes. That statement was made within a fortnight of the conclusion of the financial year. What surprised him still more was that his noble Friend stated there would be a great saving on the Vote for stores. Now, the only expenses that could possibly be incurred in this country for the Chinese war was in regard to stores. With the exception of a battery of Armstrong guns, not a single man in that Chinese expedition went from this country, the whole of 1962 the army proceeding from India, and the whole expenditure was defrayed by the Indian Government. Now, who was right? Was it the noble Lord or himself? If the noble Lord were right, that sum of £850,000 was still applicable to paying the Indian Government, and ought to be so applicable under any circumstances, because the noble Lord ridiculed the idea that any portion of this money could be applied to cover any excess of expenditure on the Votes of the year. In July following, when the noble Lord was moving for a fresh Vote of Credit, he (Gen. Peel) asked him whether any portion of that sum of £500,000 had been expended in making up the deficiencies in the ordinary expenditure of the preceding year? The answer of the Secretary for War was that not one sixpence of that sum was applicable, or would be applied in making up the deficiency in the ordinary expenditure of the year, and that the deficiency, if any, would be met by a special Vote of Credit. As no such Vote of Credit had been taken, the House would naturally conclude that he (General Peel) was wrong, but so long as there were Votes of Credit, so long as there were unsettled balances and open accounts with India, so long as the Treasury were able to apply money voted for one purpose to meet an excess of expenditure on another—so long as that practice continued would that House have no control whatever over the expenditure of the money they had voted. He would not say that the power of appropriating money sometimes to a different purpose from that for which it was voted might not be absolutely necessary. But in these cases he would leave the power and the responsibility with the Secretary of State. At present when the Secretary of State had obtained the consent of the Treasury the responsibility was thrown over a great number of persons. But this power of appropriating Votes was nothing compared with the power derived from the system of keeping continuous open accounts with India. Governments under this system actually had the power of carrying on war and paying for it out of those open accounts, of carrying it on with Indian troops, the country not hearing a word about it except from the newspapers until the House was called upon to pay some large lump sum as the balance between the English and Indian Exchequer. This was not only possible, but was at this moment actually going on. They had Indian troops em- 1963 ployed in China for which no Vote had been taken, and of which they would never hear until some lump sum was demanded. He had not the courage at present to propose another Committee upstairs, but if there were one subject more than another that deserved a strict investigation by that House it was the manner of carrying on the accounts between the Indian Government and the English Government. He was opposed to such Committees as had been recently appointed, for he thought that the legitimate control with respect to the expenditure was in the House of Commons itself. It was notorious, and it had been admitted by two gentlemen of the Treasury before the Organization of the Army Committee, that the military expenditure connected with India was on a very unsatisfactory footing; and the noble Secretary for War bore out exactly what he was stating. He said, "The great complaint of the system was that, in point of fact, the House had no power over the Executive as to the number of troops employed. They could vote the men under the Mutiny Act, and not a man more could be employed; but if we employed Indian troops there was no check on the amount of the expenditure until we were called on to pay in a lump sum." The Organization Committee reported that the present system was unsatisfactory, and they bore out what he said as to want of control. He did not blame the present Government for this; for it existed long before they came into office. There were at that moment five open accounts with India, going as far back as the Persian war. In 1858 Lord Canning sent from India to China three regiments of Native troops, without any communication with him (General Peel) whatever. He reported to the Treasury that those troops had arrived and that he had no money to pay them, and he was told that their pay had been placed in account to the Indian Government. The consequence was that nothing more was heard of them for a year or two, till the second Vote of Credit in July. The Indian troops had all the time been in excess of the Vote of the House. He wanted to know in the first place if that £850,000 was not still available to meet those charges of the Indian Government. There was this difference between a Vote of Credit and the ordinary Estimates. In ordinary Estimates they could not pay the money till after the conclusion of the financial year; the Vote of Credit was for a specific purpose. What 1964 he wanted to know was this. Whether the money supplied by the Vote of Credit was not still available to meet the charges of the Indian Government for war purposes, and whether any portion had been appropriated to pay the ordinary Estimates of the year? Had the Treasury sanctioned any appropriation of money to other purposes than that for which they were voted to meet an excess on other Votes, and would no further sum be required in order to meet the excess of 1859–60?
In order to prevent the necessity of his addressing the House a second time, he would now proceed to make a few observations on the Estimates now about to be submitted to the House. The Army Estimates, from remarks in the public newspapers, appeared to be less understood than any other. He had seen it stated in one paper that the hand of the economist might be traced in every page of the Estimates, and that the great reduction in the Vote for fortification was a step in the right direction. It was also stated in The Times of Monday that the great excess of the Army and Navy Estimates arose, in the latter case from the necessity of reconstructing the navy, and in the former from the necessity of providing rifled ordnance. Now, of the whole £424,383 required for iron ordnance, shot and shell, not one-third was applicable to rifled cannon. He wished that every year a regular debtor and creditor account with respect to the Government manufacturing establishments, showing whether they were carried on profitably or not, were inserted in the Estimates. The amount of the Army Estimates was always entirely dependent on the number of men voted. The simplest possible plan for ascertaining the amount of money required for the service of the army was to take the number of men voted and add two 0's to it, and the figures then gave a very close approximation in pounds sterling to the amount required for the service; in other words, the expense was £100 per man; and his only reliance upon the present Estimates arose from the fact that they seemed to square with that rule. The number of men to be voted was 146,044, and the proposed total expenditure for the army was £14,606,751; according to his rule it would be £14,604,000—a difference of only £2,351 in this enormous sum. When once the number of men was voted, 75 per cent of the Estimates were withdrawn from the discretion of the House; for the Vote for the number carried 1965 with it a variety of other Votes. The present Estimates were, perhaps, the most important ever placed before the House. They might be looked on as the cost of the peace establishment of the country; for at present the country was at peace with the whole world, with the exception of a few regiments necessary for a China garrison and for New Zealand. There was no reason to expect, then, that the number of men could ever be much reduced. He could imagine the anxiety with which many hon. Members might have looked for reductions in these Estimates, but all that they could find was that the net decrease amounted to £185,795. Considering that last year we were carrying on an expensive war, and that this year we were at peace, the decrease was not a large one. Hon. Members might infer, too, on looking at the Estimates, that they were called on to vote rather more men in this year of peace than during the last year of war; but the fact was, that instead of there being an increase in men, there were 9,000 men of embodied militia less provided for. He did not intend to make any observation on the disembodying of those militia troops. They had acquired great proficiency, which was highly creditable to those having the management of them. Some portion of that militia force consisted of artillery, and the Government showed an anxiety to turn a part into a regiment of Royal Artillery. The head of the War Department admitted that in that respect he had made a great mistake; and it was to be hoped that no attempt would be made to place any of the militia officers, by giving them commissions in the Line, over the heads of men who had fought their way up to the positions they now held.
He should next, with the permission of the House, proceed to show that the Estimates which were about to be proposed would not meet the expenses of our war establishment.
MR. T. G. BARINGrose to order, and appealed to the right hon. Gentleman whether it would not be the fairer and more satisfactory course to adopt to postpone any remarks which he might have to make as to the alleged inaccuracy of the Estimates until they had been submitted to the House. He made that appeal with the more confidence because, from what had already fallen from the right hon. Gentleman, it was evident he was under a misapprehension with respect to some of the points on which he had touched.
GENERAL PEELThe observations of the hon. Gentleman did not apply to the statements which he was about to make. A decrease of £185,000 was claimed for the Estimates as compared with those of last year; but no such decrease in reality existed, inasmuch as the alleged saving was gained by a reduction in the Vote for fortifications, which was merely a transference of the money which had been voted for that purpose last year in the Estimates to the loan this year. He should further observe that the amount of money asked for in the present Estimates would not pay for the number of men which it was intended to maintain. That number was 144,822, while the number of effectives on our establishment was, according to the return which had been laid before the House in February last, 143,481, so that, to complete the establishment, 1,341 more would be required. It must, however, be borne in mind that deductions, from the Vote for pay and allowances, had been made of £127,000, equal to the pay of 4,300 men, and that the country would, in April next, be left in the position of having upon its establishment 3,000 men in excess of the number for which money was asked. But that was not all. Look to the Indian establishment. The number of men sought to be voted for our Indian establishment was 66,729, the absolute number of effectives on that establishment having been, on the 1st of February last, 84,443; so that there would be on Indian establishment an excess of 17,714 men on the 1st of April next. Now, what, he should like to know, did the Government propose to do with these men? He, for one, could not exactly see how they were to be got rid of, and could not help thinking that the present Estimates must be founded on the same false principles as those which had originally been brought forward last year, and proceeded on the assumption that the Indian Government would keep a greater number of men than they were actually prepared to maintain. Under these circumstances it was clear either that the Indian establishment must be reduced by the number of men now upon it, over and above that which was required, or that we must wait until they had been sent back to this country, or become absorbed—a process which would occupy more than two years. That being so, he should like to know what arrangements had been made for the repayment to the 1967 Indian Government of the money which they would have to expend in keeping up a number of men in excess of their establishment. The hon. Gentleman, the Under Secretary for War, had, he might add, on Monday last, informed the House that there were 3,840 Indian troops in China. Those men, it was very evident, would, after the 1st of April, be in excess of our establishment, and no money was provided for them in the present Estimates. The real question, after all, however, was, whether the number of men asked for in the Estimates was adequate to the defence of the country The total number of battalions in the infantry of the Line amounted to 132; of these 50 battalions were required for service in India, which he understood was the number to be permanently maintained there, 40 would be wanted for the Colonies and foreign garrisons, thus leaving 42 battalions for home service—a number which he did not think could be regarded as excessive. It was merely sufficient to enable us to carry out our system of reliefs, as regiments remained ten years abroad and five at home. He was of opinion that 100,000 men, which was the number he calculated would be left at home—a number which Sir John Burgoyne, in his evidence, stated ought to be 200,000—was not larger than was expedient; and, in making that statement, he did not overlook that splendid exhibition of patriotism, the Volunteer movement, which, however, he trusted would always be regarded as furnishing a valuable auxiliary to, not a substitute for, the regular army. In conclusion, he had only to say that he found no fault with the Estimates, except that they did not convey a fair representation of the amount of money which the House would have to vote for the army. The House would probably support the Government in these Estimates; but he thought it was not desirable the House should be called upon to proceed with its eyes blindfolded in so important a matter.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, it was with very great regret he felt it to be his duty to animadvert on a Member of the House so much and so deservedly respected as the right hon. Gentleman who had just spoken. He must, however, observe that the course which the right hon. Gentleman had taken that evening, and at a time when hon. Members were seeking to effect amendments in the mode of transacting the public business, was, to say the least of it, extremely 1968 inconvenient. The right hon. Gentleman had inverted the order of business and had entered into a review of the Estimates in anticipation of the statement which his hon. Friend the Under Secretary for War was about to make; although the rules of the House provided that on the presentation of the Estimates they should be referred to a Committee of Supply to be there discussed. He might add that it was the practice, in conformity with ordinary courtesy, to allow the organ of the Government an opportunity of explaining the Estimates. After that explanation the Members of the House in general, and even the younger Members, were satisfied to commence their comments; and he must, moreover, say that the display of that courtesy might with more than usual justice be claimed when the task of bringing forward the Estimates fell to the lot of an hon. Gentleman who had but recently become responsible in the House of Commons, in relation to the affairs of the army, and who might, therefore, naturally anticipate that obstacles, instead of being thrown in his way, would, as far as possible, be removed from his path. He should not here further allude to the remarks which the gallant General had made on the Estimates, and thus imitate the irregularity of which he had been guilty, beyond saying that, so far as his recollection went, the course which the right hon. Gentleman had taken was entirely without precedent, and expressing a hope that it would be adopted on no future occasion. Passing, then, from that subject, he might observe that the gallant General had given him notice that he should put a question to him which he had not put; while he had asked him three questions of which he had not given notice. His (the Chancellor of the Exchequer's) course was to afford all the information he could in the very limited aspect of the case with which he had to deal, because it was not for him to enter on the question of controversy raised between the gallant General and his hon. Friend last year as to the sufficiency of the Votes for the army service. He should leave that matter to his hon. Friend; but he would first answer, as well as he could, the question of the gallant General as it appeared on the paper. The question of which the hon. and gallant General had given notice was, "What portion of the sum of £850,000 granted by Parliament to cover the entire expenditure on account of the 1969 China war during the financial year 1859–60 has been appropriated to, or is reserved for, the liquidation of the claims of the Indian Government on account of advances made or expenses incurred in India?" It appeared to him that the right hon. and gallant General had, to a certain extent, misunderstood the effect of the Return which had been made to the House of the Motion of the hon. Member for Stamford (Sir Stafford Northcote) last year. The hon. and gallant General seemed to he of opinion that, inasmuch as a sum amounting to about £610,000 of Indian expenditure was to be anticipated on account of the Chinese expedition at the time when the financial statement was made last year, and when the Vote of £850,000 was announced, £610,000 out of that £850,000 ought to have been set aside to meet Indian claims. He did not concur in that opinion. The Vote of £850,000 which the Government proposed as a Vote of Credit for the small residue of the financial year 1859–60, was necessarily indefinite to a certain extent, but it had reference to the periods within which the payments could be made, as well as to the ultimate claims which might arise during the remaining portion of the financial year.
§ THE CHANCELLOR OF THE EXCHEQUERQuite so, but the hon. and gallant General would recollect that the sum of £610,000, which was the principal item of the amount estimated, not claimed, was not a service which could probably be appropriated to the year 1859–60, because, although the expression used was "early in the spring of 1860," it was understood to mean the time at which the expedition was to sail—namely, some time in May—and, consequently, the claim was not one which, in the judgment of the Government, was properly applicable to the Vote of Credit granted in respect of the year which was to end on the 31st of March. The Government had to consider two things—first, the financial provision for the latter end of 1859–60; and, secondly, the financial provision for 1860–61. So much for the principle of the Vote of Credit, and, therefore, he should say that the main object of the Vote was to supply means for meeting such excess upon the army and navy expenditure as might be justly due to the expedition to China. The application of the Vote might be 1970 shortly stated. The navy in consequence of its having a sufficiency upon its ordinary Votes, made no claim whatever upon the Vote of Credit. A sum was provisionally allotted to it, but that arrangement was afterwards cancelled. The army, on the contrary, would absorb a very large portion of the Vote of Credit. He apprehended, however, that it could require nothing in aid of its ordinary Votes, except what it could show to have been expended on account of the Chinese expedition. The right hon. and gallant General knew that the army accounts were not yet closed, and he believed the separation of expenses between ordinary services and Chinese services was not yet completed. What he was given to understand was that the whole of the army claims on account of the Chinese expedition would be satisfied, and that the residue of the Vote of £850,000, whatever it might be, whether more or less than £200,000, would be applicable to meet the Indian claims on account of that portion of time. He must also point out to the right hon. and gallant General, with respect to these Indian claims, that it was quite impossible to make an accurate separation of accounts in respect to the periods to which the charges belonged, because, unfortunately, the Indian financial year did not coincide with ours. The Indian accounts were made up to the end of April, whereas ours were made up to the end of March; and he did not expect it would be possible to divide the Indian expenditure accurately between the year 1859–60 and the year 1860–61. Here, in passing, he might be allowed to express his entire concurrence in what the right hon. and gallant General had said with respect to the great inconveniences and disadvantages that attended the enormous depending accounts between the Indian and British Governments. It was hardly possible to exaggerate them, and, in point of fact, at particular periods they were the means of greatly misleading the House of Commons. At one time we were in large advance to the Indian Government, and then our expenditure at home appeared much greater than it really was; at another the Indian Government was rather in advance with us, and then our expenditure appeared less than it really was. Independently, therefore, of other objections, the existing state of things had a serious effect upon the functions of the House of Commons; and he, for one, 1971 should be glad when the time came, when by whatever instrumentality, the accounts could be put upon a better footing. All he could say at present was that, although great changes had taken place of late years, they had been entirely to the disadvantage of the British Exchequer. Last year, when we were called upon to make a heavy financial provision for the existing Chinese war, we were likewise obliged to pay up heavy arrears for a former Chinese war. At the present moment, we were pretty well up with the Indian Government, and, indeed, he might go the length of saying that, including all that the Indian authorities had spent on behalf of the Chinese expedition, they owed us a good deal more money than we owed them. We were, therefore, out of pocket for the moment, but with a prospect of reimbursement. He would now answer the three questions which the right hon. and gallant General had put to him. So far as he was aware, no portion of the sum of £850,000 had been, or could have been, applied to any ordinary Votes. He was unable to state, the right hon. and gallant General not having given him notice of his question, whether there had been any transfer of Votes from one army service to another. Such a transfer might have taken place in some matter not of great importance—of a mere administrative character; but, if so, it must have escaped his recollection, if, indeed, it had ever been within his knowledge. However, the question could be answered so as to give full information if the right hon. and gallant General would allow time for the purpose. With respect to the question whether there was to be a Vote for an excess over the Army Estimates of last year, that was a part of the controversy between the right hon. and gallant General and the Under Secretary for War, and all he could say was that no application had up to the present time been made to the Treasury for any such purpose. As he had already stated, the separation of expenditure on the part of the War Department between the Chinese services and the ordinary services was not yet completed, and he should leave his hon. Friend the Under Secretary to enter further into that matter. Officially he had received no information on the subject.
§ MR. DISRAELI—The answer of the Chancellor of the Exchequer has, it appears to me, fully justified the first part of the observations of my right hon. and gal- 1972 lant Friend. The right hon. Gentleman has made some important admissions; but he has not supplied my right hon. and gallant Friend with the whole of that information which he desired to obtain. I should like to know whether any portion of the sum of £850,000 was appropriated to the Indian service. But I quite despair—
§ THE CHANCELLOR OF THE EXCHEQUERI am sorry to interrupt the right hon. Gentleman, but I thought I had stated that the great bulk of the Vote of £850,000 would be appropriated to army expenditure, and that the residue would be applicable in satisfaction of the Indian claims. I may be permitted to add that the payments made to the Indian Government up to the present time on account of the Chinese war amount in all to £1,111,000
§ MR. DISRAELI—I will not pursue the subject further except to express my hope that ere long we shall have an accelerated audit. Until we have it it will be impossible to enter upon any intelligent criticism. I must say that the right hon. Gentleman entirely misapprehended the spirit of the observations of my right hon. and gallant Friend in the second portion of his observations. When the right hon. Gentleman says there was a want of courtesy and of fairness in these observations towards the hon. Gentleman, the Under Secretary for War, I must say I drew a very different inference. I thought he conferred on the hon. Gentleman a great advantage, and that the position taken by my gallant Friend was one which if I had been in the responsible position of a Minister I should have deemed one of great courtesy and consideration from a leading Member of the Opposition. My right hon. and gallant Friend expressed his approbation of the policy of the Government—so far as their estimate of the proper amount of force. Surely it was an enormous advantage to a young Minister that he found he was not to fight a battle with the Opposition, but that he would be assisted with the advice of my right hon. and gallant Friend. On the other hand, my right hon. and gallant Friend impressed upon the notice of the House and the Government that in his opinion they had not demanded sufficient funds to pay for the maintenance of this force. This gave the hon. Gentleman the advantage of knowing what, in the opinion of the Opposition, were the weak points with which he would have to deal. With that adroit- 1973 ness which I have no doubt distinguishes the hon. Gentleman—else he would not have been placed in a position which I have no doubt he is quite adequate to fill—he will find that this is one of the most favourable opportunities that could be given to a young Minister, and I do not doubt that the hon. Gentleman will know how to avail himself of it. When he rises to make his statement he will know that he has to address himself to an Opposition which has already assented to the amount of force, and which has intimated its opinion that he ought to ask for more money. I suspect, indeed, that the hon. Gentleman will find that any observations of an unpleasant character which may be made will come from below the gangway on his own side. At all events, the remarks of the hon. and gallant General cannot be said to be deficient in courtesy or in fairness to the Under Secretary, whose statement would now be heard with much interest and attention.