OBSERVATIONS. (Hansard, 20 March 1865)

§ MR. HENRY SEYMOUR

said, he wished to call the attention of the House to the proceedings of the Indian authorities with regard to the Back Bay Shares at Bombay, and to move for any Correspondence between the Governor of Bombay, the Supreme Government of India, and the Home Government, relating to any proposed increase of Salaries of Officials in the Bombay Presidency. Owing to the large exports of cotton from Bombay there had recently been an enormous accession of prosperity there, upwards of £70,000,000 hav- 1951 ing been sent to the Presidency as the balance of trade. Two years ago the Government of Bombay made an arrangement with a company there for the reclamation of a considerable portion of land in the neighbourhood of Bombay. That Company was called the Back Bay Company, and the bargain was that the Government should have one-third of the land reclaimed and the right to 400 of the shares to be issued by the company. They were £1,000 shares—£500 paid up. But after the Company was formed and proceedings were begun for the reclamation of the land, orders came from the Supreme Government that it was improper for the Bombay Government to traffic in shares, and that they were to be given up. The consequence was that these 400 shares were put up to auction, and they realized a premium of £1,160,000 which, instead of being carried to the profit of the Government, went to the profit of the Company. He asked the Secretary for India for some explanation of this strange proceeding. The Government was aware, from the history of previous companies, such as the Elpbinstone Land Company, the £1,000 shares of which sold for £3,800, the Victoria Land Company, the shares of which went up to £700 premium, and others, what enormous profits were made, and he wished to know how it was that they had not made a better bargain. He thought if the Government believed it was wrong to traffic in shares they ought to have made up their mind in the first instance; but as they had gone so far as taking one-third of the land they ought to have asked for a larger portion. It would have been particularly convenient for the Government to receive the money, which they might have obtained in the face of the deficit which there was stated to be in the Indian revenue. Perhaps his right hon. Friend the Secretary for India would take this opportunity of giving the House some account of the computed estimates of the receipts and expenditure for India, and also state when he proposed to make his financial statement regarding that empire. In answer to a question put to him on a former occasion by the noble Lord (Lord Stanley), his right hon. Friend was understood to say that he would produce the Oude papers when making his financial statement. If the right hon. Gentleman had made that answer he presumed they must do without the Oude papers till July or August. [Sir CHARLES WOOD: I never 1952 said so.] The subject of the enormous amount of speculation which had been going on in Bombay for the last three or four years was one to which he could not refer without regret, because it occurred to him that if there was a proper land system there—if they could purchase the fee-simple—the Natives would have laid out their capital on the soil of India, which investment would have returned them a large profit, and would have been of great benefit to England from the quantity of cotton which would have been cultivated. He would ask his noble Friend whether he would lay on the table the correspondence which had passed between himself and the Supreme Government, and the latter and the Government of Bombay, with regard to the request on the part of the Government of Bombay to be permitted to raise the salaries of the officials in that Presidency. It was known that in consequence of the enormous influx of capital into Bombay, prices there had increased, and that the officials could no longer live on their salaries. He was told that to meet that state of things, an increase of salaries amounting to £500,000 a year had been proposed, such increase being deemed absolutely necessary in order to obtain the services of efficient officers; for, so great was the demand for cultivated men at high salaries, it was feared that some of the best officials would leave the Government service. But the Supreme Government would not allow the Government of Bombay to make an augmentation that was so necessary; and he was informed that his right hon. Friend had confirmed the decision of the Supreme Government. He was further informed that from other parts of India a similar request for permission to increase the salaries of the officials had been made, and he asked whether his right hon. Friend would lay on the table all the papers relating to this subject. The question of the land tenure of India was now more than ever deserving the attention of his right hon. Friend. It was important to procure raw material for this country; but under the present system of land tenure in India it could not be expected that capital would be laid out on the soil. During the Russian war, when we were precluded from getting hemp from Russia, the production of jute as a substitute was stimulated in India, and since that time jute had continued to be a large item in the exports from our Indian empire. It would 1953 be the same thing with cotton were it possible in the portion of India to which he alluded—the western regions—to cultivate it with success; but no person in India was willing to spend his money in permanent improvements on land which did not belong to him, which he only held on a thirty years' tenure, and of which the rent might be raised to any amount at the end of that period, it being further, in the power of the owner to take advantage of all the improvements which had been made by the cultivator.

§ SIR CHARLES WOOD

In the questions which he has put, and the remarks by which he has accompanied his questions, my hon. Friend has travelled over a very wide range; but I do not think it would be consonant with the wish of the House —seeing that it is desirous of proceeding with the Army Estimates—that I should on this occasion enter into a long discussion on the land tenure of India, which is one of the questions that he has raised. I have no objection to lay upon the table the papers to which be has referred. My hon. Friend thinks that agriculture can only be improved in India by Englishmen buying land and cultivating it themselves, and attributes the backward state of Western India to its not being done. I will, however, take the liberty of reading a few sentences from a letter of Sir Bartle Frere with regard to what is going on in Bombay, and the House will see that the description which my hon. Friend has given of the state of that Presidency cannot be quite correct. Sir Bartle Frere, writing of the country near Nassick, says— Except the natural features of the country, there was little by which I could recognize it, or tell where I was. Sheets of cotton, grain, and oil-seed cultivation had replaced what I knew as uninhabited jungle. Wherever I have been off the road I have found villages which had been established within the last ten or fifteen years on land which had been waste for generations. With reference to what is being done in the way of application of machinery he says— The cotton district begins eighty or 100 miles west of this, and at each railway station near this I see that small factories with steam-driven ginning and pressing machinery are being set up by Bombay speculators. This is the mode in which I think improvement in India can best be carried on. My opinion is decidedly this—that it would not be an advantageous proceeding for Englishmen to engage in the 1954 cultivation of land in India. I believe the ryots can do that very well, and that Englishmen will be doing much better by setting up factories and machinery for turning to use the raw material cultivated by the ryots. With regard to the Oude papers, I did not make the statement referred to by my hon. Friend. On the contrary, the Oude papers have been on the table for a considerable time; but, as I have stated more than once, there were some documents missing. They, however, have been received since, and all the papers promised to the House will be printed and delivered with as little delay as possible. With regard to the first part of my hon. Friend's remonstrance, his complaint is that the Government of Bombay was not allowed by the Government of India to speculate in shares. Now I must say that I think the Government of India was perfectly right. I quite admit that if the Government of Bombay had taken shares and sold them it might have made a considerable sum of money; but in that case the object for which it was asked to take those shares would have been entirely frustrated. The original proposal was that the company were to reclaim a certain portion of land called Back Bay, assigning a portion to the Government. That was agreed to, but the shares did not go off very well. When it was found that the shares were not going off very well the Government was asked to take them, in order that a permanent support might be given to the project from the Government being shareholders in the concern. The Government of Bombay wrote to the Supreme Government asking that it might be permitted to comply with that request. The Government of India replied, in effect, "We don't think it proper for a Government to take part in a speculative project of this kind. Therefore don't do it." The ground on which it was desired that the Government of Bombay should take the shares was that the company might have Government security for the permanent management of the Company; and, therefore, if the Government had taken the shares and sold them, that object would have been frustrated. I am glad that the scheme has been successful and hope it will continue so.