COMMITTEE.

HC Deb 03 August 1869 vol 198 cc1147-97

Considered in Committee.

(In the Committee).

MR. GRANT DUFF*

The House has just resolved itself into Committee, for the purpose of discharging, what I may be permitted to call, not the least important of the many duties which are discharged by the most powerful and most hard-worked Assembly which exists, or ever has existed, in the world. It has resolved itself into Committee for the purpose of hearing the annual statement which it requires with regard to the affairs of its great vassal Empire in Asia—an Empire covering as large a portion of the earth's surface as France, Spain, Portugal, Holland, Belgium, North Germany, South Germany, Austria, Switzerland, Italy, Denmark, Scandinavia, Turkey, and Greece, all put together, and inhabited by men at least as various as those who inhabit all these countries, but of whom some 147,000,000 are our fellow-subjects, just as much as the inhabitants of Yorkshire or of Kent, and another 50,000,000, although not precisely our fellow-subjects, are amenable to our influence in a far greater degree than any of our neighbours in this quarter of the globe. Nothing gives a more striking idea of the ease—or ought I to say the heedlessness?—with which this great nation still, in spite of the poet, sustains "the too vast orb of its fate," than the fact that it so seldom takes the trouble to investigate, through this House, which is the reflection or concentration of itself, the progress of its affairs in the East, giving its confidence thoroughly to those who represent it here and in India, and only asking an account of their proceedings at distant intervals. If the effect of this were that our affairs were neglected, and that our Empire were slipping from us, such conduct might be properly represented as a base dereliction of duty; but if our affairs are going from better to better, then perhaps it is only a sign that the instinct which taught us how to acquire, till teaches us how to keep our wonderful possession. The phrase Indian Budget, usually applied to the business which comes before us to-night, is a misleading one. We have to deal with something less and something more than a budget. Our position is a very different one from that which we occupied on the 8th of April last. Then we were considering matters directly bearing upon our own pockets and purses. Now we are going to consider matters whose direct bearing is on the pockets and purses of men separated from us by many thousands of miles, and by still wider gulfs than any that are made by mere distance. Even if it were possible for the representative of the Indian Government in this House to invoke the assistance of the fairy Agreeable Surprise, who generally presides over English Budgets, the Committee would hear with comparatively languid satisfaction that such and such taxes, which neither they nor their constituents pay, can be dispensed with. But that fairy cannot possibly be invoked; for those hon. Members who take most interest in the affairs of India, know pretty well the main features of the statement which I shall have to present to them. I cannot accordingly indulge, as my right hon. Friend the Chancellor of the Exchequer did on a recent occasion, in the pleasure so natural to a benevolent mind, of shaking my hearers over the pit of financial ruin, or of letting them drop into it, and catching them half-way down. That pleasure, I say, is denied to the mouthpiece of the Indian Government; but as some compensation he is always encouraged by the Committee, and is, in- deed, obliged by the necessity of the case, to enter into somewhat wider considerations than the English Chancellor of the Exchequer is permitted to do. For the India Office is not a great Department, like the Treasury. It is the whole controlling government of an Empire, with its own Treasury and its own War Office, dealing with interests, not so large, indeed, as those with which the English Departments deal, but larger than those which are managed by the corresponding Departments at Vienna or Berlin.

The necessity for compressing an enormous mass of matter into a small space must make the statement which I have to lay before the Committee to-day drier than I could wish; but I shall do my best to eliminate from it all facts which are incapable of being retained in the mind of the hearer. My business, as I understand it, is to give such an exposition of the finances of India as may make pretty clear to all who listen to me, what is the actual position of that country at this moment; how it has been getting on since the 31st March, 1867, and how it seems likely to get on up to the 31st March, 1870. The Committee will see that I mean to devide my statement in the usual way, into three parts. I mean to explain the actual completed accounts for the year ending on the 31st March, 1868; to tell hon. Members, as well as I can, how the accounts of the year, ending on the 31st of March, 1869, of which we have not yet seen the whole, are likely to turn out, and to make the best predictions which our information enables me to make about the year which will end on the 31st March, 1870. In technical language, I will deal first with Actuals; secondly, with the Regular Estimate; thirdly, with the Budget Estimate. First, then, for the Actuals; that is, for the year which began on the 1st of April, 1867, and ended on the 31st of March, 1868. In that year the gross amount of our receipts was £48,534,412. That is to say, we had not so large an income as the United States, as France, as England, or as Russia; but we had a larger income than any nation except these four. Now, from what sources did this enormous income come to us? Much the largest item of our Indian Revenue is the sum which we derive from our assessments on the land. This amounted in the year ending March 31, 1868, in round numbers, to £20,000,000 (£19,986,640). This source of income is sometimes described as a rent, but that description is not altogether an accurate one; for, as is well said in the despatch by which the Court of Directors replied to a remarkable Minute of Lord Harris's in 1856— The officers engaged in the duty of fixing the assessment should always bear in mind that, as you have expressed it, the right of the Government is not a rent which consists of all the surplus produce, after paying the costs of cultivation and the profits of the agricultural stocks, but a land revenue only, which ought, if possible, to be so lightly assessed as to leave a surplus or rent to the occupier, whether he, in fact, let the land to others or retain it in his own hands. The spirit which animates these lines is that which has guided the Indian Government of late years. The tendency has been to diminish assessments—not to increase them—in ether words, to let the people, as we say in Scotland, "sit easy." In 1862, it appeared that the then rulers, forced to take action by a Resolution of Lord Canning and his Council, in the autumn of the previous year, had made up their minds that the old Indian land revenue had not the virtue in it which used to be believed, and that the summum bonum of the financier was to be found in a wealthy people, able to buy large quantities of taxable articles, and to endure all the various financial tortures which modern ingenuity has divised for the contriluable of Europe. And so a despatch went forth from the India Office on the 9th of July, 1862, decreeing the establishment of a judicious permanent settlement. A few days afterwards, Mr. Vansittart moved for certain dissents which had been recorded by Members of Council. The result was the laying before Parliament of two most excellent Papers — one by Mr. Mangles, advocating the old land revenue arrangements, the other by Sir John Lawrence advocating a permanent settlement. No one can read these Papers without being greatly impressed by both of them, but the side which he will take will depend rather upon his general views with regard to taxation, than upon his special views with regard to India. Far be it from me to say to which opinion I incline when such great doctors disagreed; but the outcome of the controversy, looking at the matter purely historically, has been a strange one, for the victrix causa has, it would seem, pleased the gods as little as it pleased Cato, and the old system of moderate assessments, liable to be revised at the end of long periods, still goes on. The permanent settlement which was contemplated has never been carried out. We are now, with regard to our land revenue, very much in the position of a gentleman who has property in various parts of the British Isles, where different customs prevail with respect to the granting and length of leases. In the North-west Provinces, for instance, no increase is to be looked for till the end of the century, for we are just commencing a new period of settlement or lease for thirty years. In Madras, on the other hand, where the settlement is made on totally different principles, we may look for a slow and steady increase. In Bombay, we may look for an increase which will be steady and not slow; and so I might go on through most of the provinces of India, showing that we and our descendants may expect a large rise of revenue from the land throughout the greater part of British India. Tributes and contributions from Native States form the second item of our revenue, and bring in not much less than £700,000 (£689,286). To explain how that aggregate has accrued to us would be to recount a very large part of Indian history during the last 200 years. The amount is not great; less than would be brought in to the English Exchequer by a halfpenny income tax at home. Of old, however, tribute has been the distinguishing mark of rule, and he must be strangely constituted who does not reflect, with a certain satisfaction, that amongst those whose offerings swell this sum are men who may vie in the splendour of their lineage with the oldest European Sovereigns, and more than one who could, with no offence to truth, make prouder answers than even that which Prince Massimo made to the First Napoleon, when he was asked if he was descended from Fabius Maximus—"I cannot prove it; but it is a story that has been repeated for 1,000 years in my family." Our forests yielded about,£330,000 (£331,088), a much smaller amount than they would have yielded if we had begun to attend carefully to them when we first grew strong in India. That, however, was not to have been expected. Forests always seem inexhaus- tible until they begin to be exhausted. When history comes to number up the good deeds which Britain has done for India, she will not, I am sure, forget to record amongst them that—not an hour to soon, indeed, but yet not too late— she called in European science to check the destruction of the forests. No one who has not looked into this subject has the faintest idea how terrible have been the effects, over wide regions of the globe, of carelessness in keeping up a proper proportion of trees. Let any one to whom this whole subject is new turn to the remarkable work of the American Minister at Florence, Mr. Marsh, upon Physical Geography as modified by Human Action, and he will shudder at the dangers which we have only just escaped. If our predecessors had known what we know, much of the enormous expense that we are now being put to with regard to irrigation would have been quite unnecessary. But the mistakes of former days are past praying for, and we can now only rejoice that free course has been given to Dr. Brandis and his subordinates; that the saving of the forest has been recognized as a great State necessity; that a regular Forest Department has been inaugurated, which will take to India the science of France and Germany, and that the good example of forest conservation set in British territory is beginning to spread into some of the Native States. The forest revenue is derived chiefly from the sale of timber, but also from a system of seignorage or license to cut, which will, however, disappear when the amended arrangements for forest organization are complete. In Burmah, something is brought in by a duty levied on the wood floated down the great rivers from non-British territory. Something, too, is gained in many places by miscellaneous products, such as honey, bees' wax, and lac. I have no doubt that when science has been more systematically applied in various places to the investigation of the resources of India, a great many small gains of this kind will be realized, all tending to make heavy the coffers of the State, and to ease the burden of the taxpayer. With a view to this, among other good results, the preparation of a Flora Sylvatica for the Punjaub and the North-western Provinces has just been sanctioned. A large project for taking stock of the natural products of India is like wise in contemplation, and the preparation of a Guide to the Indian Forester is proposed. In time we shall, no doubt, have a special college for forest science in India, like that for teaching engineering, which already exists at Roorkee. There are few sources of revenue the increase of which it is more agreeable to contemplate than this; and, although the rise will be gradual, because we have a great deal still to do, and much to expend before we can reap the full results of good and economic forest management, it will ultimately be very large. The next head is Excise on Spirits and Drugs, or, as it is sometimes called, the Abkari revenue. From this source we derived nearly £2,250,000 (£2,238,931). The articles which contributed to swell this large amount were many and various. There were spirits distilled by native methods from several palms—as the cocoa-nut, the date, and the palmyra. There were spirits made from the young leaf-stalk of the cashew, as well as from the fruit of the mangoe. There were spirits distilled by English methods from rice and sugar, and there were the many preparations of opium and of hemp, which, to a great extent, take the place in India of the alcoholic stimulants familiar to more northern climes, happily without producing quite such bad effects, although, no doubt, mischievous enough. The next head is the Certificate Tax, which gives us more than £650,000 (£653,848). This impost was introduced in 1867, by Mr. Massey, under the name of a license tax, but was somewhat altered in 1868, and changed its title. It amounted to a kind of graduated income tax, upon persons engaged in trades and professions; but as it has now, in the year 1869–70, merged in a different tax, of which I shall have to speak presently, I need not dwell further upon it. The Customs gave us upwards of £2,500,000 (£2,578,632). They are derived partly from export and. partly from import duties. The schedule of the first of these is very short, and contains only indigo, grain, lac, oils, seeds, shawls, cotton goods, hides or skins, and spices. The list of import duties is longer, still comprising sixty-five principal heads of taxed articles. Before 1867 they were far more numerous. The rates are low, 7½ per cent ad valorem, being the usual duty. Some classes of goods are exceptionally fa- voured—thus cotton twist pays only 3½ per cent; cotton, flax, silk, and woollen piece-goods only 5 per cent. It will be seen that our Indian tariff contrasts favourably with most others, though I confess that, speaking only for myself, and by no means committing anyone else, I trust the hour may one day arrive when we shall be enabled still further to reduce, not to say to extinguish, it altogether. The next head of revenue is that of Salt, from which we derived more than £5,700,000 (£5,726,093). The days are long gone by when this tax could fairly be represented as an extremely oppressive one. Nevertheless, there are large districts of the country, more especially the Punjaub, the Northwest Provinces, Central Provinces, and Oude, in which a very great deal is to be said for a reduction of duty, and in some parts of which the existing state of things is, at the least, highly inconvenient. This salt question has occupied, during the last year, much time, both in India and at the India Office, and I trust that before very long some improvements may be inaugurated. We are certainly very far from having yet arrived at the dernier mot of politico-economical wisdom in dealing with this matter. From salt, the third largest feeder of our revenue, I pass to Opium, the second largest, from which we received in 1867–8 nearly £9,000,000 (£8,923,568). Our opium revenue is derived from two sources — first, from the opium which is grown under our own superintendence, and prepared for exportation at Patna, in Bengal, and at Gazeepore in the North-west Provinces, after which it is sold by public auction for Government account; and, secondly, from a transit duty levied on the opium grown in the States of Central India, and shipped at Bombay. No one who occupies himself with Indian finance can be altogether happy about this revenue. I do not speak of its moral aspect; that is a large and interesting subject, on which I cannot enter now. When I speak of our opium revenue as a weak point, I am thinking only of its financial aspect. It is exposed, it seems to me, to three dangers—first, to the possibility of some movement in China which may effectually close that market; secondly, to an effective competition in the Chinese markets from other countries; and, thirdly, to such an improvement in the manufacture of opium in China itself, as to make it independent of the Indian supply. The first of these dangers is not an imaginary one; for we know that hostility to the poppy was one of the many strange characteristics of that terrible rebellion misnamed the Great Peace, which lately desolated so many cities in the Flowery Land, and added by its results one more irony to history. Nevertheless I cannot believe that any movement of this kind will ever be so general in China—a country which is, be it remembered, equal in size to eighteen Great Britains—as to lead to anything like an entire cessation of our traffic. Nay, rather, I expect that increased communication with Western China will favour it. As to the second danger, the increase of competition from other countries, especially Persia, some persons think it the gravest of the three; but it has not yet been proved that the supply is likely to increase very much. As to the third danger, the best authorities tell us that although the poppy is very largely grown in some parts of China, for instance in the great province of Szechuen, the Chinese drug cannot compete with the Indian, which stands to it in the relation of the Havanna cigar to ordinary European produce. At the same time, no one can venture to say that this superiority will always continue. Stamps gave us nearly £2,200,000 (£2,186,269). These do not differ materially in general character from those with which we are familiar at home. Up to the days of Mr. Wilson, the use of stamps in India had been confined to proceedings in the courts, but by him they were extended to bills of exchange, receipts, agreements, and other papers. Some persons expect a great deal of increase under this head of revenue, meeting the argument of the possible danger of a denial of justice, resulting from the operation of the stamp law, by pointing to the intense litigiousness so common in India, which they would fain check, lest our tribunals be altogether broken down—and no doubt the stamp revenue has grown enormously, having trebled itself since 1859–60; but it is a financial expedient, the operation of which seems to me eminently to require watching, and on which it would be easy to build too high hopes. The Mint yielded £120,000 (£120,252). The Post Office £660,000 (£659,670)—not a large sum; but then it should be remembered that within the limits of India our post is one of the cheapest in the world. From Cape Comorin to Peshawur in the far North-west, from Peshawur to Sudyah in Assam, whence a few days' march takes the traveller into China, the charge is uniform, and the service is generally performed with fair regularity, though the Government of India very justly conceives that it can be still further improved, and is taking measures to import the last European methods. It is, perhaps, worth considering whether we should not increase our revenue, and do more real good to the population of the Indian Continent, taken as a whole, if we somewhat increased the charge for letters passing over long distances, and very considerably reduced the charge on letters passing over very short distances. A large amount of native correspondence is said to dispense with our postal facilities. The Telegraph gave us about £215,000. Fees of court and similar payments brought us in about £720,000 (£719,342), under the head of Law and Justice; and about £232,000 (£231,972) came in under the head of Police, from fines and payments for services performed. Shore dues, pilotage charges, and the like gave us £455,000(£455,090). School and College dues, with other small matters, made up a sum of about £74,000 (£73,845), under the head of Education. Interest on Government Securities held in the Currency department, on shares in the Bank of Bengal and Madras, and on advances to the various service funds, brought us about £212,000 (£211,975), and under the three heads of Miscellaneous, Army Miscellaneous, Public Works Miscellaneous, we received the large sum of £2,428,000 (£2,428,103) from sources too numerous to mention, but chiefly from the sale of stores. I have been dealing with round numbers, but the Committee will, I dare say, take it from me, that the amount of all our items of receipt united came to £48,534,412 in the year with which I am occupied, the year of Actuals, the year ending March 31, 1868.

I now come to the other side of the account—to our expenditure. The first item which I would mention is the Interest on our Registered Debt in India, amounting to £62,827,200, for which we paid in the year ending 31st March, 1868, £2,761,000 (£2,761,833). Our home debt was, on 31st March, 1868, £30,697,000, on which we paid £1,452,490, so that we are paying £4 13s. 8d. per cent on the debt in England and India taken as a whole. In the year 1800 we were paying 8½ per cent upon our debt. That is not a very unsatisfactory state of things —little more than 4½ per cent on a debt equivalent to about twice our gross annual income. I wish our home debt was no worse, and the other great Empires of the, world, the United States, France, and Russia, may well wish the same, although our positions are not quite similar. I do not know if the attention of hon. Members interested in India has been called to a short Return which was laid before the House some weeks ago, showing approximately the amount of our registered debt in India held by Europeans and natives respectively. From that it would appear that a good deal more than three times as much of our securities is held by Europeans as by natives, and that a larger amount is held in London, in enfaced paper alone, than is held by natives in all our funds put together. One sometimes hears a good deal of uneasiness expressed at the small amount of the Government securities which are held by natives, and conclusions are drawn unfavourable to the confidence of the native population in the security of the tenure by which we hold India. No doubt it would be desirable to have a far larger number of native holders, and perhaps as time goes on we shall, by savings banks and other devices, succeed in tapping the hoards of the non-mercantile classes. The education of those classes has not, however, yet reached the investing point; and, as for the mercantile classes, why on earth should they invest at under 5 per cent, when they can get perfectly good security at 12 or 18 per cent? Such being the golden opportunities of the Indian investor, we cannot be surprised that those natives who hold our securities largely should be chiefly persons whose families have risen to importance through their connection with the British, and who are, to a certain extent, Europeanized. The second item is Interest on Service Funds and other Accounts, for which we paid more than £800,000 (£824,113). The Military and Bengal and Bombay Medical Service Funds have been taken over by us since the amalgamation, we be- coming responsible to the subscribers and annuitants for the amount they would have received if the old arrangements had continued. When the last beneficiary under the funds dies, the whole funds, and a good deal more which we have given as a matter of grace and favour, will have disappeared, the charge will vanish from our account, and the capital which we only administered, so to speak, as trustees, will vanish also. The Civil Service Annuity Fund and the Widows' Funds, also in connection with the Civil Service, still go on, and, so long as they continue, the charge on their account will appear in our expenditure.

Then come the expenses in getting in our revenue, classed under thirteen heads, with which I will not trouble the Committee, because there are only two of these items to which I think it is worth while particularly to allude. These are the Post Office and the Telegraph. The facilities given by the former are, as I have already shown, very great, but the expense is also considerable, and it is steadily increasing. In the year with which we are dealing it cost £490,000 (£491,690). The Telegraph cost£396,000 (£396,517), being more than it brought in; but, considering the peculiar conditions under which the service is carried out, this is not surprising. We send messages of ten words from one end of India to the other for 2s. Law and Justice cost £2,500,000 (£2,544,849), a sum whose relative if not absolute amount may be perhaps diminished, if it is found, as I hope it may bo, that we can substitute, to a considerable extent, in the judicial department, cheap native for high-priced European agency. I do not think I need specify the sums which we paid for Marine Charges, Ecclesiastical Charges, Medical Services, Stationery, and Printing; but the Committee may be interested to know that Superannuation, Retired, and Compassionate Allowances in India cost more than £900,000 (£911,256). Administration and Public Departments are set down in our accounts as costing £1,100,000 (£1,124,396); but, of course, a large part of the items which I have described as charges for getting in our revenue, are made up of administration charges. It is a pity that no one has ever succeeded in convoying to the imagination of Englishmen what their countrymen really do in the way of administration in India. When one has realized it, one's first feeling is one of satisfaction that men taken out of the ordinary current of English life, neither superior nor inferior in point of natural ability to the ordinary run of fairly successful professional men at home, should be capable of doing, under the stimulus of early responsibility, such wonderful things; and his second feeling is, that we hardly make sufficient use of the large number of trained administrators who return year by year to our shores. England affords no field for their labours, no field for the exercise of their peculiar aptitudes. If they succeed here, it is by virtue of possessing other aptitudes; but the remarkable administration of Sir John Peter Grant in Jamaica shows that England need never be at a loss when a colony situated like that island has to be rescued, and surely if such things were possible, more than one country might borrow retired Indian Governors to its own great advantage. The next charge which I shall mention, is that for Allowances and Assignments under Treaties and Engagements, about £1,900,000 (£1,873,072), a head of expenditure which was once neatly described in this House as the purchase-money of our position in India. That is a phrase which would require, of course, large qualification to make it square accurately with the facts, but it represents a side of the truth about our position in India which is too often forgotten by persons of the blood-and-iron school. The Indian Diplomatic Service cost £240,000 (£241,801), not a large sum when we remember the vast amount of work that is done for it. It is impossible to keep too continually before us the fact that India was not won, is not held, and never will be held, by force alone. It was won, it is held, and it always will be held, while our Empire lasts, partly by force, but largely, much more largely, by policy. Next to making the people happy within our own territories, there is nothing so important as the maintenance of satisfactory relations with the powers, small and great, scattered up and down through our vast dominions, and that not only with great princes like Scindiah, or, greater still, the Nizam, but with very many others of far inferior importance, who are yet, most of them, a good deal more influen- tial than the observer of Indian politics would, at first sight, suppose. I am happy to say that at present our relations with all the native States is very satisfactory. From this trifling charge for policy, it is melancholy to turn to the frightful drain on our resources which is caused by the sad necessity of being always ready to use the "last argument of kings." The total Army charges in India for the year under consideration amounted to over £12,600,000 (£12,603,467). In England, including costs of stores, they nearly reached the sum of £3,500,000 (£3,499,829). Thus the total Army charges in England and India were £16,100,000 (£16,103,296). Enormous as this sum is, the force which we maintain is not very great. We had, by the last Returns, 64,704 Europeans serving in India, as against 45,522, the number which we had on the 1st day of January in the year of the Mutiny; and we had of native troops 122,984, as against 249,153, whom we had on that same 1st day of January, 1857. There is no country in the world," says Major Cheney, "in which the military force bears so small a proportion to the population. City for city, the military garrisons of India are smaller than even those of England. The strong point of our system is, that we have an organization by which we could rapidly, in case of war, increase our Army to any extent we desire. Its weakest point is its enormous cost, and to this the attention of the Secretary of State in Council has been lately called. The result has been a despatch to India, which will, I trust, strengthen the hands of economists in that country. Over and above our Army we have a Police Force, which numbered, at the end of 1865, nearly 160,000 men, and cost, in 1867–8, nearly £2,500,000 (£2,434,125.) Rears have been more than once expressed in this House as to whether it was safe to maintain so large a body of armed men alongside of our native troops. The truth would seem to be, that through very large districts of the country the police is in a satisfactory condition, and in no way either dangerous or inefficient, but that in other parts it is susceptible of improvement. The next item to which I will allude is Education, Science, and Art, our civilizing agencies, which, with its £780,000 (£783,510), shows very poorly beside our colossal military outgoings. The purely educational portion of this sum of £780,000 went, for the most part, to the maintenance of Government Schools and Colleges, but some of it also for grants-in-aid, scholarships, payment of inspectors, Government book-depots, &c. We have six classes of schools in India—(1.) Village or Vernacular Schools; (2.) District Schools, where English is taught in the higher classes; (3.) Colleges, where the education is conducted in English; (4.) two Presidency Colleges, each with a faculty of arts and law; (5.) the Engineering and Medical Colleges; (6.) the Normal Schools. In all, we may have about 20,000 schools, or like establishments, with a continually improving network of official inspection. It is a matter for congratulation to those who have had of late years the disposal of Indian patronage, that when the University of Edinburgh was called upon to select a successor to a man so eminent as the late Sir David Brewster, it sent to the other end of the world for the Director of Public Instruction at Bombay. So much for our teaching machinery. Our machinery for testing the success of our higher education consists of three Universities—one at Bombay, one at Madras, and one at Calcutta—all modelled on the University of London, and doing their work extremely well. £780,000 would not be a large sum if the whole of it were spent on education; but out of this inconsiderable amount come innumerable expenses, such as those of our great surveys, the trigonometrically, the topographical, the revenue, and others; so also do the expenses of observatories, museums, scientific and literary institutions, botanical gardens, and other things too numerous to mention. In the Central Provinces, which are about as big as the British Isles, surveys and museums seem to have cost, in the year of which I am speaking, the magnificent sum of £35. This is, however, the day of small things in all these matters, and I heartily hope that this item of Indian expenditure will steadily increase, because money expended on education and civilization will, to take the lowest view, soon pay us cent per cent. Under the head Miscellaneous come expenses which defy classification; such as rewards for the destruction of wild beasts, charitable donations, cotton experiments, with much else. Under this head, too, are classed famine relief charges, which, in Bengal, amounted to no less than £227,826, that is, to rather more than a third of the total amount which stands under the head of Miscellaneous in India—over £670,000 (£672,992).

I come now to the last item of our ordinary expenditure in India, the largest of all except our Army expenditure, that, namely, for Public Works Ordinary, for which we paid in India, in the year with which I am dealing, no less than £5,800,000 (£5,800,269). There are two reproaches often brought against Indian administration which effectually neutralize each other. The one is, that enough is not done to improve the magnificent estate which we possess in the East; and the other is, that India lives quite up to her income, and is always borrowing a little. The position, however, of the Indian Government is precisely the position of a country gentleman who, with a moderate immediate income, has a large and very improvable property, on which it is distinctly right for him to make improvement of two kinds, improvements which, I suppose, the country gentleman would class in Ms accounts as improvements not bearing interest, and improvements bearing interest. The first of these are what we call in India "Public Works Ordinary," and the second are what we call "Public Works Extraordinary." Under the first of these heads the country gentleman would class cottages, roads, and other improvements which he made for the general benefit of his estate, but not as directly and immediately remunerative. And we class under it in India precisely the same kind of things—as roads, improved barracks for our troops, and, in short, all ameliorations which will improve our general position, but will not give direct, obvious, palpable returns for our money. Till recently it has not been the custom of financiers in India to draw a sufficiently broad line between these two very different kinds of expenditure; but a peremptory order was sent out by my right hon. Friend opposite, directing that henceforward only irrigation works, State railways, and what are known as the Special Fund works of Bombay, shall be considered as Extraordinary.

The Committee is aware that new barracks are now being constructed all over India on a magnificent scale. Some persons wish us to treat these as the for- tifications of this country were treated by the Government of Lord Palmerston, urging that the saving of European life which they will bring about will diminish our military expenditure, and that they will be possessions for ever, as useful for posterity as for ourselves. We are not so sanguine. We feel that, although it is right to provide the best accommodation for our troops that the science of the day can give, we have by no means arrived at final results, good for all time, with respect to the method of housing our troops; and that, although the huge buildings which are now rising, in deference to public opinion, under the combined advice of benevolence and science, are an improvement upon much that preceded them, they may yet be very far from fulfilling the conditions which the same authority may prescribe to the Indian Governors of the future. Again, even if these barracks could be considered the last expression of sanitary science in stone and lime, posterity, if it has not barracks to build, will, assuredly, have plenty of other things to build. We need only see how our expenditure, both on improvements bearing interest and improvements not bearing interest, has increased in our own time, and to listen to the loud voices, which even now accuse us of sluggishness, to be very sure of that. Common roads, again, we think, should be paid for out of income. The reason of this is, that while we can see some end, though a far-off end, to the making of railways in India, the making of roads will be endless; and to throw the charge for thorn upon capital would be wildly improvident. A great deal has been already spent upon making roads in the last quarter-of-a-century, since a sudden impulse was given to this form of improvement, first by Mr. Thomason in the North-west Provinces, and then under the orders of Lord Dalhousie in the Punjaub. Still, so enormous is the country with which we are dealing—as large, the Committee will keep in mind, as Europe without Russia—that we have hardly done more than make a commencement, although we are already constructing at the rate of about 8,000 miles of good road in every ten years— each mile of good road costing, according to Major Chesney, £1,000 to make, and £75 a year to keep up. What are 8,000 miles of road, however, in a coun- try like India? After all it only means, supposing it were distributed equally, eighty miles of good road a year in each of the ten provinces; eighty miles in Oude, which is as big as Holland and Belgium; eighty miles in the Punjaub, which is as big as the kingdom of Italy; nay, eighty miles in Bengal, which is very much bigger than France. If we were once to begin borrowing for roads we should borrow to the crack of doom. Looking through the items for Public Works Ordinary, I confess it seems to me that the amount spent is greater than it ought to be, and I hope that, although it might be bad economy suddenly to stop plans in progress, greater caution may be used in future before new schemes are entered upon. Another part of the Public Works Ordinary expenditure requires a word of explanation, loss by exchange on railway transactions—£ 101,877. This loss arises in the following way:—When the arrangements with the Indian railway companies were made, it was provided that for every rupee they paid in in India from their traffic receipts, they should be credited with 1s. 10d. in London, and for every 1s. 10d. they paid in in London to our account at the Bank of England, that is, for every 1s. 10d. of capital they raised, they should be credited with a rupee in India. A rupee is, however, at the usual rate of exchange, worth 2s., and not 1s. 10d., and all accounts between the Indian Office and the Indian Governments are settled at that figure. It follows, therefore, that the companies lose 2d. on every rupee they pay in in India, and gain 2d. on every 1s. 10d. they pay in in England, and that as the one-and-tenpences they pay in in England are more numerous than the rupees they pay in in India, they gain and we lose a great deal in the course of the year. Ere long, however, I am happy to say, that the tables will be turned; they will pay in more rupees in India than one-and-tenpences here, and we, not they, will begin to be the winners in the game of exchange.

I have now exhausted our ordinary expenditure in India. It remains to say a very few words on that portion of our expenditure which, as a matter of convenience, is disbursed at home, but over nearly all of which the Home Government has, in the nature of things, only the same general control that it has over the expenditure in India itself. First came the Charges on account of our Home Debt and of some other debt paid at home, for which we paid in 1867–8, £1,516,841, to which must be added £629,970, the Dividends on the Capital Stock of the East India Company. Over these charges we have, of course, no control. Then came the charge for the guaranteed Interest on Railway Capital, less net traffic receipts. That cost more than £1,500,000. Next followed Stores, which cost £970,000, and some other items of the same nature which I need not mention. The Committee will understand that the authorities in India indent on us for everything they want from home. We collect most of the manufactured goods which they require in that large building which stands on the south side of the river between the railway bridge at Charing Cross and Westminster Bridge, examine the articles carefully, pack them, and send them off; other things go direct. From time to time we consider the indents too large, and remonstrate; but, on the whole, the check over expenditure of this kind must be exercised by the good sense of those who order, not by the agents who execute the orders. Our business is rather to see that the Indian Government gets its money's worth for its money, and I must say I think the indents of India might often with advantage be reduced. Then came an item over which we have more control—the Secretary of State's Office and its dependencies, the great India Stores of which I have just been speaking; and, in short, the whole machinery of Indian government in this country. That cost about £193,000 (£193,141). We subscribe £35,000 a year to aid the Imperial Government to keep up a Mission at the Court of Persia, and Consular and Diplomatic Establishments in China. Our Army expenses at home I have already stated. As with revenue so with expenditure, I have been using throughout round numbers, but the Committee will, I dare say, take it from me, that the exact amount of the whole expenditure that I have been tracing conies to £49,542,107, chargeable against our income for the year ending 31st of March, 1868.

So much then for our ordinary expenditure. We are not done, however, with our outgoings for 1867–8, for we spent £219,255 for irrigation works, £382,613 for Special Fund works, as they are called, and £594 in preliminary expenses in connection with railway operations to be undertaken by the State; £602,462 in all. About irrigation works and about State railways I shall have to speak presently. I must first, however, say a word about the Special Fund works, for this phrase, which occurs so often of late years in the Indian accounts, certainly requires explanation. Some time ago the Government of Bombay determined to pull down the ramparts of that city, which were considered useless for modern purposes, to sell the land on which they wore built, and to apply the proceeds to the construction of now and more available defences, as well as of a new post office, new court houses, recreation grounds, roads, and a great many other good things. If Bombay had continued prosperous, I think it is probable that all this could have been carried out without making any demand for assistance from the Imperial funds of India. But the crash came—the land cleared of the ramparts, which was expected to fetch immense prices, became temporarily unsaleable, except at a ruinous sacrifice, and Bombay had to approach the Government of India as a suppliant, and to ask for assistance to carry on its works, until the tide of prosperity began to flow again. The Government of India agreed to assist it, and the result is this frequently recurring expenditure for Special Fund works at Bombay, which, if the Government of India holds perfectly good security for the re-payment of its advances, both principal and interest is, quite rightly, not charged against annual income. The accounts, then, of the year ending 31st of March, 1868, when balanced, show a deficit, proving that £1,007,695 have been expended over and above what has been received, irrespective of an amount of about £600,000 which has been sunk in directly reproductive works, and which may be considered simply as capital invested. In round numbers, then, India was, in the year 1867–8, just about £1,000,000 to the bad.

I come now to what is called the Regular Estimate, by which not very appropriate term is designated the estimate of our receipts and expenditure for the year intervening between the close of the year of which we possess the actual accounts, and the commencement of the year with regard to which all is calculation or conjecture. In this case, of course, the year of the Regular Estimate is the year which began on the 1st of April, 1868, and ended on the 31st of March, 1869. In March of this year, 1869, the Indian Chancellor of the Exchequer (Sir Richard Temple) expected to receive about £750,000 more during the year of the Regular Estimate than Mr. Massey anticipated in March, 1868, from the year of the Regular Estimate, and expected to pay, in round numbers, for the ordinary expenditure of the year, £3,750,000 more than Mr. Massey anticipated having to pay in that year. £3,750,000 of extra expenditure is somewhat startling, but I hasten to explain that £1,750,000 of it arise simply from a change of account. Mr. Massey having charged £1,750,000 for barracks and like works to extraordinary expenditure, or, as we should say in our own private accounts, to capital, and Sir Richard Temple, under the orders to which I have already alluded from the right hon. Gentleman opposite, being most properly, as I think, obliged to charge the same to ordinary expenditure. It remains then to account for the increase of £2,000,000 anticipated by Sir Richard Temple. That arose— first, from an unexpected additional outlay on central jails; secondly, from the fact that the amount of traffic receipts paid over by the guaranteed railway companies to us, in diminution of the interest we pay to their shareholders, has been less than we anticipated; thirdly, from a largely increased expenditure in England, including stores sent out to India from this country, on the requisition of the authorities there—an increase which we observed during the progress of the year, and thought so formidable that we were obliged to call the attention of the Government of India to it by a special despatch; fourthly and lastly, from famine relief works. The year 1868 was, as we all remember, a very exceptional year in Europe so far as the weather was concerned. It was also a very exceptional year in India, and towards its close the greatest possible alarm was excited about the condition of Behar, of the North-west Provinces, of the whole of the native States in Rajpootana, and of all the British districts bordering upon them. It was not only a famine of grain, but a famine of water. The cattle, so indispensable to the native cultivator, died by thousands, and great populations pouring out of the most afflicted territories, such as Marwar, overflowed into our provinces. The great calamity of Orissa had, however, produced its effect. Immense efforts were made alike by the local and by the central authorities; and before Christmas it was pretty clear that, although there might be terrible distress, there would, in purely British possessions, be no famine. Just, however, at the most critical moment, telegrams reached London to say that copious and far-extending falls of rain had suddenly come to the rescue, so that the spring crops have been saved in extensive regions, where, before this fortunate event, there was no hope. Still, however, the failure of last year's crop has pressed with terrible severity upon many thousands of people, and not only does it show its effects in diminishing the expected receipts, and increasing the expected expenditure of the year with which I am dealing — the year of the Regular Estimate—but it throws something of a shadow over the year of which I am presently going to speak—the year of calculation and conjecture. The general result of the somewhat increased receipts and the much increased expenditure, as it seemed to Sir Richard Temple, in the month of March last, was that the ordinary expenditure of the year of the Regular Estimate will be about £1,000,000 more than the receipts. In short, he conceived that there would be a deficit of about £1,000,000. Such were substantially the prospects of the year of the Regular Estimate — for the year, that is, ending 31st March, 1869, when Sir Richard Temple made his statement in Calcutta in the month of March last. Our latest news, however, from India, does not, I regret to say, permit me to stop here. The Committee will remember that in the month of March, Sir Richard Temple had only before him the accounts of about eight months of the year 1868–9, and the four months of which he had not the accounts are the critical months of the Indian financial year. The two great Indian crops are gathered in November and March, and the briskest Indian trade goes on during the cold seasons. We have still only imperfect informa- tion, but it seems probable that the accounts of the year 1868–9 will not turn out even so well as Sir Richard Temple expected.

I come now to the year 1869–70, the year of the Budget Estimate; the year for which we have no accounts, and which is entirely dependent on calculation and conjecture. Speaking in the month of March, Sir Richard Temple expected to receive about £49,300,000. He calculated on a great falling off in the opium revenue — a falling off of nearly £637,000, as compared with the year 1867–8; but he expected to retrieve this by a better return on various heads of expenditure — for instance, on salt, and by changing the certificate tax into an income tax. This is, I think, a very good impost, free from the faults of the old income tax imposed by Mr. Wilson, the defects of which have been, perhaps, a good deal exaggerated. It will very slightly alter the taxation of those who now pay the certificate tax, while it will catch the rich landholder, the holder of house property, and the fund holder who receives his dividends in India. Managed by a rough assessment, it will not require any returns or any inquisitorial process; and not falling below £50 of annual income, it will only be paid by 150,000 persons — that is, literally, by about one in 1,000 of our Indian fellow subjects.

Turning to the other side of the account, Sir Richard Temple expected to expend rather less than he did expend in the year 1867–8, and a good deal less than he expected to expend in the year 1868–9—£49,250,000 in all, thus obtaining a small surplus of £50,000. This was, it is impossible to deny, running it very fine; and I am not over sanguine about our surplus in 1869–70, though, if peace and weather favour us, all may be well. I am speaking, the Committee will ob-serve, of our ordinary expenditure. Over and above our ordinary expenditure, however, we shall have in this year, 1869–70, to expend about £3,500,000 (£3,565,800) in remunerative public works—public works for the execution of which we think ourselves entitled to borrow. Of this large sum about £2,750,000 will be for irrigation works. £360,800 will be for the State railways, including £250,000 for a railway from Lahore to Peshawur (£257,000). The rest will be for the Special Fund works at Bombay. The very large sum which we propose to devote to irrigation includes rather more than £1,000,000 (£1,055,000), which we have lately paid under the provisions of an Act of Parliament of this Session, for the transfer to us 6f the great works commenced by the East India Irrigation Company in the delta of the Mahanuddy in Orissa, and of certain rights, which that company had, to make irrigation works in the province of Behar. A further sum of about £600,000 will be spent in various parts of India, much of it in connection with the Granges and Jumna river system, some of it near Poona, and in many other places. Irrigation is, I need not say, of the last importance in the development of our great Indian estate, and we shall spend, I believe, a great many millions upon it before the century is done. At the same time we should, I think, be cautious not to allow ourselves to be led away by those who believe irrigation to be a panacea. Irrigation would not by itself have prevented the Orissa catastrophe. Roads and railways coming in aid of irrigation would have prevented it. Anyone who looks at the maps prepared by Mr. Frederick Danvers, which I lately laid upon the table, and which will presently be in the hands of Members, will be glad to observe that although much remains to be done, much has been already effected. The Granges Canal alone would entitle the Government which created it to a high place amongst the benefactors of mankind. It is, however, out of the question for us to carry on either great irrigation works or State railways out of annual income; and if they are to be useful, as we believe, to future generations, and if they are to be directly remunerative to us, there is no reason why they should be so carried on. Some of our friends are advising us to spend £10,000,000 a year, out of borrowed money, for the construction of remunerative public works. No array of terms can express how glad we should be to do so if we had a certainty that we could spend that sum in works which would be remunerative to us. We think, however, that in the new railway scheme which has been so much discussed since it was laid before the country by my noble Friend the Secretary of State for India, ten days ago, and which will, I doubt not, be much discussed here to-day, we are going just as far and as fast as we dare, with a due regard to prudence and to the safety of our credit. If we find we can in future years go further and faster, depend upon it we shall be only too happy to do so; but I fear our friends who are so very urgent in pressing us to spend £10,000,000 a year on remunerative public works would be uncommonly sorry to guarantee the Indian funds standing as high this day ten years, if we follow their advice, as they did in The Times this morning.

Now, then, the Committee knows all that I can tell it about the probabilities of our receipts and outgoings for 1869–70. There is, however, another question which must be asked and answered, before our pecuniary position is fairly before hon. Members, and that is, What was the state of our Indian cash balances at the close of the year of the regular estimate? In other words, What balance may India have had at her banker's on 31st March, 1869? India had at her banker's, on 31st March, 1869, £10,359,497. That is, I think, a sufficient cash balance, but she will, during 1869–70, have to borrow £3,565,000 for extraordinary public works, and she will have to borrow the better part of £1,500,000 to meet certain liabilities becoming payable during the year, if she is to have as good a balance at her banker's on 31st March, 1870, as she had on 31st March, 1869. £2,000,000 of this she has already borrowed on an open 4 per cent loan at 901/6 in India. £400,000 has been lent on reasonable terms by the Rajah of Putteealla, and the remainder, that is, £2,600,000, will be raised chiefly in this country. A Bill enabling us to borrow £8,000,000 in this country stands on the Orders to-day. We may very possibly be able to get through this financial year without trenching upon this sum, but that is very doubtful, for our borrowing powers under the last Act are nearly at an end.

Well, then, I have told the financial story of the year about which we know everything, the year about which we know a good deal, and the year about which we can, in the nature of things, only make more or less plausible guesses. I have told it with an earnest desire to blink no disagreeable facts, and have, with that object, been studious to use, at the risk of incurring excommunica- tion from all the optimist school of Indian financiers, the ugly, unpleasant word deficit. Now, however, when it is all said and done, is our position so very bad? Let us see what prospects there are of things getting better. I will not enlarge on our undeveloped resources. It may be very right for others to do so, but for me it is more pardonable to err on the side of expecting too little than too much. In 1874 we shall get rid of a charge of about £430,000 a year, being so much of the old India Stock as will be covered by the Guarantee Fund now accumulating to pay off as much as it can of our liabilities under this head. Turn, then, to Guaranteed Interest on Railway Capital. That figures at considerably over £1,500,000, alike in the year of the Actuals, in the year of the Regular Estimate, and in the year of the Budget Estimate. Now, here is an expenditure which, although it may continue at its present amount for some time, will not continue at its present amount indefinitely. One line after another will gradually become paying, and the burdens of the State under this head will be largely reduced. Turn, then, to loss by exchange on railway transactions, more than £100,000. I have already shown that the items of loss by exchange on railway transactions will ere long cross over from the expenditure to the receipt side. There was a time when a great deal was expected from the sale of waste lands in India. It was to go far, in the opinion of some, to pay off our debt. These golden dreams have not been realized; yet a decade in the life of a nation is but a small thing, and in the next two generations I fully believe that the sale of waste lands, partly to natives, and in certain districts also to European colonists, will not improbably have to some extent lightened our burdens. That, however, is for the future. For further help at present we must look to economy, and our chief hopes must centre in a large reduction of Army expenditure, and a determination to restrict Public Works Ordinary within reasonable limits. It is all very well to say that most of these works are likely to be very useful; but unless they are to be directly remunerative, some of them must wait until we can afford them better than we can now. In so great an expenditure there is abundant room for retrench- ment. Something may be done, I think, in other directions, but I will not weary the Committee by speaking of smaller economies. I have no doubt, however, that if the Anglo-Indian mind once disabuses itself of the pernicious heresy that its finances are in a thoroughly satisfactory state, and once for all resolutely refuses to listen to the sirens who sing to it that barracks and the like should be built out of loans, we shall soon put an end to Indian deficits. It should never be forgotten that our revenue not only rises, but positively springs upwards. In the year 1856–7, the year before the Mutiny, it stood at £33,000,000. In the year 1867–8, it stood, as we have seen, at £48,000,000, and this not by acquisition of fresh territory, and in spite of the fact that India, after making all allowance for the comparative poverty of her population, is one of the most lightly taxed countries in the world. The progress seen in all directions is great and incessant. If India is living fully up to her income, she has, at least, the consolation of enjoying her life. We hear much about the laches of the Indian Government in promoting commerce; but the imports and exports, which were under £15,000,000 in 1834–5, were over £101,000,000 in 1867–8: not bad progress for one generation. We have over 4,000 miles of railways open, and we have 1,820 more under construction, or about to be constructed, as part of our old scheme, and we have a huge new scheme settled and about to be undertaken. Material progress is the mother of moral progress, and it needs but little insight to see everywhere indications that the ideal of at least the upper and middle classes in India is sensibly rising. The civilization of Europe is beginning not merely to varnish over the surface of Indian society, but to stir the Indian mind to its depths. The two great branches of the Indo-European race, which parted before the dawning of history on the plateau of Central Asia, have met, rich with the contrasted experiences of I know not how many thousand years. The ancient and fruitful antagonism between East and West, which fills so large a part of human history, is renewed under changed conditions, to what strange issues who shall say?

Motion made, and Question proposed, That it appears by the Accounts laid before this House that the total Revenue of India for the year ending the 31st day of March 1868 was £48,534,412; the total of the direct claims upon the Revenue, including charges of collection and cost of Salt and Opium was £8,957,464; the charges in India, including Interest on Debt, and Public Works ordinary, were £32,362,402; the value of Stores supplied from England was £970,920; the charges in England were £5,710,880; the Guaranteed Interest on the Capital of Railway and other Companies, in India and in England, deducting net Traffic Receipts, was £1,540,435, making a total charge for the same year of £49,542,107; and there was an excess of Expenditure over Income in that year amounting to £1,007,695; that the charge for Public Works extraordinary was £602,462, and that including that charge the excess of Expenditure over Income was £1,610,157.

MR. CRAWFORD

said, it was not his intention to follow his hon. Friend through all the figures he had submitted. His hon. Friend in the course of his very able and lucid speech had referred to matters of great moment to one who, like himself, had passed many years of his life in India, and who still felt great interest in that country. He should like to say a few words upon the demand now made by the Secretary of State for India to use his borrowing powers, and to the great change in the policy of the Indian Government in regard to the manner in which railways were in future to be constructed and worked in India. With regard to the Financial Statement, the best conclusion he could come to was that the Indian Government required to raise, during the present year, a sum of about £5,000,000; of which £3,500,000 was required for carrying on various extraordinary works for India, £1,000,000 for paying the debt, and £500,000 for replenishing the cash balances in India. By the Bill which would come on for discussion at the Evening Sitting his hon. Friend would ask the House to authorize the Secretary of State to raise between the present time, and April 30, 1872, the very large sum of £8,000,000 sterling in this country for the service of India. What he (Mr. Crawford) desired to do was to call attention to the way in which this power of borrowing money was likely to be exercised, judging from the manner in which it had been exercised by previous Secretaries of State. In the year 1863, the then Secretary of State for India (Sir Charles Wood) came before Parliament for authority to raise a similar sum of £8,000,000 for the pur- pose of re-placing debts that had been incurred in this country; and what was the course of policy which he pursued? Why, he went into the market, when he wanted money, without any communication with the public, disposed by private arrangement of the securities for the sums he was authorized to raise, and the public knew nothing whatever of the demands made upon it. The whole transaction was conducted secretly, so that only a limited traffic or dealing took place in the particular stock dealt with in the market. That was not a proper way of raising money. In the language of the Stock Exchange, the Secretary for India "turned on the tap when he wanted to raise money." If, however, he wanted money, it would be better that he should come into the market and say how much he wanted, in which case, by inducing competition, he would raise money on better terms. His hon. Friend had referred to the public debt of India, which he stated was £62,000,000. He also alluded to a Paper, which had been laid upon the table two or three weeks ago, giving the details of that debt, from which it appeared that the securities were of various forms and denominations, extending as far back as 1824–5. Some of the loans were of very small amount, and if measures could be taken for consolidating these into one single debt he believed that considerable advantage would be gained. The ultimate re-payment of principal might be secure, and also the payment of interest meanwhile; but with small stocks not easily marketable, a loss was always entailed on those holders who found it necessary to realize. If, however, these different stocks were all consolidated into one stock in a form which would meet the requirements of the present day, the public would not alone be pleased, but the value of the security would doubtless be increased. He desired also to make a remark with regard to the export duties of India. It was perfectly true, as stated by his hon. Friend, that they were few in number, but they were levied, contrary to all sound principles, on some of the principal commodities exported from India. Every 82 lb. of grain exported—and this country drew from thence a great deal of grain in the shape of rice and for consumption in distillation,—incurred a charge of 3 annas, or 4½d., before it left India, the effect of which was not merely to limit our access to the Indian market, but to diminish the sales of the producer of grain. That portion of the indigo crop produced in Madras had to encounter a sharp competition here with the indigo grown in Central America; yet while the Madras indigo had to pay 3 rupees for every 82 lb., that which came from Guatemala and other Central States was free, and being produced on the Continent of America was admitted into the New York market on more favourable terms than the produce of India. Moreover, these very commodities, taxed so heavily on their export from India, had already paid a heavy tax to the Government in the. assessment of the soil upon which they were grown. There were other commodities to which reference might be made; but he had said enough, he thought, to show that the continued levy of these charges was attended with positive disadvantage to Indian interests. Another subject to which he would refer, and which was of the greatest importance, was the new railway policy to be carried out in India, which had been described by the noble Duke (the Duke of Argyll) in "another place," and was also described in the despatch which had been laid upon the table. No opportunity, however, had been given to the House of Commons of perusing this despatch till Saturday last, though there was reason to believe that it had been for some time in readiness; the Report of Mr. Danvers on the Indian railways had been ready, to his own knowledge, for some time before it was published. The House had a right to expect that these documents would be placed before them in sufficient time to enable them to be perused and considered, and these should not have been, he must almost say, withheld, until so late a period of the Session. He believed the view taken in that despatch was based upon a Minute by Lord Lawrence, dictated, he was sure, by a single object of what was for the benefit of India. A new state of things had arisen, and the Government were perfectly justified in seizing the present opportunity of considering whether they could not extend the railway system of India by a principle of action different from that which had hitherto been followed. The only exception which he took to the action of the Government was that they ap- peared to ground this new policy upon a condemnation of the existing system. Instead of being condemned, the existing system was rather, in many respects, an example to be followed. The foundation of the Government policy in constructing railways for themselves was this. Hitherto, no money had been found for the construction of railways in India, except on the security of the Government, and as the rate guaranteed for raising money in the market had been uniformly 5 per cent., whereas the Government themselves could borrow money at 4 per cent, they were losers of 1 per cent upon the transaction. He was pre- pared to dispute these assertions, and to prove that they were based upon error. The Government also alleged that the railway companies had hitherto constructed their lines—as it was called in India—departmental!)'; that was to say, by means of contractors, acting under the direction and supervision of the engineers and staff of the companies. Contractors had been employed in this country and their servants sent out; and it was suggested that these measures could as well be taken by the Government as by the companies. It was further alleged that the process of construction by the companies heretofore had been needlessly extravagant and costly, and that the working was extravagant, ill-managed, and profitless. He admitted the necessity of a Government guarantee to raise money for works in India, but the remainder of the argument he denied. When it was represented, for instance, that it had cost 5 per cent to raise the money for construction, and that the Government guarantee accordingly was the sole test of the value of the railway property, he pointed to the fact that there were different railway companies whose shares commanded, not an uniform, but different values in the market. The stock of the line with which he was connected—the Best Indian—was selling for 111, whereas the stocks of the other Indian companies as a rule did not fetch more than 106 or 108. If the Government guarantee of 5 per cent were the sole test of value they would all be exactly equal in price. There was an- other element which had been left out of sight, and that was the element of the speculation that the profits arising from the railways would exceed 5 per cent, as they had already done in two or three instances. In the course of the last year and the present year, his company had occasion to raise £2,000,000. The Government said,'' It is unreasonable in you to ask us to guarantee 5 per cent, because you will issue the stock at a large premium, which you will then put into your own pockets." The company felt the objection to be a reasonable one; but they urged the Government not to make a difference in the rate of interest hitherto guaranteed, and undertook to pay over the gain of £110,000, obtained by the issue of the stock at the current price, into the hands of the Secretary of State, to form part of the capital of the company to which the Government guarantee would not attach, because it was not the property of any individual shareholders. There was one passage in the Minute of Lord Lawrence which he thought had been written without due care or consideration, and was certainly unjust to the railway companies. His Lordship stated that their capital was an investment from which a return was guaranteed under all circumstances, and that in some cases even a wasteful outlay might be directly advantageous to the officials, as leading to the creation of stock. The meaning of this—and it was so stated in the despatch of the Government — was that the shareholders and managers of these railway companies were indifferent to the sums which they expended on the construction of their railways, because the more they expended, and the more stock they got out, the more they would make in the way of profit in placing these shares in the market. He ventured to assert that out of the £80,000,000 raised in this country for the construction of Indian railways there had been no larger outlay or allowance than fairly covered the expense of placing these shares in the market. The whole of that money had been paid over, and not a single farthing beyond the legitimate profit on the issue had been kept for their own advantage. He fully admitted that there were times when the Government might go into the market and borrow money at 4 per cent, but there were other times when they could not do so. During 1859, when the Indian Government was unable to obtain money on reasonable terms, or on hardly any terms, in the market, the railway companies wore enabled to raise large sums at a moderate rate of interest, partly, no doubt, because they could offer the security of the Government guarantee, but also because they could offer, in addition, the tangible security of valuable property. Under these circumstances it could not be said that the Government were in a better position to raise money than the private railway companies. The Indian railway companies had been charged with reckless extravagance in the construction of their lines. He would lay before the Committee a few facts which, he thought, would show that that charge was entirely unfounded. It appeared from Mr. Danvers's Report — which was issued on Saturday last, and which divided the cost of the construction of these Indian lines into its several elements, such as the mileages, the permanent way, stations, rolling stock, &c. —that the East Indian Railway Company had constructed their 1,500 miles, 600 being double and the rest single lines, at a cost of less than £20,000 per mile; and that the Madras Railway Company, also a single line, had constructed their line at a cost of less than £11,000 per mile. The great difference between the cost per mile of these two railways was accounted for by the fact that the latter, while having an excellent management, had none of the engineering difficulties to encounter which had rendered the construction of the former line so costly. Another cause of the great cost of the construction of the East Indian Railway was the Indian Mutiny. The question had been elaborately gone into, and the result, which had been reported to the Government, was that if the Mutiny had not occurred, that great work would have been constructed at a less cost by about £3,000,000 sterling. The expense of the conveyance of materials had been enormously increased by the Mutiny, and a large portion of the finished line had been destroyed—no less than 17,000 tons of rails being found wanting in transmission up the river. £500,000 had afterwards to be expended upon the erection of a steamboat flotilla, for the purpose of sending the materials up the river. In fact, the total extra cost resulting from the Mutiny might be safely put at £2,000 per mile. It must not be forgotten, in calculating the cost of the Indian railways, that they had to pay enormous sums for conveying from this country the materials necessary for building their bridges-The East Indian Railway had constructed no less than three miles of iron bridges, one being nearly four-fifths of a mile in length, and the whole of the materials for erecting those works, and for locomotive purposes, had been sent out from this country, at a total cost for conveyance of nearly £3,000,000. They had also to provide European superintendence; and. for every man sent Out to India they had to pay two or three times as much as they could secure their services for in this country. The expenses incurred for drivers of locomotives was a most costly item. All these elements must enter into the question of the cost of the railway. When they were pointed at as persons who had been guilty of extravagance, all these things should be taken into consideration. What he had said as to one railway applied to all of them. It was not improbable that the Indian railways might have made mistakes in the construction of lines for the first time over the vast Continent of India; but the Government would be warned by those mistakes, and would, therefore, be to a certain degree benefited by them. If they were guilty of extravagance, which he denied, the Government ought to share the blame with them, because the companies could not, and in fact did not, spend money without Government control. If the Government said — ''You are extravagant and thriftless," he said they were parties to these things. But he denied the fact. He maintained that the Indian railways might be held up as instances of the expenditure of enormous sums of money, with as little cause for reproach as had ever occurred under similar circumstances. In the whole course of this expenditure there had been nothing illicit in the contracts or profits of the company. He did not mean to say that everything might have been entirely proper in the case of every subordinate; but he affirmed that, as a whole, this vast expenditure might be held up as an example of fidelity on the part of those concerned. With reference to the subject of the cost of working the Indian railways, he would call the attention of the Committee to the Return laid before the last half-yearly meeting of the shareholders of the East Indian Railway Company, comparing the working expenses and receipts of that railway with those of thirteen of the principal railways in this country. The real tests of the profitable working of a railway company were its mileage receipts, its mileage cost, and its mileage net receipts. Judged by these tests, during the half-year ending the 31 st of December last, the East Indian Railway Company appeared, out of every £100 earned, to have expended £41 for working expenses, leaving £59 profit; while the London and North-Western Railway Company had expended £46 per cent for working expenses; the average expenditure under that head of the whole of the English railways being £49½ per cent. It was impossible, under these circumstances, to contend that the management of the Indian railways was expensive as compared with that of other countries, and the Government of India when asserting that that management was guilty of profligate extravagance, was doing it a great injustice. The directors had endeavoured to exercise the utmost economy in. their business, but the Government authorities did not take the slightest notice of this. The Government of India not only did not do the railway company justice, but they did the company a positive act of injustice, when they charged them with want of economy, and with the design of securing fresh profit on the issue of additional capital. The Government ignored the fact that the company had lately sent out to India an eminent and experienced engineer, at great expense, to ascertain the exact cost of all the necessary works remaining to be executed, so that they might prove at once what would be the full outlay in this costly expenditure. So far from the company-trying to increase the cost, they actually refused to undertake the construction of a bridge over the Hooghly, at Calcutta, which the Government wished to put upon them, and which would have rendered it necessary that their capital should have been increased by £1,500,000. They would not have acted thus if they had desired to traffic in the profits of new capital. They had also declined to undertake the construction of a line from Cawnpore to Lucknow, and willingly surrendered to another company that from Delhi to Lahore. They were anxious to be free from adding to the capital. He might add many other instances in proof of his argument. Their object had been to limit themselves to the works on the enormous line of 1,500 miles which they had undertaken to construct, and the resources of which they desired to utilize as quickly as possible, and to do the best they could for their shareholders. He quite agreed that in the case of Native States the Government must make the railways themselves, and that where railways were required for political purposes it might be left to the Government to make them. This would afford an opportunity for comparison between the two systems; but he deprecated their entering upon great operations of this character merely for presumed economical reasons. He did not think that any Government, as a Government, could do work of this kind so effectually as those who had devoted years to the consideration of the work, and who possessed experience which no Government Department could secure. What would be the effect of the Government going into the market for the purchase, from time to time, of 10,000 or 15,000 tons of rails by advertisement? Why, not only the price of iron but the cost of freight would be immediately raised. Whereas the Government, for their own protection, were compelled to buy by public tender, private companies could purchase what they required for the construction of their lines by ordinary contract, usually at a much lower price than the Government would have to pay. They were under the control of the Government, and had the official director appointed by the Secretary of State sitting by their side. He regarded the conduct of the Government in this matter as showing a remnant of the old exclusive policy; they did not like an imperium in imperio. The Government had resented the unwillingness of the directors to succumb to the Government officials. In one instance the Government desired the removal of a gentleman whose position was not agreeable to them, but the directors did not think that this would be just. There was a feeling of discontent on the part of the Government in having a body to deal with whom they could not command. It was very questionable whether these operations should be removed from popular observation. Opportunity should be given to the people of this country of knowing what was going on in connection with these railways. Once these lines passed under Government control nothing more would be heard about them, and the public interest in them would be quenched. There still remained the question of the extent of the intended operations of the Government with respect to these lines to be considered. It was now proposed that the Government should make 10,000 more miles of railway, at a cost of £120,000,000 of money. This was the demand to be made upon the money market. They had been told that there was owing by India in this country and in India between £90,000,000 and £100,000,000; and he thought that they did not sufficiently weigh the effect of coming, year after year, to the House for authority to raise money for the service of India. It was one thing for £80,000,000 to be taken out of the market for the construction of railways by railway companies in twenty years, and another thing for the Government to borrow £4,000,000 year by year for thirty years from the public on, that account. He maintained that the Government could not expect to be able to continue to place these large sums upon the market at the rate that they boasted they now raised it—4 per cent. He also wished to point out that had railway construction been in the hands of the Government at the time of the Mutiny in India the works would not have been proceeded with, as the whole attention of the Government was directed to quell the Mutiny, whereas the railway companies continued the construction of the railways, notwithstanding the Mutiny, and were enabled to assist the Government by the facilities afforded by such portions of the lines as were constructed. One clause of the Bill that was before them earmarked £4,000,000 of the money proposed to be raised, and set it apart for the construction of railways only; but this money would not be so spent if war or other adverse circumstances should absorb the attention of the Government. An instance of this was that when Lord Ellenborough went to India in 1843 he found there was war with Gwalior, and in consequence he suspended the works of the Ganges Canal. He took the opportunity of calling the attention of the Under Secretary for India to the manner in which the telegraph service with India was carried on. Last year a convention on this subject was held at Vienna, and every State on the Continent of Europe, together with England, was represented at that convention. One of the terms there agreed on for the conduct of the telegraphic business was that every message should be sent in the order in which it was received; but a priority in the dispatch of messages was still given to Mr. Reuter. A remonstrance was made to the Secretary of State, and then it was found that Mr. Reuter had made terms at Constantinople with the Turkish Government, giving him, in spite of the convention, an advantage over everybody else. The system still continued, notwithstanding it was said that steps would be taken to put a stop to it, and he hoped that the promise which had been given would now be carried out.

SIR STAFFORD NORTHCOTE

said, that, as there was other important business on the Paper, he would not waste time by complimenting his hon. Friend the Under Secretary for India on the excellent speech he had delivered, but would at once notice an expression which was not characterized by the same exactness as the rest of the hon. Gentleman's observations. The hon. Gentleman spoke of two complaints against the Government of India which, he thought, effectually neutralized each other. One of these complaints was, that the Government did not do enough to develop the great resources of the Indian Empire, and the other was, that the Government were living up to or rather exceeding their income. The hon. Gentleman thought that those two charges might answer each other; but that was not strictly the case, for it might happen that the Government, though exceeding their income, were not by economy saving means to improve the resources of the country. That was a danger which the Government of India should guard against. There was a magnificent field in India for the development of the resources of that Empire, but care should be taken to provide by prudent economy the power to effect that object. He wished to direct attention not only to the importance of economy in details, but to the adoption of a sound principle of finance by laying down a distinction between the different classes of expenditure which were being incurred. What he meant was what was shown in the speech of Sir Richard Temple, in which he laid down the great importance of the Government maintain- ing a distinction between unproductive expenditure and that which was not so. His (Sir Stafford Northcote's) opinion was that upon the strict maintenance of this distinction depended the whole foundation of our credit and prosperity. Our Indian credit might be seriously affected if we went on borrowing without making proper provisions for re-payment, and therefore it was of great importance that the distinction that he had pointed out should be maintained. He, last year, with the approval of the Council of India, endeavoured to draw a distinction between productive works and other classes of works. The principle they proposed to go on was that they would allow no expenditure to be provided for out of borrowed money, except that class of expenditure that would be reproductive, and they meant not only that expenditure that was capable of reproducing, but that which was made that it might reproduce. To do this there must be separate accounts kept, in order to see that the money so laid out did come back to the Treasury. He had no doubt that this subject was still engaging the attention of the Indian Government; and he would press upon Her Majesty's Government the importance of seeing that the principle to which he had referred was carried out. If this principle were adopted the Government might then borrow freely, because they would be sure that the money would come back again. There was another principle which they must not lose sight of; they must take care that in their ordinary balances of income and expenditure they kept a good regular surplus of income over expenditure. It was very well to have a £50,000 surplus for a year or two, but it would not do in the long run; for there should be a regular surplus of £500,000 or £1,000,000 of income over expenditure, because contingencies might arise which could not be foreseen. The only safe policy therefore was to keep a really good margin of income over expenditure. That involved both economy and the careful maintenance of their resources. He believed the principle of the income tax was a great, a bold, and a wise step. It required some sacrifice on the part of the Government of India. There was great temptation to put off works, owing to the necessity of raising funds by what was considered an unpopular tax. He hoped they might look to a fair surplus. With regard to items of taxation, he would not say any more than that he most cordially agreed with what his hon. Friend the Member for the City of London (Mr. Crawford) had said of export duties. He hoped the time would come when they would get rid of duties which were wrong in principle, and very injurious to India as well as to the trade of this country. With regard to railways he entirely sympathized with his hon. Friend in the expressions he had used, and the spirited defence he had made for the existing companies. He sympathized with him as to the want of cordiality and generosity of their treatment in these despatches. Considering the work done they ought not to have been treated with harshness; there should have been every acknowledgment of the services which the guaranteed companies had rendered. Even assuming that such companies were to be altogether dispensed with, still there should have been some acknowledgment of the fact that we never should have had this great network of railways so well constructed, and so ably worked in so short a time had it not been for the assistance of the companies. Though they might find fault with some details of management and upon the principle upon which the system was founded, still they should speak a little more gratefully of those who had initiated the plans of so great a man as Lord Dalhousie, and who had carried them out so successfully. His hon. Friend had complained that these Papers recently laid on the table had been kept back rather long from them. He (Sir Stafford Northcote) did not think it was right to make that complaint, for the Duke of Argyll's important despatch was only dated the 15th of July, and could not have been produced much sooner than it had been. But it was to be lamented that there had been so short a time to consider the Papers, and that they were not in so complete a form as they might be. It would, have been better if the Papers had extended a little further back, and if the origin of these communications had been given; for this matter had been under consideration for a year or two, and some Papers had not been produced which would have thrown light upon it. As to the distinction between commercial and political lines, that was a distinction that was drawn in a despatch that went out when he was Secretary of State for India, and that despatch was intended to call attention to the importance of making some definite plan for carrying out in future the railway system in India. He thought that there were several reasons why that despatch and others should have been printed, and they would have given an answer to several of the objections of the hon. Member. Now this was a matter that had been forced upon the Government. It had become necessary that something should be done to systematize the railways in India. Projects came in in driblets from the Hooghly, Madras, Assam, or Bengal for the construction of railways, here or there, and the Council for India always felt it extremely important not to commit themselves to general plans, or to inconvenient expenditure. He therefore addressed a despatch to the Governor General of India, asking them to take into consideration the general wants of India, and give a systematized plan of the works recommended—at what rate it would be possible, with reference to financial and other considerations, to carry out those works; in what order they should be proceeded with; and by what agency they should be conducted. At the same time, the Government of Sir John Lawrence had directed their attention to the same subject. He wrote to the Government at home at the same time that the despatch of the Secretary of State was being prepared. These despatches were both independent of each other, but both came to the same conclusion— that it was desirable to come to some systematic arrangement as to what should be done, and at what rate. He hoped these Papers would be printed, and that they would be able to turn their attention then more deliberately to them than was possible at present. There was a great deal yet to be considered as to the propriety of the State undertaking the whole railway management of India. It was pretty plain from expressions in these despatches that the mind of the Government of India was hankering after getting the whole system into their own hands. That policy, however, had not been adopted by the Duke of Argyll, and he hoped it would not be; but this was a point which would have to be fully considered next Session. In the meantime he was entirely satisfied with what the Government proposed to do. The principle was, that where railways were to be made for political considerations or for the general benefit of the country, but which were not likely to pay —these railways should be made by the State. There was another principle, that where railways were to be made through Native States they also should be made by the Government. Upon both these principles he thought that there was a general agreement; and he entirely agreed as to the importance of the action of the Government with regard to the political railways. He would, however, venture to point out that there were one or two special considerations that the Government should bear in mind. In the first place, they should consider whether they really would be able to take the matter up as a whole, when its very advocates admitted the scheme to be imperfect. He hoped that he might say, without offence, that there was certainly an impetuosity about some of Lord Lawrence's writing, when he took a strong view, that rather carried one away. He appeared to take always a strong view of a subject, so that one side of it was seen very clearly indeed. He also spoke his mind very strongly and ably, therefore one side was always presented in the clearest possible light. Where action was required this was a very valuable quality; but when they had to take counsel they were apt to be staggered by seeing the case made out, as it were, too good. The noble Lord talked of the expediency and importance of limiting the outlay of capital upon lines of railway, and no doubt it was important; but was he quite sure that the Government would always limit their own outlay better than the companies, when they were acting under the control of the Government? The Government, no doubt, had not properly controlled the action of the companies; but if they could not control another person, would they be able to control themselves and their own officers, as to the outlay of capital? There was a strong temptation on the part of the Government to save themselves from any outlay on their ordinary expenditure. He observed a tendency on the part of the Government of the day to put down everything they could to capital, and on the part of the Indian Government there was just as much temptation to put down all expenditure on public works as remunerative. But was it true that the Government would always keep these works going as well as the companies that undertook them? There were, if he mistook not, instances in which the Government were not quite so ready to carry on works of this kind when other and more pressing claims were made upon them. The history of the Great Trunk Railway of India did not show that the Government always proceeded very rapidly with the works they undertook. There was another point of importance, and that was whether the Government would be able to get a proper staff and work these undertakings properly. They had the admission of Lord Lawrence that the Public Works department was not in a proper state to undertake these works. The Indian Government had taken a great deal upon themselves. They had only just taken in hand all. the irrigation works, and it was not yet known whether they could carry them on satisfactorily. They were now going to undertake the railways, and they called upon the Government at home for more assistance and for engineer officers, and the Indian Government complained that they did not receive all the assistance they ought to have. He would earnestly urge upon the Government of India that, if they were going to take these great works upon themselves, they should take care to strengthen the hands of the departments which had the execution of the works, not merely by sending out officers, but by a proper organization of these departments, and by regulating relations between the Public Works departments of India and those of the several presidencies; because, if jealousies existed between them, a good deal of mischief might happen. He would also urge the Government not to suspend the execution of the harbour and irrigation works which they might have in hand for these new pet railway projects. He would likewise impress upon the Government the importance of not running into debt, and of providing a proper system of account for writing off the debt. He believed that the matter was in good hands, both at home and in India. He was not afraid of the expenditure, estimated by the hon. Member for the City of London at £120,000,000, if it were incurred wisely, and expended in a way to develop the resources of India. He had sanguine hopes of the future of India, if the Government did its duty in promoting the moral and social progress of that country. The Government of India was a paternal Government of the very best class, and its relations with its neighbours and subjects were of the most satisfactory and friendly character. They must, however, look to the possibility of dark days; but the best way of providing for them was by developing and husbanding the resources of India, and making the people feel that we were real friends to them. Whatever the Government did, let them not overwork their departments or overstrain their finances.

SIR CHARLES WINGFIELD

said, he observed that for the year 1868–9 there was a deficit of about £1,000,000, and a total deficit during the last three or four years of about £4,500,000; but he thought that this would soon disappear if the principle laid down by the late Secretary of State for India were carried out—namely, that all expenditure, except that which was extraordinary and strictly reproductive, should be met by income. By such a course only could the Government meet its liabilities and this country so preserve its credit as would enable it to borrow such large sums as would be required for railways and irrigation. With respect to barrack expenditure, he feared that many of the sites which had been declared to have every sanitary qualification would be found to be unhealthy, and consequently be abandoned. He did not believe that in India health was promoted by mere solidity of construction. The great want in that country was cubical space and free ventilation for currents of air, and mud walls and a thatched roof were cooler than stone or brick buildings. Where the barracks now in course of construction were likely to last some time, and where they were also military stations, the works might be suspended, and the Exchequer saved from any further outlay of money for some time. There wore fifty one places in India where barracks were either built or building. Some were only seventy miles distant from each other; and it was worthy of consideration whether some concentration were not possi- ble. He should like to see a Return of the outlay in building barracks since the Mutiny. He believed that they had been a most frightful drain on the resources of India. He believed that the expenditure from this source was not less than £15,000,000 up to the present time. With regard to railways, he thought it probable that the strategic considerations upon which they had been laid out would undergo a change, and that new military stations would have to be undertaken. As to the Army expenditure, he did not think that the European force could be reduced below its present standard, which he believed to be 62,000 men, He doubted whether the Native troops would ever have revolted if they had believed there were sufficient European troops in the country to coerce them. He should have regarded with greater satisfaction the increase in the Indian revenue if he did not know that half of that increase had been derived from opium and salt. It was stated that the Chinese Government had renewed their edicts against opium; but this he regarded as only the means of obtaining larger bribes for the officials. Across the Continent of India there stretched a huge Customs line, guarded by an army of several thousand officials. To the north of this line salt paid a duty of 6^*. per 80lb., while to the south of the line salt was only taxed at 3s. Statistics showed that in the northern districts the consumption of salt was only at the rate of 81b. a head, whereas to the south the consumption amounted to 13lb. a head. If the rates could be equalized, or nearly so, a considerable increase in consumption might be expected. At the same time, he could not agree with the right hon. Baronet opposite (Sir Stafford Northcote) that the consumption of salt afforded the best test of the condition of the poorer classes, for, unlike tobacco or alcohol, a man was not likely to consume more salt than nature prompted him. He was glad to perceive that by the extension given to the quantity of roughly manufactured salt which a man might have in his possession the convictions for infractions of the salt laws had fallen nearly 1,000 in number. As to the railways, he had for a long time been of opinion that a system of public companies would work most advantageously, fearing that in times of financial difficulty the construction of railways in the hands of the State would come to a standstill; and also remembering that at the time of the Mutiny a 5½ per cent open loan did not fill. Having read the despatch, however, and the exhaustive Minute on which it was based, he had come to the conclusion that the principles laid down by the Government were those which ought in future to be acted upon. The Government of India had shown a very strong case for raising such funds as were necessary upon their own credit, and they ought, he believed, to be supported in doing so. There was an apparent increase in the circulation of the paper currency. That increase, he thought, was more apparent than real, a large proportion of it being only issued in the sense of having left the central establishment for the district offices, where it lay unissued. The true remedy had been suggested in the Report of the Paper Currency Committee. As a mark of the increase of comfort and prosperity amongst the population of India, it was gratifying to observe that 600,000 lbs. of sugar were now imported, whereas, in 1850 and 1851, there were 1,800,000 lbs. exported, so that in the article of sugar, India from an exporting had become an importing country. He considered that there were two reforms needed in India. The first was the separation of the executive and fiscal from purely judicial functions, and the restriction of all offices in the service to one or other of those branches of administration. Such a multiplicity of duties were now thrown upon a collector that it was impossible he could get through them all except by devolving the larger share of the duties upon his assistants. Another evil of the existing system was that men, unless they would sacrifice pay and promotion, were constantly being transferred from one branch of the service which they thoroughly understood, and for which they were well fitted, to a totally different branch, for which, perhaps, they had no taste whatever. A separation already existed in the upper branches of the administration, which ought to be continued downwards through the various stages. He would not interfere with the general apprenticeship served by a man on entering the service, which was always useful to him, but after four or five years he ought to be called upon to choose between, the executive and the judicial branches, and, having done so, should be strictly confined to that which he had selected. With a view of ascertaining the opinions and feelings of the natives, and bringing these into harmony with the acts of our officials, weighed down as they were by their various duties, Sir Robert Montgomery had recommended the establishment of consultative native councils. Such a course would be quite in accordance with the views of the late Lord Canning, that we should abandon "the anomalous at- tempt to govern a country by thrusting aside every man whose birth, position, or social influence gave him a right to share in administering its affairs." Had such councils been in existence, with, the facilities which they afforded for studying Native sentiment, the recent spectacle would not have been witnessed of a large number of landowners in India presenting a Petition against what they conceived to be an infringement of native laws and usages, and a violation of the spirit of Her Majesty's proclamation. Such a course could not but be injurious to our reputation in the East,

MR. R. N. FOWLER

Sir, the hon. Gentleman the Under Secretary for India (Mr. Grant Duff) has admitted that it is unsatisfactory, on financial grounds, that £9,000,000 of the Indian revenue should depend on the article of opium Sir, I object to this source of revenue, not only on financial but on moral grounds. I have always regarded the conduct of this country in forcing this poisonous and deleterious drug upon the Chinese, as the greatest blot upon the name of the British nation. Did time permit I could quote the authority of eminent men of all classes—statesmen, diplomatists, officers in the Army and Navy, physicians, and missionaries—in support of my opinion; but, at this period of the debate, considering the number of hon. Members connected with India who are anxious to take part in it, I feel that I ought not to trespass on the Committee, and will content myself with two short extracts. The first is from a speech in this House by the late Sir John Cam Hobhouse, afterwards Lord Broughton, and long President of the Board of Control, who stated that "he did not deny the use of opium being a great vice, for a great vice it was." The other is a sentence from a despatch of the East India Company, the originators of the traffic, who declare that "were it possible to put an end to the use of the drug altogether, except for medical purposes, we would gladly do it in compassion to mankind." I may be told, Sir, that the question stands on the same ground as the revenue derived from wine and spirits; but there is this essential distinction, that whereas the use of wine and spirits is constantly ordered by medical men, I never heard of any patient being directed to smoke opium. I trust that Her Majesty's Government and the Indian authorities will endeavour so to regulate the finances of India that this large portion of its revenue shall not continue to be dependent on the trade in this pernicious drug.

SIR WILFRID LAWSON

Sir, the Committee, no doubt, observed that in the able and comprehensive statement of the hon. Gentleman (Mr. Grant Duff), there was one point on which he touched hastily and lightly. I allude to the revenue derived from opium. The hon. Gentleman said he should not allude to the moral aspects of that question. He was right; for there is no defence on moral grounds to the raising of revenue by these means. He told us that about £9,000,000 of the Indian revenue (nearly one-fifth) was derived from opium. What does that mean? It means that a large portion of the most fertile soil in India is diverted from the production of food for the people, and devoted to the production of a deleterious drug. This drug is employed to pauperize and de-moralize hundreds of thousands, if not millions, of the inhabitants of China. Thus, it indirectly is a great hindrance to that legitimate trade with China which it is generally considered so desirable to promote; for not only are the pauperized inhabitants unable to become our customers, but the better educated and superior classes in that country, seeing our hateful policy of forcing this drug upon their country for our own gain, become more and more hostile to us, and determine to throw every obstacle in their power in the way of our commercial pursuits. Those Gentlemen in the House—and there are many—who are interested in missionary operations, know well that nothing sets the Chinese so much against accepting the truths of Christianity as witnessing this immoral and cruel policy of our Government and merchants. What, then, is the defence of this trade? There is no defence, except that the money must be had. Is, then, money to be set against morality? Several times during the Session I have heard the right hon. Gentleman the Member for Oxfordshire (Mr. Henley) inveigh with righteous indignation against the power of mammon, when he has seen, as he thought, a tendency in our public proceedings to sacrifice moral to material interests. I hope, therefore, that he and hon. Gentlemen who sit with him will aid my hon. Friend opposite (Mr. E. N. Fowler) in the move which he has made in this matter. But I fancy that it may be said, raising this large revenue from opium in India is no worse than raising, as we do, a large revenue from drink in England. I do not say that it is worse; both are bad enough, but two blacks do not make a white. And we must remember that there is a feeling rapidly rising here against the English system to which I have alluded, which is certain in the end to sweep it away. Many years ago the present Prime Minister of this country (Mr. Gladstone), speaking on certain resolutions in reference to China and this opium traffic, moved by the late Sir James Graham, said— Justice is with them (the Chinese); and whilst they—the pagans and semi-civilized barbarians—have it, we—the enlightened and civilized Christians—are pursuing objects at variance both with justice and with religion. Now, those were the words of the head of the present Ministry. But I am not so sanguine as to believe that our Government will at present act in this spirit, and abolish this evil system. I know the temptation which there is for Government to raise money in an easy, handy manner. I fear that the Government will, for a time, go on in the old system; but I do hope that the remarks of my hon. Friend (Mr. E. N. Fowler) may help to arouse the public conscience, bring it to bear upon our rulers, and ultimately compel them to desist from raising the revenues of this great Empire by promoting the misery and degradation of millions of the inhabitants of another Empire.

COLONEL SYKES

said, he could not help congratulating the hon. Member (Mr. Grant Duff) in having been the first to create in that House an interest in Indian Budgets. Time was—and he recollected more than one occasion—when not a dozen Members remained in the House to listen to the annual Indian Financial Statement, and this was the first occasion since he had a seat of more than forty Members being present when, the Indian Financial Statement was made, and he trusted that the present comparatively large attendance was a proof that the new Parliament was taking an interest in matters connected with that gigantic Empire which had been committed to our care, and for which we were responsible, both morally and physically. He was glad to hear from the statement of the hon. Member that the result of reducing the amount of the assessments on land had been to largely increase the land revenue. He had always maintained that we did not levy a rent in India, but imposed a tax on the produce of the soil — in fact, a land tax. With regard to the question raised by his hon. Friend the Member for the City of London (Mr. Crawford), he must say that the idea of the Government assuming the execution of railway works in India was by no means a new one. It was broached in the days of the East India Company, when railways in India were first spoken of, and at that time it received the support of several men who might well be considered authorities on Indian affairs —George Tucker, Butterworth Bayley, Sir Henry Willoch, and others. As to the Army in India, it was worthy of remark that before the Mutiny the cost of our Indian Army was £12,000,000. Now it was £16,000,000. The number of European troops in India before the Mutiny was about 42,000; now it was 64,000. The native Army had been diminished by 130,000 men, and the European Army had been increased by 22,000. There was no justifiable reason for this. When the Mutiny broke out it was confined to the Bengal Army. The armies of Calcutta and Madras were not parties to it. The 42,000 European troops had sufficed to break the neck of the Mutiny before a single reinforcement had landed in India, and the number that had sufficed before would suffice in the case of another mutiny, of which there was not the remotest probability; indeed, in the Mutiny of 1857, had the native soldiery been adroitly handled, there should not have been any Mutiny at all. He not only objected to the present num- ber of European troops, but that 20,000 or 30,000 of them were not local troops, as under the East India Company, by which the great expense of relieving annually 6,000 men would be greatly diminished. That European troops could be maintained for lengthened periods in a state of efficiency we had a proof the other day in the arrival of one of the East India Company's regiments at Aldershot, which had been 112 years uninterruptedly in India. He felt convinced that the revenue of India was amply sufficient to meet any calls that might be made on it. There was a mischievous belief in the native mind in India that England drained bullion from India, and that India was consequently being impoverished. The fact being that the balance of trade had been in favour of India since 1800, and that balance had been paid in bullion. From successive Returns given to him by the House of Commons, it appeared that, after deducting exports of bullion from India from imports, there remained an annual balance of bullion in India on the 30th April, 1867, of £311,131,300, the aggregate accumulation since 1800, and of that, £262,567,643 had been coined into rupees in the Mints of Calcutta, Madras, and Bombay. It was his wish to have noticed some other subjects in the Budget, but the hour did not permit him to do so.

MR. J. B. SMITH

moved the adjournment of the debate. It was now half-past six o'clock, and they could not hope to conclude the debate before the time when the sitting would be suspended.

Motion agreed to.

House resumed.

Committee report Progress; to sit again this day.