HC Deb 23 February 1871 vol 204 cc763-77

, in moving that a Select Committee be appointed "to inquire into the Finance and Financial Administration of India," said: As I have already stated, I will not enter upon the subject of the appointment of this Committee, on which I consider the House to be agreed; but I will state to the House what I conceive to be the exact bearings of the issue with regard to the propositions which the Government intend to make, and which would be carried into effect by steps subsequent to the adoption of this Committee by a joint Committee of the two Houses. The House, I hope, will clearly understand that that is a proposition which the Committee will deal with upon its merits entirely, without reference to any supposed engagement which would in any manner affect their liberty of action. Neither the House of Commons nor the House of Lords has taken any step or has in any manner considered the question whether it is expedient that the inquiry should be conducted by a joint Committee, or whether it should be conducted by a Committee of each House separately, or by this House alone, acting on its own responsibility, if the other House should not think fit to follow our example. I do not wish to magnify the question. It is one within a limited scope; and it will only require two or three minutes for me to state the ground of view which the Government take, and the reasons which have induced them to lay the proposal before the House. In the first place, I think the principle of the co-operation of the two Houses in the matters of inquiry conducted before Committees, or even in matters of legislation, at the stage in which measures go before Committees is a very great principle. In the mass of legislation that comes before the Legislature of this country, it is a very great object to discover the means of economizing time, and I think it is the duty of the Government, where there are any means of economizing the public time with reference to matters proper for inquiry by Committees of the two Houses, to take advantage of those means. The question is whether the present occasion is a suitable occasion for that purpose, because I do not suppose it will be thought by anyone that there is any anomaly or novelty per se in conducting an inquiry jointly by Members of this House and by Members of the House of Lords. The first reason for proposing a joint Committee on this subject is that the House of Lords happens to be what may be called particularly strong on the matter of East Indian experience. I need not refer to the names of the noble Lords, some of whom have been in the face of this country; but there is one in particular who has a most distinguished name in connection with Indian administration. No one, I think, would doubt that he would contribute greatly to the efficiency of an inquiry of this kind, and I need hardly say would promote the object we have in view. Another reason is this—that by a Committee of this kind it is always desirable that what may be called the official element of Parliament should be represented up to a certain point—should be represented in considerable strength, though not in such strength as in any way to interfere with the preponderance of independent opinion on the Committee. But in inquiries of this kind, where any administrative Department is concerned, I think we generally see a fourth, and sometimes as many as a third, not of Members in Office, but of Members who are in Office or have been some time in Office in connection with the particular subject; and the advantage of that is that they can render very considerable assistance to those who prosecute the inquiry from a certain point of view. It so happens that the official element, so to speak, with reference to this particular subject is numerically weak in the present House of Commons. Indeed, the judgment of the Government has been influenced to a considerable extent by a circumstance affecting a particular Member of this House. The right hon. Baronet the Member for North Devon (Sir Stafford Northcote), sitting on the other side of the House, having held, at an anxious period, the Office of Secretary of State for India, has, with very great public spirit—and I am very glad to have an opportunity of bearing testimony in my place here to the fact, as I have done before in private — that right hon. Baronet, I say, who would have been a proper and becoming, and, I may add, essential representative of this House in an inquiry of this kind, has given his services in the important Commission sent to the United States, and thereby weakened what I may call the official element in the ranks of the Committee. No doubt it is in the power of the House to appoint the Under Secretary of State for India, and I hope he will be a Member of the Committee; but I do not think it would be entirely satisfactory that the great party which, with those sitting on this side, makes up the House should remain unrepresented in the official class. It ap-appears to me that this is a very good reason, independent of any other, why we should resort to the plan of a joint Committee. Supposing we go forward, as I now propose, there is, I believe, but one Gentleman — namely, my hon. Friend near me (Mr. Grant Duff), who discharges his duty with so much ability—whom we could appoint as having official experience. My right hon. Friend (Mr. Lowe) did hold Office in connection with India, but it was a long time ago; and, besides, his occupation as a Cabinet Minister, and being Chancellor of the Exchequer, would make it impossible for him to give due attention to the inquiry. In the same manner my hon. Friend the Secretary to the Board of Trade, who was, I believe, Under Secretary for a very short time, is in the same predicament, and it would be quite impossible for him to give attention to Indian matters. Now, it may be that there is some jealousy among the independent Members of this House, lest what I may call the officialism of the other House should be too strong. But it will be in their own power to provide against that danger. It appears to me that this Committee, being chosen from the two Houses, should be larger than usual—that it should consist of 11 Members from each House; and if there be but one person connected with Office from the House of Commons, the independent element will start with 10 Gentlemen taken from the two sides of the House. If, then, the particular position of the House of Lords should make it desirable that three, four, or even five of its Members who have served in India should be appointed, it will be seen that independent Commoners would form three-fourths, or about three-fourths of the Committee. There is only one other point of importance which touches the question of a joint Committee. It is, I believe, a matter of usage and custom that, in the case of a joint Committee, the Chairman should be a Peer; but that Chairman would be chosen by the free choice of the joint Committee itself. First of all, I believe that the technical rules of the House of Lords have been very much relaxed, of late years, with regard to the choice of the Chairmen of Committees; but it is obvious that the application of those technical rules would never be enforced, in the case of a joint Committee. So far as the Chair is concerned, it would be the choice of the Committee that would determine the matter. I may add, that the only object of the Government is to bring to the consideration of this important subject the most efficient and strongest Committee that we can get. We are of opinion that object will be best attained by a joint Committee of the two Houses. We commend that proposition to the general approval of the House; but, at the same time, it must depend upon that general approval being obtained, because it would be an ill beginning for the Committee if there should be any great and serious difference of opinion at the outset respecting its constitution. I will conclude by proposing the Motion that stands in my name, and it is not necessary at present to move the question of the joint Committee.


was of opinion that the Government was doing a great injustice to itself in limiting the scope of the inquiry to the points, how money had been collected in India and how it had been spent. There was a vast number of other subjects which required to be investigated, and to be placed before the public for its judgment. In 1833 that House appointed a Committee of its own Members to take into consideration not only the financial condition of India, but its administration by the East India Company, and the East India Company, so far from objecting, invited the strictest scrutiny into their administration and accounts. They had then a monopoly of trade with India. The result of the inquiry was, that so thoroughly satisfied was the Committee with the administration of the affairs of India by the Company, that a new term of 20 years was granted to them. In 1852 another Committee was appointed. There was at the time a strong feeling growing up in this country against the administration of the Company, though it had been uniformly successful and had transferred to England an Empire larger than ever existed before. So well satisfied was the Committee with the management of the trust reposed in the East India Company that they recommended the Company should be granted a further term of 20 years from 1852, and nothing but the unhappy mutiny in Bengal, which arose not from any action of the Company, but from the invasion of caste prejudices in the Bengal Army, had prevented the administration of India from being still in the hands of the Company. He was a witness before both of the Committees, and he knew that many important facts had been elicited which would never have been known if their labours had been confined within the narrow range now proposed. He thought he would be able to show when the Under Secretary of State for India should make his annual statement that the administration of the affairs of India would with greater advantage to the people of India, have been in the hands of the Company than of the Crown. He would tell his right hon. Friend at the head of the Government that if the inquiry were limited to the question of money it would not give satisfaction to the Europeans in India, and most decidedly not to the Native population.


said, he regretted to find himself in antagonism with the Prime Minister on this subject of a Joint Committee of both Houses; but it would be admitted that, when an unusual and unprecedented course was advocated by the Leader of the House, he was bound to give some special extraordinary and cogent reasons for the proposal. He took exception to the course proposed for several reasons. In the first place, it was unnecessary. Secondly, it involved an aspersion on the intelligence, competence, and discretion of that House. Thirdly, the inquiry into the finance and financial administration of India involved indirectly, if not directly, questions of finance which concerned the taxpayers of this country. And lastly, the composi- tion of the Committee—half of Peers, half of Members of that House—would, of necessity, involve a larger proportion of the official element than was desirable in such an inquiry. He might observe, in passing, that he entirely disagreed with the hon. and gallant Gentleman opposite (Colonel Sykes) in wishing that the scope of the inquiry should be enlarged. It would be utterly impossible, in the course of one Session, to extend the scope of the inquiry with any practical result. The right hon. Gentleman at the head of the Government had given as the first reason for departing from the usual course, that the House of Commons was particularly deficient in Members possessing official knowledge of Indian subjects. Now, he had taken the trouble to refer back to the previous Committees of that House upon Indian affairs. He held in his hand the nominal roll of the Committee appointed in 1852, and he found it was composed of 31 Members drawn from all sides of the House, from men of all shades of opinion and all degrees of experience, and of the whole 31 there were not more than four or five who had any local or official knowledge of India. Indeed, if the argument of the right hon. Gentleman was worth anything, it would go a great deal farther than he seemed to think. Who were the men who had been most frequently appointed Secretaries of State for India or Governors General? Were they men who had any personal knowledge of India? Had Lord Dalhousie, Lord Canning, or Lord Mayo, or most of those who had been most distinguished on the roll of Governors General? To come nearer home, had the four or five men in the House of Lords who had filled the Office of Secretary of State for India, or President of the Board of Control, any personal knowledge of India? Well, then, of what force was the argument that official knowledge was required? He did not hesitate to say that it would be most undesirable to have on this joint Committee four ex-Secretaries and one ex-Governor General, if not sitting in judgment, at least inquiring into official acts with which they had been more or less connected. Since the Government of India had changed hands the interest of the Debt had more than doubled; we had year by year a chaotic mass of accounts both in that country and this, and he, and those who held similar views, wished to know the causes which had led to increased taxation year by year, while the revenues of India were at the game time increasing. He wished, he might add, that the right hon. Gentleman had furnished the House with some precedent for the course which he asked it to adopt, for he had failed to find any case analogous to the present. It was quite true that within the last few years Joint Committees of both Houses had been appointed; but they had been appointed with the object of deciding what would be a suitable mode of proceeding in certain technical matters. As to the Joint Committee which had been nominated in the reign of William III., it was one which had been appointed under a special Act of Parliament, to make a judicial inquiry into the corrupt distribution of large sums of money by the then Chairman of the East India Company, alleged to have been paid to Members of both Houses to obtain a renewal of the Company's charter, and the inquiry ended in the impeachment of a noble Duke (the Duke of Leeds). When, therefore, on a future occasion, a discussion was held on the composition of the proposed Committee, he hoped some hon. Members of greater experience than himself would give their opinions as to whether it was expedient to change the long-established and recognized course of inquiry without due deliberation, and, as it were, by a side-wind. For, he could not admit that the fortuitous absence of any individual Member of the House, however able or experienced, and he did not deny that the hon. Baronet the Member for North Devon was both able and experienced, was a sufficiently cogent reason for suddenly changing the constitution of the proposed Committee. He must further observe that the financial affairs of India were intimately allied with taxation, and were of great interest as bearing upon the taxpayers of this country. Of the £200,000,000 of public debt in India, including the railway debt, less than 10 per cent was held by the natives of India, the whole of the rest being held by our fellow-countrymen. What was the security for it? A first charge on the revenues of India, which was worth only as much as the continuance of English dominion; and he should like to know whether the high-handed way in which taxation had been imposed on the natives was conducive or not to the prolongation of that dominion? Another objection he had to the Committee was, that it would be composed to too great an extent of official Members of the other House of Parliament. He was aware that those official Members were very distinguished men, who had held the office of Secretary of State for India, and he was opposed to their appointment not in their capacity as individuals, but because they would have, from the very nature of the inquiry, to pass under review their own official conduct, while what was wanted was a free unfettered investigation of Indian financial administration. The right hon. Gentleman had, indeed, observed that there was no fear the official element would override their colleagues in the Committee, inasmuch as they would be only in the proportion of 5 in 22; but he would ask anyone who knew the calibre of those five noble Lords whether they would not, in the nature of things, have a far greater power than was represented merely by their numbers? For his own part, he very much feared that the Committee would be overridden by that select band of brothers. He appealed with confidence, therefore, to the independent Members of the House, to use their influence to secure that the inquiry should be free, for otherwise it would fail to give satisfaction. He could not believe that the present reformed House of Commons was less competent to inquire impartially and effectively into Indian affairs than any of its predecessors, and he therefore hoped that the proposal for a Joint Committee would not be pressed.


said, he fully agreed in the opinion that the range of inquiry assigned to the proposed Committee was sufficiently extended; but he felt certain that if a Joint Committee were appointed the official element would be most unduly predominant. The financial mismanagement of India—or, if that phrase were considered too strong, he would say the disordered state of the Indian finances—was the subject of inquiry; it would range over the administration of the last eight or nine years, which embraced the tenures of Office of four Indian Secretaries of State, and of one Governor General, who were now Members of the other House. They could scarcely fail to feel that their own administration was called in question, and that they were put upon their defence; but surely it would be inconsistent to place the conduct of the inquiry into the hands of the very officials whose administration was to be inquired into. No doubt, the opinions of so many distinguished men who had held the office of Secretary of State would be most valuable; but those opinions might be given to the Committee as evidence, and he should think that those noble Lords would themselves prefer to take the part of witnesses rather than serve as members of the Committee. He should be sorry to see it composed mainly of men who had been in the service of the State in India. What he desired was that a broad, independent, English view should be brought to bear on Indian affairs, and he was sure nothing could give the people of that country greater satisfaction than to find that the House of Commons manifested an interest in their well-being. A Committee, having upon it a large number of officials, would certainly fail to inspire the same confidence.


said, he thought that there should be some inquiry into our relations with the Hill Tribes, against whom 21 expeditions had been sent within the period between 1850 and 1868. He should not press this question now, but he begged to give Notice that when the Committee had concluded its labours he should bring it before the House. He was also of opinion that if the Government persisted in their determination to appoint a Joint Committee it should consist of 34 Members, 17 from each House. If official experience were deemed of so much value there were several right hon. Gentlemen—such, for instance, as his right hon. Friend the Member for North Northamptonshire (Mr. Hunt) on the Bench below him—whose services might with great advantage be secured. In a letter, he might add, which he had received that morning from a very intelligent Indian gentleman residing in this country, views similar to those which had just been stated by the hon. Member for Gravesend (Sir Charles Wingfield), as to the composition of the Committee, were put forward, and as they had not the advantage of the presence of any native of India he should venture to read it. He said— A Joint Committee is proposed. I have no objection to it; but I think, in fairness to the Committee and to the ex-officials themselves, they should not be on the Committee. I mean the ex-Secretaries of State and Governor Generals since 1860, for it is their own administration that is to be the subject of inquiry; and it would not be satisfactory, I am afraid, to the public that these ex-officials themselves should sit in judgment upon their own conduct. Their true place is in the witness-box, not on the Bench. For his part, he was glad to see that the Government had acceded to the wish of the hon. Member for Brighton (Mr. Fawcett) for a Committee of Inquiry; and though that inquiry might not be so extensive or in such a form as some persons might desire, he hoped, nevertheless, that great good would result from it.


said, if the Speaker ruled he was in Order, he should move "that there be added to the words of the Resolution of the right hon. Gentleman the following words:—'and that such Committee be solely composed of Members of the House of Commons.'" He had sat in that House for 14 or 15 years, and the greatest dissatisfaction was always expressed about the East India accounts. They had been brought in at the fag-end of the Session to nearly empty Benches, when there were not more than a score of Members present; and the feelings of dissatisfaction—quite justifiable in the circumstances, had spread to the millions of our great Eastern dependency, who were naturally indignant at having been so treated. If they desired that this inquiry should be more than a "sham," if it was really to suggest remedies for some of the evils connected with the finances of India, experts might be called upon with advantage to give evidence; but they should not be judges of a system in the administration of which they had been concerned. The subject of the inquiry was the financial conduct of the Government of India. The Committee would have to discuss all matters connected with the taxation of India, including the extent and pressure of the income tax; and he thought that such questions would be best discussed not by those who had spent the best part of their lives in India or in the India Office, but by Gentlemen acquainted with the principles of sound finance.

MR. KINNAIRD (to whom Mr. Gladstone gave way)

observed that this inquiry was demanded by the people of India, but such a Committee as the Government proposed would not have their confidence. They had petitioned again and again for inquiry; there had been none since the government of India came into the hands of that House, and neither they nor the people of this country would be satisfied unless the Committee was composed entirely of Members of that House.


I give every credit to Her Majesty's Government for the motives which have induced them to make this proposition, and I feel sure they have only made it from a conviction that it was for the public advantage. But there are difficulties in the way which they ought to consider before asking the House to decide upon this course. The right hon. Gentleman regrets the absence of my right hon. Friend Sir Stafford Northcote. I also regret his absence on an occasion like the present, and I have no doubt I shall, in the course of the Session, have to regret it on other occasions. But, like the right hon. Gentleman, I am partially responsible for this absence, because my right hon. Friend would not have quitted the country at such a period without my assent, but there are occasions on which, when high political questions of Imperial importance arise, a public man, whatever his political party, owes his service to his country. In the course he has taken my right hon. Friend was influenced by motives of the highest character, and his political friends who will suffer by his absence were conscious of the sacrifice he was making and of the loss they would sustain. But they felt that, under the circumstances of the case, it was his duty to accede to the suggestion of the Government, and give his talents and his experience to the solution of difficulties which I trust will be removed by the Commission which Her Majesty's Government have resolved to appoint. With regard to the question before the House, there is no doubt that to ask for the appointment of a Joint Committee of the two Houses is a very unusual course. There have been Joint Committees of the two Houses. There was one last year, of which I was a Member. But wherever we have had Joint Committees of the two Houses they have been generally on technical points, issues of a limited character, such as arrangements about deposits for railways, and the subject considered by the last Joint Committee—namely, to expedite, if possible, the procedure of business between the two Houses. There the object in view was very intelligible, and it was not on the cards that the course taken by the Joint Committee would at all interfere with the privileges or the general conduct of business of either House. Even with this limitation, however, the instances of the appointment of a Joint Committee are rare. Now, in the present case, it must strike us at once that the proposal for a Joint Committee is not only on a large subject, but must deal with questions hitherto considered within the peculiar jurisdiction—if I may use the term—of this House—I mean the management of finance. We have all been for many years impressed with the conviction that the management of the finances of India much interests those who live in England. Otherwise, there would be no reason for the statement of those finances made to us every year. The ill-management of Indian finance must recoil ultimately upon the financial resources of this country. Therefore, it seems to me difficult for a Joint Committee to enter upon questions as to the present state of Indian finance without the Members of the other House being drawn into the consideration of matters in which it has always been one of the principal aims of this House to prevent them from interfering. This alone is, I think, a serious objection to the course proposed. The recommendation of the proposition of the right hon. Gentleman has been that it is the only one that would insure the presence of adequate official experience. I would not depreciate the value of the presence of those who possess official experience in the government, and especially in the finances, of India. But the first question we have to decide is, whether it is worth while, in order to obtain the presence of this official experience, to take a course so unusual as the appointment of a Joint Committee of the two Houses, especially on a subject as to which, of all others, according to the traditions and principles of this House, concerted action by the two Houses should be avoided. Then, again, great as is the advantage of official experience, it is an advantage not without drawbacks. You may have too much official experience upon any Committee of this character, and therefore I think we should consider whether, out of our own resources, we may not be able to appoint a Committee which shall effectually inquire into this important subject, and furnish the House with the information and conclusions it requires. The right hon. Gentleman has referred particularly to this side of the House as being denuded of official experience by the absence of my right hon. Friend (Sir Stafford Northcote). I will not make any remark upon hon. Members opposite, and I have no doubt the right hon. Gentleman is so well acquainted with them that he will be able to select many Members there whose assistance will be very valuable. But even on this side of the House, without the advantage of my right hon. Friend, or the presence of any who have been officially connected with the government and administration of India at home or abroad, there are several Gentlemen, I think, whose presence on this Committee would be highly valuable and beneficial, and who, in my opinion, would contribute to results which even Members with official experience might be unable to produce. There is my hon. Friend the Member for Huntingdon (Mr. Baring), who was Chairman of the Indian Committee which sat in 1852, and from the experience he acquired in carrying on and controlling that large investigation, as well as from his financial experience, I should say he would be most competent to sit on a Committee for considering Indian finance. I know well that my right hon. Friend the Member for Shoreham (Mr. Stephen Cave) has given great attention to Indian finance, and though he has not had official experience in Indian finance, he would form another competent member of the Committee. If such men as these were appointed, I am sure their labours would not be a source of shame to us. On the whole, although I fully appreciate the motives which have influenced the Government in making this suggestion—a fair suggestion for the consideration of the House—I cannot help feeling that the objections to the course proposed are weighty, and as upon a matter of this kind I should be sorry to see anything like a Division, I should be glad if the Government were to re-consider the proposition they have brought forward. It is a proposition which I do not think ought to be acceded to unless there were something approaching unanimity, and I hope the Government will find it consistent with their duty not to press its adoption upon the House.


rose to Order, and inquired whether the Amendment suggested by the hon. Member for Northampton (Mr. Gilpin) could be put from the Chair?


The only thing this House can do is to appoint a Committee of this House: it cannot appoint or prevent the appointment of a Committee of the other House; therefore, the Amendment could not properly be put.


said, he had risen with the hon. Member for Perth (Mr. Kinnaird) to shorten the discussion, but knowing the inflexible character of that hon. Gentleman, he had not persevered. The debate had proceeded quite far enough to satisfy, at least negatively, the condition he laid down in his own speech—that it being a proposal in some degree novel in character, he should not be justified in pressing it unless it met with the general approval of the House. He could not honestly say he was convinced by the arguments used against it. He hoped he should not be deemed disrespectful if he said that some of them partook of the nature of superstition; and as regarded the speech of the right hon. Gentleman opposite (Mr. Disraeli), though he (Mr. Gladstone) must acknowledge it to have been conceived in the fairest possible spirit, he must express his decided dissent from one important point of principle which the right hon. Gentleman raised as regarded the competency of the House of Lords to deal with Indian finance. He (Mr. Gladstone) had been as ready as any man to defend the privileges of that House in matters of finance in critical and difficult circumstances; but so far as he was capable of forming an opinion, their exclusive rights with respect to finance arose solely out of the circumstance that they represented the people of England, and consequently their rights in no way extended to Indian finance. He believed the Acts of Parliament for regulating the government of India with reference to the presentation of accounts, &c, concerned the two Houses equally. He did not think it desirable, except on grounds of broad constitutional principle, that they should attempt to narrow the deliberative functions of the House of Lords. He would not, however, argue the point now, and would simply enter his protest against the acceptance of the principle laid down. He was satisfied that his proposal did not meet with that kind of approval which he thought desirable; he quite agreed that it should not be upon the vote of a mere majority that such a step should be taken; and therefore he should not press those subsequent measures which would have been necessary to give effect to the intention of the Government in case it had been thought fit to go forward with it. He assured the hon. and gallant Member for Aberdeen (Colonel Sykes) that the Motion had been framed to make out as large a province of inquiry as under present circumstances it was possible for any Committee to occupy in an efficient manner.

Motion agreed to.

Select Committee appointed, "to inquire into the Finance and Financial Administration of India."—(Mr. Gladstone.)

And, on March 9, Committee nominated as follows:—Mr. AYRTON, Mr. CAVE, Mr. CRAWFORD, Mr. BARING, Mr. FAWCETT, Mr. BECKETT DENISON, Sir CHARLES WINGFIELD, Mr. EAST-WICK, Mr. DICKINSON, Mr. BOURKE, Mr. CANDLISH, Sir JAMES ELPHINSTONE, Mr. LYTTELTON, Mr. BIRLET, Sir DAVID WEDDERBURN, Mr. BEACH, Sir THOMAS BAZLET, Mr. HERMON, Mr. M'CLURE, Mr. CROSS, Mr. JOHN BENJAMIN SMITH, and Mr. GRANT DUFF:—Power to send for persons, papers, and records; Seven to be the quorum.