EAST INDIA REVENUE ACCOUNTS.

HC Deb 24 February 1871 vol 204 cc868-919

Considered in Committee.

(In the Committee.)

MR. GRANT DUFF*

When I addressed the Committee upon the financial position of India in August last, my Statement was founded upon three documents—upon the Actual Accounts of the year ending the 31st March, 1869; upon the Approximate Accounts of the year ending the 31st March, 1870, technically described as the Regular Estimate; and upon the calculations and conjectures of the Governor General and his Council for the year now passing over us, the year ending the 31st of March, 1871. On this occasion I must base my Statement upon two documents only, as anything corresponding to the third document which I used last year does not yet exist—that is to say, I must base it on the Actual Accounts for the year ending the 31st March, 1870, and on a telegraphic summary of the Approximate Accounts for the year now passing over us, so far as they were known to the Viceroy and his Council on the 21st February—that is, last Tuesday—an abstract, in other words, of the Regular Estimate for the year 1870–1, which will, after undergoing, perhaps, some correction, be laid before Parliament, according to law, in the month of May. Hon. Members will be good enough to observe, that this abstract gives the figures in round numbers.

I am all the more glad to make the Indian Financial Statement at the beginning rather than at the end of the Session, because I have not to be now, as I was on the 3rd of August, 1869, and on the 5th of August, 1870, a Job's messenger. On the first of these occasions, I had to announce that the Actual Accounts of 1867–8 showed that India was about £1,000,000 to the bad; and, on the second occasion, I had to announce that India was nearly £2,800,000 to the bad. Now, however, I have to announce that India was, in the year ending on the 31st March last, nearly £120,000 to the good, and that, so far as the information which we have received up to the present moment extends, but making all the reserves necessary, there is every probability of her being, in the financial year now drawing to a close, fully three-quarters of a million to the good. In short, we have reason to believe that we shall this year have almost, or altogether, the surplus which we think we ought to have, and for which the Secretary of State has laid down that the Governor General and his Council ought to arrange—that is a surplus of between half a million and a million.

The Regular Estimate for 1869–70, which was presented to Parliament in May last, showed an estimated excess of expenditure over income, excluding, of course, public works extraordinary, of £563,495. The Actual Accounts show an excess of income over expenditure of £118,669. The result shown by the Actual Accounts is, therefore, more fa- vourable than the Regular Estimate by £682,164. It will be in the recollection of some Members of the Committee, that I prepared them for this agreeable result by communicating to them the substance of the information which we had received from India by telegraph up to the 16th of July—that is, up to a date three months and a half later than the day on which Sir Richard Temple made his Budget Statement, the 2nd of April, 1870. On the 5th of August I used the following words— We have assurances that the Actuals will turn out better than Sir Richard Temple believed when he made his Budget Statement. The substance of the information telegraphed by the Viceroy on the 18th of July was that the accounts of 1869–70, adjusted up to 16th July, were better than Sir Richard Temple expected on 2nd April by about £700,000, so that we may expect, as at present advised, a small surplus, or at least an equilibrium, thanks to the prompt and decisive action which was taken in the autumn of last year by the Viceroy and his Council assembled at Simla. It is satisfactory to observe that almost every head of receipt has been a little more productive than was anticipated. I will not burden my Statement with the figures, but hon. Gentlemen will see them by looking at the Papers which they have in their hands.

So much for the comparison of the Actuals of last year with the Regular Estimate. Let us now look at the figures of the Actuals of 1869–70 as compared with those of 1868–9. These two will be found comforting from various points of view. First, let us look at the total receipts. The total receipts of last year exceeded the total receipts of the year before by no less than £1,638,390. Then let us see how this increased receipt was made up. £1,161,848 came from land revenue, the most important, the oldest, and the most satisfactory of all our sources of income. This increase is largely attributable to the fact that the land revenue of the year 1868–9 was, as I mentioned six months ago, unusually depressed by a bad season in Madras and the North-West Provinces, and to the coming into play in 1869–70 of a new settlement in Oude, and a re-settlement in some of the non-regulation Provinces of Bengal. The increase of about £600,000 under assessed taxes arose from the income tax, which it will be remembered was augmented in the second half of the year 1869–70 from 1 to 2 per cent. The increase of £300,000 under salt arose from the fact that the salt duties in Madras and Bombay were also raised during the last half of the year 1869–70 from 1 rupee 8 annas to 1 rupee 13 annas per maund—that is by 7½ on 82 lbs. These are the increases of gross receipt which it is most important to notice. On the other hand, there were some important decreases of gross receipt. For instance, customs in the year 1869–70 brought in less than they did in the year 1868–9 by over £263,000, thanks to the generally depressed state of Indian trade. Opium, again, brought less in last year than it did the year before by about £500,000. The general result, however, was, as I have said, highly comforting. Our Revenue was better in 1869–70 than it was in the year before by £1,638,390, and hon. Members may possibly recollect that the receipts of 1868–9 were themselves better than those of 1867–8 by £728,000.

Now let us look at the Expenditure. The Expenditure in 1869–70 was less than the Expenditure in 1868–9 by £1,254,309. This result was arrived at chiefly by a very large reduction in public works ordinary—that is to say, works of comfort and convenience not directly remunerative. A small but important saving in India of £160,000 was obtained by a diminished Army expenditure; and the charge for guaranteed interest on railway capital, less net traffic receipts, was £153,406 lower than that of the previous year, thanks to the large increase in the net traffic receipts during the year 1869–70, an increase which amounted to nearly £400,000. On the other hand, there were some considerable increases in gross expenditure in India, of which perhaps the most worth mentioning were £72,000 under post office, £143,000 under marine charges, owing to the debts of the Port Canning and Calcutta Port Funds having been written off as irrecoverable, and £235,000 from the loss by exchange on bills on India. As I have said, however, the total diminution of expenditure in India and England chargeable against income in 1869–70, as compared with the previous year, was £1,254,309.

Such are the more noticeable features in the receipts and disbursements of the year 1869–70.

I come now to the year 1870–1, the year just drawing to a close. The one great fact of the year, which is already certain, is that opium has come to the rescue. When Sir Richard Temple made his Statement in April last, nothing-could be much more gloomy than the prospect of the opium revenue for the financial year which had just begun, and although in the month of August I was able to say that the prospect was somewhat better, yet even then we felt anything but comfortable about the ultimate result. From almost all quarters came prophecies of evil, and the prophecies from China were the gloomiest of all. The very able man who lately represented Her Majesty at Pekin even went to Calcutta to confer with the Governor General about the increased growth of the poppy in China. Owing to some cause, however, which we cannot in the least divine, all anticipations have been for this year falsified. Sir Richard Temple took the price of the chest of Bengal opium for the year at 975 rupees, whereas the average by our latest advices has been 1,113 rupees. This is another illustration of the truth that, after an intercourse of some hundred years, Europe really knows very, very little indeed, about the circumstances of China—that marvellous country, one of, whose functions seems to be to force the nations of the West again and again and again to re-consider generalizations, in religion, in politics, and in social economy. In spite, however, of the favourable results of this year, I dare not venture to unsay anything I have said about the extreme care with which we should watch our opium revenue. Considering the enormous extent of country, even in Asia alone, where the poppy can be grown with fair success, it is really almost too much to hope that the Indian drug will continue to be so distinctly preferred by those who can buy it, as to enable us to lighten by many millions every year the price which India pays for civilized government; for whatever some Gentlemen may have to say against the opium revenue, let them never forget that hardly any of it comes out of the pocket of our Indian fellow-subjects, and if it were done away with, India would not be lightened of an impost, but robbed of a splendid estate.

To return, however, to the telegraphic summary of the Regular Estimate for the year 1870–1, which hon. Members have in their hands. In round numbers, the Regular Estimate for that year—that is, the Estimate founded on about eight months' Actuals and four months calculations and conjectures—shows that India's income for this year will be about £51,000,000, and her Expenditure, including no less than £1,800,000 for guaranteed interest on railway capital, will be somewhere about £50,000,000, the probable result being accordingly a surplus of nearly £1,000,000. Hon. Members may be surprised that I do not say more about this year 1870–1, but I do not dwell upon it, advisedly, because we have given them all the information we possess ourselves, and have in fact, fallen under the curse of Voltaire—"Woe unto him who says all he knows upon any subject." We see the figures, we can form conjectures about them, but the usual explanations of details we cannot give. There are disadvantages and difficulties in corresponding by telegraph about the affairs of an Empire.

The Committee will, I hope, do us the justice to remember that we are making this Statement at a time anything but convenient to us, under the impression forced upon us by an experience of many years, that Parliament will only give up a whole night to India, I mean, of course, in perfectly peaceful and easy times, either at the very beginning or at the very end of a Session. We should like to make our Financial Statement each year somewhere about the 15th or 20th of June; but when we have made a feeble effort in that direction, all Governments of all parties have always treated us as amiable children who asked for the moon.

Such, then, are the facts of the year that is completed, and the probabilities, so far as they are known to us, of the year which is now in progress. As to the year to come, I can say little, because we have not yet received, and cannot for some time receive, the plans of the Government of India for meeting the outgoings of 1871–2. There are two points, however, as to which I am in a position to make some explanations. First, there is the income tax of 3⅛ per cent, or, say, 7½d. in the pound. To that income tax the Home Government consented with considerable reluctance, and I am glad to say that, unless some very unforeseen and quite extraordinary emergency arises, in the next few weeks, it will certainly be reduced. It can be shown, no doubt, that, even at 3⅛ per cent, the income tax hardly redresses the balance of taxation as between the higher and the lower classes. In India the poor man certainly pays quite enough, and the rich man as certainly pays too little, but, unhappily, the masses are still not sufficiently educated to know their true interests. The classes affected by the income tax are the classes who can make themselves heard not only by the Government, but by the people; and it would not be difficult to bring evidence to show that this very income tax, which, if it could be used as we use it in England, might enable us to adjust the burden of taxation with almost scientific accuracy — is really unpopular to some extent with the very classes whose burdens it lightens. Populus vult decipi, and as usual it obtains its wish; nor must it be forgotten that the income tax has been sometimes used by unscrupulous Native collectors as an engine for the oppression of their own countrymen. The Native in power is too often, in ours as in all previous ages of Indian history, apt to use his position for his own pecuniary advantage.

The other matter on which I am in a position to give some explanation is the long discussed question of financial decentralization. It will be in the recollection of the Committee that I dwelt upon that last August as upon an expedient which ought to be tried. Well, we are going to try it. The proposal to which the Secretary of State in Council has given his sanction will be best explained by reading an extract from a Resolution of the Government of India, dated December 14th, 1870— The Governor General in Council is satisfied that it is desirable to enlarge the powers and responsibilities of the Governments of Presidencies and Provinces in respect to the public expenditure in some of the Civil Departments. Under the present system these Governments have little liberty, and but few motives for economy in their expenditure; it lies with the Government of India to control the growth of charges to meet which it has to raise the revenue. The local Governments are deeply interested in the welfare of the people confided to their care, and not knowing the requirements of other parts of the country, or of the Empire as a whole, they are liable, in their desire for administrative progress, to allow too little weight to fiscal considerations. On the other hand, the Supreme Government, as responsible for the general financial safety, is obliged to reject many demands, in themselves deserving of all encouragement, and is not always able to distribute satisfactorily the resources actually available. Thus it happens, that the Supreme and local Governments regard from different points of view mea- sures involving expenditure, and the division of responsibility being ill defined, there occurs conflicts of opinion injurious to the public service. In order to avoid these conflicts, it is expedient that, as far as possible, the obligation to find the funds necessary for administrative improvement should rest upon the authority whose immediate duty it is to devise such measures. This is the more important because existing Imperial resources will not suffice for the growing wants of the country. The Supreme Government is not in a position to understand fully local requirements, nor has it the knowledge necessary for the successful development of local resources. Each Province has special wants of its own, and may have means of satisfying them which could not be appropriated for Imperial purposes. A tax adapted to the circumstances of one part of the country may be distasteful or inapplicable elsewhere, and everywhere rates may be proper for provincial or local purposes which could not be taken for the Imperial revenue. … …. It would have been satisfactory had his Excellency in Council been able to propose the enlargement of the power and responsibility of the local Governments, without charging upon local resources any part of the existing Imperial expenditure. This cannot be done, but it has been determined to make as small a demand upon these resources as possible. At the same time it should be remembered that the relief of the Imperial finances has been a principal object in the discussion of such measures on former occasions. The Government of India is accordingly pleased to make over to the Governments, under certain conditions to be presently set forth, the following Departments of the Administration, in which they may be supposed to take special interest, and to grant permanently from the Imperial Revenue for these services the sum of £4,688,711, being less by £330,801 only than the assignments made for the same services in 1870–1,—gaols, registration, police, education, medical services (except medical establishments), printing, roads, miscellaneous public improvements, and civil buildings. Unless some fiscal misfortune, such as a heavy loss in the opium revenue, or national disaster, such as war or severe famine, occurs, the Governor General in Council will maintain for the future the assignments for 'Provincial Services' at the amounts now fixed. They will not, in any case, be reduced without previous consultation with the Governments. The actual permanent Imperial assignments for 'Provincial Services' will be as follows:—

	£
Oude	206,948
Central Provinces	261,263
Burmah	275,332
Bengal	1,168,592
North-West Provinces	640,792
Punjaub	516,221
Madras	739,488
Bombay	880,075
	£4,688,711"

These amounts for works of comfort and convenience, and local purposes of many kinds, are as large as we can afford, but they are not really very large, much less extravagant. Let us see what they amount to, if we use Colonel Chesney's convenient scale of comparison with countries nearer home. Oude, which is about as large and as populous as Holland and Belgium united, will receive from the Imperial Government for its works of comfort and convenience, and other things which have more or less of a local character, an allowance of something over £200,000. The Central Provinces, which are about as large as Great Britain and Ireland, but rather sparsely populated, will receive about £260,000. Burmah, which is about three times as large as Scotland, will have about £275,000. Bengal, or say the Austrian Empire, will have nearly £1,200,000. The North-West Provinces, about equal in area to Great Britain, and more densely peopled, will have £640,000. The Punjaub, or say the Kingdom of Italy, will have about £520,000. Madras, which is rather larger than Great Britain and Ireland, and about as thickly peopled as France, will have £739,000. And Bombay, which is somewhat bigger, will have £880,000. All local services and works, not directly remunerative, that cannot be paid out of these allowances, will have to be paid out of taxes raised by the authority of the local Governments within the area under their rule, and, presumably, to be benefited. I need not say that the imposition of these local taxes will be subject to regulation by the supreme authorities.

By this arrangement the Central Government will save in 1871–2, as will be apparent to the Committee, about £300,000 on the low Estimates of 1869–70, and prevent the growth of some terribly expansive items of expense. On the other hand, income tax will bring in a smaller amount, and, although there will doubtless be some reduction under various heads of Expenditure, there will be increase under others; but beyond this I can form no conjecture which would be worth laying before the Committee as to the finance of the year 1871–2. The Home Government, as has been truly said, controls, but does not direct, Indian finance, and., in the nature of things, cannot do so. Of one thing, however, we may be certain, and that is, that there will be the usual difficulty in making the ends meet. "But why should there be a difficulty," some one may say, "in making the ends meet?" For many reasons, of which the two chief are—first, that we discharge the most expensive duties of sovereignty for 200,000,000 of men with a revenue derived from 150,000,000 of men; and, secondly, that we discharge the duties of sovereignty after a scientific and civilized manner, with resources which would better become an uncivilized and unscientific discharge of them. "But why should you continue to do these things?" it may be asked. To that question I reply, after the manner of my country, by putting two others. My first question is — Are the objectors really prepared to adopt the short and easy methods of ridding themselves of treaty obligations which have been sometimes put forward? My second question is—Are we to go back on our steps, and to administer India as a whole, after the old rough-and-ready unscientific system which is still excellent for certain outlying districts? In this matter, the Government occupies a middle position between two extreme views. On the one side, you have the view which was well set forth by a very distinguished Native statesman, speaking to an Anglo-Indian statesman, a year or two ago— You English," said this eminent person, "make a great mistake. All this improvement of the country, about which you talk so much, is mere moonshine. Leave the country alone. Instead of the immense taxation which you levy to give us roads, and canals, and railways, and schools, and improved courts of law, and what not, let these things be. Levy much smaller taxation, and, instead of spending the money on improving India, spend it in helping out the English Revenue, or anything else you please. You will be extremely popular, and your rule will continue long in the land. The latest apostle of the diametrically opposite view is an hon. Friend of mine, whose maxim, is—"Pay; for God's sake, pay, with both hands open. Borrow money right and left from all who will lend it. Do not be such purists as only to raise loans for expenditure which you believe will be directly remunerative. Raise loans for all those objects which you are satisfied will be indirectly remunerative. Increase, in short, the wealth of the country, and you will be at the same time increasing your own."

Now, to the first of these, the Native critic, the Government answers—Even if we wished to adopt your policy, English public opinion would not allow us to adopt it. Various views prevail in England as to the moral right or wrong of our original acquisition of our Indian Empire. Some think that it was forced upon us by circumstances; others, that it was a justifiable exertion of superior power; others, that it was an unjustifiable exertion of such power. Some say that our rule in India must continue as long as the world endures; that while the Native improves in arithmetical, the Englishman will improve in geometrical ratio; and that the stronger race will always be necessary to the weaker, as guide, philosopher, and friend: others hold an opposite opinion, and say that even now, in the year 1871, we should be admitting more and more the Natives of India into the higher posts of the government, with the distinct and defined intention of some day abandoning India. But all the holders of all these antagonistic opinions agree in insisting that, while we hold India, we must endeavour to improve India according to our lights.

To the second of our critics, to my hon. Friend, the Government replies—We wish we could take your sanguine view, but we do not find that the increase of the general wealth of the country shows itself anything like so rapidly in the increase of our wealth as you suppose. The great source of our income is the land revenue. That land revenue is fixed, and must be fixed, for long periods, and it is only very slowly and at distant intervals that we can increase it. India is the most conservative of countries, and no sooner do we try a new experiment for getting some increase to the resources of government than there is a shriek from some quarter or other. This year the shriek has been, on account of the income tax. Another year it will be on account of another tax, and so on ad infinitum. We must disregard these clamours to a certain extent, but we dare not disregard them as much as would be necessary to carry out your views; and we should end in sheer bankruptcy and confusion, to say nothing of the moral guilt we should incur by tempting capital from England, which might be properly expended at home or elsewhere, to be, as we in our heart believe, unprofitably expended in doing things for India which should not, in our opinion, be done by capital at all, or in doing things which should one day be done by capital, but for which the country is not yet ripe. Well, but if we do not try heroic remedies for our chronic impecuniosity, like those of which I have been speaking, we are thrown back upon expedients—and expedients we have been trying one after another ever since the Mutiny. First came Mr. Wilson, keenest and most clear-headed of men, exactly the kind of man whose appointment a large party is, or was, lately clamouring for as a panacea for Indian financial evils. Well, what were Mr. Wilson's expedients? First, reduction, especially military reduction. That was excellent; but, remember, he had a military expenditure of £23,000,000 to reduce, while we have now one only of about £16,000,000. Second, an income tax; and third, revised or partially enhanced customs duties. As to the income tax, which I think a very good tax, especially in its improved and later form, it is the very central grievance which is put forward in all the complaints which we receive about the financial policy of Government; and as to the enhanced customs duties, which seem to me a less good expedient, how long did our own manufacturers allow them to continue? Then came Mr. Laing, and what is the burden of his song? It is— No Government in Europe and no private company ever thinks of charging to current revenue such things as extraordinary public works and interest during construction on unfinished railways, &c., which in India are so charged, and create the deficit. In other words, he maintains that there is no deficit at all. Then came Sir Charles Trevelyan. He was followed by Mr. Massey, to whose reign belong the license tax and the certificate tax, which are really only income taxes affecting portions of the population. Last of all came the crisis of September, 1869, to which belongs the sudden enhancement of the income tax and the salt duties. But the upshot of the whole, is that the principal expedients that have been hitherto tried to fill the deficit, always excepting the obvious expedient of reduction, have been three—some form of income tax, some form of revised and increased customs duties, and the enhancement of the salt duties. "But," someone may say, "this shows a great poverty of financial resource. Might you not try many other expedients? Have not many persons advised you to tax tobacco, to tax successions, to tax Native marriages?" Yes, all these expedients have been suggested to us, and have had powerful advocates; I will not commit myself against any one of them. Nothing is more possible than that, sooner or later, in Indian history one or other, or all of them, may be tried, either by the Central Government or by one or other of the local Governments in this or that part of India; but there are, certainly, a great many considerations which would have to be most carefully weighed before any one of them was adopted, and which have hitherto prevented their adoption. "But," I am told, "you are at least sure of your present sources of revenue, and these are highly expansive." Expansive they are, no doubt, but hardly highly expansive; and as to our being quite sure even of them, that I doubt too. The salt tax in some parts of India is confessedly too high, and will, sooner or later, in the exceptional districts, have to be reduced. I have again and again pointed out that under the head of opium we may have great disappointments; and the retention of the few export duties which remain to us under the head of customs must be defended rather on the ground of necessity than of principle.

Is, then, our chronic impecuniosity to be mended, by saving? Yes, to some extent; but, as I have pointed out on former occasions, our margin for reduction is not, after all, enormously great. We must always have a very considerable British force. The British soldier in India is a fearfully expensive instrument, and one not likely, I fear, to become cheaper. By the last Returns we had 61,481 European officers and soldiers in India, and 133,229 Native officers and soldiers. Add these together, and it gives you about one man for every thousand of the population of British and feudatory India. That is not an overwhelming force, though it might be very rapidly raised, in the very improbable event of trouble ever assailing India from without, to be an overwhelming force. Then consider the endless auxiliary expenses which the maintenance of even this moderate force re- quires, and it will be understood that, though we are in the course of making reductions, neither these nor any possible civil reductions will go very far to put us at ease in our circumstances in India.

The position of the Indian financier is altogether different from that of the English one. Here you have a comparatively wealthy population. The income of the United Kingdom has, I believe, been guessed at £800,000,000 per annum. The income of British India has been guessed at £300,000,000 per annum. That gives well on to £30 per annum as the income of every person in the United Kingdom, and only £2 per annum as the income of every person in British India. Even our comparative wealth will be looked back upon by future ages as a state of semi-barbarism. But what are we to say of the state of India? How many generations must pass away before that country has arrived at even the comparative wealth of this; and how long will it be before the rulers of India can feel that they can in an emergency very largely increase the taxation? No; I am afraid we must make up our minds in India to have as much to do with our money as we can well manage. The bright side of Indian affairs will not, I fear, in any time to which we can look forward, be the purely financial one. But as long as we keep our debt within moderate limits, so as to make it absolutely certain that we can always keep faith with the public creditor, and so long as we are conscious that every year's end shows a steady advance in the civilization and well-being of the country, we must be content, I fear, to remain, as a Government, very far from rich. As I said last autumn, the Indian financier must make up his mind for many a long day to sail between Scylla and Charybdis—the Scylla of doing too little by public works and improved administration for a country, the physical and moral conditions of which, require great expenditure on public works, and an administration which must be progressively costly as civilized supersede semi-barbarous ideas of polity—the Charybdis of too large a debt, damaged credit, and financial embarrassment.

I am not forgetting the various alleviations of our burdens to which I have alluded in former Statements; the fact that our debt is relatively small; the fact that we shall get rid in 1874 of a charge of about £430,000 a year on account of East India Stock; the fact that the receipts from the railways will gradually improve; the probability that the sale of waste lands will slowly grow larger; the certain, though far from rapid, increase of our land revenue; and the not unnatural expectation that the improved material prosperity of the country will enable it to consume more taxed articles; I am not, I say, forgetting these things, but, nevertheless, I should think that I was doing very wrong if I left on the mind of the Committee the impression that I thought our pecuniary prospects were couleur de rose. If, however, we look away from the mere bare question of our annual balance sheet—the question whether we have, or are likely to have, a wide margin of yearly income over yearly expenditure, and ask whether in the immediate past India has not been prospering and rapidly improving, if perhaps just a little too rapidly for her purse, the answer must be a most agreeable one.

For more than two years we have had profound peace. Since the conclusion of the Frontier Campaign in 1868, hardly a shot fired in anger can be said to have awakened the echoes of even the wild North-West, and the very last news which I have seen from that quarter—a letter written on Christmas Day by Sir Henry Durand, the distinguished Lieutenant Governor of the Punjaub, who met his death in so melancholy a way—was to the effect that one of the most intractable of the intractable tribes who look down upon our frontier posts from their crag castles beyond the Indus, had been showing a very marked desire for the elements of education—the three R's at least. There has been a little uneasiness at the opposite side of the Peninsula, where our people have had some annoyance from the Looshais, who form one section of that great company of barbarians who fill up the angle between our Province of Assam, and the dominions of the King of Burmah, and amongst whom there have lately been many symptoms of disquiet, the causes of which are by no means clear. Everywhere, however, except on the very uttermost fringe and outside edge of our possessions, there has been deep quiet, a fact which should not, however, be allowed for a moment to make us forget that, in that mighty Continent which we call India, there are many elements of unrest. The agitations that have disturbed several of the countries which fall within what may be called the influence of India's political attraction, have not required anything more on our part than an attitude of friendly but absolutely passive observation. The Coast of Oman has been the scene of a prolonged conflict, but the peace of the Persian Gulf has not been disturbed; and the civil conflict in Affghanistan has had no direct result upon us, except to postpone the lending of our assistance to the Persian and Affghan Governments in arriving at a friendly and permanent understanding about certain disputed questions of boundary.

I will say nothing as to what we are doing with regard to public works, irrigation, state railways, and so forth, because, the year being incomplete, I have no figures which I can properly lay before the House later than those to which I referred in my Financial Statement of the 5th of August, 1870, and to those contained in Mr. Danvers's Railway Report, which was circulated towards the end of last Session; but they have been progressing as rapidly as circumstances would permit. It is well known to the Committee that the present Viceroy has a very keen and strong interest in all matters of this kind. I may add, with reference to a caution that fell from the right hon. Baronet the Member for North Devon (Sir Stafford Northcote) in 1869, that the attention which is being given to railways and irrigation is not making us forget the importance of harbours, and that, especially at Kurrachee, and in the Hooghly, much good work has been lately done.

In one respect fortune has conspicuously favoured us of late, for we have not, during the last two years, suffered from any of those sudden and overpowering physical disasters which so often confound human sagacity in India. Bad seasons there have been, as I have had occasion already to mention, but nothing sudden and overpowering, like the Orissa drought, or the cyclones and inundations of some former years. Against calamities of that sort man is powerless, at least, in the present state of his knowledge; but we are doing what we can to fight against preventible calamities—witness the very remarkable monograph upon cholera which has recently been published under the autho- rity of the Government of India. Nor are there wanting agreeable indications that our efforts in the direction of sanitary reform are beginning to find favour with the Native mind. An opinion has lately been given, by very high Brahminical authority, in favour of using the water supplied to Calcutta by European agency, a fact which has been described, not unjustly, I think, in an Indian newspaper, as a real social victory.

The Trigonometrical Survey, the Topographical Survey, and the Geological Survey are progressing satisfactorily, and extending the network of our knowledge all over the peninsula.

Some want of organization having been observable in the efforts to preserve and to describe the architectural treasures of India which were set on foot in 1867, we have sent out, at the request of the Government of India, one of the most distinguished of Asiatic archæologists, General Cunningham, to give to the Archaeological Survey that definitiveness of aim and regularity of procedure which seemed to be wanting; and a cognate duty, with regard to the preparation of a complete Gazetteer of India, has been intrusted to Dr. Hunter, whose book on the Annals of Rural Bengal attracted so much and such deserved attention two or three years ago.

The lamented death of Mr. Hayward, on his way to explore the Pamir Steppe, has excited great indignation and pity throughout India. Mr. Forsyth, a Government officer sent by Lord Mayo to the Court of the Ataligh-Gazee, the stronghanded Chief who rules in Eastern Turkestan, met with but moderate success in his diplomatic capacity—the ruler whom he sought being far away from his capital, warring in the north. Still Mr. Forsyth brought back a certain amount of commercial and other information, which will not be without its uses. In another part of our frontier we are anxiously looking for the day when it may be possible to re-establish a friendly commercial intercourse with Thibet, which has been too long interrupted by irrational jealousies. Still further, on the extreme north of Burmah, we are trying to foster into renewed existence the old traffic between South-Western China and the sea-board, to which an end was put, some years ago, by the Mussulman insurrection in Yunan.

The Franco-Prussian War has interrupted the training of our forest students at Nancy, but there is every reason to hope that the interruption will not continue long after the conclusion of peace.

We have not yet succeeded in getting a satisfactory machine for working up the Rhea fibre, to which I alluded last August, and the time for sending in machines on trial has been extended.

We have sent out six more cotton gardeners, and are enlarging the area of our experiments in the production of this most important article.

The sudden death of the distinguished Indian botanist, Dr. Thomas Anderson, has not prevented our continuing the arrangements, of which he had charge, for naturalizing the Ipecacuanha, to which, as I mentioned last year, in the interest of the abatement of human suffering, we attach some importance.

We are not unmindful of the hints which we have received from my hon. Friend the Member for Macclesfield, and others, about silk, to which the Madras Government has of late been giving special attention.

As little have we failed to play into the hands of my hon. Friend the Member for Stockport, who wants his constituents to have facilities for giving English salt a fair chance of competing with the cheap salts of Madras and Bombay; and we are not without hope that we shall make a reasonable profit, as well as confer great benefits upon the neighbouring districts, by the manufacture of salt at the Sambhur Lake, which has been leased to us by the Princes of Jeypore and Jodhpore.

I had hoped to have been able to announce that the new Department of Revenue—Agriculture and Commerce—had begun its work, but the arrangements are not yet quite completed. The creation, however, of such a Department has been sanctioned by the Secretary of State in Council, and only matters of detail remain unsettled.

It seemed that the great war which has been raging in Europe was going to exercise a very unfavourable influence upon our trade; but the fears at first entertained have turned out to be exaggerated, though not unfounded. In a very excitable population, like that with which we have to deal in many parts of India, the occurrence of such a world-catastrophe as we have been witnessing of late must, of course, cause a great deal of what I may call political feverishness, and there have been rumours and speculations, without end, in the bazaars; but nothing has occurred in any way to excite uneasiness, and the scare at Allahabad, which was telegraphed to Europe in the autumn, and produced some momentary surprise and discomfort, turned out to be the offspring of mere delusion.

Our relations with all the Princes of India, and all the independent States around and near our borders, are perfectly friendly.

The administration of justice is steadily improving throughout the country, and there is no department of affairs for which intelligent Natives seem to show more aptitude than for this. Of these intelligent Natives more and more are coming to this country; a few to compete, sometimes very successfully, at the examinations for the covenanted Civil Service, the majority to qualify for various professions.

It is to be hoped that the death of the two Natives of India of the highest rank who ever left their country for Europe—the Rajah of Kuppoorthulla, on his way hither, and the Rajah of Kholapore, who was present and took a most intelligent interest when we last discussed Indian affairs in this House, but who died on his return journey—may not prevent the resort to England of many persons whose names are as closely connected as theirs with the history of India. I am sure if they are as amiable and as sensible as the Rajah of Kholapore, whom many of us came to know, they will be welcome from considerations altogether independent of political expediency.

The extension of education amongst the higher and middle classes shows increasingly satisfactory results, and the Government has been giving very special attention of late to extending the facilities for elementary education—that potent engine for the working out of all good, as well in the East, as in the West. It is probably known to some hon. Members that India is to contribute her share to the Exhibition, which is to be opened in the month of May, at South Kensington, and, I think, that there can be little doubt that if the local authorities act in the spirit of the very sensible Memorandum which has been circulated by the Home Office at Calcutta, the educational part of that Exhibition will be more instructive than many Blue Books— Competition with other countries in educational appliances is," it has been truly said, "not our object. To this we cannot hope to attain; but we can offer an illustration of a rise and progress in education such as no other country can offer; an illustration of the task which a European Government has to perform when, with limited resources, and in opposition to deep-rooted prejudices and irrational suspicion, it attempts to introduce and carry out over an enormous area, containing a vast variety of nations and tribes speaking languages or dialects, many of which have hardly yet been systematised in writing, those views upon popular education which have guided the civilized countries of Europe and America. India is also to send many contributions to the part of the Exhibition which is to be devoted to the illustration of what the world can now do in textile fabrics, and various other branches of manufacture. And in connection with this, I will venture to ask, whether it would not be extremely desirable, alike for the encouragement of manufactures in India, and for the education of taste at home, if some systematic attempt were made by persons of capital in this country to open in London a depôt, on something like an adequate scale, for the sale of the artistic products of our Eastern Empire? Anyone who will visit the Museum at the India Office, wretchedly accommodated as it is, will go away wondering why in this metropolis, which is in close communication with all parts of India, it should be impossible to purchase almost any of the beautiful works with which those rooms are filled. It seems to me a very real evil, because I am convinced that, if society in this country could have the picturesque side of India forced upon its notice, the name of that country would cease to exercise upon all sorts and conditions of men here, not directly connected with it, that narcotic spell with which we are but too familiar.

Even the exaggerated ideas about the wealth of India, which used to prevail in England, and which still linger in France, were not without their advantages; they struck the popular mind and attracted attention to it, by investing it with a halo of romance. We know that these were dreams; but we also know that if India is not as rich in gold and gems as was believed, if her soil taken as a whole is not equal in fertility to that of England, yet that the patient application of science to the cultivation of that soil, and a minute investigation of its products, organic and inorganic, will illustrate the old story of the field beneath which a treasure was said to be hid, and will make India, if India remains peaceful and progressive, one of the most important factors in the prosperity of mankind. We know that the investigation into the history of the most venerable of her languages has been important not only from the actual addition it has made to human knowledge, but as putting into the hands of the student a key for the unlocking of a thousand secrets in the history of religion, of philosophy, and of society. We know that if we can once thoroughly penetrate India with all that is best in European civilization, it will not be India alone, but the whole of Asia, or at least the whole of Asia south of the great central ranges of the Continent, that will be benefited; and that when we ask our people to take an interest in India, we are asking them to take an interest in something much wider and deeper than the mere fortunes of a British dependency. I cannot help thinking that if the public mind were once thoroughly possessed of the idea that, in addition to being a great European, a great African, a great American, a great Australian, and a great Oceanic power, we are incomparably the greatest Asiatic power, we should get rid of that foolish self-conseiousness which makes us perpetually fuss about what we are pleased to call our prestige and our position, and should make up our minds simply to do our duty as a cosmopolitan power according to our lights. I beg, Sir to move the Resolution which I have placed in your hands.

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 1870 was £50,901,081; the total of the direct claims upon the Revenue, including charges of collection and cost of Salt and Opium, was £9,230,823; the charges in India, including Interest on Debt, and Public Works ordinary, were £32,293,859; the value of Stores supplied from England was £1,379,052; the charges in England were £6,331,614; the Guaranteed Interest on the Capital of Railway and other Companies, in India and in England, deducting net Traffic Receipts, was £1,547,064, making a total charge for the same year of £50,782,412; and there was an excess of Income over Expenditure in that year amounting to £118,669; that the charge for Public Works extraordinary was £2,599,614, and that including that charge the excess of Expenditure over Income was £2,480,945.

MR. STEPHEN CAVE

said, the hon. Gentleman had made, as on former occasions, a very clear, able, and comprehensive Statement on a very difficult and intricate subject. He regretted very much that his right hon. Friend the former Secretary of State for India (Sir Stafford Northcote), owing to his absence, as the House knew, on an important mission, could not give the Committee the result of his great experience, for he felt how far less worthy of attention would be the few remarks he should endeavour to make than those which would have fallen from him. The Committee discussed an Indian Budget under great disadvantages, because, while the statement of the Minister embraced three years, hon. Members only had the opportunity of considering one of these with the requisite information before them. Taking the last three years of which they had a precise account, it seemed to him that the Revenues of India were, on the average, nearly stationary, while the Expenditure was steadily advancing. The year 1869–70, the subject of the Resolution now before them, showed rather a better account than the two years immediately preceding; but it contained the seeds of increased annual expenditure in charges for guaranteed railways and in interest on loans for reproductive works constructed by the Government, and at the same time relied too much on the apparently diminishing and questionable opium revenue, while the receipts from excise, customs, and stamps, as well as those from land, appeared to rise but little in proportion. No one, he imagined, would consider this a satisfactory condition—ordinarily a serious deficit, nearly £2,000,000 a-year for three years; sometimes a small surplus, so small that a very trifling mishap or miscalculation would suffice to throw the balance on the wrong side. The telegraphic Budget which had just been placed in their hands, showed, it was true, a larger surplus. He hoped it might be so; but they had heard occasionally of amended Budgets, and in this case also the hon. Gentleman had used the ominous phrase, that opium had come to the rescue. Surely this was not a result on which the Minister could congratulate himself, or which could be satisfactory to the people of this country, who, in addition to the general interest they must feel in so magnificent a dependency, were becoming more and more personally interested in the prosperity of India on account of the capital which flowed from them for the construction of her public works. Was there any hope of inaugurating a more prosperous era? He need hardly say that this could only be done in two ways—either by reducing the Expenditure or by increasing the Revenue. Could the Expenditure be reduced? It was generally allowed that this could not easily be effected. True, it might be that here and there charges might be cut down for what might appear to economical reformers to be unnecessary pomp and ceremony. But all people did not see with our eyes, and we were told on excellent authority that it would be unwise and impolitic to bring down our establishments in India to Spartan simplicity. The Army was enormously expensive; but an Army so situated must be costly. We heard indirectly of reductions in the artillery. He hoped this arm might not be reduced so far as to be inconsistent with safety. It might be that some reduction was possible in the Madras Presidency. But, as the Navy was scarcely powerful enough, no material diminution could be looked for in the charge for defence. The other items were by no means excessive, and that for the collection of the Revenue — about 10 per cent — was moderate. Perhaps he might except the charges for stores supplied by this country, according to requisitions. Some experience as a West India proprietor convinced him that the object of those who made out such lists was to ask for at least enough; and, though the hon. Gentleman might say, and say truly, that these items were carefully examined and some even disallowed, he (Mr. S. Cave) had gone through that ceremony in West India accounts, and generally found that those articles which he struck out were discovered afterwards to be absolutely necessary, and were purchased at a much higher price on the spot. He did not know how the guarantee fund to be paid in 1874 was invested. [An hon. MEMBER: In Consols.] But it had been proposed to lend it to Indian railway companies, and so to obtain a higher interest. There was one way, indeed, in which a diminution might be made in the present charge. The small surplus of the year 1869–70 was obtained by carrying to capital account the expenses of extraordinary public works—that was, of reproductive works—of irrigation, railways, &c. To this no one could object. But there was no reason on principle why such charges as that for barracks should not be spread over a series of years. These were permanent works, designed to last for many years. They were works like stations, which would be placed to capital by auditors of a railway without hesitation, or like the fortifications which we had been paying for by loans. He said, then, that there was no reason, on principle, why this course should not be taken; but they were told that the credit of India would suffer if we borrowed so freely. That was a valid argument. The credit of England did not assist that of her dependencies, except in a few rare instances. He thought, indeed, that those instances might be extended with care and judgment, and that one of the most legitimate and safest ways of assisting rising Colonies was to enable them to borrow money for reproductive purposes at a cheaper rate by endorsing their bills. But until this was done he could not advocate straining the credit of India by borrowing for non-reproductive works, especially as we were told that these barracks, constructed at so enormous a cost, were eminently unfit for their purpose. Repetitions, probably, of the costly mistakes in the West Indies, where the barracks used generally to be built in the most unhealthy situations, one of which, now abandoned, he was told, was constructed of bricks from England, carried up mountain-paths on mules' backs, and costing 1s. 6d. each before they arrived at their destination. If, then, there could be no material reduction of Expenditure, what prospect was there of raising a larger Revenue? Take first the customs—export and import duties, both of which were, or ought to be, regulated by circumstances over which the financier had no control. Export duties were usually the most impolitic of taxes, as, unless the country had an entire monopoly of the article, the price was not increased by the duty, which, therefore, fell upon the producer. In India this was essentially the case, as the largest amount of export duty was levied on grain, especially on rice, and it was evident that this commodity must go into the markets of the world unduly weighted. He should rejoice to see the abolition of the export duties, or their reduction to a mere registration fee. No increase on that head could be expected or desired. Could the import duties be increased? He was not one of those who had any great objection on principle to tax the necessaries of life. It could not be avoided in many instances. If a man used necessaries only, and could not be taxed directly, you were unable to touch him in any other way. He (Mr. S. Cave) should have to enlarge a little on this presently. Nor was he much influenced by what was called the Manchester School, who thought that the end and aim of finance was to get Manchester goods into every country of the world duty free. His idea was that an import tax was a good tax, so long as it did not materially impede imports. But there were two incidents to this tax in India which must not be lost sight of. Cotton goods paid the largest share of the duties, though by no means heavily assessed. In the first place, these imported goods competed with home manufactures, and, without a countervailing excise duty, the competition Was unequal. Secondly, the duty, supposing it paid by consumers, was a tax which fell upon the poor, as the upper classes wore habitually the higher priced home-made fabrics. It was possible that a slight addition to the customs duties might not materially affect imports, but he did not expect that a very large increase could be obtained; and, though the revenue derived from these, together with other taxes, had been more elastic since the Mutiny, the increase had not been great for a population of 150,000,000. There were, indeed, articles such as tobacco and sugar, the latter of which, if not the former, India had begun to import, as well as to grow at home, a moderate customs and excise duty on which might bring in a fair return, and would press very lightly on the consumer. So much for customs duties properly so-called. He now came to that very peculiar, very profitable, and very much abused source of revenue, the opium duty. He need not re-capitulate the many arguments they had heard, and would hear again, on that subject; but if it were in Bengal, as in other parts of India, a mere tax, a transit or export duty, it might be susceptible of the same excuse that the present First Lord of the Treasury, he thought, made for the spirit duty in the United Kingdom—namely, that we could not be said to foster it when we put upon it as heavy a duty as it would bear without encouraging smuggling. He did not know how the right hon. Gentleman would have felt, when Chancellor of the Exchequer, if his well-meant efforts to discourage the consumption of spirits had been entirely successful. But unfortunately, in Bengal, opium was a Government monopoly. Government not only taxed it, but they grew, manufactured, and sold it. Tobacco was a Government monopoly in many countries. The Chancellor of the Exchequer had proposed to make life assurance a Government monopoly here; but he did not know what the hon. Member for Carlisle (Sir Wilfrid Lawson) would say if it were proposed to raise some millions in the United Kingdom by a Government distillery. This opium revenue had an ugly look in more ways than one, for we charged so highly for the drug that we had fostered its growth not only in China, where at present it had found no such suitable soil, but in Persia, where he understood it was nearly as good as in India; so that we might possibly lose this source of revenue without having the credit of giving it up for conscience' sake. Then came salt, which was taxed at rates varying from 500 to 2,500 per cent on prime cost in different parts of India. That had been regarded by many as not dependent on price, subject to few fluctuations — in fact, a kind of poll tax, rising with increase of population. Unfortunately, famine had destroyed vast numbers who paid this tax; but, more than this, a casual scarcity in the Government salt stores in Bengal had proved that a large portion of the inhabitants of India, when an article arrived at a certain price, did without it, and in that way entirely upset the calculations of the Finance Minister. He had said nothing about the income tax, in respect of which opinions so widely differed. It was at present very high, and without it the telegraphic Budget would have presented a less favourable result. With the exception of great merchants, such as the Parsees, whose wealth was well known, though not more than their liberality, the money incomes of Natives was not generally very large. They had the apparent wealth, of servants, horses, and magnificent attire; but we are told that the jewels on Oriental dresses and arms were not very valuable, being of the kind called "Lasque" diamonds, and that a very superb show might be made at a comparatively small cost. To say that the income tax was unpopular in India was no very strong argument. It was unpopular everywhere. But we must not forget that of all people the Indians were most suspicious of novelty. He believed they would prefer the doubling of an old tax to the imposition of a new one. This brought him to the mode in which he ventured to ask, with great deference, whether the deficiencies in the Revenue might not be supplied. There were three conditions of national existence, to each of which, as it seemed to him, a different plan of taxation was applicable. The first was that like our own, in which the people were settled and stationary, having much fixed property and many artificial wants. In the case of such a population direct taxation might well be applied to property, and indirect taxation to luxuries. Secondly, there was the newly-settled country in which the people were sparse and migratory, and though well to do and not in the habit of denying themselves, were impatient of taxation and difficult to reach. Indirect taxation, and on the necessaries as well as the luxuries of life, was the only method which paid the cost of collection in such countries; and he had always thought it most unfair that we should first call upon Canada to incur large outlay in self-defence, and then raise an outcry against her for obtaining the ways and means by almost the only method available for her. Thirdly, there was a class of people, like the Natives of India, who, owing to climate and habits, had few wants and little accumulated property. He spoke now of the masses, who, when prices rose, did without almost all the necessaries of life, as had been shown in the case of sugar, when the price in Europe had made it worth exporting. Upon such a class a hold could only be obtained in two ways—their persons and their land. In the Native States of India this had been recognized, and acted upon from time immemorial. There the bulk of the Revenue sprang from two sources. First, the land, in customary rents—namely, the portion of rent reserved for the State—and various local rates—cesses as they were called in India as in Ireland—secondly, from a sort of protection or poll tax, that which a man paid for the protection of the State. "Skin for skin, all that a man hath will he give for his life," had frequently been the maxim of the Native Princes; and they had made it the excuse for the most grinding extortion and oppression. Mehemet Ali, in Egypt, justified his exactions in another way. He said that if he allowed the Fellaheen to have two shirts it would be impossible for him to govern them. That was not our policy; but he ventured to ask whether a way out of our difficulty might not be found in these two directions. A poll tax was the only tax for a naked man, who would live upon almost nothing, and he believed it would be found less objectionable and oppressive than the salt tax. Lord Grey, as was mentioned in a former debate, was in favour of taxing articles most used by negroes in the West Indies; but he was dealing with a people who, though adverse to work, would rather work than do without what they were accustomed to. The mention of the West Indies reminded him that the emigration of Indians to those Colonies, as well as the increase of public works in India, had caused so great a rise in wages in India that the labourer was far better off, and more able to pay, than in former times. With regard to land, he should doubtless be met by the "fixed settlement." Well, he was aware of what, speaking with great humility, appeared to him the most unwise of all arrangements, by which the Government, unlike other landlords, precluded itself for long terms of years, and in some cases for ever, from sharing in the rapidly improving value of land. Where faith was pledged it must be kept, even to our own hindrance, but there was no reason why the landlord should afterwards lay out large sums in raising artificially the value of the same land, without demanding from the tenant a percentage of the cost, which in this country was freely given in such cases every day. Again, we had in this country a land tax redeemed in most cases at a fixed rate, but this did not prevent rates being laid over and over again upon land, for local, or what were called local, purposes. Education was defrayed, in great measure, by local rates here; in India it was charged on the Imperial Revenue. And surely we might fairly ask for local aid to railways and irrigation works, which had so enormously increased the value of land and its products, that exports had multiplied nearly five-fold, and corn had risen in price at Jubbulpore from 12s. to 36s. a quarter. And all this through the State sinking £200,000,000 in improvements, expenditure on which in the last complete accounts made, according to the Resolution of the Under Secretary, the difference between surplus and deficiency, and yet taking the same rent as before, and in some instances even alienating land in perpetuity for a mere nominal price. Might not this system of local rates lead to the local and decentralizing management of affairs which was considered so desirable to those who looked forward to the Native population assisting us to govern the country, and becoming less apt than they were at present to call upon Government to initiate social reforms? At least we might begin locally, and try them with five cities, before entrusting them with the Empire. And now, although he had detained hon. Members too long, he should like to say one word on this Committee, which was to inquire into Indian affairs. He doubted its doing much good, though it might do great mischief. But he was thankful it was not to be a Commission sent to obtain information in the country itself. Persons who talked of sending Commissioners to India, as if they were to inquire into Scotch Fisheries or English Factory Acts, little knew what they were talking of. It was said that the Saxons in Ireland, after all our attempts at conciliation, were merely encamped in an enemy's country. If that were so, what must it be with the handful of English in India? Looking to the difference of national character, which made conspiracy which was almost impossible in Ireland easy in India, we might well say of our countrymen there that they are on a slumbering volcano. Incedunt per ignes Suppositos cineri doloso. What mischief such a Commission might do by exciting vague hopes or fears among excitable Southern races might be imagined from the effect which the late most ill-judged roving Commission, sent out on most inadequate grounds by the Colonial Office to British Guiana, had exercised, and would for some time longer exercise, upon the coloured population. Then, what would be the composition of such a Commission? Possibly, old Indians, who would be quite able to draw up their Report without leaving the country; or men of books and theories, who would not stay long enough to realize their own ignorance. He remembered once going to look after some family property in the West Indies. He read everything that had been written on the subject, and went out to set everybody right, fully convinced that he knew their business better than men who had been engaged in it all their lives. It was not till he had been six months in the country that he began to find out how little he really knew. How little one knew of the inner life and real feeling of the working classes immediately around us; aye, without even excepting those who claimed specially to represent them. He had heard a distinguished Indian official acknowledge this with respect to the inhabitants of India—a man whose life had been spent among them, who could speak to them in their own language, and even, as he expressed himself, knew when they meant what they said and when they did not. It behoved us to beware of expressing doubts or hesitation. A vigourous government was far preferable to a much better government weakly administered. Revolutions had usually been in the reigns of good and weak, not of bad and vigourous rulers. A Governor General, even an able and energetic one like the present, had great difficulties to contend with—difficulties within his own Council, which was not so manageable as a Cabinet, though that was said to be not always a happy family; difficulties from conflicting interests and contending races; difficulties from the Press. All these, not unknown here, had to be encountered in an exaggerated form in India. A Committee would be apt to act on the notion that English ideas and English institutions were like a general fitting saddle, good for any country. But even in these days of telegraphs India must be governed in India. Mistakes must be corrected there, not at home. With a people, or rather peoples, of that kind, want of authority would be fatal, not only to good government, but to the very existence of our magnificent and dearly-bought Indian Empire.

MR. W. FOWLER

said, he agreed with the right hon. Gentleman who had just sat down (Mr. S. Cave), that this Statement would be far from satisfactory. In the first place, there was a supposed increase of the opiume rvenue; and, in the next place, a large decrease in the expenditure on public works. If hon. Members would turn to the figures they would find that the decrease in the expenditure on public works for 1870–1 was £1,000,000 as compared with the actual expenditure in 1869–70; and there was also a decrease in the expenditure on public works extraordinary amounting to nearly another £1,000,000. Now, it appeared, to him that it was a very serious thing for the Government to commence so rapid a diminution in the expenditure on public works in India. He had read over and over again, on the authority of the very highest Indian officials, that the need of public works in that country was now as great as ever; that what had been done was comparatively nothing to what was required; and that over very large tracts there was a great deficiency of roads, bridges, embankments, and every other kind of the most necessary works. If that were so, he could not congratulate the hon. Gentleman (Mr. Grant Duff) on the decrease of expenditure this year under that head. While on this subject he begged to say a few words on a question of principle to which the hon. Gentleman had alluded with special reference to himself. He must say he held that if a public work was of a permanent character and was really useful to the community it ought not to be paid for out of revenue, but out of local taxation. In this country we should not dream of making a drain across a street without borrowing the money, because we were in the habit of proceeding on this principle—that those who came after us should share in the burden. In dealing with India we adopted a totally different principle. The hon. Gentleman had said that we did not find the result we might have expected from the money spent in India. Well, that would be an argument against making the expenditure out of revenue, for it would go to show that these works should not be constructed, as not being certain to be productive. Over and over again we had been told that the Indian Budget showed a constant deficit; but that had arisen of late years simply from this item of public works. The figures were very remarkable. In 1867–8, independent of the expenditure on public works ordinary, there was an actual surplus of £4,873,000. In 1868–9 the surplus was £3,809,000; and in the last year there would be a surplus of just about £3,000,000. Now, it puzzled him exceedingly to know why the poor people of India should have to pay additional imposts—an additional salt tax and an increased income tax, for instance—required to meet an increasing expenditure on public works. If a public work was paid for out of revenue it must be carried on in the most extravagant manner, because it would be constantly stopped in the middle for want of funds, and the works discontinued could not be resumed except at an additional expense. Take, for example, the works on the Godavery, which had been so much talked of in that House, and had almost become a by-word. He knew that a telegram had been sent out to stop those works in the middle, the men were all dismissed, and the whole affair had cost half as much again as it would have done had it been pushed on quickly. On the other hand, if the money were borrowed and the work proceeded with with all possible rapidity, he ventured to say that one-third of the cost incurred by doing it in driblets would have been saved. This was the course adopted in the construction of railways in this country, and he had yet to learn what difference there was in this respect between railways and public works so called. It had been said that those works were not directly remunerative; but a good road was as directly remunerative in its degree to the community as any work that could possibly be made; it was in its degree as remunerative as a railway, even if no toll was got out of it. So again with regard to military buildings, which formed a very large item in what was described as public works ordinary. It was of the highest importance that the lives of the troops should not be thrown away from being in bad buildings, and, therefore, to provide good barracks was a most remunerative expenditure. But he had been told that the barracks in India were badly built; but that only showed that in paying for works out of revenue there was no security against improper expenditure. The fact was it discouraged a good officer and made him feel that he would not get full supplies for his work, while it did not make the lazy man diligent. He had been exceedingly struck by a speech made last summer by Sir Bartle Frere, who was admitted to be a man of high authority in these matters, in which he said that in the Public Works Department of India the best man was not he who would forward works, but he who would check them. It was perfectly true that great caution was required as to the amount laid out in public works, just as in England in 1847 we laid out far more than the country could afford. That was a matter of judgment and discretion; but if they expected to find in paying out of revenue a security against extravagant expenditure, the check would prove utterly illusory. One or two other things in the Budget had struck him. He maintained the opinion he had expressed a year ago with regard to the opium revenue. They had been told that it was an extremely uncertain revenue; he believed it to be most unsatisfactory. The right hon. Gentleman opposite had said, with great justice, that it was like a revenue derived by the Government from an enormous distillery carried on at the public expense. But such a thing would, not be tolerated for a moment; and yet we talked of the opium revenue as perfectly innocent, and very few Members lifted up their voices against it. In his opinion, it was an immoral thing for a Government to have a hand in, and the sooner they got rid of it the better. He was told last year it was a matter of dispute whether it was or was not injurious to the people of China. He was persuaded that it was injurious, and he felt that our conduct in this matter had not been marked by the high principle which ought to be expected from a nation as civilized and advanced as our own. The expenditure on the Army had also been referred to, and certainly it was very great. He would call the attention of his hon. Friend to an opinion expressed on this point by Sir Charles Trevelyan a few months ago—that almost the whole cost of the Army of Madras was a sheer waste of money. Now, if he mistook not, the cost of that Army was nearly £3,000,000, and therefore he would recommend to the hon. Gentleman to see whether there was not a possibility of some economy with respect to it. Looking to all the circumstances, he considered the appointment of a Committee on Indian Finance as a very satisfactory proceeding on the part of the Government, which he was sure would go into the inquiry in a business-like manner. In his opinion, it was high time that the whole question should be thoroughly investigated, because he was one of those who believed that the danger of India was the danger of England. It was perfectly true that the House of Commons was not responsible for the debt of India. For the money which was invested there the people of this country got Indian security and nothing more; but he felt assured that if we were likely to lose India, the public would demand that English credit should be pledged in order to save her. Anything, therefore, which endangered her position was of great importance to every taxpayer in England, and a question of greater moment could not, therefore, be brought under the notice of a Committee. The right hon. Gentleman who had just spoken (Mr. S. Cave) had used a very serious expression when he said the English population in India were living on a volcano. That he hoped was an exaggeration; but certainly there were enormous dangers arising out of the peculiar prejudices and ideas of the people of that Empire; and living as we did in ignorance of those prejudices, there were, perhaps, many dangers the extent of which we failed to appreciate. If, then, by means of the proposed Committee, we could convince the people of India that we wished to treat them with perfect justice, and to avoid unequal taxation, we might win them to a more thorough devotion to our rule, and thereby confer a great benefit on the whole Empire.

SIR CHARLES WINGFIELD

said, that if the Indian Budget was henceforth to be laid before Parliament in the month of February, the Indian year of account must be made to agree with the calendar year. The Financial Statement of the Minister for India, in which he reviewed the results of the last year and stated the Estimates for the next, was the occasion on which the only debate of interest as to the internal conditions of the Indian Empire, arose in that House. But upon the present occasion, owing to the desire of the Government to make that Statement at an early period of the Session, they were without either of those necessary items of information. In fact, the only difference between what they knew now and what they knew in August last, was that they now had the actual instead of the estimated results of 1869–70, and a revised Estimate of 1870–1. It was said that they could not adopt the calendar, year because it would not fit in with the land revenue accounts. He did not agree with that. The land tax in India was fixed for a term of years or perhaps in perpetuity, and the amount was therefore known; the instalments were payable at variable periods in different parts of India. If the calendar year were adopted as the Indian year of account, it would only affect the first year's reckoning; after that the year's land revenue would fall into the year of account. The very same inconvenience had been got over without difficulty a few years ago, when the 31st of March was adopted as the close of the year of accounts instead of the 30th of April; and there was no greater difficulty in putting back the year three months than one. If that were done, the Indian accounts could be laid before the House with the Financial Statement and the Estimate of the current year in February. The hon. Gentleman (Mr. Grant Duff) had read extracts from an order of the Government of India, announcing a scheme of decentralization of the finances. He (Sir Charles Wingfield) had examined that scheme, and it seemed to him good as far as it went; but it did not go very far. The Government of India relinquished all control over the distribution of the sum it assigned to each provincial Government from the Imperial funds for the support of certain specified establishments and works; the local governments would submit their Estimates for these services as before, but they would be able, within the limits of the assignment, to transfer funds from one head of account to another, whereas formerly they had to obtain the sanction of the Government of India. Practically, no doubt, this sanction was little more than a form. On the other hand, the Government of India relieved itself of an immediate charge of £350,000, by reducing the aggregate grants of 1870–1 by that amount, and of all prospective charges beyond the reduced sum now granted; and as these charges related to the very objects in which increased outlay was sure to be called for—namely, education, gaols, local roads, &c.—the Government of India merely abandoned an authority it found it troublesome to exercise. The balance of advantage was clearly on the side of the Government of India. What the local governments and what Indian Reformers in this country asked for was, that after defraying the cost of their civil establishments, and having contributed pro ratâ to the Imperial expenditure—that was, debt, army, diplomacy, &c.—they might be allowed to spend the balance of their revenues as they thought best. In short, they asked for some control over their receipts; what they got was control over certain allotted items of expenditure. He thought, therefore, that this scheme had no pretension to be styled decentralization of the finances. He came now to the most important subject of all. He was not conscious of exaggeration when he said he apprehended great danger to the security of our Empire in India, if the course on which the Government of India appeared to have entered of imposing increased taxation by its own discretionary will be uncompromisingly persevered in. He might meet with the usual fate of those who declined to prophesy smooth things; but he might claim, without egotism, to know something of the feelings and ideas of the people of India, and, entertaining the strong convictions he did on the subject, he was bound not to remain silent. The Government of India, as the scheme to which he had just referred showed, had avowed its intention of restricting its grants from the general revenues for provincial purposes, and of requiring the local governments to raise the additional funds they needed by local taxation. Now, local taxation in England meant self-taxation; but that was not what it meant in India—there was no self-government in India. There the additional taxes would be levied under Acts of Legislative Councils in which the Natives were not represented at all. Already serious discontent and irritation had been aroused by attempts to raise new cesses and imposts. He had seen a memorial from Natives of the Madras Presidency complaining of a Bill that had been brought into the Legislative Council to raise funds for local purposes—sanitation being one—by a variety of new taxes, one of them a tax on marriages. The memorialists urged that religious observances and social customs were not fit objects of taxation. It appeared to him to be no defence of such a tax to plead, as had been pleaded by the Government, that it had been levied by Native rulers. Why, they could find justification for any enormity in the example of Native rulers; but, if they could, do nothing better than reproduce the Native model of government, he did not see what business they had to be in India at all. Despots for despots, the people of India might say, give us our countrymen. Again, after the 30 years' settlement had been concluded a road cess had been imposed by an Act of the Legislature; and in Oudh, where cesses for education had been provided, it was now sought to double the amount. That he regarded as a departure from engagements on the part of the Government. He was aware of the argument on which those impositions were defended—namely, that promises of the Executive Government could be overriden by Acts of the Legislature. That argument would be of more force if the people were represented in the Legislature; but, composed as the Legislative Council was of members of the Executive Government and Government nominees, mostly servants of the Government, the Government, in accomplishing its objects through such a legislative body, made itself judge in its own cause. It was well observed by a Member of Council, in the Papers on education recently presented to Parliament, that—"We have no standing ground in India save brute force if we forfeit our character for truth." He (Sir Charles Wingfield) therefore held strongly that if they sought to impose additional taxation for local purposes, they could only do so safely with the co-operation of the people. To that end councils should be established at the seat of each provincial government, composed mainly of leading members of the landed and commercial interests. The representative element should enter into their constitution, and without their concurrence no new taxes should be imposed. No one could fail to perceive that there was a great and growing demand among the upper and educated classes, who were the leaders of Native opinion, for some voice in the management of their affairs, especially in the matter of raising and spending new taxes. It was useless to attempt to wring more money out of a poor people — they only further impoverished them—they must trust to time, and the effects of works of public utility, to enrich the country, and in the meantime they held the great source of increased income in the future, the share in the rental of land. The hon. Gentleman (Mr. Grant Duff) remarked last Session that representative institutions were not yet for India. He (Sir Charles Wingfield) did not seek to transplant the British Constitution there; but there was surely a middle course between full-blown representative government and altogether refusing to consult the people on the matter, nearest and dearest to all people, the raising and spending the revenues they had to contribute. They must, moreover, bear in mind that there was in India an active and widely-diffused free Press, English and Native; and that there were facilities for higher education, of which the people eagerly availed themselves. Thousands now read with interest in the newspapers the reports of the debates on Indian subjects in that House, and of the political events happening in Europe; and every year, as knowledge and enlightenment spread, the people grew less disposed to submit without murmur to taxation, which they regarded as oppressive and unjust, or as a breach of promise on the part of the Government. If their complaints and remonstrances were unheeded, the sense of wrong would rankle in their breasts, to find vent some day—not in insurrection, for the power of the British Government was felt to be overwhelming, but in passive resistance to taxation, a form of opposition which would be far more embarrassing to the Government, for they could not issue coercive processes against a nation of 150,000,000. The hon. Gentleman attributed the unpopularity of the income tax to the oppressions of unscrupulous Native collectors. But that was the fault of the Government. From ill-judged economy they would not allow an efficient special establishment for the collection of the tax, and the duty was devolved on the overworked collectors and their deputies, and these were obliged to leave it to underpaid Native assessors, who extorted money from the poor and ignorant classes under threats of assessing them for large sums, and distraining their property in default, while many landlords re-couped themselves the amount of the tax from their tenants. He (Sir Charles Wingfield) hoped his remarks would not be understood as made in a spirit adverse to the Home Government. On the contrary, he attached the highest value to the Government by a Secretary of State in Council. He knew that complaints had been made of undue interference with the Governor General on the part of the Secretary of State. He did not sympathize with those complaints at all; so far from it, he considered that in every case that had come to his knowledge where the Secretary of State had modified or annulled the acts of the Governor General, his interference had been exercised for the public advantage. For instance, Lord Halifax had overruled a law making failure in a contract to deliver agricultural produce a criminal offence; and the present Secretary of State had disallowed two laws, one introducing the metric system, and the other the Contagious Diseases (Women) Act. It was most fortunate that there was an authority in this country to prevent the consequences of such empirical and doctrinaire legislation. It was worthy of notice, too, that this complaint of undue interference was never made by the people of India, who highly appreciated the controlling authority of the Secretary of State. And, when Lord Halifax resigned office he received addresses from the Native inhabitants of all Presidency towns, thanking him for the care and protection he had extended to their interests. The right hon. Member for Shoreham (Mr. S. Cave) laid it down as a profound political maxim, that India must be governed in India. If that merely meant that the initiative should rest with the Governor General, he (Sir Charles Wingfield) had no objection; but if it meant that the proceedings of the Governor General were not to be subjected to watchful supervision and control by the Secretary of State he entirely dissented from it. He could conceive no greater danger to our Empire in India than that the impression should prevail among the people that the Governor General must be supported at all hazards, and that there was no remedy against hasty and unjust measures. He was convinced that the decision of the late Se- cretary of State (Sir Stafford Northcote), restoring the kingdom of Mysore to its Native Prince, after repeated refusals by former Secretaries of State, had done more to inspire confidence in the Home Government and to unite the Natives of India by the bonds of attachment to this country than all the money they had spent on railways and canals had accomplished. The truth was that this maxim was first laid down at a time when there were no railways, no telegraphs, and when education was in its infancy. It was now quite antiquated. He heartily thanked the right hon. Gentleman at the head of the Government for having acceded to the request for a Committee of that House on the financial administration of India. He assured him that the announcement would be received with satisfaction and gratitude throughout India.

MR. EASTWICK

said, that, before adverting to the Statement they had just heard, he wished to express his belief that the course adopted by Government this Session with respect to India must be satisfactory to the people of India, and to all those who took a real interest in that country. He hoped that the appointment of a Select Committee to inquire into everything connected with the finance of India would go far to remove the impression—that most mistaken impression—that Parliament was really indifferent to the interests of India. That delusion would, he hoped, be further dispelled by the day for making the Indian Financial Statement having been changed from the very end to the very beginning of the Session. By a happy coincidence, although the financial year was not concluded, the alteration had not deprived the hon. Gentleman of the opportunity of making several important announcements. It might be otherwise on the next occasion, and it would, perhaps, be better that the Statement might be more complete, to appoint a day somewhat later in the Session—say, towards the end of June—for the Indian Budget. For this time, at least, nothing could be more felicitous than the alteration; and he hoped the people of India would now be disabused of the idea that there was, or had been, any real indifference on the part of Parliament towards them, except that which was not indifference, but rather an inability to act, on account of the overwhelming pressure of home business. He hoped the Anglo-Indian Press would put this matter in its true light; and would, at the same time, make the people of India understand how impossible it was for a nation that had to pay £26,000,000—much more than a third of its Revenue—for the interest of its own debt, to encourage the remittance of capital to India by way of Government loans, so as to increase the debt of that country, all of which, but 9 per cent, was already owing to England. There were a number of matters in the statement they had just heard to which he would like to advert. First, there was the important Resolution of December 14, 1870, on the decentralization of finance. It would be admitted that that Resolution was, at all events, a step in the right direction, because it would obviate the mistakes and delays which occurred in the mode of dealing with the representations of the local governments with respect to the 10 departments of expenditure to which it referred. Next, the sum allowed to the local Governments were stereotyped. Now, it was absurd to suppose that their wants could be stereotyped too, and would always remain represented by the exact sum of £4,688,711. Why, the wants of Bengal alone, in future years, for gaols, registration, police, education, and, above all, for roads and miscellaneous public improvements, might come to amount to that sum. How, then, was the deficiency to be made up? In his judgment, the better course would be for the Supreme Government to take such taxes as must be uniform throughout the Empire—say, customs, salt, opium, liquor tax, and a due proportion of the land revenue—and to say to the local Governments—"Take the rest, and make the best you can of them." That would greatly increase not only their responsibility, but also their motives for economy, which, as they were told in the second paragraph of the Resolution, were now too few. He came next to the announcement made in the third paragraph of the Resolution, and which, he feared, unveiled the real reason for making these changes. It said that "existing Imperial revenues will not suffice for the growing wants of the country." And again, in the eighth paragraph, they read that— The relief of the Imperial finances has been a prncipal object in the discussion of measures for enlarging the powers of the local governments. It was quite clear, then, that the Supreme Government found itself overburthened, and was shifting its difficulties on to the subordinate governments, which was like cutting away the trunk of a banyan tree and leaving the immense weight of its branches to rest on the suckers. He hoped the Supreme Government would not rely on any such prop, but would take the only safe means of planting itself firmly by reducing its enormous expenditure. Now, it seemed to him that there were at hand, two important means of effecting something like adequate reductions. The first, by re-establishing the local European Army for India, with long service engagements, and a very much smaller number of officers. He would not go into the question of the comparative merits of the late East India Company's European regiments. At all events, they did the work required of them in conquering India, and there could be no doubt that similar regiments could perform the much easier work of retaining it. Recruits for such regiments would cost less than £40 each, whereas those for the Imperial forces cost £100. Such regiments would be sufficiently officered with 20, instead of 33, officers. Indeed, as the Native regiments, which he supposed required more leading than Englishmen, had only seven officers, he could not understand why such regiments need have even 20. Then look at the expenditure on account of the Army and military works for the last four years, ranging between £ 175,000,000 and £185,000,000, and judge whether that expense could be borne out of an available Revenue of only £27,000,000, which was all the Indian Government had to deal with as they pleased. Other enormous savings might be made by the reduction of the Native Army to two-thirds its present force, and by obtaining from the Native States their fair quota of the expense for defending the Empire. At present, with the revenues of only a part of India, they defrayed the expense of defending the whole. One of two things ought to be done—either those States should disband their forces and maintain order with police, or they should be made responsible for the security of the country, and we might withdraw the troops which were now kept to watch their armies. Another way of reducing the expenditure would be by the introduction of Native gentlemen of rank into the higher civil appointments. He would ask, why should they be paying £2,250,000 to mediatized Princes, and, as they had been called by a Secretary of State, "titled stipendiaries," without obtaining from them any service in return? Why should they do this when many of them were capable of rendering good service to the State, and loathe their enforced idleness? Why, he (Mr. Eastwick) received a letter a few days ago from an Indian Prince, who, for the last quarter of a century, had been spending his income at Bagdad, and had always maintained a character worthy of his high rank, and had been thanked by our Government for his voluntary and gratuitous services in the Persian War. He was most anxious to be employed in his Native country. If he were so employed his large income, which was now spent abroad, would be spent in India, and the Government would derive advantage from his abilities and his great influence among his countrymen. And, no doubt, there were many pensioned noblemen and others who would gladly be employed for a moderate, perhaps, even for a nominal, salary. He thought that, when they remembered the gloomy anticipations which existed about a year ago as to the accounts of the year 1870–1, they might be glad that the out-turn had been as good as it had proved. But the element of chance was too conspicuous in the result to make it very satisfactory. The great success had been in opium, and an opium success was one that rather sobered than intoxicated his mind. He (Mr. Eastwick) would rather turn to the progress in the Orissa Irrigation Works, which had cost £1,043,698, and were now irrigating 100,000 acres. That was a legitimate cause for satisfaction. He was glad to learn, too, from private letters, that the Native Princes were strenuously engaged in the construction of irrigation works, as, for instance, the Rajah of Ahmedmyar, in the collectorate of Ahmedabad, who had lately expended about £40,000 in the construction of irrigation works, with an anticipated return of from 7 to 10 per cent. He was not going into the accounts, as he had hardly sufficient data wherewith to criticize them; but there was one point he could not forbear mentioning. He found a number of sums entered in the expenditure under the head of "Sundry Items." He had taken the trouble to add them up, and they amounted altogether to £404,379. Surely that was too large a sum to pass under such a heading, and details ought to be given. There were several matters on which he wished his hon. Friend had given them fuller information. Such was the Board of Agriculture and Commerce. He hoped that, when established, it would supply information why the agricultural produce of India was comparatively so small. Judging by the land revenue, that it might be estimated at £60,000,000, or, at most, £70,000,000; this, compared then with the agricultural produce of France or of Ireland, was in proportion very small. Another point was the small-gauge railroads, which, he understood, had been decided on, and one of which was to connect Mooltan with Kurrachee. Such railroads could be made very cheaply, but he apprehended that advantage would be counterbalanced by the disadvantage of having to break bulk. Lastly, he should like to hear something of the Princes and Chiefs who were drawing pensions from us. He should be glad to learn that some of them had been recommended to visit this country. The young persons among them ought, for two or three years, at least, to study in this country. They would get instruction here which would be of great value to them in India. The young Rajah of Mysore, for example, ought, in his opinion, to be sent to England for a time. On all these points he should be glad if his hon. Friend could supply them with information. He desired once more to express his satisfaction at the course taken this Session by the Government with respect to Indian finance.

MR. DICKINSON

said, he was anxious to point out that this was the first occasion on which the results of canal irrigation had been included as part of the land revenue. He thought it very undesirable to mix up the land revenue with railways, canals, or any works of that kind, believing that the capital expended upon reproductive works, and the income which this produced, ought to be shown clearly in the accounts. He had put an Amendment upon the Paper; but, after the Statement they had heard, and finding that its result would be rather to limit the range of discussion, he did not propose to move it. There were in that House hon. Gentlemen who were, or who had been, connected with different Departments of the Indian Government, and some who had visited India in connection with the Civil Service, with professions, or with trade, and thus acquired a knowledge of the country, but there was not one who could say that he represented the people of India, or that he was thoroughly acquainted with their views and aspirations. There being, therefore, no actual representatives in Parliament of the people of India, this country, as the governing Power, was bound to give the benefit of the doubt to India, whenever the interests of the two countries came into collision. Why, then, he would ask, should we not bear our proportion of Indian charges instead of seeking to throw an undue burden on India itself? What would be said by Australia or Canada, if we proposed to inflict upon either of these Colonies an annual charge for ships of war cruising upon their stations for the protection of our own commerce? And if, without risk of a separation, we could not attempt such a charge upon Canada or Australia, how could we justify it in the case of India? It was, no doubt, necessary that commerce in the Indian waters should be protected; but, in this, English interests were quite as much concerned as Indian interests; but the division of the charges was not proportionate. Moreover, it should be remembered that the relations of the two countries was very different from what it was when India was governed by the East India Company. At that time the Company had to bear every charge connected with the home control of its Government. It was impossible that that traditional policy could be preserved under the present state of affairs. On the part of England, the greatest commercial nation in the world and mistress of the seas, the policy of placing this burden on the Indian Government was both niggardly and unjust; and when the proper time came he should press the subject on the consideration of the Committee. They were now concerned in a hurried consideration of the Indian accounts, and, therefore, he thought it would not be convenient to press the general question at that moment. Still, he would remind the House that if our rule was to be continued in India it could only be maintained by governing the people of India in the spirit of equity and justice. Nearly three-fourths of the people were under English rule; we were in the position of the dominant power—yet we had never hitherto laid down with clearness what were the principles which were to guide our administration of affairs. A noble responsibility rested on us in determining the future destiny of that great Empire. He regarded any foreign attack on India as quite out of the question—our frontier was well protected by natural boundaries, and he had no fear of the Russian progress towards India; and, consequently, internal peace alone was required for the development of its resources. At present, of course, we could not give representative institutions to India, but this might be done at some future time. Education ought to be freely imparted to all classes, and the condition of the people elevated morally and socially. It was highly desirable that a decision should be come to as to the future language of the country, his own opinion being that English might be brought into general use. But at present he would not enter into the details referred to by the hon. Gentleman.

MR. C. B. DENISON

congratulated the Under Secretary of State on having made his Financial Statement thus early in the Session, in accordance with the wish expressed by the Committee last year; and hoped that in future it might be found practicable to make up the Indian accounts on the 31st December in each year. At the same time he must admit that it would be attended with a certain degree of inconvenience, because complete information on many details could not reach this country in time. While hoping that the scheme of financial decentralization, which had been submitted to the House in the form of a despatch, would be successful, he feared it would involve an addition to local taxation of burdens which it was found inexpedient to couple with Imperial taxation. He had glanced over the Financial Statement that had reached this country by telegraph, and there were one or two points on which he desired to say a few words. He observed that £2,000,000 of the anticipated revenue was jumbled together under the head of "Miscellaneous." He hoped that in due time they would receive a statement explaining the exact character of the various items. He also observed that there was a serious diminution in the estimated expenditure for education. It was only £540,000, for the current year, instead of £750,000—a point that required explanation; it might be that part of the expenses had been relegated to the subordinate governments. Under the head of assessed taxes he found that there was an increase of nearly £1,000,000. They had been indulged by the hon. Gentleman in a hope that the 7½ per cent income tax would be reduced, but he must confess to feeling very doubtful whether that anticipation would be realized. The hon. Gentleman, in reviewing the financial administration of India since the days of Mr. Wilson, had characterized it as a period of experiments and suggestions. The retrospect was to him (Mr. Denison) very unsatisfactory—it seemed to him that these experiments and suggestions were such as were generally understood under the maxim fiat experimentum in corpore vili. He had always been of opinion that more than half the difficulties of Indian finance had been difficulties of audit more than anything else; and had there been a definite system of audit and of accounts much inconvenience would have been avoided. When the income tax was doubled, instructions were sent to every officer to reduce his expenditure, without delay, to the lowest amount possible; and a chief engineer reported that it was impossible for him to keep his expenditure within the grant, except by postponing the charges of that year to the next. A system under which accounts could be postponed from one year to the next must lead to financial difficulty and embarrassment. He anticipated good results from the inquiries of the Select Committee.

SIR FRANCIS GOLDSMID

said, he wished to take this opportunity of calling attention to the step recently taken by the Secretary of State for India in establishing a College for Civil Engineers, a step which appeared to him (Sir Francis Goldsmid) directly opposed to the whole course of recent policy adopted by the Government and approved by the House. Appointments in the Civil Service of India had been thrown open to public competition. Haileybury College, where formerly young men intended for that service were educated, had been abolished; and now this new College was established, education at which was to be a necessary pre- liminary to young men entering as civil engineers the service of the Indian Government. Could a more retrograde step be imagined? It was said, indeed, that admission to the College was to be open to public competition. But it was to be open only to those who could afford to pay £150 a-year for three years. Before the establishment of County Courts, when it cost £30 or £40 to recover a debt of £10, the reply to the remark that the King's Courts were open to all the King's subjects, used to be—"So is the London Tavern to all who can pay the bill." The new Civil Engineering College was to be open to all on the same principle. The reason alleged by the Government for a measure so strangely contrary to all that had of late years been done, was understood to be that without it civil engineers for the service of India could not be obtained. And to prove this, it was stated that at the recent examinations the number of competent candidates was quite insufficient for the exigencies of the service. But the reason for this failure was not far to seek. The Government had offered to the approved candidates no more than £240 a-year. Not only was this remuneration too low to attract young men of the qualifications required, but the Government had shown that they knew it to be too low. For, simultaneously with the establishment of the College, they had announced their intention of giving to the candidates who might be successful a yearly salary of £420 from the time of their entering the service. The Government had thus, if better candidates should hereafter present themselves, made it impossible to ascertain whether the improvement were due, as they would suppose, to the establishment of the College, or, as he should believe, to the increased rate of remuneration. If, said Bentham, you desire to persuade yourself that a measure of no real utility is extremely useful, adopt it at the same time with some highly beneficial measure. If you wish to learn its real value, try it alone. If you want to convince yourself that saw-dust is a drastic medicine, mix it with jalap. If you desire to know its actual efficiency, swallow it in water. The Secretary of State for India was mixing the saw-dust of his College with the jalap of a nearly doubled salary. If the Government were determined to proceed with the establishment of the College, let them at least show their confidence in its usefulness by allowing young men who had been educated elsewhere to compete with their collegians. But even this had hitherto been refused.

SIR DAVID WEDDERBURN

said, that the Motion of the Prime Minister yesterday made it quite unnecessary to trouble the House with any particulars as to the anomalies and abuses of Indian financial administration, which were only too patent. The financial history of British India, like that of the Second French Empire, was a chronicle of deficit and debt, with occasional illusory surpluses, obtained, for the most part, by crediting special windfalls to current ordinary income. The inquiries of the Select Committee would go far to remedy the worst of these financial abuses, as would also the creation of the new Department of Revenue, Agriculture and Commerce. But, after all, finance proper was only one of the many subjects urgently demanding investigation at this moment in India. There was at this moment in course of signature at Calcutta a Memorial, praying for inquiry into the condition of the Native Army, the management of the Public Works Department, and the working of the income tax. He desired to draw attention to the last of these points, especially to the fallacy of the statement put forward by the Indian Government, that the income tax "does not touch the poor, but only the well-to-do-classes." Probably by this time Government had found out their mistake; he thought recent despatches showed that they had done so, and, if they had, he hoped that they would frankly acknowledge it. The usual complaints against this tax—styled "odious" by those very Members of Council who voted for it — was that it was unproductive; that it was novel; and that it was oppressive in the case of officials and other persons with fixed incomes. Every one of these objections was well founded. It was unproductive, owing to the general poverty of the country—in Bengal, out of 36,000,000, only 53,773 had incomes over £50 a-year, and this in the wealthiest Province in India; also from the difficulty of ascertaining and assessing the incomes of the few rich Native bankers and traders. It was novel, and therefore dangerous, in a country where men would endure patiently, as inevitable, almost any amount of exaction by ancient and customary methods, but regard every innovation with mingled hatred and terror. It was hard on officials and Government employés, who found their salaries heavily mulcted at a period when marked increase in the cost of living made a reduction of their pay peculiarly ill-timed. But while such objections as these had been more or less generally admitted, he felt certain that in this country, and in this House, it was not understood what a terrible instrument for grinding the faces of the poor was placed by this, or indeed by any direct tax, in the hands of subordinate Native officials. Some very startling facts had been brought to light by the Indian Press as to the working of the income tax in and around Calcutta. Men had been assessed and fined for non-payment — miserable ryots, whose entire property when sold did not amount to the nominal annual income on which they were assessed—perhaps not even sufficient to pay the fine, amounting to double the tax. Others, again, had paid to the assessors the sums demanded of them, "to save trouble, expense, and insult," as they said, although their incomes did not amount to half the minimum chargeable with income tax. In one village 25 ryots were assessed; and after a magisterial investigation, it was found that five might, perhaps, be liable to assessment. If such things took place at the Presidency, within sight of the viceregal palace, he asked those who know India what was likely to occur in the remote Mofussil, where no missionaries and no Press existed, and where European officials were few and far between? Nor was it only selfish dishonesty and peculation which must be dreaded, official zeal was equally oppressive, and the desire to find favour in the eyes of a supreme Government. In all Oriental countries the minor agents of Government were a terror to the people, and the favourite title given to a popular Prince or magistrate was "Protector of the Poor." It was to the sympathy of the British Parliament that the poor of India now looked for protection against this grinding tax.

SIR THOMAS BAZLEY

referred to the great extension in the trade and commerce of India, since its affairs were managed by the Imperial Government, as a proof of the beneficial results which had followed from that change. In 1856 the imports of India amounted to £25,000,000, and the exports to £23,000,000. Taking the 10 years, during eight of which the new Government had been in existence, the imports were £56,000,000 sterling, and the exports £67,000,000, so that the trade and commerce of India had very nearly trebled; and there was every manifestation of increase during the past year or two. But still the increase had not been so rapid as they had a right to expect. He did not think that the public works were developed with the energy they had a right to expect. Railways and irrigation works would give an immense impetus to the vast internal commercial resources of India. He did not share in the gloomy anticipations of the future of that great Empire. He rejoiced in the appointment of the Select Committee, whose labours, he thought, would be attended with the most beneficial results.

MR. HAVILAND-BURKE

observed that last year the Under Secretary laid great stress on five points. The first of these was the military reductions; but in his Statement to-night he saw very little sign of this. The second point was the reduction in the civil charges; but everyone thought they were still very greatly in excess of what they ought to be. There had been a reduction in the charge for public works, and amongst other items was that of irrigation; but this, he thought, was rather to be regretted, for expenditure of this kind was, or ought to be, reproductive. The people would never believe that there was an economical administration in India so long as there were great charges amounting, as one hon. Member said, to £2,000,000, which were almost altogether unaccounted for. It was assumed that the present rulers of India were superior to the former rulers; but there might be a difference of opinion on that point, and it might be maintained that 150 years ago India was in a better condition as to material prosperity than at present.

SIR JAMES ELPHINSTONE

said, that as the Government had moved the appointment of a Committee, it was unnecessary at present to discuss Indian financial questions in that House. He would suggest that the inquiry should be divided into two heads, the one being revenue and the other public works; and in that case the investigation might be concluded in a reasonable time.

MR. MACFIE

said, that in listening to the statement of the Under Secretary of State he had been struck by the absence of any reference to the Indian Council; and he thought that this omission might possibly provoke the inquiry whether that body was really in existence. Complaint had been made of the want of public interest in Indian affairs; but the only way to excite interest was to increase knowledge of the subject, and to do that it would be advisable to admit the public and reporters to the meetings of the Council, and allow Members of Parliament to be unpaid members of it. He concluded, from the Statement that had been made, that the whole charges of every kind upon the people of India were less than 6s. 8d. per head, and that the proceeds from land and opium provided revenue for the whole cost of the administration—so that the people generally were taxed only for reproductive works. He trusted that economy would not be sought at the expense of the Army or Navy.

MR. GRANT DUFF

reviewed at some length the various opinions that had been expressed during the course of the debate.

Motion agreed to.

Resolution to be reported upon Monday next.

House adjourned at a quarter after Twelve o'clock, till Monday next.