§ Order for Committee read.
§ Motion made, and Question proposed, "That Mr. Speaker do now leave the Chair."
§ MR. FAWCETT
, in rising to move—That this House regrets that the Government has so arranged Public Business that they have postponed bringing forward the Indian Budget until within a few days of the close of the Session,said, he thought he could affirm, on the part of hon. Members who objected to the Indian Budget being brought in so late, that they did so not from any feeling of personal inconvenience, arising naturally from their desire to go into the country, but because they thought that the exigencies of Public Business were of greater moment than their personal convenience. He believed it would not be difficult to show, however, that all who had the smallest experience of India well knew that connected with the postponement of the Indian Budget to the last hours of the Session, there was a question of infinitely greater importance than the personal convenience of hon. Members. From one end of India to the other the postponement of the Budget to the end of the Session was looked upon as a settled determination to treat Indian questions as if they were the most trifling questions that could be brought before the House; and they might depend upon it that persistence in that course would wound the susceptibilities of the Indian people, and scatter far and wide the seeds of discontent. He knew it was sometimes said that the less the House dealt with the affairs of 787 India, the better would it be both for India and for England. It was urged that it would not be well that the House should govern India when a majority of its Members confessed that they had no special knowledge of the country or its affairs. On the other hand, those who urged that we should not interfere much with Indian business ought to remember that we were dealing with things as they were, and not with things as they might be; and dealing with things as they were, no one could deny that there was a close and necessary connection between the Government of India and the House of Commons. In order to understand the peculiar nature of that connection it was necessary to remember that the Secretary of State for India had as purely political an office as the head of any English Department. While the Viceroy continued through successive Administrations, the Secretary of State for India must be sacrificed to the exigencies of English politics. That was to say, that he might be turned out of office at the very moment when he might have rendered the most essential service to India. If, therefore, India was to be presided over by one who held a political office which depended upon the fate of the Administration, and yet her affairs were not to be treated of in that House, she must suffer under the worst system of government that could be devised, as she had to bear all the disadvantages of government by Party, and reap none of the countervailing advantages. The Indian Secretary was the only one Member of the Cabinet who had particular interest in India, and upon such questions as charging Indian finance he might stand alone against the rest of the Cabinet. Lord Salisbury himself had said that in order that he might render due service to India, he required the sympathy of the English people and support in the House of Commons. He asked what chance there was of the House exercising any watchful care over Indian finance when the Budget was brought forward at a time like that, when there were neither the means nor the time for properly scrutinizing and discussing it. The Government stated that it was for want of time earlier in the Session; but when the House remembered the time that had been wasted, the hours and the days that had been thrown away on petty personal questions, on insignificant Bills that had been discussed at great 788 length and then quietly allowed to drop when they remembered the permissive legislation, which, when passed, amounted to no more than an abstract Resolution, and had no binding force in law, which had occupied so much time—he, for one, could not accept the plea of want of time. He maintained that if the Indian Budget was to form part of the official programme of the Government it ought to be brought forward at a period of the Session when there would be a reasonable opportunity for full discussion and consideration. Did the 9th of August, after the Appropriation Bill had been read a third time, meet these requirements? Why, the noble Lord the Secretary for the Colonies (the Earl of Carnarvon) last week, in reply to some questions raised as to the treatment of Coolies imported into the Mauritius, said it was too late to deal with that question this Session. Well, if it was too late last week to consider so comparatively small a matter, was it not much too late a week afterwards to discuss the financial Budget of our great Eastern Empire—an Empire the interests of which were most closely bound up with those of England? His opinion was that India had a higher claim upon their consideration, and that her Budget ought to be treated in a very different way. It was impossible that any injury could be done to India without that injury vibrating on English commerce and English homes. That was, in fact, shown at the present time in the fact that in the manufacturing districts numerous mills were closed, hundreds of factory workmen were thrown out of employment, and all because trade was bad in India. The Chambers of Commerce in Lancashire had almost unanimously resolved to ask the Government to give up the import duty upon English cotton goods as one means of improving the Indian market. Lord Salisbury, when he visited Manchester last year, seemed to agree with that proposal, but he said he could not spare the £800,000 a-year which the duties brought into the Revenue. That might or might not be the case; but whichever way it was the remission of those duties and the abandonment of the duty upon salt, which amounted to about the same sum, would confer, it was believed, very great benefit upon the people of India, and he thought that if the Government and the Members of that House gave 789 due time and vigilance to the subject, they would be amply rewarded by the discovery of the means to abolish both these duties. At all events, the import duties might be taken off, if the House were allowed to exercise watchful care over Indian finance. Apart from that, he had another complaint to make against the Government with respect to its treatment of the Indian Budget. Not only had that Budget been postponed, but the Government had shown a disposition to make use of the House of Commons where Indian money was to be expended, and never to invoke the power of the House of Commons in a case where there was a chance of Indian money being saved. That was especially the case with respect to the constant increase of the Home Charges for the Government of India. He found that within the last three years these Charges had increased 33 per cent; within the last 20 years they had increased more than 100 per cent. That was out of the money of the people of India—one of the poorest people in the world—and it was spent in this country in the payment of salaries, the costly personnel of the Secretary of State, the purchase of stores, and in numerous other ways, over which neither the people of India nor hon. Members had the slightest control or supervision. If those various sources of expenditure came under the searching scrutiny of that House a rich harvest of savings might be reaped. Two years ago a Committee on Indian finance was appointed. Evidence upon a great number of subjects was taken, but at the end of the Session the Committee had only entered, as it were, upon the threshold of their inquiry; their investigations were, as might be expected, partial and incomplete, and in their Report they strongly recommended the re-appointment of the Committee in the following year. Not the slightest notice was taken of that recommendation. But what was done? A Committee was appointed to inquire and report upon the compensation to certain English officers. He did not say those officers were not entitled to it—he believed they were—but what he said was, that that mode of appointing Committees and disregarding their; recommendations ought not to be made a precedent in future. That Committee felt strongly that the powers of the House of Commons had been abused by its appointment, and passed a Resolution 790 that the adoption of such a precedent would seriously weaken the responsibility of the Executive Government, and that their appointment Would strengthen the impression which he had before referred to, that the House of Commons was seldom appealed to where Indian money was to be saved, but that its power was frequently invoked where Indian money was to be expended. This appeared so from the fact that although the Government said they had not had time to bring in the Indian Budget earlier this Session, they had had time to introduce two Bills to give pensions to certain officials out of the Revenues of India. If the House of Commons was to be apparently primarily responsible for India, time and means ought to be given to them to deal with the subject properly. The Government had been warned on the matter, not only in that House, but out of it. Many Chambers of Commerce had passed the strongest resolutions, calling upon the Government to introduce the Indian Budget at an earlier period. The Government had also been warned by repeated Questions within the House itself. On the 13th of May the hon. Member for Lambeth (Mr. W. M'Arthur) put a Question on the subject. The Under Secretary for India replied that it was the intention of the Government to bring in the Indian Budget much earlier than usual. How had the Government fulfilled that promise? By bringing it in at a later period of the Session than had over been the case before. On the 8th of July the hon. Member for Manchester (Sir Thomas Bazley) again asked when the Indian Budget would be taken. The Under Secretary for India said, he could not then give a satisfactory reply, but he hoped to be able to name an early day. He added that he was anxious to bring it on, because the Budget had been brought on at Calcutta at an unusually early period, and the accounts had been received from India in May. The authorities in India had, in fact, given themselves a great deal of trouble in order to enable the Indian Budget to be brought before the House of Commons in good time, and now they would find that all their labour had been cast contemptuously aside. Later in the Session, on the 20th July, the hon. Member for Kendal (Mr. Whitwell) again interrogated the Government. The Under Secretary for India this time replied that 791 he could not name the day, but he hoped to announce the day in good time, so that hon. Members might make their arrangements. On the Thursday on which the Prime Minister abandoned the Merchant Shipping Bill he sketched the programme of the Business of the Session, but did not refer to the Indian Budget. The hon. Member for Manchester (Sir Thomas Bazley) again asked when it would be taken. Far from expressing any regret, the Prime Minister replied—I do not at present know—but I have no doubt the programme I have submitted will leave my noble Friend (Lord George Hamilton) an opportunity for the Indian Budget some night before the close of the Session."—[3 Hansard, ccxxv. 1822.]Yes, it had been brought forward at some time. It was the Fifth Order of the Day on the 9th of August, and stood after the third reading of the Appropriation Bill. The right hon. Gentleman the Member for Birmingham, in his speech on the visit of the Prince of Wales to India, dwelt upon the importance of showing courtesy and kindness to the Natives of India. This postponement of the Indian Budget would, however, be interpreted as indicating a settled resolution not to give to Indian affairs the attention they deserved. In former times excuses had been made, on the ground that the Indian accounts were not received until late in the year. But this year the accounts at Calcutta were made up by the end of May, and all the reward the officials of the Calcutta Government got for extra work, zeal, and a desire to forward the public interest was to see the Budget brought in later than ever it was before. Such conduct was calculated to produce unfavourable feeling and deep dissatisfaction in India. Much had been said about the growing disloyalty of the Native Indian Press; and an officer of experience, referring to the enthusiasm with which a seditious play had been received, said that India was becoming, metaphorically speaking, a hotter place than it ever was before. The House should not be a party to a system which threw upon it responsibility in the eyes of the people of India, without any real power. They ought to dispel the idea that the English Parliament, which was responsible for the Indian Budget, cared nothing about the matter, but treated it as so trivial and insignificant as needed only the last few 792 minutes of a worn-out Session. If it was not intended that the subject should be treated with proper consideration, it would be far better never to produce a Budget at all; but if the question was dealt with in a proper way, there was a strong desire on the part of the people of India to be connected with Parliament, and nothing would cause greater regret than that it should cease. The continued intervention of Parliament in Indian affairs would be warmly welcomed; and he, therefore, in moving the Resolution which he had placed on the Paper, appealed to the House earnestly, and with some confidence, to show by its vote that it neither sanctioned nor agreed to the proceedings of the Government, and that it regarded the postponement of the Indian Budget to the close of the Session as an act which would neither promote the interests of England, nor reflect credit upon that House.
§ SIR THOMAS BAZLEY
, in seconding the Amendment of the hon. Member for Hackney, said, he must express his regret at the indifference which prevailed in the House of Commons on the subject of Indian affairs and interests. Such indifference was likely to act injuriously both with regard to the interests of that country and the industry of England. Its inhabitants numbered 240,000,000; and although, at present, mutually dependent with those of England, they were making great progress towards independence. Therefore, while he was not disposed to blame Her Majesty's Government for the course which, in many respects, they had adopted, they were, he thought, open to censure for their procrastination in bringing forward the Indian Budget. It was gratifying to think of the happy termination of the Indian Famine, and he gave the Government praise for having continued in their places the officials whom they found in office when they came into power. The Governor General had especially rendered eminent services to the Indian Empire at a most trying period. He also gave the Government credit for having obtained a Vote of £10,000,000 towards mitigating the sufferings of the people of India in that sad visitation. Of the £10,000,000, it appeared that only £6,000,000 had been expended; and that being so, would it not be well to expend the remaining £4,000,000 on public works in India? They knew that 793 Sir Arthur Cotton had devoted much attention to the question of irrigation of the soil of India, and that great advantage would result to the population of that country if the work of irrigation were extensively carried out. The people of India, though having great difficulties to contend with, were making great progress; but what they wanted most were roads and facilities of communication to exchange their products, and draw out the great resources of their country. With respect to means of communication, there was great supineness; and he might state that while America had 100,000 miles of railway communication, and England 20,000, in the vast Empire of India they had only 6,000 miles. That was a subject deserving the consideration of the Parliament and people of this country. A distinguished authority had said that the famine in India had left a lesson suggestive of the necessity of improvements in the nature of public works in that country, which, in their operation, might avert future famine; and here he (Sir Thomas Bazley) might say that an outlay of £20,000,000 on public works in that country would be a wise investment. Looking at the progress of the mechanical improvements of the age, of which India was deprived, it became the interest of this country to extend those improvements to their fellow-subjects in India, and to be careful that they did not, by neglect, let that great country slip away from them. He hoped the House would mark its disapproval of the delay which had occurred; and thus show to the people of India that there existed a feeling of sympathy for the great interests and welfare of India on the one hand, and of our own commerce on the other.
To leave out from the word "That" to the end of the Question, in order to add the words "this House regrets that the Government have so arranged public business that they have postponed bringing forward the Indian Budget until within a few days of the close of the Session,"—(Mr. Faweett,)
§ —instead thereof.
§ LORD GEORGE HAMILTON
said, he would take the liberty of suggesting deferentially to hon. Gentlemen that if they objected to the Indian Budget 794 being brought forward at so late a period of the Session, they would scarcely be consistent in delaying it still longer. Moreover, if the Motion of the hon. Member for Hackney (Mr. Fawcett) were adopted, it might be that he would not be able to bring forward the Indian Budget at all. He did not propose then to follow the remarks of the hon. Member, but to re-servo what he had to say upon them until the House was in Committee, because nothing was more inconvenient than to discuss Indian finance generally before the Statement was made on which the discussion should take place. The hon. Member had not been fair to the Government in charging it with mismanagement, muddle, incapacity, and inefficiency in the conduct of Public Business. The hon. Gentleman should remember that certain persons in Opposition had studiously opposed every Government measure, which had delayed the Business of the Session. [Mr. EAWCETT denied that he had spoken against or opposed all the Government measures.] If not every measure, the hon. Member had opposed a great many; but if hon. Members seriously wished to have the Indian Financial Statement brought on at an earlier period of the Session, they could materially assist its being done not by unduly curtailing their remarks upon various subjects, but by condensing their observations, and so allow the Government to get on with their Business. The Indian accounts had been, at his request, forwarded at an earlier period than usual this year, and that he was most anxious to bring forward the Budget before the end of May; but that was rendered impossible by the long discussions which arose before and after Easter on Bills which it was necessary to advance in order to send them to the other House. If the Indian Financial Statement was not made before the first week in June, it was very difficult to spare a day during the months of June and July, as all the time at the disposal of the Government was occupied by Bills which it was necessary to send up to the House of Lords, or which had come down from that House. The Government were anxious to introduce the Indian Budget as early as possible, and last year he was authorized to state that it was their wish to do so, and he was 795 sorry he had not been able to succeed in carrying out that intention. The hon. Member for Hackney was a little inconsistent when he charged the Government with a settled determination to ignore all Indian matters, because they had not been able to realize their intention of bringing the Budget forward at an earlier period. The hon. Gentleman had criticized the appointment of the Select Committee to which he had referred, but did he remember that he supported the Motion for its appointment in 1870, which was carried against the Government of the day by a majority of 1 only? Under those circumstances it was not fair of the hon. Member to blame the Government for appointing a Committee which he himself had been the chief means of inducing the House of Commons to press for. The hon. Member had also blamed the Government for increasing the charges upon the Indian Revenues by bringing in a Bill to throw upon them the pension of the Auditor; but the fact was, that whereas formerly the Secretary of State had power to give the Auditor such a pension as he thought fit, under the Bill the amount of the pension would be fixed. He trusted that, after the explanation he had given, the hon. Member would allow the Business of the evening to proceed without further delay. He admitted readily enough that it would be much better if the Indian Budget could be laid before the House earlier in the Session, but owing to the press of Public Business this Session it had been found impossible to bring it forward at an earlier date. The mere fact of bringing on the Financial Statement so late in the Session did not embarrass Indian finance, and he doubted if one in a thousand in India knew there was such a thing as a Financial Statement in the House of Commons. Except on one occasion the Financial Statement had not been made during the last four years before August, and therefore if it had been so detrimental to India to discuss it in August, as some hon. Gentlemen had said, the condition of Indian finance would have deteriorated; but, on the contrary, Indian finance and Indian credit had never occupied a more favourable position than they did at present. He should, however, in future do his best to secure an opportunity for bringing forward the 796 Indian Budget at an earlier period of the Session.
§ MR. A. M'ARTHUR
, in supporting the Amendment of the hon. Member for Hackney, said, he hoped the House would never abdicate its right or ignore its responsibility to look very narrowly into the principles of legislation affecting India, and examine closely the Financial Statements that were presented to them. There was great reason to complain of the delay that had arisen in bringing forward the Indian Budget this year. The hon. Member was about to refer to matters of detail with regard to the establishment of an Indian Museum, when—
§ SIR GEORGE BOWYER
rose to Order, and wished to know whether it was competent to the hon. Member to enter upon such a subject at that moment?
§ MR. SPEAKER
The original question before the House was, that this House do resolve itself into a Committee to consider the Financial Statement of the Government on the East India Revenue Accounts, since which the hon. Member for Hackney has moved an Amendment with reference to the time when that statement should be made. Although I cannot say that the hon. Member for Leicester is out of Order in his remarks, I submit that the more convenient course would be to discuss the Amendment immediately before the House, and to reserve for the Committee the consideration in detail of the Financial Statement.
MR. GRANT DUFF
said, he felt great regret that he was unable to support the Amendment of his hon. Friend the Member for Hackney. In one respect, it would no doubt be more convenient to have the Budget brought forward in the middle of the Session, but that course would be very unpopular with the great majority of hon. Members. ["No, no!"] That opinion had been forced upon him by a great deal of consideration which he had given to the subject. If this matter was not brought forward in the middle of the Session, it must be brought forward at the end, or very early at the commencement. Yielding to pressure, the late Government on one occasion tried the experiment of bringing the Budget forward in February. That caused much inconvenience in India, and also at the India 797 Office. And what was the result? Not a single person was present in the House who would not have been present if it had been brought forward in August. The amount of special interest on the part of the House in Indian matters was not very great, and the amount of it was fixed. It could not be increased or lessened by the time of the Session at which the Budget was brought forward. That being so, although personally he would like to see a change in this respect in Parliamentary procedure, he thought it was a great pity that year after year so much was said on the subject. It seemed to him not only impolitic, but almost mischievous, for the hon. Member, or any person speaking with the authority which a seat in that House gave him, to speak of the postponement of the Indian Budget to the end of the Session as anything like an insult to the people of India. That, he humbly submitted, was a most unfortunate form of expression. The truth of the matter was simply this—The postponement of the Indian Budget was only a necessary detail of English Parliamentary proceedings, and he did not believe that any living creature in the Indian Peninsula would ever have attached any importance to it if it had not been for the manner in which the subject had been constantly raised in the House. It would be better to bring it forward in the month of June, but if it could not be conveniently brought forward in June, then let it be brought forward in August.
§ Question put, "That the words proposed to be left out stand part of the Question."
§ The House divided:—Ayes 90; Noes 65: Majority 35.
§ Main Question, "That Mr. Speaker do now leave the Chair," put, and agreed to.
§ Matter considered in Committee.
§ (In the Committee.)
§ LORD GEORGE HAMILTON
, in moving a Resolution relating to the revenue Accounts of India for the year ending the 31st day of March, 1874, said, that the Accounts and Estimates connected with the Revenue and Expenditure of the Indian Government which would come under the consideration of the Committee that evening embraced 798 the Actual Accounts for the year 1873–4, the Regular Estimate of 1874–5, and the Budget Estimate of 1875–6. Indian accounts were published in such a shape as to show not only the ordinary, but also the extraordinary expenditure. Their form of account differed from that adopted by any great commercial company, inasmuch as it debited against the annual Revenue, Expenditure which ought more properly to be placed against the Capital account. He proposed, therefore, in considering the Estimates and Accounts of Revenue and Expenditure, first to exclude the expenditure for Public Works Extraordinary, and then to take that expenditure by itself—an arrangement which would conduce to a clearer understanding of the state of the Indian finances. In doing so, he would take credit on the part of the Government of India for the safety of their Estimates of Revenue, which was very clearly shown by the different stages through which the Estimates and accounts of the Indian Government passed for not only did the regular Estimate of Revenue show in this, as in preceding years, a large gain upon the Budget Estimate, but we might, in addition, confidently anticipate that the full increase of the Revenue would not be shown until the Regular Estimate had passed into the last stage of Actual Accounts.
He would first give the Committee the Actual figures for 1873–4, and would compare them with the Regular Estimate of 1873–4.
It was estimated last year that the Revenue of the year would amount to £49,478,795, and the Expenditure to £51,531,408, showing a deficit of ordinary Revenue over ordinary Expenditure of £2,052,613. The Actual Accounts showed an increase of Revenue over the Regular Estimate of £119,458, and a decrease of expenditure of £125,487, thus making a gain of £244,945. The deficit was, therefore, reduced from £2,052,613 to £1,807,668. Comparing those figures with the Actual figures of the preceding year, they arrived at the following result:—that there was a decrease of Revenue of £621,000, which was accounted for by the abolition of the income tax in that year. The Land and Opium Revenue of 1872–3 were exceptionally high; but the other chief heads of receipt showed a small 799 but satisfactory increase. The Actual figures of 1873–4 showed that the Famine expenditure was £3,864,673, while the total increase of expenditure, including the Famine expenditure, was £2,952,104. If they deducted, therefore, the exceptional Famine expenditure from the ordinary expenditure of the year, there was a decrease of ordinary expenditure of £912,569. Not including the Public "Works Extraordinary or the Famine Expenditure, they found that the ordinary Revenue this year showed a surplus of £2,057,005 over the ordinary expenditure.
The Budget Estimate of last year had now become the Regular Estimate of this year, and he would now compare the Budget Estimate for 1874–5 with the Regular Estimate for 1874–5. The Budget Estimate of Revenue was £48,984,000. The Regular Estimate was £50,070,410, showing an increase of £1,086,410. The Budget Estimate of Expenditure was £50,372,000, and the Regular Estimate of expenditure was £50,564,000, showing an increase of £192,000. But that increase was almost entirely due to the construction of the narrow gauge railway to Tirhoot, which cost £185,000. The Regular Estimate, therefore, was £894,000 better than the Budget Estimate of last year, and the deficit of £1,388,000 was reduced to £494,000. But he was happy to say he had that day received a telegram from the Viceroy, giving a very good account of the prospects of the year, and expressing a hope that the deficit, first estimated at £1,388,000, and now reduced to £494,000, would ultimately grow into a surplus. That was all the more satisfactory, inasmuch as the Famine had caused a falling off of £320,700 in the land revenue, while there had also been a decrease of £96,000 in the Customs.
The other items of Revenue exhibited a satisfactory increase, but the increase which would most interest the Committee was that derived from the salt revenue. Last year the Government of India made an experiment by the abolition of the preventive line in certain districts. It was estimated that that would entail a loss of £100,000 to the Revenue, but the actual loss had been only £40,000. But so satisfactory had been the growth of the salt revenue in other parts of India that there had been 800 an increase of £109,000 over the Estimate of last year, while there had been also a decrease in the working expenses of £11,000, making the total increase on the salt revenue £120,000. The sliding scale, which, as he had explained last year, it was necessary to introduce in the districts where the preventive line was abolished, had worked well. There had been a considerable reduction of the salt duties in certain districts, and the whole of that reduction had gone into the pockets of the people. The railways were cheapening salt and extending its consumption, and he was sanguine enough to believe that in a few years they would be able to abolish the whole of the preventive line, and thus to place the salt revenue on a more equable footing.
The surplus shown by the Regular Estimate, if they excluded the Famine expenditure, amounted to £1,945,647. But the second portion of the Famine expenditure had to be borne in this financial year, and that entailed an expenditure amounting to £2,440,136. And here he might observe that it was a matter of congratulation that the happiest results had attended the exertions of Lord Northbrook, the hon. Gentleman opposite (Sir George Campbell), and Sir Richard Temple to save the lives of the people from starvation. A contrast had been drawn, which was not to be wondered at, between the Famine expenditure in Bengal and that in the North-West Provinces. He could explain in a few words how the expenditure in the former case was so much heavier than in the latter. Last year, in bringing in the Bill to raise money for the Famine, he stated that the Government of India felt serious anxiety concerning one part of Bengal alone—namely, the part situated between the Ganges and Nepaul, where the population was very dense, and there the means of communication were very deficient. The districts were under another disadvantage, for, in ordinary years, so far from importing food, they exported large quantities of rice and grain. Around these famine districts was an outer fringe of territory, in which want and scarcity, but not famine, was anticipated. In this outer fringe were those portions of the North-West Provinces affected by the drought. There was a very abundant harvest in the Punjaub, and in 801 parts of the North-West Provinces, and large quantities of grain were brought down by private trade into the North-West Provinces and those parts of Bengal intersected by the railways. The Government felt that they might largely rely upon private trade for the supply of this outer fringe, and they therefore concentrated their attention upon those districts which, from want of access or other causes, private trade would not be able to supply. It was therefore in consequence of the Famine expenditure in the North - West Provinces being so small that the expenditure in Behar and Bengal was so large, for the grain and rice which would otherwise have reached the Famine districts in Bengal was absorbed by the outer belt of scarcity surrounding them. From a Return which would shortly be in the hands of hon. Members, they would find that out of a total of 479,696 tons of rice which had been purchased, close upon 200,000 tons had been devoted to relieving the districts north of the Ganges, the waste being 21,000 tons; while there remained at the close of the Famine 95,126 tons on hand, which had been sold at £2 16s. per ton. The total estimated expenditure for the Famine was £6,500,000, and the actual amount was £6,304,809. The surplus revenues of the two years would, if the Famine had not taken place, have amounted to £4,000,000, but the Famine had turned this surplus into a deficit of £2,300,000. Taking, therefore, into account the supposed want of elasticity in the Indian Revenues, he thought that the fact of there being an exceptional expenditure of £6,300,000 during two years, and the revenues of India being able to furnish £4,000,000 of that expenditure without any additional taxation, was the strongest proof he could offer that they were not in a very unsatisfactory condition.
He now came to the Budget Estimate for 1875–6. The Revenue was estimated at £49,820,000, somewhat higher than that of the preceding years. The Estimate of Opium Revenue for the year was taken higher than in the Budgets of preceding years. It had been found that the net Opium Revenue since 1866–7 had averaged £6,620,927, and that it had never been below £6,000,000. The Government of India had taken it this 802 year at £5,750,000, being £250,000 below the lowest amount since 1866–7. The other items of Revenue showed a very small, but still not unsatisfactory increase. The Expenditure was estimated at £49,314,000, being £1,189,000 in excess of the year immediately preceding, exclusive of the Famine expenditure.
There was an increase of £191,000 for Army charges, of £451,000 for guarantees of interest, while there was a loss on exchanges amounting to £621,000, making a total of £1,163,000. Now, with respect to the Army expenditure, he did not think any very large reduction could be made. He was always under the impression before he came into office that it was possible to make large reductions in the military expenditure; but, with his present experience, he did not see how they were to be made. On the other hand, he thought they could prevent any increase. It should be borne in mind that we had not only imported a great number of European soldiers into India, but that the cost of each individual importation was increasing. A Committee had been appointed before the close of last Session, composed partly of gentlemen from the India Office, and partly of gentlemen connected with the War Office, with Mr. Bouverie as President. Their Report had been issued, and he felt bound to say that it realized the expectations of many who had expressed the opinion that the system of short service would lead rather to the increase than a decrease of the cost of the annual drafts to India, although the increase was not large. The increase of £191,000 for the Army was, he might add, due to certain alterations which were made in the pay given to European troops in India, to the increased pay to majors of Artillery, including those officers who were promoted by Royal Warrant in 1872. At the same time, it must be observed that a considerable portion of that expenditure would ultimately result in benefit to India, as the prospective chances of a certain number of officers of receiving permanent allowances as colonels had been commuted. His hon. Friend the Member for Hackney (Mr. Fawcett), in a speech which he made last Session, pointed out that in his opinion the best way to secure economy in Indian expenditure was to interest 803 the House of Commons in Indian finance; but he (Lord George Hamilton) felt bound to say that most of the Motions which were brought forward in that House with reference to India were not made with a view to economy, but rather with the object of getting money. It was the fashion to attack the Indian Government for their military expenditure, but it was in no small measure due to the guarantee clause which that House had imposed upon the India Office, and by which the Indian Government was bound to pay, promote, and pension all the officers handed over to them from the East India Company, whether they required their services or not. The increase on account of the interest guaranteed on railways was more nominal than real, inasmuch as last year there was an immense amount of grain carried by the Indian railroads, which swelled the traffic receipts. The Government had, to a certain extent, benefited by those increased receipts; but then it should be borne in mind that there were other items of Revenue in which a loss was caused by the Famine. The loss by exchanges was very serious; but whether it was due to the substitution in Germany of a gold for a silver standard, or any other extraneous cause, he did not propose at present to discuss. He thought it pointed to the wisdom of one of the principles laid down last year in a despatch from the Secretary of State for India to the Governor General. That despatch intimated that if the Indian Government wished to borrow for Public Works, it would be better to borrow in India than in England. As to Home Charges he did not think the charges on the establishment had much increased; the increase under the head of superannuation allowances being simply a matter of account.
Summing up, then, the accounts for the year 1875–6, we found that the Revenue showed a satisfactory increase, and that the Expenditure, though swollen, still left a fair margin of £500,000 of Ordinary Revenue over Ordinary Expenditure. A great deal had been said about the chronic deficit of the Indian Government; but, taking the figures from the years 1869–70 to 1875–6, the surplus for the seven years, even including the expenditure for the Famine, was no less than £4,695,000. If we excluded 804 the Famine Expenditure, which was of a very exceptional character, amounting to £6,304,000, we had a surplus during those seven years of about £11,000,000.
The most important head of Expenditure was, no doubt, that on Public Works. There were two parties in the House—one, represented by the hon. Member for Cambridge (Mr. Smollett), objected to any expenditure for Public Works; and the other, represented by the hon. Baronet the Member for Manchester (Sir Thomas Bazley), wished the Government to spend £20,000,000 a-year. No one would dispute that it was the duty of Government to construct Public Works; but it was always a difficult question to decide where a Government should stop and private enterprize begin. As, however, there was not much private enterprize in India, more depended on the Government than would otherwise be the case, or than would be necessary some years hence when private enterprize had been stimulated. It was the special duty of the Indian Government to construct works of general utility and of a remunerative character, for the Indian Government was the owner of the soil of the country, and derived a very large revenue from it. They were much in the position of a landlord who, possessing a large property, determined by opening it out, to increase its value, although aware that the actual tolls levied on the roads constructed, might not compensate him for the cost of their construction. Lord Dalhousie, first perceiving the enormous advantage of introducing the railway system into India, made certain proposals to the Court of Directors, and suggested that railways should be constructed by companies who should receive the guarantee of Government. His proposals were accepted in the main, though with many modifications which were not favourable to the Indian Government. There were two reasons why it was then necessary to entrust the construction of railroads to guaranteed companies—first, they would not have been undertaken by private enterprize without a guarantee; and, second, the East India Company could not themselves have constructed them without exceeding their borrowing powers in England. Therefore, the guarantee system was almost the only way in which money could be 805 raised for constructing railroads, and it had its advantages as well as its disadvantages. It secured the continuous application of capital; but, on the other hand, the mere fact of giving a guarantee, particularly when the rate of interest was high, did not lead to economy either of construction or working. Lord Lawrence, in a Minute with which hon. Members would be familiar, pointed out that it was impossible that this system could go on much longer. His opinions were adopted by Lord Mayo, and the system of guarantee was now at an end. The Indian Government still felt the great importance of carrying on the construction of railways; and as they refused to avail themselves of the aid of guaranteed companies, it became necessary that they should construct them themselves. In 1873 the Government of India by resolution announced the intention to devote, for five years, £4,500,000 to the construction of Public Works Extraordinary, which were to be of a reproductive character—£3,000,000tobespent on railways and £1,500,000 on canals. When, the Marquess of Salisbury came into office he found this resolution of the Indian Government recorded, and it was in consequence of the determination of the Indian Government to spend this large sum annually, that last year a Bill was passed through Parliament by which was appointed an officer through whom responsibility might be concentrated and brought home to those whose estimates might prove to be incorrect.
One of the advantages of the Budget being postponed until August was, that within the last few days he had received a forecast of the Public Works expenditure. As the hon. Member for Cambridge was going to call special attention to this point, he was glad to be armed with the Return, which showed that the Government of India were very cautiously entering upon the construction of Public Works, that their calculations had proved correct, and that no additional annual charge for the construction of the works which they undertook would be placed against the Revenues of India. Lord Lawrence estimated that the Revenues of India would bear an annual charge of £2,000,000; and Lord Mayo and Lord North brook had both held that those Revenues could afford to bear the present annual charge for 806 Public Works, amounting to £2,200,000, in which was included guaranteed interest. The calculation which the Indian Government had made was that they would annually spend for the next three or four years a sum of £4,000,000 upon the construction of Public Works Extraordinary, and at the end of that time, owing to the reduction of guaranteed interest, and to the receipts from the constructed works, the charge for interest would be considerably less than at present. Their Estimates were made with very great caution. They calculated that all the money would have to be borrowed, and borrowed at 4½ per cent. although they could now raise money at a premium at 4 per cent. It was quite clear that, unless something unforeseen occurred, we should be able so to adjust expenditure as in most years to have a surplus of no inconsiderable amount, which could be applied to the construction of Public Works Extraordinary. Therefore, it was more than probable that a considerable portion of the money to be expended upon Public Works would not be borrowed money, and the remainder, instead of being borrowed at 4½ per cent. as estimated, would probably be borrowed at 4 per cent and at a premium. These Estimates were framed upon assumptions most unfavourable, and yet at the end of five years the annual charge on the Revenues of India for Public Works would not be greater than at present, or not as great. The hon. Member for Cambridge might fairly say we were increasing our liability and raising money which would have to be paid off, and he might ask where the sinking fund was for the payment of the incurred debt. The railways and other works which they were constructing would develop the latent resources of India, and thus add to the Revenue, and the increase of the Revenue would furnish a sinking fund. The outlay upon State railways had been and was estimated to be as follows:—Up to 1873–4, £5,606,125; during 1874–5, £2,777,550; 1875–6, £3,000,000; and from 1876 to 1880, £2,700,000 annually.
The other class of Public Works which it was proposed to construct was irrigation works. The total amount which had been expended on irrigation works up to 1873–4 was £11,703,775; and the Re-turn was £610,771, which showed a 807 dividend of 5.2 per cent. The annual outlay for irrigation was at the rate of £ 1,300,000 a-year for the next four years. If the guarantee system as regarded railways had not always been satisfactory, he was afraid that the attempt to carry on irrigation works by means of guarantees had been an absolute failure, because the last irrigation company did not even pay its working expenses. While the Committee would be disposed to support the Government in carrying out irrigation works where a supply of water was absolutely necessary, he could quite understand their wishing to press upon the Government of India the great necessity of proceeding with caution. Lord North brook was fully aware of that necessity; all the Estimates had been made with the greatest care; and if their anticipations were not realized, it would always be possible to stop the expenditure upon that class of Public Works, which experience proved were unremunerative in their character.
Taking the expenditure upon Public Works Extraordinary for the three years 1873–4, 1874–5, and 1875–6, we arrived at the following results:—There were deficits for these years respectively of £5,360,975, £4,526,592, and £3,794,000. The Committee would see that the policy, as now carried out, was no new one. The Indian Government were conducting these Public Works under more favourable conditions. The railways were being made more cheaply than before. The money could be borrowed at 4 instead of 5 per cent. and, if possible, the money necessary to be borrowed was to be borrowed in India. Last year he stated the principles on which the Secretary of State had determined the Public Works in India should be constructed. They were that only works of a remunerative character should be undertaken; that they should be constructed from money borrowed in India; and that those of an unproductive character should be debited against ordinary Revenue. To those principles the Secretary of State was determined to adhere.
The cash balances for 1874–5 were in India £15,700,000, and in England £2,793,000, makingtogether£18,493,000 The expenditure for Public Works Extraordinary this year would amount to £4,300,000. The withdrawal of capital by the guaranteed railway companies was not yet completed, and was estimated 808 for the present year at £633,700, making altogether £4,933,700, for which it would be necessary to find ways and means. There was a surplus of £500,000, and certain cash receipts amounted to £316,000, so that after deducting these sums there would remain £4,100,000 to be provided. If the whole of that sum were taken from the cash balances, they would be reduced to £12,000,000 in India, and £2,500,000 in England. The Viceroy thought that would leave them too low in India, and in June, 1875, he had borrowed 2.50.00.000 rupees in Calcutta. The result of that loan was most satisfactory. The tenders were opened on the 16th of June, at Calcutta. The minimum was fixed at par. The total amount at or above the minimum applied for amounted to 126.96.36.1990 rupees. Of that sum 188.8.131.52 rupees had been applied for by Europeans, and 184.108.40.2060 rupees by Natives. In addition to this, so much higher were the tenders by Natives, that 1.07.33.500 rupees were allotted to Europeans, and 220.127.116.110 rupees to Natives. The average rate at which the loan was obtained was 102.4.1 rupees, and the tenders at 102 were accepted to the amount of only 88.97 per cent, so that the first result of the financial principle that the money employed in reproductive works should be borrowed in India had been extremely satisfactory.
He had now endeavoured to state fairly the condition of Indian Finance. He could not disguise from the Committee that this Public Works expenditure, if it were not remunerative, placed a heavy charge upon the Revenues of India. The Viceroy and the Secretary of State would, therefore, watch very carefully the result of this outlay, and would stop it whenever it proceeded beyond due limits. The best proof that the condition of Indian finance was not unsatisfactory was the credit of India in the market. Some might think that this was due to the connection between England and India. It would, however, be found that the credit of India since 1865 had risen in a greater proportion than the credit of England, and this rise of credit must be due to the fact that Indian finance was annually assuming a more satisfactory character. Foreign trade was increasing. If the Indian Government was able to devote a large sum every year to works of a reproductive 809 character, thus adding to the wealth and productive power of the country, without increasing the annual charges, and if the annual expenditure were kept below the income, the financial condition and credit of India must steadily improve. He would admit that the margin was not such as to allow of great reforms; but the two reforms which, in the opinion of the Secretary of State, were necessary, were a reform of the salt duties and the import duties. He believed that in a few years they would be able to place the salt duties in a satisfactory position. A few days ago they received a telegram stating that the Viceroy had effected certain alterations in the tariff of India. A few weeks ago a despatch had been written by the Secretary of State respecting the cotton duties, showing that whatever competition occurred between Manchester and Indian goods was confined to the coarser goods, and that Manchester was supreme in the higher class of goods. In that despatch, which had not yet been received in India, the Secretary of State pointed out that India possessed advantages in her proximity to the place of production, and in having an unlimited supply of labour; while, on the other hand, Manchester had great advantages arising from capital and machinery, and from possessing an older-established and more scientifically worked industry. The opinion of the Secretary of State was, that even without the import duty the manufactures of India would hold their own in the coarser fabrics of cotton. The Secretary of State added, that whenever it was assumed that the interests of England and India were antagonistic, the sooner such a dispute was settled the better, because the irritation caused by this supposed antagonism would increase and render a satisfactory settlement of the question annually more difficult. A telegram had recently been received stating that the Government of India proposed to make certain alterations in the tariff. It was impossible to discuss so important a question as the revision of the tariff by telegraph. He hoped the Committee would not assume, as a matter of course, that the proposals of the Governor General must receive in their entirety the sanction of the Secretary of State. The Secretary of State would give this matter his most careful consideration, and whether these proposals were accepted, or whether 810 the Secretary of State might find it to be his duty to consider an alternative plan, the Committee might rely upon it that whatever alterations were adopted they would not be opposed to the financial policy of the last 25 years.
One of the great advantages of Indian finance was that two-fifths of the total revenues were raised from the land. That was a source of revenue that could not slip away, and so far from being likely to diminish it must increase. He would admit that the Customs and Excise did not show great signs of elasticity. The Customs, the Excise, the Stamps, and Salt, however, showed an increase of £350,000 on an average of the last two years compared with the three preceding years, and if that increase was not so great as could be wished, it must be borne in mind that a reduction of duties in India did not lead to that great increase of consumption which accompanied every reduction of the tariff in this country. The Natives of India were frugal and abstemious, and their powers of consumption were as limited as ours were unbounded; and until a revolution was effected in the habits, nature, and mode of life of the people of India, we could not put in force that financial policy which had enabled us, by constant remissions of taxations, to raise even larger sums from the taxes which remained. He must admit that the expenditure of India could not be largely reduced. We had given India a better Government than she ever had before, and we had secured for her the inestimable advantages of peace and order. Introducing, however, European system of Government, it had been necessary to annually import a large number of British subjects to carry on the civil administration of India, and the presence of a European Army enabled the Native troops to put down local disturbances and secure order in the most remote districts. If, however, we attempted to dispense with the European element, England would eliminate the backbone of her Government in India. Although the charges for administration and for the Army in India need not necessarily increase, yet as the Europeans were taken from a country where the price of everything was increasing, it was probable that the Indian Government would not be able greatly to 811 reduce that portion of expenditure. If they could not largely reduce expenditure, on the other hand, by a judicious revision from time to time of their tariff, and by a cautious system of Public Works expenditure, they might, he believed, largely increase the productive power, and, consequently, the capacity of India to bear taxation. If they could succeed in so developing the resources and the latent wealth of India, and in so improving her moral and material condition as to annually enable her to bear with greater ease the cost of the Government from whom she had derived such benefits, they would have achieved a two-fold feat more tending to their credit as a nation than the long series of victories and successes which had made them masters of the Indian Empire. The noble Lord concluded by moving the formal Budget Resolution.
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 1874 was £49,598,253; the charges in India, including the collection of the Revenue, Interest on Debt, and Public Works ordinary, were £42,094,995; the charges in England (including £1,156,535, the value of Stores supplied to India) were £7,873,574; the. Guaranteed Interest on the Capital of Railway and other Companies in India and in England, deducting net Traffic Receipts, was £1,437,352, making a total charge for the same year of £51,405,921; and there was an excess of Expenditure over Income in that year amounting to £1,807,668; that the charge for Public Works extraordinary was £3,553,307, and that, including that charge, the excess of Expenditure over Income was £5,360,975."—[Lord George Hamilton.)
§ MR. SMOLLETT
, in rising to move to add at the end of the Question,and, in the opinion of the Committee, the statement of the Indian Finance now submitted is unsatisfactory, because the policy of the Government of India is based upon the principle of borrowing large sums of money in each year, without reference to the income of the Country, in order to carry on, through Government agency, undertakings of a speculative character, and classed as 'extraordinary,' many of which, especially works of irrigation, past experience has proved to be unremunerative,said, he was not one of those who thought that any great mischief was perpetrated because the Financial Accounts of our great Indian Empire were not laid upon the Table of the House at at early period of the Session. It was said that those Accounts were only produced and discussed at a time of the 812 year when hon. Members, wearied with six months of laborious idleness, and jaded with constant wrangling, were little inclined to take into serious consideration any topic of grave importance. Secretaries of State had promised reform in that matter, but it never came; and, for his part, he thought it mattered little whether it came or not, because if the Accounts were laid before them in February, at the same time as the Speech from the Throne, and discussed in March, the same apathy, indifference and neglect would be exhibited as were shown in the month of August. The reason was obvious. At the last General Election in 1874, there were returned to the House only six Gentlemen who, by long residence in India, had acquired any knowledge whatever of the country or the wants of its inhabitants, and the number of those Gentlemen was diminishing in every Parliament. It was not so in former times. In bygone days, under the double Government, before the destruction of the old Court of Directors, men of eminence in the civil and military services, gentlemen who had made fortunes in commerce, or men who had attained to eminence at the Indian Bar, sought eagerly admittance to the House of Commons, and frequently obtained admittance; for a seat in Parliament in those days was reckoned a stepping-stone to the attainment of a seat in the Court of Directors—a haven of bliss to old Indians. Gentlemen in Parliament, and possessed of seats in the Court of Directors, were well posted up in Indian affairs, and if any job, political or financial, was in contemplation, they had ample opportunity of dealing with and exposing it. Now, men who returned from India were placed in the Indian Council, and were not allowed to enter that House, which thus lost the benefit of their wisdom and experience, if they had any. The consequence was, that the Secretary of State was the only person who knew anything of the policy about to be pursued in India, and Secretaries of State for India very seldom took the House of Commons into their confidence, while debates raised by independent Gentlemen were generally as dull as ditch water. On the 3rd of August last year they discussed the financial affairs of India, and it was reported in the Resolution of the House that there was a surplus revenue of 813 £1,765,000. That, however, was a sham surplus. There was a real deficit of £418,000, caused by expenditure on Public Works Extraordinary. The Budget of 1872 was not, however, a bad one, because it was framed on the policy of Lord Mayo—namely, that no public work should be constructed with borrowed cash. That policy he enforced stringently from 1869, and it proved to be a great success, for in 1870 and 1871 Lord Mayo had the satisfaction of seeing a surplus income amounting in the two years to an aggregate sum of £1,810,000, and although there was a deficit of £418,000 in 1872, it was not met by borrowing money. The deficit of that year was paid out of the great cash balances which had accumulated under the Government of Lord Mayo, and which amounted to something like £19,000,000. The Budget of 1873, which was now before the Committee, was framed upon a totally different policy. In July of that year Lord North brook, with the concurrence of his Council, passed a resolution ordering the expenditure during the next five years of £22,000,000 sterling on Public Works Extraordinary. The outlay was required to be made at the rate of £4,500,000 a-year, and the money was to be spent without the slightest reference to the Ways and Means of the year. This resolution entirely set aside the prudent policy of Lord Mayo. Well, in 1873 there was a deficit of £5,360,000. Next year there was a deficit of £4,588,000, and in 1875 the estimated deficit was £3,794,000, the deficits of the three years amounting to £13,742,000. That he regarded as mischievous finance, although it was sanctioned by the Duke of Argyll and was apparently tolerated by the Marquess of Salisbury. In 1873 there was—if they did not take the Famine Charge into account—a surplus of ordinary revenue amounting to £2,050,000. That sum was applicable strictly to the relief of the Famine, and as the charge under that head in 1873 was £3,880,000, the whole amount necessarily required for the exigencies of the Famine would have been met by the surplus of £2,050,000, together with £1,800,000 to be taken from the cash balances of £19,000,000. If this course had been adopted, India would have met all her legitimate requirements without borrowing money. But heavy loans were had 814 recourse to, because Lord North brook needed a further sum of £9,000,000 sterling, agreeably with the resolution of July, 1873, for expenditure in that and in the following year. This expenditure was for extraordinary undertakings—works which he would show were unremunerative. As the famine of 1873–4 had been mentioned in connection with Indian Finance, he would, with the permission of the Committee, venture to say a few words on that subject. The Famine itself was the sole topic that occupied the minds of the people of England last year in connection with Indian affairs, and that was the only matter that had been shunted in both Houses of Parliament. His observations on the subject should be laudatory, because he liked to give credit where credit was due. In dealing with this great calamity, which threatened for a time to destroy the fertility of some of the finest provinces in Upper Bengal, Lord North brook had exhibited the true spirit of an English statesman, a spirit that had never before been displayed in our management of Indian affairs. In 1874, for the first time since Great Britain had become the paramount power in Hindustan, the entire resources of the Exchequer of that great country had been applied without limit and without stint—he wished he could say without undue profusion—to the relief of suffering humanity. He was not going to refer in detail to the manner in which the Famine had been met, because he believed that some difference of opinion existed upon that point. He would not discuss those differences, because, in the end, every obstacle, every difficulty, every disaster seen, had been surmounted; and, moreover, he might say that everybody appeared to have co-operated most loyally with the Viceroy with the view of saving life. The whole credit of the way in which the Famine had been dealt with was, however, due to Lord North brook, who had never truckled to idle sentiment or to silly clamour, and had refused from the first to lay an embargo upon the export of cereals from Bengal, a course of proceeding which might have obtained for him some temporary popularity, but which would have eventually landed him in considerable difficulties. If ultimate success was proof of absolute 815 wisdom, then Lord North brook's action was beyond criticism, as far as the means he adopted for stopping the Famine were concerned. The very success, however, that had attended that action rendered it clear to him (Mr. Smollett) that the extent of the Famine itself had been somewhat exaggerated. Had the Famine been so severe as had been represented, many thousands of people must have inevitably died of starvation, whereas the House was informed that only 22 persons had died from the effects of the Famine out of a population of as many millions. If the Famine had been as severe as had been stated, such a result would have been, not a marvel, but a miracle, and he believed that the age of miracles was passed. The paucity of deaths officially reported; the absence of all authoritative information of any great destruction of agricultural stock, and the fact that many hundred thousands of the peasantry were fed from Government funds up to November, 1874, all tended to show that profusion was the order of the day in India. But he did not blame Lord North brook for that profusion, inasmuch as the times were not favourable in that year to economy, and the pressure brought to bear on Lord North brook and his Council probably rendered that profusion unavoidable. All honour, therefore, in his judgment, was due to the present Viceroy in this matter. His conduct throughout this difficulty contrasted most favourably with official action in 1867. In that year, a famine of great intensity raged in Orissa, a Province immediately contiguous to the seat of Government in Calcutta. But the matter was neglected; and in that year 1,000,000 of people, out of 5,000,000 of population, were proved to have perished miserably through sheer neglect. In his judgment, if the same respectable mediocrity had been in office in India in 1874, the mistakes, disasters, and horrors of 1867 would have been infallibly reproduced. Having said this much in praise of Lord North brook, he felt bound to state that, under that noble Lord's auspices, the finances of India were yearly getting into an awful muddle. There was immense and wasteful profusion in the Civil Service and in the Army. In the latter especially, promotion was given in the most extravagant manner, and legions of field officers were 816 created, who idled their time in India while drawing £1,000 per annum in that country, merely to enable them to attain a rank which would give them £1,200 a-year in this country. His strictures, however, would chiefly apply to the Public Works Department. He had been told by Members of the Indian Council that India would be perfectly able to meet all her requirements, provided some check could be put upon the wild extravagance and the waste of her Public Works Department. Barracks and other establishments had been built everywhere, rivers were being opened up, and works of irrigation were being constructed in the interior, and altogether the riot and extravagance in the Department were something awful. He had obtained last year from reliable sources a return of the total sum paid to the department of public works in India, from which it appeared that that total amounted to no less that £1,250,000 sterling per annum. Doubting the accuracy of these startling figures, he had asked the hon. and gallant Gentleman opposite (Sir George Balfour) to revise them, and the result of the hon. and gallant Gentleman's revision was to increase the total to £1,500,000. Under those circumstances, he thought that he was justified in denouncing this Department as a vile and bloated one. It had increased, it was increasing, and it ought to be diminished; it was under no control, it was master of the situation, and it was a permanent establishment. It would be a great bane to the wealthiest country in the world, but to a poor country like India it was an absolute curse, because it required an expenditure of some £10,000,000 a-year upon public works as an excuse for its existence. In his opinion, that establishment ought to be reduced in numbers and in pay by at least one-half, otherwise India would never have a surplus. He protested against the way in which Indian Budgets were prepared—there being first an Ordinary Budget, out of which everything was kept that could be omitted; then there was an Extraordinary Budget, in which everything was put that was omitted from the first; and then there was a Famine Budget besides. All Indian Budgets came before the Committee of that House three times—first as a Sketch Budget, next as a Regular Budget, and then, in the third 817 year, as an Actual Budget—a process that was greatly calculated to mislead. This system was introduced six or eight years ago by one of those financiers whom we sent out to teach the Indian officials arithmetic. However introduced, it was indefensible, for it served only to mislead and delude. There was always shown a surplus of Revenue, which was a mere sham, for the Executive in India had for many years been perfectly unable to make the two ends meet, and had been obliged year after year to have recourse to loans. No Budget was worth the paper on which it was written if it did not show in one sheet all the expenditure which the Government meant to sanction during the year. There should be no division into "Ordinary" and "Extraordinary," and the Budget should be framed in entire subordination to the Ways and Means of the year, and in no single year in time of peace should any proposal for disbursement exceed the Revenue of the year. They should rather fall below it. If there was a surplus of income that surplus should be applied to the diminution of the National Debt of India, and if there was a constant surplus, taxation should betaken off, those taxes being remitted which pressed most severely upon the people. If, on the contrary, there was an annual deficit, then the Viceroy should be required to show by what fresh taxation the Income and Expenditure could be balanced. Budgets like the present, which showed in the receipts the income derived from Extraordinary Works, but did not show the expenditure which was the origin of that particular income, were Budgets which deceived the public and aid the truth. In his judgment, the time had come when by some authoritative Resolution of Parliament a stop should be put to the waste and extravagance which had been going on for many years, particularly in the Department of Public Works. Immense sums of money had been devoted to Extraordinary Works, of which we knew nothing except that they were, to a great extent, unproductive. In the years from 1872 to 1875, inclusive, the Expenditure of India had exceeded the Revenue by £14,100,000 or £14,200,000. That was a very serious state of things in times of perfect peace. The excess of Expenditure had been met by borrowing £10,500,000 818 in this country and in India to carry on Public Works, and by the abstraction of £3,000,000 or £4,000,000 from the cash balances. It was the object of his Resolution to compel the Viceroy to keep within his income of £50,000,000. If we meant, as he presumed we did, to rule India for a couple of centuries or so, and if we desired to see a contented population, we must adopt a safe line of finance. On the 9th of June last year the noble Lord the Secretary of State for India, addressing an august Assembly over the way, praised to the skies the Public Works Department. He admitted that finance was not its strong point; but he rejoiced exceedingly that it had works of irrigation to carry out, the cost of which would be £18,000,000. He said, moreover, that that amount would have to be greatly increased. He referred to one scheme, prepared, as he said, by one of the great engineers of India, which would itself require £14,000,000in addition to the£18,000,000 already mentioned. His Lordship then pointed out that the construction of 9,000 miles of railway was in contemplation, and altogether he spoke of an expenditure of £100,000,000 on Public Works in British India. That Apostle of Indian expenditure (Sir Arthur Cotton) wrote to The Times rejoicing that £100,000,000 was going to be immediately expended, and hoping it would be followed by other hundreds of millions in rapid succession. And Sir Arthur Cotton was not supposed to be out of his mind. In Manchester, in January last, however, the noble Lord spoke in a different strain, a strain which he (Mr. Smollett) could by no means reconcile with what had just been uttered by the noble Lord the Under Secretary of State (Lord George Hamilton) upon the subject. Some of his Lancashire friends had been pressing him to urge forward works of irrigation; but the Marquess of Salisbury, on this occasion, pooh - poohed irrigation. He said that years ago he had believed in great profits from irrigation, relying on the strong assertions of certain gentlemen who had made themselves its advocates, and who propounded false doctrines on the subject; but he had lately looked into the accounts, and it would have been well if he had done so some years previously. He had found that it was all a deception. 819 Very few works indeed, he said, had been a success, and many of them had been great impostures. Yet they had heard again to-night, from the Under Secretary for India, of profits. He (Mr. Smollett) had no faith whatever in calculations which showed such a result. It was not for him to reconcile the discrepancies of the two statements of the noble Lord. To him they were an enigma. For his part, he had never altered his opinion. Twenty-five years ago he investigated the subject of irrigation in India, and made himself master of it. He saw the delusions which people sought to spread about enormous profits, and he endeavoured to dissipate them. He denounced, not irrigation, but irrigation according to the principles of stupid military engineers. He showed the falseness of the data of their calculations as to profit, and the still greater falseness of their data as to expenditure. In this country in and out of Parliament, he followed the same course; but he might as well have whistled jigs to milestones, hoping to see them dance, as expect to get an Indian Secretary of State to listen to words of common sense. Every Secretary of State who had been selected for office during the last 15 years had been appointed mainly because he knew nothing of the country. They had all been men of intense faith. They had believed in the stories which engineers told of profits of 100 per cent. showing as much credulity as the men who had put their faith in the Honduras Loan or the Emma Mine. Every Viceroy also who had been sent out during the last 15 or 20 years had been indoctrinated, first of all, with the idea that the more money he spent in irrigation works the more would his services be valued. So, likewise, with the Governors who had been sent to Madras and Bombay. The right hon. Gentleman the Member for Horsham (Sir Seymour Fitzgerald) said last year that he went out to Bombay crammed to the throat with the idea that the application of water to the soil would prove to be the panacea for all the ills that India was heir to. Perhaps he believed it would even resuscitate the Bank of Bombay. Now, however, in the opinion of the right hon. Member there had been great waste in that Presidency owing to the expenditure on irrigation. He said that some millions had been thrown away. If he had to 820 commence his duties in India afresh, his course of conduct would be very different. In this country the mania for irrigation was declining—the fever had abated somewhat; but in India it was as rife as ever. In proof of this he need only mention that in 1874, notwithstanding all his experience. Lord North-brook sent round the country a host of engineers to devise new works, and to send in with hot haste estimates for immediate approval and sanction. Colonel Rundall, one of the least efficient officers he (Mr. Smollett) had ever known, forwarded last Christmas, in obedience to the Viceroy's commands, an estimate for works which would cost £15,000,000. Lord Northbrook seemed at that time to be labouring under a fever produced by a pressure of water on the brain. The time had come to put a stop to this system. If works of this character and magnitude were undertaken, the money needed for their construction should be borrowed on the security of the works themselves, and not upon the credit of the Indian Revenue. Perhaps it would be said that all this was idle declamation and heedless rhetoric. He might be asked to give specimens of the extravagance and waste which he denounced. That he was able to do. The Marquess of Salisbury, speaking at Manchester, referred to two large works, which his Lordship regretted to say hardly paid their working expenses. They were the Madras Irrigation work and the Orissa undertaking. The Madras Irrigation work was not a Government work. It was still in the hands of private parties. But it had been petted, patronized, and paid for by Secretaries of State; and the conduct of those functionaries in regard to this undertaking had been so reprehensible that an exposure of that work was not out of place. The work was launched to the public in December, 1858, under the guise of a joint-stock company (limited). There was a nominal capital of £2,000,000. The prospectus set forth that, as the Government of India was then engaged in putting down a great rebellion, that joint-stock company would by their own means show in the course of a very few years how the resources of British India and the revenue derived from the land would be doubled by the application of water to the soil. All that the company wanted was territory in 821 which to embark their capital, and a guarantee that that territory would remain in their hands a sufficient number of years to develop its resources. The then Secretary of State, with much zeal, embraced the cause of the company, and settled that they should hold the territory assigned to them for 25 years, at the end of which the Government might purchase that joint-stock company at the price it bore in the London market. The Governor of Madras was ordered to assign them a portion of territory. The selection of the territory was made under the auspices of Sir Arthur Cotton, and everything went well until the money came to be raised. The noble Lord the present Secretary of State for India said—and that showed how ill-informed he still was—that 10 years ago everybody believed in 100 per cent profits from irrigation works. The people of London, however, at that time, did not believe in those profits, for when the money came to be raised there was a difficulty. But the Directors were equal to the emergency. The company persuaded the Secretary of State to give a guarantee for the first £1,000,000 they raised, telling him, of course, that that was the last call they would make upon him; and he gave them the guarantee, not for 25 years, but in perpetuity. The consequence was that £50,000, less income tax, had been paid by the Government of India to those adventurers ever since; and it would continue to be paid until the crack of doom. In 1866 the first £1,000,000 was expended and a portion of the canal was made, amounting to the extent of 76 miles. The directors were then called on to find the money to go on with it, and they tried to sell fresh shares in the market, but nobody would buy them. They, therefore, went to the noble Lord the then Secretary of State (the Marquess of Ripon), and asked him for a fresh guarantee on £2,000,000 more; but the noble Marquess refused to entertain the application. He desired the directors to resign the work that they had so mismanaged, and offered to take it over with all its responsibilities. The directors declined, and after a little negotiation £600,000 was advanced from the public cash to finish the first section of the work as far as Cuddapah. The understanding come to was, that if the first section did not pay in 1870, when the additional £500,000 was 822 spent, the work should be handed over to the Government. In 1870 the section was completed as far as Cuddapah but there were no receipts; and again the Government asked the directors to deliver it over with its engagements. The directors peremptorily refused. They took high ground. They said they would not be deprived of a work of so profitable a nature, and from that day to this, though it had not yielded one shilling of revenue, they had contrived to keep possession of the work. It was true they had refunded £220,000 of debentures; but then they borrowed £360,000 and mortgaged the Government works for that amount, paying back the £220,000 with that borrowed money. Nobody doubted that the work would ultimately become the property of the Government. It had not done so now, simply because the directors expected to be paid for relinquishing it; and when the Government got it, they would obtain a work which was destructive to the country through which it went. Without reckoning compound interest, it stood the Government in £3,000,000 of money, and it had not yielded a sixpence of net revenue in the present year. So much for this Toombuddra undertaking. He would now, in a few words, expose the Orissa work, which was a greater scandal than the Madras Irrigation, though that, perhaps, seemed impossible. He had all the papers with him, substantiating what he had to say, but he would not trouble the Committee with them. It, too, was originally made by a joint-stock company, who in 1868 were in a state of impecuniosity, while the work was perfectly unproductive. In their distress the company went to the Government and offered to sell it, and in 1868 he had in that House tried to prevent that purchase; but, of course, his observations were treated with contempt. It was purchased, in the year 1867, under a Liberal Government, and £1,048,000 was paid for it; a douceur of £24,000 being paid to the secretary of the company for his services in negotiating the sale, so delighted were the directors at their escape from responsibility. £1,250,000 sterling had since been laid out on the work and its extension. The capital was now £2,283,585, and the loss in working last year was £23,000. In a few years more, with interest upon this capital account, the cost of this work would stand, at the 823 least, at £3,000,000 sterling. It might be said that those things were now better managed under Lord North-brook; but he could show that the condition of some other of those undertakings of very recent origin were just as bad as that in Orissa. On these matters they sometimes learnt more from well-authenticated letters in newspapers than even from Secretaries of State. No paper in London had correspondents who were better informed about what was going on in India than The Times. It was from a communication addressed to that journal that he would now quote. In The Times of the latter end of October, 1874, there appeared a letter dated the 2nd of the same month from its Special Correspondent in Calcutta, which was written with a view to bring to the notice of the English public the services and the opinions of Sir John Strachey, an Indian official of high position and an advocate of public works, who had recently recorded a Minute upon that subject in the archives of the Government. The Times Correspondent, after speaking of Sir John Strachey as one of the ablest men who had been sent out to India, proceeded as follows:—From the foregoing Minute the readers of The Times will see that Sir John Strachey, while insisting that it is the duty of the Government to push on irrigation to the utmost extent, expresses a strong opinion that the present system, if it goes on long enough, must end in financial ruin. The last published accounts in India show the force of this. The total receipts from irrigation works in 1872–73 are stated to he £3,600 on an expenditure of £2,220,000. The last example of the same kind"—he (Mr. Smollett) would beg the particular attention of the Under Secretary of State to what followed—was the Agra Canal," which has just been opened. "It leaves the Jumna a little below Delhi. It runs through an extremely dry country. The cost of the canal is £900,000; it is a work of the greatest possible utility, although no one will use it, and it has just been opened to the public. Although the conditions under which the work has been undertaken are most favourable, the engineers report that the estimated result of the operations of this canal for the first five years will be a loss to Government of £200,000. And I have the best reason to know that this is far too sanguine an estimate.The Correspondent went on to express his astonishment that people should shut their eyes to such facts. The late lamented Governor General of India (Lord Mayo) earnestly protested 824 against carrying out works of this unprofitable nature. Of course, the Correspondent and Sir John Strachey had their own way of making the works profitable. They contended that if the people would not use the works, a benevolence in the form of a poll tax must be levied on the districts through which they passed. That was a scheme which was seriously proposed by those gentlemen; and, so far as he was aware, the Marquess of Salisbury leant to it a good deal. But, be that as it might, he (Mr. Smollett) had spent 30 years in India, and he knew that the people would rejoice to have water, if it were brought to them in a proper manner. If irrigation was endeavoured to be forced upon the people, they would openly resist so scandalous an imposition. He had now done. He had shown how, in matters of irrigation, the money of the inhabitants of India had been mercilessly squandered; and if the exposure only effected some good, the trouble which he had taken to make it would not have been in vain. The hon. Gentleman concluded by moving the Amendment.
At the end of the Question, to add the words "and, in the opinion of the Committee, the Statement of Indian Finance now submitted is unsatisfactory, because the policy of the Government of India is based upon the principle of borrowing large sums of money in each year, without referenee to the income of the Country, in order to carry on, through Government agency, undertakings of a speculative character, and classed as 'extraordinary,' many of which, especially works of irrigation, past experience has proved to be unremunerative."—(Mr. Smollett.)
§ GENERAL SIR GEORGE BALFOUR
said, he did not take up the same unfavourable idea which the hon. Member for Cambridge (Mr. Smollett) had placed before the House with regard to the state of the finances of India. He thought that, considering the nature of the excesses, we had no reason to despond, provided we kept an attentive eye upon the expenditure in future. No doubt, expenditure had kept pace with increased income, but it should be remembered that our expenditure had been swollen by the year of Famine. In 19 years there had been 14 deficits and five surpluses; in the last three years the Expenditure had exceeded the Revenue by £10,000,000, which included 825 £6,300,000 on account of the Famine, leaving £3,700,000, which could have been saved by diminishing the expenditure on Public Works by £1,000,000 a-year. The Revenue had risen from £33,330,000 in 1857 to £50,000,000 at the present time. Although the Debt had been doubled, being about £60,000,000 in 1856–7 and £120,000,000 now, the interest had not risen proportionately, for it was £3,000,000 then and £5,100,000 now, which showed that we were able to borrow money on more easy terms than the East India Company. He attached the greatest importance to accuracy in the accounts, which had been much improved of late years, but still needed appendices to exhibit details which were needed for clearness. The expenditure on Public Works scarcely received the attention its importance demanded. On Ordinary, Extraordinary, and other provincial works the annual expenditure was £10,000,000, and the accounts ought to be so clear that the hon. Member for Cambridge could understand them. He was glad to hear that the Government of India intended carefully to consider the question of the salt duty, for there was no branch of Indian affairs that more required looking into. For the last 19 years the consumption of salt could hardly be said to have increased in India, although the duty had risen from £2,000,000 to £6,000,000. Nothing would bind the affections of the Natives to England more than the total abolition of the duty on salt. It would take a long time before the Government of India could part with a revenue of £6,000,000, but every reduction of this duty would be an immense benefit, and nothing was more likely to extend commerce between the Provinces of India than the freedom of salt from duty. It was a most important article of necessity with the population, and by aiding the people with the means of conveying it through the country from Madras and other places where it was largely manufactured, a great and remunerative trade might be established. The time might also come when Customs' duties might cease, and it would be a noble thing to say that we had in India 3,000 miles of coast entirely free from Customs' duties. It was also desirable to give every encouragement to tea cultivation. In 10 or 20 years Assam would become one of the finest Provinces of India, and there 826 were political and commercial advantages in extending its cultivation in Assam, as we should thus be brought into contact with many millions of the best educated and most enterprizing race in China, besides giving employment to many additional thousands of our countrymen. The military expenditure of India was, he thought, capable of considerable reduction. At present India was unfairly charged with much of the expenditure that went on in this country. He had expected that the Committee which sat on Indian Finance would have effected a diminution of those charges, and he regretted that the inquiry, which it was understood would be made by a Special Commission, had not already led to a very considerable reduction of expenditure. There was another point to which he took exception, and that was the growth of the expenditure upon military transports. That was an expenditure which was growing every year, and for which there was no reason whatever. The building of these vessels was a great wrong to India, which did not need transports, seeing that the trade supplied first-class vessels. He should have liked to see the money which was so wasted expended in remunerative Public Works, or in a remission of the duty on salt. Then, again, there was the increased expenditure occasioned by the short-time service. He did not wish to discuss the merits of Lord Card well's measure, but there had never been the least difficulty in getting men to take service in India, and consequently the service in India did not need this inducement to enlist. There was not a regiment in Aldershot which would not, if it had the offer, willingly go there to-morrow. The hon. Member for Cambridge had attacked the Madras Irrigation works, but irrigation was a subject upon which the hon. Member could never be convinced or induced to change his mind. Ought not the fact, that 18,000,000 acres of land which had not the benefit of irrigation did not produce so much revenue as 2,000,000 acres that had water applied, to be convincing even to the hon. Member for Cambridge? He did not deny that mistakes had been made in constructing these works, but he believed that if an account were taken of expenditure on the one hand and results on the other, it would be demonstrated that there was no just ground for 827 the attack which the hon. Member had made against Irrigation Works. He hoped the noble Lord, who might yet be advanced to a high position in India, would go out and judge of those things for himself. The hon. Member for Cambridge must be well aware that the irrigation works constructed in the Madras Presidency since 1835 had almost entirely prevented those dreadful famines which were formerly very frequent. The hon. Member could not have forgotten the Famine of 1833, in which year he was Secretary of the Board of Revenue. That famine cut off the largest portion of the people of Guntoor and extended to Madras itself. Even in the neighbourhood of that capital the deaths were many. The roads were covered with the dead, the dying, and the emaciated. But that calamity was now impossible, for the extended and improved works had secured food for the people, and grass for the cattle; so that the cultivation of the land, by the cattle so saved, was certain, after the dearth had passed away, and the rains had fallen. There were still great openings for extension of irrigation works. That noble work on the Godavery, which Sir Arthur Cotton planned and carried on, under difficulties of the most formidable character, would, in after years, make the name of Arthur Cotton foremost amongst the benefactors of India. If the time should come for our rule to cease, that work would remain as a monument of our beneficent sway.
MR. BECKETT - DENISON
said, he entirely concurred in the eulogy which the noble Lord the Under Secretary of State for India had passed on the conduct of Lord Northbrook and his able assistants during the late Famine. The hon. Member for Cambridge (Mr. Smollett) was a little unjust in omitting from the list of those who deserved the thanks of the public for their conduct during the Indian famine, the hon. Member for Kirkcaldy (Sir George Campbell) and Sir Richard Temple. He had heard with great satisfaction that it was intended to abolish the inland customs, and he received as a good sign and a guarantee of our future security in that country, and as an important political indication the fact that the recent Government loan had been taken up largely by the native population of India. He regretted there should be 828 maintained out of the revenues of that country an inordinate body of Staff officers: their name was legion; and although many of them were no doubt men of great ability, still they were unemployed men, and no Army could long permit of men drawing large pay without giving any service for it. The noble Lord had told them that the Public Works—on which they had expended £11,000,000—were now yielding a surplus revenue of £600,000, which was equivalent to 5 per cent on the outlay. That was no doubt satisfactory; but if the interest on the capital from the inception of the works to the period at which they became remunerative were added to the outlay, the result would not look so satisfactory. Still, when they were called upon to spend £4,500,000 annually upon Public Works, it was encouraging to find that they had already a system which was remunerative. He was afraid that the establishment at Cooper's Hill, which was nothing else than a new Civil Service, would lead to the growth of another inordinate Staff, similar to that which existed in the Army. He protested against a large source of Indian Revenue—that of the import duties on cotton goods—being surrendered by the Indian Government in obedience to a cry from the Manchester manufacturers of this country, whose system of trade would not bear the light of day. The chief cause of the growing aversion of the Natives of India to Manchester goods was the amount of adulteration. The Native cotton goods had always been superior to those manufactured in this country; and it was only their cheapness, coupled with some honesty of manufacture, that had given them a place in the Indian market. If, to replace the revenue so abandoned, it should become necessary to impose fresh taxation on the people of India, the Indian Government must be prepared for an outburst of indignation. He could not see how the Government of India could be carried on without imposing a moderate import duty on foreign manufactures. Free Trade doctrines were very wholesome in the hands of experts, he would admit; but in the hands of men who did not know how to apply them, they had in the Orissa Famine led to the loss of a million lives.
§ SIR GEORGE CAMPBELL
said, he was unable to take the sanguine view of Indian finance which had been expressed by the noble Lord opposite (Lord George Hamilton) and other Members, at the same time that he could not share the extremely gloomy view of the hon. Member for Cambridge (Mr. Smollett). It had been the custom to talk of the prosperity of the Indian Revenue, but there was, it seemed to him, a great deal of misapprehension on the subject. A great many charges which used to be debited to Revenue were now kept separate as "Extraordinary Charges," a source, as it seemed to him, of some danger. In regard to some items, this system was justifiable but not so in regard to many others. Notwithstanding the separation of "Extraordinany" Charges, the apparent surplus had been getting smaller, and this year it had nearly disappeared, having come down to £500,000, which was the smallest possible working surplus. If the expenditure on works which were really unreproductive was added to the ordinary expenditure, he was afraid that, instead of a surplus, there would be a large deficit. The main items of Revenue were progressing very slowly. The opium revenue had increased greatly, but was not now increasing. It seemed as if we had reached the limit of our resources in regard to the production of opium. The production had of late fallen much short of the limit which the Government had sought to reach—namely, 66,000 chests a-year, having only reached from 45,000 to 48,000, and although this had led to an increase in price, yet it was to be feared that raising the price might be killing the goose which laid the golden eggs, for it might lead to an increased production of opium in other countries. Of course, in touching on this subject, he spoke purely from the financial point of view. The opium revenue was most precarious. A war with China or a blight might extinguish it. He agreed, therefore, with the noble Lord the Under Secretary of State, in thinking that it was desirable to render India independent of that revenue; but he confessed he saw, at present, no prospect of that result. As to the land revenue, there was very little likelihood that it would rapidly increase. The doctrine was becoming more and more prevalent that the land assessment 830 must be made moderate, and the lower it was made, the more people wanted it to be lower still. In fact, we seemed to be coming to a permanent settlement of the question. The Excise revenue of India was happily very slowly increasing. That was a good thing on moral grounds, because they could not desire to encourage a great amount of drinking among the population. He thought the Customs revenue of India was doomed, and that they must make up their minds to find some substitute for it. The Customs duties yielded £2,500,000, nearly £1,000,000 of which was derived from cotton goods. Export duties on sugar and rice also contributed towards that revenue, and if the duty on cotton goods was abolished, the rest of the Customs revenue could hardly be maintained. Again, as to the measure which the noble Lord had indicated in regard to the salt duty; if that measure were adopted, no doubt there would be a considerable reduction in that source of revenue. A comparison of the amounts raised during the last four years from the land revenue, the Excise, the Customs, and the salt duty showed that the increase under those heads had been very slow and gradual. On the other hand, they must be prepared for a considerable increase of charge. He was sure that the railways in which the Government had embarked, and which were mainly undertaken for political purposes, would not pay, and, considering the interest which had to be met on accumulated loans and the deficiency also on the guaranteed railways, it was inevitable that they should have a considerable addition to their expenditure. The charge for Law and Justice was increasing, and if they were to carry out the improvements incident to a modern civilization they must expect to pay for them. The net charge for the Army of India, including military works, barracks, and the cost for superannuations, was nearly £17,000,000 per annum. The number of their force was 180,000 men, and 10,000 officers, a very small number of men for so large a sum. No other so extensive a country was guarded by so small an army, and there could be no doubt that if political difficulties should arise that army would have to be largely increased. Again, it was impossible to put out of sight the fact that famines occurred from time to 831 time in India, and if they wished to adopt measures in order to prevent their recurrence as far as possible, they must be prepared for a considerable additional charge. Of late years a great amount of time and consideration had been devoted to Public Works in India, and reforms of various kinds had been suggested. He was by no means adverse to reforms; but, at the same time, he could not admit that the system was as bad as it had been painted. The establishment charges in connection with the Indian Public Works Department had certainly been heavy, and the general result of the system was, that out of every £1,000,000 expended, one-fourth was absorbed by the Staff expenses; but then it was most important that the Staff of the Department should be most efficient. A great injustice had been done to the old East India Company in connection with this question. It had during the period of its government to undertake many and costly enterprizes; but since the termination of its government the debt which it left unpaid had been quadrupled, notwithstanding the various modes of increasing the Revenue which had been resorted to at the instance of administrators like Mr. Wilson, the Earl of Mayo, and Lord Northbrook. The people of India were not so impatient of taxation as many supposed, but what they objected to was continual change of taxation. The way to improve India was by not cutting the Revenue too close to Expenditure in times of peace and prosperity, but to establish a good working margin, and bring it back in times of adversity. Whether it was wise to abolish the income tax he did not take upon himself to say; but he believed it had not been fairly tried, and he thought it ought not to have been abolished until a substitute had been found—one that would tax the rich and not the poor. The rich people of India were less taxed than any other people in the world, whilst the poor were heavily taxed, more especially with regard to salt.
§ MR. J. K. CROSS
I wish to say a few words, because I entirely disagree with those who say that the import duties are equitable to the traders of this country. I can scarcely agree with the statement which the noble Lord the Under Secretary of State has put before the House on the question to-night. The 832 policy of the Indian Government in regard to these duties is causing a good deal of uneasiness in Manchester and the neighbourhood, but certainly his assurances will do a great deal to relieve this feeling. The question I have to lay before the House as the view of Manchester men, I will state as shortly as possible, and in stating it, I shall have to go as far back as the year 1859, when the Indian Government was emerging from the troublous times of the Mutiny, and when, like other Governments in trouble, it found itself particularly short of funds. Well, it cast about to see on what it could levy such duties as would re-fill its empty coffers, and amongst other things it laid its hands on cotton goods and cotton yarn, which then, as now, were imported into India in very considerable quantities, and it levied a duty of 10 per cent on goods and 5 per cent on yarns, which duties were received with a good deal of protest by the manufacturing and commercial interests of this country, audit was pointed out very forcibly, by my hon. Friend who sits near me (Sir Thomas Bazley), that the imposition of these duties would induce the growth of a protected system of industry in India, which we have since witnessed. Through the exertions of the hon. Baronet, aided by, I think, Mr. Hadfield, who then represented Sheffield, these duties were reduced to 5 per cent on goods, and 3½ per cent on yarns, but being ad valorem duties, the tariff values being fixed when prices were considerably higher than they now are, the duties have been and now are practically 6 per cent on goods and 4 per cent on yarns. It was generally thought by those who were connected with Indian finance that these duties would not be permanent, and I am quite free to confess that they were at first imposed for fiscal purposes only, and I do not think that the able financier, who has been alluded to by the hon. Member for Kirkcaldy (Sir George Campbell), Mr. James Wilson, who gave his sanction to them, would have had any idea that upon their imposition would be built up a system of protected industry such as we have seen grow up in India, since his time. But immediately on their imposition, it seemed to strike certain native capitalists that if their permanence could be secured, these duties might be turned to their advantage; and 833 on the principle that our extremity was their opportunity, a principle as well understood by the Natives of India as by any other people in the world, they clubbed their money together, established companies, and built mills for spinning and weaving and set to work. Well, these mills at first were singularly unsuccessful, partly owing to the great fluctuations which occurred in the price of cotton during the American War; but the duties continuing—and I wish hon. Members to observe this—the duties continuing, they were induced to persevere with their efforts, and gradually a very large industry has sprung up, as we think, under the fatherly care and protection of the Indian Government. The hon. Member opposite (Mr. Beckett-Denison) thought fit to say, but I do not know with what authority, that the main reason why Indian goods were preferred to Manchester goods was, that Manchester people wilfully deteriorate their goods; but I would remind the hon. Member that Lancashire supplies India with the best and finest goods which are used there. I am not here to defend Lancashire men who may disgrace their country by such practices as the hon. Member describes; but I entirely disagree that this is the reason for the increase of this industry in India. I find that the amount of advantage the Indian manufacturer has over the English manufacturer is about 6 per cent. There is no doubt the measure of the advantage which these Indian mills enjoy in competition with their Lancashire rivals is the exact amount of duty which they escape, but which the Lancashire mills have to pay on their productions if they export them to India; and this advantage amounts at present to a sum equal to 6 per cent per annum upon the capital employed in the Indian mill. Perhaps I shall put it more clearly by stating that £100,000 invested in cotton manufacture in India will turn over goods and yarns, worth £125,000 per annum, on which, if the goods were English, £6,000 per annum in duty would be levied; but as the Indian mill escapes the duty and gets the market price for its productions, it has £6,000 a-year to the good, or 6 per cent on its capital; and this is practically guaranteed by the Indian Government by the duty. But what is the disadvantage under which the English spinner 834 and manufacturer labours in competition with this state of things? Those who know little of it may think lightly of it; but those who are best acquainted with the details of this question think it a most serious matter. I propose to give two instances, one of a spinning mill, and the other of a weaving concern, because in Lancashire there are many such separate businesses working for the Indian trade. I hope hon. Members will excuse me for being somewhat technical, but I wish to show the matter as it is. I will first take the case of a spinning mill containing 30,000 spindles spinning coarse yarns. It will employ £40,000 of capital, engage the services of 220 workpeople, to whom from £8,000 to £9,000 per annum will be paid in wages, and its productions will be taxed to the extent of £4,000 per annum before they can enter the Indian market. But the case of the weaving mill is much worse. A manufactory running 1,000 looms, employing £40,000 of capital—the same amount as the spinning mill just mentioned—engaging the services of 600 or 700 people, to whom £22,000 or £24,000 will be paid in wages, will have to pay a tax upon its productions, before they can enter the Indian market, amounting to £9,500 a-year. Now, if hon. Members will consider that, they will see the unfairness of this treatment towards the manufacturing interests of the country. In the one case, the disadvantage is 10 per cent upon the capital employed, or half the wages paid. In the other, it amounts to 24 per cent per annum on the capital employed, or two-fifths of the wages. Such are the disadvantages under which the English manufacturers labour in comparison with this much-vaunted protected Indian industry—disadvantages which are solely caused by the action of the Indian Government, and are entirely beyond, and quite independent of, any natural disadvantages under which we labour, if any such there be. Now, this is a serious question, and it is agitating the mercantile and manufacturing classes very considerably; and various deputations have waited upon the noble Lord the Secretary of State (the Marquess of Salisbury), who in this question holds the commercial destinies of many of our manufacturers, and some of our merchants, as it were in the hollow of his hand. They have laid their case before 835 him, and he has given them his answer. He has told the gentlemen who waited upon him that he thinks they greatly over-rate the effect of the duties in inducing competition. Now, no one knows much more of the principles which regulate finance than the noble Lord; no one certainly in the other House knows better than the noble Lord what is the amount of inducement required to coax capital to flow into new undertakings. The noble Lord has been Chairman of one of our great railway companies, and as such it has been his business to inform himself on these points; but does he seriously mean to say that he thinks the practical guarantee of a preference dividend of 6 per cent per annum by the Indian Government to the Bombay spinner is no inducement to capitalists to place their money in such undertakings? Because that is what it practically comes to, and had not the deputation which waited upon the noble Lord been mostly composed of "grave and reverend signiors" I should have suspected the noble Lord of mildly chaffing them, when he told them what was exactly tantamount to saying so. But the noble Lord went on still further, and said that we must expect competition, and that any interference by the Indian Government would be hardly fair. We do expect competition; a fair, free, and open competition we welcome, from whatever source it may come; but this is no fair, or free, or open competition. It is not competition we object to; it is the weight we have to carry in the race, which gets heavier and heavier to bear the longer we have to carry it. But the noble Lord said it would hardly be fair to the Indian Government to interfere. We think it grossly unfair, and we think that this interference should cease at the earliest possible time. At the end of one of the interviews, the noble Lord is reported to have said that if these duties were really protective they were indefensible. Now, I have tried to show that they are protective, and I hope that next year when I bring this question forward, the House will agree that, being protective, they are, as the noble Lord says, indefensible, and ought to be repealed. It appears to me, further, that this protective policy which we support in India is not to the advantage of that dependency, because it taxes the poorest of the people in order to put money into the pockets of those 836 who are already rich; it extracts a much larger sum from the people than it passes into the Exchequer; it is, undoubtedly, disadvantageous to this country; and it is contrary to that Tree Trade policy which we advocate in every foreign country, and which is at the root of all commercial success.
§ SIR WILFRID LAWSON
said, he must congratulate the noble Lord the Under Secretary for India and the hon. Member for Hackney (Mr. Fawcett) upon the good attendance of hon. Members, considering the advanced period of the Session and the heat of the weather. It was a better House than he expected, and than he saw five years ago when the attraction was much greater. The hon. Member for Wick, with his strong head, said this country was governing India with too strong a hand. He (Sir Wilfrid Lawson) was anxious that justice should be done to the people of India. With regard to the opium trade, the Government of this country raised a large revenue from it, and by a system that was one of the most outrageous and disgraceful that was ever perpetrated and forced upon a people. When they came to consider the 200,000,000 of people in India and the 400,000,000 in China, who were all God's subjects, it would surely be wiser not to impose this opium upon them, and to turn the Chinese into allies. As it was this policy of ours made us hated throughout China and in other parts of the East, and he was not sure that it had not a great deal to do with the complications that had taken place in our relations with Burmah. From what he heard, the merchants of this country were pushing this opium trade too much upon the people of India and China. If he asked for information on the subject he could not get it. If a war broke out, and he asked for information, they said—"Oh, oh! it is not for the interest of the service to give you information at this moment;" and when the war was over, if you asked for information they said—"Oh, oh! the war is all over now, and the information would be of no use to you." He would now refer the attention of the Committee to the opinions of eminent medical men respecting the effects of opium on the human frame. The late Sir Benjamin Brodie, a distinguished physician, described its effects on the constitution as most injurious, an opinion which other medical men also 837 entertained and expressed; and he (Sir Wilfrid Lawson) had that day heard from a gentleman who had been 30 years in China most distressing consequences resulting from our forcing the opium trade on the Chinese; and yet those who dealt in the article said, when remonstrated with—" Oh, the Chinese will have it." "We do not make wickedness—we only live by it," was the motto upon the rogue's escutcheon all over the world; but it was a disgraceful motto for this country to adopt. He (Sir Wilfrid Lawson) must say that it was a disgrace to England that her merchants should carry on such a trade. It was all very well for the right hon. Gentleman the Chancellor of the Exchequer to say that it brought in revenue, and that spirits brought in a large revenue; but with regard to the Chinese, he (Sir Wilfrid Lawson) was sure that if England went on in the way she had been going on by forcing the opium trade upon the people of that Empire, some very serious disaster would befall her in the East. He remembered a Resolution having been moved in this House on the subject of the opium trade with China, and that the then Prime Minister made a speech against the Resolution, and said no action could be taken in the question of the duty resulting from opium without inquiry. He would like that the noble Lord in his reply should give some hope that he would institute a careful inquiry, with a view to see whether the evils which had been condemned did not really exist. He feared the system would involve us in trouble, difficulty, and perhaps bloodshed, unless it was speedily put a stop to. When that time came, those responsible for Indian affairs would be to blame who had not carefully and calmly looked into the matter, and done something to stop a system which was not only degrading to our national honour, but most injurious to the best interests of this country.
§ MR. FAWCETT
said, he was afraid, from what they had heard from the present and from the late Under Secretary for India, that there was very little chance of the Indian Budget being brought on in the early part of the Session. Under those circumstances, a private Member would have to take the matter into his own hands, and, as the Session went on, raise separate discussions upon each of the topics which it 838 concerned. In that case, every one who had paid any attention to Indian affairs would agree with him that there was no subject more worthy of careful consideration by Parliament than the functions discharged by the Indian Council. No one had a higher opinion of Members of the Council than he had, but the Council itself was the greatest disappointment in connection with the Government of India. Why the able men who were Members of the Council had not done more to protect the finances of India he could not understand. It had been conclusively shown by the hon. Members for Cambridge and Kirkcaldy that nothing but confusion arose by separating ordinary from extraordinary expenditure. The most serious danger connected with our Public Works policy was, that we did not understand what works would pay; and if we were to embark on a great public policy of that sort, one of the first things we ought to do was not to carry out those works simply by engineers of English training, but to bring to bear upon them the ability which existed amongst the Natives, among whom there had been some of the most accomplished engineers in the world. As to irrigation works, the noble Lord must have forgotten the statement of the Secretary of State at Manchester, who said there was scarcely an irrigation work which returned a fair interest upon outlay, except irrigation works based on native undertakings. The noble Lord further said that irrigation works were accompanied by serious disadvantages. Many of those works had been so unskilfully constructed that good land had been converted by them into morass, and it was now necessary to drain this land. Moreover, the Natives would often not use the water when brought to their doors, and it had been proposed to make them pay an irrigation tax whether they used it or not. At present, confuse the matter as we liked with regard to ordinary and extraordinary expenditure, we could not get over the fact that by the policy which was now being pursued we were adding to the Debt of India at the rate of £3,500,000 a-year; and these works, which might not prove remunerative, would pile up serious financial difficulty in a country where an additional tax even of £1,000,000 could not be imposed without causing great discontent. In conclusion, 839 he must be allowed to express his determination that if the Government did not move for the re-appointment of the Select Committee next Session, he should certainly take upon himself the responsibility of doing so.
MR. GRANT DUFF
said, that he trusted the success of that night's experiment would not embolden Her Majesty's Government always to bring in the Indian Budget so near the 12th August. It had certainly been one of the best attended, and also one of the most interesting Indian discussions, to which he had listened on any occasion of the kind. The points on which he thought the Committee was most to be congratulated were the ex parte, but very clear and able statement of the Manchester case by the hon. Member for Bolton (Mr. J. K. Cross); that portion of the speech of the hon. Member for Kirkcaldy (Sir George Campbell), which dealt with the unjustly light taxation of the wealthier classes in India; and the excellent speech of the noble Lord the Under Secretary of State for India. The things in that speech which give him (Mr. Grant Duff) most satisfaction were the remarks about the import duties, the announcement as to the good terms on which the recent loan had been raised, and the hope that was held out of a speedy end to the Salt Line—one of the most disgraceful anomalies in administration which existed in any civilized country. With reference to a remark which fell from the hon. Member for Hackney (Mr. Fawcett) it was his (Mr. Grant Duff's) impression that the hon. Member altogether overrated the genius hitherto shown by the Natives of India for engineering. They had shown very great genius at many periods of their history for architecture, but by no means much genius for engineering. [Mr. FAWCETT: The Madras Irrigation Works.] His remarks applied to the Native genius for engineering—that was, of course, the Native acting under Native, not under European superintendence. In conclusion, he would say that if the noble Lord had any figures which would confirm the impression which he (Mr. Grant Duff) received in India, that the Rajpootana system of State Railways was promising to pay extremely well, he (Mr. Grant Duff) would be glad if they could be produced on this or some other occasion.
§ LORD GEORGE HAMILTON
said, he wished to say a few words in explanation and by way of reply. His hon. Friend the Member for Cambridge (Mr. Smollett) had referred to the question of irrigation works, and had given one or two instances in which such works had lamentably failed. If the Government were going to construct irrigation works on the same principle as those to which he had alluded, his argument would be valid: but it was in consequence of that failure that the Government were constructing irrigation works on a different system. The hon. Member for Hackney had said that his (Lord George Hamilton's) figures did not agree with certain statements which had been made by the Secretary of State for India. His (Lord George Hamilton's) figures were taken from a Return which had only just arrived from India, and which was, therefore, more accurate than any statement which had been previously made. He fully admitted that the expenditure with regard to Public Works in India must be carefully looked into. If the irrigation works did not pay, of course they ought to be stopped; but the Government had reason to believe that those works would pay. The hon. Member for the West Riding (Mr. Beckett-Denison) had asked by what means Staff officers who were drawing pay and doing no duty would be got rid of. Upon that subject what the Government had done was this—they had allowed those officers to retire on the pension to which they were entitled, and, in addition, to receive a sum in commutation for the Colonel's allowances, to which, after 38 years, they would be entitled. As to Cooper's Hill College, he admitted that its growth must be carefully watched. As the hon. Member for Kirkcaldy (Sir George Campbell) had pointed out, the unequal incidence of taxation in India was the one great blot upon the system. If the hon. Member could suggest any plan by means of which the rich and poor could be called upon to contribute in exact proportion to their fair liability, he would promise that it should be very carefully considered by the India Office and by the Government in India. To the hon. Member for Bolton (Mr. J. K. Cross), he would say that, without entering into a discussion upon the alterations of the tariff, he was quite certain that 841 the Secretary of State would not sacrifice any legitimate sources of revenue merely in deference to a cry got up in England. With regard to the relations between India and Burmah, referred to by the hon. Baronet the Member for Carlisle (Sir Wilfrid Lawson), he could only say that any difficulties which had arisen were not due to the opium traffic, and that, as time progressed, the likelihood of a satisfactory settlement became more and more certain. The morality or immorality of the opium traffic was not legitimately under discussion; but, as the question had been raised, he must be permitted to say that, unless stronger reasons than had yet been urged were urged against the traffic, the Government would not be justified in giving up for an idea so important a source of revenue. With regard to the Amendment which had been moved, it was no new policy which the Indian Government were now carrying out. The Indian Government were now constructing Public Works under far more favourable conditions than during recent years, and if ordinary care was taken he believed none of the disastrous results which the hon. Member for Cambridge had predicted were likely to take place.
§ MR. KINNAIRD
said, the Amendment, if carried, would practically be a Vote of Censure upon Lord Northbrook, as well as upon the Government, for it was his policy they were carrying out; and he thought the House would hesitate to pass a Vote of Censure upon a Viceroy who had shown so much ability in the Government of India, and had brought it through such a crisis as the late Famine.
§ MR. FAWCETT
said, scarcely a single word had been said of Lord Northbrook, except in approbation of him, and it was not fair, at the last moment, to put such an interpretation upon the Amendment, and say that it was a vote of Want of Confidence in Lord Northbrook. He wished simply to express by his vote an opinion as to the way of keeping the accounts and the financial policy of the Indian Government, and nothing was further from the intention of himself and those who agreed with him to express anything like a personal censure.
§ Question put, "That those words be there added."842
§ The Committee divided:—Ayes 21; Noes 66: Majority 45.
Original Question put, and agreed to.
Resolved, 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 1874 was £49,598,253; the charges in India, including the collection of the Revenue, Interest on Debt, and Public works ordinary, were £42,094,995; the charges in England (including £1,156,535, the value of Stores supplied to India) were £7,873,574; the Guaranteed Interest on the Capital of Railway and other Companies, in India and in England, deducting net Traffic Receipts, was £1,437,352, making a total charge for the same year of £51,405,921; and there was an excess of Expenditure over Income in that year amounting to £1,807,668; that the charge for Public Works extraordinary was £3,553,307, and that, including that charge, the excess of Expenditure over Income was £5,360,975.
§ House resumed.
§ Resolution to be reported upon Wednesday.