HC Deb 28 February 1879 vol 243 cc1975-2034

in rising to call attention to the inadequate control now exercised over the expenditure of the Revenues of India, and to move— That a Select Committee be appointed to inquire into and report upon the operation of 'The Government of India Act, 1858,' and the other Acts amending the same; said, that so far as he was concerned, he believed that what he was about to say might just as well be spoken by any hon. Member on the other side of the House as by one who sat on the Liberal Benches. He rejoiced, too, that his Motion was to be seconded by one who held a high position on the other side of the House. He referred to his hon. Friend the Member for North Warwickshire (Mr. Newdegate), who was the only survivor on the other side of the House of that famous Committee which sat in 1853 on the affairs of the Government of India, and of which the late Mr. Thomas Baring was the Chairman. On his own side of the House, the only survivors of that Committee were the right hon. Gentleman the Member for Greenwich (Mr. Gladstone), and the right hon. Gentleman the Member for the University of London (Mr. Lowe). In order to justify the Motion which he had placed on the Paper, it would be necessary to show, in the first place, that the financial condition of India at the present moment was not satisfactory, and that this was due to inadequate control; and then to prove that such an inquiry as he suggested was likely to bring about the desired result. During the last few years a great change had come over the feeling in this country with which questions relating to India were regarded. Opinions which were now generally accepted were five years ago regarded as simply the unreasoning conclusions of a pessimist. The cardinal propositions which he had to submit to the House he would range under six heads. He should show, in the first place, that the net Revenue, or the real available Revenue, of India was less than £38,000,000; secondly, that the Expenditure of that country was increasing more rapidly than its Revenue; thirdly, that the ordinary Revenue was only barely sufficient to meet the ordinary Expenditure, and that, therefore, nothing was left to meet the contingencies of war or of famine; fourthly, that all available sources of taxation were nearly exhausted, and that, therefore, additional expenditure had to be met by increased borrowing; that was also the case with the money spent on Public Works, and the result was that the Debt of the country had steadily and rapidly increased, having doubled within the last 20 years; fifthly, that the Military Expenditure of the country was enormous, and had rapidly increased since the amalgamation of the two Armies, until they were met by the alarming fact that it absorbed about 45 per cent of the entire net Revenue; and, sixthly, that there was an increasing charge upon the Revenue arising out of the loss by exchange, which was perpetually being aggravated by the increase in the Home Charges, which diminished the demand for silver in the East. These six propositions, he submitted, correctly described the financial position of India at the present moment. If the accuracy of any one of these propositions was disputed, he would refer to a fact stated in an announcement which was lately made by the Chancellor of the Exchequer. The right hon. Gentleman had stated that a loan of £2,000,000 to India, without interest, would be proposed in aid of the expenses of the war in Afghanistan. Now, if India was not legally responsible for the expenses of that war, she ought not to be made to pay them; and if she was so responsible, as the Government said she was, then would not the proposal of such a loan, without interest, to India, be little less than a proclamation of the insolvency of the finances of that country. The Expenditure in India had been steadily increasing, and the control over the Expenditure was inadequate. If it was the fact that the financial condition of India was capable of no improvement, it simply showed that they could not financially govern India; that there was nothing before them but bankruptcy; and that the sooner they wound up the concern the better. But, for his own part, he took no such despairing view of the outlook. He believed it was possible for the House to secure a wiser and better administration of the finances of India, which would cause her resources to be more rapidly developed, and place the finances on a secure and sound basis. When, some 23 years ago, it was proposed to transfer the government of India from the Company to the Crown, there was a certain enthusiasm of public opinion in favour of the abolition of the Company; and, as was so often the case, they rushed precipitately to a conclusion. The merits of the Company were ignored, and its defects prominently brought forward. It was forgotten that the Company provided real and efficient guarantees for economical administration, and that the safeguards which were to be substituted for them were likely to prove, as they had proved, comparatively inefficient. A distinguished and experienced authority, who had served in India in the day of the Company, and also after the transfer—Sir Charles Trevelyan—comparing the government of India under the Company with its government under the Crown, said that the financial administration under the former was "frugal, independent, and resistant to exacting external pressure;" whereas, under the latter, it had been profuse and squeezable. The old East India Company was one of the most powerful Corporations in the world. Its influence was felt in every county and every borough in England. It had great influence in this House, and associated with it was a body having a direct personal interest in the economical administration of the finances of India. If any charge was thrown improperly on India, the old Directors in this House, and the powerful proprietary out-of-doors, would offer an effectual opposition to such a proceeding. The result of that system was that the administration was frugal. The only contention was whether that frugality had not been carried to the length of parsimony. It would be well for India if there were a little of that frugality or parsimony now. When the Company was abolished, both political Parties felt it necessary, if possible, to impose some financial check on the Secretary of State similar to that which had been imposed by the Court of Directors on the President of the Board of Control. The Council of the Secretary of State was accordingly constituted, because it was felt if the Secretary of State was to act alone, and being simply a Member of the English Government, that the finan- cial interests of India would be perpetually sacrificed to the exigencies of English political life. The greatest possible pains were taken, therefore, to give authority and power to the Council. Its members were at first appointed for life, and held their offices on the same tenure as those of the English Judges. That they might be cut off from political influence, they were not permitted to sit in this House. In 1869, however, an Act was passed essentially changing the position of the Council. No longer were the offices of its members to be permanent. They were to be appointed by the Secretary of State; but they were only to hold their offices for 10 years, and at the end of that term they were to be re-appointed by the Secretary of State if he so willed it. It was obvious how important was the change which was thus introduced. If the object of the Council was simply to advise the Secretary of State, there might be good reason for providing for the frequent flow of promotion; but if the object of the Council was to exercise financial control over the Secretary of State, it was of the first importance that they should be made as independent as possible, and so placed that they need not care whether they pleased or displeased the Secretary of State, provided they did their duty. Now, nothing was further from his intention than to bring any charge against the members of the Indian Council. It was impossible, without further inquiry, for any fair-minded man to arrive at a conclusion whether the inadequacy of the financial control lately exercised was due to the Council not having sufficient power, or to its members not making sufficient use of the power intrusted to them. The Council had no power of initiation. They could not bring forward any motion on which they wished to express an opinion, or raise any discussion on any subject on which they desired to offer advice. All they could do was to express their opinion on subjects brought under their notice by the Secretary of State. Under the old system, on the other hand, every despatch had to be submitted to the Directors of the Company, and even secret despatches had to be submitted to the secret committee of the Directors, consisting of the Chairman, Deputy Chairman, and the senior Director of the Company, and, according to the evidence given by Lord Ellen borough before the Committee of 1853, the secret committee of Directors had a right to comment on those despatches, and their comments were brought under the notice of the Cabinet. Thus there was a most important check upon the Secretary of State. At the present time, there was no power of remonstrance on the part of the Council; it was left solely to the Secretary of State to determine what subjects should, or should not, be considered in the secret department. The second great point of difference between the new and old system was this. If, at the present time, a charge were thrown illegally on the Revenues of India, there was no one possessing a legal status to resist the charge; whereas, in the days of the. Company, the Directors had a legal status in the Queen's Bench, so that the matter could be tried, as a question of strict law, by the highest Court in the Realm. The third point of difference was, that if a Bill were brought forward in that House affecting India, there was now no security that it would be submitted to or ever considered by the Council, or by any independent body connected with India. Formerly, not only could the members of the Company who sat in that House watch the progress of Bills, but the Company, the Court of Proprietors, or the Directors could be heard at the Bar of the House in opposition to any measure they disapproved. At the present time, the Council was deprived of all powers of controlling subjects of policy; but, under the old régime, such was the power of the directors in such matters that, in one memorable instance, the Court of- Directors recalled a Governor General because they objected to his policy. Further, if any charge were improperly thrown on the Revenues of India, it was uncertain whether the Council would resist it, and, if they did so, they would have no means of bringing the influence of public opinion to bear on behalf of India; but formerly the Directors of the Company could secure a public discussion through the Court of Proprietors, and the people who were interested had then an opportunity of coming to the rescue; but under the new system all such means of control had passed away. This description of the differences between the old and the present systems of governing India was sufficient to show how weak were the existing guarantees for economy and good administration, as compared, with those which existed before the government of India was transferred to the Crown. As to the inadequacy of the financial control, he was prepared to bring forward certain specific facts in illustration of that, which, he thought, could not be gainsaid. Some years ago, a table was issued from the Department of the Controller of the Finances of India, showing the cost of administration under the old and the present systems. In 1856, two years before the abolition of the Company, the cost of administering India—excluding the Army and Public Works Expenditure—was £14,900,000. In 15 years from that time the cost had advanced to £23,200,000, or, in other words, there had been an increase of more than 60 per cent. This increase had continued up to the present time. The cost of stationery and printing in 1856 was £120,000; in 1870–71 it was £230,000; and in 1876–7, it was £440,000, being an increase of nearly 400 per cent. The cost of the Medical Service in 1856 was £170,000; in 1870–71 it was £520,000; and in 1876–7 it was £590,000. The charge for interest in 1856 was£2,200,000; in 1870–71 it was £3,200,000; and in 1876–7 it was £4,400,000. He believed it could be shown that no inconsiderable portion of this remarkable increase in all the items of administration was due to extravagance; but, assuming that not a shilling of the money had been wasted, the matter was not less serious, for they were distinctly living beyond their income, and so long as they continued doing so their embarrassment must increase, till their position in India would become one of hopeless insolvency. He wished now to direct attention to the exact nature of the financial control which had been exercised during the period to which he had referred, when the cost of administration, excluding Army and Public Works Expenditure, had increased by 60 per cent. They were told that the Council was to exercise a supreme financial control. Official Returns in the Appendix to a Blue Book enabled him to give the House a considerable amount of information concerning the financial control of the Council. In directing attention to these facts, he desired to make no charge whatever against the Council, for it was impossible to say that the fact of their not having exercised control was not due to defects in the Act which they were called upon to administer. In numerous instances, he believed, it would be found that it was of little use for the Council to resist because items of expenditure were not brought under their consideration until the outlay had been actually incurred, and all they had to do was to sanction the expenditure after the money had been paid. In the period to which he had referred, the work of dissent was done by an extremely small minority of the Council. He would consider some of the acts of extravagance which during that period were sanctioned, or at least unchallenged by dissent. The Elphin-stone Land Company, whose shares were at 330 rupees, the Indian Government bought for 1,000 rupees a-share. The manager of that Company was a member of the firm of Fleming, Nicol and Co., of Glasgow Bank notoriety, and if the secret history of the purchase ever became known, he believed extraordinary disclosures would be made. In any case, no one could deny that £1,000,000 of the money of the Indian people was sacrificed in that transaction. The Orissa Works, which could not be sold in London for £600,000, were purchased for £1,000,000, and £70,000, in addition, was distributed among the officials of the Company during the period referred to. £11,000,000 had been wasted on barracks. The household expenses of the Governor of Bombay were also enormously increased, and it would be easy to cite numerous other instances of reckless extravagance. Since the Act of 1858 was passed a great event, so far as India was concerned, had happened. This event was not expected, and therefore it could not be provided for in the Act of 1858. When that Act was passed India had an Army of her own, and she controlled the large item of her Military Expenditure. Since then the two Armies had been amalgamated, and charge after charge and change after change had been made without a single thought being given as to what the effect on India would be, and without the Indian authorities being consulted. For instance, the pay of the English soldier had been raised 2d. a-day, entailing an additional charge of £250,000 a-year on India. The short-service system had been established, which, although it might be a good thing for England, was the most costly system that could be devised for India. But, whether for good or ill, there was no official record to show that a single person connected with the Government of India had been consulted before these changes were made. All the best Indian authorities were opposed to short service, and Lord Canning, who was then Viceroy, protested against it. The change, however, was carried out in the most high-handed manner. The subject was never even mentioned to the Council of the Secretary of State for India until the Secretary came down and said—"Gentlemen, it is no use protesting; your protest will be simply waste paper. The matter has been already decided by the English Cabinet." Yet this change had thrown a charge of £3,000,000 or £4,000,000 a-year on India, and, more than anything else, had led to her financial embarrassment. He had reserved to the last the strongest possible argument which he could advance in support of his Resolution— namely, that the Act of 1858 and the subsequent Acts relating to the Government of India had been so worded that I the highest Ministerial and legal authorities differed diametrically as to the meaning and intent of the Statutes. The result was that the law was uncertain, that to a great extent it was disregarded, and that it was concentrated in the hands of the Secretary of State. He would prove it by reference to a remarkable debate on the Bill of 1869, which made the tenure of office by the Council of the Secretary of State no longer permanent. When the Bill was passing through the House of Lords there was a most remarkable debate; he referred to it for no Party purpose, for he agreed with the opinions then expressed by Lord Cairns and Lord Salisbury, and disagreed with those expressed on the other side. Lord Salisbury, ex-Secretary of State, laid down this doctrine in the plainest manner—that by the letter and spirit of the Act of 1858 the Council of the Secretary of State had been intrusted with supreme control, not only on questions purely of expenditure, but upon almost all questions of policy, because there was no question of policy which did not sooner or later involve the question of expense Lord Salisbury compared the financial control of the Council with the control of the House of Commons over the Expenditure of England. This interpretation of the Act of 1858 was endorsed by Lord Cairns and Lord Chelmsford; but Lord Hatherley, who was then Lord Chancellor, said that no Court of Law would for a moment support the construction put upon the Act by Lord Cairns. If Lord Chancellors and ex-Lord Chancellors, Secretaries of State and ex-Secretaries of State differed diametrically as to the meaning of an Act by which 250,000,000 of people were governed, could it need any words to show that inquiry was necessary and that the time had come when the Act of 1858 ought to be put upon a certain and intelligible basis? Lord Lyveden, who was President of the Board of Control when the first Indian Act of 1858 was introduced, said that the Court of Directors had successfully resisted the whole of the charge for the Persian War being thrown on the Revenues of India, and half the charge was thrown on England; and he added it was felt at the time that if the control of the Board of Directors was abolished it would be absolutely necessary to give similar control to some other body. Therefore this Act was passed. But he believed the Council had not been so much as consulted as to what portion of the expense of the Afghan Campaign should be borne by India. In the same debate, in answer to the Duke of Argyll, Lord Cairns made the remarkable declaration that, even if Russia were to invade Afghanistan, the consent of the Council must be obtained before war was declared against Russia. But such was the uncertainty of the law that Lord Cairns was a Member of the Government which 10 years later invaded Afghanistan, and not only did not obtain the consent of the Council, but, as they knew from the Ministerial answer given in that House, did not even consult it. He knew that members of the Council were as anxious as men could be to have an opportunity of recording their opinions. So great was the uncertainty of the law that the authority and control of the Council were being gradually frittered away. He knew members of the Council who, if this Committee were granted, would come forward and boldly say, rather than such a state of things should continue, it would be better the Council of the Secretary of State should be abolished. If they wanted to get at the opinion of these 15 men of great Indian experience, as in November last, it was felt to be a great misfortune that the members of the Council could not be consulted. They could only learn indirectly what their opinions were. The two most important clauses in the Act were the 54th and 55th, which declared that if India engaged in war the fact must be announced within one month if Parliament was sitting, and within three months if Parliament was not sitting, and that the Revenues of India could not be employed beyond the Frontiers of India without the consent of Parliament; but scarcely any two lawyers agreed as to the extent to which these two clauses controlled each other. The facts he had brought forward showed that the Act of 1858 urgently needed amendment. The rule in matters of importance and difficulty was that legislation should be preceded by inquiry. In the days of the Company the Charter used to be renewed for only 20 years, and at each interval there was an inquiry into the government of India. Among the many labours to which they could look back with pride there was nothing they could refer to with greater satisfaction than the records of the Committees which sat on the Government of India in 1808, 1832, and 1853. On each of these Committees there sat most eminent men. On that of 1808 Lord Castlereagh, Mr. Tierney, Mr. Wilberforce, and the Duke of Wellington sat. On that of 1832 were Mr. Robert Grant, Mr. Charles Grant, Sir George Grey, and almost every man of eminence in the House. On the Committee of 1853 were Mr. Macaulay, Mr. Cobden, Mr. Hume, Lord John Russell, Lord Palmerston, and others most familiar with the subject. These were precedents for such a Committee as he now asked for. But, it might be objected, the time was unsuitable. Why? Because it was said they were on the eve of a Dissolution. But the most important of the three Committees to which he had referred—that of 1832—sat in the Session when the Reform Bill was passed and when a Dissolution was certain in the autumn. That Committee took most exhaustive evidence and made a most memorable and able Report. Why should a Committee not sit in 1879? Another reason why there should be no delay with regard to this inquiry was that no evidence could be more important than that of Lord Lawrence, Sir Charles Trevelyan, and others who had filled important official positions both under the old and new systems. But Lord Lawrence was advancing in years, and, except Lord Northbrook, he was the only survivor of the illustrious men who had filled the office of Viceroy, and was the only Viceroy who had held an official position before the East India Company was abolished, and the loss of his views, founded on his vast knowledge and experience, would be irreparable. No dispassionate person would deny that the financial position of India at present was unsatisfactory; and that if things were permitted to go on a financial embarrassment would soon arise which would not only put a severe strain on our resources, but would cause taxation to be imposed on the people, which they would regard as an intolerable burden, and make them feel that the rule of England was the reverse of a blessing. In bringing this Motion forward he was not actuated by any Party motive. He believed that all parties alike desired that our Indian Empire should rest on the growing contentment of the people; and he asked the House, before it was too late, resolutely to set to work to place on a secure and more economical basis the finances of a country whose poverty must excite their commiseration, and the well-being of whose people should engage their anxious, their watchful, and their constant care. The hon. Member concluded by moving the Re-solution of which he had given Notice.

Amendment proposed, To leave out from the word "That" to the end of the Question, in order to add the words "a Select Committee he appointed to inquire into and report upon the operation of 'The Government of India Act, 1858,' and the other Acts amending the same,"—(Mr. Fawcett,) —instead thereof.

Question proposed, "That the words proposed to be left out stand part of the Question."


said, he believed the hon. Member for Hackney (Mr. Fawcett) had done good service in bringing forward this question, but doubted whether this was a seasonable time to make such an inquiry as was proposed. There were two or three clauses of the Act of 1858 that were obviously inconsistent. He would more particularly mention the 41st and the 27th clauses. The former provided that there should be no actual expenditure from the Revenues of India without the control of the Secretary of State in Council, and that no appropriation of any such Revenues should be made without a majority of votes in the Council; while the 27th clause was to the effect that any order not being an order for which a majority of votes was necessary might, after the commencement of the Act, be sent by the Secretary of State without a meeting of the Council. It was thus competent for the Secretary of State—although he could not, without the consent of the Council, order so insignificant a charge on the Revenues of India as the cost of mending an armchair in the India Office—on his own authority to send a despatch which might involve India in a costly war without the slightest possibility of any control being exercised by the Council, though that, in truth, was the very object and function of the Council. If the House desired to treat the matter seriously and wisely, it could only do so by amending the Act of 1858. That would have to be done sooner or later; though he could not say whether or not the appointment of a Committee was the best way of approaching the subject. With regard to another point: the hon. Member for Hackney had alluded to the increased charge thrown on the Indian Revenue by the Amalgamation Act of 1860. Probably very few persons realized what that increase was; but it was a fact that under the old system, before the Amalgamation Act, the average military charge in India was £12,000,000; while the average since the passing of that Act was no less than £16,000,000. That sum was solely for the ordinary military charges, and not for such exceptional expenses as those consequent on an Afghan War. The main point was, whether it was possible so to construct the whole government of India as to keep the power and responsibility in the hands of the Secretary of State, at the same time investing the Council with a real financial control. He did not think that would be impossible, particularly as the Indian Council were elected on the ground of their knowledge of Indian finance, and as the exercise of their dis- cretion in time past had proved their capacity for power. The hon. Member for Hackney had described the Council as tongue-tied, and unable to criticize the Secretary of State. That was, to some extent, an exaggeration; but the point was, not that members of the Council could not express their opinions freely, but that they had little or no controlling power. Sooner or later some step must be taken in amending the Act of 1858, and, in his (Mr. Mill's) opinion, the sooner the better. It was no objection to immediate action to talk of the present House as a moribund Parliament. To that phrase he strongly objected. But, after all, if their political future was but brief, that very fact ought all the more to stimulate their energies; otherwise it might be argued with equal force that the entire Session ought to be spent in idleness and inactivity.


agreed with a great many, though by no means with all, the observations that had fallen from his hon. Friend the Member for Hackney (Mr. Fawcett). The hon. Member wished to persuade the House that the financial control now exercised over Indian expenditure was inadequate, and sought a remedy in the appointment of a Select Committee to consider the working of the Government of India Act and the other Acts amending the same. After listening to his hon. Friend's statement, he still held the opinion that among the many and great evils that already afflicted, and the still greater evils that threatened, Indian finance, an inadequate control over expenditure found no place. If an elaborate machinery of control, constantly and carefully worked during the last 20 years, could have made our Indian expenditure a thing agreeable to contemplate, we should have had great reason to be satisfied. But the machinery for controlling Indian expenditure had been, at various periods of our history, very indifferent; and the evils that were wrought even in the worst times by a defective system of control were as nothing compared to the ill effects of errors in our general policy. If the state of the finances of India were, as he admitted it to be, a subject for uneasiness and alarm, it was the result of grave errors in recent policy, not of any defective control. It would be generally admitted that an effective financial control over the In- dian Executive must be exercised in England, and by the one authority greater than the Viceroy—namely, the Secretary of State and, his Council. Some persons imagined that the power of the Council was shadowy. He maintained that it was enormous, and would mention one fact. He could speak only of what had occurred under the administration of the Duke of Argyll; but, except on very rare occasions, the same procedure had, no doubt, been followed by all Secretaries of State for India. While the Duke of Argyll was at the India Office, there must have been something over 100 questions submitted for the decision of the Indian Council every week. He was there for more than five years, and he had never once overruled his Council, so that, in that time, they had said as a body "Yes" or "No" to nearly 30,000 questions, many of them of the greatest possible importance. Could a body be said to have only a shadowy power to which not only every question directly relating to any appropriation to be made, or any grant to be given, from the Revenues of India was necessarily submitted, but which, in practice, decided upon almost every large question connected with India? He said upon almost every question, for there were, as was well known, certain reservations made in the legislation which governed the powers of the Council. There were some people—not very many, he believed—who would sweep away these reservations, and who thought that every question connected with India should be finally decided by the vote of the Indian Council. There were others who thought that every question should be submitted to it, and that its advice should necessarily be taken on absolutely every subject. To the first of these propositions he would be entirely opposed; against the second he should have a good deal to advance if this were the time to discuss it. He would only now observe that the question resolved itself into this—Was Parliament to be the supreme arbiter of Indian as of all other affairs, or was it not? If Parliament was not to remain the supreme arbiter, he did not know that this high trust could be in better hands than those of the Indian Council, consisting, as it did, of the picked men of Indian experience. But was Parliament prepared, on the advice of any Committee, how- ever composed, to abdicate its power into the hands of any Council, however able? This would be to take a most momentous step—to go back not only upon the legislation of 1858, but on that of 1784. For, although before 1858 there was what was called a double Government, Parliament had been the supreme arbiter of Indian affairs for two generations and a-half before the abolition of the Court of Directors and the Board of Control. If anyone doubted this, let him re-read the debates which arose in the Session of 1858, and more especially the speech of his right hon. Friend the Member for the University of London (Mr. Lowe), in which he narrated his experiences of the so-called double Government, gained as Secretary to the Board of Control. That speech had not been answered by any debater, and never would be answered either by philosopher or by historian. He had heard out-of-doors that it would be desirable to amend the Government of India Act in the sense of having something like the old Secret Committee, which consisted of the President of the Board of Control and the Chairman and Deputy Chairman of the Court of Directors; but hon. Members who had examined into the question must have found that the "Secret Committee" was simply another name for the President of the Board of Control; and he should be much surprised to learn that, even in recent affairs which did not come before the Council, individual counsellors had not exercised more influence than was ever exercised by the "two chairs" in the old days of the Company. But it was said the Court of Directors exercised a very real power in that they were able to recall the Governor General. In one case in all history the Court did so; and in that particular instance he should be very much surprised if the Governor General was not recalled with the good wishes of the Ministry of the day. But should not the Council have the same power? If it had, you would have this anomaly—a Cabinet irresponsible to Parliament would have the power of opposing on a vital matter a Cabinet responsible to Parliament, and the very first time it did so the power would be taken away. The Court of Directors had represented at least the money interests of the proprietors; whereas the Indian Council would have no consti- tuency to fall back on. His hon. Friend the Member for Hackney (Mr. Fawcett) always looked back upon the rule of the Company as a kind of golden age. But that golden age was about as sterling metal as other golden ages. We had not yet learned to govern India with perfect wisdom; but we were a good deal nearer doing so than we had been 20 years ago, owing, in great measure, to the continuous action of enlightened English opinion exerted through Parliament upon the great, broad questions of Indian affairs. He spoke only of the great broad questions, for he thought that all that interference with details which some persons had tried to induce the House to engage in had been either mischievous or futile. Details should be left exclusively to the authorities in India, to the Indian Council, and to the Secretary of State. He wished to express no opinion upon the question whether it would or would not be expedient at the beginning of a new Parliament to have a Committee selected from both Houses, and on which every man who had a considerable acquaintance with Indian affairs should serve, to discuss the present system of Indian government. That Committee, however, if it was to do any good, must be presided over by a statesman of the greatest authority. He also expressed no opinion as to whether the Government of India Act might not be amended. He thought that much might be said for a short declaratory Act to settle the question, which had been discussed in "another place" in the year 1869, as to what the statutory powers of the Council with reference to finance were meant by Parliament to be. These questions, however, were not now before the House. The question before them was whether they should refer to a Select Committee of that House alone, at a moment when they had, thanks to the accidents of Elections, by no means a large number of men of Indian experience in it, and when the House, even if it lived out its days, was certainly not very far from its end, the whole constitution of Indian government, on the ground of the control now exercised over expenditure not being sufficient. He thought that the control now exercised by the Council over expenditure was sufficient. This was not the time, and a Select Committee of that House alone was not the way, to inquire into the Government of India Act, and he must accordingly decline to support his hon. Friend the Member for Hackney. He should be very sorry, however, if anyone were to suppose that he did not think the state of Indian finances very unsatisfactory, or that the Government of India Act was susceptible of amendment. The Indian Government, when the late Government handed it over to their Successors, was in the position of a great landowner who was somewhat embarrassed, but could just pay his way. It was now in the position of a great landowner who, having had a succession of bad years from no fault of his own, had bad the folly to involve himself in an expensive lawsuit with a neighbour, the least unsatisfactory issue of which would be the acquisition of an estate which would be a damnosa hœreditas indeed, requiring an expenditure upon it which might easily, in a few years' time, lead him to destruction.


said, he differed from the hon. Member for Hackney (Mr. Fawcett) with respect to the financial condition of the old East India Company, which was its great weakness; and he had been surprised to hear the hon. Member assert that economy had been one of the strongest points of that Company. The following figures he had carefully tabulated from the records of the House, and he could vouch for their accuracy. From the years 1814 to 1860, inclusive, there had only been surpluses in 13 years, amounting together to £8,895,000, while there had been deficits in the remaining 33 years amounting to £72,200,000—that was, an average surplus for 13 years of £684,200, and an average deficit for 33years of £5,540,000. Between 1800 and 1859 the Debt had been increased in 44 years, while it had been diminished in 15 years only; so that, up to that time, we had in the aggregate a huge deficit, and a substantial accretion of Debt. When Mr. Wilson went out to India, in 1859, there had been a deficit for four years, amounting to £37,000,000. And all this was under the old East India Company. Thus it was clear that during the rule of that Company there were far larger deficits than since the Crown had taken the affairs of India under its direct control. Now, he would be the last person to blame too much the acts of the old East India Company; but, still, the figures adduced would, he thought, show that however much there might have been a desire for economy, still the East India Company were not successful in the administration of the finances of India. It had been truly remarked that the finance of India was a matter of surprise, because the chief part of the Revenue was derived from opium, and it was never known whether the Estimate would in any year be realized or exceeded; while at any time numerous little wars, or panics, or famines, or even cyclones, might overthrow the best calculations. In these circumstances, he could not see how the appointment of a Committee of that House could prevent the finance of India being a matter of surprise. It was impossible all at once to Americanize Indian institutions, which must be dealt with tentatively and gradually. He believed that the waste of money in India was not owing to the extravagance of Viceroys or of their Councils, but to the pressure brought to bear upon the Secretary of State by hon. Members in that House, who compelled him to force the Viceroys to spend money on objects which the latter were aware would be of no practical use, or, at all events, not so useful as many other projects. Taking the case of the building of the barracks in India: every hon. Member in that House respected Miss Nightingale, who had done so much good for our soldiers; but that lady, having gone out to India and seen the condition of the barracks there, had put such pressure upon that House, and upon the Secretary of State, that no less than £12,000,000 had been spent upon the erection of new barracks there which were practically of very little use, and, therefore, that money might be said to have been thrown away in pursuit of this philanthropic object. He did not see how the Viceroy could have resisted the pressure that was then brought to bear upon him, though, backed by his Council, he should have refused to consent to this extravagant expenditure. It must, however, be remembered that that extravagance originated, not in India, but at home. It was also owing to pressure at home that so many millions more than were necessary were spent in relief of the Famine in 1874. It was impossible for any Committee sitting even three days a-week to frame an adequate Report upon this subject in the course of a single Session. The hon. Member for Hackney said that their great object should be the contentment of the people of India; but he met that statement by asserting that the people of India were far more contented now than they were under the rule of the old East India Company. The hon. Member had further objected to the members of the Council being appointed for 10 years only; but that was far better than the old system, under which many members scarcely did anything in return for the large salaries they received, owing to physical incapacity. He could assure the hon. Member that hon. Members on that side of the House took quite as deep an interest in the welfare of India as he did; and he trusted that in discussing this question Party feelings would not be allowed to interfere. On these grounds, he submitted that no practical good would result from the proposal of the hon. Member being agreed to.


said, he recognized the very difficult position in which the finances of India now stood. The word "unsatisfactory" had been used; but to his mind that word was not strong enough, for the country was now drifting with accelerating rapidity into the gulf of bankruptcy. He disagreed with the policy of taxing any further the people of India for the purpose of getting a surplus, and the Government should exercise a wise economy by so managing the finances as not to increase the deficits. If a wise and prudent policy had been followed, India would now have found herself in a much better position than she was in. If the military expenditure had been economically managed, she might have found herself in a position of perfect solvency, with a surplus and diminished taxation. India had been overtaken by financial and commercial calamities which nobody could foresee. They should remember, that according to Sir John Strachey's figures, the whole net Revenue of India was beween £37,000,000 and £38,000,000 sterling. It was a complete delusion to talk about £70,000,000. Out of that sum they had been affected to the extent of not less than £5,000,000 a-year by two unforeseen calamities. The depreciation of silver had led to an estimated loss in the current year of £3,500,000; and they had also had a succession of Famines calling for a heavy expenditure, and for a Famine Insurance Fund which was estimated at £1,500,000. Those two items took away £5,000,000 out of the £37,500,000, which was all they had to meet the whole expenditure of India. The military expenditure, which was, in round numbers, £ 17,000,000, had to be defrayed out of the £37,500,000, or rather out of the £32,500,000, which was all they had left if they made those inevitable deductions for the loss by the exchange on silver, and for the necessity of providing against the recurrence of Famine. They had been going on steadily from bad to worse financially in India, and spending more than they received. The pressure of the Debt during 20 years had been doubled, and during the last few years, owing to the depreciation of silver and the Afghan War, that Debt was going on at an accelerating rate. They were coming very closely up to the point where the people of India must look fairly in the face the question of what they were going to do if India, very much from the consequences of their policy, became insolvent. If they could not either increase the Revenue or diminish the Expenditure, the simplest child in a national school could tell them there was only one result before them— namely, that, as had happened with Turkey, Egypt, Spain, and other countries, they would find India landed in financial bankruptcy. Now, he maintained that they could not increase the Revenue of India. That was proved by a sort of reductio ad absurdum. The attempt was made last year to establish a Famine Insurance Fund. It was found that to keep up the show of solvency they must raise £1,500,000 by fresh taxation from the people of India, and they were driven to such straits that they had to impose a 5 per cent licence-tax on men earning 4s. per week, and also to increase the salt tax. That was proof positive that they could not increase their available Revenue by any mode of laying on additional taxation. They had given the last turn to the screw. Their Revenue was all derived from about six sources. They could not increase the land revenue, except, perhaps, by means of improved cultivation—a very slow and gradual process. Their receipts from opium were very precarious. They were liable to be affected by contingencies arising in China, and by the competition of the native-grown product in that country. When they tried to increase their opium revenue in one year, that tended to diminish it in the following year. If it went up one year, it generally went down the next, and they could not reckon on any steady increase from that source. It had been held out to them that they were to cover the expenses of the Afghan War by the extra receipts from opium, but that prospect had vanished. Another head of Revenue was the Customs. An impending Dissolution was in the air, and they had heard of the pressure which Lancashire was likely to employ to obtain the remission of the Indian import duties. It was therefore more likely that they would have a diminution rather than an increase of the Indian Customs revenue. Again, the salt tax was now at a much higher point than it ought to be, and it was very desirable to equalize it by levelling it downwards. Neither could they look for much more from Stamps. In fact, taxation in India had reached its extreme limits, if it did not already even go beyond the bounds which humanity and political prudence should prescribe for it. Then, as to their expenditure—£17,000,000 of which was for the Army—no doubt, by a vigorous and close economy, they could save a little here and there; but they had really a very small amount to work upon. The £4,500,000 of interest upon the Debt they could not touch; neither could they cut down the superannuations. The charges for law, justice, and police, over a country as big as Europe, and containing nearly 200,000,000 of population, took £5,500,000—a sum which could not easily be reduced. Then they had only about £7,000,000 left. The general administration and miscellaneous expenditure absorbed about £3,500,000. As regarded the loss from the alteration in the value of silver, they could no more evade it than they could evade the effect of a bad season on the harvest. The position in which they now were with regard to the question of the stock of silver brought them face to face with the Army expenditure. When he was in India he had to meet a deficit of £6,000,000, which had to be cleared away in two years. That was only to be done by economy, and economy in India meant military reduction. Of the £6,000,000 reduction, £5,000,000 were in the Army and Navy. Was there any prospect whatever of the military expenditure now being reduced? That was the whole problem; and it was a question not of detail but of policy. The British Government had increased the expenses of the Army in India, first by the amalgamation of the Services, by doing away with a separate Indian Army, contrary to the best advice at the time, and by the introduction of an extravagant Staff system; and, second, by the short-service system, which had led to a great increase in the cost of transport. Well, that was gone; and he would be too sanguine if he hoped they would get back to the old system. What remained? It only remained to reduce the numbers of the Army. If India could have been kept in a state of peace—no external wars—the swell of the great Mutiny tempest subsiding, the country being traversed by railways and growing richer, he thought the wise policy would have been to follow up the labours of Lord Mayo and Lord Northbrook. He spoke from no Party point of view. The death of Lord Mayo was deeply to be lamented. If they could have had a second Lord Mayo instead of Lord Lytton, and Lord Mayo's policy supported by the Home Government, the country might have effected large military reductions, and, instead of an expenditure of £17,000,000, which would be augmented by the Afghan War and the extension of the Frontier, they might have done with £15,000,000 or £15,500,000. Both ends might have been made to meet, notwithstanding the silver calamity, without fresh taxation. As matters stood now, what was the prospect? Did anyone suppose that the Afghan War was going to cost anything like the figure—£950,000—thrown out by the Government'? They might as well call it £95,000. Mr. Forbes was certainly not a bad authority. He was the correspondent of The Daily News, and was so well known to them all by his admirable accounts of military affairs. He was the best military correspondent, one would say, and he said it was perfectly childish to suppose that they would get out of the Afghan War without paying £5,000,000; that if they did, they would be exceedingly well off. Most hon. Members recollected the China and Abyssinian Wars, the Estimates, and the ultimate Expenditure. It appeared to him (Mr. Laing) that the £2,000,000 talked of had been arrrived at by a rough estimate that the war would cost £4,000,000, and that England would pay half. As to the £2,000,000 to be advanced to India as a loan without interest, did anyone suppose that that "loan" would ever be repaid by India unless by India raising fresh loans? Would it be paid out of savings of Revenue? What was the conclusion they must come to? That there was something impending, and that upon the eve of a General Election it was not desirable to impose more taxes on the people of England than were necessary. Therefore, that loan was put to a suspense account, without any idea that it would be repaid. Whatever might be the cost of the Afghan War, did anyone suppose that they could get a diminution of military expenditure by extending the Frontier of India—by securing a scientific Frontier? He had seen in some influential organs of the Press—or organs that used to be influential—the statement that now they had got a scientific Frontier, they had nothing to do but to reduce their Army one-half. That was so puerile, that he might pass it by. An extended Frontier required a largo number of stations and garrisons, and the men at those extreme points would be no longer available at a distance in India. There was one great mistake made—and it was, in his opinion, the only mistake made by Canning—after the Mutiny. The opportunity ought to have been seized to disband the Native Armies, which now, he believed, were numerically stronger than their own Army. They could not risk again the dangers which were incurred during that Mutiny. Then, were they prepared to say boldly to these Native Princes—"This sort of thing cannot go on. You must disarm. We will protect you against internal and external enemies?" Unless something of that kind was done, it would be impossible to diminish the Indian Army, especially as it from time to time became necessary to send portions of that Army to distant points from which they could not return promptly to repress disturbances that might arise in other parts of the country. On this point there were no greater authorities than Lord Sandhurst, who combined the qualities of a statesman with those of a soldier, and Sir Henry Norman. The first of those authorities had stated his opinion that to extend the Frontier of India into Afghanistan would involve an additional annual expenditure of no less than £3,000,000; and Sir Henry Norman's view was, that the maintenance of a so-called "scientific Frontier" would cost at least an additional £1,500,000 per annum. If they were going to put £1,500,000 sterling as the additional expense to their military expenditure, he wanted to know how, if they put that on the top of the deficit which they had owing to their loss by the exchange in silver and the Famine Fund, they proposed to go on? Had the Government fully looked that matter in the face? Did the Government propose additional taxation? If not, how was the augmented expenditure to be met? Unless the Government were prepared to levy fresh taxation, how long did they imagine they could go on tiding over their difficulties by fresh loans, unless those loans were backed up by British guarantees? He warned the Government that such a condition of things could not last very long, and in the end England would have to pay the bill. In these circumstances, he ventured to urge that it was high time the House of Commons investigated the matter; and he was of opinion that the appointment of a Committee, before which witnesses could be examined who were thoroughly con versant with the subject, would tend to the education—the necessary education —of Her Majesty's Ministers in one of the most important branches of the duty which they had to perform, and that such education would re-act upon the Viceroy, who had to manage the affairs of India on the spot.


Mr. Speaker, while I rejoice that this debate has been carried on with comparative freedom from Party feeling in the temper of the discussions which I remember during the existence of the East India Company, still I feel that the position of this House, although we have the advantage of the experience of the hon. Member who has just sat down (Mr. Laing), is greatly weakened by the Statutes, which forbid any member of the Indian Council from occupying a seat in Parliament. I regret that prohibition all the more, because in the last resort, as was ably stated by the late Secretary of State for India, the Parliament of England must be held responsible for the government of India. This House owes reparation to the people of that country. In 1869 Statutes, which at present govern India, were passed. There was a debate in the House of Lords, whore these measures were introduced; and in the course of discussion the highest legal authorities at that time—Lord Cairns, Lord Hatherley, and the highest Indian authorities, including at least one ex-Governor General of India—were at variance with each other as to the purport of these Bills, and the interpretation to be put upon their provisions. These Bills came down to this House, and here there was positively scarcely one word spoken upon either Bill, at any of their stages. It was one of the most extraordinary instances I ever knew, in my somewhat long experience, of important measures passing this House without debate. Here was an Act—the principal Act— which totally changed the responsibility of the several persons of the Body entrusted with the supreme Executive Government of India, and yet these Bills were allowed to slip through the House of Commons without the semblance of debate. I, for one, expected that these Bills would be deferred to another Session; still I was on the watch; but the principal stage, the final stage, of these Bills passed at 40 minutes after 12 o'clock at night, quite at the end of the Session. These Bills were passed without one word of real debate, and without apparently the slightest consideration. I refer hon. Members to Hansard for the verification of that statement. There were doubts as to the interpretation of the principal Act of 1869. We know that these doubts existed after the measure passed the House of Lords. The manner in which the Act was allowed to slip through this House in 1869 is a strong additional reason in support of the Motion of the hon. Member for Hackney (Mr. Fawcett). It appeared to me that the hon. Member for the Elgin Burghs (Mr. Grant Duff), the late Under Secretary of State for India, spoke as if the Motion of the hon. Member for Hackney had reference only to the financial affairs of India. That supposition seems to me very strange, when I remember that the hon. Gentleman (Mr. Grant Duff) has had considerable Indian experience, and must have known that measures have subsequently passed greatly altering—reforming, I suppose it is called—the Act of 1858. What are the terms of the Motion of the hon. Member for Hackney?— That a Select Committee be appointed to inquire into, and report upon, the operation of the Government of India Act, 1858, and the other Acts amending the same, the chief of which subsequent Acts is the Act of 1869. Perhaps the House will allow me to show how grave a change was made in the form of government in India by that Act, or rather two Acts, c. 97 and c. 98 of 1869. I will refer to an authority, which cannot be supposed to be influenced by any Party considerations. In the Statesman's Year Book for 1867 I find the following description of the form of government at that time: — The administration of the Indian Empire is entrusted by the Charter of August 2, 1858, to a Council of State for India. The Council consists of fifteen members, of whom seven are elected by the Court of Directors from their own body, and eight are nominated by the Crown. Vacancies in the Council, if among those nominated, are filled up by Her Majesty, and if among the elected, by an election by the other members of the Council; but the major part of the Council must be of persons who have served or resided 10 years in India, and have not left India more than 10 years previous to the date of their appointment. Here is a description, of the present form of government, taken from the Statesman's Year Book for 1877, and I quote from this authority because it gives a summary, and I have almost invariably found this work reliable— The Government of the Indian Empire is entrusted by Act 21 and 22, Victoriæ cap. 106, amended by 32 and 33 Victoriæ, cap. 97, to a Secretary of State for India, aided by a Council of fifteen members, of whom at first seven were elected by the Court of Directors from their own body, and eight were nominated by the Crown. In future, vacancies in the Council will be filled up by the Secretary of State for India. I need not point out to the House how enormous is the change which has taken place in the constitution of the Government of India, consequent upon the passing of this Act. As I have already stated, the leading Members of the House of Lords differed as to the purport and interpretation of the first and chief of the two Acts of 1869. I think this is a ground why this House, which allowed the Acts of 1869 to pass without debate, ought to make reparation to the people of India by now performing the duty which we ought to have performed in 1869. Reference has been made to the Revenues of India at various periods under the East India Company's administration. The hon. Member for Guildford (Mr. Onslow) stated that there were larger excesses of expenditure, larger deficits during the rule of the Company than there have been since the Crown has taken the affairs of India under its control, and that a great deal of pressure for the expenditure of money in India really originated in this country. I would remind the hon. Member that there have been great practical changes in the Government of India during the long period to which he referred, and that the cost of the acquisition of large territories must involve the outlay of capital as well as income. A Petition was presented to this House, in 1858, by my late Friend, Mr. Thomas Baring, on behalf of the East India Company, who were then aware that the Government of India would be transferred to the Crown. In that document they say— Your Petitioners cannot well conceive a worse form of government for India than a Minister with a Council, whom he should be at liberty to consult or not at his pleasure, or whose advice he should be able to disregard, without giving his reasons in writing, and in a manner likely to carry conviction. Such an arrangement, your Petitioners submit, would be really liable to the objections, in their opinion, erroneously urged against the present system. Your Petitioners respectfully represent, that any body of persons, associated with the Minister, which is not a chock, will be a screen. Unless the Council is so constituted as to be personally independent of the Minister, unless it feels itself responsible for recording an opinion on every Indian subject, and pressing that opinion on the Minister, whether it is agreeable to him or not, and unless the Minister, when he overrules their opinion, is bound to record his reasons, their existence will only serve to weaken his responsibility, and to give the colourable sanction of prudence to measures, in the framing of which those qualities have had no share. These statements were made in 1858, and had weight in the framing of the Statute of that year, 11 years before the Act of 1869, which gave effect to the system thus deprecated by anticipation, was passed; and I ask whether, in the result, the prediction of the Petitioners, this body of experts, has not been in many respects fulfilled—whether, by having passed the Act of 1869, without due consideration in this House, we have not really reduced the Council to total and speechless subordination to the Secretary of State; whether having reduced the Council to such a position, there is not great danger of its becoming, unconsciously perhaps, simply a screen for the Secretary of State, instead of its serving as a check upon both his legislative acts and upon the expenditure? I fully admit that my knowledge of these subjects is old; that it has been drawn from my having served on the Committee of 1853, and taken part in the debates of that year, and also in the discussions of 1858, when I enjoyed the confidence of the late Lord Derby. But I, humbly and respectfully, submit, that since the year 1858 the House of Commons has never seriously considered this most important subject, the form and method of the Government of India; and I respectfully urge that I the time has come when, in justice to the people of India, and ultimately in justice to the people of this country, this House is bound to repair the oversight and neglect of 1869, and gravely to consider the form of government to which it will delegate the exercise of the supreme authority over India. The House cannot divest itself of responsibility in this matter. Are we to give up India? I ask the House that question. If we are not to give up India, then, I would ask, whence is this deficit of Revenue, the great excess of Indian expenditure, to be supplied? Must not any ultimate deficit be supplied out of the Revenues of this country? I, for one, believe that this country will not give up India. But I can see that, if we are to go on guaranteeing debt, it will land us in grave difficulties. Guaranteeing debt is simply the equivalent of postponing payment. Therefore, on the part of the people of England, I urge the House to adopt the proposal of the hon. Member for Hackney; and I cannot conceive any hon. Member of the House, or any Member of Her Majesty's Government, would find that he had suffered in the estimation of the constituencies of this country, if they were to turn their attention to this great and important task. I see the right hon. Gentleman the Member for Birmingham (Mr. John Bright) in his place. We have long differed on questions of commercial policy. I must say that I view with apprehension the fact that the commer- cial difficulties and other causes are inducing the local Governments of the Colonies and of India to impose heavy import duties upon the produce of this country, in the case of some Colonies amounting to from 17 to 20 per cent. If there be any value in the doctrines of Free Trade, I trust that my right hon. Colleague for Birmingham will apply himself to urging the application of those doctrines within the British Empire.


said, that when he heard the Notice of the hon. Member for Hackney (Mr. Fawcett) given, he confessed it was with some regret he learned that the hon. Member thought it his duty to bring this somewhat delicate question under the attention of the House; because it might appear to some persons out-of-doors who were unacquainted with the subject to imply that some difficulty had arisen in the matter, and that the relations between the Secretary of State and his Council had reached a point requiring the interposition of the Legislature. Nothing could possibly be further from the fact. The relations between the Council of India and the noble Lord the Secretary of State, and he might add also the late Secretary of State, were cordial and harmonious. The machinery which had been devised by the wisdom of Parliament for the government of India was working almost without friction; and if difficulties should arise, or had arisen, in the course of business, he was confident they would be overcome, as they had been overcome, by the exercise of tact or of forbearance either on the one side or on the other. Hon. Members who had addressed the House had called its attention, to a very considerable extent, to the existing position of Indian finance. The hon. Member for Orkney (Mr. Laing) would forgive him if he did not follow him into all the intricacies of that subject—the more that many of them were not involved in the question before the House. He proposed rather to address himself to the substantial point at issue; but, at the same time, he could not allow one or two statements of the hon. Member for Orkney to pass without a word of reply. The hon. Member had attempted to ridicule the Estimate brought forward in December last as to the expense of the Afghan Expedition. He was glad to be able to in- form the House that as far as he had any information at that moment—and he would have better next week—the Estimate of the Government had been borne out completely. He had stated what he believed would be required during the course of the present financial year, and he had reason to believe, from private letters he had received, that the Estimate would not be exceeded. He would reserve a statement as to the expenditure in the next financial year until the introduction of the Budget. He should like also to say a word as to what was constantly repeated in that House with reference to the salt tax. A great number of hon. Members appeared to think the increase in the salt tax was for the purpose of providing a Famine Insurance Fund. This was not at all the fact. The increase had been made for the purpose of equalizing the salt duty all over India. He should be much surprised if it were not found at the conclusion of the financial year that this step had been a bold and wise one, which had led to a considerable increase in the consumption of salt in Northern India and, he hoped, to no decrease in the South. The hon. Member for Hackney (Mr. Fawcett) had alluded to the present financial condition of India; and here he felt bound to say that he had a deep debt of gratitude to the hon. Member for a recent utterance of his in relation to that subject. He referred to an article from his pen in one of the monthly magazines. If the controversies on this question were always conducted in the fair and candid tone in which that article was written, they might soon be able to arrive at some means of improving the financial condition of India. He could hardly be expected to enter into a discussion of the broad and general propositions which the hon. Member had laid down to-night with reference to Indian finance. He was quite ready to admit that they contained a great deal of truth; but they also contained a great deal that would necessitate explanation on his part. He should be prepared to go into details on a suitable occasion; but if he refused to go into all the hon. Member's propositions at present, he hoped it would not be understood that he assented to them all. But there was one of his statements which he would allude to at once. The hon. Member had characterized the pro- posed loan of £2,000,000 to India during the coming financial year as, if legal, practically a proclamation of bankruptcy. Such a statement was really very hard.


I did not say it was illegal. I said, that if it was contended that India ought to bear the whole charge of the war and you then advanced her money without interest, it shows she cannot pay it.


said, that if it was felt necessary that India should pay the expenses of the war, and £2,000,000 were advanced to her without interest, that was, according to the hon. Member, a proclamation of bankruptcy. The statement was a very hard one from the hon. Member for Hackney, who took so great an interest in the affairs of India, as he must be aware of the very difficult position they were at present placed in owing to the loss experienced by exchange. This was a matter beyond the control of Government, and one entirely independent of foreign affairs. The loss by exchange amounted during the present financial year to £3,500,000, and during the coming year it was expected to be still greater. In these peculiar circumstances, it was not fair to speak of the proposed loan as a proclamation of bankruptcy. The hon. Member had called attention to the very great growth of expenditure which had arisen since the time of the East India Company. No Minister who was responsible for the finance of India could fail to admit that this growth of expenditure, and the consequent charge on the Indian Revenue, was a source of very great anxiety. If any means of diminishing it could be suggested, Members would grasp at them with great satisfaction. But he must remind the hon. Member of statements that had been made upon this subject. The hon. Member for Orkney (Mr. Laing) pointed out the extreme difficulty of really reducing any expenditure except the Army expenditure; and Lord Northbrook had stated in the summer that he could not look forward in the immediate future to any substantial reduction of expenditure. And the fact really was that if any reduction of expenditure was to be made it would not be by general recommendations from home on the part of the Secretary of State or the Council of India, but only by constant and unremitting scru- tiny of every financial detail in India itself. The hon. Member for Hackney said the expenditure of India had grown since the time when its government was transferred to the Crown. But so also had the expenditure of England in the same period. If the hon. Gentleman would take the trouble to compare the receipts and the expenditure of India in 1856–7, just before the Mutiny, with the last accounts received, making allowance at the same time for the Famine charges, which had been very large, and also for the loss by exchange, he would find that the Revenue had grown within that period to a very much larger extent than the expenditure. He made this statement after a careful comparison of the figures. But they must remember why this increase of expenditure had arisen. They had exercised a civilizing influence over the whole of India. They had made roads and railways; they had established educational agencies and Courts of Justice throughout the land; and in every way made improvements in the country and developed its resources. When the old East India Company was referred to, it ought to be borne in mind that in the 46 years preceding the Mutiny there were 33 years of deficit. When the old Company was abolished, what was the position of the Crown? It was left with a Treasury exhausted by the Mutiny, and great efforts had to be made under unparalleled difficulties to repair the disaster. The hon. Member contended that the financial control over India had become much worse since 1869, when an Act was passed by right hon. Gentlemen opposite which rendered the Council less independent than it had been before. In that year the Duke of Argyll had pointed out with great force in the House of Lords that, though it was no doubt very desirable to have the Council independent of the Secretary of State, there were, nevertheless, great evils in allowing old gentlemen who had outgrown their experience in India to remain members of the Council. One of the most urgent necessities was to have men of fresh Indian experience on the Council, in order that the Secretary of State might obtain the latest information as to facts. That was the object of the Act of 1869, and it seemed to him to have worked extremely well in this respect. The hon. Member had further argued that the Council exercised no control over the finance of India, because in a certain number of years which he named there was only a small number of dissents. But to take the dissents as an indication of the usefulness of the Council was to degrade that Council to a position he hoped he should never see it occupy. If one member of the Council differed from the rest, he had an opportunity of influencing his colleagues, and very often also the Secretary of State; and if he failed to convince them of the justice of his views, the House would be very slow in believing that he must necessarily be in the right and everybody else quite wrong. The hon. Member had also urged that if an illegal charge was made upon the finances of India, there was no one now, as in the old East India Company's days, who had a legal status to oppose that charge. The hon. Member could never have heard of the Auditor of Indian Accounts, who was independent of the Secretary of State, and who was appointed for the express purpose of examining financial details, and seeing whether or not those details had received the sanction of the Council, or were otherwise legally authorized. The hon. Member had spoken of ambiguity existing in the Act of 1858. No one who had examined some of the clauses could deny that there were points of extreme difficulty which were perfectly open to argument. In 1869, as the hon. Member had stated, the Marquess of Salisbury found the occasion opportune, because the Government of the day had a Bill before Parliament to amend the Government of India Act, 1858, to call the attention of the House to the law as regards the control of the Council of India; he explained the matter to their Lordships, and he asked the Government, if they felt any doubt on the matter, to consider whether words could not be introduced to make the intention of the Act perfectly clear. In answer, the Duke of Argyll made a speech, which showed the manner in which he interpreted the law. The Duke of Argyll said— It is the opinion of all whom I have consulted, including the Law Officers of the Crown, that under the present Statute it is unquestionably in the power of the Secretary of State for India to order in India any service which may appear to be required. … The Secretary of State is supreme in all matters whatever, except simply such matters as were included under the principle of the financial veto of Mr. Pitt (alluding to 26 Geo. III., c. 8), that is, direct grants or appropriations of money to persons either here or in India, which might be made for purposes of political jobbery. That I believe to be the state of the law; and if it be, I need hardly say that it makes the Secretary of State practically supreme in all matters, whether they do or do not cost money."—[3 Hansard, cxcv. 1074–5.] After that, it would have been surprising if Lord Cairns had sat still. Such a statement of the law, and of the intention of Parliament in carrying the Act of 1858, could not be passed over by Members of the Government and of the Party who were responsible for it. Lord Cairns returned to the attack, and demolished the argument of the Duke of Argyll in a few sentences. But, on the part of the Government of the day, it was again answered that, in their belief, there was no practical difficulty in the matter; if there had been, they would have been perfectly prepared to deal with it; but, looking at the whole matter impartially, no practical difficulty had arisen, and Parliament ought not to interfere in so delicate a matter when no actual necessity had been shown for the amendment of the law. Ten years had passed, and practical experience had given an interpretation to the law of 1858 which had met with general acceptance. No doubt, it might be said that the wording of the Statute was open to various interpretations; but, at the same time, when they found that the law had been interpreted in a particular way, and had been acted upon without difficulty, the House would be reluctant to say it was a matter with which it ought to interfere. The hon. Member for the Elgin Burghs (Mr. Grant Duff) had pointed out with great force that no difficulty had arisen, and he could cordially coincide with the hon. Gentleman's views, and could say that since the hon. Member ceased to be connected with the India Office the same was the case. He desired the House to consider two or three practical reasons why the proposal of the hon. Member for Hackney was simply an impossible one. The suggestion was, that the Council of India should be made perfectly independent and should be given absolute control over the finances of India.


said, he carefully guarded himself against making any such suggestion as that now attributed to him.


But the hon. Member's observations pointed to a large increase of the powers of the Council of India; because he showed that under the old system certain things were done by the old East India Company which the Council could not do, and left the House to infer that all the mischief that was arising was in consequence of that change. The hon. Member pointed out that the Council had no power of initiating business; that all the Bills that the Government thought it necessary to submit to Parliament did not necessarily come under the consideration of the Council; and also that questions of policy did not come now before the Council, as he thought they formerly did, under the review of the Company. These propositions were very well worthy of consideration; but if the House looked at them a little more closely, it would find that they pointed to arrangements which would reduce the Government of India Act of 1858 to a practical absurdity. If every penny spent in India or England was to be voted by the Council of India in England; if the Governor General of India was to have no power to expend money in India such as he had before the Act of 1858 and had enjoyed since; and if every single appropriation of money to the Services, whether in England or in India, was to come before the Council and be voted by the majority, the Government of India Act would be simply unworkable; and the first thing that would be done by any Government, whether of one side or of the other, would be to say that such a state of things was incompatible with the proper government of India and must be immediately altered. The second objection he had to the proposition of the hon. Member for Hackney was that it would practically hand over the whole foreign policy of this country, if it in any way touched Indian interests, to an utterly irresponsible body. The Cabinet, which represented Imperial interests and was called into existence by and had the support of the majority in this country, would devise a certain policy for the protection of those Imperial interests; and, according to the hon. Member for Hackney, that policy was to be liable to be overhauled by a body of gentlemen in the Council of India who, whatever their merits, were appointed to that Council solely for the purpose of looking after Indian interests, and not with reference to other considerations.


explained that he simply drew a comparison between the power exercised by the Directors of the East India Company and that of the Council. If he had had a distinct Motion to propose about the Council, he should have moved it; but he did not advocate that the Council should have these functions.


said, that the hon. Member brought these things forward as reasons why the Government was more expensive now than then. [Mr. FAWCETT said he quoted Lord Cairns.] Yes; he quoted the speech of Lord Cairns, and went on to urge that under the Act the Council had the power by law of which he was speaking. The proposition which the hon. Gentleman had stated in the House led to a practical absurdity; and Lord Cairns had urged that, if the law were so, it ought to be altered. The Cabinet was intrusted with the consideration of important questions affecting Imperial interests. It was bound by ties of common political interest, and it conducted its deliberations in perfect secrecy. If the Indian Council had the functions suggested, and the Cabinet had to submit to the Council questions of foreign policy in any way affecting India, the secrets of the Cabinet would be known to gentlemen not bound by the same considerations of secrecy, and in some cases gentlemen of opposite political opinions, and thus a great Constitutional change would be effected. The Act of 1858 had given to the Government, or the Secretary of State for India for the time being, the power of declaring war without consulting the Council. Was it to be supposed that Parliament really meant he was to have the power of declaring war without consulting his Council, if it had not also meant that he should have the power of ordering the expenditure necessary for the purpose? That this was contemplated was shown by the fact that the Act provided that, in that particular case in which it was clear the Council of India could not have control, Parliament should be informed of the declaration of war, and the finances of India should not be applied to the purpose without the consent of Parliament. He hoped that no Secretary of State would attempt to get rid of his own responsibility by saying that he had been forced to act against his will by a majority of his Council. Certainly, the present Secretary of State had done nothing of the kind, but had taken the responsibility of having initiated the Frontier war, and had submitted the matter to the judgment of Parliament, which had expressed its approval by decisive majorities. He did not believe for a moment it was the intention of the Act of 1858 to render Indian finance independent of Parliament. If the hon. Member's construction of the Act could be upheld, the Council could snap their fingers at Parliament and at the Cabinet, and could refuse a particular expenditure, in spite of anything the Government or the House could say. Of course, under such circumstances, the Government of India would be reduced to a deadlock. He did not suggest that any gentleman likely to be appointed to the Indian Council would bring matters to such a pass; but he was bound to point out what would be the inevitable result, if the construction which the hon. Member put upon the Act was correct. Then the hon. Gentleman said there were great acts of extravagance committed by the Indian Government; and he seemed to suggest that all that could be put right if they were to resort to something like the old system of administration, and to give a power of control to some body of gentlemen outside of Parliament. It appeared to him that many of the acts of extravagance to which the hon. Gentleman alluded, if they were so, had actually been sanctioned by the Council of India; and, therefore, apparently, the way to check such extravagance would be to make the Secretary of State really responsible in the matter. He hoped, however, the House would not suppose he thought that the financial control of the Council ought to be anything but a reality. Indeed, he thought it was a reality now. The hon. Member for the Elgin Burghs (Mr. Grant Duff) had conclusively proved that the Council exercised very important functions in controlling Indian expenditure. That financial control was limited, however, by practical considerations. Was Parliament, in the ultimate resort, to have the control or not? The exact limit of the functions of the Secretary of State and of the Council it would be somewhat difficult to define in precise terms, and he was not going now to lay down any authoritative expression of opinion on the subject. The jurisdiction of the Council arose upon drafts of despatches laid before it by the Secretary of State. Those drafts were first sent to a Committee for consideration, and subsequently they were submitted to the Council. The Council had absolute power over those drafts if they embodied any financial question, and it could overrule the Secretary of State and uphold that overruling. Hon. Gentlemen should not narrow their view by considering this question solely in respect of the exact interpretation of an Act of Parliament. He was quite prepared to meet the question which had been raised as to the object and intention of the Act of 1858. Was the object and intention of that Act to diminish the responsibility of the Secretary of State? He believed the object was to establish a Department of the Government strictly subject to Parliamentary control, and likewise to establish a Council of responsible Advisers to assist the Secretary of State on Indian questions. Secondly, it was intended to impose a cheek on the Secretary of State for India in cases where Parliament was unable or unwilling to interfere. These powers had, in his judgment, been well exercised by the Council. He did not know that anybody could suggest anything which could take the place of the Council. The hon. Gentleman the Member for Hackney said they ought to inquire at once into these questions, because it was desirable to have, while they could obtain it, the opinion of Lord Lawrence. He thought no man could give a better opinion than the noble Lord, who had served under the old and the new systems, and who, moreover, had been Governor General of India. But, in point of fact, Lord Lawrence was examined by a Committee of that House in 1873, when he expressed a general approval of the existing state of affairs. The noble Lord was asked— Is it your opinion that, on the -whole, the Council is effective for the purpose of controlling the expenditure in India? And his reply was— I think they are effective. It really cornea to this, it seems to me, whether the expenditure which is proposed is really a politic one or not. If the Council consider it impolitic, they have ample means of opposing the expenditure. He thought the Council did exercise a perfectly practical control over the finances of India in all those cases in which they could really exercise any such control; and as he did not see that the hon. Member for Hackney had made out any particular case with regard to defects in the existing system, he asked the House not to grant the Inquiry which the hon. Gentleman desired. The hon. Member for Orkney (Mr. Laing), who spoke with great experience on this subject, had also proposed the appointment of a Committee, but on very different grounds. He, for one, would not shrink from any assistance that any Member of the House might be willing to render to the Government with respect to Indian finance. Undoubtedly, they had great difficulties to deal with, and if any assistance could be given to them they would be glad to receive it. With regard, however, to the appointment of a Committee to roam over the whole condition of Indian finance, he thought they had had sufficient experience of such an Inquiry in the last Parliament. A Committee sat during a considerable number of Sessions; but, after examining a great many questions, it was unable to arrive at any report at all. On that ground, also, he believed that the Committee now proposed would not do any good. The hon. Member for Hackney (Mr. Fawcett) asked for a Committee, not only on financial grounds, but to inquire into the whole constitution of the government of India. Nobody would be more ready than he himself was to admit that the Act for the Government of India was not to be regarded as a perfect one, and in quiet times, no doubt, any Government would be ready to consider whether there were not details which might be amended; but they had already before them the facts necessary for the full consideration of the case. The Constitution of India was a thoroughly anomalous one, and it was almost impossible to reconcile their despotic government in India with their representative institutions in England. It would not bear straining. And he thought it would not be strained while they had on the Indian Council gentlemen like those who now composed it. Be- lieving that no practical difficulty had arisen in the administration of affairs at the India Office, and considering, in particular, the control which the Government of the day ought to exercise in India and in England, he asked the House to reject the proposition of the hon. Member for Hackney.


said, he could not help observing that some of the statements of the hon. Gentleman the Under Secretary of State for India had exhibited the spirit and audacity of youth. As regarded the expenses of the Afghan War, he said he had received accounts from India, from which he had reason to believe that the expenses of that war, even on the scale on which it had been carried on, would not up to the end of the financial year exceed the moderate figure which had been suggested at the beginning of the war. He had no doubt the hon. Gentleman had received such accounts; but he did not believe a word of them. Nothing but the most audacious cooking of accounts could reduce the expenses of the war to that figure. He would much rather trust the estimate made by the hon. Member for Orkney (Mr. Laing), than whom there could be no better financial authority. He acquitted the hon. Gentleman the Under Secretary of State for India of all blame of cooking accounts; but there was another point in regard to which he could not acquit him of blame. That was with reference to the salt tax. His Predecessor had made a similar statement—that it had not been the object to raise the Revenue, but to equalize the Revenue in different parts of India. The hon. Gentleman must have a very short memory indeed. A Budget was produced in India, the object of which avowedly was to establish a considerable increase in the total amount of Revenue to be received from the salt of the people of India; there was a large increase in the salt revenue, to produce a Famine Fund, and that increase was actually imposed.


£300,000 was subsequently given up, so that really there was no increase whatever.


said, he was quite aware of that. It was the result of a debate in that House, in which very strong opinions were expressed; and the Government did give up the spoil they attempted to appro- priate at the expense of the poor ryots of India. It was, therefore, somewhat audacious in the hon. Gentleman to take the high tone he did, as if the Government had never attempted to raise the salt tax revenue. He was disappointed that the hon. Gentleman had, in such decided terms, refused to concede anything to the proposal of the hon. Member for Hackney (Mr. Fawcett). He had not only refused the Committee, but he held out no hope of granting it in the future. It appeared to him (Sir George Campbell) that the hon. Member for the Elgin Burghs (Mr. Grant Duff) and the Under Secretary of State for India were agreed between themselves to oppose this Resolution as both holding the English official view. If arguments were wanted to show the necessity of a Committee, the Under Secretary of State for India himself had supplied them. He told them that the Duke of Argyll, as Secretary of State, took one view of the Act of 1858, and that Lord Cairns took a diametrically opposite view; that the relations between the Secretary of State and his Council could not be defined, and yet that practically the system worked well; but he (Sir George Campbell) had a very decided opinion that it did not work well. He was the only Member in the House, he believed, who had been a Member of the Council of India, and he regretted that the Government had decided on their line of policy before they had heard him. A period of more than 20 years had elapsed since the Act for the Government of India was passed, and it was time that a Committee should inquire into the radical change which then was made. Comparisons had been made between the government of India under the East India Company and the present system of government; but the advantage was, in many respects, by no means in favour of the present system. A great Debt was, no doubt, accumulated during the time of the Mutiny; but the East India Company was not fairly chargeable with it. As regarded the favourable side of the administration of the East India Company, he could not help thinking that it operated very beneficially as a check upon the Board of Control, and that it possessed other and very considerable advantages. The members of the Company lived, as it were, in a glass house; they were afraid that their authority might be abolished, and they were, on that account, particularly cautious, especially in their treatment of the Services under them. They presented to them a firm front; whereas nowadays he regretted to observe an inclination to yield to their demands, with what seemed to him to be somewhat excessive liberality. The East India Company, moreover, were an independent body, and were able to resist pressure such as that which was so frequently brought to bear on Members of that House. As to public works, the great system of railways was instituted under the régime of the Company, while, as a financial body, it was infinitely superior to the Council of India, and was able more thoroughly to check the construction of imprudent works. Besides, the Council of India carried on its proceedings in absolute privacy; and nothing, he imagined, could have a more depressing effect on any man than that his advice and arguments on any particular question should be altogether concealed from the public. In fact, the position of members of Council appeared to be gradually approaching that of permanent clerks, thus showing a great misapprehension of their position, tending, in his opinion, to produce very injurious results. There was, moreover, he was sorry to perceive, a growing disposition to govern India by telegrams and private communications, which was calculated to have the effect of completely checkmating the Council. That system had increased by "leaps and bounds" under the government of Lord Lytton; so that in a late important correspondence there occurred an important hiatus of 15 or 18 months, with respect to which there was not a scrap of Correspondence furnished to the House, although there must have been communications between the Indian and the Home Governments during that time. There was a growing tendency on the part of the Government in India, too, to claim to mark as secret and confidential any despatches it might write; but it was not, he believed, ever intended by Parliament that it should have that power. He had, up to the present time, treated the subject before the House on general grounds with reference to that question of administration; but directing his observations specially to finance, he must say he strongly felt that no sufficient check was exercised either by the Council of India, or by Parliament over it; while he thought it was absolutely necessary that such a check should be exercised over so large a Revenue as was raised in India. The construction of the Act was a matter on which the greatest difference existed. It was impossible to say what power the Council had and what power it had not. By means of telegrams, private letters, and political despatches sent to India, the power of the Council was evaded. In reality, the authority of the Council was vain, illusory, and dormant. It exercised no effective control whatever. In no ease of a serious expenditure of the Revenues of India did the Council exercise control. He had known many cases in which a large portion—in fact, a great majority—of the members of the Council were opposed to a certain expenditure; but he had never heard of a single case in which they had succeeded in arresting that expenditure. The Secretary of State possessed immense power. Some members of the Council were old, and some not so old. Some of the members were men of independent minds, and some were subject to influence. The general result was, that a man of great position and power like the Secretary of State was able to have his own way. There were various means by which he could have his way by hook or by crook. If he did not get a majority, he had the power of withdrawing the proposition, to bring it forward some other day when he could get a majority. Her Majesty's Ministers were able at their discretion to expend the finances of India, and he thought it was well worth inquiry whether some improved method might not be devised. Then, going to India, he had seen a good deal of the Government of India, and he was bound to say the Government in that country was not equal to the task of a continuous and systematic administration of the finances of India. Just as men acquired a good deal of experience they went out of office, and they had not that settled and continuous policy which they would have were the members of the Government more settled. In reality, too much power rested with the Governor General himself; everything was too much dependent on his individual will and character. It seemed to him that the Council of the Governor General did not always contain men of the same independence as it did generations ago; nor were the Governors General men of the same calibre as the Governors General of former days. Great oscillations of policy took place. He could not imagine a greater contrast between the character of the late Governor General, Lord Northbrook, and that of the present Governor General, Lord Lytton. In former days the Company exercised independence with regard to the appointment of the members of the Council, but now-a-days the Council was a good deal packed. Though some of the members were very able men, they might also have some who were pretty much of the opinion of the Governor General, and amenable to his influence. In old days members of the Council received a higher salary than any Deputy or Lieutenant Governor, and there was no promotion for members of the Council. They were men over whom the Governor General had no control whatever. Now-a-days the members of the Council received less salary, and there were high posts in the gift of the Governor General, which were more highly paid than a membership of the Council, and to which the members of Council looked for promotion. That had, to a considerable degree, undermined the independence of the members of the Council. They had, besides, men sent out for special work, and those men, not having strong opinions beyond their own special Department, were generally controlled by the Governor General and went with him. The result was, the Governors General were usually enabled to carry out the principle of divide et impera. Very great questions had to be dealt with. During the last 20 years very great changes had taken place in India. The Natives had been educated, and the consequence was that a Native Free Press had sprung up. The mode of dealing with Native Independent States was vacillating and uncertain, and there was a growing tendency upon the part of those States to set themselves in opposition to the Government, though at present this opposition had only shown itself mainly in newspaper articles. As to the Army, he did not see the means of effecting a reduction of the Army by which India could be saved from bankruptcy, as every important question in regard to its constitution had to be consi- dered. As regarded the Civil Service, he must say he only gleaned knowledge of some defects of that Service after he had left it. He was inclined to think that there were some great evils in connection with it, especially in reference to the system by which men in that Service were so long kept in one particular groove, so that they were prevented from acquiring general knowledge of men and things. He thought a great deal ought to be done for India in the matter of agriculture which they did not require the Government to do in this country. In the great and growing interests of India it was necessary that the strongest tribunal that it was possible to obtain should look into these matters and try to ascertain, not only whether the machinery of government was now sufficient, but whether, in the great changes taking place, there was a Government calculated to promote the permanent welfare of India in the future.


rose to express his intention to vote with the hon. Member for Hackney (Mr. Fawcett). At the same time, he must say he was strongly convinced that all the propositions for getting more control over the expenditure of the Indian Revenues were perfectly illusory. He was only too much afraid that nothing short of a great catastrophe in India would recall this House to a sense of its responsibilities. From year to year the control of the House of Commons over their great dependencies was becoming more and more nominal, and the House was becoming more and more a mere recording office. The Minister of a particular Department imposed his will on the House, and very often he was really less morally responsible for what went on in his Department than any other Member of the House. India was at that moment separated from this country by a wider gulf of misunderstanding and discontent than at any former period. Every class in India was discontented, and every class had reason to be discontented. There was plenty of good-will towards India in the Service and among the Government officials; but, somehow, routine, red-tapeism, and all the obstacles which laid between the real consideration of India and the intelligence and good-will of the House, prevented anything like the application of a real remedy for the evils under which the people of India laboured. It was all very well for ex-officials to speak disparagingly of Native criticism, the hostility of the Native Press, and the antagonism between the Native Governments and the British Government. In his opinion, they ought to go beyond those expressions of Native discontent to the grievances which lay beneath. It had been mentioned on both sides of the House, and by the leading organs of both Parties, that they must reduce the armies of the Native Princes. These Princes were, no doubt, firmly convinced that their own stability was bound up with the stability of British Rule in India, and they and many other classes in Indian society were loyal to the British Government for the best of all reasons—namely, that that they feared a far worse state of things would follow if that Rule were removed. But every class was so badly off, Native industry was so oppressed, every description of Native capacity was so heavily handicapped, the cultivators were so ground down by taxation, which was stupid still more than unjust, the artizans were so worried by the licence tax, Zemindars were so offended by our violations of the Perpetual Settlement, and neighbouring States were so alarmed by continual threats of interference, that amidst the uncertainty and growing disbelief in the promises of the Government, which their stagey Imperialism had excited, the bonds of loyalty were growing weaker and weaker, owing to the meddling and muddling, and blundering and blustering, and promising and never-performing policy of the Government. This House had no means of getting at Indian opinion except in a roundabout manner, and if they did not remedy that, they would reap the usual fruits of ignorance. He believed that the only control which could be exercised over the expenditure of the Revenues of India would have to be exercised by the representatives of Native opinion themselves. This House must face the problem of giving representation to India. He was not going to say what form that representation must have; but some bodies must be recognized which would give the House of Commons a mirror in which they might see the drift of genuine Native opinion. Every year that they neglected that they approached, if not a catastrophe, at least a serious danger. And the catastrophe might arise at any moment. Take the question of the reduction of Native Armies. The Native Princes might refuse to reduce them, and they would at once be in the midst of a crisis. He did not attribute to Government an immediate intention of that kind; but this House had such a want of real control over Indian affairs, that they might find themselves embarked in a war with the Native States in India without so much as a week's notice. They had a war in South Africa, and yet they received assurances up to the close of last Session of a most optimist character. It might be the same with regard to India. How not to do it, seemed to be the rule in regard to India, and it would continue to be so until Parliament determined to have a share in the control of the country commensurate with its responsibility.


Sir, I think before we actually divide, I ought to say one or two words upon the view which Her Majesty's Government takes of the proposition of the hon. Member for Hackney (Mr. Fawcett). I think no question could be more serious or difficult than that of the relations which should exist between the Governments of the United Kingdom and of India. We have confided to us the administration of one of the largest and most heterogeneous Empires that the world has ever seen, and of all the Members of that Imperial family whose interest we have to consider, there is none more interesting, and none which presents problems of greater delicacy and difficulty, than the great Empire of India. I fully grant that the question is one deservingly claiming attention from time to time at the hands of the Government and of Parliament, and also that great advantages arose under the old system from the Inquiries which used to take place before the Committees of the House before the Charters of the East India Company were renewed. Those periodical Inquiries gave fair and natural opportunity for investigating the whole conduct of the business of our Indian Empire, alike as to defects which existed, and remedies which might be applied. I have no doubt that the great Committees to which the hon. Member for Hackney referred deserved the encomia which he passed upon them; but there is some little difference between what I may call the natural opportunities which the expiry of the Charters of the East India Company afforded for inquiry, and that which the hon. Member now proposes to create. The Inquiries made in former days were called for by the circumstances of the case, and were entered upon by our forefathers without any special charges being made against the Administration of the day. They were not tinged with anything in the nature of political difference or criticism, but were Inquiries which naturally took place when you were going to give a fresh lease of power to a Company who occupied a peculiar and a remarkable position. But we are now asked to institute an Inquiry with special reference to what the hon. Gentleman describes as a defect in the control now exercised over the Government of India. Further, the Committee for which the hon. Gentleman asks is not to be appointed in order to institute a mere general Inquiry as to the condition of affairs, but is to start with the foregone conclusion that there is something wrong in the control we now exercise over the Government of India, coupled with the assumption that the finances of the Empire are in a state of great embarrassment, if not of alarming danger. The hon. Member for Orkney (Mr. Laing) has addressed a very interesting speech to the House; but his argument was simply directed to show that the finances of India are in such a state that, unless something be done promptly, the Government would speedily find themselves confronted with a danger such as we have never seen in that part of the world. If that is the sort of reason for appointing this Committee, we must ask the nature of the dangers with which we are likely to be confronted, before we can form any opinion as to the remedy which the Committee may be expected to afford. The hon. Member for Orkney said he considered the real advantage of the Committee would arise from the fact that it would educate Her Majesty's Ministers; but if that is so, its office must be not so much to consider the possibility of providing a better control of Indian finance, as to inquire into the way in which this and former Governments have managed the affairs of the Empire since the passing of the Act of 1858. That is a largo question, and one which might be discussed with advan- tage; but I doubt very much whether a Committee of this House, appointed as is now proposed, would be the best means of carrying on such an Inquiry. We have been told that in considering the financial position of India, we ought to inquire as to larger questions of policy as well as of detail, and to ask how far the policy which has been pursued has tended to bring about the state of things complained of. The hon. Member for Orkney, having proved to his own satisfaction that the Revenue of India was absolutely inelastic, proceeded to consider the manner in which the expenditure could be reduced, and from the premisses he laid down, deduced the conclusion that the whole matter turned upon a reduction of the Army, which could alone bring about an equilibrium. But, if that course were adopted, it would give rise to great questions of policy with regard to our Frontier neighbours and the Native States within our own Dominions, and would, in fact, raise many points with which I think no Committee of this House would be competent to deal—certainly, not a Committee appointed upon the basis suggested by the Motion of the hon. Member for Hackney. I wish to lay down what I consider to be a cardinal principle in all our dealings with India. I think the cardinal principle on which we ought to go is this—that we ought to concentrate authority where we intend to fix responsibility. If you impose on a particular body in the State responsibility for the administration of your affairs, you must give full power to that body. And from that I think we come to a distinction between two classes of Indian affairs. We sin, I think, very often in both directions when we come to matters of expenditure which are not properly left to the administration of the local authority—for these are responsible, not the Government in India, but the Government of the Secretary of State also. I treat the whole of the Indian Administration for that purpose as one. But when you deal with matters which properly belong to the local or Indian authority, then you ought to be careful how Parliament interferes with the authority you have set up. On the other hand, when you deal with matters which properly belong to the Imperial authority, then you must take care that you do not allow your local authority to interfere with you, or to impede the authority you mean to hold responsible. As an illustration, I might mention the case of salaries or retiring allowances to Civil servants—in matters of that sort, we all agree in theory that these are matters which ought not to be dealt with by the Imperial Parliament, but by some Indian authority. What do we do now? In point of fact, we constantly say that Indian matters are not of general interest, and do not attract much attention in this House. Very often I admit they do not; but very frequently, when a grievance arises which interests a certain number of hon. Members, then we find a comparatively large number coming down to the House; they fight the cause intrusted to them—they make out the cause intrusted to them—in the name, perhaps, of some individual who thinks he has not been properly treated by the Indian Government. Well, an official replies for the Indian Office, and he is aided very likely by some ex-official Members, but they receive, comparatively, little support; and very often Resolutions and Votes are passed in this House which have a tendency to impose burdens upon India in matters to which we have little or nothing to say. These may be small matters, but they sometimes extend to even larger matters. The hon. Member for Orkney (Mr. Laing), and others, have referred to questions connected with the Army in India; and he has said, with truth, that arrangements made some years ago with India in respect of the amalgamation of the Army and the formation of Staff corps led to considerable expense. Well, Sir, that was because from time to time different pleas were brought forward in Parliament on behalf of the officers of the Army, and one concession after another was wrung from India by the action of Parliament. And, therefore, if you are going to consider this whole question with a view to establish a system of administration, such as will give fair play to India and prevent too much pressure being put upon her resources, you will have to see how you can control the action of Parliament in matters in which Parliament ought not to interfere. There is a very great distinction indeed between the position of the Government intrusted with Indian affairs and the old East India Company. It has been said, and with truth, that under the old system you had a really independent body. Whatever may have been the faults and defects of the East India Company, it had at least this recommendation—that it was an independent authority. Well, you got rid of that body, and why? Because it stood in the way of Imperial action in matters which properly belonged to Imperial policy and government. But, in so doing, you got rid of a body which had, as to a class of expenditure, advantages which no Council can have, because no Council you can ever set up can have the kind of independence the East India Company had. You may put upon your Council gentlemen of great ability, large experience, high character; but it is impossible that any Council you can establish can have any real independence of action in these matters, unless you are prepared to uphold their independence and to resist any attempts to encroach upon it. I know myself from experience how difficult it is to fight the battle of India and the Indian Council, when we have to meet a body of Gentlemen here who are supported by English opinion, and who claim some kind of what they call justice and consideration for some interest which they say was set aside by the Indian Council, whilst we claim that the Indian Government or Council ought in respect of such matters to be supported because they are responsible for that class of expenditure. But with respect to great Imperial questions—questions as to the policy of the Imperial Government—we are and must be responsible. In matters for which the Indian Government are not responsible the Imperial Government are; and where you are to exact responsibility you must concentrate power. Now, Sir, we have heard something as to the construction of certain sentences in the Act of 1858. I am not prepared to say that there is not some inconsistency on the face of one or two of those clauses; but I think it is quite clear what the real and overriding intention of Parliament was, and it was this—That there should be a proper division of authority; that in all matters connected with the expenditure of the Revenues of India power should be given to the Council to put a check upon the Secretary of State, and that he and they should be responsible for the Revenues of India, except in certain cases which were excepted. But with respect to the general power, I believe it is fairly exercised in the way that Parliament intended it should be. The hon. Member for Hackney (Mr. Fawcett) says that is not so, because he picks some six or seven instances, in which he says there was no protest against the action of the Secretary of State on the part of the Council. But the truth is, that that is an argument which does not at all commend itself to one. It seems to go the other way. The truth is, that in these cases—and I am acquainted with one or two of them—there was no protest, because the Council agreed with the Secretary of State. They were prepared to take upon themselves the responsibility of the application of the Revenues of India in the way in which they were applied. That may show that the Council is an inefficient body; but it does not show that they have not properly acted upon the powers confided to them in 1858. It is a mistake to think that the Council is always guided and overruled by the Secretary of State in matters of expenditure; or that, because so large a number of cases are passed through, there was no freedom of action on the part of the Council. I know a great number of cases which occurred when I was Secretary of State in which the Council prevailed over me in matters of expenditure properly belonging to them, and as to which the responsibility properly rested upon them; and I know, too, that it is continually the case that the Secretary of State takes the opinion of the majority of the Council, and that that opinion is freely acted upon. But, on the other hand, I think the view of those who framed the Act of 1858, with regard to the responsibility of the Government of the day in great questions of policy, has been properly acted upon, and is now being properly acted upon. No man can serve two masters, and there cannot be two authorities responsible for the conduct of a policy affecting the interests of the Empire. It may be quite right that the Government here should decline responsibility for irrigation works, or other local matters in India; but in questions of war or peace, great turning questions in politics, responsibility must not be thrown upon the members of the Indian Council. If the views of this country, as expressed by the Government, were to be thwarted by a body like the Indian Council, however admirable or excellent its members might be in their own line, it would be a state of things which could not last. I say it is entirely consistent with the Act of 1858, that responsibility for the Imperial policy should rest with the Government of the day, and not upon the Council of India. Should a proper and legitimate opportunity arise for the appointment of a Committee to inquire into the general administration of Indian affairs, I do not say it would not be well to embrace it; but I do say that an Inquiry, undertaken in the manner proposed, and upon the suggestions we have heard to-night, would rest upon a false basis, not justified by the state of the facts, and that it would be more likely to lead to political differences and Party wrangling, than to the advantage of India or of the Empire.


Sir, whatever may be the course the House may take on this question, I should like to take the opportunity of expressing my obligation to the hon. Member for Hackney (Mr. Fawcett) for the speech he has made. Reference has already been made to an article contributed by him to one of those Reviews which interest us so much and give us so much instruction month by month—I mean The Nineteenth Century. I think it would be wise for every hon. Member of this House to read that article carefully, and, having read it, to ask himself whether this is not a great question—one of the greatest in fact that we have had before Parliament for many years in connection with the condition of India? I think that this is a question which we ought to discuss and determine without being biassed in the slightest degree by that Party feeling which so often disturbs and destroys our wisdom on both sides of the House. Many hon. Members perhaps did not hear the speeches of the hon. Member for Hackney (Mr. Fawcett) and the hon. Member for Orkney (Mr. Laing). Those two speeches, carefully heard, reveal, I think, the true gravity of the case before us. The hon. Member for Hackney has, I think, investigated this question with more than a common desire to arrive at the truth. The hon. Member for Orkney has himself been in India in a very high official position in connection with this very question of finance which has been so much discussed to-night. After hearing these speeches it is impossible to say that this is not a question pressing upon the House of Commons, and pressing specially on Her Majesty's Government at the present moment. The Motion before the House includes much more than hon. Members would suppose from hearing the speech from the Chancellor of the Exchequer. The Motion is this— That a Select Committee be appointed to inquire into and report upon the operation of 'The Government of India Act, 1858,' and the other Acts amending the same. Now, the Act of 1858 was one which made a complete revolution in the Government of India. It destroyed the East India Company; it established here a Secretary of State; it transferred the power of government directly to a high Officer of the Crown; and, in point of fact, it made a complete change in the whole administration of that vast Empire. Now, this Committee which is moved for, if it were appointed would no doubt go into the main question whether the transference of that power was a wise one, and whether the power so given to the Secretary of State had been wisely employed during the 20 years which had elapsed since that period. I know nothing connected with the Government of India that it would not be possible and competent for this Committee to inquire into under the words of this Motion. I think even there is something more important for the future than the question of the temporary embarrassment of the finances—and I, for my part, am inclined to think that that embarrassment is more likely to be permanent; but that question at this moment is very much aggravated by the policy of Her Majesty's Government, which has received the approbation of a very large majority of this House. In my opinion, whenever a real and thorough reform in Indian finance, administration, and government is undertaken and effected, it will have much more to do with the Government in India than with any portion of our arrangements for Indian government in this country. The question which the hon. Member for Hackney asks is not merely one to gratify curiosity, but is one which, if fairly answered, would beset the whole question of the Government of India. It would lay bare its virtues so far as they go, and also lay bare its vices—for I think they are many—so far as they go. I would therefore ask the Government whether it is worth while for the Chancellor of the Exchequer to get up tonight and give us the sort of speech which he has made? It differs from the speech of the hon. Gentleman the Under Secretary for India. He was, I may almost say, loud in contrast with the hon. Gentlemen who have spoken on this side of the House. We might have supposed that the old times had come back, when we had members of the East India Company speaking as if nothing could be more prosperous than the condition of India. The Chancellor of the Exchequer has confined his remarks almost entirely to the question of the relationship between the Secretary of State and the Council; but when he approached the end of his speech be was obliged to admit that the time has nearly come when it would be very desirable to have such an Inquiry as the House instituted during the existence of the Company. In 1853 there was a Committee of this very kind. I was not on it, though I believe I took more interest in the question than any other hon. Member of the House at that time. The object of the Committee was to get an agreement that the Company should be continued, and I recollect that the then responsible authority in this House made a speech one night five hours long. He rose at 5 o'clock and spoke until 10 o'clock, and during the whole five hours his language was one continued eulogy of the East India Company. I succeeded him, and I spoke till 12. Sir Charles Wood, the then President of the Board of Control, and myself, in fact, occupied the whole evening. I thought that I had answered his speech, but the House of Commons did not agree with me. And yet what happened? In five minutes time the whole of the eulogy was blown to the winds. The President of the Board of Control, his Colleagues, and almost everybody else, admitted that the East India Company itself was an absurdity and an antiquated arrangement which could not be continued any longer. The moment the Mutiny broke out the India Company was at once got rid of. Some hon. Members, who do not know so much of the subject as I have known, have been I talking as if the India Company were something that might be well worth re- suscitating. For my part, I do not believe we shall ever again have anything like it. Although there is much to blame in the present system of government in India, that Government has done a great many things of great advantage to India which the India Company never attempted; and which, if it had attempted, it would have failed in accomplishing. I recollect charging Mr. Mangles and Sir James Hogg, then in this House, with this fact, that in 14 years, according to their own Returns, the India Company had not expended so much on roads, bridges, and permanent works as the Corporation of the City of Manchester, with 350,000 or 400,000 of inhabitants, had expended in the same time for the advantage of their population. The East India Company fell as it deserved to fall, and I am sorry that its successor has not been more fortunate than it has been. The right hon. Gentleman the Chancellor of the Exchequer, during a great portion of his speech, argued as if there were really no case for Inquiry, and then towards the end he seemed to relent somewhat, and feel that he was not sure of his ground, and to give more hope that at some not remote period he would consent to some kind of Inquiry. I think that if there is to be an Inquiry, it cannot come a day too soon. Reference has been made, in the course of the debate, to the prospect of a Dissolution. I presume that there will be a Dissolution in the course of this year. That has been the usual Constitutional course ever since the Septennial Act was passed. ["No, no!"] I see there is an hon. Gentleman on the other side who is very much afraid of a Dissolution. We are not afraid of a Dissolution on this side, and I have no doubt that many hon. Gentlemen on the other side are not afraid. If there is to be an Inquiry, the sooner we have it the better, because these misfortunes that we see before us, not looming in the distance, but close upon us, are growing greater almost every day, and Parliament cannot one day too soon apply its mind and its utmost attention to the great and grave difficulties which are before us. Recollect what you have done in India. According to the statement of my hon. Friend the Member for Hackney (Mr.Fawcett), you extract from the people of India everything that can be extracted with safety; you do not know where you can turn for another tax of the smallest amount; you have put on a licence tax, which is in point of fact an income tax, upon a man having no more income than 4s. a-week; your salt tax is, I suppose, 2,000 per cent upon the ordinary common cost of salt, and having done all this, you have borrowed so much that you cannot borrow any more. The Chancellor of the Exchequer has offered to lend, or rather he has suggested that he will lend—and I suppose he is meditating it as he meditated the Rhodope Grant—to the Indian Government £2,000,000, for which the Indian Government is to pay no interest. That is exactly the terms upon which the people of this country lent to the Turkish Government. These terms were not in the agreement, but that has been the result. The money has been lent, and no interest paid. We call the Turkish Government bankrupt; but we say that the Indian Government is only in a position of momentary and temporary embarrassment. I ask you to turn back to the speech which Sir Robert Peel made in 1842. I have not referred to it for many years, but I recollect that he pointed out to the House what might happen if the time should arise when there would be great confusion and embarrassment in the finances of India, and to what an enormous and perilous extent a disturbance in the finances of India might affect the finances of this country. We have approached the time that Sir Robert Peel referred to, and I recollect that people thought when he spoke he was going too far away to find an argument in favour of the great change which he was anxious to make for the purpose of restoring the financial equilibrium of the country. We have come now to that point and, I say, that, listening to this debate, in which I had not the least intention of taking any part, I have been impressed with the seriousness of the position in which we are placed, and I am astounded that the Chancellor of the Exchequer, who does know his multiplication table—I think I have known Ministers who did not—who was brought up at the feet of my right hon. Friend the Member for Greenwich, and who, if he were not on that Bench, would in many financial questions agree with him—I am astounded, I say, that the Chancellor of the Exchequer should have given his consent to the recent policy of the Government in India, which must aggravate to an extent which we cannot measure, the great malady which affects that country at this moment. There is no doubt whatever that the policy which the Government have adopted within the last six months—a policy in which they have given up and repudiated the wisdom of our wisest Indian administrators—must aggravate to an enormous extent the disasters which have overtaken Indian finance and the difficulties with which this House is now called upon to grapple. I think the Government ought to have received the proposition of the hon. Member for Hackney with sympathy and with an offer of assistance. They might have objected to his words and suggested something better; but, now that the question has been brought before the House and seriously discussed, I think they ought to have consented to a Committee which should have given a thorough investigation into all the troubles which now beset the question of Indian finance. I do not ask for a Committee entirely on the ground of finance. My opinion is, as I have already said, that nothing which you can do here can materially affect the question of finance. That question is one which arises in India, and must be determined in India. I have come to the conclusion I stated here in 1858, that it was absolutely impossible—and years are proving it to be impossible—that India could be managed by a half-a-dozen members of the Indian Council, who are appointed only for five years, and who are, on the average, not more than two years and a-half in office, with a Governor General at their head who is not more than five years in office, and is for the first year or two, in a manner, learning the business of his great office. You have a Governor General who had never been in India before his appointment, who had never been in this House, who had never been connected directly or indirectly with the politics of England. You have half-a-dozen such gentlemen as I have described, presided over by such a Governor General, undertaking to manage the whole affairs of 200,000,000 of persons, of 20 different nations, speaking 20 different languages; and to say that such a thing can be done by half-a-dozen gentlemen sitting in Calcutta, with such a Governor General at their head, is to make one of the most astounding assertions that could possibly be put into language. There never can be a Government which can be just to the character of England, and which can be just to that enormous population, until you have India separated into more completely independent Governments, so that the Governor of every Province and the members of his Council shall be nearer to those whom they govern, shall be more intimately acquainted with all their circumstances and requirements, shall not be required to carry on great policies on the Frontiers and aggressive wars, but shall be required to make annually his direct account to the Secretary of State here, by whom all these things will be judged. Before I conclude with regard to that Council, I should like to state what, perhaps, many hon. Members do not know, that when the India Bill was before the House, Lord Palmerston, I believe, agreed with me that it would be well to have no Council at all. The Council was partly established to make it easy to transfer the Indian Government from one body to another, and a great many of the old East Indian body were put upon it. Lord Palmerston was very much against having a Council so numerous, and one evening he came to me in the House and asked if I would support a proposition to have it reduced. He thought a Council of seven would be abundant for all purposes. I rather smiled—for I did not agree with Lord Palmerston in many things—and I told him that there was not the slightest chance of getting the House to agree to his proposal, considering the position the Government were in with their Friends and the Company. The proposal was submitted to the House, but it did not pass. Lord Palmerston did not think that there should be a Council at all; but that if there was to be one, it should be a small body that would be confidentially consulted by the Indian Secretary. He had no idea that the Council should have the sort of power over the Indian Secretary that the directors of the East India Company had. That is my opinion still; and though in that I differ from many hon. Members of the House, and, perhaps, from my hon. Friend the Member for Hackney, I still feel bound to support this proposition, because, according to the words of the Reference, the Com- mittee would be able to examine the whole question of the government of India. There is no single thing which any man could bring before that Committee in regard to the government of India which it would not be entitled to inquire into. I am sorry that the Chancellor of the Exchequer has not come out with a little more courage. He gave us to hope that there would be some sort of Inquiry at some time. If he thinks there is not enough of pressure now, before next year's Budget there will be a good deal more; but I would recommend him—and I am giving him disinterested advice—to agree to the appointment of this Committee. If he does not like the words of the Motion, let him take an early opportunity of submitting to the House a proposition for the appointment of a Committee, with a Reference such as he approves. Whatever the House does, let it not allow this great question to escape, as if there had been no discussion to-night. There has not been in our time a question of graver moment, or one more entitled to the most earnest consideration and deliberation of the House.

Question put.

The House divided:—Ayes 139; Noes 100: Majority 39.—(Div. List, No. 30.)

Main Question, "That Mr. Speaker do now leave the Chair," by leave, withdrawn.

Committee deferred till Monday next.