COMMITTEE.

HC Deb 06 August 1885 vol 300 cc1286-385

EAST INDIA (REVENUE ACCOUNTS) considered in Committee.

(In the Committee.)

THE SECRETARY OF STATE FOR INDIA (Lord RANDOLPH CHURCHILL)

, in rising to move the following Resolution:— That it appears, by the Accounts laid before this House, that the Total Revenue of India for the year ending the 31st day of March 1884 was £71,727,421, including £13,240,507 received from Productive Public Works; that the Total Expenditure in India and in England was £70,339,925, including £12,032,754 spent on Productive Public Works (Revenue Account); that there was an excess of Revenue over Expenditure in that year of £1,387,496; and that the Capital Expenditure on Productive Public Works in the same year was £3,992,029, including a Charge of £566,261 incurred in the redemption of previously existing liabilities. said: Sir Arthur Otway, it has been thought more convenient by the authorities of the House that we should this year revert to the practice which had always been maintained for many years up to 1870—namely, of making the Indian Financial Statement when the House is in Committee. That practice was departed from on account of the custom which grew up among hon. Members interested in Indian affairs, of putting down Motions relating to India, which deferred the Statement of the Minister sometimes to a very late hour. But, no Amendments having been put down on the present occasion owing to the forbearance of hon. Members, I have gone back to what is the more ancient, and, I think, the more Constitutional custom.

In making the Statement which it is my duty to make, and which will be of some length, I appeal to the indulgence of the Committee, because, as the Committee well knows, the question of Indian finance is a very large one, a very complicated, and a very difficult one. To understand it thoroughly would require the assiduous attention of many years, and the Committee is aware that I have not had more than about six weeks, at the outside, in which to acquaint myself with the financial circumstances of the year, and that during those six weeks my attention has had to be given to other questions besides those of Indian finance. Therefore, on that ground, I would ask for the indulgence of the Committee. But, Sir, there is another ground on which even a Minister of large experience might make a special request of that character to-night. In ordinary times, the Secretary of State, so far as he confines his remarks to finance, merely re-echoes, and, more or less, repeats mechanically, the Statement which has been made in the previous month of March by the Finance Minister in India. But on the present occasion I am unable to take that course, and, in many respects, what I have to put before the Committee is practically a new and hitherto an untold story of Indian finance. I have to-day placed in the Vote Office, for the convenience of hon. Members, a Paper which will assist hon. Members in following the figures with which I have now to trouble the Committee.

Sir Arthur Otway, the Financial Statement usually laid before the House of Commons embraces, as the Committee is aware, the figures for a period of three years. It generally deals with the closed Accounts of two years ago, with the Revised Estimates of the preceding year, and with the Budget Estimate of the current year. I propose to follow that practice in the remarks which I now make, and to refer to the closed Accounts of 1883–4, to the Revised Estimates for 1884–5, and to the Budget Estimate for 1885–6.

On the closed Accounts of the year 1883–4 the formal Estimate which I submit to the Committee is moved. The Committee will find that the Accounts for 1883–4, which have now been finally closed, show a Revenue of £71,727,000, and an Expenditure of £70,340,000. In other words, they show a surplus of Revenue over Expenditure of £1,387,000.

The Revised Estimates for 1884–5 show a Revenue of £69,992,000, and an Expenditure of £70,702,000; in other words, a deficit of £710,000, in place of the surplus of £319,000 which was estimated in the Budget of that year. The result, therefore, of the Revised Estimate for 1884–5 is worse than the Budget Estimate by £1,029,000,the Expenditure being greater by £461,000, and the Revenue less by £568,000. There can be no doubt that the chief cause of that falling-off has been the great depression in trade, which has affected India as well as the other countries of the world, and especially the low price of wheat and the diminished rice trade from British Burmah, which alone produced a falling off in the Customs Duties to the extent of £260,000. The general depression of trade, and the low price of wheat, also affected the railway receipts very materially; there had been a falling-off in that matter from the Budget Estimates of no less than £755,000. There was also a temporary falling-off in the Land Revenue of £342,000. On the other hand, the improved price of the Excise was better by £217,000; the irrigation receipts improved upon the Budget Estimate by £116,000; and other sources of revenue not anticipated in the Budget Estimate of the year produced £200,000. As to the Expenditure of the year, I may point out that the opium crop was, on the whole, disadvantageous as a matter of finance; the produce was abnormally large; and, therefore, the payments and the cost of manufacture exceeded the Budget Estimate by the very large sum of £593,000. The political charges of the year were increased by £167,000, mainly owing to the expenses of the Boundary Commission; the interest on Debt increased by £242,000, including £184,000 for discount on the £3,000,000 Loan at 3 per cent raised in London last year. I will ask the Committee to bear that figure in mind— £184,000 for discount on the Loan of £3,000,000 3 per cent Stock. On the other hand, the Army charges were reduced by £126,000; the charges for exchange were less by £285,000, and the working expenses of railways were £139,000 less.

Now I come to the Budget of the current year as presented by the Government of India in March last. I put this before the Committee to make my Statement complete, though I do not think it will be of material value in this discussion. In March last Sir Auckland Colvin estimated the Revenue for 1885-6 at £72,090,000, and the Expenditure at £71,582,000. In other words, he anticipated a surplus of £508,000. He placed the Revenue higher than the Estimate for 1884–5 by £2,098,000. That is to say, going into details, he placed the Land Revenue at £788,000 higher, and the railways£929,000 higher. The opium receipts, owing to the large crop of the preceding year, he estimated at £176,000 higher than the year before. He also estimated that the improvement of the rice trade in British Burmah would increase the Customs receipts by £145,000; while the improved trade in salt, aided by an improvement in Stamps, Excise, provincial rates, and forest duties, would cause an increase of £304,000. The receipts under the head of irrigation were placed at £167,000 less. Turning to the expenditure, we find that it was £880,000 higher than the Estimate for 1884–5. That was, in some degree, owing to the working expenses and interest on railways having been placed at £598,000 higher than the previous year, besides £169,000 more than in the previous year being taken out of Revenue for the construction of railways, in addition to the money which might be borrowed for that purpose. There was also an increase in the estimated charge for Law and Justice, which was higher by £146,000 than the Estimate for 1884–5, owing to the extension of the Judicial Staff in several Provinces. Education was £81,000 in excess of the previous year; collection of Land Revenue higher by £98,000, and the charge for military works higher by £116,000, which is chiefly to be accounted for by the expenditure which became necessary for the defence of Aden and Bombay. There was also provision in the Budget for a charge for payment to the Commission for Reduction of Debt of £360,000 in excess of the previous year. The loss by exchange upon the loan of £3,000,000 was fixed by Sir Auckland Colvin at £321,000 higher, owing to the fact that the rupee was taken at the value of 1s. 7d., instead of 1s. 7¼d., the rate of exchange taken in the previous year. But, on the other hand, Sir Auckland Colvin's Estimate placed the interest on ordinary Debt, excluding the charge for public works, at £451,000 less than in the previous year, the opium charges at £458,000 loss, and the Army expenditure at £238,000 less than in the previous year. The Budget has, however, been completely knocked on the head, and smashed by peculiar circumstances —I allude to the advance of the Russian troops in Central Asia, and the failure of the Russian Government to carry out what we imagined were their engagements as to the sending of a Commission to meet our Boundary Commission for the purpose of delimitating the Frontier of Afghanistan. The advance of General Komaroff compelled oven the late Government to make considerable preparations for war. In this country there was a Vote of Credit of £11,000,000. In India the Viceroy and his Council, acting under the sanction of the Government at home, prepared two Army Corps, necessitating an expenditure on transport, rations, forage, and clothing of no less than £2,600,000. On that item I will merely remark that a very large amount of that sum—perhaps I may put it at almost one-half—together with a considerable loss of life, and an amount of hardship and suffering to man and beast which it is impossible to estimate, would have been saved if the Government of India had been in a position to avail itself of the Quetta Railway, which the late Government in 1880 ordered to be abandoned. It was also necessary to order from England ordnance at a cost of £450,000. There was also an extra subsidy to the Ameer of £250,000, and for the increased rapidity of construction, which became absolutely necessary, of the Scinde-Pishin line, storage of railway material, and construction of temporary line from Quetta to the head of the Bolan Pass, an expenditure of £1,180,000, of which £700,000 was, I regret to say, drawn from borrowed money intended for other works of great importance and Value, thus, however, reducing the additional charge on the year to £480,000. The total increase of expenditure which the late Government considered to be absolutely and vitally essential on account of military necessities, unforeseen and unprovided for in the Budget of March, thus amounted to £3,780,000. There is also other additional expenditure which Sir Auckland Colvin places in respect of opium charges, owing to the opium crop having proved unexpectedly as abnormally bountiful as last year, which throws an additional sum of £600,000 on the Revenue; the discount on the £3,000,000 loan recently raised in England the other day, amounted to £508,000, and there was also a charge of £75,000 in respect of the telegraph cable in the Persian Gulf. The total expenditure not provided for in Sir Auckland Colvin's Budget of last March thus reached the sum of £4,963,000.

Before taking the Committee further into the figures of the Budget this year, I would be glad if they would compare the real financial condition of India, in the past three years. Following the precedent of previous years, in order to show the present condition and future prospects of Indian finance, I ask the Committee to review with me the closed Accounts of 1883–4; the Revised Estimates of 1884–5, and the Budget Estimate of 1885–6. The Committee will remember that I stated that according to the closed Accounts for 1883–4 there was a surplus of £1,387,000. This surplus was, however, more apparent than real. From this surplus, if the Committee wish to arrive at the real financial results of the year 1883–4, we must deduct £569,000, the amount of Land Revenue collected in 1883–4 under special circumstances in Burmah, Madras, and Bombay, which would ordinarily have been collected in arrear in 1884–5, and which would probably, and indeed actually, have fallen into the Accounts of that year. This reduced the proper or adjusted surplus for 1883–4 to £818,000. Turning to the Revised Estimates for 1884–5 we find that the estimated deficit was £710,000; but from this deficit we must deduct the Land Revenue of £569,000 collected in 1883–4, but which would naturally have fallen into the year 1884–5. This reduces the deficit to £141,000 for that year. But even that deficit is only apparent. There is a further allowance to be made in respect of Land Revenue postponed to 1885–6, owing to floods and drought, amounting to £344,000; so that, if we take that amount from the deficit of £141,000, the apparent deficit for 1884–5 is turned into a surplus of £203,000. But in the accounts for 1883–4, now being made up, as telegraphed home to us, there are improvements in the Revised Estimate to the credit of the Imperial account of £796,000, making the real and adjusted surplus for 1884–5 £999,000, or close upon £1,000,000. If we apply to the Budget of March last this method of ascertaining the real financial position of India, which, I think, is a fair one, we shall find from the Budget Esti- mate, as calculated by Sir Auckland Colvin, that the surplus was estimated at £508,000, from which the Land Revenue of £344,000, belonging to 1884–5, but to be collected in 1885–6, must be deducted, and that leaves the adjusted surplus for 1885–6 at £164,000. The surplus, no doubt, is rather a low one, when compared with 1883–4 and 1884–5; but the Committee will remember that the three years taken together show an average surplus of £660,000, and it must be remembered that it is the practice of Indian Finance Ministers to estimate their Revenue very low and very cautiously. It is not improbable that the Revised Estimate for 1885–6, apart from all abnormal expenditure, will show a real and adjusted surplus of £300,000 or £400,000. I have made this digression in order that the Committee may not suppose that the financial position of India is so fluctuating as the figures for the three years might lead a chance observer to imagine; for these, taken alone, show a surplus of £1,387,000 in 1883–4, a deficit of £710,000 in 1884–5, and a surplus of £508,000 in 1885–6. This might lead people to suppose that the Indian Revenue is extremely spasmodic and jerky, or that the Indian Finance Ministers are extremely careless and inaccurate in their calculations.

I now have to ask the Committee to consider the Estimate of Expenditure for the current year. The Committee will remember that I stated that the deficit for the year unprovided for in Sir Auckland Colvin's Budget amounted to £4,963,000. I now wish to put the Committee in possession of the contemplated Ways and Means of the year, as they have been altered from the Budget Statement made by Sir Auckland Colvin in March. The Government of India, when they were brought face to face with this large extra expenditure, decided, and I think very wisely, that any attempt to impose fresh taxation in the course of the current year would be most undesirable; that it would throw all their accounts, and all their Revenue arrangements, into the utmost confusion. It was therefore determined to meet this extra and unprovided for expenditure in two ways—first, by economies in charge; and, secondly, by drawing on the balances. The Government of India, I am sure the Committee will recognize, have made admirable exertions in the way of reducing any expenditure which might, by any kind of argument whatever, be called unnecessary, and they have succeeded in effecting a saving in charge on the Revenue of the year of no less than £1,797,000. Of that sum, however, £700,000 is in reality capital expenditure, which would have been expended on railways and irrigation works in other parts of India, and would have been met with borrowed money, and also from, that considerable economy must be deducted to some extent £643,000, which is the effect of the economics made by the Provincial Governments, who are entitled under the present Provincial contracts to have any sum so saved placed to their credit, under the head of what is called "Provincial surpluses," and which sums the Government of India are supposed, at some future day, to be bound to make good. These two reductions of £700,000 drawn from railways and irrigation works, and £643,000 economized by the Provincial Governments, leave an actual saving on expenditure by the Imperial Government of £454,000. In addition to that, the Government have telegraphed that the estimated railway receipts were taken too low in the Budget by no loss a sum than £500,000. The drawings of the Secretary of State on India have been, on the demand of the Indian Government, reduced to such an extent that the loss by exchange, falling on the Revenues of India this year, will be lower than was calculated in March by £400,000; and those sums, taken together, make a total improvement of Revenue and Expenditure of £ 1,354,000. If the Committee will add that sum to the Budget surplus of £508,000, the amount of the charge unprovided for in Sir Auckland Colvin's Budget is reduced to £3,101,000.

Of course, the question arises how this very considerable sum is to be met. I told the Committee, and they appeared to agree with me, that fresh taxation in the course of the current year was most undesirable, and would be most confusing. A loan in India to that amount was hardly possible, and, perhaps, equally undesirable. Both these expedients have, therefore, been put aside, and the Government of India determined to increase the loan needed for irrigation and railways—the contem- plated amount of which in the Budget had been estimated at £2,225,000—to £3,500,000 Stock, producing about £2,992,000 of money, giving an increased receipt to the resources of the year of £767,000. The balances in India on March 31, 1886, were estimated by the Budget hi March last to be £10,205,000. These balances would have been weakened by the increased expenditure to the extent of £3,430,000; but they will now be strengthened by the improvement of railway receipts to the amount of £500,000, by economies to the amount of £1,097,000, and by the reduction of the drawings of the Secretary of State to the amount of £2,000,000, leaving a net increase of balance over what was estimated in the Budget of March last of £167,000.

I turn now to the Home Treasury. The balances in England were estimated by the Budget of March last as likely to be, on the 31st of March, 1886, £2,696,000. These balances will be reduced by the extra expenditure incurred in England to the amount of £1,025,000. They will be further reduced by the diminished drawings of the Secretary of State to the amount of £1,600,000, and these reductions would only have left to the Secretary of State a balance on the 31st of March, 1886, of £71,000. To this amount must be added an increase of the loan which I have spoken of to the amount of £767,000, and further receipts of capital from the Southern Mahratta Railway to the amount of £380,000, giving a balance on the 31st of March, 1886, as now estimated, of £1,218,000 instead of £2,696,000. The original unprovided charge of £3,101,000 has in reality been only partly provided for to the extent of £1,478,000 drawn from the balances in India; and although these will still leave a balance at home of £1,218,000, it is obvious that the balance is none too large. Indeed, it is rather too small to provide for the current expenditure of the year; and, therefore, not only is it more convenient, but I think more honest and accurate, to say that about £1,500,000 of the original deficit is really carried forward to next year, unprovided for either by temporary or permanent loans. I think the Committee will agree with me that this is a more accurate and fair view of the matter, when I state that the average balances in India on the 31st of March for the last 10 years amounted to £14,000,000, and in England the average is £2,500,000. The average in both countries during the 10 years is £16,500,000; this year in India the balance is £10,000,000; in England the balance is about £1,500,000—and taking the two countries together £11,500,000.

The Committee is no doubt aware that the Government of India since 1881 has provided for, or rather has professed to provide for, £2,000,000 more than the estimated Expenditure of the year—that is to say, it has endeavoured to provide a surplus of £500,000 every year, and has also endeavoured to provide £1,500,000 for what is called the Famine Insurance Fund. The Committee is also aware that that £1,500,000—a provision which dates from 1881—is usually applied in three ways. It is usually applied first in direct famine relief; but the amount under this head since 1881 has been extremely small. It is also applied for the purpose of mating railways and irrigation works as protection against famine generally to the amount of £750,000, and the remaining £750,000 has been taken for the reduction of the ordinary Debt. This year Sir Auckland Colvin proposed, in his Budget, to allot for the purposes of the Famine Insurance Fund £33,000 under the head of direct famine relief. He proposed, also, to take £287,000 from the Fund for the protective irrigation works. It was also proposed to spend on protective railways, State railways, and on Frontier railways an amount equal to £1,398,000 of Revenue, and to this sum was allotted from the Famine Insurance Fund £500,000. The railways provided for under that head were two railways in the Madras Presidency—the Cuddapore-Nellore and Bellary-Kistna, and in Rajpootana the Rewari-Ferozepore; in Oude, the Luck-now-Sitapur line was to be constructed from Provincial funds. But, Sir, the £700,000 which the Government of India has, in its emergency, provided for their expenditure has obviously been withdrawn from some of these works, and also the £680,000 from the Famine Insurance Fund, which would have gone to the reduction of the Debt, is really left in balances to meet general expenditure; and, though to this extent the amount which will have to be borrowed next year will be undoubtedly reduced, it is, perhaps, more honest and straightforward and correct to say that, to all intents and purposes, the Famine Insurance Fund has been swallowed up by the peculiar demands of the year.

I think the Committee will agree that this Financial Statement is not a very exhilarating anticipation, and also that it is rather "hard lines" upon the Minister coming into Office so recently to have to make his Financial Statement under circumstances which are certainly more or less depressing.

The Statement which I have made shows an unprovided charge of £1,500,000, and the celebrated Famine Insurance Fund practically eaten up. But I am sorry to say that is not all. There is more which I shall have to tell the Committee. The whole condition of India, political and financial, has been suddenly changed, and the change has not been for the better. I say suddenly changed; but the change ought not to have been sudden; it ought to have been foreseen and provided for; but the change has been sudden, and for the suddenness of that change neither the Government of Lord Dufferin in India, nor the Government of Lord Salisbury at home, can in any way be held responsible. Then, Sir, not only for the purpose of clearing the present Government of all responsibility for this peculiar financial condition of affairs, but also for the purpose of enabling the Committee and the country to realize the real nature of the change which has come over India, I would ask the Committee to take a brief glance with me into the finances of the next year, 1886–7. Sir, in order that the Committee may understand what it really means in pounds, shillings, and pence, that India has ceased to be isolated from all contact with any European Power except ourselves, I may remind the Committee that last year a loan of £3,000,000 at 3 per cent was issued by the Indian Government in London at an average rate of 94, and this year a loan for the same amount, and at the same rate of interest, has been issued at an average rate of 85½. Well, I think the Committee will agree that a change of position, political and financial, which can cause Indian credit to fall in London by so much as 8 or 9 per cent in issue price is a change of great magnitude and of serious importance.

Sir, I have told the Committee the amount of extra military charge imposed on the Revenue of the current year on account of the ill-success of the negotiations in reference to the Afghan Frontier, and I place that extra charge at about £1,500,000. If that were all, if it were an abnormal charge—a charge not likely to recur—the Finance Minister might deplore it, but he need not be anxious or over-concerned. But, unfortunately, a large part of it cannot be treated now as abnormal. I put aside the question of Frontier railways, for which, as the Committee is aware, under the East India Loan Bill a sum of £5,000,000 has been provided. I put aside for the moment the question of the fortification of the frontier, and the additional railways necessary for the connection of these fortifications and for their proper defence, the additional charge for which may be taken, roughly, at something like £3,000,000. The Committee will recollect that that sum will not include the armament of the fortifications; and here I may mention that, in connection with these fortifications, the Government of India have just sent home a very elaborate and considerable plan for carrying into effect the policy which has been resolved upon in India and at home, and which has been unanimously approved by all Parties for strengthening, as far as human ingenuity can do it, the North-Western Frontier of India.

But what the Committee ought to look to now is the permanent increased military charge, which may amount to something like £2,000,000 a-year, and which can hardly be reduced below £1,500,000. Perhaps the Committee will be interested if I venture to go into details on this point. In the first place, Sir, the Indian Government have, with the sanction of the Secretary of State, provided for what I am astonished that the Government of Lord Ripon did not provide for before—the formation of a Reserve for the Indian Native Army. That will add, when the scheme is fully in operation, 250 long-service men to the strength of each regiment called out in times of emergency; and it will add to the strength of the Indian Army when called out for service in the field a total number of 26,700 men. This formation of a Native Reserve will cost the Revenues of India about 15 lakhs a-year. The second military measure which the times have rendered necessary is an increase of the Native Cavalry. It has been thought impossible to make any effectual Reserve of the Cavalry men, and it has therefore been thought necessary to keep your Cavalry arm up to its full strength—the strength which would be required should hostilities break out. Acting upon that opinion, the Government of India have, with the sanction of the Secretary of State, determined to increase the Bengal and Bombay Cavalry regiments from the strength of 550 sabres in three squadrons to the strength of 650 sabres in four squadrons, and to give one additional British officer to each. It has also been determined to create three new Cavalry regiments—two in Bengal and one in Bombay—of the increased new strength, and that will give a total increase of strength to the Indian Native Cavalry of 3,900, and the total additional cost to the Revenue of India will be 25 lakhs. It has also been determined to add to the five existing Goorkha regiments a separate battalion for each. The Durbar of Nepaul, with the utmost loyalty and generosity, has removed all restrictions which interfered with our recruiting for the Goorkha regiments, and we have determined to take advantage of the attitude—of the praiseworthy attitude—of the Nepaul Durbar, to increase the Goorkha regiments in the way I have mentioned. That will give us an increase of Infantry soldiers in that branch of 4,550 men, forming the finest fighting material to be found in the East, and possibly as fine as any that exists anywhere in the world. That will cost the Indian Government an additional outlay of 11 lakhs.

Now, Sir, it has also been determined to arm the Native troops with the Martini-Henry rifle. Of course, that is an arrangement which cannot be carried out all at once. It can only be done gradually, and its rapidity must depend, in a great degree, upon whether or not a new rifle is provided for the British Army. If the British soldier is supplied with a new rifle, that would, of course, release for the Indian Army the Martini-Henry's now in the possession of our troops at home. But for this year there will be a certain number of Martini-Henry's—I think about 40,000—pro- vided for the Indian Army, which will cost the Indian Government £144,000. The total cost of re-arming the whole Army in this way I cannot now give.

In addition to all this there will also come on the Indian Revenues heavy charges for torpedoes and gun-boats for harbour and coast defence. The first outlay for this—I am only giving a rough estimate—will be from £200,000 to £250,000, and in addition to that you will have to calculate on a charge for the maintenance of the crews and equipment. I think I shall not be far wrong if I place the total extra cost imposed upon the Revenues of India under this head at about £1,000,000 sterling, roughly speaking.

Well, Sir, we must not conceal from ourselves, and no one of experience would deny, that this very important increase of the Native Army will probably necessitate an increase in the number of British troops in India, and, although that matter has not yet been decided upon, so far as the amount of the increase is concerned, by the Government of India, I think I may say that the principle has been decided upon; and the Committee will not go very far wrong if, taking all these additions together—and I doubt whether any Member of the Committee will question the necessity of taking them all together—the additions for fortifications, railways, and other miscellaneous items—and adding them all up, they may prepare themselves for an additional charge upon the Revenues of India of close upon £2,000,000 a-year, extending over an indefinite length of time. How we are to meet this charge it is not for me to say; but it is sufficient to say that it will tax to the utmost the skill and ingenuity of Lord Dufferin and his financial Advisers. The situation is full of difficulties. The extra available resources—financial resources—are narrow. Perhaps I may be allowed to indicate their nature, merely premising that there are objections to the use of nearly all, and very strong objections to the use of some. In the first place, we might attempt to meet the additional expenditure by loan; but that is a proceeding which should only be resorted to with great caution. In the second place, we might attempt to meet it by capitalizing a portion of the Famine Fund; but much the same thing may be said of that, and there would be considerable objections to that course. In the third place, the Government of India might resort to taxation; and under the head of taxation they have, I think, three courses open to them. They might recast, re-arrange, and extend the licence tax; and to that course I think there is no objection at all—on the contrary, there are reasons for performing that operation. Or they might re-impose the Income Tax; but to that there might be considerable objection. Or they might raise the Salt Tax; and to that course, I imagine, there would be enormous objection. The Committee will remember that no indirect taxation of great importance is any longer available. Anything in the direction of Customs' taxation of any financial value has been swept away, and there are insuperable objections to its re-imposition so long as you keep on in this country your present fiscal arrangements. Then there is a fourth means of getting money for the Government of India. I do not imagine, however, that the sum gained would be very large, and there might be an immense objection to its adoption. I mean the abrogation or revision of what are called "Provincial contracts." I do not think it is, at present, my duty to give any opinion on these four methods of getting money; but there is a method of getting money on which I would express a very strong opinion, and I hope the Committee will agree with me upon it, because it is of the utmost importance that Indian opinion in England should exert pressure upon English opinion in India. That method is, that due regard should be paid to economy. It seems almost a truism to say so in this country; but it is not a truism with respect to Indian finance. The expenditure under the Government of Lord Ripon has increased by no less a sum than £1,200,000 on Civil buildings and roads, thus bringing that charge up to something like £3,800,000; and that, surely, in times of emergency, might be made to bear a very considerable reduction. Then, I would ask, has not the time arrived when the expenditure from Revenue on railways and irrigation might be considerably reduced? In 1883–4 the Government of India spent £619,000 out of Revenue on these works; in 1884–5 they spent £1,498,000; and last year they spent £1,685,000, giving an average expenditure out of Revenue on railways and irrigation for the last three years of £1,270,000. It does seem to me that if you are to have an expenditure which is absolutely necessary and vital to the interests of India and its security, and if that expenditure is increased to the extent which I have named, and if you find that a very large expenditure is going on upon Civil buildings and roads, and irrigation and railways, out of Revenue, the inference is obvious and irresistible that, if you have to choose between extra taxation on the one hand, which must press hardly upon populations which cannot be wealthy, and economies on the other hand, and a large cutting down of your Revenue expenditure upon public works, you are bound to choose the latter course, and you have no right to resort to the former until you have obtained from your enforced economies all the money which can reasonably and safely be realized from them in order to be expended upon such public works.

Sir, I do not dwell upon all these matters in order, in any way, to alarm the Committee or the country. There is nothing whatever, to my mind—and I speak the opinions of others of great authority—there is nothing whatever of a nature calculated to cause alarm as regards the financial condition of India. It is a condition of difficulty and, perhaps, of anxiety, but not of alarm. My reasons for placing all this before the Committee are widely different. My first reason is to fix the responsibility for the present state of things on the right shoulders; and, secondly, to interest public opinion, and bring home to the minds of the electors the real nature and character of the care and anxiety which must be borne by the Indian Viceroy. I wish to lay down, in the first place, that the greatest and, perhaps, the most unpardonable crime of which a Governor General of India can be guilty, is that he should not look ahead, and should not make provision for the future. The Government of England cannot, from its very nature, look very far head. Its policy is always policy rather from month to month and from week to week—sometimes from day to day. It is always more or less a policy from hand to mouth, and the rea- son is that your Government here depends on a Parliamentary majority, which is violently assailed and swayed by an enlightened, but, at the same time, a capricious public opinion. Sir, the Government of England has to think, in framing its policy, of the state of Europe, of our Colonies, of Ireland, of the state of Parties in England, of the elections, and last, but not least, of the state of Business in the House of Commons. It has to think of all these subjects besides India, and all these questions have to take their turn, and have all, more or less, their chance of modifying and colouring the policy of the Government. The result is that, although in England we possess an unrivalled Constitution and unexampled freedom, yet we have purchased that freedom at the price of little stability and little continuity in our Government, at the price of hardly any forethought as regards economy in our conduct of affairs. Of course the Committee will understand that these remarks of mine are intended to be perfectly general, and if there is any exception to be made to them it would be in the case of Her Majesty's present Government. But—and this is what I am leading to—the Government of India is exempt from all these disadvantages. It is a Government in its nature purely irresponsible and despotic; but perhaps it is a despotism of the best kind, because it is not hereditary. We do our best in this country to supply India from time to time with a statesman who shall exercise the tremendous powers of Government, and who shall, as well as being courageous, at the same time be wise and experienced, and moral and humane. In India it is not as it is in England. In India you have no public opinion to speak of—you have no power of the Press. You have hardly any trammels upon the Government of any sort or kind; and it is for that reason I say that, if the Governor General of India, in forming and framing his own policy, does not look ahead and provide for the future, he not only commits a blunder, but he is guilty of a crime. I am content to apply this general statement to the Government of Lord Ripon, and I will tell the Committee why I do so, and how I have arrived at that unfortunate conviction. Lord Ripon went out to India full of knowledge of the state of affairs in Europe. He knew all the events which had occurred, of the Russo-Turkish War which led to the Treaty of San Stefano, and to the Congress at Berlin—he knew that all these events had necessitated great preparations by Russia for war in India. He also had great knowledge—he must have had great knowledge—of the gradual, but sure, extension of the Russian Empire in that direction. Now, Sir, I do not say that there was any necessity why Lord Ripon should have been nervous, or fussy, or excited, or quarrelsome, or predatory. Nothing of the sort. But I want to ask whether the commonest prudence and most ordinary common sense would not have dictated that all these great historical facts should have been borne in mind, should have influenced his whole scheme of government, and had an important bearing on his financial arrangements? Well, Sir, what was the fact? I say nothing of the abandonment of Candahar, or of the "scientific Frontier." I say not much about the discontinuance and destruction of the Quetta Railway. I come rather to the acts of Lord Ripon's Government which affected the finance of those years, and which are seriously affecting the finance of this year. Sir, Lord Ripon had prosperous times to deal with. He had to deal with an increasing Revenue. The sky overhead, to an ordinary and careless observer, seemed very blue. Danger apparently had passed away, so far as foreign affairs were concerned, and so far as they had any bearing whatever on Indian finances, and Lord Ripon and his counsellors laid themselves down and slept. All indirect taxation of any value was remitted, Customs Duties were almost totally abolished, the Salt Duty was lowered very largely—admirable arrangements, Sir, in themselves, but defective, somewhat, in this—that no provision was made, and no forethought was taken, for the future. Sir, in 1882–3 the Native Army of India was reduced by five Cavalry regiments and 10 Infantry regiments. The British Army, under the care of the noble Marquess opposite (the Marquess of Hartington), and in conjunction with the Viceroy, Lord Ripon, was allowed to fall by 10,000 men below its proper strength; and to bring it up to its full strength, which is now very nearly reached, has cost the Indian Government something like £100,000. No Frontier railways were commenced—I do not know that they were even planned—no Frontier roads were made, no preparations of any sort or kind were set on foot for the defence of that long and difficult Frontier, which surely in prosperous times a wise man would have provided for, in the event of a rainy day, and the provision being required. But no, Sir—in all these matters Lord Ripon slept, lulled by the langour of the land of the lotus. Yet there was much which ought to have aroused him. In 1882 the Russian Government themselves, with the utmost possible frankness and candour, called your attention to their proceedings in Central Asia, and invited you, at that time, to delimit the Frontier of Afghanistan, the territory of your Afghan Ally, and they only received a dull and sullen reply as from a man under the influence of a narcotic. You have had constant warnings, and it is curious to observe, in certain letters from the Ameer to Lord Dufferin, and in the accounts of his interview with him at Rawul Pindi, how constantly you come across the old familiar observation—"I told you so." Well, Sir, all the time Lord Ripon was there the cloud grew bigger, the distant darkness came nearer and grew blacker, and the great military Power loomed larger and more distinct upon your Borders. Lord Ripon and his counsellors slumbered and slept, never dreaming that any foreign danger could by any possibility come nigh those Dominions which had been entrusted to their watchful care, taking no thought for the morrow, heedless or ignorant of the future, which was shaping itself with the utmost clearness under their eyes. Then, Sir, there came a sharp and loud awakening. The Russian hosts absorbed the territory of Merv, and rapidly filled up the vacuum to the South which you had so incautiously and blindly left, and Lord Ripon and his counsellors were found, like the foolish virgins, with no oil in their lamps. Then followed the fruitless Frontier negotiations, and Lord Ripon came home, and Lord Dufferin went out, not one hour too soon for the safety of India, and for the tranquillity of our Indian Empire. Next we see the lonely and unsupported British Commissioner endeavouring to stop the advance of the Russian troops—troops flushed with success, and animated by the highest hopes of glory and of booty. Then came the incident of Penjdeh, and, following that, the 'Vote of Credit of £11,000,000. Next came the hasty and hurried recommencement of the Quetta Railway, which had been too foolishly abandoned. Then came the announcement of the Frontier railways and roads, which had been too fatally postponed. And then came your additional military expenditure in India of from £3,000,000 to £4,000,000; and the result of it all is now before the Committee, in the deficit on the Indian Accounts for the year of £1,500,000 sterling, and in the permanent extra military charge on the Revenue of India of no less than £2,000,000 sterling. Now, Sir, the good times are gone. The available financial resources have got very narrow, and those that you had in Lord Ripon's time have been wantonly thrown away. No economy of any sort or kind was practised by Lord Ripon's Government. The expenditure on Civil buildings, as I have already said, was allowed to be increased by over £1,000,000 a-year. Your Famine Insurance Fund, of which you made so much, has been proved to be in time of trial illusory. I look back on that Vice-royalty, and I declare that, although I endeavoured to contemplate the action of the late Government of India without any Party passion at all, I am unable to find in it one redeeming feature. I see the great and noble and necessary policy of admitting the Natives to a large and gradually increasing share in the Government of India, so clumsily, so stupidly handled that it has been thrown back possibly for a generation. I see recklessness and carelessness in the management of home and foreign affairs; and as Secretary of State, having to place these results before the House of Commons in the practical matter-of-fact form of figures and facts, I disown and repudiate, on behalf of the present Government, responsibility of any sort or kind for that policy, and I hold up that Vice-royalty and the Government which was responsible for it, and the Government which sanctioned it, and the Government which adopted it and introduced it, to the censure and the condemnation of the British and Indian peoples.

Sir, I have thought it right, in justice to the present Government, and in the interest of India, to place the situation before the Committee in a somewhat dark and gloomy light; but I have done so in order that the enormous change which has come over the condition of the Government of India maybe realized. But the Committee and the public would altogether misconstrue and misinterpret my remarks, and also misinterpret the situation, if they imagined that it was in any way of a desperate character, or that there was anything in it which could not be dealt with by the tact, skill, and experience of Lord Dufferin, or that Indian finance, at the present moment, was not perfectly capable of adapting itself to the circumstances, and enduring even heavier charges than those I have indicated to the Committee as necessary.

I shall, therefore, be glad to show the Committee, by facts and figures, that the Indian Revenue is elastic and growing, and that it would be the greatest possible mistake to suppose that there is not in reality a very large margin of reserve on which the Indian Government, in time of difficulty, might come. It is of the last importance that Indian credit should stand as high as it deserves to stand, and that it ought not to be regarded as in the least degree shaken by anything which may have occurred lately. It is for that reason that I will ask the Committee to look at the statistics of Indian finance as exemplified by a period of 10 years. I will take the decade which has just elapsed—1874–5 to 1884–5—and I will compare the figures of 1874–5 with the figures of 1884–5. That is an interesting period, for during that time two Governments have held Office in England, and three Viceroys held Office in India. In 1874 the total net Revenue from the 11 principal sources, including Land, Opium, Salt, Stamps, Excise, and Customs, was £40,392,000. In 1884 the total net Revenue from the same sources was £42,293,000, showing an increase of Revenue of nearly £2,000,000 in 10 years. I will take, Sir, the principal heads of that Revenue, the heads which are generally assumed to show the financial position of the taxpayers—Salt, Stamps, and Excise. I find that in 1874 the Salt Tax yielded to the Government of India £5,736,000, and that, although since that time the duty on salt has been remitted to the extent of 28 per cent, the Salt Tax in 1884 yielded £5,862,000, showing an increase of Revenue in 10 years of £126,000, in spite of the remission of taxation. I find that in 1874 Stamps yielded £2,597,000; and in 1884 £3,407,000—an increase of £810,000, of which only £120,000 was increased taxation. The Excise in 1874 yielded to the Government of India £2,251,000, and in 1884 £3,887,000, showing an increase of £1,636,000, of which only £56,000 was increased taxation. Customs in 1874 brought in £2,422,000, and in 1884 only £861,000; but this decrease is most satisfactorily accounted for by the remission of the Customs Duties in 1883, by Sir Evelyn Baring, to the amount of £1,929,000. In a word, while you find an increase of Revenue in the 10 years amounting to £2,000,000, you find that in that period there has been a net remission of taxation, after allowing for the increase of Provincial rates and assessed taxes, amounting to £2,424,000. Well, now, if to this you add your profits or your charges incurred by productive public works, you will arrive at a still more satisfactory result. In 1874 the productive public works were a charge upon the Revenue of India to the extent of £1,436,000; but in 1884 they brought in a net profit of £566,000, showing an improved position under this head, in 10 years, to the extent of £2,002,000. The interest on ordinary Debt and obligations in 1874 was £4,289,000; but in 1884 it had fallen to £3,704,000, showing a decrease of charge, by way of interest, of £585,000; or, in other words, a reduction of capital Debt to the amount of £14,000,000. Further, in these 10 years you have had to meet an increased charge for Civil Government to the extent of £2,000,000, as compared with 1874; an increased charge for non-productive public works of £783,000, as compared with 1874; an increased charge for Army expenditure of £718,000, as compared with 1874; and an increased loss by exchange of no less than £2,467,000, because the loss by exchange in 1874 was only £786,000, while in 1884 it reached the tremendous figure of £3,253,000. In the 10 years the expenditure on famine relief was £10,854,000; and in the same period India has had to meet charges for the Afghan War amounting to £11,840,000. The net general expenditure in these 10 years, under the nine principal heads of Interest, Post Office, Civil Departments, Miscellaneous Charges, Famine Relief, Non-productive Public Works, Army, Exchange, and Provincial Contracts, has increased from £37,739,000 in 1874to £42,343,000 in 1884—an increase of £4,604,000; yet during all that time your India Revenue has been steadily growing—so elastic and so rebounding, under all these increasing and fresh liabilities, that the Indian Government has been able to make a net reduction of taxation to the extent of nearly £2,500,000, and still finds itself, under ordinary circumstances, apart from abnormal charges, able to show a clear actual surplus of Revenue over Expenditure.

Whether it was wise in 1883–4 to make that large remission of taxation is another question. I have already said that I think, if the foreign policy of the late Government had been more prudent and more far-sighted, that large remission of taxation would not have been made; or, at any rate, it would have been made more gradually and more carefully. Whether it was wise to allow your Civil Expenditure and Revenue Expenditure on public works to grow so rapidly and so largely, while you, at the same time, remitted taxation so liberally, is another matter on which I venture to detain the Committee for a few moments. I have given these figures in order that the public at home may see for themselves that the Indian financial resources still possess an immense amount of vitality, and that there is no reason at all why Indian credit should not stand as high as, or perhaps even higher than, it has ever done since the connection between Great Britain and India began.

Sir, if the financial situation of India may be fairly considered as being of an enduring character, to whom ought that credit to be attributed? I have said a word about the Viceroyalty of Lord Ripon, and I will now say a word about another Viceroyalty which has had very scant justice done to it. I allude to the Viceroyalty of Lord Lytton. The closing years of Lord Lytton's Viceroyalty were darkened by the Afghan War, and that most untoward event excited in this country the fiercest Party passions, and all that was good and sound and wise in the Administration of Lord Lytton was for the time lost sight of; but, Sir, this is an undoubted fact, and a fact which ought now to be brought to light, that, if you have now in India economical, healthy, and decentralized finance, it is entirely the work of Lord Lytton—[Sir GEORGE CAMPBELL: Oh, oh!]—who, I assert, with all due deference to the hon. Member for Kirkcaldy, carried into effect Lord Mayo's policy of giving the Provincial Governments that control over, and that interest in, their own financial prosperity which is essential to frugal administration. If you have complete Free Trade in India, again I say it is the work of Lord Lytton, who, differing from and resisting and overruling his Council, carried out the policy of Lord Salisbury, which was greatly opposed by Lord Northbrook, and, by abolishing the duties on certain classes of coarser cotton goods, enabled Sir Evelyn Baring, in 1883, to free the remaining cotton imports from duty. If you have in India at the present moment the Salt Tax equalized and reduced, so that it does not press heavily on the masses of the people, that, again, is entirely the work of Lord Lytton, who, with immense patience and immense labour, succeeded in abolishing 2,500 miles of Inland Customs line through the heart of India, and in concluding Salt Treaties with no less than 36 Native States. All these preliminary and difficult operations made it very easy indeed for Sir Evelyn Baring, in 1883, to lower the Salt Tax in India. Sir, I say these are deeds which are a good mark in favour of any Administration. They were obscured, even denied and lost sight of, by what was, perhaps, one of the most wild storms of Party passion that ever swept across and devastated Indian politics at the time of the outbreak of the Afghan War. But now that that storm has passed away those are deeds that can be brought to light and demonstrated, because they were deeds which were difficult in their conception, which were large in their operation, and which were permanent in their beneficial effects; and they were deeds which merit, and which will, I am sure, receive at the proper time the recognition and commendation of an enlightened and instructed and impartial public.

Sir, I pass from all these matters, which I thought it was essential I should dwell upon, but which I admit are, to some large extent, matters of controversy, and I proceed rapidly to subjects of more general interest and agreement. It has been usual for the Secretary of State, in his Annual Statement in the House of Commons, to glance at the condition and progress of India in other branches than those purely financial. Time, however, prevents me. I think I have almost exceeded the limit of indulgence of the Committee, and I am, moreover, not particularly anxious to lead the Committee into a string of other questions now, because I am so anxious that its attention should be concentrated on the peculiar circumstances of the year, and on the transformation of the political and financial position and prospects affected in India by the close proximity to her Borders of a great European Power which is sustained and defended by an adventurous and advancing army.

But perhaps the Committee will allow me to draw their attention rapidly to four circumstances. In the first place, I would ask attention to the new opium arrangement with China. On this subject Papers will be at once presented to Parliament, if they have not already been presented; and I will only say it is estimated that, under this arrangement, China will gain an addition to her Revenue of over £1,000,000 a-year, and that India may lose about £250,000 a-year. But the arrangement has, or ought to have, at any rate, the most excellent effect of bringing into active operation much of the Chefoo Convention which hitherto has been a dead letter; and it has, or ought to have, the effect of being a settlement perfectly agreeable and advantageous to the powerful and enlightened Government of China, of grievances and causes of complaint which have for many years been a source of great difficulty and anxiety. I am quite willing to concede whatever merit is due in this matter arising from the determination of these long negotiations to Lord Granville and Lord Kimberley, who had charge of them.

The second subject on which I would like to draw the attention of the Committee, but, as it is rather late, I will pass it by, is that of the principles of the re-settlement of land by the Government, which have undergone very considerable modifications, modifications effected by long correspondence between the Secretary of State and the Viceroy of India, but which modifications are, undoubtedly, in the interest of the cultivators of the country.

Sir, the third subject on which I desire to say a few words is that of the conservation of the Indian forests. On that point I may say that, since 1858, 48,000 square miles of forests have been preserved under systematic conservation, and to those 48,000 square miles have been added another 30,000 square miles of village or district forests, which are, as it were, protected by Government. In 1859 the net Revenue to the Government of India from forests was £150,000, and in 1883 it was £370,000. No doubt, in some parts the forest laws have been necessarily very stringent, and have produced complaints from the people, and have inflicted hardship. I have ascertained that these complaints and this hardship are principally in the Presidency of Bombay; but I am happy to say His Excellency, Lord Reay, has with great propriety and wisdom appointed a Commission to investigate that hardship, and, if possible, to disclose a remedy. But the Committee will understand that it is a question of very considerable difficulty how you are, on the one hand, to obtain the most desirable object of preserving and renewing your forests, without, on the other hand, entailing hardship on the people by depriving them of privileges of which they have had valuable and long enjoyment.

The fourth subject to which I will briefly direct attention is that of Indian railways. There is now opened to traffic a total length of 12,000 miles, of which 1,218 have been added in 1884–5. Although 1884–5 was undoubtedly an extremely dull year for trade, and although, as evidence of that dulness, the trade fell off to the extent of 500,000 tons, still the net receipts show a payment of interest on capital to the extent of £5 1s. 9d. per cent, as compared with £5 13s. 6d. per cent in 1883–4. I am sure the Committee will think that is a satisfactory and encouraging circumstance.

Well, Sir, the Committee will be delighted to know I have very nearly brought my remarks to a close; but there is one other matter in which I take the greatest possible interest, and to which I will for a moment refer. Her Majesty's Government have decided that, if they are in Office next year, or if by some unforeseen circumstance they are in Opposition next year, they will either propose themselves, or support, a Motion for an inquiry into the system of government in India. Twenty-seven years have now elapsed since the Government of India was taken over by the Crown, and inquiries into special subjects during that time have been made, such as Indian finance and Indian railways; but there has been no general inquiry into the operation of the various Acts establishing the present system and machinery of government in India; and it is into the system and the machinery of the Government of India in all its parts that inquiry, as far as the present Government are concerned, will be strictly and closely made. Sir, there are many reasons in favour of such an inquiry. There is, in the first place, the general value of Parliamentary inquiries. Nothing is ever made worse, but everything may probably be made better than it is, by a thorough reviewing and overhauling by Parliament. In the second place, the reason why I support the idea of holding an inquiry is that the arrangement under which the old East India Company ruled India provided for a Parliamentary review of their system every 20 years. Every 20 years they had to come to Parliament for a renewal of their Charter, and every review of their system was attended with most valuable results to the Empire generally. There is a third reason which I think should invite Parliament to that inquiry, and that is one which I have alluded to already in the course of my remarks—namely, the altered circumstances under which the Government of India will have to be carried on in the future. In the fourth place, you have, by the system of education you have carried on for many years in India, by your free Press, by the influence of Western civilization, produced a large body of most intelligent Native opinion, which, perhaps, has not yet, for some cause or other, been allowed to exercise that amount of influence upon the Government of India which may at the present time be regarded as reasonable, as healthy, and as safe. I know of my own personal knowledge many Natives of different classes, different religions, and different races, of great intelligence, and of the most undoubted loyalty, who are strongly of opinion that they have perceived defects in our machinery, by no means, up to the present moment, of a serious nature, but defects which, fair inquiry and careful consideration would probably remedy and remove. Whether the views of those gentlemen be right or wrong I do not say; but I hold it to be in the highest sense politic and advisable that Parliament should hear and consider their opinions, as well as the opinions of experienced Anglo-Indian authorities. I think that such action by the Imperial Parliament will go far to bridge over that gap which still, to some extent, I regret to say, exists between the rule of the European and the sympathy of the Hindoo; and it will be a forcible indication to the Native mind that their interests, their prosperity, and their security are closely and carefully watched over by their British and their Irish fellow-subjects at home. [Laughter.] I cannot see anything in what I have said to laugh at. The hon. Member for Kirkcaldy seems to think it a subject of ridicule that Irishmen should take an interest in India. All I can tell the hon. Gentleman, for his information, is that, if there has been, as undoubtedly there has been, a great improvement in the management of the Indian gaols, and if more humane methods have been introduced, it is entirely owing to the repetition of Questions continually put by the hon. Member for Dungarvan (Mr. O'Donnell). That is only one instance; but I could cite others; and I own I am surprised that it should be a matter of ridicule that I referred to our Irish fellow-subjects.

SIR GEORGE CAMPBELL

I hope I may be allowed to explain. It was the newness of the phrase which excited my amusement.

THE SECRETARY OF STATE (Lord RANDOLPH CHURCHILL)

Well, the word British only applies to England and Scotland. It does not include the Irish at present, and therefore I designedly used it. I cannot, myself, detect any appreciable danger—if, indeed, there could be any danger—which can arise from such an inquiry. If there be any such danger, I am convinced it will be far outweighed and overborne by the advantages of many kinds which ought to result from an inquiry wisely and cautiously conducted. On this particular subject I will say no more at present, except that the exact nature of the Reference, the scope of the inquiry, and the constitution of the Committee, will, during the Recess, receive the closest and most anxious consideration of Her Majesty's Government, and of myself, assisted by my Council.

I am extremely grateful to the Committee for having allowed me to take up their time at such great length; and, in conclusion, before moving the formal Resolution, I will express a hope—an earnest hope—which I trust the hon. Member for Kirkcaldy may share, that the new Parliament which is to be elected by the new constituencies may manifest a more eager and a more sustained interest in Indian affairs than has hitherto been manifested by Parliament. This Parliament, Sir Arthur Otway, has done little or nothing for India. Beyond a dole of £5,000,000, and a Committee on Railways, India has remained outside the scope of the attention of this Parliament, except, perhaps, when it has been necessary to give a mechanical approval to a course of policy which events have proved to be so disastrous. It would really appear as if Members of Parliament of the present generation consider Indian affairs to be either beneath their attention or above their comprehension; and India is, apparently, left to pursue its destiny alone, and some might even think uncared for, as far as Parliament is concerned. That was not always the case. In the last century, when our Indian Empire was forming, the greatest men—Mr. Pitt, Mr. Burke, Mr. Fox—did not disdain to apply their minds, and led their respective Parties into a most careful examination and exposition of the most difficult and complicated Indian questions, and with great advantage to the Empire. I do not think that at the present time, when everything round is changing so fast, and when nothing seems secure or firm, or free from assault and danger, as far as India is concerned, I do not think that we shall act unwisely if we revert to the more patriotic practice of earlier days. I would ask those who have been so kind as to listen to me, and those who possibly may not have agreed in many remarks I have made, at any rate to agree in this—to join with me in what I would call an appeal, or even almost a command, to those who will be our Successors, in the hope that some faint echo of that appeal may possibly linger around these walls and influence the new Parliament so shortly to meet here—to shake themselves free from the materialism, the lassitude, the carelessness, and the apathy, which have too long characterized the attitude of Parliament towards the Dependency of India. I would appeal to them to watch with the most sedulous attention, to develop with the most anxious care, to guard with the most united and undying resolution, the land and the people of Hindostan—that most truly bright and precious gem in the Crown of the Queen—the possession of which, more than that of all your Colonial Dominions, has raised in power, in resource, in wealth, and in authority, this small Island of ours far above the level of the majority of nations and of States, and has placed it on an equality with,—perhaps even in a position of superiority over—every other Empire of ancient or of modern times. The noble Lord concluded by formally moving the Resolution.

Motion made, and Question proposed, That it appears, by the Accounts laid before this House, that the total Revenue of India for the year ending the 31st day of March 1884 was £71,727,421, including £13,240,507received from Productive Public Works; that the Total Expenditure in India and in England was £70,339,925, including £12,032,764 spent on Productive Public Works (Revenue Account); that there was an excess of Revenue over Expenditure in that year of £1,387,496; and that the Capital Expenditure on Productive Public Works in the same year was £3,992,029, including a Charge of £566,261 incurred in the redemption of previously existing liabilities."—(Lord Randolph Churchill.)

MR. J. K. CROSS

I am sure, Sir Arthur Otway, that, after you have read the Resolution which we have met together to consider, it will not be necessary for me to draw down the Committee from the extraordinary altitude in which the noble Lord has soared to the lower level of the finances of the Indian Empire, which is the subject the Committee have to consider. I can only say that it would have been more courteous if the noble Lord had given some intimation of the kind of attack he was about to make on the policy of the Marquess of Ripon; because, if the noble Lord had done so, some Members of the Opposition might have been prepared to follow him through some of the luminous Eastern mists into which he has taken the Committee. On this occasion I must venture earnestly to protest against the new kind of action the noble Lord has brought to bear upon the Annual Statement of Indian Finance which we have had in times gone by. This is the first occasion within my recollection, as I believe it is the first within the recollection of any Member of the Committee, when, under cover of a Financial Statement, a wild partizan attack has been made upon the government of a late Viceroy, and that, too, when neither he nor anybody else knew anything at all about the attack which was about to be made, when nobody had a chance of looking into the questions that were to be submitted to the Committee, and no opportunity was afforded for examining them, as they ought to be examined, so that hon. Members on this side of the House might be prepared to make such answer as might be called for. The charges which the noble Lord brings against the administration of the Marquess of Ripon are that he was totally careless about defence, and that he was altogether wrong in the method he adopted for the administration of the affairs of India, and especially in regard to the way in which he approached the very grave question of the treatment of matters affecting the Natives; and, as regards Russia, it is said that we ought to have foreseen, several years before the events, things which have just taken place. Well, but if we are to go a long way into the past, let me ask why did not the former Conservative Government foresee the action with which Russia threatened us in 1878–9? Why did not they, long before the murder of Sir Louis Cavagnari at Cabul, begin to construct the Northern Frontier Railways, and complete the communication between Quetta and the Indus, when our troops were interned, 270 miles away, without any means of communication, except by waterless desert and trackless mountain? The noble Lord might have some reason to say that then we did, to some extent, neglect our duties in not criticizing the action or inaction of the Government. But it was not until after the murder of Sir Louis Cavagnari, in 1879, that it ever occurred to the Conservative Government that it was desirable to improve our means of communication to the North, and extend it from the Valley of the Indus to Quetta; and it therefore ill-becomes the noble Lord to make an attack like this, and especially without Notice. It is quite unnecessary to go further into the matter than to make an earnest protest against it, and to say that, if such attacks are to be made in future under cover of an Indian Revenue Statement, it must lead to a change in the line of action between the two Parties in this House on Indian subjects. The late Government, when they came into power in 1880, might have gone far back and have alluded to the deficiencies in the Indian finances caused by the Afghan War, which the noble Lord appears now to glory in, but of which, at the time, the whole country was heartily ashamed, and of which we are now reaping some of the consequences. The noble Lord spoke of the financial arrangements under the Marquess of Ripon. As far as I am concerned, I have had the honour of making two Financial Statements, and I will lay before the Committee the anticipations which were formed of a surplus of Indian Revenue, and the way in which those anticipations have been realized. In 1882 I anticipated a surplus of £224,000; the surplus realized was £707,000. In 1883 the estimated surplus was £368,000; but there was actually realized £1,387,000, as it appears in the Accounts. In 1884–5 the surplus, according to the Statement of the noble Lord, would be nearly £900,000, or, if reduced by the £340,000 which, as the noble Lord rightly says, ought to be credited to the previous year, it would be something near £600,000. Thus, in these three years 1882–3, 1883–4, and 1884–5, a surplus was realized of £2,600,000, against an anticipated surplus of £700,000. And this is the finance of the Marquess of Ripon's Government, which the noble Lord positively comes down here and stamps upon so fiercely. It is not necessary for me to follow the noble Lord into the careful calculation he has made with regard to the finance of the last two years. I have nothing to say against the line the noble Lord has taken in making that Statement of Revenue and Expenditure, which I am bound to say he has very fairly put before the Committee. But with regard to what is to be done in the future, I am not, however, sure that I can follow the noble Lord so clearly. The noble Lord seems to think it impossible to obtain anything like a considerable increase from taxation in India. He has pointed out that the Salt Tax is now producing much more than it did under the Government of the Earl of North-brook; but that at the same time the rate of the tax has been reduced by 28 per cent. The noble Lord seemed to bemoan the reduction of the Salt Tax with one breath and to approve of it with another. I did not, at first, gather from the noble Lord's speech whether he intended to propose any increase of that tax. At the end, however, of the noble Lord's Statement he said nothing could be further from his intention than to increase the tax, and he hoped that no such proposition would be made.

THE SECRETARY OF STATE (Lord RANDOLPH CHURCHILL)

I said that there were immense objections to it.

MR. J. K. CROSS

I agree with the noble Lord that there are considerable objections to it; but as the tax was reduced by the amount of 28 per cent only four years ago, and as the noble Lord seems to wish that we should go back to the financial arrangements of four years ago, it was the logical outcome of his argument to say that it might be desirable to increase the Salt Tax. As a matter of fact, there are very few taxes in India which can be increased. The Land Revenue is a fixture. The receipts which are derived from other taxes amount to 18 crores of rupees a-year; and if we deduct the Provincial rates, for the Provincial rates are not really Imperial taxation at all, the result is that there are only about 14¾ crores of rupees on which financial ingenuity can be exercised. I am quite willing to admit that that is a very small amount. The noble Lord says there ought to be a considerable reduction in Civil buildings, roads, bridges, railways, and similar items. Let us note for a moment what is the expenditure which comes under the head of Civil buildings, roads, bridges, and other services. I am quite willing to allow that it is possible, if the expenditure on means of communication is to be checked, and all building is to stop, to reduce expenditure by no less than £1,500,000. But in that case no more Post Offices and no more Revenue buildings must be built, and no more money spent on buildings for residences for Governors, Lieutenant Governors, Secretariats, and other official bodies. But still officials must be provided with tolerably comfortable offices and houses. It is in the last few years when the Revenue exceeded the Expenditure, and there were good, handsome surpluses, that the Government of India have considered it possible to increase the expenditure on buildings of this nature. Then there has been considerable expenditure on gaols, which the noble Lord approves. My noble Friend who three years ago was Secretary of State for India (the Marquess of Hartington) has recognized the good service rendered in respect of Indian gaols by the hon. Member for Dungarvan (Mr. O'Donnell). But if you are going on with expenditure of that nature you will not meet the noble Lord's wishes. Then the question arises—are we to reduce the expenditure on the making and repair of roads, the repair of public buildings, and on the building and, repair of bridges? All of these things have to come under the consideration of the Government of India; and when the Government of India find that they cannot spend the amount of money which has been customary during the last two or three years on these works, no doubt it will be their duty, and I should also hope their wish, to reduce the expenditure in this direction as much as they possibly can. The noble Lord also spoke of a reduction of expenditure on railways out of Revenue. During the last six years there has been considerable expenditure on railways and irrigation works, amounting to no less than £9,000,000. He spoke of the enormous expenditure on Exchange, and seems to think that it is a very great evil. The loss caused by Exchange is one which may very well exercise the noble Lord's patience. It is a very serious evil indeed, and it would be very well if the noble Lord would go carefully into the consideration of the question. Of course, he has not yet been long at the India Office; but I would venture to suggest to him that if during the Recess he will take into consideration the whole of the circumstances which bear upon the question of Exchange he may be able to place before the House of Commons some proposition which may, perhaps, save us from having to contemplate so enormous a loss on the Exchange as that which threatens to come upon us if the expenditure of India in this country continues at its present rate, and if the interest on the loans which have to be issued in this country has to be remitted from India. This item of expenditure is governed to a great extent by the flow of capital from England to India, and from India to England. It is affected also by low prices. Another item in the consideration of the matter is the amount of the annual outgoings from India; and the third item is the price of silver. Before I left Office I endeavoured to obtain as much information as I could on the subject, and I hope that this information will be placed before the House in the form of a Return, showing, among other things, the flow of bullion from England to India, and from India to England. It is an important consideration to take into account, whether the merchants are at the present time increasing their investments in India or withdrawing capital from there. There is one thing which I very much desire the noble Lord to remember, and it is that every £1,000,000 sterling borrowed in England costs the Government of India no less a sum than £35,000 annually. That sum comes home in produce in payment of the interest that is due. No coin passes; and, therefore, it is incumbent on the Indian Government to see that, whenever £1,000,000 is borrowed for public works, India is made thereby the richer to the extent of atleast £35,000 a-year. If not, you must suffer considerable financial loss; and, consequently, it is absolutely necessary, in borrowing money in England for the development of the resources of India, to take care that you do not borrow unless you are certain that a full and proper result will be achieved. I am not quite sure whether the noble Lord told us what the arrangements are that have been made with the new Railway Company—the Indian Midland. I invite him, if he has an opportunity of speaking again, to make a statement in reference to the arrangements which have been made with that Company. The noble Lord spoke of a Commission of Inquiry to examine into the system of Government in India. I do not think that he indicated whether the constitution of the Indian Council would be one of the subjects of inquiry.

THE SECRETARY OF STATE (Lord RANDOLPH CHURCHILL)

The inquiry will embrace the whole of the constitution of the Government of India.

MR. J. K. CROSS

I cannot offer any objection to such a proposal. Everyone would be much interested in such an inquiry; and I have no doubt that it would result in great good. I trust that it will also include an inquiry into the status and position of the local Armies in India. That is an inquiry which I should like to see carried out as fully as possible. There was a Commission of Inquiry a short time ago at Simla, and it reported in favour of considerable changes, which changes were considered in this country; but it was decided that it was not desirable at the time to go into them. It was decided, in fact, that no considerable change should then be made. I am myself of opinion that when the state of our Indian Army comes to be inquired into thoroughly, it will be found that some branches are not so efficient as we could wish, and on that ground I welcome the statement of the noble Lord that the inquiry will be general.

THE SECRETARY OF STATE (Lord RANDOLPH CHUHCHILL)

It will include the Army.

MR. J. K. CROSS

I hope it will include an inquiry into the status and position of the three local Armies of India. The noble Lord has intimated that considerable expense was incurred by us in not going on with the Frontier Railway as rapidly as we might have done. He tells us that among the alterations made since the Budget is one which involves an expenditure of £1,180,000 for increased rapidity of construction of the Scinde-Pishin Line, storage of railway material, and construction of temporary line to the head of the Bolan Pass. I think that the noble Lord, only a few days ago, in reply to a Question, said that a considerable amount of material was now being stored at Quetta for the purpose, under certain conditions, of continuing the railway to Candahar. I hope it will not be necessary to lay down that line, although it may, to a certain extent, have been sanctioned during the tenure of Office of the late Government; but if we strengthen our position at Quetta—if we make communications direct to Quetta, and complete the line of Fron- tier communication which I ventured to describe to the House on the 23rd of March last, and strengthen ourselves along the whole of the Indus Valley line of defence—it appears to me that that is the best way in which we can meet any possible advance that may be made against us. This is the true line of defence for the Government of India against any complications which may arise. Our line of Frontier defence will then extend from Peshawur to Kurrachee, with a covering line from the Indus to Quetta; and if that line of defence were made impregnable, it appears to me that it would be a better line than any of those proposed by the former Conservative Government. Although the noble Lord has spoken with regret of the abandonment of the scientific Frontier by the late Government when they took Office, I may say that it is not correct to say that it was abandoned by us, but that it was practically demolished when Sir Louis Cavagnari was murdered at Cabul. I do not know whether it is necessary to go further into the statements which have been made by the noble Lord. In the efforts which he wishes to see made for economy I entirely and heartily concur. With the protests he has made against the policy of the Marquess of Ripon in regard to the reduction of taxation I cannot in the least agree, because, considering the surpluses of which he has spoken, I am certain that no Governor General having those surpluses in hand would have thought of putting them by for the purpose of providing a fund for meeting any future military measures. In India we are, as the noble Lord has observed, in a very grave and serious position, although it is hard to say whether the noble Lord regards it as very serious or very dangerous. From the beginning of his speech it might have been thought clear that the noble Lord was impressed with the difficulties of the position; but towards the end of the exceedingly bitter Party attack which he made upon the late Government he seemed to veer completely round, and to give in his adhesion to the present financial state of India as being perfectly sound and solid. No doubt, we have grave responsibilities with regard to India. The Dependency is one which, under any circumstances, must tax the energies and ability of any statesman at the helm of the State. In that country, upon the remnants of a civilization old and strange and well-nigh passed away, but not forgotten, we are striving to plant the customs and culture of the West. In that country new thoughts are entering the minds of men who for ages have only sought how they might earn their bread from day to day. These men as yet are dumb. They have no representation here; but everybody can see that in a future, not remote, they must and will be heard. On this point the noble Lord has spoken very eloquently; and I can only say that I hope his anticipations may be realized. I thank the Committee for having listened to these few and imperfect remarks. In conclusion, I wish again to enter my protest against the extraordinary method the noble Lord has taken of bringing forward, under cover of an Indian Financial Statement, a bitter partizan attack upon his Predecessors in the Indian Government. I will only express a hope that in the future we may revert to a policy which would be better for England and hotter for India.

GENERAL SIR GEORGE BALFOUR

Sir Arthur Otway, when you and I listened to the gloomy description by the noble Lord the Secretary of State for India of the state of the finance of India, our thoughts unavoidably turned to the years 1859 and 1860, when the bankruptcy of India was fully expected owing to the vast expenditure caused by the Mutiny of the Bengal Army and to the loss of Revenue from the disturbed state of the country. But India recovered from its then financial embarrassments after incurring a Debt by the Mutiny of about £35,000,000. In 1862 the Accounts showed a surplus of Income over Expenditure. Since then the surpluses and deficiencies of the ordinary Accounts may be said to have balanced each other; and I hope that with careful control over the outgoings we may look forward to a future surplus, instead of to the large deficiency prognosticated by the noble Lord. But, in spite of the anxious and desponding forebodings we have heard to-night, I was delighted to hear that the noble Lord spoke in hopeful terms of the possibility of carrying on the Government without the necessity of resorting to increased taxation. I was delighted to hear the assurance, for if my hon. Friend the Member for Ork- ney (Mr. Laing) was in his place, he would be able to toll the Committee of the strong feeling entertained by Lord Canning against adding to the burdens of the people of India. To both my hon. Friend (Mr. Laing) and myself Lord Canning repeatedly asserted that he would prefer risking danger from having a small but less costly Army, than face the great danger which would be general throughout India from heavy taxation. To this view I give my adherence. I believe that our rule is in greater danger from financial causes than from internal or external disturbances. Amongst the several openings for additional sources of income, the noble Lord spoke of the Salt Tax; this was on the idea that within the last few years this tax had been so lightened as to lower the price of salt to the people of India by 28 per cent; and though from the noble Lord's words I understood him to imply that this Salt Tax would not be raised, yet I feel called upon to urge not only to abstain from raising the price of an article consumed by the poorest classes, but, if possible, to try and still further reduce the present rate of two rupees a maund of 82 pounds weight, or 54 rupees a ton. I submit this claim the more confidently, because the assumed reduction in price of 28 per cent is applicable only to Bengal; there the price was lowered, but the cost was largely increased in Madras and Bombay. There, the gross income derived from salt is stated at £2,755,348; whilst in the rest of India the amount is only £3,422,433—that is, the population of the two Presidencies being47,000,000, whilst that of the rest of India is 152,000,000, shows a great inequality in the incidence of this tax, and against the people of Madras and Bombay. But it is not alone the Salt Tax which bears heavily on the people of Madras and Bombay; but generally all the eight important heads of Revenue yield more ratably from the two divisions than from the seven other divisions of India. The tabular statement in the Finance Accounts of 1862–3 show that in ratio to 1,000 of the population the two divisions yield £284, and to every 1,000 square miles £51,096, whereas in the seven other divisions the ratio is £161 to 1,000 population, and of only £40,348 to 1,000 square miles. I may also add that dear salt is more heavily felt in Madras and Bombay, because of the people's food needing this article more than in other parts of India. I would, then, earnestly remind the noble Lord that besides this excessive ratio of general taxation the people of the two Presidencies are deserving of liberal treatment, because at one period of our rule this Salt Tax did not exist in Madras and Bombay; and it was only put on because Bengal, then a lightly taxed part of India, had borne it. In the present state of the finances, I cannot expect my years of advocacy of free salt to be now accepted. But even in this dark era of finance I continue to urge that exemption. I believe that a sacrifice of the £6,500,000 which the Salt Tax yields would be a measure both politically and financially sound. The people might then justly say that they eat the salt of the great Government free of price and in abundance. The consumption of salt which would result from people and cattle using it in abundance would create a vast traffic throughout India; there is no other article which would be so generally transported as salt. Indeed, the great sources from whence salt would be obtained—I mean Bombay, Madras, Bengal, Samberlake in Central India, and the salt mines of the Punjab, are all centres from which salt would be sent to all the nooks and corners of India. I urge cheapness, by freedom from taxation, because salt would be sent in vast quantities beyond our Frontiers. Then the savage and wild tribes would be conciliated to our rule; intercourse and with it trade would expand, so that peace within and friendly feelings abroad would be created. In this recommendation I may add that I specially refer to Afghanistan and to the Russian Frontier, where the salt lakes previously supplying the Afghans with salt are now monopolized by Russia; and by this possession a serious pressure may be expected to be applied by Russia on the neighbouring people of Afghans and Turcomans. I must add that there is no measure more useful for a powerful influence on Russian aggression than that of counteracting their desire for trade. The history of Russian military progress is that of progress in trade, only the trade precedes the advance of the troops. It is the traders who spur on the advance of soldiers, and I must allow that the Russians are most persevering. In 1812, when occupying Shanghai, the artillerymen found good Russian blue cloth in the shops for a military jacket; and when I opened Shanghai for trade in 1843, the Russian cloth was then on sale, but necessarily withdrawn when our cheaper cloths came in competition. I earnestly urge that our salt and our railway charges be lessened, so as to counteract Russian trade. I am not quite satisfied with the way the noble Lord spoke of the reduction of the Sea Customs Duties. By mentioning the net amount now credited to the Income, the loss by the abolition of these duties is made to appear very large; whereas, by curtailing the gross receipts now and formerly, the difference is not so great. The discrepancy is caused by the charges for collecting the Sea Customs not being levied in ratio with the duties taken off. This is a defect which ought to have been remedied by the Secretary of State and his Council. But I may plead in favour of the wise measure of nearly making India a free port that, consequent on the removal of duties from nearly all articles of trade, the bulk of trade and its value have greatly extended, and are yearly extending, so that India is now better able to meet the annually increasing payments at home. From this view there is good cause for congratulation, and with well-deserved praise to the Marquess of Ripon and Sir Evelyn Baring, who carried into full effect the measures which were commenced by Lord Lytton and Sir John Strachey. The part of the noble Lord's speech in which I am naturally deeply interested is in regard to the roads, railways, and fortifications for the defence of our Frontier. With regard to the lines of communication, I am in favour of their being multiplied to all reasonable extent, and so laid out as to lead along the Afghan Frontier, with branches to the mouths of the Passes. I believe these Passes to be many in number, and as yet all are not known. The nature of the defensive works I am anxious about. At present the idea is conveyed from India that large forts needing the occupation of bodies of troops are intended. Besides distrusting the soundness of plans for such extensive works, I challenge the policy of standing on the defensive. I draw a distinction between great fortified places and small redoubts. The latter should be many in number to be held by small bodies of troops, and of such a size as to store ammunition and other stores for the current use of the troops immediately dependent on the depots. I wish, however, to raise my voice against locking up large bodies of troops in big forts. I beg of the noble Lord to recall to his mind the progress of troops in Asia. The many nations—Greeks, Romans, Russians—have seldom stood on the defensive. History tells us that when the advance ceased the downfall began. Our military history of India, as well as that of Russia, teaches that the best means of defence are offensive movements. I may mention our attack on Delhi during the Mutiny as a remarkable instance of the advantage of offensive warfare. The bold measure of attacking Delhi with wholly insufficient means, as compared with the force inside Delhi, was our safety. It gave time for more troops to assemble before Delhi, so that, whilst inspiriting the people of the Punjab and dispiriting the mutineers inside Delhi, we were able by this daring attack to break the neck of the Mutiny before reinforcements arrived from home. I do not raise objections to the proposal of the noble Lord for the formation of an intrenched camp in the Pishin Valley, provided the place is healthy. I hold this opinion as being in some respect conditional on the works being such as a small body of troops could defend, and thus set free the mass of the Army for offensive operations. Our camps in India have hitherto become great cantonments, into which large numbers of Natives have flocked, no doubt with benefit to ourselves; but this advantage has been injurious by lessening the mobility of the force in camp. I advocate the extension of our camp as close to the frontier of Candahar as may be possible. It is very desirable to be able to move on Herat with promptness: and with the improvements now in progress at that fortress I have no doubt—from what Eldred Pottinger, who successfully defended Herat for 10 months did against a Russian attack—but that the troops of the Ameer could easily hold the fort till our Army reached it in succour. The most important part of the speech of the noble Lord, in a military point of view, was that relating to the Army. The improvements proposed are a Reserve, an increase of one squadron to each of the regiments of Native Cavalry of Bengal and Bombay, and to raise three additional regiments in Bengal and Bombay; also to raise five additional battalions of Goorkhas. The noble Lord also referred to the necessity of adding to our European Force, and complained of this portion of our Army having been kept incomplete to the extent of 10,000, and that £100,000 had been paid by India to induce the European soldiers entitled to discharge to volunteer to continue to serve in India. As regards this payment, I protest against India being charged. The bargain with the Home Government is to keep the Indian garrison complete and effective. This guarantee has repeatedly been broken. This failure is not special to one Party, but to all the Governments of England. The European troops in India have repeatedly fallen below their fixed strength, and at the present time there are 2,000 European Infantry wanting to complete. India made a great mistake when it confided to the War Office and Exchequer of England the sole duty of keeping up the Force required for the Indian garrison. It would be a prudent precaution to resume from the War Office the charge of the depôts and troops needed to be kept at home for the maintenance of the garrison. India could then add, at a small cost, such additional strength as may provide for the efficiency of the Forces required for the defence of India. As regards additional European troops, I advise, in preference, an improvement in the present Establishment. The Artillery batteries should be raised to eight guns, the same as those of Russia; the nine Cavalry regiments can easily be formed into three squadrons, each of 150 effective troopers; and the 50 battalions of Infantry into six companies each, with 125 effective privates in a company. The squadrons, batteries, and companies would then be much more effective in officers, non-commissioned officers, corporals, and lance corporals. Past experience has shown that in warfare in Asia the completeness of companies and squadrons is of vital importance. In the event of an increase of European troops, I suggest that independent bodies of Infantry and Cavalry should be formed. I mean that separate companies of Infantry and squadrons of Cavalry, each of 150 effective privates, be formed, with sufficient officers and other ranks, to enable them to act independently. Regiments of Cavalry and battalions of Infantry, by their organization are ill-adapted for detachment duty. I well remember Lord Clyde's last words to me in 1860, when I parted with him on his return home; he specially desired me to remind Lord Canning of the importance of discipline by calling in the then many detached European companies, to give them headquarters, and thereby maintain efficiency. With regard to the Native troops being increased, I much regret the omission of the Madras Army. But if Sir Frederick Roberts has failed, I cannot expect my words to have influence in correcting this unfairness. I do not gainsay the numerical increase of the Goorkhas; but I would have wished to have heard of the existing battalions being improved. I believe in the necessity for more European officers; on them must rest the efficiency of the Native troops in action. The late failure of the 17th Poorbeahs at Suakin may be attributed to deficiency of European officers. So also in other instances; but by making this increase the organization of the Native corps would be so improved as that their duties in India should be diminished and their training greatly bettered. There is one change which I trust will be made, and that is a considerable addition to the pay of the ranks of the Native troops. My hon. Friend the Member for Kirkcaldy (Sir George Campbell) stated last year that for 100 years the pay of the Native Army had not been changed. But though in the main correct, he might have said that the pay of some ranks had within the 100 years been lessened; and if the noble Lord will refer to the Accounts of 1786 in the Library of the House he will find that the rates of pay of the Native ranks of the Bengal Army were in several instances much higher than the current rate. I do not for the first time express this opinion, because after the Mutiny I entertained and made known the like opinion to Lord Canning. I did not do so in writing, because I felt that it would be advisable not to give hopes which might not be realized. My hon. Friend the Member for Orkney (Mr. Laing), then Finance Minister, approved of the increase. Some improvements were made after I left India, but not sufficient in my opinion. Since then greater need exists for this improvement, con- sidering the additions made during the past 25 years to the pay of the European soldier. I may add that the great increase of trade has cut off from the Army many classes who made war a profession. I would also wish to see greater encouragement given to induce European officers to acquire the Frontier languages as well as those of India, the knowledge that several hundred officers had a speaking and perhaps a writing acquaintance with the Turcoman and Afghan languages would have a beneficial effect on the Russian Government. An acquaintance with the topography as well as the geography of the Frontier of Afghanistan and Russia must show that if necessary our officers could in case of need be as aggressive as the Russians have been and will be. I do not hesitate to state that the only influence that can be successfully applied to keep the Russians within bounds is a knowledge of our power to act offensively. The Germans know well that it is their great Army on the Russian Frontier which deters Russian officers from disturbing the Frontier between the two countries. I have followed with attention the financial details of the noble Lord; and though I cannot agree to the extreme views of our Expenditure. I yet consider the statement sufficiently alarming to justify anxiety, and to need all the possible economies mentioned by the noble Lord. I particularize the Civil Expenditure as worthy of control. I have repeatedly pointed out the extravagance, yearly on the increase, in this branch. From all that has been said, I understand that our preparations will require an expenditure of capital of about £10,000,000 for roads, railways, redoubts, small arms, guns, and stores; but, these once laid in, then the sum of £2,000,000 for the Army will maintain our troops in a state of great efficiency. Now, whilst warning the noble Lord against extravagant outlay on stores, I think I am justified in saying that the proposed outlay is not so large as to frighten us—at all events, as the noble Lord is young, I am confident that he will not become faint of heart.

SIR GEORGE CAMPBELL

said, the noble Lord the Secretary of State for India had proved that he was a Rupert of Debate, and he would have shown himself a great power in regard to financial matters if he had confined him- self to a Financial Statement, and to the eloquent appeal he had made on behalf of India for the sympathetic interest of Englishmen in Indian affairs. If the noble Lord had confined himself to the observations he had made upon those points, he (Sir George Campbell) would have had nothing but praise and coincidence of opinion to express. But he must say it did seem to him to be a pity that the noble Lord should have employed his genius with such brilliancy, and, he might almost say, with such effect, in a bad cause. It was much to be regretted that the noble Lord had attacked the Marquess of Ripon as he had done. The comparison he had drawn between Lord Lytton and the Marquess of Ripon was a very unhappy one, for whatever the faults of the Marquess of Ripon were—and every man had his faults—and although he might have been imprudent in parting too hastily with the resources of the country, whatever fault might be found with him for the sacrifice he had made of the finances of India, and in not making adequate provision for the protection of the North-West Frontier, the Marquess of Ripon was by no means a sleepy man. If he had been sleepy in regard to the North-West Frontier, and in some other respects, his policy was infinitely preferable to that of Lord Lytton, who had involved them in an expensive war that cost £20,000,000, and had probably brought about their present complications with Russia. Those complications were due, in a great measure, to their attacks upon Afghanistan, and to the hatred which had been engendered against them among the Afghan tribes in consequence. He thought that Lord Lytton had been most unfortunate and unwise in bringing about that Campaign. He would always maintain the opinion that that war was wrong and unjustifiable. Therefore, if the noble Lord objected to the policy of the Marquess of Ripon in connection with the North-West Frontier, that could hardly be regarded as an unmitigated evil, and the Marquess of Ripon had undoubtedly turned Lord Lytton's constant deficits into surpluses; he had materially developed the resources of India, and had succeeded in securing the goodwill of the people of that country. He (Sir George Campbell) maintained that it was much better to pursue a policy of that kind in em- ploying the finances of India, than in guarding against dangers which had not yet arrived. There was another point in which the Secretary of State seamed to contradict himself. He had taunted the Marquess of Ripon with having rashly abandoned the resources of the country, whereas he claimed credit to Lord Lytton for having so dealt with the Customs Duties of India that the first of Lord Lytton's Successors was compelled to abandon them altogether. He could not understand how it was that the noble Lord looked upon a policy of that kind as a matter in which Lord Lytton deserved praise, while, at the same time, he censured the Marquess of Ripon for getting rid of the Customs Revenue of India. He (Sir George Campbell) was inclined to think that the policy of the Marquess of Ripon, even in regard to the North-West Frontier, was far preferable to the King Stork policy of his Predecessor. He was afraid that some day or other Party polities in this country would exercise a dangerous influence in India. The noble Lord wound up his speech by expressing confidence in the resources of India; but the noble Lord's statement in regard to Indian finance was an extremely gloomy one. He had told the Committee that there was not only a largo deficit at the present time, but that they must expect to have deficits for the future. He was afraid that the noble Lord was right in that assertion; and although he did not blame the noble Lord, who had only been six weeks in Office, for not grappling with this great and difficult problem, it was certainly contrary to all sound financial principles to make no provision for the present deficit, but merely to carry it forward to next year. No doubt the noble Lord had not yet had time to consider the matter fully; but he hoped that when he had had time to apply his mind to the subject he would come to the conclusion, next year, that it was not right to hand over a deficit from one year to another without any attempt to provide for it. He was glad to hear the noble Lord express a strong opinion that there should be a Parliamentary inquiry into the affairs of India. He (Sir George Campbell) certainly thought there ought to be a full and thorough inquiry, and he endorsed the arguments of the noble Lord in favour of inquiry. His only doubt was whether it should be a strictly Parliamentary inquiry, or whether it should not be an inquiry by Royal Commission on which they might be able to appoint some of the best and strongest men in the country. He (Sir George Campbell) strongly deprecated any policy which would involve the conversion of the difficulties of India into Party questions; and he certainly thought that if the Secretary of State in future was to follow the example of the noble Lord and make such a bitter attack upon former Viceroys very serious difficulties and dangers might result. He was sorry that he had incited the indignation of the noble Lord, because he had happened to laugh when the noble Lord used the somewhat novel phrase of "Britain and Ireland." He wished to say at once that he had no intention of deriding the influence of Irishmen in Indian affairs. On the contrary, he agreed with the noble Lord in thinking that India had derived very great benefit from the services of Irishmen; he would be most ungrateful if he were not to admit that India owed very much to Irishmen. He himself, in the work he had been able to do in India, owed very much to the assistance he had received from Irishmen; and it had often struck him that there was something connected with the tenure of land in Ireland which made Irishmen peculiarly useful in India. There had been no Viceroy in whoso labours he had had greater sympathy, and who had administered the Government of India to greater advantage to the country, than the Earl of Mayo, under whom he had served a good many years ago. He believed that the Vice-royalty of the Earl of Mayo in India was one of the best Administrations that bad ever existed in that country. The Earl of Mayo was an Irishman, and at that moment there was a very large proportion of Irishmen in the Indian Service. Many of the great reforms which had been carried out in the Province of Bengal had been mainly due to Irishmen, and they were at that moment assisting the present Lieutenant Governor of Bengal in a most excellent and admirable manner. He hoped that after those remarks the noble Lord would acquit him of ingratitude towards Irishmen for their services in India. He thoroughly acknowledged the justice of what the noble Lord had said, that if there was to be a Parliamentary inquiry into the machinery of Government in India and the administration of affairs in that country, note must be taken of the opinion of the educated Native men to whom the noble Lord had referred. They were persons whose opinions ought to be fully understood, and who were entitled to be listened to. Indeed, too great weight could not be attached to the representation of the views of the Native population of India. He trusted that all classes of the people of India would be represented in the coming inquiry, and that they would be fully and fairly heard. As regarded the immediate question of Indian finance, he confessed that he had always been something of a pessimist, and he had often expressed doubts as to the propriety of the fair-weather policy which had been pursued. He was of opinion that they had not sufficiently provided for a time of great difficulty and disturbance. A time of disturbance had now arrived, and he could not say that he had been altogether unprepared for the gloomy view which the noble Lord took of Indian affairs. He had always thought that too much had been made of the Russian scare; but a period of difficulty had now come upon them, and already the country had been put to an enormous expense in that direction. It was better for the country to be called upon to spend money now rather than to have spent it prematurely some years ago. The position of Afghanistan was a very large and difficult question, and he would not attempt to discuss it at the present moment. He would only say that, as a matter of history, it was a hazardous policy to attempt to set up Afghanistan as a Kingdom. There would always be a great danger in having a country like that between our territory and that of a powerful European nation; with one side turned towards us, and the other towards Russia. In this matter England, he said, had shown that she was sensitive, and Russia had taken advantage of it. He entirely agreed with the noble Lord the Secretary of State for India that it was desirable that they should now strengthen their Indian Frontier; but he hoped the noble Lord would bear in mind the warnings of Indian military officers on that subject, and he also hoped that the experience which Members of the present Government had had with respect to Afghanistan would counsel them to free the country as much as possible from the difficulties which would result from having to do with that nest of hornets. He agreed with the noble Lord that the Indian Army must be permanently strengthened. He had always said that the Indian Army was very small for the vast Dominion, population, and interests which it had to protect and control; and now that their Indian Empire was almost in contact with that of Russia he said it was absolutely indispensable that the Indian Army should be increased. He would not, however, detain the Committee on that question, with which he did not feel himself fully competent to deal. But he did say that it was a right move to establish a Native Army Reserve in India. He had always found and urged that the old Native soldiers and pensioners were very trustworthy and reliable men, and he believed that they would be their best aid in time of difficulty in the country, and constitute a source of strength there; and, therefore, as far as he could judge, the proposal seemed to be a wise and proper one so far as the Infantry were concerned. With regard to the Cavalry, he was not quite so sure—indeed, he had always thought that the Cavalry in India were a very expensive and not very valuable force. He was rather inclined to think that the proper thing to be done was to mobilize the Infantry and keep up a force so equipped that they would be easily movable in time of need. But then there was the question of money. An increase of men meant, of course, an increased expenditure, and he agreed with the remarks of the hon. and gallant Gentleman (General Sir George Balfour) who had just spoken in saying that the pay of the Native soldiers was insufficient. There could be no doubt that a very large additional expenditure of money would be necessary, and the question was, how was that expenditure to be provided for. The noble Lord had laid great stress on reduction and economy. No one more than himself desired to see that there should be both reduction and economy; but it was always to be remembered that however they reduced expenditure on the one side there were always fresh demands to meet the growing expenses on the other. But the noble Lord had spoken of a reduction on account of Public Works paid for out of Revenue. He did not agree with the noble Lord in the views he had expressed with regard to that subject, which was one concerning which he had, in his opinion, made an entirely false comparison, between the administration of Lord Lytton and the administration of the Marquess of Ripon. What Lord Lytton had done was to stop during the Afghan War all the useful public works that were going forward in India. They knew that that could only be the source of temporary reduction, and Lord Lytton had stopped those great works in the most unfortunate way; because, in order to carry them out, large establishments had been created and maintained; and Lord Lytton, by stopping them suddenly, had those large establishments thrown upon his hands. When the reduction took place an enormous increase of expenditure was incurred for pensions and gratuities and other matters inseparable from operations of the kind; and in the end, when after two or three years the India Government was obliged to carry on the public works, the establishment had to be again increased at an additional cost. Therefore, it seemed to him that to stop the carrying out of public works was a thoughtless, uneconomical, and wrong manner of proceeding. It seemed to him that in the carrying out of large public works they ought, so to speak, to cut the coat according to the cloth, and that if they desired to carry them on at all they should do so at a uniform rate with a uniform establishment, and not indulge in a policy of see-saw— that was to say, a policy of reducing them at one time and increasing them at another, as was the case under the administration of Lord Lytton before that of the Marquess of Ripon began. Roads, bridges, irrigation works, and works of that kind were things that if they were started to-day must be carried on to-morrow; and, therefore, he did not agree with the policy indicated by the noble Lord. He was also of opinion that the policy of cutting down the Provincial Budgets was a most disastrous policy, because by so doing he believed they could not have efficiency and justice to those Departments. When he was in Bengal he, being inclined to economy and prudence, had saved a good deal of money against a rainy day; but when the famine came the whole of the savings were swept away. What was the result? His Successor spent every farthing of Revenue, and there was nothing saved at all. He agreed in thinking that the statement of the noble Lord, and the statement of Sir Auckland Colvin, Finance Minister, were very gloomy indeed, notwithstanding the hopeful expressions with which the noble Lord had concluded his speech. He had read the statement of Sir Auckland Colvin, and he found that, while it alluded to the reduction of Revenue, it did not make any reference to increased taxation. But he thought they would be obliged to resort to that. But he (Sir George Campbell) said that if the Licence Tax was extended, they would have, honestly, to make it an Income Tax, because that was a tax which would hit the rich as well as the poor, even if they did not go the length of having a graduated Income Tax, under which the rich out of their possessions should pay more than the poor in their poverty. He had often commented on the policy which abolished the Import Duties on Manchester goods; and as long as the Rice Duty remained as it was, he, for one, would not have sacrificed those duties. With regard to the Salt Tax, he considered that it was impossible to increase that; he said it was a delusion to speak of that tax as having been very much reduced. The Salt Tax, as a whole, had not been reduced, but equalized, and was very heavy still. If they compared the Revenue from that source with what it was a few years ago, it would be seen that, while in one part of India it had been largely increased, in another part it had been correspondingly diminished. The noble Lord, in making a comparison of the present Revenue of India with what it was 10 years ago, had spoken of the elasticity of the Indian Revenue. He (Sir George Campbell) had heard a good deal about that before; but when he came to the figures that had been laid before them that day, he could not help remarking that the whole increase of £2,000,000 found to have arisen in 10 years was due to the increase in Public Works alone. The net increase on those works was £2,000,000.

THE SECRETARY OF STATE (Lord RANDOLPH CHURCHILL)

The amount charged as increase of Revenue on Pub- lic Works is £566,000. The two must be taken together.

SIR GEOEGE CAMPBELL

Exactly; and the result was that there was no increase of Revenue at all, except from this source. Now, with regard to the Accounts. The noble Lord's speech had been devoted to high finance and politics; but he must ask the Committee to come down a little and consider the Accounts. He wished to express the opinion that he had expressed many times before, that the Accounts were presented to the House in far too complicated a form. It was almost impossible for Members of Parliament, save those who took an active interest in Indian affairs, to understand them. In these Accounts everything was stated in gross; items were included under the head of Revenue which were not Revenue at all, but sources of Expenditure, and they also mixed up Imperial with Provincial finance in a manner which had led to a great deal of confusion. He would illustrate his remarks by referring to one item—namely, the Public Works. There was the statement that under that head there was an estimated surplus of £566,000; but when they came to look into the matter they found that the whole surplus disappeared and became a deficit, because there was the loss on Exchange, which for 1884–5 was £1,873,000, and for 1885–6 £1,900,000. Those things were stated in the Accounts in a manner so misleading as to suggest a surplus, while a deficit really existed. He did not say that there was a real loss, but they must not run away with the belief that there was a surplus in hard cash. Then there was the subject of railways, to which the noble Lord had devoted a short portion of his speech. He (Sir George Campbell) had always been in favour of a liberal extension of railways in India; he thought that where there were no proper roads, and where road-making was expensive, the railways might with great advantage be extended considerably. But he looked with alarm on the present programme with regard to railways put forward by the Indian Works Department. The gentleman who was responsible for that had set his teeth on the construction of certain railways in India; and great care was, in his opinion, necessary in order to insure that his scheme should not be sanctioned en bloc. He found, by the Finance Minister's Statement, that he expected to spend in 1885–6 upwards of £8,000,000 on railways upon State responsibility, apart from those railways which were constructed by private enter-prize. That seemed to him to be a very large sum; it greatly exceeded the amount which the Committee of the House of Commons contemplated would be so expended, and he thought that the proposal must be regarded with concern by all. He admitted that the policy of the Earl of Dalhousie, who mapped out an extensive scheme of State Guaranteed Railways, had been in the main a success. The State had paid very dearly for it, however; but, although the railways had probably cost double what they might have cost, he considered they were worth the money spent upon them. But now that they had gained so much experience in those matters, and had an enormous establishment capable of making railways, with men experienced in their construction, he doubted very much that it was the true policy to employ those guaranteed contractors in the work. The Government ought especially to have control over the railway rates. He was one of those who thought that the rates charged by the Railway Companies in India were not nearly cheap enough. He contended that they would not do justice to the trade and resources of India until they had a system under which they could reduce the railway charges to a minimum. His experience was that railways must always be to a great extent monopolies; and if they were to have the present system and not trust to private enterprize—if the Government were to guarantee interest and debt, it would be much better that they should have complete control, so that there might not be undue competition on one side, and monopoly on the other. He was not certain that they had gained the desired object by submitting themselves to the conditions which the promoters of certain guaranteed lines had imposed on them. They might be very good and able men; but when a promoter was disposing of other people's money he was not always as careful as he ought to be. He did not like promoters to handle Government money, and, as he had said, he preferred that the system should be laid down by the Government. There was between Cal- cutta and Madras a part of India still unexplored, and which was to that day in the possession of the Aborigines. He thought it would be right for the State—cautiously, of course—to develop a railway in that district, but not too fast. He hoped that would not be lost sight of by the noble Lord. It was only the other day that he put a Question in the House with reference to another line of railway; but the only answer he received was that the noble Lord traversed all the facts and circumstances—there was no reply to his Question. He asked whether, in view of the depressed condition of Indian trade, and in view of the great difficulties of Indian finance, the Government were going to guarantee lines which would compete with the Government lines already established? He thought the new line would come into direct opposition with the East India Railway on the one side, and with other railways on the other side. It would interfere with their through traffic, and seriously injure the other lines. He did not know whether the noble Lord had applied his acute mind to the subject of railways in America; but if he had he would see that the through lines had of late years been cutting each other's throats in consequence of this competition for traffic—he referred to the lines running from the coast to the centre of the country. No doubt the public got the benefit, but it certainly seemed to be a suicidal policy so far as the railways themselves were concerned. He hoped that state of things would not be repeated in India, and that the noble Lord would take care that he did not yield too much to the promoters of those lines. As those railways were a very important subject, he thought it right to say as much as this with regard to them; but there were a lot of other matters of importance in connection with Indian finance, the details of which he would not attempt to go into. He would only say this—that if the noble Lord were in Office another year, and he hoped that he would not be in Office unless he joined the Radicals, and he had some hopes of that, he trusted he would apply his genius to the subject of Indian finance. If he did, no doubt great benefit would result; but he also felt that the task was one of enormous difficulty. It appeared to him that the noble Lord in his speech that night had made out the difficulties and dangers of Indian finance a good deal more strikingly than he had made out the bright side of the case. If he were in Office next year, it would not do for him to tide over his difficulties by balances and loans; but he would find it necessary to have to resort in some shape or other to increased taxation or to Revenue to meet the deficit which would exist. At any rate, he (Sir George Campbell) felt that this question was a very difficult and gloomy one, and he hoped that whoever was in Office he would attempt to grapple with the question.

CAPTAIN AYLMER

said, he desired to say a few words with reference to the new Frontier railways designed in India. Hon. Members had recently had a map of the approved new Frontier lines placed in their hands by the Government; and he begged to call the attention of the noble Lord the Secretary of State for India, or his Representative at the present moment in the House, to two lines, and matters connected with them which he considered of vital importance. There were two distinct lines, one running South from Rawul Pindi and Kohat to Dehra Ismael Khan on the Indus, and the other running North from Mooltan to near the Indus nearly opposite Dehra Ismael Khan. There was no connection between those lines. They ran parallel with their Frontier, and, therefore, were probably the most difficult lines to defend. It was absolutely necessary, where a line of railway ran parallel with a Frontier, that the access to both extremes should be perfectly easy, because if the line was cut by an enemy at the North, and access to the South was rendered impossible by reason of a river intervening, the line, instead of being useful, was absolutely a danger. A bridge, therefore, over the Indus, connecting the line at Dehra Ismael Khan with the line opposite, was absolutely necessary. He also, having carefully studied the question, wished to call particular attention to another railway proposed by the Government—namely, the Quetta Railway, through the Pishin Yalley. That line, begun in 1879 and 1880 by the Government of the late Earl of Beacons-field, was stopped when the late Government came into power. In October, 1883, they, however, had given orders that it should be commenced again, and the coolness with which they looked upon the line in 1880 turned to red heat in January, 1884. In such hot haste did they recommence the line that at one time from 15,000 to 20,000 men were employed upon it, and during the whole of 1884 something like 17,000 men were employed upon it, and now they were told by the noble Lord that the line could not be completed till 1886. The noble Lord had made that statement the other day in answer to a Question addressed to him. If an ordinary amount of attention had been paid to it, and an ordinary amount of strength had been put upon it during those years, it would have been completed by this; but he (Captain Aylmer) was now informed by those who were constructing it that there was no possibility of its being completed so soon in consequence of the unhealthiness of the working men being unable to do anything on the lower end in the summer, or anything on the upper and in the winter. Turning from that, however, he wished to ask Her Majesty's Government to consider one point—namely, that, instead of stopping at Shibo as it was proposed to do at present, they should go 20 miles further to the top of the Kojak Range. The distance, as he said, was only about 20 miles; but it was a difficult piece of railway work, and if it were left until war actually broke out it would be almost impossible to construct it. But from the top of the Kojak Pass to Candahar would be a very simple piece of work—the gradient was an easy one. He would strongly recommend that to Her Majesty's Government. There was a more important point still to be dealt with The line from Quetta came down to the Indus to join the Mooltan line; but it did not join it, because a bridge was required. That bridge had been contemplated, and plans had been prepared. It had been designed. The engineer whose work it was seemed to have been desirous of having in it the greatest span of any bridge in the world. The piers had all been laid, and, at the present moment, they were unable to find a contractor who would undertake the making of the bridge. The necessity for that bridge was very great. During the grain season, when produce was coming down from the North-West Provinces, at the present moment, owing to the want of continu- ous railway communication, it had to be taken across the Indus in barges and then placed again on the railway for transit to Kurrachee, and this could only be accomplished by using the electric light. He would urge upon the Government the desirability of attempting to modify the model of the bridge, as no contractor would undertake its construction in its present form. Now he came to even a more important; point than either of those two which he had already touched upon—namely, the necessity of at once building a bridge over the Indus from Sukkur to Rohree. Without it the Lahore and Delhi railways would be entirely cut off from the railways on the Afghan side of the Indus. Without that bridge there could be no possible connection in any way, by railway or otherwise, between the Bombay or Madras Presidencies and the railways on the Afghanistan side. Any Army operating on the Frontier would, simply be protecting one-half of India, leaving the other half in the cold; and it would be evident that the difficulties of transhipment and carrying it from one side of the river to the other would be very great. Finally, when the Sukkur and Rohree Bridge was completed it would be necessary to make from the Indian end of the bridge a line to Ahmatebad on the Rajpootana Railway, as without it the Bombay and Madras Army would be entirely cut off from operating in Afghanistan. With that railway a Bombay or Madras Army would be equally serviceable on the Frontier as a Bengal Army. He only wished to call attention to those matters, and he was sure that, having done so, the noble Lord would bear them in mind.

THE MARQUESS OF HARTINGTON

Although the appearance of the Committee is not very encouraging for the purpose—that is, to induce one to make many lengthened observations—I am unwilling that the debate should close without entering somewhat a protest against the unusual course that has been adopted by the noble Lord the Secretary of State for India in making his Statement on Indian Finance. The noble Lord, in the course of his speech, the ability of which I fully recognize, took the opportunity of interpolating some remarks which I am of opinion ought not to have found a place in a Financial Statement, and which were rather such as should have been made in a speech supporting a Vote of Censure on the late Viceroy and the late Administration of India. I think it is an extremely inconvenient and an extremely unfortunate course that observations of that sort, and an attack such as was made by the noble Lord, should have been introduced into an Indian Financial Statement. It has been the endeavour hitherto of those who are responsible for the Government of India in this House to avoid, on this occasion, at all events as much as possible, the introduction of controversial and Party politics. The occasion has been one upon which we have all endeavoured to elucidate, as far as possible, the facts of Indian finance; and it has been an occasion upon which various more or less valuable suggestions have been made by those who have had experience in Indian affairs, and the debate on the Indian Financial Statement has not generally shown any tendency whatever to degenerate into Party controversy. Well, Sir, I should think it very unfortunate if the practice were permanently departed from; and I think it would be very unfortunate indeed if the attention of the Committee were to be hereafter diverted from the facts and considerations bearing upon Indian finance to topics which, however interesting, are not, in my opinion, greatly calculated to conduce to the elucidation of this subject. But if topics of this sort are to be introduced, I think the Committee will understand that it would only be fair that they should be introduced after some fair warning and some fair notice given to those who are concerned in their discussion. When a Vote of Censure is proposed upon the conduct of any branch of the Administration—when a Government is attacked in respect of any part of its policy, that Government has at hand all the resources of official information; it has all the resources of its Offices behind it, and it is always more or less prepared to reply to any attack that can be made upon it. No Vote of Censure, according to my recollection, is ever proposed, and no attack is ever made upon a Government Department without previous Notice being given in this House, and to those against whom the attack is directed, in order to afford them an opportunity of preparing a defence to that attack. Well, Sir, that course has not been followed upon this occasion. Neither in public nor in private has the noble Lord thought fit to give the slightest intimation, as far as I am aware, either to the Marquess of Ripon, or to the late Secretary of State for India (the Earl of Kimberley), or the late Under Secretary (Mr. J. K. Cross), or to myself, who have been partially responsible for Indian administration, of his intention to arraign on this unusual occasion a great part of the policy of the Indian Government during the last five years. That seems to me to be a course of which I and my Friends have a right to complain. I do not, however, complain of it very much on personal grounds, because the Marquess of Ripon and the Earl of Kimberley, and other officials whose conduct has been attacked to-night, will have other opportunities, if they think it necessary to take advantage of them, which they can create for themselves to vindicate their reputation, and to reply in detail to the criticisms that have been passed upon them which I protest against. The reason why I think it necessary to protest against the course taken this evening concerns the public interest. I think that if attacks of this kind are to be made on such occasions as this it will be an inconvenient and unfortunate deviation from the ordinary practice. It would be far more consistent with the public interest that these attacks should be made after such Notice as would enable a reply to be given at the same time as the attack, so that the House and the country might judge without delay between those who attack and those who are placed on the defensive. I certainly do not intend to attempt to enter into a full vindication of that part of the policy of the Marquess of Ripon which has been arraigned by the noble Lord to-night. I have not the materials by me which would enable me to do so, and I have not had the opportunity of consulting recently with either the Marquess of Ripon or the Earl of Kimberley on these subjects; and I do not desire to enter upon what at the very best would be but a partial reply to the noble Lord. There are, however, one or two topics which the noble Lord has touched upon with regard to which it might be well that I should make one or two brief observations. The noble Lord entirely disapproved, as we were already aware that he did, the policy of the late Government in withdrawing from Candahar and in not completing the railway. Well, Sir, as to that, it might be sufficient for me to say that whatever may be the merits of our policy in that respect, we are not alone responsible for that. The subject was fully brought before the attention of Parliament, and, after a long debate, Parliament approved our conduct and made itself responsible for our policy.

THE SECRETARY OF STATE (Lord RANDOLPH CHURCHILL)

That policy was not before the House.

THE MARQUESS OF HARTINGTON

All the facts were known to Parliament at the time of the withdrawal from Candahar. But I do not rest my case entirely upon the sanction given to our policy by Parliament. I believe now, as fully as I did at the time of the debate, that the policy followed by us was the right one, and I feel the strongest conviction that we should not be in the slightest degree in a better position to defend ourselves against any aggressive steps on the part of Russia towards India if that policy had not been followed. The noble Lord said that we are likely to be called upon to make in the present and succeeding years very great exertions, and to be involved in considerable pecuniary sacrifices. That is extremely probable and likely. I do not in the least deny it; but the fact that we are likely to have to make such exertions does not in the least prove that we should have been in a better position to make these exertions or incur these pecuniary sacrifices if we had spent two or three previous years in wasting money upon useless and unprofitable enterprizes. We believe that the continued occupation of Candahar would not only not have strengthened our position against any aggression on the part of Russia, but would have actually weakened our means of defence against such aggression. Whatever value may be attached to our alliance with Afghanistan—and I quite admit we could not base the safety of India entirely on the friendship of the Afghans—we held in 1881, and we hold still, that the love of the Afghans of independence, and the resistance which they are sure to offer to any attack from Russia upon that independence, are amongst the most important factors at our disposal for resisting any aggressive Russian designs against India, and we believe now, as we believed in 1881, that the possession and retention of Candahar, the annexation of Candahar, the paring away from the Afghan territory of one of the richest parts of it, would have inevitably and unalterably and permanently alienated all chance of the friendship of the Afghans from us. It was not within our power to undo all the mischief which had been done by the Governments of Lord Lytton and Viscount Cranbrook. It was not in our power to undo all the consequences of the war which, in our opinion, was unnecessarily waged by the Government of Lord Lytton on the people of Afghanistan. We are not in the slightest degree surprised to find even now the Afghan people, to a certain extent, suspicious, unfriendly, and jealous, and not disinclined to believe that we may harbour intentions towards them quite as hostile as any which the Russian Government may itself harbour. But that is not the consequence of the policy we have pursued. It is the consequence of the war that was waged by Lord Lytton—a policy which the noble Lord has thought fit to praise to-night. We did what we could to undo the effects of that unfortunate policy, and we believe the most important part of our action was retiring from Candahar to prove to the Afghans that we had no aggressive intentions against them. The noble Lord says that for five years we have seen Russia advancing in the direction of India, and that the Indian Government has taken no notice of that advance. He says that during this time the Marquess of Ripon and the Indian Government have been wrapped in slumber. Whatever may have been the defects of the policy of the Marquess of Ripon and his advisers, does the noble Lord or the Committee think that we should be in a better position to resist Russian aggression if we had wasted the resources of India and of this country during the last four years in a series of unprofitable wars with Afghanistan? And what guarantee will the noble Lord give us that if this policy of retaining possession of Candahar had been adopted we should not have been engaged in these wars? The noble Lord says it was a mistake to retire from Candahar.

THE SECRETARY OF STATE (Lord RANDOLPH CHURCHILL)

I particularly said I would not on this occasion raise any question as to the policy of the abandonment of Candahar.

THE MARQUESS OF HARTINGTON

The noble Lord said he would not raise the question; but I heard the observations he made, and, in my opinion, they did raise the question of the mistake which he held had been committed in our retirement from Candahar. I say that that policy was right. We did not in the first instance retire from Candahar; we found ourselves committed to some extent to certain engagements which had been made by our Predecessors. We did not retire from these engagements until the circumstances had changed. But the retention of a Force in the neighbourhood of Candahar by the late Government led to a renewal of conflicts between the Afghans and the British Forces—between Ayoob Khan and ourselves. It is impossible for the noble Lord or his Friends to deny that if the policy we adopted in 1881 in withdrawing from Candahar had not been adopted we might have found ourselves engaged in a succession of these wars and in a succession of hostilities with the Afghan people. Well, Sir, therefore we consider that the policy we adopted in that respect is one which certainly would not diminish our power of self-defence against Russian aggression, but, on the contrary, would greatly increase it. The noble Lord has said that the suspension of railway communication with Quetta was bad policy. Now, the temporary suspension of that railway—for, as my hon. Friend (Mr. J. K. Cross) the other day showed, the railway was, all but a small portion of it, again taken up—was a part of the same policy and was dictated by those considerations which induced us to abandon Candahar; and, notwithstanding the contradiction of the noble Lord just now, we say that that was a policy which was before the House when the whole question was debated. We felt at that time, rightly or wrongly, that the announcement that the Indian Government had determined permanently to retain the district of Pishin would have an effect on the mind and temper of the Afghan people similar to the retention of Candahar—of the same character, though not, perhaps, so pronounced. We believed, from the best information obtainable at the time, that the Pishin district formed a part of Af- ghanistan, and we believed that the retention or permanent occupation of that district would be considered by the Afghan people as a plain sign and indication of our intention to make further aggression on Afghan territory, and to establish a footing in Afghanistan which could be further advanced if occasion served. Therefore, while not insisting peremptorily on withdrawal, as in the case of Candahar, we intimated to the Indian Government that in our opinion it would not be desirable to announce any intention of framing their policy upon the permanent retention of the district of Pishin. But a large discretion was given to the Indian Government as to the time when the withdrawal from Pishin should take place. The Indian Government urged reasons why that withdrawal should not be a hasty or precipitate one. No pressure was placed on the Indian Government, and the retirement from Pishin was postponed; but it was found in practice that the occupation of that district was quietly acquiesced in by the Afghan people and the Afghan Ruler. The Home Government did not put any pressure on the Indian Government to retire, and so the occupation has practically continued to the present time. As long as there was any doubt whether the district of Pishin should be permanently retained or not it would have been unwise to have proceeded with the railway. The completion of the railway was suspended pending the decision whether the district was to be permanently occupied or not; but no final decision as to the abandonment of that railway was ever announced, and it was open to the Indian Government, whenever it thought fit, to renew the proposal for the construction of that railway. When the time arrived that it was thought necessary for the safety of India that the railway should be further extended, that proposal was made by the Indian Government; no opposition was given to it by the Government at home, and the extension of the Pishin Railway was undertaken. But it does not appear to me to be at all clear, if the railway had been pushed on earlier, that it would not have been taken by the Afghans as an indication of aggressive intentions on our part, and would not have led to a renewal of those mischiefs and misfortunes which had been caused by the attack on Afghanistan, and which had only been partly removed by our retirement from Candahar. Then the noble Lord says that, notwithstanding the continued advance of the Russians, and the dangers that were threatening India during the whole of his administration, the Marquess of Ripon reduced the Native Army. I would like to ask the noble Lord whether he read the Report of the important Commission on the Indian Army, of which Sir Frederick Roberts, Sir John Strachey, and others of high authority were prominent members? I believe, though I have not had an opportunity of referring to the Report of that Commission during this discussion, that that Commission, at the instance of Sir Frederick Roberts, proposed a much larger diminution of the Indian Army than was adopted by the Indian Government or sanctioned at home. And when the noble Lord makes the reduction of the Indian Army a subject of charge against the Marquess of Ripon, I would ask him whether he has obtained the authority of any Indian military expert for the assumption that the efficiency of the Indian Army has been impaired by this reduction? On the contrary, I believe it is held that the reductions have been made in the less efficient and less warlike portions of the Native Army, and that the efficiency of the more valuable and more fighting portions of that Army has been increased by the measures taken by the Marquess of Ripon's Government. And I should like to suggest for the consideration of the noble Lord that, while he is increasing the strength of the Native Cavalry and the Ghoorka regiments, and taking other measures which I do not desire to call in question, and when he is considering the additional expense thrown on the Indian resources by these measures, I would like to suggest to him that it is desirable again to recur to the recommendations of that Commission, and see whether a portion of the additional expense that will be incurred by these measures might not be met by some reductions of the less efficient and less valuable portions of the Native Army. Then the noble Lord says that the Marquess of Ripon and the Government at home allowed a deficiency of 10,000 men to exist in the British garrisons in India. The noble Lord must be perfectly aware that the existence of that deficiency was no part of the Marquess of Ripon's policy. The Marquess of Ripon and the Indian Government constantly remonstrated against it. The deficiency was caused, as every military Member of the House is aware, by the changes which took place in the administration of the Army at home, and by a miscalculation made as to the establishment necessary to provide proper reliefs for the Army in India. The very first thing I did when I assumed the administration of the War Office, finding that there was a very considerable deficiency in the Army in India, was to take measures, in concert with the Government of India, for repairing that deficiency—measures which have been to a considerable extent successful, and which it may be reasonably hoped will in a short time fill up the deficiency. Therefore, I say, it is extremely unfair to charge the Marquess of Ripon with a deliberate failure of his duties in regard to the deficiency in the British garrison, which it must be admitted for a time occurred. Now, the noble Lord has also attacked the financial policy of the Marquess of Ripon. He has said that, notwithstanding the threatening symptoms to which he adverted, the Marquess of Ripon's Government did not sufficiently insist upon economy, and that it made unwise remissions of taxation. The noble Lord will not be able to find any want of attention to economy so far as the Indian Government could effect it. What I suppose the noble Lord refers to is that on the return of peace and prosperity and increase of Revenue the arrangements which were made with the Provincial Governments were reverted to, and, in some cases, the original agreements with the Provincial Governments were revised upon more liberal terms. In fact, the policy that had been instituted by the Earl of Mayo, and which received the complete approval of Lord Lytton and Sir John Strachey, was reverted to, and a considerable sum was placed by the Government of India at the disposal of the Local Governments for the improvement of their administration and the development of the resources of the Provinces. Sir, I believe that that was a wise measure. I believe that a niggardly policy in India will never be a prosperous or permanently economical policy. I believe that what we have to rely upon, to a great extent, for the future finances of India, is the development of the resources of the Local Administrations, and that if the Local Administrations were too much starved in the expenditure of the funds they consider necessary for the development of the Provinces, it would be in vain to hope for an elastic or an increasing Revenue. Well, then, Sir, as to the remission of taxation, the noble Lord says that we reduced to an unwise extent the Customs Duty. That subject was one that was fully discussed in this House, and the policy was deliberately adopted by the Indian Government after full consideration. I believe that no wiser policy could have been adopted. It was a policy that Sir John Strachey, under Lord Lytton, had advocated. If there is anything satisfactory in Indian finance it is the gradual reduction which has taken place during a very considerable number of years in the charge which falls upon the Indian Revenue in respect of the interest of capital expended on public works. The right hon. Gentleman opposite (Mr. E. Stanhope) is perfectly well acquainted with the burdens upon Indian finances. But what has produced this great change, this great reduction of the burdens upon India? It has been the increased receipts from Indian railways, owing to the development of the resources of the country—owing to the increase of industry and trade in India. I maintain that it was a wise policy when the Government found itself in possession of a disposable surplus to relieve still further the strings of Indian industry, and to do that which must inevitably have the effect of increasing the trade of India, and thereby of increasing that Revenue which is derived from the receipts from railways constructed by the Government. That was the foundation of the policy of 1882–3. I believe that it was a wise policy; and I should like to know whether the noble Lord and his Colleagues think that policy, which was always advocated by the Marquess of Salisbury and Lord Lytton and by Sir John Strachey, ought not to have been adopted when the Government of India found itself in possession of means to adopt it; or whether he considers that we ought to have continued, during a period of prosperity, to resort to the old methods of taxation—methods which had been condemned by every Indian financier of eminence? The noble Lord also introduced into his speech a subject which I cannot conceive had any relation to the Indian financial question. The noble Lord said that the policy of giving to Natives of India a larger share in the administration, and a more effective control of their own affairs, was a wise and intelligent policy; but he objected, to the policy pursued by the Marquess of Ripon, because he said it was a stupid policy. It is quite impossible to argue against adjectives such as those employed by the noble Lord. The question was brought forward and discussed in the House, and I believe that the policy of the Marquess of Ripon, and the mode in which it was adopted, has received the assent of the House, and of the vast majority of the people outside this House. Will the noble Lord undertake to say that any considerable advance in the direction of carrying out that which he himself described as a wise and intelligent policy without raising a very strong and determined opposition from a very large section of Europeans in India—

THE SECRETARY OF STATE (Lord RANDOLPH CHURCHILL)

Will the noble Marquess permit me to say that, with regard to the adjectives he has referred to, I only used words identical with what is the universal opinion among Natives and Europeans in India.

THE MARQUESS OF HARTINGTON

That is a very wide and very sweeping statement. I do not deny that there was a very strong and bitter and a very unwise and unscrupulous resistance from a large proportion of the Europeans, both official and non-official, in India, and I do not deny that there may have been a certain number of Native Indians with whom the noble Lord was thrown, in contact, moving in Anglo-Indian society, who shared very much their impressions and opinions. But, in my opinion, if the noble Lord had inquired further as to the manner in which the Marquess of Ripon's policy had been received by the vast mass of the people he would have arrived at a different conclusion. I believe there are many men of large Indian experience who have been struck by the enthusiasm by which the policy of the Marquess of Ripon was received by large masses of Indian people. The demonstrations which have been made in his honour at the conclusion of his Viceroyalty were considered, I believe, to be the most remarkable demonstrations of Indian public opinion which have been known within our recollection. I doubt very much the assertion of the noble Lord, and contend that there is no large body of public opinion which considers that the measures taken were injudicious in themselves, or were carried out in an injudicious manner. Now, I have not attempted, nor do I intend, to make any complete reply to the attack which has been made by the noble Lord this evening. The tactics pursued by the noble Lord on this occasion have made any complete reply impossible. If it should be thought necessary, however, by those whose conduct has been impugned, an opportunity will, no doubt, be found on some future occasion. That which I principally desire to do upon the present occasion is to enter my protest—first, against the introduction of matter which I have described into the Indian Financial Statement; and, secondly, against the course pursued by the noble Lord in not giving either publicly, or, at all events, privately, to those whose business it would have been to defend their Indian Administration, an opportunity of replying to statements which they could not have expected would have been brought forward.

THE VICE PRESIDENT OF THE COUNCIL (Mr. E. STANHOPE)

The noble Marquess, in the speech which he has just delivered, and in which the admissions were at least as remarkable as the contradictions, has scolded my noble Friend very severely for the course he has thought fit to pursue on this occasion. And the reason is this—that in making his Indian Financial Statement he has attacked the late Government for its Indian finance, and the Marquess of Ripon as their Executive officer. Well, Sir, I am one of those who have always felt that it is exceeding desirable that whenever possible Indian affairs should be kept out of Party controversy. But I should like to ask when right hon. Gentlemen opposite ever spared Lord Lytton or his policy?

THE MARQUESS OF HARTINGTON

Perhaps the right hon. Gentleman will allow me to reply to that? I should like to say that we have had plenty of opportunity of attacking Lord Lytton's Government; but I carefully abstained in the first statement I made, when the late Government came into Office, from entering into any controversial subjects.

THE VICE PRESIDENT (Mr. E. STANHOPE)

I quite agree with the noble Marquess; he did not on the occasion he refers to make any attack on Lord Lytton, and I can well understand why he did not. It was because there were plenty of us present who were perfectly ready to defend Lord Lytton if any such statement had been made; and I can say with perfect confidence, and in the hearing of the Members of this House, that there was no occasion possible, with the exception of that to which the noble Marquess has referred, when right hon. Gentlemen did not think fit to drag Lord Lytton into a controversy, and to attack him upon everything he had done, whether in his financial administration or in any other part of his government. But I think I may go a good deal further, and I may point out that there is a precedent for the course taken to-night—a precedent of a very remarkable character. I remember very well, if the noble Marquess does not, the debate which we had upon the English Budget in 1883. I remember very well how the Chancellor of the Exchequer, instead of coming down to make the Statement which we ordinarily expect, instead of simply telling us the financial position of this country and the changes he proposed to introduce, devoted half-an-hour of the time of the House to a most elaborate attack upon the financial administration of the preceding Government. I do not think that he gave any Notice that he intended to make that attack. There never was a more bitter and personal attack than that which the late Chancellor of the Exchequer then made, and I cannot for the life of me understand why, for him to make such an attack upon his political opponents was justifiable, and it is so wicked for a Conservative Secretary of State for India to venture to say anything with regard to the financial proposals of his Predecessors. But I might go still further than that, and point out to the Committee that the circumstances were wholly different. My noble Friend has had to take the charge of the financial affairs of India at a time of unparalleled difficulty. He has had left to him a deficit for which he and the Government are not responsible; and, much more, he has had handed over to him a charge which will, he says, remain a charge upon the finances of India for many years to come, possibly for ever. Under these circumstances, it is not at all surprising that he should endeavour to look back and examine the cause of this charge, and endeavour to point out to the House why this accumulation of financial difficulties has arisen, and what had been done by his Predecessors to produce it. My noble Friend put it into one sentence. He said that in spite of every warning the Marquess of Ripon made no provision for meeting that which everybody knew must happen in the process of time. That is the charge. And what answer has been given to-night? We have not heard any answer given either by the noble Marquess or by the hon. Gentleman the late Under Secretary of State for India (Mr. J. K. Cross). They have mentioned no preparations that the Marquess of Ripon made in India for the condition that was undoubtedly coming upon us. They have told us of no preparation that he initiated; they have suggested no policy that he deliberately adopted in the view of what was certain to come. The late Under Secretary, feeling the difficulty of making any statement of that character, resorted to a tu quoque. He said—"Well, after all, what did you do?" I might point out that there was an essential difference between the position when we were in Office before and the position of the late Government. I might point out that when we were in Office the advancing Forces of Russia were at that time a long way from the Indian Frontier; but during the last five years they have been creeping on step by step, until now the Russian Frontier is conterminous with that of Afghanistan. Everybody knew that that was coming upon us. Everybody warned you. The Ameer—the person principally concerned—told you over and over again that it was the certain consequence of the Russian advance. And any statesman who was responsible for the safety of India ought, undoubtedly, in the view of the advance that everybody knew was taking place, to have adopted some far-seeing policy based upon a determination to meet the difficulties which were likely to occur, at any rate, within the next few years. We may say for ourselves that we fore- saw it. We told the House over and over again during the time of the Government of Lord Beaconsfield what was coming upon us. Well, what did we do? We occupied Quetta amid attacks from the Liberal Party, which I have no doubt are well in the recollection of the Members of this House. We organized the system of Frontier railways, which we believed to be essential to the protection of India. When the noble Marquess speaks of useless and unprofitable enterprizes, I wonder whether he means to refer to that Frontier railway. He told us it was not in the power of the late Government to undo all that Lord Lytton had done. But they did all they could. They abandoned the system of Frontier railways; they allowed a savage tribe to pull up all that they had done of this railway beyond Sibi; they allowed the whole subject to sleep until the force of public opinion, after an interval of three or four years, compelled action to be taken. The noble Marquess speaks of Candahar. It is a remarkable story. I do not know whether the Committee fully realizes how remarkable it is. When the late Government came into Office one of the first steps they took was to order the abandonment of every position we then held on the old Indian Frontier. They began by gradually yielding to the pressure of their advisers. Whatever we may say of the Marquess of Ripon, this, at least, we may say to his credit. He resolutely opposed the policy the late Government adopted. He was altogether opposed to their policy of abandonment. It was entirely due to the pressure put upon the late Government by the Marquess of Ripon and his advisers, that the Government consented to a step they had resolutely opposed, and they said that although they had abandoned Candahar they must hold Pishin. They kept that as quiet as they could. There were many Radical supporters behind them who were opposed to the holding of Pishin, and were anxious that they should retire from a great many other points. ["No, no!"] Well, there were; there can be no doubt of it. The hon. Member for Northampton (Mr. Labouchere) kept asking the Government when they were going to retire from all their positions. Fortunately for this country they abandoned that policy, and they continued to occupy Pishin. But that unfortunate railway was sus- pended—as the noble Marquess said tonight, temporarily suspended—and was not again proceeded with until last year, when the pressure put upon the Government made it obvious that the public opinion of this country and of India would compel them to continue the work. Then it has been said that the noble Marques the late Viceroy of India (the Marquess of Ripon) might, at least, if he did not desire to take any other step for the protection of the Indian Frontier, have husbanded the resources of India. He might have endeavoured to practice some economy. The noble Marquess has spoken to-night, in somewhat contemptuous terms, of that demand, and he has referred to what was done with the Native Army. My complaint is this, that, although a Royal Commission on this railway in India had reported that there were many important steps that might be taken for increasing the efficiency of the Army in India and reducing the cost, the only step the late Government thought fit to take was to reduce the Native Army, while every other proposal of that Commission was absolutely rejected. I should like to remind the Committee that I have endeavoured in season and out of season to preach economy in India. Ever since it fell to my lot in 1879 to make a speech announcing the economies which Lord Lytton's Government thought it necessary to effect in India to meet the difficulties then existing, I have been thoroughly convinced not only of the necessity, but also of the possibility, of the reduction of Expenditure in India. In 1883 it was my good fortune to carry a Resolution pledging the House to a reduction of Expenditure in India. The House generally was favourable to the Resolution; but the noble Marquess and hon. Members opposite were hostile to it, and they endeavoured to cut it down and minimize it as much as possible. I regret even at this moment that the late Under Secretary of State for India did not on that occasion during the course of his remarks say a word in support of what I had said I believed to be essential—namely, that the Expenditure must be overhauled. Of course, the late Government were justified in their extraordinary Military Expenditure in preparation for war on our frontier; but I complain that they have not kept down the ordinary Civil Expenditure. I fully admit the services, in the cause of economy, of Lord North brook, who took every possible step to keep down Civil Expenditure in India, and his efforts were thoroughly seconded by Lord Lytton and Sir John Strachey; but I complain that ever since Lord Ripon went to India every item of Civil Expenditure has steadily and enormously increased. Might I detain the Committee a few minutes while I put before them a few figures, and I will show the Committee that year after year the Civil expenses have grown to an extent which is most serious for the welfare of India. I will compare the net Expenditure of India in certain items in 1880–1 with what it is now. General Administration has risen by £35,000, Law and Justice by £280,000, Police by £260,000, Education by £260,000, Ecclesiastical Establishments by £12,000, Medical Establishments by £90,000, Political Establishments by £120,000, and the Scientific and other minor Departments by £90,000. I do not think that in the case of any single one of these items the increase can be justified. It appeared to me that the hon. Gentleman the late Under Secretary made a naive confession just now, for he remarked that owing to certain circumstances on the Frontier of India, the Government thought they might spend rather more money than they did before. Well, Sir, all I can say is it was not the intention of Parliament they should do so. Parliament had voted that early steps should be taken to reduce Expenditure in India; and yet, in spite of the Resolution of this House, they thought they might spend rather more than they did before. I am inclined to think that my noble Friend is justified in the appeal he has made to the new Parliament to deal with Indian finance; and certainly, if I have the honour of a seat in it, I will advocate that the ordinary Expenditure of India shall have the careful attention of the House. I think my noble Friend could not have rendered a greater service to this House than in pointing out the necessity for this reduction, and in endeavouring to impress upon us the great change in the position of India. For my part, I do not desire to say a word which would aggravate or accentuate the difficulties which have existed between this country and Russia; but this, at least, I think may be said without offence and with absolute truth—that the contact of the two countries in Central Asia has revolutionized the finances of India, and altered the whole position we occupy in that country; and we may congratulate ourselves that at this time of crisis we have in the Viceroy an adviser so far-sighted, so courageous, and so prudent as my noble Friend (Lord Dufferin) who now occupies that position.

SIR ALEXANDER GORDON

wished to make a few remarks upon a point which had been approached that night—namely, the Frontier defences of India. He was afraid that the noble Lord had seemed to encourage the policy of going forward and meeting Russia. He was sorry to hear his hon. and gallant Friend the Member for Kincardineshire (Sir George Balfour) speak of the necessity of their occupying Herat for the defence of India.

GENERAL SIR GEORGE BALFOUR

said, he had said nothing of the kind; he had never spoken of the occupation of Herat.

SIR ALEXANDER GORDON

said, he was glad that he had misunderstood his hon. and gallant Friend. He wished to disabuse the minds of hon. Members of that idea. He had been recently looking at the history of Afghanistan, and found that 50 years ago, in the time of Sir John Malcolm, one of the ablest of Indian Administrators, the Kingdom of Afghanistan did not include Herat; the whole country about Herat belonged at that time to Persia, and the Frontier of Afghanistan was somewhere to the East of Herat. Therefore, to talk of Herat as belonging to Afghanistan and necessary for the defence of India was a great mistake. He should like to get some information from the noble Lord as to the expenditure incurred for the railway in the Pishin Valley, and whether that railway was to be made with a military object—for the formation of a great camp, because if it was to be made with that object, Her Majesty's Government might be sure that it would be taken as a menace to Russia. He pointed out that Russia was waiting till we advanced before she advanced herself. She considered that she had just as much right to advance towards the South as we had towards the North outside our own natural Frontier. It had been pointed out by the Government of Russia, as far back, he believed, as the year 1879, that they objected to our advance into Afghanistan, unless they also advanced in a corresponding manner to the South; and he hoped Her Majesty's Government would consider the advice that had been given them by nearly all the great Indian statesmen who had studied the subject of the defence of India for the last 20 or 30 years, that our proper Frontier was the Suleiman range. That, he said, was our proper Frontier, and the more we depended on it the better, because in proportion as we advanced outside that range our military position was weakened. The noble Marquess the late Secretary of State for War had just now said that their retention of Candahar under the former Conservative Government was a source of weakness, and not a source of strength, and that, therefore, the less they had to do with Candahar, or any part of the Afghanistan territory, the better. ["No, no!"] He (Sir Alexander Gordon) repeated that it was a source of weakness, and he would add, at the same time, that the late Government had shown great courage in abandoning it, in spite of the ridicule of the Conservative Party, for the best military Frontier. There was one more point he wished to refer to before concluding. The noble Lord had referred to arming the Native troops with the Martini-Henry rifle. He thought that such a policy would be a very bad one, because, if an arm discarded in the English Army were given to Native troops, the proceeding would stamp them at once with inferiority as being unfit to use the same weapon as that used by the English troops. [An hon. MEMBER: It is a good arm.] An hon. Member said it was a good arm. That was true; but it had been discarded in the English Army. The English and Native troops were always brigaded together, and if, when the enemy were advancing, they knew that the English regiments had a better weapon to defend themselves with than they were armed with, they could not but feel that they were in a position of disadvantage in the attack. When he was in India the question as to arming the Native troops was raised, and he then gave the opinion that they ought to be armed in the same way as the British troops. He hoped the noble Lord would consider this matter, and not allow the Native troops to have the discarded arms of the European troops. He wished to make one remark about the Frontier of India. It had been pointed out that other countries in Europe had their Frontiers conterminous with the Russian; and he was unable to see why, in Asia, Russia and England should not be conterminous, as Russia and Germany and Russia and Austria were in Europe. It seemed to him that Russia and England must come together in Asia; and he thought that the policy that did not recognize the fact that two civilized countries could be conterminous in one part of the world as well as another was one that would lead them into a great deal of expense and into a great deal of difficulty. He hoped the noble Lord would take into consideration the remarks which he had felt it his duty to make.

MR. CROPPER

said, he had a few remarks to make upon three points connected with the Budget now before the Committee; and he could promise hon. Members that he should be very brief in making them. But, before coming to those points, he wished to be allowed to congratulate the noble Lord the Secretary of State for India upon the debate which had taken place. He rejoiced that it had not been again 1he case that it had taken place in an empty House, and, as was too often the case, at a time when it could not be fully reported in the Press. He was glad, also, that the debate had been of a very interesting character,; and, perhaps, he might be allowed to thank the noble Lord for the explicit statement on Indian affairs which was made in the Papers laid on the Table of the House—a statement which, he believed, everyone could understand, and which brought before the Committee the whole subject in a very plain and intelligible manner. He had no doubt whatever that what appeared in the newspapers would give the people of England and India a better understanding of the Indian Budget than had been sometimes the case. As he had said, he wished to refer to three points in connection with the Budget. In the first place, the noble Lord had referred to the Salt Tax in India. It had been reduced, he believed, in one part of India by 28 per cent; but he must say that the extreme severity with which the officials of the Revenue Department prevented anything like a breach of the law in obtaining salt had done away with a great part of the advantage to the Natives. He knew that in Madras hundreds of people were taken to the Police Courts, and had to defend themselves for having put a little earth into their water, so that they might be able to drink a little brine. He believed that the noble Lord would earn the thanks of everyone who loved India if he would continue to endeavour to reduce the Salt Tax, in the hope that by so reducing it the trade would be increased, and prove, as had often been proved before, that reduction of duty was not necessarily reduction of income. He believed that the extension of trade which had occurred before would occur again if the noble Lord would venture still further to reduce the duty on salt. Men in England could not understand that salt which was bought for two annas should have a tax of 30 annas upon it. The Salt Tax seemed to be a most unsuitable way of raising Revenue. Then, with regard to the subject of opium. He had taken great interest in the question of the opium trade in China. He had deplored the state of things which had existed since the Chinese War, and he rejoiced that the Chefoo Convention was to be carried out; that China was allowed to see that she was now put upon equal terms with other nations. We had allowed her Ambassadors to draft the terms on which opium should be introduced into China; and, although he thought we should lose more than the amount which the noble Lord stated would be lost on opium, yet he thought we should gain in friendliness with the Chinese, and in the consciences of the English people, who would not feel always condemned when they were taunted by other nations with taking part in an injurious trade which they had forced on the people of China against the will of the Government. He had some reason to believe that the trade in opium with China would diminish. He would not regret it if it did so, and if its place could be taken by other sources of Revenue; hon. Members on that side, at any rate, would rejoice when it disappeared altogether. The trade in opium in China was more developed than it used to be from their own native sources; and he thought the noble Lord might consider that the income from opium would not increase, and that the trade with China would pass away from India and be taken up by Native growers. There was another subject which had been alluded to in former years by the hon. and learned Member for Chatham (Mr. Gorst) and others, and which was looked upon by Indians, and especially referred to by the Indian Press, as a great injustice—that was to say, the prolonged absence of the Court from Calcutta at the Hills. A vast number of officials spent a large portion of their time year after year away from the seat of Government. The hon. and learned Member for Chatham, on many previous occasions, had addressed the House on that subject, and the views he had expressed were fully borne out by English feeling, and also by the newspapers in India. He believed that anyone who could check the growing departure for the Hills, not only of Government officials, but of persons from the Telegraph and Railway Departments, would do a great service to India, by keeping down a source of expenditure and removing discontent from the minds of the Natives. He commended that point, therefore, to the consideration of the noble Lord. He must say that, while he congratulate the noble Lord on the debate that had taken place, he joined with those who had spoken before him in deploring his remarks upon the Marquess of Ripon's administration. He hoped that would be the last time that the debate on the Indian Budget would be made the occasion for Party attack. Indian Natives by thousands had expressed their deep respect and regard for that Nobleman; and he not only expressed his own feeling, but that of others, in saying that the Marquess of Ripon's rule in India had secured them more than any other from the danger, if there was such danger, of invasion from Russia—an invasion which might possibly have secured the sympathy of the people of India had they been under a less popular and less beloved Governnor. He believed that the Marquess of Ripon made their government more beloved in India than any of his Predecessors had done, and he hoped that the aim of his rule would be followed by his Successors.

SIR FREDERICK FITZ-WYGRAM

said, the noble Lord the Secretary of State for India had spoken of the pro- bable necessity of increasing the number of European troops in India. For his own part, he believed the number of European troops in India was fully sufficient for ordinary service. But a war with Russia would render it necessary to increase their Forces in India, and it was desirable that the Secretary of State should have those troops exclusively under the command of the Indian Government. If that increase were made, he hoped it would be treated as a Reserve and kept at home, because a British soldier in India cost at least half as much again as he would cost in England, while at the same time he deteriorated in health and vigour by reason of the climate. On the other hand, he increased in health and strength every year he remained in England; and therefore he thought that everyone who wished to see the Indian Establishment maintained at a less cost would desire that this reserve of men should be kept in England. He was aware that in years gone by it took five or six months to send troops to India round the Capo of Good Hope; but those conditions were totally changed, and troops could be shipped now and landed at the furthest Frontier of India in 30 days, and that was an additional reason for keeping them as long as possible at home and not sending them to a hot climate. As he had said, he believed their Force in India was amply sufficient for ordinary purposes; but he had a strong conviction that they did not make all the use they ought of their Native troops. They offered them no military prizes. His own idea was that all officers under those in supreme command should be Natives. There should be a British Officer in supreme command, and he would give him three assistant officers not in command of wings, but as Assistant Commandants. One of these would probably be at home, recruiting his health, thus leaving three officers with the regiment. All under the rank of Commandant or Assistant Commandant should be Natives. He believed it would be found that, under that system, they would have a class of Native officers who would lead the troops in the best manner possible. Moreover, they would be able to maintain the Army at much less cost than at present, and that would enable them to pay their Native soldiers well. Thus, there were two points to which he desired to draw the attention of the noble Lord the Secretary of State for India—namely, the question as to whether the Reserve of the European Army in India should not be be kept at home; and, secondly, whether they ought not to offer the prizes of military ambition to Native gentlemen, and thereby attract to the standard a class of officers ready to lay down their lives in defence of the Empire.

SIR ROBERT FOWLER (Lord MAYOR)

said, he had, in the first place, to thank the noble Lord the Secretary of State for India for the statesmanlike speech with which he had introduced the Indian Budget. He should not go into any matters of controversy, though he agreed with all the noble Lord had said, but simply allude to one point introduced by the noble Lord at the conclusion of his speech. The noble Lord said that it was his intention during the next Session of Parliament to move for a Committee on Indian Affairs. Whatever might be the opinion of the present occupants of the Benches opposite, he was sure that that statement would be hailed with the greatest satisfaction. Some years ago he had the satisfaction of seconding a Motion to that effect made in the House of Commons by his honoured Friend the late Mr. Fawcett. The Motion was not accepted by the Government of the day in its entirety; but they gave a Committee in a modified form—they gave him a Committee on the Finances of India, which he believed now bore his name. Mr. Fawcett brought forward the argument, which he was glad to hear repeated by the noble Lord, that under the old Constitution of India, when, at the end of every 20 years, the Charter of the East India Company came to be renewed, a Committee, composed of the most eminent Members of the House of Commons, was appointed to consider the whole question of the administration of India, and everything connected with it. He was very glad that the noble Lord was determined to revive that practice, and he thought the course he had taken with regard to it on that occasion would be attended with the very greatest advantage to the people of India generally. He thought also that it would be very advantageous that the Committee should be appointed at the commencement of the new Parliament. They must bear in mind that the Committee would be composed of some of the most eminent Members of the House, and that it would be almost impossible that they could go fully into this great subject, and reach the end of their investigations, in less than two or three Sessions. He had, together with at least one hon. Gentleman at that moment present, been a Member of Mr. Fawcett's Committee; and he would remind hon. Members that that Committee came to a premature end owing to the dissolution of Parliament. It was therefore obviously important that the Committee should sit at the commencement of the next Session. He trusted the noble Lord would bear that in mind in relation to the step he intended to take; and with regard to which he would say, whether or not the noble Lord continued in the Office which he now adorned, that he believed it would be impossible for anyone to resist the appeal he would make for the appointment of a Committee to inquire into the system of government in India. He should like for a moment to refer to the important subject alluded to by the hon. and gallant Member for South Hants (Sir Frederick Fitz-Wygram). That hon. and gallant Gentleman spoke with great authority on military subjects, and all must feel with him that the question as to the Army in India was one which most vitally affected the interests of the Native population in India. One of the things foreseen in connection with the future of India was that, if they were to avoid the difficulties to which the noble Lord had alluded, it would be necessary to strengthen the Native Army and also the European Army of India. Then there were some important questions bearing on the subject which they were more immediately considering that evening—the Revenues of India. Those Revenues very much depended on three sources. First, there was the Land Revenue, and it seemed to him to be so high already that it could not possibly be raised. He should be glad, if the noble Lord, at a future time, found himself in a position to make some reduction in that respect. Nest, there was the Opium Revenue, with regard to which he hoped the noble Lord's attention would be directed to the opinions urged upon the Government of India by Sir William Muir, and which would be found in a Minute written when he was Governor of the North-West Provinces. He had not heard that Sir William Muir had at all changed his view, and consequently he might in this matter appeal to the authority of that very eminent and distinguished man—a man who had not only been a Governor of the North-West Provinces, but a Finance Minister of India, and also for many years a Member of the Indian Council in this country. He hoped the noble Lord would give his earnest consideration to the question. Of course, he know the noble Lord had to be very careful how he treated the finances of India; but he was satisfied that a proposal to get the Revenue derived from opium through some other means would meet with very great favour in this country. There was a strong feeling that by turning themselves into the manufacturers of opium they were placing themselves on a footing with the distillers of alcoholic drinks in this country, and were thereby incurring great responsibility and even culpability. Again, he had a real objection to the Salt Tax, because by it a very heavy impost was placed upon the very poorest of the people. He should be glad if the Government could see their way, if not to repeal the tax entirely, to reduce it considerably. The noble Lord had referred to the Income Tax. He (Sir Robert Fowler) regretted the course which had been adopted in regard to the Income Tax, because it seemed to him that levying a tax upon the incomes of the people was a much more legitimate way of raising Revenue than levying a tax upon such a great necessary of life as salt. He thanked the Committee for permitting him to make these observations, and he thanked the noble Lord for the suggestion—which he hoped the noble Lord would be able to carry out in the next Parliament—that an inquiry should be held into the whole system, of government in India. There was one other part of the speech of the noble Lord to which he listened with great satisfaction. The noble Lord referred to the fact that this Parliament was near its close, and he said, in very forcible and eloquent language, that this Parliament had done nothing for the people of India. He (Sir Robert Fowler) supposed that a truer statement was never made in the House of Commons. Whatever views hon. Members or people outside the House might entertain of the present Parliament, it was impossible for anyone to dispute that this Parliament had grossly neglected the interests of the people of India. He joined the noble Lord in most earnestly hoping that the Parliament which would assemble next February would have a much greater desire to do its duty by the people of India than the Parliament which, was about to separate had had. He agreed with the late Professor Fawcett that every Member of the House of Commons ought to feel that there was no responsibility which weighed heavier upon him as a Member of Parliament than the responsibility he owed to the people of India.

SIR HARRY VERNEY

said, he was very much struck by the large amount of information upon Indian matters which the noble Lord (Lord Randolph Churchill) had been able to obtain during the short time he had held his present position. Much had been said that night by the noble Lord on the subject of the Army of India, and he (Sir Harry Verney) would take the liberty to make a suggestion which, if the noble Lord thought well, he might adopt. They did not admit officers to their European Army unless they were well informed in two European languages. Now, they had a great Eastern Empire, and, therefore, their officers ought to have some acquaintance with Oriental languages. He thought it was of the utmost importance that the noble Lord should make it a matter of examination that officers in India should be well acquainted with at least some one Oriental language. It was well known that they could not govern any people properly unless they were able to speak their language. He had no hesitation in saying that had many of their officers spoken Arabic they would have got on better in Egypt and the Soudan. It ought to be a strictly observed rule that no officer should be appointed to an important position in the Indian Staff Corps, or elsewhere, unless he could speak, colloquially, at least, two languages or dialects. To be able to do so ought to give an officer advantage in obtaining an office. If the noble Lord would make it a sine quâ non that officers in India should be acquainted with Hindustani and some other Oriental language, he would confer great benefit on the Army and also upon the Natives of India. Moreover, he thought the noble Lord should make it a point to bring to this country some of the best of their Indian soldiers. A few years ago so some of the Indian soldiers who fought gallantly with us elsewhere were brought here, and the experience they gained here was certainly beneficial to them, and calculated to promote our interests in India. It would be wise for the noble Lord to bring over here some of the best men of the Indian Army, send them to Aldershot, and if they proved efficient soldiers obtain for them commissions in their English Army. He very much regretted that on this the first occasion on which the noble Lord had introduced the Indian Budget he had thought it right to make an attack upon the Marquess of Ripon's administration in India. No Viceroy ever did so much for the well-being of India as the Marquess of Ripon, and no Viceroy ever proved so popular with the people of India as that Nobleman. All classes of their Indian fellow-subjects were more attached to them now than they ever were before; and that fact was entirely owing to the Marquess of Ripon having on every occasion done all he could to promote the welfare of the people he was sent out to govern. The Marquess of Ripon made it a rule that whatever could be made by the Natives of India should be made by them; that, in fact, they should have every advantage. English firms who had formerly supplied these things, parties interested in India and in England, also shipowners interested in their carriage, all cried out against Lord Ripon, for he ruled India for the Natives, not for the English; and the consequence was that the Native races were deeply attached to him, and gave him every proof of affection that it was in their power to give. He (Sir Harry Verney) wished the noble Lord the Secretary of State for India every success in the task he had set himself.

MR. ONSLOW

said, the right hon. Baronet (Sir Harry Verney), whom they all knew had taken a great interest in Indian affairs for a very long time, had pointed out to the noble Lord the Secretary of State for India the propriety of only appointing and promoting officers in India who had passed through a particular examination. That was exactly the case at the present time. No one could join the Indian Staff Corps unless he had passed certain examinations. There were many officers in India now who had passed the standard in Persian, Arabic, Hindustani, and other Oriental languages, and it was to those men they should have to look in the future. No officer could hope to obtain any advancement in the Indian Army unless he had passed one of those examinations. The hon. Gentleman the Member for Kendal (Mr. Cropper) had referred to the question of the Government of India going to the Hills. He (Mr. Onslow) was one of those who maintained that it was quite right and proper that the Government should go to the Hills in the hot weather. It was all very well formerly for the Government to remain in the plains, when the work of the Viceroy and his Council was comparatively light; but, considering the enormous amount of work which was now entailed on the Viceroy and his Council, it appeared to him (Mr. Onslow) that the Government could not possibly keep their health, or do their work, if they were to remain in the plains during the whole of the year. He was in India when the subject was much discussed; he was for many years connected with the Government of India, and he had been for some years at Simla. The originator of the idea of removing the Government to the Hills in the hot season was Lord Lawrence. As they all knew, Lord Lawrence had been most of his life in the plains of India; but during his Viceroyalty he found the work of government so hard that it was almost impossible to conduct it at Calcutta, and he suggested a migration to Simla. He (Mr. Onslow) was not aware of any miscarriage of government by the removal to Simla in the hot months of the year. He knew that some of the Native papers, and indeed many of the English papers in India, deprecated the idea very much; but his opinion was that the opposition against the Government going to the Hills had been got up chiefly by those connected with the trade of Calcutta and Madras. He held a very strong impression indeed that the government of India could not be conducted now-a-days in a fair and proper way if all the Members of the Government were to remain in the plains. Hon. Members ought not to allow themselves to be deluded by the idea that there was any harm to the Government of India, or to the people of India, by the Viceroy and his Council going up to the Hills. He was perfectly satisfied that the Viceroys could not work anything like as hard as they were required to if they remained in the plains during the whole of the summer months, and he did not know one single instance of any dereliction of duty by the supreme Government on account of this annual migration. His hon. Friend the Lord Mayor (Sir Robert Fowler) had told the Committee that he disapproved of the imposition of the Salt Duty. Primâ facie they all deprecated the tax; it was a tax upon the poorest class of the people. But Indian finance was very different to English finance. They could not impart the principles of English finance into Indian finance. In India the money must be raised; and the question was which was the best way to raise it. He thought that, after all, the Salt Duty was felt very little indeed by the people of India. Of course, hon. Gentlemen who had high notions of philanthrophy might say it was a very wrong tax. But if they were to do away with the Salt and Opium Revenue, and to mitigate the Land Tax, as had been suggested, he asked Gentlemen of common sense how would it be possible to get the money to carry on the government of the country? The hon. Baronet (Sir Robert Fowler) preferred an Income Tax to the Salt Tax. He (Mr. Onslow) had had some experience of the Income Tax in India, and it appeared to him it was utterly impossible to have an Income Tax there similar to that in this country, and for the very reason that they could not trust the Indian officials to collect it. When there was an Income Tax in India the Natives, it was well known, tried to assess persons above or below the proper amount; indeed, it was quite clear that in India an Income Tax was a failure. He was amongst those who did not look very hopefully upon the finance of India. A Committee of the House of Commons suggested last year that there should be an increase in the amount paid for the annual construction of railways in India. That was all very good, in times of peace; but, so far as India was concerned, the present were not peace times. Russia had advanced to an enormous extent, and it was necessary to protect the frontier. The ques- tion was how money should be expended in order that the country might be protected. Everyone was agreed that every Id. that was available ought to be spent in perfecting the defences of the country. The noble Lord the Secretary of State for India had pointed out the necessity of increasing the Army—Native and European. What did that mean? It meant an enormous addition to taxation in India; and how was that addition to be met? Hon. Members might say—"Oh, practice economy." It was all very well to say that. Over and over again he had heard it said—"Let us have economy." He had seen many despatches in which economy was advocated. He had seen Viceroy after Viceroy trying to do all he possibly could to impress upon those with whom he was associated the desirability of practising economy. That was all very right and proper; but, after all, how much could they save by economy? They had now to increase the Native Army and the European Army by some thousands of men; they had to spend an enormous sum of money on fortifications and other defences; and the cost of doing those things would be some millions. Do what they could in India by way of economy, they could only save a few thousands of pounds. It was impossible to meet this increased expenditure by economy in other directions. The Expenditure of India must go on increasing year by year, and it was for the Viceroy to consider how the Expenditure was to be met. He (Mr. Onslow) hoped the noble Lord would not go on year after year, if he continued to hold his present Office—and, judging from the ability with which he had made the Financial Statement, they must all wish he would—borrowing money to meet the Expenditure of India. It was a most vicious system of finance and ought no longer to be practised. Whatever Expenditure it was necessary to incur in India for the ordinary government of the country, India ought to find the Ways and Means. He had had some experience in the House, and as hon. Gentlemen knew, he took a deep interest in everything connected with India. Never, he hoped, would he say one word in a Party way regarding the management of Indian finance, or regarding India generally. Whatever his views might be of the late Vice- royalty of India, he did not want to say publicly one word against the Marquess of Ripon. But he wished to remind hon. Gentlemen opposite what they had said about Lord Lytton. What deprecation was not levelled at Lord Lytton for the way in which he conducted the government of India? Bearing in mind the course hon. Gentlemen took in regard to Lord Lytton, he was surprised they should say, à propos of some strong remarks that had been made about the Marquess of Ripon, that this was the first time in which Party spirit had entered into their discussion respecting the conduct of the Viceroy of India. [Sir HENRY JAMES: On the Indian Budget.] He did not see that it mattered whether it was on the Budget or on any other matter connected with the policy of the government of India. He asserted that no words were too strong for hon. Gentlemen opposite to use against Lord Lytton's Viceroyalty; therefore it was rather hard for them to come forward now and say this was the first time strong words had been used in the House of Commons concerning an Indian Viceroyalty. Well, the noble Lord the Secretary of State for India had alluded to a Committee he hoped to appoint next year to inquire into the system of government in India. He (Mr. Onslow) believed that an inquiry would be very useful indeed; at the present time it was greatly required. It must be borne in mind that the Act for the better government of India was passed in 1858, somewhat in a panic. The days of 1858 were, he hoped, past and gone, and that they would not hear again of an Indian Mutiny. That Act was passed under many adverse circumstances, and it appeared to him that it now required revision. It might be a matter of doubt whether the Act should be revised, and whether the whole system of government in India should be inquired into by a Committee or by a Royal Commission. For his part, he thought the inquiry ought to be made by a Royal Commission empowered to take evidence in India. At the same time, he was quite convinced that an inquiry by a strong Committee of the House would be extremely useful. He trusted that, whatever was done, hon. Members of the future would not cease to take the deepest interest in the affairs of India, because, unless the House of Commons did take an interest in India, and thoroughly sifted for themselves everything connected with the government of that country, he was afraid that that government might devolve upon a few, and all Parliamentary control lapse. In his opinion, it would be a very bad day for India if such a state of things came to pass.

MR. BUCHANAN

said, that considering the late hour (11.0), and the fact that the noble Lord (Lord Randolph Churchill) had by his extraordinary speech taken away from the House the opportunity of quietly and peaceably debating Indian subjects, he should make his remarks very brief. He, like many others, came down to the House to listen to, and possibly to join in, a discussion on Indian affairs and Indian financial questions. He admired, as others must have done, the ability with which the noble Lord described the financial position of India; but he deplored more than he could express the turn—and he desired as a private Member of the House to protest as strongly as he could against it—which the noble Lord gave to his speech, converting the Indian Financial Statement of the year into a Party election speech. In the peroration of his speech the noble Lord called Heaven to witness that he hoped that in the new Parliament more attention would be given in that House to the affairs of India. If the noble Lord's was the sort of attention the affairs of India were to get the less attention they got the better. Amongst the comments upon the noble Lord's accession to Office he observed an extract from a Native Indian newspaper, in which some of the noble Lord's characteristics were described. The Indian Echo wrote of the noble Lord— His bellicosity is notorious, he is an out and out fire-eater, and he does not believe in peace. He (Mr. Buchanan) thought that the extraordinary speech they had that night heard from the noble Lord fully justified the sentiments which that Native newspaper expressed. The noble Lord had, no doubt, displayed considerable energy in everything he undertook, and it would have been well if he had devoted his energy in his Office to securing reforms for the better administration of India. He thought that, by his conduct to-night, the noble Lord belied the force of his own words in his speech at the Tower Hamlets, when he stated that the Government of India ought never to be made a Party question in that House. It was quite impossible, after the speech the noble Lord had delivered, for Indian subjects to remain other than Party questions so long as the noble Lord remained in his present Office. What had the noble Lord clone? Why, he had taken advantage of an opportunity which presented itself to him as Secretary of State to make an unprovoked, an unwarranted, and an uncalled-for attack upon the Marquess of Ripon and the late Government. He had, in fact, turned his Ministerial Statement on the finances of India into an election address. What was it the noble Lord accused the Marquess of Ripon of doing? He (Mr. Buchanan) had taken down the noble Lord's very words. In a kind of parody of the poet Swinburne, the noble Lord had stated that the Marquess of Ripon had been "lulled by the langour of the lotus land," and that no economy had ever been practised by him during all the years of his administration. Well, an answer to that charge had already been made by hon. and right hon. Gentlemen who had spoken before him (Mr. Buchanan) from the Liberal Benches. But if he wanted to give a further answer to the charge, they had it here in the statement the noble Lord had circulated and the speech he himself had made that night. He gave them in this statement, and he had declared to them that night, that the average surplus during the last three years had been £660,000, and that the Marquess of Ripon's Government had expended on the Famine Insurance Fund the sum of £1,500,000 during the last three years. The Marquess of Ripon, then, had spent £1,500,000 on Famine Insurance, and, besides, had had an aver age annual surplus of £660,000. That was the test of the Marquess of Ripon's economy; whereas they might take as a test of the extravagance of the noble Lord's Government, that he was going to swallow up that surplus, to suspend payments to the Famine Insurance Fund, and going to add millions to the burdens of India. The noble Lord had charged the Marquess of Ripon with having spent the money on productive works, instead of on frontier railways and other projects for military defence; but he (Mr. Buchanan) would put it to the Committee whether it was not more for the permanent welfare of India and its inhabitants to spend money in developing the country, on roads and public works, which would tend to the ultimate prosperity and wealth of the country, rather than to waste it on useless military works and railways for military purposes. Then the noble Lord had accused the noble Marquess of having lowered the Salt Duty and reduced the Native Army. Well, the answer to that had been suggested by the noble Lord himself, because, alter having accused the Marquess of Ripon of having lowered the Halt Duty, he had, in a subsequent part of the same speech, thanked him for having done the same thing; and he (Mr. Buchanan) was bound to say that it was to the credit of the Marquess of Ripon, and it would be to the credit of the noble Lord himself, if during his administration he could do anything to reduce the taxation which pressed so heavily on the poorest classes in India. Then the noble Lord had attacked the Marquess of Ripon for admitting the Natives to a certain degree of political power, and had found fault with him for having advanced education and freed the Press; and it had been a matter of great astonishment to him (Mr. Buchanan) when he had heard the Vice President of the Council (Mr. E. Stanhope) justifying the noble Lord's accusation against the Marquess of Ripon. It was an astonishing thing that the right hon. Gentleman—himself a Minister of Education in that House—should think it a matter of reproach to the Marquess of Ripon that he had, during his Viceroyalty, largely increased the expenditure on education in India. He (Mr. Buchanan) knew, of course, that the noble Lord had no liking for the development of a free Press in India. He knew he had no liking for the growth of political influence among the Natives of India, because he had himself denounced those two kinds of development of recent years in India as two of the greatest dangers to their Empire.

THE SECRETARY OF STATE (Lord RANDOLPH CHURCHILL)

The hon. Gentleman is entirely incorrect. I disclaim ever having made any statement to justify that observation.

MR. BUCHANAN

I have the noble Lord's speech with me.

An Hon. Member

Read it.

MR. BUCHANAN

It would be out of Order to read it; the speech was delivered on the 4th of May of the present year. It was a speech in which the noble Lord gave the results of his Indian tour. He said that, though it might be premature in him to express any opinion as to the results of his Indian experiences, still there were four things that he thought it was necessary and right that he should bring before his audience as dangers to the stability of our rule; and of those four things two were the discontent in the Indian Army of a most serious kind and the grievances, some of which he said were well founded, between the Indian Princes and the Calcutta Government.

THE SECRETARY OF STATE (Lord RANDOLPH CHURCHILL)

What are you quoting from?

MR. BUCHANAN

From The Times newspaper of the 5th of May. The noble Lord said that there was discontent of the most serious kind in the Indian Army.

THE CHAIRMAN

The hon. Gentleman will not be in Order in quoting a speech made this Session.

MR. BUCHANAN

said, that he should pass the Report to which he referred over to the noble Lord, if he desired to look at it. At any rate, the noble Lord had given those four points as, in his opinion, salient features of the condition of things in India, the consideration of which had been forced upon him during his tour in that country. The four points were—discontent in the Native Army; grievances which were found to exist between Native Princes and the Calcutta Government; the great development and free comments of the Native Press; and the growth of political intelligence among the Natives. The noble Lord had summed up by saying that those four elements were among the dangers to which our rule was exposed in India. He (Mr. Buchanan) thought he could refresh the memory of some Members of the Committee, without quoting the noble Lord's speech, simply by informing them that it was the speech in which the noble Lord denounced the probable conclusion of peace by the late Government with Russia as "terrible news." ["No, no!"] Yes; the noble Lord had denounced the action of the late Government in that respect in these words, and he had denounced it, too, in the same speech as "a base and cowardly surrender." Well, if he (Mr. Buchanan) might be allowed for once to stoop to use the language of the noble Lord he should say that his speech that night was a base and cowardly attack upon the Marquess of Ripon.

THE CHAIRMAN

The hon. Gentleman is not entitled to use language of that kind.

MR. BUCHANAN

If in quoting the language of the noble Lord I find myself using un-Parliamentary phrases I withdraw.

THE CHAIRMAN

If the hon. Gentleman repeats such language I shall insist upon his resuming his seat.

MR. BUCHANAN

said, he withdrew the expression. He would only quote one other statement of the noble Lord, and that he was entitled to quote, as the noble Lord had made it that night. He had summed up his attack upon the Marquess of Ripon by saying that he disowned and repudiated the policy of the late Viceroy. Those were the identical words the noble Lord used the other night in regard to Earl Spencer—he had disowned and repudiated his policy. So they found that one of the leading principles of Conservative policy at that moment was ingratitude in disowning public servants who had discharged their public duty faithfully according to the commissions which had been given to them. The noble Lord in the course of his speech—and he (Mr. Buchanan) hardly thought it worth while to detain the Committee, however, by going into it at that hour—had gone on to propose, at the end of his speech, that they should have a Commission of Inquiry into the condition of the Government of India. But the noble Lord forebore to tell them what the scope of that inquiry was to be. He should like to ask the noble Lord whether part of the scope of that inquiry was to be an examination into, and arraignment of, the Marquess of Ripon's Native policy. He was sure the noble Lord did not wish to examine into that; but if he did, he would put it to him that as he himself had been in India since that policy was begun he must know very well that, in the first place, it had been successful, and that, in the second place, it had won the enthusiastic approval of all the people of India. ["No, no!"] Yes; he maintained that that was the case, and, in the third place, it was the only just and prudent policy which this country could pursue. And more than that, if the noble Lord attempted, or wished to attempt, by this Commission or Committee which he was going to appoint, to arraign the policy of the Marquess of Ripon towards the Natives, he would be really arraigning the policy of the Queen's Proclamation of 1859, on which all the liberties of Her Majesty's Native subjects depended. He had felt extremely astonished when he had heard the noble Lord say that he had the full consent of his Colleagues in the appointment of this Committee or Commission. He had felt particularly astonished to hear that he had the assent of the right hon. Member for Mid Lincolnshire (Mr. E. Stanhope). That right hon. Gentleman was Undersecretary for India at the time when a Motion was brought forward towards the close of the last Parliament on this subject by the late Mr. Faweett, in the spring of 1879. The Motion was opposed by the Government then, and all hon. Members on the Front Ministerial Bench had voted against it, the right hon. Gentleman the Vice President of the Council (Mr. E. Stanhope) included; and therefore it appeared that the noble Lord had succeeded in turning over all his Colleagues to his own view on this subject to such an extent that they were now prepared to adopt a policy which a few years ago they condemned. The noble Lord had stated—and so far as he (Mr. Buchanan) remembered he had stated it in public before—that the justification for inaugurating a Committee of Inquiry into the affairs of India was that the Indian was a despotic Government, and that it would be better to have the free air of an inquiry in the House of Commons upon it. The Government of India no doubt was a despotism but it was a despotism defined and restricted by law, and he thought that a control over the affairs of the Natives such as they exercised in India was not likely to be beneficially modified and improved by inquiries from time to time by Parliament or some political authority. He thought they should rather take care that their despotism and their Government in India was strictly guarded in its execution by definite, well-considered, and prudent laws, and that they also ought to take care that those who were charged with the administration of that system were carefully chosen and selected, and had to look for the success of their career to the prosperity and welfare of the people committed to their charge. Of course, they all knew perfectly well that complaints had often been made against the Government of India; the noble Lord had in other places told them something about those complaints. The noble Lord had told them that the Government of India was an enormous legislative machine; that it had too great rigidity, and a want of sympathy with the people of India; and in a great measure, undoubtedly, that was the case. But it seemed to him that if they were to endeavour in any way to remedy that state of things—he did not say they could wholly do so, because he believed that some rigidity and want of sympathy was indispensable to anything like the government they now exorcised over India—but if they were to attempt to remedy it, he believed it would be much better for them to do it by careful legislation for India, and by careful administration there than by setting up in the House of Commons Committees or Commissions to inquire in to a great variety of subjects. There was just one word more he should like to say upon this subject. There was, no doubt, a tendency in a Government such as that of India, composed, as Lord Lytton had estimated it, of 1,000,000 officials—there was, no doubt, a tendency among so many officials of lower grade to exercise petty tyranny over those who were subjected to them, and no doubt it was difficult to have perfect articulation to the extremities of such an elaborate machine. But he did not see how a House of Commons' Committee or a Commission could remedy a grievance of that kind. If the Committee was, as he suspected it would be, a Committee of the House of Commons, it would have to sit in this country, and in such an event it would be useless for the purpose the noble Lord appointed it. If, on the other hand, the noble Lord proposed sending out a Commission, it seemed to him that that work would be practically interminable. There was one direction in which he should have thought that the noble Lord might have exercised his energies before proceeding to ap- point another Commission. He should have thought the noble Lord might have devoted his attention to the work of seeing that the recommendations of Committees and Commissions already appointed were carried out. For instance, there had been a Committee which had sat on Indian finance for a number of years, there had boon a Committee on Public Works, there had been a Commission such as that the noble Lord had wanted to institute—namely, a Famine Commission, which had inquired into the social and economical condition of India. The recommendations of the Finance Committee had not been carried out, and far from all of those of the Famine Commission had been carried out. And then there had been another of those Commissions, the recommendations of which were now lying still-born in the India Office—namely, the Simla Army Commission, which had been alluded to that night. The noble Lord had spoken of economy in regard to the Indian Army; but he (Mr. Buchanan) would point out that the Simla Army Commission did not merely recommend the reduction of the Forces of India, but several reforms which would tend to economy and efficiency. Those recommendations, however, had never been carried out. He could have enlarged further upon those points had it not been for the cause he had already referred to, and just before sitting down he would repeat once more his deep regret at what had taken place that night, and his belief that very disastrous consequences would ensue from the present conduct of Indian affairs in that House.

THE SECRETARY OF STATE (Lord RANDOLPH CHURCHILL)

, in reply, said, he hoped that when the defence of the Marquess of Ripon's policy in India, which they had that night been given to understand would shortly be forthcoming, was attempted, it would be undertaken in a more coherent and more impressive manner than that which had been exhibited by the hon. Gentleman who had just sat down. A greater farrago of inaccurate assertion, inaccurate quotations, and inaccurate representations of other people's opinions than that in the hon. Member's speech, it had never been his misfortune to hear; and, for his part, he entirely declined to take up the time of the House of Commons, at that late hour of the evening, in attempting what he knew beforehand would be the utterly impossible task of making the hon. Gentleman understand the real opinions which he (Lord Randolph Churchill) had expressed, and the facts concerning Indian affairs which he had placed before the Committee. Turning from the observations of the hon. Member to the remarks of other hon. Members who, differing from the hon. Member for Edinburgh, had confined their remarks to the question before the Committee, he would express to them his sincere acknowledgments for the manner in which they had received the Statement he had been allowed to make. He could assure them, whether as regarded their criticisms of those parts of his Statement with which they disagreed, or their suggestions of what they would wish to see carried out in India or embodied in Indian policy, that they should have his most earnest attention. He could assure those hon. Members that he received their criticisms and suggestions in a most respectful manner. Before allowing the debate to come to a close, he would wish to make one remark in answer to the observations which had fallen from the noble Marquess the late Secretary of State for India (the Marquess of Hartington). The noble Marquess had charged him with having adopted an unusual course in making a Party attack upon the late viceroy of India on the Indian Budget. That was, to some extent, a misrepresentation of the course he had pursued. No doubt, he had adopted an unusual course in criticizing as he had done the policy of the late Government; but the Committee must remember that he had to deal with unusual times. It was absolutely necessary, in dealing with unusual times, that he should to some extent depart from the usual course which had been adopted on former occasions; and nothing could show that more clearly than the speech which had fallen from the hon. Member who had just sat down. It was absolutely necessary that he should show the Committee and the public who were the authors of the heavy expenditure and the heavy deficit he had referred to, and which they had to meet. He thought it was most fortunate that he had been able to do that, because they had had an admirable specimen of the line adopted by Radical Members in the accusation made against him by the hon. Member for Edinburgh of being responsible for a deficit of £15,000,000 in the Indian Revenue, and for adding to the Indian Army an additional expenditure of £2,000,000 a year. It was in order to free the present Government from such charges that he knew would be recklessly and widely made that he had deliberately adopted the course he did. He once warned the Party opposite that the doctrine of legacy might be used with fatal effects against themselves. Nothing was hurled over and over again more virulently against the Tory Party than the charge that all the difficulties and perplexities that the late Government had had to encounter, and which compassed them about, were a legacy from their Predecessors. As far as the present Government was concerned with regard to India, he had been determined that on this question it should be impossible for hon. Members to say that the present financial imbroglio was not a legacy from the late Tories to the Liberals, for, as a matter of fact, it was exactly the reverse. There was only one other point in the speech of the noble Marquess on which he would attempt to make any remark. The noble Marquess had complained that he had given him no notice of the remarks that he intended to make. He was not aware that when a Minister was going to make his Statement—his annual Statement—in the House of Commons, it was in accordance with precedents that he should give his opponents, or anybody else, notice of the exact line of observation he intended to pursue. He had never heard of such a course being adopted. The noble Marquess must know the circumstances of Indian finance, and he must have known, before he left Office, that those circumstances were of so peculiar a kind that they would attract the most direct, and probably severe criticism possible—the severe criticism of anyone who commented upon them from an opponent's point of view. The noble Marquess said he was not prepared for such an attack. The noble Marquess had only shown in his conduct of the debate that night the extraordinary amount of unpreparedness which was one of the main features of the policy of the late Government. He could not understand how anyone, knowing the character of the finances of India for the year, could suppose it would be possible for him to explain that financial position to the House of Commons without going on to explain what he considered to be the cause of that financial position. On examination he did not think that the noble Marquess would persist in his charge against him of having been guilty of a breach of House of Commons' decorum in taking the course he had done. He did not think the charge that he had acted unusually and indecorously would, on examination, be found a serious charge. With regard to the financial policy of the Marquess of Ripon he did not wish to enter into it again, but would only say that, if it were so successful and so admirable a policy, how was it it happened that in 1884–5 the Revised Estimates showed a deficit of £710,000? How was it that since the days of the Earl of Mayo no single year's account showed a deficit of Indian finance except deficits attributable either to war or famine, while the Marquess of Ripon, after being Viceroy of India for four years, during which time there was no war and no famine to deal with, enjoyed the proud distinction of being the first Viceroy who had produced a most remarkable deficit which he was totally unable to attribute to any other cause except his own financial policy? He would leave that point to be dealt with by the Marquess of Ripon and his friends when they made their defence. At that hour of the night, and knowing that there was much important Business to occupy the attention of the House, he would not trouble the Committee further, but would thank them, generally, for the manner in which they had allowed him to make his Statement, and for the generous way in which they had commented upon it.

Question put, and agreed to.

Resolved, That it appears, by the Accounts laid before this House, that the Total Revenue of India for the year ending the 31st day of March 1884 was £71,727,421, including £13,240,507 received from Productive Public Works; that the Total Expenditure in India and in England was £70,339,925, including £12,032,754 spent on Productive Public Works (Revenue Account); that there was an excess of Revenue over Expenditure in that year of £1,387,490; and that the Capital Expenditure on Productive Public Works in the same year was £3,992,029, including a Charge of £566,261 incurred in the redemption of previously existing liabilities.

Resolution to be reported To-morrow.