EAST INDIA REVENUE ACCOUNTS.

HC Deb 20 June 1892 vol 5 cc1581-640

COMMITTEE.

Order for Committee read.

Motion made, and Question proposed, "That Mr. Speaker do now leave the Chair."

* SIR ROPER LETHBRIDGE (Kensington, N.)

I hope, Sir, that the interest which is felt by this House and by the country at large in the affairs of our greatest Dependency will not be measured in the opinion of our fellow-subjects therein either by the number of Members who are present or are likely to be present during this Debate, or by the period of the Session at which the Indian Budget is now usually introduced. In every Session of the Parliament that is now drawing to a close, I, and many other Members interested in Indian affairs, have protested against the postponement of this Debate until such a late period. It must, however, be admitted that there is some reason for this Debate being fixed so near the end of the present Session, because the circumstances of this year are altogether exceptional. It will be remembered that the wisdom of this very House, now nearing its Dissolution, ordained only last year a return to our ancient procedure, which allows a general discussion on Indian affairs on the Motion that you, Mr. Speaker, should leave the Chair. Since that alteration in our procedure I have visited nearly every province of the Indian Empire, and I can assure hon. Members that the change has given the liveliest satisfaction to every section of the Indian community—native as well as European official as well as non-official—and it is regarded as a proof that there is a determination on the part of the House of Commons to exercise at least once a year some controlling influence over the affairs of India. Sir, I desire on this occasion to take advantage of this alteration in our procedure to submit to this House a statement, as brief as I can make it, of some of the grievances of the Indian Uncovenanted Civil Servants in that country. In bringing this subject forward it is especially desired by every one, I think, for whom I speak to-night that it should be made quite clear that it is in no spirit of hostility to the Indian Government, still less with a desire to throw the blame on any particular persons or authorities, either here or in India. The grievances to which I allude have grown up during a very long number of years. And, Sir, these Uncovenanted Civil Servants, for whom I speak, are fully aware that when I was in Calcutta last winter I received from Lord Lansdowne, the present Viceroy, a most patient hearing of every particular connected with their grievances, and the Service, therefore, are assured that they will find in Lord Lansdowne a most sympathetic judge of the merits of their case. The Uncovenanted Civil Servants are also aware that they owe to the Secretary of State for India, through the motion of my right hon. Friend the present Financial Secretary to the Treasury, who was then Under Secretary of State for India, the Select Committee of this House, to whose Report I wish to draw attention, and from whose inquiries they have obtained the only redress of their grievances that they have ever yet received. The Uncovenanted Civil Service feel that, from the Report of that Select Committee, if carried out in a spirit of reasonable liberality, they can obtain all that is necessary to content them. Sir, they are quite aware that the Secretary of State for India regards himself—and very rightly so—the natural guardian of the Indian taxpayers. My hon. Friend the Under Secretary of State for India, to whom I appeal to give this statement his favourable consideration, will doubtless tell us that the taxpayers must be considered first of all. Sir, those for whom I speak entirely agree with and support that position, but they desire to point out that the alterations they ask for would certainly not be very costly. Moreover, what they demand from the Government of India is not generosity but justice, and they maintain that native public opinion in India, equally with English public opinion there and here, will commend the resolution that renders that justice. I shall not attempt to go into any detail to-night with regard to these grievances, because various detailed statements in regard to them have already been submitted to Her Majesty's Government, to His Excellency the Viceroy, and to hon. Members of this House. But I do desire to be permitted to advert very briefly to one or two points of the Report of the Select Committee that sat in 1890, and to the evidence upon which that Report was framed, and to the steps that have subsequently been taken by the Government of India thereupon. The inquiry before that Select Committee was distinctly and avowedly of the nature of an arbitration, and that it was so accepted by the Secretary of State is shown by the Despatch of 28th August, 1890, paragraph 4, which says:— Your Excellency … preferred that the grievances of the officers should be investigated by a Select Committee of the House of Commons; and in compliance with your opinion, Her Majesty's Government consented to its nomination. Although, therefore, the recommendation of the Committee would impose on the revenues of India a heavier charge than I had intended, I do not think that it will be right to hesitate in its acceptance. And I, Sir, do not think it would be right for the Secretary of State for India to object to the ruling of this Select Committee. That disposes of the argument — an argument which I feel sure no hon. Member will countenance—that the recommendations of the Select Committee will be shelved by the Administration of India, and may be disregarded. I do not think that argument will be used, but I desire to anticipate it by quoting the language of the Secretary of State himself. Now, the reference that was agreed upon between the India Office and those who represented the Uncovenanted Civil Servants is given by the Secretary of State for India in the same Despatch, and included an inquiry into— The alleged grievances of the Uncovenanted Civil Servants of India arising from the change in the relative value of gold and silver money, and their leave and pension rules. It will be therefore seen that nothing relating to the leave and pension rules of the Indian Uncovenanted Service was outside the scope of this reference. The Report of the Select Committee was couched in the broadest and most general—and I may add liberal—terms. It practically declared that the alleged grievances, or some of them, were established, and that reform and redress were required. In one particular case, that of the "one-and-ninepenny rupee," it specified the exact amount of the redress that should be accorded. But in addition to that I find it recommends to the consideration of the Indian Government and the Secretary of State for India these points:—First, a general re-adjustment of the pensions; secondly, a "uniform scheme" for pensions and furloughs—to do away, as I take it, with the invidious differences of treatment that have caused so much heartburning between the various Departments in India; and, thirdly, the Committee asked the consideration of the Secretary of State in Council to "the obstacles in taking furlough arising from the insufficiency of the present furlough pay," and they added "that some period of furlough should in all cases count as service for pension." There was one other recommendation, on a minute and infinitesimal point—namely, that "pensionable service should commence at the ago of twenty," but as that has been granted by the Secretary of State, and as it is a matter of very small moment, I need not dwell upon it. But how have these further recommendations been dealt with by the Government of India? All the recommendations were practically put aside; every detail that was left to the Government of India was put aside, and the only concessions made were simply the two points on which the Committee gave definite and specific instructions. I do not wish, and those for whom I am speaking do not wish, to minimise the value of the two concessions that have been made—they are concessions of considerable importance; but it should be remembered that what they did ask is that all payments for pensions, sick leave, or furlough allowances should be paid at the rate of 2s. to the rupee. They pointed out that many of the officers possess this by legal right, because they happened to have from the Secretary of State a written agreement, and where they have this litera scripta it is impossible for anyone to go behind it. The latter, more or less universally, get the 2s. payment; the Government is bound to grant it. It was legally decided that certain officers were under the wording of their contract entitled to the 2s. in payment of their furlough allowances, and the very same words which made this legal claim are used on the contracts with respect to pensions and leave allowances. The Select Committee went very fully into this point, and took the evidence of everyone who could speak with any authority on the matter. Not only did they take the evidence of the officers, but they had a statement from the right hon. Gentleman who was then Under Secretary for India and was the Chairman of the Select Committee (Sir John Gorst), and they also heard the evidence of Mr. Waterfield, the able Secretary of the India Office. They ultimately said, "We advise a compromise. We do not advise that the full sum of 2s. should be given in pensions, but that a sum of 1s. 9d. should be given." That compromise, so far as pensions were concerned, was loyally accepted, so far as I know, by every officer throughout the Service. They said, "We cannot expect to get everything we had hoped for, and we will accept 1s. 9d." But they expected that something of the same kind would be done in the matter of furlough allowances. This was one concession out of a large number. I now come to another one, which I believe it was the intention of the Select Committee and of the Government to grant, but owing to some extraordinary mistake it has not been granted. I refer to the reduction of the term of pensionable service—a service that is compulsory on these officers in that terrible climate—from thirty years to twenty-five, I will, with the permission of the House, quote one or two statements made by officers to the Select Committee. I find from the Report of that Committee that many witnesses declared that the attempt to put in a service of thirty years "imperilled the health and sometimes the lives" of many officers. Mr. Hynes said— A great many of us never live to complete thirty years, and die in the country. Mr. Carnac, one of the highest officers in the Financial Department in India, said— As an officer of the Financial Department I can say safely that very few non-domiciled Europeans ever live to take their thirty years' superannuation pension. They either die or they are sent home on invalid pensions; in fact they do not get out of India until their health is broken down. I will not quote the evidence of any more officers, though a number of them gave evidence to the same effect. But what did Mr. Waterfield, speaking for the India Office, say? I will take three extracts from the Report— (Question 2,230)—Has not the Government of India repeatedly represented to the Secretary of State that a service of thirty years in the Indian climate is too great a strain upon a European? Mr. Waterfield, for the India Office: Yes. (Question 2,303) — Has it not come repeatedly under your observation that officers have not been able to afford to take furlough on account of leave not counting towards pension; it must have done so, must it not? Mr. Waterfield: I have no doubt it is so. (Question 2.307)—Did they [the Furlough Committee of the Government of India] not suggest that of the periods qualifying for pension one-tenth should be spent on furlough?

Mr. Waterfield

Yes."

The result was that the Select Committee of this House recommended first of all the general readjustment of pensions, which would allow absence on furlough to count as service for pension, a readjustment in which no distinction should be made in furlough and pension rides between Europeans and natives, and therefore of course none between the various Departments. I believe, and my hon. Friend (Mr. Curzon) will correct me if I am wrong, that the Government of India intended to grant this most reasonable and most moderate concession, and to cut down this inordinate term of service from thirty years to the more reasonable term of twenty-five years. It seems to me clear that the Government of India itself contemplated this reduction, for we have their communication of the 17th December, 1890, to the Secretary of State, who had proposed, and the Indian Government had accepted, a concession of considerable value. That concession was that one year's leave with allowances in fifteen years' service, and two years in twenty-five years' service, shall be allowed to count as service for pension, provided that such leave is taken out of India. There is not one word in these orders about thirty years' service, and yet it is a fact that these unfortunate men have to serve for thirty years in India, except for the two years they may take on furlough at home. But there is another subject which is of even greater importance to the uncovenanted officers—I refer to the claim for improved furlough allowances all along the line. They ask for a levelling-up of the rules as to amount of furlough permissible, to the standard of those enjoyed by the most favoured branches of the Public Works and Telegraph Departments. A minimum furlough allowance, for the benefit of the least highly paid officers; and more liberal furlough pay, in sterling. I will here again quote one or two statements given in evidence before the Select Committee. Practically every witness examined of those on active service bitterly complained of the present state of furlough rules, and said it is virtually impossible to take that leave which is absolutely necessary for every European living in India, whether it be for the sake of body or mind. I will quote one answer of Mr. de Brath, a gentleman of considerable position in the Service. He said— In the first furlough I took, my leave allowances after six years' service were actually insufficient to pay my mere passage out and home. That means to say that the furlough allowances are insufficient to pay a man's passage out and home, to say nothing of the necessary expenses of his wife and family. But the real complaint goes far beyond that. Mr. Carnac on the same subject says— The rules do not give us enough leave to keep our health. Mr. Hutchinson, a gentleman who holds a position of some importance and who is well known to some Members of this House, also gave evidence, and he is reported to have said— The result in my own personal case is that I have had eighteen years' actual Indian service, and have not been able to take a single day furlough."—"Because of the low rate of, furlough pay to which you are entitled?"—"Yes.

Mr. Davidson, another well-known officer, said

— I complain that I have been kept out in India a number of years, because I could not afford to come home. Every member of the Service who is now on active service, and was examined before the Select Committee, gave evidence of this character, and at last the Chairman of the Committee, who is now the Secretary to the Treasury (Sir John Gorst), when the question kept cropping up, and when witnesses persisted in giving evidence of the intolerable hardships of these absurd furlough rules, said—and I should like the House to listen very carefully to his words— I think you need hardly give evidence of that kind to the Committee; it is quite clear that if the furlough pay is se bad, men will not take leave. I would also ask attention to what Mr. Waterfield, the Financial Secretary to the India Office, said on the same subject. In answer to Question 2,305 he is reported to have said that— The Furlough Committee of the Government of India of 1868 had reported that 'it was for the benefit of the Public Service that officers, especially Europeans, should be encouraged to take a moderate amount of leave,' and that 'the present rule is strongly prohibitive of their doing so.' These statements were surely enough to make the whole of the Service feel certain that they would obtain that consideration to which they thought they were entitled; and when the Report of the Select Committee appeared it recommended to the consideration of the Secretary of State for India in the strongest terms that the obstacles to taking furlough arose from the insufficiency of the present furlough pay, and the Committee strongly recommended the matter to the consideration of the Secretary of State. I think this House ought to give an ear to the representations of their fellow-countrymen, who, in one of the most fearful climates in the world, have suffered for so many years under this system. I hope the House will give ear to their representations, and I do appeal most strongly to the Under Secretary to utter at least one word which will give encouragement to our Civil servants on this matter. There is one other point which may seem a small matter, but it is of considerable importance to a large number of those who are at the head of the Service. It is a point, moreover, in which the honour and good faith of the British Government is involved, because many of the officers were led to expect that their pension would be £500 a year, and not merely five thousand rupees. The difference is small; it is only something like £80 a year, or a little more. But I gather from a large number of these officers with whom I have spoken that it is a matter of the greatest importance to many of them who have large families to maintain and to start in life; and that whether they shall come home on a little more than £400 a year or £500 means, I will not say whether they shall live in poverty or comfort; but it does mean whether they shall be able to place their children properly or the reverse. I will again ask the permission of the House to quote from the Report of the Select Committee:— Mr. Rowe's evidence, Questions 635–653:—"£500 I was told I should receive, and £500 I expected to get.

Mr. Hyne's evidence, Question 242

— I was certainly under the impression that when I earned the maximum pension, I should get £500, and not £350 or £354, of whatever the rate [of exchange for Rs. 5,000] maybe. The £350 to which Mr. Hynes referred was the ordinary market rate of exchange, but the concession that has already been made has transformed that £350 into something a little over £400. What I now ask is that full justice should be done, and I ask that, because these men were evidently led to believe that their pension would be £500, and would not be dependent on the value of the rupee. It is not denied that the full sum was contemplated by the India Office, and it is clear from the evidence of Mr. Waterfield, the one gentleman in England who is absolutely acquainted with all the details of this subject, that it was contemplated. Here is what he said— (Question 2.215): In fact, we may take it that, up to 1871, neither party [neither Government nor officers] contemplated the fall in exchange which has taken place?

Mr. Waterfield (for the India Office)

Certainly. (Question 2,216): And that, if the £500 were paid, it would be no more than the people at that time contemplated?

Mr. Waterfield

That, I have no doubt, is correct. It is what was contemplated."

That admission was honourably and cheerfully made, and I am persuaded that the Government of India will not further resist such a just claim; and with that I will leave the question of the grievances of the uncovenanted Civil Servants of India. I should like now to advert to another matter arising mainly out of my recent travels in India, where I have visited every part of the country, and have endeavoured to make myself acquainted with the condition of affairs. There was, as the House is aware, a threatened scarcity which has not yet been altogether averted; but the last reports are that the monsoon has broken on the West Coast and over the whole of the South of India, and to some extent over Bengal, and that the grave danger of a terrible famine is by God's mercy over for the present year. I have visited every part of the famine dis- tricts, and I say that the very greatest credit is due to the administrative officers there for the precautions they have taken. I have seen, in districts which this House knows are the worst districts for health in all India—I have seen the Government officers under the burning sun carefully investigating the circumstances of all cases, and providing for any possible development of the famine. I have seen them at this work day by day, wanting only a word of approval from those at home, and I think this House will not be slow to speak that word. I think every credit should be given to the heads of the Government for the loyal support they have given to their administrative officers both in Bombay and Madras—both by Lord Harris and by Lord Wenlock—for the energy and foresight they have displayed, and for the loyal assistance they have given to the district officers. Their wisdom and care has been rewarded; but I fear that in Behar, the upper part of the great Province of Bengal, once so ably administered by the hon. Baronet (Sir R. Temple), the danger of famine is not yet over. The rains have not yet set in, as we hoped, and I must say that I do not think that the action of the Government there is to be applauded to the same extent as in Bombay and Madras. The Government of Bengal—actuated, I am sure, by the best motives, and desiring mainly to increase the revenue from taxation of land, and thereby, of course, to lighten the burdens of the people—have determined, notwithstanding the scarcity that has prevailed and the danger that still exists of famine, to press on the Cadastral Survey of Bengal, from which they hope to obtain a larger revenue from the land. I have talked on this subject with almost every person in Calcutta who is well qualified to form an opinion, and everyone expresses dissent from the action of the Government of Bengal. There is no doubt that this measure in its execution will produce terrible extortion and terrible oppression, because it must be largely carried on by men who are foreign to the country—more foreign than we are ourselves. It will, I fear, produce endless litigation, and will bring about bitter friction between landlord and tenant. I hope the Government will suggest to the Government of Bengal that, at any rate for the present, considering the scarcity and distress, they should postpone this measure. I can assure the Government from what I hear that this measure will be resisted with the utmost determination not only by the Zemindars, not only by the landlords and the planters, not only by the merchants and bankers of Calcutta, but also by the ryots and the occupying tenants throughout the whole of the province. I hope the Government will see their way to offer some suggestion to the Government of Bengal in this respect. There is one other point on which I should like to say a few words. I spent a considerable portion of last winter in the feudatory estates of Hyderabad and Mysore, and I had also the pleasure of meeting that distinguished Prince who has now come to England, His Highness the Maharajah Gaekwar of Baroda. I hope the visit of that illustrious Prince to this country will be taken advantage of by the Government to make some definite advance in the liberality of the policy with which they will deal with the feudatory States. I wish to bear my testimony, especially to the state of affairs in Mysore. I travelled through that province into its remotest districts, and I can assure the House that the administration of that province and the care with which the interests of the people are looked after will compare not unfavourably with the administration in the best portions of our own territory. The same thing holds good in Baroda and Hyderabad. The concession made in regard to the rendition of the Kingdom of Mysore to His Highness the Maharajah some years ago has turned out a most marvellous success; it has shown us how native statesmen and politicians, possessing fully the sympathy of those whom they rule, and possessing also the enlightenment and knowledge which Western education has given them, are as well qualified as any people in the world to administer Native States in India. I would say that that precedent—which also was followed when the fort of Gwalior was restored to the Maharajah Scindia of Gwalior, which created a favourable impression throughout India—might enable us to carry out some similar recognition with regard to the rendition of the Berars to His Highness the Nizam of the Deccan, to which we have long been pledged. I have travelled through the famine districts of Hyderabad, and I must say that the famine administration was as merciful, as careful, and as sufficient as either in Mysore or British territory. That is a fact upon which those interested in India may fairly congratulate the administrators of India. They may fairly congratulate our fellow-countrymen in India also, who have raised up such a class of statesmen amongst the natives of India as those to whom I have been referring. I hope the present opportunity of the visit of the Maharajah Gaekwar may be taken to make some advance, and I am quite sure in doing that the Government will not only be benefiting the people of the States concerned, but conferring a lasting benefit on the Empire. I thank the House for its patient hearing, and express a respectful hope that my remarks, especially on the grievances of the uncovenanted civilians, may come home to the mind of my hon. Friend, who so ably fills the position of Under Secretary of State for India, and that they may elicit from him some favourable statement with regard to the intentions of the Government which will introduce into official life in India a joy and content to which it has long been a stranger.

*(6.5.) THE UNDER SECRETARY OF STATE FOR INDIA (Mr. CURZON,) Lancashire, Southport

I confess, Sir, I think it is somewhat unfortunate that the practice of raising a general discussion on the Motion that you do leave the Chair, to which we reverted last year, should be made the occasion for the delivery of speeches on a great variety of subjects which, in my opinion, would be more properly raised after the Budget has been introduced.

SIR ROPER LETHBRIDGE

We are not allowed to do it afterwards.

* MR. CURZON

Debates on one particular subject may more appropriately be raised, as last year. I shall, therefore, now confine myself to the case of the Uncovenanted Service, which my hon. Friend dealt with in the opening parts of his speech. I must acknowledge the clearness and the sympathetic tone of that speech, and I am also indebted to my hon. Friend for the courtesy which induced him to place before me a tabulated statement of the grievances of his clients on this occasion and of the arguments on which they rely. I have endeavoured to master the details of what is, no doubt a very complicated subject; and, if I am compelled in many particulars to take up an attitude which is hostile to the claims of the officers whom my hon.. Friend so ably represents, I am sure he will believe me when I say that it arises from no want of sympathy on my part or on the part of the Secretary of State with that most distinguished body of public servants. Still less do I desire to shirk any one of the points which he has put before the House. I propose to argue the case point by point, and I think I shall succeed in showing the House that some of what my hon Friend conceives to be the strongest points in his case are in reality based on a misinterpretation or misreading of the Report of the Select Committee, or of the conduct of the Government, which it will be easy to expose. Broadly speaking, my hon. Friend attacks the Secretary of State and the Government of India for having failed to carry out the instructions, or for having ignored the recommendations, of the Select Committee which sat two years ago. To-night he has developed that charge with some moderation; but I am in the fortunate position of having read his speeches elsewhere, and in a less temperate atmosphere than the House of Commons, where he has used language of a more violent character, and has spoken of the delinquent officials expiating their offences in the Clock Tower of this House. With regard to this House, however, it is unnecessary for the House to go further than the Report of the Select Committee, and I am only concerned to defend the action of the Government since that Committee was appointed, and to show how far it is reasonable or unreasonable, not that old grievances should previously have existed or that some of them should still continue to exist—for, after all, this House is not a Court of Appeal to revise the recommendations of the Select Committee—but how far it is just and fair that new grievances should be described as arising from the action taken by the Government on the Report of that Committee. The points of the case I will take one by one, as stated by my hon. Friend. The first is the fixing of a minimum rate of exchange for payment of pensions. The Committee opened their Report with an expression of opinion— That the unforeseen change in the relative value of gold and silver money affords equitable grounds for the re-adjustment of the pensions of Uncovenanted Civil Servants. They made that expression of opinion the justification for their two first resolutions—namely, that a minimum rate of exchange for the payment of pensions should be fixed by the Government, and that that minimum rate should be one shilling and ninepence per rupee. This was the precise and definite recommendation of the Committee, and as such it was accepted by the Secretary of State, though a minimum of one and eightpence had formerly been suggested by him. But it still appears that there are a number of uncovenanted officers who are disappointed at not getting the full two shillings, and my hon. Friend has argued that there are some cases in which the Government either ought to have given or should now give the two shillings. That means that this recommendation, which was discussed at the greatest possible length in the Committee, and decided deliberately—

SIR ROPER LETHBRIDGE

I should like to explain. I do not mean in the slightest degree to go behind the compromise of 1s. 9d. for pensions paid in England. That was accepted loyally by every member of the Service. The remarks to which my hon. Friend refers simply pointed out what had been the claims of the Service before that compromise was arrived at. It was with regard to furlough I was speaking.

* MR. CURZON

If the claim made by my hon. Friend is antecedent to the Report of the Committee and no longer exists, I can leave the point. Undoubtedly, from certain remarks of his alluding to certain officers who were in exceptional circumstances, I drew the inference that he claims on behalf of the others that similar favourable terms as regards pensions, as well as furlough, should be extended to the general body of servants. I should like to give the House some idea of the extent to which this fixed rate of exchange has benefited the Uncovenanted Service in India, and the extent of the charges which have, in consequence, been laid upon the Government. At the date of the Report of the Select Committee the rate for bills was 1s. 7¼d.; at the present time it is 1s. 3¾d., which is itself some indication of the extent to which the Service has benefited by the fixing of the minimum rate of 1s. 9d. for pensions. But I have other figures more interesting still. In 1889–90, which was the year before the adoption of this part of the Committee's Report, the amount of pensions paid to uncovenanted officers in England was about £90,000; in consequence of this concession that sum rose in the succeeding year by no less than £30,000, and in the following year by £22,000, in all a rise of £52,000 sterling in two years.

SIR ROPER LETHBRIDGE

That was not altogether due to the change.

* MR. CURZON

If the hon. Member will allow me, I will explain. The actual increase on pensions paid in England was £52,000 sterling in two years, while the charge entailed upon the Government of India is no less than Rx.75,000, or an increase of nearly fifty-eight per cent. in two years. The hon. Member says, Is this due wholly or mainly to the payment of pensions at a fixed rate? It is undoubtedly mainly due to the direct payment of pensions at one shilling and ninepence the rupee, and the only other cause to which I conceive it can be secondarily due is the fact that many of those officers who previously remained in India have been induced by this concession to come over to England and receive their pensions here at the fixed rate of exchange. Apart from these two causes I know of no other cause which can account for this great increase, and I think it may be put forward as the measure in pounds, shillings, and pence, of the concession made by the Secretary of State. I now come, Sir, to a subsidiary point raised by my hon. Friend in the same context, and that is his claim for the Uncovcnanted Service that the R.5,000, which is the maximum limit of pensions, should be paid in sterling—£500—instead of at a lower rate of exchange. When a number of officers joined the Service who have since risen to the position qualifying for fall pension, it is perfectly true that nobody anticipated this disastrous fall in the rate of exchange; but that fall has occurred quite apart from any responsibility for it on the part of the Government. As regards the merits of the case, I must remind the House that no pensions, fixed in rupees, were payable in England till 1862, and only then on the express understanding that they should be paid at the fluctuating rate of exchange, and yet it was with a full knowledge of these conditions that the officers have continued in the Service. My hon. Friend quoted a sentence from the evidence of Mr. Waterfield, to the effect that a few years ago the Government of India recommended the fixing of the maximum at £500, and argues that the Secretary of State was bound by that recommendation. At the same time, the suggestion also came from the Government of India that the minimum rate should be one shilling and eight-pence instead of one shilling and nine-pence, but my hon. Friend does not say that the Government should be bound by that recommendation. The recommendation was made, but was not accepted by the Secretary of State in Council. I do not, however, think that I need discuss the merits of this case further, since the point was fully examined by the Select Committee, and there is no recommendation made by them upon it, and, therefore, it is obvious that they considered the maximum of one shilling and nineponce just and fair. I next come to that which is one of the principal grievances of my hon. Friend—namely, the claim of the Uncovenanted Service that the term of service qualifying for pension should be reduced from thirty to twenty-five years. I must inform the House that this term only applies to able-bodied men; those who have sick certificates can retire after twenty-five years on exactly the same pensions as those without medical certificates after thirty years, so that all the moving quotations made by the hon. Member as to the injury to health from thirty years' service fall to the ground. Here again he quoted the evidence of Mr. Waterfield, who, in answer to a question, said that representations upon this subject had been made to the Government. But I would point out that the admission of this fact is by no means an admission of the justice of the claim. Upon the grievance as to the term of service qualifying for pension, the Committee had the fullest possible statement before them, and what did they decide? They decided in Resolutions 5 and 6 that some period of furlough should in all cases count as service for pension; and that pensionable service should commence at twenty. The second point, that pensionable service should commence at twenty, was at once frankly conceded by the Secretary of State, though Lord Dufferin had reported in favour of twenty-one. In regard to the point that some furlough should always count as service for pension, it is obvious that the Committee left complete freedom to the Secretary of State; they did not specify the period of furlough, and did not say anything as to the reduction of service from thirty to twenty-five years. The Uncovenanted Service was ably represented on the Committee by the hon. Member for Central Hull (Mr. King), and it is not to be expected that, had he felt strongly on this subject, he would have allowed the opportunity for an expression of feeling to pass in complete silence. Are we to believe that the Committee, being anxious to reduce the term of service to twenty-five years all round, would have adopted a form of words so little calculated to attain their object? Such an hypothesis may be favourable to the claim of my hon. Friend, but it is uncomplimentary to the intelligence of the hon. Member for Central Hull. Well, Sir, what did the Secretary of State do? Acting upon the expression of opinion by the Committee that some period of furlough should count as service for pension, he accepted, a previous suggestion of Lord Dufferin that one year in fifteen and two years in twenty-five should count as service for pension, thereby reducing the qualifying period for able-bodied men from thirty to twenty- eight years. My hon. Friend may say that is illiberal if he chooses, but not that the recommendation of the Committee was ignored. If there be any fault, it is with the Committee for leaving the discretion to the Secretary of State, and not with the Secretary of State for using it. Here, however, my hon. Friend came in with a new point, and said that these advantages as regards the term of qualifying service are already enjoyed by certain uncovenanted officials, alluding to the officers in the Public Works Department. Here also, as he did in many other parts of his speech, he detaches from its context a Resolution of the Committee—namely, Resolution 4— That no distinction in the furlough and pension rules should be made between Europeans and natives"; and he argues that, if there is to be no distinction between Europeans and natives, è fortiori, there should be none between Europeans and Europeans, and, therefore, that all Europeans ought to be put on the most highly favoured terms. If all Europeans ought to be put on the most highly-favoured scale—and if, at the same time, we have the instruction of the Committee that there is to be no distinction between Europeans and natives — obviously natives must be put on the most highly-favoured terms also. I am surprised that my hon. Friend does not see the absurd dilemma in which he is placed. All natives cannot be put on the same footing as Europeans, because of the enormous expense it would involve; neither can all Europeans be put on the same footing as natives, because that would amount to a great injustice. As regards the difference of terms in the different branches of the Public Service—between officers of the Public Works Department and others—the Government of India have never admitted, and never can admit, the obligation to give all officers the same conditions of service, irrespective of duties. The principle on which they act is to consider the qualifications requisite for each Department, and then to offer conditions which will attract qualified persons to the different Departments; and, whatever my hon. Friend may think about the terms themselves, he cannot deny that up to the present they have attracted a sufficient number of qualified officers. I should like, however, having impugned the interpretation given by the hon. Member to the Resolution of the Committee, that no distinction in furlough or pension rules should be made between Europeans and natives, which Resolution is quoted by him over and over again in support of almost every part of his case—I should like to> explain to the House what the real meaning of that Resolution was. No doubt, Sir, if these words are taken alone, without reference to the proceedings before the Committee, they appear extraordinary, because they are more or less subversive of the most elementary principles of government in India. They might be held to mean either that all natives ought to have the same furlough and pensions as Europeans, which is impossible on the score of expense, or that all Europeans should have the same furlough and pensions as natives, which would be impossible on the score of justice. The Select Committee meant nothing of the kind. They never meant to question or subvert the whole system of our organisation in India, a system under which there are and must remain two branches in every Department—the higher branch manned chiefly by Europeans recruited in England, and the lower branch manned chiefly by natives appointed in India, with different conditions of service for each. No such suggestion was ever even made. What the Committee meant in putting that statement among their Resolutions was that in the higher branches one scale should be applicable to Europeans and natives, and that in the lower branches also one scale should apply to both; in other words, that in the higher branches natives should not, because of their nationality, be denied the advantages given to Europeans, and that in the lower branches Europeans should not, because of their nationality, be given the advantages denied to natives. How did the question arise? In past years a number of European gentlemen have been appointed in India by the Local Government to posts ordinarily filled by natives. As time went on, this method of appoint- ment was adopted to so large an extent that the Secretary of State thought it was an abuse of patronage, and that it was desirable to check the indiscriminate appointment of Europeans to posts which were intended to be filled by natives. Therefore the rule was introduced that only officers appointed by the Secretary of State, or by the Government of India with his sanction, should have the favourable rules given to Europeans recruited in England, and that Europeans appointed in India, without the sanction of the Secretary of State, should have the less favourable rules given to natives appointed in India. Well, these are the gentlemen who now complain. They appeared before the Committee and stated their case. They asked to be exempted from the conditions of service under which they took their appointments. That request was considered and deliberately refused by the Select Committee; and refused on the ground stated in the Resolution, that no distinction should be made between Europeans and natives in India, which, after all, is merely a re-assertion of a cardinal principle of our administration in that country. This is the history and this is the particular and distinct application of this paragraph in the Report of the Committee, which in the hands of my hon. Friend and his clients is made to do such extraordinary service. There remain two points in the case of the hon. Member to which I shall refer. I have now dealt with the Resolutions of the Committee, and with the manner in which they have been carried out by the Secretary of State. My hon. Friend says that there were only two isolated concessions. Having laid the above facts before the House, I must leave the House to draw its own conclusions, both as to the real number and the quality of these concessions. I now pass on to the last two recommendations with which the Committee concluded their Report. In the first they called attention to the ambiguity in which the terms of service have from time to time been stated, and they recommended that in future there should be as nearly as possible a uniform scheme with reference to pensions and furlough. Acting upon this recommendation, the Secretary of State, in the despatch quoted, wrote to the Government of India, and suggested that the Civil Service furlough and pension rules should be made more simple; and he proposed the preparation by the Government of India of a small pamphlet containing the more important regulations, but at the same time pointed out that one scheme for all branches of the Civil Service was impossible. The Government of India, in their despatch in reply, defended and explained the bulk and apparent complexity of the rules, as being necessary to intelligent administration. But they consented to the preparation of the pamphlet. My hon. Friend cheered the words "uniform scheme," when I used them. Now he uses these words in his speech and in his public statement of the grievances of his friends, and contends that when the Committee used them they meant that every European officer should be treated equally; in other words, that there should be a general levelling-up to the most highly favoured grade. The Committee meant nothing whatever of the kind. Does my hon. Friend contend for one moment that you could have a uniform scheme, say, for a pilot on the Hooghly and some eminent Civil servant such as the Lieutenant-Governor of Bengal? Yet this is the position in which he is landed by the use of the words "uniform scheme," detached from their context. A mere reference to the proceedings of the Committee will show that they never contemplated such an assimilation of the conditions of the Civil Service in each separate Department. The object of the uniform scheme was to prevent the ambiguity which had been so much complained of in the past, and to which so many of the grievances were due. The object of the Committee was not to alter the terms of the service, but to expound them for the use of those officers who might be appointed in the future, so that there might be no mistake. If they meant anything else, they would have said so. In fact, I have done them the compliment of assuming throughout that they said what they meant; but my hon. Friend has assumed that, while saying one thing, they almost invariably meant something else. There remains the second and concluding recommendation of the Committee, about the insufficiency of the furlough pay. This is the recommendation— Your Committee have had their attention called to the obstacles in taking furlough, arising from the insufficiency of the present furlough pay, and they recommend this matter to the consideration of the Secretary of State in Council. These words contain no injunction whatever. This is not a mandatory clause; it is rather a commendatory clause. The matter is left entirely to the discretion of the Secretary of State. What did the Secretary of State do in deference to this recommendation? The correspondence has been published, and hon. Members can read it for themselves. Practically there were two proposals. The Government of India proposed that a minimum rate of furlough pay of £250 a year, or the last pay of the officer converted at the official rate of exchange, should be given to officers recruited in England. The Secretary of State considered that this would be beneficial chiefly to the more highly-paid officials, and at the same time that it would give advantages to certain classes of artisans coming from England, advantages which would be denied to officers of the higher Departments if recruited in India; and accordingly he declined that proposal, and made the proposal that £200 minimum furlough pay, or three-quarters of the pay, should be given to all officers, whether appointed in England or in India. Nothing would have pleased him more than to have been able to give this concession to all; but on account of the expense he was unable to do so, and accordingly he chose the less highly - paid class, and made the concession to them. There is another point in the case of my hon. Friend—namely, about the right of the Government to make ex post facto alterations in the rules, which he has not raised to-night; so that I need not trouble the House by referring to it, further than to say that the pledges which were given by my predecessor are cordially endorsed and accepted by the Government; and that, while the Government of India, like all Governments, must claim the right of altering the rules, yet they have no desire or intention to alter them to the detriment of any officer serving under them; and they have already signified their willingness to consider the question of compensation in any case where such alteration may have operated to the detriment of any officer. I have now shown the House how the Resolutions of the Committee have been carried out; I have next dealt with its recommendations, and have shown that the Secretary of State has acted upon these recommendations, using the discretion which was designedly left to him by the Select Committee; and, if the exercise of that discretion has been inadequate, then the blame is due not to him, but to the Committee for not having given him more distinct guidance. I have also shown that the sum total of the concessions made by him is by no means slender or illiberal, and that in several particulars the uncovenanted officers, in resuming the agitation, are adopting arguments which will not stand examination, and are reading into the Report what was not placed there, and what never was intended to be placed there. My hon. Friend said to-night that the proceedings of the Committee were in the nature of an arbitration, and that both parties have pledged themselves to accept and carry out its suggestions. I have shown that the Secretary of State has loyally fulfilled his part of the undertaking; and I earnestly hope that those officers for whom the hon. Member speaks so sympathetically will equally fulfil theirs. It would be a most unfortunate thing if this agitation were to be resumed either in England or in India. The Secretary of State would be most reluctant to see a resurrection of any discontent among so important and distinguished a body of public servants. On the Report of the Select Committee his conscience is perfectly clear; but I may add that his responsibility for the welfare of these uncovenanted officers by no means ended with the issue of that Report. On the contrary, certain suggestions having been made in consequence of the Report of the Public Service Commission as to the organisation of special Departments, he has asked the Government of India to consider the conditions which may be applied to officers of the higher grades in future, and how far they may be applicable to officers already in the Service. Until an answer has been received I can say no more on the subject. I regret if the action of the Secretary of State has in any respect not so far earned the complete satisfaction of the uncovenanted officers of all grades; but I hope I have shown the House that there are good reasons for believing that it has been neither inconsistent, illogical, nor ungenerous.

(6.42.) SIR WILLIAM PLOWDEN (Wolverhampton, W.)

I think the true interpretation of the intention and meaning of the Special Committee on the Indian Uncovenanted Civil Service, as set forth in their Report, is that they intended to equalise the rules in reference to furlough and pensions with regard to natives and Europeans, so that the rules should be identical in both cases. But I do not rise to go into the grievances of the uncovenanted Civil servants of India. I think they have a very powerful advocate in the hon. Member opposite (Sir Roper Lethbridge), and I think their claims have been very fully and fairly considered by the Special Committee which was appointed for that purpose. But I should like the Under Secretary for India to bear in mind that the Select Committee did not deal with any of those cases in which it was stated that the claims of the uncovenanted officers were regulated by special contract, and that there were particular terms of contract by which better conditions in regard to furlough and pensions were reserved. It was held, and accepted by the Government, that in all these cases an equitable construction should be placed upon the contract, even where there was not an absolutely legal contract. With regard to the administration of India. I have heard with great satisfaction the tribute which was paid to the Mysore Government by the hon. Member for North Kensington. That is evidence, if evidence were wanting, to prove to those in this country, who have not personal knowledge on this subject, how very efficient the administration of the natives may be, where that ad- ministration is carried on by honest and able men—and, of course, it goes without saying that amongst the vast multitudes we govern in India there are thousands of honest and able men. The Government of India has already gone some steps forward, I think, in the direction of increasing largely the native officials in their administration of the great Empire of India; but I do not think they have gone far enough, and I am an advocate of going very considerably further. I think all those who, like myself, have had for a very long time a share in the administration of India will take the same view. We do not always agree as to the particular direction in which the movement should be advanced, but I think we all are agreed that the natives of the country are fully entitled to a larger share of the administration of the country than they have had. Some officers of high distinction seem to be of opinion that the higher posts in our administration, particularly in our Civil administration—I am not speaking particularly of our military administration just now—should be reserved for European servants; but I do not share that view at all. I consider that, so far as energy, ability, efficiency, and honesty of purpose, which are considered desirable for good administration, are concerned, the native gentlemen are just as good as European gentlemen. And while I would place the natives on exactly the same footing as Europeans in respect of offices, I must say that the Government of India, backed up by the Government of this country, deserve great credit for the advances which they have made in this direction of late; but these advances, I think, may I be carried very much further with very great advantage to themselves and to this country. Speaking of the administration of Mysore, that province is entirely in the hands of native administrators. I believe in that native administration there is a certain Representative Council. Experience there has shown that the natives are just as good for administration as Europeans. Some time ago my hon. Friend the Member for Evesham made some remarks on this subject, which I took occasion to object to, and which I wish now to object to more fully than I did then. He stated that while he had no desire to cast any aspersion on the character of our fellow subjects in India, he meant to say and still said that— In the valour, capacity, and energy which are necessary for a crisis of danger, the natives of India are not equal to, and cannot replace, Europeans. I entirely dissent from that statement; and I think if the hon. Baronet had been in India during the Mutiny in 1857 he would not have made that statement. Perhaps one of the most remarkable instances of energy and valour and of the wisdom of native administration was given at the very outset of that unfortunate occurrence by the conduct of the Maharajah of Pattialla, who at the outbreak of the Mutiny announced his intention of sending down his own troops to clear the way, and hold the road to Delhi. I only instance this to show that the Mysore Administration is not the only one which can be referred to as one of a very high class, and also to show that native administrators in India are men fitted to take the place of Europeans in a crisis of danger. I may further mention the case of the Tuhsildar of Thanah Bhawan, a Mahomedan official of that district, who remained and fought at his post and died of his wounds, while his European superior had left his charge and disappeared. A great deal has been done in connection with furthering the native administration of India by the efforts of the Government, especially of the Local Government, with regard to municipal administration. There has been in the last ten years a remarkable advance in the local self-government of the municipalities in India; but the municipalities in India embrace a very small section of the Indian people. According to the recent census of 1891 they only embraced some 15,000,000 out of the 288,000,000 who form that huge population. But apart from municipalities, there is that vast remnant of the population who have no share in the government of their country. I am extremely anxious to see a further extension of Local Government amongst the rural places of India, as I believe it would be found to be very advantageous. The village system lends itself completely to local administration; and if there was an amalgamation of some of the villages, situated favourably for such amalgamation, administration in the rural districts might, I think, be very easily conducted by the natives themselves. I do not hope, and I do not propose, that a system of that nature could be carried out in a very extensive manner; at all events I should not propose that the powers to be entrusted to those Local Authorities should be at first, at any rate, more than of a very simple character. I commend this to the attention of the hon. Gentleman, and I hope he will be able to induce the Government of India to take an interest in this matter and to devote their energies and their wisdom and their experience to some system by which the proposals I have sketched out may be carried into practical effect.

*(7.0.) MR. SAMUEL SMITH (Flintshire)

I have listened with much interest to the remarks which have fallen from the hon. Gentleman who has just sat down, and I entirely acquiesce in the liberal views which he has put forward with regard to the more extensive employment of natives of India in important posts of administration. The hon. Gentleman has a large Indian experience, and he has distinguished himself in this House by always taking a very liberal view of the rights and capacities of the natives of India, and I feel sure his speech will do much to lead the Indian people to look hopefully to the future. But I wish, in the few remarks I have to offer, to call attention to a somewhat different class of subject. I desire to call the attention of the House as briefly as possible to the condition of India, as described in the explanatory Memorandum which has been placed in our hands, and I am sorry indeed to have to state that the financial state of India as detailed in this important Paper is in the last degree unsatisfactory. I observe with great regret that last year we showed a small deficit, and I observe in the coming year the Budget Estimate shows a nominal surplus of 146,000 tens of rupees, or £100,000 sterling. I wish to call the attention of the House to this fact: that this apparently small surplus is based upon taking the exchange at the rate of one shilling and fourpence; but the Under Secretary himself has just stated that the present rate is one shilling and threepence three farthings, and it has been as low as one shilling and threepence. I am very much afraid we may again have one of those miscalculations as to the rate of exchange, causing a great deficit. I am afraid we may have the experience of last year repeated, because no one can deny that the present condition of the silver market is in the last degree uncertain and precarious. The price of silver fell recently as low as thirty-nine pence per ounce, and the exchange rate fell to one shilling and threepence. We have seen a little recovery from that, owing in part to the agreement of the Western Powers to hold an International Monetary Conference. A certain degree of hope has sprung up that possibly this Conference may be able to do something in the way of rehabilitating the monetary position of silver. But the House and the country must well understand that if this Monetary Conference should altogether fail to come to any conclusions beneficial to the position of silver as money we may look forward to another very rapid collapse in the price of silver, and I think it is not at all improbable that in the event of the failure of this coming Conference we may see the rate of exchange down to one shilling and twopence before this year is over, and possibly within a few years it will go down much lower, because it appears not at all unlikely that if the efforts of the United States to rehabilitate silver in alliance with the Great Powers of the world should fail, there may arise a strong movement in America to cease altogether the coinage of silver in order to bring pressure to bear on England. Undoubtedly if that policy were adopted we may conclude that we should see the rate of exchange at one shilling and a further loss of three or four million tens of rupees thrown upon the Indian Revenue. I call attention to these facts because they must be faced by the authorities responsible for the finances of India and bear upon the instructions to be given to the delegates of this country at the approaching International Convention. Looking at the table of the losses in exchange, I find that they have steadily increased year by year till they, last year, reached the enormous figure of eight and a quarter million tens of rupees; though, of course, at the present rate of exchange that is only equal to five millions sterling. To show the prodigious increase of this source of drainage I will quote the figures for the past ten years. In 1882 the loss on exchange was under three million tens of rupees, next year 3,200,000, then 3,300,000, then 3,500,000, then 4,300,000, then 5,600,000, then 6,000,000, then 6,300,000, then 6,700,000, then 5,400,000, then 7,200,000, and last year 8,200,000. These figures, I think, are alarming; and so far as I can see it would not surprise me at all, in the event of the failure of this International Conference, if we shall see nine million or ten millions reached within the next year or two. When I look at this question I am filled with apprehension. I think every thoughtful person who is cognisant of the financial position of India at the present time must have grave apprehensions as to the future. When I refer to the main sources of revenue I find some of them are declining, some of them are threatened, and some of them are uncertain. On the other hand. I find that the sources of expenditure are continually rising. As to income, take, first of all, the great opium revenue. It has fallen steadily from eight millions to five and a half millions. No one can doubt, with the present feeling of this country upon the subject, that the opium revenue is bound to decline, for this country will insist upon putting every possible restriction upon the consumption of opium and all other narcotic drugs. Therefore we may conclude that this source of revenue is a most precarious one. The revenue derived from salt also stands in a precarious position, and it is acknow- ledged on all hands that it is cruelly severe on the population of India. It is two and a half rupees per maund against half a rupee at the beginning of the century, and the Government stand pledged to take off the last half rupee as soon as they can; so the salt revenue is precarious and uncertain. I find, on the other hand, a steady and constant increase in the military expenditure. Last year we had the astounding figure of very nearly twenty-two millions, and this year we have an estimate of over twenty-one millions for military expenditure. I believe in the time of Lord North-brook the military expenditure was between fourteen and fifteen millions, so that it has since his time increased by nearly fifty per cent. And we must remember this military expenditure does not cover all that comes under that head in India, for we have a heavy capital expenditure for strategic railways on the frontier, which is a military expenditure, though charged to the railway account. Fifteen millions have been spent on these absolutely unproductive strategic railways. I wish to impress upon the Government, if they do not wish to have national bankruptcy in India, that they must face this question of gigantic military expenditure and take most drastic means to reduce it. In connection with the military expenditure I will just observe that a great part of it is non-effective. It is in the shape of pensions and of furlough allowances, which amount to about four and a-quarter million tens of rupees, or about double what you pay to the whole Native Army of India. That is an item which it ought to be the business of the Government to curtail in the future as much as they possibly can. I would just like to make a single remark on the question of policy. We have contrived to get into bad relations with Afghanistan. I am informed by a gentleman who has travelled over the Indian frontier that the main cause of the ill-feeling which has arisen between the Government of India and ourselves is the making of the Khojak Tunnel without the consent of the Ameer. The Ameer was most friendly disposed towards this country, and if we had waited till we had his consent, I am told there is very little doubt but that it would have been obtained. But our strategists thought it was a more advisable course to take the law into their own hands, and in a certain sense to try to hoodwink the Ameer, and carry this tunnel into his dominions.

MR. CURZON

This tunnel is not made in the dominions of the Ameer. There has been no intention of conducting the operation in a secret or underhand manner.

* MR. SMITH

Of course, I accept the explanation of the hon. Gentleman, who understands the frontier question much better than I do. My informant, however, is a man of considerable ability, who has travelled all over the country in question, and who told me that it was our present policy which has induced the jealousy of the Ameer. I think that it might have been carried out in such a way as to avoid the friction which has unhappily arisen. As some persons are endeavouring to induce the Government to push on the railway to Candahar, I beg to enter my very strong protest against that proposal. I hope all ideas of the kind will be laid aside. But the main object of these remarks is to press upon the Government the necessity for retrenchment and economy in the Government of India. We are drifting into a position of grave financial embarrassment. That cannot be denied by those responsible for the Government of India. Had the threatened famine arisen, the financial position of India would have been very dangerous; but, even as it is, in all probability we shall have a deficit. That being the case, looking to the extreme poverty of the people of India, and to the strong feeling of discontent which exists there, and which I fear is much more than is generally known—as one who has been a good deal in contact with native opinion for many years, I hold there is much discontent in India at the expensiveness of our government—there is most certainly a strong need for retrenchment; otherwise, there will be a bad time in store for us. There is one direction in which I be- lieve it possible to largely increase the resources of India, and that is to alter the system of laud taxation. As the House knows, the assessment of the land of India is generally fixed for a term of thirty years. The result is that improvements of great value are hindered towards the end of that period in consequence of the uncertainty which is naturally felt as to the assessment. There is no difference of opinion among the educated people of India that if we adopted a policy for India similar to what we have adopted in Ireland, and gave fixity or perpetuity of tenure and fair rent, we should see in the course of time a very great improvement in the productiveness of the soil of India. The wells that are sunk are far too few, for the tenant is afraid that just as he improves the soil he will have his assessment raised; but if he had absolute security for the possession of all additional value he gave to the land I believe you would see a new chapter opened in the agricultural history of India. One other suggestion I wish to press upon the Government. More attention ought to be given to the proposals of Sir William Wedderburn for the establishment of land banks. Sir William Wedderburn has devoted many years to this subject, and he has pointed out, what is perfectly well known, that the great mass of the peasantry are deeply and hopelessly in debt, and that the rate of interest they pay is most usurious, being certainly not less than two or three per cent. per month. I am told that so entirely are the mass of the peasants in the hands of the money lenders that they are debarred from improving their lands from the knowledge that whatever improvements they make are simply grasped at once by their creditors; and, consequently, they are compelled to do with the minimum amount of culture to keep their families in existence. The removal of this crushing load of debt should be one of the main objects of the Government, and the establishment of the land banks is a valuable proposal. These banks would be able to lend the money at a moderate rate of interest and yet make a handsome profit, and the people would through them be able to discharge these usurious debts on which they pay such an enormous interest. I do not propose to go further into general criticisms upon the state of India, for I know that the House is waiting with some impatience for the statement of the hon. Gentleman the Under Secretary for India; but I will just, in conclusion, say that, looking to the poverty stricken condition of India and to the grave financial difficulties that are looming in the future, it is most desirable that we should associate with ourselves in the government of India the ablest natives of that country; and I hope that the Bill which received the Royal Assent to-day, and which contains within itself the seeds of the elective system, if the Indian Government chooses so to interpret it, will be liberally interpreted by the Government, so that out of it may grow a system of elective representation, which will enable the Government of India to associate with themselves the ablest intellects of that country in solving these problems which threaten the future of that great country.

Question put, and agreed to.

Considered in Committee.

(In the Committee.)

*(7.25.) MR. CURZON

I am afraid, Sir, with the shadow of coming events lying so large across our path, that I cannot expect my Budget Statement to have much interest for a jaded and depleted House of Commons. And yet the story of the finances of India, although it does not appear to excite much concern in this House,, must be told, because it affects the prosperity and deals with the welfare of many hundred millions of our fellow-subjects whose interests, even with a General Election impending, this House cannot afford to ignore. But, late as is the period of the Session at which I have to make this statement, and empty as is the House, I at any rate may congratulate myself that opportunities have not been wasting in this Session of Parliament for considering the affairs of India. We had an Amendment upon the Address in reply to the Queen's Speech; later on, the Adjourn- ment of the House was moved by the hon. Member for South Donegal, to discuss the question of the scarcity and distress existing in different parts of India; later, again, we had two full nights' debate upon the Second Reading and the Committee stage of the Indian Councils Bill which has just passed into law; and, therefore, at any rate, the reproach cannot be made against us that in the concluding Session of this Parliament we have shown that indifference which is supposed to be so characteristic of the House of Commons to the interests of our fellow-subjects in India. But one source of regret, however, I must admit; and that is that the right hon. Gentleman who preceded me in the office I now hold, and whose financial abilities have found a larger and better sphere elsewhere, has not been able to make this statement himself. I should have been glad if he could have completed the term of this Parliament in the delivery of a statement to which he always lent the graces both of lucidity and of style; and I should have been all the more glad if he could have done so on this occasion, inasmuch as the tale I have to tell the Committee is less satisfactory than those which on previous occasions he has given. The Accounts which I have to present to the House relate as usual in these statements to three years—the closed Accounts of 1890–91; the Revised Estimate for 1891–92; and the Budget Estimate for the present financial year. Each of these I will take in turn. First, the closed Account of 1890–91, which was the Revised Estimate of last year. Here the gross revenue, in tens of rupees, was 85,711,649, the gross expenditure 82,053,478; while the net revenue was 49,354,219, and the net expenditure 45,666,048 tens of rupees, showing a realised surplus of 3,688,171 tens of rupees. In giving the House the figures of gross revenue and expendidure and net revenue and expenditure, I need hardly explain that the net revenue is arrived at after deducting the cost of collection and certain other refunds and rebates, while the net expenditure is the amount spent in the various Departments, deducting the receipts of those Departments. This large surplus of 1890–91 is slightly better—by 23,071 tens of rupees—than the revised Estimate of 3,655,100 tens of rupees made by my predecessor in the debate of last year. On that occasion the right hon. Gentleman the present Financial Secretary of the Treasury explained that this large surplus was due, partly to a general increase of income, and partly to a large reduction in expenditure, but still more to an increase in the value of the rupee to one shilling and ninepence, due to American speculations in silver, and the consequent rise in the exchange value of the rupee. The result of those circumstances was to give the rupee an average value of one shilling and sixpence, which is nearly three halfpence above the Budget rate. I am afraid that I must warn the House that that year was the last of the series of very fat years which the Government of India is likely to enjoy for some time, and that we must look forward to an era of contracted surpluses for some years to come. The next point to which I have to refer is the Revised Estimate for 1891–2, the figures of which were given by Sir D. Barbour in March of the present year as follows:—Gross Revenue, Rx.88,585,900; gross Expenditure, Rx.88,665,900; net Revenue, Rx.49,726,900; net Expenditure, Rx.49,806,900; showing a Deficit of Rx.80,000. Sir D. Barbour, however, explained that those figures were not the final ones, and he expressed a hope that before the close of the year the equilibrium would be restored; and I am now happy to say that the Approximate Account shows that there is a surplus instead of a deficit. The Approximate Account shows a net revenue of Rx.49,927,900, and a net expenditure of Rx.49,573,900, giving a surplus of Rx.354,000. Comparing this result with the various estimates hitherto made, it appears that Sir D. Barbour in March, 1891, estimated a surplus of Rx.115,600, that the Financial Secretary in August, 1891, estimated a surplus of Rx.395,600, while Sir D. Barbour in March of the present year estimated a deficit of Rx.80,000; and accordingly the result is better by Rx.238,400 than the first estimate, and is worse by only Rx.41,600 than the second, and better by Rx.434,000 than the third. The explanation of the fall from the fine surplus of the preceding year mainly consists in the capricious, and, in this case, the calamitous, factor of exchange. The Budget of the year was framed on the estimate that the gold value of the rupee would be one shilling and fivepence farthing, while it has proved to be about one shilling and fourpence three farthings. This fall in value has involved an additional charge upon the year's accounts of Rx.659,000 for exchange. The Approximate Account of 1891–2, which I am now stating to the Committee, and which is based upon later figures than those appearing in the Explanatory Memorandum, compared with Sir D. Barbour's Budget Estimate of last year, shows that, dividing the additional charge for exchange among the various heads to which it appertained, the following were the main alterations: — The improvements on the Budget Estimate have been better in the case of railways by Rx.1,107,900, the increase being due to the unusual traffic in wheat and seeds for export. The revenue has been better in the case of opium by Rx.807,200, owing to the higher price of the article and to the export from Bombay having been greater than was anticipated in the Budget, while there was a reduction of charge in consequence of the small crop. The revenue from salt is better than the estimate in the Budget by Rx.299,900, that from the excise is better by Rx.158,100, and that from stamps is better by Rx.118,600, making a total gain upon the estimate of Rx.2,491,700. The expenditure on the Army is worse than the estimate by Rx.1,329,000, owing to the various military expeditions which the Indian Government were compelled to send out—firstly, for the purpose of protecting our existing frontier from raids by border tribes; secondly, to meet a sudden and isolated outbreak, as at Manipur; and, thirdly, to preserve order in the unsettled regions of North Burmah. There small wars are capricious in their origin, even if they are fruitful in adventure. None of them are wars of aggression. All of them are wars of necessity; and they may be described as the premium which we pay upon the insurance of our Indian Empire. The land revenue is worse than the estimate by Rx.423,800, interest is worse by Rx.374,700, and other heads are worse by Rx.10,200, making a loss upon the Budget Estimate of Rx.2,137,700, and leaving the surplus above-mentioned of Rx.354,000. It must be obvious to the Committee that with so slender a surplus it is impossible to effect any reduction in taxation, especially as even that slender surplus is due to accidental causes, such as arrears not having been paid to the War Office, as was intended. So much for the Approximate Account of 1891–2. I now come to the third table in my statement—namely, the Budget Estimate for the year from the 31st March, 1892, to the 31st March, 1893. Under this head the gross revenue is Rx.88,368,000, and the gross expenditure Rx.88,221,000, while the net revenue is Rx.49,583,000, and the net expenditure Rx.49,436,000, showing a surplus of Rx.147,000. As there is a surplus of Rx.354,000 in the Approximate Account of 1891–2, these figures show a reduction of Rx.207,000, the net revenue being less by Rx.345,000, and the net expenditure by Rx.138,000. The fall in the value of the rupee from one shilling and fourpence three farthings to one shilling and fourpence has caused an addition of Rx.1,049,000 to the charges of the year; but, if that be spread, as I have previously done in the case of 1891–2, over the heads to which it appertains, the alterations may be explained as follows: In railways we are worse off by Rx.1,190,000 arising from the anticipation of smaller traffic and the increased charge for exchange; in opium by Rx.726,000, which nearly absorbs the gain of last year, the reduction in this case being due to the decreased sale of 250 chests per month announced in June, 1891, taking full effect this year, and also to the heavier charges incurred, amounting to an increase of Rx.348,000. The Civil Departments will be worse by Rx.332,000, and the construction of railways out of revenue by Rx.171,000, making a total in which we are worse off than in the Approximate Account of 1891–2 of Rx.2,419,000. On the other hand, we are better off in the following particulars: Land revenue and provincial rates, Rx.679,000; interest, Rx.364,000; buildings and roads, Rx.233,000; Army, Rx.420,000, mainly owing to the absence of any provision for special expeditions; provincial agreements, Rx.466,000—upon which point I shall have some explanation to place before the Committee; and under other heads, Rx.50,000; making a total of Rx.2,212,000, in which the Budget Estimate is better than the Approximate Account of last year. The net result of these two tables is that we are worse off by Rx.207,000 than the Approximate Account of 1891–2. The hon. Member who preceded me to-night has anticipated that the small surplus of Rx.146,600 which we contemplate for the current year may, owing to the subsequent fall in exchange, be wholly swallowed up before the end of the year, and that we may have to face a deficit.

MR. SAMUEL SMITH

It is 146,000 rupees, not 146,000 tens of rupees.

* MR. CURZON

I think that statement must be a mistake.

MR. SMITH

What page?

* MR. CURZON

I think, if the hon. Member looks at page 52, the very last figures, he will see an estimated surplus of Rx.146,600. That is the figure to which I am alluding, and he may take it that the figures are tens of rupees, and not rupees. I was about to point out, in answer to the hon. Member's somewhat gloomy prophecy, that the last telegram we received from the Government of India, dated 16th June, for the purpose of this Debate, leads me to anticipate a more favourable result than the hon. Member has predicted. There is reason to believe that the final result of the year will be very much the same as the Budget Estimate framed about three months ago. It is perfectly true that there has been the fall in exchange of which the hon. Member has spoken; but, on the other hand, railways are doing well and the general revenue is satisfactory, while owing to the bad opium crop there will be a considerable saving of charge under that head. On the other hand there has been a fall of a halfpenny per rupee in the exchange, and with the payments to the War Office deferred from the previous year, discount on the loan in England, and minor increase of expenditure, the improvement in the receipts is almost exactly balanced; so that, in giving these figures, the Government of India expects to be better than the Budget Estimate of three months ago in railways and general revenue by sixty or seventy lakhs, while the opium expenditure will be reduced by sixty-six lakhs, making a total of one hundred and twenty-six to one hundred and thirty-six lakhs. On the other hand, they expect to be worse by seventy-nine lakhs on exchange, thirty-four lakhs on Home charges, and twenty lakhs on other charges, making a total of one hundred and thirty-three lakhs—almost exactly balancing those items on which a gain is expected. Although these figures do not justify the sinister vaticinations we have heard, yet I do not pretend to say that this is a very gratifying statement which I am now making to the House; but I think, on the other hand, that it discloses features which may give satisfaction. In the first place, there is the anticipated rise in the land revenue, which is a satisfactory sign as proving the general fairness of assessment and also the general expansion of cultivation, although it is fair to explain that this rise will in part be due in the current year to the anticipated recovery from circumstances that have necessitated the postponement of revenue collection in the distressed districts during the past year. We may also note as a satisfactory sign the absence of provision for special frontier expeditions; and I may say myself that I earnestly hope in the future that the necessity for punitive expeditions may steadily diminish, and that the recurrence of acts of plunder followed by punishment, may be gradually superseded by the conciliatory absorption of the border tribes of whom I have been speaking, not into subjection, but into contented dependence on the Government of India. It is gratifying, too, to know that the main heads of revenue show a steady im- provement, enabling us to cope with the lamentable fall in the exchange value of the rupee, and I venture to submit that, in a year when these great financial difficulties have to be faced, it is no mean achievement to be able to place before the House a Budget Estimate showing such results as I have stated. Undoubtedly the hon. Member is right in saying that the main element of disappointment and disturbance in the finances of India, both now and not unlikely in the immediate future, is the fall in exchange. Perhaps, as no subject can be more interesting in connection with Indian finance than this, I may be permitted to give the figures. The total charge on revenue for exchange has been in recent years as follows: 1889–90 Rx.6,693,000; 1890–1, Rx.5,383,000; Revised Estimate, 1891–2, Rx.7,222,000, Budget of 1892–3, Rx.8,224,000, showing a difference of no less than Rx.2,841,000, in two years. How has this arisen? In December, 1890, the gold value of silver was equivalent to a rate of one shilling and sixpence halfpenny the rupee, in four months the selling rate had fallen to one shilling and fourpence three-farthings, which difference on the remittances for the year would have caused an increased charge of Rx.2,168,000. In 1890–1 bills on India were sold in April at one shilling and fivepence and one-sixteenth, and five months afterwards, in September, at one shilling and eightpence and twenty-nine-thirty-seconds of a penny. The difference between these two rates on a remittance of £16,000,000 is about Rx.4,137,800. When the Budget for 1892–3 was under consideration, the gold value of the rupee from the middle of February to 18th March ranged between one shilling and fourpence and one shilling and threepence three-farthings, and the Government based their estimate on the higher rate. Within eleven days after the publication of the Budget the market rate in India had fallen below one shilling and threepence, at which rate a fall of one penny in the rupee would cause an additional charge in the present year exceeding Rx.1,700,000. It cannot be denied that these figures are serious. They present a problem which is well calcu- lated to appeal to the intelligence and the study of our ablest financiers. This is not the occasion, and I confess that I am not the man, to deal at all exhaustively with the character of that problem; but, in order to illustrate to the House the complexity of the situation which we have to face, I may at least remind the Committee of the number of divergent interests, classes, and persons who are concerned. On the one hand there are the Lancashire cotton spinners, who argue that this fall in the gold price of silver in India amounts to little less than a bounty of twenty to thirty per cent. to the producer in Bombay. In the second place you have the Indian Government, which finds itself cruelly crippled in the matter of home remittances and sterling charges; and you have, thirdly, a large number of Civil servants in India who complain—and it seems to me there is great force and justice in their complaint—that they, too, are seriously affected in the matter of home remittances for the education of their children, and in the provision of those European comforts which may sometimes be described as almost European necessities in connection with life in India. Each of these classes has its own remedy. Some advocate bi-metallism, while a new school which has lately arisen suggests the institution of a gold standard for India. All agree in saying that some action should be taken by the Government, but as to what that action should be no two persons, certainly no two classes, in India agree. But there remains a fourth class whose interests should not be lost sight of, and that is the Indian population itself, the Indian cultivator and artisan. There are many who argue that the fall in the exchange value of silver is an industrial gain to India; that it enables the producer or the labourer or artisan to get more for his produce and to pay his rent and taxes more easily; and that, in fact, the fall in the price of silver may be considered an indirect measure for the relief of taxation to the labourer, inasmuch as, with the taxes fixed, a less portion of his produce goes into the pocket of the Government, while a larger fraction remains in his own. It is not for me to say whether the mea- sure of inconvenience in this respect to the Government of India and the Civil servants is greater than the measure of apparent gain to the taxpayer, or whether it is less; but at least I hope the considerations I have placed before the Committee will show the immense complexity of the problem we have to deal with, and will illustrate the inadvisability of accepting any unduly rapid solution. There is this further fact: that it is not British or Indian interests in the last resort that are considered by other people. These are very little considered by foreign legislation, which shapes its processes without the slightest regard to our interests. The extreme uncertainty of exchange, the fluctuations in the opium revenue, and the demands made upon the revenue in consequence of the recent scarcity, render any prediction at this moment as to the future peculiarly unsafe. On the other hand, they impress upon the Government of India the necessity of exercising strict economy in every direction. I mentioned some little time ago that in the Budget Estimate for the present year we expect to be Rx.466,000 better than last year in the matter of the provincial agreements; and the fact that these agreements are being revised during the present year affords me an opportunity of briefly explaining to the Committee the most interesting points which they suggest. By far the greater part of the revenue in India is collected by officers of the Provincial Governments, and a very large portion of the civil expenditure is under their control; and it is, therefore, highly desirable that the Provincial Governments should have a direct interest in the effective collection of the one and in the economical administration of the other. It is with this view that the Government of India, as a part of their settled policy for over twenty years, have entered into agreements with the provincial Governments, under which the latter receive certain proportions of the main sources of revenue, together with nearly all the departmental receipts, and bear the responsibility of the whole, or a fixed proportion, of the charges under most of the heads. The probable posi- tion of the several local Governments is then carefully examined, and a specific sum in each case is either added to or deducted from the amount of the provincial revenues. The last agreements were made in 1887, and lasted till 1892, so that the present year has seen their revision, and the fixing of fresh terms for another period of five years. The estimate framed in 1887 gave a virtual equilibrium to the revenue and expenditure of the Provincial Governments. Their revenue, however, during the five years was better than the estimate in every case except that of the North-West Provinces; and, on the whole, they received more by Rx.6,101,300 than the estimate of expenditure which they were expected to meet. Of this annual amount they, in 1890–91, contributed Rx.490,000 to meet the wants of the Government of India, and they spent Rx.5,281,700 on their various administrations. According to the revised estimate for last year the total provincial revenues were better than the estimates of 1887–8 by Rx.2,042,700, and of this sum they have now been required, as the basis of the fresh agreements, to contribute to the general expenditure of the Government of India Rx.466,300 annually, or between one-fourth and one-fifth of their improved revenues, the remainder being left in their own hands. This contribution is, in fact, the Return that is demanded of the Provincial Governments for the favourable bargain that was made with them five years ago. No doubt the Provincial Governments would have liked to retain the entire sum; no doubt the Government of India would have been glad to leave it to them, if possible; for there is scarcely a branch of provincial administration that would not be the better for an increased expenditure. But, inasmuch as this would have involved additional taxation, which the Government of India is in the last degree anxious to avoid, such a complete surrender of these funds was impossible. Now, although, unfortunately, I have myself no surplus to dispose of, I may remind the House that in 1889–90 there was a surplus of Rx.2,612,000, and in 1890–91 of Rx.3,688,000, mainly due to the rise in the selling price of opium and to the extraordinary and unexpected rise in the exchange value of the rupee. Well, Sir, the House may like to know what has been done with this surplus of Rx.6,300,000 in the two years. In England, of course, a surplus so acquired is devoted by law to the reduction of debt; but this surplus of Rx.6,300,000 has been practically devoted to the construction of railways and other projected public works in India, and it has enabled the Government to reduce the amount they would otherwise have had to borrow, and to dispense for the third year in succession with the necessity of raising a loan. A word or two now as to the debt of India. Although, as I have just said, the Government have been able to dispense with the necessity of borrowing in India, yet in the three years under review there has been in England an addition to the debt of £8,491,452, more than half of which was applied to the purchase of the South Indian Railway. The remainder has been used for advances to companies under engagement with the Secretary of State for the construction of railways in India, in accordance with the policy sanctioned by Parliament, by which the Government is enabled to borrow on behalf of the companies at a lower rate of interest than they could procure for themselves. Before leaving this question of the debt of India, I may mention that perhaps a better test than any other of the stability of the Government of India is furnished by the high credit which it enjoys in the City of London. In illustration of this I may state than an issue of £1,300,000 India three per cent. stock was offered in April of the present year, and was subscribed for at an average rate of £96 18s. 4d., equivalent to borrowing at somewhat less than three and one-tenth per cent., figures which I think must be extremely gratifying. Another advantage of this good credit is that the Government of India has been enabled in recent years, and is still continuing, to reduce the interest upon their debt. The Committee will perhaps have read in the newspapers of the successful conversion of the four and a-half per cent. rupee loans, mention of which has been made in the speeches of my predecessors. In 1878–79 the Government of India raised debt bearing four and a half per cent. interest, with the view of converting their five and a half per cent. debt into it; and one of the conditions of the new loan was that it should not be liable to discharge till the 15th September, 1893, or any subsequent date of which three months' notice should have been given. The amount of four and a half per cent. debt so existing on the 31st March, 1890, was Rx.20,480,313. On the 25th June, 1890, the Government of India made an offer to the holders to exchange their securities for notes bearing four per cent. interest, receiving at once, in anticipation, the additional half per cent. per annum which otherwise would be payable till September, 1893. The amount so converted was Rx.8,073,620; and, some minor sums having been discharged, the amount outstanding on the 29th February, 1892, was about Rx.12,126,900. The Government have now issued a new notice, dated the 6th instant, by which the remaining holders are invited to accept four per cent. securities from the 30th June, 1892, foregoing the additional half per cent. per annum for the next fifteen months. This offer we can afford to make less favourable than that made in 1890, because the four per cent. stock stands in the Indian market at the present time at 108, while those who do not accept the offer are liable to be paid off at par. The Government of India have reserved the right of withdrawing the offer if it thinks that a sufficient amount has been converted, but otherwise it will remain open till the 15th July, 1892. Well, Sir, the object I have in making these remarks is to show the credit we enjoy and the savings we make. By the conversion made in 1890 there will be an annual saving after 1893 of Rx.40,318, to which will be added upwards of Rx60,000 if the whole amount of the four and a half per cent. rupee loans now outstanding is discharged. After this strictly financial part of my statement, I may perhaps, with the permission of the Committee, before I re- sume my seat, say a word or two upon a question which has attracted great interest in this House—namely, the recent scarcity and distress that have arisen in various parts of India. The matter is one that, of course, has its financial aspect, because it affects very materially the increased the Estimates. The Committee will remember that at an earlier period of this Session a discussion was raised upon this question by the hon. Member for South Donegal (Mr. MacNeill) on a Motion for the Adjournment of the House. On that occasion I did not attempt to minimise the gravity of the circumstances, such as they were, but I assured the House that the Government were conscious of their great responsibility and were acting up to it, and that the prospects were by no means so bad or so serious as some ill-informed persons would lead us to expect, and, as regards the particular charges which the hon. Member thought fit to firing either against the Government or against independent officers, that those charges had not one shred of foundation. I had at that time to submit to the charge of official optimism which is so frequently levelled against this Bench, but I submitted with perfect grace, looking forward to the revenge which I hoped to be able to take when I was called upon to make this statement to the House; and, though the hon. Member for South Donegal is not here on the present occasion, I hope, in the intervals of electioneering, he may find time to read the statement which I now have the pleasure of placing before the House. I am happy to say that both the statements I then made and the predictions in which I indulged—both of which were characterised at the time as unduly optimistic—as to the conduct of affairs and as to the future have been amply verified by results. I have here two recent telegrams from the Viceroy of India, dated the 15th and 19th June respectively. The upshot of these telegrams is that the expected monsoon has set in earlier than usual on both coasts, and, although light at present, has given sufficient rain in Bengal to remove all anxiety and to supply ample food and water to cattle; that the number on relief works has already fallen by ten thousand; that in Madras the monsoon has favourably affected considerable districts, and is expected later on to do the same in others. With a view of showing the Committee the manner and the extent of the steps which were taken by the Government, and are being taken at this very moment, to meet the distress, I may mention that the latest figures give the number on the relief works at 248,000, and 16,000 in receipt of gratuitous relief, while large sums have been advanced to landholders to enable them to provide employment for the poor on their estates, and there has also been a large suspension of revenue. The financial loss to the Indian Treasury up to the 31st March of the present year entailed by this scarcity has been as follows:—Relief Expenditure, Rx. 233,000; Advances on Loan, Rx. 233,000; Suspension of Revenue, Rx. 381,000; total, Rx. 847,000. Some of this will no doubt be recovered in the present financial year, but it does not include the outlay incurred in the Native States. I remember on the former occasion the hon. Member for South Donegal said, with a want of restraint which I noted at the time, that people were perishing by thousands in India from starvation. I am happy to say that the last telegram from the Government of India contains the following statement:— No case of starvation or even of serious emaciation has come to light, notwithstanding the vigilant inspection maintained by the local officials. And, although the death-rate, it is perfectly true, rose considerably above its normal level at the end of last year, and at the opening of the present year, due in many cases to cholera and other concomitants of the prevailing distress, yet in the bulk of the affected districts I am glad to say that the mortality is returning to its normal level, while, owing to the great railway development of recent years in India, food supplies have never failed in any one of those imperilled regions, and prices have never anywhere risen to anything like the figures they did in the last great visitation. These facts, which I place before the House, are I think encouraging for the future. If this monsoon brings with it good rain, I hope by the blessing of Providence that the danger which was anticipated may be averted; that scarcity will not anywhere deepen, as it has not hitherto deepened, into famine; and also that the experience gained may fit us to face with equal or greater ability the recurrence of distress in years to come. I will conclude by apologising to the Committee for the necessarily tedious character of the statement which I have been called upon to make, although I am bound to say that hon. Members have to some extent discounted the necessity for that apology by the almost complete unanimity with which they have absented themselves from these proceedings. I thank those hon. Members who have been here to listen to me, and I hope that next year I or someone else in my place may be able to make a more interesting statement to a more interested and a fuller House of Commons. I move the Resolution that stands in my name.

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, 1891, was Rx.85,741,649; that the total Expenditure in India and in England charged against the Revenue was Rx. 82,053,478; that there was a surplus of Revenue over Expenditure of Rx.3,688,171; and that the capital Outlay on Railways and Irrigation Works was Rx.3,365,632."—(Mr. Curzon.)

(8.55.) SIR RICHARD TEMPLE (Worcester, Evesham)

I am not at all dismayed by the spectacle of the desert of green benches around me, because I know well that, through the kindness of our friends in the Press Gallery, what we say here is reported both to England and to India. I desire now to express my satisfaction that at all events my hon. Friend the Under Secretary for India has returned to his place, for that gives me an opportunity of congratulating him personally upon the statement which he has just made. It was but likely that he would make such a statement, because I, for one, am inclined to believe in all that he says about India. I recollect that he gave the best account I ever saw of the whole length of the north-west frontier of India—a region with which I am myself intimately acquainted inch by inch—while his subsequent studies in Central Asia and in Persia have given him much preliminary qualification for dealing with Indian questions. I may further congratulate my hon. Friend upon the excellent manner in which he has prepared his case. He has stated his figures with remarkable lucidity and accuracy; and I would commend all his commentaries and remarks to the confidence both of this House and of the country at large. Now, I may report to you, Mr. Courtney, that just before you took the Chair to preside over the remainder of our deliberations this evening the hon. Member for Flintshire, who has had, I believe, to leave us to catch a train, poured forth his annual flood of well-intentioned and sincerely - designed pessimisms over India in the House of Commons; but that flood will have become shallow and almost dried up by the sunlight of official figures which my hon. Friend the Under Secretary has presented, as I shall immediately proceed to show. My hon. Friend said that his statement would not be gratifying. I am afraid he hardly did himself justice; he was far too modest. I contend that it was in all respects a most gratifying statement. I have heard many such statements delivered; but I never heard one which gave me greater confidence in the future stability of Indian finance, despite all sinister anticipations, than the statement to which we have listened to-night. What does it show? There was, in the first place, one year of abundant surplus following the failures of what my hon. Friend calls the famine years. That rich year was followed by two years not so good; but the second year and the third year have both been marked by surpluses. In the second year we have a limited surplus, and in the third year a small surplus, which was disparaged by my hon. Friend the Member for Flintshire, but which is shown in the financial statement to be after all better than was at first supposed. My hon. Friend opposite says that the narrow surplus will not be maintained, but the figures produced here show that it will be more than maintained. The House will kindly observe that the first year of abundant surplus is followed by two years of narrow surpluses, and that in these two years this fairly satisfactory result has been achieved, despite the most tremendous disadvantages. My hon. Friend was quite right in using the word tremendous, for the loss by exchange can only be characterised by that term. My hon. Friend further showed that there had been a loss of nearly a million by the famine, meaning thereby a loss in point of revenue and an addition to expenditure. Yet, despite these awful disadvantages, still a surplus has been effected. Could India show stronger evidence of the stability of her financial condition than this? And when one comes to consider the causes why India has been able to keep her head so well above water in certain times of monetary misfortune it cannot but be seen that they are most satisfactory. In the first place the revenue has been not only maintained, but has gone on increasing. The Land Tax yields better and bettor results every year, notwithstanding the temporary suspensions and remissions on account of famine. The Income Tax Returns are also most satisfactory. Then the Salt Tax shows an increase, the Excise Revenue and the Customs Revenue show an increase enough to counterbalance any possible trouble there may be in the opium revenue. It is this constant growth of revenue and receipts in almost all Departments except opium which enables India to sustain the stability of her finances despite these grievous disadvantages, which are admitted. There is another satisfactory feature, and that is the good management of India. The figures which my hon. Friend the Under Secretary has produced give proof of that good management in every Department. I do not know whether the Committee fully follows the details of what my hon. Friend said regarding the provincial finances, but I can assure the Committee that the statement afforded the most remarkable instance of the good financial and administrative management of the Government of India. But there is a still further reason, and that is the progress of public improvements. Her railways and canals have enabled India to bear up against misfortune, and I hope the House observed that these excellent works have during the past three years been carried out with very little addition to the Public Debt. The Under Secretary of State showed that it was by the husbanding first, and the utilising afterwards, of the cash balances which had accrued during the cycle of fat years with which her finances had been visited. Another reason is the general prosperity of the people. The hon. Member for Flintshire has stated, perhaps for the tenth time in the House, that the people of India are poverty-stricken, and I have to repeat my denial, also for the tenth time, that they are poverty-stricken. It has been proved by the extension of their trade, of their agriculture, of their manufactures, of their industries, of everything that constitutes the prosperity of a people. The enormous increase of the population is another reason why India has been able to bear up against monetary misfortunes. Her population is increasing more rapidly than the population of any other country. Every year adds between two and three millions of taxpayers to British India, and that increase is something to go on with. Is it surprising that, with a population increasing at so unique a rate, India should be able to bear up against monetary misfortune? Another reason is the gradual reduction of the National Debt and of the interest upon that Debt. This brings me to the point of exchange. Now, there is no denying the great misfortune which this brings upon the Indian Exchequer, and most of all upon our unfortunate fellow-countrymen. My hon. Friend the Member for Kensington (Sir Roper Lethbridge) knows as well as I how it affects all branches of the Uncovenanted Civil Service and also members of the Civil Service. Many of them invested their money in Indian Securities on the faith that the value of the rupee would be sustained, and investments coming from such a quarter have always added to the public credit of the Indian Exchequer. These men have suffered enormously. If they had known what was going to happen, they would have invested their savings in European Securities. But I venture to say this cheapness of silver has something to do with the prosperity of India. It has undoubtedly benefited her industries, and, therefore, if India loses in some respects through the fall of exchange, she gains in other respects, and I am not sure whether the loss which she sustains in her expenditure by the fall in exchange is not partially, if not wholly, recouped by the gain in her revenue from the general prosperity of the people, to which the cheapness of silver conduces. All these are very satisfactory explanations of the reasons why the condition of India is so improved that she is able to sustain truly fearful losses through the fall in the rate of exchange. The Under Secretary has explained the magnitude of these losses. They are almost unique in the history of the finance of any nation, and yet, in spite of that, there India is with her public works developed, with her military and civil establishments thoroughly well maintained and developed, and with her public improvements constantly progressing. You have nothing stinted, but everything provided for on an extensive scale for the general good of the country. When I was Finance Minister, if I had had such losses I should have been driven to despair. We must have doubled the Income Tax, and resorted to a hundred dangerous devices. It seems to me astounding that India should have borne such losses, and it speaks volumes with regard to the improvement of the country within the last generation. I think the Committee and the country are to be congratulated on the existing state of things as shown by the Budget this evening. The hon. Member for Flintshire said we were gradually approaching the verge of the precipice of national insolvency. He made the most of any losses from opium, and belittled the progress we had made in the other branches of the Revenue. To hear him describing the finances of India you would think we were in a rapid decline, which must end in insolvency. But at this moment the credit of India in the Money Market stands as high, if not higher, than ever. It is quite clear that those who are best able to judge, who are bound to inform themselves properly, because their own interests are concerned, have come to the conclusion that the credit of India is good, that the people are strong and are rising in wealth and prosperity, and that the Government is thoroughly to be relied upon. Those who are best able to judge and to inform themselves on the subject have come to the conclusion that the credit of India is good, that the country is rising in wealth and prosperity, and that the Government is to be thoroughly relied upon. The power of reducing the interest on the National Debt from year to year is adding still further to the stability of the national finance. The hon. Member for Flintshire has referred to the military expenditure as something which could be cut and carved about at pleasure. That is not the case. The Under Secretary himself, in his excellent book on Central Asia, has indicated the forces which Russia may bring to bear on the Indian frontier, and the forces with which England could reply. Those who understand the military conditions of Asia know that the only question is whether or not our forces are adequate. No man can doubt that the army of India is, to say the least of it, no larger than is necessary, not for aggression, but merely for the defence of India. It is idle to talk about a reduction of the army expenditure, and it would be misleading the House to hold out any hope of such reduction. Neither is there any reasonable hope of a serious reduction in the Civil Service expenditure. That is necessary for the due progress and good government of the country. The only hope is of a constant augmentation of revenue proceeding from the growing prosperity of the country and the physical, moral, and mental development of the people. Of that I have the greatest hope, and I never have felt more confident of it than when I was listening to the spirit-stirring record which has been given to the House to-night. Seldom has there been exhibited a grander and nobler case of a nation of Asiatics struggling successfully against monetary misfortune.

(9.22.) MR. MORTON (Peterborough)

I can understand the speech we have just listened to from the hon. Baronet, who no doubt knows a great deal about India. The hon. Baronet always takes the purely official view of Indian affairs, which assumes that everything is right as it is, whatever Government is in power, so long as they are spending plenty of money on British officials of all sorts and sizes. At the same time, I believe that the hon. Baronet takes a kinder view of the people of India than do some other people. I do not agree with him as to the expenditure on military affairs. I believe that a great deal too much money is spent on the army in India, owing to a scare of what Russia might do with regard to it. If the people of India were allowed to help to govern their own country, the expenditure would, in my opinion, be reduced and greater security would be achieved. Instead of spending so much on military affairs, more money should be devoted towards the improvement of the condition of the people of that country, and by that means make it impossible to attack India from the outside. It has always appeared to me wrong that we should create such a large revenue in connection with an article that causes degradation wherever it goes, and considering the professions we make we ought rather to endeavour to do away with opium and discover other means of raising our revenue. I should like to see a reduction of the salt tax, and to see also more money spent on education. If any country is to be governed properly, it must be by education, and by making the people interested in the conduct of affairs. Then I should be glad to learn of increased expenditure on public works and railways. The late John Bright many years ago said in this connection that if we had spent on public works and improvements one tithe the money devoted to warlike operations, there would be no difficulty or danger in regard to India. Having undertaken responsibility in connection with that country, it is our duty to so direct affairs that the people may live in a decent and proper manner. Surely it ought to be possible to diminish the loss of life and decrease suffering caused by famine. When I consider all these elements it seems to me that we are, in relation to India, spending too much on pensions or superannuation, although perhaps this country has set the Indian Government a bad example. A poor country like India cannot afford to pay the large sums I notice in these accounts for superannuation without the people being impoverished. If the charges for superannuation can be reduced it will be a great benefit to the people of India and a credit to us as the governing country. The hon. Baronet in the course of his speech said that we were governing India on a most expensive scale. I believe he is right. Economy is needed in India perhaps more than in England. The hon. Baronet also made some remarks about Indian credit being good in the City of London. This country is responsible for all the money borrowed by the Indian Government, and it therefore seems to me that Indian credit means British credit, and I do not see why money should not be obtained for various purposes by the Indian Government at the same low rate of interest as it can be borrowed when the British Government requires it for this country or for the Colonies. Considering the large sums concerned in these accounts, I am sorry that we have not taken the people of India more fully into our confidence and given them a greater share in the government of their own country, and by that means obtained their assistance in preventing any outside attacks upon that large Dependency. I believe the only possible way to make that country safe, and at the same time reduce the very large annual expenditure for warlike affairs, is by getting the population of India interested in their own affairs. It is to be regretted that we have not time to consider these financial matters at greater length, and it is especially to be regretted that the Indian Budget is not brought before the House until so late a period of the Session. No doubt when we have given the various nationalities of this country that Home Rule they are crying out for, and so divest this House of a lot of local business that can be better done in the various countries, we shall have more time to consider the financial affairs of India as well as other important questions.

(9.30.) SIR WILLIAM PLOWDEN

I do not altogether agree with the hon. Baronet opposite (Sir Richard Temple) as to the impossibility of reducing the civil expenditure of India, which of course forms a large portion of the Accounts that have been presented to us. I admit that the reduction that can be made is not large, but still there is no reason why we should not attempt to reduce the expenditure if it is only by a small amount. And I will again impress upon the Government the propriety of endeavouring to carry out the recommendations of the Army Commission which sat a few years ago with respect to reducing the expenditure upon the military commands in Madras and Bombay. There might certainly be a considerable saving effected in that direction. I should like to obtain some explanation from the hon. Member in charge (Mr. Curzon) with regard to the non-effective charges, which seem to have increased in every way. These non-effective charges are enormous, and an investigation into them would, I believe, show the possibility of their being greatly reduced. I fully concur with the Under Secretary of State with regard to the greatly improved condition of the masses of the population in India. A Report, I understand, has lately been placed in the hands of the Secretary of State dealing especially with the material conditions of the population of Madras. I asked some time ago across the floor of the House whether there would be any objection to placing that Report on the Table and in the hands of the public. Considering that it is a Report drawn up by a gentleman unconnected with the Service, and is of a highly satisfactory character, I think we should have some assurance that it should be placed in the hands of the public.

*(9.34.) MR. CURZON

The remarks which have fallen from the hon. Member deserve some reply. As regards the non-effective charges to which he calls attention, I do not myself observe, on reference to page 14, that there is the great increase of which he complains. We have, on pages 14 and 47, the figures of these non-effective charges, both civil and military, stating in each case the actual increase of the charge and the loss on exchange, and it appears to me that the difference between the charges of this and the preceding year is mainly a matter of loss on exchange. With regard to the Report as to the condition of the population in the Presidency of Madras, I may say that I have not myself had time to study that Report, but I believe it answers to the description the hon. Member has given. Whether it is advisable to publish the Report in its entirety I do not know. I believe it is of considerably greater length than the hon. Member seems to imagine, but I have little doubt that, if it is not published as a whole, the British public will be given the opportunity of reading parts of it in a shorter form.

MR. MORTON

Is there any intention of reducing the Salt Tax?

* MR. CURZON

The reduction of the Salt Tax, as the hon. Member is aware, is one of those measures which are contemplated, and will be steadily kept in view both by the Indian Finance Minister and by the Secretary of State. The addition to the Salt Tax four years ago was duo to the stress of exceptional circumstances, and a pledge was given that, as soon as financial conditions would allow, the tax would be reduced. That resolution the Government have no intention of departing from. If the hon. Member had paid me the compliment of being in the House and listening to the statement I made earlier in the evening, he would have ascertained that the financial condition of India at present is not of a character to justify any such reduction. I can inform the hon. Member, however, that, so far from the consumption of salt having decreased, as it might have been expected to had this tax been felt to be a serious burden, the consumption has steadily increased from year to year. With respect to the price, I may say that it remains fairly stationary. It certainly has not increased, and there may have been a slight decrease. I mention these points with the view of showing the hon. Member that the burden of taxation is not so heavy as he is disposed to think. As regards the general policy of the duty, the Government adhere to the position they have taken up before, and we look forward to the day when we may be able to reduce the tax on this very necessary article.

MR. MORTON

I must express my regret that circumstances prevented me from being in the House to hear the statement of the hon. Gentleman. I should like to ask about the revenue from opium, which, so far as I can understand these figures, appears to be less than it was in the previous year. I ask whether that was on account of the decrease in consumption or of a decrease in taxation? I should like to know that it arises in consequence of a decrease in consumption.

*(9.44.) MR. CURZON

The rise or fall of the Revenue is not determined by the considerations the hon. Member refers to. It depends, in the first place, upon the state of the market for opium in China and elsewhere. It depends, in the second place, on the amount of opium kept in the reserves; and it depends, in the third place, on the quality and extent of the crop which is raised from year to year. These are factors which are fluctuating, and cannot, therefore, be relied upon, and it is almost impossible to predict the results from year to year. In one year we get, as I have before observed, a rise to the extent of 800,000 tens of rupees, and the following year there is a corresponding fall. The trade is one of varying character, and it is impossible for anyone to determine it with accuracy. As regards the policy of the Government of India, that I need not enlarge upon, inasmuch as it was the subject of a despatch which the hon. Member has probably seen, and it has more than once been explained in this House by those who have spoken for the Indian Government. That policy is to restrict as far as possible the consumption of opium in India.

Question put, and agreed to.

Resolution to be reported To-morrow.