§ Order for Committee read.
§ *THE SECRETARY OF STATE FOR INDIA (Lord GEORGE HAMILTON, Middlesex, Ealing)The three financial statements with which I have to deal are associated with a period of continuous agricultural misfortune and depression in Western India. A drought unequalled in its dimensions, intensity, and duration, has throughout this period afflicted Bombay and the Central Provinces, causing a distress and loss and depreciation of agricultural credit and property which have not, so far as we know, been equalled during the last century. Putting for a moment on one side the misery, the privation, and the mortality inflicted upon humanity alone by this awful visitation, the property lost to the agricultural community in Western India is estimated to be not less than £50,000,000 sterling. India has few large industries other than agricultural, 1200 and the largest of her industrial enterprises is the production and manufacture of cotton. This industry is situated in the midst of the afflicted districts, and has suffered accordingly. It is no exaggeration to say that in many parts of the province of Bombay during the greater part of this distress all private employment ceased, and the whole of the labouring classes were thrown upon the shoulders of the Government. In accordance with the pledge I repeatedly gave in this House, that the whole administrative machinery and financial credit of the Government of India should be fully exercised in saving life and relieving distress, a gigantic task and expenditure were thrown upon the financial system and credit of India.
There were many Members in this House who doubted if the resources of India were capable of sustaining this burden, and who, in their anxiety that there should be no miscarriage of relief from want of funds, pressed upon me the advisability of a large grant from the Imperial Exchequer as an essential aid to the Indian Treasury. The relief expenditure has been very great, but I am glad to be able to say that, while not a single demand from any local authority has been refused, we have been able to meet it without difficulty from our own resources. Taking the cost of direct relief and the loss to the revenue during the three years in question, they amount to £10,044,000, and, if we add to this the temporary burden thrown on cash balances from loans and advances, we arrive at a total sum of £15,171,000, which for famine relief alone had to be found by the Indian Exchequer. Under conditions such as these, it will be imagined by many that the statements I have to make must, so far as the balance of expenditure and income are concerned, necessarily be unsatisfactory, and that, even assuming that this vast additional expenditure could be met without a permanent depreciation of credit, still it must have disorganised, for the three years in which it occurred, the equilibrium of Indian finance. I am glad to be able to dissipate, at the outset of my statement, any such anticipation. Since the territories of the East India Company passed over to the authority of the Crown 1201 I doubt if any Secretary of State has been able to make a more satisfactory statement than it will fall to my lot to unfold. The surpluses of income over expenditure, including all cost for famine relief, are large, continuous, and progressive. We have had certain windfalls to assist us, but the most interesting features of the figures that I have to deal with are that they show that, notwithstanding the great losses and depreciation of agriculture in the West, taking India as a whole, the vast community within its borders have progressed and prospered, and there has been a distinct economic advance. The fact is that the great peninsula of India is not a country, but a continent, and the 300,000,000 inhabitants it contains are not one nation, but many nations, races, and communities, widely differing one from another, and living under dissimilar climates and physical divergencies, and such is the law of compensation that it almost invariably follows that the loss in one province and the distress of one community is the gain and benefit of those in other parts of the peninsula.
I shall, no doubt, be told in the ensuing debate that my figures are optimistic, that my survey of Indian finance and India's economic condition is superficial and rosy, and that my figures are cunningly manipulated to bide the increased impoverishment, if not the insolvency, of India. These comments are the reply that is annually made in certain quarters to the official statements of facts and figures connected with India's financial progress. I am no optimist. My tendency is to inflate rather than contract the difficulties I see ahead; and this characteristic as years advance grows rather than diminishes. This is the twelfth annual statement that, in the course of my political life, I have had the honour to make on behalf of the Indian Government. On every occasion certain of my critics have questioned the accuracy of my figures, which they allege are founded more on official optimism than actual facts and reliable forecast. On every occasion in the course of the next twelve months the actual figures of the closed accounts, as opposed to my estimate, have been more favourable than my anticipation. But then it may be urged that, even if my 1202 figures are statistically correct, my review of the economic and material progress of India is thoroughly fallacious, that I fasten upon a few extraneous incidents and inflate them to the glorification of British rule in India, but that I ignore the inner life of the great mass of the community, who are steadily under our processes becoming more and more impoverished.
§ MR. CAINE (Cornwall, Camborne)No, no.
§ *LORD G. HAMILTONWell, Sir, on that point I will only make this one remark. The test by which I judge of India's material advancement or retrogression are not my own, nor those of the Indian Government. They are the economic tests universally accepted and applied to all civilised nations. Year after year the Chancellor of the Exchequer, in his annual statement upon Great Britain's finance and industrial condition, applies certain criteria as to the country's prosperity. If he can show that the general powers of consumption and production of the community, the deposits in ths banks, the average wages in town and country, the intake of taxation, the proceeds of dutiable articles—if he can show that all these in combination are satisfactory, it is accepted as unmistakable evidence that the community is advancing and prosperous. If the test be a sound one here, it cannot be the reverse in India. If this test be accepted in the case of this country, it should not be disputed in the case of India. I care not what test you apply in order to ascertain whether India is improving or deteriorating, provided it is one that is accepted and in universal use amongst other civilised nations; but I wish to enter my protest against the assertion, not infrequently made by those unable to disprove our statements, that India is a country so peculiarly organised and constituted that she is to be exempt from the tests and criteria which are universally applied to all other civilised communities. For the year 1809–1900 the charge for famine expenditure, exclusive of loans, was £3,442,000, but the revenue was so satisfactory that we were able to meet the whole of that exceptional 1203 charge and, at the same time, to realise a surplus of £2,774,623. The finance of the next year, 1900–1901, passed through various changes and permutations, and caused considerable anxiety to the Indian Finance Minister. Mr. Dawkins was responsible for the Budget, and he was compelled to estimate that he would have to meet a direct famine charge of £4,648,300, and therefore he did not like to estimate for a larger surplus than £160,000 He anticipated, as he had a perfect right to do, that he might depend this year upon a normal rainfall. Unfortunately, his anticipations were not realised, and for the third year in succession, and, contrary to all meteorological experience and records, drought fastened again on the very richest part of Western India. It was under these circumstances that I had last year to make my financial statement. It was clear that there would have to be additional provision made for famine relief, and, therefore, knowing that increased expenditure was certain, but being uncertain as to the dimensions it might attain, I budgeted for a deficiency of £826,000. The famine expenditure did largely increase, and reached the large sum of £5,561,000, but I am glad to say that so satisfactory was the return of the revenue under almost every single head except land revenue that, now that I have got the final figures for the year, my estimated deficit of £826,000 is turned into a surplus of £1,671,000.
§ *LORD G. HAMILTONI was coming to that. We had a windfall this year, because a considerable number of troops were taken off the Indian Establishment and engaged both in China and South Africa, and whilst they were so absent the whole charge of their maintenance was borne by the Imperial Government. But, on the other hand, a certain proportion of the saving was expended in rearming the native troops and in various ways in improving the efficiency of the army that was in India. The really satisfactory feature of this 1204 year's finance is that as regards salt, excise, customs, post-office, and telegraphs there is a substantial increase, and that the railway account is better by £641,000 than was anticipated.
There is an important change effected in the Mint this year, which is worthy of the notice of the House. It has always been the practice in the past to include the profits from the Mint in the ordinary revenue of the year. Before the Mints were closed these profits consisted mainly of seignorage, the profits on each rupee that was coined being small. When the Mints became closed to the public sellers of silver, the profits on each rupee coined, the exchange value being taken at 1s. 4d., were large. The number coined was small; but in this year the demand for coined rupees, partly on account of famine and partly by a desire on the part of traders to exchange rupees for the gold sent to India, became very great. The Government had to purchase silver largely, and the upshot of the coinage operations of the year was that we coined no less than 171,000,000 rupees. The profit is very large. It amounts to about 26 per cent. of the intrinsic metallic value of the rupee, and this gave a net profit of £3,000,000 sterling. No part of this profit has been credited to revenue. If it had been so realised, the surplus would have been upwards of £4,500,000. The profits of the amount for this year and subsequently have been set aside to form a source of income by a gold reserve fund which has been established to give stability to exchange and security to the currency system we have recently established in India. If this sum had, in accordance with practice, been included the revenue of the year, the surplus of India would have amounted to nearly £5,000,000 sterling. In the same twelve months, notwithstanding increased taxation, the deficit in this country was £53,000,000.
The House is empty, and there is not so large an audience as I had last year. I am sorry for it, because I should like to bring home to certain gentlemen the argument which these figures suggest. Last year, on the discussion of the Indian Budget, the First Lord of the Treasury, my right hon. friend the Chancellor of the Exchequer, and I had 1205 to stand almost alone the whole night combating the view that a large grant should be made from the Imperial Exchequer for the purpose of helping India to meet its famine charges. As I have stated, every demand made by the Indian Government was acceded to; but if the House had had their way, and £5,000,000 had been voted to India, it would have made little difference as regards famine disbursements, but it would have gone to swell the large surplus in India and to have increased the deficit of my right hon. friend the Chancellor of the Exchequer here. In other words—and that is why I am sorry the audience is so small—if the House had had their way last year, at a time of exceptional financial pressure, they would have put additional taxation on the taxpayers of this country in order to add to the largest of modern surpluses in India. We, certainly I, opposed the grant not so much in the interests of the English taxpayer as in the interests of India herself. If the whole structure of Indian finance is becoming stronger and more reliable, it has become so under pressure and from the knowledge that it must be self-sustaining. I quite admit that occasions may occur in which it is essential that the Imperial Treasury should come to the rescue of Indian finance, and if, in a moment of unexpected or dire emergency, its credit requires supporting, let the Imperial Exchequer at once come to its assistance, but not otherwise.
In ordinary times the relations between the two Exchequers should be just and fair, India, as the weaker partner, getting the benefit of any doubt where the relative incidence of a common expenditure is open to question or uncertainty. Such are the relations I have endeavoured, not without success, to establish between the two Treasuries. The principles which I have laid down in connection with the expenditure connected with military expeditions outside India have been universally accepted and have been in force for some years past, and when the Commission upon Indian Expenditure, after a long delay, reported last year in favour of a considerable transfer to the Imperial Exchequer, which had hitherto been borne by the revenues of India, the Chancellor 1206 of the Exchequer at once assented to that proposition. And, moreover, we have established the principle that, where there is a difference of opinion between the two Exchequers, the question in dispute shall be referred to arbitration. I quite admit, in dealing with Eastern communities, the great part which sentiment and the emotions play in framing a policy and giving effect to it, and, if you like, I will go further and say inlaying down the general principles which should govern administration. But I think everybody will agree with me that if there is one branch of administrative and executive work in which sentiment and emotion should find no place it is in that of finance. Anyone who will take the trouble of reviewing the finance of those who have been unfortunate in money matters, whether it be individuals or communities or nations, will find that where they have had recourse to sentimental or emotional finance it has generally ended first in repudiation, and subsequently in bankruptcy. So much for the figures of the second year.
I now come to the third year, in which we now are. Sir Edward Law estimated for a surplus of £690,900 four months back, but the prospects have so improved by a general increase under all the substantial heads of revenue since March last that, by the latest telegrams, the surplus is raised to £1,824,200. On the expenditure side, as compared with the preceding year, there is a reduction of £3,245,000 of expenditure connected with famine. The House will, I am sure, be glad to know that the latest information as regards the crop prospects in India is, on the whole, satisfactory. The prices in certain districts are higher, and though there is not a large diminution at present in the numbers on relief in Bombay, their physical condition is reported as good. I think we may confidently expect that there will be nothing approaching to famine in any part of India during the present financial year, but the districts which have so sorely suffered during the past three or four years will require close watching and, possibly, careful nursing. There is an increase in the Army expenditure of £1,982,000. This may be divided into two sums of almost equal dimensions, 1207 one of which represents the increased cost associated with the return of the contingents that have been in China and South Africa, and the other half will be expended on the rearmament of the native forces with the most modern rifles, the increase of artillery, the improvement of the transport service, a large purchase of ordnance stores, and the erection of factories in India for the manufacture of munitions of war. I hope this last experiment will answer, and that we shall, as years roll on, be less and less dependent on supplies of this character from this country. The great bulk of this expenditure in connection with improvements in the service is what I may call capital expenditure, and will not recur.
Perhaps it would be well that I should explain how we stand with reference to ways and means. This year we propose to spend, in accordance with our usual practice, a large sum upon the development of railway communications, and we shall be able to meet most of this expenditure from our cash balances, surplus, and other resources, but it was estimated that in order to meet the remainder of this expenditure it would be necessary to raise a loan of two crores, or £1,333,000, in India, and a loan of £1,000,000 in this country. It was subsequently decided to reduce the rupee loan in India to half that amount. My financial advisers were of opinion that, looking to the magnitude of temporary debt in the country, and to the amount of railway capital which was proposed to be raised, and to the fact that the price of India Three per Cent. Stock was above par, I should offer for subscription £3,000,000 Three per Cent. Stock at the price of 98, in place of the £1,000,000 shown in the Budget. Unfortunately the day that we invited tenders for the subscription there was a heavy fall in American securities. In consequence a very large sale of Consols took place, with the result that there was a considerable fall in their price. It became clear that we were not likely to realise the whole of the loan. The amount placed was £700,000. Since then we have improved our position by the increase of the estimated surplus, which is better by £1,150,000 than was anticipated. Therefore we stand very much 1208 is we did before. I must of course reserve to myself a free hand as to the methods by which I may for the remainder of the year provide the necessary ways and means to meet this capital expenditure.
In reviewing, therefore, the finance of the last three years we find that, without additional taxation, the revenue of India has met a famine expenditure of over £10,000,000, notwithstanding wholesale agricultural prostration in Western India, as well as depression elsewhere in the staple industries of cotton, tea, and indigo, and that at the end of those three vears there is a surplus of £6,377,000. These figures show a stability and recuperative power in the financial system of India which must be to many a surprise, if not a revelation. The conclusions they force upon us cannot be put on one side merely by sneers at the optimism of the Secretary of State for India, nor can they be reconciled with the theory that year by year and decade by decade the mass of the population of India are becoming more and more impoverished. If India has emerged successfully from the great ordeal through which she has recently passed it is mainly due to the far-seeing policy which the Indian Government have for many years adopted in financial matters. That policy has been neither shortsighted nor niggardly. The Indian Government have never attempted to increase their revenue by piling up taxation. Their policy has been to utilise reproductive and recuperative agencies, such as railroads, canals, irrigation, cheap postal and telegraphic communication, and improved agricultural and industrial processes, and the establishment of a sound currency, to enlarge the source of India's production and powers of exchange. The task has been a long and costly one, and for years the return on the financial outlay, on the expenditure of effort, and on organisation which this policy entailed gave few outward signs of growth and encouragement. The current of general progress has been sluggish, with many backwaters, which some of my critics hare mistaken for the current itself. But though slow, so as at times to be almost imperceptible, the material advance 1209 has been continuous. The recuperative powers of which my statement gives proof mean larger resources and greater staying power than before. If twenty years ago we had been compelled to pass through such an economic convulsion as has for the last five years attacked Bombay, our means of communication, our organisation, our resources, and the powers of endurance of the people themselves would have been wholly inadequate to sustain the attack, and wholesale disaster on a gigantic scale must have ensued. I admit that the numbers on relief and the loss of cattle and crops during the last famine were greater than in any preceding visitation of which we have record; but this is due not to the increased poverty of the people attacked, but to the unprecedented dimensions of the drought. There is a small school in this country as well as in India who are perpetually asserting that our rule is bleeding India to death. Since I have been Secretary of State I have taken great pains to collect and investigate any information or evidence I could obtain, no matter from what quarter it came, which by facts, figures, or other reliable information tended to support this allegation. I admit at once that if it could be shown that India has retrograded in material prosperity under our rule we stand self-condemned, and we ought no longer to be entrusted with the control of that country. But no such facts, figures, or evidence have I ever been able to obtain. That a section of the public both here and in India believe this allegation is clear from their constant and unwearied repetition of the charge. But this belief is founded not on figures, or facts, or economic data, but on a plausible syllogistic formula that they are never tired of repeating. India, they assert, is a very poor country; its poverty is annually increased by the yearly drain caused by an excess of exports over imports. This drain is enforced upon India by the necessity of yearly meeting the obligations of the Government in gold in this country, and as this Government by continual borrowing increases these obligations so it quickens the process of impoverishment. I do not know whether the hon. Gentleman the Member for Camborne holds those views.
§ *LORD G. HAMILTONBut I think he will admit that I have not unfairly stated the allegation that is constantly made.
§ *LORD G. HAMILTONThe allegation is made so often that I should like to examine it. I admit that this question of the condition of the people of India is one to which we ought to give most attention.
§ *LORD G. HAMILTONAs I said, the evidence points to an improvement of the condition of the people. Although in parts of India there may have been declension, as regards India generally any test that you can apply, whether it relates to consumption or production returns, customs, excise, salt tax, railways, Post Office deposits, or has regard to the clothing or food or house equipment of the great mass of the population, shows that the economic movement of the last fifty years has been upward and not downward. Sir James Lyall was president of the Famine Commission which inquired into the working of the Famine Code in 1897–98, and I specially pressed hint to inquire and obtain evidence as to whether the material condition of the population in the districts which had been afflicted by famine had, during the last twenty years, improved or deteriorated. The recollection of the distress and recent misery was vivid in the minds of all who gave evidence; but he asserted, with the unanimous concurrence of his Commission, that, so far as 83 per cent. of the population was concerned, there was clear and indisputable evidence that their condition during the last twenty years had improved. As regards the remaining 17 per cent., composed chiefly of coolies and labourers, he had some doubts whether the rise in wages which they received had kept pace with the rise in 1211 the price of food. Sir, the Viceroy has recently taken the greatest pains to ascertain, upon the same data as were furnished to the Famine Commission of 1880, what the average income per head of the agricultural population is now as contrasted with that twenty years back; and he ascertains that, whereas in 1880 it was Rs. 18 per head, in 1900, notwithstanding the increased population, it was Rs.20 per head—not a great increase, but still an advance. During the same period the income per head of the non-agricultural population is estimated to have risen from Rs.27 to Rs.30. Passing on from individuals to aggregates, the total area under cultivation in 1880 was 194,000,000 of acres; it is now 217,000,000 of acres, an increase that has fully kept pace with the growth of the population. But when we turn to the yield per acre we see a marked improvement; in 1880, the yield of food crops per acre was 7301b., and in 1900, 8401b. If we turn to the non-agricultural population there are evident signs of continuous improvement. The distress of the past five years has mainly affected the West of India, in which the bulk of India's manufacturing industries are situated; but I find that, notwithstanding the depression during these five years, the cotton facotries have risen in number from 143 to 186. There has been a considerable increase in foundries and railway workshops; jute mills have risen from 29 to 33, and imports of machinery and of mill work during the last five years have increased. Now these movements, small as they individually are, are all travelling in the same direction; they all indicate progress. But the industry that has made the most important advance during the last five years is coal. Twenty years ago the whole output of coal in India was not a million tons. Ten years back it was over two million tons, in 1898, three years back, it was over four million tons, in 1899 five million tons, and last year it was over six million tons. Up to last year, India was an importing country; last year she increased her internal consumption by half a million tons, and for the first time became an exporter of coal. There are a number of known coalfields untouched by railways. We are developing these by the extension of a new 1212 line which will pass through the part of the country where they are located, and I have very little doubt that in the course of a few years, the output of coal in India will be doubled. There are enormous deposits of ironstone in India, and much of it is of fine quality but, so far as we know, nowhere in the vicinity of coal. Still, it is not improbable that attempts will be made to start the steel industry in India, and, if success is associated with such an enterprise, a far-reaching impetus would be given to Indian trade and manufacture. Now I have given a good many figures and facts to the House, and if I add to the facts I have thus enumerated the constant import and retention of precious metals on a very large scale by India, I have produced overwhelming accumulative evidence to show that the economic movement in India is certainly on the upward grade.
Let me deal now with the next allegation. It is true that the exports of India exceed the annual imports, but that does not prove that India is yearly becoming poorer. In Great Britain our imports for many years past have annually exceeded our exports. We are the creditors of the world, and the water-carriers of the trade of the world, and we import the overwhelming mass of the food we require and of the raw material used by our great industries. Under this régime we have prospered and become richer decade by decade; but the United States have, during the last few years, made phenomenal bounds in prosperity. During that period the excess of her exports over her imports has risen from 100,000,000 dollars in 1895 to 540,000,000 dollars in 1900. Is she the poorer? On the contrary, she has so increased her accumulated wealth and loanable capital that New York is now competing with London as one of the financial centres of the world. It is clear, therefore, that to base any conclusions upon the mathematical test of simple subtraction of exports from imports, or upon any survey of only the external trade of a country, but without taking cognisance of the general trade of which it is a portion is thoroughly misleading. The simple fact that India exports more than she imports is no proof whatever that she is annually 1213 becoming poorer, for the vast increase of the volume of her external trade is evidence of industrial development and of increased powers of internal consumption.
Let us now look at the nature of the payments made in this country on behalf of the Indian Government. It is not tribute or deadweight disbursements; it represents in every case payment for service rendered, and service of the most valuable and remunerative character. By far the largest part of the so-called home charges is the interest payable on debt and railway capital. These two items are practically convertible, for all the debt incurred here for many years past has been for remunerative purposes, the development either of railways or of irrigation. The total capital put into the railways is about £200,000,000 sterling, and that connected with large irrigation works about £25,000,000 sterling. For these purposes we have borrowed and continue to borrow, but these borrowings do not impoverish India. There are two classess of borrowers in this world—those who borrow because otherwise they cannot meet their immediate obligations, and those who borrow in order to improve their property and to augment their income. The first are under compulsion to borrow; the second are free agents. India is in the latter category. We could stop borrowing at once if we thought it advisable to do so; but we deliberately continue our policy of borrowing because past experience has shown us that the development of the railroads and the irrigation works is a most desirable investment for the people of India. The indirect benefits that railways have conferred upon India are so great and indisputable that the sternest of economists have not grudged the annual charge imposed upon the revenues of India for the purpose of developing railway enterprise. Twenty years ago the annual charge connected with the railway account on the Indian revenue was £2,000,000 sterling. The railway mileage then open for traffic in India was about 6,500 miles. The railway mileage in working order now is 25,000 miles, and, as the system has extended, the charge has become less and less, so that India has annually got the benefit of a larger and larger railway mileage, and 1214 paid less and less for increasing advantages, until at the present moment the Indian railways are worked at a profit and are a source of revenue. The Indian railway accounts are so extremely good that the House will allow me to explain them. The charge against railway revenues, as shown in these accounts, includes not only the working expenses and interest on all lines open, but also the interest on all the capital of unfinished lines. In addition to that there is a special charge which represents a sinking fund for the redemption of debt, which, I should think, from a strictly accounting point of view, ought not to be made a charge against the annual receipts. The Government of India have the power, under the contracts made with the guaranteed companies, of purchasing their lines at certain stated intervals, and they have the power, it they wish to avail themselves of it, of purchasing by a terminable annuity which lapses in fifty years. A considerable portion of this annuity represents the payment of capital, and that repayment of capital at the present moment amounts to the large annual sum of £590,000; and, under the operation of the sinking fund, in fifty years the Indian Government will acquire possession of a magnificent railway property, which is now valued at £85,000,000 sterling, absolutely free from debt or any annual charge connected with the payment of interest. Bearing in mind this special charge against railway receipts, it is interesting to note the remarkable improvement shown during the last five years in the railway accounts. In 1897–98 there was a loss on the railway account of £709,000. In the next year that loss was reduced to £620,000. In the first of the three years with which my statement deals the whole of this loss was wiped off', and there is a profit recorded of £76,000. In the next year this profit has increased to £156,000. In that year we acquired possession of the Great Indian Peninsula Railway, and in consequence of this operation of taking over a line and stock, the marketable value of which was £35,000,000 sterling, a large increase of the sinking fund had to be made. Sir Edward Law, therefore, estimated for the next year that, including the whole of this increased charge, there 1215 would be a deficiency of £164,000 on the railway account, but the traffic receipts of the first four months have been so satisfactory that it is now calculated that the whole of this estimated loss will be swept away, and that there will be, after including the whole of the sinking fund, a profit of some thousands of pounds.
§ MR. CAINEDoes the right hon. Gentleman ignore the standing loss of £40,000,000 on the Indian railways?
§ LORD G. HAMILTONThat has nothing whatever to do with it. When there was a loss on the railroads, of course it affected the finances of the year, and if the finances of the year had been unable to meet that charge and you had had to add to the capital value of your railways to enable you to meet the interest charge, then that figure might be taken into account. But that loss was mot year by year and wiped off, and now all we have to do is to deal with the interest charges, and, taking these charges into account, the working of the railroads gives a profit during the past three years. The result of this system of borrowing for railways is that we have wiped out the annual loss, and if we deduct the Sinking Fund, which is a charge arbitrarily placed against the railway revenues, we find that the railway system is not only now costing us nothing, but, in addition to all its enormous indirect benefits, is contributing £600,000 a year to the Indian Exchequer out of its profits. This, then, is the result of the policy which the hon. Gentleman wants to prove is placing the Indian Government year by year in a worse financial position and ought to be put a stop to. I maintain, on the other hand, that this judicious system of borrowing has been the salvation, both financially and otherwise, of India. If it had not been for the great development of railway enterprise it would have been absolutely impossible for us to have attempted to cope with one tithe of the distress which has been caused by the failure of the rains in certain parts of India. Although the working of the railroads is satisfactory, I think we ought not yet to be satisfied, 1216 but ought to try to improve it. Lord Curzon and I for some time past have been desirous of having the working and organization of our Indian railroads investigated and reported upon by an outside railway authority. Great credit is due to the Public Works Department for the ability shown in overcoming the great engineering difficulties they have had to encounter; and the construction, development, and general administration of railways in India has on the whole been crowned with marked success. But I have little doubt that a railway authority, trained for many years to study economy, expedition, and cheap carriage, under the pressure of competition and the shareholders' desire for dividends, might be able to make valuable suggestions as regards the working of railways in India. I hope I have succeeded in securing the services of an expert of very great experience and attainments. He should start at once, and, before he finally reports, he will investigate the railway system in America with the view of reporting how far the methods that there prevail could with advantage be introduced into India. I need not trouble the House with the reference which will be given to him for his inquiries, beyond stating that his attention will be specially directed towards the development of light railroads amongst the more densely inhabited agricultural districts of India. I am hopeful that when that report is made we shall be able to take action upon it which will add to the value of the railroad property of India.
The other great branch of remunerative capital outlay is irrigation. More than twenty years ago I presided over a Committee of this House which reported upon this subject, and the experience that we have since gained has tended to confirm the substance of that Report. Upon certain conditions, which combine a continuous supply of water independent of the local rainfall, and passing through a country which by gravitation permits the transmission of water in various directions, the benefits of irrigation and its profits are very great. Excepting the Punjab and Sind, there are few, if any, parts of India where this combination is to be found on such a scale as to justify very large 1217 works, or where, if the conditions do exist, they have not been fully utilised. But I am doubtful insufficient attention has been given to smaller and less ambitious works, such as reservoirs, tanks, and all those smaller schemes which, according to the climatic and physical conditions of the country, are calculated to meet local drought. These schemes occupy the great intermediate domain belonging to irrigation which is to be found between the humble well and the vast distributing works connected with the large rivers of India. The development of this class of irrigation is closely associated with land assessment and famine labour relief works. We must be most careful to see that our land revenue system by unduly assessing such improvements does not discourage the cultivator from making them, and we can, I think, by financial help or otherwise, encourage local bodies, corporations, and well-to-do individuals to plan and promote the storage and distribution of water in the manner most likely to withstand the particular forms of drought to which their localities may be liable. Though many of the relief works made during famine are subsequently useful, still their utility at present is in no way commensurate to their cost. To bring together into one focus all forms of irrigation, and lay down, both as regards Government work and private effort, rules for their interlacing, encouragement, and control is a task which we propose at once to undertake; and I have secured as chairman of a commission for this purpose Sir Colin Scott-Moncrieff, whose work in Egypt has been so remarkable that it has effaced the recollection of the excellent services which, as an irrigation officer many years ago, he performed in India. With him will be associated a revenue and engineering officer of the highest repute, and a native gentleman of capacity and administrative experience.
But there is an agency as potent as either railways or irrigation in promoting India's material progress, whose activities, though silent, are ubiquitous and never-ceasing, and which demands a word of notice. I refer to our gold currency policy. It has stood the test of three successive adverse years, and not 1218 only has it emerged triumphant from that ordeal, but it has during that period lightened the strain which India's economic system had to sustain. One of the objects both of the right hon. Gentleman the Member for East Wolverhampton and myself in promoting the adoption of a gold currency and standard in India was a firm belief that it would, by steadying exchange, largely increase the flow of loanable capital to India, thus developing industry and assisting agriculture by lowering the price of money and the rate of interest both in good years and bad years. Amongst the witnesses who appeared before the Currency Committee, no man spoke with greater knowledge and authority than Mr. Lindsay, of the Bank of Bengal, and he has recently communicated a memorandum to the Finance Minister in India, from which I will quote the following pregnant ex tract—
A comparison of the rates of interest ruling in 1899 and 1900 with those in force during the preceding two years appears to indicate that the flow of capital to India anticipated by the Indian Currency Committee of 1898 has begun; and, to judge by the comparative ease with which the exceptional strain caused by the famine of 1900 was met, there is reason to believe that, should confidence in the stability of exchange be maintained, the existing facilities for the import of foreign capital will be ample to meet all legitimate demands on the short loan market in India.He then points out that there have been, during the past twenty-five years, three great famines in India—a famine in 1877, a famine in 1897, and a famine in 1900, which was the most serious and the longest maintained. The published rate of interest averaged in the first year 8.3 per cent., in 1897 7.9 per cent., but in 1900 5.3 per cent. So after this I hope I shall never be told again that India is too poor a country to bear the luxury of a gold standard. As I stated before, we coined last year 171,000,000 rupees, and the profit upon this coinage was about £3,000,000 sterling. No part of this profit has been credited to the revenue, but it was passed on to the cash balance, and temporarily used as loans to native States and advances to cultivators. As such loans are repaid, it is intended to set the proceeds apart for the maintenance of a gold reserve fund, of which a part will be held in gold and a part 1219 invested. A beginning of investment has already been made, £1,000,000 of gold being sent from India, and about £1,000,000 of Consols have been purchased with the proceeds. But the possession of a gold reserve fund and of gold in the Treasury balances and currency reserve enables the Government to protect India from fluctuations in exchange. Formerly, the Government could only meet sterling obligations by the sale of Council bills to the public, or by borrowing; and it was sometimes necessary to press these Bills on a falling market. Now the Government has a third and valuable resource. The Government can ease the market by sending home gold from its Treasury balances, or can draw gold from the currency reserve, or from the new gold reserve fund, or the Secretary of State can sell a portion of the invested funds. Sir, it has long been recognised that the possession of a stock of gold capable of being used in this way is one of the best possible safeguards for maintaining a stable exchange between England and India. On June 30th of this year the gold held by the Indian Government was thus located:—Paper currency reserve, £5,400,000; Treasuries, £180,000; gold reserve fund, £1,100,000, making a total of about £6,700,000, exclusive of £500,000 in the gold reserve in England.I received a few days back the Report of Sir Antony MacDonnell's Commission upon the famine administration of the last drought, and this Report also contains suggestions relating to the principles which govern the suspension and remission of land revenue during times of exceptional distress. The Report is long, able, and unanimous; and in the course of a short time I hope to be able to give effect to many of its recommendations. There is in certain quarters an impression that our land assessments are in many parts of the country unduly high, and that the inability of the cultivators to meet distress caused by drought, as well as their indebtedness to the moneylenders, is largely to be attributed to these high assessments. My mind is perfectly open on such questions; I have never been able to obtain yet reliable evidence or figures in support of this contention which stood subsequent 1220 examination; and upon this point I may say that Sir Antony MacDonnell's Report, which is unanimously signed by all the Commissioners, in no way maintains or advances any theory that our land assessment is too high. At the same time, I readily admit that it may be that the rise under resettlement may sometimes be too sudden, and that here and there assessments may have been too high. And it is, further, an undoubted fact that the indebtedness of the occupier in many places is a serious economic and political danger. I do not believe, however, that the general rate of assessment is too high; on the contrary, compared with what it was under native rule, it is undoubtedly moderate, and should be well within the general paying capacity of the cultivator, provided he is free from the clutches of the moneylender. If the indebtedness of the ryot and landowner be a serious admitted evil, can we free him from its grip and consequences? My belief is that this indebtedness largely arises from two causes. We have strengthened the tenure of the occupier, and thus increased the value of the security he can offer, and the procedure of the civil courts has expedited and strengthened the moneylender's powers of foreclosure. To remedy this state of things we are having recourse to counteracting processes. We have imposed in the Punjab and are about to impose in parts of Bombay certain restrictions on the powers of alienation by the occupier. The legislation is tentative, and will have to be very closely watched.
The other measure to which I allude is an attempt to establish land banks. This is a proposal to which much attention and investigation in recent years have been given. A Committee at Simla, under the presidency of the Finance Minister, is now sitting, and I hope, in the course of this year, one or more experimental banks will be started. This problem in all countries has proved a difficult one, but its solution in India is aggravated by the relatively much greater position which Government there occupies in the minds of the governed compared with Administrations in a self-governing community. These banks to be useful must be numerous; to be numerous they must be self-supporting and self-governing; but they cannot 1221 be started without Government support. We have, therefore, to try and define the support to be given so that it should be of such a character that, whilst sufficient to start a bank, it should automatically diminish and cease with the lapse of time. Too much care cannot in this respect be given to the constitution and framework of the pioneer institutions.
There is yet a further inquiry I have to refer to, and this will interest my hon. friend the Member for North-East Bethnal Green. The indefatigable Viceroy has another great investigation in hand dealing with a subject which, if not strictly germane to those with which I have been dealing, does indirectly affect the future industrial prospects of India—namely, the reform of the existing systems of education. No one, looking at the systems in force, can deny that primary as against secondary education has been neglected, and that, in the higher branches of education, a purely literary degree of a perfunctory character, and in many cases of no subsequent use, has, until quite recent times, pushed technical and industrial education out of the field. These obvious defects must be redressed, and in any reform in the direction I have indicated the Viceroy will have the support of the whole commercial and industrial intelligence of India.
I have now enumerated the various inquiries and investigations which the Government of India have set on foot, some of which are complete, some proceeding, and others not yet commenced; but, in relation to all of these, there is but one desire on the part of those who started them—that they should bear fruit on the earliest opportunity. We are fortunate at this juncture in having as Viceroy of India a statesman who, in addition to other remarkable qualities, has a capacity of work in himself, and a power in moving others to similar exertion which I have never yet seen equalled. In his hands there will be no delay in taking action upon reports when made; and, as there will be a prompt co-operation here, I hope that, within a limited time, the reforms we have in view may be in working order in their respective spheres of operation. But I cannot mention Lord Curzon's name without 1222 pointing out that it is not only in connection with questions of material progress in India that his work is to be lauded; in other directions he has done even more valuable service. It is not so much that he has made any marked departure from the principles which have animated his distinguished predecessors, as that, gifted with a remarkable power of sympathetic speech, he has brought vividly home to all ranks of the native community the beneficent intentions of the Government of which he is the head, and the unselfish objects of the policy which it is perpetually endeavouring to promote. The fortunes of Great Britain and India are indissolubly united, and that curious and incongruous union, as it may seem to some, must, so long as it exists, bring in its wake a string of problems which would at first sight seem to baffle any stable solution. Upon the foundation of an Act of Parliament of a self-governing people there is established a Government at the other end of the world necessarily autocratic in its constitution and summary in its procedure, which exercises sway over one-sixth of the human race. It has been frequently predicted that, as this House becomes more and more democratic in its character from the lowering of the franchise, so would it show a greater disposition to interfere in the policy and practices of the Government of India. So far from this having taken place, the exact reverse has occurred. I was Under Secretary of State at the India Office twenty-seven years ago, when a higher franchise prevailed in this country, and my work then was, as far as Parliament was concerned, much heavier than it now is.
§ *LORD G. HAMILTONNo, that is not the case; it is not due to a diminution of interest in Indian questions; on the contrary, at no time can I recollect that there was a wider or more general sympathy with our fellow-subjects there than now prevails in this House.
§ *LORD G. HAMILTONI repeat, in my judgment, and I think I may speak with some authority from my connection with Indian administration for many years, there never was a time when there was a more anxious desire on the part of all sections to take an interest in Indian affairs. The truth is that a democracy loves many things, but most of all the exhibition of strength if associated with justice; and it is ready to support and applaud a strong Government in India, provided that those who exercise authority there exhibit the qualities of justice, vigilance, and fearlessness; but, of these attributes, first comes justice. It is sometimes said that the foundation of our rule in India is force. I deny that proposition. Justice is the foundation of our authority in India; force is in reserve, but only to uphold justice. Up to the time of the establishment of our Government in India her past history was one continuous record of the rule of fighting minorities dominating peaceful majorities. We suppressed the turbulent few to the immeasurable gain of the quiet many. To maintain justice between man and man, to ensure equal treatment between race and race and creed and creed—this is the mission and should be the glory of British rule in India. The volumes of multifarious papers, reports, and correspondence dealing with different branches of work and administration that come under the cognisance of the Secretary of State for India are generally pleasant reading. They do indicate the success and thoroughness with which this task of enforcing justice is carried out by our rule in India. But I occasionally come across undoubted miscarriage of justice, where verdicts are given contrary to the clear opinion of the judge and the evidence he has analysed; and, although these cases are very few and far between, they are generally connected with incidents where European and native have come in collision. The Viceroy has on more than one occasion in manly and eloquent language pointed out that any one who in any way aids, abets, or connives at such a decision is doing his best to destroy the moral foundations of our authority in India, and I wish here publicly to endorse every word he has so said. There are problems ahead, social 1224 and political, which must crop up in the future, and whose handling will be difficult, and solution impossible, unless we can associate with their ultimate settlement confidence and trust in our motives and integrity. The Viceroy has already during his present tenure of office, achieved two great personal successes; by his talents and personality he has strengthened the external policy of India, and at the same time has infused vigour and activity into every branch of internal administration, thus winning the admiration of the governing classes, and, on the other hand, by his consideration for the sentiments, feelings, and rights of the native populations, he has gained their especial esteem and confidence. Under the auspices of the new century, I believe that this rare and happy combination of governing qualities will inaugurate a new era of prosperity and progress in India.
§ Motion made, and Question proposed, "That Mr. Speaker do not leave the Chair."
*SIR MANCHERJEE BHOWNAG-GREE (Bethnal Green, N.E.)I am sure the House will rejoice with me at the satisfactory character of the finances and general affairs of India as disclosed in the lucid review which we have just listened to with so much interest. After more than three years of severe affliction India, according to the detailed and comprehensive statement made by my noble friend, shows to-day a capacity for recuperation which is evidence at once of the soundness of her administration, of the copious resources of the country, and of the thrifty habits and power of patient endurance of her peoples. After grappling with famines of exceptional severity, and making provision for a large outlay on further reforms and increase in the army, and placing to the credit of railways ten and a half crores of rupees and another crore to that of irrigation, the Finance Minister forecasts in his Estimates for the year under review a balance on the right side of upwards £1,671,000. If no untoward circumstances, such as another serious failure of crops or complications on the 1225 frontier, occur to dislocate the calculations on which this conclusion is based, we shall have reason to congratulate our fellow-subjects in India on the cheerful prospect that is before them of retrieving their economic position, which has been so gravely affected by the tribulations they have suffered in recent years.
The Secretary of State has made tonight several well-merited references to the splendid utterances and work of Lord Curzon since he took up the Viceroyalty. The tribute which he has thus paid is not too high or exaggerated, and will doubtless be endorsed by this House. Lord Curzon had at the outset of his career drawn out a programme for his activity which he classified under twelve heads, and he has been able to show that much has been already accomplished under many, if not all, of them. His most important work in the past year was the inauguration of the new frontier policy, which has admitted of the withdrawal of our troops from several advanced positions on the borders, and replacing them by tribal levies. It is a right step in the direction of minimising the chances of complications with the frontier tribes, and if the confidence reposed thereby in those tribes is not utterly misplaced, we may hope that they will realise and act up to the responsibility imposed on them for the security of peace. This, together with the formation of a new agency, constituting the Trans-Indus districts into an adminstration directly under the control of the supreme Government, is an act of high statesmanship making for tranquillity on the frontier which in process of time will possibly tend to lessen the great burden of frequent punitive expeditions on the Indian Exchequer. The reduction of upwards of a million and a quarter in the Army charges during the past year owing to the absence of regiments in South Africa and China is an item of the financial statement which is not only satisfactory in itself, but gives food for reflection whether a readjustment of the military expenses now borne by India should not be effected upon a more equitable basis than at present existing. Although it may not furnish quite a strong argument for a 1226 permanent reduction in the number of troops, still it points unmistakably to the fact that they are always available for service out of India, and that a considerable portion of them form an invaluable reserve for general Imperial purposes, and is is not therefore unfair to argue that the proportionate cost should be defrayed by the Imperial Exchequer. It would be an act of but bare justice to India.
It will be proper to refer here with satisfaction to the scheme which has been matured by the noble Lord and the Viceroy for the creation of an Imperial cadet corps. We have not yet the details of it before us, but I welcome the idea of opening out a field of military service for the scions of the ruling and noble houses of India, worthy of the traditions of those families in the past, and of the capacity which our brave Indian troops have proved over and over again in our own time. The confidence and responsibility reposed in the higher classes by their inclusion in the Army will, I am sure, be amply rewarded by the feelings of devotion to the paramount power which will be fostered thereby. The additional expenditure which the new reforms in the military service will necessitate will be regarded with some concern in India. All such increases are unpopular, especially in countries where, as in India, people are not taken into confidence as to the causes which make them desirable, but it is possible to reconcile popular opinion by allowing the people to share in some of the incidental benefits resulting from such increase. For instance, among the reforms projected, there is to be a large addition to the Indian medical service, and the Government of India might well take this opportunity for giving local medical men scope for their activity in this service. There has been a long standing and justifiable complaint that men trained in India for the medical profession who enter the public service have no prospect of promotion. Capable men of long experience have to relinquish their posts, or retire after a service of more than thirty: years without having had any appreciable advance in pay and position from where they began early in life. I trust, therefore, 1227 that in the contemplated increase of officers in the medical service, the Government of India will make some provision for the inclusion of men of tried and long careers as a reward for work which has hitherto been ill-requited.
Among the measures for relieving the cultivators in India from some of the chronic difficulties which lead to their impoverishment, I note that Lord Curzon promises to try the experiment of Agricultural Banks. I trust it will prove successful, for it is admitted generally that the very hard terms on which the agricultural communities obtain their loans at present from the money-lenders are extremely oppressive. Once they get into the clutches of this class of usurers, they can never get free of them. It is therefore of the utmost importance that the experiment should be given a fair trial, and I hope the result will be encouraging.
Now, Sir, there is one matter of very serious importance which has for some years naturally caused much irritation throughout India, to which I ask the permission of this House to refer. It is with regard to the maintenance of the rights, privileges, and fair treatment of our Indian fellow-subjects in other parts of His Majesty's dominions, and it is most desirable that they should know what is being done by the Secretary of State and the Viceroy to protect them against the mean and despicable attempts made in several colonies, both in Australia and Africa, to rob them of the equality and justice to which they are entitled as British subjects. Sir, the legislation in those colonies directed against British Indian subjects has become a scandal, and the people of India have well nigh lost all hope of redress. But the other day a piece of such legislation was vetoed by the King, thanks to the stand made against it by the Colonial Secretary, and I shall read to the House an extract from an article published in one of the most prominent native papers of India, the Bast Goftar, to show with what feelings the news was received there:—
Apart from the material injury that such legislation promises to inflict on the native Indian settlers in those colonies, the sense of humiliation and moral degradation which is being so keenly felt by the Indians throughout 1228 the Empire in consequence, is likely to create disaffection and serious mischief before long. The current of hostile feeling has been found running too strong, however, among the whites for the Government to deem it safe to interfere in the manner the native Indians have so long desired; and of late it seemed as if relief would never come till the stronger race themselves learnt to appreciate the other better, which meant the Greek calends. It has been at the moment when we had almost despaired of any effective action being taken by the British Government in defence of the rights of our countrymen that Reuter has flashed us the good news 'that Mr. Chamberlain has declared, in the House of Commons, that he has disallowed the Queensland Anti-Asiatic Act, because it excluded British subjects of India solely on account of race and colour, and was also offensive to Japan, placing its subjects in the same category as Asiatics generally, without considering their civilisation.' As we have said, for this firm attitude we were altogether unprepared, and our countrymen will, therefore, feel all the more grateful to Mr. Chamberlain for his action in the matter. It is only to be hoped that he will remain firm and consistent throughout, and that he will not only forbid such legislation in other colonies, but also try to emancipate our countrymen in those Settlements where such cruel and oppressive enactments already exist.I can only echo the sentiments so well expressed by the writer that my right hon. friend the Secretary for the Colonies will exert his great influence to stem the tide of such pernicious legislation. I cannot refrain from expressing my deep sense of the antipathy which both he and the Secretary of State for India have repeatedly manifested to the humiliating and oppressive treatment to which those of the people of India who reside in the colonies are subjected, and would here openly acknowledge with gratitude the consideration which they have given to the representations frequently made by me on the subject. But, Sir, it is evident that the Indian Administration both here and in India should not only take vigorous action to arrest this invasion on the rights of those whom they are bound to protect, but publicly declare what steps they are taking to safeguard their interests when they are attacked. We do not know yet what is being done to re-habilitate the lascars with regard to their employment on British ships after the judicial pronouncement of Mr. Justice Mathews which recently decided that they must be allotted the same space as European sailors. Of course, nobody can quarrel with the judgment, 1229 but the conflict of Imperial with Indian law which it has demonstrated calls for active interference on the part of the Government of India to redress the great hardships inflicted on so industrious and honest a working class community as the lascars. They do not want the additional space, for which reason, and owing to their thrifty and sober habits, the owners of vessels are glad to employ them. I do not see why they should be deprived of the advantage which these conditions of life give them for earning an honest livelihood.These are only a couple of illustrations of the unfair treatment from which some classes of our British Indian subjects suffer, and which fills them with much apprehension as to their future. I know that the noble Lord and the Viceroy have been doing all they could to protest against the wrongs thus inflicted on the Indian population, but it is time that what they do in this way should be made known to the people themselves, as it would on the one hand be a matter of some satisfaction to them, and on the other lead to an expression of public opinion throughout the country which will have some beneficial effect in the colonies. If no adequate steps are taken to arrest this onslaught on the rights of British Indian subjects, I am afraid the time will come, and that very shortly, when the House of Commons will have to decide whether the pledges and promises repeatedly given by British statesmen and the British nation to the people of India for fair treatment are to have any force or effect in future. The noble Lord very rightly said in one part of his eloquent speech to-night that the strength and vindication of our rule in India was the justice which it secured to the people. In this phrase are embraced the maintenance of their just rights and the security of their just treatment. If, however, in the face of the oppressive and disabling measures adopted in the colonies, Imperial statesmen were to throw up their hands and argue that, because they are self-governing administrations, they could not be touched even when they trampled underfoot the noblest traditions of the British constitution, then the right to govern India 1230 from here would be seriously impaired, not only in the eyes of the people of India but in the sight of foreign nations.
Now, Sir, I come to the motion which stands in my name on the Notice Paper, as follows—
That this House views with approval the efforts made within the last two years by the Viceroy and local Governments in India to foster the indigenous industries of the country and promote technical instruction, and is of opinion that, for the better and more rapid attainment of these objects, a public inquiry into the present condition of industrial education should be held with a view to devising a thoroughly regulated system of elementary technical and industrial training in connection with the existing educational institutions throughout India.I must confess to a feeling of satisfaction at the position in which the question of technical and industrial education for India stands to-day, as compared with that in which it stood three veins ago, when I first drew the attention of the House to it. The advocacy of this branch of popular instruction was then viewed in some quarters with suspicion as an attack on higher education. Today that suspicion has been entirely dispelled. Then it was vaguely conceded by even friendly critics that it was no doubt something good for India to have, but that the energy and intellect of the people must be first concentrated upon their academic and doctrinaire reforms and high political ambitions, which, although noble in themselves, can be, after all, the pursuit of a few, and not the occupation of the masses in a nation, however advanced. To-day, it is admitted that skilled labour and the training of large classes of the people for industrial avocations are as indispensable to the welfare of India as to the prosperity of any other country, and that it is the first duty of both the Government and the people to foster them. It is broadly recognised that if India is poor, that if she cannot keep abreast of other civilised countries in the van of national prosperity, if she is contemned even in our colonies and denied her just rights, that one of the main causes of her weakness is the fact that 95 per cent. of her children are eking out a bare subsistence from the soil without the knowledge and the capacity to delve under the surface down to those mineral resources with which she is bountifully supplied 1231 by nature, or to manipulate skilfully even those products which pass through their hands to foreign manufacturers. This is a new departure in popular sentiment, at which I have reason to rejoice. The ample sympathetic acknowledgment of the necessity for remedying the great want of industrial education which the noble Lord has repeatedly made in this House and out of it, and the spirited utterances of Lord Curzon on the subject on his landing in India, have mainly brought about this awakening. Both the Viceroy, and Lord Northcote in Bombay, have made this branch of instruction a main plank of their educational platform, and the numerous testimony which I have received from all parts of India, not excluding prominent native States, in the shape of inquiry as to the best means of promoting it shows that their lead is followed by native gentlemen of the highest intelligence and distinction. In his speech on the last Indian Budget, Lord Curzon again referred to the topic in these words—First, I would name educational reform, the placing of education in India, in its various branches—university, higher, secondary, technical, and elementary—upon a definite scientific footing, and the clear determination of the relations between private enterprise and the State.The utterances of prominent men of all races in India show that the public mind is ripe to welcome such reform. Nor is the necessity for it any the less apparent by its being urged by almost everyone who has any suggestions to make in regard to remedial measures for famines, that in industrial pursuits lies the future security of India against the terrible ravages of hunger. One of the most notable utterances of this kind is that of Mr. J. D. Rees, in his "Famine Facts and Fallacies," in which he points out what the people of India are capable of doing in the industrial line in these words:—The Indians are cunning workers in wood and ivory, capital carpenters, good blacksmiths. As shoemakers they might with education approach the Chinese standard. As weavers they are unsurpassed, probably unequalled in the world. Gold, coal, manganese, lead, copper, and other minerals abound in the bowels of the earth; diamonds and other precious stones are found upon its surface; the forests are full of rare and valuable products over and 1232 above timber, out of which anything can be manufactured from a ship to a match-box. Skins and tanning materials are equally plentiful; alongside cotton and jute grow dyeing materials. The best of carpets are made by the most ordinary prisoner in gaol. Fibres are positively a drug in the market. At present Germans and Japanese supply at sufficiently low prices for their clients furniture, fans, ropes, mats, carpets, baskets, combs, boxes, shoes, umbrellas, matches, buttons, and a hundred other things which could be equally well made in the country.He goes on to say that these articles are not made in India, and that the foreign manufacturer is not too proud to supply them. Yes, Sir, the German and the Austrian and the Japanese manufacturers supply all these articles to India. It is even worse than that, for they take away the raw produce and send them back to India in the shape of useful and: dainty articles, which have become things of ordinary consumption for large classes of her people. The valuable woods and the timber of her forests are not manufactured either into ships or matches by the local people! And now the question before us is, Why and how is it so? and the wrong of it being admitted, the next question is, How can the evil be remedied? But before I come to these questions, I must deal with one or two arguments which a certain class of optimists employ to make out that, after all, the backward condition of industries in India is common to many prosperous countries also, and, secondly, that the lack of industries is not so great as it is made out to be. With regard to the first argument, I am prepared to admit that there are thriving nations from among whom now and then an industry disappears from various causes. But then there are other scientific and technical occupations taking its place, or their great wealth and resources do not make the loss, if it is absolute, appreciably felt. If, for instance, some such existing pursuit ceases to be followed here, other of our home manufactures are on so gigantic a scale that the loss is scarcely perceived. Now, with regard to the second argument, it is in a sense true that there are, after all, various industries existing in India, and new ones being occasionally taken up. The last published Statement of the Moral and Material Progress of India gives, for 1233 instance, the following table of what are called "large industries.":—These together with
Silk mills 7 Soap factories 47 Tanneries 135 Iron and brass foundries 106 Sugar factories (large and small) 229 Donee works 44 Cotton ginning factories, cotton presses 773 Jute presses 122 Cotton and woollen spinning and weaving establishments, not classed as mills 24 Hope factories 25 Oil mills 195 Cutch and lac factories, large and small 140 Flour mills 103 Ice factories 56 Pottery and tile factories 140 Bone crushing factories 19 Tobacco and cigar factories 26 Silk filatures 66 Glass factories 6 Dye works 8 Indigo factories, large and small 5,094 Printing presses 756 Dairy farms 71 give a total of 8,693 of so-called "large factories." From a superficial point of view, this number may be regarded as satisfactory even for so big a country as India. But, Sir, the total of the men employed in these establishments is under 660,000, a fourth of which number is engrossed by the cotton mills, which are most apt to suffer in times of famine owing to the scarcity or dearness of cotton. At the best of times, however, the whole of the largo industries give employment to a mere trifling fraction of the teeming population of the country. Then, again, we have to take into account what is the share India derives from these industrial institutions. A great deal of the capital employed in them is British and foreign; likewise the direction or administration of than is in other than Indian hands. Of course, I cannot and do not complain of this, as I quite recognise that in the absence of Indian capital and Indian trained men it is to the advantage of the country to have these industries even with foreign help. But, from the point of view of the actual benefit 1234 accruing to India, it must be conceded that the existence of these more than 8,000 factories is not such an economic boon to the natives as appears at first sight. In fact, the chief gain to the country is the mere living wage earned by the inferior workman. I hope I have shown conclusively that the optimistic arguments to which I have referred are unsubstantial, and do not justify the assumption of any such hopeful prospect of Indian industries as might allow us to remain indifferent any longer as to the future. The other day when a teacher of mechanical engineering was required for one of the very few technical institutions in the country, they had to advertise for one in the papers here. The salary offered was about £300 per annum, and when I asked the noble Lord if a man of the engineering capacity of that modest valuation could not be found in all India, he admitted in his reply that that was so. This was just the answer I expected, but what a commentary it was upon the educational work accomplished after upwards of a century of settled British rule in India, and after half a century of a settled system of public instruction! Sir, it is perfectly clear that that system requires to be fundamentally altered. I do not think that the present standard of higher education should be reduced. That standard must be maintained for the literary and academic needs of the country. But some means must be devised for the training of large classes of her population so as to adapt them for skilled industrial pursuits. A beginning can be made by attaching to the existing schools technical departments and workshops. It is not possible in the course of a general discussion on the Budget to enter minutely into the details of any scheme of such an educational reform. Indeed, the subject is so vast, and has to be considered from so many different points of view, and the change which the present system will have to undergo would be so extensive, that a public inquiry into the whole question is a necessary preliminary to the inception of a new scheme of industrial education. My noble friend has given us the cheerful information that Lord Curzon has in hand an investigation for bringing about a reform of the existing systems. This makes my task simple, and I feel I need not enter at present into further argument 1235 in support of the terms of my motion, which will no doubt be embraced in the promised investigation, as I trust that I have made out a sufficient case for the inclusion in that inquiry of the whole question of industrial education, the absence of which is now so generally felt, and the adequate provision for which can no longer be delayed, and is in fact loudly called for by all classes of the people.
Cotton mills 186 Jute mills 33 Woollen mills 4 Rice mills 160 Saw mills 85 Paper mills 9 Breweries 28 I have to thank the House for the indulgence which it has extended to me in listening to these somewhat lengthy remarks on a subject in which many hon. Members are not likely to feel any immediate concern. But I can assure them that it is of paramount importance to the welfare of our great Indian dependency. I have given prominence to two among the several topics I have passed over in review to-night. The first relates to the protection of the rights and interests of British Indian subjects in our colonies, and the second has reference to their future well-being by means of industrial development. Both these subjects have an intimate bearing on the national well-being, not only from the Indian but from an Imperial standpoint. Both these subjects have aroused public interest in that country, and I should fail in my duty if I did not on the floor of this House declare that there lie upon British statesmen the most sacred and serious obligations to boldly grapple with these problems. The solution of the former will require the exercise of rare courage and tact, that of the latter a no less firm determination, to brush aside existing prejudices and to introduce necessary reforms. The Secretary of State for India, the Secretary of State for the Colonies, and the present Viceroy are the men to whom the people of India look with confidence for that solution, and I for one have no doubt that they will have the cordial support of this House in doing that justice to the people of India in the one case, and in securing in the other that great educational improvement which will give our fellow-subjects a firmer faith in the benevolent intentions of the British nation towards them. I beg, Sir, to move.
§ MR. CHARLES McARTHUR (Liverpool, Exchange)formally seconded the Amendment.
§
Amendment proposed—
To leave out from the word 'That' to the end of the Question, in order to add the words 'this House views with approval the efforts made within the last two years by the Viceroy and local governments in India to foster the indigenous industries of the country and promote technical instruction, and is of opinion that, for the better and more rapid attainment of these objects, a public inquiry into the present condition of industrial education should be held with a view to devising a thoroughly regulated system of elementary technical and industrial training in connection with the existing educational institutions throughout India.'"—(Sir Mancherjee Bhownaggree.)
§ Question, "That the words proposed to be left out stand part of the Question.
§ LORD G. HAMILTONI suppose the discussion will now be limited to this particular Amendment?
§ MR. SPEAKERYes.
§ LORD G. HAMILTON, who was very indistinctly heard, was understood to say that he believed that several hon. Members wished to speak upon other questions connected with the financial statement he had made. In these circumstances it might be for the convenience of the House if he dealt with the Amendment which his hon. friend had moved at this early stage. His hon. friend had truly said that the cause of education in India was now in a more satisfactory condition than it was a few years ago; and he thought that his hon. friend might fairly take upon himself some of the credit which had resulted from the efforts he had made in season and out of season in the direction of that improvement. It must be obvious, however, that until there was an increase of the existing industries by the multiplication and diversification of industrial employment, the condition of the people would not be benefited to that extent which every well-wisher of India would naturally desire. In various ways the development of technical and industrial education had been advanced, and, as the hon. Member for North-East Bethnal Green was well aware, some influential gentlemen in Bombay who had this question very much at heart had been pressing upon the Government of India to consider the advisability of establishing a college to promote industrial research. As he had already stated in his speech, the question of general education in 1237 India had been under the consideration of the Viceroy, and the Viceroy had determined to suggest an inquiry into the whole system. He could not state what the terms of the reference would be and what form the inquiry would take, but he felt confident that it would be much in the direction of promoting the objects which his hon. friend had in view. Therefore, if he could not accept the Amendment it was not because he was not in entire accord with it, and he hoped his hon friend would be satisfied with the assurance he had given.
§ Question put, and agreed to.
§ Main Question again proposed.
§ MR. CAINEI shall not under the circumstances move the resolution which I have placed upon the Paper,† although I differ very strongly from a great deal which has been put forward in this debate. I wish to associate myself with those critics to whom the noble Lord referred as holding certain heresies, which he detailed at some length, and which he said existed in Parliament "in other quarters." I will not allow myself to be drawn into the many issues which the noble Lord has raised, but I will come at once to the line of argument indicated in the resolution which stands in my name, and which I shall not now be able to move. I should like to say, in the first place, that there is one point in the noble Lord's speech with which I am in entire accord. I wish to express my entire concurrence in every word which has been said with regard to Lord Curzon, who has rendered, and I hope will still continue to render, great services to India. I do not deprecate the value of British over-rule. It is the only condition which is possible in India. India has benefited by it enormously
† Mr. Caine's Amendment was: "That this House recognises the devoted and earnest endeavours of the Viceroy of India and all concerned in famine administration to relieve the suffering people in the famine districts, but regrets that during a long series of years the attention of the Government has been directed too exclusively to measures for the alleviation of distress to the neglect of those adequate means of prevention recommended by successive Famine Commissions; and this House urges upon the Government of India that no other objects of expenditure, either in order of time or in amount expended, shall be allowed precedence of such measures as are calculated to prevent these constantly recurring calamities.1238 in the past, but British over-rule is by no means infallible. We have to realise that the duty of this country and of this House is to govern India for the benefit of the Indian people, and not simply to exploit the country for the benefit of the British people.The Amendment which I have down on the Paper refers to the Indian famine. There is no need for me to take up the time of the House with any eulogy of the splendid work done by the Viceroy of India, and by every official from the highest to the lowest, who has been concerned in famine administration during the last two or three terrible years. I have always declared that the Indian Civil Service is the finest in the world, and is filled by men who think nothing of self, and are prepared to make every sacrifice of comfort, health, and life in the discharge of the heavy duties which so often fall upon them. I feel sure that the whole House will join with me in an expression of grateful recognition of their unrivalled services during one of the greatest trials of their quality that has occurred for many a long year. The one great need of Indian administration is economy, and by economy I mean not parsimony and cheeseparing, but the wise expenditure of Indian resources. There is no country where public expenditure, rightly administered, brings in so quick and profitable a return. It is impossible to prevent that great waste of Indian resources, recurrent famine, without expenditure. The great need of Indian finance is the diversion of expenditure from waste to useful works. For instance, it is sound economy to reduce the amount spent on armaments and increase that spent on irrigation. In regard to the financial review of the last three years in the Explanatory Memorandum, I wish to point out that the net revenue at the end of that period has been increased by £443,000, the whole of which, and £90,000 more beside, is due to opium increase. It is, however, quite a fallacy to claim this increase from such a source as being a good feature of Indian finance, for further on in the Memorandum we are told that there is an estimated falling off next year on opium revenue of £600,000, so that this particular increase is only ephemeral, and ought to be treated as 1239 such. I would like to know what amount of this increase is due to Indian consumption, as I have reason to believe that, perhaps unconsciously but none the less certainly, the Government of India is stimulating the consumption of this drug in India with a view to making up for losses in China. During these three years expenditure in England on behalf of India has gone up nearly fourfold, to £1,654,000. These increases in England are always occurring, with the most serious consequences to India. It is significant to note that none of the additions are for purposes which add to the productivity of India. £680,000 of this expenditure is for ordnance stores and other military purposes. In reference to the previous debate on the hon. Member for North-East Bethnal Green's resolution, I want to know why this large amount of ordnance stores cannot be manufactured in India, as I am quite certain that not only this but many of the other general stores purchased in this country could be procured in India at a much smaller cost. I hope the time is not far distant when the Government of India will be permitted to make their own purchases and their own contracts for stores direct instead of through the intermediary of the India Office in London. The total increase in expenditure has been nearly two and a half millions.
I will take as an illustration of possible economy—though, it may be, in small directions—the costliness and folly of borrowing money from the feudatory states, and as an illustration of possible economy in large directions those unnecessary armaments which more than all beside cripple Indian finance. I will quote from an official Return of all loans raised in India a number of loans from native States. I wish to point out that the Government of India has borrowed from the Maharaja Holkar £1,000,000 at 4½ per cent. for 101 years. A more ridiculous transaction was never carried out, The money could to-day be borrowed easily at 3 per cent., but here is a needless payment of £15,000 a year for at least eighty years, and before this loan is repaid the Government will have disbursed in interest, apart from the principal, £3,500,000, of which £1,500,000 represents the difference 1240 between 4½ and 3 per cent., and would have been much better sunk in irrigation than in the pockets of the wealthy Maharaja. I could give many such instances as this of the waste of public money by the Government of India, but I will content myself with referring those Members who wish to look further into the matter to the Report of the Royal Commission on Indian Expenditure, on which I had the honour of serving. I want to know, and I hope my right hon. friend will be able to tell me, why, when this loan was arranged, a sinking fund was not provided to extinguish the loan in forty or fifty years instead of having it now as a weight around our necks. I have no desire to depreciate the personal loyalty and general good administration of the State of which Scindia is the chief, but this £15,000 a year would have been a good deal better sunk in enterprises for the prevention of famine. A similarly wasteful policy is carried out with the railway loans, to India's great suffering. Another loan from Scindia, this time of £1,500,000 at 4 per cent., is perpetual. Here the position is worse, for you have £1,500,000 of loan involved with no period of stoppage, This money could be borrowed at 3 per cent., and if it were a short instead of a long loan it could be easily replaced. Here we are giving a sort of pension in connection with this Scindia loan. The finances of India bristle with such foolish expenditure as this. As a result of the Expenditure Commission the Secretary of State has transferred nearly £300,000 from Indian to British expenditure, and a careful examination of the evidence shows items of bad and unjust finance too numerous to quote, but coming to large sums in the aggregate. The expenditure which is now to be transferred from the Indian to the British Exchequer had been paid by India for something like the past twenty-five years, and if you go back and give restitution it will take away the argument with regard to the grant which was pressed upon the Secretary of State last year.
With regard to the question of the reduction of armaments, I am satisfied, and I think many in the House will agree with me, that it is the only way by which any real relief can ever be got to Indian finance. Army charges were less 1241 by £1,270,000. That was due to the absence of Indian regiments in South Africa and China. The increase of the Army expenditure in India is a source of alarm. The increase in the coming year is no less than 160 lakhs—more than a million sterling. In 1890–1 the gross expenditure was £21,000,000, and in 1897–8 £27,000,000. I do not give the following years, because they are complicated by the alterations which have taken place in the value of the rupee, but the expenditure is steadily increasing year by year. The troops out of India during last year were—in China, 20,000, native; in South Africa, 8,200, British; elsewhere, 4,000, native—total, 32,200. What I want to know is whether India is safe when these 23,000 are away? Is there no danger to India by their withdrawal? This is not a period of exceptional peace. During the last five years the Indian Government, on the advice of the noble Lord himself, have suspended the Habeas Corpus Act. [Lord G. HAMILTON: No.] They arrested two brothers and kept them in prison without trial. [Lord G. HAMILTON indicated dissent.] They arrested the men without telling them why they were arrested; they were locked up for months without being told why, and they were turned out without being told why they had been arrested. India was supposed to be seething with rebellion and revolution. We have had a period of famine, and plague, and serious attacks of cholera, and the whole condition of the country was tending to its discontent, and, despite that, 32,000 troops were taken out of India and employed elsewhere. If it is safe to take them out, it is safe to do without them altogether. If 10,000 British and 20,000 Indian troops were so considered and charged to the Imperial revenues, it would relieve India of 30,000,000 rupees, which could at once be made available for famine preventive works such as irrigation.
Let me point out that all these suggested financial reforms are doubly important in view of the frightful condition of chronic famine into which the country has fallen. We have 540,000 on famine relief at present. Famine is simply insufficiency of food, whether caused by drought, or when the seasons are fairly normal, by high prices. The Secretary of State's observation early last year 1242 that the famine in India was a famine of money and not of food was, so far as the first part of the remark is concerned, an awful admission of the state of things to which the country has been reduced. It gives the whole case away to the critics of the Government of India; but, as a whole, the sentence is not accurate. There is in a sense food enough to leave a portion in the dealers' hands, because tens of millions of people do not get sufficient to eat one month out of the twelve. Poverty, not scarcity, is the root cause of Indian famines. The country is, in its famine aspect, drifting from bad to worse, and from worse to final ruin, unless this constant tendency to recurring famine is prevented. Note the history of the nineteenth century, divided into four equal parts:—1800 to 1825—five famines, with slight loss of life—1802–3, 1804, 1807, 1812–13, 1823–25; some of these arose from wars, and none extended over a large area. 1826 to 1850—two famines—1833, 1837; these were mainly local, and great suffering was caused in certain localities, notably in northern Madras; the 1833 famine led to the great Godavari irrigation works being begun. 1851 to 1875—(by this time practically all India, as we know it, was under our sway) six famines, with the loss of 5,000,000 of lives, spread over the whole; the worst was in Orissa. 1876 to 1900—four of the most terrible famines ever known in India. As to the first, 6,250,000 of lives were lost: as to the last two, during the ten years in which they occurred, according to the correspondent in India of the great medical journal the Lancet, 19,000,000 of deaths from famine and famine diseases occurred. In addition fourteen parts of the Empire suffered from famine and scarcity. There were thus eighteen famines in the last twenty-five years of the nineteenth century. How completely famine has gained a hold on the Empire may be judged from this summary:—First period—five famines, perhaps 1,000,000 lives; second period—two famines, 500,000 lives; third period, six famines, 5,000,000 lives; fourth period—eighteen famines, 27,000,000 lives. All the foregoing facts are taken from the Famine Commission Blue-books of 1880 and 1887, and other more recent official Papers. In the last twenty-five years of the past century more 1243 than one million of people died on an average every year in a British-ruled country—that is, two each minute, 2,880 each day, and during the past ten years the average has been four each minute, 210 each hour, 5,760 each day. The last famine was the worst of all.
I should like to deal with that piece of robust optimism entitled "Statement Exhibiting the Moral and Material Progress and Condition of India." The whole of the chapter on famine is the great speech of Lord Curzon to the Legislative Council on 19th October, which is well worthy the earnest attention of everyone interested in India. I want to read two or three extracts from the speech of the Viceroy. He says—
There have been many great droughts in India, but there has been no other of which such figures could be predicated as these.It must further be remembered that, unlike previous famines, that of 1900 was separated by the short space of only two years from a drought not greatly inferior to it in extent and scarcity. Some tracts which suffered in 1896–97 have been fortunate enough to escape in 1899–1900. But the most calamitous feature of the recent famine has been that there were others which not only suffered again, but suffered in a worse degree. This was the case in the Central Provinces and in portions of Rajputana, Central India, the South East Punjab, and the Bombay Dekkhan. Apart from this area of two-fold distress, the centre of gravity tended on the present occasion to shift towards the west. The cluster of native states lying between the Nerbudda, the Jumna, and the Sutlej were swept into the area of scarcity. Finally, the fertile provinces of Guzarat and Kathiawar, whose rainfall is generally so abundant and so steady that they have been styled the Garden of India, were attacked, and there, in proportion as the immunity hitherto enjoyed has been the longest, so was the suffering the most widespread and enduring. This was the situation with which we were confronted a year ago, and which has gradually developed since. It was not merely a crop failure, but a fodder famine on an enormous scale, followed in many parts by a positive devastation of cattle—both plough cattle, buffaloes, and milch kine. In other words, it affected, and may almost be said to have annihilated, the working capital of the agricultural classes. It struck some of them when they were still down from the effects of the recent shock. It struck others who had never before known what calamity was, and who were crushed and shattered by the suddenness and directness of the blow. It attacked native States to whose Durbars had never previously been brought home the obligation of famine relief on an extended scale, and whose dearth of administrative staff was enhanced by the poverty of their financial resources. It laid its hand upon 1244 primitive hill men, unused to discipline or restraint, impulsive, improvident, lazy, living in an almost barbarous state in wild and inaccessible jungles. It sharpened the lurking nomadic instinct of wandering tribes, and sent them aimlessly drifting about the country, a terror to the famine officer and an incubus to the camps. For a year it never left hold of its victims; and one half of the year had not elapsed before famine had brought its familiarattendant furies in its train; and cholera, dysentery and fever had fallen upon an already exhausted and enfeebled population. This is the picture of suffering that India has presented during the past year…. We must investigate and report upon the various public works that have been undertaken in the course of the recent famine, and must provide for the execution of a continuous programme of preventive works in the future.That is the only line in the speech of the Viceroy which speaks of prevention. Then he goes on to say—In this connection I would remind my hearers that the last Famine Commission, in their Report, devoted much attention to the matter. Unfortunately the recent famine came upon us before their recommendations had had time to bear fruit, and in the rush and hurry of the overwhelming calamity of the past year works had often to be improvised, so to speak, in a moment, to meet the demands of a particular area, whether the work was or was not likely to be of permanent value. Against this danger we shall require to guard by insisting upon the methodical preparation of district programmes, and upon the formation of provincial branches, to be charged with this special duty. Railway earthwork has been pretty well exhausted for the present. More roads exist than can be properly kept up. But there are few parts of the country where works for the storage of water are not practicable. They may not, probably will not, be directly remunerative. But if such a work will conduce to greater security of the crops, and if it can be maintained at a moderate cost, it is just the sort of work which should be taken up or kept in hand for an emergency. No direct programme of relief should be considered complete until every possible irrigation or water storage scheme in the district has been examined, until a definite opinion has been come to as to its practicability and utility, and until detailed plans and estimates have been prepared for every accepted schemel…. So far as recent information goes, the total cost of the famine of 1899–1900 will have been:—1245
British India:— £ £ Direct relief outlay 6,390,000 Loss of revenue and compensation for dearness 3,240,000 Loans and advances to landholders and Native States 4,260,000 13,890,000 How much time is required for the Report of a Royal Commission to bear fruit on a question of this kind? Twenty-years after a Royal Commission reported on a series of preventive schemes we have been through the greatest famine that has ever occurred in India. The Viceroy says a small famine Commission was appointed in the latter part of 1900 to report on four points. They are all points with regard to inquiry into relief, and not a single instruction was given to report as to prevention. Suppose we keep up the ratio of these famines of which I have been speaking, the number who will die in the first quarter of this century, 1900 to 1925, will be over 50,000,000. What did the Famine Commission recommend? I quote from the Report of the Commission itself—
Native States:— Relief, expenditure, and loss of revenue, over and above the 3,000,000l. lent by the Government (approximately about) 4,500,000 Among the means which may be adopted for giving India direct protection from famine arising from drought the first place must unquestionably be assigned to works of irrigation.These words are quoted and reiterated by the Commission of 1898—twenty years afterwards. The Commission recommends that these works should be prosecuted as energetically as may be consistent with true economy. I do not care how much you spend on irrigation. It is the most profitable method in which to invest the vast surpluses of which the noble Lord is so proud to-day. What I want to ask the noble Lord is, whether, since 1888, irrigation has had the first place in the mind of the Indian Government? How much have we spent on irrigation? A capital expenditure of £60,000,000 has gone for railways, and £10,000,000 only for irrigation. That is irrigation first, I suppose! One sixth only, as compared with railways, which in themselves do not cause a single ear of corn to grow. Railways have been pushed on too rapidly for an agricultural and poor country like India. There are few parts of the country where the storage of water is not practicable. I call upon the Government to carry out the recommendation 1246 of their own Commission and put irrigation first. What have the Government been doing all these years? They have been busy improving relief and neglecting prevention. They prepared a famine code so elaborate and far-reaching that they boasted that never again would millions die during a famine. I have nothing but praise for the code as a piece of administration. It is as fine a piece of administration as ever came from the Civil Service. What is I heir record? I have already shown the loss of life that has occurred. The Agricultural Department is not a bad department at all, but what has it done? Take, for instance, Sir James Caird's proposition that to keep pace with the growth of the population there should be an increased production from the soil of a bushel per acre in each ten years. What has been done to ensure this? Practically nothing. The Agricultural Department for all India has been strengthened, but has done nothing; while the Madras Department has fallen into the background. For the soil and the people, save a little irrigation, nothing has been done. Meanwhile the land revenue has been maintained by three things. First, the additional yield from such new land as was brought into irrigation, the dry land meanwhile yielding less and less. In the central provinces the estimated yield of wheat per acre in the year 1896–7 from irrigated and dry land was 600 lbs., while the actual yield was only 390lbs., and for the four subsequent years 405lbs., 322lbs., 229lbs., and 307lbs., or an average of 350lbs. The second cause of the maintenance of the Land Revenue was the annexation of new territories; but the most important was the help of the money-lender. I put a question to a noble Lord on 15th March last, which brought out these facts. In Surat last year, out of 95 per cent. of land revenue collected, 85 per cent. was received by the Government direct from the moneylender. The whole of the district is practically in the hands of the moneylender, yet all the use they seem to have for the money-lender is to pass drastic legislation, such as the Land Alienation Act in the Punjab, and a like Act in Bombay, and so make borrowing more difficult. Where would the Government be but for the money-lender? 1247 They are sawing off the branch on which they roost at its junction with the trunk, and will come a heavy cropper as the work of their own hand. Why should they not establish agricultural banks by which the curse of India may be abolished? The noble Lord and his colleagues have reduced India to the condition of a country so rack-rented that only the money-lender last year stood between them and financial ruin.A Bill is now before the Bombay Legislature called the Land Revenue Bill. In the year 1895–6, the Bombay Government closed with a clean balance-sheet; virtually the whole of the land revenue was realised. Then followed the famines of 1897 and 1900, and the cultivators are now heavily in arrear. The arrears of the land revenue due from them are said to be about 134 lakhs of rupees, corresponding to nearly one million pounds sterling; and these arrears are due from about one-third of the cultivated lands of the entire province. The obvious duty of the Government of Bombay after such a terrible calamity is to grant remissions, but I am alarmed to find from the Indian papers that a different policy seems to be contemplated. The Government have legally the right to sell the defaulting holdings for arrears, and they are taking power under the Bill I have mentioned to resettle them without those tenant-rights which they have hitherto possessed. In other words, the grave calamity of recent years is being taken advantage of to pass a law which, if enforced, will deprive one-third of the tenantry of Bombay of those rights of sale and mortgage with respect to their holdings which they have enjoyed under British rule for over half a century. Since the days of Elphinstone, Lord Canning, and Lord Lawrence the policy of the British Government has been to foster and create proprietary rights in the cultivators of the soil, and now, all of a sudden, in a year of unprecedented distress and famine, the new Bill seeks to extinguish these rights over one-third of a large and populous province. The tenants of Bombay may be poor, and may he indebted to their money-lenders, but the proper course to relieve them would be to moderate the land revenue, and to grant remissions after famine, not to 1248 deprive their holdings of that marketable value which they have so long possessed. The Bill has produced a grave and wide-spread discontent, it is regarded as a confiscation of tenant-right over a large part of the country, and it may lead to the most lamentable consequences. The Bill was referred to a Select Committee of the Bombay Council, and the minority of that Committee dissented from the Report on the Bill. In the Minute of dissent they say—
We regret we are unable to sign the report which a majority of the members of the Select Committee have adopted. The Bill, we fear, has little to recommend it beyond the intentions of Government. At the same time it is obviously capable of being so worked as to revolutionise the existing land tenure over a large and constantly increasing area of the Presidency. Its leading principles are open to serious objection; and its introduction at the present juncture has been widely misunderstood and has been attended with results which all must deplore. The public have had hardly any time to examine the precise character and scope of the measure and formulate their objections—the Bill having been first published only on the 18th May last, and that, too, simply in the English language. Meanwhile a vague feeling of panic—perfectly unwarranted so far as the intentions of Government are concerned—prevails everywhere, both among agriculturists and sowcars, the former imagining that the Bill threatens their proprietary rights over their holdings and the latter being under the impression that it will eventually lead to a partial confiscation of their property. Under the circumstances we feel bound to recommend that the Bill should be dropped altogether, or that at any rate its further consideration should be postponed until next year.I sincerely trust the noble Lord will pay some attention to this Minute of the native members of the Council, and that the Bill will not be pressed.I have taken up the time of the House much longer than I intended, but there is another point to which I wish briefly to refer. The Excise policy of the Government in India undoubtedly stimulates very largely the consumption of intoxicating liquor. The shops for the sale of intoxicants are practically a Government monopoly, and the consumption of intoxicants has practically doubled in the last twenty-five years. The Government, instead of stimulating the consumption of intoxicants, should stimulate the consumption of quinine. Having the liquor trade in their own hands, and having no vested interests to buy out, they could abolish 1249 all the liquor shops to-morrow. The people of India are practically total abstainers, and probably 250 millions out of 300 millions have never tasted liquor in the course of their lives. In talking on this subject with the Finance Minister in Calcutta he said to me—"If we abolish the liquor shops what are we to do to get revenue?" I said—"That is your business, not mine; but by your present excise policy you are encouraging the people to take drink for food, and the certain result of that is the degeneration, demoralisation, and impoverishment of the people." I hope the noble Lord, before he leaves office, will do something to diminish this evil, and that more money will be spent than now on irrigation.
§ *MR. COHEN (Islington, E.)The hon. Gentleman who last addressed the House, the hon. Member for Camborne, referred to the subject of India as being a very interesting and vital subject, and he found it difficult, he said, to keep his observations within the limits he desired, because of the interest he takes in every branch of the question. I do not think I shall experience so much difficulty. I do not rise with the view of answering the hon. Gentleman on a great many of the points to which he called attention, but there is one thing upon which I should like to meet him point blank. He charged my noble friend with what he called optimism. I do not know what is meant by that expression. If it means that my noble friend and his predecessors have always painted Indian finance in colours which are too favourable, then I say the optimists are those who have spoken the truth, and the pessimists are those who have been inaccurate in their forecasts. If there be any person who is entitled to congratulate himself and the House upon the position of affairs in India at this moment it is my noble friend. In this year 1901 we have presented to us accounts showing a far more favourable state of affairs than could have been predicted, or that any reasonable person would have ventured to predict had he known the unfavourable influences at work during the year which has been under review. I should like to know, if my hon. friend opposite considers my noble friend an optimist for the very moderate language 1250 in which he has described the situation which he had to unfold, what he would call a Chancellor of the Exchequer who had such a state of affairs to present to this House with regard to this country with influences so adverse to him as my noble friend has had to combat. I venture to say my noble friend, having regard to the facts he had to unfold, was studiously moderate in his statement, and I repudiate the charge of optimism which has been brought against him. The hon. Member opposite said a great portion of the financial success of India was due to the army charges having been so much reduced. There was no doubt about that, but the hon. Gentleman adduced from that the argument that if the army was not wanted it should not be retained, and he asked, Was it safe to withdraw these troops? The answer to that, I suppose, is that it was safe, or they would not have been withdrawn; but surely the hon. Gentleman would recognise the difference between withdrawing temporarily troops who could be brought back at a moment's notice and reducing the number of troops permanently.
§ MR. CAINEIf my hon. friend will allow me to explain, what I advocated was that the cost of these 20,000 troops should be transferred, but that they should be retained in India as a reserve for the defence of the Eastern portion of the Empire.
§ *MR. COHENThey are retained there, in the first place, for contingencies which might happen, and which have happened, but which are becoming less probable, and if my hon. friend recognises that, I am sure he will at once acknowledge that the charge of these troops could not be borne by the Imperial Exchequer.
§ MR. CAINEThe Indian army, with out these troops, is sufficient to preserve law and order in India.
§ *MR. COHENThere was one expression which just escaped my hon. friend on which I should join issue with him. He says you do not require this large army; that 30,000 troops would be more than enough to preserve law and roder. That is not what the army is 1251 there for at all. Troops in India are not called out to keep order in a street squabble; they are called out for the protection of the frontiers, and it would not be safe if they were withdrawn. I press that view, because an injurious effect would be created if it was believed that troops were kept in India for a purpose for which they are not used at all. There is one other point to which I wish to allude. My hon. friend opposite has charged my noble friend with taking an optimistic view of Indian affairs of finance and the social religious wellbeing of the native races. Our belief in that view does not proceed at all from any diminished solicitude for the welfare of all the native classes throughout the Indian Empire.
I pass now from the rather formal attack, or reflection, of my hon. friend opposite on the Indian Government to the concrete charge which he brought against the Indian Government in connection with the dire troubles which they had to combat. I can sum it up in one pregnant sentence. We have embraced measures of relief, and are said to have neglected measures of prevention. I think there ought to have been a little more, evidence before such a charge as that was made. I have studied with very close attention the Indian Papers circulated before the Indian Budget, and I claim that the policy of Lord Curzon has not only not been open to the charge of neglecting protection, but if there has been any particular characteristic which has distinguished the versatility of Lord Curzon in this matter it is the progress he has made in works for provision against famine, and the success which has attended his efforts.
Now I claim, and I think my hon. friend opposite will agree with me, that the two principal, if not the two only preventive measures against famine are railways and irrigation. With regard to irrigation, I think my hon. friend is not very fair to the Viceroy, and I should like to read two sentences from a speech by the Viceroy—
I will quote the words of the Chief Commissioner, Mr. Fraser, with reference to the recent famine. 'It is impossible,' he writes, 'to overestimate the benefits which railway extension has conferred upon the provinces. If Chattisgarh, for instance, had not been opened up by railways, it is horrifying tothink of what might have occurred. The recent extensions of the 1252 Bengal-Nagpur Railway poured in supplies of the cheap scalded rice of Orissa which penetrated far into the interior. In 1897 this source of supply was wanting, and the more expensive rice from Burma was the chief food-stuff brought in. In the famine of 1897, when exports were carried away in the early months, the Chattisgarh people pointed to the railways as an exaggeration of their ills. In this famine they have regarded them as their salvation. Within one year the railways have brought into the province grain enough to feed three millions of people for a year. Now this is a very instructive quotation, for it shows how in 1897, when the Chattisgarh people held fairly large stocks, they resented the depletion of these by the railway and a rise in prices later on. On the other hand, in 1899 there was in over two-thirds of Chattisgarh no crop at all. Where, I wonder, in such a case would the grain-pits have been? On this occasion, had it not been for the railway, the entire population would have perished like flies.
§ MR. CAINEMy only complaint is that for one part spent on irrigation seven parts are spent on railways.
§ MR. COHENSo far as I am concerned, if I had to place one before the other, I should place railways first and irrigation second, and the testimony of Mr. Fraser, the Chief Commissioner quoted by the Viceroy, which I have just read, is sufficient to show what the railways have done for the prevention of famine. I do not wish to elaborate it; it must be perfectly clear that the extension of railways, if not a protection against famine itself, tends to a mitigation of its ravages. There is a delusion that railways tend to increase the price of grain stuffs. They only tend to equalise them, and bring grain stuffs within reach of famine-stricken districts, and I rejoice to know that the present Viceroy has determined to proceed with this energetic policy with regard to the extension of railways, which, as I have already said, has so brilliantly characterised this distinguished Viceroy. A few years ago there were only 5,000 miles of railway in India, now there are 25,000 miles at work, and I believe that the more this railway policy is pursued, without regard to the fact whether the railway passes through fertile or barren districts, the greater will be the protection against these terrible visitations of famine to which it seems certain India is bound to be intermittently exposed. I congratulate my noble friend on the position which 1253 Indian finance has attained, and upon its comparative stability, which I attribute to two causes. In the first instance, I attribute it to the stability of the exchange, and I do not think I ought to refer to that without paying a tribute to the right hon. Gentleman the Member for East Wolverhampton, the predecessor of my noble friend in his office, for the splendid services he rendered in this regard. I believe they laid the foundation of the stability for Indian credit.
The Viceroy of India explained that it was his constant desire to promote the flow of British capital into India. Let me tell the House that the flow of British capital into India does not need any encouragement. It is a thing which we should be powerless to prevent, so long as the exchange is stable. The moment people know they can get their money back whenever they want it they never do want it; given stability in the exchange, capital will flow into India. Nothing can stop it. If I differ from any expression in the speech of the Viceroy to the Legislative Council I differ, and I do so with all humility, with him in the idea of separating railways likely to be flourishing from those which do not pass through such fertile districts. I do not think he ought to do that. I think capital ought to be tempted to Indian railways, provided there is reasonable security that the money can always be paid back, and provided there is a reasonable return for the investment. The error made in former times is where contracts were made whereby Indian investors were assured of a handsome income where things went wrong, and a more handsome income where things went right. That is not right. They ought to be assured of a reasonable return for their capital; more is not needed, and more should not be given. It is a matter of indifference whether the railways pass through barren or fertile districts, and I hope they will be encouraged, because, a reasonable return having been given for the capital, the balance ought to go to the Indian Government. I can only congratulate my noble friend on the satisfactory statement he had to make to this House, and I hope in the future, as in the past, it will be the luck of my noble friend always to be what is called optimistic, because he has always been accurate in his forecasts.
MR. HERBERT ROBERTS (Denbighshire, W.)We cannot get over the fact that the total loss in revenue on concessions of railways in India is fifty millions of tens of rupees, although it may be contended that the indirec gain to the country has more than compensated for a part of that. But, however that may be, I was glad to hear one thing, which was that the noble Lord had employed an expert to examine into the financial working of the railways in India, and I am assured that such action will bear useful fruit in the future. I desire to associate myself with every word that has been said with regard to the action Lord Curzon has maintained since he has been appointed to the position of Viceroy. It fell to my lot in 1898 to express, so far as this side of the House was concerned, our hopes with regard to that appointment. Everything we then said and every hope we expressed has been fulfilled, and more than fulfilled, by the capacity and energy, the courage and wisdom of Lord Curzon, under circumstances of unexampled difficulty which have up to now met his administration. I am not now going to refer in detail to the famine, although I cannot help thinking with the hon. Member for the Camborne Division that the House to-night did not grasp sufficiently the seriousness of the case. I still think it is better to go to the root of the scourge of India than to constantly attempt temporary remedies. We are face to face with a serious question. If famine is to recur in India as frequently in the future as it has in the past, the outlook for India is dismal indeed. I am not a pessimist. I think it is possible to take reasonable and wise steps for preventing famine, and it is possible to resist the evil consequences to a large extent, but I venture to lay down the proposition, with which I think no one will disagree, that it will be necessary that the administrative policy of the Government of India in the future in dealing with famine should be wiser than it has been in the past in its, endeavour to meet and minimise these terrible calamities which so frequently occur in the heart of that great empire. There are only two points to which I should like to direct attention with respect to this question, and they arise out of the delay in the publication of the Report of the Famine Commission of 1899. The 1255 noble Lord said at question time that the reason of the delay was that the questions raised were of so complicated a nature that the Government had not yet had time to decide as to the action to be taken, but the publication of the Report would not involve the Government in the necessity of deciding what action they were to take. The other point is with regard to the Bombay Land Revenue Bill. I am not in a position to argue the merits of that case, but I think, having regard to the seriousness of the matter, it was a reasonable request that was made by the members of the Committee which discussed the Bill that a delay should take place before the Bill is passed. I still hope it is possible for the Government to consider the possibility of granting a delay.
I now desire to say a few words with regard to the motion which I put down on the Paper, namely—
To call attention to the lack of parliamentary facilities for the discussion of Indian questions; and to move, That this House views with grave concern the lack of parliamentary facilities for the consideration of Indian questions, and is of opinion that no arrangement will be satisfactory which does not provide that the appointment of the Committee on the Indian Accounts takes place at such a period of the session as to afford adequate time for the discussion of Indian affairs.I was rather astonished at the remark made by the noble Lord that experience had proved to him that the House is taking an increased interest in the affairs of India; that statement is in strong contrast with the continuance of this kind of thing year after year, and I think the appearance of the House to-night shows that that statement ought to be explained and qualified in certain points. I cannot help thinking that until something is done to enable us to come more frequently into close contact with Indian affairs it will be impossible to stimulate Members of this House in this matter. What has happened in the last forty years? The controlling statute with reference to the presentation to this House of the East India Revenue Accounts is the Act of 1858, but I venture to say that what Section 53 of that Act lays down as necessary to be done in regard to the publication of Indian finance in this House makes it clear that the intention of that Act was that these accounts should be 1256 presented at a reasonably early period. If that was considered necessary when the Act of 1858 was framed, how much more necessary is it that the spirit of that section should be carried out to-day. I move forward now to the Select Committee appointed in 1871, on the motion of Sir Harry Foster. That Committee sat until 1874, and made the following recommendation on this point—That no arrangement would be satisfactory unless the Committee on Indian Accounts was appointed within three weeks of the opening or each session.I asked the noble Lord the other day whether he had considered the advisability of carrying out the recmomendations of the Commission of 1898 on Indian expenditure; that was with regard to changing the financial year, and making the end the 31st December instead of the 30th March. The noble Lord said the Select Committee of 1871 had reported against it, which was quite true; but it reported most strongly in favour of the principle I have just referred to, namely, that this statement might be made within three weeks of the opening of each session.What are the difficulties in the way of carrying this out? The Indian system of keeping accounts is generally considered one of the most perfect in the world. The advantages of the change would be two-fold. In the first place, there would be many advantages from the Indian standpoint. The statement in India would be laid before the Legislative Council early in January, in the cool season of the year, and the making of the financial year to close at the end of December would help rather than put difficulties in the way of those engaged in carrying out the financial policy of the Government of India. From a parliamentary standpoint the advantages would be obvious. The attention of the House of Commons would be drawn to Indian affairs at an early period of the session, and I believe, with the improved opportunities for debate, there would be created a new interest in Indian affairs, a new capacity for dealing with them, and an increase in the power of Parliament really to help and encourage those charged with the administration of that great dependency. 1257 The noble Lord stated the other day that he had sent out the recommendation of the Commission of 1898 to the Government of India, but they were not at present prepared to advise in favour of it. I submit that in a matter of this kind, which concerns firstly and chiefly this House, it is not the Government of India, but the House of Commons that should decide the question.
Let me give one concrete case as an example of the difficulty under the present system in the way of this House getting an opportunity of considering most important points of policy. I refer to the new frontier arrangements. As far as I understand the proposal, it is a good plan, but it cannot be denied that it involves more than one important issue of considerable interest. To begin with, there is the substitution of military rule for civil government. But we have not had an opportunity of learning the facts or of considering the situation in regard to that matter. Lord Curzon has referred to the publication of the proposals of the Government of India with regard to the matter, and he also said in March that the Secretary of State had given his consent. In Tune last I asked the noble Lord when he would be in a position to lay Papers on the subject, and he replied that he would not be in a position to do that, because he had not received a reply from the Government of India to a previous despatch of his. I hope he will now be able to give some information on that specific point, and also inform the House as to the exact position with regard to these new arrangements. I believe we are all agreed that some change should be made, so that we might be enabled to discuss Indian affairs more frequently and at an earlier period of the session; the only question is as to the way in which the idea can best be carried out. The Select Committee of 1874 made a recommendation which, if given effect to, would practically answer our purpose. If, however, there is any doubt in the mind of the Government as to what should be done, would it not be a good plan to appoint at an early date a small Committee, composed of Members of this House and representatives of the Government of India, to make a recommendation on this 1258 specific point? I believe that such a decision would be of real value both to the Government of India and to the good administration of the affairs of the country.
§ *MR. J. E. GORDON (Elgin and Nairn)I am sorry to introduce a somewhat jarring note into the chorus of congratulation to-night, but for a year past I have had a friendly controversy with the noble Lord, and I hope he will not take any remarks I may make (on a matter of business) as a personal reflection upon himself. This time last year the House sanctioned an expenditure of £34,800,000 to repay the shareholders of the Great Indian Peninsula Railway. The Government, however, exercised their right of selecting another method of repayment by deciding on annuities, instead of a cash payment, and in the calculation involved in finding out the correct "rate of interest" in connection with these annuities a blunder has taken place by which trustees, widows and orphans, and penny-banks, and insurance offices have amongst them lost towards £3,000,000. I believe that this is due to want of care on the part of the India Office, a want of thorough personal responsibility in the solution of this contract, and also by an error of judgment in an almost equally influential quarter—namely, the Bank of England. Last autumn I addressed a letter of warning to the Chancellor of the Exchequer, to which I received a courteous reply concluding with the remark that it was impossible for the Chancellor of the Exchequer to interfere as the contract, he had been informed, had been settled according to precedent. I shall be able to explain that the information given to the right hon. Gentleman had no foundation in fact, and it is because, indeed, I am convinced, all the precedents for twenty years have been violated that I am bringing the matter up to-night. This House has a Parliamentary responsibility for the correct determination of these contracts, for the actual terms of repayment were omitted from the Great Indian Peninsula Railway Bill (indeed, were then unknown), and have never yet been scrutinised or passed by the House of Commons, but only others, dummy 1259 terms, which have not been acted on. The contract now under investigation is the fourth since 1880, and the previous three have been harmoniously settled between the high contracting parties without a murmur of dispute or discontent. For twenty years these Parliamentary and Departmental precedents have ruled the investments of insurance offices, trustees, penny-banks, and so on, and those persons who bought their securities on a Parliamentary guarantee that those clear, just, and harmonious precedents would be maintained, have now been deceived, and have lost their money. Fortunately for my argument the noble Lord has done almost as bad a thing as to write a book. For, twenty-two years ago, he presided over a Select Committee, and on reading the Report of that East Indian Railways Select Committee and the evidence then given by men so eminent as the present Prime Minister, Lord Cranbrook, Mr. Cave Brown, Sir Julian Danvers, and other authorities on these financial subjects, I find myself in complete accord with that Committee as to precedents and practice. The noble Lord's memory has misled him—
§ LORD G. HAMILTONNo, it has not.
*MR. J. E. CORDONYesterday I put this very pertinent question to the noble Lord—
Whether he is now prepared to publish the manner of calculating the rate of interest used in connection with the amount of Great Indian Railway Company's annuities; whether it was identical with the process employed when the Indian Government terminated the lease and repaid the capital of the Scinde and Eastern Bengal railway companies; and if not, what cause there was for altering the precedents of the past twenty years.In reply, the noble Lord stated—The Secretary of State has no knowledge of the manner in which the rate of interest was calculated by the Governors of the Bank of England in any of the cases mentioned.
§ LORD G. HAMILTONHear, hear.
§ *MR. J. E. GORDONI am sorry the noble Lord accepts the answers which have been put into his hands. He will be sorry for it "in the morning."
§ LORD G. HAMILTONPardon me, I am responsible.
§ *MR. J. E. GORDONThe noble Lord is no doubt officially responsible for an answer acknowledging his own ignorance of the very data upon which three great financial contracts have been settled. Moreover he is not prepared to justify his position to the shareholders, for whom, indeed, he is trustee, nor is he able to stand at that Table as the guardian for the finances of India and say his bargain is an equitable one alike for buyer and seller. That is the position set up by the answer, and I regret that the noble Lord accepts it. But I turn to page 61 of the Report of the noble Lord's Select Committee, and there I find that authorities far higher than myself agree with me and differ from the noble Lord. The attitude of the noble Lord is that he has no responsibility or knowledge. He shifts the responsibility to the Bank of England, and that is where the mistake has occurred. In answer to Mr. Henry Fawcett, the present Lord Cranbrook (then I presume Secretary of State for India), stated that the Secretary of State "was not bound to consult the Bank in any way," and if at all, "only for consultation as to the money market"—
§ LORD G. HAMILTONLord Cranbrook was speaking of an arrangement made outside the contract.
§ *MR. J. E. GORDONThe noble Lord's memory fails him again, for he has for a long time told me that this East Indian Railway Company's settlement, so elaborated before the Select Committee, was an exceptional termination, and that the terms there laid down were not to be taken as precedents for future settlements. If the noble Lord would read the Report again, and more carefully, he would find that this limitation of precedent, though correct as to new conditions and arrangements with fresh shareholders, etc., has no reference to the "rate of interest" which governs this annuity question in the contract. On being asked as to whether the Bank of England had any responsibility, Lord Cranbrook answered "not as arbitrators in any sense of the word." He then says "the Bank of England has nothing to do with the principle," but it is indeed this principle that the noble Lord has handed over to one fallible and 1261 unchecked gentleman (outside of the India Office) with such disastrous results. He ought to have faced this responsibility and dealt with the principle as himself a trustee, not only for the finances of India, but for the shareholders. Again, Lord Cranbrook went on to say "the Bank of England has nothing to do with the interpretation." The noble Lord, then, differs from his predecessor, and has handed over to the Governor of the Bank of England the interpretation of this principle, which has cost the company nearly £3,000,000. The Governor of the Bank of England has, I believe, made a mistake with reference to the rate of interest. He would probably tell you so himself. I have no difficulty in lodging the responsibility in the right quarter, because when the India Office refused to accept it, I naturally applied to the Bank of England, and I have had replies assuring me that the Bank of England has no responsibility for what the noble Lord says they have every responsibility. The truth is that the functions of the Bank of England have been acted on in haste, in error, and beyond their proper sphere. Documents were laid before the House last session, when the India Office gave the Bank warning that they might presently be asked to determine this question, but the Governor of the Bank of England, unfortunately, without consulting the parties interested so deeply or considering the precedents, blurted out an answer to a question which Parliamentary Papers prove had never been put to him. The question put to the Bank of England was a very simple one, namely: Tell us what the average rate of interest has been during the last two years on the Government debt of India. The answer to this question for the last two years of the contract was about £3 5s. There were £112,000,000 of debt, at 3½, 3, and 2½ per cent., and the average works out at about 3¼ per cent. Here is where the error has been committed. The contract question is, What is the rate of interest "received" in London? "Received" by whom? By the "receivers" of Government dividends, by the holders of Government stock? That question has not yet been answered. The reply from the Bank of England I have in my hand. It is—
I am directed to say that the Governors have undertaken the duty imposed upon them, 1262 and have determined that the average rate of interest received "by persons who invested" in the three India sterling stocks, viz., 3½ per cent., 3 per cent., and 2½ per cent. during the two years ending 31st December last is £2 17s. per cent.The truth is that the Governor of the Bank of England by inadvertence finds out, not the average rate "received" on £112,000,000 by the holders of Government stock, but the interest "received by investors," who are a different and smaller class of persons, probably less than one-fifth of the contract whole. The noble Lord is refusing responsibility which I maintain still rests and will remain upon him to see that this contract is fulfilled. He tells us he does not know the exact methods of a great financial operation for which he has paid £35,000,000.
§ LORD G. HAMILTONNo. Parliament says that the governor or the deputy governor shall decide. I have left the decision to the governor and deputy governor. The hon. Member and his friends chose to appeal to a court of law; the decision has been given against them, and the hon. Gentleman should explain why he is now bringing it before the House of Commons.
§ MR. J. E. GORDONThis precedent since 1880 has been established as a solemn Government and Parliamentary obligation, and it has been practically followed in the case of the Scinde and Eastern Bengal Railways. I am not a director of any company, and I will state why I have taken the matter up. From 1875 to 1890 I had an opportunity of knowing every possible view that came from the India Office, the Banks, and the railway companies, and I was shocked to see at the end of twenty years of precedents so gross a departure, also the refusal of the India Office even to tell the shareholders why their terms should be 15 or 20 per cent. less than the contract terms, or why the India. Office accepted without intelligent scrutiny an obvious and unexpected misinterpretation of the contract on the part of the Bank of England. As to the law courts, the case is a very complicated one, and the Report of that Select Committee will tell you that a contract made with the East India Company fifty years ago is naturally 1263 most obscure. The law court's view was simply on a small issue, and on the second alternative only, before a Chancery Judge. I am not going to discuss what happened there, but it was very amusing to see one of His Majesty's Judges explaining that the obscurity of this contract was so dense that he must have time to discover a fresh alternative interpretation, and yet to those who knew the contract the matter had been for twenty years as clear as daylight. There is a moral responsibility attaching to a matter of this kind, and I do not think the noble Lord's political conscience will be satisfied until he has found out for himself the details as to how this contract has been wound up. So far from the noble Lord's view as to method being correct, I find that in paragraph seventeen of his Select Committee the interest of all the obligations was taken at par, and it was not taken at "investors" premium prices. Putting aside my own views, which are of very slight importance compared with those of Lord Cranbrook and the noble Lord himself, I think I have established a case to ask the noble Lord, in the defence of the parliamentary routine and honour of this House, and in defence of the India Office, to make full and public inquiry into this matter. If the India Office does not know of these affairs, I think I am justified in asking the noble Lord to make inquiries. If he does not know, the Bank of England ought to know, and the Public ought to be informed, and if he inquires he will then be able with a good departmental conscience to look into this question and see whether he does not hold a great railway property, and whether he can retain within his parliamentary pocket a sum of nearly three millions of money which possibly belongs to another class of persons.
§ MR. LEAMY (Kildare, N.)I did my best to follow the hon. Member opposite in what he has stated, but I got rather lost in my endeavour to understand him. I only wish to say a few words of protest against keeping back the discussion on Indian affairs until this late hour. The only Indian Gentleman who is a Member of this House speaks on behalf of three millions of 1264 people. I am sorry the hon. Member for North-East Bethnal Green is absent now, and that he does not appear to take enough interest in this subject to remain till the close of the debate. The House is almost now a jaded House, and it is almost an affront to think that this great subject is being discussed in a House like this. I want to say a few words with regard to the famine. I have not studied this subject very closely, but I have seen statements from time to time in the leading metropolitan newspapers. I have also seen many illustrations in the principal illustrated papers, and all I can say is that I can hardly imagine any man with any human sympathy at all reading these statements and seeing these illustrations without them making his heart sore. I have read that some six millions or seven millions of the King's subjects in India perished from famine within the last twelve months. I entirely agree with the hon. Gentleman who sits below me that, instead of talking about the splendid exertions of Lord Curzon, or anybody else, what you ought to do is to try and prevent the famines from arising, Famines have occurred and recurred in India for many years past. Owing to the conditions of the climate it is quite possible that, no matter what may be done, famine may recur under the most beneficent rule. You have in that magnificent Empire a people who are on the verge of famine every single season when there is a drought, and we know, at the same time, that these people are ground down by taxes. It is a fine thing, I know, to talk about your great Indian Empire. It is a fine thing in your little island over here to be able to stretch your hands across the seas and to say that you hold this great Indian Empire in your palm. Does this not bring with it some responsibilities? Whatever my opinions as an Irish Nationalist may be, I am not going to say that you are any worse governors in India than France would be if India happened to be a French Empire. But there must be something wrong when the wants and the wishes of these 300,000,000 people are never heard of in this House. If one of your Indian princes possessing a native army were to revolt, then we should have day 1265 after day questions in this House and debates and divisions, but these people are quiet, and there is never a word said about them, and all we do is to meet together for a few hours at the end of the session, and we do not know half the time what some hon. Gentlemen who take part in this debate are talking about.
I heard the hon. gentleman opposite who represents North-East Bethnal Green talking about some petty question of technical education, at a time when some 7,000,000 people have perished in one year from famine. I make no accusation against the noble Lord or against the administration of India, because I have not sufficient data before me. What do we ever hear in this House about India? There is a duty devolving upon every hon. Member in this House, even though, like myself, he be an Irish Member, and that duty is to say something on behalf of the suffering millions of India. The fact remains that millions are perishing from famine every year, and it is the duty of every hon. Member of this House to see whether it is not possible to do something which will prevent the recurrence of these famines. I know the Mansion House Fund is opened for this famine, and is generously contributed to. I would ask, when you come here frequently for millions of money for your battleships and your armies on paper, why you do not come here and demand three or four millions to meet the famine in India? Why do you leave it to the unfortunate people of India to make this provision for famines? It is time that there should be an end to this.
I make no accusation against the administration of the Government of India, but I do say that there must be something wrong. You talk about the solidarity of the British Empire; you talk about the manifestations of loyalty by the people throughout the world; you create new titles for the King, but supposing there were one million people in Australia perishing of famine, what would the Government do? Why, they would come to this House immediately and ask for help. Why will you not help the Indian people? You are proud enough to boast that the Indian troops are ready to fight your battles, and that Indian princes generously offered to help you to tight the Boers, but when 1266 the people are dying of starvation no one comes down here to ask for money to help them. I have all through this session opposed the imposition of taxes upon Ireland, but if any Minister came down here and asked for money for the starving people of India I venture to say that there would not be a single Irish Member who would not vote for such a proposal. It is a cruel, unjust, and dishonourable action upon your part to shirk the proper discussion of this question, and to keep it back until the last moments of a dying session.
§ SIR EDGAR VINCENT (Exeter)The great end and aim of the Indian Government appears to be economy. I confess that, compared with the ordinary standard which we have set before us in this country, the policy of the Indian Government appears to be singularly exempt from the extravagance which has attacked this country in so virulent a form. I think the Secretary of State and the Government of India may be congratulated upon the most satisfactory statement of the finances of India which has been brought forward for many years. I believe this is all the more welcome because it has occurred in the year of a great famine, and I hope that the rule which has been followed on this occasion will not only be continued as far as regards this country, but will also be gradually introduced into the accounts of the Government of India.
In the optimistic tone which has been adopted, and which I believe is thoroughly justified by the circumstances, there is no doubt the Secretary of State is at variance with a large body of private opinion in India. In that country there appears to be a clear line between official opinion, which is optimistic, and private opinion, and judging, as one must judge at a distance, from the returns of revenue and the tables of commerce, I confess that I do not see any reason either for disappointment or pessimism. If you consider the fact that the Government of India has had to face during the last two years one of the greatest famines of the century. I think it will be readily admitted that both the returns and the revenue are highly satisfactory. The noble Lord the Secretary of State for India has brought forward some very interesting figures respecting the average revenue of each individual of the country. 1267 I do not, however, attach any very great importance to such estimates. It appears to me to be most difficult to arrive at any correct data upon the subject, but what I do regard as of considerable interest is the continued largo importation of treasure to India. The statistics of last year show that the total import of gold and silver into India amounted to more than seven millions sterling. If we go back one year further we shall find that it amounts to eight and a half millions, and those figures, being largely in excess of the average imports, appear to me to disprove to a large extent the theory of the impoverishment of the Indian ryots. Indeed, taking the years from 1870, it will be found that the aggregate importation of treasure into India in those thirty years amounts to the gigantic sum of 200 millions sterling, and that the rate of importation during the last fifteen years had been 50 per cent. higher than during the first fifteen years. I consider that these facts, which are indisputable, show two things. First, that the current talk about the extreme poverty of India has been somewhat overstated, and, secondly, that, with occasional intermissions on account of famine, the wealth of India is pursuing a gradual and even a rapid path of progress.
This view was put forward by a large body of expert opinion and of commercial opinion before the Currency Commission, when it was stated that the establishment of a fixed exchange at 1s. 4d., which was then considered a high level, would exercise a dangerous influence upon the export trade of India. What are the facts? The exports last year amounted to, approximately, seventy-three millions sterling. This figure compared with that of the highest year previously known—seventy-five millions sterling. There has thus been a drop of only 4 per cent., although the year under review is one of almost unexampled famine. These figures seem to me to prove that all the pessimistic forecasts regarding the baneful influence upon the export trade of a fixed exchange of 1s. 4d. have been disproved by recent experience. I think that the consideration of native opinion in India is a subject which deserves to engage the attention of this House and this country. You 1268 cannot afford to ignore the native opinion of a large section of the country which you govern. I venture with all deference to put forward what appears to me to be a possible explanation of what I consider is undue pessimism.
It appears to me that Indian public opinion has not perhaps sufficiently realised the full importance of the currency reform which has been carried out in the course of the last few years. The question of currency appears now to have lost most of its interest, but it should not be forgotten that for fifteen or twenty years this most difficult and most interesting question of exchange threatened to ruin the very essence and fabric of Indian finance. In relation to the currency, it is important that we should take stock of the situation and that the House should realise various laws which appear to be established by recent experience. The first is that the influence of a low exchange upon exports is largely transient and momentary. A falling exchange is a temporary stimulus to export, but it ceases to operate as a considerable factor the moment the exchange has established itself at the lower level. The second deduction is that the real factor in determining the price of exchange is much less the relation between the exports and imports from India than the demand for currency for the purposes of internal trade in the country itself. It is essential to bear this in mind, not only because it has been found to be the key solution, but because without exception, in my judgment, much of the future success of the currency depends upon it.
The two phenomena of a large export trade and active internal circulation occurring at the same time, the high exchange which occurs with them is wrongly attributed to the large exports, instead of to the active internal circulation. If the House will permit me, I will give two examples which appear to me to prove the probable correctness of this theory. In the first place, it is an acknowledged fact now that famine is a factor in high exchange. Everyone can understand that famine cannot possibly be an element in a large export trade, but it is an element which induces a considerable abnormal demand for currency on account of the large payments 1269 which the Government make in their relief camps. My second example is that the frontier wars which have occurred during the course of this currency experiment have proved to be important factors affecting this question. No doubt these frontier wars are elements which increase the small transactions required in currency. I think, therefore, that these two factors, although they may not absolutely prove this theory, undoubtedly show that the real phenomenon on which those responsible for the finance of India should keep their attention is the amount of the supply of capital afforded to India in relation to the demand for it. We are apt to neglect to a very large extent the figures which are usually considered as a guide in this matter—the relation between exports and imports.
There is only one other subject connected with Indian administration upon which, with the indulgence of the House, I should like to say a few words, and it is the introduction of European capital into India. It is obvious that a community of more than 200,000,000 people, which subsists almost solely, and certainly mainly, upon agriculture, is exposed to a very grave danger in case of drought and disturbance of the ordinary monsoon. I consider that the creation of non-agricultural resources is the paramount and perhaps the most important duty which now devolves upon the Government of India, and I think it will be admitted that the diversification of employment and of the means of livelihood of the inhabitants of India can only be achieved by the introduction of extra Indian capital and European supervision and organisation. In the admirable debate which took place on the Budget of India Lord Curzon wound up his speech by enumerating the various reforms which had been achieved and the schemes which the Government had in contemplation, and they form a splendid record. In regard to this question, what I would say is that, if the financial classes of this country are somewhat shy in regard to investing their capital in India, it is, to some extent, due to the fear that the official classes in India are not altogether friendly to private enterprise. There is an idea that if a venture proves successful in India that the Government or the officials of the Government somehow or another 1270 will prevent the full profit coming to the adventurer. I only mean by this that there is a certain hostility to any considerable profit being made by private individuals in India. I do not at all say that this fear or this suspicion is justified, but I am certain that if the Government of India and the Viceroy desire to have a steady flow of capital into the country which they administer then they must find means to reassure capitalists and the investing public on this point. The Indian Government have, I believe, already done away with the most important danger which prevented capital flowing into India—namely, the fluctuation in exchange—and it remains for them to dissipate the perhaps needless alarm which exists with regard to the attitude of the Indian administration in regard to the investment in India. If the Government do so they will be able in a few years to give to commerce and industry a far larger share in supporting the labouring population of India. I am convinced that by so doing the wealth of our great dependency will be increased, and that this reform will conduce to the greater happiness of a large number of the population, that it will strengthen and popularise our trade in India, and tend to consolidate our Empire.
§ *LORD G. HAMILTONwelcomed the intervention of his hon. friend as a great financial authority in an Indian debate, and as a valuable contributor to these discussions. The views which had been expressed by his hon. friend as to the industrial condition of India would receive most careful consideration. Turning to what he described as the extraordinary speech of the hon. Member for Elgin and Nairn, he said that earlier in the evening two gentlemen had been brought to the Bar for insulting Members of the House. But he did not think that the language these gentlemen employed was more insulting than the language used by the hon. Member. The hon. Member practically accused him of deceiving a number of persons, who had in consequence lost their money, and implied that the parliamentary honour of the Secretary of State was at stake, that his answers were founded on gross ignorance, and that £3,000,000 were in parliamentary pockets which belonged to other people. This was very strong 1271 language; but the House did not understand what the hon. Member was talking about. He was amazed that any hon. Member should apply such language to another Member of the House. As Secretary of State three years ago he had to decide whether or not they should, under the existing contract, purchase the Great Indian Peninsula Railway. The Government decided to buy it, and they availed themselves of the option in the contract to purchase the railway by annuity. The terms of that annuity had to be priced, and they were settled by the directors and the Government without any dispute. Then according to the contract the question was referred to the Governor and the Deputy Governor of the Bank of England to decide the rate of interest payable on that annuity. The rate of interest was decided at £2 17s. Certain shareholders protested, and an appeal was made to him to allow the case to go to the courts. He consented, and the case went to the court, which decided in favour of the decision of the Governor and Deputy Governor. An appeal was carried to the Appellate Court, and it also decided in favour of the Bank of England. The shareholders declined to carry the case further. Those were the facts. Reference was next made by the hon. Member to the decision of a Select Committee which sat twenty years ago, of which he (the Secretary of State for India) was chairman. He was acquainted with the purport of that Report; be carried it by his own casting vote. It dealt with the purchase of the East Indian Railway. The period for purchasing the main line had arrived, but there was a branch line for which the period of purchase had not yet arrived. A contract was arranged for the purpose of buying the whole line. This was referred to a Select Committee. Three members of the Committee thought that the terms were too favourable, and the greatest difficulty was found to get them to assent to the exceptional arrangement due to the necessity of acquiring the branch line, which the railway was under no objection to sell. He decided it by his casting vote, and the Committee decided that the contract should not in the smallest degree determine the interpretation of contracts in future. He thought that the hon. Member must on reflection see that he had used unpardonable language.
§ *MR. J. E. GORDONsaid that no one in the Douse had a greater respect for the noble Lord, and if he had conveyed the impression which the noble Lord indicated he withdrew the language complained of as regards the noble Lord himself. He had asked for information on three occasions during more than a year as to the actual arrangement on which this great financial undertaking hinged, and the noble Lord had said that he was ignorant, and had refused information to the shareholders who had elected him as chairman for the purpose of appeal to the House of Lords.
§ *LORD G. HAMILTONsaid he was one of two parties obliged by statute to go to the Governor and Deputy Governor of the Bank of England to arbitrate between them. He declined to cross-examine these gentlemen with reference to the method in which they had arrived at their decision. ["Why?"] Supposing that the decision had been very favourable to the hon. Member and his committee of shareholders?
§ *MR. J. E. GORDONsaid he belonged to no committee of shareholders. A year ago he attended the statutory meeting to make this great arrangement. He chanced to attend, and explained the position to the shareholders, and the 400 gentlemen present were so indignant with the callousness of the directors in this matter that they elected him as chairman of a supplementary meeting, and asked him to proceed with an appeal to the Douse of Lords. The case never wont there, because the favourable consideration of better terms were expected from the India Office. This was twice held out by the railway company's chairman who was in communication with the India Office. Further, this proposal was made because the period for calculating the rate of interest had been altered by the India Office (adversely to the interests of the shareholders) by one-half of the entire two-years period, without equivalent or excuse.
§ *LORD G. HAMILTONasked, supposing the decision had been one which was satisfactory to the hon. Gentleman and the 400 discontented shareholders, what would the hon. Gentleman have said if he had insisted on the governor and deputy-governor explaining the exact methods by which they had arrived 1273 at their decision. The hon. Gentleman must know, as every business man knew, that if by statute the Government were compelled to leave a question to an absolutely impartial authority, which was above suspicion, those concerned must abide by the decision at which it arrived He must protest against the remarks of the hon. Gentleman. He might not have wished to cast any personal reflection, but such an attack did permanent harm to the office of which he (the Secretary of State for India) was for the time being the head.
The hon. Member for Camborne entered into the question of the famine, and he gave expression to the view that a parliamentary grant would have done much to prevent loss of life. If it would have had that effect, he would have unquestionably asked for it; but there had been during the whole of the famine no lack of funds. Lot him remind the House what was meant by famine in India. A famine in India arose from drought. Eighty per cent. of the population were agriculturists, and if there was no rainfall for ton months the whole occupation of 80 per cent. of the population ceased. What would the position in this country be if 80 per cent. of the population were thrown out of occupation? Even in the richest part of this country, in Lancashire, there was a temporary failure in the cotton trade, and there was terrible distress in that part of the country. It must be borne in mind that when a drought occurred, not only did employment cease, but the wage-earning power ceased also, and all means of transport became disorganised. That was the difficulty that had to be faced. It had been suggested that the famine could be killed and the wealth of the country immensely increased by irrigation works. If that were the case the Government of India would have spent very much more money on irrigation. But these last two famines had occurred almost entirely in Bombay and the Central Provinces, and the conditions that had to be dealt with were of an abnormal and unprecedented character. In Bombay it was impossible to carry out irrigation works. Under certain conditions irrigation paid exceedingly well. Where there was a continuous rainfall, running through a country where it could be distributed by gravitation, 1274 there was at once a condition of things which made irrigation of extraordinary agricultural value; but there were only a few areas in India where that could be done. At the present moment, he thought, with one exception, there was hardly an irrigation work in Bombay. It was absurd to lay down the proposition that by spending enormous sums of money in irrigation works the famines could be stopped. He was, however, so far agreed with the hon. Gentleman as to say that the matter should be properly looked into.
The hon. Member had suggested that as the Government had lent a considerable number of troops for Imperial purposes in South Africa and China it was clear that they were not wanted in India, and there ought to be a permanent reduction made in the military establishment. He had always welcomed discussion on Indian matters in that House on the understanding that no attack was made on men absent in India who, under very difficult circumstances, had to perform an unpleasant duty, and he welcomed the kindly criticisms of the hon. Member. But he was hardly treating the Indian Government fairly when he suggested that there should be a permanent reduction of the military establishment. All the Indian Government had done was to run the risk of making a loan to the Imperial authorities of a certain number of troops, who were to be repaid as soon as possible. While he disliked unlimited military expenditure, he could not hold out any hope of a reduction of the military establishment below its usual normal strength. In proportion to the civil population the military establishment in India was extremely small, and he should feel bound to accede to all requests which were made to him with a view to maintaining the efficiency of the Indian Army. The hon. Member had estimated appalling figures in regard to the loss of life by famine. He could not accept those figures. The loss had been very great, but in these visitations far more people died from drinking bad water than from want of food. One of the difficulties which had frequently arisen was to obtain a supply of pure water. The effect of drinking impure water was to produce cholera, and then the loss of life was great. He admitted that the 1275 loss of life was much greater than was expected, taking into consideration all the exertions that had been made to save life. It was estimated that the loss of life was a million and a quarter, of which three-quarters of a million were in British territory. But the hon. Member stated the loss at 27,000,000.
§ *LORD G. HAMILTONsaid the population of British India had increased by over 33,000,000 in twenty years, and, if they added the 27,000,000 the hon. Member said had been lost by famine, it followed that the increase of the population had been 60,000,000 in twenty years, which was absolutely phenomenal.
Another hon. Member had described the Bombay Land Revenue Bill as an attempt on the part of the Bombay Government to deprive occupiers of their homes. There was no such intention behind the Bill. In the Punjab there were cultivators of the land who had complete tenant-rights, but there was a limitation on their powers of alienation, and this form of tenure had proved most successful. There was no doubt that in the Bombay case the Government, during the next few months, would have to make a considerable number of re-grants of their land to occupiers who had forfeited their holdings in consequence, of their insolvency, but whom the Bombay Government wished to reinstate. The object of the Bill was to prevent these reinstated occupiers from again getting into the clutches of the money-lenders. He could assure the hon. Member that the whole of the agitation against this Bill was a money-lenders' agitation. In India there were loud denunciations in the popular press and in the Congress of the terrible state of insolvency and indebtedness of the land cultivators, but when the Government attempted to relieve this indebtedness the whole agitation of the money-lending class was turned against the Government. There was no institution in India which was so strongly impregnated with the money-lending influence as the National Congress.
§ *LORD G. HAMILTONsaid he did not expect the hon. Member to accept it. He would look very carefully after the Bill. It was not intended to enable the 1276 Bombay Government to impose hard terms on the occupiers, but to try and give them a chance of getting on their legs again.
§ MR. CAINEAll I ask is that there shall be no hurry in passing this Bill. It is an important measure, and there are appearances about it which I do not like.
§ *LORD G. HAMILTONsaid he would take care that the matter was thoroughly considered, and that whatever was done in this case should not be a bar to any future financial legislation for the purpose of curtailing alienation in other parts of India.
§ Question put, and agreed to.
§ Considered in Committee.
§ (In the Committee.)
§ Resolved, That it appears by the Accounts laid before this House, that the Total Revenue of India for the year ending on the 31st of March, 1900, was £68,637,164; that the Total Expenditure in India and in England charged against Revenue was.£65,802,541; that there was a surplus of Revenue over Expenditure of £2,774,623; and that the Capital Outlay on Railways and Irrigation Works not charged against Revenue was £3,035,672.—(Secretary Lord George Hamilton.)
§ Resolution to be reported.