EAST INDIA REVENUE ACCOUNTS (INDIAN BUDGET).

HC Deb 26 July 1910 vol 19 cc1950-2023

Order for Committee read.

The UNDER-SECRETARY of STATE for INDIA (Mr. Montagu)

I beg to move "That Mr. Speaker do now leave the Chair (for Committee on East India Accounts.)"

This Motion would not sound to a stranger to our proceedings a highly controversial one, but the discussion which will arise upon it is rather inaccurately known as the Debate on the Indian Budget, and it gives the House an opportunity, somewhat markedly inadequate, for a review of the whole circumstances of Indian government and conditions. In the very large draft which I shall have to make upon the patience of hon. Members I trust they will make all allowance for certain obvious disadvantages under which I labour. My Noble Friend, Lord Morley, has now been Secretary of State for five years. It was only during the first two of them that he was able to make his own annual statement in the House, and for the last two years and on this occasion the House has to listen to what I believe it will agree is a story of conspicuously successful administration from different spokesmen, each one of whom—and I hope I shall not be guilty of any disrespect to my predecessors when I say it—has felt the almost insuperable difficulty of adequately representing not only a great administrator, but so gifted and individual a personality as Lord Morley of Blackburn. Concerning my own predecessor (Master of Elibank) I can only say that I regret, and never more than at this moment, the fact that he has been translated from the India Office, with those gifts of lucidly expounding any case he has to defend and gone to another sphere of action.

I do not think it is necessary for me to say much about the foreign affairs of India. The North-West Frontier has been in a peaceful and undisturbed condition during the year that has just closed. There have been a few small raids which are the ordinary features of frontier life. The Amir of Afghanistan has appointed Afghan representatives to the Joint Commission which has been constituted to consider, with a view to settlement, various boundary disputes and claims of many years' standing. The Commission met for the first time last month, and the attitude of the Afghan representative was such that I do not think it is too sanguine to expect that the Commission will soon be able to arrive at a satisfactory settlement. On the North-East Frontier the chief events of the year have been the conclusion of a new treaty with Bhutan and the flight of the Dalai Lama from Thibet. With regard to the treaty with Bhutan the effect is to give Great Britain control over the foreign relations of the State. It may be taken as an indication of the firm determination of His Majesty's Government in no circumstances to allow foreign interference in the frontier States of Nepaul, Sikkim, and Bhutan—a determination which I am glad to be able to say is fully shared by the rulers of those States themselves. The flight of the Dalai Lama from Lhassa was apparently due to the despatch to that city of Chinese troops. Hon. Members will find a complete account of all the events in the Blue Book on Thibetan affairs which has just been presented to the House. His Majesty's Government have found nothing in them to necessitate a departure from their policy and the policy of their predecessors of non-interference in the internal affairs of Thibet or, with the domestic relations between Thibet and China, but they have made it clear to China that they will require a strict conformity with the provisions of the Anglo-Thibetan Convention of 1904 and with the Anglo-Chinese Convention of 1906, and they have no reason to doubt the good faith of the assurances which have been received from the Chinese Government. The avowed purpose of the despatch of troops to Lhassa was to maintain order in that city and at the trade marts.

Coming to internal affairs, I am not in the position of my predecessor, who had to describe India in March, 1909, as still under the effects of famine and distress. The autumn rains of.1909 were eminently satisfactory, and the autumn harvest has been followed by an equally fine spring harvest. Almost all the crops have been exceptionally productive. The cotton crop gathered in the winter months of 1909 was one of the best on record. The estimated yield is 4,500,000 bales, being an increase of 22 per cent. on the yield of the previous year. The rice crop has been equally good. In the province of Bengal, where rice is the staple article of food, the yield is put at 78 per cent. better than that of the previous year, and 47 per cent. better than the average for the previous five years.

4.0 P.M.

The wheat crop of 1910 now coming into the market is one of the best of recent years. In 1908 the yield was 6,000,000 tons. In 1909 it was 7,600,000 tons. This year the final estimate is no less than 9,500,000 tons. The agricultural prosperity of India may thus be said to be completely reestablished, and it immediately begins to have an effect on the increase of exports and of imports, and a diminution of prices of the commoner food grains. The export trade has increased from £100,000,000 sterling in 1908–9 to £123,000,000 sterling in 1909–10. Should wheat and seeds continue to be exported through the autumn and winter months to the extent anticipated, the export trade of 1910–11 will be on a very large scale indeed. Of course, the import trade has been slower to move because there was a great accumulation of stocks, and the slump of 1908 was so severe that recovery cannot be expected very quickly. In 1909–10 the imports fell from £86,000,000 to £82,000,000, but in the closing months of the year there was a considerable upward movement. The third sign of improvement, the fall in general food prices, is in some degree the most important to large portions of the population of India, particularly those who dwell in towns, and is a most gratifying sign of improvement, when we recollect that the common food grains are 20 per cent. cheaper now than they were a year ago. But, of course, it must not be forgotten that the agriculturists of India have benefited very largely by the increase in the prices of what they have sold, while the land revenue and other taxes have remained stationary. Twenty years ago it took 40 lb. of wheat to pay the land revenue on an acre of land in the Punjaub; now it takes only 29 lb., and meanwhile the average sale price of a cultivated acre of land has risen from 38 to 98 rupees, and it is a much higher figure in the canal irrigated colonies This picture that we have been able to sketch of a practically wholly agricultural community is a very satisfying one, but I have something rather less optimistic to say upon two subjects which have always to be mentioned in Debates on Indian affairs—they are the plague and the malaria. Last year my predecessor was able to say that plague was decreasing, that it had shown diminishing virulence in 1908 and 1909. Experts thought that the worst had been seen of this disease in 1906, which had shown the biggest rate of disappearance of its virulence. The mortality in that year dropped from 1,000,000 to 375,000. In 1907 it rose again to 1,300,000. In 1908 it decreased to 156,000, and in 1909 the mortality was only 175,000. But this year it has flared up once more, and to the end of June the mortality was 374,000. As in former years, the death-rate has been most severely felt in the United Provinces and the Punjaub.

It is a local disease in the sense that it seems always to recur in particular provinces and in particular districts of particular provinces. But, on the other hand, scientific evidence all seems to show that it is unconnected with any peculiarities of local circumstances, such as soil and drainage, and it is wholly unconnected with the comparative wealth or poverty of the inhabitants. The extermination of rats and fleas, the prevention of their importation from an infected district to a district not infected seems to be now agreed as the essential way of tackling the disease. Inoculation and the temporary evacuation of infected premises are used as subsidiary measures. Although the statistics are not hopeful, it is satisfactory to think that the population of India are getting more and more to realise the necessity for co-operating in the administration of remedial measures and in carrying on the continual war which the Government of India have undertaken against the ravages of the plague. But I may point out that in British India, with a population of 226,000,000, the death-rate annually is 8,000,000, so that in most years the contribution which the plague makes to the death-rate is a very small one. Malaria is far more important to the population of India at large. It is very difficult to gauge accurately the ravages of this disease, because the death returns under the heading "Fevers" in India are not very scientific; but, of course, in years when malaria is active the death-rate under that heading "Fevers" in British India reveals the fact. In 1908, when malaria was very severe in Upper India, the death-rate from fever rose from 4,500,000 to 5,424,000, or an increase of 900,000, which may roughly be set down to the ravages of this disease. The causes which bring about epidemics are obscure. They seem to be connected with excessive rainfall that floods the country and increases the facilities for the breeding of the infecting mosquito. In October, 1909, a Committee was convened by the Viceroy at Simla, and the results of this Conference are such that when they are adopted we may hope for a very profitable and satisfactory effect. In the towns site improvement may be made that will have the effect of limiting the breeding places of the mosquito. In the country I fear that we must still have resort to prophylactic measures such as the distribution of quinine. This has always been provided by means of plantation as widely and cheaply as possible, and the supply is now being largely increased and cheapened and more effectively distributed, while at the same time, by Grants in Aid of various municipal bodies for drainage and improvement of sites, remedies are being attempted in the towns where the malarial mosquito abounds and breeds.

So much for a general view of the material conditions of the people of India. I now come to the financial position of the Government of India, which, after all, in this Debate must occupy some place. With the permission of the House I do not propose to go in great detail into the financial position. The Blue Books which have been laid before the House on the subject contain a full account of it, and for the first time this year they contain, it addition to the financial statement of the financial member of the Viceroy s Council, and the ordinary tabular statement, the very instructive debates in the Viceroy's enlarged Council, and I would recommend to all students of Indian affairs a perusal of these books. They will find them of exceptional and absorbing interest. At the beginning of the year 1910–11 the chief topic of interest is how far the results of the past year actually coincide with the Budget Estimate of March 1, 1909. This Estimate shows a surplus of £231,000, while the revised Estimate shows a surplus of £290,000, and I am happy to say that later figures show the surplus as £526,000, so that the difference between this final figure and the £231,000 estimated for is inconsiderable, having regard to the large amount of expenditure involved. But the resemblance is only superficial, and the discrepancies between the results of the year and the Budget Estimate are very large indeed. There was as the Budget had anticipated a great improvement in revenue as compared with the preceding year, but, with the exception of opium, the improvement fell very far short of what had been anticipated. Land revenue, taxation, and commercial undertakings produced together £470,300 less than the Budget Estimate, and a deficit was only avoided for two reasons. First, expenditure on both civil and military work was kept well within the Budget Estimate. Having regard to the very great importance of economy in India, this is not only satisfactory in itself, but augurs very well for the future of the finances of the country. The second reason was that owing to the fact that higher prices than were expected were obtained at the sales, opium produced £900,000 more than the Budget Estimate. The House will agree that this sum, exceptional as it was, was rightly treated by the Government of India as a windfall, and a large portion of it was expended in making Grants to those local Governments whose finances had been depleted by the famine arrangements of three years ago. After making these Grants to local Governments they are able to show, as I was saying, a surplus for the year 1909–10 of £526,400. As regards the present financial year, 1910–1911, new taxation is necessary for the first time in sixteen years. Since 1894–95 there has been no new taxation in India, while the relief granted to the taxpayer in land cesses in 1905–6 and the reduction of the Salt Tax in 1903, and again in 1905, and again in 1907, and the reduction of the Income Tax have relieved the taxpayer and have cost the State no less than £4,500,000 a year. This year, in order to show a balance of £376,000, additional taxation to bring in £1,126,000 is being imposed. The main cause of this additional taxation is that while the revenue, owing to the remission of taxation under certain heads, has not expanded in the last three or four years, there has been a very large increase in the expenditure under certain heads with which the revenue has not been able to keep pace. I will not make a comparison with the revenue of 1907–8, because that was a year of famine, or of 1908–9, which was a year of exceptional depression in trade, or of the year 1909–10, in which there were abnormally high opium prices. The last normal year was 1906–7, and if I compare the Estimate for the year 1910–11 with that year, I find that while land revenue, stamps, Excise, and Customs have increased, railways, salt, Post Office, and irrigation have decreased by almost the same amount, so that if there was no increase in taxation the revenue would be very nearly the same as in 1906–7. Let me explain for one minute, briefly, this question of the decrease in revenue.

First, as to railways. The gross receipts have increased by £3,000,000, but the working expenses and interest charges have increased by £4,750,000, leaving a net decrease of £1,750,000. These increases and expenses were fully explained by the chairman of the Railway Board during the discussion in the Viceroy's Council. They are attributable partly to increases in wages and salaries, partly to improvements in facilities, and to a large expenditure in strengthening and doubling lines and improving and enlarging stations. Such expenditure is not immediately productive, but there is every reason to hope that, in course of time, its value will be very great. I am spared the necessity of developing further the subject of railways, because a few months ago I was able to lay before the House, in introducing the Loans Act of this year, an account of the convenience and profit to India of this, which is one of the best examples of Socialistic undertakings which the world has to show. As regards salt, the loss of revenue is due to the reduction of the duty in 1907–8 from 1½ rupees to 1 rupee per maund. If the reduction of the duty had caused the revenue to fall in the same proportion the loss would have been £1,365,000, but there has been a considerable increase in consumption in this necessary of life, reducing the loss to £967,000. Of the £481,000 loss under the heading of "Post Office, Telegraph, Mint and Exchange" there was a reduction in postal rates in 1907–8 which cost £200,000 a year. When I turn to the expenditure figures I find an increase for 1906–7 of £2,485,000. Nevertheless, I would point out that there is a decrease under the heading of "Military Services" of no less a sum than £463,900, although the figures for 1910–11 include the cost of the increase granted to the pay of the Native Army, £426,000. The chief cause of this economy is that the expenditure on Lord Kitchener's scheme for the improvement of the Indian Army has been greatly reduced, owing to the completion of some measures, the modification of others, and the improvement of the international situation.

As regards the increases, expenditure in the Education Service has increased by half a million, in the Medical Service by £300,000, in the Scientific and Agricultural Departments by £224,000, and in buildings and roads by £185,500. I do not think I need defend these increases. In addition to this there has been an increase of £881,300 in the cost of the police force, in accordance with the recommendation of the Police Commission of 1903. There have been also increases in the pay of subordinate establishments employed on the collection of the land revenue and in other departments, necessitated in some cases by the general upward movement of prices and wages. There is one aspect of the growth of expenditure which I ought to mention, because it was referred to at some length in the financial statement of the Government of India—I mean the increased amount assigned to the Government of Eastern Bengal and Assam. The income assigned to the Province in 1906 was found to be inadequate for its needs; the Province was somewhat backward in educational facilities, in medical establishments, in means of communication, and so on, and the experience of the last four years has shown the necessity for increasing the funds available for its development. The Government of India has, accordingly, made to it a Grant of about £255,000 a year, with effect from 1910–11, and this is the charge which has to be met in this year's Budget.

The Finance Member of the Viceroy's Council also laid especial stress upon the prospective loss of revenue from opium, compared with 1908–9 and 1909–10. It is a fact well known to Members in all parts of the House that new sources of revenue will have to be discovered to replace the opium revenue which is to be lost to India during the next seven years. Actual receipts for any particular year may vary, because the reduction in the output may lead to an increase in price, but the larger the receipts in any year the greater the loss that will be felt when the trade is ultimately stopped and that source of revenue disappears. During the five years 1901–5 the average total annually exported from India to countries beyond the seas was 67,000 chests, of which China took 51,000, and this amount the Government of India undertook, with effect from 1st January, 1908, to reduce by 5,100 chests per year for three years. The Chinese Government on their part undertook to reduce progressively in the same way the production of opium in China. There are no returns as to the amount of this production, but recent estimates put it at eight or ten times the amount of the Indian import. It was further agreed that if the Chinese would fulfil their share of the agreement, the Indian Government would continue to reduce their export by 5,100 chests annually for seven years more. The present year is the third year of the agreement. The Indian Government have limited the export of opium, and the Imperial Chinese Government on their part claim to have reduced production by more than three-tenths of the area formerly under poppy. Although this cannot be substantiated by statistics, there is no reason to doubt that it is true. But the Foreign Office, before agreeing to the renewal of the agreement, have deputed Sir Alexander Hosie, lately Consul-General at Tientsin, to make inquiry. The condition that statistical proof should be furnished has been waived, and the Chinese Government have been offered an extension of the existing agreement for another three years.

As regards the average annual net revenue, before the agreement with China it was £3,500,000 sterling. In 1908–9, the first year of the agreement, it rose to £4,645,000; in 1909–10 it was £4,232,000. This improvement, despite the reduction of export, is due to the higher prices obtained for Bengal opium, to the decrease on expenditure in Bengal, owing to reduced operations, and the fact that Pass Duties on Malwa opium have been received in advance on opium that will be exported up to the end of 1911. In 1910–11 there will be no receipts from Pass Duties, but a higher price has been estimated for Bengal opium, and the revenue budgeted for is £3,550,000 sterling. In 1911–12 receipts on account of duty on Malwa opium will not commence until January, 1912, and there will then be monthly sales from that date of the rights to export the fixed number of chests of Malwa opium. Assuming that Bengal opium will continue to fetch 1,750 rupees a chest, a net revenue of about £3,000,000 a year may be hoped for in 1911–12 and 1912–13. It will thus be seen that the first half of the agreement with China will pass without injury to the Indian revenue, but the second half will be more serious.

The Secretary of State is receiving representations from Members of this House, urging the shortening of the ten years' period. This period was proposed by the Chinese Government themselves, and the Chinese have suggested no alteration. I can only say that any alteration would lead to serious financial and administrative questions. I would urge Members to be satisfied with the very satisfactory arrangement that has been made, and to forbear to ask that an excessive strain should be placed either on the finances of India or on the temper of the opium cultivators, the taxpayers, both in British Provinces and in native States, and the relations of the Indian Government with the Native States.

It is generally known that the United States Government have issued an invitation to His Majesty's Government to take part in a proposed International Opium Conference to he held at The Hague, in order to give effect to the recommendations of the Shanghai Commission and to consider otherwise the opium question. His Majesty's Government, in examining in a friendly spirit the tentative programme which the United States Government has suggested, is inclined to think that it may require some revision before it can usefully serve as a basis for a Conference, and that some preliminary understanding between the Powers as to the subjects to be discussed may be desirable. His Majesty's Government, for instance, could not agree to submit to discussion at the proposed Conference the diplomatic relations subsisting between this country and China, and it may probably desire to know whether the Powers, accepting the principle of a conference, will assent to the Conference dealing fully with the cognate question of regulating the export of morphia and cocaine to the East, and will undertake to have the necessary information collected if it is to arrive at a useful decision.

However that may be, the fact remains that despite the prosperity of India, the increase in its expenditure on subjects such as I have mentioned, the condition of the revenue, owing to remission of taxes and the prospective loss of revenue from opium, account for the necessity for new taxation this year. To meet a deficit of £750,000 and to turn that deficit into a surplus of £376,000, the Government have proposed new taxation amounting to £1,126,000. This money is to be found by increasing the Customs Duties on imported liquors, to yield £135,000 with a corresponding excise on beer manufactured in India to yield £33,000; an increase in the duty on silver to yield £307,000; on petroleum to yield £105,000, and on tobacco to yield £420,000, with an increase on Stamp Duties to yield £126,000. No increase, it will be seen, has been proposed on any necessary of life, and the easy expedient of once again increasing the Salt Tax or the land rates has been very properly avoided. There has been little discussion of the Liquor Duties, an increase in which will have satisfactory results if it stops some of the import of cheap foreign spirits with their corrupting and demoralising effects on the natives in some parts of India.

The duty on silver has been seriously canvassed, and the Debate thereon in the Council is one of the most valuable and instructive. The duty was formerly 5 per cent., but the increased duty is 16 per cent., or a rise from about 1¼d. to 4d. per ounce. One incidental effect of the duty will be to raise the value in India of the large amounts of savings held by the Indians as silver. It was expected in some quarters that, in consequence of the imposition of the Indian duty, the prices of silver outside India would fall, and this would involve a fall in Indian exchange on China. It was argued that, in consequence of this, the exportation of goods from India to China would become less profitable, while the Chinese producer, not being exposed to this same disadvantage, would gain. I will not go now into the question as to whether the trade of one country is permanently fostered, or that of another injured by a rise or fall in the rate of exchange; but these objections to a very good revenue-producing duty have been answered, and the question has become academic only because the price of silver and the Indian exchange on China have risen since the imposition of the increased duty. The price has risen from 23 7–16d. per oz. to 25⅛d., and the China exchange has risen from 129½ rupees to 132¾ rupees per 100 dollars.

The increased tax on petroleum is not likely to cause much comment. The im- port of petroleum is increasing, and rose in India from 84,000,000 gallons in 1904–5 to 97,000,000 gallons in 1908–9. There has been considerable objection to the new duties on tobacco. These were imposed for revenue purposes only. The amount of tobacco imported into India in 1908–9 was five and a half million pounds. If duty had been paid on this import at the rate now in force in the United Kingdom it would have produced £1,449,000, instead of £39,000. It was only reasonable that, when in need of revenue, an attempt should be made, as in other civilised countries, to obtain from this source a substantial amount. The new duties are less than half those now in force in the United Kingdom. In so far as they will stop or reduce the importation of inferior cigarettes into India, cigarettes which sell for ¾d. per packet of ten, or even cheaper, and do something to check the growth of cigarette smoking, no one will be sorry. If they were protective they would defeat the object of the Secretary of State, and the Government of India, in raising revenue.

I may add that the Indian tobacco which is alleged to compete with the imported article is of very poor quality. The natural conditions in India are hostile to good curing, for the climate is too dry, and the fermentative changes necessary do not take place. The average value of such unmanufactured tobacco as is produced in, and exported from, India, is shown by the Trade Returns to be about 1¾d. per lb. As I have so often said, their effect has been watched, and is being watched, with the greatest of care, and the desirability and possibility of a corresponding Excise will always be considered. I may remark, before leaving finance, that the need for economy is obvious from what I have said. The Secretary of State is now considering what steps may be desirable in order to secure a more economic administration. I have now done my best to enable the House to form some opinion of the material condition of the people of India. There remains the even more important task of examining the political condition of the Empire. Western people, bred in the tradition of self-government, do not easily realise the complexities that involve the ruling power in India, the diversities of interest through which the path of compromise must be found, the multifarious elements that must be welded into a large and steady policy. The conflicting claims of different classes may bulk largely at home, but underlying them there is an essential unity of religion, of tradition, and, on the whole, of interests. In India are associated under a single rule varieties of races far wider than can be found in the whole of Europe, as many different religions as Europe contains sects of Christianity. Stages of civilisation range from the Hindu or Mahomedan gentleman on the Bench of the High Court to the naked savage in the forest. Grafted on to this diverse population, numbering nearly 300,000,000, is a European element, numerically insignificant, less than 200,000 in all, a population in no sense resident in the country, but of an importance in the spheres of education, commerce, and administration wholly disproportionate to its numbers.

The responsibility for the government of such a country rests ultimately on the people of Great Britain, and is exercised through the Secretary of State in his Council. We have got to yoke a Government, as complex and irresponsible to the peoples which it governs as the Government of India, to a democratic system in England which every year becomes more determined to do its share in the government of this great dependency. The mechanism for performing this duty lies in this House. The views expressed in it on an infinite variety of subjects must be duly considered by the Secretary of State, who is, in effect, the servant of the House. This responsible task to be achieved in the House requires dignity, reserve, and a sense of proportion difficult to attain. In the last Parliament there was one who was accustomed to take a prominent part in Indian and Imperial affairs, who differed widely from me and my Friends in his views, whose methods might well be taken as a model for such discussions as these. I should like to add a word expressive of my personal sense of loss on the death of Lord Percy, which has already been widely lamented.

I fully realise that my words, and, indeed, the words of all who follow me, are not only likely, but certain, to be overheard, and that our discussions are awaited thousands of miles away by people of little experience of political government, of growing political ambition, with inherent and acquired characteristics totally different from our own. Our words must be chosen not only for Englishmen accustomed to Parliamentary Debates, but for Englishmen impatient of Parliamentary Debate—not only for English audiences, but for Indian audiences.

I know full well that recent changes in the Indian attitude are confined to a very small portion of the population. Nine-tenths of the vast population of India are still uneducated and illiterate. All talk of unrest, of which one hears so much, is talk of the small fraction of a vast number of people which has been educated, and within this small fraction are to be found all those divergent forces which are classed together as political unrest. We must remember, however, that the amount of yeast necessary to leaven a loaf is very small; when the majority have no ideas or views the opinion of the educated minority is the most prominent factor in the situation. How much earnest thought and hasty judgment centres on the word "unrest." Of course there is unrest. It is used by some, adorned by instances of the inevitable friction of complex government, as a proof of the failure of the British occupation. It is used by others, ornamented with details of crime statistics, as evidence of the lack of strength of British rule, of the lack of firmness of a particular political party in this country, and it is, of course, used by that portion of the Press which considers only its own circulation for sensational purposes.

May I say how strange it seems to me that a progressive people like the English should be surprised at unrest! You welcome it in Persia, commend it enthusiastically in Turkey, patronise it in China and Japan, and are impatient of it in India! Whatever was your object in touching the ancient civilisation of the Indian Empire, whatever was the reason for British occupation, it must have been obvious that you could not bring Eastern civilisation into contact with Western without disturbing its serenity, without infusing new ingredients, without, in a word, causing unrest. And when you undertook the government of the country, when, further, you deliberately embarked on a policy of educating the peoples on Western lines, you caused the unrest because you wished to colour Indian ideals with Western aspirations. When you came into India you found that the characteristic of Indian thought was an excessive reverence for authority. The scholar was taught to accept the assurance of his spiritual teacher with unquestioning reverence; the duty of the subject was passive obedience to the ruler; the usages of society were invested with a divine sanction which it was blasphemy to question. To a people so blindly obedient to authority the teaching of European, and particularly of English thought, was a revelation. English literature is saturated with the praise of liberty, and it inculcates the duty of private and independent judgment upon every man. We have always been taught, and we all believe that every man should judge for himself, and that no authority can relieve him of the obligation of deciding for himself the great issues of right or wrong.

The Indian mind was at first revolted at this doctrine, then one or two here and there were converted to it. They became eager missionaries of the new creed of private judgment and independence, and the consequence is that a new spirit is abroad wherever English education has spread, which questions all established beliefs and calls for orthodoxy, either political, social, economic, or religious, to produce its credentials. We are not concerned here, except in so far as they are important causes of political unrest, with either religious or social unrest. It is not necessary for me to do more than state the platitude that religious unrest produces among those who have experienced it political results. There can be no departure from religious orthodoxy without its being accompanied by its fierce reaction to orthodoxy. Side by side with the unrest produced directly by English example comes as an indirect result a religious revival. The activities of those who are questioning the teaching they have inherited call into action those who fiercely combat the new religious heterodoxies, abominate the Western example producing them, emphasise the fundamental and, they say, the unconquerable differences between the east and west, and demand freedom from alien influences. These two counterforces—the reform movement and the revival that opposes it—involve not only those directly affected, but their parents, relations, and friends, and cause political and social unrest.

For an example of social unrest I would call the attention of the House to the social reformers who are devoting their attention to the education of women, the abolition of infant marriage, freedom of travel and sea voyage, and similar social work, with far-reaching effects on the domestic sphere, and the result of questioning the usages which claim divine sanction, and were hardly in olden times distinguishable, from religion. Despite ostracism and sometimes boycott, pecuniary loss and moral obloquy, the efforts of the reformers are in a small degree bearing fruit. And just as religious reform produces religious revival, so social reform brings its counter movement. Those forming it resent interference with old-established usage, disapprove of the reforms achieved and proposed, and hate the teaching which has produced them and those who gave the teaching. And then there is, of course, economic unrest—the necessary concomitant of an advance in the material well-being of the masses, indicative of impatience with the incommodities of life which were once accepted as inevitable, of changes in industrial conditions, of increasing wants and of quickened desires. There is a perceptible advance in the general well-being; but the start is from a very low point. The enlargement of the wants of people accustomed to an extraordinarily simple standard of living is bound to manifest itself in ways which are indicative of economic unrest.

Viewed broadly, India may be said to be passing from the stage of society in which agricultural and domestic industries of the cottage order have predominated, in which each village has been an isolated community, and each individual attached to a particular spot and hereditary occupation, to the stage of organised over-seas commerce and capitalised industry. As yet the transition is visible only in a few exceptional districts, where factories or coal-mining have taken hold, and in the maritime cities through which the commerce of India to other countries pours. Indirectly, the whole continent is affected the demand for labour of the industrial centres penetrates to the most secluded villages, raising the local wage rates, and increasing the farmer's wage bill. The demand of foreign countries for the food grains, the oil seeds, the cotton and the jute of India raises local prices, widens the cultivator's market, and changes the crops he grows. The competition of machine-made goods with hand-loom industry impoverishes the village weaver, or converts him into a mill hand and drives him into a town.

These three movements—the religious movement, the social movement, and the economic movement—and the counter movements of those who abominate the new teaching, resent the alteration of the time-honoured social customs, dislike any departure from orthodox religion, question the teaching that produces it, and also show resentment to those who teach it—all these things together make that curious, differently produced force in India which is known as political unrest. It would be very surprising indeed if the religious and social reform movements, such as I have described, together with the opposition to them, the desire for economic trade, the tendency to preserve uneconomic and ancient industries, together with the spread of education and the growth of the Native Press, and the fermentation of new ideas, stopped short of the political sphere. Of all forms of liberty England has always shown the most jealous solicitude for political liberty, and I think we can regard political unrest in India as being but the manifestation of a movement of Indian thought which has been inspired, directly or indirectly, by English ideals, to which the English and the Government of India themselves gave the first impetus. It is constantly being nourished by English education given in Government schools and colleges. In so far as this political unrest is confined to pressing the Government to popularise the government of the country, so far as the conditions of India will permit, I do not believe that anybody in this House will quarrel with it. You cannot give to the Indians Western education from carefully chosen and carefully selected teachers, trained either in Europe or in India; you cannot give to the Indians Western education either in Europe or in India and then turn round and refuse to those whom you have educated the right, the scope, or the opportunity to act and think as you have taught them to act and think. If you do, it seems to me that you must cause another kind of unrest, more dangerous than any other, among those bitterly dissatisfied and disappointed with the results of their education, who use methods which have been taught them in Western countries to vent their disappointment. For this reason, it seems to me, if I may say so, that the condition of India at the moment is one which, handled well, contains the promise of a completer justification of British rule; handled ill, is bound to lead to chaos. English thought may be responsible for the fundamental principle of revolt against authority, but it cannot be responsible for all the changes which that principle has undergone in its adaptation to Oriental environment. It would be absurd to suppose that old beliefs can be unseated and old usages altered without some element of danger. There have been recently in India manifestations of political unrest with which no one can sympathise, and with regard to which difference of opinion is not legitimate. There have been assassinations and conspiracies to murder; there have been incitements to violence in the Press; there have been attempts to create hatred against certain sections of His Majesty's subjects. If this pernicious unrest was allowed to spread it would result in widespread misery and anarchy; it would produce a state of things in India which would be more inimical to progress than even the most stringent coercion. It would bring chaos, from which society would seek refuge in a military dictatorship. For these reasons, if the Government was hindered from doing its duty in preventing this, it seems to me it would be a great step backwards, and a tragedy in history. I have only to add that the majority of the Indians themselves, as the House well knows, realise fully the danger, and will exert themselves to suppress those extremists who are jeopardising their position. I do not want to risk any assurance which the conditions do not justify, but I can say that within the last six months there has been a considerable revulsion in our favour. Horror at the assassinations and political outrages, which are wholly repugnant to the true spirit of Hinduism; the strong line taken by the Government and the Rajahs in regard to sedition; the general feeling that political agitation carried on by students and schoolmasters is doing infinite injury to the rising generation, and attempts that have been made in public and private life to promote more intimate relations between the different races—all these, combined with the liberal policy pursued by the present Government in affording to Indians a wider entry into public life, have had their effect.

But I would ask the House to consider what, in the face of these different spirits of unrest arising from the complex and contradictory causes that I have tried to show, should be the root principle of government in India. The answer is easy to give, if difficult to act up to. True statesmanship, it seems to me, ought to be directed towards separating legitimate from illegitimate unrest. The permanent safeguard must be a sympathetic government, which realises the elements of good as well as the elements of danger, and which suppresses criminal extravagances with inflexible sternness. His Majesty's Government, acting upon this principle, are determined to arm and to assist the Indian Government in its unflinching war against sedition and illegitimate manifestations of unrest, while it shows an increasingly sympathetic and encouraging attitude towards legitimate aspirations.

I propose, if the House will permit me, to give the latest example of the two branches of policy which I have outlined. The latest example of the first part of the policy is the new Press Act. After full debate in the new Council this has become law, and has been in force for some months—I believe already with beneficial effects. Its object may be said to have been to create a responsible instead of an irresponsible Press. In this country public opinion may usually be trusted to produce this effect; but in India, with its differences of race, of creed, and of caste, public opinion in this sense can hardly be said to exist. Therefore something is required in the manner provided by this Act, which I propose to examine in some detail, because I recognise frankly that it is an exceptional measure which the House is justified in demanding should be thoroughly examined, and because I believe that a large amount of the criticism which has been directed against it is due to a misapprehension of its provisions. May I assume that it is common ground that a certain section of the Indian Press has done incalculable mischief during the last two years? It was certainly common ground in the Viceroy's Council when the Bill was under discussion. There was criticism of the remedy proposed by the Government, but nobody questioned the necessity for some remedy or the existence of the disease. I think it would be difficult to exaggerate the dangerous effect of seditious literature on the unformed and impressionable minds of students. I need not labour the point; it will be admitted by all who have a knowledge of Indian affairs, and terrible tragedies have brought it home to us. No one better realises than the Indian parents themselves the gravity of the evil, or more earnestly seek to remedy it. I would ask permission to read to the House a leaflet which has recently been disseminated in Bengal:—

"Dear Readers,

"We have made our appearance at this juncture as the situation is one of extreme importance. Do not be led away by false hopes and temporary conciliations. Let not any conciliatory measure of the Government pacify you and scare you away from your path. Sacrifice white blood unadulterated and pure to your gods on the altar of freedom; the bones of the martyrs are crying for vengeance, and you will be a traitor to your country if you do not adequately respond to the call. Whites, be they men, women or children, murder them indiscriminately, and you will not commit any sin, but simply perform the highest Dharma. We shall appear again with more details. Adieu!

"EDITOR."

Then follows a postscript:— The editor will be extremely obliged to the readers if they translate this into all languages, and circulate it broadcast.

I say, by way of preface, that being an example of the sort of thing that is sometimes circulated among schoolboys in village schools, it is absolutely necessary that the Government should seek some weapon with which to try and prevent the dissemination of such nauseous stuff. Of course, the question presents itself, "Why not be satisfied with the existing law? You can punish sedition under the Penal Code and you can prevent sedition under the Criminal Procedure Code. Two years ago you passed a very stringent Press Act, which enabled you under certain circumstances to crush newspapers out of existence." To this the reply must be that, notwithstanding careful trial, the existing law cannot cope with the evil which the new law is designed to meet. The policy of prosecution under the Penal Code has been given a thorough trial during the last three years; its result has been to make martyrs of misguided and insignificant youths; to advertise sedition, and to enhance the circulation of offending newspapers. Its deterrent effect on the worst class of papers has been negligible. The preventive clause in the Criminal Procedure Code is not much good. It empowers a magistrate to call upon a printer or publisher to furnish security to be of good behaviour. This is easily evaded. The person bound over ever has only to cancel his registration as a publisher and to register a dummy publisher and the newspaper goes on all the same. The Act of 1908 has been successful in preventing the open advocacy of murder; but the Act only concerns itself in open incitements to violence. What we have now to deal with as well as that evil are methods which are just as dangerous even if less flagrant—incessant misrepresentation, the imputation to the Government of malevolent motives, incitements to revolution under the guise of religious exhortation, implied justification of assassination by reference to revolutions in other countries. This preaching by innuendo has proved just as mischievous to the Oriental imagination as any direct incitement to murder which would have come under the Press Act of 1908.

In these circumstances the Government determined to make an effort to create a sense of responsibility and to prevent rather than to punish. Let us see what the Act does. Instead of concerning itself with the individual, like the clause of the Criminal Procedure Code referred to above, it transfers the security to the newspaper or the Press itself. No security is exacted from any registered newspaper which was existing when the Act was passed, unless it is guilty of publishing seditious matter. All new publications alike, so that it does not involve any insidious distinction, furnish security varying from £33 to £133, unless the magistrate thinks fit to grant an exemption, on the ground, for instance, that, in his opinion, the funds of the newspaper are not sufficient to find the money necessary.

5.0 P.M.

In the event of a newspaper which has given security, publishing seditious matter, the security and all the copies of the offending issue may be declared forfeit, and a newer and larger security demanded. On a subsequent offence, subject to appeal to the High Court, the press itself, as well as the security, is forfeit. Such are the main provisions of the Act. I would submit to the House that this Act really provides a far more humane procedure than the procedure by prosecution, which some Members seem to prefer. Instead of putting the offender to the ignominy of prosecution and imprisonment, he is, on the first offence, merely warned in a friendly manner. If he proceeds in his infringement of the law he does so with his eyes open. Even then he is only asked for a modest security, upon which he can obtain interest from the Government. Even after a further offence, if his security is forfeited, he has only to furnish a further security in order to have a further chance. Nobody can represent this as drastic. The Act certainly will not prevent anarchy of which the Press is not the cause, but only the instrument of propagation. We only hope that by this means we shall be able to check the contamination, by deliberate misrepresentation and inflammatory doctrine, of those who might otherwise be useful members of the community.

The Press remains free to publish what it likes. Honest papers will not be affected by it. Those papers which have anything to fear from it will have so abused the full measure of freedom, previously granted, that the continuation of their unfettered freedom will become impossible. The fear that the smaller concerns may be extinguished by their liability to find security has been met by the orders issued by the Government of India that in these cases the requirement should be waived, and no security should be taken. Personally I am not impressed by the picture some have drawn of the nervous editor, not knowing whether he may have incurred the displeasure of a crotchety Government. The Act enumerates very definitely the sort of writing that constitutes an offence, and it expressly exempts from its purview the honest expression of disapproval of Government action. May I quote to the House a remark of Sir FitzJames Stephen, which was quoted in the Debate in the Viceroy's Council. It runs:— I do not believe that any man who sincerely wished not to excite disaffection ever wrote anything which any other honest man believed to be intended to excite disaffection.

I believe there is nobody in this House who will not in his heart of hearts agree with that remark. I can only say that the Government of India have always kept prominently before them the necessity of avoiding, at all costs, what might impair the right, which is not less valuable to the Government itself than to the governed, of frank and honest criticism of Government measures and action. They have issued Administrative Orders with a view of securing uniformity of obligations, and with a view of avoiding, if possible, hardships. In the circular in which they issue instructions to refrain from demanding security in the case of papers whose resources cannot supply it, it is also stated, or laid down, that existing newspapers should be warned before demanding security, and that the security should be fixed at the minimum that may reasonably be expected to enforce obedience to the law. I should like to quote one parapragh of the recent Order, because I do not think you can find better evidence of the determination of the Government not to use this Act in any harsh or oppressive way:— It is the earnest wish of the Governor-General in Council that the Act should be administered with careful discrimination between those newspapers and Presses which are generally well conducted and those which transgress from a deliberate intention to excite disaffection. No order of forfeiture should be passed without previous consultation with the Law Officers, and in coming to a decision due weight should be given to other articles published by the offending journal which indicate the nature and tendency of its writings.

I am going to ask the House's permission to quote an opinion from an Indian paper on the way in which the Act is being administered. The editors of certain vernacular papers had been warned by the Deputy-Commissioner of Lahore against continuing to publish matter which might excite disaffection and cause a disturbance of the peace between the Hindu and Mahomedan populations. The "Tribune," a daily paper edited in English by an Indian gentleman, commented as follows:— Where the authorities think it necessary to move, it is certainly wise and far-sighted to put in friendly council before taking action under the law. The fact that the Deputy-Commissioner of Lahore has demanded an undertaking in the first instance, is a clear and welcome indication that the authorities have no desire to work the law in a harsh or rigorous manner.

That is a welcome tribute with which I trust the House will agree. Let no one imagine that this Act has been thrust upon an unwilling India. If there is anyone who thinks that I would beg him to study an account of the Debate in the Viceroy's Council, which has been issued as a White Paper, and note the way in which speaker after speaker arose and acknowledged the lamentable necessity for such action. I believe that the Act, taken in conjunction with the Seditious Meetings Act, will complete the armour necessary, so far as one can foresee, for the repression of the campaign of calumny and of sedition. It will, at any rate, prevent that horrible form of sedition-mongering, which consists in disseminating cruel misstatements among young boys at school. May I ask the House to consider for one moment how difficult it is by quoting words to decide what is and what is not seditious. Let me give an example. It is constantly said by seditious people that the English have caused malaria. There are apologists who say—and on one occasion I heard my hon. Friend the Member for Leicester adopt this attitude—"But this is an interesting scientific fact. Canals are the breeding places of anopheles. The English build canals. It is a good wind that blows nobody ill; they, therefore, produce malaria. This statement, which is seditious in your opinion, is merely an attempt from the man who utters it to disseminate an interesting scientific result incontrovertible and remarkable." But what sophistry all this is! How harmless is the sentiment if this were all! But when it is uttered with the deliberate attempt to make the ignorant believe that the British Government have introduced malaria deliberately, by building canals and even railroads to diminish the troublesome population, it ceases to be a scientific fact; it becomes a dangerous, libellous, and malignant calumny.

I will take again, as another example, the subject of the Indian police, and I will say, as I have so often said in the House, that no one can deny the imperfections of this force. But you cannot produce a complete reform of a faulty force in a year, a decade, or even fifty years. The improvement has been the most earnest attempt of the British Government—yes, and of the Indian people—during the last sixty years, during which the police have formed the subject of a series of Commissions of Inquiry, the last of which was appointed in 1902 by Lord Curzon. It recommended comprehensive reforms in all branches of the service, the annual cost of which was estimated at over £1,000,000 sterling. Its findings were adopted by Government Resolution; effect has already been given to most of the proposals, and the work of reorganisation is still in progress. Let us consider for one moment the force with which the Report deals. The Civil Police in British India number 176,000 men, who have to deal with a population of nearly 232,000,000, scattered over 1,000,000 square miles. Let me give a typical district. In a district of Bengal there is a European superintendent of police, with the assistance of an Indian deputy-superintendent, who has to control nine inspectors, seventy-nine sub-inspectors, eighty-three head constables, and 778 constables. The area of the district is 5,186 square miles, the population is nearly 3,000,000, there are twenty-six police stations and twenty-one outposts, some of them very difficult of access, and in 1908 4,170 cases of serious crime to investigate. These statistics illustrate, far more than any words of mine, the difficulties under which the police work is done in India, and when one reflects that educated Indians regard police duties with abhorrence, that to "work for a confession," as it is euphemistically termed, has been inherited from pre-British times as the best mode of procedure in a criminal trial, that little help is obtained from the people in bringing criminals to book, some faint idea of the difficulties will be realised. Having regard to all these circumstances, it is not surprising that isolated instances of abuse may sometimes be found. But by improving the police, by the vigorous prosecution of malefactors, by the expenditure of money, reorganisation must be gradually effected, and is going on with a determination which no honest man can doubt.

Let me ask the House to compare some extracts which I have taken from the Commission on Torture in Madras in 1855 with the Report of the Curzon Commission of 1902. The Commission of 1855 quotes and endorses the words of an official witness:— The so-called police of the Mofussil district is little better than a pollution. It is a terror to well disposed and peaceable people, none whatever to thieves and rogues, and if it were abolished in tote, property would not be a whit less secure.

The Commission of 1902 say:— It is significant that a proposal to remove a police station from any neighbourhood is opposed by the people. They know that, on the whole, the police are for their protection.

The Commission on Torture in Madras in 1855 spoke of— The universal and systematic practice of personal violence, and said: It is still of enormous proportions, and imperatively calling for an immediate and effectual remedy.

The Commission of 1902 wrote:— Deliberate torture of suspected persons and other most flagrant abuses occur occasionally, but they are now rare.

Again, I say a marked improvement has been seen. Nevertheless so keenly and rightly sensitive are the English people about reform in the police force that defects are quickly pointed out. To point out defects in the police force, if it is considered that they still require pointing out, and to suggest new remedies and palliatives which have not yet been discovered, if there be such, is useful work, demanding the sympathy of all men, but to collect instances of abuse, many unproved, some proved to be false, to take quotations from their context and garble them, to represent as findings of a Commission what is merely report of popular opinion, to quote a statement of an interested party as being "an account of what happened in the very words of the official resolution," to say that the Indian Government has never prohibited torture, when it is punishable with seven years' penal servitude, to ignore any Government action to stop these abuses, and to represent the Government as ignorant or supine, callous, and tolerant of bad practices, I say, whether this be the work of a Hindu agitator or an ex-Member of Parliament, it is seditious, dangerous, and ought to be stopped.

The House will agree further, that, hand in hand with any repressive measures designed to deal with manifestations or symptoms, the root causes must be dealt with too, and chief among these we must look for an improvement in the matter of education. The worst danger which threatens India is the lawlessness or disregard of authority which exists amongst students or schoolmasters. Now, I have described the political difficulties which exist to-day as largely the consequence of Western education. If there is a solution it is surely to be sought in some reconsideration of the system which caused it, both in India and England, even at the cost of other economies or new taxation and large expenditure from the revenues of India. Let me first deal with the position of the Indians who come to England for purposes of study. The number now in England cannot be less than 1,000; they are far removed from the influence of their parents and guardians; they often arrive wholly friendless and ignorant of Western customs. Their position is one of great difficulty and considerable danger, and they afford a problem urgently demanding solution. Last year my predecessor outlined the means by which we hoped to deal with the question, and the House will expect to hear what progress has been made.

These measures fall under three heads, namely: (1) The appointment of Educational Adviser to Indian students at the India Office; (2) the appointment of an advisory committee; (3) the provision of a house for the National Indian Association and the Northbrook Society for the purpose of a joint clubhouse. The educational adviser, Mr. T. W. Arnold, was appointed in April, 1909. His duties are multifarious. He must be a store of information upon educational matters of every kind. He must advise students as to their residence if they do not become members of a residential university or college. He is a standing referee for educational institutions as to the qualifications of Indian applicants for admission. A doubt was entertained whether Indian students would be willing to avail themselves of the assistance of an official agency situated at the India Office. This doubt has been resolved in a most satisfactory manner. The students come in very large numbers, and the immediate problem is to cope with the very large amount of work with which the educational adviser has to deal. In the last twelve months his personal interviews with Indian students have numbered upwards of 1,300. In addition to the work which was originally assigned to him, he has been entrusted by parents in India with the guardianship of their sons in no less than seventy cases. This entails closer supervision than is attempted in ordinary cases, and involves, among other duties, the care of their money.

The Advisory Committee, appointed in May, 1909, consists of Lord Ampthill as Chairman, six Indian gentlemen of standing, resident in this country, and two English members of the India Office, with correspondents in the various provinces in India. This Committee makes recommendations to the Secretary of State upon all questions referred to them regarding Indian students and holds receptions from time to time in the India Office of students recommended to them by the University Committees in India. The Committee, and especially the Chairman, have thrown themselves with ardour into their work, and have proved very useful to the Secretary of State.

The Secretary of State has leased a house (No. 21) in Cromwell Road, facing the South Kensington Museum, to which the Northbrook Society and the National Indian Association will shortly be transferred. The educational officer will also have his office in this building. Bedrooms will be reserved for the use of Indian students upon their first arrival in this country. Arrangements have been made for meeting students on their first arrival, and, instead of wandering about as at present in search of lodgings, they will be welcomed at the house in Cromwell Road, and given a bed and meals at once. Subsequently they will be given information about the many details which a stranger wants to know on arrival, and advice as to their studies; and they will be furnished, it is hoped, with introductions to English friends and see in fact that they are not friendless in London. The Northbrook Society will run a social club in the rooms assigned to it. Both the societies give receptions at regular intervals, to which Indian and English ladies and gentlemen are invited, and where opportunities of making acquaintance are frequent. The house will be opened, it is hoped, in August, and will be available for students who come to this country at the beginning of the next academic year.

A good start has been made on the right lines. The Secretary of State intends to proceed vigorously on these lines, and as time goes on and opportunity offers to enlarge the scope of organised effort. Let me add one word, addressed not so much to those within these walls as to such audience as I may have outside them. Our efforts cannot bear real fruit unless we have the co-operation of those among whom the lives of Indian students are thrown. Many a friendless, sensitive lad looks back, I fear, on the period that he spent in England as one long spell of loneliness and unhappiness. Nothing that the India Office can do will remedy that. The remedy lies in the endeavours of those among whom their lives are spent to overcome insular reticence and reserve, and to extend a real welcome which, if it is given in the spirit of true and frank comradeship, and not in patronising tolerance, will meet with warm-hearted reciprocation and will bear fruit of which the giver did not dream.

Turning now to India, we must make the teaching more practical, encourage and extend technical instruction, for which there is a great demand, supervise and improve the hostels. The educational system now in existence has undoubtedly been successful in purifying the judicial service. It is capable of great extension in improving the moral tone of the country, spreading discipline and disseminating useful knowledge by means of well-paid and contented teachers. Now education is left to the Member in charge of the Home Department. He is overburdened with work as it is, and his duties will be multiplied by the enlargement of the Council. Adequate consideration of educational questions touching the foundations of life in the many communities of India cannot be reasonably expected from a Department placed in such circumstances as these. A responsible Minister for Education has been an indispensable Member of a British Cabinet for some time, and there is no reason why the same necessity should not be just as strong in what I may call the Cabinet of the Government of India. Steps are needed to secure a coherent policy towards education and to control the expenditure of the money allotted for this purpose.

We have, therefore, decided to revive the sixth membership of the Council, dormant since the abolition of the Military Supply Department, and to appoint a member of Council for education. The head of an Education Department will be all the more likely to perform his work in a broad and comprehensive spirit if he is brought into living contact with the currents of Indian affairs, and this is most effectively secured by knowledge of the general deliberations on public business. It is no object of ours to take a step towards centralisation, but I would remind the House that the Decentralisation Commission have given their reasons for thinking that the general control of educational policy is within the legitimate sphere of the Government of India, and does not hamper development in accordance with local needs and conditions. I may say that such a man, it is confidently hoped and believed, has been found, and His Majesty has approved the selection of Mr. Butler—a man who has been occupying up till now the position of Foreign Secretary to the Government of India. He will, I am sure, become the head of a Department which will ensure to India one of its greatest needs—a better and co-ordinated system of education.

Whilst I am on the subject of the Viceroy's Council, I desire to put an end to public anxiety, by announcing that Mr. W. H. Clark, of the Treasury and the Board of Trade, has been appointed, and His Majesty has approved his appointment, as Member for Commerce and Industry. No one who knows his high attainments and conspicuous achievements in this country and in the East, and certainly no one among his friends, of whom I am glad to think he has many in this House, will question that he brings to a difficult and important task great qualifications which will be invaluable to the Government of India. I pass now to deal with the other branch of the policy I have outlined, to give some account of the latest contribution in the direction of meeting legitimate aspirations by saying something of the Indian Councils Act, the working of which has done much to improve the condition of affairs in India during the last six months.

I think I may claim for the Indian Councils Act that it has been a great success. The House will expect me to make a few remarks, necessarily brief, on its working. It provided, it will be remembered, for a large increase in the number of the various legislative councils in India, introduced a true system of election, making its members more widely representative, and greatly widened their deliberative functions. At the same time, though this did not form part of the Act, it was decided to abolish for the future, in all councils save that of the Governor-General, the practice of maintaining a majority of official members. The Act also provided for the enlargement of the Executive Councils of the Governors of Madras and Bombay, and the establishment of an Executive Council to assist the Lieutenant-Governor of Bengal. Our proposals were subjected to much criticism, both here and in another place, and, although we met with no actual opposition in the Division Lobby—except on one point, which was eventually settled by compromise—the right hon. Gentleman the Leader of the Opposition deliberately disclaimed on behalf of his party any responsibility for the consequences that were likely to follow the passing of the Act. We are quite content to accept sole responsibility for the consequences, which so far—though it is early yet to speak—not only falsify the gloomy anticipations expressed in some quarters, but I might almost say actually surpass our expectations.

The Regulations that were necessary before the Act could come into operation were published on 15th November last. No time was lost in holding the elections, and the new councils were able to meet early in the present year. Since then there has been no inconsiderable amount of legislation. In every council a budget has been discussed and passed, and full use has been made of the newly granted right to move resolutions on matters of public importance. So, although the time is short, the material for forming a judgment on the working of the Act is not wholly inadequate. There are two salient points in which particularly the fears of our more conservative critics have been falsified. The one is the admirable dignity and sense of responsibility displayed by the non-official members; the other is the conspicuous and gratifying success with which the official members, after the manner of old Parliamentary hands, have explained and defended their policy in debate.

Let me take one illustration—an excellent illustration, for it is drawn from a case in which the circumstances were such as to have strained the system to breaking point if it had possessed the defects that some saw in it. About a year ago, before the revised councils had come into existence, a Bill to amend the Calcutta Police Act was introduced into the Bengal Council. It was largely uncontroversial, but certain of its provisions which in the opinion of the Government were needed for the efficient discharge by the police of the duty of maintaining order, excited the liveliest disapproval from a certain class of Indian politicians, and a certain section of the Indian Press; disapproval which found an echo in this country and within these walls. Even after its stringency had been modified in certain respects this opposition continued and the Lieutenant-Governor wisely decided not to pass the measure at once but to reserve its final stages for the reformed Legislative Council.

Now, of all the revised Councils, Bengal has the largest unofficial majority, and, as everyone knows, what I may call, for want of a better term, the "spirit of independence" is more active in Bengal than anywhere else. We had therefore the interesting experiment of a Bill that had excited vehement protests as an encroachment on liberty being considered by a council with a large unofficial majority drawn from, politically, the most progressive Province of India. What happened? The Bill became law after a reasonable and temperate debate. Only one amendment was put to the vote, on a point which must, therefore, presumably be considered the most contentious in the Bill, namely, the proposal to empower the Commissioner of Police to prohibit processions if likely to cause a breach of the peace. The amendment was lost by thirty-six votes to five, nineteen non-officials voting with the Government. I have dwelt upon this example because in it were present in a peculiar degree all the elements of danger that our critics apprehended and because a single actual instance is more illuminating than a profusion of generalities. Incidentally, I may observe how much stronger is the position of a Government when they rely on legislation passed in such a way than when their legislation bears the quasi-executive stamp of an official majority.

As in legislation, so in non-legislative discussions the debates have, on the whole, been notable for moderation and reason. Such debates, especially the preliminary debates on the financial statement, have an educational value that must not be overlooked in that they bring home to non-official members the real difficulties of administration. Every question has been fully discussed; all opinions have been represented, and the Government has had ample opportunity for stating its views, explaining its motives, and bringing out the difficulties of a particular line of action. And in these discussions there has been no sharp line of cleavage between officials and non-officials; the old idea that non-officials must necessarily be in opposition seems to have disappeared. I would commend many of these debates—as, for instance, the debate on primary education in the Governor-General's Council on 18th March—to the careful attention of students of Indian matters. The House is aware that in fulfilment of the other part of the Act of 1909—the part relating to Executive Councils—we have appointed Indian gentlemen to the Executive Councils of the Governors of Madras and Bombay. We have also sanctioned proposals for the establishment of an Executive Council for the Lieutenant-Governor of Bengal; I hope an announcement will be made on this subject at a very early date.

In effect, the Councils Act has resulted in producing excellent debates, creating opportunities for the ventilation of grievances and of public views, creating public opinion, permitting the Governors to explain themselves, giving to those interested in politics a better and a more productive field for their persausive powers than the rather more sterile and discursive debates in Congress. I have now described not only the latest measure for dealing with disorder, the measure to create a responsible Press, but also the latest measure for an attempt to popularise the Councils. The material which I have now laid before the House will give the least imaginative Member ample food for profitable thought on the most difficult problems which the science of government has ever offered to students. I am fully conscious of the impossibility of presenting a true picture, and of the audacity that I have been guilty of in endeavouring to analyse nations and attempting to assign causes for their emotions. Let me frankly tell the House that I could never have found the courage to make these attempts or to occupy the attention of those who have survived so long, did I not find strength, courage and inspiration in the supreme importance, overwhelming interest and great complexities of my subject. The dangers that beset the future of India are the sources of its possibilities. They can only be avoided by acknowledging and fostering the germs of progress, and they can only be really aided to a healthy growth by war upon the internal evils in which they are embedded.

Let me only point out frankly some of the dangers that I think I see: first here in this House. Do not, on the one hand, oppose all agitation for reform because you are led astray to confuse it with seditious agitation. Do not use your murderer as an excuse for your conservatism. And I use that term in no party sense. It is as applicable to my hon. Friend the Member for Montgomery Boroughs as it is to those who sit on the opposite benches. You cannot foster sedition more surely than by driving to it, or confusing with its advocates those who look to you with confidence for sympathy with their legitimate aspirations. You see clearly the seditious man and his seditious writings, and you are led to say, "This is Indian unrest; this House can have no sympathy with it. Let us put it from us, let us uproot it vehemently." But when you put it from you, do not put away with it the man who is deserving of your respect and sympathy.

And aided by this, and because of this, the other danger comes into being. Do not fear that you are lacking in sympathy with the true reformer because you refuse sympathy to the anarchist. Of course, nobody in this House really sympathises with anarchy. But because you are afraid that some reformer may be called an anarchist, because you fear that you will be accused of refusing to assist those who are animated by some democratic ideals similar to your own, you are led sometimes to appear to throw a protecting cloak over the malefactor in order to proclaim aloud your sympathy with the reformer; to resist the efforts made to cope with the anarchist because you will not trust the Government of India to differentiate between the anarchist and the reformer. These divergent, contradictory, and equally dangerous tendencies would, either of them, if they prevailed, subvert order and dissipate the promise to be found in Indian affairs at the moment; and it is because of their existence that all parties in the House should help the Government in segregating violence and incitement to violence which mask, hinder, and might render impotent real efforts for reform.

What of those at the other end of the machine? I trust implicitly, from what I have seen of the public-spirited men who administer India on the spot, that they are determined to meet the changing spirit of the time generously and sympathetically. Paper reforms are useless if given grudgingly and made the excuse for tightened reins in administrative action—punitive measures become as dangerous as the evils they are to cure if used indiscriminately for repression and not for punishment, to drive honest men to despair instead of sinners to repentance. But I am positive—and this House will, I hope, find evidence of this in the study of Indian affairs on all hands—that lessons and examples of the past and the high purpose and loyalty which are the cherished possessions of the Service I am discussing, ensure the avoidance of such obvious dangers as these. The ranks of the Civil Service are, however, recruited yearly from our universities, and to those who are going to India to the responsible tasks they have chosen I am bold enough to say, mainly because I am fresh from the university and know vividly at what I am hinting, banish as quickly as you can the intolerance of boys and the prejudice of undergraduates, imbibe the traditions of the great Service you are joining, adapt them to modern demands, and go to administer a country in virtue and by the power of the sympathy you can implant in its people. Remember that the best intentions of the Government may be frustrated by the most junior members of the Service, called upon, as they are, immediately to assume great responsibilities. I can conceive no more important career than the Indian Civil Service, and I would urge that it should be the object of all those who enter it to permit not even the must unfriendly examination to detect any deterioration in the Service. This is a suitable moment for taking so comprehensive a survey as I have wearied the House with this afternoon.

Lord Minto, after a difficult reign, is returning to England, and I believe will receive, when he returns to this country, the gratitude which he has so richly earned from those upon whom the ultimate responsibility for Indian Government rests. The relations of a Viceroy to the Secretary of State in Council are intimate and responsible. The Act of Parliament says:— That the Secretary of State in Council shall superintend, direct and control all acts, operations and concerns which in any way relate to or concern the government or revenues of India, and all grants of salaries, gratuities and allowances, and all other payments and charges whatever out of or on the revenues of India.

It will be seen how wide, how far-reaching and how complete these powers are. The Secretary of State is separated from this task by the sea, hampered by the delays of communication, often checkmated by the lapse of time. The cable and the steamer alone render them possible, and for a successful administration of India the most liberal-minded, hard-working Secretary of State is helpless without a loyal, conscientious and statesmanlike Viceroy. Lord Morley and his Council, working through the agency of and with the help of Lord Minto, have accomplished much. Taxation has been lightened to the extent of millions of pounds; famine has been fought and frontiers have been protected with unparalleled success and speed. Factory conditions, general health, education, the efficiency of the police, have all been improved; the pay of the Native Army has been increased. Our relations with native States have been improved and were never better. The rigidity of the State machine has been softened, while liberal measures of reform have opened to the educated classes of the Indian community a wider field for participation in the government of the country. This is a great record for five years, and contains many abiding results of a conspicuously successful administration of Indian affairs. I believe that men of all parties will be grateful that Lord Morley remains to carry out the policy he has initiated, and the new Viceroy, Sir Charles Hardinge, goes to India amid the almost universal welcome of those who recognise his high attainments and great qualifications. I cannot do better than close by addressing to him with all respect the words that were addressed to his grandfather on a similar occasion by Sir Robert Peel, because I believe they embody now as then, as shortly as it is possible to put them, the essential needs of the continued success of English Government in India. The Prime Minister wrote in 1844:— If you can keep peace, reduce expenses, extend commerce, and strengthen our hold on India by confidence in our justice and kindness and wisdom, you will be received here on your return with acclaims a thousand times louder, and a welcome infinitely more cordial, than if you had a dozen victories to boast of.

Mr. WYNDHAM

My right hon. Friend the Leader of the Opposition has asked me to follow the Under-Secretary of State for India in this Debate. It is a custom of this House that someone should rise from this bench whenever an important statement has been made by a Minister on behalf of the Department for which he is responsible to this House. It is not always easy, and in this instance I think it is impossible, to defend that custom, but perhaps it may be said that in the case of what is popularly known as the Debate on the Indian Budget this convention is something more than an act of inter-party courtesy; it is a symbol of the fact that both of the historic parties in this House wish to be associated in what is the annual ratification of the vast work accomplished each year by the Government of India. But even that reflection would serve in no degree to dispel my difficulties in being called upon at short notice to intervene in a Debate on a subject of this magnitude with which I am not familiar. I will not dwell upon that. Any such personal feeling on my part is altogether overshadowed by my regret for the cause which made it necessary for my right hon. Friend to depute another of his colleagues to fulfil this duty. The Under-Secretary for India has referred in eloquent terms to the loss which this House, and which he was good enough to say India, has suffered by the death of Earl Percy. It is even less than a year ago—it was on 5th August last—that Lord Percy spoke on behalf of the Opposition in the Debate on the Indian Budget. He gave one of those brilliant speeches which lent distinction to this Assembly, and which were characterised by that keen intellect which added weight to the conclusions to which we arrived. It was not only his brilliant intellectual gifts which commanded the admiration of this House. His transparent sincerity and his unselfish devotion to public duty, without one thought of personal advancement, gave him a position in this House which will not be forgotten, and have placed all his countrymen under a debt of obligation to him. I find it almost impossible to state in words that would satisfy my desire our regard for the memory of Lord Percy.

I pass from that to congratulate the Under-Secretary most heartily, if he will allow me, upon the manner in which he has discharged his difficult task. This discussion affords but very limited opportunity to this House to review the numerous and important subjects which have been detailed this afternoon, but even this opportunity is rendered of great value when the Minister in charge lays his statement before us, as the Under-Secretary has done this afternoon. Let me say again I repudiate any profession of special knowledge on the subject we are debating, but, though with far less confidence, I think I may also congratulate him on the matter which he was privileged to unfold. He gave, and I believe was entitled to give, a more favourable account of the condition of India than was possible in the case of his predecessor last year. He dealt first with the purely financial aspect of the question, and, although it is not easy to follow any Budget, and difficult to follow the Budget of a country with which one is not familiar, I think the facts in his explanatory Memorandum, supplemented as they are by his statement to-day, corroborate the anticipation to which Lord Percy gave utterance last year. He then reviewed the financial part of India, and was able to say, speaking as a critic from this side of the House, that he discovered only a temporary set-back, which was due to universal trade depression. I think the account we have heard this afternoon completely bears out the view for which Lord Percy then made himself responsible. After the authoritative information contained in the Blue Books to which the Under-Secretary has referred, it is quite unnecessary for anyone, speaking from this bench, to dilate upon the more favourable aspects of the financial figures that have been presented. I would perhaps, however, not altogether neglect the small opportunities I have of making a useful contribution to this Debate if I put a question on this point or that as they arise, and with which the Under-Secretary may be able to deal later on when he comes to reply.

I recollect last year Lord Percy pointed out that the principal direction in which economy was apparently to be sought by the Indian Government was in respect of railways. This year we find a larger capital sum of money is to be expended on railways in India than last year, but I did not gather from the Under-Secretary—and this is the point to which I would direct his attention—that the capital sum allocated to the Indian Railway system will be largely spent upon new extensions. I infer that suspension in the development of the railway system of India by the construction of new lines to which Lord Percy referred last year still continues, and that the financial position of India, although it enables India to improve the existing railways, does not enable India to carry forward new extensions with the rapidity which characterised an earlier and more favourable financial period. Lord Percy also in his speech of last year found that there had been some economy effected in respect of education. I think I am right in saying that this year larger sums of money are to be devoted to education, and I would ask the Under-Secretary to tell us a little more fully than he has done whether that provision will do more for the higher branches of education in India. I listened with great attention to all he said about the provision of education in this country, and about the new membership of the Council, but in the Debate last year Lord Percy brought forward some interesting and even some discouraging figures. I think he was able to say that, although there had been an increase of 80 per cent. in the last twenty years in the number of children attending the elementary schools in India, the number of those who reached the higher standard had not only relatively but absolutely diminished. We would like to hear from the Under-Secretary whether the further provision of money for education in India is in his opinion and in that of Lord Morley likely to make good that falling off in the number of children in India who receive higher education? I would also ask whether efforts are being made in connection with Indian education to give an equal opportunity to those of every nationality and of every creed. The Under-Secretary, in his most interesting speech, has adverted more than once to the immense difficulty inherent in any government of India, owing to the fact that we have to deal with so many nationalities and with so many different creeds. Lord Percy pointed out last year that in this matter of education facilities which might be valuable for, and acceptable to some classes of the Indian community were not so valuable and acceptable to other classes of that community. That, again, is a point upon which, perhaps, I may ask for a little further light.

Coming to pure finance, I would take up and associate the Opposition with the views set forth by the Under-Secretary upon opium. At first blush the satisfaction which we naturally feel owing to the fact that the revised Estimates were better than the Budget which preceded it may be disturbed when we find the increase is due to an increased revenue of £918,300 from opium. We associate ourselves entirely with the views expressed by the Under-Secretary. As I understand the matter, the increase of revenue is due to an increase in price, which, in turn, is due to the very policy of restriction which the Government of India has recently adopted. Looking at it from the financial point of view, we must bear in mind that any increase in revenue due to that inflation of price is not a permanent increase to which we can look in the future. It will and must of necessity be succeeded by a great drop in the revenue derived from opium. It is, I imagine, the prospect of this great drop in the revenue derived from opium which largely accounts for the necessity to impose new taxes in the Indian Budget.

I cannot refrain from dwelling for a moment upon a point of such interest, at any rate to us, which arises out of the new taxation which has been imposed. I know a little more about the Indian Budget now than before the Under-Secretary spoke. When I read his Memorandum, I found the announcement that there were to be new Customs duties upon wine, beer, and spirits was accompanied by a perfectly explicit statement that there was a corresponding increase in the Excise duties upon wine, beer, and spirits. We were further told in the Memorandum of the new Customs duties upon tobacco, silver, and petroleum, but that announcement was not accompanied by any similar statement. There was not a word in the Memorandum about these Customs duties being accompanied by a similar increase in the Excise duties. When the Under-Secretary came to deal with that, he felt it necessary to announce his Free Trade principles in the clearest possible terms. I thought he was going to slide away from the subject without telling the House definitely whether those three Customs duties on tobacco, petroleum, and silver were, or were not to be accompanied by corresponding Excise duties.

6.0 P.M.

I gather from him that they are not to be accompanied by any such corresponding Excise duty, and that he defends that from the point of view of the orthodox Free Trader by saying that, in his opinion, these taxes will have no protective effect and will do nothing to benefit those who are concerned in India with the tobacco industry, with silver, or with the refining of petroleum. That is the way in which these taxes are presented here in London when we review the Indian Budget. When the Budget is presented in the Viceroy's Council, however, the Finance Member, although also declaring his Free Trade convictions, accompanies that declaration by saying that if the outcome of the changes he has laid before the Council result in some encouragement of Indian industry, he for one will not regret it. I understood from the Under-Secretary, however, that if the changes did result in the encouragement of Indian industry, then the Indian Government would have to consider whether those changes would not have to be abandoned. We have a complete gradation of tone. We have the Under-Secretary saying that if these taxes do encourage Indian industry they must be considered, and we have the Finance Member of the Viceroy's Council saying that he will not regret if they do encourage Indian industries. In the Debate on the Budget referred to with so much satisfaction by the Under-Secretary I find that a Member who is representative of Indian opinion goes a great deal further than the Finance Member of the Viceroy's Council, for he says that:— Now-a-days, we hear a good deal of Tariff Reform. There is a swinging back of the pendulum of Free Trade, and why cannot the people of this country hope to share in that reform. There is a general feeling in favour of protection and a judicious protective tariff is demanded by intelligent public opinion in the interests of undeveloped industries. There you get a more emphatic expression of Indian opinion upon these new taxes and upon the process of having further and more fundamental changes in the fiscal system of India. When we are discussing the reforms the Government have undertaken in order to associate Indian subjects more closely with representatives of our own race in the personal responsibility for the government of India, when we are told that the repression of crime must be accompanied by a sympathetic and intelligent attitude towards the wishes of the people who are governed, why are we to neglect this direct expression of wish on the fiscal system of India which the Under-Secretary will hardly be able to say does not represent the opinions of those whom he governs in India and whom we do not allow to govern themselves?

I pass from that, and, if I may, I will pass entirely from the purely financial aspect of this question, upon which the Under-Secretary himself has dwelt at comparatively little length. The hon. Gentleman dealt in greater detail with the political aspect of Indian controversies which we all notice in the diversities of race and religion in that country. We agreed with him when he stated that the almost infinitesimal proportion borne by our race, responsible for the government of India, to those to whom it is responsible, is a salient feature which nobody can ignore. I am certain that we echoed his sentiments when, in dealing with this question, he said the gifts of dignity, reserve and sense of proportion were required. That being so, I am sure the House will understand that I do not commit myself upon these very difficult matters, not having had an opportunity to do that which he said we should all do, that is to choose my words. If he will allow me to say so I think he has very properly chosen and weighed his words. But in one sentence which, if taken out of its context, was not so well advised as the context from which it was extracted, he reminded the House that anything said here was not said merely in this House but was said to all in India. The one sentence which did not come up to that high standard of judicious choice which characterised the whole speech was that in which he said he thought that the British attitude towards unrest in India was different from the British attitude towards unrest in other countries which he named. Undoubtedly it is true. And why? Because we Britons have a deep sense of responsibility in matters for which we are responsible. Therefore, our attitude towards unrest is characterised by a good deal of reserve. On the other hand, we are not endowed very largely with a gift of imagination which enables us to understand how other persons may view it, and that is why we so freely criticise the government of other countries when they find themselves face to face with unrest not altogether dissimilar to that unrest which comes up in India. The only criticism I venture to make on the manner in which the Under-Secretary dealt with this part of the subject is to say that he showed his sense of responsibility when he spoke of the necessity of distinguishing between pernicious and illegitimate forms of unrest and that form which springs from the starting of new ideas through the awakening intelligence of the population. We were glad to hear that there has been a revulsion of feeling in our favour. I take it that the Under-Secretary, when he said that, meant that a large number of our fellow-subjects in India are, in his opinion, rallying to the Government when the Government carry out their primary duty, which is to stamp out unflinchingly crime which masquerades as politics or reform. By all means let that distinction be drawn. We do not cavil with the manner in which it has been drawn this afternoon.

The Under-Secretary proceeded to deal in some detail with the Press Law. His arguments seemed to be addressed almost exclusively to those who consider that that law is too drastic. But will anyone who heard the shocking, inhuman document read out by the Under-Secretary for India for one moment entertain the idea that the law is too drastic to meet such an outrage against our common humanity? Perhaps one ought not to support the case of such a law by citing only such terrible evidence as that which he gave. But I would go further, and I say, when the Under-Secretary gave as an example the statement that the English were responsible for the introduction of malaria into India, that is also a form of malicious slander carrying with it grave political consequences in such a country as India which must be adequately met by any Government responsible for the interests of India. If we are to govern India, then the Government of India must protect India from evils which are far worse than the evils of so-called coercive legislation.

I may, on behalf of the Opposition, associate ourselves fully with the Under-Secretary's defence of the Indian police. We were glad to hear that, in the view of the Government of India, the people of that country are beginning to recognise that the police of India are there for their protection. The cruel attacks on the police as a whole, because, it may be, some excess or crime has been committed by an individual policeman, are not only wrong in themselves, but they come with a singular lack of logic and common sense from those who say that they desire to associate the people more closely with ourselves in the administration of the laws of that country. The police are Indian fellow-subjects, who have been put in a responsible position—one of the most responsible positions which a man can occupy, next to that of being a judge, or sitting in the Councils of the nation. Those who are responsible for the life and property of their fellow-subjects are discharging one of the most necessary and also one of the most laudable functions that fall to the lot of civilised man. Therefore, if we are ever to associate the people of India more closely with the Government of India we shall not succeed in that object if we tolerate these cruel and malicious attacks on that body of the people of India whom we have associated with ourselves in the great mission of civilisation for which we are responsible in that country.

The Under-Secretary turning from that part of the duty of the Government which consists in protecting the lives and property of those committed to its charge, went to another part equally important, the duty of any Government to deal with the subject of education. I have already touched on that, and I will not revert to it except to this extent. The hon. Gentleman informed the House that membership of the Council is to be given to a new Minister of Education. I am not now speaking from any knowledge of my own on the subject. I should not presume to do so. But I would tell the Under-Secretary that one whose views on India are entitled to respect mentioned this matter to me only this morning, and, without directly criticising the step which the Government has taken, said we ought to be very careful that we did not over-concentrate in this matter of education in India. He asked me to suggest to the Under-Secretary for India the question also of whether the local Governments in India are in agreement with this step, and I would ask the Under-Secretary to deal with these points when he comes to reply. Of course, in our enthusiasm for education, we may advance at a pace which cannot be maintained in India, and I would remind the House once more of what Lord Percy said last year: that in any advance in India we must see that the education provided is suitable to all the natives and all creeds in India, and is not of such a nature that some can avail themselves of it and others cannot.

The Under-Secretary mentioned another appointment which has been made—that of Mr. W. H. Clark to the Department of Commerce and Industry. It would be ungracious on the part of anyone to criticise the appointement of a young man to a post of great distinction and responsibility. The sympathy of all is with youth, but we cannot look at this matter merely as a personal one to Mr. Clark, or decide that the appointment is a good one merely because of his qualifications for it. I think other matters must be borne in mind. This post of Minister of Commerce and Industry was, I think, originally created with the idea that it would be filled by some great merchant in India—some man conversant from practical experience with the commerce of that country. I think it was found that it would be very difficult to secure the services of such a candidate, and consequently another appointment was made. But is it necessary because it was found difficult to discover the particular man of that kind in India, to go outside of India altogether and outside the Indian Civil Service altogether? Those who are in the Indian Civil Service lead laborious lives, and they are voluntary exiles for the greater part of their years. The Indian Civil servant is one of those creations of which I suppose England has most reason to be proud; and why should he have been overlooked? It may be that the Government will give us some reason for this exceptional step, but it is an exceptional step, and it is one which, in our opinion, cannot fail to give umbrage to that devoted band of servants in the Civil Service of India. Then while I am speaking of these appointments to the Council, am I not right in saying that there are three Hindus appointed to positions on the Council and not one Mahomedan?

Mr. MONTAGU

Only one Hindu has been appointed, and he is the first elected to the Council. So far, there has been no Mahomedan; only one Hindu gentleman.

Mr. WYNDHAM

I mean in Madras and Bombay, and I am informed that there Hindu gentlemen have been given important positions, while so far no Mahomedan has been appointed. That is a matter which, I think, deserves, and ought to claim, the attention of the Government. I remember, again, that last year Lord Percy was speaking for the last time before the Indian Councils Act came into operation, and he contended that the ultimate success of that measure would depend upon whether the Government could meet the legitimate expectations of our Mahomedan fellow-subjects, and he developed his argument at a length which I shall not venture to reproduce by saying that it was not sufficient to offer them opportunities at the top of the scale of administration and government, but that opportunities must be found for them also in the lower scale of responsible situations, otherwise they would not qualify for those higher appointments with the ease with which their Hindu fellow-subjects can qualify for them. Having had that warning last year, I think we are entitled to ask the Government whether they are giving it all the attention which I think it obviously deserves. The immediate result of the Indian Councils Act is hailed by the Under-Secretary for India with satisfaction. I think he is entitled to express that satisfaction. I think the debates which have taken place in the Viceroy's Council are of a character which justifies a great deal that has fallen from his lips this afternoon. He tells us that some projects of the Indian Government which were criticised before the Councils Act came into operation are now criticised with fan less sharpness and asperity; and in some cases he went so far as to say they have been acquiesced in or accepted by public opinion of India. If that is so, all must rejoice. I notice in one of those debates a vindication on the part of Mr. Lyons of the partition of Bengal, another instance which might be given.

Surely such instances encourage the belief that sincere work in India will extract a modicum of acquiescence in the long run, and that sincere work undertaken for the benefit of India should be prosecuted without regard for the criticism or the maledictions of that particular form of unrest to which the Under-Secretary alluded this afternoon. There has been criticism, and there will be criticism of the Government of India, and I understand that this evening we are to have speeches of that character, but it comes, if I may say so with respect, from a school of political opinion which believes that it is possible to apply representative institutions and judicial procedure which has been developed in this country during centuries at once and almost in their full development to the wants of even an older civilisation, extending for a greater number of centuries, which in the course of all its existence has never spontaneously given birth to anything of the kind, either in the case of legislation or in connection with the administration of justice. I think we all gathered from the speech of the Under-Secretary that he for one will not be swayed by such criticisms as we may have to listen to later on. His statement followed many notable pronouncements by Lord Morley, which show that the Government of India are concerned in preserving that authority and that lenity which are involved in good government, and where we are concerned with the government in a country where, whatever the reasons may be, the sympathy of the population is not entirely with the administration of the law, then the proportion of authority must be increased in proportion to the lenity in the administration of justice. I take no exception to the concluding part of the Under-Secretary's speech. We are prepared to draw with him a distinction between the different classes of reformers, but I say that the unflinching repression of crime is a necessary concomitant to even the consideration of the necessary reforms, and that the intelligent and sympathetic consideration of the proposals for reform is perhaps one of the ways which best enlists the support of the unflinching repression of crime.

Mr. RAMSAY MACDONALD

If my hon. Friend will allow me, I should like to associate myself with the right hon. Gentleman who has just concluded his speech in congratulating him both upon the matter and the manner of his speech. That, of course, my hon. Friend will perfectly understand does not mean that I agree with everything he has said, and in fact the great difficulty which I have in venturing to rise to address the House at the present moment is the enormous field which he covered and the tremendous wealth of subjects which open to receive our attention. I begin with a protest against the Government not for anything it has done in India, but for what it has not done here. One day in this House is not at all adequate either for the representative of the India Office to develop his case in favour of that Department and to explain its work to the House, and it certainly is not adequate for those of us who are critics of the Indian Government to explain our case to the House, so that the Members of the Indian Government may be benefited and we ourselves enlightened as the result of the Debate. There are many points which he has raised which really ought to be considered, but which it is impossible to do justice to in a speech here. But let me just indicate one or two points. My hon. Friend, for instance, took great credit to the India Office for making special arrangements for receiving Indian students in London. I quite agree with him. I am simply amazed that the India Office did not do that years ago. However, they have done it now, and I am not going to make any grudging criticism on what they have done, but those who know India best know perfectly well that that is just the beginning of one of the greatest difficulties that the Government of India has to face. What happens? An Indian student comes over here, he is conducted by someone in authority whom he holds in respect to the India Office, he sees Mr. Arnold, and he is taken under official care to a place in the West End of London. Whilst he is with us he is received in our drawing rooms. He is regarded as being one of our equals, and he is in short patted on the back and sent home to India, where every door that was open to him in London is closed against him, where he is not regarded as an equal, and where he is compelled to associate with society which he himself has been taught rather to look down upon during his stay in this country.

That is one of the most extraordinary and difficult problems that the Government of India has got to face, and consequently it is not enough for the Government of India to pride itself on this excellent work that it has done. Had my hon. Friend clearly surveyed the whole situation, he would have indicated that while as a matter of fact that is very good for the student here it is the source of a very difficult problem for the student and us as soon as he goes back. I should like to congratulate the Government in regard to its decision to appoint an Education Minister. The advantage is very great. The right hon. Gentleman who has preceded me pointed out that over-centralisation is bad in every Department, but it is particularly bad in education. I am bound to say, however, when we were told who was to be the first Minister, I felt perfectly satisfied. Those of us who know and have taken opportunities of examining the work Mr. Butler has done during his connection with the Indian Civil Service I think will feel that nobody is more aware of the dangers of over-centralisation in education than Mr. Butler, and we are content to let him work out his experiments in the way which seems best to him. I should like also to associate myself with my hon. Friend in his congratulations to India on the appointment of Mr. Clark. There is no use in hiding our heads to avoid seeing a fact, but this appointment has been the subject of a most unwarrantable and most malicious attack. Mr. Clark is fully qualified for the position and his experience is precisely the experience that Indian commerce wants at the present moment. Mr. Clark's experience in the Civil Service will be of the most profound benefit to him and to the Indian Civil Service. I hope the Government of India will lay it down that these appointments in India are not going to be preserves of the Indian Civil Service. I hope the Government will make it perfectly clear that there are certain appointments in India, like the Finance Minister and the Minister of Commerce, which are peculiarly fitted to be held by people who have Parliamentary experience in this country and who go to India not merely as Civil Servants accustomed to deal with the heads of the Departments but as men who have had to study public opinion and Parliamentary institutions and to manipulate Parliamentary Government here. That the higher posts Of the Indian Civil Service should be held by such men, with such experience and with such minds, is all to the good of India, and will, I am perfectly certain, be very much to the benefit of the Indian Civil Service itself.

On the vexed question of the police I have to say practically nothing, but I protest against the language that the right hon. Gentleman (Mr. Wyndham) used. He talked about the cruel and malicious attacks. The cruel and malicious attacks have been the attacks of High Courts and of Commissions, and when he goes on, after professing to be a peculiarly exemplary exponent of good logic, to say that those of us who are in favour of associating the Indian people with us in the Government of India cannot surely attack the police, surely he forgets the most fundamental principles of representative and responsible Government. Will he say that we ought to say nothing about the peculation, bribery and corruption practised by the lower grades of officials in the Canal Services? We have been complaining about that and we have been criticising that as "maliciously" and as "cruelly" as we have been criticising the conduct of the police in India. Everyone knows that the lower grades of the Irrigation Service are simply riddled and honeycombed with bribery and corruption and inefficiency. The criticism on the police or any body of Civil servants is precisely the door through which we are going to find association between the Indian people and ourselves in the Government of India. I regret very much that the right hon. Gentleman associated himself with the special Mahomedan demands. It seemed to me that he did not quite see what he was putting his foot into. We know perfectly well the quarrel that is going on in India at present between Hindus and Mahomedans. We know perfectly well what happened both in the Reform Bill and more particularly in the rules and regulations which followed the Reform Bill, but I think it is an exceedingly improper thing for Members of the Front Benches in this House to associate themselves in a partisan way with either side. The less party capital is made out of it the better, and the less one of the great historical parties or the other associates itself here with either pro-Mahomedanism or pro- Hinduism the better it will be and the sooner this unfortunate trouble will be settled by natural events.

The right hon. Gentleman has told us that those who are going to criticise the Government of the day are going to do it because they hold two fundamental tenets. The first is that representative Government ought to be applied to India in precisely the same way that it has been applied here, and the second tenet, which we are supposed to hold, is that we are in favour of the Western judicial procedure being adopted in its fulness in India. Really it is perfectly amazing that the right hon. Gentleman should make such a proposition or should live under such delusions. As a matter of fact, if he would characterise us accurately and properly, he would say that we do not believe that representative government can be applied in India in the same way as it has been applied here, that, as a matter of fact, one of the most important sections of our criticism against, not this Government and these holders of office, but against English rule in India, has been that those responsible for English rule have never quite made up their minds whether they are in favour of representative government or not, and that from the point of view of political theory and political education we hold that one of the greatest blunders that ever has been made in the education of India has been that the system has never discriminated between what is political education in the East and what is political education in the West. On the judicial point, as a matter of fact, we have taken opportunity after opportunity in this House for the purpose of pointing out that one of the most serious things that has happened in India has been the application of Western judicial methods to the administration of the law. You have upset the whole idea of the judicial foundation of property in India, you have created the false witness by an absurd adaptation of the method of the law of evidence to Indian conditions which are not natural to such a law of evidence, and to our methods of taking evidence. If the right hon. Gentleman had desired to distinguish us by two qualities which are exactly the opposite of those qualities which do distinguish us, he could not have selected two better points than he has taken.

It is impossible to deal with my hon. Friend's speech without spending some time upon its political aspects, because, after all, although we should like to have heard a great deal more about India itself, although we should have liked his optimism to be somewhat toned by a wise pessimism both regarding the economic and the political outlook of India, although we should have liked him to remember that the best description ever given of India was that it was a land of poverty-stricken people, at the present moment the great topic and the overshadowing thought is the political situation in India now. How is the Government going to meet all its troubles? I agree with that part of the speech of my hon. Friend, which really struck me as being much more directed to the Government of India than to this House, when he traced its origin and explanation, and tried to define what really unrest and sedition are. How does the Government propose to deal with the situation? Briefly, the theory is this: The Government says, We are doing the very best we can under the circumstances; we are honest, we are sincere, and we are hardworking, and they, as it were, challenge us to deny it. I never have denied it. The Government is honest, it is hardworking, and it is sincere. The Government is not deliberately sowing tares in its own wheat-field. If my hon. Friend really thinks we are proposing to challenge him on his virtues I beg that he will pass suspicion out of his mind altogether. But they go on to say one of two things, sometimes one and sometimes the other. The mild thing they say is, If you criticise us you are increasing our difficulties. Of course we are. All criticism increases one's difficulties. We increase your difficulties in this country if we criticise you. If our Friends from Ireland, when the state of Ireland is in an unfortunate condition, criticise the Government, of course it may be said they are hampering the operations of justice in Ireland. But we must criticise the Government. We cannot possibly sit quiet here and see the Government deport people without a trial, pass Press Laws, and do practically nothing to put the police on a satisfactory footing.

Their other point is that all criticism is malign. The criticism that is passed in India upon them is malign. It is often twisted and misrepresented by officers, and the Government produce, as my hon. Friend, I exceedingly regret to say, produced to-day, that Bengal bill. But between saying that the criticism encourages sedition-mongering in India and that all criticism is malign, the Government tries to close our mouths and to close everyone's mouth who expresses an independent opinion about them. Let me remind my hon. Friend of the difference between the situation now and in 1878. In 1878, when a Conservative Government made itself responsible for a Press Law much milder than the present one, Mr. Gladstone was leading the Liberal party. He asked for and got Papers. The Conservative Ministers at the time went out of their way to provide this House with every scrap of interesting evidence that they could lay their hands upon. As a matter of fact, they rather put themselves about to place in the possession of Members of this House arguments and information opposed to the Press Law, and the India Office insisted upon being informed step by step as the Press Act was being considered in India. Despatch after despatch passed and repassed between Whitehall and Calcutta, but we were told the other day that apparently all that the India Office did whilst this Press Law was under consideration was to sit quiet and hold its tongue and then defend the Government of India when the time came for it. The Blue Book which has just been published has been published so late that those of us who are interested in the subject have not had time to read it. If I had not read the debates which took place in the Governor-General's Council when the Press Act was under consideration, I should not have known a single word which had been said, but fortunately I read them in a newspaper before, and the Blue Book which was published for the purpose of informing us in this Debate still lies unopened on my desk. Not only that, but the whole Liberal party then opposed the Press Act. Mr. Gladstone himself made one of his most eloquent speeches in opposition to it, and Lord Morley, in his "Life of Gladstone," refers to this incident in his career as his attacks on "the wrongful laws about the Press in India." That is the change that has taken place. Now instead of criticism, instead of the Government welcoming criticism, it tries to suppress it, and instead of giving us despatches, it says, "We have had none." Instead of giving us detailed, full information, it simply says, "We present you with a Blue Book which gives you the debate which took place in the Governor-General's Council," and, fortunately, those interested in Indian affairs have read the debate quite fully before the Blue Book was even printed. I think the Government might have saved public money in this respect. What is going to happen in this matter? The Government is going to pursue, in the face of the great difficulties in which it finds itself in India, the old method of more drastic and repressive legislation. This Press Law which has been passed is not the sort of thing my hon. Friend has described. It is all very well for my hon. Friend to rise in this House and in very carefully chosen language to describe to us the provisions of this Press Act. To begin with, we are Members of the House of Commons, we are accustomed to English liberties and English Press methods, we are accustomed to English magistrates and English legal processes. Of course, these provisions to us are most innocent and almost the most inoffensive things that could be enacted. But supposing we were editors of Indian papers, supposing we were accustomed to live the lives of the critics of the Indian Government. Supposing we were living in Lahore, and felt this Act was the most objectionable and offensive ever passed by the Government of India, I think for our own sake we should have been compelled to write such a leading article as my hon. Friend quoted this afternoon. As a matter of fact, no magistrate can equitably and judicially administer this Act. What is going to happen? The Gujarat case has been referred to. In that case the magistrate has been instructed by the Bombay Government to refund the securities, but the Bombay Government has not issued an instruction in the same terms as the explanation given by my hon. Friend. The Bombay Government instruction says that in future the past of these papers must be taken into account. If the past of these papers is to be taken into account, all papers without committing any serious act of indiscretion, certainly without being guilty of publishing seditious matter, may be asked by the magistrates to find securities. Take the case of criticism. There is a pretty well-known paper, the "Barisal Hitaishi," which published a leading article of a humorous character to the effect that everybody ought to be pleased with the partition of Bengal, because it had increased the rates and the number of public offices. The paper said that those who criticise the partition on the ground that it would be expensive should be pleased, and those who supported the partition, because it would provide new offices, should be pleased. I have a complete translation of the article. The magistrate actually warned the paper that it was publishing seditious matter, and that if it did not turn over a new leaf he would be compelled to ask it for some security. That is not all. Cases are already on record where magistrates have given general warnings. They have warned the editor of a paper that he was publishing seditious matter, and they have declined to state what the seditious matter was. Moreover, it is all very well for my hon. Friend to say that the magistrate has discretion not to take guarantees from papers too poor to give them. Case after case has already occurred where editors have appeared and said that they cannot find guarantees, and the publication of the papers has had to cease. One would say that that of itself is evidence that in the opinion of the magistrates the papers were seditious.

I say seriously and honestly that we are not going to govern India in that way. After all, we are not going to allow papers of small capital, which may be suspected by magistrates, to be treated in that way. I do not say that the magistrates are to blame. They are surrounded by all sorts of irritating circumstances. They are subject to the policy of pinpricks, their temper is not of the best, and their whole life is one of worry. These are not men who can sit calmly down when a little irritating sheet is brought before them, and say it is written in the interest of the good government of the people. They are not the men who can say, "We are willing to regard this as an inoffensive paper." As a matter of fact, the impulses moving the magistrates are impulses which make them think that the very least thing is the beginning of sedition, and that it ought to be stopped. There is another point to which I wish to refer, and it is one on which I think hon. Members opposite ought to associate themselves with us, namely, the absolute impossibility of applying this law to the Anglo-Indian Press. The Anglo-Indian Press is far more seditious than the native Press. I have stayed just outside Calcutta with native gentlemen. Day after day you can buy, as I have done, a certain newspaper that calls itself "The Englishman." Day after day, in that paper most offensive, most irritating, most unjust, and most ignorant things about native Indians are published. The paper seems simply to delight in badgering the native. If it can misrepresent him, it does; if it can vilify him, it does; if it can irritate and enrage him, it does. Does the Government of Inda propose to apply the Press Law to this paper when it publishes in the most reckless manner articles which are a menace to civil order? Will this paper be asked to find security? I do appeal to those who believe in fair play in India to associate themselves with our criticisms, because we think that the very foundation of law and order and peace in India is the conviction on the part of the people of India that our laws are fairly administered, that what is justice to the Hindu is justice to the Anglo-Indian, and that. when criticism published in a vernacular paper is regarded as sedition, it will, if published in an Anglo-Indian paper, also be regarded as sedition.

I will sum up my criticism on this part of the policy of the Government. This method, which is expressed and emphasised by the Press Act, does a great deal to undo the good that the Reform Act did. It unsettles the mind of the Indian Press. The optimism of my hon. Friend in that respect is misplaced. This method weights down the safety-valve which the Government ought to keep open as long and as much as it possibly can. It hampers the expression of opinion by moderate native organs. It increases the importance of the papers which have to find security, because we know perfectly well that in the present state of feeling any small sectional Indian paper itself becomes a sort of hero when it has to find security at the dictate of the local magistrate. Above all—and this is the most serious effect which is going to happen—it is going to destroy that great middle party of moderate constitutionalists upon whom ultimately the Government of India is going to rest. It is going to make it easy for, and as a matter of fact invite, a lot of men whose character is not particularly good to profess loyalty which they do not feel, and to simply hang about the Lieutenant-Governor's, the Governors', and the magistrates' verandahs in order to see what is to be picked up by this profession of loyalty. It is going to invite this expression of insincere and cheap loyalty on the one hand, while on the other hand it is going to drive below the surface that feeling of objection to, irritation with, and disagreement with, the action of the Government, which is always much more dangerous to civil liberty when silenced than when it is allowed to find expression in the public Press.

7.0 P.M.

I would like to say a word about a circular issued by the Government of India, and which is being supplemented by covering circulars issued by the various Provinces. In this circular the admission is made that sedition is not widely spread. That is a very important admission. Three chief things are laid down in it. First of all, that the district officers should keep in touch with the important people of their districts. I wish the district officers would do so. I feel perfectly certain that if the district officers did keep in touch with the important people of their districts sedition and unrest would be much less prevalent than it is at the present time. At the same time I want to put in a plea for the district officers. The Government of India is putting far too much clerical and other work on the district officers. If an officer gives up his morning to interviews, as is suggested in the circular, he has to work far into the night in order to do the clerical work that falls upon him. If a district officer is to keep in touch with the important people in his district, the Government must devise some new adjustment of the work imposed upon him. The second point in the circular is that the district officers are asked to have better manners. The Government say they are going to issue a circular telling them what good manners are. I welcome that, and everybody does. The well-authenticated stories one hears in India of the way our officers treat native gentlemen is in itself a sufficient explanation of much of the unrest that India suffers from at the moment. Even if the rest of the circular goes, I hope the Government of India will stick very closely to that part. The third point in the circular is that the district officer should understand the economic nature of the so-called drain in India. A more absurd thing it would be difficult to mention. Of course, it can be twisted, as everything can be twisted. It can be twisted, as Free Trade and Tariff Reform are twisted here. Are the Government officers to stand at street corners or to interview conferences and deputations in their own houses, and lay down the economic explanation of why there appears to be a drain from India to England? The whole thing is absurd. If the Government of India would simply trust to ordinary educated intelligence, and see that the intelligence was real and was educated, then they might allow all those criticisms to go by the board. But, as a matter of fact, in the text-book of political economy, which is used in at least one of the universities, one of the leading universities in India, the drain is explained, and statements are made which indicate that, in the opinion of the author of the text-book, the drain is a real drain, and the author is an English political economist.

If the Government of India, instead of issuing those somewhat silly, pettifogging, and nonsensical instructions, sought simply to take a survey of the educational work that it is doing, and remember that by reconstructing that work and making it much more efficient than it is, it will be knocking out of the heads of the young people, in India in particular, all the economic heresies that have found their way there. Finally, the circular asks the officer to keep an eye upon sedition. Now, again, what is sedition? Go to the Punjaub, to our own officers in the Punjaub, even to the men who tell you they know everything about the Punjaub, and 90 per cent. of them will tell you that the Arya Somaj is a seditious organisation. Well, the opinion of the other 10 per cent. is that it is not a seditious organisation, and as that 10 per cent. includes those from whom I personally received the greatest enlightenment on the Indian problem, I am bound to associate myself with their opinion. But take the Patiala sedition case, where you find men simply hauled promiscuously before a court on a charge of sedition. When the charge was formulated it was found to amount to this, that they were members of the Arya Somaj, and the men had to be discharged. As a very old Indian official, a man who, when he goes into a village is received by every child and old woman in that village as a father, and is regarded by everybody who comes in contact with him as a sort of protector of all they have, and as a sort of personal friend, said to me with reference to this question of the sedition of the Arya Somaj, "I always test my own officials by asking whether they consider the Arya Somaj seditious or not. If they think it seditious, then I come to a certain conclusion, if they think it is not seditious then I come to the opposite conclusion, and congratulate myself on having a good, promising officer under me." Take the case of malaria which has been referred to to-day. Exactly the same point occurs. It is perfectly true that there have been cases of seditious agitators who went about various parts of India and said that the English brought malaria, and that it is a sort of magic which has been introduced by them into India in order to destroy the fighting, robust qualities of the race. Then my hon. Friend said that the only way you can deal with these people is to convict them of sedition, and put them under lock and key, or if they are editors you can ask security from them. My hon. Friend seems to forget the Poona case and a score of other cases.

When the late plague campaign was going on in Poona some years ago that sort of statement was made. The agitator was about, and our officials were murdered. What did we do? We had the good sense and the great wisdom not to embark on repressive measures. We appointed Sir O'Moore Creagh to take charge in Poona. His experience with the natives was simply invaluable. The men who were there before him were murdered. He himself settled the whole thing just by his skill and sympathy, and by exercising that capacity for explanation, and that capacity to sympathise which are so characteristic of his qualities. Although the only knowledge that Poona had of him was precisely the same knowledge it had of the two men who were murdered, and he went away, and for some years had not set his foot in the place, yet when he returned to India the other day and happened to go to a station a few miles from Poona he found to his great amazement, and to the amazement of everybody else, that every public official in Poona turned out to welcome him, and reminded him of the very pleasant time they had had together when he was in charge there. That is how we have got to meet those silly stories about malaria and other things. If you get an individual case undoubtedly you should prosecute and deal with it. But simply to say you are going to adopt a general Government policy of repression because a handful of men say you poison a well, or another handful of men say you are responsible for malaria, and so on, is to enter on a path which is bound to lead to destruction. I feel I have already kept the House too long. It is a very crowded, difficult subject, a subject to which justice cannot be done in the course of one afternoon, and when one desires to take part in a Debate like this one naturally- wishes to raise what seems to himself at any rate to be the large and important questions, and it cannot possibly be done within the limits of decency, if I might say so, which we all try to observe in addressing this House and remembering that other Members at the same time desire to express their opinions. But the House will bear with me if I make one other point, and that is in reference to the Birthday honours.

I think I do know a little about how these honours will be regarded by some of what my hon. Friend called the most dangerous and undesirable element in India at the present moment. He chastised me, and I am not quite sure that he would now repeat the chastisement, for raising the question of the issue of a warrant in this House on a Motion to adjourn over the Whitsuntide holidays. A warrant was issued against Mr. Arabindo Ghose tor having published certain seditious articles. My hon. Friend objected because he said the matter was still sub judice. I think that that is an exceedingly bad constitutional argument. Nevertheless I want to pay him back in his own coin. Those of us who have been following Indian affairs know about the Midnapore case. We know that very severe censure was passed by the Chief Justice upon the two policemen who bore the most important part in the getting up of the evidence in that case. We know that their honesty was doubted by the High Court, and we know that everything they did and all the methods they employed were regarded by the High Court as very doubtful and not at all honourable. As a result of that a civil suit was entered against those two policemen by a certain gentleman who had been arrested by them, and the Government also instituted an independent inquiry. The position up to to-day is this. The civil suit has not come off. The gentlemen who are responsible for it are exceedingly anxious that it should come off; they want the whole thing settled. The Government inquiry has been held and finished by Mr. MacPherson, the gentleman who made the inquiry, but the report has not been published, and nobody knows what is in it. What has the Government done? First of all they have promoted temporarily one of the policemen who are under this cloud, but that is not all. They have given them both decorations, honours which are valued in India, and which are supposed to mark very emphatically and very decisively the good will and pleasure of the Government. I would submit to my hon. Friend that he cannot defend the Government for such action as this. It is surely quite impossible, and would it not be very much better in the interests of good Government and good feeling in India if the India Office quite honestly and sincerely tells us what it thinks about it? It is all very well for my hon. Friend to say, as he did in reply to a question to-day, that one of these men has served thirty years as a policeman. Surely it is not too much to have asked the Government, while this civil suit was pending, and while the inquiry was incomplete so far as the public are concerned, and while the whole of this case was in suspense, and the only thing we did know was that the High Court had censured both policemen, surely it was only decent, and it would have been policy and would have been wisdom for the Government to have withheld those honours. If they have got private information, if they know what is in Mr. MacPherson's report and are perfectly certain that these two policemen have been wronged by the decision of the High Court then all the more value would be attached to the honour if it had been given after the whole matter was settled and the matter had been taken out of the hands of the court altogether. But that is the sort of thing that is doing the Government of India so much harm. It is not the big things. The people of India are much less influenced by large blunders than they are by small blunders like that. It is just the little things that can he gossiped about that arouse suspicion. It is just the infinitesimal things that everybody understands. When the Indian Government makes these blunders it throws into the shade the large liberties given by the Reform Bill and various other great measures which my hon. Friend went over to-day. My appeal to the Government is this. Let the Government apply liberal experience and liberal wisdom to the Government of India to-day. The Secretary of State, one whom I for one honour myself by calling one of my teachers, really ought not to depart in his administration of India now from those principles of civil liberty and political wisdom which he enunciated when he was Mr. Morley, writing his books on French Revolution characters and on Burke, and even up to the time he was writing the life of Mr. Gladstone. The Government has got itself into this difficulty. Our control in India has resulted in a system of education which has created in the words of the document which I have just been criticising "intellectual unsettlement." Intellectual unsettlement in India is much more serious for the Government than economic unsettlement. Though the intellectual people of India are a very small section—I do not care about your hundreds of millions of uneducated people—that small section, restless, seditious, active, full of Eastern peculiarities, yet directed by Western philosophy, will give you no rest, no peace, and will deprive you of all the honours you hope to get from your administration in India. I appeal to the Government to remember that the people of India ought to be consulted, and that it ought to submit to criticism, which, after all, is the greatest safeguard. I appeal to the Secretary of State to do nothing more in the present crisis than apply his Liberal principles rather than assume the methods' of the benevolent tyrant; who, feeling perfectly justified, feeling that he, and he alone, can govern India, says, "I am going to suppress criticism, to suppress meetings, to look for sedition, to instruct my officers to become spies, to become policemen, to report to me all the tittle-tattle about seditious movements in their districts." It is bad. It looks all right on the face of it, but it will land the Government in disasters, and will defeat these beneficial and humane ideas and ideals which, I am perfectly certain, animate my hon. Friend.

Sir SEYMOUR KING

There is one part of the speech of the hon. Gentleman who has just sat down with which I entirely agree, namely, the difficulty of dealing with so vast a matter as the government of India in one day. So many branches require criticism that it is impossible to keep on one line as one would wish to do or to keep to one topic and settle it. It is necessary to sandwich into the discussion questions which are apparently irrelevant to those with which we have been occupied; yet it is the only opportunity one has to call attention to matters which are worthy of consideration by the Secretary of State. I desire to call attention to an administrative question of considerable interest to the parties concerned, and somewhat vital to the Indian Revenue. Of late years there has been unfortunate friction between the Railway Board and the Railway Companies of India. The Under-Secretary in his most interesting speech made but one brief allusion to the Indian railways, and that was to mention the diminished revenues they were giving. It is somewhat owing to the diminished revenues coming from the Indian railways that the question at issue has arisen. The Railway Board was established in 1904 by Lord Curzon with the object, if I understand aright, of giving greater elasticity, if possible, to the management of railways in India. It set to work with the energy of a new broom, and the result was that admirable improvements, as it thought, were introduced into the Indian railway administration. A good many posts were created, the expenses went up, and the Indian revenue went down. The Finance Minister was alarmed, and he called for immediate reduction in the expenditure of the railway boards. Apparently in a panic they issued what I think was an extremely foolish and ridiculous order to the railway companies. For a long time there has been only one principle as to the attitude which existed in the Department of the Indian Government towards the Indian railway companies. It was that while keeping the strictest view on general policy and the strictest eye on expenditure the management of the railways should be left to responsible boards—boards which have managed the railways in a manner highly creditable to themselves and highly fruitful to the revenue of India. The orders to which they take exception are these. The Railway Board request a budget estimate for which hitherto the companies have hardly taken any responsibility at all, and that this should be sent in in December in four watertight compartments; in other words, that they should divide the year into quarters, and that the estimates for each quarter should be taken by themselves, and dealt with, and not departed from.

But they have gone further than that, and they have said that savings under one head should not be available for expenditure under another. To anyone who has had a large business experience and has managed big commercial concerns it must be at once obvious how ridiculous such a suggestion is. Here is a great railway, liable to all the variations coming from the monsoon, liable to the effects arising from change in trade, from famine, plague, or floods which may breach its line, yet it is not allowed, apparently, to apply the savings under one head to work which may be necessary under another head. The railway might be broken down or breached, and under the old system money saved under other heads could be spent in the engineering or other departments. But now money saved under other heads may not be spent in the engineering or other departments unless there is a long correspondence with the Railway Board, which may last for six months, as in a case of which I know, that of one of the great railways in Madras. The whole thing seems to me to have arisen from some misunderstanding. In the first place, there was no consultation whatever between the railway boards and the Board itself. These Orders were issued without consultation, whereas it seems to me the greatest and most friendly co-operation should subsist between the two powers. In the next place, the railway boards communicated with the India Office nine months ago, and except a purely official acknowledgment, they have received no reply, and no attention whatever has been paid to their complaint. They say, "We cannot carry on our railways under this system; it is absolutely impossible that railways can be carried on under the system you propose." And for this reason: The Budget Estimate has to be forwarded in December. It can only be formed on the working of the railway for the year in which you are or the year before that, in other words, two years back. The Railway Board is asking for accurate estimates, not to be departed from, to be supplied by the companies on 5th April this year for next year, on an estimate the creation of which has commenced last August and is to be ended in December. The old system was to send a rough estimate in the gross, as a rule formed by the Government auditors themselves, on the railway. There were also most careful half-yearly estimates under established rules, and they were never formed until they had the working of the corresponding half-year in their hands to deal with, and on this they could form fairly reliable estimates.

The Government of India did not suffer, and month by month they knew how the railways were going on, and what would be the result to the Indian Exchequer. But not only have these Orders been issued, but the Indian Railway Board has taken to threatening. They threatened in one case to cease to issue any further funds to carry on the railway, and when they were told the railway would be stopped they withdrew the notice. Now they threaten not to certify the accounts—a course which everybody knows would prevent the shareholders from getting their dividends until three months after they were due. I hope the Secretary of State will have the goodness to direct his attention to this matter, which is urgent, and which is leading almost to a deadlock between the railway boards here and the Railway Board in India. It is most necessary that the boards should work in intimate relationship and in friendly co-operation with the Board in India, and if that be done I think it will soon be seen how impossible it is that the railways can be carried on under the system which it is attempted to devise. I think if the Railway Board would only deal with the beam in their own eye they would not find so much fault with the mote in the eyes of their neighbours, because the State Railways are the worst managed in India so far as expenditure goes. Anyone who looks for a moment at the gross proportion of expenditure will find that the State railways have lost since the year 1908 70 per cent. in Eastern Bengal, 83 per cent. on the North-Western Railway, and 68 per cent. on the Oudh and Rohilkund Railway. The average is about 50 per cent. on the company-worked railways.

I think if the Under-Secretary of State will consider the figures he will see where considerable additional revenue might be saved for the Government of India, and at the same time perhaps come to the conclusion that the railway boards know their business perfectly well, and that the result of their working has not been altogether bad for the Government of India, for whom they have earned vast profits in the past, and are likely to earn large profits in the future; but they must be trusted; you must give them the discretion which they have merited by the way in which they have carried on their business in the past. You must not tie their hands in this childish fashion, so that they cannot even say that the estimates which they put down for boilers may not be reduced if they find it necessary to spend a little more on permanent ways. At present the only result of the new system is that it is obvious that you must not apply any saving under one head to something under another head; and everything will be estimated at the highest possible point in order to make quite certain that they will get as much money as they require for any possible conceivable purposes, and when once they get the money in the Budget Estimates it is perfectly certain that it will be spent. That is not the way in which you will increase your revenue. I feel that this is, in its way, quite as important a topic for the consideration of the Secretary of State as even those higher political matters, because revenue is the basis of all social improvement, and it is the Indian railways which are the greatest contributors to the revenues of the Government of India.

Mr. THEODORE TAYLOR

I desire to refer to a subject which was given great importance in the financial statement of the Indian Minister. The very first paragraph of the Finance Minister's statement alludes to the fact that fifty years ago the then Finance Minister referred to "the precarious nature of the opium traffic." That was a pretty long warning, but we now have the present day Finance Minister saying that "the most dramatic feature in the present situation has been the sudden and unexpected development of opium revenue," that is a development after a warning given fifty years ago. This rise in price is but a pale reflection of a real drama that is going on somewhere else, but it is in China and not in India. There is a drama in China where a reform moral and social is taking place, which is dependent very largely upon the extinction of this revenue. My hon. Friend the Under-Secretary in his extremely able speech attributed the increase in the selling price to three causes, the restriction of production and sale in India, less cost involved, and, the largest item of the three as regards India, the large amount of duty paid ahead on Malwa opium. He said nothing at all about the chief cause of the increase in the price of Government opium in India. The chief reason for that is the restriction of the production in China where he estimates that there used to be from eight to ten times as much produced as in India. But the reduction of production in China, where he estimates that eight or ten times as much has been produced as in India, instead of being three-tenths as in India is, I do not hesitate to say, something like 70 or 80 per cent. Where production has been most reduced is the cause that has the most effect on price.

Nobody is more alive than I am to the very great difficulty of this question and nobody acknowledges more freely than I do the readiness with which Lord Morley has agreed to carry out the policy—the declared policy of this country in the House of Commons—in the agreement that was made with China three years ago. My hon. Friend the Under-Secretary stated that there were no statistics about the reduction of opium in China. If he were as well informed on the subject of the restriction of the production of opium in China as he is in his own subject he would know that the evidence is positively overwhelming that in China opium production is very very much restricted. That has a bearing on the point raised by the Under-Secretary as to the reduction of price which affects so greatly the revenues of India. Be that as it may, whether India or China has the larger share in producing this increased price, the increased price is there. Contrary to the general impression that has been assiduously circulated by interested parties that we have already made a great financial sacrifice of Indian revenue to help China out of her difficulty, the fact is that it is not so. The fact is, as we have heard this afternoon from the Under-Secretary, our revenue from opium in India since this agreement was made with China about three years ago has very largely increased. In 1908 the Indian Finance Minister anticipated a loss of revenue of £200,000 from this source, and that that loss would continue for three years certain. The predecessor in office of the present Under-Secretary had, however, to explain a year ago that, instead of a reduction in revenue of £200,000 there was an actual increase of £1,250,000. This year the Finance Minister has told us that the revenue exceeds the Estimates by £1,100,000. Those may seem small figures, but when one remembers that the actual average net revenue for opium in India, and I am excluding Excise revenue, that the actual revenue from Malwa opium and Bengal opium for the ten years was £3,250,000, then those Budget surpluses at the end of each of the three years of £1,100,000, £1,041,000, and £1,250,000 are of course very large indeed. The excesses for the last five years of surplus income over the Estimates have been 23 per cent., 10 per cent., 29 per cent., 24 per cent., and 25 per cent. I do not, therefore, think it is very wrong to say that the Budget Estimates have not been what they ought to be, and I have no hesitation in saying that the Estimate of this year is not what it ought to be.

For this year the statement is that there is a reduction of receipts anticipated amounting to £870,000, of which sum £718,000 is for pass duty on Malwa opium—that is, opium in the native States to the seaboard, which the Indian Government have decreed, and in my judgment quite rightly, should not be taken into account this year, because they have already received a large amount of money in advance for what is going to be sold in after years. Of course, the quantity to be sold is fixed, but the question always is at what price is this opium going to be sold? As the House knows, the sales of opium are on Government account monthly in Calcutta. Thus, in 1905–6 the price realised was 1,434 rupees per chest; in 1906–7, 1,391 rupees; in 1907–8, 1,350 rupees; in 1908–9, 1,384 rupees, and in 1909–10, 1,610 rupees. But the Budget Estimate for 1909–10 was 1,350 rupees per chest, and in 1910–11 it is 1,750 rupees per chest. For the year that we have already begun—that is, from 1st April—the average monthly price of the opium sold in Calcutta was estimated to amount to 1,750 rupees per chest, and so far, for the four months, April, May, June, and July, has produced 2,800 rupees per chest. In April and May there is no doubt that there was a phenomenal rise in price, caused, as I say, mainly—I will not say entirely—by the very heroic and marvellous efforts China is making to reduce the production of her opium, even cutting off the heads of people who produce it. [Sir J. D. REES: "Do you approve of that"] Many of them have had their heads cut off for growing poppy. I am only saying it is very effective, for they do not go on producing when their heads are cut off. My hon. Friend agrees with that. At any rate, 2,800 rupees per chest is the average amount that we have got for opium in Calcutta so far this year. In the present month of July the price is 2,062 rupees, and in June it was 2,177 rupees, and taking the average of the present month and last month, it is 2,200 rupees per chest.

Taking that price, instead of a revenue of £3,500,000 which has been budgeted for in the Finance Minister's Estimate for the current year, we should have a sum of £4,400,000. I have not sufficient information to undertake the role of the prophet, but I will venture to follow in the wake of the experienced members of the Indian Council, who, when they discussed this matter, prophesied that there would again be, as there has been for the last few years, a very large surplus. It is only reasonable to suppose that with still greater restriction of production going on this year as compared with last year, the price will be very much higher than in the past year. Taking, however, the Budget Estimate of £3,500,000, and not counting the extra £900,000 which I have no doubt it will yield we have this remarkable conclusion, that adding together the opium revenue (excluding, of course, the Excise revenue) for this year, last year, and the year before, we get a total of nearly £12,500,000. I want for a moment to contrast that sum with the sum that the Indian Government had reason to expect when this agreement with China was made to reduce the sales of opium for export by one-tenth every year for ten years. The revenue for the ten years previous was £32,700,000, or a little over £3,250,000 per year. Then divide that by two because the quantity was going to be reduced year by year by one-tenth, which would average for the whole ten years half the revenue, not making allowance for the increased price. Thus we get this remarkable conclusion that the total revenue, on that principle, that we could have anticipated for the ten years of the declining period was £16,350,000, of which we have had in the first three years no, less than £12,500,000.

I say that there is a very strong case, not as my hon. Friend so very cleverly put it as a matter of debate this afternoon, that having got so much more revenue was a reason why we should stick to it. Why, that is a pawnbroker's argument, it is a highwayman's argument. Instead of being a reason why we should stick to this money it is a reason why having got so much more than we expected, we should bring this arrangement with China to an earlier conclusion than at present seems likely to be done. We have been talking for three years about the great sacrifices we are making in Indian revenue. We have so far actually sacrificed nothing, but gained largely. Even this year the Finance Minister budgets for a quarter of a million more than the average revenue before this agreement was entered upon, though, as I anticipate, we shall get more, about a million more at least, of revenue than we had before this agreement was entered into. I cannot bring statistics from China. It is a curious place to get statistics from. I have been to China, and they are not strong in statistics, but they really are in earnest about this. There is such a thing as moral character in the Chinese, and they are showing it extraordinarily well in this, and they deserve support. My hon. Friend to the right (Sir Joseph Walton), who is the "Member for China," says they are the honestest people in the world. They have a high character as business men, and it is part of their religion to be straight and honest. I really consider that we are morally bound to go at a quicker rate in this matter. I am sorry to find from this financial statement of the Finance Minister that there is no indication that there is any intention further to reduce the acreage planted with poppies. I think we ought to continue the process of producing less.

I cannot bring forward any Chinese statistics, but less than a year ago there was an official statement from our Legation at Pekin to the effect that China had more than cone her share. Since then, as I have said, the evidence is overwhelming: the poppy is being actually extirpated over large areas of China. Speaking from as full knowledge, perhaps, as anybody in this country, as within the last few days I have had presented to me scores of reports and the results of hundreds more from all over China, I say without hesitation that the extent to which China has put down the production of opium is simply marvellous—far beyond anything that even her best friends could have expected. Is there not a case on almost every ground, except the one ground of revenue—I will not say of international policy; I must not go into that—why we should go forward more rapidly? This has never been a party question. Happily it is not a party question at all. There is absolute unanimity in this House that the Indo-Chinese opium traffic is morally indefensible. How much longer are we to continue this morally indefensible practice? It could be said, and was said, three or four years ago, with some show of reason, when we were making the agreement, that China could not carry it out. I venture to say that even my omniscient Friend the Member for India (Sir J. D. Rees) thought she never could do as much as she has done. I do not think that anybody even less omniscient than my hon. Friend could have thought it possible. But she has succeeded. Are we to put her back? Can her moral enthusiasm be kept up to this point for many years? I do not think so. China is weak in many ways, but she is doing a great thing here. We are told that the Indian cultivators a year ago had not so much inducement to grow opium, because the price of food was high. I was really sorry to hear my hon. Friend the Under-Secretary give the cultivators as a reason for no increase in regard to the restriction. My information all goes to show that if we did not bonus the cultivators by giving them money in advance upon their crops at the time of sowing—opium is the only crop in India in regard to which we do that—they would rather not grow this crop. I was told by many people, some in very high office, when I was in India, that the Indian cultivator would be very glad to cultivate other crops instead of opium.

The Under-Secretary mentioned the Conference which is being called by the United States at The Hague. He recognised, as we all do, that some revision of the international regulation of this traffic and the traffic in similar drugs is necessary; but he said that we could not submit to this Conference questions of high international policy, such, for instance, as the relations between this country and China, or anything of that sort. Only two months ago, when in Washington, I took occasion to go to the State Department, where I was assured on the highest authority that they did not wish to bring up at that Conference any such question as the relations between this country and China. I can assure my hon. Friend that there is no fear of anything of that sort. The Under-Secretary also said that he would like to know the views of the United States as to the regulation of the international traffic in dangerous drugs. If he had read the Report of the Shanghai Conference he would know that the whole question was raised as to the international traffic in other drugs, and that this other Conference, at which I hope our Government will consent to be represented, and the calling together of which I trust they will facilitate, is to devise machinery to carry out the pious opinions expressed at Shanghai a year ago. I congratulate my hon. Friend on the fact that the Indian Government recognises, as we all do, that it is not a question of one drug merely, but that it is a question of all these drugs. There must be international control. I am very glad to see that in Bengal the opium-smoking habit, which is growing in certain towns, is to be nipped in the bud by the Indian Government. It would be a grim revenge indeed upon us if this Chinese habit were to get hold of India.

I acknowledge once more the very great advance that Lord Morley has made on this deeply important moral, as well as economic, question; but while thanking him most heartily for what he has done, I urge, without any hesitation, but with the feeling that we cannot do less, that the Government should quicken the pace of the restriction of the sending of this drug from India to China, promote good international relations between us and China, and remove from our escutcheon the blot, the existence of which we have all recognised for a long time, and which this House is unanimous in desiring to see removed. I thank the House for having listened to me. I hope the Government will do something better in the new agreement of which we have heard to-day. Only the other day in a letter to the Society of Friends the Prime Minister, in conjunction with the Indian Secretary and the Foreign Secretary, said that the agreement with China would have to come up for review, and that at the end of three years it would be renewed or amended. If China has gone at a much quicker rate, is there not a case for an amendment of that agreement, such as was indicated in the letter of the Prime Minister, and as, it seems to me, is called for by the actual facts of the case to-day?

Mr. GEORGE LLOYD

I would join in the hope expressed by the hon. Member for Leicester (Mr. Ramsay Macdonald) that on future occasions the Indian Budget Debate might be given more than one day. We devote sometimes six months to the discussion of an English Budget, but we are content with six or seven hours for a budget dealing with 300 or 400 million people in another part of the Empire. I should like to congratulate the Under-Secretary on the speech he has made today. The lucidity of his statement, the eloquence of its terms, and the obvious sympathy of its aims, commanded the admiration of all who listened to it. It is all the more difficult to come back to the duller topics relating to finance, and to turn away from the consideration of the fascinating and complex problems affecting the political situation in India. With regard to opium, I think everyone who read Sir Fleetwood Wilson's budget statement this year must have been greatly struck by the continual references to this question. All who are acquainted with the subject are agreed that the automatic decline which will take place in the revenue of India on account of the restrictive agreement with China will probably land the Indian Government in great financial difficulties in the future. I notice there is no tendency to decrease the expenditure in the Budget to meet that diminution in revenue. Personally, I do not believe it is possible to decrease the expenditure. The growing needs of India, particularly in education as well as in many other matters, demand the continued increase of expenditure which we note this year. I would remind the House that no less have we to face a very difficult financial situation in the future. We have £160,000 less on Eastern Bengal opium and £700,000 on Malwa opium to consider. No one will question for a moment the laudable motives which actuated the Government in this matter. I for one am entirely in agreement with them; but I think there is some evidence that they rushed rather light-heartedly into the agreement with China. In spite of the Shanghai Conference and the testimony of missionaries and travellers, I do not think it is at all clear—and the statement of the Under-Secretary has not reassured me on this point—that China will succeed, however much she may try—and I do not question her desire—in exterminating the consumption of opium in that country. We all agree with the general proposition involved in the restrictive agreement, but I would ask for information with respect to the manner in which the Indian Government started upon this question. From some personal knowledge of the East I feel a certain amount of mistrust in the miraculous spectacle we are invited to contemplate of the most populous country in the whole world being cured of a very old habit in the space of ten years. The object of the restriction was particularly in favour of China. Seven-eighths of the opium consumed in China is grown in that country. Therefore, whatever our good intentions, I think we have a very onerous task to justify to the Indian taxpayer the attitude we have taken up in this matter. Unless China is going to do something very immediate and very drastic in regard to the seven-eighths grown in her own country it is absolutely impossible for us to hope for any good by restricting the one-eighth which comes from India.

Mr. THEODORE TAYLOR

She has done it.

Mr. GEORGE LLOYD

The hon. Member says that China has done it. In that he differs from the Under-Secretary, who has told us that he has absolutely no statistics to show that China has already carried her own wishes into effect. It is a very difficult thing to do. We have to bear in mind that 66 per cent. of all the opium grown in China is grown in the one Province of Szechuen. If China had been doing something really marked in this respect, I think there are ample opportunities for us to have heard of it—at any rate, in that one Province. Has the Under-Secretary any report to give us as to what China is doing with regard to restricting the poppy growth in the Province of Szechuen? There are one or two other questions in reference to opium in regard to which we should like some assurance. If China is really in earnest, or if she is capable of reducing her growth of opium, I think she should also abandon her exports of opium to Indo-China and Siam, which countries have equally asked to be delivered from the scourge of opium smoking. Another matter is the illicit export of opium into our Colony of Hong Kong. China, at any rate, for six months after the agreement, was continually smuggling large quantities of opium into Hong Kong. Seizures were being made at the rate of one per day, according to the Governor's report issued in February. We have no information that China has shown her absolute intention of carrying out the restriction with regard to herself in either of the matters to which I have referred.

8.0 P.M.

It is perfectly easy for China to show us some absolutely definite assurance, quite apart from statistics. The province of Shen-si, I would remind the Under-Secretary, some time ago attempted to do something in that direction by differentially taxing land under poppy-growing. Why should not this be extended to the Province of Szechuen and other provinces? If it was so extended to the Province of Szechuen, which really grows the great bulk of the plant in China, we should feel satisfied that China was doing something to meet our efforts in this direction. I would also like to ask the Under-Secretary whether the information I have got in regard to the manner in which the restrictive agreement was entered into was really according to the facts I am going to present to him. Is it or is it not the fact that the Government entered into this restrictive agreement without consulting in any way the native princes and rulers who were greatly affected by it? My information is that they were not consulted in the least, and that there was a considerable amount of irritation caused by that neglect to consult them. I should like to be assured that that was not the case. I am aware that the Government have recently announced that they are going to give the native States a generous share of the reduced exports of opium. That does not relieve them. I do not want to criticise unduly. I merely want information. I may be quite wrong in this matter, but I want to know why they did go into this very effective agreement, which was going to considerably damage the revenues of the native States, and I should like to be assured that my information is incorrect, and that the native princes were consulted before this step was taken. My information is entirely contrary. It would possibly satisfy the House if we had some assurance on that score. In view of the large amount of ground to be travelled and the short time left, I want to curtail my remarks, so I will not refer at any greater length to questions of that sort. I have put forward two or three financial questions which I think ought to be answered.

With regard to the provincial finance of India, I think the Under-Secretary is some what scanty in what he told us. He gave us very little information at all. I must say that I think the outlook with regard to provincial finance in India is a very serious one. I think the Government are sincerely to be congratulated on the step they have taken in regard to the increase in the amount devoted to Eastern Bengal and Assam. It is an immensely important step, I think. Every one who is interested in Indian affairs will realise that it is very important that these vast regions beyond the Ganges which have been systematically starved for generations should receive adequate financial help during their years of growth. Very little attention has been paid to the subject, but I think the work that is being done by the Indian Government in Eastern Bengal and Assam vies with the work that Lord Cromer did in Egypt in the patient development of economic resources under very great handicap. I think the Government of Eastern Bengal deserve especially a warm tribute from this House.

In regard to other provincial matters which I shall touch upon very lightly, I would like to remind the House that we were told in the Financial Member's statement that the surplus of this year of £683,000 was entirely a fortuitous one. The Government of India—here I am quoting:— Is driven to the conclusion that these provinces in the aggregate are steadily overspending their income by about £500,000 a year, and that position is one which compels the most serious reflection. Even in the case of the most flourishing provinces, like Bombay, we were told that their substantial balances have been some-what rapidly diminished. Therefore any survey or any remarks upon the Indian Budget would be incomplete without some reference to the problem of provincial finance. I am confident that the problem will have the full attention of the Government of India, but I think the Secretary might, in justice to the subject he so eloquently treated to-day, have given us a rather fuller account of the future in regard to the provincial finance of India.

I turn now to the military side of the question, and shall touch upon one or two matters which have not been referred to in the course of Debate, which I think are of very special importance. The general military position is, I am quite sure, thoroughly satisfactory. That is another point that I entirely congratulate the Government upon. There are very few people who in the least realise the magnitude of the task that we have got in the defence of India, and in looking after the security of millions of people under our control there. The comparative peace on the frontier to which the Under-Secretary alluded has undoubtedly been largely the result of Lord Curzon's able policy when he was in India. It has been due to the frontier policy that he developed, and no doubt to some extent—to a large extent perhaps—to the following up by Lord Kitchener of that policy.